TABLE OF CONTENTS

Acknowledgements

CHAPTER 1: Introduction
About The Topic
History & Origin

CHAPTER 2: Description
2.1: Core Business
2.2: Sales Revenue and Value of Stocks
2.3: Manufacturing Globally
2.4: SWOT analysis
2.5: path to growth strategy
2.6: Elements of path to growth strategy
2.7: leadership and development
2.8: Hofstede’s dimensions

CHAPTER 3: CONCLUSION

REFRENCES
Acknowledgement

At first I would like to thank our Almighty for his blessing,

which gave us patience to do this important research successfully.

First we want to thank our respective course teacher Mr Ulke

veersma for his co-operation. Despite his busy schedule, he has
helped us a lot to prepare the assignment. Our whole research was
based on his proper guidance and framework. This study gave us a
chance to look into the operation of a globally successful
company-UNILEVER.

We also like to thank those web developers who develop the web
sites which help us to make our concern.
Chapter 1: Introduction

1.1: About Unilever:

Unilever is a multi-national corporation, formed of Anglo-Dutch

parentage that owns many of the world's consumer product brands
in foods, beverages, cleaning agents and personal care products.
Unilever employs nearly 180,000 people and had worldwide
revenue of almost €40 billion in 2005.

Unilever is a dual-listed company consisting of Unilever NV in

Rotterdam, Netherlands and Unilever PLC in London, England.
This arrangement is similar to that of Reed Elsevier, and that of
Royal Dutch Shell prior to their unified structure. Both Unilever
companies have the same directors and effectively operate as a
single business. The current non-executive Chairman of Unilever
N.V. and PLC is Michael Treschow while Patrick Cescau is Group
Chief Executive, who will retire at the end of 2008. Mr Paul
Polman will succeed Patrick Cescau as Group Chief Executive.
[1]
The company is widely listed on the world's stock exchanges.
1.2: History & Origin

Unilever was created in 1930 by the merger of British soap maker

Lever Brothers and Dutch margarine producer Margarine Unie. It
was a very logical merger, as palm oil was a major raw material
for both margarines and soaps and could be imported more
efficiently in larger quantities.

By 1980 soap and edible fats contributed just 40% of profits,

compared with an original 90%. In 1984 the company bought the
brand Brooke Bond (maker of PG Tips tea).

In 1987 Unilever strengthened its position in the world skin care

market by acquiring Chesebrough-Ponds, the maker of Ragú,
Pond's, Aqua-Net, Cutex Nail Polish, Pepsodent toothpaste, and
Vaseline. In 1989 Unilever bought Calvin Klein Cosmetics,
Fabergé, and Elizabeth Arden, but the latter was later sold (in
2000) to FFI Fragrances. In 1996, Unilever purchased Helene
Curtis Industries, giving the company "a powerful new presence in
the United States shampoo and deodorant market". The purchase
brought Unilever the Suave and Finesse hair-care product brands
and Degree deodorant brand. In 2000 the company absorbed the
American business Best Foods, strengthening its presence in North
America and extending its portfolio of foods brands. In a single
day in April 2000, it bought, ironically, both Ben & Jerry's,
[2]
known for its calorie-rich ice creams, and Slim Fast.
Chapter 2: Description

2.1: Core Business:

Unilever’s core business is the food business. It is the no. 3 in the

food business after Nestle and Kraft foods.

Anglo-Dutch Unilever maker of Knorr soups, Hellmann's

mayonnaise and Skippy peanut butter, reported underlying 2006
sales growth of 3.8 percent in 2006. Within that, its foods rose
just 2.9 percent, while sales in the HPC unit, which sells soaps
and deodorants, grew 4.7 percent. "We expect that food growth
will catch up eventually with that of HPC, but we are not giving a
timescale," Alan Jope, global foods vice president for Unilever,
said at the Reuters Food Summit in Chicago on Wednesday. He
highlighted two products that are spearheading its "vitality"
program toward healthier eating -- a yogurt-based "one shot" drink
aimed at lowering cholesterol levels and a soya-based fruit drink
from South America. One-shot yogurt drinks are now a 3 billion
euro market in Europe, and Unilever intends to launch a product
containing plant sterols, which are claimed to lower harmful
cholesterol, on May 21 in the U.S. under its Promise brand at
$1.00 a shot. It has also launched its South American soya-based
fruit drink in the UK under the Adez brand, and this and a
European Knorr Vie fruit-and-vegetable-shot drink are also under
[6]
consideration for launch into the U.S. market.
2.2 Sales Revenue & Value of Stocks:

Unilever’s mission is to add vitality to life. It is estimated that

people around the world in 150 countries uses Unilever products
150 times a day. The 2006 sales revenue was 39.6 billion pounds.
Which came from the Americas 13.8 billion (36%), from Europe
15.0 (38%) billion and from Asia/Africa 10.9 billion pounds
(27%). Unilever has approximately 206,000 employees working
all over the world.

By 2010, Unilever plans to improve its financial standard by:

• Ungearearing free cash flow in the period 2005-2010 of €25-30

billion
• Improvement in Return on Invested Capital
• Underlying sales growth of 3-5% p.a.
• Operating margin of over 15% by 2010 after normal restructuring
• Improving capital and tax efficiency

Value of Stocks:

Unilever PLC ordinary shares are listed on the London Stock

Exchange and as American Depositary Receipts in New York. Each
ADR represents 1 underlying ordinary PLC share. There are 1 714
727 700 NV ordinary shares in issue, each with a nominal value of
€0.16. There are 1 310 156 361 PLC ordinary shares in issue, each
with a nominal value of 3 1/9 pence. The equalization agreement
between NV and PLC is such that each NV ordinary share has the
same rights and benefits as each PLC ordinary share.
(Unilever NV ordinary shares are listed on the stock exchanges in
Amsterdam and as New York shares on the New York Stock
Exchange.)
2.3: Manufacturing Globally:

Unilever now owns about 400 brands, many of them local that can
only be found in certain countries. Unilever markets its products
to 150 countries. Unilever has a portfolio of brands that are
popular across the globe - as well as regional products and local
varieties of famous-name goods. This diversity comes from two of
our key strengths; (1) Strong roots in local markets and first-hand
knowledge of the local culture. (2)World-class business expertise
applied internationally to serve consumers everywhere. The
brands fall almost entirely into three categories: Food &
Beverages, Home and Personal Care.

2.4: SWOT Analysis:

The overall evaluation of a company’s strengths, weaknesses,

opportunities, and threats is called SWOT analysis. In general, a
business unit has to monitor key macro environment forces
(demographic-economic, technological, political-legal, and social-
cultural) and significant microenvironment actors (customers,
competitors, distributors, suppliers) that affect its ability to earn
profits. The business unit should set up a marketing intelligence
system to track tends and important developments. For each trend
or development, management needs to identify the associated
opportunities and threats.
S.W.O.T

Strength Weakness
Recognized as a global Dual leadership
company. Not connecting with
Strong brand portfolio. customer
Strong relationship with Inefficient management of
retailers brands
Economies of scale. Inability to maximize
acquisition

Opportunities Threats
Changing consumer Decrease in revenue
preferences String competition
Increasing need for Tougher business climate
healthy products Exchange rates

2:5 Why path to growth strategy

• Years of slow performance
• Lack of sound corporate strategy
• Numerous low-volume brands
• Small global presence compared to competition
• Mediocre performance in emerging markets

2:6 Elements of path to growth strategy

1. 5 year growth plan

2. Reduce portfolio to 400 “core” brands
3. Focus R & D and advertising on leading brands
4. Concentrate on product innovation to fuel internal growth
5. Grow through acquisitions
• Program that focuses on brand initiatives to the consumer
• Lets the consumer know more about the product and its uses
• Objective: Bring top of the mind awareness
• Strategy: Use advertising that connects with consumer needs

• Delivers innovative products that capitalizes on changing consumer preferences

• Allows Unilever to focus on the needs of their customers and consumers thus
reigniting growth and increasing sales potential
• Provides a strong competitive platform against major competitors and private label
brands
2:7 Leadership development

A key part of the business transformation has been equipping their people with the skills they
need to help deliver their business strategy. Unilever has invested significantly in learning in
partnership with Accenture – its HR outsourcing partner – by creating a single curriculum for
General Management and Leadership Skills, favored by a one technology infrastructure that
also provides e-Learning. This capability has enabled a fast roll-out of new 'Standards of
Leadership' framework. This programme promotes a set of behaviours aimed at ensuring that
every manager takes personal responsibility for delivering Unilever's strategy. So as a result
we can say that Unilever is creating and flourishing leaders.

Health & safety

Their principal measure of progress is the total recordable frequency rate, which counts all
workplace accidents except those requiring only simple first aid treatment. In 2008, this rate
decreased to 0.21 accidents per 100 000 hours worked, down 19% on 2007. Regrettably,
three employees and one contractor lost their lives in 2008. The lessons learned from these
deaths were communicated across our business.

People vitality

Unilever’s People Vitality programme aims to enhance the personal well-being and
effectiveness of their people, through advice on exercise, nutrition and mental resilience.
During 2008 the programme was rolled out to their operations in Asia, Africa and Latin
America. The programme is already showing positive results. Participants have reported
improvements in their quality of sleep, energy levels, motivation and work performance.

Global diversity

Unilever is committed to developing a diverse workforce. They have 20 different

nationalities among their top-level group of 100 managers worldwide. Their commitment to
diversity is set right at the top of the business with Global Diversity Board, comprising
leaders from all business functions and chaired by Chief Executive Officer.

Listening to employees
Unilever gather feedback from employees via Global People Surveys (GPS). The first GPS-
Pulse survey after the arrival of new Chief Executive Officer was carried out in February
2009. Some top-line observations were that ‘People are proud to work for Unilever and feel
good about the culture and business’. Feedback also pointed to areas where there is need to
do better and these are being actioned by the Unilever Executive and senior leaders.

Recruitment and selection through Talent pool management

Unilever Nederland and also in South Asia and Great Britain has been working for last
couple of years with talent pools for recruiting and selecting top candidates with work
experience; the ‘mid careers’. Apart from the concrete vacancies or the direct availability of
candidates, the top 10% best candidates in the labour market are sought and a relationship is
built up with them.

EMPLOYEE EVALUATION

Employee evaluation in Unilever is based on two major aspects.

Performance

Sustainability

Performance

‘3Cs of success’, the first two of which are

Courage and conviction.

Courage is the quality you need to act on your beliefs, to take accountability, to accept failure
and learn from it and to do all this even in the face of adversity. Such courage, of course,
stems from the second ‘C’, which is conviction. And conviction flows from knowledge; one’s
deeply held beliefs and world view.

Third ‘C’, which stands for character. It is only character that drives and channels courage
and conviction to the right ends, meeting goals that bring about a positive change in society.
This leadership development model served UNILEVER well for many years. The company
effectively became a school for practicing managers. But in the late 1990s, as the business
environment underwent a sea change, cracks began to appear in the model. First, there was a
reduction in the number of positions due to the withdrawal of many brands under
UNILEVER’s power branding strategy. The closure of non-core businesses, like seeds and
the downsizing of the large commercial department, due to outsourcing of a large number of
backroom activities, also eliminated many promotional opportunities.

Meanwhile, Unilever itself began to divest brands and businesses, reducing the need for

Expensive expatriate talent. As a matter of fact, the supply of UNILEVER's pipeline of talent
grew because of returning expatriates from the Unilever system.

With fewer slots available and supply increasing, internal competition also increased. During
good times, most managers got good performance ratings. But the system changed as growth
slowed down and competition increased. In the early 2000s, UNILEVER instituted a forced
rank system of evaluating people for all its businesses, further accentuating the insecurities
inside the minds of employees. Managers began to rely on short-term recourses to deliver
quarterly profit and sales numbers. If one brand team did well to grow through a short-term
scheme, there was immediate pressure on the others to follow the same.

The process of identifying fast trackers began to cause disgruntlement among employees.
Initially, when UNILEVER instituted the system of listers, it had focused more on
performance. However, over the years, apart from performance, the potential of the person
had played a bigger role in identifying the fast trackers. This seemed to have introduced an
element of subjectivity in the process of identifying talent.

When Dadiseth rolled out Project Millennium, many young managers were identified to lead
a set of new growth initiatives. But these initiatives had moved Lever into entirely new areas,
which took a long time to be conceptualized and implemented. Under the Lever system, there
were clear work levels, which defined the nature of work and responsibilities. So, unless
there was a change in the nature of work, a manager could not be promoted to the next level.
Career progression was also slowing down at senior levels. Many of the management
committee members, like the head of the foods division, Gunender Kapur had been expected
to move to larger regional roles in Asia. But the continued non-performance of the foods
business had thrown a spanner in the works. That meant that category heads were unlikely to
find a berth soon, until someone at the top moved on. Many UNILEVER managers had CEO
aspirations.

They were attracted by the opportunities opening up in the country in newly liberalized
businesses like telecom, healthcare and insurance. They moved when they felt they did not
get any clear signals from the top management about what the future held for them.
In 2002, responding to these concerns, UNILEVER switched to an open job posting (OJP)
system. All new jobs were advertised on the intranet. Any employee who met the criteria
could apply. UNILEVER also started a new personal development plan (PDP), where each
manager was evaluated on a set of 12 competencies. The superior was expected to discuss the
assessment with each person.

In the early 2000s, UNILEVER extended the reach of its products through a new channel, the
UNILEVER Network to leverage the power of direct selling. The UNILEVER Network was
poised to enter various categories. UNILEVER enrolled over 1,00,000 consultants for the
Network. The company targeted a turnover of Rs. 500 crores and planned to have a million
consultants working for it by 2007.In addition, UNILEVER proposed a revamp of its entire
brand portfolio in the face of severe competition from low-cost manufacturers and other
multinational players. UNILEVER planned to upgrade its soap, skin cream, shampoo and
toothpaste products, and launch new variants. Among the major initiatives was a new variant
of Fair & Lovely, to pre-empt Procter & Gamble’s (P&G) proposed launch of ‘Oil of Olay’
in South asia, a relaunch of Clinic Plus shampoo and Close Up toothpaste and a new Liril
Orange Splash soap, in addition to Liril Lime Fresh and Liril Icy Cool Mint.

Besides revamping its brand portfolio, UNILEVER realized that the bulk of its future growth
was likely to come from rural areas. The company embarked upon Project Shakti, which
enlisted underprivileged rural women as direct-to-home distributors. Not only did this
initiative provide sustainable income opportunities, but it also extended UNILEVER’s rural
reach to another 100 million consumers in over 100,000 villages.
Key quadrant of performance climate

Beckhard, Harris and Schein has made a tremendous progress on thos topic which is being
followed by Unilever. These four quadrant are discussed below.

Goals

Goals In developing outstanding performance, the first quadrant to review is Team Goals.
This is the team performance. An unclear vision, lack of goal clarity or conflicting goals is
the most common cause of underperformance.

Roles

The second quadrant of the Performance Climate Survey relates to the clarity and
contribution of the different players in the team. it is the Who of team performance (roles
and responsibilities) In high performing teams, each team member understands their
own role and contribution.

Processes

The third quadrant looks at the How of team performance and focuses on a team’s processes
and procedures. PCS provides feedback on the effectiveness of the team’s processes. This
includes the extent to which communication is clear and effectively managed internally and
with other groups. It also measures how individual and team performance is managed and
monitored (performance management.

Connection

The fourth quadrant addresses the Why factor. The relationship team members have
with their colleagues and the connection they have with the goal and their work is critical to
long term motivation. For example: A Doctor may strongly connect with the Hippocratic
Oath to save life and to their own professional advancement but have little connection to the
Hospital employing him or to his colleagues. High performance teams take time to create.
Likewise, changes in behavior take time to reflect in the performance of the team so PCS
should be used quarterly or every six months for best results. Developing a high
performance team is not an art but a skill based on logic and emotional intelligence. Great
leaders follow the flow; Goals, Roles, Process and Connection (What Who How and Why).

INTERNATIONAL MANAGEMENT STRATEGY MATRIX

 NATIONAL RESPONSIVENES

Low high

High

ECONOMIC

INTEGRATION

Low UNILEVER

The employees need to be given bigger and challenging roles to strengthen the environment
for personal growth. In UNILEVER, employees change roles in every 2-2.5 years. Different
learning programs help the employee in developing multidimensional personality. Brief
introductions of these programs are given below:

Organization Culture
All Unilever employees are expected to avoid personal activities and financial interests which
could conflict with their responsibilities to the company. Unilever employees must not seek
gain for themselves or others through misuse of their positions.

Compliance – Monitoring – Reporting Compliance with these principles is an essential

element in our business success. The Unilever Board is responsible for ensuring these
principles are communicated to, and understood and observed by, all employees.

Day-to-day responsibility is delegated to the senior management of the regions and operating
companies. They are responsible for implementing these principles, if necessary through
more detailed guidance tailored to local needs. Assurance of compliance is given and
monitored each year. Compliance with the Code is subject to review by the Board supported
by the Audit Committee of the Board and the Corporate Risk Committee. Any breaches of
the Code are reported in accordance with the procedures specified by the Joint Secretaries.
The Board of Unilever never criticise management for any loss of business resulting from
adherence to these principles and other mandatory policies and instructions. The Board of
Unilever expects employees to bring to their attention, or to that of senior management, any
breach or suspected breach of these principles. Provision is made for employees to be able to
report in confidence and no employee will suffer as a consequence of doing so.

2:8 What are the five Hofstede’s cultural dimensions?

Geert Hofstede is amongst pioneers in elaborating the cultural issues and that is the reason his
five dimension theory is well known among academics. He states “Culture is more often a
source of conflict than of synergy. Cultural differences are a nuisance at best and often a
disaster.

Power Distance Index (PDI) that is the extent to which the less powerful members of
organizations and institutions (like the family) accept and expect that power is distributed
unequally. This represents inequality (more versus less), but defined from below, not from
above. It suggests that a society's level of inequality is endorsed by the followers as much as
by the leaders. Power and inequality, of course, are extremely fundamental facts of any
society and anybody with some international experience will be aware that 'all societies are
unequal, but some are more unequal than others'.

Individualism (IDV) on the one side versus its opposite, collectivism, that is the degree to
which individuals are inte-grated into groups. On the individualist side we find societies in
which the ties between individuals are loose: everyone is expected to look after him/herself
and his/her immediate family. On the collectivist side, we find societies in which people from
birth onwards are integrated into strong, cohesive in-groups, often extended families (with
uncles, aunts and grandparents) which continue protecting them in exchange for
unquestioning loyalty. The word 'collectivism' in this sense has no political meaning: it refers
to the group, not to the state. Again, the issue addressed by this dimension is an extremely
fundamental one, regarding all societies in the world.

Masculinity (MAS) versus its opposite, femininity, refers to the distribution of roles between
the genders which is another fundamental issue for any society to which a range of solutions
are found. The IBM studies revealed that (a) women's values differ less among societies than
men's values; (b) men's values from one country to another contain a dimension from very
assertive and competitive and maximally different from women's values on the one side, to
modest and caring and similar to women's values on the other.
Uncertainty Avoidance Index (UAI) deals with a society's tolerance for uncertainty and
ambiguity; it ultimately refers to man's search for Truth. It indicates to what extent a culture
programs its members to feel either uncomfortable or comfortable in unstructured situations.
Long-Term Orientation (LTO) versus short-term orientation: this fifth dimension was found
in a study among students in 23 countries around the world, using a questionnaire designed
by Chinese scholars It can be said to deal with Virtue regardless of Truth. Values associated
with Long Term Orientation are thrift and perseverance; values associated with Short Term
Orientation are respect for tradition, fulfilling social obligations, and protecting one's 'face'.
Both the positively and the negatively rated values of this dimension are found in the
teachings of Confucius.

Graphical view of Hofstede cultural dimensions (UK. Vs South Asia)

Here is the diagram which explicit the above mentioned dimensions in the regions selected
for Unilever i.e. UK and South Asia.
3: Conclusion
Internal competition was added to external competition and the method fallowed by the
highest group was implemented in all the other group to increase product quality and reduce
cost of production.

Working on any multinational is not an easy task specially the HRM strategies are
considered very confidential in any organization. But we try to sum up the material in a
effective manner and tried to elaborate the things up to our best.
A framework which takes both business environment and culture into consideration is
recommended for organisational middle managers. Key principles for the framework are: (1)
focus on competencies which lead to business success in a particular cultural environment;
(2) differentiate and add competencies depending on business, functional or cultural needs,
even if they may not be a part of the Leadership for Growth Profile; (3) balance between
competencies that build international growth (LGP) and competencies that are necessary to
achieve operational business success.
There is huge difference in culture between the host and home countries of Unilever. As we
discussed in Hofstede theory about the five cultural dimensions. As we can observed from
above that there is huge power distance in south Asia as compared to UK bu on the other
hand the individualisim is much higher in UK rather than South Asia.

We also came to know that the authority given to regional managers is quite a good strategy
to have prompt decision making for the interest of the business.

At last one very important thing we have observed is that Unilever has always priority to
focus upon its employees so that to get maximum out of them. We have mentioned ample HR
strategies which fully facilitate the personnel of the Unilever.
References

THE END OF GLOBAL STRATEGY Alan M. Rugman* and Richard M . Hodgetts

INDIANA UNIVERSITY.

Adler, N.; Doktor, R.; Redding, S. (1986) From the Atlantic to the Pacific century: cross
cultural management reviewed. Journal of Management, 12(2), 296-318.

Arnold, D. & Quelch, J. (1998) New strategies in emerging economies. Sloan Management
Review, 40, 7-20.

Barney, J. (1991) Firm resources and sustained competitive advantage. Journal of

Management, 17, 99-120.

Barney, J. (1995) Looking inside the competitive advantage. Academy of Management

Executive, 9, 49-67.

Bartlett, C. & Ghoshal, S. (2002) Building competitive advantage through people. Sloan
Management Review, Winter, 34-41.

Bass, B. (1981) Stogill’s handbook of leadership. New York: Free Press.

Chakravarthy, B. & Perlmutter, H. (1985) Strategic planning for a global business.

Columbia Journal of World Business, Summer, 3-10.

Donaldson, T. (1996) Values in tension: ethics away from home. Harvard Business Review,
September-October, 48-56.

Doz, Y. & Prahalad, C.K. (1986) Controlled variety: a challenge for human resource
management in the MNC. Human Resource Management, 25, 55-71.

Dunette, M.D. (ed) (1976) Handbook of industrial and organisational psychology. Chicago:
Rand McNally College Publishing.

Elenkov, D. (1997) Differences and similarities in managerial values between US and

Russian managers. California Management Review, 40, 133-156.