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1.

Introduction

Organizing is what you do before you do something, so that when you do it, it's not all mixed
up. (Milne, A.)Organization is one important element of the management process. It is next
to planning. In management, organization is both the process as well as the end-product of
that process which is referred to as organization structure. The success of the management
process will be determined by the soundness of the organization structure which binds
together and brings proper adjustment and coordination of their work. It facilitates efficient
administration, direction and control avoiding wastage of raw materials and human efforts.
Every management has to establish its own organization structure for efficient conduct of
business activities.

This report intends to critically examine the organizing process at Unilever Sri Lanka
Limited and would give a comprehensive insight in to the existing organizing process.

2.0

Overview of the company

Details of the organizational insights are given below.

Unilever is in the fast moving consumer goods (FMCG) market and operates in product
categories of Home Care, Personal Care and Foods. Over the years the company has
expanded rapidly by introducing differentiated product range and has achieved the market
leadership with the currently featuring 26 leading brands in Sri Lanka.
Unilever Sri Lanka Limited (USL) is the local representative of Unilever PLC, one of the
leading multinational organizations in the world, and has established its presence throughout
the continents in the world. Unilever Sri Lanka Limited was incorporated in 1938.
Unilever brands represent household care, fabric cleaning, skin cleansing, skin care, oral care,
hair care, tea, spreads and personal grooming products. Bands marketed by Unilever include
Astra, Flora, Marmite, Knorr, Lipton, Lux, Lifebuoy, Signal, Rexona, Ponds, Pears Baby,
Fair & Lovely, Sunsilk, Dove, Sunlight, Vim, Rin, Surf Excel, Comfort, Close Up and Pureit.
USL provides employment opportunities for more than 1100 employees directly & thousands
indirectly. USL factories are located in Horana, Agarapathana and others are 3P factories.
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3.0

Organizing in management

According to Daft (2012, p272) organizing is the deployment of organizational resources to


achieve strategic goals.
Managers are responsible for arranging and structuring work to accomplish the
organizations goals. When managers organize, they determine what tasks are to be done,
who is to do them, how the tasks are to be grouped, who reports to whom, and where
decisions are to be made.
3.1

Organization structure

According to Robbins (2012), organizational structure is the formal arrangement of jobs


within an organization. Top managers typically put a lot of thought into designing or
redesigning an appropriate organizational structure. What that appropriate structure is
depends on four contingency variables.
Table 3.1: Determinants of structure with respect to Unilever
Determinant

Organizational objective

Structural
requirement

Strategy

Profitable volume growth , innovation and

Flexibility and free

marketing investment , cost effective leverage

flowing information

with winning people, brands, and operations


Technology

Convert inputs in to outputs by less complex

more non routine

continuous processes
Environment

Facing dynamic and complex environments with

Flexible and organic

a lot of uncertainty
Human

Highly skilled people with professional norms

Resources

Flexible and team


oriented

Source: Author
The above determinants show that an organization as Unilever requires a flexible and organic
team oriented structure. (Annexure2)
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4.0

Key elements of organization design

According to Robbins (2012), when managers create or change the structure, theyre engaged
in organizational design, a process that involves decisions about six key elements.
4.1

Work Specialization/ Division of labor

Its the degree to which organizational tasks are subdivided in to individual jobs. (Daft, R.L,
2012). Specialization facilitates division of work into units for efficient performance. Work
can be specialized both horizontally and vertically (Anderson, 1988). When Sri Lanka
continue to see work specialization as important because it helps employees be more efficient,
Unilever use minimal work specialization and instead give employees a broad range of tasks
to do. The major concept gets connected to this is job designing. Job designing approaches
are job simplification, rotation, enlargement and enrichment.

4.1.1 Job Simplification


At Unilever smaller tasks can be learned and completed quickly. Repetitive tasks allow
employees to perform better as they become experts thus enhancing production efficiencies.
Unilever has out sourced most of the repetitive and smaller tasks to simplify managerial jobs.

4.1.2

Job Rotation

A simplified and repetitive task leads to monotony and boredom. At Unilever in order to
alleviate boredom jobs get rotated inside same function or different.
Brand managers gets rotated handling different brands, management trainees get rotate
through all the functions to receive the exposure of various aspects of organization better.
Managers will also become more capable and flexible since they are exposed to a series of
different and more challenging jobs and will develop new skills.

4.1.3 Job Enlargement


Unilever counteract monotony by increasing job scope by the number of different tasks an
employee performs in a particular job. This makes the managers work challenging as well as
motivating.
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4.1.4 Job Enrichment


Unilever exercise this to increase the level of satisfaction among the employees by increasing
job depth, that is, the workers are allowed a degree of freedom. Subordinates are empowered
with a view to enhance self-satisfaction.

4.2

Departmentalization

Departmentalization is the basis for grouping individual positions in to departments and


departments in to total organization (Daft, R.L., 2012).
Three traditional departmentalization approaches such as functional, divisional and matrix
are identified in the book of new era of management by Richard Daft. Unilever Sri Lanka
uses the matrix approach on a larger scale as it uses both functional and divisional chains of
command simultaneously in the same part of the organization.
Functional managers will be responsible for functions on country level, and product
managers will oversee work in specific regions or countries. This results a multi reporting
system for some employees. Main functions at Unilever are grouped in to departments.
Table 4.1: Organization Departments Unilever
Department
Supply Chain

Functions
Demand Planning, Supply Planning , Sourcing, Third Party
Operations, Logistics Manufacturing, Quality Management

Customer Development General Trade, Modern Trade, Food Solutions


Home & Personal Care

Home Care Brands, Personal Care Brands and Pureit

Food and Beverages

Savoury and Spreads, Beverages

Finance , IT and Legal

Finance operations, Management Accountancy, IT, Legal


operations

Human Resources

HR Business Partners, HR Expertise, Pillar HR Expertise,


HR Services, Unilever people and leaders

Source: Company profile


As shown on table 4.1 the company is departmentalized in to 6 departments and each
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department is headed by the functional director.


4.3

Chain of Command

The chain of command is the line of authority extending from upper organizational levels to
lower levels, which clarifies who reports to whom. (Robbins, 2012). This revolves around the
concepts of authority, responsibility, delegation and unity of command. But Unilever violates
the latter and has both vertical and horizontal chain of commands.
Table 4.1: Concepts of chain of command at Unilever
Concept
Authority

Unilever approach

Example

Line and staff organization.

Line managers are placed

Line managers Coordinating and

starting from the low level

overseeing the work of others

of hierarchy.

Line authority entitles a manager to

Personal secretaries to the

direct the work of an employee and

directors are staff officials.

to make certain decisions without


consulting anyone.
Delegation of

Transfers responsibility, fully

Brand manager becomes

authority over budget, resources and

responsible for overall

personnel to the subordinates.

brand, budgeting, resources,

Establishing controls to monitor the

but to check the progress

subordinates progress. Periodic spot

network meetings are held

checks are done to ensure that

where category managers

authority guidelines are met.

are also participated.

Being responsible for overall

Value it as a core theme of

and

performance, not just by delivering

Standards of Leadership

Responsibility

own results but by helping other

(SOL) which is the heart of

people deliver their results.

Unilever global

Core indicator of performance


driven leadership.

performance culture.

authority

Accountability

(Annexure 4)

Concept
Unity Of
command

Unilever approach

Example

Violates due to the matrix structure,

Employees can access

as it involves dual reporting /

information that used to be

multiple bosses and treating this

available only for managers.

concept as irrelevant.

Enable to communicate with


anyone else in the company
without going through the
chain of command.

Source: Author
Above details are vital for employees as they are in vertical and horizontal command lines.
4.4 Span of Management / Span of Control
It is the number of subordinates who report directly to a specific manager. (Aquinas, 2009). It
directly impacts the number of hierarchical levels in organization. The trend in recent years
has been toward larger spans of control because it reduces costs, speeds up decision making,
increases flexibility, gets closer to customers, and empowers employees. Unilever is also
moving from tall structure to a flat structure with appropriate span of control. The structure
has minimized to only 6 departments. With the recent changes undergone in the structure of
USL all directors are in charge of many functions and having wide range of responsibilities
as shown below.
Table 4.2 Unilever top management move to wider span of management
Previous functions

Current function

Supply chain customer service and manufacturing

Supply chain

Supply chain and Sales Finance , IT , Legal

Finance , IT & Legal

Home Care ( HC ) , Personal Care ( PC)

Home & Personal Care ( HPC)

Food and Beverages, Customer marketing ( CMI),

Food and CMI

Activations
Source: Author
As shown in the above table, all the current functions are headed by respective functional
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directors where the numbers of directors were reduced.


Unilever has widened the span of control by giving more authority to lower level managers.
Therefore the category managers have less work to do since some of the decisions they
previously made are transferred to their subordinates. By the same token, these managers
may then be able to oversee and coordinate the work of more subordinates.
4.5

De-centralization and Centralization

The term decentralization and centralization refers to which decision making is concentrated.
Both the concepts should be treated as relative and not extreme concepts. Unilever demands
the application of a combination of both these concepts in a relative manner. Therefore
cannot be totally centralized or totally de-centralized.
Unilever believes that when individual characteristics of both are put to effect together would
function effectively will prove beneficial to the organization.
Table 4.3 Centralization and Decentralization of functions at USL
Centralization

Decentralization

co-operate/ strategic goals setting

Tactical & operation goals setting

key decisions involving innovations

Human resource services

marketing and sales strategies

Financial operations

Sales and distribution

Manufacturing

Source: Author
Centralized functions on the above table are governed by senior managers or the regional
managers. Decentralized functions are governed by middle / low lever managers.
Teams in these department make their own decisions based on their knowledge and skills
while aligning them to the co-operate goals. Line managers also oversee the teams and offer
suggestions when needed. All departments may need resources from each other and therefore
organizational level decisions cannot be made by just one department or an individual.
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To be effective in todays global business environment, companies are embracing elements


of centralization and decentralization that allow them to act quickly at the local level while
leveraging best practices at the corporate level (Wickman, L.E, 2008)
Table 4.4: Advantages and disadvantages of using both concepts
Advantages
Using the experience of the top

Disadvantages
Time consuming decision making at the

managers at decision making

centralized functions which

Promotes a strong leadership

overshadows the fast track process of

because part of authority lies with

decision making at decentralization.

the senior management

Conflicts within workers

Encourage decision making at

Mixed judgements on various situations

lower levels easing the heavy


workload of top managers

Faster decision making at the


decentralized functions as decision
making is referred up the hierarchy

Source: Author
Details of the above table show the advantages and disadvantages when the structure is partly
centralized and partly decentralized.
4.5

Formalization

It is the degree which an employees role is defined by formal documentation. Uses below
formalizations that bring about coordination by specifying expected behaviors in advance.
Table 4.5: Unilever ways of formalization
Formalizations
Policies

Unilever approach
Reward Policies

Examples
Work Level Policy, Base Salary Standard,
Employee Advances Standard, Annual Bonus
Standard, Management Co-Investment Plan
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Formalizations

Unilever approach

Examples

Policies

Benefit Policies

Authority Schedule, Benefit Procedure Disability ,


Benefits Standard, Pensions Procedure

Learning Policies

Global Learning Policy

General Policies:

PDP Policy

Medical &

Medical and Occupational Health Specific

Occupational health

Standards , No Smoking Standards, Mental

Policies

Wellbeing Standards , HIV/AIDS Standards

Leadership and

LDT Documents, HRP Documents, Recruitment

Development

Policy

Procedures

Functional S&OP

Shipping , packaging , R&D

Rules

Behavior guidelines

Code of Business principles ( COBP) and


Standards of Conduct

Job

During the

descriptions

recruitment

Job description document with the package data

Source: Company profiles


Above ways of formalization help to co-ordinate the efforts of growing number of employees.
5.0

Organizational culture

Unilever is passionate about their brands and products. Regardless of where they work in the
business, everyone has an opportunity to share in the excitement of seeing the launch of a
new product. They will really learn how a FMCG business operates from an initial idea,
through the creation of a product, to it appearing on the supermarket shelf. But passion
doesnt stop there. Employees are able to see how the product impacts the consumer.
At Unilever, they value the team environment where people treat each other with integrity
and respect. There is great passion, innovation and commitment to working together to fulfill
ambitious goals and realize true potential. At the mean time cultures at the factories of
Horana, Agarapathana and other 3P factories are quite different to the main office at
Colombo. But Unilever try to work with the identity of One Unilever amidst of the
differences.
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5.1

Diversity at Unilever

Research by Forbes Insights surveyed 321 organizations in US, UK and China and found that
81% of these had called out gender diversity as a key deliverable. This highlights that the
organization is more successful when it retain a good balance of men and women. Unilever
focuses on the gender balance and diversity inside the organization.
This task is mainly delivered by balancing own teams and supporting and driving targets.
Also by encouraging and valuing diversity, becoming aware of inclusive behaviors,
promoting agile and flexible working, providing development and mentoring opportunities

5.2 Successful practices for performance management at Unilever

Successful practices highlights the great concepts utilized to deliver performance effectively.

Table 5.1: Unilever best practices to enhance performance management


Best practice

Approach

Agile Working

All employees may work flexibly at anytime and anywhere as long as


the needs of the business are being met. It is all about producing results
with maximum flexibility and minimal constraints. ( Annexure 5)

Global Mentoring

Building a successful relationship and set of processes where one

Program

employee offers help, advice and support to facilitate learning or the


development of another employee. (Annexure 6)

Flexible working

Permitting flexibility of working hours at the beginning or end of the


day provided a core time is spent at work. Moms-to-be enjoy a healthypregnancy program, where they get up to 12 weeks off for maternity
leave (with 6 fully paid).

Source: Company profiles


The above practices help to maintain the balance of the working life and subsequently
winning people and market place.

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6.0

Developing & engaging our people

A skilled, motivated and engaged workforce is essential to achieving our growth ambition.
Winning with Talent is our Unilever way of outlining how we need to grow talent as leaders
today, tomorrow and in the future. Enjoy it and embrace it. (Polman, P. CEO of Unilever
PLC)
6.1

Developing a team fit for growth

Unilever is increasingly an agile, flexible and diverse business with people who are
motivated by doing good while doing well. Unilever is building capability and leadership
among our people and are attracting some of the best talent in the market place to a
sustainable profitable growth.
Unilever business strategy is called the Compass (Annexure 7). It sets out the ambitious
Vision and Purpose, and defines four Winning with pillars within the business that will help
to achieve both. One of Unilever Winning with pillars is Winning with people. This is
because developing and retaining the right quantity, quality and diversity of people is crucial
to the growth strategy.
Unilever talent and organization readiness assessment programme helps to ensure people
have the right skill sets to manage the business through a period of growth. They assess the
areas of the most crucial to the strategy, identify gaps and focus on

Changing organizational structures

Revising the recruitment strategy and approach

Focusing on culture and employee engagement

Using development and training programmes to build capability levels.

6.2

Investing in learning

Unilever highly invest in employee training and learning to meet the market place with
knowledge, leadership and general skills.

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Table 6.1: Investment systems of training, learning and development


Investment
Training

Learning

System
Learning

Objective

Offers learning programmes in more than 20

Management

languages providing 7,600 e-learning modules.

System (Lms)

These can be accessed with corporate intranet.

Learning

passport

Enables all the employees to manage their own


skills development, at the same time allowing
driving specific training important for strategies.

Development

Unilever

Brings together all the major functional academies

Learning

to share best practices and to adopt common

Academy

processes and standards for learning.

(ULA)

Provides career skills maps for all the functions

Providing employees with a clear understanding of


their development & to build a successful career.

Source: Author
Details above indicate that Unilever has a strong plan for employee training and development.
6.3

Promoting sustainability

In support of the Sustainable Living Plan, Unilever intends to increase the number of
training programmes that are delivered virtually. This helps to reduce the need for air travel.
Also intend to introduce new learning resources which make the most of social media and
mobile technology to deliver training.
6.4

Employee engagement

Unilever put great effort into engaging with employees to find out whether they understand
the companys mission and their role within it, what their views of Unilever are and what
they believe needs to change to achieve ambitions.
We gather feedback from our employees through our biennial Global People Survey (GPS)
covering all our employees, and through interim Pulse surveys of all managers. (Appendix 6)
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Unilever believe that the Sustainable Living Plan and values are significant factors in
keeping employees fully engaged in the business and therefore driving performance.

7.0

Identification of issue and recommendations for improvements

This section highlights the issues of organizing at Unilever and suggested the
recommendations along with expected output and outcome.
Table 7.1 Issue analysis and recommendations for organizing
Issue

Recommendations

Output

Outcome

Potential confusion

Clear instructions of

Less conflicts

Well organized and

over authority and

employee reporting

between subordinates productive internal

responsibility due to

should be given to

and line managers in.

the double reporting

the employee and

the organization

system

line managers during

processes

recruitment.
Indifference of the

Locally compatible

Simplification of the

Greater innovations

regional and local

agreements that

internal processes

that meet the local

practices in the

comply with region

that leads to effective

market complying

organization

should be introduced

internal

with the global /

via HRM

communication

regional practices.

Over emphasis in

Conduct virtual

Minimizing the time

Effective decision

group decision

meetings to receive

that managers spend

making in the

making (Frequent

information on

on meetings and

organization

meetings) through

progress reports etc,

make a productive

both regional and

and group meetings

use of the time for

local aspects.

when explaining

strategy

technical & sensitive

implementations and

data, and planning.

issue analysis.

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Issue

Recommendations

Output

Outcome

Excessive focus on

Focus equally on

Positive stakeholder

Gain competitive

internal relations

internal and external

management

advantage in the

relations

business

Slow response to

More delegation of

Relatively quick

Sustainable growth

change as the

authority down the

responses to the

in the market even

decisions are taken

hierarchy to the

changes in the

when the external

collectively with the

responsible middle

market, competitors.

factors change.

region which is time

level managers could

consuming

fast track the process

Source: Author
Details above indicate that the company has to improve organizing in terms of the above
aspects taking the suggested recommendations.

8.0

Conclusion

This report intended to provide a comprehensive insight in to the organizing function at


Unilever Sri Lanka Limited. It extends to discuss the inherent issues by identifying its
strengths and weaknesses. Also suggests recommendations for improvement with the
expectation that recommendations in this report will enable effective organizing process
within the company at all levels so as to ensure a sustainable competitive advantage in the
future.
This document concludes that despite that Unilever Sri Lanka is a leading company in its
category; it should improve to have a sustainable growth in the changing environment. In
order to tackle the external changes it needs to master this fundamental principle of
management organizing
Surround yourself with the best people you can find, delegate authority, and don't interfere
as long as the policy you've decided upon is being carried out. (Ronald Reagan)

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9.0

List of References

Aquinas, P.G. (2008), Organization Structure & Design: Applications And Challenges, New
Delhi: Excel Books
Centralization and Decentralization: The Need for Coexistence. Retrieved from
http://clomedia.com/articles/view/centralization_and_decentralization_the_need_for_coexist
ence) on 2nd March 2014
Daft, R.L. (2012). New Era of Management, 10th ed., New Delhi: Cengage Learning India
Pvt. Ltd.
Ebert, R. & Griffin, R. (2012), Business Essentials, Canada: Pearson Education
Gabbaro, J (1992), Managing People and Organizations, II series, New York: McGraw- Hill.
Robbins, S. (2012), Management, 11th ed., New Jersey: Pearson Education, Inc.
Unilever Sri Lanka Limited (2014). Retrieved from http://www.unilever.com.lk/ on 21st
February 2014

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