Case Study of Ikea Essay

1451 Words Nov 20th, 2013 6 Pages
Case Study of IKEA’s Global Sourcing Challenge

In 1995, IKEA met a problem that its main supplier, Indian rugs, used the child labor to produce products, although they had signed an attachment of the contract to ban employing child labor. In addition, a German documentary maker was about to broadcast the problem of child labor on German television and also invited an employee from IKEA to have a live discussion in the TV program. Marianne Barner, the leader of IKEA, must find a great solution to this serious issue to both save her business and the corporation’s brand image. In this issue, IKEA was not the one who produced products, so they might not realize the use of child labor in the process of production. In addition, child labor
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In addition, it could be easier for them to communicate because there will not be some external voice. In this way, using its own relationship will not cost a lot. However, this issue was not a common issue. It might be useless because Indian rugs had already signed the attachment of their contract but they still used child labor. Moreover, IKEA is not an expert in monitoring the use of child labor and IKEA does not have enough resources and experience to monitor the use of child labor. If IKEA cannot follow the routine to negotiate with suppliers, it will be expensive for IKEA to solve this problem because it costs a large amount of time and money. As a result, this solution could be difficult to carry out.
The second method for IKEA is cooperating with Rugmark Foundation. This organization, established to supervise child labor with labels, was based on “the partnership of manufacturers, importers, retailers and Indian nongovernmental organizations” (Bartlett, C.A., 2006). They can help IKEA monitor the use of child labor in the process of rug production because they are more professional and experienced in that. In addition, it is pretty common for companies, which meet important social issues, to ask the third parties for help. Because third parties do not have a stake with companies, they could be more just and fair to

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