Closing Case Chapter 13

Angela Burnham
1. Why did Unilever’s decentralized structure make sense in the 1960s and 1970s? Why did

this structure start to create problems for the company in the 1980s?

Unilever’s decentralized structure made sense in the 60s and 70s because it was easier.

Technology hadn’t advanced to the point where we could log on to our computers and e-mail

headquarters about issues that were arising within the company. Having a decentralized structure

meant that the managers of individual countries were able to make decisions based on the needs

for that country. In the 80s technology and the ability to communicate internationally evolved.

Having a decentralized structure was becoming obsolete and quickly. Having a structure that

didn’t incorporate communication was a sure fire way for the company to fall apart.

2. What was Unilever trying to do when it introduced a new structure based on business

groups in the mid-1990s? Why do you think that this structure failed to cure Unilever’s

ills?

Unilever was trying to consolidate their products and production when it introduced a

new structure based on business groups in the mid-1990s. I feel the principle behind their new

structure was sound but the implementation of the new structure was not well executed. If

Unilever implemented a better form of communication or also implemented a centralized

structure paired with the structure that they introduced, I feel the new structure would have been

more successful.
3. In the 2000s, Unilever switched to a structure based on global product divisions. What do

you think is the underlying logic for this shift? Does the structure make sense given the

nature of competition in the detergents and food business?

In the 2000s Unilever managed to consolidate not only their products but their

manufacturing plants as well. I feel the logic behind this was that Unilever would be able to

specialize in certain products and produce them at a more accurate rate. The company still allows

branches in other countries to have a majority of decision making when it comes to the products

that they sell, however, with this agent-principal relationship, the companies in other countries

have some say but still need to report back to headquarters. Unilever’s main issue has always

been communication, however, they fixed this issue of communication. I feel that the new

structure that Unilever implemented does make sense given the nature of competition in the

detergents and food business. The competition was burying Unilever, so with good reason the

company had to switch their strategy.