Strategy of Unilever Article Critique
The article “European Integration and corporate Restructuring: Strategy of Unilever” written by Jones and Miskell provides thorough examination of Unilever integration strategy from 1950s till 1990s. It is necessary to outline that findings presented in the article significantly contribute the evidence that integration is necessary for modern businesses. The article provides thorough examination of the causes, possibilities and consequences. Actually this article is intended not only for lawyers and other officials, but also for businessmen and entrepreneurs, because it would assists in solving problems(Jones and Miskell 2005).
Therefore the article leads through abundant data presented the advantages and disadvantages of integration on a certain example as well as sums up main achievement of Unilever. The article is rather persuasive, because logical arguments, conclusions, facts and viewpoints of different critics are used. However, Jones and Miskell (the authors of the article) are effective in defending their viewpoints. The strength of the article is abundant data and evidence used to support the main idea(Jones and Miskell 2005). The article provides the background of Unilever.
Two parent companies British-based Lever Brothers and Dutch-controlled Margarine Unie were merged and thus Unilever Ltd. was created. Unilever was created in the United Kingdom having British chairman and head office in London. Moreover, it was listed on the London Stock Exchange. Unilever NV was created in Denmark having Dutch chairman and head office in Rotterdam. The company was listed on the Amsterdam Stock Market. Board of directors was similar in both companies and chairman of one company might be acting as chairman of the other.
The recent researches (Jones and Miskell 2005) have proved that “even some of the largest US multinationals took a long period to develop a coherent European strategy and organization”. However, those European-owned companies remained far behind the US counterparts in the integration process. Jones and Miskell give reasonable accounts why integration takes too much time. The discussion in the article covers the examination of the Unilever case and its response to European integration. It is reported that Unilever was the largest firm in Europe appeared after merging.
Actually the company remained probably the largest company the postwar decades. The company was jointly owned in Britain and the Netherlands. It is emphasized that Unilever tended to be the driven force to extend the European Economic Community (EC). Though as it was mentioned the company’s policy didn’t consider political contribution, it was prepared to finance necessary campaigns and operations. Britain’s applications to join the EC were supported by publicity and Unilever as well.
The main reason that Unilever supported economic integration was apparent – the company had affiliated offices in many European countries. The company made its own effort to expand geographically to other southern European countries(Jones and Miskell 2005). The authors provide evidence that Unilever was one of the most international businesses in the world. Unilever performed operations not only in Europe, but also in United Kingdom where its operations accounted for one-fifth of total sales after World War II.
Furthermore, the company managed to establish business in Latin America, West Africa, Asia, etc. Therefore it is apparent that Unilever was a strong proponent of economic integration(Jones and Miskell 2005). Moreover, the article discusses the phenomenon of company’s integration. Actually the article makes an attempt to go beyond the suggestion that multinational companies and organization were the main driving force of European integration and they weren’t the first to consider the importance of restructuring the businesses in order to be advanced in market integration.
Senior executives of Unilever were rather enthusiastic and they were real proponents of EC creation. It is apparent that though Unilever wasn’t driving force of market integration, its contribution to the integration process can’t be either ignored or neglected, because the company financed campaigns in European countries. However, the policy of Unilever wasn’t aimed at making political contributions(Jones and Miskell 2005). The authors point out that Unilever was engaged “in making its views known at the various levels of European decision making”.
Unilever was able to achieve coherent external policy for some reasons. The first reason was that external policy was conducted at the highest corporate levels and the second was that goals of individual national companies were similar to those of Unilever aiming at European integration(Jones and Miskell 2005). The article provides evidence that it was very difficult for companies to build Europewide business, because the competition was hard and pressed companies’ development.
Furthermore, highly competitive environment appeared to erode seriously the market share in domestic market. Concerning Unilever, it is stated that its factories and brands were embedded in the nation state of Europe. Unilever had to spend twenty years in order to manage to implement product group management and thus to introduce Co-ordinations for Europe. Unilever spent more time on rationalizing production and brands in international basis. Cost structures and markets were changed because of economic integration and partly due to changes in customers’ preferences.
Therefore Unilever’s competitors managed to respond quicker and to concentrate on seeking ways how to rationalize production. Moreover, they managed to focus on fewer brands. Changes were restricted within Unilever because of acute organizational rigidities. The author notices that those acute rigidities were caused by vested interests as well as by corporate values. Unilever had to identify “local decision making as the primary source of competitive advantage” (Jones and Miskell 2005).
Jones and Miskell argue that it was easier for legislation to reduce trade barrier rather than for companies to restructure their businesses. Therefore the reality of European integration at industry and firm level was vague and doubtful. The article provides comparison between P&G and Unilever and assumes that companies having the same industries had to move at different places. Regarding Unilever it is stated that its managers “responded differently to the prospect of a single market”.
(Jones and Miskell 2005) Thus the author hope that similar firm-based studies will be able to provide new perspective for economic integration, employment, and trade flows. The authors actually suppose that many companies having businesses in several European countries were challenged by the beginning of the economic integration. The main reason was that companies had to “decide the extent to which decisions should be made on a regional basis rather than reflecting the borders of nation states which had previously defined their organization and operations”.
(Jones and Miskell 2005) Unilever had strong confidence and belief in decision-making process at the local level and it was encouraged by the growth of political nationalism in postcolonial countries. Therefore Unilever decided to acquire stronger local identities. The article is concluded that economic integration wasn’t an easy task, but the companies along with the government managed to achieve the desired outcomes. Furthermore, the article shows on a relevant example of Unilever that the company is able to succeed not only national-wide, but also in the international markets.
Though Unilever wasn’t considered the driving force of economic integration, it significantly contributed the process and assisted in financing campaigns. Moreover, Unilever “was the only company to accept the parliament’s invitation to appear at a hearing on Europe’s responsibilities to fight hunger”. Therefore the company’s success is evident and indisputable(Jones and Miskell 2005).
Jones, G. and Miskell, P. 2005. European Integration and corporate Restructuring: Strategy of Unilever. Economic History Review LVIII, (1): 113-139.