Organizational Structures and External Factors: Impact on Productivity of Unilever

This report analyzes the organizational structures and external factors that impact the productivity of Unilever, a multinational consumer goods company. It discusses the different types of organizational structures, such as functional and divisional, and their effects on productivity. It also examines the impact of external factors, including political, economic, social, technological, legal, and environmental factors, on the performance of the business. The report concludes with insights on how Unilever can optimize its productivity in light of these factors.

Individual report

Table of Contents
Table of Contents.............................................................................................................................1
INTRODUCTION...........................................................................................................................2
SECTION 1.....................................................................................................................................2
SECTION 2.....................................................................................................................................4
SECTION 3.....................................................................................................................................6
3.1 Identifying organizational structures and its effect on productivity of business:..................6
3.2 Impact of external factors on performance of business:........................................................6
REFERENCES................................................................................................................................9

INTRODUCTION
Company is the form of business organization which is invested by company’s law in the
UK. It also classifies an association of individuals which is created to handle the business
activities which have a separate legal entity and have perpetual succession. Companies are
classified according on the basis of liabilities, members and control. This report is based on the
company which is Unilever. It is British- Dutch multinational consumer goods which is located
in London and Rotterdam. It includes various product which are food, candy, energy drink, baby
food, cheese, ice cream, coffee, pet food, bottled water, frozen pizza, beauty products, breakfast
cereals and all health care product. In this report, there is the evaluation of different company
which is micro, small, medium sized and large sized business. There is also the characteristics of
the sole trader, partnership, limited liability business and cooperative. In this there is the
explanation of the organizational structure and external factors that affect the performance of
business.
SECTION 1
Basis Micro business Small business Medium sized
business
Large size
business
Definition This business is lie in the
category of the small scale
industries that produce
goods and services on a
small platform, they play a
important role in maintain
the economic development
of the country. Their
capital is not more than
one crore in the business.
They have less number of
labour and less number of
This is the
business which is
small in number
and have turnover
around 6.5 million
pounds and not
more than 50
employee working
with it.
It is the business
in which the
amount is 18
million and
average size of the
employee is
present in this are
250.
It is the
business
which have
employee size
of 500 and
turnover of
the company
is 1.7 trillion.

machine.
Characteri
stics
Key characteristics which
are present in this-
 There is small
number of
employee is
present.
 They have more
knowledge of the
local persons of the
society.
 Provide benefits to
local person in the
society.
 Make innovate in
the existing
products.
There are main
characteristics are
present-
 It is
present in
small area.
 It has
small
number of
employee.
 Their area
is very less
in the
market
location.
 Self
motivated
and self
reliant.
Key
characteristics are
there-
 they are
good in
dealing
with
different
types of
customers.
 They have
educated
team
members
for doing
work hard.
 They have
ability to
learn from
the
mistakes
easily.
Main
characteristics
are there-
 it is
more
profita
ble.
 They
have
lower
efficie
ncy
ratio.
 They
gain
the
market
area
easily.
Example Example for this is the
Mantons cards, this
company is based on
making greeting cards and
gifts on the street, they
have worked hard to offer
a point of difference to
Example for this
is the Company
name The Bowler
which was do the
business of a
meatball- peddling
food truck, this is
The company
name is Verdant
Leisure, it is an
holiday park
operating in the
Scotland and
north of England.
The company
fall in thus are
adm group
which offer
global
marketing
services to the

consumers. the restaurant on
wheel which make
the food with love
, they offer free
range meats and
fresh and seasonal
veggies.
It is estimate that
the employees
number is doubled
by 2020. they
have annul
turnover is 31
million in 2019.
customers. It
is the
interconnected
business
consist of 400
employees
and 27 offices
in 19
countries.
They improve
the
performance
user
experience
through their
services.
SECTION 2
There are different types of organization are present-
Sole trader business- In this business only individual is the owner of the entity. There
main purpose is to provide all quality goods to peoples in a highly effective manner. They can
make decision alone in this.
Characteristics-
 In this there is no sharing of the profit among others all profit and loss is bear by one
person.
 There is no requirement for consulting to some other person because there is only single
owner is present.
Example- example for this is small grocery store located in the colony or society.
Partnership- In this there is the minimum two members are present to start a business, they
share their profit in the ratio of capital contributed by them.

Characteristic-
 There is the profit is distributed in the equal ratio or the ratio they set in the business.
 Both partner is consult with each other before taking any decision.
Example- Rock partner is an example of this, they provide the global marketing services in the
Manchester.
Limited liability business- In this business, owner have limited liability towards the
business. They are not liable for any actions of other partner.
Characteristics-
 It has separate existence from owner.
 It has all legal rights are present in this business.
Example- Blockbuster is the example for LLP which provide the law services to the customers.
Public limited liability business- This business is formed by government to accomplish
the objectives, in this they have limited liability towards the entity and also ownership in form of
shares by government.
Characteristics
 In this business maximum liability is help by the government which mean at least 51%
shares held by them.
 They have limited liability in respect to number of shares.
Example- Bank of London is example of this because majority stakeholder is held by
government.
Cooperative- This business is formed by the association of the peoples, their main purpose is to
accomplish the needs through joint-controlled.
Characteristics-
 In this organization, anyone can take membership for the achievement of the organization
goals and objective.
 There is freedom is available, everyone is express their views in the company.
Example- Equal exchange is the national retailer of fair trade, organic goods in west
Bridgewater, Massachussets.

SECTION 3
3.1 Identifying organizational structures and its effect on productivity of business:
Organizational structure indicates allocation of tasks, coordination as well and supervision
of operations in business which directs towards accomplishment of business goals. Following are
different organizational structure along with its impact on productivity of Unilever:
Functional structure: It is an organizational structure helps in grouping of the employees
by their skills and their roles. Functional structure is based on the hierarchy in which there are
different departments and have different leaders. Functional structure is mostly used in the
business as the people have same knowledge and skills so that they can achieve their targets
easily. Functional structure can help Unilever in increasing the productivity, developing the skills
helps in increasing the performance and helps in minimizing the cost of the operations. This
helps the employees to work effectively in a proper manner by using their skills properly.
Divisional structure: It helps firm in segregating the larger sectors of the business into the
smaller parts according to their major manufactured production. This type of structure is needed
when the firm is dealing in a different product we need divisional structure. In each department
different functions are to be done like sales, purchase, finance, marketing so that the
organisational goals can be achieved. The function of each division are different as it depends on
the product they are producing. Divisional structure can help Unilever in developing the skills
and helps in making the quick decision so that the goal can be achieved (Zhang and Du, 2017).
. From the analysis of both divisional and functional structure, it can be interpreted that
divisional structure is appropriate for Unilever. As, it ensures separation of roles and
accountability of various departments due to which chances of complexity reduces and its
productivity increases (Bukreev and et.al., 2018).
3.2 Impact of external factors on performance of business:
External factors of business pinpoints those factors that influence productivity or efficiency
of business but entity do not have capability to change or alter those factors. For the purpose of
analysing such external forces business applies pestle analysis. It is a technique of that
management or marketers of company use with the motive of monitoring or analysing macro
environmental factors (Bullinger, 2017). In context to Unilever, it helps firm in increasing its

effectiveness and expanding its scope. Further, it is also a useful tool formulating upcoming
plans of business as it provides adequate scanning of business environment. Following is the
pestle analysis of Unilever along with its impact on company:
 Political: It includes stability or instability in government, changes in legislation, global
influence, government policies, etc. As Unilever is a multinational company, it operates
in various countries. Hence, firm has to align with rules and regulations of each country
its functioning in, which is a complex process (Sainati, Brookes and Locatelli, 2017).
Further, political related issues in European Union also serves as a threat to company
because it hinders free trade relations of company. Hence, it impacts profitability of
Unilever negatively.
 Economical: Exchange rates, monetary policies, economic growth rate, disposable
income of consumers, rate of unemployment, interest rates, inflation rate etc. are involved
in this factor (Carmo, Moreira and Miranda, 2016). Increasing rate of wages in various
developed countries impacts firm negatively. As due to high minimum wage criteria,
company has to pay high salary. It will increase cost associated with business, hence,
profit margin earned by Unilever is reduces. But, on the positive side, it can be noted that
increasing wage leads to increment in disposable income of people due to which buying
capacity of customers is enhanced. It results in improvisation in sales unit of an
organization and impacts firm positively.
 Social: Here, safety emphasis, consciousness of people towards health, career attitude,
population growth rate, age distribution and similar other factors related to society are
covered. As interest among adoption of healthful products is increasing, it provides
advantage to company. Unilever can improve customer experience by focusing more of
quality of products sold and offering more product range of health conscious items. It
leads to enhancement in customer attractiveness, hence, brand recognition will increase
(Mijatovic, Maricic and Horvat, 2019).
 Technological: Automation level, change in technology, innovation, research and
development activities awareness about transforming technology etc. are analysed in it.
On the one hand, rising automation enables Unilever to improve customer experience by
implementation of advance technologies in business, which is its positive impact. But on
the other hand, job insecurity emerges among employees of firm as, equipment reduces

need of manpower. It demotivates workforce and even some employees are not able to
utilize advance machinery hence, training cost also increases. In this way it negatively
impacts company (Scholz and Vitols, 2019).
 Legal: It determines regulations such as, consumer law, advertising standards, safety
standards etc. Unilever is subjected to various legislations. On the negative side, it
increases expenses of company. Further, implementation of patents or copyright law
secures brand name and image, which can be referred on positive side ( klein and Weill,
2016).
 Environmental: Environment policies, corporate social responsibility, changes in
weather etc. are examined in this factor. As Unilever, is highly involved in corporate
social responsibilities, such as, promotion of renewable resources. It increases brand
value of an enterprise, hence, positively impacts business.
CONCLUSION
From the above report it can be concluded that companies are of different types, such as,
micro, small, medium as well as large. Further, sole trader business, partnership, limited liability
business, cooperative and public limited liabilities are five different forms of business.
Organizational structures consist of policies and working methods implemented in an
organization. Functional and divisional are two organizational structures. Along with it, external
business environment can be examined with the application of framework named, pestle
analysis.

REFERENCES
Books and journals
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