Thy subject Case Study deals with Unilever´s real estate decision on leasing an office at

Canary Wharf or Chiswick, which would mean to move from their current office or

redeveloping the Unilever house in the heart of London and stay at the current location. To

get an effective result the company has to consider how their real estate strategy will

support their corporate strategy. The decision to be made must be consistent with the

corporate strategy to achieve the desired objectives. Although the company's core business

is not real estate, but real estate is a significant asset of their total assets. The first thing to

be made is to analyze the corporates’ strategy in order to find out which real estate strategy

to pursue.

1. Using the Nourse and Roulac (1993) model, identify the overall strategic driving

force and primary real estate strategies for UNILEVER. What recommendations can

you make, based on this model, for the decision to move vs. stay? What

recommendations can you make regarding other operational real estate decisions?

The Nourse and Roulac model (1993) was used to find out which corporate strategy Unilever

is pursuing and to develop a real estate strategy. First the model identifies nine different

driving forces that determine the general orientation of a firm and define its business.

Afterwards a framework is provided to guide the operational decisions and their priority.1

In the present case general counsel Williams is assigned to show a new concept of the

corporates real estate strategy because at the beginning of the 21st century it became apparent

that the current property had significant defects that no longer met the work requirements. All

in all, the office infrastructure was very anonymous, where employees are isolated from each

other and was characterized by an haphazard partionating of offices with poor access to

1
Nourse and Roulac, 1993, The Journal of Real Estate Research
natural light. These poor office conditions were further compounded by poor business

performance, leading to a management rethink and a call for change.

Using the mentioned model, Unilever´s core business is driven by the force of the “Market”.

This type of driving force is defined as a business to search for new services and products in

particular market segments. As Unilever is one of the biggest consumer product producer in

the world and the holding company of many food product, cleaning product and cosmetic

product brands this type of driving fore was analyzed. As a consumer product holding the

company is dependent on the constant release of new and innovative products to cover new

trends and needs.

Once the driving force of the business has been identified, the model can be used to determine

the real estate strategy. In this case the model shows that the primary real estate strategies

would be increasing flexibility and promote sales and selling. However, judging by the case

study, there are differences between Unilver´s goals and the model's recommended strategy.

Unilever's goal is to develop a new sustainable corporate culture, either by removing the

shortcomings of the current property or by moving into a new property.

The recommended strategy to promote sales and selling applies to the company's products,

but since Unilever is only the holding company for many brands that promote themselves, this

strategy does not necessarily fit with Unilever's goal. However, it could be said, that Unilever

wants to enhance the overall reputation of the company through a sustainable corporate
culture and this would also indirectly promote the sales and selling process. Regarding the

increase of flexibility this strategy fits in with the company's objectives. If the property were

to be redeveloped, Unilever would have to rent some floors to other tenants. Since this

strategy involves the conversion of the general office space environment and the multiple use

of space by corporations and others this should be pursued and a redevelopment should be

considered. In addition, when changing the corporate culture, the focus is primarily on the

human recourses, because these are the most important drivers of a company. A changed

working environment should increase the interactivity and productivity of employees.

Since the location is particularly favorable for the employees and the associated history with

the building, I would recommend that Unilever should redevelop the existing building.

Furthermore redeveloping the building as green as possible, meaning to increase the

efficiency would lead to lower operating cost of the building in the long run. The planned

construction of a glass wall would allow natural light to enter the property, thus saving

electricity and heating costs. An open office culture would also increase employee interaction

and also loosen up the hierarchical structures somewhat, as employees can more easily

communicate with managers. Furthermore, Unilever could generate a new source of income

by renting office space to other companies. With a flexible office infrastructure, there would

therefore be no specific refurbishment costs for a specific tenant. These reasons also underline

the recommendation for redevelopment.

Referring to the Nourse and Roulac model, it must be said that Unilever's strategy is to

promote human resources, but this does not correspond to the driving force of the market in

the model. In this driving force, human resource objectives are in a subordinate level. Thus, it

can be said that although Unilever follows the wrong strategy, it also leads to the objectives of

the strategies proposed in the model, namely to increase flexibility and indirectly promote

sales and selling.

Other operational real estate recommendations

The following table provides further recommendations regarding operational real estate

decisions that have an impact on reaching the companies objectives:

Real Estate Strategies Operational Recommendations

Promote HR objectives  creating more common areas to further promote
interactivity (e.g. recreational areas on the rooftop;
cafeteria which offers green food)
 introduce HR measuring instruments to analyze
employee satisfaction and interests
 employee participation in office design
 introduce green areas
 open and closed office with special glass to reduce
noise
Managerial Process  office design that facilitates meeting effectiveness and
promote exchange of knowledge
 change office layout (senior management offices close
to the teams' workplaces)
Reduce Occupancy Cost  monitoring system for operating expenses of the
building (e.g. heating and cooling depending on
requirements and occupancy of the property)
2. Research the global UNILEVER vision. How can it be reflected in the building’s

design? Make sure you provide specific recommendations in addition to the ones

provided in the case study.

Unilever´s global vision is to make sustainable living commonplace because they have set

themselves the task of making the world a better place. They believe that the success of the

company can be increased through social and sustainable commitment and that these values

are the future. For this reason, the company has drawn up a sustainable Living plan that

defines the tasks and responsibilities. These include working for gender equality, climate

justice, waste management, sustainable resources and healthy eating. For the success of the

company, this commitment means reduced costs and a better reputation both in the world and

with customers. To name a few examples the company has empowered 1.85 million women,

reduced 52% CO2 emissions from energy per tonne of production and sourced 56%

agricultural material sustainably.

The mentioned objectives of the Unilever Living Plan mainly regard for the products of

Unilever´s brands. Therefore, these cannot be applied directly to the property but can create

an offer for employees so that they feel comfortable. In addition, measures can be pursued in

the redeveloping process to develop a sustainable building. In the following, design and

operating actions will be explained for the three sections of the redeveloping process to fulfil

the company´s sustainable plan:

 Demolition Process and Logistic

 Building Design & Characteristics

 Interior Infrastructure and Human Resource wellbeing

Demolition Process and Logistic

As already described in the case study, the redevelopment process would require the

demolition of a large part of the existing building, with the exception of the facade. The

development office estimates that about 50% of the existing building will be demolished,

resulting in a large amount of construction waste that will be disposed of or processed. The

following procedures are suggestions for a sustainable demolition and logistical actions for

the redevelopment and refer only indirectly to the design of the building. I think besides

design specific measures the general processes should be considered as well, because they

make up a big part of the redevelopment and have a high emission level.

 recycle the demolition waste and provide it for the construction process

 examination of possibilities for the re- and further use of building parts

 professional deconstruction work with regard to environmental and health

protection (e.g. reducing emission of noise and fine dust)

 separation of materials according to type during demolition/selective

dismantling

 creating a special distribution and production center outside of London to

recycle and pre-produce certain parts (would decrease the number of

shipments to the construction site)

The mentioned procedures would reduce the emission of CO2 during the demolition process

and would thus be in line with the company's sustainability plan.

Building Design & Characteristics

Although the average consumer does not come into contact with Unilever, but rather with the

individual brands, it is important for the development of a new corporate culture to exemplify

the sustainability goals internally, for example in the design of the new HQ. The following

section provides suggestions for a sustainable building design:

  use of recyclable or renewable raw material (e.g. wood, clay for the

insulation, natural fibers)

 examination of modular construction

 third party usability

 usage of renewable energy (e.g. solar systems, heat pumps)

 intelligent heating and cooling systems (integration of the proposed glass

wall on the building)

 comfortable use of public transport

 acoustic comfort and accessibility (e.g. barrier-free)

 building certification (e.g. LEED, DGNB)

Interior Infrastructure and Human Resource wellbeing

As already described in the previous section, it is important to set an internal example of the

sustainability that the company is committed to. Therefore, an offer must be made to

employees, as they are the driving force for the success of the company:

 collaborative working and relaxing spaces (e.g. open floor plans to increase

the interaction between employees)

 cafeteria with healthy food

 on-site gym, wellness center and dentist as proposed

 open working space with access to natural light and fresh air
3. How can a building such as the UNILEVER house and workplace environments in it

affect corporate culture, collaboration, innovation and ultimately economic value?

Provide recommendations for a suitable office workplace design for UNILEVER

employees. In your discussion, include recommendations that are not yet mentioned

in the case study.

Corporate culture is the heart of a company and plays a significant role in the long-term

success. If employees identify with the company's values and standards, they will not consider

leaving the company, but are likely to be more committed and motivated in their work. In

simple terms, a corporate culture can be described as "This is how we do things here".

The OECD defines corporate culture as follows:

“Procedures and processes according to which an organization is directed and controlled. The
corporate governance structure specifies the distribution of rights and responsibilities among
the different participants in the organization – such as the board, managers, shareholders and
other stakeholders – and lays down the rules and procedures for decision-making.” 2

In the case study, Unilever's current corporate culture is described as non-transparent,

hierarchical and isolated, resulting in poor morale and unproductive employees. This can also

be seen in the overall performance of the company, which is why those in charge want to

create a new corporate culture.

To change a corporate culture, both visible and invisible factors must be considered and

changed. Edward T. Hall's model from the tip of the iceberg describes the invisible factors of

corporate culture as those that are internalized and taken for granted in the actions of all

persons involved. These include values shared within the company (such as sustainability

thinking), hidden rules and the relationship between employees. The visible appearances are

only a small part of the iceberg, which are carried outside and can be seen. These include the
2
European Central Bank, 2004, Annual Report: 2004, ECB, Frankfurt
company's reputation, mission statements, strategies and objectives, and the appearance of the

building. Especially the last point of the visible elements of a corporate culture can be

analyzed here.

Basically, the company must take measures that open up the entire pattern of action and

decision-making. A team-oriented corporate culture must be created by increasing the

communication behavior between employees and by giving everyone a certain freedom of

action. These measures increase the flexibility of the workforce and at the same time increase

the employees' identification with the company, which in turn increases productivity.

As described above, such changes can be achieved through a changed and more open office

design. The following table includes recommendations on what such a design could look like:

Office Design Impact on the workforce

Grand atrium (proposed)
Third party usability
Open floor plans
No assigned working spaces
and no special areas/ floors for
the executive management
Collaborative spaces with
special meeting rooms and
creative areas
Adjustable office equipment
Work-free areas
 natural light and breathtaking view over London
leads to an overall wellbeing of the employees
and a commitment to an unique building
 attracts other companies to rent the lower levels
 opens the company and the possibility to learn
from other companies
 enhances employee interaction
 more dynamic office atmosphere
 contact with other employees
 equal treatment of executives with others (final
decisions remain with senior management)
 increases interaction as well
 creative areas to develop new innovative ideas
and business models
 individual and group meeting rooms for
concentrated work alone or together as a team
 tables and chairs
 shows employees the focus on health
 taking time off from work; playing community
games
 increases the feeling of well-being at the
workplace
4. Beside financial and HR considerations, are there any marketing and branding

considerations to support the redevelopment of the historic UNILEVER house?

Discuss.

Not only the transformation of the Unilever house into a sustainable building is an important

step, but also a rethinking of marketing and branding activities can strengthen the

development of a sustainable corporate culture. As Unilever owns many worldwide known

brands in its portfolio, it is of great importance to provide the individual brands with

sustainable characteristics and to market them individually. As marketing methods for this,

reusable or recyclable packaging material can be an option.

Furthermore, it must be Unilever's strategy to stand out uniquely from its competitors. The

site in the heart of London next to the Thames can provide such a unique flagship. By leaving

a large part of the facade in the redevelopment process, the company is able to bring the

historical significance of the building to bear. In addition, this sets an example of preserving a

large part of the building and thus reducing demolition work and dust emission and

maintaining the brilliance of the city. In relation to the building, Unilever can distinguish

itself from other companies, which can be seen as a marketing strategy.

As a company that sells consumer products under various brands around the world, it relies on

a well-functioning research and development team to identify new trends and needs early. In

order to be innovative and respond to new trends, the company could conduct campaigns with

well-known environmental protection associations and support them in their projects. The

newly developed Unilever House could serve as a successful symbol and the company could

hold congresses and events in its own building. By improving the company's overall

reputation, the protests described in the case study would be stopped in front of the building,

especially as this would have been a crucial point in moving to another location. As discussed

in previous assignments, it is recommended that the building gets a LEED certificate of the
highest level. This would demonstrate once again the commitment to sustainability. In

addition, Unilever can be involved in the planning, as they know that this would not be the

case in an existing building in Canary Wharf and Chiswick. There would always be a risk that

the building and its equipment would not be compatible with the new mission statement. This

would possibly lead to the issue starting all over again with new protests.

Regarding the branding, it should be noted that it consists of many small motifs which also

strengthen the commitment to sustainability. Each individual motif reflects a commitment to a

better and sustainable world. With regard to the building, this logo could be placed in front of

the building with a detailed explanation for an average consumer. This would also raise the

company's reputation.

All in all, it has to be said that a redevelopment in the heart of London is the only right

decision. Even if it is the most expensive option of all, the history of the building must not be

forgotten. In addition, activities such as changing the corporate culture, redeveloping the

headquarter and the commitment to sustainability can help the company achieve great long-

term success.