A Decade of Organizational Change at Unilever
1. Decentralization was a source of strength for Unilever. The company create basis of subsidiary companies in major national market. Each market were responsible for production, sales and distribution of products in that market. Example western Europe had 17 subsidiaries in the early 1990’s. a. Different national market, Profit center and accountable for its performance b. Local managers were allowed to match product offerings and marketing strategy to local tastes and preferences to fit the prevailing retail system. 2. which were responsible for production.
3. make sense in the 1950s and 1970s for Unilever because Ques: 1. 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.
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 and...
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