BSS064-6 Leading and Managing Organisational Resources Assignment Sample
Module code and Title: BSS064-6 Leading and Managing Organisational Resources Assignment Sample
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Subject: Critical discussion of corporate governance and leadership challenges of Unilever
Introduction and Purpose of E-mail
Corporate governance is the strategic process of an organisation that can be effective in successfully directing and controlling the business process of an organisation leading to the long-term success of the company. Managing the proper role of stakeholders, and effective appointment of a board of directors, as well as auditors, directly helps in the successful achievement of business objectives by corporate governance.
Effective implementation of corporate governance by a brand helps the brand to enhance its overall performance, reduce organizational risks and achieve sustainable business ventures by incorporating effective leadership. In this regard, the overall corporate governance and leadership challenges of Unilever, a well-established retail brand in the United Kingdom have been analysed. Finance, Ethics and sustainability issues of corporate governance and leadership issues have been focused on in this email along with proper recommendations for improvements have also focused on here.
The main purpose of this email is to analyze the recent issues and challenges of the Unilever brand regarding its corporate governance and leadership. In addition, the evaluation of governance issues and Leadership issues along with proposing possible recommendations for achieving sustainable retail brands in the UK has aimed to analyse in this email.
Discussion on Corporate Governance and Leadership of Unilever
Corporate governance
According to Mariano et al. (2021), the development of an effective strategy regarding corporate governance helped a brand to develop a positive work environment, effective accountability and transparency as well as business stability to achieve business goals. In terms of developing proper governance corporate of a brand, financial operations, business ethics, as well as sustainability needs to be maintained. In the case of Unilever, the corpse governance has been bad on the 4ps as “People”, “Process”, “Performance” and “Purpose”.
Finance
In the case of finance management, the “Auditing management system” and “remuneration management systems” of Unilever need to be managed properly to develop corporate governance. In the case of the financial management system, the company has been massively disrupted after the outbreak of Covid-19 in the UK. Overall performance and sales of the company decreased during 2020 and 2021. In the year of 2022, the company has gained revenue of around 46.16 billion GBP, however, the company can only manage to gain around 44.63 billion GBP in 2020 (Statista.com, 2022a).
Therefore, it has been identified that the financial stability of the company has been massively disrupted after the impacts of Covid-19. In addition, the company faced financial issues in 2021 regarding packaging costs and transportation costs due to the increase in raw materials pricing that resulted in lower consumer attraction (Bloomberg.com, 2021).
As opined by Heald and Hodges (2020), disruption in the supply chain, increase prices of raw materials as well as changes in consumer behaviour resulted in financial risks for retail sectors in the UK. However, the lack of human resources in finance management and auditing management system has also impacted the financial crisis of different retail sectors in the UK after the Covid-19 pandemic (Zhong et al. 2021). As the Unilever Company have focused on the “Divisional organisational culture” therefore, a lack of risk management and employee skills management resulted in ineffective performances during critical business environment (Unilever.com, 2022a).
A recent massive fall in the share price of Unilever has fallen due to the “defended its £50bn takeover” strategies regarding the “consumer healthcare arm” of “GlaxoSmithKline (GSK)” in recent times (Ft.com, 2022). Ineffective decision-making and lack of risk management resulted in the arisen of different corporate governance issues for Unilever that reduced its overall performance in recent times.
Ethics
According to Maye et al. (2019), retail brands need to maintain business ethics that includes characteristics of business, values, and principles to achieve organizational goals effectively. In terms of managing corporate governance, Unilever operates its business by maintaining business ethics such as accountability, transparency, customer loyalty, Respect, Pioneering Integrity and others (Unilever.com, 2022b).
As argued by Zou (2021), in the case of Unilever, different challenges regarding business ethics have been identified as major issues that directly impact the business performance of Unilever such as “Misleading advertisement”, “employee brands relationship, customer relationship, discrimination, working culture and others. In addition, environmental issues and product development have also been associated with the business ethics issues of Unilever.
In 2022, an advertisement for Unilever regarding misleading environmental claims by advertisement of “Persil”, a laundry detergent brand of Unilever resulted in a loss of 0.1% share of the company (Morningstar.co.uk, 2022). Along with that, workplace discrimination has been identified as one of the major ethical issues in the business progression of Unilever.
Workplace discrimination and violation of code policies regarding business development result in conflicts between employees. In the present situation, Unilever has managed to operate its business with 148,000 employees globally and it has been reported that the number of employees has fallen over the years (Statista.com, 2022b). However, Unilever has taken the initiative to reduce workplace sexual harassment by “IUF- IndustriAll-Unilever” joint commitment (Iuf.org, 2022).
As opined by Zou (2021), ineffective stakeholder management and lack of consumer attraction have also resulted in the financial loss of the company that affects corporate governance. In addition, the “S.W.A.T.” team of Unilever company security guards’ attack on an employee in 2019 resulted in the serious injury of four members reducing the overall reputation of the company (Ethicalconsumer.org, 2022).
Sustainability
In terms of managing sustainability in business performance management, Unilever has focused on “Corporate social responsibility (CSR)” by promoting health, hygiene and Nutrition. As opined by Jones and Comfort (2018), managing corporate social responsibility can be achieved by the retail sector through proper stakeholder engagement, effective relationships between consumers and brands, sustainable product development, focus on local communities’ development and others.
“Carbon footprints” have been identified as the major issues in sustainable business development for brands that affect directly consumer attraction and brand awareness globally. The company has focused to promote plant-based product. The sustainable product development strategy of the company has helped it to aim to sell around €1 billion within 2024 (Unilver.com, 2021). In addition, the company aimed to develop a zero carbon footprint by 2030 as well as use “100% renewable electricity” in business operations.
As the company faced issues with stakeholder management and organisational culture diversity management, therefore “Stakeholder management theory” can be considered effective in managing the stakeholders. According to Nyame-Asiamah and Ghulam (2019), stakeholder management theory has been effective for retail brands to build an effective relationship between the stakeholders by developing effective communication that assists in the overall growth of brands.
Therefore, with the implementation of the stakeholder theory in the workplace of Unilever, overall issues regarding sustainability in business operations can be achieved. Effective approaches regarding “Economy”, “Social” and “Environment” the company can establish a sustainable business culture and process that can help in long-term success within the industry. According to SEONG (2021), the incorporation of “Authentic Transformational Leadership” has been effective for the company to regularly provide feedback to the employees and proper guidance helped in developing sustainable business structures.
Leadership
In the business operations of retail brands, leadership has played an important role that helped in the overall development of business strategies and effective management of business processes. As Unilever is a multinational company, the company has used “Commitment leadership” which resulted in the rise of different challenges in business operational management.
Traditional perspective
Unilever is one of the well-established retail brands around the world as well as one of the top brands in the UK. The company have successfully operated its business by managing employees, business operations, CSR approaches and corporate governance through its “Commitment leadership” approaches. In the traditional perspective of leadership, different challenges have been identified that can reduces the overall significance of traditional approaches adopted by retail brands.
According to Galera‐Zarco et al. (2020), a lack of knowledge regarding digital media and technology has been denied as the major challenge in traditional approaches to leadership for business development.
As traditional approaches of leadership have lacked knowledge regarding technology therefore overall competitive advantages and effective business options strategies have not been properly executed. In this regard, as Unilever has followed a commitment to leadership for intentional business operations and employee management, their lack of innovation, and lack of integration of technology in leadership approaches resulted in the poor performance of business strategies development and employee management.
However, other retail brands in the UK such as Tesco, ASDA and others have successfully operated theory business by adopting new business cultures and leadership approaches that have appropriate for the modern generation business operations.
Limitations in employee selection, lack of diversity and inclusion in human resource management, result in the poor performance of a brand. One of the most common examples of traditional leadership approaches has been identified as the “Great man theory” of leadership. According to Clark and Harrison (2018), the adoption of traditional porches of leadership such as the Great man theory results in poor decision-making and a lack of effective employee management results in poor performance of the business.
Regenerative leadership
Regenerative leadership has been considered one of the effective leadership approaches for the retail sector to manage business performance as well as business strategies to gain competitive advantages and sustainable business culture development. As opined by Jones and Comfort (2020), regenerative approaches regarding changes in leadership approaches have been effective for the retail sector to improve theory performances and overall business management that helped in the adaptation to a new environment.
As this approach of leadership allows business organizations to easily adopt different business situations as well as identified as a flexible leadership approach, therefore this leadership has been effective for business development. It has been identified that Tesco, ASDA and retail barns have successfully operated their business by adopting regenerative approaches to leadership such as “Democratic leadership” and “Transformational leadership”. According to Chiang et al. (2020), “Transformational leadership” has been identified as effective for the retail sector as this helped in effective employee engagement, communication development and allowing innovation within the workplace resulting in the development of product innovation.
In the case of Unilever, poor infrastructure of workplace culture, lack of effective employee management, and inadequate use of technology in employee management resulted in the poor management of employees and business performances. According to Grabowska and Saniuk (2022), transformational leadership has been effective for the retail sector as this promotes the motivation of the employees, allows diversity and inclusion in human resource management, and promotes cultural diversity that helps in the enhancement of business decision-making and strategic development.
Contemporary leadership in the technology sector
Contemporary leadership has been categorised as one type of “Influential leadership” that assists in the effective management of employees within a workplace as well as aching to bring structural changes in business strategies. Effective implementation of contemporary leadership styles directly helped an organisation to develop a positive workplace environment that assists in product innovation, effective decision-making and communications through collaborative work culture promotions (Nash, 2018).
As Unilever has faced issues regarding conflict among stakeholders and communication gap between employees, therefore the implementation of this leadership approaches resulted in the overall modification of the business structure and organisational culture. Effective implementation of modern technology and modern perspective marketing has been identified as the major success area of this leadership that can improve overall brand reputation and business performance.
As opined by Nash (2018), focusing on the modern adaptation of leadership within the integration of technology has been effective to become a socially strong brand that attracts a wide range of consumers. Adoption of transformational leadership with the integration of advanced technology in business operations such as Artificial intelligence, Machine learning and others has been identified as an effective approach to leadership in modern business development that results in the boosting of business performances of the retail sector. As an example, Tesco, the leading retail brand in the UK has successfully adopted contemporary leadership approaches with the effective incorporation of
Conclusion
In conclusion, it can be stated that Unilever has faced different corporate governance issues as well as leadership issues that negatively impacted the overall growth and business performance of the company. It has been identified that the company have faced financial issues as the company can only manage to gain around 44.63 billion GBP in 2020.
In addition, it has been identified as a critical issue that the issues in ethically business operations such as accountability, transparency, customer loyalty, Respect, Pioneering Integrity and others resulting in the loss of 0.1% share of the company and a lower rate of retention of employees as 14800 employees in 2020. Sustainability issues and leadership issues have also been identified as prominent for Unilever as lack of employee management, conflict between stakeholders, and lack of technology have been identified as critical issues.
Traditional approaches of leadership result in poor management of business operations and employee management as they have not allowed technical up gradations and cultural diversity. It can be concluded that, focusing on regenerative leadership and Contemporary leadership such as “Democratic leadership” and “Transformational leadership” has been effective in sustainable business development and effective employee management for Unilever.
Recommendations
Effective implementation of technology in business operations
According to Nash (2018), the adoption of technology-based leadership approaches directly enhances overall performance through product differentiation, innovation and technical up gradations in business operations. In addition integration of Artificial intelligence, Machine Learning, and IoT has been identified as effective for different retail brands to successfully operate their business and gained competitive advantages. As an example, Tesco has effectively integrated technology within its business development process helping the company to successfully establish its business in the UK market and become a leading retail brand.
Modification in leadership and workplace culture
As opined by Chiang et al. (2020), the adoption of Transformational leadership has been identified as effective for Unilever to adapt to the different critical business situations with the help of technology up gradation and proper employee management. In addition, as this leadership approaches allow cultural diversity and promote motivation, therefore this can be effective for Unilever to mitigate corporate governance issues as well as leadership issues in their business development.
Proper integration of Transformational leadership can also be recommended for Unilever to develop a sustainable business structure by modifying its corporate culture. Successful modification in the organisational, culture and leadership approaches directly helps the company to gain competitive advantages and promoted brand reputation globally that leads to the establishment of sustainable business.
References
Bloomberg.com (2021). Unilever Sees Toughest Inflation Since 2008 Financial Crisis. Available from https://www.bloomberg.com/news/articles/2021-07-22/unilever-lowers-profit-forecast-on-rising-raw-material-costs?leadSource=uverify%20wall. Accessed on 11.10.2022
Chiang, H.H., Han, T.S. and C McConville, D., 2020. A multilevel study of brand-specific transformational leadership: employee and customer effects. Journal of Brand Management, 27(3), pp.312-327. https://doi.org/10.1057/s41262-019-00182-6
Clark, C.M. and Harrison, C., 2018. Leadership: the complexities and state of the field. European Business Review. Clark, C.M. and Harrison, C., 2018. Leadership: the complexities and state of the field. European Business Review. https://doi.org/10.1108/EBR-07-2017-0139
Ethicalconsumer.org (2022). Unilever. Available from https://www.ethicalconsumer.org/company-profile/unilever. Accessed on 11.10.2022
Ft.com (2022). The basic problem with Unilever’s £50bn healthcare bid. Available from https://www.ft.com/content/ca672f49-65c3-424d-80b6-ebbeba6dcff0. Accessed on 11.10.2022
Galera‐Zarco, C., Opazo‐Basáez, M., Marić, J. and García‐Feijoo, M., 2020. Digitalization and the inception of concentric strategic alliances: A case study in the retailing sector. Strategic Change, 29(2), pp.165-177. https://doi.org/10.1002/jsc.2319
Grabowska, S. and Saniuk, S., 2022. Assessment of the Competitiveness and Effectiveness of an Open Business Model in the Industry 4.0 Environment. Journal of Open Innovation: Technology, Market, and Complexity, 8(1), p.57. https://doi.org/10.3390/joitmc8010057
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Iuf.org (2022). IUF- IndustriAll-Unilever Joint Commitment on preventing sexual harassment. Available from https://www.iuf.org/wp-content/uploads/2020/12/1-2016-IUF-IndustriAll-Unilever-Joint-Commitment-on-preventing-sexual-harassment.pdf. Accessed on 11.10.2022
Jones, P. and Comfort, D., 2018. Storytelling and corporate social responsibility reporting: A case study of leading UK retailers. European Journal of Sustainable Development Research, 2(4), pp.1-11. https://doi.org/10.20897/ejosdr%2F3916
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Morningstar.co.uk (2022). UK advertising standards body bans “misleading” green ad by Unilever. Available from https://www.morningstar.co.uk/uk/news/AN_1661951046226386800/uk-advertising-standards-body-bans-misleading-green-ad-by-unilever.aspx. Accessed on 11.10.2022
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