Ikea Social Responsibility Case Study

1002 Words 5 Pages
According to the United Nations Industrial Development Organization, Corporate Social Responsibility, or CSR, is a management concept whereby organizations integrate social and environmental concerns into their business operations and interactions with their stakeholders. CSR requires that organizations focus more than just profits. CSR demands that organizations demonstrate social responsibility by addressing social concerns, economic concerns and environmental concerns. Today’s organizations are proactively implementing CSR initiatives into their business operations while others are forced to develop CSR initiatives in response to scandals and unethical behavior.
In this paper, the focus is on the IKEA organization and its response
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For IKEA, its internal stakeholders include management, owners and employees. An example of a such a stakeholder is Marianne Barner (Bartlett, Dessain & Sjoman, 2006, p.1). As the business area manager for carpets, she had a vested interest in the success of the business as her job and salary depended on IKEA being successful. External stakeholders include shareholders, suppliers, local communities, governments, and nongovernmental organizations (NGOs). Both the internal and external stakeholders have demands and perceptions and expect IKEA to understand and address the social and community issues that are relevant to them. Pressure from and demands by these various stakeholders underline the emergence of CSR concepts. Moreover, it creates challenges for organizations like IKEA to develop and communicate CSR policies. For example, two external stakeholders IKEA has an existing relationships with are the International Labour Organization (ILO) and Save the Children. Both organizations have social and economic agendas that include human and labour rights (IKEA, 2008). Rangan Exports, an IKEA supplier is another example of an external stakeholder. Rangan Exports was one of IKEA’s major suppliers and had willfully violated IKEA’s contractual commitment to not use child labor (Bartlett, Dessain & Sjoman, 2006, p. 8). This was also in direct opposition of what partner organizations Save the Children and ILO …show more content…
Unfortunately, none of these treaties are being implemented in India or Pakistan. Given the poor enforcement of these treaties and India’s local laws, how can organizations address the environmental, social and economic areas of social responsibility comprehensively and effectively. Moreover what are these areas of social responsibility or sustainability?
Areas of Social Responsibility From the 1980’s, influence from external stakeholders have had a profound effect on IKEA and its organizational culture. Based upon the criticisms received and the numerous scandals IKEA faced, its code of conduct was developed. IKEA faced environmental issues with the International Federation fo Building and Wood Workers (IFBWW) because 70% of IKEA’s raw materials were wood (Maon, Swaen, & Lindgren, 2007, p.12). With regards to social issues, IKEA partnerships with UNICEF and IFWBB were also developed to address child labor, support for impoverished families and improve working

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