Reference no: EM132164784

Unilever Case study questions:

There is certainly was not shortage of view within the company, from those who were deeply committed to others more generally skeptical. To the former, this was the time to double down and make an ever stronger effort to achieve USLP’s objectives by 2020. Now that evidence existed supporting the business value of the sustainability agenda, they felt that management should push lagging parts of the business to increase the number of “sustainable living brands” in the portfolio.

To achieve that objective, they felt the new metrics offered an opportunity to evaluate and reward managers on their effectiveness in meeting USLP goals. Because this had previously been difficult to do, current evaluations and rewards were biased toward financial performance. But recently, parts of the organization had experimented with holding managers as accountable for their sustainability objectives as for their financial targets. Some felt it was time to expand that practice companywide.

However, others worried that because “strong headwinds” were slowing growth, shrinking margins, and depressing the stock price, the company should hunker down and show financial restraint. Their concern was that creating “sustainable living brands” typically involved significant upfront investment to shift the brand positioning and implement the product or process changes needed to deliver on environmental and social goals. They felt that the current environment did not support making such large investments that promised mostly long-term payoffs. In their view, this might be the time to scale back and acknowledge that despite the company’s best efforts, some objectives like reductions in GHG and water usage were beyond its reach.

Still others believed that Unilever should pivot toward its transformation agenda and focus on building external partnerships to support and amplify the company’s good work over the past four years. In this view, management should acknowledge that while Unilever would not meet its GHG and water usage objectives through internal efforts, its leadership in forging partnerships to reduce global deforestation could well achieve those goals through different means.

These were large and complex questions facing Polman and his ULE team. At a minimum, they had to decide what, if any, fine-tuning adjustments needed to be made in its USLP strategy. But they also recognized that Unilever could well be at a major inflection point in the program. The question was, where to next?

1. What actions should the company take now? Which of the three options identified at the end of the case would you recommend management take?

2. How would you go about implementing your recommendations?