Essentials of Management Assignment
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Unilever is an Anglo-Dutch company that was founded in the year 1930 by the lever brothers (Murphy and Murphy, 2018). The company owns more than 400 brands relating to, household items, foods, personal care etc. The company has been considered one of the largest consumer goods companies which occupy the 7th rank in terms of most valuable company of Europe. Unilever is run by 150,000 employees and it has its subsidiaries in around 190 countries.
The present report will display a critical analysis of the organizational structure of one of the most valued companies of the world, Unilever. The next section has drawn out a SWOT and PESTLE analysis of the company to strengths, weaknesses and other factors that can assist or hamper the growth of the company. The final part has enlightened regarding the CSR, corporate governance of the company and noted some of the recommendations for enhancing the development of the company.
1. Critical analysis of the organizational structure
Structure: The multinational company, Unilever, owns more than 400 brands including 11 billion-dollar brands (Murphy and Murphy, 2018). The company was first established in 1929 as a margarine and soap producer. The board of this company is mainly comprised of executive directors and non-executive directors. The company occupies a product type divisional structure where the organization is divided into different components focusing on the products. The main feature of the organizational structure of Unilever is the following:
- Product type division
- The corporate executive team of Unilever
- Divisions based on Geography
In the organizational structure of Unilever, the corporate structure is secondary. The structural characteristic of Unilever is based upon the business function, like for the finance team Unilever has its team; again, for marketing and leadership, Unilever has its distinct groups. Description of the executive team of Unilever's organizational structure:
- Chief Executive
- Human resource
- Research and development
- Personal care
- Supply chain
- Marketing and Communication etc.
The workforce of Unilever is diverse as they connect with global consumers. Their international leadership team runs the whole companyand creates impactful strategies and guides the employees. Unilever is driven by the Leadership executives or ULE: The Chief executive Officer of Unilever is Alan Jope and the Chief Financial Officer is Graeme Pitkethly. The executive officer is responsible for making major corporate decisions, managing the resource and operation of Unilever (Chernobay, Yasinska and Malibroda, 2020). The financial officer plays a crucial role in deciding the financial future of the company. The Digital and marketing department of Unilever is run by Conny Braams and the supply chain management is principally operated by Fabian Garcia. Apart from these people, some other renowned people of Unilever are, Sunny Jain, President of Beauty and Personal Care, President and Chair and Managing director is Sanjiv Mehta, Leena Nair is the Chief Resource manager and The Chief Operating Officer is Nitin Paranjpe etc.
Human Resource Management: One of the renowned and largest suppliers of fast-moving consumer goods is Unilever. The company is Anglo-Dutch multinational company and operates all over the world. The company has more than 400 brands and has its subsidiaries in 100 countries across the globe. Apart from having wide organizational scope, Unilever has proved its efficiency in human resource management from time to time. Unilever possesses most of the shining stars in its workforce as it has renowned and attractive employees around the globe. The company serves a high value on motivating their employees as their efficiency is very much dependent on the effectiveness and productivity of the employees (Chiedu, Long, and Ashar, 2017). The company always provides a self-assessment of the employees to understand their perspectives as they have recognized that happiness is an influential driver for the growth and success of the company. Again, to strengthen the international HRM and to motivate the employees the company keeps on organizing campaigns around the globe.
2. SWOT and PESTLE analysis of Unilever
2.1 SWOT Analysis
Global operation: The company operates in more than 190 countries worldwide which has created a global footprint and has strengthened the brand image (Nathaniel, N.D.).
Distinguished brand name: Over the year, the company has put great effort to establish its name among the consumer’s mind that has given a great strength for the products of Unilever as it stays on top of the consumer’s preference.
Distribution Channel: One of the biggest strengths of this company is its distribution channel. The company has shown fabulous efficiency in developing its channels in every corner of the geography.
Product imitation: Like the most renowned companies, Unilever has been facing the same issue that most of Unilever products are easily imitable by other competitors.
Dependency on retailers: When a company hugely depends on the retailers, the effect influences the company as well as the consumers (Birahim, 2020). Unilever is also directly affected by the dominance of the retailers.
Availability of substitutes: There are multiple similar products available in the market like Unilever products. That has become a great concern for the company as substitute products are available at low cost and the consumers do not need to pay anything for switching products.
Growing demand: Globally, the economy is developing rapidly and with this development, the living standard of people is increasing that is considered to be a huge opportunity for Unilever (Cheng, 2021). As in this right time, the right product placing in the right place will show the company abundance of opportunity.
Social media advertising: Around 3.7 billion people use social media worldwide that has become a corridor of opportunity for most of the company around the world. The company can save lots of costs if they focus on social media marketing than TV ads.
The increasing popularity of Private labelled brands: Unilever products are heavily dependent on the retailers. Recently, big retailers are inclining towards their own labelled brand and that has become a threat for the company.
The popularity of Ayurveda products: With the rise of human health sincerity, mankind is rapidly moving towards Ayurvedic products. This high popularity has become a threat for the company. Though the company has started to battle against these Ayurvedic products by bringing Ayush Lever this was not capable to leave a huge response from the consumers (Rabu, 2019).
2.2 PESTLE Analysis
Political influence: Unilever has a huge range of product portfolio and most of the revenue is generated from fast-moving consumer goods. One of the foremost political issues faced by the company is the regulatory restriction by European Commission and Food and drug administration in the US (Ullah, 2021). The company is also liable for the rules and regulations of the local and regional laws of Europe and global rules of the countries where the company sell its products. These countries are India, Russia, China and South Africa.
Economical influence: Economic factors like savings rate, foreign exchange rate, economic cycle, inflation rate determines the demand for products (Ahmed, 2021). The global recession, business shutdown, employee cut has majorly hampered the sales of Unilever. The Covid-19 has displayed the downfall of Unilever growth and that has brought out a long period of uncertainty over the destiny of Unilever.
Social influence: As the increasing number of the product has started developing in the market, the company has decided to develop a strong reputation through emphasizing social and environmental factors. Unilever's product of personal care and wellbeing is visibly declared their strong desire to help people to feel and look good. Even their marketing of Dove soap focuses mainly on helping women feels better from within (Papenfuss, 2019).
Technological influence: Unilever is consistently working towards developing efficiency and decreasing its production cost (Ahmed, 2021). Concerning this, the company is consistently producing new products and selling them online. Unilever has also focused more on digital marketing and different selling method. The company has also been widely regarded for their use of automation that has given them a huge competitive advantage.
Legal Factors: Being a commercial goods company, Unilever needs to obey the rules and regulations of the countries they operate in. Unilever owns 400 brands and each brand and location of the stores need to follow variousregulations like product safety, health and safety of employees, copyright laws etc (Chatterjee and Sahay, N.D.).
Environmental Factors: Unilever promotes those resources which are sustainable and renewable (Ullah, 2021). All the materials of their product are eco-friendly and these products are designed to be safe for all the consumers around the globe. The organization is indeed environmentally friendly.
3. Meticulous Analysis of Corporate Governance, CSR and Quality Policies
Unilever is indeed one of the recognized companies which recognize the importance of good corporate governance and behaviour. The code of business principles signifies the standard of code that all the employees of Unilever need to follow during their business endeavours. Unilever constantly maintainsits corporate governance arrangements and compliance under review and within the annual reports and accounts (Wati, 2020).
“I intend to build further on Unilever's century-old commitment to responsible business. It is not about putting purpose ahead of profits; it is a purpose that drives profits.”—Stated Unilever CEO Alan Jope.
Uniliver has been pioneering in the field of corporate social responsibility. In the financial year of 2019-2020, Hindustan Unilever Limited has spent around 143 crores on their Corporate social responsibility. The company is focusing on their social and stakeholders’ responsibilities because the company has understood the importance of stakeholders in business performance. The stakeholder of Unilever includes investors, stakeholders, suppliers, employees etc (Mirza, 2020). The social responsibility strategy prioritizes the stakeholders as per the business importance. Again, these strategies help Unilever to maintain its position in the market and keep its sustainability in the market.
In terms of product quality, Unilever maintains its responsibility towards product safety by following its Product Safety and Product quality Code policy. The company works with multiple teams to ensure the safety and sustainability of the environment. Apart from these, Unilever continuously focuses on the continuous improvements of the product quality issues and conduct safety research with the global scientific company for assessing the product vulnerability (Rezeki and Nasdian, 2020).
4. Reflection of Company’s Strategy
Undoubtedly this multibillion-dollar has been able to maintain its reputation since its establishment by implementing various strategies. In the case of human resource management, their continuous implementation of strategies will enhance the productivity of the workforce as well as it will boost the profitability of Unilever (Khan, Raza and Siddiqui, 2020). The company has given more importance to social media marketing the strategy will help the business in various ways. Social media marketing will help the company to reduce costs along with this it will help Unilever to boost their sales through digital marketing. Again, their strategies related to corporate social responsibility will aid to build a firm image of loyalty among the mind consumers. Therefore, the effective implementation of numerous strategies of Unilever will assist them to gain a unique position in the global market.
The overall writing has highlighted almost every aspect of the renowned company. Though the company is globally distinguished, still it has some side that needs to be evaluated by the company. Uniliver should focus more on creating strategies that will help them to grow and expand globally in the consumer good market. While creating strategies, the leaders must consider the external as well as the internal factors that regarding the rising health concern among the employees. The company must improve their sustainability programs and should enhance the quality of food products. Along with this Unilever should focus more on the automation process to reduce cost expenditure and gain competitive advantages.
The complete report has discussed various aspects of one of the renowned companies of the world, Unilever. The organization structure, leadership strategy and human resource management have always been considered great. In this regard, the research has analysed every aspect of this topic and has used analysing tools like SWOT and PESTLE to identify numerous impacting factors of the company. This analysis will help to recognize and evaluate the impacting issues and create an impacting strategy for the company. The research has been concluded by discussing a reflection of the company and providing some recommendations that can enhance the profitability and growth of the company.
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