The company was unaware of this fact so they had to admit their ignorance and they declared that they would do something Ikeas global sourcing challenge solve the problem as fast as possible. In those countries, the children are even often used to help to pay the debts of their parents.
Building long term relationships with manufacturer, IKEA brought his know-how in other countries to ensure a certain level of quality. In the carpet industry, to encourage firms to resolve the problem, the Rugmark Foundation is in charge of the supervision and the development of a label certifying that a carpet has been made without the use of child labor.
First, the situation of IKEA about this subject is difficult since when a Swedish television declared that one of their suppliers in Pakistan was using children in their factories.
This alternative is the only one where Ikea try to do something to improve the children life conditions in those countries.
Even if Ikea put a clause in the contract and visits the supplier manufacture before signing a contract, child labor is something so common that another controversy including Ikea could still happen with all those precautions. Ikeas global sourcing challenge, no investment is needed from Ikea since it is simply withdrawing from India since there is no insurance of result even Ikeas global sourcing challenge they try to fight against child labor.
They could first try to deal with the child labor problem trough its relationships with his suppliers or let Rugmark in charge of monitoring child labor on its behalf. Rugmark has a bigger power and influence in the child labor issue and is able to do more than Ikea since it is dealing with much more suppliers.
Since the problem is really deeply embedded in the culture of those countries, they could also withdraw form the rug market to avoid being associate to child labor or, as it is always an option, Ikea could choose the option to do nothing concerning this issue.
This is precisely where began the problem that IKEA have to face also in with Rangan Export, one of his major suppliers, situated in India. The implications for IKEA in this debate are that, in the decisions taken, the company has to considerate the impact on brand and image. Moreover, it would be more costly for them to insure that their suppliers meet the requirement concerning child labor and they would have to verify it on a regular basis.
To let Rugmark operates the control on child labor avoid Ikea to invest money in its own watching program and do not reduce the profit margin made on the rugs. By doing that, Ikea could regain its popularity and erase the damages that all those controversies concerning child labor have done to the brand image.
The positive aspects of letting the situation exactly as it is right now are that it would not engage any costs and would not require any efforts. Another option for Ikea is to withdraw from form the rug market because the child labor problem is too deeply embedded in the culture of a country like India for Ikea to be able to have any impact on it.
The option to do nothing is possible in all situations. Hire Writer The company kept a few manufacturers who were often delivering during the night to avoid being seen.
How to cite this page Choose cite format: By withdrawing they would not improve the company image and would be seen as a company that is not involves in the well being of the society and that does not take part of a solution for the child labor problem.
Alternatives Ikea faces a few alternatives in order to solve this problem.
Problem definition There are a few related problems to solve but the main problem that could join everything would be that IKEA is facing a problem of Child Labor with his suppliers of India and Pakistan, indicating a general challenge of global sourcing for the company.
IKEA got involved in the elaboration of environmental plan for the company. It also allows Ikea to get involve in social issues and cooperate with human rights organizations in order to improve its company image after those scandals. They could work along with their suppliers to educate them towards the bad effect work on young children and aware them of the consequences of their actions.
The first alternative, where Ikea would continue to try to deal with the child labor problem through its relationships with his suppliers is interesting because it allows Ikea to stay in the rug market without neglecting the child labor problem. On the government side, sincewith the Children Act, bounded labor is illegal and then inthe law was reinforced with the Bounded Labour System Act.
Ikea also have to be ready to pay a premium for products that are not produce at all by child labor because normal labor can increase a the production cost of the suppliers.
However, dealing only with Rugmark can bring less flexibility to Ikea in for the supply of Indian rug and oblige Ikea to take what is provided and authorised by Rugmark.
The company has also always been concern about environmental and social issues and had never hesitate to take the appropriate measures improve their standards in those areas. Then, during the expansion of the stores and the propagation of the concept in many countries, the IKEA image and concept became formalized and uniformed.
IKEA has a distinctive way of managing people in an informal manner and constantly search for creative and cheap solution to keep the lowest prices possible. Now, to have a better idea of the situation of child labor in South Asia, we will make an overview of the major facts that IKEA as to take into account.
Moreover, Ikea would be involved in that kind of scandals repeatedly and would lose more and more customers and profits because people do not want to buy from company that encourages child labor.Free Essay: IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor Ethics in Business and Society Professor Stephen Griffith Otis West Tuesday.
IKEA’s global Sourcing Challenge: Indian Rugs and Child Labor - Assignment Example On In Assignment Sample Founded in by Ingvar Kamprad who is 17 years old and have innovative values and beliefs in business, IKEA, started as a mail-order company selling small items at low prices, and is nowadays the world’s largest furniture retailer.
November (Revised December ) IKEA's Global Sourcing Challenge: Indian Rugs and Child Labor (TN) (A) and (B) by. C-Suite IKEA's Global Sourcing Challenge May 13, 1 Emma Karkar Olivia Heo Joyce Kung Vikram Angelo Dalal AlBawardi Panos Anadiotis 2.
Agenda COMPANY BACKGROUND DETAILS OF ENVIRONMENTAL ISSUES AND CHILD LABOR WHAT CAUSED THIS ISSUE -ISSUES ASSESSMENT THE ALTERNATE RESPONSES. IKEA's Global Sourcing Challenge: Indian Rugs and Child Labor (A.
Identify major problems/themes. The case “IKEA's Global Sourcing Challenge: Indian Rugs and Child Labor (A)” basically explains the issue which the company IKEA faces because of the increasing environmental and social issues with the suppliers.
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