Inside Unilever: The Evolving Transnational Company
..., Unilever became the world's largest ice cream compaŽny and achieved strong market posiŽtions in many other frozen foods. In 1966, the company drastically reorganized responsibilities for all products, including those handled by the foods business, in its main European countries. In setting up the new profit-reŽsponsible groups, the head office creŽated three separate foods units. The company established an edible fats group, a frozen food and ice cream group, and a food and drinks group that took care of everything else - mainly soup, tea, and salad dressings. This setup worked well enough for some time; indeed, it enabled Unilever's foods business to grow overall, especially in Europe and North America Effective marketing is now a company's prime competitive advantage, and marketing efforts have led to concepts like low-calorie products, health foods, convenience foods, and the use of natural ingredients. Clearly, shared use of well-known brand names, new food-processing technologies, and consumer reŽsearch can benefit a company with worldwide operations. Foods products at Unilever are now concentrated in five strategic groups: edible fats, ice cream, beverŽages, meals and meal components, and professional markets. (The last group includes catering, bakery items, and other nondomestic food industries.) These groups are not reŽsponsible for profits but remain imŽportant centers of product expertise. They advise the profit-responsible directors of the Foods Executive and the relevant operating companies. And their advice carries much more weight than that of Unilever's prodŽuct groups in the early 1960s. In product terms, the company has improved its position because the new strategic groups are more in line with identified consumer needs. In geographic terms, we continue to rely on the knowledge of our operatŽing companies to judge what product expertise to use in their local marŽkets. Although Unilever's most recent reorganization was based on our strategic intention to concentrate on the foods business in the broadest sense, one of our marketing direcŽtors in Switzerland or a factory manŽager in Italy might not have shared that perspective at first. At Unilever, we see organizational change as a long march forward rather than one big jump. A Matrix for Managers In the early 1940s, Unilever began actively recruiting local managers to replace the Dutch and British exŽecutives from the head office who had been running most of its local units. Starting with the Indian subŽsidiary in 1942, Unilever put into place a management process that company insiders referred to as "izaŽtion." The company's "ization" policy, as well as an increasing number of local competitors and the isolation of many of Unileverl's operating companies during World War H, creŽated a decentralized organization of self-sufficient subsidiaries. Without the Unileverization of those Indian, Australian, Brazilian, and other local managers, the comŽpany's many scattered units would not have shared any common corpoŽrate culture or vision. Once the proper formal organizaŽtion is in place - such as, in UniŽlever's case, a matrix that combines local initiative with some centralŽized control - its managers must still be encouraged to think ...