A case study of Uniliver
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The concept of international business and various elements included in it are covered in the report to highlight the need for a company operating in international competitive environment to align with changes occurring. Understanding the concept of Organization structure is an important area of concern as it determines the way in which the cited company carriers out various functional activities. The corporate culture of Uniliver has a broader scope including set of beliefs and assumptions adopted by the senior executives to lead the personnels working under them in an appropriate manner to sustain the positive image of the company among its customers to contribute its part in the society in which it exists. Organizational structure and corporate culture together determine how to design strategies for managing human resource department to achieve global objectives and goals.
INTRODUCTION TO INTERNATIONAL BUSINESS
The framework presented in the report is prepared with consideration to world's largest multinational company that is Uniliver which has wide scope of operational functions in various countries across the globe. The enterprise has been providing a wide range of products including detergent, personal care products and food products, etc. Looking at the company's background, it has been observed that the entity had initially followed decentralized structure for number of subsidiaries that operated in specific national market within the assistance of local managers who were held responsible for performance of activities carried out by them including marketing, promotional and distributional activities that were aligned with customer's demand and preferences. However, the cited company faced the issue of falling behind production and marketing of new products as compared to improved global branding of rivals on account of being able to bring new product ranges in the market. This imposed a requirement on Uniliver to coordinate manufacturing and marketing activities of various subsidiaries located within the region (Griffin and Pustay, 2012).
1.1 National cultures affecting Uniliver's business transfer process
The statement mentioned in the section has empirical evidence as observed in the case of cited company. The corporate culture of Uniliver traditionally included list of beliefs and assumptions that focused upon promoting the idea of decentralization. Company cited in the report has been observed facing problems and issues with respect to designing and transferring a new corporate culture to bring a new product in the market to successfully operate in global market environment. Sustainability in competitive business environment requires the cited firm to design a corporate culture that includes framing as well as implementing strategies and policies that enables the organization to coordinate the marketing activities of various subsidiaries on international basis. Bringing up with a new product in the market requires the cited entity to analyse market condition of each regional market. Technological and fashion trends prevailing in the market, influence the need for designing and manufacturing a new product to align with changing taste and preferences of customers on a large scale. Uniliver is an internationally operating company which has acquired a prominent position among its customers. Corporate culture is an management environment that prevails within organization on overall basis. It has been analysed that the cited enterprise has been following different management structure which directly affects the way in which company needs to design its own corporate culture. Looking upon the objectives and goals of Uniliver, it is required that the company adopts various strategies for overall improvement of various subsidiaries that are existing in specific geographical area. There are number of rivals that have been successful, following a strategy that effectively coordinates marketing activities of similarly working subsidiaries to reduce the manufacturing cost by putting in efforts to reduce the purchasing cost (Ball, Geringer, Minor and McNett, 2012). Similarly, the corporate culture of cited organization needs to be modified by bringing in required changes in beliefs and ideology followed. The concept of corporate culture has a wide scope that includes clarifying the objectives to be attained by following common set of beliefs that symbolize common set of policies followed. The concept highlights the fact that employees are also an important resource for the organization and therefore it needs to adopt such strategies that enables the cited organization to enhance its relationship with its employees to enable them to deliver quality assured services for carrying out task assigned to them. Basic principle that needs to be followed by the cited organization includes bringing required modifications within the management structure in such a way that it ensures alignment of corporate culture with that of market in internationally working parlance. It must also include and accept ideology and beliefs of major section of society so that the cited entity is able to deliver higher level of satisfaction to customers on global basis. Corporate culture determines the way in which human resources including senior executives and employees will be working to deliver uniquely featured products as compared to various competitors in the industry. The internal culture of the cited company reflects values that are considered to guide senior executives to design policies that can be effectively applied to attain the objectives to lead the international market against strong rivals such as Procter and Gamble. Corporate culture is held responsible for performance of various subsidiaries that work on the basis of policies imposed to be followed by the cited company. Corporate culture of Uniliver has also determined that the senior executives and directors act and behave in a manner that reflects the importance of consideration of providing an appropriate environment to the employees to keep them happy so as to make best possible use of their skills and expertise in designing and enhancing various product range. The cited entity's organizational culture reflects various norms adopted by the senior officials to effectively lead number of teams that includes providing required training to employees and finding out solutions for list of issues that are likely to arise in international business market. It must include constructing enough space for accepting with emerging trends and cultural values adopted by customers on global basis (Peng, Wang and Jiang, 2008). Uniliver has designed a unique structure of corporate culture that has a room for providing required job motivation and job satisfaction to employees in continuously changing business environment to effectively address all the issues and difficulties arising in case of changing set of policies that were initially implied.
2.1 Suitability of organizational structure
The structure of organization determines the hierarchy of how a complex task of managing an organization is divided into small groups working for accomplishment of task assigned. Each of the small groups are determined as functional departments in case of company cited. Each of these functional department are required to follow principles and guidelines mentioned to be followed by various corporate strategies governing application of same for promoting overall organizational growth. Organizational structure is directly affected by strategies adopted in corporate cultural environment. Operating efficiently in international market imposes need for framing effective corporate strategies to be able to lead the industry in which the cited company is operating that might include food industry or home care products industry. On the basis of strategies applied by various competitors to pull potential customers and promote brand image of their respective company, Uniliver also has to undergo the process of brining a change in organizational structure as well as strategies followed to align with the same. Organizational structure followed by the organization cited has not been the same since when the organization initiated various operations till date. Addressing the changing market demand and prevailing trends required the cited company to design new set of policies and strategies to withstand amongst strong multinationally operating companies such as Nestle which is Swiss oriented company (Chang, Van Witteloostuijn and Eden, 2010). Suitability of each structure of management has been discussed below in detail with consideration to appropriate corporate strategy followed during application of same.
Structure based on decentralization
Decentralization structure of organization has been observed to exist within the business environment of Uniliver for a longer period of time originating since the organization initiated to exist in the industry. Under this system of organizational structure, the cited enterprise had been leading the market in various areas for providing products that included detergent segment, home care products and personal care products. These products were distributed in different national markets. Each of the subsidiaries in national markets that were a part of specific geographical area were responsible for there own level of performance with respect to success or failure of marketing, promotional, distributional and manufacturing activities. The success of these subsidiaries directly depended upon how efficiently and effectively they have been managed and organized by senior executives. These subsidiaries were thereby operating on independently leading to increase in core competence of the cited organization. List of strategies applied by the organization enabled to lead the industry for a longer period. Personnel responsible for managing respective subsidiary company, were determined as local managers belonging to cultural environment of the same area. They were therefore able to align various activities according to preference and taste of customer in the market. However, with rapid increase in competition in the international environment there was a considerable impact on increased level of cost incurred after manufacturing and marketing activities conducted to manage these companies on individual basis. Competitors were now able to lead the market by applying pan-European product launches in consideration to Nestle and Procter and gamble. Uniliver was however slow and ineffective in bringing new product range in the market as compared to its rapidly developing competitors in different product sectors (Killing, 2012).
Structure based on regional division
To address the issues that raised on account of increasing competition and increasing new entrants in the market, Uniliver adopted a change in its organizational structure. Considerably, changes occurred within various national subsidiaries as the cited company adopted regional organizational structure. Company followed the pattern of establishing number of business groups for different national markets wherein each of the groups were responsible for performance of number of divisions that undertook manufacturing of different products. For e.g., European Business Group in the European market, consisted of number of divisional areas that were operating for manufacturing different products. National subsidiaries producing similar product range were coordinated to reduce the overall cost incurred on particular product range. It thus united number of subsidiaries to enable them work as a single segment with specific geographical area (Johnson, Lenartowicz and Apud, 2006). Each regional business group therefore consisted of a single segment that was actually coordination of number of subsidiaries in a particular area.
Structure based on reorganization
Application of regional organizational structure was however displaying lack of overall performance as compared to various competitors in the industry. Uniliver thereby felt a need to redefine its organizational structure by practically applying the concept of reorganization structure wherein it decided to reduce the varied list of brands that were a part of company's organizational structure. In case of company cited, it was observed that it reduced number of brands from 380 to 280 only. The complex structure of activities of organization was divided into two major segments that included food range and personal care products range. Reducing the total cost incurred on promoting marketing activities was the main objective to be attained by the cited entity to withstand against increasing competitiveness in the market. Uniliver's two subsidiary brand segments included food and personal care products (Beamish, 2013).
3.1 Importance of effective human resource management
The cited organization has considered the importance of effectively managing human resource department to easier the task of achievement of complex objectives too along with basic goals and targets. Each of the employee of organization is a part of human resource department. Company cited in the report has been observed to frame effective strategies that provides guidelines and principles to senior executives to efficiently select, recruit, motivate and sustain each of the personnel for a longer time period. Strategies are framed to enable each of the personnel to align with corporate culture of the company. Managing human resource is an important area of concern for the organization as employees are responsible for carrying out different functional activities in an appropriate manner to enable organization to attain overall objectives of an organization. Selection procedure requires at most care to be taken by the executive responsible for same purpose as strategies followed by the organization requires selecting employees on the basis of requirement of each functional department. For e.g., marketing department requires skilled and efficient employee holding expertise in same area. Strategies designed for selection of an employee must be implied to ensure capable candidate is selected who can be held responsible for the performance level of task assigned to him. Recruitment is completed after selected employee passes all the required level of test and examination conducted to analyse his capability (Dhanaraj, 2007). Strategies must therefore include providing guidelines to conduct effective emotional intelligence test. Required training must be provided to employees employees who are new joiners as well as those who require training on account of change in technology adopted by the organization to conduct procedural activities for completing specific task or a project. Strategies designed by the company cited, also includes a special consideration to provide effective communication within an organization. Top level management needs to convey each of the employee's group with important information and details that might be with consideration to change in procedure adopted for completion of specific task. On the other hand, the employees to need to communicate important information and details which can be with respect to issues arising in workplace area or problems that are increasing for carrying out routine activities (Radebaugh, Gray and Black, 2006). Skilful and efficient employees might need to convey the company cited with important recommendations for bringing in required change in organizational structure or corporate culture. Corporate changes can be implied only if appropriate strategies are adopted to align each of the employees with corporate environment by providing required training to each of them.
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As the organization is operating in an international business environment, it has specific set of objectives and goals to be achieved in international environment. All of these objectives will be achieved by the organization only if strategic importance of effectively applying policies with respect to protection of interest of employees are applied thoroughly by the cited company. Extent of effectiveness of strategies can be accessed by analysing the performance of Uniliver all through since past years of performance wherein it has been observed that, with reference to increasing competitiveness in the market, it has been designing effective training programs and campaigns for the employees to train them to accept change in organizational structure and work accordingly. Moreover, the cited firm has been considering the importance of ensuring none of the employee is confronted with situation of partially on the basis of cultural diversity to promote the concept of global ideology which has been successfully conveyed by the company in global society. Uniliver has aligned it corporate culture with that of society culture followed on global basis in international market to ensure that the employees are provided with ample of opportunities to enhance their carrier development plan by exploiting the list of opportunities available to them. Strategies must focus upon increasing motivation of employees to coordinate their activities with that of other group members by accepting common objective to be attained to help the organization to achieve overall objectives and goals reflected in mission and vision statement by effectively applying strategies designed for managing human resource department. Effective leadership must be provided to employees to enable them to get assistance with respect to complex task or during difficulties arising in certain situations. Evaluating work performed by each personnel ensures effectiveness of strategies implied that also ensures completion of task within specified time limit. Thus, it can be included here that the strategies adopted by Uniliver for effectively managing human resource department are the blueprint of success of company that has enabled to maintain a strong image in the society.
It can concluded here that the organization cited in the report has a well structure corporate culture consisting of effective set of policies designed considering various set of beliefs and assumptions that are followed to align the operational and other functional activities in accordance with needs of customers, that can also be determined as a blue print of success of company's prominent position in various local markets located in different geographical areas. The corporate culture has been a role model for various competitors to guide them design a corporate cultural environment that will be efficient of pulling potential customers in different sectors such as food, home care products and health care products, etc. Uniliver has thereby aligned with international business environment by effectively applying strategies designed for managing and controlling human resource department to provide guidelines upon which company needs to operate in. The cited organization has responded to changes that arise on account of trends prevailing in market. Lastly, the company has well applied the policies that enables various personnels to align with changed organizational structure adopted to withstand strong competitive conditions.
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