The selected company to critically discuss the organization’s strategy is Unilever. It is a multinational company dealing with consumer goods, whose headquarters are based in London. This company sells over four hundred brands in 190 regions worldwide. The principal rationale for selecting Unilever is the availability of its vast network all over the world. Additionally, since the company holds a definite competitive advantage among its competitors, including Reckitt Benckiser, and P$G, it holds one of the largest consumer bases in its line of goods. Creating shared value implies the creation of economic values that address the needs and challenges of society (Crane et al., 2014). This can be done by redefining the productivity in the value chain, reconceiving markets and products, and local cluster development. The stakeholder approach also aims at creating mutual value and interests for all stakeholders. This company has considered aptitude growth resulting from a spurt in sales in the personal care section.
Creating Shared Value
Unilever sustains community organizations through the help of social capital for social sustainability. It can ensure the effective management of the organizations through the adoption of conservative use of the available resources and the attraction of the already available external resources. At the community level, Unilever aims to offer support at the retail level by offering expertise in the areas such as sustainable agriculture and even analyzing the lifecycle (Crane et al., 2014). This helps by reinforcing the relationship between the consumers and the company. Since the company is commanding a large market for its products in third-world countries, its products often face significant sustainability challenges. The business also aims to promote the customers’ well-being and health, thus saving many costs and improving the general environment (Donaldson & Preston, 1995). Health would be promoted by providing highly nutritious goods in a clean environment that presents the best disease-preventive measures. Notably, the environmental measures can focus on the mitigation measures of greenhouse gases and water treatment, as well as using waste products through recycling. This will help improve the general livelihood of the consumers, thus, guaranteeing them good health and productivity.
Similarly, Unilever company has realized that it cannot deliver a sustainable future on its own. Thus, they have decided to share their daily operations through the involvement of multiple stakeholders. This is through the acceptance that no business is an island, thus, helping it to create new networks. As well, the application of the sustainable development of the Unilever company involves the management of the available resources putting in mind the present and future generations; thus, through the availability and the sustainability of the current resources, the security of the current resources is assured through the health economic, natural, and societal systems of operation (Donaldson & Preston, 1995). Additionally, Unilever focuses on economic sustainability by running the businesses based on productive resources, which involves all the stakeholders since it holds the company’s future. The main difficulty involved is the distribution channel of the economic capital aimed to benefit society (Donaldson & Preston, 1995). In addition, incrementing the production levels to satisfy the dependent population would give the company a chance to undermine the sustainability processes since it advocates for material wealth obsession, competition amongst the companies, and resource extraction.
Stakeholder Perspective of Corporate Sustainability
Based on Archie Carroll’s theory, companies are seen to assume social responsibilities to the stakeholders. Similarly, stakeholders directly impact the success and performance of the business. The company’s stakeholders include consumers, suppliers, employees, communities, and investors. The company prioritizes these stakeholders depending on their importance to the business. As a significant firm in the global consumer goods market, Unilever utilizes corporate responsibility as a supportive approach to maintaining its position in the industry and sustainability of the business (Freeman, 2001). This company adopts a systematic strategy to fulfil its corporate social responsibilities. For instance, Unilever’s CSR puts the customers at the top of its production and distribution hierarchy. The stakeholder’s interests are focused on the quality of the products and the prices.
Similarly, it stresses the environmental impact of the consumer goods business. Consumers are significant because they determine the profit of the company directly. For instance, satisfied customers will increase the revenue of Unilever due to repeated sales. This company’s corporate responsibility strategy satisfies these interests through quality assurance and innovative processes for the diverse product mix (Freeman, 2001). This creates a compelling image to influence the consumers’ perception.
In Unilever company, the employees are considered the second priority in its corporate social responsibility strategy. This is because they have a direct impact on the consumer goods industry. They are much interested in career development and competitive compensation. In response to this, Unilever responds through high compensation that is competitive with the other employers in the labour market (Freeman, 2001). The holistic career development program includes the flexibility of the employees to work anywhere so long as they meet their responsibilities and general job roles. As a result, this reduces the employees’ travel, thereby ensuring corporate citizenship fulfilment.
Similarly, the investors are given the third priority in this company’s corporate responsibility strategy. For instance, if the company realizes much revenue and profitability, it will increase the investor’s satisfaction and confidence in the company. This will also lead to the company’s increased success in addressing its corporate citizenship. Notably, the program provides the suppliers with strategic plans to help them grow together with the company (Freeman, 2001). This also influences the suppliers’ business activities, thus maximizing the corporate citizenship benefits.
Besides, the communities are one of the leading players in the business’s success; their interests, including community development and environmental protection, influence how the consumers perceive Unilever company. For instance, the company gains positive consumer confidence through active community involvement. The Unilever Foundation, the leading corporate citizenship body, satisfies these interests. The Foundation plays a role in funding community programs, including nutrition, sanitation, and personal development. The stakeholder group provides positive feedback that helps boost the brand image and the corporate (Garriga & Melé, 2004). The resulting impact of this is the increased sales and attractiveness of the consumer goods from the company. Additionally, the increased market presence influences the company’s performance by using its brand image and popularity to address the community’s needs.
Sustainability Approach of Unilever
Unilever company primarily focuses on critical areas, including water conservation, greenhouse gas emissions, sustainable sourcing, and waste reduction. This is made possible through the involvement of the stakeholders and a variety of communities, thus, generating good profits for the company (Porter, 2013). This company’s entire portfolio and market have spanned based on the sustainability approach implemented in its operations. As of 2020, it had various goals with varying levels, including reducing environmental impact, enhancing livelihoods, and improving well-being and healthcare. In 2014, this company measured their sustainable living brands, consistently and continuously outperforming its average growth rate (Porter & Kramer, 2014). As well, Unilever has been able to avoid € 1 billion since 2008 through the improvement of energy and water efficiency in the factories, as well as using fewer materials resulting in less waste production. Besides, Unilever acknowledged the importance of teamwork in executing the USLP. This has been realized by working with NGOs, social enterprises, suppliers, and governmental organizations to enhance livelihoods and create opportunities for women through fighting for fairness in the workplace (Porter, 2013). Similarly, these entities help in building trust in their brands and business.
Unilever brought in new CEO, Paul Polman. He, in turn, introduced the Unilever Sustainable Living Plan (USLP). This strategy was aimed at helping one billion people in improving their health, having the environmental footprint of using and making Unilever products, and enhancing livelihood for those in the company’s value chain. After the CEO admitted that some of the ways this company adopted in doing its business had some problems, he then wanted to break the rules of the business, thus, wanting to connect the people to his new strategies (Porter, 2013). Therefore, in response to the problems he noted, he decided that he would create products that reduce the use of water. He realized that many businesses think about how to use the environment and society to be successful. Still, he thinks about how he can contribute to society and be successful. As the first step, he changed a third of the top executives and created the Unilever Leadership Executive team. He used this strategy to connect to the customers since he believed that Unilever was there for the consumers, not the shareholders.
Discussion On How Unilever Has Adopted the Shared Value
Unilever has been a pioneering and responsible business for an extended period. This can be dated back to the times of William Lever, who launched one of the most purposeful brands in the world, Sunlight Soap, approximately 100 years ago. Its goal is to strive to do more for this planet and society by enhancing people’s lives and providing high-quality products. Primarily, they are motivated to lead the channels in the future through capturing the eCommerce opportunity and pioneering innovative routes in the market. It has applied the levels of Shared Value, including redefining productivity, reconceiving products, needs, and markets, and enabling the local cluster development (Garriga & Melé, 2004). The company has been able to design products and services that address the needs of society, like safety, nutrition, environmental impact, living with disability, and even financial security. Some new markets have also been created by serving the needs of the underserved regions by redesigning the products and implementing different distribution channels (Garriga & Melé, 2004). Additionally, through self-reinforcement in economic growth, this often applies to places where the opportunity has been identified, and the masking is done by supplying the relevant product to that region.
In addition, the realization that businesses have the potential to be more effective than NGOs and governments in marketing has contributed to the realization of the solutions to social problems. The Snap Tax also provides low-income earners the needed access to tax preparation services through the phone and supports rapid refunds. Therefore, redefining the business is based on unsolved customer concerns and improving the consumers’ lives. This is often possible depending on identifying the customer groups that have been identified as poorly served (Garriga & Melé, 2004). Notably, developing a local cluster of suppliers and institutions will help improve the company’s productivity. Unilever has ensured that all the business-related benefits should be specific societal benefits as the expected outcomes for every product generated.
Discussion on how it has adopted a Stakeholder Perspective
The stakeholders’ perspective is based on three aspects, including normative, instrumental, and descriptive justifications. The descriptive aspect primarily examines the significance of each stakeholder group to the company. Often, it uses data to determine the management method’s effectiveness in achieving the company’s financial goals. Instrumental justification also considers the firms’ ethical relationship with the stakeholders, characterized by high levels of trust, information sharing and cooperation (Porter & Kramer, 2006). Also, normative justification notes that managers tend to pay much attention to the relationship between the key stakeholders. Thus, they should be given priority when making decisions.
Figure 1: A Stakeholder model of the corporation.
Source: https://academic.udayton.edu/lawrenceulrich/Stakeholder%20Theory.pdf
Figure 1 describes the stakeholders as a large corporation; thus, each is responsible for affecting the other in terms of duties and rights. The owners have a financial stake in the form of stocks, and bonds, on which they expect financial returns. The employees also have their jobs and livelihood as their stake; this is limited to their specialized skills, which are limited to the market. Additionally, the suppliers determine the business’s success for the raw materials, which help determine the quality of the final product. Notably, the customers, in turn, exchange the resources for the firm’s products (Porter & Kramer, 2006). They provide revenue to the business, which acts as the lifeblood of the business. Similarly, the local community plays a role in providing the right to build the facilities. The firm should ensure that it does not expose the local community to hazards due to its building facilities, including air pollution, noise pollution, or even disposal of toxic waste.
Conclusion
Unilever is faced with some challenges in providing quality goods and services, including rapid urbanization and population increase. If not closely monitored, they can be the potential causes of environmental degradation. The marketing agencies should impose the necessary fines on the companies that contribute to the high percentage of greenhouse gas emissions to the environment. The Unilever company has enough machinery to aid in designing suitable policies for preserving the socio-economic environment (Porter & Kramer, 2014). The educational programs should also be implemented to teach the matters associated with the environment to boost decision-making concerning the issues related to sustainability. The increasing demand for resources and human actions are the major contributors to the depletion of life’s wealth and sustaining the environment’s biological system. Through some human activities, significant damage has been caused to plants and animals, leading to the extinction of some species. Due to this, Unilever company has implemented some new strategies to help regulate the impacts caused by the production and marketing process (Porter & Kramer, 2014). As a result, it has adopted the shared value approach that incorporates both the community and the firms in developing environmentally friendly and hazard-free products. To accommodate all other companies, there is a need to develop assessment measures that apply to all other companies in the global market.
References
Crane, A., Matten, D., & Spence, L. (Eds.). (2014). Corporate social responsibility: Readings and cases in a global context. Routledge.
Donaldson, T., & Preston, L. E. (1995). The stakeholder theory of the corporation: Concepts, evidence, and implications. Academy of Management Review, 20(1), 65–91.
Freeman, R. E. (2001). A stakeholder theory of the modern corporation. Perspectives in Business Ethics Sie, 3(144), 38–48.
Garriga, E., & Melé, D. (2004). Corporate social responsibility theories: Mapping the territory. Journal of business ethics, 53(1), 51-71.
Porter, M. (2013). The case for letting businesses solve social problems. The case for letting businesses solve social problems. TED Talks. Obtenido de https://www. Ted. com/talk/michael_porter_why_business_can_be_good_at_solving_social_ problems.
Porter, M. E., & Kramer, M. R. (2006). The link between competitive advantage and corporate social responsibility. Harvard business review, 84(12), 78-92.
Porter, M. E., & Kramer, M. R. (2014). A response to Andrew Crane et al.’s article. California Management Review, 56(2), 149-151.
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