Report: Context of Business - Unilever's Strategies & Culture

This report provides an in-depth analysis of Unilever's business context, focusing on its leadership style, management practices, and organizational culture. It begins with a brief overview of Unilever, a leading global consumer goods company, and then delves into its vision, leadership styles (autocrat...Read More

CONTEXT OF BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
A brief summary of Unilever......................................................................................................1
Vision, Leadership style, Management practices and the organisational culture of the industry
.....................................................................................................................................................2
Influence of culture and management style on the business functions and strategies................4
Recommendations.......................................................................................................................5
CONCLUSION................................................................................................................................6
References........................................................................................................................................7

INTRODUCTION
Business context can be defined as an entity where individuals are employed for the
particular duty and role. It defines the factors of the industry such as; strategies, framework,
environment and other internal and external surrounding in which business performs. The
present report of 'Context of Business' is based on Unilever, a British consumers goods provider
that is headquartered in London. This study is going to identify the leadership style, management
style and organisational culture of Unilever. Moreover, the report will cover the design and
development of the industry.
MAIN BODY
A brief summary of Unilever
Unilever is one of the leading supplier of fast moving consumers goods all around the
world that was incorporated on 21st June 1894. The industry was founded by William Lever on
2nd September in the year 1929. Unilever is a public limited company and is known for its
innovative conceptual ideas and technologies (Alonderiene and Majauskaite, 2016). Moreover,
the products are customer friendly and promote sustainability factor to promote the carbon
footprint.
The segment of the industry include;
 Primary care; skin care, hair care, deodorants and oral care products
 Foods; Soups, snacks, bouillons, salad, margarines, mayonnaise, etc.
 Home care; home care products, range of cleaning products, refreshments.
It is one of the oldest multinational industry that operates and serve their products
worldwide. Unilever owns more than 400 brands that mostly fall under two main categories;
Personal care and food and beverages. Unilever serves high quality products under each brand to
the consumers in all the geographic location of the world.
In the context of profit and revenue, in the year of 2018 the revenue of Unilever was
£50.983 billion and operating income was £12.536 billion. Along with it, the total assets has
been calculated around £59.457 billion and total equity in the year of 2018 was £12.293 billion
(Donate and de Pablo, 2015).
Unilever offers the products and services in approx 190 countries that effectively
functioned by 155,000 employees. All the employees are communicated with the vision and
1

mission of the industry and also communicated by the leaders and managers to achieve the
objective with ease.
In the context of legal structure and governance, Unilever was formed in 1930 from two
companies; Margarine Unie and Lever brothers. Thus, it was a full business merger, operating as
a single business entity. There are two separate legal parent companies have been maintained;
Unilever NV (Netherlands) and Unilever PLC (UK). Unilever NV and PLC registered at Port
sunlight in United Kingdom.
Vision, Leadership style, Management practices and the organisational culture of the industry
Unilever Vision:
Unilever have vision of creating a better future every day for consumers as well as or the
employees. The vision of the industry is to make sustainable living commonplace and believe
that this is the best long-term way that help in business development (Elsmore, 2017).
Unilever's vision statement widely presents what industry is required to do to succeed in
the long-run. The vision statement of the organisation put emphasis on sustainability among
consumers and provides direction of growth and development to the company.
Leadership style
Leadership style is a method that provide direction of implementing plans and to
motivating people to the leaders. There are many leadership styles that can assist Unilever in
leading and guiding the workforce in the right direction to achieve the vision and motivate them
to accomplish the organisational goals. Following are some examples of effective and various
types of leadership styles;
 Autocratic leadership: In this leadership style, leaders make decisions without consult
with the team members, even if their input and ideas would be useful. This style can be
useful when leader of Unilever need to make decisions on quick basis and when there is
no requirement for team input (Holten and Brenner, 2015). However, this style can be
demoralising and it can lead to high level of absenteeism and labour turnover.
 Democratic leadership: Democratic leaders are kind of participative nature that
encourage the team members to put their ideas and perception on the topic and include
them in decision making process. But the final decision made by the leader only. Leaders
encourage creativity and people within the industry are often highly engaged to the
2

decisions and projects. As a result, members in the team tends to have high job
satisfaction and high productivity.
 Delegative leadership: In this style, leaders give a lot of freedom to the team members
and individuals regarding the way of completing task, how they set their deadlines.
Leaders is not much involved in the decisions but provide support with advice and
resources if needed (Murphy and Murphy, 2018).
Leader of Unilever Plc is of democratic leadership style as they believe that there is no
requirement in the industry to being so strict and limits the involvement of employees. As their
vision is to create a happy and comfortable environment, by following this leadership style, they
are able to make the employees feel motivated, encouraged and valued by the industry. Along
with it, this leadership style make the employees able to think out of the box as it encouraged
innovation and creativity.
Management practices
Management practices can be refer to the working methods that can be followed by
managers to improve the effectiveness of work system and to manage and motivate the
workforce to accomplish objectives and also improve employee productivity (Murphy and
Murphy, 2018). There are some common practices of management such as; introducing various
form of new technologies, training staff, empowering employees and introducing different
schemes for improving quality.
 Reward efforts: Under this management practices, manager provide rewards to the
employees based on their performance. Reward can be tangible or intangible. The
manager of Unilever aims to give both financial and non-financial rewards to the
workforce that help in encourage them and improve their performance.
 Focus team efforts: Team work is the key to success in Unilever and manager make sure
that the team gets the right direction and on ongoing team dynamics and encourage them
to work as a team for accomplishing the team goal.
 Engagement: This is very essential management practice to make the employees care
about their responsibilities toward company and about the vision of the organisation
(Smith, 2016). Engaged workers are more productive and enthusiastic and encourage
engagement enable manager to build a relationship between company and the staff that
help in to enhance their loyalty.
3

Organisational culture
Culture of Unilever based on the beliefs, norms, vision and attitudes. Along with it, the
company have organisational culture of performance that emphasizes on importance of employee
output. Thus, the culture of Unilever focuses on performance as well as quality (vom Brocke,
Zelt and Schmiedel, 2016). To make the culture more stable and effective, organisation use
Handy's culture model. The model present four types of culture; Power, person, task and role and
the focus of Unilever is on role culture.
Influence of culture and management style on the business functions and strategies
The management style and organisational culture of Unilever have significant impact on
the functions and strategies of Unilever. It also has intense impact on the performance and
operations. It has both negative and positive impact on the workforce and their productivity.
Unilever follow democratic leadership style that is very effective to enhance the productivity of
staff and their performance (Wang and et. al., 2016). On the other hand, it has disadvantages too
democratic leadership style limits the time of making decision that can affect the day to day
functions and operations. For example; In the situation of bringing new technology in the
industry that is a demand of market and requirement for the company. Leader is taking point of
view of employees that can take time and limit the operation of the company. One style can
affect the performance and lead the company towards the lack of discipline. It directly affects
financial performance and sales as well as profitability of the organisation.
Unilever's Corporate culture affects business performance as whole, functions and
strategies. It has different characteristics and all the elements & division of its culture affects
human resources and leadership as all are interrelated. Unilever organisational culture is
responsible for rising financial performance as well as the quality of its products and services
(Yahaya and Ebrahim, 2016). There are assorted elements in this culture, leadership and human
resources also support and perform some functions for developing this.
Unilever can able to develop the culture through regular monitoring and evaluation of
leader. Leadership plays an essential role in developing the corporate culture as it examine and
identifies all the requirements of employees and the way if employees of interacting with each
other. Management style have various impact on the business function and on the performance of
employees and overall staff. It makes positive and negative both influence on the company.
Democratic management style influence the motivation of the workforce high that indicate in the
4

productivity and on the overall performance. But in some critical situations and in quick situation
it limits the function and capability of the leader and manager to take effective and quick
decision that is the negative side of this style (Holten and Brenner, 2015).
Recommendations
By examine business context of Unilever, it has been summarised that the company has
effective policies and strategies formulated by the leadership and management and it enforced on
all the functions and operations of the business but Unilever is required to consider areas of
improvement and
 It is recommended to the industry the organisational culture of Unilever should improve
the collaboration of various functions, it will encourage work cross-functional that help to
accomplish business goal effectively (Unilever, 2019).
 Leader should boost and communicate on collaboration in the industry to reduce the
discrimination the staff based on gender, capabilities, age, etc. and also recommended to
make effective policies that help them in preventing discrimination.
 It has also been examined that Unilever follow democratic style by its leaders but they
are also suggested following autocratic to take decisions in quick situations. Although,
democratic style is beneficial for the employees as well as staff but autocratic will help in
maintaining discipline.
 The organisational culture is based on the beliefs, norms and values. The management
and leadership should develop advanced working culture and environment in the
structure that promote employees to think creative and innovative and should expand
their CSR policies and strategies that is responsible for sustainable growth in the global
market (Elsmore, 2017).
 They are also required to upgrade their marketing strategies and should implement digital
marketing tactics as this will give competitive advantage to the industry in global
business environment. Furthermore, the distribution channel of Unilever should be
expanded on the technological level in online store that provide services and products
directly to the consumers and it makes them able to cover more consumers and more
market.
5

 They manage all the resources effectively and efficiently that help in future and critical
surrounding. The resources include; human resources and other reliable resources as well
and should change the style and approach as per the situations.
CONCLUSION
From the above study it has been summarised that leadership and management in the
Unilever able to effectively develop the tactics and strategies as well as handle the people. The
organisation has followed Democratic leadership style that enable the leaders and managers to
manage organisational and employees. The culture and style have significant impact on the
business function of the organisation as well as strategies. It has been recommended to Unilever
to adopt autocratic leadership style in specific and required situation. Furthermore, the culture of
organisation is role-oriented that focuses on actual performance and employee centred.
6

References
Books and Journals
Alonderiene, R. and Majauskaite, M., 2016. Leadership style and job satisfaction in higher
education institutions. International Journal of Educational Management. 30(1).
pp.140-164.
Donate, M. J. and de Pablo, J. D. S., 2015. The role of knowledge-oriented leadership in
knowledge management practices and innovation. Journal of Business Research. 68(2).
pp.360-370.
Elsmore, P., 2017. Organisational Culture: Organisational Change?: Organisational Change?.
Routledge.
Holten, A. L. and Brenner, S. O., 2015. Leadership style and the process of organizational
change. Leadership & Organization Development Journal. 36(1), pp.2-16.
Murphy, P. E. and Murphy, C. E., 2018. Sustainable Living: Unilever. In Progressive Business
Models (pp. 263-286). Palgrave Macmillan, Cham.
Murphy, P. E. and Murphy, C. E., 2018. Sustainable Living: Unilever. In Progressive Business
Models. (pp. 263-286). Palgrave Macmillan, Cham.Garavan, T., 2016. Management
development. In Encyclopedia of Human Resource Management. Edward Elgar
Publishing Limited.Anitha, J., 2016. Role of Organisational Culture and Employee
Commitment in Employee Retention. ASBM Journal of Management. 9(1).
Smith, A., 2016. Experiential learning. Edward Elgar Publishing Limited.
vom Brocke, J., Zelt, S. and Schmiedel, T., 2016. On the role of context in business process
management. International Journal of Information Management. 36(3). pp.486-495.
Wang, Y.S. and et. al., 2016. A conceptual model for assessing blog-based learning system
success in the context of business education. The International Journal of Management
Education. 14(3). pp.379-387.
Yahaya, R. and Ebrahim, F., 2016. Leadership styles and organizational commitment: literature
review. Journal of Management Development. 35(2). pp.190-216.
Online
Unilever. 2019. [Online]. Available Through:<https://www.unilever.com/about/who-we-are/>.
7