Sample Answer
Strategic Human Resource Management at Unilever
Introduction
This report critically evaluates the alignment between Unilever’s business strategy and its human resource (HR) strategy, with a focus on how this alignment contributes to organisational performance and productivity. The discussion draws upon relevant HRM theories, including the Ulrich model, and examines both internal and external factors affecting the HR function. As part of a group presentation, this report also demonstrates individual understanding of how HR strategy supports Unilever’s business goals.
Organisational Context
Unilever is a multinational consumer goods company operating in over 190 countries, with annual revenues exceeding €60 billion. Its vast product portfolio includes food, beverages, personal care, and home care items, with well-known brands like Dove, Lipton, and Persil. Unilever faces several strategic challenges, including rising costs, sustainability pressures, and rapidly evolving consumer preferences. The HR function plays a key role in supporting Unilever’s long-term strategy known as the “Compass Strategy,” which focuses on growth through sustainability and innovation.
Internal and External Context Analysis
Internal Factors
Unilever’s structure is decentralised, allowing regional autonomy while maintaining global oversight. This requires HR to manage talent across diverse markets, aligning global standards with local needs. Internally, there is a strong emphasis on leadership development and employee engagement, which supports innovation and operational efficiency.
External Factors
Externally, Unilever must respond to global competition, regulatory pressures on sustainability, and the growing importance of digital transformation. Political uncertainty, especially in key markets, and social trends like consumer demand for ethical products also influence the HR strategy. Analytical tools such as PESTLE and SWOT reveal that HR must adapt rapidly to these changing external conditions.
HR Function Analysis
Unilever’s HR function is best understood through Dave Ulrich’s model, which categorises HR roles into four main areas: strategic partner, administrative expert, employee champion, and change agent. At Unilever, HR acts predominantly as a strategic partner and change agent, aligning talent management and leadership development with business goals. Additionally, HR supports digitalisation and sustainability initiatives, which are central to the company’s Compass Strategy.
HR practices such as global talent acquisition, performance management, and learning and development are streamlined through a digital HR platform, which improves efficiency and data-driven decision-making. The company also invests heavily in diversity and inclusion, recognising that diverse teams improve innovation and performance.
Critical Evaluation of HR Approach
The strategic orientation of Unilever’s HR function has contributed positively to organisational success. By aligning HR with business needs, the company has increased employee engagement, reduced turnover, and improved productivity. For example, Unilever’s Future of Work initiative, which includes flexible working and digital upskilling, has supported adaptability and resilience, especially during and after the COVID-19 pandemic.
However, there are some challenges. The strong centralisation of strategic decisions can sometimes limit local responsiveness. Additionally, despite efforts, achieving gender balance in senior leadership remains a work in progress. The reliance on digital systems also introduces risks related to data security and employee privacy.
