Unilever is the world's second largest consumer processed goods company. With a current
market capitalization of $126 billion and revenues of $57 billion in 2014, it is second only to
Procter & Gamble in the CPG industry. Unilever has over 400 brands spread across four
broad categories; namely, Personal Care, Home Care, Foods, and Refreshments.
Company’s Mission :
To meet everyday needs of people all around the world for nutrition, hygiene, and
personal care. We do this with products that help people feel good, look good, and get more
out of life.
Company’s Vision:
To double the size of our business, while reducing our environmental footprint and
increasing our positive social impacts.
Organizational culture:
Unilever is a very transparent company, they try to keep their consumers very
knowledgeable about their products and are active in showing their growth towards
sustainable development. Their organizational culture, or set of values and principles that is
expected of doing business with Unilever is boldly posted on their website. They include:
Always working with integrity, positive impacts on society, continuous commitment, setting
out aspirations and working with others. In exhibit A above there is a brief description as to
what these values mean and how they are applied at Unilever. After reviewing the following
aspects of their ‘Culture’, one could observe that Unilever is rather consistent with what
they say, however that doesn’t go without error.
Beginning with the first value, always working with integrity, Unilever falls short of
this with the incident that happened in Israel. Unilever failed to inform the Israeli public that
their boxes of Telma cereal had been contaminated with salmonella. In fact, they said their
cereal was good for consumption and all contaminated cereals had been removed from the
market, however this wasn’t the case and a reported 250 boxes of cereal were found to
contain salmonella. After a license suspension from the Israeli consumer protection and free
trade authority and public scrutiny, it was found that Unilever had made mistakes in their
packaging and made the correct changes so this wouldn’t happen again. Unilever is a
relatively honest company, this however, proves that they are quite capable of the contrary.
The next value is making a positive impact on society, something Unilever is
exceptional at. Unilever had founded a joint initiative with Mastercard to help small
businesses around the world. This would involve providing resources and information that is
often not available to small businesses so they can prosper. Unilever believes in
sustainability and that small businesses are the backbone to cities. Unilever is making not
only a positive impact but a long term economic impact that could employ and empower
many people, something that is vital for sustainability.
Another value is continuous commitment, which states their commitment to the
environment and sustainability. Unilever has made 50 long term sustainability goals. They
believe that being an actively green company will increase their profits as consumers are
becoming more socially aware. Therefore, they have launched 50 long term goals they hope
to reach to ‘reap what they sow”. Some of these initiatives include halving the water supply
they use in their 300 factories as well as training 5 million women in the workplace and
stopping all non hazardous waste from going to the landfill. This proves that they committed
in the long haul for a better and more sustainable future.
The next value that is a part of Unilever’s organizational culture is their setting of
aspirations. Unilever is determined to delivering the highest standards of corporate
responsibility which is upheld by the supporting article. Recently Unilever was under the
scope of KraftHeinz, a company owned by 3G capital. 3G capital is a large Brazilian firm that
is not known for its corporate responsibility which is why the offer was shut down
immediately. The good folks at Unilever were not about to sacrifice the effort they have
made in their sustainability goals for money, especially to a company that does not deliver
the same corporate responsibility as it does. Paul Pogman, the CEO of Unilever, delivered
some humbling words about the situation saying that “It’s not important to be the CEO, it’s
important to be a human being”.
The final value of Unilever’s organizational culture is working with others. Unilever
sets the bar with this value as they work with over 76 000 suppliers and 1.5 million farmers
in all countries they operate in. All suppliers are held to the Unilever suppliers code which
outlines ethics and human rights to which they must uphold. Unilever works with a lot of
“others” and upholds them to a moral standard which in return has a positive impact for
both parties.
Top financial and non-financial goals:
Unilever, on their annual report, stated that some of their top non- financial goals
include zero hunger, reduction and elimination of poverty, good health and well being,
quality education and gender equality, among other things.
As for financial objectives, Unilever makes sure that they work with retailers to make sure
that their products are ready and out there for people to easily access and increase sales
and revenue, as their firmly believe that their profitable growth should also be responsible
growth. Cost savings and higher returns are possible only to the way their manufacture
their products, allowing for the extra money to me used in new opportunities that are
strategic and profit earning.
Organizational Structure:
Unilever is made up of strategically independent units with a local initiative and
decentralized control. Their structure was revised over time with sustainability and growth
in mind. It is decentralized in order to make their divisions more autonomous. This gives
them more decision-making freedom of control. Unilever is swift to make decisions within its
environment. The other goal was to create innovation. Unilever further decentralized control
between 2000-2004.
In 1930, a special three person committee was made. This further developed around
1996-1999. The three person committee was then changed into a seven member executive
committee. The committee is placed even above the board of directors in terms of
hierarchy. It was also around this time that the two layer organizational structure was
replaced with a single team of fourteen business presidents. The used to be centrally-driven
expansion to branched expansion.
Unilever also has a unique legal structure. This is because Unilever N.V. and Unilever
PLC are made up of different shareholders. Keeping in mind however that the two groups
cannot exchange or convert shares between each other . This ruling was laid in the
Foundation Agreements, where it states that The Unilever Group is kept in order by a group
of agreements made by the parent companies of NV and PLC. These agreements are in
accord with Unilever's mission and goals.
The Equalisation Agreement is one of the Foundation Agreements. The goal of this
agreement was to make the shareholders of the two different companies to stand on equal
footing, so it was like they all held shares to a single company . The second agreement was
the Deed of Mutual Covenants. This agreement between N.V and PLC is to allocate the
assets of the Unilever Group . Finally, the last agreement was for mutual guarantees of
borrowing. As the name states it's for the mutual guarantees of borrowing as well as the
forming of a single operation platform. In essence, PLC and NV will guarantee money
lending to the other if asked. Done in order to provide a more financially stable front for
shareholders to back .
Key Factors for Success:
A major cause for Unilever’s success is Quality. Unilever owns brands like Dove and
Axe which are known for their quality, and used world wide. In the personal care industry
quality in products plays a huge role for success because if the product is of good quality
customers know that they can trust it.
Another key factor for Unilever’s success is its prices. Since Unilever brands are sold
in 190 countries and a lot of them that are third world countries, prices play an important
role on the company’s success. Unilever prices in one country might be different in another
because of many reasons, one reason could be that one country is a first world country and
the second is a third world country, it could also be because different packaging materials
are used for in those 2 countries.
Making products Environmentally friendly will affect the company’s success rate.
Making products environmentally friendly will show the consumer that you have good social
responsibility. Unilever shows this by introducing a new type of packaging technology that
cuts the use of plastic in its packaging by 15%.
The Customer:
Unilever has developed many brands in the personal care industry with their own
distinct target demographics. For instance, Dove targets alternative conscious women by
redefining the standards of beauty in an over glamorized world. Dove is in the business of
building self esteem by feeling good. Axe, another brand owned by Unilever , targets
adolescent males to look better, smell better and feel better. They attribute Axe products
with male sexuality and the ability to find and attractive female counterpart. Axe is in the
business of building the confidence of younger males so they can find attractive women.
Exhibit A
Organizational Culture Chart
Organizational Culture as
described by Unilever
Supporting evidence from outside sources
Always working with integrityconducting operations with
integrity and respect with the
people, businesses, and
environment that Unilever deals
with.
In July of 2016 Unilever’s Israeli cereal, Telma was
accused of having traces of salmonella. Unilever came
out to the public and assured that it's contaminated
cereals had not reached the shelf yet and all cereals
on the shelf were safe for consumption. To the
contrary, 240 Telma boxes produced between the 18
and 20 were found to have traces of salmonella
which led to accusations of Unilever misleading the
consumers and health board of Israel. Subsequently,
the consumer protection and fair trade authority then
sued Unilever and suspended their license until they
solved their problem. This is in direct conflict with
their organizational culture of displaying integrity as
they were dishonest to the people they deal with.
th
th
Positive impact- Making a positive
impact through brands,
relationships, contributions, and
the society Unilever engages with.
On March 1 Unilever launched a new initiative along
with mastercard to help small businesses across the
globe. This is to further Unilever’s sustainable
development goals to reduce poverty and to create
sustainable cities and communities. Combining
Unilever and MasterCard’s expertise they can help
small businesses, the backbone of local economies,
grow through marketing information, distribution
networks, financial management skills and
technology. This initiative displays Unilever’s positive
impact on society and proves they want to create
sustainable relationships with small businesses.
Continuous commitmentCommitted to continuously
improving to manage
environmental impacts and
focusing on long term
sustainability goals.
CEO Paul Pogman has launched 50 separate
sustainability goals that Unilever is working towards.
Some of which include training 5 million women in
the workforce, halving the amount of water their
plants use and stopping all non-hazardous going to
landfills. Unilever has proven that they are consistent
with their sustainability and environmental goals.
Setting out aspirations- The
highest standards of corporate
behavior when governing and
operating the business.
Unilever has recently received an offer from
KraftHeinz with for 143 billion dollars in exchange for
the company. They rejected the offer since it is
owned by 3G capital, which is not known for its social
corporate responsibility and CEO Paul Pogman had
this to say “It’s not to be the CEO, it’s important to
be a human being”.
Working with others- working
with suppliers that have the
similar values and standards as
Unilever.
Unilever is known for having many suppliers in the
various countries they operate in. To be exact they
work with 76,000 suppliers and 1.5 million farmers.
Each supplier must follow Unilever’s supplier code for
them to be able to supply to Unilever.
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