A Decade of Organizational Change at Unilever

A Decade of Organizational Change at Unilever Case Details Discussion Questions

1. Why did Unilever’s decentralized organizational structure make sense from the 1950s through the
1970s? Why did this structure start to create problems for the company in the 1980s?
Decentralization worked because:

• Localization allowed Unilever to adapt to consumer tastes

• Post-war world created ideal economic conditions Company Details • Founded in 1929

• Unilever is one of the world’s oldest multinational corporations • World’s third largest consumer
goods company

• Offers products in food, detergent and personal care • Annual revenue in excess of $50 billion

• Brands are offered in virtually every country

• Unilever originally operated with a decentralized structure

• Unilever realized its structure was working against them (1990s)

• A new regional business group structure is introduced (1996)

• Unilever was reorganized once again (2000) Decentralization created problems because:

• Structure resulted in duplication of business processes, lack of scale of economies and high cost
structure

• Unilever was falling behind its competitors

• Its structure prevented the creation of global brands, consolidation of manufacturing and quick
product development and launches

2. What was Unilever trying to do when it introduced a new structure based on business groups in
the mid-1990s? Why do you think that this structure failed to cure Unilever’s ills? Unilever
attempted to:

• Cut operating costs and speed up development and introduction of new products by streamlining
operations New structure failed because:

• Managers no longer had power to modify products to local preferences

3. In the 2000s Unilever has switched to a structure based on the global product divisions. What do
you think is the underlying logic for this shift? Does the structure make sense given the nature of
competition in the detergents and food business? Unilever attempted to:

• Improve on previous structure by allowing flexibility to adjust to local tastes while still being able
to reduce costs and create global brands New structure made sense because:

• Consumers want well-known and reputable brands while still being able to suit different needs
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