INTERNATIONAL FINANCIAL MANAGEMENT

“A DECADE OF ORGANIZATIONAL CHANGE AT UNILEVER”

PREPARED BY:NURUL HUSNA BT ABDUL RAHIM 2012245772MOHD SHAFLI B JAAFAR SIDEK 2012239534NORBAIZURA BT KAMARUDIN 2012452424NUR ASHIKIN BT ABDUL JALIL 2012419658

NORLIYANA BT WAHID 2012655352

PREPARED FOR:MADAM ZURAIDAH BT SIPON

COMPANY DETAILS

• Founded in 1929• Unilever is one of the oldest multinational corporation • Offer extensive product offering in food, detergent and

personal care business• Generates annual revenues in excess of $50 billion.• A wide range of branded product in virtually every country.• Such as:

CASE DETAILS

Historically, early 1990s :• Unilever was organized on decentralized basis.• Subsidiary companies in each major market were

responsible for production, marketing, sales and distribution of product in the market.

• Each was profit center and each was held accountable for its own performance.

By the mid-1990s:Unilever realized its decentralized structure was working against them.•Unilever competitor has been more successful .•It means there a rose of duplication, particularly in manufacturing ,lack of scale economies and used high cost of structure.•This has show Unilever was failed to bring a new product to the market.

In 1996,to change the situation in mid-1990s:Unilever has introduced a new structure based on regional business group.•Where by each business group included a number of divisions focusing on a specified category of products.•These group and division coordinated the activities of national subsidiaries within their region to reduce costs and to speed up the process of developing and introducing new products.

By 2000:Unilever found that its still lagging behind its competitors, so its decided to reorganize.•The goal was to cut the number of brands that Unilever sold from 1600 to just 400 that could be marketed on a regional or global scale.•Unilever also established a new organization based on just two global product division which is food division and home personal care division.

CASE DISCUSSION QUESTIONS

1.Why did Unilever’s decentralized organizational structure make sense from the 1950s through the

1970s? Why did this structure start to create problems for the company in the 1980s.

• Decentralized make sense from the 1950s through the 1970s because at first it drive to the localization which mean this structure allowed the local manager to match product offerings and marketing strategy to local taste and preferences. It also alter sales and distribution strategies to fit the prevailing retail system.

• This structure start to create problems for the company in the 1980s because there are existence of a lot of duplication in manufacturing, a lack of scale economies and need high cost structure. It also resulting Unilever falling behind its rivals in term of bring new product to the market.

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 introduced structure based on business groups actually are to cut down operating costs and introducing new product.

• Based on my opinions, this structure failed to cure Unilever’s ills because the manager are no longer allowed to match product offerings and marketing strategy to local tastes and preferences.

3.In the 2000s, Unilever has 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 my point of view, Unilever are try to improved it products availability and flexibility to the local preferences and at same time want to reduce operating cost and create a global brands.

• Yes, new structure made sense because consumers more prefers products that has brands and able to fulfills their needs.

THANK YOU!!

ANY QUESTION?