02 Corporate Social Responsibility Assignment Sample
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Corporate Social Responsibility of Unilever
Executive Summary:
Beyond the targets, company has to concentrate on the sustainability of the society, which helps in long term achievement of its goals in a strategic way. Organisation has to have a strong base plan for the accomplishment of corporate social responsibility tasks. Management should involve all of its stakeholders in the decision making process which helps in smooth operation flow of the business. Corporate social responsibility has many uses in the long term like increasing customer base, attaining loyal customers, employees will stick to the organisation, and suppliers will help in investment process and production processes. Economic growth of the organisation is higher with CSR.
Introduction:
Corporate Social Responsibility:
Corporate Social responsibility is the management of businesses processes of an organisation to produce the goods or services through which an organisation can create positive impact on the society by economic, social and environmental benefits (C.V. Baxi, 2016). It includes sustainability, social impact and ethics that are done in a proper way by the organisation to pursue its core business in other words ethical way of generating money by the organisation. Corporate social responsibility helps in generating profits in a long term way, by enabling the companies to have a sustainable impact on society. Corporate Social Responsibility is an organisational policy (Pedersen, 2015). Corporate Social responsibilities strategies of the organisation show positive impact on the employees, stakeholders etc. The organisation has to follow legal code while adopting corporate social responsibility strategies. It is the strategy formulated and implemented by the top level management of the organisation (C.V. Baxi, 2016).
Purpose:
The purpose of the report is to know why the strategy of Unilever has failed and how other organisations have success in accomplishing the corporate social responsibility strategy.
Scope:
The report gives relevant information about the corporate social responsibility concept, strategy used by Unilever and recommendations to Unilever through which it can achieve competitive advantage.
Structure:
Initially the report has introduction to the concept of corporate social responsibility, then it includes strategy of Unilever and why it has failed then how different companies in the industry are successful in attaining their corporate social responsibility strategy. In the discussion part the report includes the strategy adopted by Unilever which has led to its failure with respect to the article of Borelli. At the end report also includes some recommendations for Unilever to formulate a strategy so as to attain corporate social responsibility to achieve competitive advantage.
Unilever Limited:
Unilever Limited is multinational consumer goods company, it is the market leader in the industry. It is headquartered in London United Kingdom. Products of the organisation are foods, beverages, cleaning agents, personal care, water purifiers etc. It is the largest consumer goods company in terms of revenue and largest producer of margarine. It has its presence in around 190 countries. Products of the company are divided into four categories, they are: foods, refreshments, Home care and Personal care (Unilever, 2017). Organisation is known for its better quality at low prices and with a wide range of products in the portfolio.
Literature Review:
Corporate Social Responsibility has four elements which are represented in the form of a pyramid. They are:
i). Economic responsibility: It is basic need for the company in generating profits by creating value to the customer and satisfying their needs will generate profits to the company.
ii). Legal responsibility: The organisation should follow a legal compliance with the government code and should have a governance team in the organisation for verifying the rules and regulations of the government. In short it should have a set of ethical standards for its working.
iii). Social responsibility: The company should follow the rules and eco-friendly measures which are needed to be taken for its performing business in the social environment.
iv). Philanthropic responsibility: Assumption of a good citizen on company is made here. Company is accountable for whatever it does and company should maintain transparency with its customers and stakeholders (SU, 2015).
Various studies that are done have shown that there is a connection between financial performance of the organisation and the corporate social responsibility done by the organisation. Best activity done by the organisation in the name of CSR will fetch both customers and revenue to the organisation.
CSR will be successful only when the company implementing corporate social responsibility should identify, balance and give priority for the needs of the customers, customers not only buy the product they need both quality of the product and knowledge on the product which makes them to be loyal to the organisation.
Unilever’s Corporate Social Responsibility:
CSR at Unilever is focused on its stakeholders, stakeholders of the company include employees, investors, consumers, suppliers and communities. Unilever uses its CSR strategy as a supporting tool for its growth and maintain standards of industry and sustainability of the society (Unilever, 2017).
Consumers: Unilever has its highest priority to consumers. On consumers it is focused on product quality and price as well as the environmental impact of its business. Satisfied customers increase the company’s profits, in order to satisfy customers Unilever’s research and development team constantly does innovation and quality assurance of the product (Thompson, 2017).
Employees: Employees of the organisation will show a direct influence on the production process and performance part of the organisation. Employees expects his professional growth along with company’s growth, so Unilever has a HR policy for work life balance of its employees, and takes measures on the safety and security aspects of its employees. Unilever has an agile working program for its employees for the overall development of the employee. It also has a flexibility of work place for its employees in CSR policy (Unilever, 2017).
Investors: Higher revenue generation and profit maximisation of Unilever will satisfy its investors, Investors provide funds to Unilever if the profits are higher. If more funds are available from Investors Company can expand its business with the funds which in turn leads to profit maximisation. Unilever strives hard for its innovation and quality in the new products.
Suppliers: This group will affect the business capacity of Unilever in terms of the availability of raw materials for its production purpose, Unilever’s has collaborative ties with its supplier partners which satisfies the interests of suppliers for their growth. Unilever has a win-win strategy with its suppliers (Unilever, 2018).
Communities: Unilever has a foundation which satisfies the interests of communities. Foundation gives funds to the communities for the sanitation, nutrition and personal development of the society. Communities provide a positive brand image in the society which helps for the increase of business from that society, Community people act like opinion leaders among the public for the brand promotion in the society (Unilever, 2018).
Unilever and the failure of its Corporate Social Responsibility strategy:
Under the leadership of Polman, Unilever has suffered its financial and public relations. Polman has kept superficial policies in the business decisions and he has taken his personal decisions which had made the organisation down on the business side. Unilever has gone out of line during the measures like sustainability evangelist taken by polman, it has mired in environmental and sexual harassment controversies too during his regime in Unilever. His claims are not accepted by the Non-Government organisations. The organisation business in South Africa was declined because of its competitors. Sales of the organisation has also declined in the organisation. Polman has made a mistake by acquiring Kraft Heinz, because of this the stock of Unilever has decreased by about 14 percent, the share has also been decreased. Polman also he rejected because of his mistake.
Let’s have a look on the Review:
Polman has not taken care on any issue of its corporate social responsibility.
i). Because of its decisions, sales got declined which shows that customers have lost their loyalty and the reputation of the brand among the consumers have gone down.
ii). Unilever under the leadership of Polman did not even consider its employees as assets, The CEO has taken decisions without considering his employees which has made him rejected his decision at the end. Employees have resigned, there is an attrition rate in the organisation too.
iii). He did not even consider his investors in decision and fund raising hence they did not support him during his fall in the business.
Decision making plays a major role for the progress of the organisation, it should be done very carefully so as to yield better results, but this was not the case during the regime of polman which has made the organisation fall in the business, innovations were also very less at that point of time. Polman did not address social issues that has made him fail in the business.
Bloomberg’s Andrea has highlighted growth problems in personal care unit, which was the best division or the product portfolio among all the portfolios of the Unilever’s products. The brand image has been decreased among the customers, which has made consumers buying the products in very less which in turn resulted in less number of revenue generation and less profits for the organisation. The growth was very less than the expectation of the experts. It was about 2 percent for two years, which was very less in the history of Unilever, since its inception. Sales was less than 3 percent. There are many drawbacks and setbacks organisation has faced in past few years.
Sustainability is not only about the specific activities of the company, it includes all the end to end operations of the business, it includes activities like supplier relations, investor relations, and consumer relations like value creation of customers by producing satisfying goods or services for the customers.
Recommendations:
i). The Unilever can raise its awareness campaigns to make the customers aware about its activities and new product launches.
ii). the brand image of Unilever can raise its voice against the corporate citizenship activities.
iii). The global reach of the organisation ties will make the organisation still expand its business and reach more number of customers through its supplier ties.
iv). Innovation in products for the organisation according to the social requirement would make the organisation row both in terms of sustainability and Revenue.
v). Organisation should focus its activities son women empowerment, which would help the organisation in attaining customer base and creating value for the acquired base would help Unilever in attaining the best customer base who would be loyal to the products and spread a positive word of mouth among their neighbours.
vi). Unilever must work in collaboration with the government and some non-profit organisations which would make the organisation have a positive impact on the larger customer base who would fetch large customer base in the meantime.
vii). Organisation should be trust worthy to all its stakeholders, for the development in long term.
viii). Organisation should not expect results in a short term, organisation should be persistent for the outcomes to be positive.
ix). Company should be credible and accountable for customers at all times, it shows the moment of truth between the customer and the organisation.
x). Organisation should select the area or the range of the corporate social responsibility according to the recommendations of the communities and on the needs of the society.
Conclusions:
Corporate social responsibility is a double edged sword, it enhances revenues of the organisation and creates a market value for the company. It is the management theory or the strategy, which helps in attaining sustainability both for economic and society. Unilever has failed in implementing its corporate social responsibility strategy, because of the harsh decisions of the Polman. CSR will help the organisation in attaining its long term strategic goals in the best way. CSR will make all the stakeholders of the organisation under one roof, everyone will be on a single line, which makes the management rule to be in a very simple way. Organisation should do any production or launch any new products that must be eco-friendly.
References
C.V. Baxi, A. P. (2016). Corporate Social Responsibility: Concepts and Cases : the Indian Experience (5 ed.). Excel Publications.
https://www.unilever.com/sustainable-living/our-approach-to-reporting/. (n.d.).
kinsey, M. (2017). Making the most out of csr.
Pedersen, E. R. (2015). Corporate Social Responsibility (3 ed.). SAGE publications.
SU, R.-j. (2015). Literature review on CSR.
Thompson, A. (2017). Unilever’s CSR and stakeholders. Panmore Institute.
Unilever. (2016). Unilever approach to csr.
Unilever. (2017). Retrieved from Unilever.
unilever. (2018). https://www.unilever.com/sustainable-living/values-and-values/.
Unilever. (2018). Unilever. Retrieved from Unilever.
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