The Organizational Behavior of Unilever
An organization is usually a complex social system formed with different individuals in order to achieve a specific task or perform a special role (Barnard, 1938) .As the various individuals play a key role in an organization, the organizational behavior is an science used to study the organization, people, organization-people relationship, structure as well as management in a special setting (Jonathan, 2005). Unilever, a multinational organization and fortune 500 company with headquarters based in Rotterdam and London, has attached great importance to organization behavior in managing the multinational company and its subsidiaries all across the globe (Unilever Global, 2013). It has done a lot in building an organizational structure to best facilitate the outcome of a strategy when putting the individual at the center of the structure. It has also noticed the importance of satisfying the human needs in order to spur their motivation. In the meantime, team building is considered as essential by Unilever to gather the wisdom of all individuals. Finally, how power functions within the organization and how to avoid conflict in exercising the power is considered. Still, many problems could occur because of the ever changing cultural environment within the multinational company. Unilever still have to be more flexible in using the organizational behavior to adapt to the changing business environment.
This paper will first briefly discuss some important concept in organizational behavior with regard to Unilever and relevant theories will be linked to the organizational behavior and human resources practice of Unilever. Based on the literature review of the concepts, a synthesis will be given and recommendations will be made to improve the organizational behavior of Unilever.
2. Literature Review
2.1 Organizational Structure
In an organization, an appropriate structure is needed to define the pattern of relationships of members within an organization. It is also needed to distribute the task and define the authority and responsibility within an organization.
2.1.1. Mechanistic structure VS organic structure
In specifying an structure for an organization, there are usually two types of structure, mechanistic ones and organic ones. The formal one is characterized by rigid systems of management, clear hierarchy, task specialization, defined duties, knowledge centered at the top of the hierarchy (Nicholas, 2010). The latter one enjoys the virtues of fluid and flexible management, continual redefinition of tasks, networked control and communication structure, knowledge dispersed through the organization (Nicholas, 2010).
In Unilever, the organizational structure is characterized by task specialization and defined duties in order to achieve the economies of scale. It has different departments like R&D, marketing department to fulfill separate roles. However, Unilever has also realized the importance of being more fluid and dispersing the knowledge through the organization. It has a network control and communication structure which could enable people of different departments to talk with each other and share their insights.
2.1.2. Centralization vs decentralization within Unilever
In building the organization structure, both centralization and centralization are taken into consideration. In an organization, the centralization is important to establish control and build economies of scale whereas decentralization could help manage the human resources according to the local culture and context (Goldsmith, 1985).
In Unilever, the centralization and decentralization practice is incorporated into the organizational structure. In order to make centralized decision for the overall development of Unilever, Unilever Leadership Executive is responsible for the overall development and strategy making of Unilever with Paul Polman as the CEO (Unilever Global, 2013). In the meantime, in order to delegate powers, the decentralization practice is incorporated into the business operation of Unilever. In the subsidence, the local managers could make independent decisions on the basis of different local cultures.
2.2 Human needs and motivation
In an organization, motivation has become the driving force to push the employees working towards a common objective. Thus, fulfilling the human needs and driving the motivation have become an important part of organizational behavior, especially the multinational companies and international organizations.
2.2.1 Maslow’s hierarchy of needs (1943)
According Maslow’s hierarchy of needs (1943), the psychological needs of employees contain such elements as safety, love, esteem and finally self-actualization. This theory pays more attention to the psychological needs of the employees. However, this theory receives much criticism because the ranking of needs is supported by little evidence (Wahba & Bridwell, 1976).
2.2.2 Herzberg’s two-factor theory
In Herzberg’s two-factor theory, the hygiene or maintenance factors include salary, job security, safety working conditions as well as a good interpersonal relations (Frederick, 1959) .The motivators or growth factors include sense of achievement, recognition, advancement and personal growth. Both factors should be considered by the human resources managers in an organization when trying to spur their motivation.
2.2.3 De-motivators and frustration
While the motivational force inside an organization could spur the motivation, it could also be blocked. It should be realized that the emotional needs of the employees should be considered and such factors as unfair treatment, pressure, lack of opportunities and detachment could be the de-motivators (Adelman,1995)..
2.2.3. The issue of human needs and motivation in Unilever
In Unilever, the importances of human resources have been recognized and the organization is seeking to realize the needs of employees through the intrinsic as well as the extrinsic motivation. The chief human resource manager Doug Baillie is seeking to motivate the employees and benefiting the organization at the same time. Working in Unilever enables the employees an attractive salary, good quarter dividends and good chances of promotion (Unilever Global, 2013). In addition, the safety concern and working condition is taken into consideration. With a safe and sound working environment, the human resources manager is seeking to push the morale of employees. For the intrinsic motivation, the manager is seeking to fulfill psychological needs of the employees. Unilever provides its employees with a platform to challenge themselves while creating added value for the company. The company rewards the employees and appreciates the good performance of their employees openly not only via the benefit system but also via the open reward.
Recognizing the needs of the employees and trying to spur their motivation has enabled Unilever to recruit a diverse range of employees that could create added values for Unilever. However, working in a fortune 500 company brings the employees tremendous pressure and a lack of security, an important intrinsic needs for many employees in developing countries like China. What’s worse, it should be realized that some de-motivators like detachment and time laps between time and effort could be a serious issue for quick developed companies like Unilever.
2.3 Team building and development
Group is made up of people who interact with each other and are aware of the existence of others socially and psychologically. In an organization, people cannot exist independent of others. Certain tasks can only be performed through the joint efforts of group members. However, tension and conflict could arise in a group, bringing challenges to the building of the team. Within an organization, building a collective team could really shape the organizational competitiveness. In a team, each member should be given a specific role in order to better finish the task. In the meantime, adequate communication is important to avoid the group conflict.
2.3.1. Belbin’s Theory of team roles
Belbin defined team as a group composed entirely of clever people or people with similar personalities (1981). Usually, successful teams within an organization consist of a range of roles undertaken by various members.
The strength and weakness of the nine team roles have been pointed out by the theory.
In Unilever, a divisive team role is given to each member of specific department in order to improve efficiency and achieve economies of scale. Using the team role theory, Unilever has tried to improve the strength of the team members in building a team.
2.3.2 Patterns of communication inside a team
In building a team, the communication is essential to promote group cohesiveness inside a team. Four patterns of team communication are known as wheel, circle, and all-channel and chain communication.
In Unilever, an all-channel type communication is undertaken to improve the group communication within Unilever. As an multinational company specialized in consumer goods, the research and development, product, marketing as well as financial members have to connect with each other in order to facilitate communication and target the needs of the consumers. However, this pattern of communication could sometimes lead to conflicts within the team as it is sometimes difficult to get a consensus on some issues.
2.3.3 Problems within a team
188.8.131.52 Social loafing
Ringelmann points out the tendency for individuals to expend less effort when working as a member of a group, defined as social loafing (1913). Thus, how to improve collectiveness while spurring individuality is a dilemma for an organization.
The process of decision-making can reflect compromise in an organization as it is difficult to get the consensus. As a result, the individual interest is sometimes sacrificed.
Some of intra-group problems are the issues to be solved in the team building process of Unilever. As the individuality is highly emphasized by the multinational company like Unilever, employees are all keen to pursue the self-actualization and the social loafing problem is rarely a problem. However, compromise has been a problem for Unilever. Usually, competition is encouraged and only the best practice could be adopted in the business procedure, meaning some initiative of other employees would be ignored and resulting in the destructiveness of self-esteem as well as the destructiveness of team spirit.
Power is an important ingredient within an organization as power has capacity or potential for control or influence over the behavior of other people with or without their consent (Mullins, 2010). Thus, power relations are an important part in an organization.
Authority is a form of institutionalized power, often linked with formal position. It is accepted in specific social context for the stability organization. Usually, the authority is perceived as legitimate and the members have to obey the authority.
In Unilever, the authority is the institutionalized power needed for the overall running of the business operation and the managing of the human resources. The senior managers in Unilever enjoy the authority to make final decisions after the negotiation of the group members and have the power to make decisions linked to human resources management.
The existence of power and control inside an organization also brings to conflict and conflict of interest within an organization. Simon & Oaks (2006) defines four “faces” of power relations as overt conflict, overt conflict (conflict never surfaces), apparent consensus (masked actual conflict as well as consensus (shared identity at some level). In an organization, it is best to conquer the conflict and achieve apparent consensus for the better cooperation between the team members.
In a multinational company where individuality is always valued and new opinions encouraged, it is really difficult to get the apparent consensus in Unilever. The negative impact of power relations where power is sometimes over-centralized should be addressed.
2.5 Ever-changing organizational culture
Both the regional and national culture could greatly impact the organizational behavior. According to the cultural dimensions theory of Geert Hofstede's, six dimensions of national culture that effect the behavior of individuals in organizations, known as power distance, masculinity and long term orientation (1984) .
As a multinational company, Unilever has business operations all across the globe, meaning that the organizational culture and structure has become more complex. Although the localization strategy has been adopted in the human resources management considering the culture difference, how to adapt to the changing circumstances and different culture in parent company and subsidiaries is still a problem for Unilever.
3. Conclusion linked to earlier analysis
Organizational behavior, a science used to study the behavior in a special setting, has become very important to the multinational companies in a complex business environment (Robbins, 2003). As a typical multinational corporation, Unilever has recognized the importance of OB and tried to come up with appropriate structures for the control of human resources and the finishing of the specific goals. Unilever combined the strength of the mechanistic and the organic structure in order to standardize the business operation while responding to the change. As the human is crucial to an organization, Unilever has tried to motivate the employees through the intrinsic and extrinsic channels. However, some of the de-motivators is not well addressed by the company to avoid negative impacts. In addition, Unilever realized that the power and coalition of team could bring about more potential. Thus, specific team roles are defined and adequate communication channels is made inside the company. Still, in a competitive environment, the conflict of interest has become a problem threatening the shaping of team spirit. Moreover, power and politics have become an important part of the business operation as it has the power on the group behavior. However, the power relations inside the company mirrors the compromise and conflict as it is almost impossible to get a consent during the decision making process, meaning that the interest of some parties is sometimes scarified. Finally, as the company has business operation all across the world, the ingredient of culture has made the context more complex.
4. Recommendation For Unilever In Terms of Organizational Behavior
4.1 Further motivate employees and avoid the de-motivators
As the human resources have become more important to the well-being and further development of the companies, trying to further motivate employees and avoid the negative impact of de-motivators like stress and sense of loneliness will be an issue for Unilever (Ishmael , 2008), . While encouraging competition, creating some activities for the group members and creating some sports and health facilities will be important to strength group cohesion and lower pressure within Unilever.
4.2 Avoiding team conflict brought by competition
Inside a multinational company, competition is encouraged and only the best practice will be adopted, sometimes bringing conflict within a team. Thus, Unilever has to further address the issue of team conflict and try to mend the relationship between the team members. The team members should be given more opportunities to interact with each other and communicate their ideas while shaping a healthy competition.
4.3 Avoid the negative impact of power politics
Although it is important to institutionalize power and create authority, it is important for Unilever to avoid the negative impact of power politics. Fairness should be the corner stone of the decision making process. The authority should be obeyed but the chances to overturn the wrongful practice of the top officials should also be given to the employees.
4.4 Cope with the multi-cultural environment
Operating in an multi-cultural environment asks Unilever to cope with the different local culture and adopt the localization strategy. When managing people from different culture, local managers of Unilever should cultivate the culture awareness when managing the employees and making related decisions (Greet, 2010).
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