17 Aug Competing through Sustainability

Read Case 8.3 Unilever’s New Global Strategy: Competing through Sustainability from your textbook. Read the follow excerpt and post your answer to the discussion question.

Case 8.3 Unilever’s New Global Strategy: Competing through Sustainability

Headquartered in London, Unilever was established in 1930 on the principle of “doing well by doing good” and, along with Nestle and P&G, went on become one of the world’s leading competitors in the consumer goods sector. In 2009 Paul Polman (a Dutchman) became Unilever’s new CEO and set about redefining the firm’s strategy to include a major commitment to sustainability. Despite outper-forming its competitors, Unilever’s sales growth in 2014 was its lowest in a decade, as demand in emerging markets had begun to shrink and growth in the developed world was depressed. Until 2014 Unilever had been able to success-fully deliver on both its financial expectations and sustainability commitments. Whether the firm could continue that delicate balance in light of a complex set of global challenges was now a major question. Although the firm’s results to date were very impressive, not all within the organization fully embraced its trans-formational initiatives.
Note: Exhibit 1 contains important financial performance statistics, 1995-2014, and Exhibit 4 is an abbreviated organization chart. Other exhibits concern the company’s values and priorities.

Question 5A: As Polson and his team considered the future direction of Unilever, they were called to consider three basic alternatives:

1. acknowledge that despite the firm’s best efforts, certain sustainability objectives were beyond its reach and scale back on such investments
2. double down and make an even stronger commitment to sustainability objectives (hold managers accountable)
3. pivot toward Unilever’s transformational agenda and focus on building external partnerships to support and amplify the firm’s work, thus achieving its goals through a different means

Briefly compare and contrast (discuss) the shorter- and longer-term benefits of each of these three alternatives.

Questio5B: Identify which of three alternatives you believe to be the best decision for Unilever. Defend your recommendation primarily in terms of its benefits to the firm and its stakeholders, but also share your thoughts regarding the challenges that it may pose.

To see an interview with *Paul Polman regarding sustainability challenges and change leadership, go to You Tube Yale Insights “Paul Polman, Unilever” Jan. 31, 2020 (8:30 min.)