Ikea

I. Analyzing the Issue and the Scope

Ikea is a company that is known worldwide for its history of constant innovation and low prices. They have successfully expanded into many countries, and have seen continuous growth. Over the years, they have become one of the leading furniture stores in the world. Along with this success, however, they have also faced some environmental and human rights controversies in the past.

The primary CSR issue Ikea faced in this case is the issue of child labor, which is the fifth UN principle. The issue of child labor was not very controversial at the time, as it had only recently come to light. Ikea had initially faced this problem in 1994, when a Swedish television documentary showed children working on looms used to produce carpets sold at Ikea. Ikea was not targeted specifically, and the repercussions were minimal. Management began to investigate the situation, and discovered it was not as simple to handle as they had hoped it would be. Ikea first faced environmental issues during the 1980s, and then again in the 1990s. When faced with these issues, Ikea responded by teaming up with various organizations to deal with the problem, and to avoid future problems. Their response was well received, and Ikea set into motion long-term policies that helped regulated the problem.

At the time this case was written, Ikea was in a defensive position in terms of how they handled the issue of child labor. This position can be understood when considering how recent the issue was, as well as taking into consideration how Ikea is able to achieve such low prices. Ikea uses suppliers from developing countries in order to keep costs low, which makes it very hard to keep track of how ethically these suppliers are acting. Ikea did not have any policies already in force in terms of how to deal with this kind of issue.

When this issue cam out again a year later on a larger scale, Ikea found themselves in a bad position. This time Ikea was...