IKEA Global Sourcing Challenge Essay

SummaryIn this case, it is known that IKEAs procurement mannerl is the mode of global sourcing. IKEA products argon shipped to the 26 distribution centres from the trade area subsequently procurement, and then delivered to the shopping m every last(predicate)s in the world. IKEAs procurement philosophy and sound judgement of suppliers mainly include four aspects continuous price improvement unyielding supplier performance and service levels good reference and healthy products and environmental and mixer function (IKEA Sustainability Report 2011). In the aspect of social responsibility, IKEA does non accept youngster fatigue, but too actively impedes the use of barbarian jade when its supplier Indian Rugs is revealed to use tiddler labour (Bartlett et al., 2006). altogether IKEA suppliers and subcontractors must comply with the special code of satiate away on tyke labour The IKEA Way on Preventing chela Labor. The standard requires that all acts must be done to maxim ize 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 legislate the root causes behind child labour. It is for these reasons, the IKEA Foundation actively supports UNICEF and Save the Children backing Projects designed to protect the rights of children.Key issues resulted in problems and analysisIn this case, the strike cultural management issue is the corporate social responsibility. IKEA, the worlds largest furniture company has a fairly commendable corporate culture, and an definitive element of its containing IWAY. In terms of IWAY, there are strict rules on the procurement of products, materials and services, particularly intolerance of IKEAs suppliers using child labour or forced labour (Maon et al., 2007). Another prominent feature of it is perpetrate to preventing corruption, fraud and illegal activities, and developing the anti-corruption rules . The championshipmanagement researchers fundament disassemble the business grow and even decline and fall from all angles. IKEA chance in essence is supported by its corporate values. Otherwise, it bay windownot guard everyplace in numerous fluctuations of economic cycles.A sustainable culture of enterprise is largely determined by the corporate culture. The quality of enterprise could also affect competitiveness. This is not an ideal question for entrepreneur, more than a philosophical question, but a question of competition in the market. In fact, virtually all first-class entrepreneurs in the business process carry place first-class corporate culture operations. They use the values, philosophy to channelise a unique quality in business. And this kind of internal but deprecative competitiveness is the riche class and managers lack of.In the production process, the trade duty staffs will keep in contact with the IKEA suppliers, they can take an favor by this opportu nity to observe social and working conditions of suppliers and make efforts to prevent the use of child labour (IKEA Group, 2003). IKEA in the supplier organization encourages workers and subcontractors to dispute the problems they encounter every day. This approach strengthens IKEAs understanding of the causes of child labour.If IKEA finds child labour, it will require suppliers to take action found on the childs best interests. The supplier must implement corrective and safety action plans, including education and training aspects. IKEA will visit the childrens school, and carry out a surprised visit to suppliers. If the supplier does not take action on the scheduled date, or later theres occurrence of the violations, IKEA will terminate all business relationships with the suppliers.It can be seen that IKEAs motivation emphasis on corporate social responsibility is closely related to commercial activities. Its primary motivation includes the legitimacy of the business, grime r eputation, reduction in business risks, total quality management and merchandise environmental analysis, especially the legitimacy of the business and reduction in business risks are becoming increasingly important.In addition, the communication of corporate social responsibility is crucial. It can maintain the attractiveness of IKEA for a new contemporaries of partners. IKEA hopes that the partners in dealing with corporate social responsibility can show in viewence, but the ability to realize this issue will have to depend on the employees management level (Maon and Swaen, 2006). Through this initiative, colleagues at all levels can increase the awareness of corporate social responsibility, so as to compass the purpose of incentives.Key learningCorporate social responsibility is highly-developed since the 1990s, which is a turning point of corporate social responsibility. IKEA is also in accordance with some of the pressure in this community to adjust its direct way on the req uirements of the enterprise. IKEAs business is constructed in the price and quality environment and work environment (Maon et al., 2007). With regard to a supply and motivation model of corporate social responsibility (CSR), its assumed that a firms size, level of diversification, research and development (R&D), advertising, government sales, consumer income, labour market conditions, and stage in the industry life cycle could forecast the firms standard of CSR (McWilliams and Siegel, 2001). IKEA as a large transnational Corporation with 26 distribution centres and emphasis on R&D and advertising hopes to establish long-term cooperative relationship with suppliers looks for more partners who key the IKEA culture as the common value and aim at its development (Maon and Swaen, 2006).Respect for fundamental human rights and fair treatment of labour are the basic requirements for its suppliers. Therefore, child labour is absolutely not allowed. And the cooperation should be based on frankness and respect and it should be put into a inactive and long-term procedure. Under continuous pressure on price and sub-contractors from developing countries, IKEA is positive to face with the accusation of using child labour. Its shown that how stakeholders can affect the improvement of CSR policies by showing their societal expectations, by domainally criticizing corporate behaviours considered as irresponsible or by building in a collaborative and constructive relationship with the company. This case study focuses on the CSR practices and communication by a complexity of the corporate decisionsand it also reflects the public attitudes have played a key role in enhancing a companys CSR construction (Maon and Swaen, 2006).ReferencesBartlett, C. A., Dessain, V. & Sjoman, A., 2006, IKEAs Global Sourcing Challenge Indian Rugs and Child Labor, Harvard Business School, 9-906-414.IKEA Group, 2003, IKEA mixer and environmental responsibility key, 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.