Unilever's CSR Failure: Leadership, Ethics, and Financial Impact

This report examines the reasons behind the failure of corporate social responsibility (CSR) initiatives at Unilever, a global consumer goods company. It identifies ineffective leadership, particularly the preference for social objectives over economic performance and the emergence of unethical issues as key contributing factors. The report contrasts Unilever's struggles with successful CSR implementations by companies like Microsoft and Lego, highlighting the importance of ethical business practices and leadership commitment. It recommends that organizations prioritize CSR as a differentiation strategy to enhance brand value, improve organizational performance, and address environmental concerns, while emphasizing the need for effective management to avoid the pitfalls experienced by Unilever. The report concludes that, despite potential challenges, CSR is crucial for contemporary businesses to gain a competitive edge and foster a positive social environment.

Running head: ORGANIZATIONS AND MANAGEMENT
Organizations and management
Name of the student
Name of the university
Date: 07/04/2018
Author note

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Executive summary
The aim of this report is to discuss about the reasons of failure of corporate social responsibilities
in Unilever from different perspectives. In addition, this report also discussed about the reasons
for the successful implementation of the corporate social responsibilities in some other
organizations. This report concludes that initiation of the corporate social responsibilities is
important for the business organizations in order to gain competiveness in the market.

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Table of Contents
Introduction......................................................................................................................................3
Failure of corporate social responsibilities for Unilever.................................................................4
Ineffective leadership...................................................................................................................4
Preference of social objective over economic.............................................................................4
Emergence of unethical issues.....................................................................................................5
Probability of successful CSR activities..........................................................................................5
Viability of implementing corporate social responsibilities............................................................6
Differentiation strategy................................................................................................................6
Enhancement of organizational performance..............................................................................7
Fulfillment of the environmental issues......................................................................................7
Conclusion.......................................................................................................................................8
Reference.........................................................................................................................................9

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Introduction
In the current time, contemporary business organization is having different goals and
objectives to meet. This is due to the reason that earlier, the key objective of the business
organization was only maximizing the profit. However, in the current time, apart from the profit
maximization, meeting the social responsibilities is also one of the objectives for the business
organizations. Therefore, in order to initiate the social responsibilities, business organizations
initiates activities through the means of corporate social responsibilities (Cheng, Loannou &
Serafeim, 2014). This refers to the concept of a part of the profit gained by the organizations in
any kind of social welfare. The key objective of initiating corporate social responsibilities is to
give back to the nature and the communities from where they are gaining profits. It is perceived
that apart from the government, business organizations are also having responsibilities towards
the society.
Initiation of the corporate social responsibilities is having multiple benefits for the
organizations but there are few organizations that have faced difficulties in initiating corporate
social responsibilities or they have not achieved the desired outcome from it. Unilever is one of
those organizations, which regardless of being a huge brand worldwide has not being able to
leverage on their corporate social responsibilities (www.forbes.com, 2018). The purpose of this
report is to discuss about the reasons for failure of CSR activities by Unilever. Scope of the
project includes the benchmarks in initiating CSR activities successfully by some other
organizations. This report is done based on secondary data available in the online sources.
This report will discuss about the reasons for unsuccessful approach of corporate social
responsibilities by Unilever. In addition, this report will also discuss about the reasons behind the

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success of corporate social responsibilities by some other organizations. It will also be
recommended whether corporate social responsibilities should be implemented or not.

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Failure of corporate social responsibilities for Unilever
Ineffective leadership
According to the article discussed in Forbes, there are various reasons being identified
for the failure of the corporate social responsibilities of Unilever. One of the major reasons
identified is the ineffective leadership in Unilever (Du, Swaen, Lindgreen & Sen, 2013). In the
article it is stated that Paul Polman, CEO of Unilever is one of the key reasons for the disaster of
Unilever in their corporate social responsibilities. He was working towards meeting his own
political goal by using the resources of Unilever. According to him, initiation of more social
responsibilities through the organization will help to gain positive impression in the market. It
will help him to gain goodwill by considering more social objectives over economic objectives.
Initiation of the corporate social responsibilities is having positive impact for the business
organizations but over concentration of the social objectives over the economic considerations
will hurt the financial stability of the organization. Unilever also faced the similar situation with
the leadership of Paul Polman (Christensen, Mackay & Whetten, 2014). It caused negative
impact on the organizational process of Unilever and issues such as sexual harassment and
environmental controversies. These issues ultimately reduced the social image of Unilever.
Preference of social objective over economic
Another reason that is being identified for the failure of the corporate social
responsibilities of Unilever is the preference of social objectives over the economic objectives.
This is due to the reason that activities in relation to the corporate social responsibilities will only
get succeed when the organization is having favorable financial position. However, in the case of
Unilever, they have concentrated more on the social responsibilities. This took a toll on their

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financial performance. Thus, negative financial performance of Unilever caused limitation in
their corporate social responsibilities. In the article of Forbes, it is stated that the CEO of
Unilever, Paul Polman, have concentrated more on fulfilling the sustainable development goals
of the United nations over the poor financial result of Unilever in 2016. It is to be noted that
corporate social responsibilities are the added business aspects that should be initiated by the
business organizations (Wu, Kwan, Yim, Chiu & He, 2015). These activities cannot be core
business objectives of any business organization. This should also be noted that favorable
financial performance of the business organizations will only help in supporting the corporate
social responsibilities. On the other hand, according to Zhu, Sun and Leung (2014), ineffective
initiation of the CSR activities will further reduce the brand image of the organization. Thus, the
economical objectives will get further dwindled.
Emergence of unethical issues
Another reason for the failure of the corporate social responsibilities of Unilever
identified is the emergence of different unethical issues in their worldwide business. For
instance, in the article, it is stated that issues such as the sexual harassment in Africa,
contamination from mercury in India and undue competition in South Africa caused damage in
their social impression. However, initiation of the corporate social responsibilities should have
positive image in the market. Thus, these issues caused negative brand image in the global
market (Zhu, Sun & Leung, 2014). Hence, companies with having negative brand image will not
be able to leverage from the initiation of the corporate social responsibilities much like Unilever.
Probability of successful CSR activities

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There are various business organizations who have effectively and successfully
implemented their activities in relation to the corporate social responsibilities. However, there
are some factors, which should be considered in effectively implementing the corporate social
responsibilities. For instance, Microsoft is one of the major organizations who are known for
their extensive policies to the corporate social responsibilities. Microsoft is successful for their
effective policies of social responsibilities due to the approach of their leadership. This is due to
the reason that Bill Gates, founder and former CEO of Microsoft is known for his social
activities worldwide. On the other hand, current CEO of Microsoft, Satya Nadella is also known
for his preference for social responsibilities. However, they have not overlooked their core
business objectives; rather they have initiated the corporate social responsibilities in order to
enhance their brand image in the market. This is one of the major reasons for successful
implementation of the corporate social responsibilities by Google (Chin, Hambrick & Trevino,
2013).
Practicing ethical and unethical business policies also determines the effectiveness of
corporate social responsibilities. This is due to the reason that if the organizations are not having
positive brand image in the market, then it is difficult to gain positive outcome from the initiation
of the corporate social responsibilities (Saeidi, Sofian, Saeidi, Saeidi & Saaeidi, 2015). Thus,
organizations should be positive image in the market that will create the authenticity of their
corporate social responsibilities. For instance, Lego is one of those organizations that is having
positive and favorable image in the market. Thus, their corporate social responsibilities are more
effective and create positive impact in the market. This is the reason behind the popularity of
corporate social responsibilities of Lego.
Viability of implementing corporate social responsibilities

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Differentiation strategy
The above discussion concludes that initiation of the corporate social responsibilities is
having both positives and negatives for different business organizations. Thus, it is obvious for
the business organizations to relook at their strategies of initiating corporate social
responsibilities in terms of their viability (Filatotchev & Nakajima, 2014). However, it is
recommended that business organizations should implement corporate social responsibilities in
their business activities. This is due to the reason that in the current business scenario,
competition is huge in every business sector. It is important of the business organizations to have
distinctive business approaches in order to stay ahead and unique in the competition. In this case,
one of the most effective strategies will be the corporate social responsibilities. Having activities
in relation to the social responsibilities will help the business organizations to have positive
brand value in the market and this will reflect in pushing their products and services to the
customers.
Enhancement of organizational performance
Corporate social responsibilities are recommended for the business organizations due to
the reason that it will enhance the ethical business practices in the management. This will reflect
in their positive business management. It is also to be noted that positive business management
will help in enhancing the organizational productivity and financial performance (Rexhepi,
Kurtishi & Bexheti, 2013). Thus, the economic objective of the business organizations can get
enhanced with the initiation of the corporate social responsibilities.
Fulfillment of the environmental issues

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Initiation of the corporate social responsibilities also helps the business organizations
keeping the environmental factors considered. This is due to the reason that in the current
business scenario, one of the major issues being faced by the business organizations is the
climate change and environmental degradation. On the other hand, initiation of the corporate
social responsibilities will help the organizations to initiate strategies in relation to the protection
of the environment and natures. This will have multiple benefits for the business organizations
by having both fulfillment of the social responsibilities and the protection of environment.
Therefore, the business sustainability will get enhanced for the organizations along with having
positive impression in the market.
Conclusion
Thus, it can be concluded that initiation of corporate social responsibilities will help the
business organizations in having multiple benefits in their operation. However, on the other
hand, ineffective management of the corporate social responsibilities may also pose challenges
for the business organizations. This report discussed about the reasons of failed process of
corporate social responsibilities in Unilever. In addition, instances from various other
organizations are being used in this report in order to determine the reasons about how other
companies are successfully implementing activities in relation to the corporate social
responsibilities. This report concludes that regardless of negatives and positives of corporate
social responsibilities, it is important for the contemporary business organizations to implement
this strategy.
Arguments for CSR outweigh the arguments against due to the reason that CSR is not
having direct negative impact on the organizations except due to ineffective implementation. On

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the other hand, initiation of CSR will help the organizations to have positive brand image along
with favorable social environment for their business operations.

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Reference
Cheng, B., Ioannou, I., & Serafeim, G. (2014). Corporate social responsibility and access to
finance. Strategic Management Journal, 35(1), 1-23.
Chin, M. K., Hambrick, D. C., & Treviño, L. K. (2013). Political ideologies of CEOs: The
influence of executives’ values on corporate social responsibility. Administrative Science
Quarterly, 58(2), 197-232.
Christensen, L. J., Mackey, A., & Whetten, D. (2014). Taking responsibility for corporate social
responsibility: The role of leaders in creating, implementing, sustaining, or avoiding
socially responsible firm behaviors. The Academy of Management Perspectives, 28(2),
164-178.
Du, S., Swaen, V., Lindgreen, A., & Sen, S. (2013). The roles of leadership styles in corporate
social responsibility. Journal of business ethics, 114(1), 155-169.
Filatotchev, I., & Nakajima, C. (2014). Corporate governance, responsible managerial behavior,
and corporate social responsibility: Organizational efficiency versus organizational
legitimacy?. The Academy of Management Perspectives, 28(3), 289-306.
Rexhepi, G., Kurtishi, S., & Bexheti, G. (2013). Corporate social responsibility (CSR) and
innovation–the drivers of business growth?. Procedia-Social and Behavioral
Sciences, 75, 532-541.
Saeidi, S. P., Sofian, S., Saeidi, P., Saeidi, S. P., & Saaeidi, S. A. (2015). How does corporate
social responsibility contribute to firm financial performance? The mediating role of