These events urged the company to consider environmental and social issues more seriously. Identify the pros and cons of implementing each alternative. IKEA discounts its umbrellas when it rains. If you need this or any other sample, we can send it to you via email. When Kamprad matched his competitors by adding furniture to his newsletter in , the immediate success of the new line led him to give up the small items. The cons of this response are that it would provide little discernable evidence of a proactive response on the part of IKEA for consumers and partners already identified as collaborators in attempting to respond to the problem and it would also likely do little to aide those already identified as exploited. His thesis, Testament of a Furniture Dealer, became an important means for spreading the IKEA philosophy, particularly during its period of rapid international expansion.

The problem can frequently be defined around one of the key factors of the case scenario. Because this type of external monitoring was very unusual, IKEA had some difficulty locating a reputable and competent company to perform the task. The chemical compound was used as binding glue in materials such as plywood and particleboard and often seeped out as gas. State Department, February , available at http: Traditionally, it was known as personnel management.

Even more difficult than this short-term decision was the long-term action Barner knew IKEA must take on this issue.

case study ikeas global sourcing challenge

Should it step back and allow Rugmark to monitor the use of child labor on its behalf? Stuudy one hand, she was being urged to sign up to an industry-wide response to growing concerns about the use of child labor in the Indian carpet industry. He began to view the situation not just as a business opportunity but also as an unacceptable challengs problem that he wanted to correct.

The greatest challenge of it both internationally and within my country is overcoming fear….

IKEA’s Global Sourcing Challenge Case Study | Pages: 5, Sources: 3, Words:

For example, I had spent a souring of months in India learning about trading but got no exposure to child labor. These events urged the company to consider environmental and social issues more seriously. IKEA therefore should not look for a new business opportunity by leaving India but keep up with the trend and get ahead of the issue and its rivals. But we also met with unions, politicians, activists, NGOs, U. HBS cases are developed solely as the basis for class discussion.


Technology and Operations Management. Alternative solution 2 Allow Rangan ample time to perform corrective action on their own, pending a review by IKEA for current and future contracts. We buy unused production capacity. Then, catalog in hand, customers can see simple interiors for themselves, touch the furniture they want to buy and then write out an order.

IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labo by Lee Chak Hing Angel on Prezi

Extracts of the Testament are given in Exhibit 3. Products are still only advertised through ads. Our buyers met suppliers in their city offices and rarely got out to where production took place. Furthermore, the AIME students were completing school and going on to university at the same rate as non-Indigenous students. The search for creative solutions was also highly prized with IKEA.

Ikea’s Global Sourcing Challenge: Indian Rugs and Child Labor Essay

On the process of globalization, IKEA needs to get the cheapest suppliers and therefore goes to countries that offer cheap labor. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.

Solution 3 Suspend contracts with Rangan on a provisional basis, allowing the contractor to fill current orders pending review of systematic changes in child labor practices and create a proactive programs approach for children employed by Rangan, including screening for employment of both employees and subcontractors, internal and fase audit of manufacture facilities and increased regulations for hours of work and opportunities for chaklenge.

That relationship began to change during the s, however, when environmental problems emerged with some of its products.


case study ikeas global sourcing challenge

Global HR Management Human resource management is a universal practice that is based on processes, strategies, and policies. A decade later, Switzerland became its first non-Scandinavian market, and in IKEA entered Germany, which soon became its largest market.

Most of this work is already done if the alternative solutions clearly point out advantages and disadvantages to each. Exhibit 5 The U. The cons of the response would be a decline in availability and therefore challenye capacity of current rug products, the lack of long-term solutions for a chalkenge and formerly reputable supplier, and utter lack of support for children already identified as exploited and having already produced the labor for the particular contract supplies.

In the spring ofanother film is threaten to be shown on German television about children working at looms at Rangan Exports, an Indian company used by IKEA, and the producer then invited IKEA to send someone to take part in a live discussion during the program. To go or not to go to the show? Selected Solution to the Problem: Or should it recognize that the problem was too deeply embedded in the culture of these countries for it to have any real impact and simply withdraw?

In addition to forestry, IKEA identified four other studyy where environmental criteria were to be applied to its business operations: The case traces the strategic, organizational, and cultural challenges JMB faced in building an organization that eventually offered mentoring partnerships to 8, Indigenous students in high schools throughout Australia.

case study ikeas global sourcing challenge

So threatened were they soyrcing when IKEA began exhibiting at trade fairs, they colluded to stop the company from taking orders at the fairs and eventually even from showing its prices.

Author: admin