Study on HindustanUnilever’s OrganizationBehaviorFor the subject Organizational Behavior

Different aspects of HUL like Organizational culture,Leadership, Personality of CEO, Employee’s learning andmotivation level etc. are studied.

Shashank SaxenaRoll No.-2K92A37PGDM General (2009-2011)Asia Pacific Institute of Management3 & 4, Institutional Area, Jasola,New Delhi-110025

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Hindustan Unilever Limited

1. 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.

1.1. 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.

1.2. 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).

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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.

1.3. 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 recognised 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.

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2. Personality of CEO

Nitin Paranjpe the youngest CEO & MD of the country's largest fast-moving consumer goods

(FMCG) company. 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 Paranjpe’s 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; one’s 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.

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He's a popular guy in the corridors of HUL. He not only shares a good relationship with his

bosses and peers, but also has a great working relationship with his juniors. He's been given the

toughest assignments. In the 90s, he was made the Chennai area manager, a difficult assignment

at that time for anybody and he came up trumps. The 46-year-old MD & CEO of HUL says: you

need not be immensely talented to succeed in a project as long as you are determined to

succeed and are willing to put in that extra effort.

The youngest ever occupant of the corner office at HUL is, by his own admission, a CEO with a

difference. His CV doesn’t boast an IIT or IIM badge; he is not extra fond of management books;

has remained a one-company man for 21 years; returns home by 7 pm almost every day; listens

to Vedanta philosophy on Sunday mornings and enjoys teaching his children over the weekends.

As an MBA student at Jamnalal Bajaj Institute, Mumbai, he used to dream of getting into

Hindustan Lever (as it was then called), India’s largest FMCG company. When he finally got the

“high of his life” after Hindustan Lever gave him a job, he says he would have been delighted if

he could have risen to head of sales or marketing in the company.

“Any job beyond that would be a bonus. My motto has been simple: be focused on your current

job and do that well,” he says. His career graph shows the management at Lever has been quite

generous in doling out ‘bonuses’.

He finally realised he is a ‘lister’ — HUL jargon for those on the superfast career track — when

his boss once asked him to spell out his career ambitions. Paranjpe, then a brand manager,

replied he wanted to become a regional manager. He forgot about the conversation, but his boss

didn’t as two weeks later he got a double promotion and was made the south India regional head.

It turned out be a tough assignment as it coincided with the company’s products being boycotted

in Kerala. For the first time in his life, Paranjpe realised that he was capable of managing more

than he had imagined. In Paranjpe’s view “Every manager must have one or two tough

assignments. When you have to achieve more than what available resources permit, you grow

professionally as well as mentally.”

He graduated from the stairs to the elevator in his career when he was made the head of the

laundry category during the detergents’ price war between Procter & Gamble and HUL in 2002.

For the first time in his career, he suffered from self-doubt as he was unable to meet the numbers

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target. The top line just refused to budge as consumers shied away from HUL products, often

preferring cheaper alternatives.

But the management obviously felt otherwise as he went on to become the executive director

(home & personal care) soon after. The reason was obvious: the platform he built during those

days helped HUL regain its glory in subsequent years.

Though HUL has changed its management strategy swiftly with changing times, Paranjpe is

clear that the one practice which has and will remain constant is sending managers to rural areas

early in their career. 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.”

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3. Leadership

HUL’s 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 well-

rounded 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 HUL’s 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.

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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

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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 & Gamble’s (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 HUL’s rural reach to another 100 million

consumers in over 100,000 villages.

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4. 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:

4.1. 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.”

4.2. 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

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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.

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.

4.3. The Vitality Index:

HUL, a company known for its marketing innovations, had come up with a health idea—the

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 HUL’s 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.

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A case in point is Hindustan Unilever’s 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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5. 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, BranchStructure and Brand Portfolio.

Sales Stint Experience a first hand contact with the trade to get agrip of market dynamics and understand the role of anArea Sales Manager.

Brand Management Imbibe the Unilever principles of Brand Management,understand the role of a Brand Manager and developbrand strategy.

International Stint Complete a project in your core funct ional area inanother country within a durat ion of 8 to 12 weeks.The object ive is to help you build relevant skills inyour core funct ional area with a global perspect ive

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and transfer your learning’s to an Indian context.

Business Projects A cross-functional team pro ject which shall be workedout with every Business Management Committee andevaluated by the Management Committee at the end ofthe st ipulated 9 week period.

Rural Consumer StintIn addit ion to the primary aim of community service,the object ive of the four-week st int at an NGO is togive you an understanding of the Rural Consumer.

Business Orientation Program

An 11-day program that mainly consists of classroomsessions at our in-house Training Centers to provide aclearer understanding of key business processes andpract ices.

Factory Stint Get familiar with the production process, commercialfunct ion payments and factory working capitalcontrol.

Familiarization Get familiar with the company's Sales System, BranchStructure and Brand Portfolio.

Sales Stint Experience a first hand contact with the trade to get agrip of market dynamics and understand the role of anArea Sales Manager.

Brand Management Imbibe the Unilever principles of Brand Management,understand the role of a Brand Manager and developbrand strategy.

International Stint Complete a project in your core funct ional area inanother country within a durat ion of 8 to 12 weeks.The object ive is to help you build relevant skills inyour core funct ional area with a global perspect iveand transfer your learning’s to an Indian context.

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Business Projects A cross-funct ional team pro ject which shall be workedout with every Business Management Committee andevaluated by the Management Committee at the end ofthe st ipulated 9 week period.

Rural Consumer StintIn addit ion to the primary aim of community service,the object ive of the four-week st int at an NGO is togive you an understanding of the Rural Consumer.

Business Orientation Program

An 11-day program that mainly consists of classroomsessions at our in-house Training Centers to provide aclearer understanding of key business processes andpract ices.

Factory Stint Get familiar with the production process, commercialfunct ion payments and factory working capitalcontrol.

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6. Organization Culture

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 – Monitoring – Reporting

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

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important thing besides formal/informal communication is to make sure that the medium allows

upward communication (employees speaking to the management and management listening).

Target

Group

Formal Communication

Media

Informal Communication

Media

Employees

News release, large groupmeetings, employee newsletterarticles, Management trainingsession, managers meeting,Intranet, printed publicationsuch as posters or bookmarkswith the new corporate cultureimage or texts, hotline servicethat can be accessed from allaround the world.

Small group meeting and one-on one meeting, ‘Ask TheManagement' session on theIntranet, party or picnic,approach by management,informal Q&A sessions, group(or per department) e-mails.

Suppliers

News release, large groupmeeting, suppliers’ newsletterto home, hotline service thatcan be accessed from allaround the world.

Small group meeting and one-on one meeting, managementvisit, informal Q&A sessions,gathering or lunch party forsuppliers in each area wherethey can exchange ideas or askquestions.

‘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.

6.1. Network Building with Alumni:

Hindustan Unilever (HUL) has many firsts to its credit. Now, it adds one more. India’s 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.

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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.

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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7. Power and 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.

7.1. Unilever’s Mercury Fever:

In March 2001, residents of Kodaikanal, a pretty hill retreat in Southern India, caught the Anglo-

Dutch multinational Unilever red-handed when they uncovered a dumpsite with toxic mercury-

laced waste from a thermometer factory run by Unilever's Indian subsidiary Hindustan Lever.

The 7.4 ton stockpile1 of crushed mercury-containing glass was found in torn sacks, spilling onto

the ground in a busy scrap yard located near a school. Despite the visible evidence, Mr.

Subramaniam, Hindustan Lever's export marketing manager, dismissed charges of indiscriminate

dumping. "No hazardous wastes have left the factory site," he said.

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The company claims that none of the 140 current workers, or any of the 250 or so ex-workers,

(many of who resigned in the past due to health reasons), are at all affected by mercury. Ten

workers below the age of 40 have died while employed at the plant. No investigations were

performed at the time of death. Ex-workers report kidney problems, chronic stomachaches, blood

vomiting, infertility, and women suffering a variety of gynaecological disorders. The company

has neither conducted a comprehensive and scientific epidemiological study, nor published the

basis of its claims that no workers have ever been affected.

Immediately after the controversy became public in March 2001, Unilever also had its workers

unearth more than 40 tons of waste from unlined pits within the factory compound. Workers

engaged in the unearthing operation say that contrary to Unilever's claims that only "non-

mercury glass wastes had been buried," the waste unearthed had visible quantities of mercury. If

this is true, the fact that none of the workers engaged in unearthing the wastes wore any

protective clothing constitutes a serious violation of worker safety norms. Unilever claims that its

environmental and worker safety standards are applied uniformly in all their facilities worldwide.

Responding to public pressure and the weight of the evidence, the company announced the

closure of the mercury thermometer factory in India, the largest in the world, on 21 June, 2001.

Unilever was made to clean up the toxic wastes at the scrap yard under supervision of the

community and the authorities under a protocol designed to US standards. A company statement

dated June 21 explained that: "Hindustan Lever Limited has retrieved, for secure storage at the

site, the 5.3 tonnes of mercury containing glass scrap currently stored on a scrap dealers premises

in Kodaikanal, which had been inadvertently removed from the factory in breach of established

procedures."

Unilever's agreement to close the factory and to clean up the scrap yard is a clear admission of its

guilt. That it will not accept people may have been exposed to the mercury as a result of its bad

practices is scandalous.

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7.2. 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 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.

21

7.3. 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.

22

8. Corporate 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.

23

9. References

http://www.financialexpress.com/news/hindustan-lever-to-exit-hybrid-seeds-jv-in-2005/103436/2

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-will-clean-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.business-standard.com/india/news/lever-agingold-boys-network-online/360110/

http://blog.giftex.in/corporate-gifting-benefits/a-great-way-of-incentivizing-employees-the-hul-way/

http://business.outlookindia.com/newolb/article.aspx?102386

http://economictimes.indiatimes.com/News/News_By_Industry/Cons_Products/Unilever_copying_HULs_project_Shakti_globally/articleshow/3986738.cms

http://economictimes.indiatimes.com/rssarticleshow/msid-3473880,flstry-1.cms

http://www.business-standard.com/india/storypage.php?opn=op&autono=330477