How will zero-based budgeting impact Unilever? Original blog posting (March 1, 2016)

Unilever Unilever is a multinational consumer goods company with 4 main divisions: Foods, Refreshments, Home Care, and Personal Care Has brands such as Dove, Hellman’s, Lipton, and Ben & Jerry’s Recently implemented zero based budgeting, which is expected to save the company about $1.09 billion per year by 2018 Source: Depositphotos.com image #80685478

Question 1 What is zero-based budgeting?

Question 2 What is operating margin?

Question 3 How would zero-based budgeting help Unilever increase its operating margin?

Question 4 How would zero-based budgeting impact Unilever’s cash flows?

Question 5 What benefits does zero-based budgeting potentially hold for Unilever? What disadvantages?

Question 6 Put yourself in the position of a brand manager for Unilever. Imagine that your brand has been performing well over the past three years. How would you feel about the zero-based budgeting initiative? How could this impact your work performance?

Question Recap What is zero-based budgeting? What is operating margin? How would zero-based budgeting help Unilever increase its operating margin? How would zero-based budgeting impact Unilever’s cash flows? What benefits does zero-based budgeting potentially hold for Unilever? What disadvantages? Put yourself in the position of a brand manager for Unilever. Imagine that your brand has been performing well over the past three years. How would you feel about the zero-based budgeting initiative? How could this impact your work performance?

For additional news stories to use in the accounting classroom, see the Accounting in the Headlines blog at http://accountingintheheadlines.com/ Questions or comments? Contact Dr. Wendy Tietz at wtietz@kent.edu