Unilever Tensions in structure Unilever originally operated with a decentralized structure from 1950-1970.

It worked because localization helped them to adapt to consumer tastes.But it created problem in 1980 because of duplication of business process, lack of scale of economies and high cost structure.Moreover it prevented creation of global brands,consolidation of products and quick product development launches thus making it fall behind its competitors.(slide 13-unilver a troubled giant),slide 18focus on 4 diff products and slide 21 problems) It introduced a new structure based on business groups in 1990s.It attempted to cut operation cost and speed up development and introduction of new products by streamlining its operations.This one failed too as managers no longer had power to modify products according to local preferences.(1996-1999 restructuring page22 and problems on page26 IN 2000 unilever switched to structure based on global product divisions.This allowed flexibility to adjust to local tastes while reducing cost and creating global brands.This structure made sense as consumers want well known brands while still being able to suit different needs.( we think
globally as well as act locally)

Unilevers growth prompted a growing debate about the appropriate organizational structures required to manage the firm effectively and to respond to changes in its external environment. The central difficulty revolved round getting the right balance between centralization

and decentralization, and between products and geography. A consumer goods manufacturer needed intimate knowledge of each market in which it operated, but if each country was managed as an independent entity the potential economies of scope possible from cross-border transfers of knowledge would be lost. Finding the right balance was complicated because there were major differences in the markets faced by different productssome were mature, and others growingwhile the nature and intensity of competition also varied. Because of the diverse layers of decisionmaking within Unilever, starting at the top with the twin head offices, there were always likely to be winners and losers from any major organization change. Unilever consisted of numerous subgroups linked by partial communication channels, which functioned in part by forming loose, transient coalitions with one another. The different product categories had little contact with one another, being organized in different operating companies and possessing different subcultures. There was poor communication between functional areas also, including marketing and research

Unilever on Thursday named Patrick Cescau its sole chief executive, scrapping a 75-year-old management structure that had drawn criticism from investors because the company was led by two chairmen in different countrie(2005)

The new org structure is moving univer away from location specific dominance that is associated with multidomsetic strategy and world wide are restuructre.in restrucutirng unliver sought to reduce the influence of country \heads by forming global temas for some products