Organizational structure refers to the formal system of authority, communication, roles, and responsibilities within an organization. It determines how tasks are coordinated and controlled and how information flows between different levels and departments. An effective structure can enable efficient communication and coordination, streamline decisionmaking, foster innovation and employee motivation, and improve cost efficiency, all of which are critical for a company to compete in a global market. There are three key aspects of organizational structure encompassing vertical differentiation, horizontal differentiation and integrating mechanism. Vertical differentiation discusses where the decisionmaking power is concentrated, whether at the headquarters, i.e. centralized decision making, or at all levels of the organization, i.e. decentralized decision making.
FOREIGN TRADE UNIVERSITY SCHOOL OF ECONOMICS AND INTERNATIONAL BUSINESS -*** - MID-TERM ASSIGNMENT TOPIC: CHANGE IN ORGANIZATIONAL STRUCTURE OF UNILEVER AFTER 2022 Course : International Business Class : KDOE307 Group : Instructor : PhD Nguyễn Hồng Hạnh Table of contents Executive Summary Company Overview 2.1 Establishment of Unilever 2.2 Products and Markets Unilever's international business strategy Change in organizational structure of the company through period 4.1 Organizational structure of Unilever before 2022 4.1.1 Vertical structure 4.1.2 Horizontal structure 4.1.3 Integrating mechanism 4.2 Organizational structure of Unilever after 2022 4.2.1 Vertical differentiation 4.2.2 Horizontal differentiation 4.3 Comparison in Unilever’s organizational structure before and after 2022 and further evaluation 4.3.1 Comparison between periods 4.3.2 Comparison between new organizational structure of Unilever and P&G’s organizational structure Conclusion Reference 3 6 7 11 13 13 14 16 16 17 18 18 Executive Summary Organizational structure refers to the formal system of authority, communication, roles, and responsibilities within an organization It determines how tasks are coordinated and controlled and how information flows between different levels and departments An effective structure can enable efficient communication and coordination, streamline decision-making, foster innovation and employee motivation, and improve cost efficiency, all of which are critical for a company to compete in a global market There are three key aspects of organizational structure encompassing vertical differentiation, horizontal differentiation and integrating mechanism Vertical differentiation discusses where the decision-making power is concentrated, whether at the headquarters, i.e centralized decision making, or at all levels of the organization, i.e decentralized decision making Horizontal differentiation indicates how a firm divides into sub-units At the domestic level, it includes functional structure and product divisional structure At the international level, there can be international division (firms maintain their domestic structure when going global), worldwide product divisional structure (firms expand their current domestic product divisions to different geographical areas), worldwide area structure (firms divide the world into autonomous geographic areas and from then develop product divisions), and global matrix structure (allows for differentiation along two dimensions - product division and geographic area) The purpose of this paper “Change in Unilever’s organizational structure after 2022” is to analyze the changes made to Unilever’s organizational structures by 2022 by comparing with those of previous periods, using above mentioned key elements that make up an organizational structure This paper aims to identify the benefits and challenges of each structure, and to provide recommendations to Unilever on how to optimize their organizational structure to improve performance Company Overview 2.1 Establishment of Unilever Unilever was established in 1929 through the merger of two companies, Lever Brothers, a British soap maker, and Margarine Unie, a Dutch margarine producer (Unilever's Official Website, unilever.com) The merger was aimed at creating a larger and more diversified consumer goods company, with a focus on leveraging the strengths of both companies in different markets and product categories Unilever's purpose is “to make sustainable living commonplace.” This corporate statement emphasizes the importance of sustainability in the daily lives of consumers around the world through their use of the company’s consumer goods The company’s corporate vision and mission statements extend the business purpose to characterize the business, its manufacturing operations, and its products 2.2 Products and Markets Unilever is a multinational consumer goods company with over 400 brand names in over 190 countries (Unilever's Official Website, unilever.com) The company offers a diverse range of products across brand families Since July 2022, Unilever's brands operate in five Business Groups, each fully responsible and accountable for its strategy, growth, and profit delivery globally: ● Beauty & Wellbeing: ○ Brands you may know: Dove, Sunsilk and Vaseline ○ €12.3 billion turnover in 2022 ● Personal Care: ○ Brands you may know: Rexona, Dove, Lifebuoy and Axe ○ €13.6 billion turnover in 2022 ● Home Care: ○ Brands you may know: OMO, Domestos, Cif and Comfort ○ €12.4 billion turnover in 2022 ● Nutrition: ○ Brands you may know: Hellmann’s, Knorr, The Vegetarian Butcher and Horlicks ○ Circa €13.9 billion turnover in 2022 ● Ice Cream: ○ Brands you may know: Wall’s, Ben & Jerry’s and Magnum ○ Circa €7.9 billion turnover in 2022 Unilever’s global reach has expanded to more than 190 countries worldwide The Geographic footprint of Unilever can be easily found in Europe, Latin America, North America, and Asia Pacific Africa Unilever's international business strategy The choice of a firm's international business strategies has a direct impact on which model of organizational structure the firm should adopt Therefore, to analyze Unilever’s organizational structure, this paper is going to provide an overview on the international strategy the enterprise is applying When entering any new international market, multinational firms usually need to identify which international business strategy it may apply Commonly, the Bartlett and Ghoshal model is used to identify international business strategies of a firm, which access factors when including pressure for local responsiveness and pressure for cost reduction on a foreign firm International business strategy includes objectives, measures and means to globalize business, which assist firms to compete successfully in the international market According to the Bartlett and Ghoshal model, international business strategies are divided into types based on the level of pressure for cost reduction and pressure for local responsiveness, which include: International Strategy, Global standardization strategy, Multidomestic strategy and Transnational Strategy Figure 1: The Bartlett and Ghoshal matrix In a broad view, Unilever has adopted both Multidomestic strategy and Transnational strategy: ➢ Multidomestic Strategy: A multidomestic strategy is characterized by a high level local responsiveness In this approach, companies adapt their products, marketing strategies, and operations to meet the specific needs and preferences of each local market Decision-making is often decentralized, giving subsidiaries or regional offices autonomy to tailor their strategies to local conditions The focus is on customization and adaptation to local market dynamics, with less emphasis on global integration ➢ Transnational Strategy: A transnational strategy seeks to achieve a balance between global integration and local responsiveness It recognizes the importance of standardizing certain aspects of operations for efficiency and economies of scale, while also adapting to local market conditions In a transnational strategy, companies aim to leverage global resources, knowledge, and coordination while allowing for customization and flexibility in different markets Decision-making can be centralized to some extent, ensuring consistent strategic direction and coordination across regions Since the first days of internationalization, Unilever has adopted the multidomestic strategy by customizing its products upon different markets For example, for popular Lipton tea, in the U.S market, Unilever used black tea why it used green tea for the Japanese market (Claudio U Ciborra, 2021) This strategy helps the company to deal better with local demand and adapt faster with changing taste and preferences of local consumers However, there are still several drawbacks to this strategy as it may significantly increase the R&D, production and marketing costs Firms using such a strategy are also unable to exploit the experience curve, the economy of scale, which leads to high duplication of effort and inefficiency Therefore, nowadays, Unilever is more defined as following the transnational strategy due to its diversity in product portfolio Specifically, product lines like chemical products require high standardization and little modification In contrast, other product lines such as packaged food demand more changes to suit local taste This diversity contributes to adaptation of Transnational strategy as there is both high pressure for local responsiveness and the need to standardize products to cut costs Additionally, Unilever also organizes its operation using a transnational strategy While the R&D function is synced and shared globally, other activities including marketing, sales, distribution, and advertising are regionally responsive and decentralized to suit particular markets Therefore, Unilever is able to benefit from reduced costs paired with a differentiation owing to transnational strategy Change in organizational structure of the company through periods 4.1 Organizational structure of Unilever before 2022 4.1.1 Vertical structure Since establishment, Unilever has undergone several organizational structure adjustments Between 1950 and 1980, it had a decentralized organization Decentralization provided the company with advantages because it allowed them to adapt to local consumer demand They hired managers who were local to the area so that the company would have a thorough understanding of the local market Local managers were in charge of everything, including marketing, sales, and distribution However, due to decentralization, Unilever lacks a unified corporate culture and vision It also resulted in product duplication, which leads to excessive expenses Furthermore, they placed less emphasis on globalization and were unable to develop worldwide brands Therefore, the company's structure was altered in 1990 to one based on business units The organization grew more centralized Regional executives made the decisions, while local managers had no authority to adjust them to fit local markets They streamlined their processes in order to get the products to market as soon as possible This system also failed since there was no cooperation between the headquarters, regional, and national groupings Their main issue was finding a correct balance between centralization and decentralization Therefore, after a few more times of modification in organizational structure, in 2005, Unilever announced the program “One Unilever” which divided the company leader team based on both product and regions (Unilever, n.d.) Accordingly, there were people leading product divisions, namely Food, Personal care, Home care and Refreshments; and there were regional managers who were in charge of separate areas With this new structure, Unilever experienced both centralization and decentralization Specifically, leaders of product divisions helped to ensure the uniformity in product, taking advantage of an unified worldwide brand and reducing the duplication in production process, which illustrated the centralization of the company Meanwhile, decentralization appeared in the fact that regional leads also have authority to make decisions relating to many aspects of the business so that they could best adapt the global products to local areas, which improve leadership and accountability for Unilever’s top executives Besides, purchasing Transnational strategy also points out Unilever’s strive to balance between centralization and decentralization Such an organizational structure which is called “matrix” that will be discussed later in this paper has been maintained until recently 4.1.2 Horizontal structure a, Domestic level Figure 2: Unilever’s Organizational Structure at domestic level before 2022 Unilever's horizontal organizational structure at the domestic level refers to how the company organizes its operations in the homeland and domestic market At this point, Unilever typically organized its operations into various functional departments which were responsible for their specific areas of expertise and provided support to the various divisions or business units operating within the country (Changellenge, Unilever: Towards a new organization) Here are some of the common functional departments encompassed within Unilever's organizational structure: ➢ Marketing: The marketing department is responsible for developing and implementing marketing strategies to promote Unilever's products and brands in the domestic market This includes market research, brand management, advertising, and customer engagement activities ➢ Finance: The finance department handles financial planning, budgeting, accounting, and reporting within the domestic market It ensures proper financial controls, manages investments, and supports decision-making by providing financial analysis and insights ➢ Supply Chain: The supply chain department oversees the flow of goods and services from suppliers to customers within the domestic market It manages logistics, procurement, production planning, inventory management, and distribution to ensure efficient and timely delivery of products ➢ Research and Development (R&D): The R&D department focuses on innovation and product development within the domestic market It conducts research, experiments, and tests to create new products, improve existing ones, and stay ahead of consumer preferences and market trends ➢ Human Resources (HR): The HR department manages various aspects related to human capital within the domestic market This includes recruitment, employee training and development, performance management, compensation and benefits, employee relations, and ensuring compliance with labor laws and regulations ➢ Operations: The operations department is responsible for overseeing the day-to-day operations and processes within the domestic market It ensures operational efficiency, quality control, productivity, and continuous improvement across different functions and business units ➢ Legal and Compliance: The legal and compliance department handles legal matters, regulatory compliance, and risk management within the domestic market It ensures Unilever's operations adhere to local laws and regulations, protects the company's intellectual property, and manages legal contracts and disputes ➢ Corporate Affairs: The corporate affairs department focuses on managing the company's reputation, stakeholder relations, and public affairs within the domestic market It handles external communications, government relations, corporate social responsibility initiatives, and sustainability efforts These functional departments work together collaboratively, combining their expertise and resources to drive Unilever's operations, strategies, and success within the domestic market However, it's important to note that the specific departments and their names may vary across different regions and markets, as Unilever adapts its organizational structure to local contexts and needs Moreover, within each functional department, there may be further levels of management, including department heads or managers overseeing specific functions For example, there may be a marketing manager responsible for developing and implementing marketing strategies for Unilever's brands in the domestic market b, International level As Unilever implements transnational international business strategy, they have also developed an organizational structure that suits the strategy Unilever employs a hybrid structure that incorporates elements of both vertical and horizontal structures, commonly known as a "Global Matrix" structure Unilever's global matrix organizational structure is designed to balance global coordination and local responsiveness It combines elements of both vertical and horizontal structures, allowing for effective collaboration and communication across different functions, geographies, and product categories At the core of Unilever's global matrix structure are two key dimensions: product categories and geographic regions Unilever organizes its operations into different product categories, such as personal care, home care, and foods and refreshments Each product category is overseen by a global executive or leadership team responsible for setting the overall strategic direction and coordinating activities related to that category on a global scale Simultaneously, Unilever also divides its operations into geographic regions or markets These regions can be continental, such as Europe, Asia, or North America, or they can be further divided into specific countries or clusters of countries Within each region, there are regional leaders who are responsible for overseeing operations, adapting strategies to local market conditions, and driving performance in their respective regions Decision-making in Unilever's matrix structure is a combination of both top-down and bottom-up approaches Strategic decisions are typically made at the higher levels of management, such as the CEO, executive directors, and divisional leaders These decisions set the overall direction and goals for the organization Overall, Unilever's global matrix organizational structure enables the company to leverage its global scale and resources while maintaining a local market focus It combines the strengths of both vertical and horizontal structures to promote collaboration, integration, and efficiency across different functions and regions, driving Unilever's success in the global market The global matrix organizational structure employed by Unilever offers several advantages that contribute to the company's success in managing its global operations Here are some key advantages: ➢ Enhanced Collaboration: The global matrix structure promotes collaboration and cross-functional integration By bringing together employees from different functions and regions, Unilever fosters a culture of collaboration, knowledge sharing, and innovation This allows for the exchange of ideas, best practices, and expertise across departments, facilitating better decision-making and problemsolving ➢ Flexibility and Adaptability: Unilever operates in diverse markets with varying customer preferences and local dynamics The global matrix structure enables the company to be flexible and adaptable to local market needs It allows for regional teams to have autonomy and make decisions that are aligned with local requirements, while also benefiting from the global scale and resources provided by the centralized functions ➢ Global Scale and Efficiency: Unilever's global matrix structure leverages the company's global scale and resources effectively It allows for centralized functions, such as research and development, finance, and supply chain, to provide support and expertise to the various product categories and geographic regions This centralized coordination ensures efficiency in resource allocation, procurement, and knowledge sharing, leading to cost savings and optimized operations ➢ Customer Focus: The global matrix structure enables Unilever to maintain a customer-centric approach With dedicated regional teams responsible for specific markets, the company can tailor its products, marketing strategies, and customer experiences to meet the unique needs and preferences of local consumers This customer focus allows Unilever to stay competitive and relevant in different markets globally ➢ Knowledge Transfer and Talent Development: The global matrix structure facilitates knowledge transfer and talent development across different functions and regions Employees have the opportunity to work on cross-functional projects, collaborate with diverse teams, and gain exposure to different markets This promotes professional growth, knowledge sharing, and the development of a diverse skill set within the organization However, managing a global matrix structure can present challenges as followings: ➢ Creating complexity and ambiguity in roles and responsibilities: Employees may face challenges in reporting lines, as they have to navigate dual reporting to both functional and regional managers This can lead to confusion and a lack of clarity in decision-making processes ➢ Slower decision-making due to the need for coordination and consensus across different functions and regions This may hinder agility and responsiveness to market changes ➢ Requiring effective communication and coordination mechanisms to overcome potential conflicts or power struggles between functional and regional teams Without proper management, conflicts may arise, impacting collaboration and hindering organizational effectiveness ➢ Demands strong leadership and management skills to navigate the complexities and dynamics of the organization 4.1.3 Integrating mechanism Integrating system is a tool for firms, especially MNCs, to coordinate between subunits and ensure the flow of information Integration mechanisms have a direct impact on effectiveness of knowledge transfer in these organizations (López-Sáez et al., 2021) When the company is large and involves a huge amount of tasks to delegate, it needs to determine upon which mechanism will play a key role The integrating system is evaluated based on dimensions: formal system and informal system Formal integrating system: Firstly, the formal system indicates the way company members officially discuss work and collaborate with each other The higher the need for cooperation is, the more complex the integrating mechanisms get Formal system is categorized into types that increase in complexity and demand for cooperation, namely centralization, direct contact, liaison roles, teams and matrix structure In the case of Unilever, the company is believed to be pursuing the model of Team and Matrix structure in the formal integrating system This is reasonable as Unilever’s organizational structure has both product divisional structure and geographic area structure, even when they have shifted more focus to divisional structure recently Therefore, only matrix formal integrating systems, in which all roles are viewed as integrating roles, is able to solve the complexity of communication among subunits across borders However, matrix structures can become mired in a bureaucratic tangle that produces as many issues as it solves Matrix systems, if not adequately managed, can become bureaucratic, inflexible, and conflict-ridden, rather than the hoped-for cooperation For such a system to function, it must be somewhat adaptable and supported by informal integrating processes (Wisdom Jobs, n.d.) Informal integrating system: Knowledge network Secondly, the informal integrating system also plays a key part in information transfer among subunits inside a company Informal integrating system is a knowledge network supported by organizational culture that encourages teamwork and cross-unit cooperation A knowledge network is a network built on informal interactions between managers within an organization and rather than formal organizational structure Unilever, as well as some other multinational companies that acquire factors of matrix organization and have high need for integration, usually try to build its culture to support the informal integrating network The indication of a good informal integrating culture can be seen in the firm's culture of collaboration and supporting technology In terms of Unilever’s collaboration culture, according to Culture 500 Ranking, “collaboration” is the feature that is both the most discussed and ranked the highest by Unilever’s employees (MIT Sloan Management Review, n.d.) Furthermore, Unilever also has stated: “In 2021, we introduced a set of global principles to guide how we can make best use of our office spaces while giving our people flexibility and choice, which include spending at least 40% of our time in the office to collaborate and connect with each other.” Although these numbers not emphasize teamwork between managers from different units, these data still show Unilever’s encouragement towards knowledge sharing This firm also organizes large amounts of internal meetings, conferences and other knowledge sharing systems equipped with modern technology to ensure the consistent flow of information 4.2 Organizational structure of Unilever after 2022 On 25th January 2022, Unilever disclosed changes to its organizational structure that will make the company's operations simpler and more category-focused Analysts have hypothesized that increasing pressure to accelerate expansion and innovation may have contributed to Unilever's statement as an external pressure These pressures have increased recently since Trian Fund Management, an activist investment group led by Nelson Peltz has started to target the company After Unilever's failed $68 billion offer to purchase the consumer health division of pharmaceutical behemoth GlaxoSmithKline PLC (GSK), Peltz consolidated a stake of the firm in mid-January Following the news of the hedge fund's purchase of its shares, Unilever stock rose, possibly signaling increased investor interest in significant changes at the company Is this the signal of divestitures to come? Analysts see investor requests for Unilever to increase sales growth and concentrate on innovation as a sign that the business may sell slower-growing units The corporation appears to be well-positioned for this approach going forward thanks to the reorganization plan Particularly, the separation of ice cream into its own division from nutrition—which will include ingredient lines, brands for healthy snacks, and items for functional nutrition—indicates that Unilever may eventually sell off its ice cream business Compared to its Personal Care and Beauty & Wellbeing, the company's food brands have a history of growing more slowly According to a slight drop in share price after the release, investors’ reaction to Unilever's restructuring news was muted The new divisions will all be headed by Unilever veterans despite the company's business reorganization and the shift of some top executives Investors can be doubtful of the restructuring plan's overall effectiveness if new faces are not generating fresh strategies for expansion and innovation (Investopedia, n.d.) 4.2.1 Vertical differentiation Previously, the company operated following a matrix structure, so the management team consisted of executives and presidents who took the lead on product segments to regional segments However, when the company announced changes to its structure in 2022, Unilever minimized its lead team by focusing mainly on product division The new organization model will result in a reduction in senior management roles of around 15% and more junior management roles by 5%, equivalent to around 1,500 roles globally (Unilever, n.d.) This means decision-making power belongs to fewer people, especially, regional managers will have less authority to make decisions Therefore, it can be indicated that Unilever still follows a mixed decentralization and centralization but there will be an increasing trend towards centralization 4.2.2 Horizontal differentiation The business will reorganize around five distinct Business Groups instead of its present matrix structure: Beauty & Wellbeing, Personal Care, Home Care, Nutrition, and Ice Cream Each of these entities will be “fully responsible and accountable for their strategy, growth, and profit delivery globally”, said the company in a statement In the announcement, Unilever CEO Alan Jope said that with five category-focused Business Groups, the company will be able to be “more responsive to consumer and channel trends, with crystal-clear accountability for delivery.” He also emphasized that the company's growth remains the top priority and these adjustments will support the pursuit of this (Unilever, n.d.) At the domestic level, this structure is known as a functional structure, dividing the company into focal areas The five Business Groups, which encompass key brands and product areas, are the main emphasis At the international level, Unilever has moved its former horizontal structure from matrix structure to a more suitable one which is Worldwide product divisional structure However the new structure has its own advantages and drawbacks Figure 3: Unilever’s Organizational Structure at the International level after 2022 Advantages: One of the primary advantages of a worldwide product divisional structure is its support for innovation and product development Each Business Group at Unilever runs practically independently and is in charge of its own expansion, as we emphasized, which can lead to greater product specialization and differentiation This indicates that staff members who work for each Business Group are more motivated to embrace their positions as a result of being able to more clearly understand how their efforts affect the wider organization (Unilever, n.d.) The structure can also encourage positive competition among divisions of an organization, particularly when compared to geographically-based structures (Nibusiness info) Divisional managers can work more closely with their teams and foster tighter-knit groups This can also lead to improved cross-functional collaboration Moreover, by creating a clear responsibility for each product unit manager, the structure can incentivize and motivate employees to work together towards meeting clear goals and objectives specific to their division, which provides a greater accountability and the decision making process can be quicker In addition, divisional managers are responsible for allocating resources and implementing strategies related to their division's product line This gives them greater control over budgets and helps ensure that resources are being properly allocated and utilized Disadvantages: The absence of regional support for Unilever's strategy is one of the drawbacks The organizational structure of the corporation has certain geographical components, but its primary emphasis is on its Business Groups and the brands and products that are included in them Accordingly, depending on how each Business Group decides to run its operations, there may be limited support for market-specific activities (Unilever, n.d.) The second disadvantage of product divisional structure is that if some divisions are granted considerable autonomy by the central firm, which could ultimately result in control loss Additionally, instead of the company's overall aims, each division pursues its own objectives (Nasrudin, A (2022)) In addition, because each division of the organization operates as its own unit, there is likely to be more bureaucracy, including additional meetings and reporting structures This can slow decision-making and hamper progress, particularly if there are disagreements between divisions (way2benefits.com (n.d.)) Furthermore, the duplications in operation can also lead to the extra cost when the firm buys from the same suppliers, for instance (Nasrudin, A (2022)) 4.3 Comparison in Unilever’s organizational structure before and after 2022 and further evaluation 4.3.1 Comparison between two periods Unilever has recently announced a series of modifications to its organizational structure, with the aim of streamlining operations and enhancing a more focused approach to its various product categories The new structure seems to be simpler and more category-focused in comparison to that in the previous period These changes are intended to simplify the company's internal processes, foster greater efficiency, and enable Unilever to better meet the evolving needs and preferences of its diverse consumer base By reconfiguring the organizational structure, Unilever seeks to create a more seamless and agile framework that aligns closely with the specific requirements and dynamics of each product category, allowing for more targeted strategies and optimized resource allocation Through this restructuring effort, Unilever aims to strengthen its market position, drive innovation, and ultimately deliver enhanced value and satisfaction to its customers across the globe We can take a more in-depth look at the changes in organizational structure of Unilever between the periods: Report lines: In a matrix structure, employees report to both functional managers and project leaders Meanwhile, in a worldwide product divisional structure, employees report to managers within their specific product division (Consumer Health, Pharmaceutical, Medical Devices) Therefore, Unilever’s system can be more efficient and simpler to function Flexibility: The kinds of structure provide flexibility in different sections The matrix structure is highly flexible, allowing for quick adaptation to changing business requirements depending on the project requirements On the other hand, when Unilever changed to the worldwide product divisional structure, the firm possessed more flexibility within the product division, but only within the constraints of the division's mandate Decision making process: Before the change, Unilever’s structure can be time-consuming and cumbersome in the decision making process With the new adaption of the product divisional structure, Unilever’s decision making process is now more efficient and also provides streamlining decision-making power to a select few within the division 4.3.2 Comparison between the new organizational structure of Unilever and firms in the same industry In comparison to other firms in the industry, particularly Procter & Gamble (P&G), it can be inferred that Unilever and P&G have exhibited different, or even contrasting orientations in their organizational structure Firstly, the most remarkable contrast between these two firms is their shift in organizational structure horizontally Unilever recently announced a transition towards a structure organized solely around business units This shift signifies a move away from their previous matrix structure and highlights a focus on streamlining operations and enhancing category-specific strategies By adopting a business unit approach, Unilever aims to foster greater accountability and specialization within each product category, allowing for more efficient decision-making and resource allocation On the other hand, P&G has implemented the Global Matrix structure within their organization since 2020 The Global Matrix structure combines elements of both functional and divisional structures, aiming to balance global coordination and local responsiveness This organizational approach enables P&G to leverage global scale and resources while accommodating the specific needs of regional markets It facilitates cross-functional collaboration, knowledge sharing, and efficient coordination across different functions and regions These divergent approaches to organizational structure reflect the strategic priorities and evolving business contexts of Unilever and P&G Each approach is tailored to address the unique challenges and opportunities faced by the respective companies in their pursuit of sustainable growth and competitive advantage Second, Unilever has a relatively more decentralized organizational structure than P&G Unilever has a federative structure with regional managers having significant autonomy to make decisions that are best suited to their markets This allows Unilever to be more agile and responsive to local market dynamics and consumer preferences In contrast, P&G has a firmly centralized command-and-control structure, with decision-making being more topdown This makes P&G less flexible but enables it to have tighter control over its operations and products In addition, the two companies have a slightly different mix of functions in their organizational structures For instance, P&G has focused more on its research and development, with its R&D centers being responsible for creating new products and technologies Unilever, on the other hand, has a more diversified product line and has more functions including IT, human resources, and supply chain management (Week, M (2007) Procter vs Unilever) Besides, another comparison to notice is the analogy and the divergence of Unilever and J&J (Johnson and Johnson), another multinational corporation in the same field of consumer goods After the change in 2022, Unilever shares the same organizational structure with J&J, which is the worldwide product divisional structure This structure provides J&J with the flexibility to tailor its operations to the specific needs of each product division, ensuring faster product development and organizational growth within each product segment In spite of having the same structure, Unilever also enhances their system in terms of local control, the agility in responding to regional preferences, and customizing the products based on local consumer demand (ULLAH, N (2021) A Comparative Analysis between Unilever and Johnson & Johnsons) Conclusion This paper examines Unilever's organizational structure and its evolution in response to its international business strategies With the flexible implementation of both multidomestic strategy and transnational strategy, the organizational structure has shifted from a global matrix structure and now to a world-wide product divisional structure The new structure focuses on product division and reduces management roles, increasing centralization and decision-making power Unilever encourages an informal knowledge network and a culture of collaboration to promote teamwork and cross-unit cooperation The global matrix structure combines product categories and geographic regions to promote collaboration, flexibility, global scale, customer focus, and talent development However, it can create complexity and ambiguity in roles, slower decision-making, potential conflicts, and requires strong leadership and management skills The new product divisional structure is designed to enhance efficiency and agility by aligning closely with the specific requirements of each product category While it has benefits of supporting innovation and improving communication and coordination between divisions, there are also potential drawbacks such as limited regional support and slower decision-making Unilever's organizational structure reflects its commitment to balancing global integration and local responsiveness, promoting collaboration and teamwork, and enhancing efficiency and agility The company encourages an informal knowledge network and a culture of collaboration to promote teamwork and cross-unit cooperation Unilever's new structure simplifies operations and focuses on categories, increasing centralization and decisionmaking power, and promoting efficiency and agility However, potential drawbacks include limited regional support and slower decision-making Overall, Unilever's organizational structure aims to balance the advantages of global integration and local responsiveness while promoting collaboration and enhancing efficiency and agility During the research process, we have limited insights into the internal structure of Unilever and there may be some gaps in our understanding Therefore, we would greatly appreciate any contributions and feedback on this paper from PhD Nguyen Hong Hanh Reference Anna, I., Anjali Saxena, Mandeep Singh, Renuka Bhagat, Sagar, Sunil Tewari, Coke, Thums (n.d.) 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