1. Company Background
· Unilever is a British-Dutch multinational company. The company was founded on November 9, 1927 and is headquartered in Rotterdam, the Netherlands. It is the world's third-greatest buyer stock company measured by 2012 salary, after Procter & Gamble and Nestlé 2.5 billion people use Unilever products every day. (The guardian, 2010).
When consumers are buying foods with nutrition or any affordable soaps that combat disease, any good quality shampoo or the everyday household care products, its most like from this brand.7 out of 10 households products have at least one unilever product and the brands which are popular are Knorr, axe, Lipton, Omo. Regarding the home market this company had designed the specific needs of the consumers through Blue Band, Pureit, and Sauve.
· Unilever NV participates in the production and marketing of consumer goods in personal care categories, hygiene and nutrition. It functions through the given segments- home care, refreshment, foods and personal care. The personal care sector consists of the sales of skin and hair care products, oral care products and deodorants. In the food sector it includes the sales of soups, sauces, mayonnaise, salad dressing, spreads, bouillons, margarines and snacks. The refreshment sector sells tea-based beverages, ice cream, weight management products and nutritionally improved staples sold in the developing markets. Lastly the home care sector looks after the home care products such as liquids and capsules, a wide range of cleaning products and powders. (forbes, 2017)
· Its goal is to help more than million and billion people to make their health and wellbeing better as their source is 100% or their agricultural raw materials and they develop the livelihoods of the people across the value chain.
· Business facts & figures
- In 2016 unilever Sustainable Living brands grew 50% faster than the rest of the business
- Emerging markets is 50% of their market
- turnover in 2017 is €53.7 billion
-12 brands have sales of more than €1 billion a year
- Unilever has 161000 people working for them.
- 47 % of women are the managers of the company.
-In 2017, we maintained zero non-hazardous waste to landfill
-No.1 FMCG graduate employer of choice in 44 of the 52 countries we recruit from
-In 2016 our Sustainable Living brands grew 50% faster than the rest of the business. (unilever, 2018).
2.Problems associated with the company
· A. Palm oil issues that affected by Unilever
The world’s largest buyer of palm oil is the Unilever company. They use the oil to turn their products into detergents, soaps, bio-fuel and cosmetics.as they were cutting down the palm oil in the Kalimantan area, it was slowly affecting the habitat of orang-utan, an endangered spice which lived everywhere in the rainforest of that area. For this action, the species were slowly getting extinct.2 million acres of the rainforest were eventually cut down in that area. This act is also hampering on the Indonesian rainforest which is resulting in severe climate change. Unilever wanted to create products to help people in their everyday life but at the same time they are also destroying other endangered lives. Unilever was also criticized by Greenpeace Uk for their action in the year 2008 (Sandison, 2008)
· B. Unilever Use Child Labour in India
In India, in the cotton seed production, unilever has employed 25,000 children which are mostly girls. They usually work for at max 10 to 13 hours a day for which they get 40 Eurocents per day. While they are working, they are sometimes exposed to toxic pesticides which can be harmful. The company employ child labour because they can save money in waging the labour. Usually, a child only receives 55% less than a man and 30 % less than a woman (unilever, 2018)
· C. Evidence of poor labour practices in Unilever's operation
In Vietnam, there were evidence of poor labour practises in unilever operation as per a report between 2011 and 2012 which was the latest in a long line of collaborations between Oxfam and the food and the consumer goods manufacturer. (case study unilever).
Generally, it is seen that unilever are the global leader in CSR, confident in robust international standards. However, the results of an in-dept review by Oxfam of one of unilever Vietnam factories show that-
• Wages are less to make savings or support dependants, with instances of workers unable to eat adequate diets or afford to keep children in school.
• Suppliers and managers unclear about Unilever's codes of conduct, in some cases only accessible in English.
• Workers are also scared to raise voice or get involved in freedom of association.
• Factory workers are hired by a third party on much poorer terms and conditions.
• Suppliers with employees working illegal overtime hours.
Oxfam researchers have been given access to the factory at Cu Chi, near Ho Chi Minh town, wherein 700 workers had been directly hired by means of Unilever and 800 more have been employed through Thang Loi, a 3rd party labour. Managers and workers had been interviewed on website online and stale website; 48 providers have been also interviewed, with 3 decided on for in-depth findings. The consequences, posted with the approval of Unilever, confirmed the employer fell out of the standards it set for itself.
Even though the study discovered that wages paid by Unilever had been more in comparison to countries minimal wage (approximately £45 per month in 2011) and the international poverty line of $2 (£1.20) per day, wages nonetheless did not meet the simple needs of employees and their families.
The minimum wage itself, stated the report, "lags behind a rapidly-growing price of living ... meeting most effective 40% to 46% of employees' minimum fees according to month." Of employees within the Cu Chi manufacturing unit, 80% stated they wanted some other source of earnings to feed their families. One employee stated that she had to take her young siblings out of school to work due to inadequate pay. (Unilever Annual Report and Accounts 2016, 2016)
3. ANALYSIS on UNILEVER
· A. In the year 2009, during November Unilever declared to cancel and stop buying palm oil from the Indonesian company, PT Smart for enviromental reason. After that, in the year 2010 in April, Unilever had secured Green Palm certificates. Green Palm authorized By RSPO (Roundtable on Sustainable Palm Oil), Organization formed by numerous shareholders in the palm oil industry, to keep the environmental impact of palm oil and endorse maintainable agriculture. These certificates have function to cover the supplies of its European, Australian and New Zealand businesses. (forbes, 2017)
· B. Countries such as Netherlands, Germany and Ireland started to do campaign in the year 2003 to stop child labour. The campaign eventually started from Germany, then to Netherlands and the finished in Ireland. The main message they tried to convey was that, school students are made to go to school, that’s the best place for them hence child labour should be stopped. In May 2003, Unilever publicized that they would solve the child labour problem in India and also, they stopped hiring children for work. (Jones, 2002)
· C. Labour issues can be dealt with a trade union or a grievance hotline but, unfortunately none of this were used or trusted. There is only one state-run which is run by the senior managers. The workers fear if they apply through the grievance hotline, it would directly go to the management which might lead to an increase of losing a job. The workers cannot ever dare to raise voice against the union leaders as they are paid by the company hence they are the company people.
Globally, the number of people who worked under Unilever were decreasing by half for example- 295,000 employees to 164,000 between 2000 and 2009.but the work the employees did not go away as it was outsourced or under temporary contracts (unilever, 2009).
In the Cu Chi factory, 748 of the 1,539 workers (53%) were employed by a third party, Thang Loi – mostly migrants living in rented accommodation, paid just above minimum wage (only with cash benefits and overtime did this rise above the local average urban income). Unilever has since stated an aim to reduce the ratio of contracted workers to 30:70 (30 on temporary contracts to 70 on permanent contracts)
Sigismondi stated the organization could change the manner it organised it's Vietnam operations. "we will organise human labour rights training workshops for all our internal business stakeholders, such as our factory leadership in Cu Chi and key suppliers to sell fine exercise," he stated. "we can also work with the eighty-plus providers to make sure they cope with the non-compliance troubles that have been highlighted in the observation. we will overview again our grievance mechanisms for each transient and everlasting employee to ensure that they end up by not only understanding but accessible." (In slideshare, 2015)
The intercessions relevant to the state of affairs of wages system in Unilever are as follows:
An example of how the wages are in Pakistan and how’s the motivation there.
LINK BETWEEN MOTIVATION AND REWARD
There is incredible connection between the motive and wages as we have seen in the problem above. The best way to guarantee a continuous growth in people’s public presentation is to constituent a reward system and the wage system must focus on positive support as it motivates the preferable behaviour successfully. In Pakistan, Unilever company gives the right amount of money for the exact amount of work hence, there no need to worry about the right payment. (Free Essays, 2018)
Whenever we hear the word “Motivation” the theory that comes in our head is the Abraham Maslow’s hierarchy of demands. In his theory he talked about his investigation on human behaviour and focused on 5 basis points. These basic demands (physiological, safety, societal, self-regard and self-realization or self-fulfilment) can be though as basic ends for any human being. These needs have been given priority in the ranking and lucubrate the form in which everyday life goes on ( Goble, 2004 )
(n.d.). Retrieved from http://changellenge.com/wp-content/uploads/2014/04/CL-Unilever-Organizational-changes-in-INMARKO-ENG.pdf
(n.d.). Retrieved from case study unilever: http://changellenge.com/wp-content/uploads/2014/04/CL-Unilever-Organizational-changes-in-INMARKO-ENG.pdf
(n.d.). Retrieved from https://klon.org/motivation-and-reward-from-hrm-at-unilever-pakistan-business-essay-essay
forbes. (2017). Retrieved from https://www.forbes.com/companies/unilever/
Free Essays. (2018). Retrieved from google: https://klon.org/motivation-and-reward-from-hrm-at-unilever-pakistan-business-essay-essay
In slideshare. (2015, may 06). Retrieved from https://www.slideshare.net/DhaifinaIdznitia/unilever-strategic-management-assignment?next_slideshow=1
Jones, G. (2002, 12 09). Harvard Business School. Retrieved from https://hbswk.hbs.edu/item/unilevera-case-study
Sandison, N. (2008, may 02). Campaign . Retrieved from https://www.campaignlive.co.uk/article/unilever-buy-sustainable-palm-oil-ape-protest/806746
The guardian. (2010, 10 11). Retrieved from https://www.theguardian.com/sustainable-business/profile-unilever
unilever. (2018). Retrieved from https://www.unilever.com/about/who-we-are/about-Unilever/
Unilever Annual Report and Accounts 2016. (2016). Retrieved from google: https://www.unilever.com/Images/unilever-annual-report-and-accounts-2016_tcm244-498880_en.pdf
Essays, UK. (November 2013). Environmental and social issues of Unilever.
Environmental and social issues of Unilever. (2018). UKEssays. Retrieved 13 April 2018, from http://www.ukessays.com/essays/business/history-background-environmental-and-social-issues-of-unilever-business-essay.php?vref=1
Living, S., & reporting, O. (2018). Defining our material issues. Unilever global company website. Retrieved 13 April 2018, from https://www.unilever.com/sustainable-living/our-approach-to-reporting/defining-our-material-issues/
Renewing Unilever: Transformation and Tradition. (2018). Google Books. Retrieved 13 April 2018, from https://books.google.com.au/books?id=XBWLfba4adMC&pg=PA281&dq=what+are+the+problem/issues+that+were+found+in+the+unilever+company&hl=en&sa=X&ved=0ahUKEwj8p5qV8q_aAhXDTbwKHT6pA5sQ6AEIJzAA#v=onepage&q=what%20are%20the%20problem%2Fissues%20that%20were%20found%20in%20the%20unilever%20company&f=false
Sustainability Isn’t A Moral Issue For Unilever, It’s An Economic Issue. Retrieved from https://www.fastcompany.com/3061180/sustainability-isnt-a-moral-issue-for-unilever-its-an-economic-issue
Unilever's labour practices in Vietnam found wanting by Oxfam report. Retrieved from https://www.theguardian.com/sustainable-business/blog/unilever-labour-practices-vietnam-oxfam-report