Inside Unilever: The Evolving Transnational Company
Inside Unilever: The Evolving Transnational Connpany by Floris A. Maljers
The story behind one worldwide company's flexible organization-and the managers who make it so successful.
These days, Unilever is often described as one of the foremost transnational companies. Yet our organization of diverse operations around the world is not the outcome of a conscious effort to become what is now known among academics as a transnational. When Unilever was founded in 1930 as a Dutch-British company, it produced soap, processed foods, and a wide array of other consumer goods in many countries. Ever since then, the company has evolved mainly through a Darwinian system of retaining what was useful and rejecting what no longer worked-in other words, through actual practice as a business responding to be marketplace. But regardless of the process, Unilever has become a transnational company in tbe most basic sense: we think globally as well as act locally. The very nature of our products requires proximity to local markets; economies of scale in certain functions justify a number of head-office departments; and the need to benefit from everybody's creativity and experience makes a sophisticated means of transferring information across our organization highly desirable. All of these factors led to our present structure: a matrix of individual managers around the world who nonetheless share a common vision and understanding of corporate strategy. At Unilever, major product groups are responsible for profits in Europe and North America, and regional groups arc responsible elsewhere. Some of our brands, like Lipton Tea and LUX Soap, are known even in Albania and Cambodia - that is, even in countries where Unilever does not have its own industrial operations. In each of some 75 countries, we do business through one or more operating companies, with a total of about 500 companies in the Unilever group. In our case, "thinking transnationally" means an informal type
The story behind one worldwide company's flexible organization-and the managers who make it so successful.
These days, Unilever is often described as one of the foremost transnational companies. Yet our organization of diverse operations around the world is not the outcome of a conscious effort to become what is now known among academics as a transnational. When Unilever was founded in 1930 as a Dutch-British company, it produced soap, processed foods, and a wide array of other consumer goods in many countries. Ever since then, the company has evolved mainly through a Darwinian system of retaining what was useful and rejecting what no longer worked-in other words, through actual practice as a business responding to be marketplace. But regardless of the process, Unilever has become a transnational company in tbe most basic sense: we think globally as well as act locally. The very nature of our products requires proximity to local markets; economies of scale in certain functions justify a number of head-office departments; and the need to benefit from everybody's creativity and experience makes a sophisticated means of transferring information across our organization highly desirable. All of these factors led to our present structure: a matrix of individual managers around the world who nonetheless share a common vision and understanding of corporate strategy. At Unilever, major product groups are responsible for profits in Europe and North America, and regional groups arc responsible elsewhere. Some of our brands, like Lipton Tea and LUX Soap, are known even in Albania and Cambodia - that is, even in countries where Unilever does not have its own industrial operations. In each of some 75 countries, we do business through one or more operating companies, with a total of about 500 companies in the Unilever group. In our case, "thinking transnationally" means an informal type