Strategic Change in Unilever: A Case Analysis

This article analyzes the strategic change implemented by Unilever under the leadership of Paul Polman. It discusses the need for change, the strategies adopted, and the outcomes achieved. The case analysis explores the concept of change kaleidoscope and the leadership style of Polman. The article concludes with recommendations for implementing successful strategic change.

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Strategic Change
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Table of Contents
Introduction......................................................................................................................................2
Strategic Change..............................................................................................................................2
Leadership style...............................................................................................................................5
Conclusion.......................................................................................................................................6
Bibliography....................................................................................................................................7

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Introduction
The world is changing, customer preferences are changing, economy is changing and technology
is changing. Due to changing environment businesses need to change its strategies and
businesses who fail to embrace change cannot survive in the current environment. In an
organization, change can be implemented with the help of an effective leader. Firstly managing
change in an organization involves diagnosing the organization environment and then analysing
strategic change required in the organization1. This can be understood with the help of case
analysis of Unilever. The company was started in 1930 in the UK and now a multinational giant
that offers various products in a different range to its customers. Case analysis of Unilever is
done to know the strategies that company followed from 2009 to 2014 in order to improve its
performance and to survive in the market2. The case analysis includes identifying the problem
that company faced and reasons for change and how the company accepted the change under the
leadership style of Paul Polman. Further sections disclosed the changes that company made and
this is analysed with using different concepts and model of change that is change kaleidoscope,
type of strategic change and done and levers of change that leader adopted to improve the
performance.
Strategic Change
Strategic change is a choice that companies made in order to change its structure and working to
improve performance3. Under the leadership style of Paul Polman, Unilever gone through
various changes and the need for change was diagnosed by Paul Polman in 2009. Unilever was
facing various challenges in the market that was, competition from other big players at
international platform, slow growth in its profits and performance and it was recognized by the
leader that company’s profit declined in the year 2009 that showed that there was a need to
change the structure and key performance indicators and implement change in an effective way.
Paul recognized in 2009 that “the company had to deal with significant economic headwinds and
1 Johnson, G., Whittington, R., Scholes, K., Angwin, D. and Regnér, P., 2011. Exploring strategy. Financial Times Prentice Hall.
2 Steve Smith, W., 2009. Vitality in business: executing a new strategy at Unilever. Journal of Business Strategy, 30(4), pp.31-41.
3 Tidd, J. and Bessant, J.R., 2018. Managing innovation: integrating technological, market and organizational change. John Wiley &
Sons.

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weak markets that affected the sales growth of Unilever by 3 per cent and turnover of company
declined because of adverse effect of currency changes”4.
Paul Polman played the role of better strategic leader for Unilever as he managed to identify the
need of change on right time and developed strong future strategies to improve the performance
of the company and aligned organization resources and structure to improve the performance of
the company and implemented change strategy appropriately.
The strategy that Polman adopted or formed included focused on the innovation of products,
vision to improve performance and focused on profitable volume growth. Change in vision and
strategy of Unilever led the change in people, organization structure, and change in culture,
performance target and remuneration arrangements of the company. In 2010, launch of the
“Unilever sustainable living plan” helped the company to renew its business objective and this
helped the company to increase overall impact on society5. Change in people included the hiring
of most of the experienced person for top level management and this step by Polman shuffled top
management structure of the company. Further, “he implemented change in organization in a
systematic way and in 2011 transformed the organization structure of the company from
decentralized to multi centred and followed a structure that with 22 regional centre operates in 11
different categories and focused on our categories with 8 geographical cluster this change was
done to speed up the decision making process and to improve resource allocation in each
segment of Unilever”. Polman also changed the performance indicators that were followed by
the company on constant basis and included some short term performance indicators also that
were cash flows, market share and cost levels. At last remuneration system was changed
including top level employees to ground level staff and more focused was given to efficiency and
speed and for that Polman increased variable factors in the salary of employees and lowered the
basic pay6.
From the above initiatives that were taken by the leader of Unilever it is known that Polman
adopted situational leadership style and took decision by analysing the market needs and
4 Thompson, A., Strickland, A.J. and Gamble, J., 2015. Crafting and executing strategy: Concepts and readings. McGraw-Hill
Education.
5 Unilever, 2019. Sustainable Living. Accessed from: https://www.unilever.com/sustainable-living/
6 Nazarova, V. and St, S., 2015. An Analysis of the Effectiveness of the M&A Strategy of a Diversified Company (Unilever Group
Case Study).

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environment demand and trends. In situational leadership style leader change its style according
to the situation and thinks that there is no best or appropriate style that fits in all the situations.
By analysing the strategies formed by Polman and the steps he took to implement change can be
best analysed with the help of “change kaleidoscope”. This concept helps in analysing the factors
that are important in implementing change process in an organization. Strategic change
programme includes factors such as time, scope, preservation, diversity, capability, capacity,
readiness and power.
By analysing Unilever case, it is known that Polman implemented change in the organization at
right time as profit and growth of the company was slowed during 2009. The level of change that
was implemented in the organization was revolutionary as he changed all the aspects and vision
or objectives of the company and made it more centralized. The preservation includes the level
of organization resources to be maintained in order to be successful in change implementation
and Unilever changed its organizational structure and all the resources were allocated to different
categories as per the requirement of the segments7. Polman possess the capabilities that were
required to change the organization for betterment, he initiated and identified need of change,
made strategies accordingly and with minimum resistance to change, he implemented change in
the organization within six years and his strategies proved to be successful as profit and turnover
of Unilever was increase in a positive manner. Looking into the capabilities and readiness of
employees in Unilever, the power that Polman had force the employees to accept the change and
the leadership style that was adopted by Polman was the reason behind the low resistance and
readiness of employees to accept the change. Workforce of Unilever accepted the change in
organisation structure, management structure, remuneration system and targets in a positive note
and this was because of the capabilities that leader had and that helped the organization to speed
up the change process and get maximum benefit out of it for longer run.
According to capabilities and readiness of employees at Unilever the style of leadership opted by
Polman was collaborative as workforce was ready to accept the change and the company had
capabilities to implement all the strategies effectively and get maximum benefit out of it. High
capabilities and high level of readiness lead to adoption of collaborative style of leadership
whereas low level of readiness and high level of capabilities leads to adoption of participative
7 Rumyantseva, M., Enkel, E. and Pos, A., 2007. Supporting growth through innovation networks in Unilever. In Knowledge
networks for business growth (pp. 77-97). Springer, Berlin, Heidelberg.

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style of leadership. Further, type of change that was implemented by Unilever was revolutionary
change and Polman possess the characteristics of transformational leader and that led to drastic
and big changes in Unilever in 2009 to 2014. Type of change that is analysed in the case of
Unilever, nature of speed was big bang and the change ended up in the big transformation and
that is called revolutionary change as Polman changed the whole structure of Unilever at right
time with right strategies. Revolutionary change is when need of change is not fast strategic but
deep cultural change is required in the organization and in case of Unilever there was need to
change the organization culture and that was reflected after six years of leadership of Polman as
organization become more focused towards ethics and corporate social responsibility and for
societal outcome. Further, revolutionary change includes clear vision and direction for the
company, changes in top management structure, change in organization culture, and monitoring
those changes.
Levers for strategic change include changing operational processes, symbolic management,
power and political system. There is relationship between operational processes and strategic
change and this can be considered with three aspects, challenging operational assumptions,
operational change planning, and bottom up routines. Symbolic management includes change in
belief and culture of the organization and ability of leader to change the mindset of employees.
Political mechanism includes expertise, support of stakeholders and strong network. In relation
to case of Unilever, it is identified that strategic change was done in operational level and
symbolic management was done by changing belief and values and by including ethical
consideration in all the aspects and power system of leader was strong that led to effective
strategic change in the organization8.
Leadership style
Paul Polman is a transformational leader; he achieved remarkable things in transforming
Unilever in 2009. “He reinvigorates Unilever’s financial outlook, he also transformed the
company into an environmentally conscious and ethical organization. Polman transformed
Unilever in six years into a more successful company as the share prices of company go up due
to changes implemented in 2018 share prices was €17.34 and in 2015 was €39.05. Further,
8 Johnson, G., Scholes, K. and Whittington, R., 2008. Exploring corporate strategy: text & cases. Pearson education.

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Unilever rank in peer group was increased as in 2009 ranked number 5 and in 2014 ranked 14.
Under the leadership style of Paul the company grows and showed positive outlook in sales of
luxurious products. Because of strategic change company margin and performance was
improved and earning per share growing at double digit pace”9
Leadership style of a person differs in different situation as analysed in case of Paul Polman. The
successful leaders don’t stick on a particular style of leadership rather their style changes as per
the situation and readiness of workforce and behaviour of employees and mindset of employees
towards the change10 Most of the leaders opt and follow the style as per the behaviour of
followers as leaders have to lead the follower and provide them the direction to work well. So
leadership styles that can be adopted by leader depend on various factors and a transformation
leader always change its style of leadership as per the situation and demand of situation.
Conclusion
From the analysis it is recommended that to improve the strategic change or to implement
change in an organization a roadmap is created and need of change should be communicated to
the employees on time with most effective way so that resistance of change become low and
change can be implemented successful that can give more benefits to the organization for longer
run. It is concluded from the case analysis of Unilever that the most important thing that is
required while implementing change is to recognize need for change on time and communicate it
to others. Leadership style also plays an important role during strategic change as leader plays a
role of change agent also that help to implement change in positive way. Further, it is also
concluded that to analyse the change and to implement it change kaleidoscope can be useful that
helps in analysing the factors that affect the change. Under the leadership of Polman, Unilever
transformed and all the change strategies applied by Polman proved to be successful and
achieved the strategic purpose that was improving the performance and make the sales profitable
with greater margin and to make all the segments and categories profitable. So from analysis it is
known that change can be implemented in a positive way only when leader can take risk and
initiate and identify the need for change at right time.
9 Kashmanian, R.M., Wells, R.P. and Keenan, C., 2011. Corporate environmental sustainability strategy: Key elements. Journal of
Corporate Citizenship, (44), pp.107-130.
10 Mitchell, A., 2010. Taking Responsibility. International Commerce Review, 9(1), pp.30-34.

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Bibliography
Johnson, G., Whittington, R., Scholes, K., Angwin, D. and Regnér, P., 2011. Exploring strategy.
Financial Times Prentice Hall.
Johnson, G., Scholes, K. and Whittington, R., 2008. Exploring corporate strategy: text & cases.
Pearson education.
Kashmanian, R.M., Wells, R.P. and Keenan, C., 2011. Corporate environmental sustainability
strategy: Key elements. Journal of Corporate Citizenship, (44), pp.107-130.
Mitchell, A., 2010. Taking Responsibility. International Commerce Review, 9(1), pp.30-34.
Nazarova, V. and St, S., 2015. An Analysis of the Effectiveness of the M&A Strategy of a
Diversified Company (Unilever Group Case Study).
Rumyantseva, M., Enkel, E. and Pos, A., 2007. Supporting growth through innovation networks
in Unilever. In Knowledge networks for business growth (pp. 77-97). Springer, Berlin,
Heidelberg.
Steve Smith, W., 2009. Vitality in business: executing a new strategy at Unilever. Journal of
Business Strategy, 30(4), pp.31-41.
Thompson, A., Strickland, A.J. and Gamble, J., 2015. Crafting and executing strategy: Concepts
and readings. McGraw-Hill Education.
Tidd, J. and Bessant, J.R., 2018. Managing innovation: integrating technological, market and
organizational change. John Wiley & Sons.
Unilever, 2019. Sustainable Living. Accessed from: https://www.unilever.com/sustainable-
living/