How Principles Of Responsible Management Implemented In Unilever?
An individual management report critically evaluating the most significant component of a chosen organisation’s operations (UK company) and /or behavior that has the most contentious issues arising. Make responsible recommendations that could be implemented to address the arising issues.
The work’s main focus must be on “TRIPLE BOTTOM LINE” (Responsability, Sustainability and Ethics), and how they influenced the organisation.
Further aspects that can be added into the work are:
- Building a responsible strategy and competitive advantage - Responsible supply chains management
- Responsible human resources Management
- Responsible marketing and communication
- International business responsibly
Principle of responsible management is solving the issues that are being encountered in the three major aspects. They are ethics, sustainability and responsibility. It provides a perspective that is completely related to practices. Responsible management is scientifically sound and helps the organisations properly (Hibbert and Cunliffe 2015). The principles are the primary text for traditional society and business. All corporate social responsibility is managed by this type of management. In the process of responsible management, there are four points. They are planning, organising, leading and controlling. It helps in handling sustainability, ethics and responsibility. Further for this report, the company taken is Unilever. Firstly, all the issues of the company will be identified and then some responsible management recommendations will be provided.
Figure 1: The Responsible Management Process
2. Overview of the company
Unilever is a transnational consumer goods company whose headquarters is in London, United Kingdom (Unilever.com 2019). It was founded in the year 1929 and currently, they are serving worldwide. The revenue of the company was 50.982 million Euros. The net income was 9.808 billion Euros. There are 155,000 employees working in the company. The main products of Unilever are food and refreshments, cleaning products, beauty and personal care. In the year 2010, the company shifted its focus from food brands to health and beauty care products due to slow growth. The research and development facilities are available at Netherlands, China, United States, United Kingdom and India.
3. Issues of Unilever: Sustainability Challenges
The framework of Triple Bottom Line is consisting of three main parts. They are environmental, social and financial. Most of the organisations are using this framework for handling their performance in broad perspectives and to main responsible management (Gou and Xie 2017). This also helps them to create some business value. The ethical behaviour of the companies is on the basis of triple bottom line. The concerns of corporate are handled by this method. It includes profit triads and some social responsibilities. It is quite important because it focuses on social impacts, returns of finance and environmental responsibilities. The survival of the companies is dependent on this technique. Further the issue of Unilever is mentioned and it is focusing on Triple Bottom Line.
Unilever was facing some issues due to the disastrous leadership of Paul Polman from the year 2009. It included both financial losses and damage to public relations. The main problem of Paul was to put the superficial feel policies ahead of some important business decisions (Forbes.com 2019). Paul was trying to make the company a corporate citizen. However, Unilever got involved in sexual harassment and environmental issues. Unilever had settled with 600 workers in India because of mercury exposure from a thermometer plant. The study of responsible management also mentions that there was a lawsuit against the company in the year 2006 (Marketingweek.com 2019).The issues had gained some global attention too. Then in 2011, the Irish Times had exposed a story of sexual harassment of African workers. It said that supervisors had to be bribed so that unwanted advances could be stopped. NGOs did not accept the efforts of Polman’s for solving the problems of sexual harassment. The existing system of balances and checks had failed completely and hence the abuse on workers could not be stopped. It also included poor conditions of housing. The company's South Africa business was accused of collusion with different competitors. This was filed by the commission and the fine was around 10% of the annual turnover. The main business challenges couldn’t be addressed by the CEO because of social matters. CEO had expressed his views of supporting the United Nations Sustainable Developments Goals. But the business was suffering. There were some problems with the growth in the personal care unit of the company. The biggest problem was the rejection of $143 billion takeovers from Kraft Heinz and the stock of Unilever fell by 8% (Unilever.com 2019). The question was revolving around the growth challenges and the threat of disruptors. They were unable to battle the challenges of talent. Unilever has experienced a paradigm shift, where people, profits, and the planet are inseparable. An old paradigm of business assumed profits must be sacrificed to help people and the planet. Unilever does not focus on the supply chain activities to mitigate risk and ensure security, corporate behaviour and spurring sustainable behaviour.
Figure 2: Unilever’s Value Chain
(Source: Forbes.com 2019)
The deadline of the Unilever Sustainable Living Plan of the year 2010 has currently had no progress (Murphy and Murphy 2018). The deadlines are looming. Consumers are not staying beside the company because environmental promises are not being met. Unilever is not entering the war of promotions. There is some uncertainty due to Brexit and other political issues. Unilever has to be mindful in between the balance of volume sales and value. In the marketing segment, the main threat is of direct-to-consumers. Unilever is not developing their brands or reshaping the business models of important products. Overcrowded categories are quite a common issue in the company. The marketing of the company is endangering the loyalty among the customers (McDonald 2015). The rigid structure is creating issues for Unilever. They are favouring the traditional methods and path for promotions. Unilever is making no such efforts for saving water. According to the plan of the company, the water impact through customers has just decreased by 7% after 2010. The company is unable to handle its suppliers and no efforts are being given for reducing the consumption of water. The gap is reducing the amount of water used by suppliers and consumers.
4. Building a responsible strategy and competitive advantage
There are different ways through which strategy can be built responsibly and competitive advantage can be gained. There is a clear link between CSR and competitive advantages. It is necessary for Unilever to follow the ethics and laws so that moral obligations can be maintained. It should not be compared with competitors. The moral obligation will be helpful in making a business strategy and hence competitive advantage could be gained (Rothaermel 2017). In the case of responsible management strategy, there are five main areas which the company should focus on. They are customer trust and loyalty, brand awareness, customer advocacy, employees and customer engagement. One of the best tools for marketing is CSR. Unilever should integrate this into their products and brand story. It is generally seen that customers are trusting companies that are having top sustainability factors for handling the decisions of the purchase. Employee engagement can be handled by CSR.
Brand awareness should be done by the company. They should introduce some activities for engaging the customers. It can be some charitable cause. Customer advocates must be created so that they can spread information about the brand. Top talent should be retained so that the growth of the company can be managed. For building responsible management strategies the core competencies must be identified. Handling risks can be helpful in the mitigation of the risks. Some social initiatives must be used by Unilever so that employees can be handled and they stay committed to environmental work. The company should fulfil all the demands of the company and its customers. The traditional methods should be discarded and new environmental ways are to solve the problem of Unilever. Just by implementing the strategies are not enough. It is important to measure the ROI of different strategies. The coordination of all the departments will be analysed and it included human resource, marketing and sustainability. Some socially conscious efforts must be directed to the bottom line of the company for the purpose of awareness.
5. Responsible supply chains management
The main concern of responsible management of supply chain in Unilever should be too corporate with the suppliers. This will be ensuring that CSR strategies will be implemented. Some improvements should be created by the performance of CSR suppliers. It is essential to focus on high-risk suppliers that will be creating less of anti-corruption and human rights problems. The supply chain must strengthen their relationships with the suppliers so that productivity can be increased and costs can be reduced. The supplier chain management must safeguard the quality of products and hence promote more sustainable products in the market (Boström et al. 2015). It is also important to meet the expectations of the customers and their requirements. This means proper products documents must be provided so that it can comply with the International CSR guidelines and standards.
It is essential for Unilever to reduce the risks of negative PR and to conduct responsible management. The employees of the company should handle violations of human rights. The reputation of the company should be maintained even if some problems are being faced. This will be helpful for the company to attract and retain the employees. At the time of outsourcing tasks to the suppliers, the employees must be given high priority to the issues of CSR. Proper security must be given to creditors and investors. There are risk profiles in these people. So attention should be provided to their CSR activities in the assessments of investors and creditors. The company should be branded for creating new opportunities for Unilever in the market. The details of process requirements must be supplemented for the CSR principles. It will be providing a better set of opportunities for the company. Knowledge must be shared with the suppliers because it will be saving resources and the uniform requirements for the customers can be handled. It is essential to work in line so that international CSR expectations can be met. Suppliers should practice CSR and there is cooperation and dialogue for sustainability so that activity results can be achieved.
6. What is the role of responsible management in HRM?
Unilever can foster sustainability with the help of socially responsible management. The HRM department of the company should develop good relations with the employees and implement the functions of building sustainability. The employees should be made aware of the policies of sustainable development. The human resource must implement corporate social responsibility components for accessing the issues. The HRM department of the company should make some progress in their Unilever Sustainable Living Plan. By this more number of customers will be attracted and the company will be gaining some competitive advantages. In the case of ecological balance, there should be some reduction in environmental degradation.
HRM should suggest only those technologies and methods that will not be destroying the environment. There should be the implementation of health protection and programs for the employees. Proper education and safety are quite essential. There are many social challenges taking place within the company. Sustainable activities should be implemented for the development of the employees, their learning, adaptation and reorientation (Shen and Benson 2016). CSR initiatives should be happening within the company by the emphasis of HR functions. They should be treated as strategic partners who are participating in the policies. The aims of the society, environment and social should be infused with the leading role. The goals of the company can be achieved through sustainable practices. HRM of Unilever should build employee trust and increase motivation for sustainable development benefits. There should be environmental friendly practices. This will be preventing the issues of society and responsible management. Just implementation is not important for Unilever. The employees must check the progress that will be taking place in the years to come. This will also be improving business models. Durability is an important feature that should be there as a personal initiative by the human resource management of Unilever. Reports must be drafted on social responsibility and employee involvement should be checked for social projects. This is part of corporate volunteering. A budget should be made for handling the activities that are related to sustainability. Ethical code training must be given to the employees of Unilever.
7. Responsible marketing and communication
Unilever should mainly focus on attracting the customers who will be making some positive difference through their purchase. There are some socially responsible management elements that should be used by the company in their marketing strategies. This will be helping the community and also beneficial for the products and services. Unilever should be having recyclable packaging. The promotional methods should be giving some awareness of societal problems and issues. Some profits of the company must be contributed to the charitable groups. Health and beauty care products must be made from natural and organic ingredients. It is the responsibility of the company to be ethical and socially responsible. It will be supporting the welfare of the communities. Ethical practices must be practised by the stakeholders and they should join the community for the promotion of marketing efforts that are responsible (Charter 2017). Unilever should have some effective strategy which can be linked to the core product and its social responsible endeavour. Profitability can be increased through innovative marketing and communication for sustainability.
Unilever should find out the regulations and industry compliance. The company is having an objective of promoting the highest standards of the industry. This will be possible if they strengthen their national and international industry partners. There should be the truth of shared standard in case of marketing communication. Unilever should make a proper distinction between sensationalism and advertisement. The major focus should be on long-term gains and not the short term ones. Before marketing the products it is important for the company to analyse the trends in the market. In order to develop a responsible management, it is necessary to ask the choices of the customers. People should be involved by the efforts that the company will be providing. The company can turn their business to a socially responsible one by creating opportunities for donating money. The CEO of the company should look for the growth of the company. The content must be spread through different channels through some social campaigns and operations that are eco-friendly (Sanclemente-Téllez 2017). Unilever should post some videos for their green production line.
8. International business responsibly
These days the international business is being conducted throughout the globe. There are many transactions taking place each day. Unilever is also serving all over the world and hence they should focus on import and export of goods and services. The production of goods should be done on the name of an international country and license should be available (Newman et al. 2018). Unilever can opt for joint-venture with some company that is having a stronghold on ethics, sustainability and responsibilities. Unilever should be using eco-friendly ways of producing and distributing services and goods in the host country. The operations must be conducted on a huge scale in the case of international business. The global economies must be combined with various countries. All the ethics of the two countries must be followed properly. There should be the promotion of eco-friendly technologies and science. This will be adding value to the product and its quality when business outsourcing will be done.
Small changes will be affecting the business of Unilever. It is essential for the company to understand all the factors of other countries before opting for international business. It includes technology, environmental, economic and political. There is a large amount of sensitivity in the case of global business. Unilever should carefully research the market. They must look for some elements that will be useful in flourishing the business in some other country. By developing a knack of handling things, small business issues can be handled. In the case of international business, there can be some cultural issues. It can be related to employees especially the female ones. The company must implement some safety protections for the employees. All the ethics of different countries must be followed properly. There might be some differences in the working environment but that should be solved smoothly. Environmental issues are the largest problems for companies like Unilever. The company should have a proper waste management system so that they are not banned from starting their business in the international market.
Principles of Responsible Management are quite essential in business these days. There is a “Triple Bottom Line” which included sustainability, ethics and responsibility. The CEO of the company was unable to handle corporate social reasonability and the growth of the company. Apart from this, the marketing techniques were also having problems. Then some recommendations were provided so that Unilever can solve their issues properly. All the responsible management methods will be used by the company. It was related to supply chain management, competitive advantage, international business and marketing and communication. Each of these was having some part that was managed by the employees of the company. Just by following the recommendations Unilever will be trying to make their working condition better and growth will be increasing. Sustainable ways will be managing the productivity of Unilever.
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