Ikea Global Sourcing Challenge
Ikea Global Sourcing Challenge: Indian Rugs and Child Labor
IKEA and Marianne Barner are facing a very challenging issue. Because they were blind sided by the child labor issues with their supplier, they had to scramble to respond to the issues in a quick and appropriate manner. IKEA sent a legal team to Geneva to seek input and advice from the International Labor Organization on how to deal with the problem and to find out more about the child labor issues. They also hired a third party agent to monitor child labor practices in India and Pakistan and to conduct random audits to ensure there were no children working. They had all their suppliers sign a legal document stating that if a supplier employed children under legal working age that the contract would be cancelled. Ikea and Marianne felt that these actions would protect them. They reacted to this as a social issue, they did not ignore the problem and just hope that it would go away, they accepted responsibility and moved towards creating a plan to deal with the problem.
IKEA's founder, Ingvar Kamprad, has ingrained a very strong value and belief system in the company that were based on his own values. Because the company has this culture the decision Barner had to make was not a difficult one. The company's vision statement is "To create a better everyday life for the many people". Because Ingvar cultivated a corporate culture based on his personal beliefs and styles his employees had a mentor to rely on and could feel comfortable in knowing right from wrong and that they would be supported in their decisions. The company has a history of confronting social issues and taking responsibility when they have done something wrong. They have not used rationalizing techniques in order to make themselves look better in the public eye. This is evident in the formaldehyde environmental issue. When this issue arose IKEA immediately stopped production on affected product which ended up costing the
IKEA and Marianne Barner are facing a very challenging issue. Because they were blind sided by the child labor issues with their supplier, they had to scramble to respond to the issues in a quick and appropriate manner. IKEA sent a legal team to Geneva to seek input and advice from the International Labor Organization on how to deal with the problem and to find out more about the child labor issues. They also hired a third party agent to monitor child labor practices in India and Pakistan and to conduct random audits to ensure there were no children working. They had all their suppliers sign a legal document stating that if a supplier employed children under legal working age that the contract would be cancelled. Ikea and Marianne felt that these actions would protect them. They reacted to this as a social issue, they did not ignore the problem and just hope that it would go away, they accepted responsibility and moved towards creating a plan to deal with the problem.
IKEA's founder, Ingvar Kamprad, has ingrained a very strong value and belief system in the company that were based on his own values. Because the company has this culture the decision Barner had to make was not a difficult one. The company's vision statement is "To create a better everyday life for the many people". Because Ingvar cultivated a corporate culture based on his personal beliefs and styles his employees had a mentor to rely on and could feel comfortable in knowing right from wrong and that they would be supported in their decisions. The company has a history of confronting social issues and taking responsibility when they have done something wrong. They have not used rationalizing techniques in order to make themselves look better in the public eye. This is evident in the formaldehyde environmental issue. When this issue arose IKEA immediately stopped production on affected product which ended up costing the