Unilever: Balancing Profit and Social Responsibility
The role of companies in society is a topic of ongoing debate, with many questioning whether their primary responsibility is solely to generate profits or to also consider social and environmental causes. To explore this issue, the history and operations of Unilever, one of the world’s largest and most diverse companies, are examined.
Company Overview
Unilever is a multinational corporation that produces over 75% of the products found in supermarkets. The company’s products are used by people throughout their daily lives, and it operates in four main categories: personal care, food, refreshment, and home care. Unilever was formed in 1929 through the merger of a Dutch margarine producer and a British soap maker, and it remains a joint venture between its Dutch and British parts.
Business Structure and Operations
Despite being listed on two stock exchanges, Unilever operates as a single economic entity with equivalent shares and the same board of directors. The company has acquired and launched numerous successful brands, and it dominates the ice cream market, controlling over 30% of Western Europe’s market and nearly a quarter of the global market. However, Unilever’s business practices have faced challenges, including issues with monopoly laws and price fixing cases.
Controversies and Criticisms
Unilever has been involved in several controversies, including:
- Price fixing cases in 2002 and in South Africa, resulting in significant fines
- Contributing to the devastating environmental impact of palm oil production, leading to rainforest loss in Indonesia
- Settling allegations of poisoning Indian workers with mercury in 2016
These incidents have raised questions about the company’s commitment to social and environmental responsibility.
Sustainability Efforts and Challenges
In recent years, Unilever’s CEO has pledged to make radical changes, aiming to cut the company’s environmental impact in half, improve the health of a billion people, and double sales. While the company has made progress in reducing emissions and waste, achieving true sustainability is a daunting task due to the enormous range of products and ingredients involved. This has led to skepticism about the company’s genuine intentions and prioritization of sustainability over profits.
Financial Performance and Future Prospects
Unilever is growing, but at a slower rate than expected, leading to a takeover attempt of Kraft Heinz for $143 billion in 2017, which was rejected. Some shareholders are calling for the CEO’s removal, citing his prioritization of sustainability over profits, while others argue that consumers vote with their wallets, showing their ethics through purchases.
Conclusion
In conclusion, Unilever’s story raises important questions about the role of companies in society and their responsibility to balance profit with social and environmental causes. As consumers, we have the power to influence companies’ priorities through our purchasing decisions. By staying informed and making conscious choices, we can promote a more sustainable and responsible business practices.
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Key Vocabulary
| Term | Definition | Example Usage |
|---|---|---|
| Multinational Corporation | A company that operates in multiple countries, often with a global reach and diverse product lines. | Unilever is a multinational corporation with operations in numerous countries worldwide. |
| Monopoly Laws | Regulations that prohibit a single company from dominating a market, restricting competition and potentially harming consumers. | Unilever has faced challenges related to monopoly laws due to its significant market share in certain industries. |
| Price Fixing | The practice of companies colluding to set prices, often to the detriment of consumers and in violation of antitrust laws. | Unilever has been involved in price fixing cases, resulting in significant fines and damage to its reputation. |
| Sustainability | The practice of meeting the needs of the present without compromising the ability of future generations to meet their own needs, often through environmentally friendly and socially responsible practices. | Unilever has pledged to make radical changes to reduce its environmental impact and improve sustainability. |
| Corporate Social Responsibility | The idea that companies have a responsibility to give back to society and contribute to the well-being of their stakeholders, beyond just generating profits. | Unilever’s commitment to corporate social responsibility has been questioned due to its involvement in controversies such as palm oil production and worker poisoning. |
| Environmental Impact | The effect of a company’s operations on the environment, including factors such as emissions, waste, and resource depletion. | Unilever has faced criticism for its environmental impact, particularly with regards to palm oil production and deforestation. |
| Stock Exchanges | Platforms where companies’ shares are bought and sold, providing a way for investors to participate in the company’s ownership and profits. | Unilever is listed on two stock exchanges, allowing investors to buy and sell its shares. |
| Takeover Attempt | An attempt by one company to acquire control of another company, often through the purchase of a majority of its shares. | Unilever was the target of a takeover attempt by Kraft Heinz in 2017, which was ultimately rejected. |
| Shareholders | Individuals or organizations that own shares in a company, giving them a stake in its ownership and profits. | Some of Unilever’s shareholders have called for the CEO’s removal, citing concerns over the company’s prioritization of sustainability over profits. |
| Consumer Ethics | The moral principles that guide consumers’ purchasing decisions, often influenced by factors such as environmental sustainability, social responsibility, and personal values. | Consumers can influence companies’ priorities through their purchasing decisions, with many opting to support companies that demonstrate strong consumer ethics. |
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Vocabulary Quiz
1. Which word means ‘a situation or condition that is difficult to deal with or overcome’?
A) Monopoly
B) Sustainability
C) Daunting
D) Equivalent
2. What does ‘multinational’ mean in the context of a corporation?
A) Operating in a single country
B) Owned by a single individual
C) Having operations in multiple countries
D) Limited to a specific industry
3. Which term refers to ‘the act of fixing prices at an artificially high level’?
A) Price reduction
B) Monopoly laws
C) Price fixing
D) Market domination
4. What is meant by ‘sustainability’ in the context of business practices?
A) Prioritizing profits over environmental concerns
B) Reducing emissions and waste while improving health and sales
C) Ignoring social responsibility for financial gain
D) Focusing solely on market growth
5. What does ‘radical changes’ mean in the context of Unilever’s CEO pledge?
A) Small, gradual adjustments
B) Significant and drastic transformations
C) Temporary modifications
D) Minimal adjustments
Answer Key:
1. C
2. C
3. C
4. B
5. B
Grammar Focus
Grammar Focus: Using the Subjunctive Mood for Doubt and Uncertainty
Grammar Quiz:
Choose the correct sentence that uses the subjunctive mood correctly:
- It is A) necessary that Unilever increase B) necessary that Unilever increases C) necessary for Unilever to increase D) necessary for Unilever increases its efforts to reduce emissions.
- The CEO suggested A) that the company will reduce B) that the company reduce C) the company to reduce D) the company reduces its environmental impact.
- It is A) possible that Unilever has been B) possible that Unilever be C) possible for Unilever to have been D) possible for Unilever to be involved in price fixing cases.
- I doubt A) whether Unilever will achieve B) whether Unilever achieves C) that Unilever will achieve D) that Unilever achieves its sustainability goals.
- It is A) desirable that the company increases B) desirable that the company increase C) desirable for the company to increase D) desirable for the company increases its commitment to social responsibility.
Answer Key:
- C) necessary for Unilever to increase
- B) that the company reduce
- B) possible that Unilever be
- A) whether Unilever will achieve
- B) desirable that the company increase