14 Aug Read the Case Unilever the assignment and answer the questions in a three pages

Read the Case Unilever the assignment and answer the questions in a three pages essay.1. If a company such as Unilever has to make trade-offs between being a good corporate citizen and making a profit, which should be the higher priority?2. Assess Cescaus response to the Greenpeace palm-oil protest. Was it appropriate? What type of relationships should Unilever cultivate with Greenpeace and other NGOs in the future?3. Do you think that a streamlined management structure and emphasis on emerging markets will enable new CEO Paul Polman to lead Unilever to improved performance?Read the Case (p.524) Unilever and answer theUnilever: The AssignmentAfter Cescau was elevated to the top job, Unilevers board streamlinedthe companys management structure. Now there is a singlechief executive; previously, there had been one in Rotterdam and onein London. Cescau asserted that, with a single chief executive, theneed for consensus was replaced by speed at making decisions. Asnoted, many of those decisions concerned doing good. However,some observers were skeptical of Cescaus determination to operationalizea responsible business philosophy. Cescau recalled, Thecompany was not doing well. There was an article saying that I wasdraping myself in a flag of corporate social responsibility to excusepoor performance. I was so angry with that.Cescaus commitment was put to the test in 2008, his final year asCEO. Greenpeace launched an advertising campaign alleging thatUnilevers purchases of Indonesian palm oil were contributing torainforest destruction. Palm oil, a key ingredient in Doves beauty bar,comes from oil palm trees that grow in Indonesia and Malaysia. Risingworld prices for the commodity prompted Indonesian farmers to cutdown large swaths of old-growth rain forest and plant fast-growingoil palms. Specifically, Greenpeace identified the operations of SinarMas, an Indonesian company that is a major palm oil supplier, ascontributing to deforestation.The media strategy for the Greenpeace campaign included newspaperads in London and a video on YouTube. Fliers parodiedUnilevers Campaign for Real Beauty; for example, they showed picturesof orangutans juxtaposed with the headline Gorgeous orgone? John Sauven, executive director of Greenpeace, explainedwhy his organization had targeted Unilever. Everyone has heard ofthose brands. They are the public face of the company.Cescau responded by calling for a moratorium on rain forestdestruction by Indonesian oil producers. The Unilever chief alsopledged that his company would only buy palm oil from producerswho could prove that the rain forest had not been sacrificed in theproduction process. The move allied Unilever with the Roundtable onSustainable Palm Oil (RSPO), an organization that certifies palm oilproducers. A Unilever spokesperson also indicated that the proposedchange in Unilevers palm-oil sourcing strategy had been in the worksfor months. Nevertheless, Greenpeace and other nongovernmentalorganizations claimed victory.Unilever brought its message to the public with a print ad campaignfeaturing the headline What you buy in the supermarket canchange the world. The body copy outlined Unilevers pledge that by2015 all our palm oil will come from sustainable sources. The adsended with the tagline Small actions, big difference.Doing well is also part of the leadership equation at Unilever.Cescau understood the importance of improving Unilevers profitability.To this end, he continued a restructuring drive that was initiated by hispredecessor, co-chairman Niall FitzGerald. Specific actions includedreducing Unilevers bureaucracy by removing several managementlayers. Cescau also reduced the top management head count from25 people to 7 and narrowed the vertical distance between managementand marketing. The company also shed hundreds of brandsand closed dozens of factories in France, Germany, and elsewhere. InCescaus view, the new, leaner structure would translate into morerapid response to changing market trends and consumer preferencesand ensure quicker rollouts of new products.Cescau also bet heavily on emerging markets to jump-start salesgrowth. Rising incomes mean that many people are purchasingconsumer packaged goods for the first time. One scenario: As increasingnumbers of people in developing countries buy their first washingmachines, they will need to buy laundry detergent. To capitalize on suchtrends, Cescau shifted budgetary resources out of mature markets suchas Europe; those funds were used to support research in India and otheremerging markets. Brand managers were instructed to innovate bytaking a clean slate approach to developing new products for emergingmarkets. As Steph Carter, packaging director for deodorant brands,noted, Traditionally, we would have taken existing products andthen tried to fathom how to adapt them for the developing world.Our thinking has changed.The Polman Era BeginsPaul Polman took over as CEO in January 2009; a former Nestlexecutive, he is the first outsider to lead Unilever in its 80-year history. Inhis first months on the job, Polman initiated a shift in Unilevers corestrategy. In the past, the company generated sales growth by increasingprices. Noting that this was the wrong strategy for recessionary times,Polman said the new priority would be to increase sales volumes. Thechange entailed some risk: holding the line on prices could put pressureon margins, given the trend of rising costs for the agricultural commoditiesthat are key ingredients in Unilevers products.Polman was also keenly aware that many budget-conscious shopperswere choosing less-expensive private-label supermarket productsinstead of well-known name brands. Polman vowed to improve productquality across the board and to boost marketing and advertisingspending. To support the increased investment, he accelerated some ofthe cost-cutting measures that his predecessor had initiated. Forexample, the timetable for planned factory closures and job cuts wasmoved up; Polman also froze executive salaries and changed the bonuspolicy. He established 30-day action plans for managers of brandswith flagging sales. He also replaced about one-third of Unilevers top100 executives, including the chief marketing officer.When it comes to demonstrating Unilevers commitment to itscustomers, Polman sends clear signals to his employees. He spendsabout 50 percent of his time on the road, with regular stops in Asia,Latin America, and, of course, Europe. In a recent interview, he noted,Theres not one visit in a country when I dont meet a consumer. Ifwe want to make this company passionate about consumers andcustomers, the example starts at the top.That passion is evident in a flurry of marketing activities orchestratedby Polman. One is the quick pace of new-product rollouts,especially in emerging markets. For example, Unilevers home careunit was first-to-market with liquid laundry detergent in China; it alsointroduced a dishwashing liquid in Turkey in less than 30 days.Innovation has also become a key element for shoring up the valueproposition of Unilevers brands, with existing brands such as Surflaundry detergent getting an upgrade in the African market.Driving growth in the personal care category is another priority forPolman. By itself, the global deodorant segment represents an estimated$17 billion in annual sales. To tap into that market, the Dove brand hasbeen extended to mens products. Dove for Men has been rolled out indozens of countries. Meanwhile, Doves product managers devised anew strategy for persuading women to switch deodorant brands. DoveUltimate Go Sleeveless resulted from company research designed todiscover insights about consumer attitudes towards underarms. Whatthe researchers learned is that 93 percent of women think their armpitsare not attractive. Dove Ultimate Go Sleeveless is formulated withmoisturizers that, the company claims, will result in nicer-lookingunderarms after just a few days use.The ice cream and beverage unit is also on the move. UnileversMagnum brand premium ice cream bars are the worlds top-selling icecream novelty. Although Magnum enjoys great popularity in Europe, itwas not introduced in the United States until 2011. Hagen-Dazs andMars are already entrenched in the market; undaunted, the Magnummarketing team is confident its brand will stand out. One managerexplained that an important part of the brands equity is the loudcracking sound heard when someone bites through Magnums thickchocolate shell.Even as he oversees these and other marketing activities, Polmanis also making sure that former CEO Cescaus commitment tocorporate social responsibility is maintained. Summarizing his views onsustainability and environmental impact, Polman said:. . . the road to well-being doesnt go via reduced consumption.It has to be done via more responsible consumption. . . . Sothats why were taking such a stand on moving the world tosustainable palm oil. Thats why we go to natural refrigerantsfor our ice-cream cabinets. Thats why we work with small-holdfarmers, to be sure that people who dont have sufficient nutritionright now have a chance to have a better life. Because atthe end of the day, I think companies that take that approachhave a right to exist.Discussion Questions1. If a company such as Unilever has to make trade-offs betweenbeing a good corporate citizen and making a profit, whichshould be the higher priority?2. Assess Cescaus response to the Greenpeace palm-oil protest.Was it appropriate? What type of relationships should Unilevercultivate with Greenpeace and other NGOs in the future?3. Do you think that a streamlined management structure andemphasis on emerging markets will enable new CEO PaulPolman to lead Unilever to improved performance?Sources: Louise Lucas, Growing Issue for Palm Oil Producers, Financial Times (May 23,2011), p. 22; Ellen Byron, Unilever Takes On the Ugly Underarm, The Wall StreetJournal (March 30, 2011), p. B1; Lucas, Investors Skeptical as Unilever Pursues BoldGrowth Plan, Financial Times (November 16, 2010), p. 20; Stefan Stern, The Outsiderin a Hurry to Shake Up His Company, Financial Times (April 5, 2010); Jenny Wiggins,Unilever Vows to Focus on Cheaper Products, Financial Times (August 7, 2009), p. 17;Wiggins, Unilevers New Chief Prepares to Brew Up Changes, Financial Times(February 6, 2009), p. 15; Michael Skapinker, Taking a Hard Line on Soft Soap,Financial Times (July 7, 2008), p. 12; Aaron O. Patrick, After Protests, Unilever Does anAbout-Face on Palm Oil, The Wall Street Journal (May 2, 2008), p. B1.Read the Case Unilever the assignment and answer the questions in a three pages essay.1. If a company such as Unilever has to make trade-offs between being a good corporate citizen and making a profit, which should be the higher priority?2. Assess Cescaus response to the Greenpeace palm-oil protest. Was it appropriate? What type of relationships should Unilever cultivate with Greenpeace and other NGOs in the future?3. Do you think that a streamlined management structure and emphasis on emerging markets will enable new CEO Paul Polman to lead Unilever to improved performance?Read the Case (p.524) Unilever and answer theUnilever: The AssignmentAfter Cescau was elevated to the top job, Unilevers board streamlinedthe companys management structure. Now there is a singlechief executive; previously, there had been one in Rotterdam and onein London. Cescau asserted that, with a single chief executive, theneed for consensus was replaced by speed at making decisions. Asnoted, many of those decisions concerned doing good. However,some observers were skeptical of Cescaus determination to operationalizea responsible business philosophy. Cescau recalled, Thecompany was not doing well. There was an article saying that I wasdraping myself in a flag of corporate social responsibility to excusepoor performance. I was so angry with that.Cescaus commitment was put to the test in 2008, his final year asCEO. Greenpeace launched an advertising campaign alleging thatUnilevers purchases of Indonesian palm oil were contributing torainforest destruction. Palm oil, a key ingredient in Doves beauty bar,comes from oil palm trees that grow in Indonesia and Malaysia. Risingworld prices for the commodity prompted Indonesian farmers to cutdown large swaths of old-growth rain forest and plant fast-growingoil palms. Specifically, Greenpeace identified the operations of SinarMas, an Indonesian company that is a major palm oil supplier, ascontributing to deforestation.The media strategy for the Greenpeace campaign included newspaperads in London and a video on YouTube. Fliers parodiedUnilevers Campaign for Real Beauty; for example, they showed picturesof orangutans juxtaposed with the headline Gorgeous orgone? John Sauven, executive director of Greenpeace, explainedwhy his organization had targeted Unilever. Everyone has heard ofthose brands. They are the public face of the company.Cescau responded by calling for a moratorium on rain forestdestruction by Indonesian oil producers. The Unilever chief alsopledged that his company would only buy palm oil from producerswho could prove that the rain forest had not been sacrificed in theproduction process. The move allied Unilever with the Roundtable onSustainable Palm Oil (RSPO), an organization that certifies palm oilproducers. A Unilever spokesperson also indicated that the proposedchange in Unilevers palm-oil sourcing strategy had been in the worksfor months. Nevertheless, Greenpeace and other nongovernmentalorganizations claimed victory.Unilever brought its message to the public with a print ad campaignfeaturing the headline What you buy in the supermarket canchange the world. The body copy outlined Unilevers pledge that by2015 all our palm oil will come from sustainable sources. The adsended with the tagline Small actions, big difference.Doing well is also part of the leadership equation at Unilever.Cescau understood the importance of improving Unilevers profitability.To this end, he continued a restructuring drive that was initiated by hispredecessor, co-chairman Niall FitzGerald. Specific actions includedreducing Unilevers bureaucracy by removing several managementlayers. Cescau also reduced the top management head count from25 people to 7 and narrowed the vertical distance between managementand marketing. The company also shed hundreds of brandsand closed dozens of factories in France, Germany, and elsewhere. InCescaus view, the new, leaner structure would translate into morerapid response to changing market trends and consumer preferencesand ensure quicker rollouts of new products.Cescau also bet heavily on emerging markets to jump-start salesgrowth. Rising incomes mean that many people are purchasingconsumer packaged goods for the first time. One scenario: As increasingnumbers of people in developing countries buy their first washingmachines, they will need to buy laundry detergent. To capitalize on suchtrends, Cescau shifted budgetary resources out of mature markets suchas Europe; those funds were used to support research in India and otheremerging markets. Brand managers were instructed to innovate bytaking a clean slate approach to developing new products for emergingmarkets. As Steph Carter, packaging director for deodorant brands,noted, Traditionally, we would have taken existing products andthen tried to fathom how to adapt them for the developing world.Our thinking has changed.The Polman Era BeginsPaul Polman took over as CEO in January 2009; a former Nestlexecutive, he is the first outsider to lead Unilever in its 80-year history. Inhis first months on the job, Polman initiated a shift in Unilevers corestrategy. In the past, the company generated sales growth by increasingprices. Noting that this was the wrong strategy for recessionary times,Polman said the new priority would be to increase sales volumes. Thechange entailed some risk: holding the line on prices could put pressureon margins, given the trend of rising costs for the agricultural commoditiesthat are key ingredients in Unilevers products.Polman was also keenly aware that many budget-conscious shopperswere choosing less-expensive private-label supermarket productsinstead of well-known name brands. Polman vowed to improve productquality across the board and to boost marketing and advertisingspending. To support the increased investment, he accelerated some ofthe cost-cutting measures that his predecessor had initiated. Forexample, the timetable for planned factory closures and job cuts wasmoved up; Polman also froze executive salaries and changed the bonuspolicy. He established 30-day action plans for managers of brandswith flagging sales. He also replaced about one-third of Unilevers top100 executives, including the chief marketing officer.When it comes to demonstrating Unilevers commitment to itscustomers, Polman sends clear signals to his employees. He spendsabout 50 percent of his time on the road, with regular stops in Asia,Latin America, and, of course, Europe. In a recent interview, he noted,Theres not one visit in a country when I dont meet a consumer. Ifwe want to make this company passionate about consumers andcustomers, the example starts at the top.That passion is evident in a flurry of marketing activities orchestratedby Polman. One is the quick pace of new-product rollouts,especially in emerging markets. For example, Unilevers home careunit was first-to-market with liquid laundry detergent in China; it alsointroduced a dishwashing liquid in Turkey in less than 30 days.Innovation has also become a key element for shoring up the valueproposition of Unilevers brands, with existing brands such as Surflaundry detergent getting an upgrade in the African market.Driving growth in the personal care category is another priority forPolman. By itself, the global deodorant segment represents an estimated$17 billion in annual sales. To tap into that market, the Dove brand hasbeen extended to mens products. Dove for Men has been rolled out indozens of countries. Meanwhile, Doves product managers devised anew strategy for persuading women to switch deodorant brands. DoveUltimate Go Sleeveless resulted from company research designed todiscover insights about consumer attitudes towards underarms. Whatthe researchers learned is that 93 percent of women think their armpitsare not attractive. Dove Ultimate Go Sleeveless is formulated withmoisturizers that, the company claims, will result in nicer-lookingunderarms after just a few days use.The ice cream and beverage unit is also on the move. UnileversMagnum brand premium ice cream bars are the worlds top-selling icecream novelty. Although Magnum enjoys great popularity in Europe, itwas not introduced in the United States until 2011. Hagen-Dazs andMars are already entrenched in the market; undaunted, the Magnummarketing team is confident its brand will stand out. One managerexplained that an important part of the brands equity is the loudcracking sound heard when someone bites through Magnums thickchocolate shell.Even as he oversees these and other marketing activities, Polmanis also making sure that former CEO Cescaus commitment tocorporate social responsibility is maintained. Summarizing his views onsustainability and environmental impact, Polman said:. . . the road to well-being doesnt go via reduced consumption.It has to be done via more responsible consumption. . . . Sothats why were taking such a stand on moving the world tosustainable palm oil. Thats why we go to natural refrigerantsfor our ice-cream cabinets. Thats why we work with small-holdfarmers, to be sure that people who dont have sufficient nutritionright now have a chance to have a better life. Because atthe end of the day, I think companies that take that approachhave a right to exist.Discussion Questions1. If a company such as Unilever has to make trade-offs betweenbeing a good corporate citizen and making a profit, whichshould be the higher priority?2. Assess Cescaus response to the Greenpeace palm-oil protest.Was it appropriate? What type of relationships should Unilevercultivate with Greenpeace and other NGOs in the future?3. Do you think that a streamlined management structure andemphasis on emerging markets will enable new CEO PaulPolman to lead Unilever to improved performance?Sources: Louise Lucas, Growing Issue for Palm Oil Producers, Financial Times (May 23,2011), p. 22; Ellen Byron, Unilever Takes On the Ugly Underarm, The Wall StreetJournal (March 30, 2011), p. B1; Lucas, Investors Skeptical as Unilever Pursues BoldGrowth Plan, Financial Times (November 16, 2010), p. 20; Stefan Stern, The Outsiderin a Hurry to Shake Up His Company, Financial Times (April 5, 2010); Jenny Wiggins,Unilever Vows to Focus on Cheaper Products, Financial Times (August 7, 2009), p. 17;Wiggins, Unilevers New Chief Prepares to Brew Up Changes, Financial Times(February 6, 2009), p. 15; Michael Skapinker, Taking a Hard Line on Soft Soap,Financial Times (July 7, 2008), p. 12; Aaron O. Patrick, After Protests, Unilever Does anAbout-Face on Palm Oil, The Wall Street Journal (May 2, 2008), p. B1.

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