Study on Hindustan

Unilevers Organization
Behavior
For the subject Organizational Behavior

Different aspects of HUL like Organizational culture,

Leadership, Personality of CEO, Employees learning and
motivation level etc. are studied.

Shashank Saxena
Roll No.-2K92A37
PGDM General (2009-2011)
Asia Pacific Institute of Management
3 & 4, Institutional Area, Jasola,
New Delhi-110025
 Hindustan Unilever Limited
1. Company Description

Hindustan Unilever Limited is an India-based fast moving consumer goods company. The
Company has more than 400 brands spanning 14 categories of home, personal care and food
products. It operates in various business segments. Soaps and Detergents include soaps,
detergent bars, detergent powders, detergent liquids and scourers. Personal Products include
products in the categories of oral care, skin care, hair care, deodorants, talcum powder, color
cosmetics and Ayush services. Beverages include tea and coffee. Foods include branded staples,
(atta and salt), culinary products (tomato-based products, fruit-based products and soups). Ice
Creams include ice creams and frozen desserts. Others include chemicals and water business. In
May 2009, the Company divested its entire shareholding in Shamnagar Estates Pvt. Ltd. and
consequently, Shamnagar Estates Pvt. Ltd. ceased to be a subsidiary of the Company effective
May 13, 2009.

1.1. Mission:

Unilever's mission is to Add Vitality to life. We meet everyday needs for nutrition, hygiene,
and personal care with brands that help people feel good, look good and get more out of life.

1.2. 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).

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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.

1.3. Present Stature:

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods (FMCG)
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 37 factories across India. The operations involve over 2,000 suppliers and associates. HUL's
distribution network, comprising about 2,500 redistribution stockists, covering 6.3 million retail
outlets reaching the entire urban population, and about 250 million rural consumers.

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2. Personality of CEO

Nitin Paranjpe the youngest CEO & MD of the country's largest fast-moving consumer goods
(FMCG) company. 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, has risen
rapidly through the ranks. He was a member of Project Millenium, a key organisation initiative
and also served a stint with Unilever in London in 2000-2001, when he worked closely with the
Unilever Executive Committee. He returned to India as the head of innovation for fabric wash
and home care. In May 2004, he was appointed as Vice-President, Laundry & Home Care.

After two years, in March 2006, Mr Paranjpe was appointed as the Executive Director of Home
& Personal Care and was inducted into the management committee. He joined the board of
directors of HUL in May 2007. In April 2008 Nitin Paranjpe appointed as the Chief Executive
Officer (CEO) and Managing Director (MD) of the company.

In Paranjpes words, Businesses must make money and grow, but the role of a business
cannot be to make money at all costs.

The person he treats as his idol is his father, a retired IAS officer. Paranjpe found three traits that
are key to achieving true success. He calls them the 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; ones deeply
held beliefs and world view.

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.
Character is the litmus test, the fire through which courage and conviction must pass if they are
to be steeled into a recipe for success that is replicable and sustainable.

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He's a popular guy in the corridors of HUL. He not only shares a good relationship with his
bosses and peers, but also has a great working relationship with his juniors. He's been given the
toughest assignments. In the 90s, he was made the Chennai area manager, a difficult assignment
at that time for anybody and he came up trumps. The 46-year-old MD & CEO of HUL says: you
need not be immensely talented to succeed in a project as long as you are determined to
succeed and are willing to put in that extra effort.

The youngest ever occupant of the corner office at HUL is, by his own admission, a CEO with a
difference. His CV doesnt boast an IIT or IIM badge; he is not extra fond of management books;
has remained a one-company man for 21 years; returns home by 7 pm almost every day; listens
to Vedanta philosophy on Sunday mornings and enjoys teaching his children over the weekends.
As an MBA student at Jamnalal Bajaj Institute, Mumbai, he used to dream of getting into
Hindustan Lever (as it was then called), Indias largest FMCG company. When he finally got the
high of his life after Hindustan Lever gave him a job, he says he would have been delighted if
he could have risen to head of sales or marketing in the company.
Any job beyond that would be a bonus. My motto has been simple: be focused on your current
job and do that well, he says. His career graph shows the management at Lever has been quite
generous in doling out bonuses.

He finally realised he is a lister HUL jargon for those on the superfast career track when
his boss once asked him to spell out his career ambitions. Paranjpe, then a brand manager,
replied he wanted to become a regional manager. He forgot about the conversation, but his boss
didnt as two weeks later he got a double promotion and was made the south India regional head.
It turned out be a tough assignment as it coincided with the companys products being boycotted
in Kerala. For the first time in his life, Paranjpe realised that he was capable of managing more
than he had imagined. In Paranjpes view Every manager must have one or two tough
assignments. When you have to achieve more than what available resources permit, you grow
professionally as well as mentally.

He graduated from the stairs to the elevator in his career when he was made the head of the
laundry category during the detergents price war between Procter & Gamble and HUL in 2002.
For the first time in his career, he suffered from self-doubt as he was unable to meet the numbers

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target. The top line just refused to budge as consumers shied away from HUL products, often
preferring cheaper alternatives.
But the management obviously felt otherwise as he went on to become the executive director
(home & personal care) soon after. The reason was obvious: the platform he built during those
days helped HUL regain its glory in subsequent years.
Though HUL has changed its management strategy swiftly with changing times, Paranjpe is
clear that the one practice which has and will remain constant is sending managers to rural areas
early in their career. A very practical thought by Paranjpe is, Selling soaps to a shopkeeper in a
remote village gives you invaluable lessons. You start listening to the market; you empathise
with problems that a salesman faces these are lessons no B-school can ever teach you.

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3. Leadership

HULs top management realized that its ability to attract and nurture good talent would be
crucial to the success of Project Millennium. Over the years, HUL's leadership development
model, considered one of the best in the country, had groomed managers by providing a well-
rounded view of the business through job rotation and various new assignments. The system was
designed to identify fast-trackers, who were called the Lever listers and groom them for handling
greater responsibilities. For every position, typically three people competed. One would
eventually make it, the second person would be offered an alternative slot, while the third would
simply fall out of the system.

This leadership development model served HUL 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 HULs 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 HUL'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, HUL 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.

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The process of identifying fast trackers began to cause disgruntlement among employees.
Initially, when HUL 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.

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 HUL 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, HUL switched to an open job posting (OJP) system. All
new jobs were advertised on the intranet. Any employee who met the criteria could apply. HUL
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, HUL extended the reach of its products through a new channel, the HUL
Network to leverage the power of direct selling. The HUL Network was poised to enter various
categories. HUL 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, HUL proposed a revamp of its entire brand portfolio in the face of severe
competition from low-cost manufacturers and other multinational players. HUL planned to

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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 & Gambles (P&G)
proposed launch of Oil of Olay in India, 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, HUL 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 HULs rural reach to another 100 million
consumers in over 100,000 villages.

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4. Motivation Level

It is always important to motivate employees so they remain optimistic and can perform better
under unfavorable conditions too. For encouraging their employee Hindustan Unilever conducts
different project and programs time to time. Some of them are as follows:

4.1. Project Millennium:

For HUL, the problem of slow growth had not appeared overnight. Aware of the fact that many
of the growth opportunities had been tapped, Chairman Keki Dadiseth launched Project
Millennium in the late 1990s. The famous management guru, C K Prahalad, was roped in as an
advisor. Teams of young, talented managers were formed to explore and suggest ways to
generate growth. Project millennium also aimed at promoting lateral thinking and innovation
instead of being dictated only by the rules and systems, HUL was famous for. At the heart of
Project Millennium was human resources.

As Dadiseth put it,

Growth is created by the people of an organization. To win in the New Millennium, we must
continue to attract and excite the best talent in the country. Our people will be vested with
unparalled power to imagine, innovate and implement new ideas. Our business model will make
Levers not just a great company, but also a great employer.

4.2. Sankalp:

Human resources director, HUL, said: We strongly believe that employees have an in-built
desire to give back to the society. At HUL Sankalp, we provided employees a platform with
multiple volunteering opportunities on various social issues. Many of these are in the cities
within easy reach. We also encouraged employees to involve their families and thus started the
self actualisation process.

With a mission statement that says add vitality to life and a corporate culture that believes in
rendering service to community, Hindustan Unilever Ltd (HUL) started on an employee self

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actualisation journey that involved its 14,000 employees across 40 locations on completion of 75
years in October 2007.

A year later the company has exceeded what then looked like an ambitious target of contributing
27,375 hours or one hour per day of community service for the 75 years that the company has
been in India.

The self actualisation process was introduced under the HUL sankalp programme, which was
intended to help employees make a difference and was started in October 2007. HUL Sankalp is
a platform for employees to register, track and get associated with a cause or an NGO.

The programme has now gone beyond the cities to touch lives of people in the rural districts like
that of Wad/ Jawahar. Here HUL Mumbai employees travelled 130 km to create awareness on
hand wash and hygiene. Similarly, employees have also started involving their family members.

An employee of HUL, Crystelle Ellis along with her family clocked over 600 hours of voluntary
service at the Little Sisters of the Poor, an old age home in Kolkata. Their activities included
cooking, cleaning, serving, washing, helping the invalid to groom themselves and move about
apart from helping with office work.

4.3. The Vitality Index:

HUL, a company known for its marketing innovations, had come up with a health ideathe
Vitality Index. The company has applied for a copyright for the index, which is not just a set of
numbers but a reflection of its employees health. Eventually, says Leena Nair, Executive
Director, HR, HUL, the health of HULs employees reflects in the health of its business. The
company has since exported the Vitality Index to the global Unilever family, to subsidiaries in
Africa, the Middle-East, Asia-Pacific, and Central and Eastern Europe.

Employers looking to incentivize their employees need not only consider gifts and monetary
rewards. There are so many other steps and ideas that they can initiate to strike a rapport with
their workforce.

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A case in point is Hindustan Unilevers recent health initiative for its 15,000 strong team. The
program is reaping great rewards.

The health plan is ahead of the curve and hence is getting a favorable response from the
company employees. At the heart of the new HUL initiative is a vitality index - the measurement
of the personal vitality of every individual employee. It is based on four parameters - blood
pressure, blood cholesterol, the Body Mass Index (BMI), and blood sugar.

T Rajgopal, HUL vice-president (Medical and Occupational Health) stated that, We are
providing employees the encouragement and the necessary tools to change unhealthy lifestyles
before these transform into chronic diseases. We do it in a fun way that also allows them to
choose the path, which fits them best.

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5. Learning of Employees

Managers at Unilever formed learning groups that helped them strengthen their leadership
abilities by exchanging frank feedback and developing strong mutual trust. Arising from the
focus in driving a holistic capability program, over 300 training programs were delivered through
classrooms. World saw a significant amount of sharing of Unilever best practices in building
functional expertise through Global Learning Academies. Unilever introduced an e-learning
platform which offers a bouquet of 3000 courses on a self learning mode via computer and
internet. These programs can be accessed by a Unilever employee anywhere in the world, at
anytime.

The employees need to be given bigger and challenging roles to strengthen the environment for
personal growth. In HUL, 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:

Activity Description

Familiarization Get familiar wit h the company's Sales Syst em, Branch
Structure and Brand Portfolio.

Sales Stint Experience a first hand contact wit h the trade to get a
grip of market dynamics and understand the role of an
Area Sales Manager.

Brand Management Imbibe the Unilever principles of Brand Management,

understand the role of a Brand Manager and develop
brand strategy.

International Stint Complete a project in your core funct ional area in

another country wit hin a durat ion of 8 to 12 weeks.
The object ive is to help you build relevant skills in
your core funct ional area wit h a global perspective

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 and transfer your learnings to an Indian context.

Business Projects A cross-functional team pro ject which shall be worked

out with every Business Management Committee and
evaluated by the Management Committee at the end of
the stipulated 9 week period.

Rural Consumer StintIn addit ion to the primary aim of community service,
the object ive of the four-week st int at an NGO is to
give you an understanding of the Rural Consumer.

Business Orientation An 11-day program that mainly consists of classroom

Program sessio ns at our in-house Training Centers to provide a
clearer understanding o f key business processes and
pract ices.

Factory Stint Get familiar wit h the production process, commercial

funct ion payments and factory working capit al
control.

Familiarization Get familiar wit h the company's Sales Syst em, Branch
Structure and Brand Portfolio.

Sales Stint Experience a first hand contact wit h the trade to get a
grip of market dynamics and understand the role of an
Area Sales Manager.

Brand Management Imbibe the Unilever principles of Brand Management,

understand the role of a Brand Manager and develop
brand strategy.

International Stint Complete a project in your core funct ional area in

another country wit hin a durat ion of 8 to 12 weeks.
The object ive is to help you build relevant skills in
your core funct ional area wit h a global perspective
and transfer your learnings to an Indian context.

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Business Projects A cross-funct ional team pro ject which shall be wo rked
out with every Business Management Committee and
evaluated by the Management Committee at the end of
the stipulated 9 week period.

Rural Consumer StintIn addit ion to the primary aim of community service,
the object ive of the four-week st int at an NGO is to
give you an understanding of the Rural Consumer.

Business Orientation An 11-day program that mainly consists of classroom

Program sessio ns at our in-house Training Centers to provide a
clearer understanding o f key business processes and
pract ices.

Factory Stint Get familiar wit h the production process, commercial

funct ion payments and factory working capit al
control.

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6. 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.

As Marshall McLuhan said the medium is the message, which refers to symbolic meaning that
a medium carries, how the message is delivered to Unilever employees and suppliers matter.
Internal conflict can be avoided by employing informal, face-to-face communication1. However
formal communication is official tool to convey corporate message to all departments, reaching
out all employees. Thus, both formal and informal communications are necessary. The more

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important thing besides formal/informal communication is to make sure that the medium allows
upward communication (employees speaking to the management and management listening).

Target Formal Communication Informal Communication

Media
Group
News release, large group
meetings, employee newsletter
articles, Management training
session, managers meeting,
Intranet, printed publication
Employees such as posters or bookmarks
with the new corporate culture
image or texts, hotline service
that can be accessed from all
around the world.
News release, large group
meeting, suppliers newsletter
to home, hotline service that
Suppliers can be accessed from all
around the world.
Media
Small group meeting and one-
on one meeting, Ask The
Management' session on the
Intranet, party or picnic,
approach by management,
informal Q&A sessions, group
(or per department) e-mails.
Small group meeting and one-
on one meeting, management
visit, informal Q&A sessions,
gathering or lunch party for
suppliers in each area where
they can exchange ideas or ask
questions.

Ask the Management session on Intranet allows employees all over the world to post question

for the management in regards to the acquisition. This allows them to use any device office
computer, smart phone, or notebook to ask questions. Storytelling method is suggested for
approaching employees and suppliers, and engaged with them emotionally.

6.1. Network Building with Alumni:

Hindustan Unilever (HUL) has many firsts to its credit. Now, it adds one more. Indias largest
fast-moving consumer goods company has found a new way of keeping in touch with its
employees present and former. And it has nothing to do with Facebook and LinkedIn, which
have already made social networking sites and community building popular.

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HUL has built its own community site for networking with its alumni. The website gives a
formal structure to do things that we were already doing networking with other Leverites,
said Gurdeep Singh, an independent director at Blue Star, who had joined the company as a
management trainee in 1966 and retired in 2006 as the director for human resources.

Overseas most large companies have alumni associations, either informal or through an
officially-sponsored effort. In India, HR departments of several companies have started eyeing
alumni associations as a useful means of networking.

HUL is no exception, but the portal takes the effort one step further. The alumni portal, a first for
fast moving consumer goods (FMCG) company in India and also a first for Unilever, was created
around Diwali last year. The company realised that even though people had moved on, their
interest in the company remained.

So far, of the 1,500 people that the company contacted, 600 have already registered. Some 270 of
them are management board representatives from diverse sectors like telecom, IT and ITeS
service, retail, banking and, of course, FMCG.

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7. Power and Politics

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. 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.

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.

7.1. Unilevers Mercury Fever:

In March 2001, residents of Kodaikanal, a pretty hill retreat in Southern India, caught the Anglo-
Dutch multinational Unilever red-handed when they uncovered a dumpsite with toxic mercury-
laced waste from a thermometer factory run by Unilever's Indian subsidiary Hindustan Lever.
The 7.4 ton stockpile1 of crushed mercury-containing glass was found in torn sacks, spilling onto
the ground in a busy scrap yard located near a school. Despite the visible evidence, Mr.
Subramaniam, Hindustan Lever's export marketing manager, dismissed charges of indiscriminate
dumping. "No hazardous wastes have left the factory site," he said.

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The company claims that none of the 140 current workers, or any of the 250 or so ex-workers,
(many of who resigned in the past due to health reasons), are at all affected by mercury. Ten
workers below the age of 40 have died while employed at the plant. No investigations were
performed at the time of death. Ex-workers report kidney problems, chronic stomachaches, blood
vomiting, infertility, and women suffering a variety of gynaecological disorders. The company
has neither conducted a comprehensive and scientific epidemiological study, nor published the
basis of its claims that no workers have ever been affected.

Immediately after the controversy became public in March 2001, Unilever also had its workers
unearth more than 40 tons of waste from unlined pits within the factory compound. Workers
engaged in the unearthing operation say that contrary to Unilever's claims that only "non-
mercury glass wastes had been buried," the waste unearthed had visible quantities of mercury. If
this is true, the fact that none of the workers engaged in unearthing the wastes wore any
protective clothing constitutes a serious violation of worker safety norms. Unilever claims that its
environmental and worker safety standards are applied uniformly in all their facilities worldwide.

Responding to public pressure and the weight of the evidence, the company announced the
closure of the mercury thermometer factory in India, the largest in the world, on 21 June, 2001.
Unilever was made to clean up the toxic wastes at the scrap yard under supervision of the
community and the authorities under a protocol designed to US standards. A company statement
dated June 21 explained that: "Hindustan Lever Limited has retrieved, for secure storage at the
site, the 5.3 tonnes of mercury containing glass scrap currently stored on a scrap dealers premises
in Kodaikanal, which had been inadvertently removed from the factory in breach of established
procedures."

Unilever's agreement to close the factory and to clean up the scrap yard is a clear admission of its
guilt. That it will not accept people may have been exposed to the mercury as a result of its bad
practices is scandalous.

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7.2. Hindustan Unilever and Child labor:

Allegation: Hindustan Unilever Ltd., an Indian subsidiary of British-Dutch multinational

company Unilever, is making use of hazardous forms of child labor in cotton seed production in
India on a large scale. An estimated number of 25,000 children, mostly girls, work an average of
ten to thirteen hours a day for Hindustan Unilever. These children get no education, earn less
than 40 Eurocents (Rs. 20) a day and were exposed to poisonous pesticides like Endosulphan
during their work. The cottonseed companies do not employ the children themselves, but they
work through agents called seed organisers. The companies unilaterally fix a price for the
farmers that make it almost impossible for them to employ adults. A child earns 30% less than a
woman and 55% less than a man.

Response from Hindustan Unilever: Responding to the issue of use of child labor in
production of its cottonseeds HUL denies any direct contact with seed farmers and also the use
of forced child labor as such in production of seeds. As a response to a news report ` Even
Multinationals Employ Child Labor for Profit` published in `The Hindu Business Line, 21-6-
2001`, the General Manager in charge of Corporate communications, HUL, in a press statement
issued on 25-6-2001, states that `HUL has third-party seed organisers who get seeds produced
from numerous farmers on sale/purchase basis and supply them to HUL. In no case, HUL deals
with any farmer, either for production or for payments. Though HUL does not control or
influence seed organisers` selection/dealing with farmers, the seed organiser typically supplies
parental seeds to farmers at a cost with a buy- back arrangement of the resultant seed
production. To carry out actual production, the farmer and his entire family work in the fields
and employ additional labor whenever required. HUL or the seed organiser has no direct or
indirect role in the farmer's practice of either taking help from his family members or employing
labor.

Hindustan Unilever (HUL) had to exit its hybrid seeds joint venture Paras Extra Growth
Seeds by exercising the put option in the first quarter of 2005.

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7.3. Some famous cases from the house of Unilever:

Unilever are of course huge producers of soaps and detergents, and have been held responsible
for a number of serious cases of water pollution. For example in 1990, Crosfield Chemicals (part
of Unilever, specially chemicals group), was fined 35,000 after leaking fifty tonnes of
concentrated sulphuric acid into sewage systems in Warrington. Also, in 1991, the River
Purification Board of Scotland found that the company had exceeded its discharge consent by
three or more times; the company was convicted for water pollution offences.

They have been criticised for unnecessary testing of cosmetics on animals and accused of
making misleading remarks with regard to their stance on the issue of genetic engineering by
claiming the company 'takes a positive view of genetic engineering'. The company, in fact, does
not have an overall stance on genetic engineering, but takes a country by country decision, so
Unilever Germany does not currently use genetically engineered products while others do.

They were accused of negligent marketing after advertising a free offer of multivitamins
(including Vitamin A) with their pregnancy testing kits after the Department of Health advised
pregnant women to avoid taking dietary supplements containing vitamin A because of the risk of
birth defects.

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8. Corporate Responsibility

In the earlier years, HUL continued to involve itself in social welfare initiatives across the
Country, both through charity and social investment around issues like education, health,
nutrition and initiatives for the economic upliftment of the underprivileged.

In addition to initiatives like Shakti, HUL has commenced a pilot in its tea business, in
partnership with an NGO (Partners in Change) to source tea directly from small producers and
thereby improve their livelihood.

The effort of the Company in improving water availability through soil conservation and water
harvesting methods has borne good results. In the Parkhed region (near Khamgaon factory),
HUL has been successful in demonstrating the effectiveness of the model which is now ready for
roll out. In Kharchond, Silvassa the area under irrigation has increased, thereby improving the
economic condition of the villagers in the region.

The Company believes that brands must be at the forefront of driving social change. The
extension of the Lifebuoy Swasthya Chetna programme to 43000 villages with a view to improve
hygiene standards and thereby reduce the risks of infant mortality through diarrhoea is a case in
point. HUL has formalized a brand imprint protocol, which will help every brand to assess the
opportunities for social contribution and integrate the same in the overall brand strategy.

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9. References

http://www.financialexpress.com/news/hindustan-lever-to-exit-hybrid-seeds-jv-in-
2005/103436/2

http://www.corpwatch.org/article.php?id=480

http://www.indianet.nl/cotseed.html

http://www.greenpeace.org.uk/media/press-releases/unilever-admits-toxic-dumping-will-clean-
up-but-not-come-clean

http://economictimes.indiatimes.com/articleshow/msid-3587508,flstry-1.cms

http://spoonfeedin.blogspot.com/2008/08/business-interview-nitin-paranjpe.html

http://www.dnaindia.com/money/report_nitin-paranjpe-crowned-at-hul_1153505

http://samsmba.blogspot.com/2007/10/case-study-hindustan-unilever.html

http://www.business-standard.com/india/storypage.php?autono=338610&chkFlg=

http://www.thebetterindia.com/tags/hindustan-unilever-limited/

http://www.business-standard.com/india/news/lever-agingold-boys-network-online/360110/

http://blog.giftex.in/corporate-gifting-benefits/a-great-way-of-incentivizing-employees-the-hul-
way/

http://business.outlookindia.com/newolb/article.aspx?102386

http://economictimes.indiatimes.com/News/News_By_Industry/Cons_Products/Unilever_copying_
HULs_project_Shakti_globally/articleshow/3986738.cms

http://economictimes.indiatimes.com/rssarticleshow/msid-3473880,flstry-1.cms

http://www.business-standard.com/india/storypage.php?opn=op&autono=330477

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