IKEA Case Study

1.

How

should

Marianne

Barner

respond

to

the

invitation

for

IKEA

to

have

a

representative

appear

on

the

upcoming

broadcast

of

the

German

video

program?

To tackle this knotty problem,

it

is

highly

recommended that IKEA should participate

in the program.

The first thing should be taken into account is that this documentary was produced by

a noted German company

, which

further

meant

gaining

high

credibility and extensive

influence too dangerous and can be

harmful

for Marianne Barner to

underestimate or

ignore.

Consequently

,

a

heads-on

response

is

not

merely

necessary

but

also

imperative.

Further

to that point,

the company does

have

gained some positive accomplishments

to the child labor issue since the problem was first raised by Swedish television. IKEA

could analyze

and discuss the

information

it

had collected so

far

from UNICEF and

the ILO and demonstrate

its same attitude as the director of the documentary

film as

well

as

pursuing

the

same

goals

of

eradicating

child

labor.

It

could

turn

the

baffling

problem

around

by

showing

its

gratitude

to

the

director

for

helping

spot

the

child

lab

or

at

the

company?s

manufacturing

and

could

never

to

be

too

emphasize

that

the

company is going to study the case thoroughly

.

Furthermore, what Marianne Barner should point out

is that as the IKEA

? s

philosophy

goes:

Anyone

can

make

mistake

but

one

should

take

the

responsibility

of

making

a

mistake.

Taking

responsibility

has

been

served

as

a

privilege.

Since

the

IKEA

was

unaware of making the mistake by accepting the contract without further investigating

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the production facility of the supplier. By having a representative showing up on the video

program, IKEA will proclaim that not only the company has guts to accept mistakes it

committed but also cares to rectify it.

Last but

not the least,

Marianne

Barner

should

further

mention

IKEA

?

s

inadequate

engagement in social responsibility, pointing out it remained at the reactive step but not

yet at the proactive step or interactive step. This inadequate engagement

accounts for

reasons why the company keeps undergoing social and environmental issues pushed by

the public. IKEA is prominent at new ideas for marketing but the company is still passive

in social responsibility action. To fix this drawbacks,

Marianne

Barner

needs

to

assure

the public

that

IKEA

will be more aware of social responsibility and potential upcoming

social issues in the future and grasp this opportunity to deliver its elaborate plan to the

masses. With a carefully considered plan, participating in the television program would

not only help save the brand and image but also be a perfect occasion for publicity.

2.

What

actions

should

she

take

regarding

the

IKEA

supply

contract

with

Rangan Exports?

As far as IKEA is concerned, the most tactical and logical method towards addressing

this

issue

would be

to

give

Rangan

Exports a second chance and

help

them out

from

the

plight

rather

than

simply

terminating

the

contractual

relationship

with

them

and

discarding the hot potato to them.

Since

IKEA

?

s

vision

statement

goes

“To

c

reate

a

better

everyday

life

for

the

many

people.”

That

is

to

say

,

IKEA

endeavors

to

fight

for

the

benefits

of

the

majority

of

people, including those who are working for Rangan Exports.

2

Actually, child labor issues have long existence and deep social roots, thus it would be

unreasonable

and

unjustifiable

to

merely

blame

a

single

supplier

or

company

,

therefore,

Rangan

Exports

should

not

solely

take

the

blame

and

deserves

a

second

trust and chance.

What?s

more, IKEA should

make

investigations

into IKEA

? s s

uppliers

to

make

sure

that

all

of

them

are

in

compliance,

if

IKEA

singles

out

Rangan

Exports,

they

could

risk some sort of discrimination suit. In addition,

if

there

were

more suppliers violate

their

contract besides

just Rangan

Exports, these will also eventually

head above

the

water.

If

IKEA

chooses

not

to

terminate

the

contract

with

Rangan

Exports

and/or

other suppliers

in

violation of their contract once again,

they risk

losing respect

from

the

public

including

potential

tarnishing

of

their

brand

image,

etc.

These

effects

can

result

in

significant

financial

losses

regarding

sales

because

the

public

will

not

be

willing to support a company who allows or indulge child labors.

In this sense, Marianne Barner should firstly seek the assistance of UNICEF, ILO and

NGOs

and

should

help

Rangan

Exports

to

avoid

using

child

labor

in

production

of

rugs by raising awareness about such social issues and how it impacts the life of child

in physical, moral, and social terms.

Then

she

should

address

the

problem

as

a

whole

and

make

sure

all

suppliers

are

in

compliance

to

the

terms

of

their

contract

agreements.

Any

suppliers

that

are

in

violation of their

supply contract and are currently participating

in child

labor

should

be fired.

Moreover,

IKEA

could

extract

some

proportion

of

its

sales

revenues

to

help

those

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