Ikea Case Essey

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IKEA case
1) Marianne Barner, IKEA business area manager for Carpets, should definitely accept the invitation to appear on the upcoming broadcast of the German video program. Indian rugs account for a small part of IKEA`s turnover, maintaining IKEA’s reputation, brand and image is imperative. Thus, Barner must act according to Item 8 of “A Furniture Dealer`s Testament” – “Taking responsibility – A Privilege”. During the video program Miss Barner must admit in calm and cooperative way even when aggressively confronted, that IKEA`s suppliers in India are using child labor. She needs to add that IKEA is currently addressing this issue. As a top manager of IKEA carpet division, she has to explain key points on the case and assure the audience that she personally along with IKEA management will investigate and take appropriate actions to respect and protect above all the lives of the children she had seen in India. As IKEAs vision states: “Creating a better everyday life for the many people”, keeping it in mind and remembering IKEA`s behavioral norm such as “the true IKEA spirit is founded on an willingness to assume responsibility”, Miss Barner is going to up hold these visions. 2) Regarding the IKEA supply contract with Rangan Exports she should take straightforward approach to resolve the issue with the best possible outcomes for all parties involved. No doubt, Rangan Exports`s apparent violation of the contractual commitment gives to IKEA right to cancel the contract and it would be legally and economically correct. However, this action would not be the best outcome for the many people involved. The key concern assertion is if those employed families by Rangan Exports have no other employment opportunities to earn even minor income to provide themselves food and shelter. What if IKEA exits Indian market and find another more reliable supplier? Then, those who work for Rangan Exports, including children, would not have the possibility to satisfy their needs. Children may appear on the streets to beg for their livelihood, debts may go unpaid. To take such step is correct as a business decision but not ethical. Therefore, Barner has to directly monitor the use of child labor, work conditions and establish norms to provide safe job, limited working hours and normal range salaries. She has to offer social and medical assistance from IKEA`s side to help Rangan Exports to establish appropriate environment for children. 3) To exit Indian market would be the simpliest and even primitive approach. Barner should propose to continue and develop IKEA`s operations in India as long-term strategy. Having once been involved in formaldehyde issues in early 1980s and again in 1992, IKEA addressed broader environmental concerns directly. The company established a forestry policy and monitored compliance and run projects on responsible forestry around the world. Although such program had significant costs, the image of the company as reliable and responsible agent of the world global business overweighed these expenditures. I suppose M.Barner will take course of action in an analogous fashion to which the “forest” was addressed. She knows to take a proactive stand will have cost disadvantage but only for a short period of time. However, being able to establish child labor policy and social help with education, medicine and infrastructure, IKEA would have a long term and lasting benefit. I would manage this situation exactly in this way because many evidences exist – without correcting today`s problems we would not be able to find solution to create a better everyday life for the many people. In the coming years Indian children will grow to be as educated and knowledgeable, which provide better start their own businesses ensuring new work opportunities for future generation and better living and working conditions for Indian people. Most importantly the need for kids to work would be eliminated. IKEA will maintain its...
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