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Read the Chapter 12 Mini-Case: A Change at the Top at Procter & Gamble: An Indication of How Much the CEO Matters? Respond to question 2: How Is it a good practice to rehire a former CEO who has retired? Please explain the potential advantages and disadvantages of doing so. Discuss the particulars of the firm that you are researching for your project or other publicly owned firms. Do NOT review the Proctor & Gamble case specifics. Mini-Case A Change at the Top at Procter & Gamble: An Indication of How Much the CEO Matters? A. G. Lafley joined Procter & Gamble (P&G) in 1977 a brand assistant for Joy dishwashing liquid. From this beginning, he worked his way through the firm's laun dry division, becoming highly visible due to a number of successes including the launching of liquid Tide. A string of continuing accomplishments throughout the firm resulted in Lafley's appointment as Pas CEO in June 2000, a post he held until retiring in mid-2009. Bob McDonald, who joined P&G in 1980, was Lafley's handpicked successor, McDonald took the top position at P&G in July 2oo9, but resigned under pressure in May 2013. Lafley, revered by many, was asked to come out of retirement and return to P&G as president, CEO, and chair of the board of directors Lafley said that when contacted to return to P&G, he agreed immediately to do sa, committing to remain as long as needed to improve the company's performance. However, speculation is that Lafley likely would not remain beyond three years. What went wag for McDonald, a long time P&G employee who seemed to know the firm well and who received Lafley's support! Not surprisingly a number of possibilities have been mentioned in response to this question Some condded that, under McDonald's lead hip, P&G suffered from poor cecution globally an outcome created is part by P&G seemingly ineffective responses to aggressive competition in emerging mar kets. Other apparent problems were a failure to control the firm's costs and croployees low of confidence in McDonald's leadership. Still others argued that McDonald did not fully understand the effects on US. consumers of the recession in place when he took over, and that, during that time period, P&G was selling BMWs when cash tight consumers were looking for Kias." The net result of these types of problems included P&G "losing a step to rivals like Unilever." In turn, this caused Investors to become frustrated by "P&Gs inability to consistently keep up with its rivals' sales growth and share price gain." But why bring Ladley back in a few words, because of his previous success. Among other achievements during his first stint as P&G's main strategic leader were building up the firm's beauty business, acquiring Gillette expanding the firm's presence in emerging markets, and launching hit products such as Swiffer and Febreze. An overall measure of P&G) success during Lafley's initial tenure as CEO is the fact that the firms shares increased 63 percent in value while the S&P dll 37 percent in value. Thus, multiple stakeholders, includ. ing investors and employees, may believe that Lafley can return the firm to the pory days it experienced from 2000 to 2009 Product innovations are a core concern and an area receiving a significant amount of attention Analysts suggest that P&G needs to move beyond incremental innovations, seeking to again create entirely new prod- uct categories as it did with Swiffer and Febreze. This will be challenging at least in the short run, given recent declines in allocations to the firm's research and devel opment programs. These reductions have resulted in * product pipeline focused mainly on "reformulating rather than inventing Additionally, arts are underway to continue McDonalds stre, recent commitments to reduce the firm's hosted cost structure and reenergize the competitive actions it will take in global markets Restructuring PAGs multiple brands and products Into four sectors, each of which will be headed by a pees ident, is a major change Lafleis initiating Currently, the firm has two global business divisions-beauty and grooming and household care. Final decisions about the precise compositions of the fout sectors were not announced by mid-2011. Speculation, though, was that each sector would be formed to reflect synergies between various businesses. For example, one expec tation was that paper based products such as Bounty paper towels, Charmin toilet paper, Pumpers diapers and Always feminine care products would be combined to form & sector. Moreover, Lafey's replacement was expected to be sdected from among the four presidents who would be chosen to lead the sector Beligt Sw.M. Game. My Ang dan IS, nurwewe ARCH comandare wewe PG wom. Meer weer Car My Case Discussion Questions What makes a CEOs complete the ministro vide exemples that help support your new sit a good practice to the former CEO who has retired? Please explain the potential advantages and disadvantage doing so What should Pa do replace taley when he retires fora cond time? What should the prepare for Son