Monday, May 14, 2007

A Corporate Overhaul at Procter & Gamble (NYTimes)

Published: May 15, 2007
Procter & Gamble announced an overhaul of its corporate structure yesterday, dividing it into three new global units and breaking up the Gillette business that it acquired in 2005.

As part of the revamping, the company will promote Susan E. Arnold to president, global business units, and Robert A. McDonald to the new post of chief operating officer.

Procter & Gamble, based in Cincinnati, has nearly doubled its business since 2000 with the acquisitions of the Clairol and Wella hair care businesses and Gillette. The chairman and chief executive, A. G. Lafley, said in a statement that the changes were intended to meet the needs of a larger business that is developing new initiatives faster than in the past.

Gillette will no longer operate as its own global business unit. Its Duracell battery division will be part of the global household care unit, while the shaving part of the business will come under beauty care.

Several unit presidents and other corporate officers will leave, the company said. The changes will take effect July 1.

Ms. Arnold, 53, will be in charge of the company’s three worldwide business units: beauty care, global health and well-being, and household care. She will be responsible for development and innovation in P.& G.’s brands.

Mr. McDonald, 53, is vice chairman for global operations. As chief operating officer, he will be in charge of global operations, including the units that develop P.& G.’s businesses in local markets.

An analyst at Goldman Sachs, Amy Low Chasen, wrote in a research note that “we believe this news formalizes a potential near-term succession plan with Arnold and McDonald as the primary successors” to Mr. Lafley.

Still, she noted, Mr. Lafley, 60, “has no intention to retire” soon.

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