MANAGEMENT PRACTICES OF

UNILEVER SRI LANKA LIMITED

A Report

By

Group 4

SAB/BSc/2017/2/A/20 -M.P.K. Gunathilake

SAB/BSc/2017/2/A/37 -A.N. Pragash

SAB/BSc/2017/2/A/35 -B.C Perera

SAB/BSc/2017/2/A/46 -B.Rukshan

SAB/BSc/2017/2/A/ -W.D. Nayanagani

SAB/BSc/2017/2/A/11 -D.M.K.I . Dinishika

SAB/BSc/2017/2/A/51 -K.P.F.M Silva

SAB/BSc/2017/2/A/52 -G.D.R. Silva

Course: MGT 10225 Principles of Management

Mrs. Thareendra Suraweera

Year 1, Semester 2

School of Accounting and Business

The Institute of chartered Accountants of Sri Lanka

19th June 2018
Table of Content
 ACKNOWLEDGEMENT

We here by thank all who have guided us in different ways to make our group project
a success.

We would like to thank, the teacher in charge Mrs. Thareendra Suraweera for
providing us with this opportunity to do our project on management practices of
Unilever Sri Lanka.

A big thank you goes to the ------------------------------------------------------------------

for providing us with necessary information and for helping us to succeed in our aim.

Sincere thanks to our parents, who always encouraged us in different ways.

 Abstract

This report provides information obtained through company visit regarding the basic
management practices of Unilever Sri Lanka Limited Such as Planning , Organizing ,
Leading and controlling processes. This report includes detailed description of
current practices related to management of the organization , and the critical
evaluation of current management practices of the Unilever Sri Lanka Limited against
theories learned in the classroom.

This report will pay particular attention to the functions of management, management
thinking of the organization, corporate culture and the organizational
environment ,how the organization manages the global environment, purpose and
levels of planning, Strategy management and decision making process, process of
organizing, managing human resource, leadership style of Unilever Sri Lanka Limited
and will highlight major strengths and weaknesses while offering some explanation
for observed areas in management.

This report contains both qualitative and quantitative analysis about Unilever.
Unilever Sri Lanka is one of the biggest FMCG companies in Sri Lanka, with 29
market leading brands in categories such as Home Care, Personal Care and Foods.
Established in Sri Lanka in 1938 with brands such as Sunlight, Lux and Pears Rose,
today Unilever manufactures 95% of its products locally. Unilever’s corporate
purpose is to make sustainable living commonplace. The Unilever Sustainable Living
Plan sets out to decouple the company’s growth from environmental impact, while
increasing its positive social impact. The Plan has three big goals that by 2020 will
help improve people’s health and well-being, reduce the company’s environmental
footprint, and enhance livelihoods across its value chain.

Unilever is a British-Dutch transnational consumer goods company co-headquartered

in London, United Kingdom and Rotterdam, Netherlands. Its products include food,
beverages, cleaning agents and personal care products. It is the world's largest
consumer goods company measured by 2012 revenue, and is also the world's largest
producer of food spreads, such as margarine. It is Europe’s seventh most valuable
company. Unilever is one of the oldest multinational companies; its products are
available in around 190 countries.(Wikipedia)
Section 1:

Work Organization.

Activities:

Unilever Sri Lanka is the leading FMCG Company in Sri Lanka Marketing 22 Brands
in the areas of Laundry, Personal Grooming & Foods, Tea Exporters.

Board of directors:

 Mr Carl Cruz (Chairperson)

 Mr Udayan Dutt (India) (HR Director)
 Mr Surith Perera (Customer Development Director)
 Mrs Ramani Samarasundara (Marketing Director)

 Mr Thalib Caffoor (National Finance Director)

General Information
 Year established -1938
 Legal form -Limited Liability Company

Associations - Ceylon Chamber of Commerce

Import

Area : Central Asia, Asia-Pacific, West. Europe, North America

Country : India, Thailand, Indonesia, China, Germany, United Kingdom, United

States

Export

Area : Central Asia

Country : Maldives, India

Employees

On site 1000-4999 Employees

Unilever is a Franco-Dutch transnational consumer goods company based in London,
the United Kingdom and Rotterdam, the Netherlands. Their products include food and
beverages (around 40% of their income), detergents and personal care products. It is
the largest consumer goods company in the world, measured on 2012 revenue, and is
also the world's largest producer of food products, such as margarine. It is the seventh
most valuable company in Europe. Unilever is one of the oldest multinational
companies; Its products are available in approximately 190 countries.

Unilever has more than 400 brands, with a turnover of over € 50 billion in 2016 and
thirteen brands with sales exceeding one billion Euros: Ax / Lynx, Dove, Omo,
Becel / Flora, Heartbrand ice creams, Hellmann's, Knorr, Lipton , Lux, Magnum,
Rama, Rexona / Degree, Sunsilk and Surf. It is a publicly traded company composed
of Unilever plc, based in London and Unilever NV, based in Rotterdam, but which the
company has established as its main office in Rotterdam. The two companies operate
as one company, with a joint board of directors. Unilever is organized into four main
divisions: food, non-alcoholic beverages (drinks and ice cream), home care and
personal care. It has research and development facilities in the United Kingdom (two),
the Netherlands, China, India and the United States.

Unilever was founded in 1930 by the merger of Dutch margarine producer Margarine
Unie and the British soap producer Lever Brothers. During the second half of the 20th
century, the company increasingly diversified to become a producer of oil and fat
products and expanded its operations worldwide. He has made numerous acquisitions,
including Lipton (1971), Brooke Bond (1984), Chesebrough-Stagni (1987), Miglior
Foods (2000), Ben & Jerry (2000), Alberto-Culver (2010) and Dollaro Shave Club.
(2016). Unilever sold its specialty chemical business to ICI in 1997. In 2015, under
the leadership of Paul Polman, the company began to gradually shift its focus to
health and beauty brands and to move away from food brands to slow growth. .

Unilever plc has a primary listing on the London Stock Exchange and is a component
of the FTSE 100 index. Unilever N.V. has a main list in the next Euro Amsterdam and
is a component of the AEX index. The company is also a luxury of the Euro Stoxx 50
stock index. (Wikipedia)
 Brands | Unilever LTD.
Unilever's products include foods, beverages, cleaning agents and personal care
products. The company owns more than 400 brands, which are organized into four
main categories - Foods, Refreshments, Home Care, and Personal Care.

Food &
Drink Home Care
Personal Care Water Purifier

Why Unilever Sri Lanka LTD ?

Section 2:

Functions of management

Planning

Planning is aimed at the future and decides the direction of a company. It is a rational
and systematic way of making decisions today that will influence the company's
future. It is a kind of organized foresight and corrective retrospective. It foresees the
future and tries to control events. It implies the ability to predict the effects of current
long-term actions in the future.
Why do Organizational planning?

It is a basic premise that shared strategic thinking and behaving are more important
than the completed, written plans themselves. The written plan becomes the reminder
of the agreements and shared strategic thinking. There are many benefits for an
organization to invest time and resources in a planning process. Some of these
benefits are:

• Achieving clarity and agreement on the organization’s mission and vision

• Building a more participative board and membership by being aligned on
the same purpose
• Practicing effective stewardship
 • Anticipating and effectively managing change
• Being strategic in decision-making and problem-solving
• Building on existing strengths of the organization
• Overcoming existing weaknesses
• Responding to opportunities as an organization
• Identifying and blocking threats
• Continuously improving processes and products within the organization
• Maintaining a healthy competitive advantage
• Maintaining a balance between people (relationships), process (the way
things are done), and product (results)

Current practices related to planning in Unilever

A sustainable business plan

Unilever wants its business to expand but identifies that growth at the expense of
people or the environment is unacceptable and commercially unsustainable.
Sustainable growth is the only tolerable model for your business.

Unilever's sustainable life plan (USLP) is fundamental to its business model. It

establishes how we will separate its growth from its environmental impact, while at
the same time increasing its positive social impact.

Your USLP has three main goals:

• Help more than a billion people improve their health and well-being.
• Halve the environmental impact of your products.
• Get 100% of our agricultural raw materials sustainably and improve
people's livelihood across our value chain.

Unilever about their strategy

They believe that sustainable and equitable growth is the only way to create long-term
value for their stakeholders. That’s why they have placed the Unilever Sustainable
Living Plan at the heart of their business model.

What do They mean by sustainable living?

They want to help create a world where everyone can live well within the natural
limits of the planet. They’re putting sustainable living at the heart of everything they
do including through their brands and products, their standards of behavior within and
beyond Unilever, and their partnerships which are driving transformational change
across their value chain.

Driven by their purpose & vision

They have a clear purpose – to make sustainable living commonplace – and a vision
to grow their business while decoupling their environmental footprint from growth
and increasing positive social impact.

Blueprint for sustainable growth

The Unilever Sustainable Living Plan (USLP) provides the detailed blueprint for how
they will achieve sustainable growth, while delivering their purpose and vision. It
covers all aspects of their business, incorporates all their brands and Divisions, and
covers every country they work in. It aims to create change across their value chain –
from their operations, to their sourcing and the way consumers use their products.
And it is designed to drive profitable growth and fuel innovation, in the right way, so
that all their stakeholders benefit.

The Plan, launched in 2010, is built around three big goals and nine pillars. To check
these are still the right priorities, we conduct a materiality analysis every two years.

Improving health and Reducing environmental Enhancing livelihoods

well-being impact

Goal: By 2020 we will Goal: By 2030 our goal is Goal: By 2020 we will
help more than a billion to halve the environmental enhance the livelihoods of
people take action to footprint of the making millions of people as we
improve their health and and use of our products as
 well-being. we grow our business. grow our business.

Pillars: Pillars: Pillars:

Health & hygiene Greenhouse gases Fairness in the workplace
Improving nutrition Water use Opportunities for women
Waste & packaging Inclusive business
Sustainable sourcing

They have long known that growth and sustainability are not in conflict – and they
now have evidence to prove this. Their four-point framework shows how the USLP
drives value for our business:

Four-Point Framework

• More growth: sustainability creates innovation opportunities, opens up new

markets and allows our brands to connect with consumers in new ways.
Unilever's Making Purpose Pay research found that over 50% of consumers
want to choose brands that are more sustainable – our brands are well-placed
to capitalize on this growth opportunity.
• Lower costs: by cutting waste and using resources carefully we create
efficiencies, cut costs and improve margins, while becoming less exposed to
the volatility of resource prices. For example, by using less energy we avoided
energy costs in our factories of over €490 million since 2008. And by using
fewer materials and producing less waste we have avoided costs of over €260
million over the same period.
• Less risk: operating sustainably helps us future-proof our supply chain against
the risks associated with climate change and long-term sourcing of raw
materials. By 2017, 56% of our agricultural raw
materials were sustainably sourced.
• More trust: placing
sustainability at the heart of our
business model strengthens our
relationships. It helps us maintain
 our value and relevance to consumers, while inspiring Unilever’s current and
future employees. For example, in 2017, we maintained our status were as the
Graduate Employer of Choice in the fast-moving consumer goods sector
among 44 of the 60 countries we recruit from.

Unilever's generic strategy and intensive growth strategies

Unilever's generic strategy (based on the Michael Porter model) creates a competitive
advantage by fulfilling the specific needs and preferences of customers. In the Porter
model, generic strategies are used to guarantee the organizational competitiveness
need for the growth and resilience of the business. In the case of Unilever, the
competitive advantage is based on product development attempts that integrate
research to meet market needs. In addition, the company preserves growth through an
appropriate combination of intensive strategies. Unilever changes the priority of its
intensive growth strategies based on the conditions of the consumer market. The
overall blend of this generic competitive strategy and intense growth strategies
ensures Unilever's continued success in its global operations.

Using a generic strategy (Porter model) that responds directly to market needs,
Unilever maintains a competitive advantage in the global consumer goods sector. This
competitive advantage furthermore allows Unilever to implement intensive growth
strategies that meet the needs of the business, and thereby achieve supporting growth

The Unilever generic strategy (Porter model)

Unilever uses broad differentiation as a generic strategy of competitive advantage.
The main objective of this generic strategy is the emphasis on the characteristics or
characteristics that distinguish its products compared to its competitors. For example,
Unilever produces personal care products such as Dove cream bars to meet
consumers' needs for non-aggressive or dry soaps. Even though their relatively high
sales prices, these Unilever products are competitive because they vary from most
soaps that concentrate more on cleaning than on hydration. In this strategy, the
organization magnetizes consumers to specially designed products. In consequence,
this generic strategy is in accordance with Unilever's vision statement and mission,
which targets to aid global sustainability and increase vitality in the lives of
consumers, respectively.

A strategic goal based on the generic competitive differentiation strategy is Unilever's

growth through intense efforts in product development. This goal focuses on
developing products that stand out from the competition and attract clients. In
contrast, a financial objective attached to the generic strategy is the increase in
Unilever's revenue in developing countries, which provide great opportunities for
growth. These opportunities are detected in the Unilever PESTEL / PESTLE analysis.
The mixture of these strategic objectives guides to a competitive advantage reflected
through products and a solid financial achievement in the consumer market.

Unilever intensive strategies (Intensive growth strategies)

Market Penetration Unilever applies market penetration as the main strategy of

intense growth. In this intensive strategy, the company increases sales volume to
improve revenues and the growth of the corresponding business. as an
exemplification, in the home care market, Unilever competitively sells its products in
current markets, such as the United States and Canada. These aggressive attempts
increase the company's ability to grab customers from competing home care
companies. Unilever effectively applies this intensive strategy using the generic
differentiation strategy to make its products more competitive and attractive than
other competitors. A strategic objective linked to this intensive strategy is the growth
of the business through the aggressive marketing of Unilever products in the global
consumer goods market.
Product Development Product development works as an intensive secondary
strategy that Unilever uses for business growth. The company applies this strategy of
intense growth by introducing new products that meet the needs of consumers. For
example, over time new or completely new versions of Unilever personal care
products are launched to maintain or increase the company's market share. This
strategy of intense growth is in line with the company's generic differentiation
strategy to achieve competitive advantages in the consumer goods sector. For
example, differentiation requires the exclusivity of the product, which is applied in the
Unilever product development processes. This intensive strategy leads to the strategic
objective of growing the company through continuous product innovation. This
innovation improves the product mix in Unilever's marketing mix.

Diversification Unilever uses diversification as a support strategy for intensive

growth. This intensive strategy focuses on creating new businesses to grow the
business. For example, to achieve diversification, Unilever acquires other companies
over time, such as the acquisition of Sara Lee Corporation's personal assistance
business in 2009-2010. The strategy of generic competitive differentiation supports
this strategy of intensive growth ensuring that the brands acquired by Unilever offer
unique characteristics that attract the target consumers. A strategic objective related to
this intensive strategy is to achieve growth by continuing the trend of mergers and
acquisitions of the company. This trend strengthens Unilever's reach in the global
consumer goods sector.

Market development Market development is used as an intensive growth support

strategy in the Unilever business. In this intensive strategy, the company grows by
entering new markets or market segments. For example, Unilever can grow by
marketing its current products as a new solution for unmet needs in certain market
segments, such as childcare needs. However, the company already has a significant
presence in almost all segments of the consumer market worldwide. Therefore, this
intensive growth strategy has only a secondary role in the Unilever business. The
generic differentiation strategy supports this intensive strategy creating a competitive
advantage, based on the uniqueness of the product needed to successfully access new
market segments. A strategic goal based on market development is the growth of
Unilever through the implementation of marketing campaigns that highlight other
potential benefits of its current products

Analysis

Our Findings are-

• Unilever is focusing more on sustainable growth than profit,

• Decreasing environment pollution in manufacturing goods and
products,
• Increasing positive social impact,
• Minimizing direct impact on nature and improving hygiene, nutrition,
opportunities and health for communities,
• Trying to get the newly emerging markets

Unilever's Vision Statement

“To make sustainable living commonplace. We believe this is the best long-term way
for our business to grow.”

The following components are notable in Unilever's vision statement:

1. Sustainable common life

2. The best long-term way
3. Business growth

Common and sustainable life is a central component in Unilever's corporate

declaration. This component shows the company's efforts to change its products to
adapt to current market conditions. For example, through sustainable design for
personal care and home care products, Unilever helps consumers achieve their goals
to integrate sustainability into their lives. The company vision also states that
common sustainability is the best long-term way for the business. Unilever
understands the importance of sustainability and other market trends that shape the
industry. Furthermore, the vision statement reflects the company's vision of
sustainability as a way to maintain business growth. This vision statement is aligned
with Unilever's corporate social responsibility strategy to reach out to stakeholders in
the consumer goods sector.

Unilever's Mission Statement

“to add vitality to life. We meet everyday needs for nutrition, hygiene and personal
care with brands that help people feel good, look good and get more out of life.”

The following are the important components in Unilever's mission statement:

1. Add vitality to life

2. Meet the daily needs of nutrition, hygiene and personal care
3. Help people feel good, look good and get more out of life

Adding vitality to life is a general indicator of corporate strategy in Unilever's

corporate mission. This vitality is the value that consumers can expect from

the company's products. The company mission also specifies aspects of life in which
that vitality is added. For example, Unilever's food products meet the nutritional
needs of consumers in terms of nutrition. Moreover, through these products, the
company attracts customers who want to feel good, look good and get more out of
life. Product type mission statement specifications provide a basis for the combination
of products in the Unilever marketing mix.

Unilever company vision and mission: analysis and recommendations

Unilever's vision statement implies the desired condition to be a leader in providing

sustainable life to customers through consumer goods. However, the declaration does
not specify the desired condition of the company as a commercial organization. A
solid statement of business vision contains details on the desired future state of the
organization. For example, it is necessary to specify the company's market position in
the future, to guide organizational development. Therefore, a recommendation for
Unilever's vision statement is to improve it by including more information on the
market position or a leadership role in the consumer goods sector.

The mission of the Unilever mission includes detailed information about what the
company does and should do. For example, the company adds vitality to life through
products that meet the needs of consumers in terms of nutrition, hygiene and personal
care. In this sense, the corporate mission statement complies with the standards that
require specificity in general strategic approaches. However, one recommendation is
to improve Unilever's mission statement by adding more information on how the
company strategically reaches its goals to add vitality to consumers' lives.

BCG Matrix Analysis

Now different kind of products BCG Matrix Analysis from Unilever is presented

Star Products: High growth rate and High

Market share

• Sunsilk

• Lux

• Fair & Lovely

Cash Cow Products : Low growth rate and

High market share

 Surf Excel
 Lipton
 Lifebuoy

Question Marks Products :High Growth Rate Low Market Share

 Rexona
 Dove
 Ponds

Dog Products : Low Growth Rate Low Market Share

 Vaseline
 Lifebuoy Shampoo

Analysis And Recommendation of BCG matrix

 sunsilk, fair & Lovely, Lux are in a very well position and they needs to
sustain their market and growth,
  Surf Excel , Lipton, Lifebuoy are well in market share but low in growth, so
this need some priority and modifications,
 Dove , Rexona , Ponds are having high growth but their share prices is low ,
so they need some investment,
 Lifebuoy Shampoo And Vaseline are facing some real problems in Sri Lankan
market, their growth and market share both is low. They need some serious
marketing and product promotions to survive otherwise these product
production should be stopped before any huge loss.

Unilever’s SWOT Analysis

Unilever is a leading consumer goods business in the global market. A SWOT

analysis of the company highlights business strengths that ensure long-term success.
The SWOT Analysis model identifies the relevant strengths and weaknesses (internal
strategic factors) and the opportunities and threats (external strategic factors).
Unilever’s SWOT analysis shows significant opportunities that the company can use

for further international growth and expansion. The business is in a strong position to
withstand the threats in its external environment. However, Unilever must consider all
of the factors outlined in this SWOT analysis to guide strategic formulation for global
operations.

A SWOT analysis of Unilever depicts the conditions of the business, as well as its
external environment. Strategies based on business strengths and market opportunities
can boost Unilever’s performance in the long term.

Unilever’s Strengths (Internal Strategic Factors)

Unilever’s organizational and business strengths are identified in this section of the
SWOT analysis. Strengths are internal strategic factors based on the company’s
conditions, such as human resources, production processes, organizational structure
and investments. The following strengths are significant in Unilever’s consumer
goods business:

1. Strong brands
2. Broad product mix
3. Economies of scale
 4. Strong global market presence

Unilever has some of the strongest brands in the consumer goods industry. This
strength enables the company to penetrate markets and effectively compete against
other firms. The broad product mix shows the extent of Unilever’s business growth.
For example, the company has increased its product portfolio through years of
mergers and acquisitions, leading to organizational growth and corresponding
increases in revenues. On the other hand, economies of scale support production
efficiency necessary for competitive pricing strategies, as shown in Unilever’s
marketing mix. Through years of international expansion, the company has also
increased its market presence, which is a strength that reinforces brand popularity.
The internal strategic factors in this section of Unilever’s SWOT analysis show
strengths that the company can use to sustain global growth and success in the
consumer goods market.

Unilever’s Weaknesses (Internal Strategic Factors)

Despite its strong market position, Unilever has weaknesses that limit its potential
growth. This section of the SWOT analysis presents the internal strategic factors that
impose barriers to organizational and business development. Unilever must address
the following weaknesses:

1. Imitable products
2. Limited business diversification
3. Dependence on retailers

One of Unilever’s weaknesses is the imitable nature of its products. For example,
even though the company heavily invests in its product development processes, other
firms can imitate Dove and Rexona products. Also, in spite of its broad product mix,
Unilever is weak because of limited diversification in businesses outside the
consumer goods industry. Moreover, the company lacks direct strong influence on
consumers, considering that retailers are the ones who directly affect buyers. Thus,
based on the internal strategic factors in this section of the SWOT analysis of
Unilever, the weaknesses emphasize the importance of diversification, innovation,
and enhanced marketing efforts.
Opportunities for Unilever (External Strategic Factors)

Unilever must take advantage of growth opportunities in consumer goods markets

around the world. This section of the SWOT analysis determines such opportunities
or external strategic factors that can facilitate business development. The following
opportunities are significant in Unilever’s external environment:

1. Business diversification
2. Product innovation for health
3. Business enhancement for environmental conservation
4. Market development

Unilever has opportunities to diversify by entering businesses outside the consumer

goods industry. Diversification reduces market-based risks and improves business
resilience. On the other hand, product innovation can increase Unilever’s product
attractiveness by addressing the needs of increasingly health-conscious consumers.
Similarly, the company has an opportunity to make its business more sustainable and
environmentally friendly to attract and retain environmentally conscious consumers.

In addition, market development can grow Unilever’s business by increasing revenues

from the sale of its current products in new market segments. For example, the
company can market its Lipton products as health drinks for consumers with special
diets. The external strategic factors in this section of Unilever’s SWOT analysis point
to major opportunities to grow the business despite its weaknesses.

Threats Facing Unilever (External Strategic Factors)

A variety of external factors can limit or reduce Unilever’s business performance. The
SWOT Analysis model considers these external factors as threats that the company
must strategically tackle. The following are the threats relevant to Unilever’s
consumer goods business:

1. Tough competitive rivalry

2. Product imitation
3. Increasing popularity of retailers’ house brands
Unilever faces tough competition, which is a threat based on the strengths of other
firms in the industry. Competitors threaten to reduce the company’s market share and
corresponding financial performance. Product imitation is also a major threat against
Unilever. For example, local firms can develop products highly similar to Unilever’s.
Also, retailers impose a threat by selling their own brands. These brands are known as
house brands, store brands or generic brands. For example, Costco uses Kirkland
Signature as a house brand, and Wal-Mart has its own house brands that directly
compete against Unilever’s products. Based on the external strategic factors in this
section of the SWOT analysis of Unilever, strategies must focus on improving the
company’s competitive advantage.

Unilever’s SWOT Analysis – Recommendations

This SWOT analysis of Unilever highlights a number of internal and external strategic
factors that managers must include in strategy development. For example, the
weaknesses of limited business diversification and imitable nature of products are
significant because they influence business stability and performance. In this regard, a

recommendation is to diversify Unilever’s business through acquisition of related

firms not in the consumer goods industry. Also, Unilever needs to consider product
innovation as an opportunity to boost business performance. It is recommended that
the company must use its strengths, such as economies of scale, for product
innovation to address competition and the threat of imitation.

Unilever Formulating Business-level Strategy

Unilever’s Five Forces Analysis (Porter’s Model) & Recommendations

Unilever effectively competes in the global consumer goods market. A Five Forces
Analysis (Porter’s model) of the company shows the need to strategically prioritize
competition and the bargaining power of customers in the industry environment.
Michael Porter’s Five Forces Analysis model is a management tool for understanding
the impacts of external factors in a firm’s environment. In Unilever’s Five Forces
Analysis, competitive rivalry is viewed as one of the strongest external forces, along
with the bargaining power of buyers. To ensure long-term success, the company must
address the issues related to these forces. Unilever’s market position and
organizational strengths are adequate to address such forces.

A Porter’s Five Forces analysis of Unilever identifies competition and consumers as

the most important forces in the company’s industry environment. The external
factors related to these forces have a direct impact on Unilever’s financial
performance in the consumer goods market.

Overview: Unilever’s Five Forces Analysis

Unilever deals with a wide variety of external factors, considering the extent of its
operations in the global consumer goods market. However, as shown in this Five
Forces analysis, such external factors lead to variations in the intensities of the five
forces impacting the business. The following are the intensities of the five forces in
affecting Unilever:

1. Competitive rivalry or competition

2. Bargaining power of buyers or customers
3. Bargaining power of suppliers
4. Threat of substitutes or substitution
5. Threat of new entrants or new entry

Recommendations. This Porter’s Five Forces analysis highlights competitive rivalry

and the bargaining power of buyers as the issues with the highest intensity in affecting
Unilever’s business. The bargaining power of suppliers is also important, but has
limited impact on the company. The threats of substitutes and new entry have minimal
effect on Unilever and the consumer goods industry environment. In this regard,
strategic action must prioritize competition and the bargaining power of customers. A
recommendation is for Unilever to further build its competitive advantage through
product innovation. For example, the company can increase its investment to produce
better and more competitive variants of its current personal care and home care
products. This effort should reflect Unilever’s generic strategy and intensive growth
strategies, which emphasize product uniqueness as a strategic approach. It is also
recommended that the company must enhance its customer relations to attract and
retain more consumers. For example, in applying Unilever’s organizational culture of
performance on customer relations processes, higher quality request and complaint
processing can improve consumers’ perception on the company and its brands. The
company has the strengths needed to strategically address these issues (Read:
Unilever’s SWOT Analysis: Strengths, Weaknesses, Opportunities, Threats)

Competitive Rivalry or Competition with Unilever

Competition is a major force in Unilever’s industry environment. This section of the

Five Forces analysis identifies the external factors that present the impact of firms on
each other. The strong force of competitive rivalry against Unilever is based on the
following external factors and their intensities:

• High number of firms

• High aggressiveness of firms
• Low switching costs

There are many firms operating in the consumer goods industry. This external factor
imposes a strong force on Unilever. In addition, these firms are generally aggressive,
further adding to the intensity of competition. Unilever also experiences tough
competition because of low switching costs. For example, it is easy for consumers to
switch from one firm to another. Thus, a high level of competition is shown in this
section of Unilever’s Five Forces analysis, highlighting the need to consider
competitive rivalry as a high-priority force in the company’s industry environment.

Bargaining Power of Unilever’s Customers/Buyers

Unilever’s business and industry environment depend on the response of consumers

to its products. The influence of buyers on business performance is considered in this
section of the Five Forces analysis. Unilever must address the following external
factors that lead to the strong force of the bargaining power of customers:

• Low switching costs

• High quality of information
• Small size of individual buyers

The low switching costs make it easy for consumers to transfer from Unilever’s
products to other companies’ products. This external factor contributes to the strong
intensity of the bargaining power of buyers. In addition, consumers have access to
high quality of information about consumer goods, making it even easier for them to
decide when transferring from Unilever to other providers. For example, buyers can
compare products based on online information. The small size of an individual
consumer’s purchases has minimal impact on Unilever’s profits. However, the low
switching costs and high quality of information outweigh this third external factor in
the industry environment. Based on this section of the Five Forces analysis, the
bargaining power of customers is one of the strongest forces affecting Unilever’s
consumer goods business.

Bargaining Power of Unilever’s Suppliers

Suppliers impact Unilever’s industry environment by affecting the level of supply

available to firms. This section of the Five Forces analysis presents the influence of
suppliers on companies. The following are the external factors that contribute to the
moderate force of the bargaining power of suppliers on Unilever:

• Moderate size of individual suppliers

• Moderate population of suppliers
• Moderate overall supply

While Unilever has large suppliers like foreign firms that supply paper and oil, the
average supplier is moderate in size. This external factor imposes a moderate intensity
force on the consumer goods industry environment. In addition, the moderate
population of suppliers enables them to impose significant but limited influence on
firms like Unilever. Similarly, the moderate level of the overall supply adds to such
significant but limited influence of suppliers. For example, any supplier’s change in
production level leads to significant but limited change in the availability of raw
materials used in Unilever’s business. Other firms in the industry are similarly
affected. As shown in this section of the Five Forces analysis of Unilever, the
bargaining power of suppliers is a significant but moderate consideration in the
consumer goods industry environment.
Threat of Substitutes or Substitution

Substitutes can reduce Unilever’s revenues and the strength of firms in the consumer
goods industry environment. The impact of substitution is determined in this section
of the Five Forces analysis. In Unilever’s case, the following external factors are
responsible for the weak force of the threat of substitution:

• Low switching costs

• Low substitute availability
• Low performance to price ratio of substitutes

The low switching costs enable consumers to easily use substitutes to Unilever’s
products. This external factor imposes a strong force on the company and the
consumer goods industry environment. However, the overall impact of substitution is
weakened because of the low availability of substitutes. For example, it is easier to
access Unilever’s Close-Up toothpaste from grocery stores than to obtain substitutes
like homemade organic dentifrice. In relation, most substitutes have low performance
with minimal or insignificant cost difference when compared to consumer goods
readily available in the market. This condition makes Unilever’s products more
attractive than substitutes, thereby further weakening the intensity of the threat of
substitution. This section of Unilever’s Five Forces analysis shows that the threat of
substitutes is a minor issue in the business.

Threat of New Entrants or New Entry

Unilever competes with established firms as well as new firms in the consumer goods
market. This section of the Five Forces analysis considers the influence of new firms
on the industry environment. The following external factors create the weak force of
the threat of new entrants against Unilever:

• Low switching costs

• High cost of brand development
• High economies of scale

The low switching costs enable new entrants to impose a strong force against
Unilever. For example, consumers can easily decide to try new products from new
firms. However, it is costly to build strong brands like Unilever’s. This external factor
weakens the intensity of the threat of new entrants against the company. Also,
Unilever takes advantage of high economies of scale, which support competitive
pricing and high organizational efficiencies that new firms typically lack. As a result,
the company remains strong despite new entrants. Based on this section of the Five
Forces analysis, the threat of new entry is a minor concern in Unilever’s industry
environment.

Section 3:
Organizing

Organizing is the function of management that involves developing an organizational

structure and allocating human resources to ensure the accomplishment of objectives.
The structure of the organization is the framework within which effort is coordinated.
The structure is usually represented by an organization chart, which provides a
graphic representation of the chain of command within an organization. Decisions
made about the structure of an organization are generally referred to as organizational
design decisions.

Organizing also involves the design of individual jobs within the organization.
Decisions must be made about the duties and responsibilities of individual jobs, as
well as the manner in which the duties should be carried out. Decisions made about
the nature of jobs within the organization are generally called “job design” decisions.

Organizing at the level of the organization involves deciding how best to

departmentalize, or cluster, jobs into departments to coordinate effort effectively.
There are many different ways to departmentalize, including organizing by function,
product, geography, or customer. Many larger organizations use multiple methods of
departmentalization.

Unilever’s Organizational Structure

Unilever’s corporate structure is responsible for ensuring adequate support for product
innovation in the firm’s global business. A company’s organizational structure or
corporate structure is the design that defines the arrangement and systems used to
build and interconnect various organizational components, such as offices and teams.
Unilever’s organizational structure adapts to changes in the consumer goods industry
and global market. At present, the company maintains a structure that addresses
corporate needs in terms of managing product types across the world. As a leading
consumer goods firm, Unilever has an organizational structure that suitably supports
diversified global operations.

With an organizational structure that enables effective product development, Unilever

continues its position as one of the biggest consumer goods companies in the world.
Such organizational structural design ensures Unilever’s continuing success despite
the complexity of its global operations.

Features of Unilever’s Organizational Structure

Unilever has a product type divisional organizational structure. The organization is

divided into components based on their product focus. For example, the company has
a division for personal care products and another division for home care products. The
following are the main characteristics of Unilever’s organizational structure:

1. Product type divisions

2. Corporate executive teams
3. Geographic divisions

Definition of Divisional Structure

Divisional Structure is defined as an organizational structure that clubs together

various functions on the basis of product lines and regional divisions. Further, each
division of the organization has its own essential resources and functions like
production, marketing, purchase, human resource, etc. In this type of organizational
structure, the divisions are headed by the general manager who controls the regular
business activities. The general manager is accountable to the top management of the
organization for the performance of their division.

Product Type Divisions. A product type division functions as a unit that enables
Unilever to manage the development, manufacturing, distribution and sale of its
consumer goods. For example, corporate managers use this feature of the
organizational structure to match markets needs with appropriate products. An
advantage of this structural characteristic is its facilitation of the company’s efforts to
apply product differentiation, which is Unilever’s generic strategy for competitive
advantage. This corporate structure is beneficial, especially because the company
already has a diverse portfolio of products. Unilever maintains the following product
type divisions in its organizational structure:

Advantages Disadvantages
 Places attention and effort on  Requires more persons with general
product line abilities
 Facilitates use of specialized capital,
facilities, skills, and knowledge  Tends to make maintenance of
 Permits growth and diversity of economical central services difficult
products and services
 Improves coordination of fun  Presents increased problem of top
 Places responsibility for profits at the management control
division level
 Furnishes measurable training
ground for general managers

1. Personal Care
2. Foods
3. Home Care
4. Refreshment

Corporate Executive Teams. Corporate teams are a secondary characteristic of

Unilever’s organizational structure. This structural feature is based on business
functions. For example, Unilever has a team for finance and another team for
marketing communications. These teams make up the Unilever Leadership
Executive (ULE) group. The following are the corporate executive teams in
Unilever’s organizational structure:

1. Chief Executive
2. Human Resources
3. Research & Development
4. Supply Chain
5. Refreshment
6. Personal Care
7. North America
8. Home Care
9. Finance
10. Legal
11. Foods
 12. Marketing & Communications
13. Europe

Geographic Divisions. Geographic divisions are a minor feature of Unilever’s

organizational structure. The company uses this structural characteristic to support
regional strategies. For example, Unilever’s marketing strategies for Europe are
different from strategies applied for Asian consumer goods markets. Also, this
corporate structure feature is used to analyze the company’s financial
performance. The following geographic divisions are maintained in Unilever’s
organizational structure:

1. Asia/AMET/RUB (Africa, Middle East, Turkey; Russia, Ukraine, Belarus)

2. The Americas
3. Europe

Advantages Disadvantages
 Places responsibility at a lower level  Requires more persons with general
 Places emphasis on local markets and manager abilities
problems  Tends to make maintenance of
 Improves coordination in a region economical central services difficult
 Takes advantage of economies of and may require services such as
local operations personnel or purchasing at the

 Better face-to-face communication regional level

with local interests  Increases problem of top management

 Furnishes measurable training ground control

for general managers

Unilever’s Corporate Structure – Implications, Advantages & Disadvantages

An advantage of Unilever’s organizational structure is its support for product
development and innovation. For example, each product type division has its semi-
autonomous capabilities to develop products that directly suit the needs in consumer
goods market segments. This corporate structure is also advantageous because it
enables Unilever to differentiate its products despite the large size of its global
operations.

A disadvantage of Unilever’s organizational structure is its minimal support for

regional strategic implementation. Even though geographic divisions are one of its
structural features, the company focuses more on product type divisions. As a result,
there is limited support for market-specific or regional strategic reforms. Thus, to
improve this organizational structure, a recommendation is that Unilever must
increase its emphasis on geographic divisions to empower regional managerial teams.
Such structural change improves strategic effectiveness in regional consumer goods
markets.

Unilever Managing Human Resources

Unilever is one of the companies that have set examples of efficient human resource
management. The company focuses greatly on human rights and ensures that
compliance with human rights is carried out through its positive assurance process. In
order to learn about the perspective of its employees, Unilever carried out self-
assessments of employees, external audits, and trainings. The strategic management
of Unilever realizes that happiness among employees directly influences the success
and growth of its business.

Unilever has initiated numerous campaigns internationally that strengthen its HRM
strategy and enhance the motivation of employees. In 2013, Unilever held a global
‘Winning with Integrity’ week that comprised of surveys and interviews regarding
human rights, and it encouraged the suppliers of Unilever to operate to the standard
set by the company. This campaign was continued in the form of the ‘speaking up’
initiative in 2014, which also helped the company learn the concerns of employees
around the world.

In 2013, Unilever also launched a ‘Social Impact Hub’ on its employee portal which
helped the company introduce its employees to social activities. This had a positive
impact on the society and linked the business with its corporate social responsibility.
The hub also included information regarding human rights in order to help the
employees learn about their rights in the workplace.

Apart from the international human resource campaigns, the local subsidiaries of
Unilever also carry out activities that are worthy of note. For example, Unilever Klev
recently installed a device that tracked employee motivation and job satisfaction on a
daily basis. The employees were required to input their mood to the device every day
before exiting, and this information helped the management identify whether the
employees were satisfied or dissatisfied.

Recruitment of Unilever

Unilever collects their staffs by two process. The process is given below

1. Recruiting for peoples under management trainee office workers level

2. Recruiting for peoples above management trainee office workers level

Recruiting for peoples above management trainee office workers level involves five
stages

o Curriculum Vitae Collection

o Writing test
o Day Long Screening
o Final Interview
o Medical checkup
1. Curriculum Vitae Collection

The first thing applicant must do is complete the application form, which allows him
to present a complete picture of his talents, interests and ambitions. The most
remarkable parts are-

 Must answer all the question,

 At each stage of the recruitment process Unilever reviews the Unilever
competencies,
 Exploring the motivation for applying for the specific business area and for
Unilever,
 Individual achievement.

2. Writing test

In this stage applicants take part in a writing test. Here Mathematical, General
Knowledge and English skills are being tested.

3. Day Long Screening

This is followed by a full day assessment, which consists of a variety of exercises,

which include:

1. Group Discussion
2. Case Analysis
3. Presentation

4. Final Interview

This is the final stage of the recruitment process. The senior officers take a final
interview and try to sort out the most capable person for the job.

5. Medical Checkup
At last a medical checkup is done to find if the person is carrying any fatal disease or
not

Training Systems

Unilever only follows two types of system for the training of the new recruiting
officers.

i. Mentoring and coaching

Employees work with an experienced worker who provides information, support, and
encouragement; also called apprenticeships in certain industries.

ii. Experiential exercise

Employees participate in role playing, simulations, or other face-to-face types of

training.

iii. Classroom lectures

Employees attend lectures designed to convey specific information. This course
includes a month long training program.

Appraisal Methods

It is meant to be the very critical part of this steps. Making a appraisal report is very
challenging. Some of the common methods that are used by the Unilever managers
are given below:

i. Graphic Rating Scale

Popular method that lists a set of performance factors and an incremental scale;
evaluator goes down the list and rates employee on each factor

+Provides quantitative data; not time-consuming

-Doesn’t provide in

-depth information on job behavior

ii. Written Essay

Evaluator writes a description of employee’s strengths and weakness, past

performance, and potential; provides suggestions for improvement.

+ Simple to use

-may be better measure of evaluator’s writing ability than of employee’s actual

performance

iii. BARS (behaviorally anchored Rating Scale)

Popular approach that combines elements from critical incident and graphic rating
scale; evaluator uses a rating scale, but items are examples of actual job behaviors

+ Focuses on specific and measurable job behaviors

-Time-consuming; difficult to develop

iv. Multi-person comparison

Employees are rated in comparison to others in work group

+ Compares employees with one another

-Difficult with large number of employees, legal concerns

Advantages of Keeping Track of Employee Motivation

In this age of highly competitive business environments, the workforce has become
increasingly fluid, and it has become a challenge for organizations to retain their
valuable employees. In such a scenario, one of the most effective ways to reduce
employee turnover is to ensure that the level of motivation of employees is
maintained continuously at a high level. This results in high job satisfaction and high
organizational commitment, which keeps the employees from switching to other
organizations.

Organizations such as Unilever have implemented innovative ways to ensure high

employee motivation, and the example of Unilever Klev is one of those innovative
methods. At the core of all of Unilever’s strategies, was the extensive use of software
technology that made communication easy within the company. Businesses, both
small and big, can take a tip from Unilever’s example regarding how using the right
tools and strategies gets the company better employee satisfaction data. Tracking
employee satisfaction and ensuring continuous communication with software driven
employee scheduling helps the enterprise management devise impactful HR
strategies, no matter the size of the company.

Important Take Aways

The aim should be to use these software and tools towards the goal of achieving
employee satisfaction. This is not so difficult when interfaces are employee and
management friendly. Such software centric approaches help you schedule,
communicate, and manage part-time employees and freelancers as well. Thus, the
approach used by Unilever is resonant with what small businesses and enterprises are
looking to accomplish through the use of similar tools and strategies.
The strong financial performance of Unilever, its impressive human resource
strategies, and valuable workforce have had a positive impact on the stock
performance of the company. Considering the positive trend in revenue and
profitability, it can be said that the net income of Unilever will continue to increase in
the prospective periods, which will have a positive impact on the stock performance
of the company. In light of this information, it can be said that Unilever stock is a
‘buy’.

Section 4:
Leading
The Leading function is concerned with leadership, communication, motivation and
supervision so that the employees perform their activities in the most efficient manner
possible, in order to achieve the desired goals.

The leadership element involves issuing of instructions and guiding the subordinates
about procedures and methods.
The communication must be open both ways so that the information can be passed on
to the subordinates and the feedback received from them.

Motivation is very important, since highly motivated people show excellent

performance with less direction from superiors.

Supervising subordinates would lead to continuous progress reports as well as assure

the superiors that the directions are being properly carried out.

Unilever's Leaders

Paul Polman

Chief Executive Officer

Paul Polman has been CEO of Unilever since January

2009. Under his leadership Unilever has an ambitious vision to fully decouple its
growth from overall environmental footprint and increase its positive social impact
through the Unilever Sustainable Living Plan.

Dr Marijn Dekkers

Chairman, Unilever N.V. and PLC

Dr Marijn Dekkers was appointed Chairman of Unilever in April 2016. He is the

Chair of Unilever’s Nominating and Corporate Governance Committee and is also a
member of Unilever’s Compensation Committee.
Graeme Pitkethly

Chief Financial Officer

Graeme Pitkethly, Chief Financial Officer, was appointed an Executive Director to

the Boards of Unilever N.V. and Unilever PLC in April 2016.

Carl Cruz, chairman at Unilever Sri Lanka

Carl Cruz assumed duties as Chairman of Unilever Sri Lanka from March 1, taking
the helm from his predecessor, Shazia Syed who has returned to Pakistan to assume
her duties as the Chief Executive Officer of Unilever Pakistan, the company
announced this week.

Mr. Cruz comes from the Philippines, where he last served as the Vice President of
Customer Development for Unilever Philippines. Under his leadership, the function
was transformed into an execution and talent powerhouse for the business, while
simultaneously achieving sustainable double digit growth.

Joining Unilever immediately after graduating from university in 1992, he began his
career in General Trade before eventually becoming the company’s first General
Trade Development Manager.

Speaking about the business he has inherited, Mr. Cruz said, “Sri Lanka is an
important market for us and these are exciting times for the country. Over the last two
years, the Unilever Sri Lanka team has worked diligently to ensure the growth of the
business and delivered exceptional results. We have the right mindset and ambition to
capitalize on the current situation

Unilever -Leading

Leading is the art or process of influencing people so that they will strive willingly
and enthusiastically toward the achievement of group goals. The leadership of UBL is
somewhat different. In our analysis we got every possible positive leadership
categories and may be this on of the base point of their success

Charismatic Leadership

Charismatic leaders are essentially very skilled communicators individuals who are
both verbally eloquent, but also able to communicate to followers on a deep,
emotional level. They are able to articulate a compelling or captivating vision, and are
able to arouse strong emotions in followers. In our appointment we found out that
some leaders are very charismatic and they are very successful in their ways.

Characteristics of Charismatic Leadership

Some of the primary characteristics of charismatic leadership include:

 True charisma is a measure of a person's maturity and character

 Charismatic leaders have exceptional communication skills
 Charismatic leaders know how to listen to the concerns of their employees
 Flash works for a while, but eventually people want something substantive
 Charisma is an important, but not essential, element of success
 Charismatic Leadership Democratic Leadership Transformational Leadershi

Democratic or Participative Leadership

The democratic leadership style is a very open and collegial style of running a team.
Ideas move freely amongst the group and are discussed openly. Everyone is given a
seat at the table, and discussion is relatively free-flowing. This style is needed in
dynamic and rapidly changing environments where very little can be taken as a
constant. In these fast moving organizations, every option for improvement has to be
considered to keep the group from falling out of date. This is the basic function that is
mostly required in the UBL leadership. Autocratic leadership is never welcomed
there.

Characteristics of Democratic Leadership

Some of the primary characteristics of democratic leadership include:

 Group members are encouraged to share ideas and opinions, even though the
leader retains the final say over decisions.
 Members of the group feel more engaged in the process.
  Creativity is encouraged and rewarded.

Transformational Leading

Transformational leadership is a type of leadership style can inspire positive changes

in those who follow. Transformational leaders are generally energetic, enthusiastic,
and passionate. Not only are these leaders concerned and involved in the process; they
are also focused on helping every member of the group succeed as well. In some case
Unilever leaders uses this kind of leadership, because this is a very modern and
effective process to influence subordinates.

Characteristics of Transformational Leadership

The common characteristics of transformational leader:

 They identify themselves as change agents.

 They are courageous individuals.
 They are powerful yet sensitive of other people, and ultimately they work
toward the empowerment of others.
 They are value-driven.
 A transformational leader is able to talk about mistakes he/she has made
without seeing them as failures but learning experiences.
 They have the ability to deal with complexity, ambiguity and uncertainty.
 They are visionaries.

Managerial Grid

The managerial grid model (1964) is a situational leadership model developed by

Robert R. Blake and Jane Mouton. This model originally identified five different
leadership styles based on the concern for people and the concern for production. The
optimal leadership style in this model is based on Theory Y.
1. Impoverished Style (1, 1): evade and elude. In this style, managers have low
concern for both people and production. Managers use this style to preserve job and
job seniority, protecting themselves by avoiding getting into trouble. The main
concern for the manager is not to be held responsible for any mistakes, which results
in less innovative decisions.

2. Country club Style (1, 9): yield and comply. This style has a high concern for
people and a low concern for production. Managers using this style pay much
attention to the security and comfort of the employees, in hopes that this will increase
performance. The resulting atmosphere is usually friendly, but not necessarily very
productive.

3. Authoritarian style (9, 1): control and dominate. With a high concern for
production, and a low concern for people, managers using this style find employee
needs unimportant; they provide their employees with money and expect performance
in return. Managers using this style also pressure their employees through rules and

punishments to achieve the company goals. This dictatorial style is based on Theory
X of Douglas McGregor, and is commonly applied by companies on the edge of real
or perceived failure. This style is often used in cases of crisis management.
4. Middle-of-the-road Style (5, 5): balance and compromise. Managers using this
style try to balance between company goals and workers' needs. By giving some
concern to both people and production, managers who use this style hope to achieve
suitable performance but doing so gives away a bit of each concern so that neither
production nor people needs are met.

5. Team Style (9, 9): contribute and commit. In this style, high concern is paid both
to people and production. As suggested by the propositions of Theory Y, managers
choosing to use this style encourage teamwork and commitment among employees.
This method relies heavily on making employees feel themselves to be constructive
parts of the company.

Analysis:

After analyzing the managerial methods and leadership of Unilever, we came the
conclusion that in the Managerial Grid UBL scores 5, 5 or 9, 9 and both score is very
appreciable. Cause:

In the 5, 5 score it is a balanced company that every company desires because

company can take flexible decision and can make it happen quickly

In the 9, 9 score it is working as a team that makes them very effective in executing
any task or innovating some product.

Unilever’s Organizational Culture of Performance

Unilever is one of the largest consumer goods firms in the global economy. The
progress of this company is linked to its organizational culture and the kinds of
activities and policies leaders have implemented over time. Organizational culture,
leadership and the human resources of a firm are all interrelated. Unilever is an
integrated global firm. Any change in one area leads to changes or developments in
other areas. The characteristics of these components also affect each other and the rest
of the organization of Unilever. The company is successful because of the overall
effectiveness of its leaders in supporting improvements in the organizational culture.
Unilever’s corporate culture contributes to improvements in other areas, such as
production and human resources.

Unilever’s organizational culture supports high performance of human resources. The

effects of this corporate culture are reflected on the company’s stable performance in
the consumer goods industry.

Unilever’s Organizational Culture & Its Characteristics

Unilever has an organizational culture of performance, which emphasizes the

significance of employee output. This corporate culture also points to the importance
of criteria or measures used to determine required output and adequacy of output.
Unilever’s organizational culture of performance has the following characteristics:

Focus on performance – individual performance and organizational performance

Focus on quality – quality of output in all areas

Efficiency – efficient work through technology and other tools

Unilever’s organizational culture is focused on performance and quality. This

corporate culture is observable in the long history of the company. The business has
grown from a small firm to a global powerhouse. Such success is significantly based
on the ability of Unilever’s organizational culture to instill high performance and
quality in employees’ work ethic to maximize business output. For example, because
of high quality, the company’s consumer goods remain competitive in the global
market despite tough competition. This emphasis on quality is also a reflection of the
emphasis on product effectiveness in the firm’s mission statement (Read: Unilever’s
Vision Statement and Mission Statement). Unilever has also mastered efficiency
through technology and innovation in its internal business processes, including human
resource development.
Leadership’s Role in Unilever’s Organizational Culture

Unilever’s success is partly based on the ability of leaders to support a culture of

performance and quality. For example, the firm’s leaders use market-based and
results-based approaches to manage the business and drive performance higher.
Market-based management uses market data to make changes in management tactics.
On the other hand, results-based management focuses on the achievement of desired
outcomes. These tactics facilitate human resource productivity and organizational
performance in the consumer goods business. Thus, Unilever’s leadership and
managerial approaches are a factor that maintains the company’s organizational
culture.

Unilever’s leadership-based approaches support the integrity of corporate culture

implementation, especially in mergers and acquisitions. Integrity is important in
mergers and acquisitions, where human resource integration is needed for successful
organizational merging. For example, Unilever applies results-based management to
implement its organizational culture throughout the newly merged organization. In
this way, the company’s leadership supports integrity for the continuity of the
organizational culture of performance and quality even after mergers and acquisitions.

Culture, Leadership, and Human Resource Structures and Practices

Leadership reinforces the development of the organizational culture of Unilever. This

organizational culture affects human resource structures and practices. Unilever
reinforces the corporate culture of performance and quality through leaders’ regular
monitoring and evaluations, as well as commitment and support. For example, the
results of evaluations are used for guiding HR practices that reinforce Unilever’s
organizational culture of performance and quality. Employees’ needs are identified
and integrated in HR program enhancements. Through this cultural reinforcement, the
company instills quality as a defining factor in employees’ performance and
productivity.
Unilever’s Culture of Performance – Evaluation and Recommendations

Unilever’s culture is a culture of performance. The different components of the

business are focused on improving financial performance and quality of products.
Through effective leadership, individual performance is supported. Through
collaborative efforts of leaders from different departments, the firm also ensures an
organizational culture of performance. Thus, this culture of performance is manifested
at the individual and organizational levels in Unilever’s consumer goods business.

Unilever’s organizational culture has room for further improvement. A

recommendation is to improve policies to accommodate diversity. Higher diversity is
inevitable in global business, and the company must take advantage of it. Also,
Unilever can implement improvements in information technologies. For example,
these technologies can support workers in all areas through advanced tools for market
research, customer relations and internal communications. These improvements can
help strengthen the firm’s organizational culture of performance.
Section 5:
Controlling

The function of control consists of those activities that are undertaken to ensure that
the events do not deviate from the per-arranged plans. The activities consist of
establishing standards for work performance, measuring performance and comparing
it to these set standards and taking corrective actions as and when needed, to correct
any deviations.

According to Koontz & O’Donell, “Controlling is the measurement & correction of

performance activities of subordinates in order to make sure that the enterprise
objectives and plans desired to obtain them as being accomplished”.

The controlling function involves:

a. Establishment of standard performance.

b. Measurement of actual performance.
c. Measuring actual performance with the pre-determined standard and finding
out the deviations.
d. Taking corrective action.

All these five functions of management are closely interrelated. However, these
functions are highly indistinguishable and virtually unrecognizable on the job. It is
necessary, though, to put each function separately into focus and deal with it.
Unilever -Controlling

Unilever has an immovable control experience, which is agreed and frequently

reviewed by the Boards. This incorporates risk management, internal control
procedures and operations control which are planned to provide rational, but not
complete, security that assets are refreshed, the risks facing the business are being
addressed and all information required to be released is reported to the Group's senior
management, including where appropriate the Group Chief Executive and Chief
Financial Officer, within the required timeframe.

RISK MANAGEMENT

Unilever manages a variety of marketplace risks, including the effects of fluctuations

in foreign exchange rates, interest rates, and liquidity. It deals with the following
risks:

 Treasury Risks
 Commodity Risks
 Procedure Risks
 Customer Relationship Risks
 Systems and information Risks
 External Risks

TREASURY RISKS:
Unilever has an interest rate management policy designed at enhancing net interest
cost and decreasing instability. This is accomplished by adjusting the interest rate
analysis of debt and cash places over the practice of interest rate switches.

Fixed rate investments and borrowings give growth to a rational value interest rate
risk. The fluctuating amounts give growth to a cash flow interest rates.

Because of Unilever's wide operational reach, it is subject to risks from changes in

foreign currency values that could move incomes. It is not possible to fully border
these fluctuations. Unilever does have a foreign exchange policy that needs operating
companies to manage tradeoff and economic foreign exchange contacts within given
limits. This is attained mostly through the use of forward foreign exchange contracts.
Regional groups monitor compliance with this policy. Unilever objects to decrease its
foreign exchange contact in operating companies by borrowing in the local currency,
except where introverted by local guidelines, shortage of local liquidity or local
market conditions. In order to decrease the risk, Unilever border such investments and
from time to time they reevaluate the currency.

COMMODITY RISKS:

Unilever sees risk where there is the potential for price instability in respect to the
distinct commodities used in the production of the ultimate product. Commodity is the
term used to describe a type of good which, while in demand, has no different
variances when related to a rival's offering. Unilever feels that compelling a goods-
based supply-chain perception helps to manage contact. In accumulation to the
commodity risk focus, Unilever also borders risk by "locking down contracts" and
using results.

PROCEDURE RISKS:

Procedure risk involves that there's a lack of formal procedures and lack of quality
control system. Unilever always check their procedures and policies and they do have
a check and balance over their control system.

CUSTOMER RELATIONSHIP RISKS:

To know the needs and taste of customer and building strong relationship is also a risk
factor for Unilever because of the continuous innovations and developments the needs
and taste of the customers are changing frequently. In order to know the needs of
customer Unilever has set its customers sales and design outlets which enables them
to find the new ways to satisfy customer needs. They monitor the progress on a
regular basis.
SYSTEMS AND INFORMATION RISKS:

Unilever use IT systems to interact with their customers but on the other hand they
have a threat of the misuse of their personal and sensitive information through
unauthorized access. In order to prevent this risk they maintain the control system
check the security settings on a regular basis.

EXTERNAL RISKS:

The external factors such as economic and political indicators and natural disasters
can create a great amount of risk for Unilever. They regularly update themselves from
the current business results and cash flows. They have been continuously designing
plans for crisis management in the event of economic, political and natural disasters.

INTERNAL CONTROL AND PROCEDURES:

Unilever control framework is supported through a code of Business Principles which

set values of efficiency. It needs that senior manager's in each department controls the
value of internal control because they are a key to huge risk factors. The Boards have
individually all the responsibility for establishing procedure to check the effectiveness
of internal control and reviewing and revaluating them their effectiveness. There is a
day- to- day review of effectiveness of internal control system and Unilever monitor
its risks with ongoing basis.

OPERATIONS CONTROLS:

Operations Controls is the control in which you make sure that operations activities
are carried out as they were planned. Operations Controls include following controls:

 Financial Control
 Budget Control
 Inventory Control
  Maintenance Control
 Cost Control

FINANCIAL CONTROL:
Managers at Unilever put financial controls in order to trace performance and evaluate
the performance to the attainment of financial goals. Unilever managers develop
strategies to line the risk in a structured way. They follow a financial assessment
process through which they evaluate that at what pace they are reaching their strategic
financial goals. This assessment process requires the senior manager in each business
unit to check effectiveness of financial controls.

BUDGET CONTROL:
Managers at Unilever put budget control in order to track that whether their income
and expenditures are planned or not. They have a comprehensive budget system
which is approved by all the stakeholders and board of directors, which is revised and
restructured on a regular basis. The performances against the budget of Unilever are
monitored through monthly and quarterly reporting routines. Then the updated report
is distributed among the stakeholders.

INVENTORY CONTROL:
Unilever has a very proper system through which they control their inventory.

They produce the goods according to the demands and tastes of their customers. A
unique supply chain and warehouse capacity is bigger challenge for them. They had a
very strong inventory control at their different distribution centers, where they control
the supply and demand of their products. Unilever has also a proper warehouse
management system in which they capacitated their inventories.

MAINTENANCE CONTROL:
Unilever has a proper maintenance control system. The maintenance manager at
Unilever individually monitors the equipment on daily basis. After monitoring, they
create a report on the history of this monitoring for future examination. Furthermore,
they have a warning system alerts on their equipment's which makes their controlling
system more effective and efficient.

COST CONTROL:
COST control is the process of controlling cost and checking whether the costs are
with the accordance to the budgeted cost. In Unilever cost control is an essential part
because it determines business stability. Unilever controls cost to create more profit.
They have a proper check and balance over the wastages of raw materials so that they
might eliminate those raw materials which are inadequate for their production
process.

INSPECTION:
Unilever has also an inspection system in which they hire inspectors. They check
quality of products, machines and equipment's, raw materials used for the production
of goods, site inspection and location inspection where they conduct their research
work.

AUDIT AT UNILEVER:
Unilever's internal audit plays an important role in the assurance of the value of risk
management and other related control operations to both operations management and
the Board. Unilever has an independent audit committee which is entirely composed
of Non-Executive Directors. This Committee meets Chief Auditor and external
auditors on a regular basis.

INFORMATION TECHNOLOGY:
Unilever uses Information technology to provide managers with information which
they need in their decision making. Unilever uses SAP software to monitor and
control its business, which now used globally. The ERP system produces annual
sustainability reports. SAP is working more with the business leadership and process
leaders; it develops and support business strategy. The SAP system values it
customers, meet its customers, started to listen its customer and take corrective
actions for the needs of its customers.
Mistakes can be controlled by SAP and they are rectified at the time they are detected
by SAP.

SAP:
SAP stands for Systems Application and Products in Data Processing. It was
developed by IBM engineers in 1970's as standard based software. SAP is used by
organizations to manage their enterprise. This includes managing their day-to-day
operations, inbound and outbound logistics, finances, HR etc.

ERP:
ERP stands for Enterprise Resource Planning. It is implemented by various
organizations to centralize the database systems and functions of every department in
a single system. ERP is used by Unilever which helps them to decrease their losses
and increase their profit.