Business and Management: IKEA Case Study.
cross cultural management
Type of paper:
Business and Management: Management
Format or citation style:
Hi, these files are weekly PPT.
Identify and analyze the issues
using relevant theories and concepts studied in
class and give evidence from the case
just do the analyse, do not worry other part.
IKEA Case Study
IKEA has run after enlarging into materializing markets as well as evolving countries to grant consumers to take leverage of its products and appreciate their furnishings. It likes to portray itself as honorable, socially liable, and environmentally aware. Its products must adhere to a set of governance for its suppliers globally. These rules require the manufacturers to avail annual reports on origin, type and the sourcing of the woods used to make the products. It should also make sure that the type of labor used meets the ground rules that are set by international regulations.
In becoming a huge seller of low cost, IKEA classy furniture, all it does is follow or own the quantity to ensure its business practice fulfills all the ground rules on ethical business practices and social obligation. The initial area of interest is the disproportionate marketing and optimism of mass-consumption of furniture items that are not long-lasting and need replacement in just a few years. Selling products that needed replacement in a few years puts compelling burden on the wood reserves of the world.
Furthermore, it is a cause for worry when it gets into the new evolving markets and the strides it takes to make sure that its employees take advantage of both socially and environmentally responsible business practices. IKEA’s operations in Russia declined to go after its business practices and fell victim to bribery that is common in the former Soviet Republic. On the overall, IKEA tried to meet the Global Impact Practices by making sure it protected, respected and supported human rights and not by being ignorant in the cases of human right abuse. Grasping the freedom of corporation and recognizing the rights of cumulative bargaining, erasing all practices of compelled labor and adequately confirming to make sure there is no child labor. On the other hand, unfairness is not allowed at any of its manufactures or even suppliers. It also went ahead to make use of and grow a business that is subjected environmentally and working against bribery, fraud, and corruption in all their forms.
IKEA needed to effectively advocate these principles in the stores it run but it also needed to make sure that its entire staff adhered to the UN principles. IKEA however failed in a way in its ability to control and make sure that it followed the guidelines itself. Its aim in business was to get profit and expand fast into the emerging and developing markets. In a trial to bring in more and more profit, it marketed cheap products that came from sustainable resources encouraging excessive consumption. Its location is in remote areas where it had a large impact. Products with time able lifecycle need frequent replacing and customers end up getting more than what they needed when they visit IKEA. Its design is consumer-friendly with comfortable rooms to visualize the placement of furniture and there also staff available to help you plan on the placement of your furniture.
Corruption and bribery case in Russia was an awakening call for IKEA. In February 2013, IKEA’s food service was a clear embarrassment when it came to light that the Swedish meatballs they served were made of horse meat. In another scenario, its two managers were fired due to bribing contractors to supply electricity to its generators and avoid power shortage. With knowledge, it allowed payments of bribery to secure electricity supply which was a major hit to them because it was an ethical business practice in the world. In Russia, bribery and corruption are pervasive and therefore cannot be avoided.
Another instance of corruption of IKEA in Russia occurred in July 2012 when a Turkish national was sentenced to five years imprisonment for bribery with the organization’s head who fled the country before being arrested. Additionally, in the same year, the global environmental agencies came to learn of the poorly written Russian logging rules where old-growth trees were being cut down. It is this situation that made people question their environmental consciousness and socially responsible policies.
To remedy this, IKEA must unleash employment policies where each co-worker signs on to agree to its policies concerning being socially and environmentally responsible to steer off any future embarrassments. It should also create an internal audit department to annually review and inspect, as well as check and confirm each division for possible corruption practices that are against its policies. It should also reduce its expansion rate and plan in the way of presenting itself to every market to gain more profits. By failing to control its employee’s behavior, it becomes immoral to present an image of an environmentally and socially responsible firm.
With its sets of principles, it must proceed to promote environmental and social responsibility to the community and the countries that it operates in. it must be a role model to other companies coming into that market and wanting to take advantage of the market openings for goods and services. In conclusion, IKEA is an environmentally and socially responsible company; however, it must put in mind the consequences of sustainability and social responsibility in its race for profit at all costs.