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Unilever Company’s Leadership and Corporate Governance Case Study

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Updated: Aug 17th, 2020

How does Unilever display its commitment to leadership?

Unilever was established in 1930 after an amalgamation of companies that existed before the 20th century. In the early years of its establishment, the company went through tough economic conditions courtesy of World War II and the Great Depression (“Case study 4: Unilever” n.pag). Further, the persistence of inflation in the 1970s forced Unilever to abandon more than two-thirds of its brands by selling them to rival firms or pulling out. In the end, Unilever managed to come out of that predicament. Currently, it is one of the world’s largest fast-moving consumer goods (FMCG) companies (Market Line 3). The company operates in Europe, America, Africa, and Asia. Its headquarters is in London, United Kingdom. As of December 2014, the company has 172,472 employees.

The success of Unilever associated with the company’s commitment to leadership. Mainly, it displays its commitment to leadership through the corporate government, embracing organizational change and incorporating local cultures within the internationally accepted corporate framework. The leadership commitment of Unilever is founded on its corporate governance (“Case study 4: Unilever” n.pag). Notably, its Code of Business Principles mandates the company and its subsidiaries to conduct business operations within the internationally accepted principles of best practices.

As such, the Code of Business Principles enables the company to comply with the best practices such as obeying the law, embracing vigorous competition, pursuing business integrity, promoting diversity, providing quality products and services to customers (Unilever Code of Business 2). Corporate governance constitutes the norm of the company. Remarkably, irrespective of the leader in charge, leadership commitment is always evident in Unilever. For instance, Patrick Cescau, a former chief executive, initiated the “One Unilever” model of corporate governance (“Case study 4: Unilever” n.pag). This approach pursued the expansion and decentralization of the company operations regarding leadership and management.

Unilever, as a multinational company responds to diverse international environments. Through commitment leadership, Unilever manages to express diverse and sensitive responses based on cultural issues in question. According to Van Beek and Grachev, the response of Unilever’s leadership to cultural issues in its subsidiaries is based on strategic disposition (from ethnocentric to geocentric level) and strategic configuration (from multi-domestic to global level). The cultural sensitivities influence Unilever’s ability to prevail over cultural frictions. Besides, the response enables the company to transfer competencies and ethical behaviors past national borders.

Further, Unilever demonstrates its commitment to leadership through organizational culture and practices. According to Paul Polman, the current Unilever CEO, every individual in the company is a leader, so long as he/she influences someone else positively (“Case study 4: Unilever” n.pag). As such, Polman’s argument demonstrates that Unilever considers leadership as one of its core competencies. Notably, this consideration has a strong influence on leadership development and leadership behaviors in the company’s international operations. According to Van Beek and Grachev, the concept of leadership relates not only to traditional dimensions such as styles and traits but also with the development of the level of leadership competencies generated via processes of organizational learning as well as the competitive advantage (320). The efficacy of leadership is determined by the interplay between its proficiency and strategic organizational contingency on one hand, and its approach and behaviors on the other. In enhancing its efficacy, Unilever’s leadership relies on attitudes and behaviors which are congruent with the considered managerial contingencies.

How has this commitment to leadership allowed it to capitalize on opportunities in the marketplace?

The commitment to leadership enables Unilever to capitalize on the marketplace in numerous ways. First, the strategic leadership of Unilever is tied to the company’s long-term goals and objectives. Unilever’s 2009 annual report demonstrates this interplay by reiterating the strong base of company principles and values that Unilever embraces such as trust, integrity, investments to people, and doing what is best for the business in the long term (“Case study 4: Unilever” n.pag). Specifically, the company operates in a competitive market, and in this regard, its leadership is committed to customers through enhanced accountability, responsibility, and quick action. The company enhances its relationship with consumers by simplifying its target setting and sharpening the performance of its employees.

Leadership Growth Profile (LGP) acts as a link between Unilever’s leadership efficacy and the corporate strategy (Path to Growth). This leadership concept was established in the early 2000s (Van Beek and Grachev 321). As an inclusive strategy, the “Path to Growth” entails business operations such as customer development, the supply chain, and brand marketing. Mainly, “Path to Growth” pursues effective enterprise culture by encouraging employees to demonstrate winning behaviors at the marketplace through attitude, motivation, and passion (Rao 268). Using the “Path to Growth” principle, Unilever has managed to amalgamate the main business activities for growth at the global markets with behaviors that result in growth in the long term (Van Beek and Grachev 321). The use of leadership competence has continued to act as the main tool for making Unilever emerge as a winner in markets characterized by strong competition.

Unilever uses LGP as a model of leadership commitment to manage and to control its human resource. Specifically, “Leadership Growth Profile” entails the establishment and implementation of growth vision where the behaviors of employees constitute the foundation of Unilever’s growth (Van Beek and Grachev 321). Besides, this concept enables the management to energize other employers, and at the same time secure their commitment for the sake of the company’s growth. Over the years, Unilever has relied on LGP efficacies in administration development, employment, and performance appraisals to transform and enhance the attitudes and behaviors of managers relating to the attainment of strategic growth. Specifically, LGP competencies have enabled Unilever to pursue opportunities relating to marketplaces across the globe.

Unilever’s commitment to leadership has relied on “Corporate Purpose Statement” to describe its aspirations in the marketplace, as well as the values and beliefs. Using this concept of leadership, Unilever has managed to focus on the local culture of its subsidiaries within a global framework (Van Beek and Grachev 322). The “Corporate Purpose Statement” enables Unilever’s foreign subsidiaries to harness their resources at the local level by aligning them within the local relevance and acceptable global framework. In particular, the company combines its multinational expertise with its deep roots in varied local cultures to provide a wide range of products that suit the needs and preferences of customers (Unilever Our Vision par. 3).

“Leaders into Action” concept enables Unilever to take advantage of opportunities presented in the marketplace. The concept aligns with Unilever’s competencies model with relevant managerial behaviors. Considerably, Unilever relies on the “Leaders into Action” concept to measure cultural change. According to Van Beek and Grachev, the measurement of cultural change in Unilever yields positive and tangible results relative to improvements in LGP (322). Notably, the results demonstrate that Unilever managers can view business activities from diverse angles.

Unilever’s LGP promotes empowerment, delegation, accountability, courageous and persistent, opened, trust, and collaboration, and better coaching. Again, LGP based strategic leadership of Unilever combines numerous aspects such as delivering sustainable value in large categories, working within consumer pyramids, building core competencies such as competitive advantage and trading the market ups (Van Beek and Grachev 322). These attributes have empowered Unilever to continue developing managers as the next generation of leaders across the world. In short, the success of Unilever in international markets is due to the company’s commitment to leadership.

Works Cited

Case study 4: Unilever: Leadership Knows No Boundaries. n.d., n.pag. Print.

Market Line. “Unilever: Company Profile.” A Progressive Digital Media Business, 2015, 1-10. Print.

Rao, Madanmohan. Knowledge Management Tools and Techniques: Practitioners and Experts Evaluate KM Solutions. Ed. Burlington, MA: Routledge, 2005. Print.

Unilever. Code of Business Principles: The Unilever Group of Companies, 2015, 1-2. Print.

—. Our Vision, 2015. Web.

Van Beek, Maarten, and Mikhail Grachev. “Building Strategic Leadership Competencies: The Case of Unilever.” International Journal of Leadership Studies 5.3 (2010): 317-332. Print.

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