Case study Unilever

Towards a new organization

/3

Contents
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This case study is dedicated to the acquisition of major
national ice cream producer (Inmarko) by Unilever leading
worldwide FMCG company. You should bridge the gaps
between corporate cultures and organizational structures of
two companies and elaborate the necessary organizational
changes. Solution of the case should include a new
organizational model, staff optimization proposal and a
change management plan to achieve target acquisition
synergies.

Introduction

/14
Synergy effects
during mergers
and acquisitions

/15

/4
Unilever
Company Background
Unilever today
Unilever in Russia
Organizational set-up of Unilever
Mission, values and corporate culture
of Unilever

/10
Inmarko
Company Background
Company Business Today
Organizational set-up of Inmarko
Mission, values and corporate culture
Inmarko

Integration of companies:
business consolidation
models and corporate
culture

/16
Organizational
changes in company
Organizational changes in the context
of HR strategy
Key HR risks and issues related
to organizational changes

Appendices

/18

Case study Unilever - contents

Introduction

Anna, HR Director, Unilever, had just

returned from the meeting with top corporate
management. The meeting was dedicated to
the recent transaction acquisition of the large
state-wide leading ice-cream manufacturer1.
This transaction had been prepared, estimated
and planned for a long time before and finally
colleagues were celebrating the successful
close-out. Anna was also quite happy with
the changes. Even though she was not a key
decision-maker on Inmarko acquisition she
earnestly believed that this expansion would
grant Unilever new business opportunities in
Russia.

This case describes situation as of January 2009. Hereinafter any

references to current situation should be regarded as references
to the situation actual of January 2009. When using any additional
materials please make sure that such materials are dated January
2009 or earlier

Anna had loads of work forthcoming. After

all, the company employing over 5 500 people
would now become a member of Unilever
family. In fact the merger of two companies
was a demanding challenge for Anna.
Differences in corporate cultures, excessive
Inmarko headcount, deeply rooted diverging
organizational concepts all that could result
in certain integration issues. Anna was not
expecting swift and easy wins. Moreover, she
actually preferred complex tasks over simple
ones. She was well poised for careful planning
and productive scrutiny.
Anna already had a positive experience
of integrating a new plant into the company
some time ago. In case with Inmarko Unilever
management granted Anna almost unlimited
powers related to integration of two companies
cultures on one condition: as a result the
planned synergy effect from merger should
be attained. The following operating indicators
should be reached with account for merger
of both companies resources: improved cost
efficiency should result in 3 million EUR saved
per year and overall Inmarko and Unilever
FTE productivity2 should increase 2.5 times
in a year.
Anna called a meeting for her work team
and listed all outstanding tasks with detailed
descriptions on a flip chart:
1) Propose a new target organizational
model determine Inmarko autonomy range
and Unilever control extent (at the level of
sales and revenues volume, decision-making
in business processes, and managerial
control).

2) Develop organization chart what it will

comprise, determine cost cutting approach,
define target headcount on departmental
level.
3) Develop Talent3 and Reward management
policies.
4)1Develop Change Management policy.
Prepare a plan of organization activities for
12 months and incorporate performance
indicators.
5)1Develop plans for integration of two
corporate cultures.
Definitely, not a single task is the easy
one summed up Anna. Should we remake
and/or integrate organization charts of two
companies? Should we reassign certain
functions between departments and (if yes)
how exactly? How can we preserve unique
competitive advantages already pertinent to
Inmarko whilst maintaining high Unilever
environmental protection and production
quality standards (and get the maximum
effect)?
Furthermore, we should not forget about
our internal values and competencies model.
How exactly are we going to define general
and professional skills of our colleagues, and
how can we blend/prioritize those skills in the
new model? We could just leave all Inmarko
employees in their current status as they are,
evidently, very experienced in what they are
doing, and yet on the other hand, since this icecream manufacturer is about to become a part
of the global corporation, maybe we should
consider adding our specialists into their team
and decide what should be the ratio? In the

Calculated as the ratio of TO (Turnover) to FTE (Full Time

Employee), where TO - is turnover (volume of sales of goods or
services in terms of money for a certain period of time), and FTE full-time equivalent of one person in one day

latter case one team will comprise people very

different in their skills, knowledge, values,
and background. Another point for investigation maybe certain processes should be
outsourced?
Should Inmarko employees be retrained
and should Unilever business culture be
propagated there? If so, how should we
proceed educating Inmarko employees or
appointing Unilever reps? What corporate
culture attributes are most important and
what should be the implementation sequence
in case of ice-cream manufacturer?
In a week we will be discussing a draft
new organization concept. Im expecting all of
you to submit ideas on new model, structure,
headcount and all other aspects we discussed
today with these words Anna concluded the
meeting. She was shivering with anticipation
for huge amount of interesting and challenging
work!

Talent Management - a set of tools of personnel management,

giving organizations the opportunity to attract, retain and effectively
use staff who makes a significant contribution to its development

Case study Unilever - introduction

Unilever

Company Background
The multinational Anglo-Dutch company
was established in England in 1880, and its
contemporary name appeared when Dutch
Margarine Uni and Lever Brothers (British
soap manufacturing company) merged in 1930.
The reasons for merger were the multiple
benefits gained in purchasing of raw materials
oils and fats required in manufacturing of
both products. Thus the company started with
larger merger, and throughout the history
of Unilever development M&A4 transactions
played a significant role.
The current state of the company and the
strategy of its development has been affected by
a range of characteristic historical background
features. First years of the company business
coincided with the Great Depression in 1930s.
These years were a period of trial for both
Unilever and the entire world. The unfavorable
economic conditions made the freshly united
enterprise adapt and streamline as fast as
possible. In the following years this furthered
the creation of corporate methods of quick
adaptation to the global changes and external
economic factors.
World War II became the second trial for
the transnational company. Unilever was
fragmented during the years of war. German
and Japanese enterprises were located on
occupied territories and any connections

to London and Rotterdam were completely

severed. This resulted in development of
the distinct corporate culture: local Unilever
companies started to operate with high level
of independence and focused on particularities
of local markets. The trait kept up till
nowadays: group operational management
is split based on location of enterprises, and
different brands are promoted on different
markets. Geographical diversification of
business makes it possible to acquire local
companies and brands that are successful in
the markets of Unilever presence (this strategy
is impossible for many FMCG companies as
their development strategies allow acquisition
of global players and businesses only).
The postwar European prosperity and
growth of wealth stimulated with the European
Community take-off resulting in consumer
demand boom and growing living standards,
which also influenced new Unilever strategy.
The company starts to pay additional attention
to perfection of process solutions and
establishes R&D units. Eventually, Unilever
expands and the products of the company gain
in variety; innovations are implemented and
new acquisitions are effected. Advertising units
also evolve, as do affiliated marketing research
and packing companies.
By the beginning of 1980s Unilever
becomes 26th largest company in the world.

The company businesses included tropical

plantations, cargo forwarding, manufacturing
of plastics, packing materials, and a wide
range of food, personal, care and household
maintenance products.
In 1990s the company changed the strategy
abruptly: the strategy of brand portfolio
diversification was replaced with the strategy
of focusing on key products and best selling
markets with high growth potential. By the end
of 20th century Unilever decreased the number
of marketed product categories from 50 to 13.
At the same time, the company launched first
environmental efficiency programs.
Unilever welcomed XXI century with the
Path to Growth program. This new five-years
strategy is aimed to further development of
leading brands, improvement of production,
and speeding up the company growth. Sweeping
changes were introduced to the group range of
marketable products: the company sold 140
various brands and focused on leading brands.
Unilever Health Institute was established in
the beginning of the century. The Institute
is dedicated to R&D in food, health, and life
energy. In 2004, Unilever adopted a new
corporate mission. Its essence is formulated
in just one word Vitality. The new corporate
mission statement is Add Vitality to Life.

Mergers and acquisitions

Case study Unilever - Unilever

Unilever today
Today, Unilever is one of the world leaders
in production of FMCG goods. The company
products are sold to more than 170 countries
with 160 million purchase units worldwide
using a Unilever product, and on any given day
over two billion customers enjoy the company
brands.
Unilever products are broken down into 4
product categories: personal care products,
household maintenance products, food
products, and refreshment5.
Personal care products category covers
antiperspirants, skin care products, hair
care products, and oral care products. This
category includes Dove, Lux, Rexona, Sunsilk,
Axe, Close Up, and other brands.
Unilever household maintenance products
category comprises softeners, washing
powders and detergents, soaps, and dish
washing and cleansing agents. In this respect
famous brands are Omo, Surf, Comfort,
Radiant, Cif, Domestos, and Sunlight.
Food products segment consists of soups,
sauces, snacks, mayonnaise, salad dressings,

margarine, and spreads6. Well-known brands

in this category comprise Knorr, Blue Band,
Rama, Hellmanns and Amora.
Refreshment category comprises icecream, tea-based cold beverages, weight
loss products, and vitamin enriched staple
food products sold in emerging markets.
The category brands sold worldwide are
Heartbrand, Lipton, Slim-Fast, Becel, and
Flora.
Unilever
pays
particular
attention
to emerging markets as they have been
demonstrating the stable sales growth for over
20 years. Today their share in the company
total turnover is over 40 %. Unilever sales in
13 emerging countries are in excess of EUR 0,5
billion, and the sales growth in these countries
outpaces the total corporate sales growth.
The company focuses on implementing
innovations and creating new products in all
consumer segments. Unilevers approach
is that of open innovation7, which helps to
source new ideas all over the world. In 2009
the company announced a new R&D Genesis
program that provides for a long-term

streamlining of new ideas. Thanks to the

program, the innovational pyramid-shaped
Lipton Yellow Label tea bags were introduced
to the market recently. These unique formed
bags preserve the taste of fresh tea leaves.
Another successful product is Rexona for
Women deodorant that combats body odor
even during active movements. The company
has 6 research & development laboratories
worldwide with over 6 000 employees. The
high efficiency of R&D programs is proved
with annual registration of 250 to 350 new
patents in the corresponding industry fields.
Total volume of annual investments into R&D
is around 891 million EUR in 2009.
The top 25 brands from Food and Personal
Care categories generate as much as 70 % of
the companys revenues. The company owns
13 brands priced at over 1 billion EUR each:
Lipton, Sunsilk, Dove, Rexona, Axe, Knorr,
Becel, Hellmanns, Rama, and also Omo, Surf,
Lux and Heartbrand (not sold in Russia). The
companys sales amounted to over 40.5 billion
EUR in 2009.

Beverages and ice-cream

Food product based on vegetable and milk fat mix
Open innovation (term suggested by professor H. Chesbrough) is a
paradigm that assumes that firms can and should use external ideas
as well as internal ideas

5
6
7

Case study Unilever - Unilever

Unilever in Russia
Unilever entered the Russian market in 1991,
and in 1992 it opened the Unirus representative
office in Moscow. This office started by importing
products, including Lux soaps, OMO detergent,
Signal toothpaste, Impulse deodorants and
Lipton tea .
The head office was created in St Petersburg
in January of 1994; by July of the next year the
fragrance and cosmetics manufacturing site
Severnoye Siyanie was united with Unirus.
Production of brands like Sunsilk, Timotei and
Denim, and also of a wide variety of goods under
Severnoye Siyanie label (Flowers of Russia toilet

Organizational set-up of Unilever

To a large extent, companys achievements
result from work of its international
management team that consists of Chief
Executive Director, 5 Executive Directors (for
Finance, R&D, HR, Supply Chain, and Marketing
and Communications), 4 Directors responsible
for major product categories (personal care,
home care, foods, refreshment), and 3 regional
Presidents.
Unilever manages its operations within
three geographical segments, each headed by
a regional President with a dedicated Board of
Directors. Those are America, Western Europe,
and all other regions: Asia, Africa, Central and
Eastern Europe.
In the period from 2000 to 2008, Unilever
reduced global workforce numbers by 41 %,
from 295 000 to 163 000 people.

water, For men and Club cologne water), was

started in Russia.
Investing further in its Russian assets and
aiming at development in the food market,
Unilever founded its Van den Bergen Jurgens
B. V. office in April 1996. This is how brands like
Rama, Delmy and Calve appeared. There was
also Brooke Bond tea with similar to advertising
concept of Lipton, because this brand was
widely distributed and had gained consumer
trust by that time.
In March 1998, the company acquired the
Moscow Margarine Factory (MMF). In October
2000, Unilever bought the Bestfoods Company

Global
employment
at Unilever
20002008

(former CPC Foods). This companys goods,

including Knorr and Hellmanns, were well
known. As a result of this merger, in Russia
emerged another very modern production factory in Tula. Along with companies
acquisitions, Unilever was building its own
factory in St. Petersburg, a copy of the plant
in the United Arab Emirates. The construction
of the tea-packing factory began in 1998,
but adverse economic conditions allowed to
complete the construction only by 2002. Today
this factory produces the entire range of the
Unilever tea: Lipton, Brookebond and Beseda.
Since 2009, Unilever owns the St. Petersburgs

Baltimore company, which started producing in

1995 the same-name ketchups.
In 2008 Unilever became 100 % shareholder
of Inmarko and anchored in Russian ice-cream
market. Inmarko had a turnover of around USD
243 million, 16 % markets share, about 5 500
full-time employees and 3 plants located in
Novosibirsk, Omsk and Tula.
6 500 people work for Unilever in Russia,
Ukraine and Belarus at the present date. The
total amount of the companys investment into
Russian economy exceeds 20 billion rubles.

300,000

250,000

200,000

150,000

100,000

50,000

Source: Unilever
Annual Reports
2004, 2008

2000

2001

2002

2003

2004

2005

2006

2007

2008

Numbers in Europe (for 20002003 it is whole Europe, from 2004 only Western Europe)
Represents the Americas
Represents Asia, Africa, and Middle East (since 2004 including Eastern and Central Europe)

Case study Unilever - Unilever

Unilever organisational structure

at regional level
Operation or Unilever companies in
Russia, Ukraine, and Belarus (Unilever RUB)
is organised through a unified structure
and headed by President and the Board of
Directors, who define the general strategy of
business development for all businesses in
the territory of Russia, Ukraine, and Belarus.
Company headquarters are located in Moscow.
It hosts all departments of the company and its
management: Directors by function, and the
Chairman of the Board.

The company organisation has a matrix

structure, with the following basic departments
by function: sales function is represented
by Customer Development Department,
supply function is represented by Supply
Chain Department, marketing function is
represented by Brand Development and Brand
Building Departments, and other functions, in
line with Unilever model, are instrumental and
include the following departments: Human
Resources, Finance, IT, Legal, and PR. Each
Department is headed by a Vice President.

Customer Development Department is

one of the biggest departments at Unilever,
and its employees work in all the regions of
Russia and ensure availability of products on
the shelves from Kaliningrad to Vladivostok. It
consists of several departments.

Key Accounts department is responsible

for sales through major customers (defined
by sales volume and in relation to channel of
trade, for instance, Metro Cash & Carry, X5
Retail Group, etc.).
Field Sales department is responsible
for sales through network of distributors.
Customers Marketing department is engaged
in organising promotion activities in line with
sales tasks for specific categories, and with
account to brand concepts.
Capability Building Department takes
strategic decisions on where to and how the
whole Department will develop.
CD Operations Department supports
keeping Sales Department databases, together
with planning and analysing sales figures.
Then, there are divisions that are not direct
parts of CD, but they work closely with it as
specialised partners:
CD Finance division renders commercial
support, analyses efficiency of funds application, and fulfilment of business results KPI8.
CD HR division
CD Customer Services division
Supply Chain Department is comprised of
specific areas: production, planning (planning
functions for production and shipments),
procurement (negotiating with suppliers,
enforcement of contracts with suppliers),
logistics (shipments and storage), and
monitoring service levels (tracking the level
of customer service and developing measures
to improve it). In addition, this Department
includes production facilities.

Marketing Department works along

two major directions: Brand Development
and Brand Building. Brand Development is
responsible for brand concepts, and the needs
to introduce changes and develop new brands.
Working results of Brand Development team
(for example, responsible for Central and
Eastern Europe) are transferred to a local
Brand Building team (for example, in Russia,
Ukraine, and Belarus) for further introduction
of brand to the market. Brand Building, in its
turn, analyses the market and its requirements,
and organises brand promotion in view of this
analysis.

Brand Building, Supply Chain, and

Customer Development jointly plan sales
volumes for various periods. The anticipated
production volume they order from Production
Department. In the event that factories located
in Russia, Ukraine, and Belarus are not
capable of producing the necessary volume
in the required timeframe, the order may be
transferred to a different factory in a different
country, if it is appropriate from efficiency
viewpoint. Thus, factories compete with one
another in order to provide the company with
quality products at a relevant original cost.

Key Performance Indicators

Case study Unilever - Unilever

Mission, values and corporate culture

of Unilever
Unilevers mission

Day by day Unilever is working to create a

better future.
Company helps people feel better, look
better and get more from life due to friendly
products and services.
And by leveraging Unilevers global reach
and inspiring people to take small, everyday
actions, everyone in the company believes that
all together we can help make a big difference
to the world. Unilever inspires people for small
daily actions that will help all of us to make
great advances.
Unilever will develop new ways of managing
the business, which will give it the opportunity
to double its volumes, at a time decreasing
environmental impact

Purposes & Principles

Unilever Corporate Purpose states that the
company stives to suceed through the highest
standards of corporate behaviour towards
everyone we work with, the communities we
touch, and the environment on which we have
an impact.
Conducting companys operations with
integrity and with respect for the many people,
organisations and environments Unilever
business touches has always been at the heart
of its corporate responsibility.
The company aims to make a positive
impact in many ways: through own brands,
commercial operations and relationships,
through voluntary contributions, and through

the various other ways in which the company

engages with society. Unilever is also
committed to continuously improving the way
company manages its environmental impacts
and is working towards their longer-term goal
of developing a sustainable business.
Corporate Purpose sets out companys
aspirations in running business. Its
underpinned by Code of Business Principles9
which describes the operational standards
that everyone at Unilever follows, wherever
they are in the world. The Code also supports
companys approach to governance and
corporate responsibility.
Compliance with these principles is
an essential element in Unilever business

success. The Unilever Board is responsible

for ensuring these principles are applied
throughout Unilever. The Board of Unilever
will not criticize management for any loss of
business resulting from adherence to these
principles and other mandatory policies and
instructions.
Unilever is socially responsible business

See http://www.unilever.com/aboutus/purposeandprinciples/
ourprinciples/

Case study Unilever - Unilever

Corporate Culture and Values

Unilever values guide people in their
judgments, decisions and actions they take
every day. These values underpin everything
people say and do.
Integrity
We are committed to integrity because it
creates our reputation, so we never compromise on it. It defines how we behave, wherever
we are. It guides us to do the right thing for the
long-term success of Unilever.
Respect
We are committed to respect because
people should be treated with dignity, honesty
and fairness. We celebrate the diversity of
people, and we respect people for who they are
and what they bring.
Responsibility
We are committed to responsibility because
we want to take care of our consumers,
customers and employees, as well as the

environment and the communities in which we

operate. We take this personally and always do
what we say we will do.
Pioneering
We are committed to the pioneering spirit
because it created us and still drives us as a
business. It gives us the passion for winning
and for creating a better future. It means that
we are always willing to take intelligent risks.
Standards Of Leadership
The company encourages its employees to
sustain high behavior standards in their daily
work, corresponding to the companys values:
integrity, respect, responsibility, and the
manifestation of pioneering spirit. Sustainable
profitable growth can be reached if the company
would have people with a winning mindset,
a passion for consumers and an appetite to
drive personal performance. Standards of
Leadership are behaviours Unilever expects
to see in its employees, because they drive

companys performance and culture.

Growth Mindset this is competitive
leadership. Its a positive, yet realistic, attitude
about the companys future. Its passion for
winning.
Consumer & Customer Focus this is
purpose-driven leadership. Its externally
focused-on consumers, on customers. Its
seeing our brands through their eyes.
Bias for Action this is action-driven
leadership. Its a sense of urgency in decisionmaking. Its thoughtful action, intelligent risktaking.
Accountability & Responsibility this is
performance-driven leadership. Its staring
reality in the eye. Its owning Unilevers overall
performance.
Building Talent & Teams this is peopledriven leadership. Its investing in peoples
development. Its building teams that pull
together to win.

Case study Unilever - Unilever

Inmarko

10

Company Background
In 1992 two entrepreneurs in Novosibirsk
came up with an idea to organize ice-cream
sales from the portable street stands. It was
a successful move as ice-cream was in short
supply in the city at that moment and there
was no specialized ice-cream trade network.
Inmarko company was officially registered on
January 26, 1993.
Company owners were not considering own
manufacturing at first. Initially, the company
sold ice-cream made by Novosibirsk ColdStore Combine, and later Inmarko started to
cooperate with other regional manufacturers.
The sales proceeded from eighty stands
located in city. Distribution was set through
personal contacts.
Later in 1993 the company turned its
attention to overseas products, reaching
out for complex ice-creams like fruit ice or
chocolate and nuts sundaes as opposed to
traditional ice-cream cones or briquettes. This
was a novelty for Russia as local ice-cream
factories only manufactured popular low cost
items. Inmarko imported cornets and eskimo
from Poland, Denmark, England, Sweden,

Spain, and cooperated with internationally

renowned companies like Koral, Augusto,
ISCO, Menorquina, Frederics. The assortment
backbone remained to be Danish (premium
segment) and Polish (economy class).
Manufacturing Capacities
In the mid-90s customs duties changed
drastically in Russia. It became more
affordable to establish own manufacturing
lines rather than continue importing icecream from foreign countries.
In 1996 Inmarko opened first own factory
(capacity 5 thousand tons) in Elitnoe village,
Novosibirsk Oblast. This factory was built
under supervision of Danish subjects from
Frisco. The product composition and packaging
was developed by the designated unit. At that
period, there was no purported advertisement
of Inmarko brands, as the company believed
that the extraordinarily flashy packaging would
serve as such. In addition to wholesaling and
sales through kiosks, the company started to
supply products to grocery stores.
In about a year, the existing factory
manufacturing capacity began to run short.
The corporate management started to

consider manufacturing lines expansion but

that was impossible at Novosibirsk plant due
to space limitations. In 1997 Inmarko acquired
a tendered block of state shares of Omsk
factory. This plant required modernization
and the company invested all its profits
into reconstruction. The same Danish and
German specialists were in charge of the
modernization. As of today Omsk factory has
underwent three stages of reconstruction, and
its potential capacity is 50 000 tons. Potential
capacity of Novosibirsk factory is 35 000 tons.
In 2007 the company considerably
strengthened its positions in European Russia
after purchase of OAO Tulski Cold-Store
Combine with the annual production capacity
of over 25 000 tons and ready products storage
capacity of over 18 000 tons. After the fullscale reconstruction the factory capacity rose
to 45 000 tons.
The company makes full use of five own
low-temperature storage facilities and rents
three more with the total capacity of 7 420 tons.

Case study Unilever - Inmarko

Company Business Today

Throughout its development Inmarko company
transformed from the distributor of Novosibirsk
cold combines into the major Russian ice-cream
manufacturer.
At the beginning of 2009 the total number of
kiosks owned by Inmarko is around
600
retail kiosks10 located in omsk, novosibirsk,
Krasnoyarsk and Barnaul. Over 92 000 frost
chambers and low temperature counters are
installed at retail points including retail stands
and kiosks both owned by the company and
rented. inmarko also owns the largest
russian fleet of refrigerated trucks (330
vehicles11) that delivers products to retail
outlets, and 8 large refrigerated trucks for
long distance cargo

transportation. Inmarko is the leader in retail

segment in terms of total number of retail
trade units (frost chambers) and its distribution
network leaves behind all Russian competitors
(80 distributors in 100 Russian cities).
Inmarko has 10 own sale centers located in
Novosibirsk, Omsk, Krasnoyarsk, Moscow, Tula,
Kazan, Novokuznetsk, Yekaterinburg, Barnaul
and Kemerovo. Company headquarters are
located in Novosibirsk.
In contrast with many Russian ice-cream
manufacturers, Inmarko focuses on sales of
branded ice-cream in middle and middle-top
price segments. Company range of products
includes such brands as Magnat, Zolotoi
Standart, Djemka, Cornetto, Carte dOr and

more. Several key brands of the company

are actively promoted by both ATL and BTL
advertisement thus preserving the high level
of brand awareness. Huge corporate portfolio
comprising 139 product items covers all price
segments, which results in high demand from
distribution channels.
In 2008 Inmarko became the absolute leader
of Russian ice-cream market in production
and sales volume. As of the beginning of 2009
Inmarko controlled 16.2 % of sales (natural
units) in Russia. Inmarko revenues in 2008
totaled 243 million USD in cash and 72.700 tons
of ice cream in kind.

Organizational set-up of Inmarko

On the date of acquisition, Inmarko has been
employing 5 500 staff members, and operating
three plants in the cities of Omsk, Novosibirsk
and Tula. The main office of the company is
located in Novosibirsk; the company also owns
10 branches.
The main Inmarko units are commercial,
production and logistics sectors.
The commercial sector effects sales
of the Companys products. It is regionally
divided into departments and comprises the
Eastern department (Urals, East and Siberia
divisions), the Central department, the Key
Chains department (in charge of sales to the
key federal and regional retailers), and the
Moscow department. To cover the demand of

large territories the companies resort to selling

via their own branches, where it is difficult to
find a distributor satisfying the requirements of
Inmarko. The branches allow for direct sales of
products, both to third trade units and to inhouse chain of kiosk (600 units).
The production sector is in charge of
operations in Tula, Omsk and Novosibirsk,
as well as for quality control and feedstock
procurement. The plant in Tula produces 40 % of
Inmarko ice-cream and covers North-Western,
Central, Southern, and North Caucasian
Federal Districts, while the plants in Omsk and
Novosibirsk (60 % of production) supply icecream to the Volga region, Siberia, Far East, and
Kazakhstan.

The logistics sector secures timely

deliveries of end products to the retail chains
and the distribution network; it includes
the transportation and products logistics
departments. Given the fact that ice-cream is a
short shelf life product, and strongly dependent
on the temperature conditions too, it is therefore
subject to higher requirements in terms of
storage and transportation. Inmarko uses
expensive specialized transportation equipment
and special low-temp storage facilities.
The rest of the sectors are regarded
as support services (manpower, financial,
marketing, legal sectors, etc.).

10
11

Required staff of one kiosk - 2,5 FTE

Required staff of one vehicle - 2 FTE

11

Case study Unilever - Inmarko

Mission, values and corporate culture

Inmarko
Company Mission
Inmarko is an actively developing company,
a leader in ice-cream production and sales in
Russia. Leadership of Inmarko is based on high
standards of product quality, guaranteed level
of services and is being achieved by continuous
innovations and professional teamwork.
Companys mission is defined as follows:
We meet the customers needs better than
the competitors can do. We produce not just
ice-cream, we produce pleasure for you.
Values
Responsibility
This means responsibility for your own
result. Fulfillment of accepted obligations on
time and on a full scale. Achieving high quality
results. Understanding that the result is the key,
not the amount of work performed. Courage in
taking decisions within your competence and
responsibility for consequences.
This means responsibility for the results of

the teamwork. Taking care of interests of the

subordinate employees and colleagues when
making decisions. Accepting responsibility
not only for your small part of the job, but also
for achieving the companys goals in general.
This means social responsibility of the
company. Ensuring safety and high quality
of products and services. Fulfillment of
commitments to employees, customers and
partners.
Leadership
Whoever does well, we shall do better. We
are not satisfied with what has already been
achieved, and aspire to continuously improve
our performance and our professionalism.
We are constantly moving ahead. Every one of
us aspires to be the best in his place. We are
already thinking today, what will let us be the
best tomorrow.
We wish to go beyond just being better;
we wish to be substantially better than the
competitors: best producers, best employers,
best distributors, - best in everything! So that

Goals and Principles

As a result of the interviews with 10 managers of the company, main principles that had
helped ensure leadership in the market and best describing the culture of working at Inmarko,
were formulated:
Leadership and ambitiousness. Set
new ambitious goals on a regular basis to
outperform competitors. Passion to win. If the
company does not win, there is no success for
everyone.
Prompt decisions prompt result. High
speed and flexibility in taking decisions. Less
discussions more simple actions. Result is in
the first place and is the main indicator. You
better do it than not.

12

Market and consumers. Flexibility and

attention to every market and to every consumer.
Involvement of the employees through
trust and openness.
Close personal approach establishing
emotional ties with employees, lack of barriers
to discuss the concerns with the manager
(without an appointment through a secretary
or within special visiting hours)

the others unconditionally acknowledge our

leadership.
We are all sharing the spirit of the winners.
There are no impossible tasks for us. We
are not afraid of difficult goals, not afraid of
jumping over our own head. We are able to
energize the others, encouraging optimism
and confidence in success.
Leadership is our joint commitment, we
are the team of leaders. We support healthy
competition inside the team. But we stand
together against the competitors. We are
proud of our companys successes. We are
all convinced that every employee can do his
important contribution to the common cause.
Innovations
This means constant search for new,
bright, unusual, positive ideas and solutions
in our industry. Successful implementation
of a new approach, product, method of work.
Unconventional approach which goes ahead of
the market and thus ensures the leadership.
We are investigative; we are constantly
involved in self-development - aimed at
acquiring new knowledge and experience.
We love changes. We are constantly
looking for something new and adopting it for
development and improvement of our work
and the companys position in the market.
We aspire to change relations, products
and the world to the better.
Teamwork
We are a professional united team, where
we value the atmosphere of mutual help and
support in order to achieve the joint goal. We
aspire to base our cooperation on mutual trust
and readiness for joint constructive work.
We aspire to coordinate all important

decisions.
We help each other. We share our experience
and knowledge with the members of the team.
Our principle is concerted teamwork. Every
one of us has his strengths and weaknesses,
but altogether we can achieve more, we take
proper solutions needed to succeed. We are
proud of our team!
Customer Mania
What is a customer for us? A customer is
who receives our services and products. This
means not only consumers and buyers, but
also partners and colleagues.
Every one of us is responsible for the
companys image as perceived by the customers
and by the society in general. We aspire to let
our customers feel supportive of the united
team. We are oriented at long-lasting mutually
beneficial relations. Strategic partnership is
important for us. We are committed to the winwin principle in our joint work.
We aspire to explore in detail and
understand the situation, interests and
needs of our customers in order to exceed
their expectations. We show respect to our
customers opinion. We aspire to understand
first, and then to be understood.
We meet commitments to our customers
and to each other. We understand that any
unresolved problem affects all customers of
the company. We sincerely take care of our
customers.
A customer should not be just satisfied.
A customer must be happy and pleasantly
surprised!

Case study Unilever - Inmarko

Company Style
Openness
We are open and friendly to contacts and communication. When
we have problems, we speak about them openly. We are not afraid
to voice our opinion even if it goes against the majority. When
discussing the problems, we propose solutions.
We aspire to make our company comprehensible for those who
work with it. Every employee understands the company structure
and areas of responsibility, has access to non-classified information.
He is informed about key developments in the companys life.
We care about what people think of us. We are open for feedback
and proposals from outside.

Individuality
We take people as they are. We show respect to different styles
of work, thinking and appearance. We consider that the employee
may choose any style of dress and behavior which is convenient for
him and does not interfere with his fulfilling professional tasks. We
appreciate bright individuality in people. Every one of us has a zest.
Our ideas are a surprise.

Enthusiasm (Drive)
We are enthusiastic in our approach. We feel inspiration and
encouragement to give the world something more than just a product. We have sense of humor, optimism, positive and good spirits.
We find pleasure in what we are doing.

13

Case study Unilever - Inmarko

Synergy effects
during mergers
and acquisitions12

12
When working with the case participants may not focus on this
list, they are free to add any other synergies and to exclude those
described here if they find this to be desirable course of action.

14

The purchase of Inmarko group by Unilever

and its proper integration in Unilever business
can create a variety of synergies. In economics
a synergetic effect is an improvement in work
effectiveness as a result of combination,
integration, merger of parts into unified whole.
During merger and acquisition, synergies stop
being abstract notions they are identified
and each synergy is evaluated.
Synergies can show themselves through
two major aspects: sales and expenses.
While calculating synergies, it is important
to realize the necessity of taking into account
not only the potential growth of income (and
cut in expenses), but also readiness to incur
expenses on carrying out synergies. Fulfillment
of synergies is a complex process, which is
conducted during companys integration, and
often expenses on integration substantially
exceed planned figures. Also it is essential to
keep in mind, that synergies cant be reached
instantaneously, and its important to expect
in which timeframe certain synergy can be
achieved.
Hereafter, as an example, possible
synergies from Unilever and Inmarko merger
are cited.
1. Synergy in purchase of raw materials
and packing
Growth of values, due to purchase of
different raw materials can lead to major
improvements on the part of suppliers. With
delivery expansion, suppliers are likely to give
discounts leading to reductions in the product
cost. In particular, the discount rate of sugar
and vegetable oil can usually be amounted to
1.5-2 %, condensed and dried milk to 3-4 %,
while discounts on purchase of products with
higher price, such as various filling agents and
packing, can reach 10%.

2. Synergies in brand promotion (through

mass media)
Inmarko did not invest in advertisement
of their product until 2006, when the national
advertising campaign on the television
started for the first time. This advertising
campaign focused on two super specialties
Magnat brunette and Magnat blond. In 2008
Inmarko advertising budget totaled around 350
million rubles directed to ATL advertisement.
Unilever is much more dominant when it
comes to investing in media promotions.
In Russia, the price on purchasing the
broadcast time for advertisement is calculated
individually for every client and that is why the
power of negotiation is of high importance.
Consolidation of companies will substantially
increase negotiation power and will contribute
to achieving better terms and conditions when
purchasing media services.
3. Synergy in transportation and storage
Increase in production volume will lead
to restructuring and consolidation of two
separate logistic networks into a large-scale
joint network. Due to the scale effect this can
decrease the corresponding maintenance
expenses. However, one should not forget that
restructuring of logistic network is a long and
high cost process.
Unilever can also be characterized by a
more stable level of stock during the year, faster
circulation of receivables (15 days instead
of 80 days) and payables (70 days instead of
78 days). Altogether, introduction of Unilevers
management techniques into Inmarko can
improve financial indicators of the latter.
However, if the clientele of both companies
is not merged and the overall business presence is not increased, this might result in
considerably worse conditions for clients in
the ice-cream market. This should be taken

into account when combining financial and

trade policies.
4. Synergy in administrative costs
Inmarko headquarters (together with
financial department, IT and HR) is located
in Novosibirsk. Preserving management
team, strengthened by Unilever leaders, in
Novosibirsk, all supporting functions (finances,
IT, HR) could be relocated to Unilever service
center in Omsk, which could make it possible
to considerably decrease labor expenses while
reducing the total headcount. Furthermore,
a set of functions like, for example, safety
control can be outsourced (thus reducing
labor expenses and shifting costs from labor
expenses to expenses for third party services).
5. Synergy in sales department costs
Currently Inmarko has a network of
10 branches. Merging teams, internal
restructuring and letting go a number of
employees can significantly decrease the
expenses of the united enterprise. Sales can
also be stimulated with inclusion of Inmarko
goods distribution into distribution network of
Unilever.
At the same time there are certain
issues in unification of sales teams as ice
cream business requires special assets (low
temperature storage facilities, frost cameras
in cargo vehicles fleet, special sales equipment
at retail outlets), which imposes certain
requirements to distributors. These issues
are of significant impact on sales department
headcount decrease possibility.
6. Synergy in technologies
Incorporation of Unilever process solutions
in Inmarko manufacturing lines could also
lead to costs reduction, along with promoting
the environmental friendliness when it comes
to working conditions and manufacturing
processes.

Case study Unilever - Synergy effects during mergers and acquisitions

Integration
of companies:
business
consolidation
models and
corporate
culture

15

The main problem, which arises during

integration, is how to properly and effectively
distribute the spheres of influence between
the acquirer and the acquiree. Will integration
be effected as acquisition, merging of equal
entities, or as transformation? There is no
single answer to this question, although
there are models that could be held up as an
example.
There are several models distinguished
by the extent of centralization of management
1) Authoritarian model
In such a case, one company would fully
blend into the other (acquirer as a rule)
and build into the existing organizational
structure. There would be a full integration of
business processes and a replacement of top
management of the acquiree. The consolidated
company would continue operating under the
brand name of its mother company, while
the acquired companys brand name would
not be used at all. The acquiree would inherit
the mission and values of the acquirer, and a
substitution of the corporate culture would
take place.
2) Autonomous model
In such a case, the acquiree would assume
a position of a comparatively independent
element in the acquirers structure, e.g. it
would become a separate division. Once
consolidated, the companies would then
continue acting almost independently of one
another. This would be a reasonable scenario
provided that the business of the consolidated
companies remains diversified. The acquiring
company would set up an overall objective (e.g.
volume if sales or revenue), while business
processes would continue to be controlled
by managers of the acquired company. The
new brand names would be included into the
acquirers brief-case, or vice versa, the brand

names of the acquiree would suffer a transfer.

The personnel replacements would not be
numerous, nearly all employees would remain
in their positions, and the only need would be to
identify the roles of the top ranking managers.
There would be a possibility of existence for
various corporate cultures, sometimes even
with different lists of values/principles.
3) Combined model
This integration model represents a
combination of elements of the above models
in various proportions. During merging, there
could exist different options for incorporation
of the acquired company into the acquirers
organizational structure, or creation of a
new one differing from the structures of both
companies. A selective integration of business
processes would take place. For example,
logistics, sales network, marketing, feedstock
and advertising space procurement procedures
would consolidate, while production processes
would be implemented in an autonomous
control mode. A mixed team of top managers
would be created with a possibility of hiring
of new employees, which would contribute by
providing missing experience, or their transfer
from the acquiring company to the acquired
one. The management of brand names would
also include several optional scenarios:
creation of a new brand name, incorporation
of brand names into the acquirers brief-case,
transfer of a part of the acquirees brief-case.
The value system would then transform
with a possibility of a simultaneous
assumption of the acquirers mission at a
global level and preservation of a part of
the functioning philosophy and corporate
culture of the acquired company. There is an
option of development of a new culture based
on effective factors and values of the two
companies this time, not one.

Corporate culture and mergers of

companies
Corporate culture helps the company in
being successful in its trade. For instance, the
good today is better than perfect tomorrow
principle can be productive in FMCG or IT
industries, where being ahead of competitors
and capturing the market share is important.
The same principle may not work in other
companies, in oil & gas industry for example,
where the cost of error would be too high and
where a measure thrice, cut onceprinciple
would rather be applied. Any culture can be
evaluated only with reference to a specific
strategy of a particular company. There is
no poor or good culture; there is culture that
facilitates companys efforts in achieving its
goal, and culture that undermines them.
How should corporate culture be managed
in case when two companies are merged or
one company is acquired by the other? The first
thing to do is to understand the development
strategy of the merged company both in
general and in relation to eventual results
of the integration. Would it lead to adding a
new product in the companys portfolio to be
marketed alongside other products? Or should
the acquired company be integrated in the
value chain of a joint product?
Which specific processes in every company
would be altered after the integration, and
how exactly? The second step is to identify
in every companys culture the features that
would complicate or assist implementation
of this strategy, and also to determine the
missing, but important features. Based on
the understanding of cultures of the merging
companies and the strategy, a scenario of
working with the merged companys corporate
culture should be elaborated.

Case study Unilever - Integration of companies:

business consolidation models and corporate culture

Organizational
changes
in company

Organizational changes in the context

of HR strategy
When two companies are being merged,
the HR department is required to perform a
consistent job in the following directions:
1) Changing the organizational set-up
includes as follows:
Optimization of organizational structure;
1Transformation of business processes,
decision
making
system,
information
management;
Support of released manpower.
2) Coordination and adaptation of talent
management system (human assets) implies
solutions in the following areas:
Assignment to key managing positions;
Transfer to equivalent levels (grades);

1Integration into a new model of career

management and professional development
processes;
Retention of key employees in short and long
terms;
Harmonization of remuneration and exemption system.
3) Transformation of corporate culture
should be based on the following principles:
Understanding of the integrated companys
culture;
Employee assistance during integration into
a new cultural environment (main principles,
language and traditions, corporate standards
and policies);
Observation of high moral standards before,
in the process of, and after integration.

The success of an integration project

is estimated by the key business indices
profitability and market share e.g. in
one, two or three years after acquisition. The
most crucial integration success rate for HR
department can be HR budget (salaries and
exemptions) and efficiency. Organizational
changes should also be tracked for timing, as
any transient state of an organization can turn
out to be inefficient. Therefore, it should be
minimized.

Restructuring flow-sheet in the context of HR Strategy development

HR Strategy

HR
Result

Corporate
Culture

16

Business
Result

New
Structure
Renivated
Organization

Prot

Talent / Human
Asset

Transformation
Integration

Organizational
Structure

Enhanced
Culture

Case study Unilever - Organizational changes in company

Key HR risks and issues related to

organizational changes
Information support of restructuring
Changes in employee professional life
can lead to a rise of the stress level: certain
employees will perceive these changes as
an opportunity to advance, while other will
see it as a threat. Planning informational
announcements on every restructuring
stage is one of vital tasks. All corporate
channels should be used: headquarters
announcements public or through e-mails,
publications in corporate mass media, series
of meetings with various managers and
employees, getting feedback and reacting
on employees requests. If a vision of future,
after the changes take place, is not clearly
communicated to employees in advance, the
hunger for information can occur, which in
its turn might lead to appearance of rumors.
It is difficult to separate empty rumors from
objective information and that is why extra
efforts could be needed to show the real state
of affairs to all employees.
During any changes, the most talented
employees are likely to use them to move up
inside or to move out to another company.
Noncompetitive employees are likely to adjust
to new circumstances and all in all are not so
dynamic. In addition, it is of high importance to
illustrate well in advance and in simple words

17

the strategic nature of changes, stimulated

by particular goals and conducted through
transparent steps. It is essential to explain
new employee duties as quick as possible, to
show goals and future career potential.
Resistance to changes
As a rule, changes in the company are
always accepted with resistance. Employees
can respond layoffs, reduced productivity and
rejection of new ideas. They could refuse the
rules of unfamiliar corporate culture. The
main task of management in this case as
quickly as possible to reduce the resistance,
to transfer personnel in the neutral stage, and
then to stage of contribution.
In order to minimize such risks, it is
necessary to maintain systematic and regular
work to ensure highest participation of
employees in the process of reorganization
(both by informing and involving them in
decision-making).
The goal of managers and HR specialists
is to forecast reasons, which can lead to
employees resistance, as well as to design
initiatives, which could help to prevent such
scenarios or minimize negative effects and
adapt people to new conditions.
Competence assessment
The results of personnel assessment can
show that lack of necessary competence does
not allow employee to effectively hold desired

job position. This is a challenge for both an

employee and a manager: the employee
has either to stay on lower position and
develop necessary skills or try to realize his/
her potential in other fields. The very fact of
mismatching can appear unexpected to both
sides and require administrative decision.
Furthermore there is issue of cooperation
between Inmarko and Unilever employees in what proportion should Unilever
representatives be incorporated in the new
organization, how to soothe differences in
corporate culture, the level of skills, values
and traditions. Generally mixed teams
are characteristic of higher possibility of
conflict, the predictability of administration is
declining, and efficiency reduction could be
observed. It is important to establish a proper
selection procedure so that it is both just and
non-discriminating.
Retention of talented members and key
stakeholders
For the first time in the company after the
merger may be an outflow of personnel, but it
is not always a negative process. The company
may leave employees who doesnt support the
new owner or doesnt fit into values framework
of new organization. But business success
and stability depends on professionalism of
key employees (for example highly qualified
technologist or efficient seller).

Usually, during integration the management would distinguish several employee

categories:
Key employees, which would be needed to
assure efficient performance after integration;
Employees, which would not be needed
within the consolidated structure, but should
be retained for the period of integration;
Employees, which are opinion leaders or
opinion shapers;
All the rest.
All these categories should be surveyed in
order to find a way to identify such employees
and develop an action plan for each category.
Should there be an aim for retention, there
must be a clear understanding of motivation
and retention of an employee.
Upon completion of activities to retain
the key employees, a dismissal procedure
should be thought over. Respect for both the
employees which are staying and those who
are leaving, can help reserve their loyalty
and retain them as potential partners of
the company. The best long-term strategy
is a dismissal compensation, reservation of
exemptions for the transient period, assistance
in further employment.

Case study Unilever - Organizational changes in company

Appendices

appendix 1. inmarko organizational Chart, 2009

Automation and
QA/QC system

Financial

Legal dept.
Commercial
Sector

East

Central region

Key accounts

Management
Marketing

Moscow

HR

Production

Logistics
Economic
Security

19

Case study Unilever - Appendices

Appendix 2. Inmarko branch organizational chart, 2009

Branch
Manager

Delivery Section
Manager

20

Transportation &
LogisticsManager

Sales
Manager

Head of

Head of

Head of

Sales Section

Sales Section

Sales Section

Case study Unilever - Appendices

Appendix 3. Unilever RUB Field Sales organizational chart, 2009

Field sales units have a functional organizational structure in each region. Each region contains two independent
branches sales: the group Food and group of products for Home and Personal Care (HPC).

Vice-President
(Customer Development)

National Sales Director

(Field Sales)
Regional Sales Manager Food / HPC (6 regions)

21

Customer

Territory

Regional

Marketing

Sales Manager

Sales

Executive

(30 sales areas)

Coordinator

Channel

Modern Trade

Modern

Customer

Development

Activation

Trade

Sales

Activation Executive

Executive

Executive

Supervisor

Distribution
Supervisor

unilever
-
Case study Unilever
- Appendices

Distinctive
Features

Linear-functional
organizational structure

Functional
organizational structure

Linear
organizational structure

Graphic Expression
Company
Manager

Line Manager 1

Executive

Line Manager 2

Executive

Company
Manager

Executive

Head of Functional
Department 2

Executive

Executive

HR

Product
Development

Planning

Production

Procurement

Product
Sales

Divisional
organizational structure

Graphic Expression

22

Corporate
Center

Division
1

Division
2

Unity of command principle

only one direct manager
Position ranking top to
bottom
Supervision of downline
subdivisions in all activities

Simplicity of
organizational forms and
clarity of interrelations
Coordination of
managers' actions

High requirements to
managers' qualication exceptional competency
in all areas (accounting,
production, sales, etc.)

Departments are formed by

functionality (production,
sales, nance)
Multiplicity of personnel
subordination to managers
in accordance with the
scope of competence

Exclusion of duplication
of managerial functions
High competency of
specialists

Hard to maintain
constant interrelations
between various
functional services
Long duration of
decision-making
procedures

Executive

Plant
Director

Finance

Disadvantages

Executive

Executive

Head of Functional
Department 1

Advantages

Division
3

Division of managerial labor

Linear departments main
job (sales and production),
functional departments
support services
(nance, HR)
Dual subordination of
personnel

Rational combination of
linear and functional
interrelations
Acquittal of the chief line
manager from detailed
problem analyses

Duplication of managers'
and specialists' functions
in the process of
management
Impossibility of quick
response to changing
conditions
Absence of exibility of
interrelations between
departments

Distinctive
Features

Advantages

Disadvantages

Differentiation of
management by product
types, geographical
distribution, or client groups
Division is an element of the
organization, and is entitled
to independently solve
current business issues

Decentralization of
management
Assurance of closer bond
between manufacturers
and customers
Quick response of the
organization to
environment changes

Multilink character of
management and
expansion of hierarchy
Complication of
informational links
Escalation of costs for
maintaining of
managerial personnel

Linear-functional
organizational structure

Finance

HR

Product
Development

Planning

Production

Procurement

Product
Sales

Graphic Expression

Divisional
organizational structure

An organizational structure is a form of labor division by making and implementation of

managerial decisions. There are linear relations (administrative subordination), functional
relations (by business segment without direct administrative subordination), interfunctional or
cooperative relations (between subdivisions of the same level). Depending on the character of
relations, there are several main types of management organizational structures:

Matrix
organizational structure

Appendix 4. Types of organizational structures

Plant
Director

Corporate
Center

Division
1

Division
2

Division
3

Company Manager

Head
of Functional
Department 1

Head
of Functional
Department 2

Head
of Functional
Department 3

Project Manager

Executive

Executive

Executive

Project Manager

Executive

Executive

Executive

Project Manager

Executive

Executive

Executive

Division of managerial labor

Linear departments main
job (sales and production),
functional departments
support services
(nance, HR)
Dual subordination of
personnel

Rational combination of
linear and functional
interrelations
Acquittal of the chief line
manager from detailed
problem analyses

Duplication of managers'
and specialists' functions
in the process of
management
Impossibility of quick
response to changing
conditions
Absence of exibility of
interrelations between
departments

Distinctive
Features

Advantages

Disadvantages

Differentiation of
management by product
types, geographical
distribution, or client groups
Division is an element of the
organization, and is entitled
to independently solve
current business issues

Decentralization of
management
Assurance of closer bond
between manufacturers
and customers
Quick response of the
organization to
environment changes

Multilink character of
management and
expansion of hierarchy
Complication of
informational links
Escalation of costs for
maintaining of
managerial personnel

Fusion of project activities

and functional organizational structure
Dual subordination of
executives to project
manager and to functional
department manager

Improvement of
personnel management
efciency
Flexibility of organizational structure
Efciency of decision
making
High goal orientation of
activities

Complication of
organizational
interrelations
Possibility of conicts in
temporary teams
Achievement of longterm goals of
organization may be
hindered

Case study Unilever - Appendices

appendix 5. personnel struCture and Costs in inmarko, 200814

Position

FTE

Personnel cost,
EUR

3554202
5639
Inmarko
11900
5
1. Management
2. Department of automation
79220
62
and QA/QC (total)*
4375
1
2.1 Process development
6174
4
2.2 Management systems development
212356
272
3. Financial sector (total)
9065
13
3.1 Planning and business support
9590
8
3.2 Internal audit
120926
153
3.3 Accounting
8750
7
3.4 Finance & accounts
7298
7
3.5 Category development
34066
61
3.6 Monitoring
17301
22
4. Legal
27003
18
5. Marketing
1824846
2696
6. Commercial sector
900855
1917
6.1 Eastern department
142482
136
6.1.1 Urals division
115812
123
Yekaterinburg sales branch
186606
354
6.1.2 East division
112448
253
Krasnoyarsk sales branch
54453
88
Barnaul sales branch
527493
1384
6.1.3 Siberia division
266844
769
Novosibirsk sales branch
149832
470
Omsk sales branch
100528
140
Novokuznetsk sales branch
309188
297
6.2 Central department
31955
24
6.2.1 Tula division
64467
62
Tula sales branch
107409
126
Kazan sales branch
104117
88
6.3 Key Accounts department
444655
389
6.4 Moscow department
61380
58
7. HR sector (total)
14
Exchange
for desk
calculations shall be adopted as follows: one16dollar - 30 roubles,8862
7.1 Branchrates
service
one
41 roubles
12285
9
personnel and brand name development
7.2euro
Employer
2450
2
7.3 Business partnership
891540
1772
8. Production sector (total)
41258
64
8.1 QA/QC department
238.2 Procurement
33492
27
126952
221
8.3 Novosibirsk production unit

6.1.3 Siberia division

Novosibirsk sales branch
Omsk sales branch
Novokuznetsk sales branch
6.2 Central department
6.2.1 Tula division
Tula sales branch
Kazan sales branch
Position
6.3
Key Accounts department
6.4 Moscow department
"Inmarko"
7.
HR sector (total)
1. Management
7.1
Branch service desk
2. Department
of automation
7.2
Employer personnel
and brand name development
andBusiness
QA/QC (total)*
7.3
partnership
2.1Production
Process development
8.
sector (total)
2.2 QA/QC
Management
systems development
8.1
department
3. Financial
sector (total)
8.2
Procurement
3.1 Novosibirsk
Planning andproduction
business support
8.3
unit
3.2 Tula
Internal
audit unit
8.4
production
3.3 Omsk
Accounting
8.5
production unit
3.4 Finance
& accounts
8.5.1
Cold Storage
Facility
3.5Economic
Category security
development
9.
3.6 Logistics
Monitoring
10.
(total)
4. Legal
10.1
Product logistics
5. Marketing
10.2
Transportation logistics
6. Commercial sector
6.1 Eastern department
6.1.1 Urals division
Yekaterinburg sales branch
6.1.2 East division
Krasnoyarsk sales branch
Barnaul sales branch
6.1.3 Siberia division
Novosibirsk sales branch
Omsk sales branch
Novokuznetsk sales branch
6.2 Central department
6.2.1 Tula division
Tula sales branch
Kazan sales branch
6.3 Key Accounts department
6.4 Moscow department
7. HR sector (total)
7.1 Branch service desk
7.2 Employer personnel and brand name development
7.3 Business partnership
8. Production sector (total)
8.1 QA/QC department
Case
8.2 Procurement
8.3 Novosibirsk production unit

527493
1384
266844
769
149832
470
100528
140
309188
297
31955
24
64467
62
107409
126
Personnel cost,
FTE
104117
88
EUR
444655
389
5639
3554202
61380
58
5
11900
8862
16
12285
9
62
79220
2450
2
1
4375
891540
1772
4
6174
41258
64
272
212356
33492
27
13
9065
126952
221
8
9590
287160
539
153
120926
452022
1016
7
8750
278030
692
7
7298
21088
17
61
34066
407570
717
17301
21466
22
18
27003
9107
15
2696
1824846
1917
900855
136
142482
123
115812
354
186606
253
112448
88
54453
1384
527493
769
266844
470
149832
140
100528
297
309188
24
31955
62
64467
126
107409
88
104117
389
444655
58
61380
16
8862
9
12285
2
2450
1772
891540
64
41258
study27
Unilever - Appendices
33492
221
126952

appendix 6. number of employees inmarKo and unilever rub, 2009 (fte)

Inmarko

Total

2 339

5 782

8 121

Customer Development

551

2 770

3 321

Marketing

94

23

117

Supply Chain

143

199

342

General Management

12

15

Facilitites (incl. security)

23

32

Total (main departments)

800

3 027

3 827

Deliver

197

732

929

Make

1 034

1 595

2 629

Plan

20

25

45

1 250

2 353

3 603

Marketing research

Communications

Finance (incl. regional)

106

236

346

Research & Development

68

78

HR (incl. regional)

76

61

137

Information Technology (incl. regional)

13

72

85

Legal

12

22

33

Total (support functions)

288

403

691

Unilever RUB
Function

Total (production)

24

Case study Unilever - Appendices

appendix 7. harmonization reward Costs for inmarko personnel

Elements of Harmonization
Managers (Work level 2+)

514 546

Directors (Work level 1)

147 990

Social Tax

439 300

Current relocation cases

66 801

New relocation cases (incl. relatives)

490 625

Long service award

25 852

Test drive implementation (to provide

corporate car)

11 500

Recruitment policy harmonization

113 620

Medical Insurance for relatives Wl2+

56 884

Harmonization compensations, benets and rewards

(all work levels)

2 026 491

Harmonization compensations, benets and rewards

(for workers)

1 795 071

Inmarko on-top bonuses

308 200

Retirement policy

190 000

Mobile phone policy

23 592

Total

25

Additional cost,
EUR

6 210 472

Case study Unilever - Appendices

appendix 8. finanCial results of inmarko aCtivities, 2008

26

Parameter

Thous. $

Revenue

243 242

Net cost

122 756

Feedstock and materials

73 686

Sales technical support

2 128

Transportation

8 188

Storage costs

8 646

Advertising

11 800

Salaries and taxes

8 021

Overhead operating costs

5 016

Depreciation in net costs

5 271

Case study Unilever - Appendices

Appendix 9. Reward at Unilever

We are building a winning culture, in which every employee is encouraged to grow to his or her full potential. We have developed a performancebased reward structure that recognises people have delivered results and have the right values for our business.

Our goal is to deliver Unilevers promise to consumers and the world through a pioneering employment experience that our competitors
wish they had.

That means we dont just encourage employees to give us feedback, we have developed leading-edge tools to help us hear clearly how reward
feels from the point of view of our people.

We aim to give every employee access to a Total Reward Statement in real time. This describes and values every element of the reward package.
It also provides useful information on how the elements of each individuals package work.

We will stretch the content and coverage of Total Reward Statements to more than just money; we want employees to be able to see the value of
all their benefits at Unilever, including learning to help individuals keep track of their progress and potential.

Our Total Reward Statements also have a unique feature in Rate-my-Reward through which our people can tell us what they think of every
aspect of their package. How important is each element to an individual? How satisfied are they with it? We want to see reward from our
employees point of view and hear their suggestions for improvements.

We create a longer-term Reward Development Plan for each country so that we can continuously improve the relevance and effectiveness of the
rewards we offer our people.

We know that reward is important. Reward should not be a black box. We believe that rewards should be open, fair, consistent and explainable
and we aim to deliver every aspect of this in everything we do.

We also offer employees attractive incentives. If the company does well in meeting its goals, our total pay should be around the top quarter of
the market. That means that pay for highly rated people making an exceptional contribution will be towards the top of the market range. If we all
work together to deliver excellent results for Unilever, we will be well rewarded.

27

Case study Unilever - Appendices

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This case study was

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