Admirable Leadership Traits of Paul Polman, CEO of Unilever - Case Study Example

Organizational Leadership and Performance Name Institution Organizational Leadership and Performance Introduction Globalization is the integration of world economies through elimination of barriers on trade, while strengthening communication and interaction between states. Globalization can also be defined as the compression of the world and the intensification of the consciousness of the world as a whole (Robertson 1992). Globalization is an ongoing process, and therefore; leaders should portray good leadership skills and competency to face the challenges brought about by globalization. Leadership could be defined as the ability to create a vision and communicate it to the people who are involved in making it a reality (Avolio & Yammarino, 2013). According to Avolio & Yammarino (2013), leadership is not defined by one’s position or level in an organization. Vinkenburg et al. (2011), states that leadership is dynamic, and therefore, leaders should have certain fundamental attributes such as honesty, ethical behaviors, accountability, holistic thinking and good communication skills. The process of globalization has led many leaders to change their leadership styles and competencies. Many leaders throughout the world use different types of leadership styles, including transformational, transactional, participative, and autocratic and laissez-Fare (Wang, Oh, Courtright & Colbert, 2011). Globalization brings about a more integrated community that has both benefits and challenges. The process of globalization also brings communities and people together to experience a common social, economic and cultural environment (Wang, Oh, Courtright & Colbert, 2011). Global leadership, therefore, involves creating an environment that stimulates and encourages people to overcome obstacles. Unilever serves a good example of one of the most successful companies that operate in a globalized environment, under the leadership of Paul Polman. Paul Polman took the role of Chief Executive Officer of Unilever in 2009 (Sheehan, Marti & Roberts, 2014). Having served as the Chief Executive Officer of Nestle and P&G previously, Polman can be termed as having the advantage of having served at three largest fast-moving consumer goods organizations globally. This paper discusses the style of transformational leadership in a globalized environment. In addition, the paper discusses some of the transformational leadership qualities of Paul Polman as the Chief Executive Officer of Unilever, the organizational structure and culture of Unilever. Finally, the paper will look at some of the impacts of globalization on Unilever and the communication styles of Paul Polman. Admirable Leadership Traits of Paul Polman, CEO of Unilever Transformational leadership style involves touching the deeper values of one’s followers and seeking to achieve their higher purpose (Epitropaki & Martin, 2013). Furthermore, transformational leaders provide their employees and customers with the required and acceptable visions of the future (Epitropaki & Martin, 2013). Stanley (2001) argued that transformational leaders have the role of setting clear cut goals and also, gaining the required support to ensure that the goals are achieved appropriately. A research, which was done by Demann (2006), suggested that transformational leaders are the pillars of organizational change because they have the necessary influence. Transformational leadership is characterized by high levels of communication between leaders and their employees and customers to meet the organizational goals. The two most significant challenges facing leaders today are globalization and the advancement of information technology. Therefore, leaders need to focus on the big picture and long term goals of an organization (Moynihan, 2012). While different leaders prefer different leadership styles to achieve their goals, Paul Polman, the chief executive officer of Unilever is one of the transformational leaders who have inspired trust to their employees and customers through their conviction and unshakeable self-confidence. Paul Polman has the most admirable and effective leadership characteristics that have led to the turnaround of Unilever Company. Under the leadership of Polman, Unilever is now the third largest fast moving consumer goods company in the world (Sheehan, Marti & Roberts, 2014). Since Polman took the responsibility of a Chief Executive Officer in 2009, the share price of Unilever has increased by approximately fifty percent (Sheehan, Marti & Roberts, 2014). Polman serves a good example of a transformational leader because upon joining Unilever, he focused on transforming the organization, the processes used and the operating teams. Transformational leaders first study the methods used in an organization, its practices and current focus (García-Morales, Jiménez-Barrionuevo & Gutiérrez-Gutiérrez, 2012). According to Simon (2012), Polman states that when he first joined Unilever, the first action he did was to study the mission and vision statement of the company. Having a clear understanding of an organization’s goals and visions helps one to work comfortably as a team with the existing team members. Polman had the advantage of serving as chief executive officer in P&G and nestle previously, and therefore, he had leadership experience. Having joined the company in volatile economic times, Polman reflected on the opportunities and challenges he had, to make the company successful. Grant (2012) states that a value based leader has to focus on ideas and values, encourage followers to pursue a seemingly impossible goal and understand the conflicting needs of the employees and clients. Polman proves to be a value based transformational leader because, although he took the helm of Unilever with the goal of doubling its size, he also focused on the values and needs of the society by creating a plan that would reduce the overall environmental impacts (Singh & Kumar, 2014). The second characteristic of Polman as a transformational leader is having an improved vision for the future that is in line with the current values and in consideration to the needs of the society. Most of Unilever’s products such as palm oil rely on tropical agriculture products (Singh & Kumar, 2014). Tropical forests have to be cleared to allow production of palm oil by Unilever, which has caused adverse effects such as reducing livelihood opportunities of people who depend on income from forests, biodiversity and increase of emission of greenhouse gases (Singh & Kumar, 2014). Polman acknowledges that the effects of production of some of Unilever’s products to the environment and the living things are negative and came up with ways to reduce the impacts, which is an admirable trait (Singh & Kumar, 2014). He further proves that he is aware of the cost of externalities and of the negative impacts to the society, and he came up with a strategy to reduce the negative impacts to the society. Polman initiated Unilever’s Sustainable Living Plan whose main purpose is to reduce the impacts Unilever’s products have on the environment by half, by the year 2020 (Singh & Kumar, 2014). Polman wishes for an improved future for small holder farmers by targeting to lift over half a million small holder farmers out of poverty, if they can produce agricultural products that can be used in the production of Unilever products (Singh & Kumar, 2014). Polman proves to be a transformative leader by coming up with strategies that are in line with and have the vision of increasing the wellbeing of people. Transformational leaders have a strong emotional attachment to others, and they seek to protect the rights of other people as they protect their own (Kelloway et al., 2012). According to (Singh & Kumar, 2014), in an interview with the Guardian, Polman stated that there is no reason why one would invest in a company that does not take into consideration the needs of the society. When making business strategies, Polman advices that one should resist making short-term decisions that may have a negative effect on the long-term goals (Simon, 2012). For example, Polman came up with the lifebuoy hand washing program, which aims at saving the lives of children. According to Simon (2012), the aim of the lifebuoy hand washing program is to help every child reach the age of five years. Polman sets a good example of a transformative and an influential leader because he makes everyone want to work on the purpose of the lifebuoy hand washing program to improve the lives of people and reduce mortality rates for children. The Culture and Organizational Structure of Unilever In the face of globalization, successful multinational companies such as Unilever, capitalize on their worldwide learning, global efficiencies and multinational efficiencies (Simon, 2012). Unilever is one of the largest global businesses today. Having been formed in 1930, the main factor that has seen the growth of Unilever is collaboration by having to share some resources such as palm oil (Singh &Kumar, 2014). Although the growth of Unilever has been characterized by strategic acquisitions and mergers, not all of them have been friendly. The brand portfolio of Unilever (that exceeds four hundred) has varieties of consumer goods ranging from personal care products, beverages and cleaning products (Singh & Kumar, 2014). The fact that Unilever is a large company in terms of size and scope means that it must operate in a defined and organized structure to avoid exposing it to stagnation and paralysis risks (Sheehan, Marti & Roberts, 2014). The leadership structure of Unilever is four-tiered, and this enables it to respond to external stimulus flexibly and to make faster decisions. Unilever has two executive directors, Paul Polman who is the Chief Executive Officer and Jean-Marc Huet who is the Chief Financial Officer, who are the figureheads of the company (Sheehan, Marti & Roberts, 2014). The second hierarchal tier consists of ten non-executive directors who are from different backgrounds and cultures and have varying expertise and experiences according to their respective areas (Singh &Kumar, 2014). The third tier consists of ten executive and operational directors who manage profits and losses and deliver the growth of Unilever in different regions, functions and categories (Simon, 2012). Finally, Unilever has three senior corporate officers who make sure that the Unilever executive and nonexecutive board members have the required information to make the necessary decisions on strategic and operational basis (Singh & Kumar, 2014). According to Hofstede’s theory of cultural dimensions, not all individuals in the population of a country have the same characteristics (Bovee & Thill, 2013). Furthermore, the theory states that the administrative and institutional arrangements within a country will be shaped by the norms of behavior for the country (Bovee & Thill, 2013). The Hofstede’s theory is well evidenced at Unilever whereby, due to globalization, the cultural organization of the company is determined by its multinational background. The influence and effect of Paul Polman as the first external chief executive officer have been positive. Polman is a Dutch national who has experience in commercial goods, is commercially aware and financially astute (Simon, 2012). The mission of the company and its operating ethos since he took up the leadership role can ascertain that his leadership style is influenced by European culture. The leadership style, therefore, reflects both laissez-faire and democratic. Different Unilever units worldwide have regional leaders who, although they share the common goals and visions of Unilever, they make decisions and use leadership styles that are in line with their norms of behaviors in their regions (Hartman & McCambridge, 2011). Ways in Which Globalization Has Impacted Unilever Unilever is a very prosperous and attractive company in the world today. In the recent past, the market for Unilever has significantly increased, and this has led to increased sales. Due to the increase in population, potential customers of Unilever products are increasing daily (Hartman & McCambridge, 2011). Globalization has resulted to Unilever being able to sell their products in different countries throughout the world, and to diverse customers with different values and needs (Dasgupta, Suar & Singh, 2012). There is, however, intense competition in the global markets, and this has caused Unilever to produce unique products (Dasgupta, Suar & Singh, 2012). Due to globalization, Unilever has been forced to adapt to local cultures and preferences when customizing their brands with the purpose of gaining a competitive edge over its rivals. With the growing need of having to make adaptations to fit different cultures, it is becoming a challenge for Unilever to maintain a global brand that is meant to reflect a universal set of values that can be recognized worldwide, hence creating a strong relationship and enduring relationship across cultures and countries (Dasgupta, Suar & Singh, 2012). The challenge of dealing with the management of a brand as it stretches in various cultures and countries has been one of the impacts of globalization to Unilever. Globalization has led Unilever to recruit local managers to replace the British and Dutch managers who runs most of the local units (Martin & Chaney, 2012). Localization of management according to different countries has led to decentralized organization of Unilever’s subsidiary companies. The greatest challenge that Unilever has had to face due to this process is finding the brightest and best local leaders to fit in the company (Martin & Chaney, 2012). Paul Polman’s communication style According to Singh & Kumar (2014), Polman won the 2014 European Communication award for having been a clear and direct communicator of his business strategies that were regarded as being over ambitious and radical at first. Polman uses the assertive communication style which is characterized by high self-esteem. Assertive communicative style is the most effective communication style for organizational leaders, and it is also the healthiest (Perry et al., 2011). The style lies between aggressiveness and passiveness, and the leaders who use it have the confidence to communicate without playing games or being manipulative (Perry et al., 2011). Polman uses assertiveness communication style by trying to achieve goals without hurting others. When Polman took the leadership role of Unilever Company in 2009, the company was famous for a complicated organizational structure (Lambin & Meyfroidt, 2011). Polman used an effective communication style to communicate his strategies. Polman’s direct, clear and assertive communication style can be witnessed in his membership of B-Team. B-Team is an organized group of business leaders who focus on finding effective and sustainable ways of conducting businesses (Frost, 2014). Through his direct and clear communication, Polman was able to communicate and spread word about alternative methods of leadership for businesses (Murray, 2013). Furthermore, Polman’s assertiveness can be witnessed through his cooperation with other important bodies such as United Nations. In addition, the united Kingdom Prime minister invited Polman to be the British Business Ambassador which proves that he has a high self-esteem, ambitious, is socially and emotionally expressive and finally, protects his and other’s rights which are all characteristics of an assertive communicator. The clear, direct and assertive communication of Polman has led Unilever to be one of the world largest consumers Products Company and Polman to one of the greatest global leaders. Conclusion In conclusion, globalization is an ongoing process and it is inevitable. The process of globalization brings people from all communicates to experience a common cultural, social and economic environment. One of the impacts of globalization is an integrated community that brings about both problems and benefits to everyone. Global organizational leaders leading organizations such as Unilever should be competent in their leadership and communication styles. Paul Polman who serves as the Chief Executive Officer of Unilever has the most admirable leadership styles of a transformational leader. Having joined Unilever when it had a complicated organizational structure, Polman had a high self-esteem and created plans that seemed overambitious at the time, but he was ready to make them work. Polman proved to be an effective transformational leader because he conquered challenges such as competition and recruiting local managers that were brought about by globalization to double the size of Unilever. References Avolio, B. J., & Yammarino, F. J. (Eds.). (2013). Transformational and charismatic leadership: The road ahead. Emerald Group Publishing. Bovee, C. V., & Thill, J. V. (2013). Business Communication Essentials 6th edition. Prentice Hall. Dasgupta, S. A., Suar, D., & Singh, S. (2012). Impact of managerial communication styles on employees’ attitudes and behaviours. Employee Relations, 35(2), 173-199. Demann, J.P.(2006).The Pillars of Excellence: A Peak Performance and Life Enhancement Course.Indiana: AuthorHouse. Epitropaki, O., & Martin, R. (2013). Transformational–transactional leadership and upward influence: The role of Relative Leader–Member Exchanges (RLMX) and Perceived Organizational Support (POS). The Leadership Quarterly, 24(2), 299-315. Frost, J. (2014). Values based leadership. Industrial and Commercial Training, 46(3), 124-129. García-Morales, V. J., Jiménez-Barrionuevo, M. M., & Gutiérrez-Gutiérrez, L. (2012). Transformational leadership influence on organizational performance through organizational learning and innovation. Journal of Business Research, 65(7), 1040-1050. Grant, A. M. (2012). Leading with meaning: Beneficiary contact, prosocial impact, and the performance effects of transformational leadership. Academy of Management Journal, 55(2), 458-476. Hartman, J. L., & McCambridge, J. (2011). Optimizing millennials’ communication styles. Business Communication Quarterly, 74(1), 22-44. Kelloway, E. K., Turner, N., Barling, J., & Loughlin, C. (2012). Transformational leadership and employee psychological well-being: The mediating role of employee trust in leadership. Work & Stress, 26(1), 39-55. Lambin, E. F., & Meyfroidt, P. (2011). Global land use change, economic globalization, and the looming land scarcity. Proceedings of the National Academy of Sciences, 108(9), 3465-3472. Martin, J. S., & Chaney, L. H. (2012). Global business etiquette: A guide to international communication and customs. ABC-CLIO. Moynihan, D. P., Pandey, S. K., & Wright, B. E. (2012). Setting the table: How transformational leadership fosters performance information use. Journal of Public Administration Research and Theory, 22(1), 143-164. Murray, K. (2013). The Language of Leaders: How top CEOs communicate to inspire, influence and achieve results. Kogan Page Publishers. Perry, R. I., Ommer, R. E., Barange, M., Jentoft, S., Neis, B., & Sumaila, U. R. (2011). Marine social–ecological responses to environmental change and the impacts of globalization. Fish and Fisheries, 12(4), 427-450. Robertson, R 1992, Globalization: social theory and global culture (Reprint. ed). London: Sage. Sheehan, M., Marti, V., & Roberts, T. (2014). Ethical Review of Research on Human Subjects at Unilever: Reflections on Governance. Bioethics, 28(6), 284-292. Simon, S. S. (2012). An investigative study on market potential and performance analysis of Hindustan Unilever Ltd. International Journals of Marketing and Technology, 2(10), 104-114. Singh, A. P. H., & Kumar, A. P. P. (2014). A study of financial appraisal of Hindustan Unilever Limited in India. International Journal of Research in Finance and Marketing, 4(5), 70-76. Stanley, D. (2011).Clinical Leadership: innovation into action. Banyo Queensland: Australian Catholic University. Vinkenburg, C. J., van Engen, M. L., Eagly, A. H., & Johannesen-Schmidt, M. C. (2011). An exploration of stereotypical beliefs about leadership styles: is transformational leadership a route to women's promotion? The Leadership Quarterly, 22(1), 10-21. Wang, G., Oh, I. S., Courtright, S. H., & Colbert, A. E. (2011). Transformational leadership and performance across criteria and levels: A meta-analytic review of 25 years of research. Group & Organization Management, 36(2), 223-270. Read More