Organizational Theory and Practice in Unilever: Structure, Culture, and Management

Organizational Theory and
Practice

Table of Contents
INTRODUCTION...........................................................................................................................2
MAIN BODY..................................................................................................................................2
Organizational Structure..............................................................................................................2
Organizational Culture.................................................................................................................4
Impact on Management...............................................................................................................6
Motivation of Employees............................................................................................................8
Recommendations........................................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
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INTRODUCTION
Organizational theory is the consists of the concepts that are related to each other and
provides the explanation of behaviour of individuals that are working within an organization.
Organizational practice refers to the routine followed within the organization for doing tasks
applying the knowledge regarding the specific function. Unilever plc is a MNC based in Britain
dealing in consumer goods. Company is the biggest soap producer in the world. The system that
is followed for giving directions to the business activities aimed at achieving organizational
goals is termed as organizational structure. The set of values, prospects and practices guiding the
functions of employees that work within the organization is termed as organizational culture.
This report will discuss the organizational structure and culture that exists in Unilever. The
report will analyse the impact of organizational culture and structure over the management of the
company. Further the report will include the motivation in the employees of Unilever. Based on
the study that will be done in this report recommendations will be given for the company.
MAIN BODY
Organizational Structure
Organizational structure is defined as the system that is applied within the organization
for the purpose of directing the tasks that are division of the objectives into activities essential for
the accomplishing of the objectives that are laid down. Organizational structure of an
organization is responsible for achieving maximum performance. The organizational structure
followed at Unilever is divisional organizational structure (Kaufman, Borry and DeHart‐Davis,
2019). Divisional organizational is used by and best suited for the organizations that are
concerned with organizing their business activities circling around the geographical area, product
groups, market, or service groups. The organizational structure of the Unilever is product based.
Every product of the company is categorized as separate division. Further each product of the
having distinct division has departments namely, production department, sales department,
research and development department, marketing department, etc.
Advantages:
 Accountability: The division of organizational activities into the product ranges of the
company helps Uniliver to easily assign the responsibilities for the set of actions of a
particular division resulting into certain outcome. Each division is accountable for the
actions made by it.
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 Competition: The structure helps Uniliver to compete in the highly competitive market.
The direction of business efforts can be easily shifted in response to the changes in the
business environment.
 Culture: Product based divisional structure helps the company to design its culture for
meeting the needs of the customers.
 Local Decisions: The decision making of the company becomes speedily making the
responsive by the company improved (Ali and et.al., 2018). The company responses
swiftly and on time to the changing market conditions.
 Multiple offerings: The company like Unilever having vast product offerings benefits
from the product based divisional organizational structure through easing the process of
handling the multiple offering to the market.
 Speed: With the adoption of the divisional organizational structure the speed of the
company to respond dynamic market condition increases.
Disadvantages:
 Cost: The creation of whole new set of different departments for each product line that
the company offers to market involves essentiality to recruit more number of employees.
This means occurrence of huge costs by the organization (Zusman, 2021). Cost are
incurred during the recruitment and selection process, training and development of the
employees, salaries and wages to the employees, compensation etc.
 Economies of Scale: The advantage of economies to scale will benefit the company only
when the purchasing of raw materials for each division of the company is integrated.
 Inefficiencies: The another disadvantage of divisional organizational structure is that
having separate set of departments for each product is not as efficient as having one
department dedicated for each function performing the task for every product that the
company offers.
 Rivalries: The changes of rivalry between the different divisions of the organization are
high. Each division will seek to have more amount of budget allocation, tend to hinder
the performance of other division in order to be the best performing division of the
organization.
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