Unilever's Global Management: Indianization, Recruitment, and Transnational Network | Assignments International Management

A Matrix of Managers

In the early 1940s, Unilever began actively recruiting local managers

to replace the Dutch and British executives from the head office who

had been running most of its local units. Starting with the Indian

subsidiary in 1942, Unilever put into place a management process

that company insiders referred to as “ization.” In other words, filling

local executive and technical positions with Indian managers led to

the “Indianization” of that subsidiary—along with “Australianization,”

“Brazilianization,” and other examples of localization of management

in various countries with Unilever operations.

The company’s “ization” policy, as well as an increasing number of

local competitors and the isolation of many of Unilever’s operating

companies during World War II, created a decentralized organization

of self-sufficient subsidiaries. Yet the head office also recognized the

danger of becoming too decentralized. Without the Unileverization of

those Indian, Australian, Brazilian, and other local managers, the

company’s many scattered units would not have shared any common

corporate culture or vision.

By 1995, Unilever had opened Four Acres, its international

management training college near London. Now every year, the head

office sends 300 to 400 managers from all over the world to this

international training ground. In addition, training courses are

organized on a local basis in many countries, sometimes in our own

centers (for example, in the city of Megamendung on Java),

sometimes in hired facilities.

Once the proper formal organization is in place—such as, in

Unilever’s case, a matrix that combines local initiative with some

centralized control—its managers must still be encouraged to think

transnationally. While we continue to develop local talent in our

subsidiaries, we also expect managers to gain experience in more

than one country or product line. A matrix, however well designed,

cannot work if the people across the organization aren’t prepared to

accept its flexibility. At Unilever, the recruitment and training policies

that reinforce the matrix are not only held in high esteem, they are

also a matter of long-standing practice.

Since the 1950s, we have pioneered new managerial selection

systems in western Europe. And in many developing countries, we

use advanced methods to recruit the best university graduates. For

instance, teams of Unilever managers are charged with spotting

talent in local universities at an early stage; or prizes are given for

work done by young scientists to make contact with them. The

company also sponsors an extensive program of business courses for

university students in many countries, from Turkey to the United

Kingdom. Through these courses, Unilever instructors and students

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A Matrix of Managers

In the early 1940s, Unilever began actively recruiting local managers to replace the Dutch and British executives from the head office who had been running most of its local units. Starting with the Indian subsidiary in 1942, Unilever put into place a management process that company insiders referred to as “ization.” In other words, filling local executive and technical positions with Indian managers led to the “Indianization” of that subsidiary—along with “Australianization,” “Brazilianization,” and other examples of localization of management in various countries with Unilever operations. The company’s “ization” policy, as well as an increasing number of local competitors and the isolation of many of Unilever’s operating companies during World War II, created a decentralized organization of self-sufficient subsidiaries. Yet the head office also recognized the danger of becoming too decentralized. Without the Unileverization of those Indian, Australian, Brazilian, and other local managers, the company’s many scattered units would not have shared any common corporate culture or vision. By 1995, Unilever had opened Four Acres, its international management training college near London. Now every year, the head office sends 300 to 400 managers from all over the world to this international training ground. In addition, training courses are organized on a local basis in many countries, sometimes in our own centers (for example, in the city of Megamendung on Java), sometimes in hired facilities. Once the proper formal organization is in place—such as, in Unilever’s case, a matrix that combines local initiative with some centralized control—its managers must still be encouraged to think transnationally. While we continue to develop local talent in our subsidiaries, we also expect managers to gain experience in more than one country or product line. A matrix, however well designed, cannot work if the people across the organization aren’t prepared to accept its flexibility. At Unilever, the recruitment and training policies that reinforce the matrix are not only held in high esteem, they are also a matter of long-standing practice. Since the 1950s, we have pioneered new managerial selection systems in western Europe. And in many developing countries, we use advanced methods to recruit the best university graduates. For instance, teams of Unilever managers are charged with spotting talent in local universities at an early stage; or prizes are given for work done by young scientists to make contact with them. The company also sponsors an extensive program of business courses for university students in many countries, from Turkey to the United Kingdom. Through these courses, Unilever instructors and students

get to know each other, determining what they have in common. Every candidate who survives this initial screening is then reviewed by a panel of senior managers, which often includes board-members from the parent company. The greatest challenge of recruiting, of course, is to find the best and brightest who will fit into the company. We certainly do not want a homo unileverensis; but for international careers in our current operating companies, we look for people who can work in teams and understand the value of cooperation and consensus. For managerial trainees, preparation includes both on-the-job experience and courses at Four Acres. In fact, many have joked that Unilever is really a management education institute financed by soap and margarine. Our courses go beyond teaching specific subjects like “Edible Oil Refining” or “Developments in the Retail Trade.” We also offer the “International Management Seminar” and the “Senior Management Course.” These general courses are often taught by visiting professors from well-known business schools, with Unilever instructors participating occasionally. Every trainee becomes part of a group of 25 to 30 people recruited for similar managerial positions. This shared experience creates an informal network of equals who know one another well and usually continue to meet and exchange experiences. Such an exchange is particularly important in an organization that has an extremely diverse group of international managers. Unilever’s board includes members from six different countries, and virtually every operating company contains expatriates. We have an Italian managing our large company in Brazil, a Dutchman in Taiwan, an Englishman in Malaysia, and an American in Mexico. Another element that lends coherence to Unilever’s management is our extensive system of attachments. A manager can be placed for a short or long period in a head-office department or a subsidiary. In the early 1980s, when I was responsible for profits for a large group of companies, we had a staff of about 20 people. Of these, there were usually two bright young managers on temporary assignment from several of our far-flung operating companies. After a period of 6 to 12 months, they would move on to new positions—as marketing director in Brazil, for instance, or development manager in Turkey. When these managers return home, they are still part of the Unilever network. They know whom to call in case of need and what to expect. They also realize that their own ideas can make an important contribution to Unilever’s overall progress. Exposure to another environment not only gives them more know-how but also improves their “know-who.”

strategic group at the head office but also has the authority to implement strategy on its own. The use of major conferences is one more important element in creating and maintaining Unilever’s large network of managers. Once a year, each of the two chairmen addresses a meeting of 350 to 500 senior managers from all over the world. One conference takes place in Rotterdam, and the other is in London. At these conferences, over good food and drink, our most senior people meet, exchange views, and reconfirm old friendships. The chairmen can also make major announcements to a large group of senior managers on these occasions. When we wanted to change our strategic direction some six years ago, we chose such a meeting as the place to explain why. When we needed to pursue a more active acquisitions program, we disclosed our intentions at a conference. When we wanted to explain the new foods structure and other major changes in the organization, we did so at the chairman’s review meeting. After such meetings, every chairman of an operating unit and every manager of a department gets a copy of the main points and presents a similar review to the middle management in his or her own unit. In this way, we reach most managers in the Unilever matrix effectively. In fact, shifting toward a concentration on the foods industry, our largest core business, would not have been possible if we hadn’t been able to convince senior and middle managers that this move was logical and necessary for future growth. Of course, in order to maintain a flexible organization with well- trained, dedicated managers, we must constantly reassess the balance between our centralized and decentralized activities. The relations among Unilever’s head offices in Rotterdam and London, regional groups (such as those that cover the European Community and eastern Asia), and national operating companies must be monitored on an ongoing basis. We are currently experimenting with involving members from operating company boards in head-office decision making. For example, our strategy for detergents in Europe is determined by a board that includes a few members from Lever Europe in Brussels and the CEOs of the main European operating companies. We call this new organizational arrangement the “Extended Head Office.” This structure is certainly not yet cast in stone but, if successful, it will require an additional and perhaps even a different type of training program for our managers.

Unilever's Global Management: Indianization, Recruitment, and Transnational Network, Assignments of International Management

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A Matrix of Managers