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EXECUTIVE SUMMARY
Organizational Behaviour is helpful to managers because it allows them to analyze their
employees and how they interact within their departments/organizations. If we look at an
organization like an organism it lives and breathes. If we do not put forth a clear vision
(Goals) for our body (Groups/Employees) then we can become clumsy and confused. The
organizational vision must be continually not only reinforced, but also it must be reviewed
and updated as the organization learns from its own experiences. The study of organizations
is a broad and diverse subject covering everything from corporate Governance, Ethics,
Corporate Culture, Human Resources and the Analysis of Labour.
HUL has the best organisational structure and the best organisational behaviour. The culture
of the company, leadership qualities, and motivation level are the positive aspects. The study
helps to understand all the aspects of organisational behaviour.
This area of study examines human behaviour in a work environment and determines its
impact on job structure, performance, communication, motivation, leadership, etc. Internal
and external perspectives are two theories of how organizational behaviour can be viewed by
companies.

WHAT IS ORGANISATIONAL BEHAVIOUR?

Actions and attitudes of individuals and groups toward one another and toward the
organization as a whole, and its effect on the organization's functioning and performance.
Organizational behavior studies organizations from multiple viewpoints, including behavior
within the organization and in relation to other organizations.
Micro organizational behavior refers to individual and group dynamics in an organizational
setting. Macro organizational theory studies whole organizations and industries, including
how they adapt, and the strategies, structures, and contingencies that guide them.
Concepts such as leadership, decision making, team building, motivation, and job satisfaction
are all facets of organizational behavior and responsibilities of management. Organizational
behavior also deals heavily in culture. Company or corporate culture is difficult to define but
is extremely relevant to how organizations behave.

ORGANISATIONAL BEHAVIOUR AT WORK PLACE

The Workplace Communication website defines organizational behavior as how employees

act as individuals within the company and how they interact as part of work groups.
Understanding the way that people and groups interact in the workplace is important in being
able to create positive organizational change. You need to be able to identify types of
organizational behavior in the workplace in order to monitor the way in which your company
functions.
Managerial control over an organization is a critical part of organizational behaviour, the
Workplace Communication website notes. There are several levels of managerial control -from autocratic control, in which the management team dictates to the staff, and interactive
control, in which the staff has a say in how the company is run. The type of managerial
control you choose for your organization will affect how you maintain policy. If you do not
allow interaction from the staff, you could be blinding yourself to important input that would
allow your company to run more smoothly.
A company that creates and uses a strong ethical policy will notice that the ethic affects
organizational behaviour in the workplace. The management team is asked to enforce the
company's ethical code when it comes to interacting with employees, treating customers and
doing business with vendors. High turnover in an organization can put ethics in jeopardy
because incoming employees are not familiar with the company culture and will need time to
get up to speed. A company needs to consider all factors that can affect organizational ethics
and work to maintain the way of doing business at all times.
A strong organizational structure can help maintain the organizational behavior of
accountability. When the company knows which staff members are responsible for various
company functions and projects, those employees can be made accountable for their success.
If there is no accountability for success or failure within an organization, there is not way to
reward productivity or punish those who take away from the company's bottom line.
Developing a corporate culture where every employee is accountable for her actions can have
a positive effect on staff behaviour.
Workplace harassment is one of the negative organizational behaviours that management
must address with training, company policies and diligence. Harassment is any kind of
intimidation or unwanted conduct between two employees. Federal laws bind employers
investigate and deter harassment when it is reported by employees. Some of the more
prevalent types of harassment include sexual, physical, mental and age discrimination. Work
with an attorney to develop strong policies against harassment, and train your entire staff on
how to properly deal with this negative organizational behaviour.

Hindustan Unilever Limited

Company Description:
Hindustan Unilever Limited is an India-based fast moving consumer goods company. The
Company has more than 400 brands spanning 14 categories of home, personal care and food
products. It operates in various business segments. Soaps and Detergents include soaps,
detergent bars, detergent powders, detergent liquids and scourers. Personal Products include
products in the categories of oral care, skin care, hair care, deodorants, talcum powder, color
cosmetics and Ayush services. Beverages include tea and coffee. Foods include branded
staples, (atta and salt), culinary products (tomato-based products, fruit-based products and
soups). Ice Creams include ice creams and frozen desserts. Others include chemicals and
water business. In May 2009, the Company divested its entire shareholding in Shamnagar
Estates Pvt. Ltd. and consequently, Shamnagar Estates Pvt. Ltd. ceased to be a subsidiary of
the Company effective May 13, 2009.

Mission:
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.

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 52.10% equity in the company. The rest of the shareholding is distributed
among about 360,675 individual shareholders and financial institutions.

Present Stature:
Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods (FMCG)
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 nearly Rs.13718
crores.
HUL is also one of the country's largest exporters; it has been recognized 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 52.10% of the equity. The rest of
the shareholding is distributed among 360,675 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 37 factories across India. The operations involve over 2,000
suppliers and associates. HUL's distribution network, comprising about 2,500 redistribution
stockists, covering 6.3 million retail outlets reaching the entire urban population, and about
250 million rural consumers.

Personality of CEO

Nitin Paranjpe the youngest CEO & MD of the country's largest fast-moving consumer goods
(FMCG) company. He is also an Executive Vice President of Unilever Companies in South
Asia. Mr. Nitin Paranjpe joined the Company as a Management Trainee in 1987 after
obtaining a degree in BE (Mech) and MBA in Marketing (JBIMS) from Mumbai, has risen
rapidly through the ranks. He was a member of Project Millenium, a key organisation
initiative and also served a stint with Unilever in London in 2000-2001, when he worked
closely with the Unilever Executive Committee. He returned to India as the head of
innovation for fabric wash and home care. In May 2004, he was appointed as Vice-President,
Laundry & Home Care.
After two years, in March 2006, Mr Paranjpe was appointed as the Executive Director of
Home & Personal Care and was inducted into the management committee. He joined the
board of directors of HUL in May 2007. In April 2008 Nitin Paranjpe appointed as the Chief
Executive Officer (CEO) and Managing Director (MD) of the company.
In Paranjpes words, Businesses must make money and grow, but the role of a business
cannot be to make money at all costs.
The person he treats as his idol is his father, a retired IAS officer. Paranjpe found three traits
that are key to achieving true success. He calls them the 3Cs of success, the first two of
which are courage and conviction.
Courage is the quality you need to act on your beliefs, to take accountability, to accept failure
and learn from it and to do all this even in the face of adversity. Such courage, of course,
stems from the second C, which is conviction. And conviction flows from knowledge; ones
deeply held beliefs and world view.

Third C, which stands for character. It is only character that drives and channels courage
and conviction to the right ends, meeting goals that bring about a positive change in society.
Character is the litmus test, the fire through which courage and conviction must pass if they
are to be steeled into a recipe for success that is replicable and sustainable.
A very practical thought by Paranjpe is, Selling soaps to a shopkeeper in a remote village
gives you invaluable lessons. You start listening to the market; you empathise with problems
that a salesman faces these are lessons no B-school can ever teach you.

LEADERSHIP

The meaning of leadership now should be simply the successful promotion of new directions.
Leadership and management that are based on different assumptions and theories. The style
that individuals use will be based on a combination of their beliefs, values and preferences, as
well as the organizational culture and norms which will encourage some styles and
discourage others.

Charismatic Leadership
Participative Leadership
Situational Leadership
Transactional Leadership
Transformational Leadership
The Quiet Leader
Servant Leadership

HULs top management realized that its ability to attract and nurture good talent would be
crucial to the success of Project Millennium. Over the years, HUL's leadership development
model, considered one of the best in the country, had groomed managers by providing a wellrounded view of the business through job rotation and various new assignments. The system
was designed to identify fast-trackers, who were called the Lever listers and groom them for
handling greater responsibilities. For every position, typically three people competed. One
would eventually make it, the second person would be offered an alternative slot, while the
third would simply fall out of the system.
This leadership development model served HUL well for many years. The company
effectively became a school for practicing managers. But in the late 1990s, as the business
environment underwent a sea change, cracks began to appear in the model. First, there was a
reduction in the number of positions due to the withdrawal of many brands under HULs
power branding strategy. The closure of non-core businesses, like seeds and the downsizing
of the large commercial department, due to outsourcing of a large number of backroom
activities, also eliminated many promotional opportunities.
Meanwhile, Unilever itself began to divest brands and businesses, reducing the need for
expensive expatriate talent. As a matter of fact, the supply of HUL's pipeline of talent grew
because of returning expatriates from the Unilever system.
With fewer slots available and supply increasing, internal competition also increased. During
good times, most managers got good performance ratings. But the system changed as growth
slowed down and competition increased. In the early 2000s, HUL instituted a forced rank
system of evaluating people for all its businesses, further accentuating the insecurities inside
the minds of employees. Managers began to rely on short-term recourses to deliver quarterly

profit and sales numbers. If one brand team did well to grow through a short-term scheme,
there was immediate pressure on the others to follow the same.
The process of identifying fast trackers began to cause disgruntlement among employees.
Initially, when HUL instituted the system of listers, it had focused more on performance.
However, over the years, apart from performance, the potential of the person had played a
bigger role in identifying the fast trackers. This seemed to have introduced an element of
subjectivity in the process of identifying talent.
When Dadiseth rolled out Project Millennium, many young managers were identified to lead
a set of new growth initiatives. But these initiatives had moved Lever into entirely new areas,
which took a long time to be conceptualized and implemented. Under the Lever system, there
were clear work levels, which defined the nature of work and responsibilities. So, unless
there was a change in the nature of work, a manager could not be promoted to the next level.

Career progression was also slowing down at senior levels. Many of the management
committee members, like the head of the foods division, Gunender Kapur had been expected
to move to larger regional roles in Asia. But the continued non-performance of the foods
business had thrown a spanner in the works. That meant that category heads were unlikely to
find a berth soon, until someone at the top moved on. Many HUL managers had CEO
aspirations. They were attracted by the opportunities opening up in the country in newly
liberalized businesses like telecom, healthcare and insurance. They moved when they felt
they did not get any clear signals from the top management about what the future held for
them.
In 2002, responding to these concerns, HUL switched to an open job posting (OJP) system.
All new jobs were advertised on the intranet. Any employee who met the criteria could apply.
HUL also started a new personal development plan (PDP), where each manager was
evaluated on a set of 12 competencies. The superior was expected to discuss the assessment
with each person.
In the early 2000s, HUL extended the reach of its products through a new channel, the HUL
Network to leverage the power of direct selling. The HUL Network was poised to enter
various categories. HUL enrolled over 1,00,000 consultants for the Network. The company
targeted a turnover of Rs. 500 crores and planned to have a million consultants working for it
by 2007.
In addition, HUL proposed a revamp of its entire brand portfolio in the face of severe
competition from low-cost manufacturers and other multinational players. HUL planned to
upgrade its soap, skin cream, shampoo and toothpaste products, and launch new variants.
Among the major initiatives was a new variant of Fair & Lovely, to pre-empt Procter &
Gambles (P&G) proposed launch of Oil of Olay in India, a relaunch of Clinic Plus
shampoo and Close Up toothpaste and a new Liril Orange Splash soap, in addition to Liril
Lime Fresh and Liril Icy Cool Mint.

Besides revamping its brand portfolio, HUL realized that the bulk of its future growth was
likely to come from rural areas. The company embarked upon Project Shakti, which enlisted
underprivileged rural women as direct-to-home distributors. Not only did this initiative
provide sustainable income opportunities, but it also extended HULs rural reach to another
100 million consumers in over 100,000 villages.
The Unilever Future Leadership Programme is about developing tomorrows leaders,
today.So no more sacking out. No more two-hour chai sessions. It's just you and 15 months
of pure, unadulterated, intensive training. Some may call it the boot camp.
Its designed to help you grow into a manager, through hands-on learning alongside worldclass experts. Youll be hired into a function and develop your leadership skills by working
on live projects which offer you all the experience you need to be ready for your first
management role.

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MOTIVATION LEVEL
It is always important to motivate employees so they remain optimistic and can perform
better under unfavorable conditions too. For encouraging their employee Hindustan Unilever
conducts different project and programs time to time. Some of them are as follows:
Project Millennium:
For HUL, the problem of slow growth had not appeared overnight. Aware of the fact that
many of the growth opportunities had been tapped, Chairman Keki Dadiseth launched Project
Millennium in the late 1990s. The famous management guru, C K Prahalad, was roped in as
an advisor. Teams of young, talented managers were formed to explore and suggest ways to
generate growth. Project millennium also aimed at promoting lateral thinking and innovation
instead of being dictated only by the rules and systems, HUL was famous for. At the heart of
Project Millennium was human resources.
As Dadiseth put it,
Growth is created by the people of an organization. To win in the New Millennium, we must
continue to attract and excite the best talent in the country. Our people will be vested with
unparalled power to imagine, innovate and implement new ideas. Our business model will
make Levers not just a great company, but also a great employer.

Sankalp:
Human resources director, HUL, said: We strongly believe that employees have an in-built
desire to give back to the society. At HUL Sankalp, we provided employees a platform with
multiple volunteering opportunities on various social issues. Many of these are in the cities
within easy reach. We also encouraged employees to involve their families and thus started
the self actualisation process.
With a mission statement that says add vitality to life and a corporate culture that believes
in rendering service to community, Hindustan Unilever Ltd (HUL) started on an employee
self actualisation journey that involved its 14,000 employees across 40 locations on
completion of 75 years in October 2007.
A year later the company has exceeded what then looked like an ambitious target of
contributing 27,375 hours or one hour per day of community service for the 75 years that the
company has been in India.
The self actualisation process was introduced under the HUL sankalp programme, which was
intended to help employees make a difference and was started in October 2007. HUL Sankalp
is a platform for employees to register, track and get associated with a cause or an NGO.

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The programme has now gone beyond the cities to touch lives of people in the rural districts
like that of Wad/ Jawahar. Here HUL Mumbai employees travelled 130 km to create
awareness on hand wash and hygiene. Similarly, employees have also started involving their
family members.
An employee of HUL, Crystelle Ellis along with her family clocked over 600 hours of
voluntary service at the Little Sisters of the Poor, an old age home in Kolkata. Their activities
included cooking, cleaning, serving, washing, helping the invalid to groom themselves and
move about apart from helping with office work.

The Vitality Index:

HUL, a company known for its marketing innovations, had come up with a health ideathe
Vitality Index. The company has applied for a copyright for the index, which is not just a set
of numbers but a reflection of its employees health. Eventually, says Leena Nair, Executive
Director, HR, HUL, the health of HULs employees reflects in the health of its business. The
company has since exported the Vitality Index to the global Unilever family, to subsidiaries
in Africa, the Middle-East, Asia-Pacific, and Central and Eastern Europe.
Employers looking to incentivize their employees need not only consider gifts and monetary
rewards. There are so many other steps and ideas that they can initiate to strike a rapport with
their workforce.
A case in point is Hindustan Unilevers recent health initiative for its 15,000 strong team. The
program is reaping great rewards.
The health plan is ahead of the curve and hence is getting a favorable response from the
company employees. At the heart of the new HUL initiative is a vitality index - the
measurement of the personal vitality of every individual employee. It is based on four
parameters - blood pressure, blood cholesterol, the Body Mass Index (BMI), and blood sugar.
T Rajgopal, HUL vice-president (Medical and Occupational Health) stated that, We are
providing employees the encouragement and the necessary tools to change unhealthy
lifestyles before these transform into chronic diseases. We do it in a fun way that also allows
them to choose the path, which fits them best.

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LEARNING OF EMPLOYEES

Managers at Unilever formed learning groups that helped them strengthen their
leadership abilities by exchanging frank feedback and developing strong mutual trust. Arising
from the focus in driving a holistic capability program, over 300 training programs were
delivered through classrooms. World saw a significant amount of sharing of Unilever best
practices in building functional expertise through Global Learning Academies. Unilever
introduced an e-learning platform which offers a bouquet of 3000 courses on a self learning
mode via computer and internet. These programs can be accessed by a Unilever employee
anywhere in the world, at anytime.
The employees need to be given bigger and challenging roles to strengthen the environment
for personal growth. In HUL, employees change roles in every 2-2.5 years. Different
learning programs help the employee in developing multidimensional personality. Brief
introductions of these programs are given below:
Activity Description
Familiarization: Get familiar with the company's Sales System, Branch Structure and
Brand Portfolio.
Sales Stint: Experience a first hand contact with the trade to get a grip of market
dynamics and understand the role of an Area Sales Manager.

Brand Management: Imbibe the Unilever principles of Brand Management,

understand the role of a Brand Manager and develop brand strategy.
International Stint: Complete a project in your core functional area in another country
within a duration of 8 to 12 weeks. The objective is to help you build relevant skills in
your core functional area with a global perspective and transfer your learnings to an
Indian context.

Business Projects: A cross-functional team project which shall be worked out with
every Business Management Committee and evaluated by the Management
Committee at the end of the stipulated 9 week period.
Rural Consumer Stint: In addition to the primary aim of community service, the
objective of the four- week stint at an NGO is to give you an understanding of the
Rural Consumer.

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Business Orientation: An 11-day program that mainly consists of classroom Program

sessions at our in- house Training Centers to provide a clearer understanding o f key
business processes and practices.
Factory Stint: Get familiar with the production process, commercial function
payments and factory working capital control.

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ORGANISATIONAL STRUCTURE

The main purpose of organizational structure can be identified as the division of work among
member of the organization, and the co-ordination of their activities so they are directed
towards the goals and objectives of the organization. There are mainly three types of
organizational structures.
1) Functional Structure: In such a structure groups of people who hold similar skills or
perform similar tasks are clustered together and usually departments are formed.
2) Divisional Structure: Divisional structures can be of three types. They are,

Division based on Product: Each product division contains the functions necessary to
that service the specific goods or services it produces
Division based on Market: Group functions into divisions that can be responsive to
the needs of particular types of customers
Division based on Geography: In such a structure regional divisions are set up to
service customers in different geographic areas

3) Matrix Structure: In a matrix structure specialists from functional departments would be

assigned to work on one or more projects that are lead by a project manager.
Other structures are
4) Flat structure
5) Pre-bureaucratic structures
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 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.
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

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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 are reported in accordance with the procedures specified by the
Joint Secretaries. The Board of Unilever never 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 is made for
employees to be able to report in confidence and no employee will suffer as a consequence of
doing so.
As Marshall McLuhan said the medium is the message, which refers to symbolic meaning
that a medium carries, how the message is delivered to Unilever employees and suppliers
matter. Internal conflict can be avoided by employing informal, face-to-face
communication1. However formal communication is official tool to convey corporate
message to all departments, reaching out all employees. Thus, both formal and informal
communications are necessary. The more important thing besides formal/informal
communication is to make sure that the medium allows upward communication (employees
speaking to the management and management listening).

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Target GROUP

Employees

Suppliers

Formal Communication Media Informal Communication Media

News release, large

group
meetings, employee newsletter
articles,
Management training
session,
managers
meeting,
Intranet, printed
publication
such as posters or bookmarks
with the new corporate culture
image or texts, hotline service
that can be accessed from all
around the world.
News release, large
group
meeting, suppliers newsletter
to home, hotline service that
can be accessed
from all
around the world.

Small group meeting and oneon one meeting, Ask The

Management' session on the
Intranet, party or picnic,
approach by management,
informal Q&A sessions, group
(per department) e-mails.

Small group meeting and oneon one meeting, management

visit, informal Q&A sessions,
gathering or lunch party for
suppliers in each area where
they can exchange ideas or ask
questions.

Ask the Management session on Intranet allows employees all over the world to post
question for the management in regards to the acquisition. This allows them to use any device
office computer, smart phone, or notebook to ask questions. Storytelling method is
suggested for approaching employees and suppliers, and engaged with them emotionally.

Network Building with Alumni:

Hindustan Unilever (HUL) has many firsts to its credit. Now, it adds one more. Indias
largest fast-moving consumer goods company has found a new way of keeping in touch with
its employees present and former. And it has nothing to do with Facebook and LinkedIn,
which have already made social networking sites and community building popular.
HUL has built its own community site for networking with its alumni. The website gives a
formal structure to do things that we were already doing networking with other Leverites,
said Gurdeep Singh, an independent director at Blue Star, who had joined the company as a
management trainee in 1966 and retired in 2006 as the director for human resources.

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Overseas most large companies have alumni associations, either informal or through an
officially-sponsored effort. In India, HR departments of several companies have started
eyeing alumni associations as a useful means of networking.

HUL is no exception, but the portal takes the effort one step further. The alumni portal, a first
for fast moving consumer goods (FMCG) company in India and also a first for Unilever, was
created around Diwali last year. The company realised that even though people had moved
on, their interest in the company remained.

So far, of the 1,500 people that the company contacted, 600 have already registered. Some
270 of them are management board representatives from diverse sectors like telecom, IT and
ITeS service, retail, banking and, of course, FMCG.

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POWERS AN POLITICS

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.

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.

Hindustan Unilever and Child labor:

Allegation: Hindustan Unilever Ltd., an Indian subsidiary of British-Dutch multinational
company Unilever, is making use of hazardous forms of child labor in cotton seed production
in India on a large scale. An estimated number of 25,000 children, mostly girls, work an
average of ten to thirteen hours a day for Hindustan Unilever. These children get no
education, earn less than 40 Eurocents (Rs. 20) a day and were exposed to poisonous
pesticides like Endosulphan during their work. The cottonseed companies do not employ the
children themselves, but they work through agents called seed organisers. The companies
unilaterally fix a price for the farmers that make it almost impossible for them to employ
adults. A child earns 30% less than a woman and 55% less than a man.

Response from Hindustan Unilever: Responding to the issue of use of child labor in
production of its cottonseeds HUL denies any direct contact with seed farmers and also the
use of forced child labor as such in production of seeds. As a response to a news report `
Even Multinationals Employ Child Labor for Profit` published in `The Hindu Business Line,
21-6-2001`, the General Manager in charge of Corporate communications, HUL, in a press
statement issued on 25-6-2001, states that `HUL has third-party seed organisers who get
seeds produced from numerous farmers on sale/purchase basis and supply them to HUL. In
no case, HUL deals with any farmer, either for production or for payments. Though HUL

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does not control or influence seed organisers` selection/dealing with farmers, the seed
organiser typically supplies parental seeds to farmers at a cost with a buy- back arrangement
of the resultant seed production. To carry out actual production, the farmer and his entire
family work in the fields and employ additional labor whenever required. HUL or the seed
organiser has no direct or indirect role in the farmer's practice of either taking help from his
family members or employing labor.
Hindustan Unilever (HUL) had to exit its hybrid seeds joint venture Paras Extra Growth
Seeds by exercising the put option in the first quarter of 2005.

Some famous cases from the house of Unilever:

Unilever are of course huge producers of soaps and detergents, and have been held
responsible for a number of serious cases of water pollution. For example in 1990, Crosfield
Chemicals (part of Unilever, specially chemicals group), was fined 35,000 after leaking fifty
tonnes of concentrated sulphuric acid into sewage systems in Warrington. Also, in 1991, the
River Purification Board of Scotland found that the company had exceeded its discharge
consent by three or more times; the company was convicted for water pollution offences.

They have been criticised for unnecessary testing of cosmetics on animals and accused of
making misleading remarks with regard to their stance on the issue of genetic engineering by
claiming the company 'takes a positive view of genetic engineering'. The company, in fact,
does not have an overall stance on genetic engineering, but takes a country by country
decision, so Unilever Germany does not currently use genetically engineered products while
others do.

They were accused of negligent marketing after advertising a free offer of multivitamins
(including Vitamin A) with their pregnancy testing kits after the Department of Health
advised pregnant women to avoid taking dietary supplements containing vitamin A because
of the risk of birth defects.

20

CORPORATE SOCIAL RESPONSIBILITY

In the earlier years, HUL continued to involve itself in social welfare initiatives across the
Country, both through charity and social investment around issues like education, health,
nutrition and initiatives for the economic upliftment of the underprivileged.

In addition to initiatives like Shakti, HUL has commenced a pilot in its tea business, in
partnership with an NGO (Partners in Change) to source tea directly from small producers
and thereby improve their livelihood.

The effort of the Company in improving water availability through soil conservation and
water harvesting methods has borne good results. In the Parkhed region (near Khamgaon
factory), HUL has been successful in demonstrating the effectiveness of the model which is
now ready for roll out. In Kharchond, Silvassa the area under irrigation has increased, thereby
improving the economic condition of the villagers in the region.

The Company believes that brands must be at the forefront of driving social change. The
extension of the Lifebuoy Swasthya Chetna programme to 43000 villages with a view to
improve hygiene standards and thereby reduce the risks of infant mortality through diarrhoea
is a case in point. HUL has formalized a brand imprint protocol, which will help every brand
to assess the opportunities for social contribution and integrate the same in the overall brand
strategy.

21

CONCLUSION

The fundamental principle determining the organisation structure is to infuse speed and
flexibility in decision-making and implementation, with empowered managers across the
companys nationwide operations.
The Board of Directors of the Company represents an optimum mix of professionalism,
knowledge and experience. The total strength of the Board of Directors of the Company
is nine Directors, comprising Non-Executive Chairman, three Executive Directors and five
Non-Executive Independent Directors.
The day-to-day management of affairs of the Company is vested with the Management
Committee which is subjected to the overall superintendence and control of the Board.
Firstly, I had started off in discussing about my selected company to this project report. Then
I would be moving to discussing the approach to management and compare it with one of the
competitive company. Afterward, I am discussing all relevant information about the
leadership style that both the company uses and that go on with discussion of motivational
strategies. Lastly, the impact of technology with business. Afterward, I moved on to the
factors which influence the individual at work, and had discussed few factors and how it
effects the organizations.

22

BIBLIOGRAPHY

http://www.corpwatch.org/article.php?id=
480 http://www.indianet.nl/cotseed.html
http://www.greenpeace.org.uk/media/press-releases/unilever-admits-toxic-dumping-willclean-up-but-not-come-clean
http://economictimes.indiatimes.com/articleshow/msid-3587508,flstry-1.cms
http://spoonfeedin.blogspot.com/2008/08/business-interview-nitin-paranjpe.html
http://www.dnaindia.com/money/report_nitin-paranjpe-crowned-at-hul_1153505
http://samsmba.blogspot.com/2007/10/case-study-hindustan-unilever.html
http://www.business-standard.com/india/storypage.php?autono=338610&chkFlg=
http://www.thebetterindia.com/tags/hindustan-unilever-limited/ http://www.businessstandard.com/india/news/lever-agingold-boys-network-online/360110/