Corporate social responsibility is a self regulated activity of the international businesses that aims to contribution to the societal goals of the philanthropy activities or charitable nature by engaging all the stakeholders of the business (Liang and Renneboog, 2017). It is the responsibility of the organisations to maximise the values for all he stakeholders and secure future sustainable development. The study provides a scope to develop the practice of corporate social responsibility as well as evaluate the organisational practice and strategic planning to mitigate the contemporary issues related to the corporate social responsibility. Through this paper, it is possible to evaluate the stakeholder’s views at Unilever and identify the strategic tactics of the organisation in managing their stakeholders in long run. The organisational analysis can be evaluated further with the theories and practice of the firm in tackling their stakeholders so that the organisational objective of creating values of the stakeholders can be fulfilled well.
Unilever is the British Dutch multinational consumer goods company, headquartered in London. The organisation is successful to provide high quality products including beauty and personal care, food and refreshments and cleaning products, and the large produce portfolio further provides a scope to the customers to make effective purchase decision. The organisation is also efficient to generate profitability and maximise their sales volume in long run. Unilever is successful to generate €51.980 billion revenue in 2019 and the total asset was €64.806 billion in the previous year. The organisation is also efficient to provide the products across 190 countries and it owns 400 brands for manufacturing and stocking the high quality products to serve the customers in a better way with new fruitful products (Unilever, 2020a).
The organisation serves the customers worldwide and it has strong customer base which is one of the major success factors of the organisation to secure future sustainable development. In the field of sustainability, it also has crucial impacts on the society and the economy across the international nations and thus it can be stated that, the organisation is efficient to create values for the stakeholders, engaged with the business and mitigate the recent business issues related to the corporate social responsibility (Unilever, 2020b).
In the recent era of globalisation, the multinational corporations face difficulties to manage their corporate social responsibility for which it becomes difficult for them to manage theory stakeholders in long run as well as expand the business ethically. The firms face problems in managing their negative environmental impacts due to production and operational activities of the companies and apart from that, the firms are also suffering through over use of natural resources and destroying the ecological chain of the earth. There are adverse impacts on the society also for which the organisation face difficulties to run their business in an ethical way. As per the Carroll’s pyramid of corporate social responsibility, there are four layers; the layers are economic, legal, ethical and philanthropic (Bellantuono, Pontrandolfo and Scozzi, 2016). The economic responsibility of the firm is to be profitable where the firm must maximise the profitable in the market to be sustainable in future. This further provides a scope to the organisations to provide high return on investment to the stakeholders and satisfy them in long run. Hence, economic responsibility must be managed though improving productions and operations so that the organisations can manage their stakeholders in long run. On the other hand, legal responsibility is to obey the rules, where the Minimum Wage Act 2020 Equality Act 2010 and non-discriminatory practice at the workplace are the basic rules which need to be obeyed by the entrepreneurs for managing their employee’s managers and suppliers who are major stakeholder of the business. In addition to this, health and Safety at Workplace 1974 is also another effective law for managing safety and security of the staff in the workplace.
The organisational activities must be according to the rules and the organisational practice including copyright and intellectual property rights to run the business legally. On the other hand, the ethical responsibility is also necessary to be managed well in the organisational workplace, where the organisations are able to create values for the stakeholders by providing them incentives and rewards and fulfilling their interest. The organisational entrepreneurs try to manage transparency and accountability at the workplace, reduce the conflict of interest between the company and the stakeholders as well as respect each stakeholder in the business, providing health and safety and giving them monetary rewards and these practices are effective for the organisations to be ethical and expand their business sustainably. The philanthropic responsibility is also necessary, where the organisations should be good corporate citizen and maximise the values for the social communities as a whole. In the recent era of globalisation, the firms are suffering from managing the conflicts between the leader and the stakeholders as well as there is lack of transparency and accountability which raise difficulties for the firms to achieve future success. The other issues such as poor communication, misunderstanding as well as poor accountability and unethical practice at the workplace also have adverse impacts on the organisational operations where the business firms may lose the market share and hamper the operational activities in long run.
As per the triple bottom line theory, there are three factors which are social, environmental and economic. The organisations need to create values for the social communities by developing suitable labour practice, providing job opportunities, managing human rights and community practice as well as maintaining product responsibility. In this regard, it is necessary for the organisations to manage the quality of the products for creating values for the customers and in this regard it is mandatory to meet the consumer’s needs and preferences and satisfy them in long run. The customers are the major stakeholders of the business and it is the responsibility of the firms to satisfy the customers and maximise their values by providing quality products and efficient services at best price. On the other hand, the economic responsibility should be managed by maximising the organisational profitability (Crane, Matten and Spence, 2019). The organisations must develop effective strategic planning to generate revenues and enhance sales volume so that the asset and profitability of the companies would be maximised in long run. This is effective for the businesses to be sustainable in the market and expand the firms internationally.
Another responsibility of the firm is in the recent years to protect the planet where environmental responsibility should be managed well. In this regard, the major issues faced by the organisations in operating their business in the market place are such as high emission of green house gas, over utilisation of the natural resources, destroying the ecological chain of the earth, use of plastics and other dangerous chemicals and materials which are harmful for the natural resources, lack of recycling technique for which the firms face the issue of waste management. These are the major problems, for which there would be harmful impacts on the environment where the stakeholders are hampered as well as the ecological chain and living beings would be suffering for such situation (Lins, Servaes and Tamayo, 2017). Thus, it is high concern of all the multinational corporations to manage their operations in the market in a environmentally sustainable way, as per the triple bottom lime theory, it is the responsibility of the business firms to manage water quality, protect the ecological chin, providing green environmental footprint, optimal use of the energy and manage waste of the production and manufacturing activities as well as reduction of greenhouse gas emission. These are the major activities through which the firms can mitigate the business issues and secure future sustainable development.
Stakeholder analysis is also important to identify the business issues as well as acknowledge the overview of the stakeholders so that the organisational leaders may restructure the practice for retaining the stakeholders and satisfy them in long run. There are internal and external stakeholders who are engaged with the business and the internal stakeholders are such as employee, managers and other staff members, and the external stakeholders are shareholders, suppliers and distribute, customers, government and social communities as a whole. It is hereby the responsibility of the organisation to manage both the internal and external stallholders to ensure steady and successful growth of the companies (Grayson and Hodges, 2017). In this regard, as per the stakeholders analysis the interest of the stakeholders must be developed and the firm would be able to mitigate the issues of internal conflicts and interest conflicts among the stakeholders. For this, the leaders must focus on the interest of the stakeholders, get proper consent from them about the organisational decision, inform them with adequate information and authentic data, enhance communication and involve them in the business activities. These are important for the leaders to manage the stakeholders and improve their interest to play a crucial role for the business to be successful in future. On the other hand, it is also mandatory for the organisations to influence the power of the stakeholders by meeting their needs and preferences as well as make them key player to run the organisations successfully. In his regard, the leaders must focus on engaging them, empowering them in the decision making behaviour of the firm as well as develop trust and loyalty so that all the stakeholders are involved to run the business efficiently.
There are crucial impacts of the corporate social responsibility on the organisations when the firms are able to manage their corporate social responsibilities, the positive impacts are such as, increasing sales and customers insight, strengthening customers base, maximising organisational profitability, providing green environmental footprint, creating values for the social communities, improving involvement with all the stakeholders, gaining ability to attract and keep satisfied the stakeholders, greater productivity and developing trust and loyalty. The above mentioned issues, faced by the organisations like Unilever on the other hand hamper the smooth business pace. The impacts of the contemporary issues on Unilever are such as, low operating income, decrease in net income, high labour turnover rate, lack of business growth and sustainability, deteriorating customer base, lack of government support due to poor environmental sustainable performance, internal conflicts among the employees, interest conflicts between the business and the stakeholders mainly shareholders and lack of business expansion. The above mentioned issues related to the corporate social responsibility also has adverse impacts on the society, which are, poor charitable program, lack of value creation for the social communities, lack of investment on the social developmental project and lack of fulfilment of the philanthropic responsibility of the firm. There are also adverse effects on the economy for such existing business issues such as, low employment opportunities, poor national income, and lack of contribution of the company on GDP of the country, lack of foreign investment and poor international trade and deterioration of trade earnings.
It is fruitful for the organisations to review the stakeholder’s feedback and understand their opinion for managing the business and fulfilling their requirement so that the organisations can retain the long run stakeholder and run the operations successfully. Stakeholder’s views are mainly the feedback and perception of the stakeholders where the companies try to identify their opinion and their requirements to run the firms sustainably. Unilever also focuses on stakeholders both internal and external in order to manage them and retain them for long run. The organisation is also responsible to the stakeholder’s views for better management of the organisational activities and engaging them with the business for achieving future success (Unilever, 2020c). The major stakeholder of the organisations and the strategies of Unilever are described further,
The customers are the highest priority stakeholders of Unilever, where the origination follows the corporate social responsibility and mitigate the issue of low product quality and lack of efficient services. The organisation is successful to deliver high quality products at affordable price and this strategy us good for retaining the customers in long run and creating values for them (Unilever, 2020e). The cost leadership strategy is helpful to set affordable price for their products as well as the expert team and the specialist are managing the quality of the final output to satisfy the buyers. Unilever maintains its position in the consumer goods market by understanding the perception of the customers and fulfilling their demands and various expectations with product quality and price and this further provides a scope to the organisation to maximise profitability and fulfil the economic responsibility of the firm (Unilever, 2020d).
The employees are another priority group which is one of the contributing factors in the organisation Unilever for achieving the success across the international nations. Organisational performance is maximising over the years where Unilever focuses on providing competitive compensation and holistic career development. Apart from that, work life balance as well as high compensation scheme is helpful for the leader at Unilever to satisfy the employees and create values for them. The CSR approach of Unilever includes flexibility at the organisational workplace, freedom to work harmony at the place, cooperative working practice and team work activities which further ensure satisfaction of the staff towards their roles and responsibilities. Hence, Unilever responds to the employees by providing monetary and nonmonetary rewards to the staff where the organisational culture, corporate governance as well as health and safety of the staff are managed well (Unilever, 2020e).
The suppliers is another major stakeholder group of Unilever, where the organisation is efficient to manage business capacity, maintain quality of raw martial and product stock as well as engaged the suppliers with the business operations and empower the in the operational activities and these are major strategy of Unilever to retain then in long run and efficient suppliers and maximise the organisational excellence. The company is also successful in implementing the employment rules and manage safety and security of the suppliers to act responsibly and fulfil their expectations as well in the organisational workplace (Unilever, 2020f).
Higher revenue and profitability are the major concern of the shareholder and Unilever is successful in this context to provide high return on investment to all the shareholders. The Partner to win strategic program is effective to ensure mutual benefit between the company and shareholders which further develops trust and loyalty among the group and ensure that the organisation is efficient to manage their shareholders in future. Unilever also focuses on product innovation for higher quality management and process innovation for better productivity, efficiency and sustainability. This strategy also encourages the shareholders to invest in the business and expand the organisation worldwide to achieve future sustainable development (Unilever, 2020g).
The social communities are also another important group, where Unilever follows the government rules and regulations as well as provide chartable fund and investment for social developmental projects. Foundation funds community programs for sanitation, nutrition, and personal development are also there where Unilever has invested a charge amount for ensuring social development (Unilever, 2020h).
Hence, stakeholder’s views are effective, where the firm is able to identify the needs and preferences of each stakeholder engaged with the business. Through the above strategic planning, the organisation is successful to ensure growth in the previous year by 2% and sales growth by 2.9%. Free cash flow is also increasing over the years and it was €6.1 billion in 2019. The organisation also invests a he amount for hath and wellbeing of the social communities and in the recent pandemic era of COVID 19, the organisation is also working hard to support the social communities for maximising their wellbeing and health status (Unilever, 2020i). In 2019, the organisation reach 615 million people for maximising their health and it now targets to 1 billion in 2020 to support the communities for their health and hygiene. Moreover, the organisation is also efficient to maximise the nutrition standard of the people and it reached 56% in 2019 and the organisation now targets to reach 60% to help the people by having good nutrition diet. The organisation also contributes positively to manage green environmental footprint and in this regard, it focuses on waste management as well as develops paper packaging style for managing the water and social quality of the earth. It further protects the natural resources and improves ecological chain of earth by utilising renewable resources for technological up-gradation and innovation. Unilever focuses on reducing greenhouse gas emission to providing low carbon environment to the society for healthy living. For sustainable sourcing strategy, there are 2.5 billion customers a day are using Unilever products (Unilever, 2020j).
Driving change through continuous improvement policies with suppliers, encouraging agricultural products and quality raw materials, protecting biodiversity, transforming the agricultural business to the Unilever business mainly for tea and palm oil as well as no deforestation are also some strategies of Unilever to be sustainable. Managing human rights, legal compliance and migrant labour management are the practice which maximise the standard of the company to act responsibly and maximise values for the stakeholders, engaged with the business. Additionally, the organisation also utilises electric cars for reducing greenhouse emission as well as there are renewable resources such as solar panel and water protection practice to maximise sustainability of the operational activities in the market (Unilever, 2020i).
Unilever is successful to manage their stakeholders and acknowledge their views to restructure the organisational strategic planning for fulfilling its responsibility and create values for all the stakeholders including customers, employees, suppliers and social communities. The environmental policies and practice of Unilever are also efficient to manage ecosystem and protect natural resources for health and wellbeing of the individuals. The organisation is hereby successful to mitigate the business issues related to corporate social responsibility and develop sustainable practice to secure future development and achieve the organisational objectives.
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Bellantuono, N., Pontrandolfo, P. and Scozzi, B., 2016. Capturing the stakeholders’ view in sustainability reporting: a novel approach. Sustainability, 8(4), p.379.
Crane, A., Matten, D. and Spence, L., 2019. Corporate social responsibility: Readings and cases in a global context. London: Routledge.
Grayson, D. and Hodges, A., 2017. Corporate social opportunity!: Seven steps to make corporate social responsibility work for your business. London: Routledge.
Liang, H. and Renneboog, L., 2017. On the foundations of corporate social responsibility. The Journal of Finance, 72(2), pp.853-910.
Lins, K.V., Servaes, H. and Tamayo, A., 2017. Social capital, trust, and firm performance: The value of corporate social responsibility during the financial crisis. The Journal of Finance, 72(4), pp.1785-1824.
Wang, H., Tong, L., Takeuchi, R. and George, G., 2016. Corporate social responsibility: An overview and new research directions: Thematic issue on corporate social responsibility.
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