Stakeholder Management And Engagement: A Case Study Of Unilever

About Unilever

As per Hörisch, Freeman and Schaltegger(2014), stakeholder’s management has gained immense significance in management of business management and the importance of stakeholders in the operation is indisputable. The term refers to the management of stakeholders so as to ensure benefit of all them. This helps business organisations to gain prolonged support of stakeholders. Stakeholders can be individuals or groups, but all of them play tremendous role in ensuring growth and sustenance of business operations in the market. In fact, the stakeholder management has emerged as a core business strategies which advances and gains shape. The stakeholders’ engagements play far more significant roles multinational companies compared to small firms. This makes it important to maintain a continuous strong communication with the stakeholder groups. The paper would explore this engagement of stakeholders through the lenses of one of the largest fast moving consumer goods marketer in the world, Unilever.

Unilver is one of the world’s oldest and largest multinational fast moving consumer goods marketing companies. In fact, according to an article published by the China Daily, Unilever occupies the fourth position internationally behind PepsiCo, Procter & Gamble and Nestle AG (chinadaily.com.cn 2018).The company has its headquarters in London, the United Kingdom and Rotterdam, Netherlands. Unilever is a public limited multinational company primarily listed on London Stock Exchange. Unilever adopts various business models to function in the global market like export, joint venture, acquisition and merger and wholly owned subsidiaries. The British-Dutch consumer giant functions in its potentially important host countries like the United States of America and India through its wholly owned subsidiaries which are also public limited companies listed on the top stock exchanges like NYSE and NSEIL. The graph below shows that Unilever holds a high position in the share market and enjoys a formidable capital base.

Unilever along with its wholly owned subsidiaries own some of the top brands in the global market like Lux and Axe. The product line of the company consist of food and drink, home care, personal care and water purifier.It exports products in countries where it has no direct presence. Thus, Unilever through its diverse products serve millions of customers around the world both through its subsidiaries and channel partners. The management of the company is helmed by Paul Polman, the present CEO. The wholly owned subsidiaries function under the leadership of their individual management which function under director of the apex management. The company is one of the top employers in the world and works with several governments. The company employs around 165000 employees and bears an expenditure of € 6712 million globally. The company earned a profit of €8857 million while its net profit is €6486 million in the year 2017 (unilever.com 2018). Unilever besides earning an immense profit also promotes to the growth and development of societies around the world through its corporate social responsibilities. The main markets of Unilever are Europe, Asia-Pacific, Americas, Middle East and Africa where some of the subsidiaries like Hindustan Unilever rule their respect markets making huge profits on its behalf (bloombergquint.com2018).

Stakeholders of Unilever and their impact on the company

The above discussion about Unilever brings into light the several stakeholders both groups and individuals. The following table would enlist the stakeholders including the ones mentioned and the ones not mentioned.

According to Mansell(2015), stakeholders refer to groups and individuals which effect the operations of business organisations. The stakeholders’ theory mention that the business organisations should ethically and morally operate towards ensuring benefitting the stakeholders. Bridoux and Stoelhorst (2014) further contributes to this opinion of Mansell (2015). They mention that business organisations are responsible to the stakeholders because stakeholders are capable of boosting or devastating their business operations with their decisions. For example, as per Chavez et al. (2016) customers are capable of impacting the revenue generation of the multinational companies like Unilever. The company uses a part of the revenue to pay dividends to investors for their investments. Unilever enjoys high share index in the stock market and thus canraise huge capital to support its global operations (londonstockexchange.com 2018).Davcikand Sharma (2016) mentions that high revenue generation by companies act as a security to investors. Thus, it can be inferred from this statement that the customers do not only influence the revenue generation of Unilever but also its capital generation. Fornell, Morgeson and Hult(2016) point out that the investors on the other hand are capable of influencing the revenue generation of Unilever or any other company. The investments from investors form the capital base of the companies which catalyse their business operations like production of goods and marketing. Thus, in this respect it can be mentioned the business organisations require to satisfy both the customers and investors.

Hörisch, Freeman and Schaltegger (2014) mentions that business organisations like Unilever is required to manage the stakeholders efficiently and ensure their benefits.Mok, Shen, and Yang(2015) in this respect point out a very important paradigm of the stakeholder management theory, the conflicting interests of the stakeholders. For example, the investors expect the companies to allocate maximum amount of revenue towards production of goods while the investors on the other hand expect the multinational companies to give them a big share of revenue as bonus and dividends on shares. Once, the government expects the companies to pay immense amount of taxes while the multinational banks encourage the firm to reinvest their capital which boosts their own revenue generation (Krüger, Rösch and Scheule 2018). Apparently the interests of the stakeholders are contradictory. However, in reality loss of support of stakeholder can result in loss of support of the other stakeholders as well. Hillebrand, Driessen and Koll (2015), mention that this pressure of stakeholders on organisation necessitate the latter to manage the stakeholders efficiently. For example, as Sharma (2016) points out customers impact Unilever by purchasing its products and generating revenue for the company. The company uses a part of the revenue to pay dividends to its investors. Thus, support of customers go on to earn support of investors for the company. Thus, efficient management of stakeholders is very important for multinational corporations like Unilever to enjoy perpetual market leadership and growth.

Hillebrand, Driessen and Koll (2015) mention that management of stakeholders is necessary for the very sustenance of organisations. This necessitate them to identify the stakeholders into specific categories to be able to manage them efficiently. Handfield et al. (2015) mention that stakeholders of business organisations like Unilever can primarily be divided into internal and external stakeholders. The apex management, the middle level managers like the project managers and the lower level employees are internal stakeholders. The apex management form strategies and policies. The managers lead their respective departments according to these strategies. The lower level employees follow the instructions of the apex management and the managers. Eskerod, Huemann and Ringhofer (2015), mentions that these internal stakeholders play significant role in operating the company. Thus, the companies like Unilever manage employees and managers by offering them training to improve their efficiency. Similarly, the external stakeholders like government and customers play significant roles in impacting the operations of the company. The government and financial institutions are the key stakeholders which make policies which apply to the company. Dodgson (2018) mentions in this respect that customers are important stakeholders who are capable of impacting the strategies of the company. Thus, it can be inferred from the discussion that MNCs should identify and manage stakeholders efficiently.

Binder (2016) mention that stakeholders play a very important role in commencement and success of the projects. He further points out that global companies execute multiple projects simultaneously like manufacturing and new product development. Thus, the project managers in these projects, the employees and the apex management play significant role. Again, the government and customers also play important roles. For example, the MNCs like Unilever operate in hundreds of countries. Thus, for companies like these the host governments play significant role.

The multinational companies like Unilever as per Muller (2017) require to predict the behaviour to be able to manage them efficiently and meet their demands. Agnihotri et al. (2016) in this respect that business organisations would require to communicate with the stakeholders on daily basis to gain knowledge and satisfy them. An effective communication strategy with stakeholders would enable Unilever to predict their behaviour and form appropriate strategies.

The management of Unilever is always dedicated towards the purpose of making the living place a sustainable commonplace and engages in the work partnership with a wide range of different kinds of stakeholders. A partnership or bond is created between the management of the company and with that of the shareholders (Fraile Jiménez and Delgado 2017). The shareholders may include the likes of a wide range of NGO’s, investors, customers, consumers and suppliers. The involvement with that of the shareholders helps the organization to manage the different complex functioning of the business. Stakeholder engagement is one of the most important part of the Unilever sustainable Living plan or (USLP). The following plan also underpins the external advocacy and joint working with different Governments of different nations where the company has a presence (Jurietti Mandelli and Fuduri? 2017). The management of the company depends upon the transformational change that seeks to change the ideology of the business. The mentioned company in the following assignment follows a set of policies for transparency and an effective engagement. They are as follows;

The reputation for carrying on business with proper form of integrity and respect for the others and the involvement of the different kinds of the brands and people. The code of business Principles and Code Policies underpin how the management of the company interacts with the organization’s stakeholders and other forms of business partners. The code policy on the engagement of the external includes the likes of the two most important sections that cover contact with the government of the country where the business has its presence and the regulators or the NGO’s (Pronk et al. 2017). It also involves the likes of the political interventions and political donations. The following states that only the authorized and expert employees who are trained in a proper manner can engage with the different groups like the ones mentioned earlier. The interactions must be conducted by them in different ways like;

In a transparent manner with honesty, integrity and openness

In accordance with the values of Unilever

In accordance with local as well as International Laws

On the other hand the employees of the company must;

Take all kinds of proper and efficient steps to ensure the truth and accuracy of the different kinds of information

Maintaining a report of all kinds of contacts and interactions that happens with the stakeholders within and outside the workplace

Must be honest and integrated while disclosing the names, the name of the company and other kind of basic and Important information

As mentioned earlier, the company engages with a huge range of stakeholders daily to fulfill the different kinds of needs of the company and keep the stakeholders updated about each and every kind of situation and happenings. This helps the organization to attain a proper form of value chain and also attain a proper and efficient sustainable goal for the company. Some of the engagement strategies with different range of stakeholders are mentioned below;

The engagement with the governments of the country where the company has its business forms the most important part of the business (Jurietti Mandelli and Fuduri? 2017). The policies and procedures are discussed with the Government and ultimately a proper policy is curved out by such discussions. Apart from this the direct engagement with the stakeholders with prior permission from the Government is also another way of a sustainable engagement with the Government (MacQueen et al. 2015). However the management of the company abstains itself from supporting any particular political party and also does not sponsor or invest in any kinds of political campaigns. The company also publishes its annual reports and accounts which help them to be free from any sort of controversy from the legal and government side.  

The engagement with different forms of NGO’s is utmost necessary for the management of the company to engage in a variety of CSR initiatives (Melton Damron and Vernon 2017). The engagement with the NGO’s also helps the organization to move towards a more sustainable future and the formulation of an equally efficient sustainable plan that will be necessary for the survival of the industry in times of turbulence.  

A large number of suppliers are involved in the day to day working of the mentioned business and thus the organization generally succeeds in achieving success in the market where they operates. The supplier also helps the organization to innovate and design totally new kind of products that are useful for the coming future (Fraile Jiménez and Delgado 2017). The suppliers are brought under an umbrella that helps them to engage with the company in an efficient and effective way.

The engagement of the company with the customers is another important step towards the development and the sustainability of the organization. The main motive behind the engagement of the organization with the stakeholders of the organization is to make the most of the marketing and promotional techniques to attract more and more customers to the organization.

Unilever’s digital social media platform enhances collaboration by means of;

Providing the marketers of the firm the access to the latest Unilever knowledge, people and tools and also allowing them to participate in different kinds of discussions and share the best practices examples across the business organization

To provide a set forum for the support and collaboration between the central and local teams and between the Unilever marketers and other kind of agencies

Unilever is one of the biggest spenders on marketing and social media in the world. It invests a huge sum of money of close to $8 billion each year to communicate its brands to the consumers and the customers across the globe (Banks et al. 2016). Some experts have the belief that the organization entirely controls the media and the advertising industry alone. The social media is used by the mentioned company by means of latest marketing techniques like graphics and 3D marketing and many more as such. Some of the features of such kind of marketing by the organization are as follows;

People Centric Approach- The main aim of the management of the company to use social media is directed towards the people or the customers of the organization. The strategies of the organization are totally directed towards the people. The experts controlling the different social media channels of the organization generally interact with the customers and try to address the different problems with the products.

Mix up of the Global and Local Media- The mixing up of the local and the international strategies is one of the most important elements of the business. Unilever has partnerships with both international as well as local companies that help to develop a good communication strategy and frameworks for the organization.  

Media Neutral Planning- Unilever has been recently changing the media strategy to reflect the “Omni-Channel world”. The planning of the organization is completed on a “media-natural basis” that starts with the creative insight and target audience, and building up a strategy from that point.

Demanding more from the Agencies- Unilever possesses one of the biggest contributing amounts to different social media policies. One of the examples is the “mediapalooza” where the management of the company invested a huge amount of $20 billion in different forms of media agency business.  

Innovation through Partnerships- The Company has recently entered into a new partnership with VICE media and has also launched a new female focused video channel has created waves in the industry. The content channel that promises to give the mentioned organization the chance to push different products especially beauty and personal care products to a lots of different individuals.

Keeping ahead of the curve- Unilever is among the selected group of companies that implemented the different latest technological advancements of the organization. The foundation program of Unilever helped them to gather the much needed pace to make the most of the organization (Banks et al. 2016). The company prides itself of being ahead in the curve. The main motive of the organization is to provide the world with new ideas and innovations that helps them to stay ahead of all the rest of the companies and its competitors in the market.

Unilever uses social networking sites like YouTube, Twitter and Instagram to promote its products. The multinational consumer manufacturer uses social networking and digital marketing platforms to not only advertise its products but also sell them. The visitors on the official website of the company can gain complete information about the products and can order them online. Unilever aims to provide appropriate and accurate product information on its social networking platform. The MNC does not use distorted and unrealistic statements and models to promote its products. It does not use schools as a part of its social media promotions and promotes healthy habits among children like washing hands before meals on its social media promotions (unilever.com 2018). This strong yet ethical social media strategy enables Unilever to access to billions of consumers across the world on computers, smart phones and tablets.

According to, Banks et al,.(2016) Unilever implements a systematic and well calculated strategy to fulfill its different kinds of stakeholder commitments and CSR initiatives. The following strategy also supports the company’s citizenship ideals, especially with regard to the satisfaction of the expectations and the expectations of the different customers. Business sustainability is also maintained through the different kinds of strategy (Andriof et al. 2017). On the other hand Fraile Jiménez and Delgado (2017) has stated that, CSR prioritization helps top put the customers of the business on top rather than any other commitments. Such corporate responsibility strategy addresses the interests of the following kinds of stakeholder groups. The importance of the Unilever’s consumer goods business is as follows;

Consumers- The CSR strategy of Unilever provides the most priority to the consumers. These stakeholder interests are focused on product quality and price as well as the environmental impact of the consumer goods business. The satisfied consumers of the industry increase the consumer’s revenues from repeat sales. The company’s strategy is designed in such a way that it satisfies the needs of both the organization and the customers.  

Employers- The Company considers the employees as the second priority in its CSR strategies and always provides first priority to customers. This is because the company mainly deals with the different kinds of consumer goods. The management of the company addresses the different kinds HR policies to make the most of the business.

Suppliers- The organization includes the suppliers in its corporate responsible strategy. As stakeholders, suppliers have interests in profitable business with the company. The stakeholder group is significant in affecting the business capacity of the mentioned company. The program satisfies supplier’s interests through different kinds extensive collaboration that supports Unilever’s and suppliers growth.

Communities- Apart from the stakeholders, the different communities are also involved in the strategic set up of Unilever. The group of stakeholders or the community of stakeholders has a significant influence on the community development process of the organization. The management of the company ensures to create different kinds of community fund that are needed for the creation of a better bonding of the organization and the stakeholders. The meetings and conferences between the stakeholders and the management of the organization helps to curve out new kinds of feedbacks that is helpful for the betterment of the organization and also improves the organizational and strategic performance of the mentioned consumer goods company.

Investors- The investors are the last but never the least in the list of preferences. Though being the third among the preference list they are considered to be one of the most influential elements in the business as because the investors are the one who supply goods and capital to the business and ensures the smooth running of the organization. However according to, Andriof et al,.(2017) Unilever’s intensive growth strategy, process innovation, key market characteristics and other similar elements.

A thorough analysis of the total report suggests the importance of Stakeholder Management and also highlights the necessary elements that are needed for the proper implementation of the Stakeholder engagement strategy in the business. Unilever has been one of the successful companies in the market and the proper implementation and use of the right kind of strategies is useful for the success of the business in the market.  

Conclusion: 

Stakeholder Management is at the centre of a firm’s CSR strategy. Stakeholders have to be strategically engaged and managed for the success factors of any kind of project and CSR for that matter. All kinds of stakeholder engage with the organization to receive one benefit or the other and derive the benefits which are worth their time and effort. The following study has shown that to be a guide to maintain a professional stakeholder management for CSR, which can be used by the other kind of companies especially by those in the sub-region due to similar socio-economic climate. The stakeholder management thus stands out to be one of the most important elements in the success of Unilever. An effective and efficient stakeholder management is key to the success of the business.

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