Corporation and Unilever Decentralized Structure
Why did Unilever’s decentralized organizational structure make sense from the 1950’s through the 1970’s? Why did this structure start to create problems for the company in the 1980’s?
Ans: Because then there was almost no competition in the markets Unilever was targeting, they mostly maintained the largest market share and there was probably not so much international influence from other multinationals. 1. The structure began to create problems for the company because influencing other multinationals (competitors like Nestlè and Procter & Gamble) started to offer :- * global brand products for cheaper price. * reduceing cost structure by consolidation manufacturing operation at a few choice location * Executing simultaneous product launches in several national market OR Unilever decentralized structure work against the company effort to build Global or regional brand which led the company into : * duplication in munufacturing * lack of scale economies * High cost structure Ques :2. What was unilever trying to do when it introduced a new structure based on business groups in the mid 1990s ? Why do you think this structure failed to cure Unilever’s ills ? Unilever want to drive down operating costs and speed up the process of developing... [continues] 2. A Decade of Organizational Change at Uniliver. Uniliver is one of the world’s oldest multinational corporations with extensive product offerings in the food, detergent, and personal care business. It generates annual revenues in excess of $50billion and a wide range of branded products in virtually every country. Detergents which account for about 25 percent of corporate revenues, include well-known name such as Omo, which is sold in more than 50 countries. Personal care products, which account for about 15 percent of sales, include Calvin Klein cosmetics, Pepsodent toothpaste brands, Faberge hair care products,
Ans: Because then there was almost no competition in the markets Unilever was targeting, they mostly maintained the largest market share and there was probably not so much international influence from other multinationals. 1. The structure began to create problems for the company because influencing other multinationals (competitors like Nestlè and Procter & Gamble) started to offer :- * global brand products for cheaper price. * reduceing cost structure by consolidation manufacturing operation at a few choice location * Executing simultaneous product launches in several national market OR Unilever decentralized structure work against the company effort to build Global or regional brand which led the company into : * duplication in munufacturing * lack of scale economies * High cost structure Ques :2. What was unilever trying to do when it introduced a new structure based on business groups in the mid 1990s ? Why do you think this structure failed to cure Unilever’s ills ? Unilever want to drive down operating costs and speed up the process of developing... [continues] 2. A Decade of Organizational Change at Uniliver. Uniliver is one of the world’s oldest multinational corporations with extensive product offerings in the food, detergent, and personal care business. It generates annual revenues in excess of $50billion and a wide range of branded products in virtually every country. Detergents which account for about 25 percent of corporate revenues, include well-known name such as Omo, which is sold in more than 50 countries. Personal care products, which account for about 15 percent of sales, include Calvin Klein cosmetics, Pepsodent toothpaste brands, Faberge hair care products,