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Course INDU1114: International Context of HRM Course School/Level BU/PG

Coursework Groupwork (3000 words) Assessment Weight 20.00%
Tutor U Veersma Submission Deadline 03/12/2009

Coursework is receipted on the understanding that it is the student's own work and that it has not,
in whole or part, been presented elsewhere for assessment. Where material has been used from
other sources it has been properly acknowledged in accordance with the University's Regulations
regarding Cheating and Plagiarism.

000469445 Zafar Iqbal Pravin Kumar, Fahmida. Amanda

Tutor's comments

Grade Awarded___________ For Office Use Only__________ Final Grade_________

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 ACKNOWLEDGEMENT

Producing a reflection report was only possible because of efforts made by our
group members.
We would like to thank our course leader Dr. Ulke Veersma who was always
happy to help us in this regard. Above all we would like to good wishes for all
academics and specially the Dr. Antoinette whose efforts to make us clear
that how to develop a effective piece of writing. A lot of articles and books
were consulted to prepare this report.

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 EXECUTIVE SUMMARY

After consulting with group members we choosed the topic of Unilever to work for the

presentation. The reason for selecting this organization was that Unilever is the most diverse

organization which was our focus. As we are studying Managing Across Cultures course, so the

cultural differences in Unilever are obvious which we have observed. As we have mentioned the

brief introduction and history followed by organizational structure/hierarchy. After that we tried

to explain the HR strategies executed by the leadership in both regions selected i.e. UK and

South Asia.

We also try to sum up the communication and performance evaluation policies from material

collected through various sources.

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 2

TABLE OF CONTENTS
ACKNOWLEDGEMENT 2
EXCUTIVE SUMMARY 3

INTRODUCTION 4

STRUCTURE 5

HRM STRATEGIES 6

EMPLOYEE EVALUATION 8

QUADRANT OF PERFORMANCE 11

MANAGEMENT STRATEGY MATRIX 12

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ORGANIZATION CULTURE 13

HOFSTEDE DIMENSIONS 14

CONCLUSION 15

REFERENCES 17

Introduction

Unilever is a multinational corporation, formed of British and Dutch parentage, that owns many
of the world's consumer product brands in foods, beverages, cleaning agents and personal care
products. Unilever employed 174,000 people serving more than 150 countries and had
worldwide revenue of €40.5 billion in 2008. Unilever is a dual-listed company consisting of
Unilever NV in Rotterdam, The Netherlands and Unilever PLC in London, United Kingdom.
Both Unilever companies have the same directors and effectively operate as a single business.

History of Unilever

1930s Unilever's first decade is no easy ride: it starts with the Great Depression and ends
with the Second World War. But while the business rationalises operations, it also
continues to diversify.

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1960s As the world economy expands, so does Unilever and it sets about developing
new products, entering new markets and running a highly ambitious acquisition
programme.

1980s Unilever is now one of the world's biggest companies, but takes the decision to
focus its portfolio, and rationalise its businesses to focus on core products and
brands.

1990s The business expands into Central and Eastern Europe and further sharpens its
focus on fewer product categories, leading to the sale or withdrawal of two-thirds
of its brands.

The 21st century The decade starts with the launch of Path to Growth, a five-year strategic plan,
and in 2004 further sharpens its focus on the needs of 21st century consumers with
its Vitality mission.

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So from the history we can observe that It had passed through a lot of stages to reach such a
distinctive position.

Company structure

Executive directors

The Executive directors are those members of the Unilever executive (UEX), including the group
chief executive, who are also directors of Unilever. CEO and CFO are actually the executive
directors from UEX.

Non-executive directors

The non-executive directors are the independent element in Unilever's governance.

Unilever executive (UEX)

The Unilever executive (UEX) is responsible for managing profit and loss, and delivering growth
across our regions, categories and functions. The positions lye under this are president foods,
regional president and chief HR officer.

Senior corporate officers

Unilever's senior corporate officers are responsible for ensuring that Board meetings and Board
committee meetings are supplied with the information they need. The examples of positions are
like group treasurer, group secretary and chief auditor etc.

Unilever HR strategies across the borders (South Asia vs. U.K)

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As the leadership of the Unilever believe, as discussed at later stage in detail, in one Unilever so
the centralized system of decision making throughout the globe is fundamental factor for the
Unilever success. Unilever every focus is upon its employees because the leadership at Unilever
believe that a loyal employee contribute much than any other category of resources. They are
making progress in transforming Unilever's business structures and ways of working. This has at
times involved difficult decisions, but ones we believe are right for the long-term health of their
business.

A changing business environment

Unilever is introducing a transformation process which basic aim is to simplify the procedures
and to get maximum out of resources employed. Their transformation process has focused on
three major areas (1) restructuring and simplifying organisation to eliminate costs that the
consumer does not want to pay for;(2) developing employee skills and capabilities; (3) and
evolving our culture and behaviours to align with a more global way of running business.

A learner, fitter business

The top management announced the creation of a One Unilever R&D function, combining
Foods, HPC and Research into a unified organisation to improve the efficiency, speed and
quality of innovation. After creating One Unilever operating companies in each country around

Leadership development

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A key part of the business transformation has been equipping their people with the skills they
need to help deliver their business strategy. Unilever has invested significantly in learning in
partnership with Accenture – its HR outsourcing partner – by creating a single curriculum for
General Management and Leadership Skills, favored by a one technology infrastructure that also
provides e-Learning. This capability has enabled a fast roll-out of new 'Standards of Leadership'
framework. This programme promotes a set of behaviours aimed at ensuring that every manager
takes personal responsibility for delivering Unilever's strategy. So as a result we can say that
Unilever is creating and flourishing leaders.

Health & safety

Their principal measure of progress is the total recordable frequency rate, which counts all
workplace accidents except those requiring only simple first aid treatment. In 2008, this rate
decreased to 0.21 accidents per 100 000 hours worked, down 19% on 2007. Regrettably, three
employees and one contractor lost their lives in 2008. The lessons learned from these deaths
were communicated across our business.

People vitality

Unilever’s People Vitality programme aims to enhance the personal well-being and effectiveness
of their people, through advice on exercise, nutrition and mental resilience. During 2008 the
programme was rolled out to their operations in Asia, Africa and Latin America. The programme
is already showing positive results. Participants have reported improvements in their quality of
sleep, energy levels, motivation and work performance.

Global diversity

Unilever is committed to developing a diverse workforce. They have 20 different nationalities

among their top-level group of 100 managers worldwide. Their commitment to diversity is set
right at the top of the business with Global Diversity Board, comprising leaders from all business
functions and chaired by Chief Executive Officer.

Listening to employees

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Unilever gather feedback from employees via Global People Surveys (GPS). The first GPS-Pulse
survey after the arrival of new Chief Executive Officer was carried out in February 2009. Some
top-line observations were that ‘People are proud to work for Unilever and feel good about the
culture and business’. Feedback also pointed to areas where there is need to do better and these
are being actioned by the Unilever Executive and senior leaders.

Recruitment and selection through Talent pool management

Unilever Nederland and also in South Asia and Great Britain has been working for last couple of
years with talent pools for recruiting and selecting top candidates with work experience; the ‘mid
careers’. Apart from the concrete vacancies or the direct availability of candidates, the top 10%
best candidates in the labour market are sought and a relationship is built up with them.

EMPLOYEE EVALUATION

Employee evaluation in Unilever is based on two major aspects.

Performance

Sustainability

Performance

‘3Cs of success’, the first two of which are

Courage and conviction.

Courage is the quality you need to act on your beliefs, to take accountability, to accept failure
and learn from it and to do all this even in the face of adversity. Such courage, of course, stems
from the second ‘C’, which is conviction. And conviction flows from knowledge; one’s deeply
held beliefs and world view.

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Third ‘C’, which stands for character. It is only character that drives and channels courage and
conviction to the right ends, meeting goals that bring about a positive change in society.

This leadership development model served UNILEVER well for many years. The company
effectively became a school for practicing managers. But in the late 1990s, as the business
environment underwent a sea change, cracks began to appear in the model. First, there was a
reduction in the number of positions due to the withdrawal of many brands under UNILEVER’s
power branding strategy. The closure of non-core businesses, like seeds and the downsizing of
the large commercial department, due to outsourcing of a large number of backroom activities,
also eliminated many promotional opportunities.

Meanwhile, Unilever itself began to divest brands and businesses, reducing the need for

Expensive expatriate talent. As a matter of fact, the supply of UNILEVER's pipeline of talent
grew because of returning expatriates from the Unilever system.

With fewer slots available and supply increasing, internal competition also increased. During
good times, most managers got good performance ratings. But the system changed as growth
slowed down and competition increased. In the early 2000s, UNILEVER instituted a forced rank
system of evaluating people for all its businesses, further accentuating the insecurities inside the
minds of employees. Managers began to rely on short-term recourses to deliver quarterly profit
and sales numbers. If one brand team did well to grow through a short-term scheme, there was
immediate pressure on the others to follow the same.

The process of identifying fast trackers began to cause disgruntlement among employees.
Initially, when UNILEVER instituted the system of listers, it had focused more on performance.
However, over the years, apart from performance, the potential of the person had played a bigger
role in identifying the fast trackers. This seemed to have introduced an element of subjectivity in
the process of identifying talent.

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When Dadiseth rolled out Project Millennium, many young managers were identified to lead a
set of new growth initiatives. But these initiatives had moved Lever into entirely new areas,
which took a long time to be conceptualized and implemented. Under the Lever system, there
were clear work levels, which defined the nature of work and responsibilities. So, unless there
was a change in the nature of work, a manager could not be promoted to the next level. Career
progression was also slowing down at senior levels. Many of the management committee
members, like the head of the foods division, Gunender Kapur had been expected to move to
larger regional roles in Asia. But the continued non-performance of the foods business had
thrown a spanner in the works. That meant that category heads were unlikely to find a berth
soon, until someone at the top moved on. Many UNILEVER managers had CEO aspirations.
They were

attracted by the opportunities opening up in the country in newly liberalized businesses like
telecom, healthcare and insurance. They moved when they felt they did not get any clear signals
from the top management about what the future held for them.

In 2002, responding to these concerns, UNILEVER switched to an open job posting (OJP)
system. All new jobs were advertised on the intranet. Any employee who met the criteria could
apply. UNILEVER also started a new personal development plan (PDP), where each manager
was evaluated on a set of 12 competencies. The superior was expected to discuss the assessment
with each person.

In the early 2000s, UNILEVER extended the reach of its products through a new channel, the
UNILEVER Network to leverage the power of direct selling. The UNILEVER Network was
poised to enter various categories. UNILEVER enrolled over 1,00,000 consultants for the
Network. The company targeted a turnover of Rs. 500 crores and planned to have a million
consultants working for it by 2007.In addition, UNILEVER proposed a revamp of its entire
brand portfolio in the face of severe competition from low-cost manufacturers and other
multinational players. UNILEVER planned to upgrade its soap, skin cream, shampoo and
toothpaste products, and launch new variants. Among the major initiatives was a new variant of
Fair & Lovely, to pre-empt Procter & Gamble’s (P&G) proposed launch of ‘Oil of Olay’ in
South asia, a relaunch of Clinic Plus shampoo and Close Up toothpaste and a new Liril Orange
Splash soap, in addition to Liril Lime Fresh and Liril Icy Cool Mint.

Besides revamping its brand portfolio, UNILEVER realized that the bulk of its future growth
was likely to come from rural areas. The company embarked upon Project Shakti, which enlisted
underprivileged rural women as direct-to-home distributors. Not only did this initiative provide
sustainable income opportunities, but it also extended UNILEVER’s rural reach to another 100
million consumers in over 100,000 villages.

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Key quadrant of performance climate

Beckhard, Harris and Schein has made a tremendous progress on thos topic which is being
followed by Unilever. These four quadrant are discussed below.

Goals

Goals In developing outstanding performance, the first quadrant to review is Team Goals. This
is the team performance. An unclear vision, lack of goal clarity or conflicting goals is the most
common cause of underperformance.

Roles

The second quadrant of the Performance Climate Survey relates to the clarity and contribution of
the different players in the team. it is the Who of team performance (roles and responsibilities)
In high performing teams, each team member understands their own role and contribution.

Processes

The third quadrant looks at the How of team performance and focuses on a team’s processes and
procedures. PCS provides feedback on the effectiveness of the team’s processes. This includes
the extent to which communication is clear and effectively managed internally and with other
groups. It also measures how individual and team performance is managed and monitored
(performance management.

Connection

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The fourth quadrant addresses the Why factor. The relationship team members have with their
colleagues and the connection they have with the goal and their work is critical to long term
motivation. For example: A Doctor may strongly connect with the Hippocratic Oath to save life
and to their own professional advancement but have little connection to the Hospital employing
him or to his colleagues. High performance teams take time to create. Likewise, changes in
behavior take time to reflect in the performance of the team so PCS should be used quarterly or
every six months for best results. Developing a high performance team is not an art but a skill
based on logic and emotional intelligence. Great leaders follow the flow; Goals, Roles, Process
and Connection (What Who How and Why).

INTERNATIONAL MANAGEMENT STRATEGY MATRIX

NATIONAL RESPONSIVENES

Low high

High

ECONOMIC

INTEGRATION

Low UNILEVER

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The employees need to be given bigger and challenging roles to strengthen the environment for
personal growth. In UNILEVER, employees change roles in every 2-2.5 years. Different learning
programs help the employee in developing multidimensional personality. Brief introductions of
these programs are given below:

Organization Culture

All Unilever employees are expected to avoid personal activities and financial interests which
could conflict with their responsibilities to the company. Unilever employees must not seek gain
for themselves or others through misuse of their positions.

Compliance – Monitoring – Reporting Compliance with these principles is an essential element

in our business success. The Unilever Board is responsible for ensuring these principles are
communicated to, and understood and observed by, all employees.

Day-to-day responsibility is delegated to the senior management of the regions and operating
companies. They are responsible for implementing these principles, if necessary through more
detailed guidance tailored to local needs. Assurance of compliance is given and monitored each
year. Compliance with the Code is subject to review by the Board supported by the Audit
Committee of the Board and the Corporate Risk Committee. Any breaches of the Code are
reported in accordance with the procedures specified by the Joint Secretaries. The Board of
Unilever never criticise management for any loss of business resulting from adherence to these
principles and other mandatory policies and instructions. The Board of Unilever expects
employees to bring to their attention, or to that of senior management, any breach or suspected
breach of these principles. Provision is made for employees to be able to report in confidence
and no employee will suffer as a consequence of doing so.

What are the five Hofstede’s cultural dimensions?

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Geert Hofstede is amongst pioneers in elaborating the cultural issues and that is the reason his
five dimension theory is well known among academics. He states “Culture is more often a
source of conflict than of synergy. Cultural differences are a nuisance at best and often a
disaster.

Power Distance Index (PDI) that is the extent to which the less powerful members of
organizations and institutions (like the family) accept and expect that power is distributed
unequally. This represents inequality (more versus less), but defined from below, not from
above. It suggests that a society's level of inequality is endorsed by the followers as much as by
the leaders. Power and inequality, of course, are extremely fundamental facts of any society and
anybody with some international experience will be aware that 'all societies are unequal, but
some are more unequal than others'.

Individualism (IDV) on the one side versus its opposite, collectivism, that is the degree to which
individuals are inte-grated into groups. On the individualist side we find societies in which the
ties between individuals are loose: everyone is expected to look after him/herself and his/her
immediate family. On the collectivist side, we find societies in which people from birth onwards
are integrated into strong, cohesive in-groups, often extended families (with uncles, aunts and
grandparents) which continue protecting them in exchange for unquestioning loyalty. The word
'collectivism' in this sense has no political meaning: it refers to the group, not to the state. Again,
the issue addressed by this dimension is an extremely fundamental one, regarding all societies in
the world.

Masculinity (MAS) versus its opposite, femininity, refers to the distribution of roles between the
genders which is another fundamental issue for any society to which a range of solutions are
found. The IBM studies revealed that (a) women's values differ less among societies than men's
values; (b) men's values from one country to another contain a dimension from very assertive
and competitive and maximally different from women's values on the one side, to modest and
caring and similar to women's values on the other.

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Uncertainty Avoidance Index (UAI) deals with a society's tolerance for uncertainty and
ambiguity; it ultimately refers to man's search for Truth. It indicates to what extent a culture
programs its members to feel either uncomfortable or comfortable in unstructured situations.
Long-Term Orientation (LTO) versus short-term orientation: this fifth dimension was found in a
study among students in 23 countries around the world, using a questionnaire designed by
Chinese scholars It can be said to deal with Virtue regardless of Truth. Values associated with
Long Term Orientation are thrift and perseverance; values associated with Short Term
Orientation are respect for tradition, fulfilling social obligations, and protecting one's 'face'. Both
the positively and the negatively rated values of this dimension are found in the teachings of
Confucius.

Graphical view of Hofstede cultural dimensions (UK. Vs South Asia)

Here is the diagram which explicit the above mentioned dimensions in the regions selected for
Unilever i.e. UK and South Asia.

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Conclusion
Internal competition was added to external competition and the method fallowed by the highest
group was implemented in all the other group to increase product quality and reduce cost of
production.

Working on any multinational is not an easy task specially the HRM strategies are considered
very confidential in any organization. But we try to sum up the material in a effective manner
and tried to elaborate the things up to our best.
A framework which takes both business environment and culture into consideration is
recommended for organisational middle managers. Key principles for the framework are: (1)
focus on competencies which lead to business success in a particular cultural environment; (2)
differentiate and add competencies depending on business, functional or cultural needs, even if
they may not be a part of the Leadership for Growth Profile; (3) balance between competencies
that build international growth (LGP) and competencies that are necessary to achieve operational
business success.
There is huge difference in culture between the host and home countries of Unilever. As we
discussed in Hofstede theory about the five cultural dimensions. As we can observed from above
that there is huge power distance in south Asia as compared to UK bu on the other hand the
individualisim is much higher in UK rather than South Asia.

We also came to know that the authority given to regional managers is quite a good strategy to
have prompt decision making for the interest of the business.

At last one very important thing we have observed is that Unilever has always priority to focus
upon its employees so that to get maximum out of them. We have mentioned ample HR
strategies which fully facilitate the personnel of the Unilever.

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