University of Dhaka

Department of International Business

Course Name: Principles of Management

Course Code: EIB-506

Assignment on9

ANALYSIS OF THE ORGNIZATION

AND LEADERSHIP OF UNILEVER
Submitted to-
Dr. Khondoker Bozlul Hoque
Professor, Department of International Business
Submission date- 14/08/2018
Submitted By:
Md. Oliur Rahman Pritom 801825040
14 august,2018

Professor (Dr.) Khondoker Bozlul Hoque,

Department of International Business

Dhaka University

Subject: Letter of Transmittal.

Dear Sir,

I feel immense pleasure in presenting to your good self, the term report
as a part of our course requirement. We found this report to be truly
challenging in many aspects, indeed very interesting in relation to the
various interpretational and engrossing exercises. Writing this report
itself was truly comprehensive learning experience.

The report is mainly based on the ANALYSIS OF THE

ORGNIZATION AND LEADERSHIP OF UNILEVER.
I tried my level best to complete the report with respect to the desired
requirements. However, if any explaining is required, I would be
honored to oblige. Kindly accept this humble effort of bringing forward
my findings on the subject matter.

Yours sincerely,

Md. Oliur Rahman Pritom

ID#801825040
 Preface

In any comprehensive work, like this, credit must go to

the multitude of people. I am still students and just
novice. Hence, I have taken help from different people for
preparing my report. Now here is a petite effort to show
our deep graduate to those helpful people.

First, I commit myself grateful to Allah for his unlimited

kindness and maximum helpful hand in continuing my
report preparation.

I express my sincere gratitude to my honorable course

teacher Professor (Dr.) Khondoker Bozlul Hoque,
Department of International Business, Dhaka university
for their guidance and valuable remark about the
convention of the report.
 Executive Summary

Unilever Limited is one of largest multinational business firm in the world. Over the last four decades,
Unilever Bangladesh has been constantly bringing new and world-class products for the Bangladeshi
people to remove the daily drudgery of life. Over 90% of the country’s households use one or more of
our products. It provides sixteen verities brands and try to mitigate all types of human demand by
introducing with new innovative products. Unilever Operations in Bangladesh provide employment to
over 10,000 people directly and through its dedicated suppliers, distributors and service providers.
99.5% of UBL employees are locals and they have equal number of Bangladeshis working abroad in
other Unilever companies as expatriates. Unilever wants to attract the best graduates to join in their
leadership actions. This report enlightens what type of recruitment opportunities offered by Unilever
Bangladesh Limited for university students and how the students can access that opportunity. Unilever
look for passionate people who want to do real business and have the potential to be highly motivated
by brands, and are enthusiastic, creative and rigorous. They want people who are hungry for success
and can work confidently in teams.

Unilever create an environment where people with energy, creativity and Commitment work together
to fulfill ambitious goals. In addition, they all work to the highest standards of professional excellence
and integrity Most career are open to graduates of any discipline, although there are some exceptions. If
you know which area interests you, great – but it’s good to keep an open mind and find out about all the
opportunities they offer. Unilever accomplish their recruitment and selection process basically into
three criteria. One is committed in distribution department where employs is selected on their physical
skilled and recruitment and selection process is committed by competency based interview, case
Unilever create an environment where people with energy, creativity and Commitment work together
to fulfill ambitious goals. In addition, they all work to the highest standards of professional excellence
and integrity Most career are open to graduates of any discipline, although there are some exceptions. If
you know which area interests you, great – but it’s good to keep an open mind and find out about all the
opportunities they offer. Unilever accomplish their recruitment and selection process basically into
three criteria. One is committed in distribution department where employs is selected on their physical
skilled and recruitment and selection process is committed by competency based interview, case Surf
Excel encourages all to learn through new discovery and exploration. Unilever believe in all these
insights as well. They believe the people who work with us are confident of their capabilities, believe in
nothing less than star performances and of course are not afraid to work hard at achieving goals.

1- Introduction
This report offers an analysis of the current organizational structure and management approach of
the senior management team at Unilever, a multi-national organization that produces and
distributes many well-known consumer products. Recent years have seen the organization undergo
massive transformation, and they have reduced their workforce by some 41% over the last ten
years (Unilever, 2010). They are dual-listed in the Netherlands and the UK, but operate as a single-
entity with the same board and senior team. This structure offers them flexibility and adaptability
across the globe, and also efficiency in production and distribution. It will draw on the theories of
eminent scholars such as Taylor (1999) who proposed the theories of increased organizational
efficiency by utilizing an appropriate management structure, and also highlight how the internal
structure of the organization is influenced by external environment and organizational structure.
This report will consider some of the recent changes and challenges, which have faced Unilever,
and provide and analysis of the likely future challenges facing the organization.

2- Organizational History
Unilever is one of the largest businesses in the world, with an annual turnover of nearly £40 billion
and in excess of 179,000 employees globally (Unilever, 2010). It was formed in 1930 as the
amalgamation of the UK soap company Lever Brothers, and the Dutch margarine company
Margarine Unite. The main driver for the merger was collaboration, as both companies relied
heavily on palm oil as a major ingredient for their products and by sharing resources they were
able to import and distribute to their factories far more cost effectively (Unilever, 2010). Indeed,
palm oil remains a major ingredient for many products toady, and their continued commitment to
sustainability and efficient distribution is one of Unsilvers’ core corporate strategies (Dhillion,
2007).

The growth of Unilever has been characterized by mergers and strategic acquisitions, not all of
which have been friendly (Polsson, 2008), and their brand portfolio exceeds 400 and includes a
wide range of consumer goods, ranging from foods and beverages to personal care products and
cleaning products. They are listed on both the UK FTSE 100 and the Dutch equivalent the AXE,
and they have 13 brands which generate revenue of over €1 billion per year. The portfolio includes
such well-known brand names as Walls, Ben and Jerry’s, Dove, Lipton and Flora, and as can be
seen from the few names mentioned, they are both diverse and equally powerful brands and market
niches. They are also the largest ice-cream manufacturer in the world, controlling some 73% of
the world’s ice cream production and generating revenue of €5 billion per year alone from ice
cream sales in Europe. Unilever have been able to make sales particularly profitable and efficient
through centralization of their brand under the “heart” logo, meaning that they were able to
manufacture and distribute under the same brand across Europe with minimum customization for
local regions (Unilever, 2010).

Unilever has also built strong links with its subsidiary businesses around the world for its teas and
coffees, as much of the raw material required for food stuffs is sourced from African and Latin
American countries, such as cocoa, vanilla, palm oil and coffee beans. To reach the size and level
of diversity that they now control, Unilever have sought to acquire a further brand or
manufacturing interest at the rate of approximately one per year for the last ten years. Such
significant activity in terms of corporate diversity and consolidation makes for an interesting topic
of study. (Full timeline of activities available in appendix 1).
3- Organizational Structure
Considering the size and scope of the organization it is understandable that they must operate
within a defined framework, and as noted by Cummings and Worley (2005:136-138) the sheer size
of the company can expose them to the risk of paralysis and stagnation as they are too large to
respond flexibly to external challenges. Therefore Unilever have explicitly set out to create a
management structure, which is capable of making faster decisions and responding more flexibly
to external stimulus. Accordingly Unilever has created a four-tier hierarchical structure, which
helps to funnel information into the business, and allows the senior team to make appropriate
decisions based on available data (Unilever, 2010b).

4- Organizational Culture
Organizational Culture has been defined as “the specific collection of values and norms that are
shared by people and groups in an organization and that control the way they interact with each
other and with stakeholders outside the organization,” (Hill and Jones, 2001:27). This definition
also helps us to understand the values of the organization and how they seek to lead and develop
their business. Organizational culture is complex, and can be influenced by a huge variety of
factors as noted by Hofstede (1980) who identified the influenced and effects of multi-cultural
workforces within multi-national environments. He proposed a theory of cultural dimensions
which he used to help explain how multi-cultural influences act upon an organization with regard
to strategic application as discussed by De Wit and Meyer; “Hofstede’s (1993) theory of cultural
dimensions implies that although not all the individuals within a country’s population will have
exactly the same characteristics, the cultural dimensions will color the institutional and
administrative arrangements that are made within the country, and will set the norms for behavior.”

Hofstede, G. (1993) ‘Cultural constraints in management theories’, in De Wit, B. and Meyer, R.

(2004) Strategy Process, Content, Context, 3rd Edition, Thomson, London pp206.

This is strongly evidenced at Unilever where the culture of the organization is derived from its
own multi-national background. This has influenced the process of strategic decision making at
Unilever under the systemic approach advocated by Whittington in his work “What is strategy and
does it matter?” (2000). Whittington proposed that organizations in the same circumstances as
Unilever would do well to adopt what he described as a systemic approach. In this model the
organization should seek to create a hybrid of “processual” or delineated strategy on the basis of
organizational objective, but that the approach should be tailored or tempered by a respect for
cultural differences. Whittington observed that organizational culture is governed by the social
structures created by management level, social class and interest groups, and that trying to cut
across these groups in certain localized areas was likely to create excessive tension and achieve
very little (Whittington, 2000:185-189).

It is therefore interesting to observe the influence and effect of Paul Polman as the first external
candidate to take the role the Chief Executive Officer. Paul is a Dutch national and has held the
role since October 2008. His background and experience in the commercial goods and
manufacturing sectors make him an ideal candidate for the role, as he is both financially astute and
commercially aware. From the analysis of the company and its operating ethos and mission it can
also be implied that his management style is European-influenced and therefore likely to be
reflective of an inclusive culture and style in that it is both democratic and laissez-faire (Morgeson,
2005:497-508). Alternatively under the Tannenbaum and Schmidt continuum (1957) it can be
suggested that Paul Polman allows freedom of his subordinates to pursue suitable corporate
strategies on the basis of their capability and the application of democratic decision-making.

Paul Polman succeeded Patrick Cescau as the Chief Executive Officer of Unilever. Patrick Cescau
was the former CEO of Unilever and the first group CEO for the company. He is a French national
with numerous accreditations to his name and an extremely successful history at Unilever. As
reported in the Telegraph (2008), Unilever searched long and hard for a suitable successor to the
position and eventually felt that Paul Polman would be a suitable candidate given his own
background, capabilities and skills. This was a departure for the Anglo-Dutch company as they
had never previously taken an external candidate for the position, preferring to recruit internally.
Although Patrick Cescau formally stepped down from his role following his 60th birthday (the
main reason for him to leave the post), he has continued to play an active role in corporate life and
now serves as a non-executive director to another large multi-national firm. Patrick Cescau was
known across the world for his work in regard to sustainability and business growth, and he has
proved a hard act to follow (Insead, 2010).

5- Specific Issues
It is useful to compare and contrast specific issues at Unilever and the various approaches which
the board of directors have taken when addressing these situations, particularly with regard to the
work of Patrick Cescau and his approach to corporate sustainability and social responsibility.
Indeed he is quoted as having said that “There is no dichotomy between doing business well and
doing good; and, in fact, the two go hand in hand.” (Insead, 2010). Thus, this element will consider
some of the current issues facing Unilever and how they will seek to address them.

5.1- Approaches to Corporate Social Responsibility

As noted on the corporate website (Unilever, 2010c), Unilever have a strong commitment
corporate social responsibility and sustainability and they have adopted a specific and targeted set
of measures and key performance indicators to benchmark their own sustainability performance.
It is recognized by scholars such as Atkinson et al (2007:66-68) that there is currently no uniform
approach to sustainability or any codified measures of best operational practice. This is despite
increasingly stringent legislation which seeks to set out minimum performance standards and has
been applied on very few occasions save for flagrant breaches which have resulted in catastrophic
consequences (Constanza et al, 2007:203-210). Unilever state that their approaches to Corporate
Social Responsibility incorporate “business benefits as well as ethical principles” (Unilever,
2010c). By this they mean that they have continued the work started by Patrick Cescau seeking to
align business activity and ethical activity. They have chosen to apply sustainable principles to as
many areas of possible in their business on the simple premise that sustainability makes good
business sense. Therefore they have engaged some of the most innovative principles in research
and development, agriculture, packaging and manufacturing as they believe that “sustainability
helps [them] win” (Unilever, 2010c). The Unilever website offers several examples of successful
case studies where sustainability has proved to be of great business benefit amongst both internal
and external stakeholders, and the board of Unilever also recognize that this can only be achieve
by impeccable business performance and adherence to best principles in their own right.

5.2- Reputation Management and Diversity

Contrastingly it is also useful to consider some of the more controversial activities, which have
been undertaken by Unilever in their recent history. Unilever have been accused of causing
deforestation by campaigners such as Greenpeace because of the use of palm oil, a major ingredient
in many products. In consequence Unilever have committed to sourcing all of their palm oil
requirements sustainably by 2015 (Unilever, 2010d). This principle has also been applied with
regard to their requirements for tea leaves for their Lipton and PG Tips brands (Unilever, 2010c).
Unilever recognize that because of their level of consumption of these raw materials and their need
to invest in sustainable practices they will need to work closely with bodies such as the Rainforest
Alliance to form synergies, which are beneficial to all stakeholders.

However Unilever have a strong commitment to positive diversity as evidenced by their localized
products and marketing campaigns, which are specifically aimed to meet the needs of consumers
at a localized level. This includes specific beauty products for various nations in response to
consumer demand. Examples of such positive diversity can be found in Indian advertising for skin
creams (Telegraph, 2007). Although there was some adverse reaction to the advertisement it is
also recognized that the product met a considerable demand in India and there was also some
evident confusion at a localized level as to why the product might not be required. When compared
to the Dove brand “real beauty” campaign which Unilever have managed since 2007 (Dove, 2010)
it can be seen that there is a strong demand for localized product management and positive
diversity, which Unilever have responded to. This has helped their own reputational and brand
management and has enabled them to react rapidly to consumer demand, which has served to
strengthen their corporate and market position.

6- Management and Leadership Approaches at Unilever Netherlands

There are several theories, which can be used to help understand the relationship between
managers and employees within an organization. This element of the report will consider three of
the main theories put forward by leading academics in the subject, via Taylor (1999) Maslow
(1992) and Fayol (1999). Each of these theories addresses a different aspect of the employee –
management relationship as will be discussed.

6.1- Taylor and Scientific Management

Taylor (1999 cited in Matteson and Ivancevich), identified that to achieve maximum efficiency
and effectiveness within an organization it is necessary to “synthesize workflows” (1999:12-15)
to ensure that there is alignment between resource availability and organizational requirements.
Taylor suggested that by measuring and monitoring these objectives and setting out clear processes
and procedures for employees to follow, it is possible to significantly increase labor productivity
and effectiveness. The cornerstone of Taylors’ theory was centred on adhering to “best practice”
processes to minimize waste and maximize productivity.

Taylors’ theories were developed whilst observing car production plants, and there are close
analogies with regard to the production flows of manufacturing in the Unilever plants. As each of
the manufacturing plants owned and operated by Unilever produces products and foodstuff, which
their consumers will either ingest or use for personal care, the manufacturing must be of the highest
standards and quality, with rigorous safety and quality checks at every stage of the process.
Unilever have therefore developed and implemented a robust series of controls, which enables
them to manage and monitor every part of the production process, and also standardize it across
their estate. Such is the level of control exerted by Unilever, that in theory it should be possible to
take an employee from a UK manufacturing site and exchange them for an employee from a Dutch
manufacturing site, and they should each be capable of performing the necessary roles and
functions (Unilever, 2010). Critics of Taylors’ approach such as Daft et al (2010:26), argue that
the forced level of direction engendered by the Tayl9orist approach de-skills and de-motivates
employees who effectively become “machines” who are dehumanized. This is a particularly so on
production line, as there is a requirement for absolute conformity as opposed to creativity and
individualism. It is a perpetual challenge for Unilever to maintain the interest and enthusiasm of
employees who perform repetitive jobs such as those that will be required for a significant
proportion of the Unilever workforce. This is something, which was acknowledged and addressed
by Maslow (1999, cited in Strage), who noted that employees require more than simple fiscal
reward to remain motivated. This has been noted and observed by the management team at
Unilever, and when their management approach and corporate culture is applied to the
Tannenbaum and Schmidt continuum, as cited in Matteson and Ivancevich, (1999), it can be seen
that although some level of authority must be applied to ensure consistency of process, many of
the Unilever employees have a far greater level of freedom and creativity to offer innovative
suggestions for product and process improvement.

6.2- Maslow and the Hierarchy of Needs

In contrast to Taylor, the Maslow school of thought discusses tools and techniques to help
managers to motivate and empower employees to perform to the best of their ability. Maslow
(1999, cited in Strage) discusses the hierarchy of needs model, whereby he identified that it was
not simply money that motivated employees to work, but many other factors contributed to the
desire of employees to perform to the best of their ability. The diagram below outlines what
Maslow has identified, in that as each level of need is satisfied, the individual moves up the
pyramid to satisfy the next need in the ranking.

Maslow’s Hierarchy of Needs (1999).

As Maslow’s’ theory suggests, once the basic needs of financial reward for work have been
satisfied sufficient to meet the demands of paying bills, then an employee looks for other
motivations to come to work, such as feeling valued by their employer, and having their work and
achievements recognized. It would seem given that there have been no recent publicized disputes
between employees and leaders at Unilever that employees are satisfied with the both the pay and
recognition which they receive from the management team. As Maslow noted, once the basic needs
have been satisfied, the need to be accepted and to “belong” is a powerful human motivator. This
is closely linked with reward and recognition for work that has been done well or is particularly
innovative. Some theorists such as Hackman and Wageman (2005:269) refer to this as “celebrating
success”. They suggest that if major achievements which have been made possible by the co-
operative work of the team are celebrated and recognized, this will go on to motivate and
encourage employees to continue to perform. Unilever have recently won awards for innovation
and environmental achievement (Unilever, 2010), which they were keen to share with the rest of
the business, as the entire firm will benefit from such a positive approach (Morden, 1996;
McGovern et al, 2008).

6.3- Fayol

A third perspective on matters of management and leadership approach is that put forward by
Fayol (1999 cited in Matteson and Ivancevich), who similarly to Taylor subscribed to a scientific
theory of management. He proposed a “general theory of management”, suggesting that managers
had six primary functions and fourteen further principles of management. In contrast to Taylor,
Fayol proposed a far more interactive approach to management techniques, which suggested that
process controls were in fact best designed by those people who performed the work every day (ie,
the workforce). Fayol argued that if management interacted closely with the workforce and
understood their needs and concerns, they would be far better placed to gather feedback about
systems and processes and make the necessary efficiency changes. It would seem from the success
and growth of Unilever as a multi—national conglomerate that they have been particularly
successful and following these principles and instilling a collaborative approach which harnesses
the power and knowledge of the workforce and uses it to further the growth and development of
the business (Fayol, ibid). Examples of this include working with employees to indentify and
implement efficiency savings, and also generating a culture of continuous improvement, which
builds a self-perpetuating cycle of success (Judge et al, 2002:770-775).

When considering these findings in the light of the Blake and Moulton Leadership grid (1964), it
can clearly be seen that the leaders at Unilever are at the inclusive and collaborative point on the
scale as termed the “sound” style (previously known as “tem style”). At this point they have equal
concern for both production and people as they recognize that to deliver consistently excellent
products they must have committed and motivated employees. According to Blake and Moulton
(ibid), this leadership style relies on managers recognizing that employees must feel as if they are
a highly valued part of the organization, a theory that is closely aligned with that of Maslow who
observed that those employees who produced the best work felt that they were suitably rewarded
for their efforts. Moreover, as increasing numbers of organizations recognize the benefits of
adopting a collaborative and co-operative approach to achieving organizational excellence, current
management theory would indicate that the days of dictatorial mangers are on the decline (Den
Hartog and Koopman cited in Anderson et al, 2002:166-168). This also seems particularly likely
given the increasing legislation to prevent employers from bullying their employees and behaving
in an inappropriate manner (Miner, 2009).

Application of the Hersey and Blanchard’s situational theory model (1999, cited in Gabriel et al,
1999) further underlines that the Unilever management style is one of participating and delegating
as opposed to “telling” employees what to do. Unilever is characterized by open channels of
communication, and there are points which against the Hersey and Blanchard model the leadership
style could be regarded as “selling”, this is more to do with the differing levels of maturity in
various parts of the business, and particularly in those parts which have been recently acquired. It
is interesting to set the Hersey and Blanchard model against the backdrop of situational leadership,
as it seems that the characteristics of Unilever are a mature and confident group of leaders who are
happy to delegate tasks and responsibility, and thus leverage the best from their employees (Den
Hartog and Koopman, ibid). Remembering that the board of Unilever has been secure and stable
for some time, it is of little surprise that they are able to adopt and react flexibly to change.
Moreover, their considerable experience of acquisition allows them to rapidly assimilate and
absorb new businesses into the estate, and embraces the culture changes, which must necessarily
follow (Simons and Billing, 1995; Spillane, 2004). Despite the size of Unilever, it is remarkable
that they are able to adapt so readily to change at both an internal and external level, and across
global boundaries. In some ways their sheer size has enabled them to cushion themselves from
some of the worst effects of the recession, coupled with the fact that their diverse portfolio requires
them to be adaptive and flexible to consumer trends – a style which is reflected in both their culture
and leadership.

7- Recommendations to Enhance Management Practices

As can be seen from the preceding discussions, the senior management team at Unilever have
faced some serious internal and external challenges, both at a local level and a global level. Some
of these challenges are outside of their control, however in order to ensure that they remain one of
the leading conglomerates in the world they must adapt and respond flexibly to both internal and
external challenges. This section of the report considers some recommendations to continue to
improve employee motivation and engagement by enhancing and improving management
practices, and also offer suggestions based on relevant theory as to how the necessary changes can
be embedded.

7.1- Recommendations for Strategic Change and Effective Management Practices

Although there are few current difficulties with employee relationships, it is apparent that some
significant changes still need to be made in order to secure the future of Unilever in the current
turbulent economic environment. Whilst they are far from bankruptcy, recent years have seen
considerable expenditure and challenge for Unilever, which has centred on the considerable
number if divestments and acquisitions in order to strengthen and consolidate their global brand
portfolio (Morden, 1996:458-496). The theories of Taylor, Maslow and Fayol all offer suggestions
as to how to engage with employees in times of significant change and challenge. Application of
the Tannenbaum and Schmidt continuum (cited in Matteson and Ivancevich, 1999) indicates that
the collaborative style of leadership has helped Unilever in managing and instilling change, and it
is clear that under modern management practices that for them to continue to be successful they
must continue to engage and motivate employees, especially those who are new to the culture of
Unilever and have joined them through acquisition (Hassard and Parker, 1993:43-45).
Furthermore, Gergen (1995) concurs with Hassard and Parker (ibid), in those organizations, which
operate in a post-modernist world, should take care to adopt appropriate management styles and
techniques, or get left behind their competitors in a rapidly changing world.

Taking all of these factors into consideration, and with reference to all of the theories which have
been discussed and applied, it is apparent that there is a self-perpetuating cycle and culture of
success which is supporting the leaders at Unilever to behave in a manner which is highly likely
to assist them in developing a robust business which is fit to operate in current times. The
collaborative and communicative style of the leaders should be upheld and gently molded in newer
acquisitions to one which is collaborative and co-operative in approach, drawing on the theories
of Maslow to help motivate and engage employees in such a way that they provide constructive
criticism and feedback on how best to help Unilever develop in the current challenging
environment. Whilst it is appreciated that management culture and organizational culture is not
something that can be changed overnight, as reliance on technology increases and organizations
must become more adaptable to survive, it is likely that the current culture will be fit to see
Unilever through into the future.

References

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Cheltenham: Edward Elgar.

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2010

Blake, R.; Mouton, J. (1964). The Managerial Grid: The Key to Leadership Excellence. Houston:
Gulf Publishing Co.

Black, Richard J. (2003) Organizational Culture: Creating the Influence Needed for Strategic
Success, London UK.

Cohan, William D., (2009) House of Cards: A Tale of Hubris and Wretched Excess on Wall Street,
[a novel]. New York, Doubleday.

Costanza, R., Graumlich, L.J. & Steffen, W. (eds), (2007). Sustainability or Collapse? An
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