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Dispersed Responsibility

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How to resolve imbalances between market demand and constraints?
How to resolve the uneven subsidiary capabilities?
These are the main problems MNCs are facing today!!!

Let us see how P&G European operations resolved this issue!?
Company’s vision:
To introduce their products worldwide and to create a winning strategy for the company.
Historical practice in P&G European operations:
- Subsidiaries were free to adapt technology, products and marketing approach to their local market
What happened?
- Inhibited product development
- Company lost its ability to capture the Europeanwide scale economies
- Poor protection of their product lines from the competitors
Independent Operation/ more dependent on one person:
Pamper’s experiment:

P1, P2…Pn are different products of the same brand.

Expected Result:
To eliminate the diversity in brand strategy by coordination activities across the subsidiary boundaries.
Actual Result:
Failure
Why??
- Ignored local knowledge
- Under-utilized subsidiary strengths
- Demotivated the country’s managers – they were not given any responsibility for the sales performance of the brand in their areas  so basically no commitment.
So the company came up with other strategy
Interdependent operation / Distributed responsibilities
- They were finding a way to exploit the expertise of national units
- The responsibilities were distributed amongst the subsidiaries
So what they actually did?

The Manager from each subsidiary was given responsibility.
- The management team is responsible for development and coordination for marketing strategy.
- Each euro brand team was headed by the manager from each subsidiary and not from the headquarters.
- Brand managers from other subsidiaries and functional managers from headquarters were allotted to support the managers.
- Team meetings were…...

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