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INDU1114: International Context of HRM Groupwork (3000 words) U Veersma

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BU/PG 20.00% 03/12/2009

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000469445 Tutor's comments

Zafar Iqbal Pravin Kumar, Fahmida. Amanda

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Final Grade_________ Date _______________

ACKNOWLEDGEMENT

Producing a reflection report was only possible because of efforts made by our group members. We would like to thank our course leader Dr. Ulke Veersma who was always happy to help us in this regard. Above all we would like to good wishes for all academics and specially the Dr. Antoinette whose efforts to make us clear that how to develop a effective piece of writing. A lot of articles and books were consulted to prepare this report.

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EXECUTIVE SUMMARY After consulting with group members we choosed the topic of Unilever to work for the presentation. The reason for selecting this organization was that Unilever is the most diverse organization which was our focus. As we are studying Managing Across Cultures course, so the cultural differences in Unilever are obvious which we have observed. As we have mentioned the brief introduction and history followed by organizational structure/hierarchy. After that we tried to explain the HR strategies executed by the leadership in both regions selected i.e. UK and South Asia. We also try to sum up the communication and performance evaluation policies from material collected through various sources.

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TABLE OF CONTENTS ACKNOWLEDGEMENT EXCUTIVE SUMMARY 2 3

INTRODUCTION

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STRUCTURE

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HRM STRATEGIES

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EMPLOYEE EVALUATION

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QUADRANT OF PERFORMANCE

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MANAGEMENT STRATEGY MATRIX
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ORGANIZATION CULTURE

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HOFSTEDE DIMENSIONS

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CONCLUSION

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REFERENCES

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Introduction Unilever is a multinational corporation, formed of British and Dutch parentage, that owns many of the world's consumer product brands in foods, beverages, cleaning agents and personal care products. Unilever employed 174,000 people serving more than 150 countries and had worldwide revenue of €40.5 billion in 2008. Unilever is a dual-listed company consisting of Unilever NV in Rotterdam, The Netherlands and Unilever PLC in London, United Kingdom. Both Unilever companies have the same directors and effectively operate as a single business. History of Unilever

1930s

Unilever's first decade is no easy ride: it starts with the Great Depression and ends with the Second World War. But while the business rationalises operations, it also continues to diversify.

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1960s

As the world economy expands, so does Unilever and it sets about developing new products, entering new markets and running a highly ambitious acquisition programme.

1980s

Unilever is now one of the world's biggest companies, but takes the decision to focus its portfolio, and rationalise its businesses to focus on core products and brands.

1990s

The business expands into Central and Eastern Europe and further sharpens its focus on fewer product categories, leading to the sale or withdrawal of two-thirds of its brands.

The 21st century

The decade starts with the launch of Path to Growth, a five-year strategic plan, and in 2004 further sharpens its focus on the needs of 21st century consumers with its Vitality mission.

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So from the history we can observe that It had passed through a lot of stages to reach such a distinctive position.

Company structure Executive directors The Executive directors are those members of the Unilever executive (UEX), including the group chief executive, who are also directors of Unilever. CEO and CFO are actually the executive directors from UEX. Non-executive directors The non-executive directors are the independent element in Unilever's governance. Unilever executive (UEX) The Unilever executive (UEX) is responsible for managing profit and loss, and delivering growth across our regions, categories and functions. The positions lye under this are president foods, regional president and chief HR officer. Senior corporate officers Unilever's senior corporate officers are responsible for ensuring that Board meetings and Board committee meetings are supplied with the information they need. The examples of positions are like group treasurer, group secretary and chief auditor etc. Unilever HR strategies across the borders (South Asia vs. U.K)

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As the leadership of the Unilever believe, as discussed at later stage in detail, in one Unilever so the centralized system of decision making throughout the globe is fundamental factor for the Unilever success. Unilever every focus is upon its employees because the leadership at Unilever believe that a loyal employee contribute much than any other category of resources. They are making progress in transforming Unilever's business structures and ways of working. This has at times involved difficult decisions, but ones we believe are right for the long-term health of their business. A changing business environment Unilever is introducing a transformation process which basic aim is to simplify the procedures and to get maximum out of resources employed. Their transformation process has focused on three major areas (1) restructuring and simplifying organisation to eliminate costs that the consumer does not want to pay for;(2) developing employee skills and capabilities; (3) and evolving our culture and behaviours to align with a more global way of running business. A learner, fitter business The top management announced the creation of a One Unilever R&D function, combining Foods, HPC and Research into a unified organisation to improve the efficiency, speed and quality of innovation. After creating One Unilever operating companies in each country around

Leadership development

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A key part of the business transformation has been equipping their people with the skills they need to help deliver their business strategy. Unilever has invested significantly in learning in partnership with Accenture – its HR outsourcing partner – by creating a single curriculum for General Management and Leadership Skills, favored by a one technology infrastructure that also provides e-Learning. This capability has enabled a fast roll-out of new 'Standards of Leadership' framework. This programme promotes a set of behaviours aimed at ensuring that every manager takes personal responsibility for delivering Unilever's strategy. So as a result we can say that Unilever is creating and flourishing leaders. Health & safety Their principal measure of progress is the total recordable frequency rate, which counts all workplace accidents except those requiring only simple first aid treatment. In 2008, this rate decreased to 0.21 accidents per 100 000 hours worked, down 19% on 2007. Regrettably, three employees and one contractor lost their lives in 2008. The lessons learned from these deaths were communicated across our business. People vitality Unilever’s People Vitality programme aims to enhance the personal well-being and effectiveness of their people, through advice on exercise, nutrition and mental resilience. During 2008 the programme was rolled out to their operations in Asia, Africa and Latin America. The programme is already showing positive results. Participants have reported improvements in their quality of sleep, energy levels, motivation and work performance. Global diversity Unilever is committed to developing a diverse workforce. They have 20 different nationalities among their top-level group of 100 managers worldwide. Their commitment to diversity is set right at the top of the business with Global Diversity Board, comprising leaders from all business functions and chaired by Chief Executive Officer. Listening to employees

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Unilever gather feedback from employees via Global People Surveys (GPS). The first GPS-Pulse survey after the arrival of new Chief Executive Officer was carried out in February 2009. Some top-line observations were that ‘People are proud to work for Unilever and feel good about the culture and business’. Feedback also pointed to areas where there is need to do better and these are being actioned by the Unilever Executive and senior leaders. Recruitment and selection through Talent pool management Unilever Nederland and also in South Asia and Great Britain has been working for last couple of years with talent pools for recruiting and selecting top candidates with work experience; the ‘mid careers’. Apart from the concrete vacancies or the direct availability of candidates, the top 10% best candidates in the labour market are sought and a relationship is built up with them. EMPLOYEE EVALUATION

Employee evaluation in Unilever is based on two major aspects. Performance Sustainability Performance ‘3Cs of success’, the first two of which are Courage and conviction. Courage is the quality you need to act on your beliefs, to take accountability, to accept failure and learn from it and to do all this even in the face of adversity. Such courage, of course, stems from the second ‘C’, which is conviction. And conviction flows from knowledge; one’s deeply held beliefs and world view.

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Third ‘C’, which stands for character. It is only character that drives and channels courage and conviction to the right ends, meeting goals that bring about a positive change in society. This leadership development model served UNILEVER well for many years. The company effectively became a school for practicing managers. But in the late 1990s, as the business environment underwent a sea change, cracks began to appear in the model. First, there was a reduction in the number of positions due to the withdrawal of many brands under UNILEVER’s power branding strategy. The closure of non-core businesses, like seeds and the downsizing of the large commercial department, due to outsourcing of a large number of backroom activities, also eliminated many promotional opportunities. Meanwhile, Unilever itself began to divest brands and businesses, reducing the need for Expensive expatriate talent. As a matter of fact, the supply of UNILEVER's pipeline of talent grew because of returning expatriates from the Unilever system. With fewer slots available and supply increasing, internal competition also increased. During good times, most managers got good performance ratings. But the system changed as growth slowed down and competition increased. In the early 2000s, UNILEVER instituted a forced rank system of evaluating people for all its businesses, further accentuating the insecurities inside the minds of employees. Managers began to rely on short-term recourses to deliver quarterly profit and sales numbers. If one brand team did well to grow through a short-term scheme, there was immediate pressure on the others to follow the same. The process of identifying fast trackers began to cause disgruntlement among employees. Initially, when UNILEVER instituted the system of listers, it had focused more on performance. However, over the years, apart from performance, the potential of the person had played a bigger role in identifying the fast trackers. This seemed to have introduced an element of subjectivity in the process of identifying talent.

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When Dadiseth rolled out Project Millennium, many young managers were identified to lead a set of new growth initiatives. But these initiatives had moved Lever into entirely new areas, which took a long time to be conceptualized and implemented. Under the Lever system, there were clear work levels, which defined the nature of work and responsibilities. So, unless there was a change in the nature of work, a manager could not be promoted to the next level. Career progression was also slowing down at senior levels. Many of the management committee members, like the head of the foods division, Gunender Kapur had been expected to move to larger regional roles in Asia. But the continued non-performance of the foods business had thrown a spanner in the works. That meant that category heads were unlikely to find a berth soon, until someone at the top moved on. Many UNILEVER managers had CEO aspirations. They were attracted by the opportunities opening up in the country in newly liberalized businesses like telecom, healthcare and insurance. They moved when they felt they did not get any clear signals from the top management about what the future held for them. In 2002, responding to these concerns, UNILEVER switched to an open job posting (OJP) system. All new jobs were advertised on the intranet. Any employee who met the criteria could apply. UNILEVER also started a new personal development plan (PDP), where each manager was evaluated on a set of 12 competencies. The superior was expected to discuss the assessment with each person. In the early 2000s, UNILEVER extended the reach of its products through a new channel, the UNILEVER Network to leverage the power of direct selling. The UNILEVER Network was poised to enter various categories. UNILEVER enrolled over 1,00,000 consultants for the Network. The company targeted a turnover of Rs. 500 crores and planned to have a million consultants working for it by 2007.In addition, UNILEVER proposed a revamp of its entire brand portfolio in the face of severe competition from low-cost manufacturers and other multinational players. UNILEVER planned to upgrade its soap, skin cream, shampoo and toothpaste products, and launch new variants. Among the major initiatives was a new variant of Fair & Lovely, to pre-empt Procter & Gamble’s (P&G) proposed launch of ‘Oil of Olay’ in South asia, a relaunch of Clinic Plus shampoo and Close Up toothpaste and a new Liril Orange Splash soap, in addition to Liril Lime Fresh and Liril Icy Cool Mint. Besides revamping its brand portfolio, UNILEVER realized that the bulk of its future growth was likely to come from rural areas. The company embarked upon Project Shakti, which enlisted underprivileged rural women as direct-to-home distributors. Not only did this initiative provide sustainable income opportunities, but it also extended UNILEVER’s rural reach to another 100 million consumers in over 100,000 villages.

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Key quadrant of performance climate Beckhard, Harris and Schein has made a tremendous progress on thos topic which is being followed by Unilever. These four quadrant are discussed below. Goals Goals In developing outstanding performance, the first quadrant to review is Team Goals. This is the team performance. An unclear vision, lack of goal clarity or conflicting goals is the most common cause of underperformance. Roles The second quadrant of the Performance Climate Survey relates to the clarity and contribution of the different players in the team. it is the Who of team performance (roles and responsibilities) In high performing teams, each team member understands their own role and contribution. Processes The third quadrant looks at the How of team performance and focuses on a team’s processes and procedures. PCS provides feedback on the effectiveness of the team’s processes. This includes the extent to which communication is clear and effectively managed internally and with other groups. It also measures how individual and team performance is managed and monitored (performance management. Connection

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The fourth quadrant addresses the Why factor. The relationship team members have with their colleagues and the connection they have with the goal and their work is critical to long term motivation. For example: A Doctor may strongly connect with the Hippocratic Oath to save life and to their own professional advancement but have little connection to the Hospital employing him or to his colleagues. High performance teams take time to create. Likewise, changes in behavior take time to reflect in the performance of the team so PCS should be used quarterly or every six months for best results. Developing a high performance team is not an art but a skill based on logic and emotional intelligence. Great leaders follow the flow; Goals, Roles, Process and Connection (What Who How and Why). INTERNATIONAL MANAGEMENT STRATEGY MATRIX NATIONAL RESPONSIVENES Low high

High ECONOMIC INTEGRATION Low UNILEVER

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The employees need to be given bigger and challenging roles to strengthen the environment for personal growth. In UNILEVER, employees change roles in every 2-2.5 years. Different learning programs help the employee in developing multidimensional personality. Brief introductions of these programs are given below: Organization Culture 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 communicated to, and understood and observed by, all employees. Day-to-day responsibility is delegated to the senior management of the regions and operating companies. They are responsible for implementing these principles, if necessary through more detailed guidance tailored to local needs. Assurance of compliance is given and monitored each year. Compliance with the Code is subject to review by the Board supported by the Audit Committee of the Board and the Corporate Risk Committee. Any breaches of the Code are reported in accordance with the procedures specified by the Joint Secretaries. The Board of Unilever never 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 is made for employees to be able to report in confidence and no employee will suffer as a consequence of doing so.

What are the five Hofstede’s cultural dimensions?

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Geert Hofstede is amongst pioneers in elaborating the cultural issues and that is the reason his five dimension theory is well known among academics. He states “Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster. Power Distance Index (PDI) that is the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally. This represents inequality (more versus less), but defined from below, not from above. It suggests that a society's level of inequality is endorsed by the followers as much as by the leaders. Power and inequality, of course, are extremely fundamental facts of any society and anybody with some international experience will be aware that 'all societies are unequal, but some are more unequal than others'.

Individualism (IDV) on the one side versus its opposite, collectivism, that is the degree to which individuals are inte-grated into groups. On the individualist side we find societies in which the ties between individuals are loose: everyone is expected to look after him/herself and his/her immediate family. On the collectivist side, we find societies in which people from birth onwards are integrated into strong, cohesive in-groups, often extended families (with uncles, aunts and grandparents) which continue protecting them in exchange for unquestioning loyalty. The word 'collectivism' in this sense has no political meaning: it refers to the group, not to the state. Again, the issue addressed by this dimension is an extremely fundamental one, regarding all societies in the world.

Masculinity (MAS) versus its opposite, femininity, refers to the distribution of roles between the genders which is another fundamental issue for any society to which a range of solutions are found. The IBM studies revealed that (a) women's values differ less among societies than men's values; (b) men's values from one country to another contain a dimension from very assertive and competitive and maximally different from women's values on the one side, to modest and caring and similar to women's values on the other.

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Uncertainty Avoidance Index (UAI) deals with a society's tolerance for uncertainty and ambiguity; it ultimately refers to man's search for Truth. It indicates to what extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations. Long-Term Orientation (LTO) versus short-term orientation: this fifth dimension was found in a study among students in 23 countries around the world, using a questionnaire designed by Chinese scholars It can be said to deal with Virtue regardless of Truth. Values associated with Long Term Orientation are thrift and perseverance; values associated with Short Term Orientation are respect for tradition, fulfilling social obligations, and protecting one's 'face'. Both the positively and the negatively rated values of this dimension are found in the teachings of Confucius. Graphical view of Hofstede cultural dimensions (UK. Vs South Asia) Here is the diagram which explicit the above mentioned dimensions in the regions selected for Unilever i.e. UK and South Asia.

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Conclusion Internal competition was added to external competition and the method fallowed by the highest group was implemented in all the other group to increase product quality and reduce cost of production. Working on any multinational is not an easy task specially the HRM strategies are considered very confidential in any organization. But we try to sum up the material in a effective manner and tried to elaborate the things up to our best. A framework which takes both business environment and culture into consideration is recommended for organisational middle managers. Key principles for the framework are: (1) focus on competencies which lead to business success in a particular cultural environment; (2) differentiate and add competencies depending on business, functional or cultural needs, even if they may not be a part of the Leadership for Growth Profile; (3) balance between competencies that build international growth (LGP) and competencies that are necessary to achieve operational business success. There is huge difference in culture between the host and home countries of Unilever. As we discussed in Hofstede theory about the five cultural dimensions. As we can observed from above that there is huge power distance in south Asia as compared to UK bu on the other hand the individualisim is much higher in UK rather than South Asia. We also came to know that the authority given to regional managers is quite a good strategy to have prompt decision making for the interest of the business. At last one very important thing we have observed is that Unilever has always priority to focus upon its employees so that to get maximum out of them. We have mentioned ample HR strategies which fully facilitate the personnel of the Unilever.

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Elenkov, D. (1997) Differences and similarities in managerial values between US and Russian managers. California Management Review, 40, 133-156. Avolio, B., Yammarino, F., & Bass, B. (1991). Identifying Common Methods Variance With Data Collected from A Single Source: An Unresolved Sticky Issue. Journal of Management, 17(3), 571-588. Ayman, R. (1993) Leadership perception: the role of gender and culture, in: M. M. Chemers and R. Ayman (Eds) Leadership Theory and Research (pp. 137–166) San Diego, CA: Academic Press. Bass, B.M. (1997). Does the transactional-transformational paradigm transcend organizational and national boundaries? American Psychologist, 22(2), 130-142. Bass, B.M., & Avolio, B.J. (1990). Transformational leadership development: Manual for the multifactor leadership questionnaire. Palo Alto, CA: Consulting Psychologists Press. Brislin, R.W. (1983). Cross-Cultural Research in Psychology. Annual Review of Psychology. 34, 363-400. Dickson M.W., Den Hartog D.N. & Mitchelson, J. (2003) Research on leadership in a crosscultural context: Making progress, and raising new questions. Leadership Quarterly,14(6), 729-768. Dickson, M.W., Hange, P.J., & Lord, R.G. (2001). Trends, developments and gaps in crosscultural research on leadership. Advances in Global Leadership, 2, 75-100. Dorfman, P. (1996). International and cross-cultural research. In B.J. Punnett and O. Shenkar (Eds.), Handbook for International Management Research (pp.). Blackwell.
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www.unilever.org.uk accessed on 25/11/2009 16:30 www.unilever.com accessed on 25/11/2009 17:00 http://www.dnaindia.com/money/report_nitin-paranjpe-crowned-at-hul_1153505 http://samsmba.blogspot.com/2007/

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