The history and growth of Hindustan Unilever Limited
Introduction
Hindustan Unilever Limited is one of the fastest and largest Fast Moving Consumer Goods (FMCG) that is based in India. It was formed in 1933 but after merging with Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd., the name of the organization was changed to Hindustan Lever Limited in 1956. The company name was changed again in June 2007 to “Hindustan Unilever Limited”. The company is so big that it is touching the lives of every 2 out of 3 Indians. The major stake hold by Anglo-Dutch Company is around 67.28% (Purkayastha, 2013).
HUL established itself as a market leader in the consumer products by providing more than 20 categories with 700 million of the consumers using their phone. Around 18000 employees are working in the company currently whose headquarter is situated in Mumbai, India.
The mission of the company – “add vitality to life” inspired more than 16,000 employees including 1500 managers. The company was also ranked number one in the Asia-Pacific region (Young, 2017).
HUL believes that a business enterprise worth is also present in their service rendered to the society and community. Therefore, HUL always focuses on equality, health and hygiene education, women empowerment and water conservation.
HUL also launched an ambitious programme in 2001 named as “Shakti”. With the help of this programme, HUL is growing various opportunities for the rural women, which will improve their livelihood and standard of living (Majumder, 2009). This movement also includes Shakti Vani Programme based on health and hygiene education. Shakti programme has covered across 18 states in India with over 80,000 micro entrepreneurs.
Sustainable Development
The term ‘Sustainability’ is well ddescribed as the growth that satisfies the wants of today generation without negotiating the capability of future generations and this make a balance between the economic growth, environment protection and community well-being.
Sustainable development, an approach that appeared in the Brundtland Report for the first time in 1987 by giving warning of the negative environmental consequences of globalization and economic growth and various possible solutions are tried due to the problem caused by excess growth of the population and industrialization (Sachs, 2015).
Sustainable growth is among the biggest challenge that is faced by any business leader but this problem is facing by many organizations for a long time. In the past, the meaning of every organization making sense is – “time is money”.
It is necessary that a business must serve the society or community as it is giving them resources and materials used in the production and manufacturing.
The company’s mission and initiatives for sustainability
Sustainable development goals are the driver of business growth and sustainable development. The Sustainable Development Goals (SDGs) represents an ambitious vision, which needs to be rendered to the streets, companies and fields where people pass their daily lives (Sachs, 2015).
Against their sustainable targets, HUL has helped more than 480 million people by enriching their livelihoods with the help of training, employment and promoting human rights. Their action plan also helps in achieving health and well-being.
Considering environmental impacts of 2008, in 2015, Unilever plants sent 97% less total waster for disposal, abstracted 37% less water per tonne of production and emitted 39% less CO2 from energy (Brooks, 2011).
However, some big challenges faced by the company like many consumer products of the company are not able to reduce the environmental impact after leaving the factory. In addition, the water related with the use of their product also only fallen by 1% and the gasses as greenhouses related with consumer use of the product is risen by 6%.
In 2015, the company made UN Sustainable Goals (SDGs) which included many innovative strategies to address these problems but a change in the behaviour of consumer made it difficult for the company to take collective actions regarding the widening inequality and climate change.
Hindustan Unilever Limited focus on many areas of sustainable development like-
- No poverty and Zero Hunger.
- Quality in the education and Gender Fairness.
- Good healthiness and Well-Health.
- Clean water and Sanitation.
- Responsible consumption and production.
- Climate and Environment protection.
- Collaboration for the objectives.
- Harmony, Honesty and Organisations.
There are many factors, which makes the company manage the sustainable goals more efficiently. Hindustan Unilever Limited use collective action plans for achieving the sustainable development goals in an efficient manner (Randhawa and Ahuja, 2017). There strategies and plan always connected to the innovation, creativity and society.
- Strong Sustainability performance linked to growth– Unilever Sustainable Living Plan Summary report states that they are working in the value creation for their business, society and the environment (Adams, 2015). The strategy behind this is their driving growth, lowering costs, reducing risk and building trust. Sustainable Living Brands like Dove, Lipton and Hellmann’s are directly connected to the purpose of sustainable growth, which also connects to the objectives of USLP and accounted for nearly half of Unilever’s growth in 2015.
- Innovative approaches – The Company is adopting innovation approached for addressing various issues blocking the path of sustainable development. The Paris agreement and UN Sustainable Development Goals focus on building a global community, which will be good for the society as the company is working between the society only i.e. using resources of society (Griggs et al, 2013).
- Enormous opportunities – The CEO of their parent brand Unilever stated that – “2015 was proved to be a remarkable year for humanity and the planet” and this shows that the model of sustainable development cannot be termed as relevant but it is essential for the company. He also stated that the sustainable goals are the fuel of innovation, which will help the company in saving costs, recruiting and retaining the best talent. In addition, enormous opportunities exist for those who commit to taking action for the development (Epstein, Buhovac and Yuthas, 2010).
- Employees Well-Being – Human resource is a very important aspect for any organization as the talent and skills he/she possesses cannot be replicated by any other brand, unlike the technology and infrastructure (Hendry, 2012). The company want to encourage employees to live healthier and safely both at work and outside it. The reason behind this is that healthier employees are more motivated and productive which can meet company objective efficiently. This will also lead to the creation of leadership and team spirit, which will be proved beneficial for the company.
- Stakeholders Engagement – In a company, Stakeholders engagements help in the decision-making and delivery of USLP commitments, which helps the business in the strengthening of relationships and succeeding in the business (Spitzeck and Hansen, 2010).
- Environment – It makes business sense to minimize the risks in the business by protecting sustainable sources of the supply of raw materials and cutting costs through decreasing packaging material and all this will leads to higher manufacturing efficiencies (Chathoth and Olsen, 2007).
- For making and building a better world – With the help of their sustainable development plans, the company want to inspire every brand in the county so that to make a positive impact on the society.
Hindustan Unilever Limited (HUL) has shown strong growth and development under the Unilever Sustainable Living Plan (USLP) in 2016. All the initiatives related to USLP are aligned to HUL to one or more SDGs.
The planning and strategy made by the company are all inter-related with the goals of sustainable development. The plan is made explicitly as the focus area is diverse in many fields like –
- For achieving the objective of improving health and well-being, a unique market based entrepreneurial model is launched by the company named as Domex Toilet Academy specifically for improving access to sanitation (Pani, 2018). They have also planned a technology named PureIt water purifiers for making water safe, accessible and affordable to the millions of people. It was made at a running cost of just 30 paise per litre without the process of boiling or electricity. They have launched a programme named as “Swachh Aadat, Swachh Bharat” (SASB) and the objective of this programme was to promote good health and hygiene practices.
- For achieving the objective of reducing environmental impact, the company had made plans to use innovative techniques in reducing the miles of their products travel to reach to the market. Some other initiatives of the company include installation of solar panels on office terraces, application of cool roof paint to reduce penetration of heat in to the office and this all will leads to reduce in the cost of electricity (Santamouris, Synnefa and Karlessi, 2011). They also have rolled out many environment friendly freezer cabinets using hydrocarbon (HC) refrigerants. For reducing the employee travelling and environmental footprints, the company used video conferencing and tele-presence facilities at many places. The company reduces the use of water in the process of manufacturing by 53% as compared to the 2008 baseline. This reduction can be possible with their proactive plans like rainwater harvesting and cooling towers. Some other initiatives and plans were – waste reduction initiatives in the office, purchasing 100 percent certified palm oil (Schouten and Glasbergen, 2011), sustainably sourced of tomatoes ketchup for Kissan ketchup, etc.
- For enhancing the livelihoods, they have made various plans, which include creating a framework for fair compensation, reducing workplace accidents and injuries, provide equal opportunities for the women, career choice programme, campus facilities, forward focus leadership, safety training and skills and other plans for improving the income of small-scale retailers. The company also launched ‘PRABHAT’ programme for the contribution to the development of local communities (Gambhir et al, 2017).
Most important Sustainable Development Goals
Hindustan Unilever has a plan consisting of three big goals need to achieved targeting on environmental, social and economic aspects in the value chain. These goals need to be achieved by the year 2020 and 2030 respectively (Ahlstrom, 2010). They will continue in these areas with the help of partnership and collaborations so that to drive the biggest change and promote their SDGs.
The visionary program “Shakti” for promoting women empowerment and hygiene education
These three major goals for the growth and sustainability show that USLP drives value for the business. Tshese goals are also showing concern towards the corporate social responsibility and corporate government, which is a compulsory activity of the business enterprise in order to sustain.
- More growth– With the help of sustainability, more innovation opportunities will be evolved, the new market will be opened, and make HUL connect with the consumers in new ways. As per the survey, more than 50% of customers prefer those brands that are more sustainability and thinks for the society (Young et al, 2010). Hindustan Unilever Limited is well place to capitalize on this growth opportunity.
- Lower costs – The Company can lower down the costs by cutting the waste and using resources efficiently and thus improve the margins. Like, HUL is avoiding energy cost in their factories of over €490 million since 2008by using less energy. In addition, they have avoided a cost of over €260 million in the similar period.
- Minor threat – As HUL working with the sustainability model, it helps them against the risks related to long-term sourcing of raw materials and climate change. They were also able to sustainably source their agricultural raw materials of around 56% by 2017 (Slavin, 2018).
- More trust – As HUL business model is aligned with the sustainability, the relationship with the customer are more tightly strengthened that help them in maintaining value with inspiring the company current and future employees. Like, in 2017, they have preserved their position as the Graduate Employer of Choice in the sector of FMCG among 44 of the 60 countries they recruit from.
For achieving any objective or goals, an organization needs to follow a set of procedures and innovative strategies in the alignment of the goals, so that they can be achieved effectively and efficiently. Some proposed strategies are given below for the above-mentioned sustainable development goals. These are –
- The SDGs goals seem to be representable as a shared goal as the time gap is very large i.e. 2030. As the business environment is influenced by various factors like consumer behaviour, resource depletion and social factors – there is a requirement of collaboration with other business and the government agencies, which helps in the proactive role through innovation.
- For achieving the goals, Hindustan Unilever Limited need to use the 5-step approach mentioned in the SDG compass (a guide created for the companies). It is necessary that the companies to actively shape their sustainability strategies in line with the 2030 objective and targets. The negative impacts also need to address. The five step process is –
- For explicitly understanding the SDGs goals, the company need to full respect the human rights so that the barriers to the global development can be removed (Cingranelli and Richards, 2010). It will also help in addressing megatrends like climate change, depletion of resources, migration and urbanization. In a nutshell, it is difficult to understand SDGs goals alone, as various factors like drivers of innovation, sources of finance, and engines of economic growth and employment play a major role.
- Various essential elements are necessary to bring parallel with the SDGs like aligning with the civil society and public sector so that to improve the system and share knowledge, support for smart CSR so that to an emphasis on most weak populations with superior products and services (Guerry et al, 2015).
- Cooperation across sectors and geographic can also promote common value emphasizing the significance of business developing local clusters of associates for the purpose of profit suppliers, non – profit, local government, academies) to endure more open and transparent markets. The concept of common value should be extended to connect greater cross sector association moving beyond local groups to a national or even regional cluster approach.
In any organization, after the implementation of the strategies, the management evaluate these strategies based on appropriate targets and indicators. The management of the Hindustan Unilever Limited require to take periodical survey i.e. may be in every 3 months with the public, employees and stakeholders so that appropriate result can be analysed. This will help them in gathering relevant data and information about the success of their plans and strategies (whether explicitly implemented or not) so that further improvement can be done in a proactive manner.
The management team of the HUL can also raise a survey with the help of a social poll including Facebook, Twitter, Google + and LinkedIn. As due to the presence of a large number of audience in the social life, it can prove to be a cost effective and reliable approach to gather the information (Davidov, Schmidtand and Schwartz, 2008).
Some of the management approaches like the setting of KPA i.e. Key Performance Area and KPI i.e. Key Performance Indicator can be used theoretically in alignment with the targets and indicators (Yoon, Shin and Lee, 2018)
Application
To the director,
Hindustan Unilever Limited,
September 31, 2018.
Hello Sir,
I am a third-year Harvard Business School student and want to present myself as a consultant position for Work Integrated Learning programme at your company. My learning experience with the various NGO helps me to understand the concept and approaches related to the sustainable development and growth, CSR and the importance of human rights.
According to my understanding, with the help of sustainability development, when an individual or organization meets their today needs without negotiating the requirements of the upcoming generations and thus ensure all over development in the society. The focus of sustainable development is on improving livelihood of people, reducing environment impact and sustains resources from depletion.
In my opinion, every organization needs to do something good for the community life and the society. The actual reason behind this statement is that society gives many elements (resources and people) to the organization through which they may profit and this is the duty of the company to do something well for the society.
HUL’s innovative strategies for achieving the Sustainable Development Goals
Myself as a consultant, it will be my duty to promote high standards, transparency, effectiveness and accountability among the management of your company.
Before applying as a role of consultant, I had made some research that shows what practices are going on related to the sustainable development in your company. I can confidently say that I am happy to be a part of your company as both in the role of employee and customer i.e. as I prefer your brand over the others due to quality products made without much harming to the environment as we as your contribution towards the society.
After analysing your annual reports, it can be stated that your sustainable development goals are stand on three pillars includes improving well-being, reducing environment impact, and enhancing livelihoods. I am impressed and also would like to contribute my knowledge which I had gained in my previous NGO so that to promote more efficiency in the development of sustainable development goals. I want to present a suggestion like for such a big company as yours, to achieve the sustainable development target, it is necessary to do partnership and collaboration with the other companies an economy of scale can be achieved through joint goals and objectives. It will also lead to more growth and trust with lower risks and costs. In many organizations, the consultant role is of a follower but I want to establish myself in your company as a leader who will contribute more explicitly.
I firmly believe that I will be a good fit for your company culture. I am excited to work for your company, as it is one of the top most FMCG in my country. Thank you for your time and attention.
Your Faithfully,
(Sign)
XYZ.
References
Adams, C.A. (2015). The international integrated reporting council: a call to action. Critical Perspectives on Accounting, 27, pp.23-28.
Ahlstrom, D. (2010) Innovation and growth: How business contributes to society. Academy of management perspectives, 24(3), pp.11-24.
Brooks, J. (2011). Unilever achieves zero waste to landfill at UK sites. Available from https://www.packagingnews.co.uk/news/unilever-achieves-zero-waste-to-landfill-at-uk-sites-12-09-2011 Accessed on 31 September 2018.
Chathoth, P.K. and Olsen, M.D. (2007) The effect of environment risk, corporate strategy, and capital structure on firm performance: an empirical investigation of restaurant firms. International Journal of Hospitality Management, 26(3), pp.502-516.
Cingranelli, D.L. and Richards, D.L. (2010) The Cingranelli and Richads (CIRI) Human Rights Data Project. Hum. Rts. Q., 32, p.401.
HUL’s commitment to partnerships and collaborations for achieving sustainable development goals
Davidov, E., Schmidt, P. and Schwartz, S.H. (2008) Bringing values back in: The adequacy of the European Social Survey to measure values in 20 countries. Public opinion quarterly, 72(3), pp.420-445.
Epstein, M.J., Buhovac, A.R. and Yuthas, K. (2010) Implementing sustainability: The role of leadership and organizational culture. Strategic finance, 91(10), p.41.
Gambhir, V.K., Majmudar, N., Sodhani, S. and Gupta, N. (2017) Social Return on Investment (SROI) for Hindustan Unilever’s (HUL) CSR initiative on livelihoods (Prabhat). Procedia computer science, 122, pp.556-563.
Griggs, D., Stafford-Smith, M., Gaffney, O., Rockström, J., Öhman, M.C., Shyamsundar, P., Steffen, W., Glaser, G., Kanie, N. and Noble, I. (2013) Policy: Sustainable development goals for people and planet. Nature, 495(7441), p.305.
Guerry, A.D., Polasky, S., Lubchenco, J., Chaplin-Kramer, R., Daily, G.C., Griffin, R., Ruckelshaus, M., Bateman, I.J., Duraiappah, A., Elmqvist, T. and Feldman, M.W. (2015) Natural capital and ecosystem services informing decisions: From promise to practice. Proceedings of the National Academy of Sciences, 112(24), pp.7348-7355.
Hendry, C. (2012). Human Resource Management. New York: Routledge.
Majumder, I. (2009) ” SHAKTI”: A Strategic Marketing Approach of FMCG Giant, HUL-Enabling a Journey towards Business Excellence in the Era of Globalization. Indian Journal of Marketing, 39(9), pp.3-10.
Pani, P. (2018) Domex launches toilet academy. Available from https://www.thehindubusinessline.com/companies/domex-launches-toilet-academy/article23152116.ece Accessed on 31 September 2018.
Purkayastha, D. (2013) Unilever Offers $3.2bn to Boost Stake in Indian Unit. Available from https://www.ibtimes.co.uk/unilever-increase-stakes-open-offer-indian-arm-486830 Accessed on 31 August 2018.
Randhawa, J.S. and Ahuja, I.S. (2017) 5S–a quality improvement tool for sustainable performance: literature review and directions. International Journal of Quality & Reliability Management, 34(3), pp.334-361.
Sachs, J. (2015). The Age of Sustainable Development. New York: Columbia University Press,
Santamouris, M., Synnefa, A. and Karlessi, T. (2011) Using advanced cool materials in the urban built environment to mitigate heat islands and improve thermal comfort conditions. Solar Energy, 85(12), pp.3085-3102.
Schouten, G. and Glasbergen, P. (2011) Creating legitimacy in global private governance: The case of the Roundtable on Sustainable Palm Oil. Ecological economics, 70(11), pp.1891-1899.
Slavin, T. (2018). The FMCG giant reveals that its most sustainable brands grew 46% faster than the rest of the business and delivered 70% of its sales growth last year. Available from https://www.ethicalcorp.com/sustainable-living-brands-still-fuelling-unilevers-growth Accessed on 31 September 2018.
Spitzeck, H. and Hansen, E.G. (2010) Stakeholder governance: how stakeholders influence corporate decision making. Corporate Governance: The international journal of business in society, 10(4), pp.378-391.
Yoon, B., Shin, J. and Lee, S. (2018) Technology assessment model for sustainable development of LNG terminals. Journal of Cleaner Production, 172, pp.927-937.
Young, J. (2017) Unilever’s Vision Statement & Mission Statement (An Analysis). Available from https://panmore.com/unilever-vision-statement-mission-statement-analysis Accessed on 31 August 2018.
Young, W., Hwang, K., McDonald, S. and Oates, C.J. (2010) Sustainable consumption: green consumer behaviour when purchasing products. Sustainable development, 18(1), pp.20-31
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
