Ikea Case

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IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor (A)

1) How should Marinanne Barner respond to the invitation for IKEA to have a representative appear in the upcoming broadcast of the German Video program?

Two months after being hired as a business manager of carpets and rugs, Barner already had to face that kind of problem. Indeed, in 1994, a Swedish television broadcasted a documentary showing children working at weaving looms in Pakistan. IKEA was the only famous name listed in the documentary, the brand image of the company was damaged. She undertook a lot of actions of her own free will in order to understand what the problem abroad was and find a solution to stop dealing with child labor. The main purpose of those actions was also to be more aware of those practices: “[Barner contacted child associations to expand her understanding and to get advice about the issue of child labor]”.

As we’ve seen in class, two companies faced the same issue: Walmart and Siemens. Walmart'’ CEO used doublespeak in front of medias: nothing of what he said was answering the main question whereas Siemens managers told the whole truth to the journalists.

According to us, Siemens managers were right in admitting their unethical practices because they took the entire responsibility of this case. That showed to the medias and the customers that they assume and that they can repair their mistakes.

That is why we advise Barner to go to the German television and tell the truth to the world: they assume the fact that Rangan Exports was using child labor. Nevertheless, she has to talk about their unawareness about the fact that Pakistan was not signatories to the Convention 138. Moreover, she should talk about their ignorance regarding all of what happened in the factories because every meeting between IKEA and the supplier was held at the headquarters of Rangan Exports. They never have been visiting the factory, which is the main reason why...
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