Part One

Introduction

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.

It was created in 1930 by the merger of British soap maker Lever

Brothers and Dutch margarine producer Margarine. In the 1930s
the business of Unilever grew and new ventures were launched
in Latin America. Since then Unilever has made tremendous
growth, going through economic crises like the First World War
and the Great Depression.

Today the company is fully multinational with operating

companies in over 100 countries, employing about 179000
employees. With the onset of the 21st century, Unilever
implemented a strategy known as Path to Growth to transform
business and to launch their Vitality mission.

With 400 brands spanning 14 categories of home, personal care

and foods products, no other company touches so many people's
lives in so many different ways. 150 million times a day,
someone somewhere chooses a Unilever product. From feeding
ones family to keeping ones home clean and fresh, Unilever
brands are part of everyday life.

More than 2 billion consumers worldwide use a Unilever product

on any given day. In 2012, we added nearly 5 billion of turnover,
pushing through the 50 billion mark in the process.

Uniliver products are sold in more than 190 countries, generating

sales of 51 billion in 2012, with 14 brands with sales of more
than 1 billion a year.

Unilever has been present in the North Africa and Middle East
region since 1933. In 1954 Unilever made its first foray in the
Maghreb market with the launch of Omo in Algeria, from
France, through a local partner followed by an entry into Morocco
in 1960 and Tunisia in 1961.

Unilever Egypt was formed as a Joint-Venture with the Fine Foods

Company, a member of the Rachid Group. In 1999 Lever Egypt
and Fine Foods Group merged to form Unilever Egypt.

Organization chart

In 2003 the firm has changed its organizational structure from

geographic divisional structure and implemented a 6 product
type organizational structure as shown above. This divided the
product types into 6 groups of Baby, Feminine and Family Care,
Beauty, Fabric and Home Care, Food and Beverages, and Health
Care.

Characteristics
1. Each product based division has its own functional
specialists(marketing ,finance,etc) who provide products different
2.
3.
4.
5.
6.

from those of other divisions

Allows decentralization to lower level managers
Raises flexible to changes in market
Forces on coordination
Gives chances to CEO for strategic decisions
Focus on products and markets

Information Linkage
Horizontal information linkage is allowed through
1. The horizontal structure that replaced the vertical tall structure
2. Using ERP (Enterprise Resource planning) developed by Oracle to
integrate all business unit resources in one single data base that
enable information sharing across the business unit
3. Cross-functional managers work on multi products on the same
product type

Part Two Contextual Dimensions

Differentiation strategy
Uniliver achieves the differentiation strategy through:
1. High skilled human resources, complex technology and
multifaceted strategies to provide a more flexible environment to
respond to uncertainty, allow for adaptation to changes.
2. Research and development based on product could boost new
ideas, stronger marketing by focusing on what customers want in
a product rather than in a region.
Effect of the differentiation strategy on the organizational
design:
1. High opportunities of empowerment are given to employees
,decentralization is allowed to lower levels
2. High creativity and risk taking opportunities provided to
employees ,employees are given chances to brain storm ,create
and take initiatives
3. Horizontal flat structure with horizontal informational flow, low
specialization and formalization; and loose departmentalization.
4. The removed of dual reporting and a tall structure of hierarchy.
Cross-functional managers could enhance product development,
research, and sales and result in a more flexible, employeecontent but progressive company working at a more efficient and
effective rate

B-External Environment Assessment

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Task Environment
Industry Sector
Dmain is Manufacturing Care products (Family, Health, Home,
and Beauty)
Large size sector
Major competitor is Procter and Gamble
Industry threats
Threat of competitors (High)
Uniliver is facing intensive competition from strong competitors
including Procter and Gamble ,Henkel
Threat of substitutes (low)
Substitutes to care products include very little substitutes
Threat of Powerful Buyers (High)
Buyers are powerful sue to many brand alternatives with few
differences between competitors, and if differences exists they
arent well recognized by buyers
Threat of powerful suppliers (Low)
Suppliers are numerous in number ,with little differences among
them accordingly suppliers have weaker power against large
market player like Uniliver
Threat of new entrants (Low)
The market is saturated ,large capital requirements are
needed ,existing market players are powerful with large market
shares

Raw material sector

Purchases organization is charged with the strategic sourcing of
all materials, equipment and services for the Company and is
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responsible for overall supplier relationship management and

strategy. Suppliers become more and more diverse every day
Suppliers include :
1. Raw material suppliers
2. Equipment suppliers
3. Packaging materials suppliers
4. 3rd party logistics
5. Information technology suppliers
The quality of suppliers contributes to the final products quality
and accordingly customer value, customer satisfaction, level of
loyalty and market shares. Thats why Uniliver is keen of dealing
with the world class suppliers ]
Suppliers are a source of risk in the following cases :
1. Powerful suppliers with unique products
2. Short supply due to supplier production problems
3. Variability in lead time
4. Foreign exchange risks in case of global suppliers

International Sector
The international sector is of very high value to Uniliver Egypt
Today, Uniliver Egypt is the country's biggest exporter of
packaged goods, and one of the top-10 exporting companies,
exporting to more than 34 countries in Africa, Asia and Europe.

Market Sector
The care products had a high market growth of 14%
A market problem is the low awareness of customer with health
and benefits differences between oral care products
Human Resources Sector
Uniliver is affected by the human resources sector as follows:
1. Surplus in number of candidates graduating from the Egyptian
universities in fields of engineering , sales ,accounting
,finance ,marketing and administration especially with the growth
in the graduates of the private universities that yield higher
qualified candidates
2. Shortage in the technician candidates is always experienced in
Egypt ,due to the low quality technical and vocational training in
Egypt
3. The current economic recession and inflation in Egypt put
pressures on financial compensations required.

General Environment
Sociocultural Environment

Egypts total population stood at 82,079,636 million. Out of this

approximately 90% are Muslims while the remaining are
Christians. Most of the population inhabits the area near the Nile
River and almost half of Egypts population is urban, living in the
densely populated cities such as Cairo and Alexandria.
The education indicators of Egypt project a poor image of the
education system. Only about 58% of the population is literate
and there is a big difference in the literacy rates for males and
females. Male literacy rate is around 68%, while female literacy
rate is just about 47%, indicative of gender disparity. The
National Council for Women, a nodal government agency that
works for the welfare of women in Egypt, aims to completely
eradicate illiteracy among females.
The healthcare system in Egypt is underdeveloped with only
around 29% of the population covered by governmental health
insurance. Egypts public healthcare system is under-funded,
with the government committing only around $1 billion in 2005
06 for upgrading the healthcare sector, which represents a
meager 2.7% of the total state budget. The ministry of health is
the largest institutional financier providing free healthcare
services in Egypt but its reach is limited. Almost 65% of the
Egyptian people pay for their own insurance through private and
other health insurance organizations. The total spending on
healthcare in Egypt is only about 4% of its GDP.

In Egypt one of the main dimensions of culture is Religion

.Egyptian spending is highly related to Religious events example
in the Month Ramadan as the TV watching rates are higher than
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normal, accordingly the TV commercials highly affect the

Egyptian's spending .When there is an event or an occasion
Uniliver always there for its customers.
A strong cultural shift is currently occurring in Egypt especially
among middle and high income groups towards health
consciousness
Egyptians are highly affected with TV and Radio advertising
rather than printed ads
Economy
One of Egypts biggest socio-economic problems is the high
unemployment rate which has been growing over the years.
The unemployment rate, which has averaged more than 10%
over a decade, increased to over 12% in 200506. With the
population growing at 1.8% per annum, the economic growth
of 4.4% is not enough to curb the unemployment rate. While
the average growth in employed population during the last
five-year period stood at 2.3%, the rise in unemployed
population has been much higher during the same period
averaging around 8%. The high rates of unemployment and
population growth coupled with meager wages in most of the
public sector companies contribute to the poverty levels, with
close to 20% of Egypts population below the poverty line. A
big challenge for Egypt in the near future will be to create
jobs, as the population within the 2045 age-group constitutes
around 65% of the total population.

Egypt is experiencing a period of economic recession that

followed the 25th January revolution in 2011 .The Egyptian
Pound has depreciated against US dollar from 5 L.E/$to 7 L.E/$
Egyptian GDP growth rate is expected to reach 2% by end of
2012 compared to 7% in 2010
Technological factors
The internet usage in Egypt is rising greatly to reach around 23
million users makes online advertising through social networks
example face book and other sources like YouTube a very
effective advertising tool to reach the target market ,especially
that the internet users are composed of young and moderate
aged users who represent
Technological advancements in bottling ,refrigeration ,quality
inspections, logistics ,IT ,Manufacturing are highly dynamic and
large corporations like Uniliver should be up-to-date with the
latest innovations and advancements
Uniliver Company adopted the recycling method to keep its
environment clean & also to have the soft corner in people's
heart. Uniliver Company is producing new packaging sizes with
differentiated packaging with the help of new technology every
day.
Financial factors
Financial resources are easily accessed in Egypt by Uniliver due
to

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1. Egypt has a well-developed banking sector with large foreign

and local commercial banks operating in the Egyptian market
2. Egypt has a well-developed stock market
3. Uniliver as a well-established organization finds no obstacle
in raising the required resources for further expansion or new
investment opportunities
Governmental Sector
Post revolution the new political system might apply many future
changes in : Corporate Tax rates ,Energy Subsidies ,Minimum and
Maximum Salary limits, environmental and health regulations .
New rules and laws by the new political authority negatively
affect Uniliver for example the new Maximum and minimum
wages law that will put financial pressure on the firm. Reduction
and cancelling the energy subsidies will increase the price of
fuel and energy
While regarding infrastructure, the governments projects have
stimulated and are expected to continue stimulating investment
and economic growth
C-Environmental Uncertainty
Uniliver belongs to the Complex-Stable Environmental
Uncertainty facing too many dissimilar elements and factors that
change slowly accordingly Low Moderate Uncertainty is
determined

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Adaptation to the low moderate uncertainty is done in Uniliver

using the following :
1. The firm has an organic structure
Vertical communication
Eliminated of dual reporting
Flat organization
Horizontal information linkage
High degree of decentralization
Low degree of specialization and division of labor
2. Great emphasis on research and development efforts
3. Great emphasis on the importance of sales and market trend
forecasting
4. The old boundary spanning approach as departments play their
roles in reducing the exposure to risk :
Forward buying to reduce the risk of fluctuations in
exchange rate
Multiple sourcing to reduce the risk of short supply
The current organizational structure suits that level of high uncertainty
as the flat horizontal organization structure increases flexibility and
adaptation to frequent changes in external environment
D-Organizational Culture
Type of culture
Uniliver maintains an adaptability culture
Most importance on flexibility and innovation.
Adaptability and quick reactions to the changing market,
Competition and external environment is an integral component
of corporate strategy in this type of business.
Leadership in such culture is demonstrated by entrepreneurship
and risk taking.
The emphasis is always on growth opportunities and employees
are encouraged to experiment with new ideas.

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Non-observed culture
The non-observed culture in general includes values and
principles shared by the organization and is embedded in its
mission statement, Uniliver mission statement includes the
following values
1. Superior quality and values ,
2. Allowing employees our shareholders and the communities in
which we live and work to prosper.
Website and offices include the following values that are shared
among managers and employees
1. Integrity
2. Leadership
3. Passion for Winning
4. Trust
5. Innovation Is the Cornerstone of Our Success
6. We place great value on big, new consumer innovations.
7. Uniliver Seeks to Be the Best

Observed culture
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It includes cultural practices performed at the organization

Observed

Explanation

culture
practices
Rites

In sales department the employee with highest sales

&Ceremonies

achievement is honored in a ceremony attended by

sales district managers and top managers
The company last year had celebrated 15 years in the
Egyptian market since established in 1999 ,a large event
had been held and attended by the board of directors
,employees and labor
A special ceremony is always held when one employee
or worker is promoted to a higher place
Annual Ramadan's iftar is held and all employees
,workers ,management ,board of directors attend

Symbols

Workers in the plant all are dressed with a standard

overall uniform, managers always insist on wearing

Organization
structure

uniform as an indication for discipline

Uniliver holds an organic structure with no strict
hierarchy of authority ,low specialization ,low
centralization and low division of labor ,this structure is

Power

kept to focus on learning and innovation

Managers have formal power due to their positions as
they have power of rewarding, promoting, etc
Informal power of first line factory managers is due to
strong relations with workers
Informal power of sales managers is due to network of
clients

Culture is affected by the organization structure, horizontal and flat

organization structure allows innovation, brainstorming, this serves
the non- observed cultural values of the firm focusing on innovation
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Technology
Its clear its a sequential workflow interdependence applying
long linked technology for example the output of the purchasing
department (parts and raw materials ) are the inputs for the
assembly department ,the output of the assembly department is
the input of the sales department
Departments depend on each others to guarantee best
performance where medium level of interrelation and horizontal
communication is maintained between departments and there is
one way of flow of materials
The organization structure doesnt suit this type of workflow
interdependence required using because sequential technology
requires medium communication and task forces rather a horizontal
structure with high communication

Part Three
Structural dimensions

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Studying the contextual dimensions of Uniliver takes us to the

fact that the company is a learning organization looking for
innovation ,flexibility ,accordingly the recommended structural
dimensions are those of the horizontal structure with low
formalization, low specialization , less strict hierarchy of authority
,horizontal flow of information and low degree of centralization
Formalization
Low formalization Uniliver keeps a less than strict policy that
includes a minimum set of rules and regulations with
minimum written communication replaced by face to face
communication
Specialization
Low level of specialization is available in all departments
Hierarchy of authority
Horizontal structure with a less strict hierarchy of authority
Centralization
Low degree of centralization
Professionalism
The highest level of professionalism is maintained through
ensuring providing the work force with the latest training
methods and techniques. Human resources all own the
necessary educational requirements that include professional
knowledge, computer literacy and language fluency
Social responsibility

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1. The Unilever Foundation is partnering with five leading global

organizations Oxfam, Population Services International (PSI),
Save the Children, UNICEF, and the World Food Programme. The
Foundations mission is to improve quality of life through the
provision of hygiene, sanitation, access to clean drinking water,
basic nutrition and enhancing self-esteem.
2. The Unilever Sustainable Living Plan will help us double the size
of business while reducing our environmental footprint and
increasing our positive social impact. And Are working on climate
change; water, sanitation and hygiene; and sustainable
agriculture and smallholder farmers.

Recommendations
The current organizational structure should be maintained
and we suggest a change which is forming task force or
teams

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There are common problems facing each product based

division example packaging problems ,distribution
problems ,each division example Uniliver used to work on
such problem separately ,this results in duplication of
activities and extra costs
We suggest the following so that Uniliver can adapt :Task
Force organizational structure is lacked and is needed, a task
force is a unit or established to work on a single defined task
or activity Task force members tend to come from different
areas
Task force or a team formed from different division will be
formed to handle such common problem

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