Unilever: Organization Analysis, Ethical Problems, and Proposed Solutions

Unilever Organization Analysis, Ethical Problems, and Proposed Solutions
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March 14, 2023
Context and Scenario
For this paper, I have chosen to focus on Unilever, a British-Dutch consumer goods company that operates in over 190 countries worldwide. Unilever's product portfolio includes food, beverages, cleaning agents, and personal care products. The company is known for its brands, such as Dove, Lipton, Knorr, and Axe.
Unilever's approach to responsible business is centered around its Sustainable Living Plan (USLP), launched in 2010. The plan is built on three pillars: (1) improving health and well-being, (2) reducing environmental impact, and (3) enhancing livelihoods (Kusuma, 2022). The USLP sets over 50 targets to be achieved by 2020, including a commitment to halve the environmental footprint of Unilever's products, improve the health and well-being of 1 billion people, and enhance the livelihoods of millions through initiatives such as the Sustainable Agriculture Programme.
Approach to Business
The USLP is closely aligned with the Triple Bottom Line (TBL) approach, which considers a business's social, environmental, and economic impacts. By adopting this approach, Unilever seeks to create value for all its stakeholders, including customers, employees, suppliers, and communities.
Unilever's approach to responsible business is also guided by the Carroll Pyramid of Corporate Social Responsibility, which identifies four levels of responsibility: economic, legal, ethical, and philanthropic (Carroll, 2016). Unilever's focus on sustainability and responsible business practices aligns with the ethical and philanthropic levels of the pyramid, as the company seeks to comply with legal and economic obligations and do the right thing for society and the environment.
Mission Statement and Ethics
Unilever's mission statement is "to make sustainable living commonplace." This mission is reflected in the company's ethical statements, emphasizing the importance of responsible business practices and sustainability. For example, Unilever's Code of Business Principles sets out the company's commitment to acting with integrity, respecting human rights, protecting the environment, and supporting the communities in which it operates.
Several factors drive Unilever's interest in ethical business practices. First, the company recognizes that it has a responsibility to operate sustainably and socially responsibly. This responsibility is reflected in the company's mission statement and ethical statements. Second, consumers increasingly demand sustainable and ethical products, and Unilever recognizes that meeting these demands is essential for long-term success. Third, Unilever recognizes that sustainability and responsible business practices can create value for the company by reducing costs, increasing efficiency, and improving brand reputation.
Overall, Unilever's approach to responsible business is guided by its Sustainable Living Plan, which seeks to create value for all stakeholders by improving health and well-being, reducing environmental impact, and enhancing livelihoods. The company's focus on sustainability and responsible business practices aligns with the TBL approach and the Carroll Pyramid of CSR. Unilever's commitment to ethical business practices is driven by its responsibility to society and the environment, consumer demands, and the potential to create value for the company.
Financials
Regarding financials, Unilever is a large multinational corporation with a market capitalization of approximately $155 billion as of March 2023. The company's revenue in 2021 was approximately €52 billion, with a net income of €7.4 billion. Unilever's share price has been relatively stable in recent years, with a high of around €55 per share in early 2021 and a low of around €43 per share in late 2020.
Recent News and Criticisms
In recent news, Unilever has been making headlines for its efforts to increase the sustainability of its products and operations. In September 2021, the company announced it would achieve net-zero emissions from all its products by 2039, ten years ahead of the Paris Agreement target. Unilever also announced a €1 billion investment in climate and nature projects over the next ten years. In January 2022, Unilever partnered with The Ocean Cleanup to remove plastic from rivers and oceans worldwide.
In recent years, Unilever has also faced criticism for its plastic packaging and palm oil sourcing practices. The company has committed to making all its plastic packaging reusable, recyclable, or compostable by 2025 and sourcing all its palm oil sustainably by the same year. However, some environmental groups and activists have criticized Unilever for not doing enough to address these issues.
Overall, Unilever's financials and recent news demonstrate the company's commitment to sustainability and responsible business practices. While the company has faced criticism in some areas, its Sustainable Living Plan and focus on the TBL approach and the Carroll Pyramid of CSR suggest a long-term commitment to sustainability and ethical business practices.
Ethical Underpinning
Unilever's approach to responsible business is guided by its Sustainable Living Plan, which seeks to create value for all stakeholders by improving health and well-being, reducing environmental impact, and enhancing livelihoods. However, despite its efforts to promote sustainability and responsible business practices, Unilever still faces criticism and challenges regarding its ethical, social, and environmental impacts. Considering the company’s size and complexity, the author of this article believes that the best approach should be a multi-lateral approach that utilizes the best practices of various corporate ethical paradigms.
One ethical issue that Unilever has faced is related to using palm oil in its products. Palm oil production has been linked to deforestation, habitat destruction, and human rights abuses in countries such as Indonesia and Malaysia. In 2008, Greenpeace launched a campaign against Unilever, accusing the company of contributing to deforestation by using palm oil (Allen, 2018). In response, Unilever committed to sourcing all its palm oil from sustainable sources by 2015. However, in 2016, Greenpeace accused Unilever of still sourcing palm oil from suppliers linked to deforestation and demanded that the company take more decisive action to address the issue.
Another ethical issue that Unilever has faced is related to its advertising practices. In 2017, Unilever's Dove brand faced backlash over an advertisement criticized for being racist (Astor, 2017). The advertisement showed a black woman removing her shirt to reveal a white woman underneath. The advertisement was widely criticized on social media, with many accusing Unilever of perpetuating racist stereotypes. Unilever apologized for the advertisement and withdrew it.
To become more ethical and sustainable, Unilever must address these challenges and take a more proactive role in contributing to the broader/macro environment. One approach that Unilever could take is to adopt a stakeholder theory perspective, which considers the interests of all stakeholders, including customers, employees, suppliers, communities, and the environment (Astor, 2017). By adopting this perspective, Unilever could ensure that its business practices align with the needs and interests of all its stakeholders rather than just focusing on maximizing profits.
Another approach that Unilever could take is to adopt a corporate social responsibility (CSR) framework, enabling the company to identify and address its social and environmental impacts. Unilever's Sustainable Living Plan is a step in this direction, but the company could do more to embed CSR into its business strategy and decision-making processes.
Unilever could also adopt a more proactive role in contributing to the broader/macro environment by supporting initiatives such as the United Nations' Sustainable Development Goals (SDGs). The SDGs provide a framework for addressing global challenges such as poverty, inequality, and climate change. By aligning its business practices with the SDGs, Unilever could contribute to achieving these goals while creating value for its stakeholders.
Ethical Theory and Reasoning
In terms of ethical theory and reasoning, Unilever's approach to responsible business is aligned with the Triple Bottom Line (TBL) approach, which considers a business's social, environmental, and economic impacts. The TBL approach is based on the idea that businesses are responsible for creating value for all stakehold...