Analysis of Leadership and Strategic Change at Unilever (MGT 201)

This case study analyzes the leadership of Paul Polman at Unilever, examining the strategic changes he implemented to address weak markets and economic headwinds. The analysis includes an evaluation of the organizational situation, the needs for change, and the impact of changes on Unilever's culture. It explores the effectiveness of Polman's transactional leadership style and the success levels of the implemented strategies. The paper suggests two initiatives to improve strategy implementation, including a feedback system and increased decision-making authority for regional managers. The study also discusses the difference in leadership styles in varying situations and concludes with a comprehensive overview of Unilever's transformation under Polman's leadership. This assignment is a valuable resource for students studying leadership and strategic management, offering practical insights into real-world business challenges.

Running head: STRATEGIC MANAGEMENT ANALYSIS
STRATEGIC MANAGEMENT ANALYSIS
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction....................................................................................................................2
Analysis and systematic evaluation of the situation......................................................2
Needs for the change......................................................................................................3
Impact on the culture......................................................................................................4
Effectiveness of the leadership styles and the techniques used by leaders....................5
Success levels of the changes.........................................................................................6
Suggestion of two initiatives that can improve implementation of the strategy............7
Comments related to difference in leadership style in a different situation...................7
Conclusion......................................................................................................................8
References......................................................................................................................9

2STRATEGIC MANAGEMENT ANALYSIS
Introduction
Leadership can be defined as the ability that is developed by an individual or a group
to influence the followers or the other members of the organizations as well. The sound and
effective decisions within an organization are mainly made by the leaders and this is able to
support the goals that can be achieved by them. The leaders are found in various aspects of
the society from the business to politics and region to the organizations that are community
based. The effective leader mainly possesses different characteristics that include strong
communication, management based skill, self-confidence, innovative and creative thinking
and the openness to the changes as well (Akinbode and Al Shuhumi 2018).
The report will be based on the analysis of leadership qualities that have been
depicted by the leader in the provided situation. The changes that had been initiated by Paul
Polman, the CEO of Unilever in the year 2009. The effectiveness of changes and impact of
the changes on organizational culture will also be an important part of the analysis that will
be made in the report.
Analysis and systematic evaluation of the situation
Unilever had started its operations in the industry in 1930 after Margarine Unie and
Lever Brothers had started working with each other. The merger of two established
companies in their own industries had led to the development of Unilever. The two
headquarters of the organization are located in the UK and the Netherlands. The situation that
was being faced by the organization was mainly related to the weak markets and economic
headwinds that had played a significant role as well (Binci, Cerruti and Braganza 2016).
Although the company had experienced a sales growth, the levels of turnover of the
organization were quite low. The negative changes that had taken place in the currencies also
had an adverse impact on Unilever and the profitability levels of the firm as well (Choi, Kim

3STRATEGIC MANAGEMENT ANALYSIS
and Kang 2017). The economic pressure had been able to play a major role in the ways by
which Unilever has tried to maintain its position in the competitive industry. The major
challenge faced by Unilever is mainly based on the ways by which progress can be
maintained and the organization can improve its operations despite the economic conditions
(Bligh, Kohles and Yan 2018).
Needs for the change
The type of change that is mainly required and had been planned by the CEO Paul
Polman is the revolutionary change that is based on deep cultural changes that are required in
the organization. The major need related to implementation of changes in Unilever was
mainly related to the lack of growth of the revenues of the company from the year 2005 to
2014 (Fortune.com 2019). The lack of proper growth of the turnover of Unilever has been
able to influence the revenue levels in a huge manner. The relative performance levels and
returns provided to the shareholders had also been influenced in a negative manner due to
changes that taken place in the economic conditions (Fiaz, Su and Saqib 2017).
Unilever was not able to gain a rank among the top 50 most admired companies in the
Fortune magazine in comparison to its competitors Procter & Gamble, Nestle and L’Oreal
who had received the ranks of 5, 27 and 37 respectively. The growth strategy that had been
implemented by the previous CEO of Unilever had also been criticised due to huge lack in
the revenues gained by the company. The changes were mainly required in the business
strategy that had been implemented by Unilever. The split up of the company was also
required in order to ensure the growth of the firm in the industry (Geier 2016). The business
level strategy that had been implemented by the organization was based on three major
elements that include
 Continual development of the improved and new products.

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 Rolling out the innovations and brand based concepts in various businesses in
different parts of the world.
 Reducing the costs based on sourcing.
The change mainly needs to be implemented in the strategies that have been
implemented by the organization previously in order to improve the growth levels of the
organization (Halkias et al. 2017).
Impact on the culture
The new strategy that had been developed by Polman was mainly based on the ways
by which growth of the company can be increased and the competition levels in the industry
can be faced as well. The CEO aimed at sharpening the previous strategy of the firm in order
to move forward and develop consistent levels of business results as well. The two major
aspects related to development of the new structure of Unilever included reduction of gap
from the competitors and bringing Unilever to a leading position in the fast moving consumer
goods or FMCG industry (Holten and Brenner 2015).
The approach that had been implemented by the new CEO was mainly based on four
elements including changes in the strategy, changes in the personnel, changes in culture and
changes in the organizational structure as well. The development and implementation of
values in the company is a major part of the changes that have been made in culture of
Unilever.
The change in the systems had been able to change the behaviour that had been depicted by
people or individuals at various levels of the organization. Major attention is mainly provided
to changes in two systems that are remuneration and setting the performance target (Khalili
2016).

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The targets that have been set by the new CEO were based on long term profits and
growth of the organization as well. Long-term behaviours had been encouraged effectively
with the help of new strategies that are developed by Polman. Performance culture within the
organization had been sharpened effectively with the help of new strategies that are
developed by the CEO. The company had become highly cost-competitive in nature and the
cost levels and market share had been influenced by the new strategy developed by Polman
(Mehmood, Jian and Waheed 2019). The increase in competitive levels in Unilever had led to
the increase in innovation capabilities and growth of the company as well. The major aim of
the CEO was to change the decentralised organizational structure to a more organized and
centralised structure. The performance based culture had been formed in Unilever with the
help of remunerations that are provided with respect to the levels of performance and
sustainability levels as well. Risk taking in the organization had also been reduced and the
company had aligned the measures of its performance with the strategies that have been
implemented by the firm (Odoardi et al. 2015).
Effectiveness of the leadership styles and the techniques used by leaders
Paul Polman had an optimistic view related to human nature that is an important part
of the leadership style of the CEO of Unilever. Polman has always proved to be a social
entrepreneur with the help of changes that the CEO has made in the management styles and
making proper use of the capital that is possessed by the company. The changes that have
been implemented by Paul Polman are related to the proper development of long term based
goals of the organization rather than short term objectives (Popli and Rizvi 2016). The
leadership style that had been developed and implemented by Polman is termed as the
transactional style that is mainly based on the focus that employees have on the proper
achievement of the objectives in order to gain rewards. The remuneration system developed
by the CEO was totally performance oriented in nature and even the higher level executives

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had to depict effective performance in order to gain proper rewards (Rogiest, Segers and van
Witteloostuijn 2018).
The measures of annual bonus of the employees were also based on the improvement
of core operating based margin and the free cash flow as well. More than 70 percent of the
total amount of remuneration had been provided to the executive directors with respect to the
performances that had been shown by them (Nytimes.com 2019). The implementation of long
term based strategies had been able to increase the levels of efficiencies of the organization
along with the speed and performance targets of the employees as well. The leader was able
to transform Unilever into a successful organization that led to the positive response provided
to changes in share prices (Slater 2015).
The employees have been able to form more differentiated strategies that are aligned
to the growth levels of the organization. The “Unilever Sustainable Plan” was implemented in
the year 2010 in order to improve the business operations. The successful changes in culture
and structure of Unilever had been able to play a major role in proper implementation of
sustainable initiatives. The environmental initiatives had been able to play a major role in
ensuring the fast growth of Unilever in fast moving consumer goods industry (Rogiest,
Segers and van Witteloostuijn 2018).
Success levels of the changes
The changed strategy of Polman was also based on the process of “management
shuffle” that had taken place in Unilever. The implementation of innovative capabilities had
also increased and the CEO aimed at changing the organizational structure. The change was
based on the structure of the firm from decentralised nature to an organized centralised
nature. The new strategy had also helped in effective decision making and had improved the

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levels of resource allocation as well. The opportunities that are offered by the market can be
used by the organization in an effective manner (Mehmood, Jian and Waheed 2019).
The innovation hub that had been opened in Rotterdam also led to development of
growth drivers. The CEO also aimed at implementing the vision of “Winning with people”
with the support that is provided by the employees. Unilever started providing the employees
with opportunities related to proper self-development and reaching their full potential as well.
The training courses provided to employees had been able to provided growth opportunities
to the employees (Binci, Cerruti and Braganza 2016). The changes that had taken place in
Unilever under the leadership of Paul Polman had received mixed levels of reactions.
Although the organization had developed sustainable operations, the growth levels of the firm
were not quite high. The predictions that been made by The Financial Times in the 2015 were
that the organization had fell short on growth (Nytimes.com 2019).
Suggestion of two initiatives that can improve implementation of the strategy
The growth levels of Unilever need to be enhanced so that the organization is able to
maintain its position in the highly competitive FMCG or fast moving consumer goods
industry. The CEO of Unilever Paul Polman can thereby implement two major initiatives that
have the capability to improve the revenue levels and growth of the firm. The two initiatives
that can be implemented by the CEO are as follows,
 Development of a proper feedback system for the employees in order to
understand their needs and improve their performance levels further.
 The decision making capabilities of regional managers have to be increased to
a certain extent in order to streamline the operations of Unilever in different
parts of the world (Khalili 2016).

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Comments related to difference in leadership style in a different situation
The leadership style that had been developed and implemented by Paul Polman in
Unilever is transactional in nature as the leader is highly performance oriented. However, in a
competitive industry like the fast moving consumer goods or FMCG, the support and
opinions of the employees are considered to be highly important. The implementation of
transformation leadership and providing inspiration to the employees could play a major role
in improving the operations of the firm in an efficient manner (Mehmood, Jian and Waheed
2019).
Conclusion
The report can be concluded by stating that the CEO of Unilever Paul Polman has
been able to improve the growth levels of the company to a certain extent. However, the
importance that is provided to sustainability is quite high and Polman needs to improve the
leadership qualities in order to improve the relationships that are developed with the
employees as well. Transformational leadership will be able to play a major role in proper
improvement of the operations of Unilever in the future.

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References
Akinbode, A.I. and Al Shuhumi, S.R.A., 2018. Change Management Process and Leadership
Styles. PEOPLE: International Journal of Social Sciences, 4(2).
Binci, D., Cerruti, C. and Braganza, A., 2016. Do vertical and shared leadership need each
other in change management?. Leadership & Organization Development Journal, 37(5),
pp.558-578.
Bligh, M.C., Kohles, J.C. and Yan, Q., 2018. Leading and learning to change: the role of
leadership style and mindset in error learning and organizational change. Journal of Change
Management, 18(2), pp.116-141.
Choi, S.B., Kim, K. and Kang, S.W., 2017. Effects of transformational and shared leadership
styles on employees' perception of team effectiveness. Social Behavior and Personality: an
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Geier, M.T., 2016. Leadership in extreme contexts: Transformational leadership,
performance beyond expectations?. Journal of Leadership & Organizational Studies, 23(3),
pp.234-247.

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Halkias, D., Santora, J.C., Harkiolakis, N. and Thurman, P.W. eds., 2017. Leadership and
change management: A cross-cultural perspective. Taylor & Francis.
Holten, A.L. and Brenner, S.O., 2015. Leadership style and the process of organizational
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Down as Unilever C.E.O.. [online] Nytimes.com. Available at:
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Rogiest, S., Segers, J. and van Witteloostuijn, A., 2018. Matchmaking in organizational
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study. Scandinavian Journal of Management, 34(1), pp.1-8.

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Slater, S., 2015. Leadership style & strategic management: An analysis of hierarchical
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