Global corporations, local markets
Thursday 14 March 1996
High profile, pushy executives for ever spouting visions and missions? That may characterise the management style of most companies these days but forget it as far as the Anglo-Dutch giants of Unilever and Shell are concerned. Their style is that of stately progress under mostly faceless officer corps. Now the two Anglo-Dutch multinationals have other things in common: both have suffered recent PR disasters - Shell at the hands of the North Sea oil storage buoy Brent Spar and Unilever over Persil Power - and both have announced restructurings designed to introduce greater accountability.
Nor do the similarities end there. In announcing its reorganisation yesterday Unilever confirmed that it had been assisted in drawing up the plan by McKinsey & Co, the mighty US-based management consultancy that also played a significant role in reducing the management layers at Shell.
The consumer goods giant apparently turned down the approach McKinsey had already sold to Shell of basing the management of the company around products. Instead it has opted in favour of a division along regional lines.
The important thing is that both companies are seeking to make their managers more accountable. Greater local autonomy might have alerted the Shell hierarchy to the danger of protests over the Brent Spar disposal and Unilever has admitted that the reorganisation is at least in part a response to the difficulties of finding anybody directly responsible for the Persil Power fiasco.
But the real value of cutting away at a Civil Service-style bureaucracy that characterise these two companies will not be in finding culprits. Rather, it is in making local managers more responsive and allowing them to act on their hunches without having to have every initiative approved by a plethora of committees. As plenty of management consultants besides McKinsey will be happy to tell either company, the world may be getting smaller but it remains highly fragmented.
The concept of "global, local" corporations might be overdone. But Unilever seems to have belatedly realised that it cannot assume that a brand of soap or margarine that sells in Scunthorpe will win the same favour in Sao Paulo.
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