LEADERSHIP AND CUSTOMER SATISFACTION

(With Special Reference to Hindustan Unilever ltd.)

A dissertation submitted in partial fulfillment of the requirements for Personality
Development and Communication Skills
BBA (3rd SEM)

By
Name – Pankaj Grover
Enrolment no. 06410601709 (In BBA 3rd SEM)

Under the Supervision of

Ms. Nidhi Parsad

Ansal Institute of Technology.

(Affiliated to GGSIPU)
Kashmiri Gate, New Delhi.

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 CERTIFICATE

This is to certify that the Dissertation title Social is bonafide & original Research work done
by Student of Ansal Institute of Technology (affiliated to GGSIPU), under my
supervision and guidance.

This Subject on which this dissertation has been written by her original contribution towards
the discipline of Management and it has not previously formed the basis for the award of the
Degree, Diploma, or other similar title to any candidate

This Dissertation represents entirely an independent research work of the candidate under
my guidance.

Guide Signature

Date - ( )

Place - Ms. Nidhi Parsad.

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 DECLARATION

This work has not previously been accepted in substance for any degree and is not being
concurrently submitted in candidature for any degree / diploma.
Signed: ……………………..
Date: ………………………..

Statement 2
This project is the result of my own independent work/investigation, except where otherwise
stated. Other sources are acknowledged by giving explicit references. A bibliography is
appended.

Signed: ……………………..
Date: ………………………

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 ACKNOWLEDGEMENT

This project work has been a great experience to. This work would not have been possible
without the help, cooperation, constructive suggestion and well wishes of many people. I
would like to thank all of them, as I mention a few here.

I owe my profound respect to Ms. Nidhi Parsad, my project guide, and express my deep
sense of gratitude and indebtedness for their inspirations, valuable and scholarly guidance,
imperative suggestions and personal attention at each stage of the Work. Their gamut of
knowledge, dedication towards research, exemplary devotion and trust towards me has been
unique and is the prime key behind the success of this project. Her personality has been
instrumental in blending an exciting spirit and atmosphere for research. It has been a great
opportunity and experience to work with her, as I will forever cherish the deep interaction I
had with her.

Finally, I am most grateful to my parents for their moral support and blessings and for being
an immense source of inspiration for me all through my life.

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 TABLE OF CONTENTS

Topic Page No

1. Introduction-
• Customer satisfaction 6

• Leadership 12
2. History and Present Scenario –
HINDUSTAN UNILEVER 24
3. Brands 29
4 Growing with India 59
5. Review of literature 66
6. Methodology 67
7. Bibliography 68

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 INTRODUCTION

Customer satisfaction
Organizations are increasingly interested in retaining existing customers while targeting non-
customers; measuring customer satisfaction provides an indication of how successful the
organization is at providing products and/or services to the marketplace.

Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of
the state of satisfaction will vary from person to person and product/service to
product/service. The state of satisfaction depends on a number of both psychological and
physical variables which correlate with satisfaction behaviors such as return and recommend
rate. The level of satisfaction can also vary depending on other options the customer may
have and other products against which the customer can compare the organization's
products.

Because satisfaction is basically a psychological state, care should be taken in the effort of
quantitative measurement, although a large quantity of research in this area has recently been
developed. Work done by Berry, Brodeur between 1990 and 1998 defined ten 'Quality
Values' which influence satisfaction behavior, further expanded by Berry in 2002 and known
as the ten domains of satisfaction. These ten domains of satisfaction include: Quality, Value,
Timeliness, Efficiency, Ease of Access, Environment, Inter-departmental Teamwork, Front
line Service Behaviors, Commitment to the Customer and Innovation. These factors are
emphasized for continuous improvement and organizational change measurement and are
most often utilized to develop the architecture for satisfaction measurement as an integrated
model. Work done by Parasuraman, Zeithaml and Berry between 1985 and 1988 provides
the basis for the measurement of customer satisfaction with a service by using the gap
between the customer's expectation of performance and their perceived experience of
performance. This provides the measurer with a satisfaction "gap" which is objective and
quantitative in nature. Work done by Cronin and Taylor propose the
"confirmation/disconfirmation" theory of combining the "gap" described by Parasuraman,
Zeithaml and Berry as two different measures (perception and expectation of performance)
into a single measurement of performance

according to expectation. According to Garbrand, customer satisfaction equals perception of

performance divided by expectation of performance.

The usual measures of customer satisfaction involve a survey with a set of statements using
a Likert Technique or scale. The customer is asked to evaluate each statement and in term of
their perception and expectation of the performance of the organisation being measured.

In a competitive marketplace where businesses compete for customers, customer satisfaction

is seen as a key differentiator and increasingly has become a key element of business
strategy.

“Customer satisfaction, a business term, is a measure of how products and services

supplied by a company meet or surpass customer expectation. It is seen as a key

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performance indicator within business and is part of the four perspectives of a Balanced
Scorecard.”

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Customer Satisfaction in 7 Steps
It's a well known fact that no business can exist without customers. In the business of
Website design, it's important to work closely with your customers to make sure the site or
system you create for them is as close to their requirements as you can manage. Because
it's critical that you form a close working relationship with your client, customer service is
of vital importance. What follows are a selection of tips that will make your clients feel
valued, wanted and loved.

1. Encourage Face-to-Face Dealings

This is the most daunting and downright scary part of interacting with a customer. If you're
not used to this sort of thing it can be a pretty nerve-wracking experience. Rest assured,
though, it does get easier over time. It's important to meet your customers face to face at
least once or even twice during the course of a project.

My experience has shown that a client finds it easier to relate to and work with someone
they've actually met in person, rather than a voice on the phone or someone typing into an
email or messenger program. When you do meet them, be calm, confident and above all,
take time to ask them what they need. I believe that if a potential client spends over half
the meeting doing the talking, you're well on your way to a sale.

2. Respond to Messages Promptly & Keep Your Clients Informed

This goes without saying really. We all know how annoying it is to wait days for a
response to an email or phone call. It might not always be practical to deal with all
customers' queries within the space of a few hours, but at least email or call them back and
let them know you've received their message and you'll contact them about it as soon as
possible. Even if you're not able to solve a problem right away, let the customer know
you're working on it.

A good example of this is my Web host. They've had some trouble with server hardware
which has caused a fair bit of downtime lately. At every step along the way I was emailed
and told exactly what was going on, why things were going wrong, and how long it would
be before they were working again. They also apologised repeatedly, which was nice. Now
if they server had just gone down with no explanation I think I'd have been pretty annoyed
and may have moved my business elsewhere. But because they took time to keep me
informed, it didn't seem so bad, and I at least knew they were doing something about the
problems. That to me is a prime example of customer service.

3. Be Friendly and Approachable

A fellow Site Pointer once told me that you can hear a smile through the phone. This is
very true. It's very important to be friendly, courteous and to make your clients feel like
you're their friend and you're there to help them out. There will be times when you want to
beat your clients over the head repeatedly with a blunt object - it happens to all of us. It's
vital that you keep a clear head, respond to your clients' wishes as best you can, and at all
times remain polite and courteous.

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4. Have a Clearly-Defined Customer Service Policy

This may not be too important when you're just starting out, but a clearly defined customer
service policy is going to save you a lot of time and effort in the long run. If a customer has
a problem, what should they do? If the first option doesn't work, then what? Should they
contact different people for billing and technical enquiries? If they're not satisfied with any
aspect of your customer service, who should they tell?

There's nothing more annoying for a client than being passed from person to person, or not
knowing who to turn to. So make sure your customer service policy is present on your site
-- and anywhere else it may be useful.

5. Attention to Detail (also known as 'The Little Niceties')

Have you ever received a Happy Birthday email or card from a company you were a client
of? Have you ever had a personalised sign-up confirmation email for a service that you
could tell was typed from scratch? These little niceties can be time consuming and aren't
always cost effective, but remember to do them.

Even if it's as small as sending a Happy Holidays email to all your customers, it's
something. It shows you care; it shows there are real people on the other end of that screen
or telephone; and most importantly, it makes the customer feel welcomed, wanted and
valued.

6. Anticipate Your Client's Needs & Go Out Of Your Way to Help Them Out

Sometimes this is easier said than done! However, achieving this supreme level of
understanding with your clients will do wonders for your working relationship.

Take this as an example: you're working on the front-end for your client's exciting new
ecommerce endeavour. You have all the images, originals and files backed up on your
desktop computer and the site is going really well. During a meeting with your client
he/she happens to mention a hard-copy brochure their internal marketing people are
developing. As if by magic, a couple of weeks later a CD-ROM arrives on their doorstep
complete with high resolution versions of all the images you've used on the site. A note
accompanies it which reads:

"Hi, you mentioned a hard-copy brochure you were working on and I wanted to provide
you with large-scale copies of the graphics I've used on the site. Hopefully you'll be able to
make use of some in your brochure."

Your client is heartily impressed, and remarks to his colleagues and friends how very
helpful and considerate his Web designers are. Meanwhile, in your office, you lay back in
your chair drinking your 7th cup of coffee that morning, safe in the knowledge this happy
customer will send several referrals your way.

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 7. Honour Your Promises

It's possible this is the most important point in this article. The simple message: when you
promise something, deliver. The most common example here is project delivery dates.

Clients don't like to be disappointed. Sometimes, something may not get done, or you
might miss a deadline through no fault of your own. Projects can be late, technology can
fail and sub-contractors don't always deliver on time. In this case a quick apology and
assurance it'll be ready ASAP wouldn't go amiss.

Conclusion

Customer service, like any aspect of business, is a practiced art that takes time and effort to
master. All you need to do to achieve this is to stop and switch roles with the customer.
What would you want from your business if you were the client? How would you want to
be treated? Treat your customers like your friends and they'll always come back

Employee Satisfaction + Customer Satisfaction = Sustained Profitability

“When companies put employees and customers first, their employees are satisfied, their
customers are loyal, their profits increase, and their continued success is sustained.” This is
the conclusion of a recent Harvard Business Review article, “Putting the Service-Profit
Chain to Work” by James L. Heskett, Thomas O. Jones, Gary W. Loveman, W. Earl Sasser,
Jr. and Leonard A. Schlesinger, members of the Harvard Business School faculty and
service-management interest group. While there are a number of studies which link customer
satisfaction with profit, there are few studies which add employee satisfaction into the profit
formula. Digital became interested in this connection in 1994. Based on this interest, an
internal study of customer satisfaction, employee Satisfaction and operating measures was
conducted. The purpose of this article is to support the assertion of the customer satisfaction
and employee satisfaction connection and to illustrate Digital’s approach towards acting on
this connection.

When describing the service profit chain, the authors discuss the experience and success of
companies that include Banc One, Intuit Corporation, Southwest Airlines, Service Master,
USAA, Taco Bell, and MCI. They stress that the correlation of putting employees and
customers first with profits has necessitated new ways of managing and measuring success.
The techniques used, focus on the impact of employee satisfaction, loyalty, and productivity
on “the value of products and services delivered so that managers can build customer
satisfaction, loyalty and assess the corresponding impact on profitability and growth.” The
authors note, “...the lifetime value of a loyal customer can be astronomical, especially when
referrals are added to the economics of customer retention and repeat purchases of related
products.” The tool used to examine the relationship between service and profit is called the
Service-Profit Chain.

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 The Service-Profit Chain
“The service-profit chain establishes relationships between profitability, customer loyalty
and employee satisfaction, loyalty and productivity. The links in the chain are as follows:
• Profit and growth are stimulated primarily by customer loyalty.
• Loyalty is a direct result of customer satisfaction.
• Satisfaction is largely influenced by the value of services provided to customers.
• Value is created by satisfied, loyal and productive employees.
• Employee satisfaction, in turn, results primarily from high-quality support
services and policies that enable employees to deliver results to customers.”

Building Commitment through Employee and Customer Engagement Practices

Dr. David Ulrich in his article, “Tie the Corporate Knot: Gaining Complete Customer
Commitment,” makes a strong point of connecting customer satisfaction and employee
satisfaction. “Psychologists have identified two major principles that help determine how
individuals develop commitment: information and behavior. When individuals have access
to extensive, understandable, and credible information, they engage in activities consistent
with the information. For example, when we hear from many people whose opinions we
value that a restaurant offers good food or services, we are more likely to act on the
information and visit the restaurant. Providing credible information is a first principle of
creating commitment. Information does not sustain commitment without the second
principle,behavior.

Complete customer commitment flows from the same two principles of information and
behavior. When customers receive more information about the firm, they are more apt to
take action that demonstrates commitment to the firm. Customer commitment may develop
at two tiers: strategic and organizational. The strategic tier includes products and services.
The organizational tier includes firm practices that translate strategies into action. Partial
customer commitment focuses exclusively on the strategic tier, where firms build
commitment by sharing information about how products have been adapted to meet
customer criteria and by encouraging customer is to participate in the design and delivery of
products. Creating unity with customers through human resource practices ensures

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complete customer commitment because customers receive information and participation not
only on strategic activities, but on organizational ones as well.”

“Market-In and Product-Out Measures”

It was used as part of the Product Quality Taskforce report issued in 1994 within Digital
Equipment Corporation. It reflects the relationship of the “Market-In” versus “Product-Out”
measures. The concept of Market-In rather than Product-Out is the basis of one of the four
revolutions in management thinking taught by the Center for Quality of Management.
William Davidow from Total Customer Service: The Ultimate Weapon., writes, “Effective
measurement... can’t take the place of having a solid core product or service to begin with,
nor is it a substitute for strategy...but...lacking good measures, no company can assess its
progress or adjust to changes in customer expectations”.

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 Leadership

HUL has produced numerous business leaders for corporate India. It is referred to as a 'CEO
Factory' in the Indian press for the same reasons. It's leadership building potential was
recognized when it was ranked 4th in the Hewitt Global Leadership Survey 2007 with only
GE, P&G and Nokia ranking ahead of HUL in the ability to churn out leaders with
regularity.

………………………………………………………………………………………

The word leadership can refer to:

1. Those entities that perform one or more acts of leading.

2. The ability to affect human behavior so as to accomplish a mission.
3. Influencing a group of people to move towards its goal setting or goal achievement.

A leader is simply someone who has followers.

………………………

Leadership in organizations :

Leadership in formal organizations

An organization that is established as an instrument or means for achieving defined

objectives has been referred to as a formal organization. Its design specifies how goals are
subdivided and reflected in subdivisions of the organization. Divisions, departments,
sections, positions, jobs, and tasks make up this work structure. Thus, the formal
organization is expected to behave impersonally in regard to relationships with clients or
with its members. According to Weber's definition, entry and subsequent advancement is by
merit or seniority. Each employee receives a salary and enjoys a degree of tenure that
safeguards him from the arbitrary influence of superiors or of powerful clients. The higher
his position in the hierarchy, the greater his presumed expertise in adjudicating problems that
may arise in the course of the work carried out at lower levels of the organization. It is this
bureaucratic structure that forms the basis for the appointment of heads or chiefs of
administrative subdivisions in the organization and endows them with the authority attached
to their position.

Leadership in informal organizations

In contrast to the appointed head or chief of an administrative unit, a leader emerges within
the context of the informal organization that underlies the formal structure. The informal
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organization expresses the personal objectives and goals of the individual membership. Their
objectives and goals may or may not coincide with those of the formal organization. The
informal organization represents an extension of the social structures that generally
characterize human life — the spontaneous emergence of groups and organizations as ends
in themselves.

In prehistoric times, man was preoccupied with his personal security, maintenance,
protection, and survival. Now man spends a major portion of his waking hours working for
organizations. His need to identify with a community that provides security, protection,
maintenance, and a feeling of belonging continues unchanged from prehistoric times. This
need is met by the informal organization and its emergent, or unofficial, leaders.

Leaders emerge from within the structure of the informal organization. Their personal
qualities, the demands of the situation, or a combination of these and other factors attract
followers who accept their leadership within one or several overlay structures. Instead of the
authority of position held by an appointed head or chief, the emergent leader wields
influence or power. Influence is the ability of a person to gain co-operation from others by
means of persuasion or control over rewards. Power is a stronger form of influence because
it reflects a person's ability to enforce action through the control of a means of punishment.

Leader in organizations

A leader is anyone who influences a group toward obtaining a particular result. It is not
dependant on title or formal authority. (elevos, paraphrased from Leaders, Bennis, and
Leadership Presence, Halpern & Lubar). An individual who is appointed to a managerial
position has the right to command and enforce obedience by virtue of the authority of his
position. However, he must possess adequate personal attributes to match his authority,
because authority is only potentially available to him. In the absence of sufficient personal
competence, a manager may be confronted by an emergent leader who can challenge his role
in the organization and reduce it to that of a figurehead. However, only authority of position
has the backing of formal sanctions. It follows that whoever wields personal influence and
power can legitimize this only by gaining a formal position in the hierarchy, with
commensurate authority. Leadership can be defined as one's ability to get others to willingly
follow. Every organization needs leaders at every level.

Orthogonality and leadership

Those who praise leadership may encounter problems in implementing consistent leadership
structures. For example, a pyramidal structure in which authority consistently emanates from
the summit can stifle initiative and leave no path for grooming future leaders in the ranks of
subordinate levels. Similarly, a belief in universal direct democracy may become unwieldy,
and a system consisting of nothing but representative leaders may well become stymied in
committees.

Thus many leadership systems promote different rules for different levels of leadership.
Hereditary autocrats meet in the United Nations on equal representative terms with elected
governments in a collegial leadership. Or individual local democracies may assign some of
their powers to temporary dictators in emergencies, as in ancient Rome. Hierarchies
intermingle with equality of opportunity at different levels.

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Support-structures for leadership

Charisma and personality alone can work miracles, yet most leaders operate within a
structure of supporters and executive agents who carry out and monitor the expressed or
filtered-down will of the leader. This undercutting of the importance of leadership may serve
as a reminder of the existence of the follower: compare followership. A more or less formal
bureaucracy (in the Weberian sense) can throw up a colorless nonentity as an entirely
effective leader: this phenomenon may occur (for example) in a politburo environment.
Bureaucratic organizations can also raise incompetent people to levels of leadership (see
Peter Principle).

In modern dynamic environments formal bureaucratic organizations have started to become

less common because of their inability to deal with fast-changing circumstances. Most
modern business organizations (and some government departments) encourage what they see
as "leadership skills" and reward identified potential leaders with promotions.

The foundational support structure for leadership will be the organizations Corporate culture,
this is where the structure of the environment either supports or degrades a leaders potential.
A leaders ability to influence Organizational culture will be directly related to the results
they achieve.

In a potential down-side to this sort of development, a big-picture grand-vision leader may

foster another sort of hierarchy: a fetish of leadership amongst subordinate sub-leaders,
encouraged to seize resources for their own sub-empires and to apply to the supreme leader
only for ultimate arbitration.

Some leaders build coalitions and alliances: political parties abound with this type of leader.
Still others depend on rapport with the masses: they labor on the shop-floor or stand in the
front-line of battle, leading by example.

Determining what makes "effective leadership"

Leadership maintains its effectiveness sometimes by natural succession according to

established rules, and sometimes by the imposition of brute force.

The simplest way to measure the effectiveness of leadership involves evaluating the size of
the following that the leader can muster. By this standard, Adolf Hitler became a very
effective leader for a period — even if through delusional promises and coercive techniques.
However, this approach may measure power rather than leadership. To measure leadership
more specifically, one may assess the extent of influence on the followers, that is, the
amount of leading. Within an organizational context this means financially valuing
productivity. Effective leaders generate higher productivity, lower costs, and more
opportunities than ineffective leaders. Effective leaders create results, attain goal, realize
vision, and other objectives more quickly and at a higher level of quality than ineffective
leaders.

James MacGregor Burns introduced a normative element: an effective Burnsian leader will
unite followers in a shared vision that will improve an organization and society at large.
Burns calls leadership that delivers "true" value, integrity, and trust transformational
leadership. He distinguishes such leadership from "mere" transactional leadership that
builds power by doing whatever will get more followers. But problems arise in quantifying
the transformational quality of leadership - evaluation of that quality seems more difficult to
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quantify than merely counting the followers that the straw man of transactional leadership
James MacGregor Burns has set as a primary standard for effectiveness. Thus
transformational leadership requires an evaluation of quality, independent of the market
demand that exhibits in the number of followers.

Current assessments of transformational and transactional leadership commonly make use of

the Multifactor Leadership Questionnaire (MLQ), developed by Bass and Avolio in 1990
and revised in 1995. It measures five dimensions of transformational leadership:

1. idealized influence - attributions

2. idealized influence - behaviors
3. inspirational motivation
4. individualized consideration
5. intellectual stimulation

The three dimensions of transactional leadership measured by the MLQ cover:

1. contingent reward
2. management by exception (active)
3. management by exception (passive)

The functional leadership model conceives leadership as a set of behaviors that helps a group
perform a task, reach their goal, or perform their function. In this model, effective leaders
encourage functional behaviors and discourage dysfunctional ones.

In the path-goal model of leadership, developed jointly by Martin Evans and Robert House
and based on the "Expectancy Theory of Motivation", a leader has the function of clearing
the path toward the goal(s) of the group, by meeting the needs of subordinates.

Some commentators use the metaphor of an orchestral conductor to describe the quality of
the leadership process. An effective leader resembles an orchestra conductor in some ways.
He/she has to somehow get a group of potentially diverse and talented people - many of
whom have strong personalities - to work together toward a common output. Will the
conductor harness and blend all the gifts his or her players possess? Will the players accept
the degree of creative expression they have? Will the audience enjoy the sound they make?
The conductor may have a clear determining influence on all of these questions.

Suggested qualities of leadership

Studies of leadership have suggested qualities that people often associate with leadership.
They include:

• Technical/specific skill at some task at hand

• Charismatic inspiration - attractiveness to others and the ability to leverage this
esteem to motivate others
• Preoccupation with a role - a dedication that consumes much of leaders' life - service
to a cause
• A clear sense of purpose (or mission) - clear goals - focus - commitment
• Results-orientation - directing every action towards a mission - prioritizing activities
to spend time where results most accrue
• Cooperation - work well with others

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 • Optimism - very few pessimists become leaders
• Rejection of determinism - belief in one's ability to "make a difference"
• Ability to encourage and nurture those that report to them - delegate in such a way
as people will grow
• Role models - leaders may adopt a persona that encapsulates their mission and lead
by example
• Self-knowledge (in non-bureaucratic structures)
• Self-awareness - the ability to "lead" (as it were) one's own self prior to leading
other selves similarly
• Awareness of environment - the ability to understand the environment they lead in
and how they affect and are affected by it
• With regards to people and to projects, the ability to choose winners - recognizing
that, unlike with skills, one cannot (in general) teach attitude. Note that "picking
winners" ("choosing winners") carries implications of gamblers' luck as well as of
the capacity to take risks, but "true" leaders, like gamblers but unlike "false"
leaders, base their decisions on realistic insight (and usually on many other factors
partially derived from "real" wisdom).
• Empathy - Understanding what others say, rather than listening to how they say
things - this could partly sum this quality up as "walking in someone else's shoes"
(to use a common cliché).
• Integrity - the integration of outward actions and inner values.
• Sense of Humour - people work better when they're happy.

In 2008 Burman and Evans published a 'charter' for leaders:

1. Leading by example in accordance with the company’s core values.

2. Building the trust and confidence of the people with which they work.
3. Continually seeking improvement in their methods and effectiveness.
4. Keeping people informed.
5. Being accountable for their actions and holding others accountable for theirs.
6. Involving people, seeking their views, listening actively to what they have to say and
representing these views honestly.
7. Being clear on what is expected, and providing feedback on progress.
8. Showing tolerance of people’s differences and dealing with their issues fairly.
9. Acknowledging and recognizing people for their contributions and performance.
10. Weighing alternatives, considering both short and long-term effects and then being
resolute in the decisions they make.

The approach of listing leadership qualities, often termed "trait theory of leadership",
assumes certain traits or characteristics will tend to lead to effective leadership. Although
trait theory has an intuitive appeal, difficulties may arise in proving its tenets, and opponents
frequently challenge this approach. The "strongest" versions of trait theory see these
"leadership characteristics" as innate, and accordingly labels some people as "born leaders"
due to their psychological makeup. On this reading of the theory, leadership development
involves identifying and measuring leadership qualities, screening potential leaders from
non-leaders, then training those with potential.

David McClelland saw leadership skills, not so much as a set of traits, but as a pattern of
motives. He claimed that successful leaders will tend to have a high need for power, a low
need for affiliation, and a high level of what he called activity inhibition (one might call it
self-control).

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Situational leadership theory offers an alternative approach. It proceeds from the assumption
that different situations call for different characteristics. According to this group of theories,
no single optimal psychographic profile of a leader exists. The situational leadership model
of Hersey and Blanchard, for example, suggest four leadership-styles and four levels of
follower-development. For effectiveness, the model posits that the leadership-style must
match the appropriate level of followership-development. In this model, leadership behavior
becomes a function not only of the characteristics of the leader, but of the characteristics of
followers as well. Other situational leadership models introduce a variety of situational
variables. These determinants include:

• the nature of the task (structured or routine)

• organizational policies, climate, and culture
• the preferences of the leader's superiors
• the expectations of peers
• the reciprocal responses of followers

The contingency model of Vroom and Yetton uses other situational variables, including:

• the nature of the problem

• the requirements for accuracy
• the acceptance of an initiative
• time-constraints
• cost constraints

However one determines leadership behavior, one can categorize it into various leadership
styles. Many ways of doing this exist. For example, the Managerial Grid Model, a behavioral
leadership-model, suggests five different leadership styles, based on leaders' strength of
concern for people and their concern for goal achievement.

Kurt Lewin, Ronald Lipitt, and R. K. White identified three leadership styles: authoritarian,
democratic, and laissez-faire, based on the amount of influence and power exercised by the
leader.

The Fiedler contingency model bases the leader’s effectiveness on what Fred Fiedler called
situational contingency. This results from the interaction of leadership style and situational
favorableness (later called "situational control").

Leadership "styles" (per House and Podsakoff)

In 1994 House and Podsakoff attempted to summarize the behaviors and approaches of
"outstanding leaders" that they obtained from some more modern theories and research
findings. These leadership behaviors and approaches do not constitute specific styles, but
cumulatively they probably characterize the most effective style of today's leaders/managers.
The listed leadership "styles" cover:

1. Vision. Outstanding leaders articulate an ideological vision congruent with the

deeply-held values of followers, a vision that describes a better future to which the
followers have an alleged moral right.
2. Passion and self-sacrifice. Leaders display a passion for, and have a strong
conviction of, what they regard as the moral correctness of their vision. They engage

18
 in outstanding or extraordinary behavior and make extraordinary self-sacrifices in
the interest of their vision and mission.
3. Confidence, determination, and persistence. Outstanding leaders display a high
degree of faith in themselves and in the attainment of the vision they articulate.
Theoretically, such leaders need to have a very high degree of self-confidence and
moral conviction because their mission usually challenges the status quo and,
therefore, may offend those who have a stake in preserving the established order.
4. Image-building. House and Podsakoff regard outstanding leaders as self-conscious
about their own image. They recognize the desirability of followers perceiving them
as competent, credible, and trustworthy.
5. Role-modeling. Leader-image-building sets the stage for effective role-modeling
because followers identify with the values of role models whom they perceived in
positive terms.
6. External representation. Outstanding leaders act as spokespersons for their
respective organizations and symbolically represent those organizations to external
constituencies.
7. Expectations of and confidence in followers. Outstanding leaders communicate
expectations of high performance from their followers and strong confidence in their
followers’ ability to meet such expectations.
8. Selective motive-arousal. Outstanding leaders selectively arouse those motives of
followers that the outstanding leaders see as of special relevance to the successful
accomplishment of the vision and mission.
9. Frame alignment. To persuade followers to accept and implement change,
outstanding leaders engage in "frame alignment". This refers to the linkage of
individual and leader interpretive orientations such that some set of followers’
interests, values, and beliefs, as well as the leader’s activities, goals, and ideology,
becomes congruent and complementary.
10. Inspirational communication. Outstanding leaders often, but not always,
communicate their message in an inspirational manner using vivid stories, slogans,
symbols, and ceremonies.

Even though these ten leadership behaviors and approaches do not really equate to specific
styles, evidence has started to accumulate that a leader’s style can make a difference. Style
becomes the key to the formulation and implementation of strategy and plays an important
role in work-group members’ activity and in team citizenship. Little doubt exists that the
way (style) in which leaders influence work-group members can make a difference in their
own and their people’s performance.

(Adopted from: Robert House and Philip M. Podsakoff, "Leadership Effectiveness: Past
Perspectives and Future Directions for Research" in Greenberg, Jerald ed.),pp. 45-82
Organizational Behavior: The State of the Science, Hillsdale, NJ, England: Erlbaum
Associates, Inc, 1994. x, 312 pp. .)

Leadership and vision

Many definitions of leadership involve an element of Goal management|vision — except in

cases of involuntary leadership and often in cases of traditional leadership. A vision provides
direction to the influence process. A leader or group of leaders can have one or more visions
of the future to aid them to move a group successfully towards this goal. A vision, for
effectiveness, should allegedly:

19
 • appear as a simple, yet vibrant, image in the mind of the leader
• describe a future state, credible and preferable to the present state
• act as a bridge between the current state and a future optimum state
• appear desirable enough to energize followers
• succeed in speaking to followers at an emotional or spiritual level (logical appeals
by themselves seldom muster a following)

For leadership to occur, according to this theory, some people "leaders" must communicate
the vision to others "followers" in such a way that the followers adopt the vision as their
own. Leaders must not just see the vision themselves, they must have the ability to get others
to see it also. Numerous techniques aid in this process, including: narratives, metaphors,
symbolic actions, leading by example, incentives, and penalty|penalties.

Stacey (1992) has suggested that the emphasis on vision puts an unrealistic burden on the
leader. Such emphasis appears to perpetuate the myth that an organization must depend on a
single, uncommonly talented individual to decide what to do. Stacey claims that this fosters
a culture of dependency and conformity in which followers take no pro-active incentives and
do not think independently.

Kanungo's charismatic leadership model describes the role of the vision in three stages that
are continuously ongoing, overlapping one another. Assessing the status quo, formulation
and articulation of the vision, and implementation of the vision.

Leadership's relation with management

Some commentators link leadership closely with the idea of management. Some regard the
two as synonymous, and others consider management a subset of leadership. If one accepts
this premise, one can view leadership as:

• centralized or decentralized
• broad or focused
• decision-oriented or morale-centred
• intrinsic or derived from some authority

Any of the bipolar labels traditionally ascribed to management style could also apply to
leadership style. Hersey and Blanchard use this approach: they claim that management
merely consists of leadership applied to business situations; or in other words: management
forms a sub-set of the broader process of leadership. They put it this way: "Leadership
occurs any time one attempts to influence the behavior of an individual or group, regardless
of the reason.Management is a kind of leadership in which the achievement of organizational
goals is paramount."

However, a clear distinction between management and leadership may nevertheless prove
useful. This would allow for a reciprocal relationship between leadership and management,
implying that an effective manager should possess leadership skills, and an effective leader
should demonstrate management skills. One clear distinction could provide the following
definition:

• Management involves power by position.

• Leadership involves power by influence.

20
Abraham Zaleznik (1977),for example, delineated differences between leadership and
management. He saw leaders as inspiring visionaries, concerned about substance; while
managers he views as planners who have concerns with process.Warren Bennis (1989)
further explicated a dichotomy between managers and leaders. He drew twelve distinctions
between the two groups:

• Managers administer, leaders innovate

• Managers ask how and when, leaders ask what and why
• Managers focus on systems, leaders focus on people
• Managers do things right, leaders do the right things
• Managers maintain, leaders develop
• Managers rely on control, leaders inspire trust
• Managers have a short-term perspective, leaders have a longer-term perspective
• Managers accept the status-quo, leaders challenge the status-quo
• Managers have an eye on the bottom line, leaders have an eye on the horizon
• Managers imitate, leaders originate
• Managers emulate the classic good soldier, leaders are their own person
• Managers copy, leaders show originality

Paul Birch (1999) also sees a distinction between leadership and management. He observed
that, as a broad generalization, managers concerned themselves with tasks while leaders
concerned themselves with people. Birch does not suggest that leaders do not focus on "the
task." Indeed, the things that characterise a great leader include the fact that they achieve.
Effective leaders create and sustain competitive advantage through the attainment of cost
leadership, revenue leadership, time leadership, and market value leadership. Managers
typically follow and realize a leader's vision. The difference lies in the leader realising that
the achievement of the task comes about through the goodwill and support of others
(influence), while the manager may not.

This goodwill and support originates in the leader seeing people as people, not as another
resource for deployment in support of "the task". The manager often has the role of
organizing resources to get something done. People form one of these resources, and many
of the worst managers treat people as just another interchangeable item. A leader has the role
of causing others to follow a path he/she has laid out or a vision he/she has articulated in
order to achieve a task. Often, people see the task as subordinate to the vision. For instance,
an organization might have the overall task of generating profit, but a good leader may see
profit as a by-product that flows from whatever aspect of their vision differentiates their
company from the competition.

Leadership does not only manifest itself as purely a business phenomenon. Many people can
think of an inspiring leader they have encountered who has nothing whatever to do with
business: a politician, an officer in the armed forces, a Scout or Guide leader, a teacher, etc.
Similarly, management does not occur only as a purely business phenomenon. Again, we
can think of examples of people that we have met who fill the management niche in non-
business organizations Non-business organizations should find it easier to articulate a non-
money-driven inspiring vision that will support true leadership. However, often this does not
occur.

Differences in the mix of leadership and management can define various management styles.
Some management styles tend to de-emphasize leadership. Included in this group one could
include participatory management, democratic management, and collaborative management
styles. Other management styles, such as authoritarian management, micro-management, and
21
top-down management, depend more on a leader to provide direction. Note, however, that
just because an organisation has no single leader giving it direction, does not mean it
necessarily has weak leadership. In many cases group leadership (multiple leaders) can
prove effective. Having a single leader (as in dictatorship) allows for quick and decisive
decision-making when needed as well as when not needed. Group decision-making
sometimes earns the derisive label "committee-itis" because of the longer times required to
make decisions, but group leadership can bring more expertise, experience, and perspectives
through a democratic process.

Patricia Pitcher (1994) has challenged the bifurcation into leaders and managers. She used a
factor analysis (in marketing)factor analysis technique on data collected over 8 years, and
concluded that three types of leaders exist, each with very different psychological
profiles:'Artists' imaginative, inspiring, visionary, entrepreneurial, intuitive, daring, and
emotional Craftsmen: well-balanced, steady, reasonable, sensible, predictable, and
trustworthy Technocrats: cerebral, detail-oriented, fastidious, uncompromising, and hard-
headed She speculates that no one profile offers a preferred leadership style. She claims that
if we want to build, we should find an "artist leader" if we want to solidify our position, we
should find a "craftsman leader" and if we have an ugly job that needs to get done like
downsizing.we should find a "technocratic leader".Pitcher also observed that a balanced
leader exhibiting all three sets of traits occurs extremely rarely: she found none in her study.

Bruce Lynn postulates a differentiation between 'Leadership' and ‘Management’ based on

perspectives to risk. Specifically,"A Leader optimises upside opportunity; a Manager
minimises downside risk." He argues that successful executives need to apply both
disciplines in a balance appropriate to the enterprise and its context. Leadership without
Management yields steps forward, but as many if not more steps backwards. Management
without Leadership avoids any step backwards, but doesn’t move forward.

Leadership by a group
In contrast to individual leadership, some organizations have adopted group leadership. In
this situation, more than one person provides direction to the group as a whole. Some
organizations have taken this approach in hopes of increasing creativity, reducing costs, or
downsizing. Others may see the traditional leadership of a boss as costing too much in team
performance. In some situations, the maintenance of the boss becomes too expensive - either
by draining the resources of the group as a whole, or by impeding the creativity within the
team, even unintentionally.

A common example of group leadership involves cross-functional teams. A team of people

with diverse skills and from all parts of an organization assembles to lead a project. A team
structure can involve sharing power equally on all issues, but more commonly uses rotating
leadership. The team member(s) best able to handle any given phase of the project
become(s) the temporary leader(s). According to Ogbonnia (2007), "effective leadership is
the ability to successfully integrate and maximize available resources within the internal and
external environment for the attainment of organizational or societal goals". Ogbonnia
defines an effective leader "as an individual with the capacity to consistently succeed in a
given condition and be recognized as meeting the expectations of an organization or
society."

22
Orpheus orchestra

For example, the Orpheus orchestra has performed for over thirty years without a conductor
-- that is, without a sole leader. As a team of over 25 members, it has drawn discriminating
audiences, and has produced over 60 recordings for Deutsche Grammophon in successful
competition with other world-class orchestras.

Rather than an autocratic or charismatic conductor deciding the overall conception of a work
and then dictating how each individual is to perform the individual tasks, the Orpheus team
generally selects a different "core group" for each piece of music. The core group provides
leadership in working out the details of the piece, and presents their ideas to the whole team.
Members of the whole team then participate in refining the final conception, rehearsal, and
product, including checking from various places in the auditorium how the sound balances
and verifying the quality of the final recording.

At times the entire Orpheus team may follow a single leader, but whom the team follows
rotates from task to task, depending on the capabilities of its members.

The orchestra has developed seminars and training sessions for adapting the Orpheus
Process to business.

Historical views on leadership

Sanskrit literature identifies ten types of leaders. Defining characteristics of the ten types of
leaders are explained with examples from history and mythology.

Aristocratic thinkers have postulated that leadership depends on one's blue blood or genes:
monarchy takes an extreme view of the same idea, and may prop up its assertions against the
claims of mere aristocrats by invoking divine sanction: see the divine right of kings.
Contrariwise, more democratically-inclined theorists have pointed to examples of
meritocratic leaders, such as the Napoleonic marshals profiting from careers open to talent.

In the autocratic/paternalistic strain of thought, traditionalists recall the role of leadership of

the Roman pater familias. Feminist thinking, on the other hand, may damn such models as
patriarchal and posit against them emotionally-attuned, responsive, and consensual
empathetic guidance and matriarchies.

Comparable to the Roman tradition, the views of Confucianism on "right living" relate very
much to the ideal of the (male) scholar-leader and his benevolent rule, buttressed by a
tradition of filial piety.

In On Heroes, Hero-Worship, and the Heroic in History, Thomas Carlyle demonstrated the
concept of leadership associated with a position of authority. In praising Oliver Cromwell's
use of power to bring King Charles I to trial and eventual beheading, he wrote the following:
"Let us remark, meanwhile, how indispensable everywhere a King is, in all movements of
men. It is strikingly shown, in this very War, what becomes of men when they cannot find a
Chief Man, and their enemies can." [8]

Within the context of Islam, views on the nature, scope and inheritance of leadership have
played a major role in shaping sects and their history. See caliphate.

23
In the 19th century, the elaboration of anarchist thought called the whole concept of
leadership into question. (Note that the Oxford English Dictionary traces the word
"leadership" in English only as far back as the 19th century.) One response to this denial of
élitism came with Leninism, which demanded an élite group of disciplined cadres to act as
the vanguard of a socialist revolution, bringing into existence the dictatorship of the
proletariat.

Other historical views of leadership have addressed the seeming contrasts between secular
and religious leadership. The doctrines of Caesaro-papism have recurred and had their
detractors over several centuries. Christian thinking on leadership has often emphasized
stewardship of divinely-provided resources - human and material - and their deployment in
accordance with a Divine plan. Compare servant leadership.

For a more general take on leadership in politics, compare the concept of the statesman.

The great traits that a leader must have, have been debated over time, and most people agree
that these are the five key traits. You must have a vision. We've all heard the saying "You
must stand for something, or you'll fall for everything." But what does that really mean?
Standing firm when it comes to your company's policies and procedures is all well and good,
but it doesn't speak to having a vision. As a leader, you have to learn to communicate your
vision or the vision of your company to the people you want to follow you. You must have
passion, you have to show your team that you want to accomplish the goal as badly as they
do, your passion will drive them. You must learn to be a great decision maker. Sometimes,
leaders must face times of pressure where they are forced to make quick decisions, a great
leader must have this skill. You must be a team builder. To become a great leader, you must
first make your team great, you must have the power to give your team responsibilities, and
trust them too, you must slowly make them greater and greater. You must have character.
Without character, all the other "keys" are for naught. That's because your innate character
strengths and limitations play a critical role in your leadership style. The real question is, are
you aware of just what role they play? All great leaders have taken steps to learn about their
individual personality and what part it plays in their leadership style.

24
25
Hindustan Unilever
Mumbai, India

Revenue : $2.74billion
No. of employees: 15,000
CEO : Douglas Baillie
Top alumni : Anand Kripalu, managing director of Cadbury India; P.M. Sinha,
chairman of Bata India

Place the Right People in the Right Jobs. At this Anglo-Dutch-owned Indian
conglomerate, known for churning out leaders as fast as it produces Pears soap and Lipton
tea, managers are rated in colorcoded boxes. The top 200 to 250 managers, called greens (as
in "go," not "novice"), are singled out on a leadership rating matrix. Mediocre execs are
labeled amber, and at the bottom are reds. The aim is to get the top 50 greens into critical
jobs at various levels of seniority. The ranking system, the company says, helps it attract and
nurture leaders.

HUL also won The Top Companies for Leaders 2007

By fortune

Type : Public

Founded : 1933

Headquarters : Mumbai, India

Key people : Harish Manwani - Chairman

Nitin Paranjpe - CEO

Industry : Fast moving consumer goods

Products : tea, soap, detergents

Employees : 41,000

Parent : Unilever

Website : www.hll.com

26
Hindustan Unilever Limited (abbreviated to HUL), formerly Hindustan Lever
Limited , is India's largest consumer products company and was formed in 1933 as Lever
Brothers India Limited. It is currently headquartered in Mumbai, India and its 41,000
employees are headed by Harish Manwani, the non-executive chairman of the board. HUL is
the market leader in Indian products such as tea, soaps, detergents, as its products have
become daily household name in India. The Anglo-Dutch company Unilever owns a
majority stake in Hindustan Unilever Limited.

The company was renamed in late June 2007 to "Hindustan Unilever Limited" to provide the
optimum balance between maintaining the heritage of the Company and the future benefits
and synergies of global alignment with the corporate name of "Unilever". This decision will
be put to the shareholders for approval in next "Annual Genera Meeting"

27
28
Hindustan Unilever Ltd

29
30
Hindustan Lever Ltd (HLL) is India's largest Fast Moving Consumer Goods (FMCG)
company. HLL's brands like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely,
Pond's, Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-
Annapurna, Kwality Wall's are household names across the country and span a host of
categories, such as soaps, detergents, personal products, tea, coffee, branded staples,
ice cream and culinary products. These products are manufactured over 40 factories
across India and the associated operations involve over 2,000 suppliers and associates.
Hindustan Lever Limited's distribution network comprises about 4,000 redistribution
stockists, covering 6.3 million retail outlets reaching the entire urban population, and
about 250 million rural consumers. HLL is also one of India's largest exporters. It has
been recognised as a Golden Super Star Trading House by the Government of India.
Presently, HLL has over 16,000 employees including over 1,200 managers. Its
mission is to "add vitality to life." The Anglo-Dutch company Unilever owns a
majority stake in Hindustan Lever Limited.

In the late 19th and early 20th century Unilever used to export its products to India.
This process began in 1888 with the export of Sunlight soap, which was followed by
Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim soon after. In
1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing
Company, followed by Lever Brothers India Limited (1933) and United Traders
Limited (1935). The three companies were merged in November 1956 and the new
entity that came into existence after merger was called as Hindustan Lever Limited.
HLL offered 10% of its equity to the Indian public, and it was the first among the
foreign subsidiaries to do so. Currently, Unilever holds 51.55% equity in the company
while the rest of the shareholding is distributed among about 380,000
individual shareholders and financial institutions.

Brooke Bond entered Indian market in 1900 and in 1903 it launched Red Label tea in
the country. In 1912, Brooke Bond & Co. India Limited was formed. Unilever
acquired Brooke Bond through an international acquisition. Similarly, Lipton's link
with India date back to 1898. Unilever acquired Lipton in 1972 and in 1977 Lipton
Tea (India) Limited was incorporated. Pond's (India) had been in Indian market since
1947. It joined the Unilever ranks through an international acquisition of Chesebrough
Pond's USA in 1986.

The liberalization of Indian economy in 1991 and subsequent removal of the

regulatory framework allowed HLL to explore every single product and opportunity
segment, without any constraints on production capacity. The 1990s witnessed a
string of crucial mergers, acquisitions and alliances. In 1992, the erstwhile Brooke
Bond acquired Kothari General Foods, with significant interests in Instant Coffee. In
1993, it acquired the Kissan business from the UB Group and the Dollops Ice-cream
business from Cadbury India. In one of the most talked about events of India's
corporate history, the erstwhile Tata Oil Mills Company (TOMCO) merged with
HLL, effective from April 1, 1993. In July 1993, Brooke Bond India and Lipton India
merged to form Brooke Bond Lipton India Limited (BBLIL). Brooke Bond Lipton
India Limited launched Wall's range of Frozen Desserts in 1994 and by the end of the
year, HLL entered into a strategic alliance with the Kwality Icecream Group families.
BBLIL merged with HLL, with effect from January 1, 1996. HLL has also set up a
subsidiary in Nepal, Nepal Lever Limited (NLL). The NLL factory manufactures
HLL's products like Soaps, Detergents and Personal Products both for the domestic
market and exports to India. In January 2000, as part of its divestment strategy, the
government decided to award 74 per cent equity in Modern Foods to HLL. In 2002,

31
 HLL acquired the government's remaining stake in Modern Foods. In February 2007,
the company has been renamed to "Hindustan Unilever Limited" to strike the
optimum balance between maintaining the heritage of the Company and the future
benefits and synergies of global alignment with the corporate name of "Unilever".

BRANDS

Some of its brands include Kwality Wall's ice cream, Lifebuoy, Lux, Breeze, Liril,
Rexona, Hamam, Moti soaps, Pureit Water Purifier, Lipton tea, Brooke Bond tea, Bru
Coffee, Pepsodent and Close Up toothpaste and brushes, and Surf, Rin and Wheel laundry
detergents, Kissan squashes and jams, Annapurna salt and atta, Pond's talcs and creams,
Vaseline lotions, Fair & Lovely creams, Lakmé beauty products, Clinic Plus, Clinic All
Clear, Sunsilk and Dove shampoos, Vim dishwash, Ala bleach and Domex
disinfectant.Rexona,Modern Bread and Axe deosprays .

32
Lux Breeze
Lifebuoy Dove
Liril Pears
Hamam Rexona

Surf Excel Fair & Lovely

Rin Pond's
Wheel Vaseline
Aviance

Sunsilk Naturals Pepsodent

Clinic Closeup

Axe Lakme
Rexona

Ayush

33
Brooke Bond Brooke Bond Bru
Lipton

Kissan Kwality Wall's

Annapurna
Knorr

34
HUL Exports

35
Today, HUL is one of India’s Largest exporters of branded Fast Moving Consumer Goods. It
has been recognized by the Government of India as a Golden Super Star Trading House.

Over time HUL has developed into a viable & competitive sourcing base for Unilever world
wide in Home and Personal Care & Foods & Beverages category of products. HUL is also a
global marketing arm for select licensed Unilever brands and also works on building
categories with core country advantage such as branded basmati rice.

HUL Exports offers high level of service with flexibility and responsiveness thorough out
the supply chain. It has a dedicated organization structure to support this endeavour and this
has helped in growth of these businesses in particular. Intrinsic cost competitiveness in the
end to end Supply chain with appropriate technology and competitive capital investment
operations while delivering best in class quality enables HUL to position itself as a key
sourcing hub for Unilever and also become a preferred partner for Global customers in
categories we operate.

HUL’s key focus in the exports business is on two broad categories. It is a sourcing base for
Unilever brands in Home & Personal Care (HPC) and Food and Beverages (F&B) for
supplies to other Unilever companies. It also focuses on becoming a preferred supplier to
both non-Unilever and Unilever clients in three categories in which India, as a country, has
competitive advantage – Branded Rice, Marine Products and Castor and its Derivatives .
HUL enjoys international recognition within Unilever and outside for its quality, reliability
and speed of customer service

HUL's Exports geography comprises, at present, countries in Europe, Asia, Middle East,
Africa, Australia, North America etc.

A brief on HUL's Exports portfolio

HPC:

The categories under HPC include products in Skin care, Oral care, Pears ,Personal Wash &
Lakme range.

- Skin Portfolio includes Mass & Masstige Skin (Cream & lotions under Fair & Lovely and
Dove brands), Shampoos and Conditioners (under Sunsilk brands), Vaseline & Talc (under
Ponds brands). In the past the focus market was in Middle East and Asia, which is now
slowing changing with current exports to European countries and robust plans to source
different products to US in the near future.

- Oral Care consists of Tooth Paste and Tooth Brush (under Pepsodent, Close-up, Mentadant
and Signal brands). The exports are to Asian and European countries.

- Pears Category consists of Bars, Hand Wash, Body Wash and Shower Gel. Pears is being
sold globally including to North America / UK to the GCC / African countries extending up
to Singapore and Australia. While the bar remains the most popular product, the brand has
now extended to hand wash, shower gel, body wash and face wash. Currently Pears is
celebrating its 200 year anniversary which shows the rich heritage and the strong brand
36
equity it enjoys over generations.

- Personal wash category predominantly consists of Lux, Fair & Lovely Soap, Lifebuoy
Hand wash.

Lakme Products are mainly exported to the countries with Indian Ethnic population or to
geographies where the brand enjoys strong equity. The markets include Nepal, Bangladesh,
United Kingdom & Maldives.

F&B:

The categories under F&B include products in Tea, Coffee & Processed Foods range.

- Tea Category Includes: Tea Bags (includes Tea Bags, Flavored Tea Bags and Square Tea
Bags), Instant Tea, Bulk Tea & Packet Tea. The branded packet tea, and instant tea are for
Unilever's ready-to-drink tea business. The branded teas are Brooke Bond, Brooke Bond Red
label, Brooke Bond Taj Mahal, Lipton, Lipton Yellow Label, Lipton Green Label, Lipton
Brisk and Lipton 3-in-1 premix,

- Coffee Category consists of Instant coffee & special coffee Beans (under Bon and Bru
brands). The focus market for Bon is CIS markets while Bru is mainly sold to Ethnic
markets / Indian diaspora world-wide. Both Bon and Bru straddle the entire gamut of
formats comprising of spray dried coffee, granulated, freeze dried and pre mixes.

- Processed Foods categories include Fruit Spreads / Jams, Soup Powders, Salt, Wheat Flour,
Tomato Ketchup and Custard Powder. The branded processed food items consists of Kissan,
Knorr, Annapurna, Captain Cook, Brown & Polson brands.

Marine Products:

HUL offers a comprehensive portfolio, ranging from Surimi, Crabsticks to Shrimps and
several value-added products. Among its customers is Icelandic, the world's third largest
seafood company. In addition, HUL has also become a part of Unilever's supply chain in
seafoods for Europe too. HUL's Marine Products brands are Ocean Diamond, Ocean
Excellence, Shogun, Hima, Gold Seal, Tara and Prima.

Rice:

The categories are Basmati Rice and Basmati Rice-based ready-to-eat rice meals. The brands
are Gold Seal, Indus Valley, Rozana and Annapurna .

37
 www.pureitwater.com

Pureit - The world's most advanced in-home water purifier

Pureit, a breakthrough offering of Hindustan Unilever (HUL), comes with many unique
benefits – complete protection from all water-borne diseases, unmatched convenience and
affordability.

Pureit’s unique Germkill Battery technology kills all harmful viruses and bacteria and
removes parasites and pesticide impurities, giving you water that is ‘as safe as boiled’. It
assures your family 100% protection from water-borne diseases like jaundice, diarrhea,
typhoid and cholera. What’s more, it doesn’t need gas, electricity or continuous tap water
supply.

Pureit not only renders water micro-biologically safe, but also makes the water clear,
odourless and good-tasting.

You will be further reassured to know that Pureit meets the stringent germ-kill criteria of the
Environmental Protection Agency (EPA), the toughest regulatory agency in the USA. The
performance of Pureit has also been tested by leading scientific and medical institutions in
India and abroad.

This patented technological breakthrough has been developed by HUL. This state-of–the-art
engineering developed by a team of over 100 Indian and international experts from HUL and
Unilever Research Centres has made Pureit possible at the consumer price of just Rs. 1800.

Pureit runs with a unique ‘Germkill battery Kit’™ that typically lasts for 1500 litres* of
water. The Germkill Battery Kit™ is priced at Rs.300. This means consumers will get five
litres of water that is ‘as safe as boiled water’ ™ for just one rupee. Which works out to an
extremely affordable 20 paise per litre.

38
PRESENT STRATURE

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods
company, touching the lives of two out of three Indians with over 20 distinct categories in
Home & Personal Care Products and Foods & Beverages. They endow the company with a
scale of combined volumes of about 4 million tonnes and sales of nearly Rs.13718 crores.

HUL is also one of the country's largest exporters; it has been recognised as a Golden Super
Star Trading House by the Government of India.

The mission that inspires HUL's over 15,000 employees, including over 1,300 managers, is
to "add vitality to life." HUL meets everyday needs for nutrition, hygiene, and personal care
with brands that help people feel good, look good and get more out of life. It is a mission
HUL shares with its parent company, Unilever, which holds 52.10% of the equity. The rest
of the shareholding is distributed among 360,675 individual shareholders and financial
institutions.

HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's, Sunsilk,
Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna, Kwality
Wall's – are household names across the country and span many categories - soaps,
detergents, personal products, tea, coffee, branded staples, ice cream and culinary products.
They are manufactured over 40 factories across India. The operations involve over 2,000
suppliers and associates. HUL's distribution network, comprising about 4,000 redistribution
stockists, covering 6.3 million retail outlets reaching the entire urban population, and about
250 million rural consumers.

HUL has traditionally been a company, which incorporates latest technology in all its
operations. The Hindustan Unilever Research Centre (HURC) was set up in 1958, and now
has facilities in Mumbai and Bangalore. HURC and the Global Technology Centres in India
have over 200 highly qualified scientists and technologists, many with post-doctoral
experience acquired in the US and Europe.

HUL believes that an organisation's worth is also in the service it renders to the community.
HUL is focusing on health & hygiene education, women empowerment, and water
management. It is also involved in education and rehabilitation of special or underprivileged
children, care for the destitute and HIV-positive, and rural development. HUL has also
responded in case of national calamities / adversities and contributes through various welfare
measures, most recent being the village built by HUL in earthquake affected Gujarat, and
relief & rehabilitation after the Tsunami caused devastation in South India.

In 2001, the company embarked on an ambitious programme, Shakti. Through Shakti, HUL
is creating micro-enterprise opportunities for rural women, thereby improving their
livelihood and the standard of living in rural communities. Shakti also includes health and
hygiene education through the Shakti Vani Programme, and creating access to
relevant information through the iShakti community portal. The program now
covers 15 states in India and has over 45,000 women entrepreneurs in its fold,
reaching out to 100,000 plus villages and directly reaching to 150 million rural consumers.
By the end of 2010, Shakti aims to have 100,000 Shakti entrepreneurs covering
500,000 villages, touching the lives of over 600 million people.

39
HUL is also running a rural health programme – Lifebuoy Swasthya Chetana. The
programme endeavours to induce adoption of hygienic practices among rural Indians and
aims to bring down the incidence of diarrhoea. It has already touched 84.6 million people in
approximately 43890 villages of 8 states. The vision is to make a billion Indians feel safe
and secure.

If Hindustan Unilever straddles the Indian corporate world, it is because of being single-
minded in identifying itself with Indian aspirations and needs in every walk of life.

PAST MILESTONES

Over 100 years' link with India

In the summer of 1888, visitors to the Kolkata harbour noticed crates full of Sunlight soap
bars, embossed with the words "Made in England by Lever Brothers". With it, began an era
of marketing branded Fast Moving Consumer Goods (FMCG).

Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim.
Vanaspati was launched in 1918 and the famous Dalda brand came to the market in 1937.

In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing
Company, followed by Lever Brothers India Limited (1933) and United Traders Limited
(1935). These three companies merged to form HUL in November 1956; HUL offered 10%
of its equity to the Indian public, being the first among the foreign subsidiaries to do so.
Unilever now holds 52.10% equity in the company. The rest of the shareholding is
distributed among about 360,675 individual shareholders and financial institutions.

The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the company
had launched Red Label tea in the country. In 1912, Brooke Bond & Co. India Limited was
formed. Brooke Bond joined the Unilever fold in 1984 through an international acquisition.
The erstwhile Lipton's links with India were forged in 1898. Unilever acquired Lipton in
1972, and in 1977 Lipton Tea (India) Limited was incorporated.

Pond's (India) Limited had been present in India since 1947. It joined the Unilever fold
through an international acquisition of Chesebrough Pond's USA in 1986.

Since the very early years, HUL has vigorously responded to the stimulus of economic
growth. The growth process has been accompanied by judicious diversification, always in
line with Indian opinions and aspirations.

The liberalisation of the Indian economy, started in 1991, clearly marked an inflexion in
HUL's and the Group's growth curve. Removal of the regulatory framework allowed the
company to explore every single product and opportunity segment, without any constraints
on production capacity.

Simultaneously, deregulation permitted alliances, acquisitions and mergers. In one of the

most visible and talked about events of India's corporate history, the erstwhile Tata Oil Mills
40
Company (TOMCO) merged with HUL, effective from April 1, 1993. In 1995, HUL and yet
another Tata company, Lakme Limited, formed a 50:50 joint venture, Lakme Unilever
Limited, to market Lakme's market-leading cosmetics and other appropriate products of both
the companies. Subsequently in 1998, Lakme Limited sold its brands to HUL and divested
its 50% stake in the joint venture to the company.

HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994,
Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary Pads. HUL
has also set up a subsidiary in Nepal, Unilever Nepal Limited (UNL), and its factory
represents the largest manufacturing investment in the Himalayan kingdom. The UNL
factory manufactures HUL's products like Soaps, Detergents and Personal Products both for
the domestic market and exports to India.

The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on the Foods
and Beverages front. In 1992, the erstwhile Brooke Bond acquired Kothari General Foods,
with significant interests in Instant Coffee. In 1993, it acquired the Kissan business from the
UB Group and the Dollops Icecream business from Cadbury India.

As a measure of backward integration, Tea Estates and Doom Dooma, two plantation
companies of Unilever, were merged with Brooke Bond. Then in July 1993, Brooke Bond
India and Lipton India merged to form Brooke Bond Lipton India Limited (BBLIL),
enabling greater focus and ensuring synergy in the traditional Beverages business. 1994
witnessed BBLIL launching the Wall's range of Frozen Desserts. By the end of the year, the
company entered into a strategic alliance with the Kwality Icecream Group families and in
1995 the Milkfood 100% Icecream marketing and distribution rights too were acquired.

Finally, BBLIL merged with HUL, with effect from January 1, 1996. The internal
restructuring culminated in the merger of Pond's (India) Limited (PIL) with HUL in 1998.
The two companies had significant overlaps in Personal Products, Speciality Chemicals and
Exports businesses, besides a common distribution system since 1993 for Personal Products.
The two also had a common management pool and a technology base. The amalgamation
was done to ensure for the Group, benefits from scale economies both in domestic and
export markets and enable it to fund investments required for aggressively building new
categories.

In January 2000, in a historic step, the government decided to award 74 per cent equity in
Modern Foods to HUL, thereby beginning the divestment of government equity in public
sector undertakings (PSU) to private sector partners. HUL's entry into Bread is a strategic
extension of the company's wheat business. In 2002, HUL acquired the government's
remaining stake in Modern Foods.

In 2003, HUL acquired the Cooked Shrimp and Pasteurised Crabmeat business of the
Amalgam Group of Companies, a leader in value added Marine Products exports.

41
MANAGEMENT STRUCTURE

Hindustan Unilever Limited is India's largest Fast Moving Consumer Goods (FMCG) company. It
is present in Home & Personal Care and Foods & Beverages categories. HUL and Group companies
have about 15,000 employees, including 1200 managers.

The fundamental principle determining the organisation structure is to infuse speed and flexibility in
decision-making and implementation, with empowered managers across the company’s nationwide
operations.

Board
The Board of Directors as repositories of the corporate powers act as a guardian to the Company as
also the protectors of shareholder’s interest.

This Apex body comprises of a Non- Executive Chairman, four whole time Directors and five
independent Non – Executive Directors. The Board of the Company represents the optimum mix of
professionalism, knowledge and experience.

Profile of the Board of Directors

Management Committee

The day-to-day management of affairs of the Company is vested with the Management Committee
which is subjected to the overall superintendence and control of the Board. The Management
Committee is headed by Mr. Nitin Paranjpe and has functional heads as its members representing
various functions of the Company

Mr. Nitin Paranjpe –

Mr. D Sundaram –
Chief Executive Officer
Vice Chairman
and Managing Director

42
Mr. Shreejit Mishra – Mr. Gopal Vittal –
Executive Director Executive Director
Foods Home & Personal Care

Mr. Sanjiv Kakkar –

Mr. Dhaval Buch –
Executive Director
Executive Director
Sales and Customer
Supply Chain
Development

Mr. Ashok Gupta – Ms Leena Nair –

Executive Director
Executive Director
Legal
HR.

43
44
BOARD OF DIRECTORS

Harish Manwani

Chairman

A distinguished alumnus in statistics & economics and MBA from Mumbai University, Mr.
Manwani joined HUL in 1976. Following several Sales and Marketing assignments, he
became Divisional Vice President - Marketing. Mr. Manwani joined the Board of HUL in
1995, responsible for the Personal Products business. In addition, he held regional
responsibility as the Category Leader for Personal Products for the then Central Asia and
Middle East (CAME) Business Group.
Mr. Manwani then moved to the UK as Senior Vice President for the Global Hair Care and
Oral Care Categories and in early 2001 was appointed President of the Home & Personal
Care (HPC) - Latin America Business Group.
In 2004, he was appointed President and Chief Executive Officer of the HPC - North
America Business Group. In April 2005, he was elevated to the Unilever Executive as
President – Asia & Africa.
Mr. Manwani has attended the Advanced Management Programme (AMP) at Harvard
Business School.

Nitin Paranjpe

CEO and Managing Director

Mr. Nitin Paranjpe joined the Company as a Management Trainee in 1987 after obtaining a
degree in BE (Mech) and MBA in Marketing (JBIMS) from Mumbai. In his early years in
the Company, Mr. Paranjpe worked as an Area Sales Manager – Detergents, in Delhi Branch
and then as a Brand Manager in the Household Cleaning Category.
In April 1996, he became the Branch Manager, Chennai and in February 1999 was appointed
a member of the Project Millennium team. In 2000, he moved to Unilever, London and was
involved in a review of the Organisation Structure. During 2001, he became the Personal
Assistant to the Unilever Chairman in London. On his return to India in 2002, he became the
Category Head – Fabric Wash & Regional Brand Director (Asia) for some Laundry and
Household Cleaning (HHC) Brands. In 2004, he became Vice President – Home Care

45
(Laundry & HHC) India, responsible for the top and bottom-line of the Homecare business
and in March 2006, he was appointed as the Executive Director for the Home & Personal
Care business. Mr. Paranjpe was appointed as the CEO and Managing Director of the
Company in February 2008.

D. Sundaram

Vice Chairman and CFO

Mr D. Sundaram joined HUL in 1975 as Management Trainee and worked
in various capacities in HUL as Corporate Accountant, Commercial
Manager and Treasurer till 1990. He was seconded to Unilever, London as
Commercial Officer for Africa and Middle East Group between 1990 and
1993 and on return was the Financial Member of TOMCO Integration
team from 1993 to 1994.
He became the Finance Director of Brooke Bond Lipton India Limited in March 1994 when
the two companies were merged. He was again seconded to Unilever in August 1996 as
Senior Vice President – Finance Central Asia and Middle East Group with responsibility for
Finance, IT and business strategies for Unilever companies in the Indian sub-continent,
North Africa and the Middle East countries. He returned to India in May 1999 as Finance &
IT Director of HUL. Mr Sundaram was elevated as Vice Chairman of the Company in April
2008.

Sanjiv Kakkar

Director
Mr. Sanjiv Kakkar is BA (Economics) and PGDM from IIM Ahmedabad
with 23 years work experience. Mr. Kakkar joined the Company in June
1984 and has worked in various Sales and Marketing assignments. His
marketing experience spans across categories including Beverages,
Personal Products and Oral & Hair Care.

He has also had key stints as Category Head of Oral and General Manager – Sales &
Customer Management of Personal Products. He was appointed Vice President – Oral &
Hair Care in May 2004. In March 2006, Mr. Kakkar was appointed as Executive Director -
Foods and joined the Management Committee on 1st January 2007. Sanjiv was appointed as
the Executive Director - Sales and Customer Development in May 2007.

Dhaval Buch

Director
Mr. Dhaval Buch joined HUL as a Management Trainee in June 1984. He
has held a series of assignments in Manufacturing, Household Care
category and New Ventures including a stint with Unilever in U.K. during
1993-95. He was a member of Project Millennium, a key organisational
initiative.

In June 2005, he was appointed as Vice President - Technical (HPC) and in 2006 was
appointed as Executive Director Supply Chain. He was appointed to the Board of Directors
of the Company in April 2008.
46
D. S. Parekh

Director
Mr. D. S. Parekh holds a FCA degree from England & Wales. Mr. Parekh
has held senior positions in Grindlays and Chase Manhattan. He is the
Executive Chairman of Housing Development Finance Corporation. Mr.
Parekh joined the Board as Independent Non-Executive Director in 1997.

C. K. Prahalad

Director
Professor C. K. Prahalad is the Harvey C. Fruehauf Professor of Business
Administration at the University of Michigan at Ann Arbor, the US. His
contribution to business strategy is globally recognised. He joined the
Board as Independent Non-Executive Director in 2000.

A. Narayan

Director
Mr. A. Narayan is the Managing Director and CEO of ICI India Limited.
He is also the Chairman of ICI India Research & Technology Centre. Mr.
Narayan joined the Board as Independent Non-Executive Director in
2001.

S. Ramadorai

Director
Mr. S. Ramadorai is the Chief Executive Officer of Tata Consultancy
Services. Mr. Ramadorai is also Chairman of Tata Technologies Ltd. and
Chairman of CMC Ltd. He joined the Board as Independent Non-
Executive Director in 2002.

R. A. Mashelkar

Director

47
 Dr. R.A. Mashelkar, a Ph. D in Chemical Engineering is an eminent
scientist. He has served as the Director General of Council of Scientific
and Industrial Research ( CSIR) for over 11 years and is presently the
President of Indian National Science Academy and President of Global
Research Alliance, a network of publicly funded R&D institutes from
Asia-Pacific, Europe and USA with over 60,000 scientists.
He is also the President of National Innovation Foundation and Institution of Chemical
Engineers (IChemE), UK. Dr. Mashelkar has won over 50 awards and medals in the field of
science and technology and was honoured by the President of India with Padmashri (1991)
and with Padmabhushan (2000), in recognition of his contribution to nation building.

CODE OF BUSINESS PRINCIPLES

Introduction

Unilever has earned a reputation for conducting its business with integrity and with respect
for the interests of those our activities can affect. This reputation is an asset, just as real as
our people and brands.

Our first priority is to be a successful business and that means investing for growth and
balancing short term and long term interests. It also means caring about our consumers,
employees and shareholders, our business partners and the world in which we live.

To succeed requires the highest standards of behaviour from all of us. The general principles
contained in this Code set out those standards. More detailed guidance tailored to the needs
of different countries and companies will build on these principles as appropriate, but will
not include any standards less rigorous than those contained in this Code.

We want this Code to be more than a collection of high sounding statements. It must have
practical value in our day to day business and each one of us must follow these principles in
the spirit as well as the letter.

Standard of Conduct

We conduct our operations with honesty, integrity and openness, and with respect for the
human rights and interests of our employees.

We shall similarly respect the legitimate interests of those with whom we have relationships.

Obeying the Law

Unilever companies and our employees are required to comply with the laws and regulations
of the countries in which we operate.

48
Employees

Unilever is committed to diversity in a working environment where there is mutual trust and
respect and where everyone feels responsible for the performance and reputation of our
company.

We will recruit, employ and promote employees on the sole basis of the qualifications and
abilities needed for the work to be performed.

We are committed to safe and healthy working conditions for all employees. We will not use
any form of forced, compulsory or child labour.

We are committed to working with employees to develop and enhance each individual's
skills and capabilities.

We respect the dignity of the individual and the right of employees to freedom of
association.

We will maintain good communications with employees through company based

information and consultation procedures.

Consumers

Unilever is committed to providing branded products and services which consistently offer
value in terms of price and quality, and which are safe for their intended use. Products and
services will be accurately and properly labelled, advertised and communicated.

Shareholders

Unilever will conduct its operations in accordance with internationally accepted principles of
good corporate governance. We will provide timely, regular and reliable information on our
activities, structure, financial situation and performance to all shareholders.

Business Partners

Unilever is committed to establishing mutually beneficial relations with our suppliers,

customers and business partners.

In our business dealings we expect our business partners to adhere to business principles
consistent with our own.

Community Involvement

Unilever strives to be a trusted corporate citizen and, as an integral part of society, to fulfill
our responsibilities to the societies and communities in which we operate.

49
Public Activities

Unilever companies are encouraged to promote and defend their legitimate business
interests.

Unilever will co-operate with governments and other organisations, both directly and
through bodies such as trade associations, in the development of proposed legislation and
other regulations which may affect legitimate business interests.

Unilever neither supports political parties nor contributes to the funds of groups whose
activities are calculated to promote party interests.

The Environment

Unilever is committed to making continuous improvements in the management of our

environmental impact and to the longer-term goal of developing a sustainable business.

Unilever will work in partnership with others to promote environmental care, increase
understanding of environmental issues and disseminate good practice.

Innovation

In our scientific innovation to meet consumer needs we will respect the concerns of our
consumers and of society. We will work on the basis of sound science applying rigorous
standards of product safety.

Competition

Unilever believes in vigorous yet fair competition and supports the development of
appropriate competition laws. Unilever companies and employees will conduct their
operations in accordance with the principles of fair competition and all applicable
regulations.

Business Integrity

Unilever does not give or receive whether directly or indirectly bribes or other improper
advantages for business or financial gain. No employee may offer give or receive any gift or
payment which is, or may be construed as being, a bribe. Any demand for, or offer of, a
bribe must be rejected immediately and reported to management.

Unilever accounting records and supporting documents must accurately describe and reflect
the nature of the underlying transactions. No undisclosed or unrecorded account, fund or
asset will be established or maintained.

Conflicts of Interests

50
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 applied throughout Unilever.

The Group Chief Executive is responsible for implementing these principles and is
supported in this by the Corporate Code Committee comprising the General Counsel, the
Joint Secretaries, the Chief Auditor, the SVP HR, the SVP Communications and the
Corporate Code Officer, who presents quarterly reports to the Unilever Executive.

Day to day responsibility is delegated to all senior management of the regions, categories,
functions and operating companies. They are responsible for implementing these principles,
if necessary through more detailed guidance tailored to local needs, and are supported in this
by Regional Code Committees comprising the Regional General Counsel together with
representatives from all relevant functions and categories.

Assurance of compliance is given and monitored each year. Compliance with the Code is
subject to review by the Board supported by the Corporate Responsibility and Reputation
Committee and for financial and accounting issues the Audit Committee.

Any breaches of the Code must be reported in accordance with the procedures specified by
the General Counsel. The Board of Unilever will not 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 has been made for employees to be able to report in confidence and no employee
will suffer as a consequence of doing so.

51
ENVIRONMENTAL POLICY

Introduction

Hindustan Unilever Limited (HUL) supplies high quality goods and services to meet the
daily needs of consumers and industry. In doing so, the Company is committed to exhibit the
highest standards of corporate behaviour towards its consumers, employees, the societies and
the world in which we live.

The company recognises its joint responsibility with the Government and the Public to
protect environment and is committed to regulate all its activities so as to follow best
practicable means for minimising adverse environmental impact arising out of its operations.

The company is committed to making its products environmentally acceptable, on a

scientifically established basis, while fulfilling consumers' requirements for excellent
quality, performance and safety.

The aim of the Policy is to do all that is reasonably practicable to prevent or minimise,
encompassing all available knowledge and information, the risk of an adverse environmental
impact arising from processing of the product, its use or foreseeable misuse.

This Policy document reflects the continuing commitment of the Board for sound
Environment Management of its operations. The Policy applies to development of a process,
product and services, from research to full-scale operation. It is applicable to all company
operations covering its plantations, manufacturing, sales and distribution, research &
innovation centres and offices. This document defines the aims and scope of the Policy as
well as responsibilities for the achievement of the objectives laid down.

The Vision

Our vision is to continue to be an environmentally responsible organisation making

continuous improvements in the management of the environmental impact of our operations.

We will achieve this through an Integrated Environment Management approach, which

focuses on People, Technology and Facilities, supported by Management Commitment as
the prime driver.

52
The Environment Policy

Hindustan Unilever Ltd. (HUL) is committed to meeting the needs of customers and
consumers in an environmentally sound manner, through continuous improvement in
environmental performance in all our activities. Management at all levels, jointly with
employees, is responsible and will be held accountable for company's environmental
performance.

53
Accordingly, HUL's aims are to:

 Ensure safety of its products and operations for the environment by using standards of
environmental safety, which are scientifically sustainable and commonly acceptable.

 Develop, introduce and maintain environmental management systems across the

company to meet the company standards as well as statutory requirements for environment.
Verify compliance with these standards through regular auditing.

 Assess environmental impact of all its activities and set annual improvement objectives
and targets and review these to ensure that these are being met at the individual unit and
corporate levels.

 Reduce Waste, conserve Energy and explore opportunities for reuse and recycle.

 Involve all employees in the implementation of this Policy and provide appropriate
training. Provide for dissemination of information to employees on environmental objectives
and performance through suitable communication networks.

 Encourage suppliers and co-packers to develop and employ environmentally superior

processes and ingredients and co-operate with other members of the supply chain to improve
overall environmental performance.

 Work in partnership with external bodies and Government agencies to promote

environmental care, increase understanding of environmental issues and disseminate good
practice.

54
Responsibilities

Corporate

The Board and the Management Committee of HUL is committed to conduct the company
operations in an environmentally sound manner. The Management Committee will:

 Set mandatory standards and establish environmental improvement objectives and targets
for HUL as a whole and for individual units, and ensure these are included in the annual
operating plans.

 Formally review environment performance of the company once every quarter.

 Review environment performance when visiting units and recognise exemplary

performance.

 Nominate:
- A senior line manager responsible for environmental performance at the individual HUL
site.
- HUL environmental coordinator.

The Management Committee, through the nominated environmental coordinator will:

 Ensure implementation of HUL Policy on environment and compliance with Unilever

and HUL environmental standards and the standards stipulated under relevant national /
local legislation. When believed to be appropriate, apply more stringent criteria than those
required by law.

 Assess environmental impact of HUL operations and establish strategies for sound
environment management and key implementation steps.

 Encourage development of inherently safer and cleaner manufacturing processes to

further raise the standards of environment performance.

 Establish appropriate management systems for environment management and ensure

regular auditing to verify compliance.

 Establish systems for appropriate training in implementation of Environment

Management Systems at work.

 Ensure that all employees are made aware of individual and collective responsibilities
towards environment.

 Arrange for expert advice on all aspects of environment management.

 Participate, wherever possible, with appropriate industry and Government bodies

advising on environmental legislation and interact with national and local authorities
concerned with protection of environment.

Individual Units

55
The overall responsibility for environment management at each unit will rest with the Unit
Head, who will ensure implementation of HUL Policy on environment at unit level.
Concerned line managers / heads of departments are responsible for environmental
performance at department levels.

In order to fulfill the requirements of the Environment Policy at each site, the Unit Head
will:

 Designate a unit environment coordinator who will be responsible for co-ordinating

environmental activities at unit, collating environmental statistics and providing / arranging
for expert advice.

 Agree with the Management Committee Member responsible for the unit, specific
environmental improvement objectives and targets for the unit and ensure that these are
incorporated in the annual objectives of the concerned managers and officers and are
reviewed periodically.

 Ensure that the unit complies with Unilever and HUL mandatory standards and the
relevant national and state regulations with respect to environment.

 Ensure formal environmental risk assessment to identify associated environmental

aspects and take appropriate steps to control risks at acceptable levels.

 Ensure that all new operations are subjected to a systematic and formal analysis to assess
environmental impact. Findings of such exercises should be implemented prior to
commencement of the activity.

 Manage change in People, Technology and Facilities through a planned approach based
on training, risk assessment, pre-commissioning audits and adherence to design codes.

 Regularly review environment performance of the unit against set objectives and targets
and strive for continual improvement.

 Sustain a high degree of environmental awareness through regular promotional

campaigns and employee participation through training, safety committees, emergency drills
etc.

 Ensure dissemination of relevant information on environment within the unit and to

outside bodies, and regularly interact with Government authorities concerned for protection
of environment.

 Maintain appropriate emergency procedures consistent with available technologies to

prevent / control environmental incidents.

 Provide appropriate training to all employees.

 Ensure periodic audits to verify compliance with environment management systems and
personally carry out sample environment audits to check efficacy of the systems.

 Report environmental statistics to HUL Corporate Safety & Environment Group on a

monthly basis.

56
Research and Innovation Centres

Since most new products and processes are developed in these Units, certain additional
responsibilities devolve on them to ensure implementation of the Environment Policy of the
company. In addition to the Unit Head's responsibilities outlined above, the heads of these
units will:

 Ensure that a formal and systematic risk assessment exercise is undertaken during the
process/product development stage with specific reference to environmental impact.

 Transfer technology to the pilot plant and main production through a properly
documented process specification which will clearly define environmental impact and risks
associated with processes, products, raw material and finished product handling, transport
and storage.

 Ensure that treatment techniques are developed for any wastes generated as a result of
the new product/process and is incorporated into the process specifications.

57
QUALITY POLICY

Quality is fundamental to our Business Success

Unilever’s mission is to meet everyday needs for nutrition, hygiene and personal care with
brands that help people feel good, look good and get more out of life. And a key requirement
is building in the quality expectations of our consumers into our products.

To win consumers’ confidence and loyalty, we need to consistently deliver branded products
of excellent quality. We understand the different needs of our consumers and customers and
strive to develop and deliver superior brands to ensure that they’re the preferred choice. And
by applying consistently high standards, we’re able to do things right first time, cut waste,
reduce costs and drive profitability.

Our Quality Policy describes the principles that everyone in Unilever follows, wherever they
are in the world, to ensure that we are recognised and trusted for our integrity, the quality of
our brands and products, and the high standards we set.

Principles of the Quality Policy

• Putting the safety of our products and our consumers first.

We have stringent mandatory quality standards in place against which compliance is verified
through regular audits and self assessments. These standards ensure we design, manufacture
and supply products that are safe, of excellent quality, and conform to the relevant industry
and regulatory standards in the countries in which we operate. Comprehensive management
procedures are in place to mitigate risks and to protect our consumers and markets.

• Putting consumers and customers at the heart of our business

We actively engage our consumers and customers, translating their needs and requirements
into our products and services, thus creating consumer value wherever we position our
products. This is at the very heart of our innovation process.

• Quality is a shared responsibility

Quality and consumer safety is the responsibility of every Unilever employee and Unilever
demonstrates visible and consistent leadership to meet this policy. The drive for quality, in
all that we do, is a passion reflected in our brand development, manufacturing and customer
service processes and is also expected of our business partners. We partner with stakeholders
to provide leadership, promote transparency and share best practice. And we’ve forged
effective working relationships with suppliers and contract manufacturers.

• Building and maintaining excellent systems to ensure the quality and safety of our

58
products
We’re proactively and continuously developing our systems and processes to ensure quality
and safety throughout the whole value chain, and we’re setting a benchmark for the business.
We provide appropriate training and resources, and will ensure that we deliver our quality
objectives and targets. We regularly measure and improve our performance using both
internal and external measures.

We actively promote our Quality Policy and have a quality assurance organisation in place
to ensure consistency and visibility of quality standards, processes and performance
indicators across all Unilever businesses at all levels, and to anticipate and develop future
quality capability requirements.

SAFETY AND HEALTH POLICY

Introduction

Hindustan Unilever Limited (HUL) supplies high quality goods and services to meet the
daily needs of consumers and customers. In doing so, the Company is committed to exhibit
the highest standards of corporate behavior towards its consumers, employees, the societies
and the environment in which we operate.

Towards this, the Company recognises its responsibility to ensure safety and protection of
health of its employees, contractors and visitors in all its operating sites, which include
manufacturing, sales and distribution, research laboratories and offices during work and
work related travel.

This Policy document defines the vision, principles, aim, required actions and scope of the
policy application as well as the responsibility for execution.

Our Vision

Our vision is to be an injury free organisation.

Our Mission

We will bring safety on top of mind for all employees and will integrate it with all business
processes. We will realise our Vision through an Integrated Safety Management approach,
which focuses on People, Processes, Systems, Technology and Facilities, supported by
demonstrated leadership and employee commitment at all levels as the prime drivers for
ensuring a safe and healthy work environment.

59
Safety Principles

HUL's Occupational Safety and Health Policy is based on and supported by the following
eight Principles.

These Principles have the same status as the Company's Code of Business Principles:

 All injuries and occupational illnesses are preventable

 All operational exposures can be safeguarded

 Safety evaluation of all business processes is vital

 Working safely is a condition of employment

 Training all employees to work safely is essential

 Management audits are a must

 Employee involvement is essential

 All deficiencies must be reported and corrected promptly

Note: In order to facilitate operationalisation of the Safety Principles, a separate document

has been prepared, which covers:

a) Safety Principles

b) Success Criteria

c) Illustrative KPI

This document will form the basis for the concerned Line / Organisations in developing
KPI's for their respective functions / sites.

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Scope of Application

This section defines the scope of application of this Policy (where, when and to whom is this
Policy applicable).

61
Where does this policy apply?

 All own/leased sites – Manufacturing, Research/Innovation, Offices, Depots, Warehouses

 In-house purchased services i.e. canteen, travel desk, IT implementation etc.

 Sites of associates with HUL holding > 24%

while carrying out operations of making, handling, using, transporting, selling or disposing
off of our products

Who does the policy apply to?

 All employees at business anywhere
 Contractors and visitors while at our own sites

When does it apply ?

 At work (our employees, contractors and visitors)

 Travel between home and work of our employees

 Business related travel including stay out of headquarter

 All Company organized business events i.e. training programmes, conferences, business
related get-togethers, annual sports etc.

Implementation Responsibility

HUL Management at all levels is responsible for Policy implementation. Every site shall
prepare a responsibility matrix with respect to this Policy. Such SHE responsibilities shall
form an integral part of overall job responsibilities of all employees.

All Unilever and HUL Standards, Rules and Procedures on Occupational Safety and Health,
including those that may be specific to a site are integral to this Policy and its
implementation. All employees are required to ensure strict adherence.

62
HINDUSTAN UNILEVER : GROWING WITH INDIA

1997 was a milestone for India, being our 50th year of Independence. This was also around
the time when Hindustan Lever undertook the consolidation of Unilever's operations into a
single corporate entity. It is therefore an opportune time to review how the company has
grown, in India and with India.

Hindustan Lever and its constituent companies have been in India since 1912. Over these
decades, the company has benefitted greatly from the developments in the country; I believe
that the company equally, in its own way, has contributed to these developments. This
congruence of interests can best be exemplified by seeing the way in which the company has
reflected national priorities over the years, through its strategy and operations. Looking
ahead, it is clear that the country is now dedicated to growth with a renewed sense of
purpose and that national interests will evolve. As a company, we remain committed to
evolving national priorities and see a bright and promising future both for ourselves and for
the country; indeed we believe that the future of Hindustan Lever depends on the future of
India.

The relationship between the company and India is enduring and truly synergistic. It is the
result of the company's history, but is more fundamentally shaped by our ethos and that of
our parent company. Unilever, in its worldwide operations, strives to be a multilocal
multinational. For Hindustan Lever this means that the seed with which the company began
was foreign, but our roots are deeply planted in Indian soil. The growth of this plant depends
on the soil and the benefits accrue directly and indirectly to many in India. Our ethos led us
to Indianise management since 1942 and shareholding since 1956, the very first time that
this was done by any foreign subsidiary.

The scale of Hindustan Lever's operations can be measured in many ways. They all show the
deep linkages we have with India and the extent of the symbiotic relationship. We are an
organisation of 36,000 employees and indirectly provide employment to a further 200,000;
this is without considering the one million retailers who we service and who rely to a
considerable extent on the sale of the company's products for their income. We have 7,000
redistribution stockists and source raw materials from over 2,000 suppliers and associates.
We have 346,000 local shareholders who have benefitted from their investment in the
company. Rs.1000 invested seven years ago, would have grown to over Rs.14,000 today.
The score and scale of share value growth are not dissimilar over other time periods.

The beginnings of the company were small. In 1956 when Hindustan Lever was formed, by
the merger of Hindustan Vanaspati Manufacturing Company, Lever Brothers India Ltd and
United Traders Ltd, the company had sales of Rs.27 crores (about Rs.650 crores in current
money). Guided throughout its history by men of vision, with the unstinting efforts of
employees and the strong support and contribution of Unilever, sales of Hindustan Lever and
its subsidiary companies have in 1997 grown to around Rs.9500 crores and in so doing
developed the scale and linkages described earlier.

I would like to talk about the key areas where the company has consciously sought to grow
in line with national interests, weaving the company's operations with the country's
imperatives. The areas covered are:

63
- Developing and using relevant technology
- Generating productive employment
- Stimulating industrialisation and dispersing its benefits
- Adding value to agriculture
- Sustaining export performance

Developing and using Relevant Technology

We began our R&D initiative, setting up the Hindustan Lever Research Centre in 1958; it is
currently the largest R&D centre in the Private Sector, focusing on applied research. There
are over 80 highly qualified scientists working in the areas of physical sciences, bio-
sciences, agriculture and chemical engineering. Apart from the best talent in India, we have
been able to attract back Indian scientists from some of the leading universities in the USA
and Europe, to work with us. There is a strong inter-dependence between Hindustan Lever
and Unilever in research. We are an integral part of Unilever's global network of research
laboratories, and benefit by adapting knowledge and ideas from Unilever research around the
world to our local requirements. This complements the significant innovation and invention
we do locally.

Clear trends are seen when looking back at how technology has been developed and used in
the company. In the early years, our R&D efforts were centred on import substitution and we
have many significant achievements that continue to be of great relevance even today. The
use of unconventional oils, such as neem, karanja, castor and rice bran, for soap making was
pioneered by the company and enabled the substitution of imported oils. Cumulatively, we
estimate that this has resulted in a saving of around $1.2 billion in foreign exchange since the
1970s. R&D was also used for substituting imported aroma chemicals and nickel catalysts.

The next phase of research has been to improve the functional delivery of our brands,
ensuring that we are able to fully satisfy consumer needs and remain ahead of competition.
This is done through the development of innovative products and new processes, applied
across the entire spectrum of the company's business. It is this development and application
of technology that makes us the market leader in areas as diverse as Fair & Lovely Cream
and hybrid maize seeds. Research finds its application as much in Lifebuoy soap, which is
the brand leader in rural India, as it does in the development of our functionalised
biopolymers which improve quality and productivity in the paper industry. It is often
believed that the role of technology in the fast moving consumer goods (FMCG) area is
limited. Our experience has been exactly the opposite; we find that technology in FMCG is
critical. Skillfully applied it can result in fundamentally lower cost structures and the ability
to deliver new and more exciting benefits to meet the growing aspirations of consumers.

Recently, we have begun to use research to support our export initiatives, thus ensuring that
our exports are both globally competitive and sustainable. For example, we have developed a
cold water soluble instant tea powder which has become a major export product. We have
been able to isolate and process a powerful ultraviolet ray absorbing sunscreen from an
indigenous naturally occurring vegetable oil. This is being exported to Europe and has
significant long-term potential.

Research and its application in Hindustan Lever has come full circle; it began with import
substitution and is now being used to develop our export businesses.

For the country, there is need to apply R&D towards improving quality and lowering cost of

64
domestic products and equally to ensure export competitiveness. India has a significant base
of technological skills on which to build. This base has been developed over the years and
has resulted in many R&D institutes with impressive abilities. The Council of Scientific and
Industrial Research is an outstanding example. We now have the opportunity and challenge
to use these scientific resources to improve the quality of life of all Indians and to make our
industries globally competitive. However, we must clearly focus our research resources to
well-defined national priorities.

At Hindustan Lever, we have been successful in the application of research because it is

fully integrated with our business. A way forward for India could also be to ensure that
strong linkages are forged between industry and the various research establishments.

Generating Productive Employment

Providing adequate employment opportunities has been a key objective of planners and
continues to be of great importance. At Hindustan Lever we have always recognised the
importance of this national objective and have integrated it in our business strategies. We not
only generate employment but also ensure that this employment is productive and therefore
sustainable. Since 1956 our direct employment has grown over six-fold. To ensure that
employment in our units is productive and sustainable in the long term, we have restructured
our manufacturing base over the years. Certain unviable units have been closed down and
yet others scaled down; on the other hand, many units have been expanded and several new
factories established. The restructurings were necessary to maintain local and global
competitiveness and to overcome the cost disadvantages of such locations.

The company's efforts at ensuring sustainable productive employment is mirrored in the

approach to turning around sick companies. Since 1983, we have acquired five sick
industrial establishments and have restructured them all into highly productive assets,
infusing new technology and building the skills of their employees. Two of these factories,
at Mangalore and Mysore, have since received the ISO 9002 accreditation. Today these five
factories have a capacity utilisation of over 85 per cent.

Consumer goods industries, like Hindustan Lever, generate both direct and indirect
employment. The indirect employment reflects those employed in supplier industries,
transport and logistics systems and the distributive trade. Often when considering the
employment generating potential of the consumer goods industry, its capacity to create
indirect employment does not get adequately considered. At a very conservative estimate,
the company has created over 200,000 indirect jobs through the entire supply chain, over and
above the 36,000 directly employed.

It is commonly, but mistakenly, believed that the consumer goods sector has limited
potential to add to employment generation. Studies that we have done based on data from the
Annual Survey of Industries show that consumer goods industries, such as foods, perfumes,
cosmetics, plastic products and other consumer products, have an employment elasticity of
around 0.9. This means that if output in these industries were to double, employment would
increase by 90 per cent. In contrast, in basic and capital goods industries, such as cement,
petroleum, iron and steel, the employment elasticities are about 0.2, indicating that if output
were to double, employment would increase by 20 per cent. The consumer goods sector can
therefore have a high impact on job creation. Given the importance of employment in the
national agenda, this fact needs to be recognised.

65
Stimulating Industrialisation and Dispersing its Benefits
At Hindustan Lever our corporate purpose is to meet the everyday needs of people
everywhere. Our wide range of brands are consumed by all sections of society, across urban
and rural societies and in all parts of the country. A business with our scale and spread,
operating in a country as vast as India, requires an efficient supply chain and logistics
system; this necessitates a wide dispersion of manufacturing capacity. This business
imperative is well matched with the national objective of spreading the benefits of
industrialisation. Today we have over 54 manufacturing units of which only five are in the
metro cities while 28 are in backward districts. In many cases, we have been among the first
industries in these backward districts and have demonstrated that it is possible, through
intensive training, to convert people from agrarian backgrounds into competent and skilled
industrial workmen. We have thus been able to spread an industrial culture across many
districts and help to sow the seeds for further development by attracting investments from
others.

HUL has manufacturing locations at places such as Khamgaon and Kanhan in Maharashtra,
Orai and Sumerpur in Uttar Pradesh, and Chhindwara in Madhya Pradesh. At many places,
our factories have been the nucleus and the catalyst for further investment in such areas. For
example, in the 1980s, we were the first to make a significant investment at Chhindwara,
Orai and Sumerpur with soaps and detergents factories; today these three areas have a
further five large scale and around 70 medium and small scale factories, backed by
numerous transporters and other service industries. We have seen that our initiative in
backward districts leads to further growth in two distinct ways. It brings a number of our
suppliers and associates in the supply chain to the area; it also catalyses the establishment of
non-related industries since they can benefit from the industrial and service infrastructure
already set up in the district. This starts a virtuous cycle for continued growth and
development.

The process of industrial development also brings about a change in the quality of life for the
local community. For instance, when we entered Haldia (West Bengal) in 1979, the town
had one hospital and six doctors; today it has five hospitals and nursing homes and 57
doctors. It had nine educational institutions including schools and colleges; today it has 32.
We have witnessed similar changes in all our backward locations. As a responsible business,
in the communities among whom we operate, we have done our best to support the
development of such social infrastructure. This benefits the community and improves the
quality of life of our employees.

Investment by the company also creates further investment by suppliers. We estimate that
our operations have attracted an investment of over Rs.1,600 crores from a range of supplier
industries: oil extraction, organic and inorganic chemicals, packaging, paper, plasics, glass
and engineering.

The linkage with Hindustan Lever has in many cases given viability and economies of scale
to these industries. Several suppliers have been supported to produce goods and equipment
for the first time in India; this includes many chemicals, specially structured lamitubes,
liquid sachet-filling machines and eutectic freezers. We have provided help in terms of
technology, by underwriting investment during the initial development phase and by
providing a secure market for what is produced. Particularly satisfying is the fact that our
suppliers, specially in packaging materials and chemicals, now also export to Unilever
companies in other countries, thus forming international linkages for India's intermediate
66
industries. As a large business, we provide an umbrella under which small businesses have
grown and prospered, while providing us with the necessary goods and services.

The government has provided much encouragement and many incentives for stimulating
industrialisation in backward areas and thus spreading development. We have found it
possible to establish viable manufacturing units at such locations and have been a catalyst to
their further development. As the country makes the transition to a more industrialised
economy, continued emphasis needs to be given to spreading the benefits of industrialisation
widely across the country, rather than creating small islands of affluence.

Adding Value to Agriculture

The importance of agriculture in the Indian economy cannot be overstated, and the need to
improve productivity and add value to agricultural output through food processing is widely
recognised. There is a clear need to better integrate industry and agriculture, to reduce
wastage in the food chain, improve rural incomes and create employment opportunities.

The linkages between the company and the agricultural sector are many. The company is
dependent on the agricultural sector for much of its raw material in its Foods & Beverages
operations and also in its Home & Personal Care business. Our Fertiliser business caters to
the needs of 30 million farmers with a total crop production of 140 million tonnes. Several of
our major business categories, for example Fabric Washing, Personal Wash and Beverages,
get over 50 per cent of their sales from rural areas and depend on improved rural prosperity
for further market growth.

HUL has done much to help increase agricultural productivity and generate demand for
increased production. We do this by introducing the latest technology, sharing and updating
best practices, and investing in food processing. The average yield of tea at the company's
plantations has grown from 900 kg per hectare in the 1960s to about 2,500 kg per hectare
now. Our tomato extension programme in Punjab has increased the yield per acre from eight
tonnes 10 years ago to 20 tonnes today. In Animal Feeding Stuffs we are the country's
largest seller of branded animal feeds; our Innovation Centre in this business has developed
poultry feeds which give a high conversion efficiency.

The country has achieved self-sufficiency in basic food grains through the Green Revolution.
Much however remains to be done to improve productivity for other cash crops. It is in these
areas that partnership between agriculture and the relevant user industries can be of great
mutual benefit.

Our early experience with a dairy plant at Etah (Uttar Pradesh) demonstrated how important
it was to recognise the need for mutual dependence between agri-business viability and
agricultural development. When we first set up the dairy in 1964, milk availability in the
area was very poor, leading to unviability of the investment. Through a series of focused
initiatives in animal husbandry and in rural development, milk availability in the district has
gone up in the last 20 years from 2500 tonnes per year to over 30,000 tonnes. This has
improved the operations of the Etah dairy and has also improved the incomes of the rural
community around the factory.

For us at Hindustan Lever the rural sector represents an immense source of future demand
growth for our products and a vital source of raw material supply. The importance of both

67
for the ongoing success of our operations is well understood and has led to a genuine
commitment to improving the rural economy, wherever we can make an impact.

Sustaining Export Performance

For India, exports have consistently been an area of priority. In 1947, the
country had a positive Balance of Trade. However, in the last 50 years we have
had a negative Balance of Trade, in all but two years.

HUL’s export efforts began in 1962, and in 1997 they accounted for Rs.1,150 crores, thus
making the company one of India's top five exporters. The policy framework under the 1973
Foreign Exchange Regulations Act, required the company to ensure 10 per cent of its
turnover from exports. This obligation was removed in 1991. However, we have continued
our exports thrust because it is a viable business opportunity and because we recognise the
need to earn foreign exchange. Indeed, since 1991, exports have on an average accounted for
about 14 per cent of the company's net turnover - a higher percentage than when it was an
obligation.

Hindustan Lever is India's largest tea exporter by value, accounting for about 22 per cent of
the country's exports; we are also the largest exporter of castor oil, supplying about 23 per
cent of total world demand. We are India's largest FMCG exporter with a 75 per cent share
of such exports from the country, including brands developed by us in India. And today the
company is increasingly becoming a global sourcing base for Unilever, with internationally
competitive quality and pricing.

HUL’s exports focus is best articulated by the fact that between 1991 and 1997, while
exports grew by a compounded rate of 35 per cent, our domestic business grew by 31 per
cent. I have already spoken about the scale of our activities in India; much of this is already
known and recognised. However, to put this in a different perspective, the value added in our
domestic activities accounts for 0.2 per cent of India's Gross Domestic Product, while our
export sales account for one per cent of the country's export turnover. Thus seen, we are
even more significant in India's export economy than we are in the domestic economy.

Much of the success of our exports business has been through working with foreign alliance
partners through whom we access brands, markets, technology and skills. In return, we
invest capital, management and manpower in a local manufacturing base which is run to
international standards. Through this alliance model, we are, for example, manufacturing
Pears soap, branded tea and several other products for Unilever companies, Surimi fish
products for Shinto Corporation of Japan, and Hush Puppies Shoes for Hush Puppies UK.
One of the key learnings from our exports business that may be of wider relevance, is that in
industry sectors where India has a global competitive advantage, building alliances with
foreign partners can lead to a strong, growing and sustainable exports business.

68
Looking Ahead

The country has achieved much in the last 50 years; we are self-sufficient in
food and the world's fifth largest industrial economy. However, despite the country's
considerable achievements in the past, much remains to be done. In the foreseeable future,
the five areas that I have highlighted will continue to be of great importance not only to us
but also to other businesses and, I believe, to the national agenda.

HUL has found that research can be applied with enormous benefit across every one of our
businesses, ranging from seemingly simple consumer products to industrial chemicals and
machinery. It is a mistaken belief that research is only relevant to what seem to be 'high tech'
areas; there are always opportunities to use research to reduce costs, improve performance
and provide new products and benefits. Critical in the successful application of R&D is the
ability to get business and research working together in real partnership.

HUL’s business has many external interfaces; in these we find that there is no alternative to
carefully building the appropriate linkages so that benefits are mutual and equitably shared.
This is demonstrated in the symbiotic relationship between us and our many small suppliers
and business associates; we provide an umbrella under which they grow and prosper,
providing us, in turn, with the necessary goods and services. Our relationships with the farm
sector benefit us through improved availability of agricultural produce and equally benefit
the farmer. In exports, our success is based on building foreign alliances through which we
get market access and leverage our strengths and the country's natural competitive
advantages.

Employment generation is ultimately a consequence of industrial development, improved

agricultural value and growing export businesses. Consumer goods industries have a high
employment elasticity - growth in their output can create greater employment. When
evaluating the employment generating potential of an industry sector, both direct and
indirect employment should be fully considered. Finally, it is productive and sustainable
employment and the income this generates that will help build a better quality of life for all
Indians.

Hindustan Lever has a breadth of operations across Home and Personal Care, Food and
Beverages, Agri-inputs, Chemicals and Exports, and a history of successful experience in
India across all these areas. There is, in all that we do, something unique about our approach
that is at the heart of our success. I firmly believe that an integral part of this approach has
always been the recognition that business interest and national interest must be interwoven.
In this, we have always received the fullest encouragement and support of Unilever. We
remain committed to continue to keep national objectives central in our business strategies
and operations. It is this that gives us the confidence that we will grow in India, just as we
will grow with India .

69
 Review of literature

Hindustan Unilever Limited

Hindustan Unilever Limited (HUL) was earlier known as Hindustan Lever

Limited and it has its presence since 1956 in India. The Company Hindustan
Unilever Limited is the country's biggest company in the consumer products
sector and it has its head office in Mumbai.

The Company Hindustan Unilever is a subsidiary of the UK based company

Transnational Unilever which holds 51% share. The company is the topmost
marketer of detergents and soaps and it has also the biggest business in India in
personal care products like deodorants, color cosmetics, fragrances, and products
of skin care. Hindustan Unilever Company is also a leading company in ice
creams, squashes, jams, tea, branded flour, processed coffee, and tomato
products. The company also manufactures bulk and specialty chemicals,
fertilizers, and animal feed.

Hindustan Unilever Limited's home and personal care brands include Lux,
Breeze, Pears, Lifebuoy, Surf Excel, Rin, Pepsodent, Lakme, Axe, Ayush, and
Rexona. The company's food brands are Brooke Bond, Lipton, Brooke Bond Bru,
Kissan, Annapurna, Knorr, and Kwality Wall's. Hindustan Unilever has more
than 80 manufacturing facilities that are spread all across the country. All the
production units of the company are highly technologically advanced. Also
Hindustan Unilever Limited uses the best quality of raw material for the
production of its products. These measures has ensured that the products of the
company are of good quality. The Company Hindustan Unilever has more than
15,000 employees.

The Company Hindustan Unilever is one of India's biggest exporters and this is
the reason that the government of India has recognized the company as a super
star golden trading house. The company has merged with a number of companies
such as Lakme, Ponds, Brooke Bond Lipton India, and Modern Foods. Hindustan
Unilever Limited's total income amounted to Rs. 31646.30 million in 2005- 2006
and the next year, this figure stood at Rs. 35877.20 million. The net profit of the
company stood at Rs. 3805.90 million in 2005- 2006 and the next year, this
figure increased to Rs. 4930.80 million. This shows that the Company Hindustan
Unilever Limited has registered a significant growth in its profit levels.

Hindustan Unilever Limited has become one of the leading company in its sector
in the country. This has been possible due to the fact that the company has
strictly maintained the quality of its products which has led to customer
satisfaction and loyalty. And so in the future also the Company Hindustan
Unilever Limited must continue to supply the best quality of products to its
customers so that it can retain its leadership position in the market.
70
Research Methodology

Corporate Social Responsibility (CSR) is the decision-making and implementation process

that guides all company activities in the protection and promotion of international human
rights, labor and environmental standards and compliance with legal requirements within its
operations and in its relations to the societies and communities where it operates. CSR
involves a commitment to contribute to the economic, environmental and social
sustainability of communities through the on-going engagement of stakeholders, the active
participation of communities impacted by company activities and the public reporting of
company policies and performance in the economic, environmental and social arenas and
community Development is Non-profit, community-based organizations that work to
revitalize the economic and social base of low-income urban and rural communities across
the nation. They usually have a specific geographic focus and are engaged in a wide range of
development activities, including child care facilities

Towards community assistance and social development, RIL has provided financial as well
as administrative support

This project has been prepared to study those support which Reliance Industries Ltd. had
provided.

The data used to study has been collected from the following secondary sources

• Newspapers
• Magazines
• Journals
• Books
• Internet

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BIBLIOGRAPHY

Websites

• www.google.com
• en.wikipedia.org
• www.search.com
• www.hul.co.in

Books

• Organizational Behavior – C B Gupta

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