Documente Academic
Documente Profesional
Documente Cultură
J. Prabhat
Paritosh kanwar
Rohit Jain
Rinky Sachdeva
Flow of presentation
Summary of
the case
Background
Issues identified
Solutions
Learnings and
references
Background
Source-Wikipedia.com and IKEA facts and figures, 2003 and 2004 editions & Internal documents
Source-http://www.ikea.com/ms/en_GB/about-the-ikea-group/company-information/index.html
Improvement Strategy
The
Environmental
Issue
1980:
Formaldehyde
scandal in Denmark
Action
1st
Action
Alternative
action
1st Action
bookcases worldwide
Estimated lost: $6-7 million
Alternative Action
1st Action
Marianne Barner, business area manager,
had to deal with the issue
Apology for ignorance and acknowledge
not being in full control
1994:
Child labor scandal in
Pakistan
Alternative Action
Take advice from International Labor Organization
"Black-and-white Clause"
Monitoring child labor practices with a third-party agent.
Appointed a Scandinavian company for quality assurance program and random
audits of child labor practices at suppliers' factories
Environmental Issue
Child Labor Issue
Accept
the
invitation
Terminate
Rangan
Exports
contract
Exit India
Rugmark
Solo
Monitorship
Ethical Dilemma
Short vs.
Long-term
Justice vs.
Mercy
Short vs.
Long-term
Purpose
Principle
No law obligation
Ethical principles
Our right for
explanation
People
Customers have
the right to know
Shareholders and
employees have
the right to be
protected
Ikea
Haunt them
Make it less
bad
Affect on
shareholders
Some of
Terminante
Rangan
employees will be
fired for their
companys
mistakes.
More pressure on
Rugmark
employees
Send a negative
message to
stakeholders.
Chances of
reoccurrence
Lose a good
supplier
Positive public
response
Lesson to other
suppliers
Lose a good
percentage of
their suppliers
Cheap childlabor free
countries
dont exist
Course of Action
Immediate actions
1
Take full
responsibility
- Fire Rangan
Exports
Find new
supplier that
aligns with
our values
and
corporate
ethics
Take legal
actions
Work with
our CSR
department
Monitoring
of the rest
of our
suppliers
Work with
Rugmark
Foundation
Debate
NO
YES
Do not accept
Take all the measurements
Do not fall in his trap
Do not allow him to use us
Be proactive and prepare
Take advantage of his mistake
Decision!
Accept the interview
Recommendations
Rugmark Foundation
Financial assistance
Staffing
Improve quality of services
Monitoring controls
Community based rehabilitation
Community development programs
Health care services
Expansion plans
IKEA
Monitoring
IKEA CSR department
Avoid same mistakes
Become part of any community we enter
After 1997
By 2009 they had 267 store out which in USA
they came up 37 & in Germany 44 stores
By 2013 they started capturing new emerging
markets like Latin & middle east
If one is in UK it is better to head to IKEA outlets
rather a real estate agent
One can grab a flat-pack house for a fraction of
the cost.
The BoKlok houses were originally released in
Sweden in 1996, and have since expanded to
IKEA stores across Northern Europe.
After 1997
2011 Labor unrest in
Virginia , US
Illegal activity of spying on
its employees and clients by
illegally accessing French
police records.
2012, Glendal Foods a
major supplier to IKEA Store
Restaurants in Australia
was the subject of bullying
allegations by about 50% of
staff at the company
Key Learnings
Never compromise with the core values and
beliefs embedded in the firms culture
Avoid myopic view: Evaluate long-term
consequences of short-term decisions
Ensure that excessive attention to profitmaking are not harming the firms image and
reputation
Exploit unused production capacity
Maintain good relations with business
partners
Contd..
Fulfillment of performance objectives requires
continuous improvement and innovation.
Global sourcing strategy should be carefully
monitored in order to avoid
issues(environmental, social)
References
Official website of IKEA group, accessed on 27/10/14 using
the link:-http://www.ikea.com/gb/en/
IKEA logo taken from google images.
Thank you !