IKEA Way - a Program of Corporate Social Responsibility Implemented by a Global Corporation – Case Study Example
The paper "IKEA Way – a Program of Corporate Social Responsibility Implemented by a Global Corporation" is an expressive example of a case study on business. Basing on the IKEA’S case on corporate social responsibility, the Swedish-founded home furnishing multinational company starts by highlighting its area of focus in the quest of attaining its corporate social responsibility and these include the environment and people. The company highlights the approach that it takes to address in the environmental and social issues while asserting that its low price strategy must not compromise its environmental and social responsibility. As such, the company acknowledges that through social and environmental sustainability, it creates a good condition for doing business while enabling the customer to accept that their products are safe. To effectively pursue its corporate responsibility, IKEA ensures that its products are manufactured in a conducive environment by manufacturers who are responsible for the environment. IKEA strives to minimize the impact of climate change by supporting sustainable forestry while its long-term goal is to procure wood from forests that are certified as responsibly managed. To uphold ethics in its employment procedure, the company does not accept child labor as a mean of safeguarding the right of children (IKEA, 2019). To effectively pursue its corporate social responsibility, IKEA has adopted “I WAY” which is also referred to as The IKEA Way, as a mean of purchasing products for home furnishing.” I WAY” entails code of conduct that stipulates the minimum requirements regarding the conditions of the workplace, environmental protection, and Child labor that IKEA imposes on its suppliers while highlighting what they are bound to gain when pursuing them. Other codes of conduct that IKEA adopts include the IKEA WAY on food purchases and the IKEA way of the distribution of the products used in home furnishing. This section enables the reader to understand the codes of conduct that IKEA applies to make it a corporate socially responsible company while enhancing social and global sustainability (IKEA, 2019). Basing on the case, IKEA contributes positively in supporting communities and general society through charity and sponsorship. The IKEA Group focuses its philanthropic action on active partnership rather than undertaking sponsorship and making charitable donations. From the analysis of the corporate social responsibility of the company, the social projects that it initiates targets children, for which it partners with organizations that support the interest of children such as Save the Children and UNICEF. IKEA’s sponsorship for events, education needs, and local projects are usually done by its individual stores (IKEA, 2019). According to the company, IKEA is a living brand that facilitates how the store innovates and operates by focusing on the needs of the customers. In this case, IKEA stresses on its profit, planet and people perspective of corporate sustainability and considers them as key indicators that it integrates with its values and operational policies. The sustainable policy has been instrumental in enhancing the brand image of the company which is considered as Green, which has been instrumental in enhancing its profitability and social reputation. IKEA’s social approach seeks to enhance the stakeholder empowerment and more importantly, the employees from their recruitment to operation while enabling them to be committed towards their customers. This approach has been instrumental in creating a close relationship between the company and the consumer market (IKEA, 2019).
IKEA accepts that it has encountered different crises over time and has discovered the essence of considering other key stakeholders such as environmental activists to lead in addressing emerging challenges such as climate change, employees’ safety, and supplier management as a mean of supporting sustainable business practices (IKEA, 2019).
An important area that IKEA utilizes to present its corporate social responsibility is in its CSR communication. Before 2005, IKEA used its product packaging, product catalogs, and stores to communicate its corporate social responsibility policies to the members of the public. For instance, the brochures from IKEA’s stores comprised information relating to the environmental impacts of different products while the 2004 catalog had two pages that focused on corporate social responsibility themes (Arrigo, 2005). However, since 2005, the description of the social and environmental efforts are no longer in the catalogs as the organization adopted the national IKEA websites to display the company’s corporate social responsibility policies, annual reports, and brochures. The communication from its first report was transparent on its corporate social responsibility while it highlighted general objectives and their indicators. Although the description of the report in general and in some cases vague, the publishing of its CSR is a major step towards communicating its commitment to its corporate social responsibility (Maon et al., 2007).
IKEA attracts pressure from different stakeholders and this can be attributed to its cost-effectiveness business model and its effort to concentrate its activities in developing nations. These policies have attracted criticism from NGOs in regards to obtaining wood from questionable forests such as those in Indonesia, poor working conditions in Asia operations and child labor in Asia. The pressures and impacts of various stakeholders have been instrumental in shaping the corporate social responsibility policies that the company has been adopting. At the moment, IKEA has systematically embedded its corporate social responsibility goals into its business operations and management philosophy. This has enabled the company to respond swiftly to any challenge in its image or reputation. To proactively address the demand of its stakeholders, IKEA has collaborated with different external stakeholders in developing system framework that assists communities, organizations, and individual to take steps that facilitate sustainability (Maon et al., 2007).