Unilever on its company website (n.d) reveal, “Our Corporate Purpose states that to succeed requires the highest standards of corporate behaviour towards everyone we work with, the communities we touch, and the environment on which we have an impact.” This purpose underlines the following stakeholders: the customers, the employees, the shareholders, corporate partners, suppliers, competition and society in general.
Rigorous efforts are seen to make a positive impact in the market and in the society by Unilever in its commercial operations, by making its products available to over 2.5 billion people (Unilever company website, n.d) and in its voluntary commitments and contributions; such as investing 1 % of its pre-tax profits into various social causes. For example, Unilever is a partner in the African Comprehensive HIV/AIDS partnership in Botswana (John Hancock, 2005)
Corporate sphere of power refers to the macroeconomic influences a company has on a society. Namely, they are: socio-cultural, technological, economical, environmental, political, legal and ethical.
Unilever’s business has a considerable impact on many of these strata. The company is a “multi-local” MNC that operates in over one hundred and ninety countries, contributing to over fifty eight percent of its business in emerging markets. (Unilever company website, n.d). This results in holding a strong position in developing economies and rising markets. They have major potentiality in such markets that host a large amount of the world’s population (Unilever Environmental and Social Report, 2005). This results in Unilever influencing the local and foreign economic, political, socio-cultural and ethical environments. Unilever published a report that stated its turnover was 53,715 euros for the financial year 2016-2017. (Unilever annual report, 2017). Unilever employs 161,000 people across the world. (Unilever company website, n.d). Therefore the corporate sphere of power that is most affected by Unilever is the economic sphere of influence. A hindrance to the operations of the business would drastically affect the economies that the company conducts business in due to the large scale and wide range of products offered by Unilever and the vast amount of jobs created by the company.
While a corporation with diverse product segments, like Unilever, has an impact on all spheres of corporate power, the sphere that would be least affected by Unilever and its operations are the technological aspect of a market. Although the technological advancements made by Unilever have a lasting effect on the market it operates in, such as the new technology developed to tackle the issue of plastic sachets, (Anne Marie Mohan,2017), the overall operations of the corporation is far from the realm of information technology.
Social contract in simple words is the two way understanding of the two major institutions that defines the relationship between them. There are two prominent keys to a social contract; the laws and regulations that the society has set for the business to operate within and the reciprocity of understanding of expectations between the two parties. In recent times, the expectation of society has increased in terms of responsibilities that a business has to undertake in relation to social and environmental aspects.(Archie B. Carol, Ann K. Buchholtz).
Despite its “sustainability” virtue, Unilever has failed to deliver on both aspects of the social contract. CEO Paul Polman intends to halve the environmental impact of the manufacturing and the use of Unilever’s products by the year 2020. However, due to poor management, this goal has been pushed to 2030. Also, the greenhouse gas caused by the products of the company has gone up by six percent. (Michael Skapinker, Scheherazade Daneshkhu, 2016).
In addition to this, alleged mercury contamination in a former factory of Unilever located in the southern part of India hurt the company’s stand on sustainable and clean living. Unilever admits to selling mercury-tainted waste less than three kilometers away; which is a breach of its rules. (Michael Skapinker, Scheherazade Daneshkhu, 2016).
Nityanand Jayaraman (2017), in the financial times said, “Unilever doesn’t exercise its responsibility unless it’s enforced on it.” Hence, the corporation abortive in its attempts to upkeep both key elements of the social contract.