Unilever South Korea focuses on home and personal care products especially after the food sector for the most part failed. It has introduced strategies of “Koreanization” and consumer satisfact, and followed the company-wide strategy to reduce the number of brands and strive towards higher profitability. These strategies seems to have been successful because Unilever products tend to dominate the South Korean market. Unilever has only one factory South Korea, where its products that are popular on the South Korean market are being made. This investigation did not clarify precisely how Unilever's strategy for higher production standards through training and addressing health and safety issues is being implemented in South Korea. According to the researchers, local Unilever management does not follow all the directives and guidelines issued by the parent company. This might be related to the fact that the current CEO was able to turn Unilever's fortunes around after 1999 and has therefore quite some authonomy.
Employment
Job cuts were only implemented during the 1997 economic crisis. When business began improving, Unilever began hiring again. But the strategy remains to focus on the hiring of irregular employees of which some have moved on to become regular employees. 42% of the current workforce is composed of irregular workers whose general labour conditions are much lower than that of the regular workforce.
Labour relations
Unilever has recognised the union that was established in 1993 and which is now an affiliate of the Korean Chemical and Textile Workers Federation under the Korea Confederation of Trade Unions (KCTU). However, the trade union represents mostly manual labourers and only 20% of the total workforce because of legal restrictions on plural unionism and the fear by white collar workers that union membership might affect their careers. This investigation was unable to ascertain precisely what kind of informal pressures were behind these fears. The management does not oppose or hinder white-collar workers from joining the union. Currently, South Korean labour law still prohibits clerical workers from establishing their own trade union alongside another union in the same company. Current labour relations are generally stable and cooperative. After various debates concerning the 1997-98 lay-off plans as necessitated by the economic crisis, job cuts were implemented according to national labour laws and the advice of the official mediation commission. There is now more trust between management and the employees who now feel they can more easily and directly address management about various issues. There is collective and wage bargaining, and several annual meetings between management and the union. The union has access to proper facilities for their various activities. In general, Unilever seems to be implementing national legislation, the OECD Guidelines and Unilever’s Code of Business Principles related to the right to organise and collective bargaining. However the union remains dissatisfied with the fact that negotiations with the management are confined to wage and working conditions, and have not been extended to include strategic issues and the notion of democratic partnership on company decisions. Except for the CEO’s “annual management briefing”, OECD Guideline (art. 4.3.) which stipulates that Unilever must provide company performance figures is ignored and Unilever Code’s principle of good communications is not fully implemented.
Labour Conditions
The major problem involves management’s unfair treatment irregular employees. They are excluded from Unilever welfare benefits and their salaries are on average only 68% of that of regular employees despite the fact that they perform similar work. In general, Unilever South Korea’s wage rates are lower than that of other employees working in the same sector and Unilever’s “standard living wage” remains far below the figures proposed by KCTU. The average work week for union members is lower than the legal maximum of 44 hours per week. However, non-union members have a flexible 40-hour work week and the actual average work week for manual labourers is closer to 55 hours because they want to supplement their low wages with overtime. Unilever South Korea observes basic labour rights concerning child labour, forced labour, health and safety, and discrimination. There is, however, a lack of training and education programmes which contradicts Unilever’s own commitment to the development and enhancement of employees individual’s skills and capabilities (Code of Business Principles and Unilever’s strategy of raising standard production via training). Compared to the OECD Guideline for welfare benefits such as social security and medical care,
Unilever South Korea performs high to average. Its benefit rates are low, however, in areas like child care and housing.
Community involvement
It was only in 2000 that Unilever South Korea began supporting cultural, social, environmental, and educational projects. However, these projects were implemented without prior consultation with the unions. Community projects seems for the most part to be implemented unilaterally by management. Unilever’s attempt of fulfilling its responsibilities to the societies and communities in which it operates, as stated in the Code of Business Principles, have been limited in its implementation in South Korea.