Case Study on Unilever’s decision to move their HQ

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Case Study On Unilever’s Decision To Move Their Headquarters
Unilever was formed in 1930 through a merger between Lever Brothers which was a U.K. soap-maker and Margarine Unie, a Dutch margarine producer. It first started by introducing a revolutionary idea of producing Sunlight soap in the 1890s. This idea came from William Lever who was the founder of the Lever Brothers. This assisted the Lever Brothers company to be the first company to popularize cleanliness in Victorian England. In the 1930s it continued to grow its business by promoting its products in America. Furthermore, in the 1940s it kept improving its business by adopting a new strategy, growing their business and adding current areas like specific food and chemical products. Additionally, they focused on research and marketing and in 1944 it associated themselves with two firms in the US, Pepsodent which manufacture toothpaste brand and Thomas J. Lipton Company which manufacture tea (Lingard 225). Unilever continued their actions and again associated themselves with Birds Eye, which is a U.K. maker of frozen foods in 1957 and also with Good Humor, a U.S ice cream maker in 1961.
Unilever restructured in the 1980s by selling majority of its subsidiary businesses to improve their core business which then became, detergents, toiletries, food, and other chemicals. The restructuring facilitated the collaboration with Chesebrought-Pond in 1986. This move increased their profits and resulted in it buying Chesebrought-Pond in 1987 (Lingard 225).

Currently, Unilever has become the most consumed brand in the world focusing on food, personal care and home care. As at 2002, Unilever has had two parenting companies, Unilever Plc in London and Unilever NV in Rotterdam and its headquarters has been in London for almost a century. But it has now legally shifted its headquarters to Rotterdam in the Netherlands. Under different conditions, centralization can be advantageous and also disadvantageous.
First of all, centralization improves the standardization of work. These are technology, strategy, and processes. Thus, reducing the learning curves in organizations and enabling them to improve efficiency and making substantial judgments. It is also beneficial since it ensures fair allocation of work to employees (Bartlett 1987). Distribution of work will be equitable and just within units of the organization. Consequently, improving the progress of the company.
Additionally, centralization promotes flexibility and avoids replication of work. In times of emergency, centralized training will enable easy standardization and revision of activities altogether. It will not leave replication of tasks and actions which thus reduces additional cost of labor. Moreover, a centralized organization has improved customer experience. Customers see the company as more consistent, and they will not feel that they are separated.
On the other hand, Centralization can bring a negative impact on an organization. For instance, it encourages dictatorship and limits communication. Employees will work based on what they have been dictated to them and do not have an authority to decide on issues affecting them (Lingard 225). With a strict control, employees will not be comfortable with the chain of command and will not be inclined to communicate with their supervisor’s through emails.
Centralization will also limit creativity within a company. Since employees are tightly monitored, they will not share ideas to improve production because of the less democratic structure. For example, Unilever requires a high degree of creativity and centralizing it will significantly affect its core business operations. Additionally, there is rigidity when employees always have to seek permission from the head offices when making decisions.
Work Cited:
Bartlett, Christopher A., and Sumantra Ghosbal. “Managing across borders: new strategic requirements.” Sloan Management Review (1986-1998) 28.4 (1987): 7.
Lingard, Thomas. “Unilever’s strategic response to sustainable development and its implications for public affairs professionals.” Journal of Public Affairs 12.3 (2012): 224-229.