2.1.

Logistics

Logistics is the management of the flow of goods between the point of origin and the point of
consumption in order to meet some requirements, for example, of customers or corporations. The
resources managed in logistics can include physical items, such as food, materials, animals,
equipment, and liquids, as well as abstract items, such as time, information, particles, and
energy. The logistics of physical items usually involves the integration of information flow,
material handling, production, packaging, inventory, transportation, warehousing, and often
security. The complexity of logistics can be modeled, analyzed, visualized, and optimized by
dedicated simulation software. The minimization of the use of resources is a common motivation
in logistics for import and export.

Note that the above definition of logistics is not unified, although it might be indeed, in current
environment, a commonly acknowledged one. For example, Council of Logistics Management
(now renamed as Council of Supply Chain Management Professionals) referred to logistics as
“the process of planning, implementing, and controlling the efficient, effective flow and storage
of goods, services, and related information from point of origin to point of consumption for the
purpose of conforming to customer requirements,” which includes inbound, outbound, internal,
and external movements and return of materials for environmental purposes.

As we can see, the concept of logistics focuses on the product flow, which is the meaning by
which this word has been translated in Chinese. It also puts emphasis on the activities of
handling product, which include the storage, transportation, distribution, and packaging and
processing. Although business logistics involves many activities, the traditional research of
operations management on logistics mainly relates to the fields of logistics facility,
transportation, and inventory planning.

2.2. Supply Chain

Compared to “logistics,” there appears to be even less consensus on the definition of the term
“supply chain management.” Kathawala and Abdou [1] point out that SCM “has been poorly
defined and there is a high degree of variability in people’s minds about what is meant.”
Nevertheless, we present a rather widely adopted definition, which is given by Mentzer et al. [2]
which is rather broad, not confined to any specific discipline area, and adequately reflecting the
breadth of issues that are usually covered under this term: “Supply chain management is defined
as the systemic, strategic coordination of the traditional business functions and the tactics
across these business functions within a particular company and across businesses within the
supply chain, for the purposes of improving the long-term performance of the individual
companies and the supply chain as a whole.”

The terms of “logistics” and “supply chain” are usually comparative in academy and industry,
since both of them are closely relevant to the product circulation during its whole life cycle, and
both have been regarded as the central unit of competitive analysis of model management
science. Generally speaking, supply chain is a more broadened conception with a wider range
which can involve other similar subjects, such as network sourcing, supply pipeline
management, value chain management, and value stream management [3–5].

In addition, we can see that the conception of logistics has no relationship with organization,
which is the opposite of supply chain, since supply chain is made up of multiple organizations,
usually companies. An important issue in supply chain management is that companies will not
seek to achieve cost reductions or profit improvement at the expense of their supply chain
partners but rather seek to make the supply chain as a whole more competitive. Hence, the
contention that it is supply chains, and not a single company, that compete is a central tenet in
the field of supply chain management [6]. A central research methodology for supply chain
management is game theory (and also incentive theory for the scenario of incomplete
information).
Unilever’s strategy implementation is based on five steps, which include strategic
analysis, external and internal environmental analysis, formulation of the
business strategy, and overall implementation of the strategy. Theoretically once
the core elements of the specific strategy and the mission and vision statements
have been written, implementing the strategy begins. The core business strategy
must be aligned to the corporate mission statements and objectives based on the
company’s existing business model. Here, Unilever’s mission statement consists
of the values, major goals, and objectives. The mission statement elements
provide guidelines to the management and the workforce to work towards
implementing the strategy and to keep the strategy in control to ensure workers
do not deviate from the strategic path. The mission provides an explanation of
the existence of the company, and Unilever’s business strategy to ‘think-global
and act-global’, using the cross-market subsidization strategies. To effectively
address the situation, the company has formulated finance, acquisition and
merger, human resource, product development, and corporate strategies into the
‘Path to Growth’ strategy.

The process of implementation is the most difficult part because it involves taking
actions on different levels of the organization, which include the provision of
leadership, changing the organizational culture, organizational structure, and
organizational controls to support and accommodate the new changes. The
company’s implementation of the ‘Path to Growth’ strategy was formulated and
started in 2000 with the aim of sustaining the firm to achieve growth, reduce the
cost of doing business, reduce the dependence on less qualified human
resources, and to align the company to the goals and objectives defined in the
strategy. The elements defined in the growth strategy include concentrating on
product innovation, marketing better performing brands in the global market,
concentrating on investment, reducing the brands to concentrate on profitable
brands, and strongly focusing on brand development to achieve the projected
annual growth of 6% and the profit margin of 16%.
leadership is one of the key elements of Unilever’s approach to strategy
implementation because leadership provides strategic direction, effective
management of the company’s resource portfolio, sustaining an effective
organisational culture, putting measures in place to ensure ethical practices
within the company affairs, and establishing balanced organisational control for
brand building, innovation, market leadership, and brand awareness. Here,
Unilever’s leadership is about providing direction on what to be done and how it
should be done in multicultural, local and foreign environments. In addition, the
leadership provides direction on how to expand globally in the company’s
activities. Unilever sometimes outsources the leadership services to companies
which have specialised personnel, who interact with the senior leadership of the
company to create the mission and vision statements of the company, which
reflect the desired changes to implement in the organisation In addition to that,
the leadership relies on total quality management techniques in some subsidiary
plants, and not on the entire organisation. In the context of Hubbard and
Beamish’s (2010) and Barney and Hesterly’s (2009) arguments, the company’s
leadership focuses on the enhanced work organisation, team building
techniques, which were very successful in certain centers including the personal
products division.

Unilever’s cooperate structure consists of executive directors and non-executive

directors. In addition, the company has senor leadership executives responsible
for managing profit and loss to ensure the cooperate strategy of reducing losses
and increasing profits are achieved and sustained. The senior cooperate officers
are interested in providing the required information on the success and other
trends in strategy implementation to the executives for decision making. Based
on the company’s pursuit to achieve the growth strategy, Unilever streamlined
the management and carried out some cooperate restructuring, which led to
greater clarification on the roles and responsibilities of the management, the
removal of bureaucracies and other unnecessary complexities, and the
simplification of operations within the company’s different branches. The results
were a reduction in operational costs and better performance in the global
market. Under the human resource strategy, the company’s human resource
management undertakes to recruit competent staff that is responsible for the
successful implementation of the growth strategy. Under the strategy, the
management is responsible for the employee recruitment and placement to
ensure the right people with the right skills are assigned to the jobs. In addition,
the right human resource strategy is responsible for the replacement planning,
employee compensation, employee training and development, and rotation in the
departments.
Organisational culture is one of the tools the company uses to implement its
growth strategy. Typically, organisational culture is the specific collection of
values, norms, beliefs and attitudes that are shared by people and groups in an
organization and that control the way they interact with each other and with
stakeholders outside the organisation. Unilever uses culture as one of the
strongest tools to achieve coordination and integration of different strategies,
which include financial strategies, human resource strategies, acquisition and
mergers when they happen and when they are necessary, product development
and innovation strategies, and the cooperate strategies in the pursuit of the
growth strategy. Financial strategies enable the company to operate within the
available resources, keep the debtors; stock as little as possible while ensuring
that the working capital is appropriately maintained at the desired levels, adhere
to the authorised accounting laws and practices, ensure that the sales revenue
are consistently maintained and within the target, and ensuing that the
purchasing function is kept at appropriate levels. Other the supporting strategies
such as the corporate strategy is achieved and maintained by managing good
relationship with governments where the company has its assets and operations,
and becoming a leader in the consumer goods market. Towards the pursuit and
fulfillment of the growth strategy, the company provides the management and the
workers with the ability to effectively communicate decisions, guide the daily
business relationships, and to develop a collective identity. The core values of
the organisation are controlled by a belief system, which controls the core values
of the Unilever Company, which are linked to its growth strategy in a multicultural
environment.
Control is one of the strategic approaches the company uses to ensure strategy
is aligned to the goals and objectives of the growth strategy during the strategy
implementation process. Typically, the organisation uses strategy control
mechanisms to provide incentives for the employees and the management to
pursue the right activities to achieve the growth strategy. In addition, the
company has control systems in place to facilitate the performance and ensure
effective monitoring and progress of the performance objectives. Here, the
control systems provide the management with the ability and tools to take action
to ensure correct decisions are made provide the management with the ability to
respond to unexpected events in appropriate ways, and reward mechanisms,
which are used to determine the approaches used to reward employees in
executing their activities. To ensure strategic controls, the company struggles to
accomplish strategic control through the behavioral, output, and personal
controls. The company sets targets for the employees to achieve to ensure that
the company gains for the synergy of group dynamics.
Unilever’s implementation of the path to growth strategy was successful in driving
the organisation to achieve its growth strategy in the global market. However,
several issues have emerged in the process of strategy implementation. For
instance, the company identified the core strategy was to reduce the number of
brands and concentrate on certain core brands. Typically, the company’s
decision to concentrate on the core brands and leave other brands was a means
to jeopardize its growth strategy because no research was done to determine the
underlying reasons, which led the brands to underperform. In addition to that,
neglecting other brands could give rivals the opportunity to use the neglected
brands to penetrate the market and provide the platform the competitors to enter
the highly competitive market.

In addition to that, the strategy for growth does not clarify the points where
culture, which is an important asset of strategy implementation, is given the
required emphasis. The company operates in a multicultural environment and
seems not to be sensitive to the values, beliefs, and norms of different cultures in
product innovation and development. There is no effective strategic leadership
and planning for strategy growth and development defined by the company.
Here, strategic leadership is one of the core principles of strategy implementation
and if not properly factored, leads to the failure to achieve the goals and
objectives if strategy implementation. Here, the leadership style is critical in
providing the strategic direction for strategy implementation and when not well
articulated might not lead to the desired results.
Implementation is the most difficult part of the growth strategy because the
company has not clearly demonstrated the point at which the different strategies
get combined to provide the pillars for the overall growth strategy. It implies that
the management and the workers at different levels have to develop their own
objectives to support the overall implementation of the overall growth strategy.
Such an approach could be very difficult to achieve the solid implementation of
the overall strategy because each department has their own ways of approaching
the implementation process. In addition to that, providing leadership is very
difficult because the company operates in an international environment with
many countries, which have their own laws and regulations concerning labor
rights, employment laws, and taxation and other laws, which are difficult to
synchronize into a single package when implementing the strategies. It is also
important to consider the problem of diversity of beliefs, norms, and the values of
different customers in a global environment.

The above scenario creates a situation where it becomes difficult for the
company to distinguish the strategy to be implemented when different strategies
need to be implemented and the scope of implementing the support strategies.
The reason is that each strategy requires different approaches to be
implemented. For instance, implementing the financial strategy means that
different laws and regulations governing taxation and salaries among other laws
have to be evaluated for each country the company has its operations. The
dilemma is to determine the strategy to implement at a specific location not to
contradict the final strategy. Another problem is that when managers and workers
misinterpret the strategy, it becomes a problem for the managers to implement
the strategy. For example, the workers might concentrate on old products or
regions, and the managers want the workers to concentrate on specific products
and regions, which they figure could lead to the success of the growth strategy.

Such misunderstanding could lead the team to leave the brand and product
portfolio and concentrate in activities, which do not broaden the scope of the
strategy. In addition to that, the process should start with preparation of complete
details of the changes that are necessary to implement the strategy. The problem
is because the management and the workers do not know what they don’t know.
The solution in most instances is to look for an outside team to help in the
provision of advice on what is not known. If the company resources are
inadequately aligned with the new strategy, the results make the strategy
implementation process difficult to achieve. The problems related to resources
include employing personnel with the wrong skills and lack of time to implement
the strategy. Other issues include unanticipated major problems such as wars
and changes to laws and regulations, environmental factors, inadequate
leadership, loss of focus, poor coordination, lack of information systems to
monitor the implementation progress, and poorly done tasks.
The results from the study show that the company has to start the overall
implementation strategy by communicating the case for change and ensure that
all stakeholders understand the details and reasons for new change. In addition,
the company needs to build consensus on how to start the implementation
process. The consensus should cover all employees including the top
management. Once a common consensus has been reached, it is important to
position key allies and people with skills in key positions and empowering them to
move the implementation process. Rewards are necessary for achievers and
resources should be reallocated to the key areas, which drive success.The need
for an implementation plan is critical because it clearly defies the scope, main
activities and their implementation strategies, timeline for change, risk
identification, contingency plans, communication efforts, and reporting and
monitoring framework.
In conclusion, it has been established that strategy implementation is the most
difficult part of strategic management because organisations, which operate in
multicultural environments with different values, and beliefs find it difficult to
provide leadership for strategy implementation. In addition, strategy controls to
realign the company to its mission and mission statements are additional sources
of difficulties. Results from the study show that the organisational culture should
be factored into the decision making process when starting the strategy
implementation process to accommodate the organisational culture when new
changes are introduced into the company. In addition, the study shows that for
Unilever to be successful in strategy implementation, the company should adopt
and integrate the concept of total quality management into the strategy
implementation process. It is important for organisations to communicate strategy
change and the need for change, organisations can better prepare employees to
be proactively involved in strategy change.