Case: IKEA Global Sourcing Challenge: Indian Rugs and Child Labor
In this case, it is known that IKEA 's procurement model is the mode of global sourcing. IKEA products are shipped to the 26 distribution centres from the trade area after procurement, and then delivered to the shopping malls in the world. IKEA 's procurement philosophy and assessment of suppliers mainly include four aspects: continuous price improvement; strict supplier performance and service levels; good quality and healthy products; and environmental and social responsibility (IKEA Sustainability Report 2011). In the aspect of social responsibility, IKEA does not accept child labour, but also actively prevents the use of child labour when its supplier Indian Rugs is revealed to use child labour (Bartlett et al., 2006). All IKEA suppliers and subcontractors must comply with the special code of conduct on child labour "The IKEA Way on Preventing Child Labor”. The standard requires that all acts must be done to maximize the protection of the rights and interests of children (Motamed et al., 2010). The code of conduct and monitoring measures must be supplemented by the corresponding program to eliminate the root causes behind child labour. It is for these reasons, the IKEA Foundation actively supports UNICEF and Save the Children Relief Projects designed to protect the rights of children.
Key issues resulted in problems and analysis
In this case, the key cultural management issue is the corporate social responsibility. IKEA, the world 's largest furniture company has a fairly commendable corporate culture, and an important element of its containing: IWAY. In terms of IWAY, there are strict rules on the procurement of products, materials and services, particularly intolerance of IKEA 's suppliers using child labour or forced labour (Maon et al., 2007). Another prominent feature of it is committed to preventing corruption, fraud and illegal activities, and
References: Bartlett, C. A., Dessain, V. & Sjoman, A., 2006, ‘IKEA 's Global Sourcing Challenge Indian Rugs and Child Labor’, Harvard Business School, 9-906-414. IKEA Group, 2003, ‘IKEA: Social and environmental responsibility report’, viewed 1 May2012, . IKEA Group, September 1, 2010 – August 31, 2011, ‘IKEA Sustainability Report 2011’, IKEA, viewed 1 May2012, . Maon, F., Swaen, V. and Lindgreen, A. 2007, ‘Corporate Social Responsibility at IKEA: commitment and communication’, Research Memorandum, F Maon, V Swaen, A Lindgreen. Maon, F. & Swaen, V. 2006, ‘Integration and communication of CSR principles by IKEA: an analysis of the influence of and on external stakeholders’, LGA Working Paper, Louvain School of Management. McWilliams, A. & Siegel, D. 2001, ‘Corporate social responsibility: A theory of the firm perspective’, Academy of Management Review, 26(1), p.117-127, viewed 1 May2012, . Motamed, M., Ozhusrev, N. & Pena, G. 2010, ‘IKEA and the Child Labor Challenge’, BAHR 509 – Group Project Paper.