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Leading and Management at Unilever

Paper Type: Free Assignment Study Level: University / Undergraduate
Wordcount: 3225 words Published: 15th Dec 2020

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Unilever is one of the largest business organisation in the world where more than 165,000 employees (Total number of Unilever employees worldwide from 2003 to 2017 (in 1, 2018) contribute nearly £49 billions revenue in 2017 (Global revenue of the Unilever Group from 2005 to 2017, 2018). To be known as the giant in the fast – moving consumer goods industry (FMCG) with various ranges of food, beverages, cleaning agents and personal care products; Unilever had gone through its historical merging process nearly hundred years ago by the two organisation: Unie and Lever. Unie itself was the merged company since 1927 after two Dutchmen: Jurgens and Van Der Bergh decided to form the margarine businesses that they all ventured in the later of 1800s. They set up Margarine Unie NV, based in the Netherlands and Margarine Union Ltd, based in the UK. Lever, well – known as Lever Brothers were established in 1885 by William Hesketh Lever who then create the world first packaged laundry soap in 1887 and expended his business from The UK to Australia, North America, and other parts of Europe.

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After becoming the public company in 1894, Lever & Co started diversification progress into other business sectors, came by pears soap, Wall’s ice cream, and continue with its innovative product Vim. In 1930, the full business merger formed and re-operated a single business entity which was named Unilever. With the new rising, it legalised two independent parent companies as Unilever NV based in Netherlands and Unilever PLC located in The UK. These two organisations had equalisation agreements and other contracts between them. Following the development process, in 1931, Unilever build up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company, followed by Lever Brothers India Limited in 1933, then United Traders Limited in 1935. After almost three decades of understanding and dominating the local market and surrounding regions, Unilever parent company again decided to merge three subsidiaries in this urban area into one as HUL in November 1956.

To sum up, although Unilever is dual-listed in the Netherlands and the UK, its operation as a single entity has been gathering them working under the same board and senior management team. This structure model offers the flexibility and adaptability across the world as well as maintaining productivity and distribution efficiently. However, according to Posson (2008), Unilever earns the growth by merging and strategic acquisitions, not all of which have been friendly. They have been facing organisational changes and leadership challenging through the periods of development time. The research of Llego (2014) shows that the lower the level of synchronisation between the leadership style and HRM practices, the less performance displayed by employees regarding unaccomplished psychological contracts. Unexpected issues arise recently in this year 2018 which are:  Unilever has picked Rotterdam over London as its sole headquarters (Kollewe,2018), then followed by the announcement Paul Polman retires after a decade playing his role as a CEO of world most prominent FMCG organisation (Fleming, 2018).

After any necessary changes, the organisation needs to restructure and proceed the implementation that is very much required to stabilise and fit the gap between the Human resource practices and the strategies adopted by the business (Holbeche, 2009). This report aims to discuss the strategic human resource management being faced by Unilever within their organisation, the essential roles of leadership interaction which the board of directors have taken when addressing these situations, and the impact of psychological contract of employees’ engagement to organisation performance. The case will be Illustrated by several theories, which bring the understanding about the relationship between managers and employees in the concern of well – cooperation. The use of academics theories in the subject as Maslow’s hierarchy of needs (1999) to explain how people are motivated not only to apply in the workplace but also business; the concept of Psychological contract is used to reveal the implicit and silence expectations which impact the relationship between employers and employees negatively. Moreover, the new theory of Leader-member exchange (LMX) that concentrate on the two-way relationship between leaders and subordinates. Each of these theories addresses a different aspect of organisational management as will be described.

Literature Review


According to Fiedler (1995), the leader is an individual who can appoint, elect or informal choose the direction and coordination the work of others within a group or organisation (Fiedler, 1995). Leadership, at first, is the process of manipulating the group member behaviour in order to reach the company’s goals (Furnham, 2008). Leadership effectiveness will lead to the followers’ readiness positively or negatively that will reflect on their job and psychological maturity (Hersey 1984). The leadership style holds an important role in influencing the business culture and nourishing the employee’s satisfaction and motivation. In another word, leadership is a renovated force which can modify the level of engagement, encouragement and potentiality in a member of the group (Bass and Stogdill, 1990).

The modish studied frameworks of transformational and transactional leadership styles are unlike procedures. On one side, the successfulness of an organisation requires four elements that categorise the transformational leadership style, such as cognitive stimulation, personal observation, inspirational motivation and glamorise influences (Bass and Avolio, 1993). Then, the leader is capable of motivating the other team members to go beyond and further rather than concentrate on short-term achievements. On the other side, the study of Burns (1978) demonstrates the contradiction between transformational leadership and transactional leadership, which operates by chains of interpersonal interaction within a stable environment by focusing on compliance primarily rather than targeting on commitment. Notwithstanding the later research of Bass and Avolio (1993) recalls the suggestion of implementation these both concepts in harmony simultaneously.

Maslow and the Hierarchy of Needs:

The diagram above demonstrates what Maslow has identified, in that as each satisfaction level of need, the single constituent climbs up the pyramid to obey the next rank.  According to the fundamental theory, the lower – order needs that are satisfied externally, psychological, and safety needs; which employees ask for basic salary pay, presentable working conditions, health and safety provision, then job guarantee and security. On the other hand, the higher – order needs that are satisfied internally, social desire, esteem, and self-actualisation needs; which the members require staff room, team – working opportunities, recognition or award, the opportunity to create differences, professional training, and chances for promotion and career progression.  To extend, the Maslow school of thought presents all tools and techniques which managers can profit to drive and escalate their crews for the best performance with their highest capability. The later research of Maslow (1999) restates the hierarchy of needs model, whereby the identification of money is not the merely motivated component that results to employees motivational working attitude, but numerous factors donate to their aspiration in delivering their most excellent ability.

Motivation and Commitment:

Herzberg (1986) points out the features which lead to job satisfaction are dissimilar from those resulting in dissatisfaction known as incentive and purity factors. Accordingly, the individual job design should be formed by a healthy source of motivation which can be further demonstrated by goal-setting theory as stating that whether individual feels the working tasks is broadening, the immediate motivating intervention will be arrived to treasure their spirits and empower them to fulfil the desire and strengthen the effort to complete their goals (Locke and Latham, 2006). Besides, the attempt of reaching target relies on the condition that accomplishment will deliver the reward and that reward is assessed by the employee (Vroom, 1962)

Psychological contracts:

Rousseau (1989) defines psychological contract as an individual’s implicit belief in mutual obligations (expectations) between a person and another party. Both parties indicate cognisance about labour interrelation, commitment and compulsion. Follow by the research of Guest et al (1996), a healthy psychological contract is a subject that should be considered and executed seriously due to its consequence drives a higher level of employee satisfaction, labor relationship, commitment to the company, and for the essential reason why organization in the need of pursuing HRM practices progressively. This belief is contextual which navigate the actions of employees expectedly and the response in return they wish to receive from their employers and vice versa, reciprocally (Guest, 2007).

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Furthermore, there is noticed that interpretation procedure the psychological contract is illuminated even if both candidates are tied up in the similar employment relationship, their unalike expectations can bring them an entirely different point of views (Rousseau and Wade‐Benzoni, 1994). The other research of Rosseau (1995), psychological contracts can be divided into two separate components as transactional psychological contract and relational psychological state, whereby the meaning of intrinsic and extrinsic are both emphasised inland that individual. It is crucial to highlight the fact that the psychological contract is naturally dynamic and be nourished by the time that agglomerate within itself, and this state is changeable by the fluctuated employment conditions (Guest et al.,1996).

Critical Analysis

The size and scope of the organization are concerned as they understand that being operated within an accurate framework, and as researched by Cummings and Worley (2005) the sheer size of the company can danger them closer to the risk of immobility and stagnation due to their large organization in order to respond flexibly to the outer stimulus. Therefore, with more than 165,000 employees (Total number of Unilever employees worldwide from 2003 to 2017 (in 1, 2018), Unilever have set out their management structure creation, that is applicable faster the decisions and countering more flexibly to external challenging. After nearly a century Unilever headquartered in London and Rotterdam, It now reorganises by pick Netherland over The UK to set its sole headquarter during the Brexit progression (Kollewe,2018). Beside this organizational restructure that could lead to numerous reformed organization strategy, followed by several changes in human resource management to adopt the new arrangement; the newest announcement that CEO Paul Polman retires after almost a decade of holding the power of the first executive position increase the level of challenge for current Unilever manager team, especially in competition marketing talent which Fleming (2018) has described about five elements that challenge the new CEO who will be the successor of Paul.

Playing an essential role in the leadership style management over Unilever, Paul Polman, a Dutch nationality, is the first external candidate to take the highest responsibility driving Unilever since 2008. His experience in the commercial goods and manufacturing sectors promote him a valuable candidate for the role, as he is both financially acknowledge and commercially aware. He delivers the message as his behavioural attitude in business: “Despite the normal business pressures we all need to deal with, it is good to remind ourselves once more that we will never compromise on ethically running our company. Success without integrity is the failure.” (Principle, 2018. Alternatively, the finding of Tannenbaum and Schmidt continuum (1957) posted that Paul Polman acknowledges freedom of his subordinates to prosecute suitable corporate strategies on their fundamental capability and the implementation of democratic decision-making. In the concern of employees cooperate attitude:  the model of the hierarchy of need notices, as soon as the lower – level of needs have been fulfilled, the need to be compiled and to “belong” is a far-reaching human motivator.

Moreover, Betim (2011) restates that higher – level needs include respect, esteem, and actualisation the employees’ motivation. They will tend to love doing their jobs feeling their soul in the workplace, and then they will keep a positive working attitude and earn the most experiences. However, there still be the limitation on this theory apply to Unilever case. According to the theory, the employees’ needs are being categorised dissimilarly by sectors. As Unilever is a large complex organisation, it is not easy to satisfy all level of employees, additional the recent change and challenge, the HRM is heavily driving the whole company go through the competition marketing talent. Although the company has always been a great learning ground, a rigid structure can be disconcerting for those who expect a range of skills and training. Moreover, working for Unilever does not have the ‘cool factor’ as saying you work for Google and Apple (Fleming, 2018).


It can be concluded that the admittance of the HR management intelligent includes understanding about recognising of organisation change. Leadership style and behaviour toward employees through the needs of each level of participants and the essential of psychological contract illustration will help the managing team having a holistic process of looking after their human resources and providing them with specific facilities for engaging and motivated in their workplace. The implemental efficiency of these components will ensure that the organisation will have the desired outcome from the talent management. Furthermore, it can also be concluded that the productive process of talent management will help Unilever facing the current scenario to build credibility and stability internal environment in place. Moreover, the recommendation for all times of managing an organisation is building high commitment management through HRM tools such as training, awards and incentives, work-life balance care, career promotion and development. All these elements need to be continuously invested in to gain the most employees trust and escalate their work performance (Guest 1987; Walton 1985).


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