Thursday, October 18, 2007

Case Study : Hindustan Unilever

HINDUSTAN UNILEVER LIMITED
‘THE BEST CORPORATE COMMUNICATOR’

Date and Time of Submission: 29-10-2007, 1.30 p.m
Note: Only handwritten solutions are permitted.
Introduction

Hindustan Unilever Limited (HUL) is India's largest fast moving consumer goods company, with leadership in Home & Personal Care Products and Foods & Beverages. HUL's brands, spread across 20 distinct consumer categories, touch the lives of two out of three Indians. They endow the company with a scale of combined volumes of about 4 million tonnes and sales of Rs.10,000 crores. The mission that inspires HUL's over 15,000 employees is to "add vitality to life". With 35 Power Brands, HUL meets everyday needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life. It is a mission HUL shares with its parent company, Unilever, which holds 51.55% of the equity. A Fortune 500 transnational, Unilever sells Foods and Home and Personal Care brands in about 100 countries worldwide.

Unilever's mission is to add Vitality to life. We meet everyday needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life.
Unilever's mission is to add Vitality to life. We meet everyday needs for nutrition, hygiene and personal care with brands that help people feel good, look good and get more out of life

Our deep roots in local cultures and markets around the world give us our strong relationship with consumers and are the foundation for our future growth. We will bring our wealth of knowledge and international expertise to the service of local consumers - a truly multi-local multinational.

Our long-term success requires a total commitment to exceptional standards of performance and productivity, to working together effectively, and to a willingness to embrace new ideas and learn continuously.
To succeed also requires, we believe, the highest standards of corporate behaviour towards everyone we work with, the communities we touch, and the environment on which we have an impact.
This is our road to sustainable, profitable growth, creating long-term value for our shareholders, our people, and our business partners.

Over 100 years' link with India

In the summer of 1888, visitors to the Kolkata harbour noticed crates full of Sunlight soap bars, embossed with the words "Made in England by Lever Brothers". With it, began an era of marketing branded Fast Moving Consumer Goods (FMCG).Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim. Vanaspati was launched in 1918 and the famous Dalda brand came to the market in 1937.


In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company, followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). These three companies merged to form HUL in November 1956; HUL offered 10% of its equity to the Indian public, being the first among the foreign subsidiaries to do so. Unilever now holds 51.55% equity in the company. The rest of the shareholding is distributed among about 380,000 individual shareholders and financial institutions.

The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the company had launched Red Label tea in the country. In 1912, Brooke Bond & Co. India Limited was formed. Brooke Bond joined the Unilever fold in 1984 through an international acquisition. The erstwhile Lipton's links with India were forged in 1898. Unilever acquired Lipton in 1972, and in 1977 Lipton Tea (India) Limited was incorporated.Pond's (India) Limited had been present in India since 1947. It joined the Unilever fold through an international acquisition of Chesebrough Pond's USA in 1986.Since the very early years, HUL has vigorously responded to the stimulus of economic growth. The growth process has been accompanied by judicious diversification, always in line with Indian opinions and aspirations.The liberalisation of the Indian economy, started in 1991, clearly marked an inflexion in HUL's and the Group's growth curve. Removal of the regulatory framework allowed the company to explore every single product and opportunity segment, without any constraints on production capacity.

Simultaneously, deregulation permitted alliances, acquisitions and mergers. In one of the most visible and talked about events of India's corporate history, the erstwhile Tata Oil Mills Company (TOMCO) merged with HUL, effective from April 1, 1993. In 1995, HUL and yet another Tata company, Lakme Limited, formed a 50:50 joint venture, Lakme Lever Limited, to market Lakme's market-leading cosmetics and other appropriate products of both the companies. Subsequently in 1998, Lakme Limited sold its brands to HUL and divested its 50% stake in the joint venture to the company.HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994, Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary Pads. HUL has also set up a subsidiary in Nepal, Nepal Lever Limited (NLL), and its factory represents the largest manufacturing investment in the Himalayan kingdom. The NLL factory manufactures HUL's products like Soaps, Detergents and Personal Products both for the domestic market and exports to India.

The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on the Foods and Beverages front. In 1992, the erstwhile Brooke Bond acquired Kothari General Foods, with significant interests in Instant Coffee. In 1993, it acquired the Kissan business from the UB Group and the Dollops Icecream business from Cadbury India.As a measure of backward integration, Tea Estates and Doom Dooma, two plantation companies of Unilever, were merged with Brooke Bond. Then in July 1993, Brooke Bond India and Lipton India merged to form Brooke Bond Lipton India Limited (BBLIL), enabling greater focus and ensuring synergy in the traditional Beverages business. 1994 witnessed BBLIL launching the Wall's range of Frozen Desserts. By the end of the year, the company entered into a strategic alliance with the Kwality Icecream Group families and in 1995 the Milkfood 100% Icecream marketing and distribution rights too were acquired.
Finally, BBLIL merged with HUL, with effect from January 1, 1996. The internal restructuring culminated in the merger of Pond's (India) Limited (PIL) with HUL in 1998. The two companies had significant overlaps in Personal Products, Speciality Chemicals and Exports businesses, besides a common distribution system since 1993 for Personal Products. The two also had a common management pool and a technology base. The amalgamation was done to ensure for the Group, benefits from scale economies both in domestic and export markets and enable it to fund investments required for aggressively building new categories.

In January 2000, in a historic step, the government decided to award 74 per cent equity in Modern Foods to HUL, thereby beginning the divestment of government equity in public sector undertakings (PSU) to private sector partners. HUL's entry into Bread is a strategic extension of the company's wheat business. In 2002, HUL acquired the government's remaining stake in Modern Foods.
In 2003, HUL acquired the Cooked Shrimp and Pasteurised Crabmeat business of the Amalgam Group of Companies, a leader in value added Marine Products exports.


YEAR
MILESTONES
1888
Sunlight soap introduced in India.
1895
Lifebuoy soap launched; Lever Brothers appoints agents in Mumbai, Chennai, Kolkata, and Karachi.
1902
Pears soap introduced in India.
1903
Brooke Bond Red Label tea launched.
1905
Lux flakes introduced.
1913
Vim scouring powder introduced.
1914
Vinolia soap launched in India.
1918
Vanaspati introduced by Dutch margarine manufacturers like Van den Berghs, Jurgens, Verschure Creameries, and Hartogs.
1922
Rinso soap powder introduced.
1924
Gibbs dental preparations launched.
1925
Lever Brothers gets full control of North West Soap Company.
1926
Hartogs registers Dalda Trademark.
1930
Unilever is formed on January 1 through merger of Lever Brothers and Margarine Unie.
1931
Hindustan Vanaspati Manufacturing Company registered on November 27; Sewri factory site bought.
1932
Vanaspati manufacture starts at Sewri.
1933
Application made for setting up soap factory next to the Vanaspati factory at Sewri; Lever Brothers India Limited incorporated on October 17.
1934
Soap manufacture begins at Sewri factory in October; North West Soap Company's Garden Reach Factory, Kolkata rented and expanded to produce Lever brands.
1935
United Traders incorporated on May 11 to market Personal Products.
1937
Mr. Prakash Tandon, one of the first Indian covenanted managers, joins HVM.
1939
Garden Reach Factory purchased outright; concentration on building up Dalda Vanaspati as a brand.
1941
Agencies in Mumbai, Chennai, Kolkata and Karachi taken over; company acquires own sales force.
1942
Unilever takes firm decision to "train Indians to take over junior and senior management positions instead of Europeans".
1943
Personal Products manufacture begins in India at Garden Reach Factory.
1944
Reorganisation of the three companies with common management but separate marketing operations.
1947
Pond's Cold Cream launched.
1951
Mr. Prakash Tandon becomes first Indian Director. Shamnagar, Tiruchy, and Ghaziabad Vanaspati factories bought.
1955
65% of managers are Indians.
1956
Three companies merge to form Hindustan Lever Limited, with 10% Indian equity participation.
1957
Unilever Special Committee approves research activity by Hindustan Lever.
1958
Research Unit starts functioning at Mumbai Factory.
1959
Surf launched.
1961
Mr. Prakash Tandon takes over as the first Indian Chairman; 191 of the 205 managers are Indians.
1962
Formal Exports Department starts.
1963
Head Office building at Backbay Reclamation, Mumbai, opened.
1964
Etah dairy set up, Anik ghee launched; Animal feeds plant at Ghaziabad; Sunsilk shampoo launched.
1965
Signal toothpaste launched; Indian shareholding increases to 14%.
1966
Lever's baby food, more new foods introduced; Nickel catalyst production begins; Indian shareholding increases to 15%. Statutory price control on Vanaspati; Taj Mahal tea launched.
1967
Hindustan Lever Research Centre, opens in Mumbai.
1968
Mr. V. G. Rajadhyaksha takes over as Chairman from Mr. Prakash Tandon; Fine Chemicals Unit commissioned at Andheri; informal price control on soap begins.
1969
Rin bar launched; Fine Chemicals Unit starts production; Bru coffee launched
1971
Mr. V. G. Rajadhyaksha presents plan for diversification into chemicals to Unilever Special Committee - plan approved; Clinic shampoo launched.
1973
Mr. T. Thomas takes over as Chairman from Mr. V. G. Rajadhyaksha.
1974
Pilot plant for industrial chemicals at Taloja; informal price control on soaps withdrawn; Liril marketed.
1975
Ten-year modernisation plan for soaps and detergent plants; Jammu project work begins; statutory price control on Vanaspati and baby foods withdrawn; Close-up toothpaste launched.
1976
Construction work of Haldia chemicals complex begins; Taloja chemicals unit begins functioning.
1977
Jammu synthetic Detergents plant inaugurated; Indian shareholding increases to 18.57%.
1978
Indian shareholding increases to 34%; Fair & Lovely skin cream launched.
1979
Sodium Tripolyphospate plant at Haldia commissioned.
1980
Dr. A. S. Ganguly takes over as Chairman from Mr. T. Thomas; Unilever shareholding in the company comes down to 51%.
1982
Government allows 51% Unilever shareholding.
1984
Foods, Animal Feeds businesses transferred to Lipton.
1986
Agri-products unit at Hyderabad starts functioning - first range of hybrid seeds comes out; Khamgaon Soaps unit and Yavatmal Personal Products unit start production.
1988
Launch of Lipton Taaza tea.
1990
Mr. S. M. Datta takes over as Chairman from Dr. A. S. Ganguly.
1991
Surf Ultra detergent launched.
1992
HLL recognised by Government of India as Star Trading House in Exports.
1993
HLL's largest competitor, Tata Oil Mills Company (TOMCO), merges with the company with effect from April 1, 1993, the biggest such in Indian industry till that time. Merger ultimately accomplished in December 1994; Launch of Vim bar; Kissan acquired from the UB Group.
1994
HLL forms Nepal Lever Limited, HLL and US-based Kimberley-Clark Corporation form 50:50 joint venture - Kimberley-Clark Lever Ltd. - to market Huggies diapers and Kotex feminine care products. Factory set up at Pune in 1995; HLL acquires Kwality and Milkfood 100% brandnames and distribution assets. HLL introduces Wall's.
1995
HLL and Indian cosmetics major, Lakme Ltd., form 50:50 joint venture - Lakme Lever Ltd.; HLL enters branded staples business with salt; HLL recognised as Super Star Trading House.
1996
Mr. K. B. Dadiseth takes over as Chairman from Mr. S. M. Datta; Merger of Group company, Brooke Bond Lipton India Limited, with HLL, with effect from January 1; HLL introduces branded atta; Surf Excel launched.
1997
Unilever sets up International Research Laboratory in Bangalore; new Regional Innovation Centres also come up.
1998
Group company, Pond's India Ltd., merges with HLL with effect from January 1, 1998. HLL acquires Lakme brand, factories and Lakme Ltd.'s 50% equity in Lakme Lever Ltd.
2000
Mr. M. S. Banga takes over as Chairman from Mr. K. B. Dadiseth, who joins the Unilever Board; HLL acquires 74% stake in Modern Food Industries Ltd., the first public sector company to be disinvested by the Government of India.
2002
HLL enters Ayurvedic health & beauty centre category with the Ayush range and Ayush Therapy Centres.
2003
Launch of Hindustan Lever Network; acquisition of the Amalgam Group
2005
Launch of "Pureit" water purifiers

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company, touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages. They endow the company with a scale of combined volumes of about 4 million tonnes and sales of Rs.10,000 crores. HUL is also one of the country's largest exporters; it has been recognised as a Golden Super Star Trading House by the Government of India. The mission that inspires HUL's over 15,000 employees, including over 1,300 managers, is to "add vitality to life." HUL meets everyday needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life. It is a mission HUL shares with its parent company, Unilever, which holds 51.55% of the equity. The rest of the shareholding is distributed among 380,000 individual shareholders and financial institutions.

HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's, Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna, Kwality Wall's – are household names across the country and span many categories - soaps, detergents, personal products, tea, coffee, branded staples, ice cream and culinary products. They are manufactured over 40 factories across India. The operations involve over 2,000 suppliers and associates. HUL's distribution network, comprising about 4,000 redistribution stockists, covering 6.3 million retail outlets reaching the entire urban population, and about 250 million rural consumers. HUL has traditionally been a company, which incorporates latest technology in all its operations. The Hindustan Unilever Research Centre (HLRC) was set up in 1958, and now has facilities in Mumbai and Bangalore. HLRC and the Global Technology Centres in India have over 200 highly qualified scientists and technologists, many with post-doctoral experience acquired in the US and Europe.

HUL believes that an organisation's worth is also in the service it renders to the community. HUL is focusing on health & hygiene education, women empowerment, and water management. It is also involved in education and rehabilitation of special or underprivileged children, care for the destitute and HIV-positive, and rural development. HUL has also responded in case of national calamities / adversities and contributes through various welfare measures, most recent being the village built by HUL in earthquake affected Gujarat, and relief & rehabilitation after the Tsunami caused devastation in South India.

In 2001, the company embarked on an ambitious programme, Shakti. Through Shakti, HUL is creating micro-enterprise opportunities for rural women, thereby improving their livelihood and the standard of living in rural communities. Shakti also includes health and hygiene education through the Shakti Vani Programme, and creating access to relevant information through the iShakti community portal. The program now covers 15 states in India and has over 31,000 women entrepreneurs in its fold, reaching out to 100,000 villages and directly reaching to 150 million rural consumers. By the end of 2010, Shakti aims to have 100,000 Shakti entrepreneurs covering 500,000 villages, touching the lives of over 600 million people.

HUL is also running a rural health programme – Lifebuoy Swasthya Chetana. The programme endeavours to induce adoption of hygienic practices among rural Indians and aims to bring down the incidence of diarrhoea. It has already touched 70 million people in approximately 15000 villages of 8 states. The vision is to make a billion Indians feel safe and secure.

If Hindustan Unilever straddles the Indian corporate world, it is because of being single-minded in identifying itself with Indian aspirations and needs in every walk of life.

Hindustan Unilever Limited is India's largest Fast Moving Consumer Goods (FMCG) company. It is present in Home & Personal Care and Foods & Beverages categories. HUL and Group companies have about 16,000 employees, including 1200 managers.

The fundamental principle determining the organisation structure is to infuse speed and flexibility in decision-making and implementation, with empowered managers across the company's nationwide operations. For this, HUL is organised into two self-sufficient divisions - Home & Personal Care & Foods - supported by certain central functions and resources to leverage economies of scale wherever relevant.

Board At the apex is the Board, headed by the Chairman, and comprising 5 whole time Directors and 5 independent non-executive Directors. The day to day operations are supervised by the National Management comprising the Vice Chairman, Managing Director (HPC), Managing Director (Foods) and the Finance Director.

Divisions Each division is self-sufficient with dedicated resources and assets in sales, marketing, commercial, and manufacturing. The two divisions are further reorganised into categories.
Typically, each category and each function - Sales, Commercial, Manufacturing - is headed by a Vice President. They with their respective Managing Director, comprise that Division's Management Committee.

For managing sales operations, HUL divides the country into four regions, with regional branches in Delhi, Kolkata, Chennai and Mumbai. Headed by a Regional Manager, they comprise Regional Sales Managers and Area Sales Managers, assisted by dedicated field forces, comprising Sales Officers and Territory Sales Incharges.

In Marketing, each category has a Marketing Manager who heads a team of Brand Managers dedicated to each or a group of brands.
The commercial team of a Division is responsible for its supply chain management. There are teams dedicated to sourcing, planning and logistics.
Each Division has a nationwide manufacturing base, with each factory peopled by teams of Production, Engineering, Quality Assurance, Commercial and Personnel Managers.
Central functions

HUL's Central Functions are Finance, Human Resources, Technology, Research,
Information Technology, Legal & Secretarial, and Corporate Affairs. Their services are shared across the company. But, wherever necessary, managerial resources are dedicated exclusively to a business. For example, each Division now has dedicated HR managers. HUL believes that while it leverages the scale of a large corporate, it must also retain the soul of a small company. Its organisation structure, which has and will continue to evolve with time, is aimed at achieving this knitting.

BusinessesHome & Personal Care• Personal Wash• Fabric Wash• Home Care• Oral Care• Skin Care• Hair Care• Deodorants & Talcs• Colour Cosmetics Foods• Tea• Coffee • Branded Staples• Culinary Products• Ice Creams• Modern Foods rangesNew Ventures• Hindustan Unilever Network• Ayush ayurvedic products & services• Sangam• Pureit water purifiersExports• HPC• Beverages• Marine Products• Rice• Castor

Mr.Harish ManwaniChairman
A distinguished alumnus in statistics & economics and MBA from Mumbai University, Mr. Manwani joined HUL in 1976. Following several Sales and Marketing assignments, he became Divisional Vice President - Marketing. Mr. Manwani joined the Board of HUL in 1995, responsible for the Personal Products business. In addition, he held regional responsibility as the Category Leader for Personal Products for the then Central Asia and Middle East (CAME) Business Group.

Mr. Manwani then moved to the UK as Senior Vice President for the Global Hair Care and Oral Care Categories and in early 2001 was appointed President of the Home & Personal Care (HPC) - Latin America Business Group

In 2004, he was appointed President and Chief Executive Officer of the HPC - North America Business Group. In April 2005, he was elevated to the Unilever Executive as President – Asia & Africa.

Mr. Manwani has attended the Advanced Management Programme (AMP) at Harvard Business School.

Mr.Douglas BaillieCEO and Managing Director

Douglas Baillie (50) Born and educated in Zimbabwe, Mr. Baillie graduated from the University of Natal with majors in business finance, marketing and business administration and joined Unilever SA in 1978. His career over the years has spanned various sales and marketing positions, culminating in a secondment to Lever Rexona in Australia in 1987.
On his return to South Africa in late 1988, he took up the position of Sales Director, which was followed by a spell as Marketing Director. Mr. Baillie moved to London in 1994 to Personal Products Co-ordination where he became the Regional Liaison Member for Africa, Middle East, Central and Eastern Europe and Turkey before moving to Vice President, Home and Personal Care for the Africa Business Group. Mr. Baillie was appointed Managing Director Lever Pond’s South Africa in 1997 and National Manager, Unilever South Africa, in May 2000. Whilst in this position Mr. Baillie served on several external Boards including the Advertising Standards Authority, the Consumer Goods Council of South Africa and was a member of Presidential Big Business working group

Prior to assuming responsibilities as the Chief Executive Officer (CEO) of Hindustan Unilever Limited, Mr. Baillie was Group Vice President and Head of Unilever AMET (Africa, Middle East and Turkey). Mr. Baillie is also the Group Vice President responsible for Unilever’s business in South Asia, which includes Sri Lanka, Pakistan and Bangladesh.

D. Sundaram
Finance & IT Director
Mr. D. Sundaram is post-graduate from Madras University and a Fellow of the Institute of Cost and Works Accountants of India (FICWA). He joined Hindustan Unilever in 1975 as a Management Trainee. He has worked in various capacities as Corporate Accountant, Commercial Manager and Treasurer.He was seconded to Unilever, London,as Commercial Officer for Africa and Middle East
Group between 1990 and 1993 and on return was the Financial Member of the TOMCO Integration team from 1993 to 1994. He became the Finance Director of the erstwhile Brooke Bond Lipton India Limited in March 1994. He was again seconded to Unilever in August 1996 as Senior Vice President–Finance, Central Asia and Middle East Group with responsibility for Finance, IT and business strategies for Unilever companies in the Indian sub-continent, North Africa and the Middle East countries. He returned to India in May 1999 as Finance & IT Director of HUL.

Mr. Nitin Paranjpe
Exectuive Director
Mr. Nitin Paranjpe after obtaining a degree in BE (Mech) and MBA in Marketing (JBIMS) from Mumbai joined the Company as a Management Trainee in 1987. In his early years in the Company, Mr. Paranjpe worked as Area Sales Manager – Detergents and then Product Manager – Detergents.
In April 1996, he became the Branch Manager, Chennai and in February 1999 was appointed a member of the Project Millennium team. In 2000, he moved to Unilever, London and was involved in a review of the Organisation Structure. During 2001, he was Assistant to the Unilever Chairman & Executive Committee in London. On his return to India in 2002, he became the Category Head – Fabric Wash & Regional Brand Director (Asia) for some Laundry and Household Cleaning (HHC) Brands. In 2004, he became Vice President – Home Care (Laundry & HHC) India responsible for the top and bottom-line of the Homecare business. Effective March 2006 Mr. Paranjpe is the Executive Director for the Home & Personal Care business.

Mr. Sanjiv Kakkar
Director
Mr. Sanjiv Kakkar is BA (Economics) and PGDM from IIM Ahmedabad with 23 years work experience. Mr. Kakkar joined the Company in June 1984 and has worked in various Sales and Marketing assignments. His marketing experience spans across categories including Beverages, Personal Products and Oral & Hair Care
He has also had key stints as Category Head of Oral and General Manager – Sales & Customer Management of Personal Products. He was appointed Vice President – Oral & Hair Care in May 2004. In March 2006, Mr. Kakkar was appointed as Executive Director - Foods and joined the Management Committee on 1st January 2007. Sanjiv was appointed as the Executive Director - Sales and Customer Development in May 2007.
A.Narayan
Director
Mr. A. Narayan is the Managing Director and CEO of ICI India Limited. He is also the Chairman of ICI India Research & Technology Centre. Mr. Narayan joined the Board as Independent Non-Executive Director in 2001.
V. Narayanan
Director
Mr. V. Narayanan is a post-graduate from Madras University. He was Chairman and Managing Director of the erstwhile Pond's (India) Ltd. He is now Chairman of the Academy of Management Excellence. He joined the Board as Independent Non-Executive Director in 1987.
D. S. Parekh
Director
Mr. D. S. Parekh holds a FCA degree from England & Wales. Mr. Parekh has held senior positions in Grindlays and Chase Manhattan. He is the Executive Chairman of Housing Development Finance Corporation. Mr. Parekh joined the Board as Independent Non-Executive Director in 1997.
C. K. Prahalad
Director
Professor C. K. Prahalad is the Harvey C. Fruehauf Professor of Business Administration at the University of Michigan at Ann Arbor, the US. His contribution to business strategy is globally recognised. He joined the Board as Independent Non-Executive Director in 2000.
S. Ramadorai
Director
Mr. S. Ramadorai is the Chief Executive Officer of Tata Consultancy Services. Mr. Ramadorai is also Chairman of Tata Technologies Ltd. and Chairman of CMC Ltd. He joined the Board as Independent Non-Executive Director in 2002.

Code of Business Principles
Unilever has earned a reputation for conducting its business with integrity and with respect for the interests of those our activities can affect. This reputation is an asset, just as real as our people and brands.
Our first priority is to be a successful business and that means investing for growth and balancing short-term and long-term interests. It also means caring about our consumers, employees and shareholders, our business partners and the world in which we live.
To succeed requires the highest standards of behaviour from all of us. The general principles contained in this Code set out those standards. More detailed guidance tailored to the needs of different countries and companies will build on these principles as appropriate, but will not include any standards less rigorous than those contained in this Code.
We want this Code to be more than a collection of high-sounding statements. It must have practical value in our day-to-day business and each one of us must follow these principles in the spirit as well as the letter.

Code of Business Principles

Standard of Conduct
We conduct our operations with honesty, integrity and openness, and with respect for the human rights and interests of our employees.
We shall similarly respect the legitimate interests of those with whom we have relationships.Obeying the Law
Unilever companies and employees are required to comply with the laws and regulations of the countries in which we operate.
EmployeesUnilever is committed to diversity in a working environment where there is mutual trust and respect and where everyone feels responsible for the performance and reputation of our company.
We will recruit, employ and promote employees on the sole basis of the qualifications and abilities needed for the work to be performed.
We are committed to safe and healthy working conditions for all employees. We will not use any form of forced, compulsory or child labour.
We are committed to working with employees to develop and enhance each individual's skills and capabilities.
We respect the dignity of the individual and the right of employees to freedom of association.We will maintain good communications with employees through company based information and consultation procedures.
ConsumersUnilever is committed to providing branded products and services which consistently offer value in terms of price and quality, and which are safe for their intended use. Products and services will be accurately and properly labelled, advertised and communicated.ShareholdersUnilever will conduct its operations in accordance with internationally accepted principles of good corporate governance. We will provide timely, regular and reliable information on our activities, structure, financial situation and performance to all shareholders.Business Partners
Unilever is committed to establishing mutually beneficial relations with our suppliers, customers and business partners.
In our business dealings we expect our partners to adhere to business principles consistent with our own.
Community Involvement
Unilever strives to be a trusted corporate citizen and, as an integral part of society, to fulfill our responsibilities to the societies and communities in which we operate.Public Activities
Unilever companies are encouraged to promote and defend their legitimate business interests.Unilever will co-operate with governments and other organisations, both directly and through bodies such as trade associations, in the development of proposed legislation and other regulations which may affect legitimate business interests.Unilever neither supports political parties nor contributes to the funds of groups whose activities are calculated to promote party interests.The Environment
Unilever is committed to making continuous improvements in the management of our environmental impact and to the longer-term goal of developing a sustainable business.Unilever will work in partnership with others to promote environmental care, increase understanding of environmental issues and disseminate good practice.InnovationIn our scientific innovation to meet consumer needs we will respect the concerns of our consumers and of society. We will work on the basis of sound science, applying rigorous standards of product safety.
CompetitionUnilever believes in vigorous yet fair competition and supports the development of appropriate competition laws. Unilever companies and employees will conduct their operations in accordance with the principles of fair competition and all applicable regulations.Business Integrity

Unilever does not give or receive, whether directly or indirectly, bribes or other improper advantages for business or financial gain. No employee may offer, give or receive any gift or payment which is, or may be construed as being, a bribe. Any demand for, or offer of, a bribe must be rejected immediately and reported to management.Unilever accounting records and supporting documents must accurately describe and reflect the nature of the underlying transactions. No undisclosed or unrecorded account, fund or asset will be established or maintained.

Conflicts of Interests

All Unilever employees are expected to avoid personal activities and financial interests which could conflict with their responsibilities to the company.Unilever employees must not seek gain for themselves or others through misuse of their positions.

Compliance – Monitoring – Reporting
Compliance with these principles is an essential element in our business success. The Unilever Board is responsible for ensuring these principles are communicated to, and understood and observed by, all employees.

Day-to-day responsibility is delegated to the senior management of the regions and operating companies. They are responsible for implementing these principles, if necessary through more detailed guidance tailored to local needs.Assurance of compliance is given and monitored each year. Compliance with the Code is subject to review by the Board supported by the Audit Committee of the Board and the Corporate Risk Committee.
Any breaches of the Code must be reported in accordance with the procedures specified by the Joint Secretaries. The Board of Unilever will not criticise management for any loss of business resulting from adherence to these principles and other mandatory policies and instructions.
The Board of Unilever expects employees to bring to their attention, or to that of senior management, any breach or suspected breach of these principles.Provision has been made for employees to be able to report in confidence and no employee will suffer as a consequence of doing so.

In this Code the expressions 'Unilever' and 'Unilever companies' are used for convenience and mean the Unilever Group of companies comprising Unilever N.V., Unilever PLC and their respective subsidiary companies. The Board of Unilever means the Directors of Unilever N.V. and Unilever PLC.

Environment Policy

Hindustan Unilever Limited (HUL) supplies high quality goods and services to meet the daily needs of consumers and industry. In doing so, the Company is committed to exhibit the highest standards of corporate behaviour towards its consumers, employees, the societies and the world in which we live.The company recognises its joint responsibility with the Government and the Public to protect environment and is committed to regulate all its activities so as to follow best practicable means for minimising adverse environmental impact arising out of its operations.The company is committed to making its products environmentally acceptable, on a scientifically established basis, while fulfilling consumers' requirements for excellent quality, performance and safety.The aim of the Policy is to do all that is reasonably practicable to prevent or minimise, encompassing all available knowledge and information, the risk of an adverse environmental impact arising from processing of the product, its use or foreseeable misuse.This Policy document reflects the continuing commitment of the Board for sound Environment Management of its operations. The Policy applies to development of a process, product and services, from research to full-scale operation. It is applicable to all company operations covering its plantations, manufacturing, sales and distribution, research & innovation centres and offices. This document defines the aims and scope of the Policy as well as responsibilities for the achievement of the objectives laid down.The Vision Our vision is to continue to be an environmentally responsible organisation making continuous improvements in the management of the environmental impact of our operations.We will achieve this through an Integrated Environment Management approach, which focuses on People, Technology and Facilities, supported by Management Commitment as the prime driver.The Environment Policy Hindustan Unilever Ltd. (HUL) is committed to meeting the needs of customers and consumers in an environmentally sound manner, through continuous improvement in environmental performance in all our activities. Management at all levels, jointly with employees, is responsible and will be held accountable for company's environmental performance.Accordingly, HUL's aims are to:
· Ensure safety of its products and operations for the environment by using standards of environmental safety, which are scientifically sustainable and commonly acceptable.
· Develop, introduce and maintain environmental management systems across the company to meet the company standards as well as statutory requirements for environment. Verify compliance with these standards through regular auditing.
· Assess environmental impact of all its activities and set annual improvement objectives and targets and review these to ensure that these are being met at the individual unit and corporate levels.
· Reduce Waste, conserve Energy and explore opportunities for reuse and recycle.
· Involve all employees in the implementation of this Policy and provide appropriate training. Provide for dissemination of information to employees on environmental objectives and performance through suitable communication networks.
· Encourage suppliers and co-packers to develop and employ environmentally superior processes and ingredients and co-operate with other members of the supply chain to improve overall environmental performance.
· Work in partnership with external bodies and Government agencies to promote environmental care, increase understanding of environmental issues and disseminate good practice.Responsibilities Corporate The Board and the Management Committee of HUL is committed to conduct the company operations in an environmentally sound manner. The Management Committee will:
· Set mandatory standards and establish environmental improvement objectives and targets for HUL as a whole and for individual units, and ensure these are included in the annual operating plans.
· Formally review environment performance of the company once every quarter.
· Review environment performance when visiting units and recognise exemplary performance.
· Nominate:- A senior line manager responsible for environmental performance at the individual HUL site.- HUL environmental coordinator.The Management Committee, through the nominated environmental coordinator will:
· Ensure implementation of HUL Policy on environment and compliance with Unilever and HUL environmental standards and the standards stipulated under relevant national / local legislation. When believed to be appropriate, apply more stringent criteria than those required by law.
· Assess environmental impact of HUL operations and establish strategies for sound environment management and key implementation steps.
· Encourage development of inherently safer and cleaner manufacturing processes to further raise the standards of environment performance.
· Establish appropriate management systems for environment management and ensure regular auditing to verify compliance.
· Establish systems for appropriate training in implementation of Environment Management Systems at work.
· Ensure that all employees are made aware of individual and collective responsibilities towards environment.
· Arrange for expert advice on all aspects of environment management.
· Participate, wherever possible, with appropriate industry and Government bodies advising on environmental legislation and interact with national and local authorities concerned with protection of environment.Individual UnitsThe overall responsibility for environment management at each unit will rest with the Unit Head, who will ensure implementation of HUL Policy on environment at unit level. Concerned line managers / heads of departments are responsible for environmental performance at department levels.In order to fulfill the requirements of the Environment Policy at each site, the Unit Head will:
· Designate a unit environment coordinator who will be responsible for co-ordinating environmental activities at unit, collating environmental statistics and providing / arranging for expert advice.
· Agree with the Management Committee Member responsible for the unit, specific environmental improvement objectives and targets for the unit and ensure that these are incorporated in the annual objectives of the concerned managers and officers and are reviewed periodically.
· Ensure that the unit complies with Unilever and HUL mandatory standards and the relevant national and state regulations with respect to environment.
· Ensure formal environmental risk assessment to identify associated environmental aspects and take appropriate steps to control risks at acceptable levels.
· Ensure that all new operations are subjected to a systematic and formal analysis to assess environmental impact. Findings of such exercises should be implemented prior to commencement of the activity.
· Manage change in People, Technology and Facilities through a planned approach based on training, risk assessment, pre-commissioning audits and adherence to design codes.
· Regularly review environment performance of the unit against set objectives and targets and strive for continual improvement.
· Sustain a high degree of environmental awareness through regular promotional campaigns and employee participation through training, safety committees, emergency drills etc.
· Ensure dissemination of relevant information on environment within the unit and to outside bodies, and regularly interact with Government authorities concerned for protection of environment.
· Maintain appropriate emergency procedures consistent with available technologies to prevent / control environmental incidents.
· Provide appropriate training to all employees.
· Ensure periodic audits to verify compliance with environment management systems and personally carry out sample environment audits to check efficacy of the systems.
· Report environmental statistics to HUL Corporate Safety & Environment Group on a monthly basis.Research and Innovation Centres
Since most new products and processes are developed in these Units, certain additional responsibilities devolve on them to ensure implementation of the Environment Policy of the company. In addition to the Unit Head's responsibilities outlined above, the heads of these units will:
· Ensure that a formal and systematic risk assessment exercise is undertaken during the process/product development stage with specific reference to environmental impact.
· Transfer technology to the pilot plant and main production through a properly documented process specification which will clearly define environmental impact and risks associated with processes, products, raw material and finished product handling, transport and storage.
· Ensure that treatment techniques are developed for any wastes generated as a result of the new product/process and is incorporated into the process specifications
Quality Policy
Hindustan Unilever Limited considers quality as one of the principal strategic objectives to guarantee its growth and leadership in the markets in which it operates.The company is committed to respond creatively and competitively to the changing needs and aspirations of our consumers through relentless pursuit of technological excellence, innovation and quality management across our businesses, and offer superior quality products and services that are appropriate to the various price points in the market as well as to our commitment to building shareholder value.The company recognises that its employees are the primary source of success in its operations and is committed to training and providing them the necessary tools and techniques as well as empowering them to ensure broad base compliance of this policy in the organisation at all levels.The company is committed to fulfill its legal and statutory obligations and international standards of product safety and hygiene and will not knowingly sell product that is harmful to consumers or their belongings. It will institute systems and measures to monitor compliance in order to meet its responsibilities to consumers.The company will maintain an open communication channel with its consumers and customers and will carefully monitor the feedback to continuously improve its products and services and set quality standards to fulfill them.The company is committed to extend its quality standards to its contract manufacturers, key suppliers and service providers and by entering into alliances with them, to jointly improve the quality of its products and services. This policy is applicable to production from its own facilities as well as to production that is outsourced.The company will periodically review this quality policy for its effectiveness and consistency with business objectives.The company delegates authority and responsibility for dissemination and implementation of this policy to each Business and Unit Head.
Safety and Health Policy
Hindustan Unilever Limited (HUL) supplies high quality goods and services to meet the daily needs of consumers and customers. In doing so, the Company is committed to exhibit the highest standards of corporate behavior towards its consumers, employees, the societies and the environment in which we operate. Towards this, the Company recognises its responsibility to ensure safety and protection of health of its employees, contractors and visitors in all its operating sites, which include manufacturing, sales and distribution, research laboratories and offices during work and work related travel.This Policy document defines the vision, principles, aim, required actions and scope of the policy application as well as the responsibility for execution.Our Vision Our vision is to be an injury free organisation. Our MissionWe will bring safety on top of mind for all employees and will integrate it with all business processes. We will realise our Vision through an Integrated Safety Management approach, which focuses on People, Processes, Systems, Technology and Facilities, supported by demonstrated leadership and employee commitment at all levels as the prime drivers for ensuring a safe and healthy work environment.Safety PrinciplesHUL's Occupational Safety and Health Policy is based on and supported by the following eight Principles.These Principles have the same status as the Company's Code of Business Principles:
· All injuries and occupational illnesses are preventable
· All operational exposures can be safeguarded
· Safety evaluation of all business processes is vital
· Working safely is a condition of employment
· Training all employees to work safely is essential
· Management audits are a must
· Employee involvement is essential
· All deficiencies must be reported and corrected promptly Note: In order to facilitate operationalisation of the Safety Principles, a separate document has been prepared, which covers: a) Safety Principles b) Success Criteria c) Illustrative KPIThis document will form the basis for the concerned Line / Organisations in developing KPI's for their respective functions / sites.Scope of Application This section defines the scope of application of this Policy (where, when and to whom is this Policy applicable). Where does this policy apply?
· All own/leased sites – Manufacturing, Research/Innovation, Offices, Depots, Warehouses
· In-house purchased services i.e. canteen, travel desk, IT implementation etc.
· Sites of associates with HUL holding > 24% while carrying out operations of making, handling, using, transporting, selling or disposing off of our products Who does the policy apply to?
· All employees at business anywhere
· Contractors and visitors while at our own sites When does it apply?
· At work (our employees, contractors and visitors)
· Travel between home and work of our employees
· Business related travel including stay out of headquarter
· All Company organised business events i.e. training programmes, conferences, business related get-togethers, annual sports etc.Implementation Responsibility HUL Management at all levels is responsible for Policy implementation. Every site shall prepare a responsibility matrix with respect to this Policy. Such SHE responsibilities shall form an integral part of overall job responsibilities of all employees.All Unilever and HUL Standards, Rules and Procedures on Occupational Safety and Health, including those that may be specific to a site are integral to this Policy and its implementation. All employees are required to ensure strict adherence.





Questions:

1) If Hindustan Unilever straddles the Indian corporate world, it is because of being single-minded in identifying itself with Indian aspirations and needs in every walk of life, for being single –minded in identifying itself it needs to have good communication system, taking into account the parameters given in the case study you are required to explain the communication environment within the Organization set up of Hindustan Unilever Ltd.

2) Based on the details given with reference to Hindustan Unilever Ltd, you are required to prepare a speech for The Chairman of Hindustan Unilever Ltd on ‘every employee needs to be an effective communicator’.


3) Prepare a diagrammatic representation of Organization structure and explain it with relevance to Formal Communication network.

4) Explain the relevance of informal communication network and how to use for the benefit of a multi product company like Hindustan Unilever Ltd.

6 comments:

arnab said...

this is a unique oppertunity for the new entreprenures by which they can lean how to set up a business and how to cope up with the envoirment to run a business sucessfully.this case studies also give the mba students to gather knowlede about the industries.I AM THAKFUL THAT WE R GETTING AN CHANCE TO LEAN ABOUT THOSE INDUSTRIES,AND ABOUT THEIR CHALLENGES IN THE MARKET.

arnab said...

this is a unique oppertunity for the new entreprenures by which they can learn how to set up a business and how to cope up with the envoirment to run a business sucessfully.this case studies also give the mba students to gather knowlede about the industries.I AM THAKFUL THAT WE R GETTING AN CHANCE TO LEAN ABOUT THOSE INDUSTRIES,AND ABOUT THEIR CHALLENGES IN THE MARKET.

Kuldeep said...

This report is really helpful for management students as it covers all areas of HUL, How it has been developing and we can also realize how it is creating value to its stakeholders..I would like to thank to the writer for giving his value description..

Kuldeep
DoMS, IIT-M

kishor Jagirdar said...

This is an excellent gateway of information for the novel methods adopted by HLL.This will be very useful for Entrepreunership on the lines of what C.K Prahalad has propounded in the creation of wealth at the bottom of the pyramid.The MBA aspirants too can use this to analyse this novel story re-told

kishor Jagirdar said...

This is an excellent gateway of information for the novel methods adopted by HLL.This will be very useful for Entrepreunership on the lines of what C.K Prahalad has propounded in the creation of wealth at the bottom of the pyramid.The MBA aspirants too can use this to analyse this novel story re-told

sudarshna.gemini said...

hey can I use this case for academic purposes to make a presentation/ where did you get this case from?