BUS4010
Contemporary Business Environment
Company Appraisal
Introduction
According to Karneli (2023), the external factors affecting the growth, success, and operations of a company are termed as business environment. Unilever was created by Lever Brothers and Margarine Unie after signing an agreement in 1929 (Unilever, 2024). Globally, the revenue of Unilever reached 60 billion euros on average (Statista, 2024). Martyn Berry is the owner of Argos which is a part of the Sainsbury’s group (LinkedIn, 2024). In 2023, the net sales of e-commerce peaked at 4.1 billion US dollars (Statista, 2024). The study will discuss the stakeholders and structures of Argos and Unilever along with the impact of digitalisation and leadership and management theory. Further, a key component of macroeconomics and microeconomics will be explained followed by two global issues and how the companies manage the same.
Figure 1: Revenue of Unilever
(Source: Statista, 2024)
Task 1
Types of organisations, their structures, and stakeholders
Unilever is a public organisation being a supplier and manufacturer of fast-moving consumer goods (Global Data, 2024). On the other hand, Argos is a private company which is a subsidiary of Sainsbury’s since 1973 (LinkedIn, 2024). The shares of a public company are generally traded on the stock exchange whereas the shares of private companies are not (CFI, 2024). On the other hand, as compared to private companies, public companies are capable of raising new money by selling their shares easily.
Argos is known to follow a functional structure as the structure represents a clear division of departments (HR, Legal, Sales, Health, Finance, Marketing, Operations, Product) and their respective reporting lines to a general manager (Rocket Reach, 2024). A functional organisational structure possesses a centralised leadership with clearly defined job functions, chain of command, roles, and authority in decision-making (Bortorff, 2024).
Figure 2: Organisational structure of Argos
(Source: Rocket Reach, 2024)
Unilever abides by a hierarchical organisational structure being the fast-moving consumer goods company (The Org, 2024). A hierarchical organisational structure often described as a tall structure includes several managerial layers coined as a top-down approach with a long command chain and a narrow span of control (BBC, 2024).
Figure 3: Organisational structure of Unilever
(Source: The Org, 2024)
Stakeholder Analysis for Unilever
Table 1: Unilever's Stakeholder Analysis
(Source: Created by the learner)
Figure 4: Stakeholder matrix
(Source: Created by the learner)
Shareholders, customers, investors, board of directors, and employees are key stakeholders of Unilever. In more than 20 sites, the company employs over 6000 staff (Unilever, 2024). Maintaining a robust stakeholder network helps the organisation to ensure the long-term success and enhanced reputation of the business by setting strategic directions helping to keep them engaged.
Stakeholder Analysis for Argos
Stakeholder’s name |
Classification of stakeholders |
Impact |
Influence |
Role |
Barriers |
Engagement |
Shareholders |
Internal |
High |
High |
Provide capital and expect returns |
Financial market volatility and business performance fluctuations |
Regular financial updates, Annual General Meetings, dividends |
Customers |
External |
High |
High |
Drive revenue through purchases |
Changing preferences, competition, price sensitivity |
Surveys, loyalty programs, customer support, social media interaction |
Investors |
Internal and External |
High |
High |
Supply additional capital |
Market risks, investment returns, transparency |
Investor relations activities, reports, meetings |
Board of directors |
Internal |
High |
High |
Strategic decision-making |
Aligning diverse interests, regulatory compliance |
Board meetings, strategic reviews, regular reports |
Employees |
Internal |
High |
Moderate |
Execute operations and customer service |
Workload management, job satisfaction, and training requirements |
Employee surveys, training programs, internal communication |
Table 2: Argos's stakeholder analysis
(Source: Created by the learner)
Figure 5: Stakeholder matrix
(Source: Created by the learner)
Based on the stakeholder analysis, it is important for Argos to manage stakeholder expectations by navigating through the complexities to offer fair treatment, enhance job satisfaction, and offer consistent returns. This will also help the retailer to effectively engage its stakeholders contributing to the long-term survival of the company in the competitive marketplace.
Digitisation of the organisations’ structure, operations, and strategies
As discussed by Ramazanov et al. (2021), digitalisation in the retail industry has resulted in access to online platforms facilitating higher economies of scale. This has helped the retail industry significantly thus helping to increase operational efficiency and growth.
In 2022, Unilever transformed its structure to a more category-focused model across its five business groups (Unilever, 2022). The brand has replaced its traditional matrix structure which is supported by its business operations including systems, processes and technology. The main aim of the company is to drive substantial changes to make Unilever faster and simpler (Unilever, 2022). In its supply chain, Unilever integrates the most essential technologies facilitating digital transformation helping to create a sustainable and competitive edge by transforming its value chains (Unilever, 2023). Customer connectivity is at the heart of the business for which the organisation has built an advanced AI-driven customer connectivity helping in collaborative planning, replenishment, and forecasting (Unilever, 2024). As its strategy, for Unilever, e-commerce is a major driver of growth for which the company is increasingly integrating the latest technologies to enhance customer experience (Unilever, 2021). The company also understands the significance of digital sustainability as a core part of its integral sustainability embarking on over 80 corporate websites in its network (Unilever, 2024).
Argos has been well-known as a technology-led retailer with a billion website visits and 70% online sales on average yearly (Argos, 2024). Technology is considered to be at the heart of Argos which has helped the retailer design a fully integrated supply chain helping to respond effectively and quickly at the marketplace (Digital Supply Chain, 2020). The retailer has also completed the first phase of deploying its digital strategy. 70% of its sales are achieved online through its digital stores along with its click-and-collect orders (Searles, 2024). As a part of its strategy, Argos has invested heavily in digital innovation to stay competitive helping customers to visualise the store from the inside (Logan, 2024). On the other hand, digitalisation at Argos has also helped the retailer to foster better communication with its customers for a comprehensive in-store experience.
One leadership and one management theory and the leadership challenges at Unilever
As per Shala et al. (2021), the Contingency theory of leadership proposes that the effectiveness of a leader depends on how well their style fits a specific context. The theory extends to elaborate that leaders effective in one environment might not be effective in another. According to the theory, leaders must adopt and adjust their leadership styles based on the situation. As mentioned by Tompkins (2023), the Scientific management theory recommends the use of scientific methods at work rather than depending on personal discretion or judgement of the team members. This particular theory aims to enhance workplace efficiency through effective cooperation and ensuring that team members and empowered with adequate training.
According to the reports from 2024, the senior executives at Unilever mentioned cutting a total of 3200 roles by the end of 2025 in Europe (Naidu and Anilkumar, 2024). These steps taken by Unilever to revitalise the growth of the company are most likely to cause employee dissatisfaction, anxiety, and high stress. Based on employee reviews, staff have reported poor job security, heavy workload, and power dynamics (Glassdoor, 2024). All these represent the leadership challenges at Unilever which might negatively affect employee engagement. The Contingency theory of leadership and Scientific management theory suggests that leaders should adapt their styles to the situation and use scientific methods to improve workplace efficiency.
Task 2
Microeconomics
Microeconomics can be defined as an essential concept that can help determine the independent actions of sellers and buyers in terms of moving towards market equilibrium (Browning and Zupan, 2020). Herein, it can help analyse market behaviour as its key component with the help of tools such as Porter’s Five Forces Analysis or competitive analyses in the form of SWOT. Focusing on market behaviour can help extract the impacts on the national economy of the United Kingdom as well as organisational behaviour within Unilever. The current strength of Unilever is that in the year 2023, the organisation generated revenue of €60 billion (Statista, 2024). However, there have been weaknesses associated with Unilever that have been influencing the economy and organisational behaviours based on a competitive landscape.
Figure 6: Revenue Generated by Unilever
(Source: Statista, 2024)
For instance, Unilever decided to cut 7,500 job opportunities on a global scale (Kollewe, 2024). This influenced organisational behaviour on a negative scale, demotivating and discouraging employees within the workplace landscape of Unilever. Unemployment rates have been impacting the national economy of the UK based on microeconomic influences. For instance, the unemployment rate in the UK was 13.44% in the year 2020, an increase of 2.4% from the prior year (Macrotrends, 2024). This has been reducing job opportunities within the national economy while in organisational behaviour, Unilever may experience a high threat of competition in addition to further expansion opportunities or options for imposing partnerships.
Figure 7: Unemployment Rate in the UK
(Source: Macrotrends, 2024)
Macroeconomics
Macroeconomics can be defined as an approach or theory that takes into account changes in the field of aggregate investment against aggregate income or economic growth working as the economic accelerator (Thomas, 2021). Herein, increasing inflation rates and lower economic growth rates within the UK have been adversely influencing organisational behaviour and the national economy. For instance, inflation rates peaked at 11.1% in 2022 within the UK while the economic growth rate was 4.35% in 2022, indicating a decline of 4.33% from 2021 (Statista, 2024, Macrotrends, 2024). Herein, the demand and supply for commodities from Unilever have also been influenced by changes in prices based on a mixed market structure in the UK. For instance, a mixed market structure represents both the private and public sectors based on the private sector being associated with setting prices and the public sector having the benefit of limited government interventions (CFI, 2024).
Figure 8: Inflation Rates in the UK
(Source: Statista, 2024)
With a price increase, the demand for commodities in Unilever may decline while supply may also increase, and vice versa. Macroeconomic activities such as Brexit adversely impacted the national economy and the workplace operations of Unilever with an emphasis on high employee turnover rates concerning organisational behaviour. The circular flow of income represents the flow of money and supplies between the household, business, government, financial and foreign sectors (CFI, 2024). In addition to fiscal policies outlining tax breaks and tariffs on imports and exports which can influence organisational behaviour for the operations department of Unilever, the Monetary Policy influenced the national economy. For instance, with 5.25% bank interest rates set by the Bank of England in the UK, the Central Bank imposed a target of 2% (Bank of England, 2024).
Figure 9: Economic Growth Rate of the UK
(Source: Macrotrends, 2024)
Global Issues
Global issues that Unilever has come across revolve around cultural differences, accountability or ethical decision-making which can be mitigated with the help of adopting self-awareness, cultural diversity and openness. The fields of responsible global citizens include cultural awareness, diversity in thinking and sustainable ethics. Herein, the two major global issues such as cultural differences and ethical decision-making are carefully handled by Unilever through the establishment of inclusion and equality along with sustainable measures. For instance, Unilever has been engaged in building an equitable workplace environment recognising the worth and dignity of individuals capable of giving them freedom (Unilever, 2024). In addition to tackling cultural issues within the national economy and creating diversity in organisational behaviour, Unilever has also upgraded its operations department to protect the national economy and enhance organisational behaviour. For instance, Unilever has been driving an ambitious agenda to address ever-growing environmental, social and economic challenges (Unilever, 2024).
Conclusion
In conclusion, it can be derived that both Unilever and Argos have been experiencing the influence of microeconomic and macroeconomic theories. For instance, Argos has been engaged in the implementation of effective organisational structures while Unilever has exclusive supply chain operations. On the other hand, Unilever has been engaged in axing a myriad of job opportunities, influencing organisational behaviour based on the demotivation of employees within the workplace. Herein, macroeconomics and microeconomics have also been adversely impacting job opportunities in the national economy. However, Unilever may focus on implementing job security and protection for its employees in the long run.
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