MNG3702
EXAM PACK
, lOMoARcPSD|18222662
MNG3702
FI Concession March 2025
PART A: UNILEVER’S COMPASS STRATEGY
Unilever operates in a variety of industries, including consumer goods, food and beverages, personal care,
home care, and health and wellness. As one of the world’s largest multinational corporations, Unilever’s
products span across a wide range of sectors, touching the daily lives of millions of people globally. In
response to global challenges such as rising temperatures, water scarcity, and food insecurity, Unilever
has committed to integrating sustainability into its business model. The company aims to tackle these
pressing issues by making sustainable living a core part of its operations and business strategies,
positioning itself not only as a market leader but also as a proactive agent of change in addressing global
sustainability challenges.
The Compass
Unilever’s strategy document, The Compass, steers it closer to its vision to double the size of its business,
reduce its environmental footprint by half and increase its positive social impact. First developed in 2009,
The Compass sets out an ambitious vision and purpose, and defines four non-negotiable commitments:
winning with brands and innovation; winning in the market place; winning through continuous improvement;
and winning with people.
Brands
Strong brands and innovation are central to the ambition to double the size of Unilever. Unilever invests in
brand equity by finding and strengthening the connections between consumers and the products they buy.
Strong brand equities also enable Unilever to create efficiencies by focusing on fewer but bigger projects
that will enhance margins. Unilever actively seeks superior products that consumers will prefer, which drives
profitable growth.
Core business
Unilever is a global multinational with a diverse portfolio in consumer goods, food, beverages, personal
care, home care, and health and wellness, offering products that impact consumers worldwide.
Sustainability is central to its operations, addressing challenges like climate change, water scarcity, and
food insecurity by integrating sustainable practices across its business model. The company focuses on
strong brands and innovation, investing in products that connect with consumers while aligning with its
sustainability goals. Unilever fosters a high-performance culture based on values like integrity,
responsibility, and respect, which guide decision-making and drive its success. The company also attracts
top talent by being a desirable employer with a commitment to sustainability, ensuring long-term growth
and positive social impact.
People
Unilever believes sustainable, profitable growth can only be achieved if the right people work in an
organisation that is fit to win and in a culture that aligns performance with values. The Unilever Sustainable
Living Plan (USLP) is one of the reasons why talented candidates regard Unilever as a potential employer.
In 2013, Unilever was rated the third most in-demand employer by business social network LinkedIn;
Google and Apple were first and second, respectively. Such external recognition helps Unilever to attract
talented individuals.
Values and performance culture
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, lOMoARcPSD|18222662
MNG3702
FI Concession March 2025
In our turbulent world, people are looking for meaning at work. Contributing to making sustainable living
commonplace, as Unilever does, is highly motivating. Unilever also focuses on reinforcing values of
integrity, responsibility and respect, and a pioneering spirit that guides employees in their daily judgements,
actions and decisions. These values are especially important as Unilever expands into new markets, recruit
new people and face new challenges.
Motivation
To reach the ambitious goal of sustainable growth, Unilever needs people with a winning mind set, a
passion for consumers and the drive to succeed. Unilever strives to build a winning culture in which every
employee is encouraged to grow to his or her full potential. A performance-based reward structure
recognises those who deliver results and have the right values.
Recognition reinforces Unilever’s values and the positive behaviours that drive performance, and
rewards take on many forms. For example, Unilever honours people nominated by their
colleagues as Unilever heroes.
Conclusion
By instilling a relatively consistent set of values and following a business model that governs its
operations, Unilever created an adaptive and inclusive organisational culture that promotes good
performance.
Adapted from:
http://www.unilever.com/investorrelations/annual_reports/AnnualReportandAccounts2013/our-
businessmodel.aspx, accessed 2015/01/05.
PART B: UNILEVER SUSTAINABLE LIVING PLAN
In 2009 Paul Polman, the CEO of Unilever, announced a bold strategic plan, the Unilever Sustainability
Living Plan (USLP), to double the size of Unilever and half the company’s environmental impact. The
motivation for launching such an aggressive long-term plan was that many parts of the world were becoming
more volatile, uncertain, complex and ambiguous (VUCA). The VUCA trend was also fuelled by the strain
(or stress) placed on large sections of many societies and the world’s resources. While a more volatile,
uncertain and complex world made it more difficult for Unilever to navigate, it also presented opportunities,
but these opportunities needed to be well managed. Paul Polman’s thinking was that the USLP would be a
step in the right direction to address these strain issues. He said: “There are clear signs of stress around
the world, coming from the ‘other 99%’. A billion people still go to bed hungry. A child dies of starvation
every six seconds. Our form of capitalism has brought us far, but it hasn’t solved everything. We think that
businesses that are responsible and actually contributing to society as part of their business model will be
successful.”
To achieve the goals of the Unilever Sustainable Living Plan, several initiatives were undertaken. These
included reducing waste and material use, which created efficiencies and reduced costs, and improving
5|Page
Downloaded by Thomas Mboya ()
, lOMoARcPSD|18222662
MNG3702
FI Concession March 2025
margins. By looking at product development, sourcing and manufacturing through a sustainability lens,
opportunities for innovation opened up. By collaborating with partners, including not-for-profit organisations,
valuable new market insights were gained, which extended the channels to engage with the consumer.
Unilever knew that such an ambitious plan would be questioned by skeptics, therefore there was a sense
at Unilever that results had to be shown. To show results an environment had to be created that focused
on the long term. This was achieved by abolishing quarterly reporting and changing the compensation
system to focus on the long term.
Furthermore, a disproportionate amount of time was spent on explaining to shareholders what was being
done in terms of the long-term strategy. Strategic success did not mean that shareholder wealth would be
created at the expense of everything else. This would have been a myopic view that would not assist the
company in surviving in the long term. Therefore, the focus was on attracting shareholders that aligned
themselves with the long-term strategy, rather than the other way around. Hedge fund managers and short-
term speculators were told that they did not belong in the company. The sheer fact that they bought a few
shares did not give them the right to ruin the company’s strategy.
In 2013 Paul Polman reported that steady progress had been made in implementing the USLP: “[T]he USLP
becomes more firmly embedded in all aspects of the business. As this annual report highlights, the USLP
is driving waste and inefficiencies out of the system and helping us transform the supply chain. Suppliers
and customers are increasingly keen to work with us under the USLP. By helping grow our business in a
responsible and equitable way, the USLP is benefitting all our stakeholders, including our shareholders.”
Three years after launching the USLP, there was evidence that making sustainable living commonplace
was helping to drive business growth at Unilever. In addition, new insights were gained into the
implementation of the USLP. These insights were used to update the USLP in 2014 and to develop new
focus areas.
Adapted from:
http://www.unilever.com/investorrelations/annual_reports/AnnualReportandAccounts2013/unilever
sustainable-living-plan.aspx, accessed 2015/01/05 https://hbr.org/2012/06/captain-planet,
accessed 2015/01/05
6|Page
Downloaded by Thomas Mboya ()
EXAM PACK
, lOMoARcPSD|18222662
MNG3702
FI Concession March 2025
PART A: UNILEVER’S COMPASS STRATEGY
Unilever operates in a variety of industries, including consumer goods, food and beverages, personal care,
home care, and health and wellness. As one of the world’s largest multinational corporations, Unilever’s
products span across a wide range of sectors, touching the daily lives of millions of people globally. In
response to global challenges such as rising temperatures, water scarcity, and food insecurity, Unilever
has committed to integrating sustainability into its business model. The company aims to tackle these
pressing issues by making sustainable living a core part of its operations and business strategies,
positioning itself not only as a market leader but also as a proactive agent of change in addressing global
sustainability challenges.
The Compass
Unilever’s strategy document, The Compass, steers it closer to its vision to double the size of its business,
reduce its environmental footprint by half and increase its positive social impact. First developed in 2009,
The Compass sets out an ambitious vision and purpose, and defines four non-negotiable commitments:
winning with brands and innovation; winning in the market place; winning through continuous improvement;
and winning with people.
Brands
Strong brands and innovation are central to the ambition to double the size of Unilever. Unilever invests in
brand equity by finding and strengthening the connections between consumers and the products they buy.
Strong brand equities also enable Unilever to create efficiencies by focusing on fewer but bigger projects
that will enhance margins. Unilever actively seeks superior products that consumers will prefer, which drives
profitable growth.
Core business
Unilever is a global multinational with a diverse portfolio in consumer goods, food, beverages, personal
care, home care, and health and wellness, offering products that impact consumers worldwide.
Sustainability is central to its operations, addressing challenges like climate change, water scarcity, and
food insecurity by integrating sustainable practices across its business model. The company focuses on
strong brands and innovation, investing in products that connect with consumers while aligning with its
sustainability goals. Unilever fosters a high-performance culture based on values like integrity,
responsibility, and respect, which guide decision-making and drive its success. The company also attracts
top talent by being a desirable employer with a commitment to sustainability, ensuring long-term growth
and positive social impact.
People
Unilever believes sustainable, profitable growth can only be achieved if the right people work in an
organisation that is fit to win and in a culture that aligns performance with values. The Unilever Sustainable
Living Plan (USLP) is one of the reasons why talented candidates regard Unilever as a potential employer.
In 2013, Unilever was rated the third most in-demand employer by business social network LinkedIn;
Google and Apple were first and second, respectively. Such external recognition helps Unilever to attract
talented individuals.
Values and performance culture
4|Page
Downloaded by Thomas Mboya ()
, lOMoARcPSD|18222662
MNG3702
FI Concession March 2025
In our turbulent world, people are looking for meaning at work. Contributing to making sustainable living
commonplace, as Unilever does, is highly motivating. Unilever also focuses on reinforcing values of
integrity, responsibility and respect, and a pioneering spirit that guides employees in their daily judgements,
actions and decisions. These values are especially important as Unilever expands into new markets, recruit
new people and face new challenges.
Motivation
To reach the ambitious goal of sustainable growth, Unilever needs people with a winning mind set, a
passion for consumers and the drive to succeed. Unilever strives to build a winning culture in which every
employee is encouraged to grow to his or her full potential. A performance-based reward structure
recognises those who deliver results and have the right values.
Recognition reinforces Unilever’s values and the positive behaviours that drive performance, and
rewards take on many forms. For example, Unilever honours people nominated by their
colleagues as Unilever heroes.
Conclusion
By instilling a relatively consistent set of values and following a business model that governs its
operations, Unilever created an adaptive and inclusive organisational culture that promotes good
performance.
Adapted from:
http://www.unilever.com/investorrelations/annual_reports/AnnualReportandAccounts2013/our-
businessmodel.aspx, accessed 2015/01/05.
PART B: UNILEVER SUSTAINABLE LIVING PLAN
In 2009 Paul Polman, the CEO of Unilever, announced a bold strategic plan, the Unilever Sustainability
Living Plan (USLP), to double the size of Unilever and half the company’s environmental impact. The
motivation for launching such an aggressive long-term plan was that many parts of the world were becoming
more volatile, uncertain, complex and ambiguous (VUCA). The VUCA trend was also fuelled by the strain
(or stress) placed on large sections of many societies and the world’s resources. While a more volatile,
uncertain and complex world made it more difficult for Unilever to navigate, it also presented opportunities,
but these opportunities needed to be well managed. Paul Polman’s thinking was that the USLP would be a
step in the right direction to address these strain issues. He said: “There are clear signs of stress around
the world, coming from the ‘other 99%’. A billion people still go to bed hungry. A child dies of starvation
every six seconds. Our form of capitalism has brought us far, but it hasn’t solved everything. We think that
businesses that are responsible and actually contributing to society as part of their business model will be
successful.”
To achieve the goals of the Unilever Sustainable Living Plan, several initiatives were undertaken. These
included reducing waste and material use, which created efficiencies and reduced costs, and improving
5|Page
Downloaded by Thomas Mboya ()
, lOMoARcPSD|18222662
MNG3702
FI Concession March 2025
margins. By looking at product development, sourcing and manufacturing through a sustainability lens,
opportunities for innovation opened up. By collaborating with partners, including not-for-profit organisations,
valuable new market insights were gained, which extended the channels to engage with the consumer.
Unilever knew that such an ambitious plan would be questioned by skeptics, therefore there was a sense
at Unilever that results had to be shown. To show results an environment had to be created that focused
on the long term. This was achieved by abolishing quarterly reporting and changing the compensation
system to focus on the long term.
Furthermore, a disproportionate amount of time was spent on explaining to shareholders what was being
done in terms of the long-term strategy. Strategic success did not mean that shareholder wealth would be
created at the expense of everything else. This would have been a myopic view that would not assist the
company in surviving in the long term. Therefore, the focus was on attracting shareholders that aligned
themselves with the long-term strategy, rather than the other way around. Hedge fund managers and short-
term speculators were told that they did not belong in the company. The sheer fact that they bought a few
shares did not give them the right to ruin the company’s strategy.
In 2013 Paul Polman reported that steady progress had been made in implementing the USLP: “[T]he USLP
becomes more firmly embedded in all aspects of the business. As this annual report highlights, the USLP
is driving waste and inefficiencies out of the system and helping us transform the supply chain. Suppliers
and customers are increasingly keen to work with us under the USLP. By helping grow our business in a
responsible and equitable way, the USLP is benefitting all our stakeholders, including our shareholders.”
Three years after launching the USLP, there was evidence that making sustainable living commonplace
was helping to drive business growth at Unilever. In addition, new insights were gained into the
implementation of the USLP. These insights were used to update the USLP in 2014 and to develop new
focus areas.
Adapted from:
http://www.unilever.com/investorrelations/annual_reports/AnnualReportandAccounts2013/unilever
sustainable-living-plan.aspx, accessed 2015/01/05 https://hbr.org/2012/06/captain-planet,
accessed 2015/01/05
6|Page
Downloaded by Thomas Mboya ()
