...1. How should Marianne Barner respond to the invitation for IKEA to have a representative appear on the upcoming broadcast of the German video program? For IKEA and Barner, appearing in the program has a lot of pros and cons that could heavily affect the public perception of the brand. One critical aspect of attending is that Barner shouldn’t be the only representative of IKEA present, given the high status of this issue, she should be accompanied by a senior level individual to show that IKEA takes the issue seriously and they are heavily prioritizing the assuagement of this injustice. The team that would represent IKEA should clearly acknowledge the issue of child labor and understand that they are walking on eggshells. Preparation is key...
Words: 1036 - Pages: 5
...After a few years of IKEA undergoing speculation of unreliable suppliers in countries such as India, Pakistan, and Nepal whom used child labor freely throughout their practices, Ikea’s business area manager of carpets, Marianne Barner, was faced with a dilemma that she was quickly forced to overcome, change, and improve. In 1995, a well-known German TV reporter broadcasted an ongoing investigation report naming a main supplier of Ikea used child labor in their work place. Although this supplier claimed to recently sign an agreement in their IKEA contract forbidding the use of child labor or else termination, recent video and still-photographs have proved otherwise. In a whirl-wind of events, Barner was forced to look into alternatives to help save the reputation and image of IKEA as well as maintaining a profit. Three of these alternatives that Barner juggled that were stated within the case included: 1. Sign up to an industry wide response to growing concerns of child labor in India – monitoring manufacturers, importers, and retailers to use the new label of RUGMARK: a label on carpets that states they were made without the use of child labor. 2. Barner started conversing with the Swedish “Save the Children” organization who urged Ikea to respond to this situation in “the best interest of these children,” whatever that change may be. 3. Cut the use of these companies within India to lessen the loss of a profit for the company IKEA. Before investigating...
Words: 2288 - Pages: 10
...How should Marianne Barner respond to the invitation for IKEA to have a representative appear on the upcoming broadcast of the German video program? To tackle this knotty problem, it is highly recommended that IKEA should participate in the program. The first thing should be taken into account is that this documentary was produced by a noted German company, which further meant gaining high credibility and extensive influence too dangerous and can be harmful for Marianne Barner to underestimate or ignore. Consequently, a heads-on response is not merely necessary but also imperative. Further to that point, the company does have gained some positive accomplish ents to the child labor issue since the problem was first raised by Swedish television. IKEA could analyze and discuss the information it had collected so far from UNICEF and the ILO and demonstrate its same attitude as the director of the documentary film as well as pursuing the same goals of eradicating child labor. It could turn the baffling problem around by showing its gratitude to the director for helping spot the child labor at the company’s manufacturing and could never to be too emphasize that the company is going to study the case thoroughly. Furthermore, what Marianne Barner should point out is that as the IKEA’ s philosophy goes: Anyone can make mistake but one should take the responsibility of making a mistake. Taking responsibility has been served as a privilege. Since the IKEA was unaware of making th...
Words: 1393 - Pages: 6
...Case 8-2 IKEA’s Global Sourcing Challenge. 1. How should Marianne Barner respond to the invitation for IKEA to have a representative appear on the upcoming broadcast of the German video program? I suggest Marianne Barner to refuse to appear on the upcoming broadcast of the German Video Program. Every coin has two sides. Accepting this invitation is the opportunity for IKEA to quickly response the child labor issue in public media. In this way, IKEA could assure that they will be more aware of social responsibility and potential upcoming social issues in the future. However, the German Video Program won’t allow the company to preview the video and that the program clearly “planned to take a confrontational and aggressive approach aimed directly at IKEA”. If they go to the invitation with no preparation of what kinds of issue and questions could probably be faced with, it might potentially mislead by the videos or questions they answered in the show. Therefore, Marianne Barner should politely refuse the invitation and respond the video when they have a chance to review and verify the truth in the video. While, in the meantime, IKEA have time to investigate the truth and assign more policies to against child labor issue for their suppliers. 2. What actions should she take regarding the IKEA supply contract with Rangan Exports? IKEA should sent out the investigation term to figure out the truth whether the Rangan Exports failed in compliance with the ethical...
Words: 831 - Pages: 4
...and household items. The company started as a home-furniture retailer in Sweden over 60 years ago. Throughout the years with the use of effective globalization, “IKEA managed to increase its business revenue and profit by selling and making home-furniture in different countries all over the world, and it has over 300 retail stores in more than 30 countries”. Other than that, they sell roughly 10,000 different products, which attract customers from different places all over the world. The basic assumption behind IKEA's global strategy was “one-design-suits-all”. This case “IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor ” is about IKEA’s development from a backyard company to one of the world’s largest furniture retailers, which has to deal with the issues of child labor and how they should behave considering economical issues and the company’s policy. Business Manager Marianne Barner has to face tough decisions on How to effectively enforce their anti-child labor policies while keeping the best interest of the child in mind? Indian rugs are...
Words: 2411 - Pages: 10
...IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor Nathan Johnson Case Analysis MGT 400 – 10/27/09 1) How should Marianne Barner respond to the invitation for IKEA to have a representative appear on the upcoming broadcast of the German Video Production? The offer to have a representative appear on the upcoming broadcast of the German Video Production seems like a total setup. This movie sounds like it is totally geared towards tearing down the corporation’s credibility, etc. If a representative goes, most likely there will be set questions created by the group that made this video in attempt to incriminate IKEA on camera. I would recommend that Marianne Barner thank the German Video Production company for the invitation but to politely decline and say something to the extent that IKEA is currently investigating the operations of its suppliers to ensure compliance with IKEA’s policies. Thereby, as kindly as possible you extend politeness and it is implied that IKEA is now aware of the child labor IKEA is actively seeking to resolve the issue. 2) What actions should she take regarding the IKEA supply contract with Rangan Exports? The most logical approach towards addressing this issue would be to perform some sort of investigation on ALL of IKEA’s suppliers to make sure that all of them are in compliance. If IKEA singles out Rangan Exports, they could risk some sort of discrimination suit. Additionally, if there are more suppliers in violation of their...
Words: 1016 - Pages: 5
...1. Should Marianne Barner participate in the German Documentary? • Yes. The German program planned to take a confrontational and aggressive approach aimed directly at IKEA and one of its suppliers. The best defense is to take this opportunity to fight back. • Since IKEA already signed agreement on not using child labor, they can’t ignore the challenge this program may bring. • IKEA has gained some positive accomplishments to the child labor issue and took actions to eradicate child labor. It is a good chance to further publicize their efforts. • Marianne should prepare herself well by analyzing the situation of that year (May 1995) before going to the program; Rangan Exports should be investigated by both independent 3rd party auditors and IKEA before the program. • It is the opportunity to communicate with the public regarding Ikea’s long-term strategy with accurate milestones to prevent child labor, in response to their social responsibility. • If Marianne is not outspoken, an eloquent person from the senior management who is familiar with IKEA’s child labor issue and company’s stand should go to the program. 2. Should IKEA continue to deal with Rangan Exports? • No. Rangan Exports apparently violated the contractual commitment it had made not to use child labor. Legally speaking, IKEA should terminate the contact right away. • In 1994 after the Pakistan child labor issue, IKEA already had a clause to all supply contracts, stating that if the supplier employed children...
Words: 825 - Pages: 4
...SJÖMAN IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor (A) In May 1995, Marianne Barner faced a tough decision. After just two years with IKEA, the world’s largest furniture retailer, and less than a year into her job as business area manager for carpets, she was faced with the decision of cutting off one of the company’s major suppliers of Indian rugs. While such a move would disrupt supply and affect sales, she found the reasons to do so quite compelling. A German TV station had just broadcast an investigative report naming the supplier as one that used child labor in the production of rugs made for IKEA. What frustrated Barner was that, like all other IKEA suppliers, this large, well-regarded company had recently signed an addendum to its supply contract explicitly forbidding the use of child labor on pain of termination. Even more difficult than this short-term decision was the long-term action Barner knew IKEA must take on this issue. On 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. A recently formed partnership of manufacturers, importers, retailers, and Indian nongovernmental organizations (NGOs) was proposing to issue and monitor the use of “Rugmark,” a label to be put on carpets certifying that they were made without child labor. Simultaneously, Barner had been conversing with people at the Swedish Save the Children organization who were...
Words: 6420 - Pages: 26
...9-906-415 REV: NOVEMBER 14, 2006 CHRISTOPHER A. BARTLETT VINCENT DESSAIN ANDERS SJÖMAN IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor (B) After more than a decade spent struggling with the issue of child labor, Marianne Barner felt good about how IKEA had responded. But occasionally, she found herself wondering whether the progress the global furniture retailer had made was real and durable. Just as it had in the mid-1990s, in 2005 the company could still find itself on the defensive in dealing with the issue. Even more troubling to Barner was that after 10 years of working to prevent child labor among IKEA’s suppliers— introducing a clear code of conduct, developing internal controls and third-party audits, training its suppliers, supporting their corrective actions, and instituting stiff sanctions against offenders—the company was still finding cases of child labor in its supply chain. The latest issue had been drawn to Barner’s attention by Kaisa Mattson, the head of IKEA’s compliance office in south Asia. Like Barner herself a decade before, Mattson was facing the decision of whether to terminate a relationship with a long-standing major supplier. This one, however, had violated not one but several items in IKEA’s detailed code of conduct, known as “The IKEA Way on Purchasing Products”—or IWAY for short. Venkat Industries was a textile mill with over 10,000 workers, and a recent audit had shown that it had stopped using the water treatment plant it had...
Words: 8055 - Pages: 33
...Case Study of IKEA’s Global Sourcing Challenge In 1995, IKEA met a problem that its main supplier, Indian rugs, used the child labor to produce products, although they had signed an attachment of the contract to ban employing child labor. In addition, a German documentary maker was about to broadcast the problem of child labor on German television and also invited an employee from IKEA to have a live discussion in the TV program. Marianne Barner, the leader of IKEA, must find a great solution to this serious issue to both save her business and the corporation’s brand image. In this issue, IKEA was not the one who produced products, so they might not realize the use of child labor in the process of production. In addition, child labor did not attract lots of attention from the society at that time, so they did not pay attention to the use of child labor when they were finding their suppliers. However, they sold terminal products so they were to blame. As a result, Marianne had to make several decisions, respectively about whether IKEA should accept the invitation to join the TV program, how to deal with the broken contract with Rangan Exports, how to deal with the child labor on the long term and whether IKEA should use Rugmark. To address this problem and make these decisions, IKEA has four choices. One is that IKEA could utilize its own relationship with its suppliers to solve the issue. The second choice for IKEA is to invite Rugmark Foundation on its behalf to monitor the...
Words: 1445 - Pages: 6
...Dear Mr. Ingvar Kamprand, I am writing to you to make recommendations on the ethics issues referring to the child labor problem raised by both the Swedish and German television documentaries. I think we took the necessary steps in dealing with Swedish documentary that showed children in Pakistan working at weaving looms, by sending a legal team to Geneva to seek input and advice from the International Labor Organization (ILO) on how to deal with the problem. The fact that India, Pakistan, and Nepal were not signatories to the convention implies it is unreasonable to accuse IKEA of violating the law of child labor. However child labor is an ethical issue. That’s why we added a clause to all our supply contracts, stating that if any supplier employed children under legal working age of 14, that contract would be terminated. We also appointed a third-party agent to monitor child labor practices at its suppliers in India and Pakistan. This definitely improved the public’s and media’s perception of the company. Also contacting concerned organizations, such as Swedish Save the Children, UNICEF, and the ILO to get advice on how to handle these labor issues with some of our suppliers was proactive. The trip my team and I took to India, Nepal and Pakistan to investigate the real situation of child labor exposed us to Rugmark Foundation. The foundation developed a label certifying carpets that were made without the use of child labor. We endorsed our name to Rugmark Foundation to show...
Words: 652 - Pages: 3
...eaElena Fischer Case: Ikea’s Global Sourcing Challenge 1. Should Ikea dissolve its relationship with its carpet supplier? I think IKEA should in fact, exit the Indian rug market. While it would translate to higher cost for consumers, it would remove any conflict of interest for both society and management in terms of child labor. With the public knowledge that IKEA rugs have in fact been made using child labor, rug sales will decrease and customers will feel uncomfortable purchasing products with the wonder of whether or not child labor was used to create the product they are about to purchase. If IKEA dissolves the relationship, socially conscious consumers will feel ease when buying a rug, with the knowledge that no children were used to weave the rug, even with the slightly higher price. Exiting this market will also put pressure on Indian government to take more efforts in preventing child labor by implementing more labor laws, or better enforcing the current ones. While the Rugmark Foundation programs implemented with suppliers to supervise the use of the label helps regulate child labor, it does not get rid of it all together and is only a short-term fix. The only way I see IKEA saving their image, following their values and ethics, and preventing the use of child labor in the making of their rugs, they need to withdraw because it is the only action that truly shows their seriousness with the issue and zero toleration policy in being a part of their company....
Words: 723 - Pages: 3
...In the business world, unethical practices are wildly used as an easy way to success in a business, but ethical business practices can be used by businesses to maintain their integrity while being successful financially and in other business aspects. An example of a successful company that has had much favourable outcomes from incorporating ethical practices is IKEA. IKEA was founded in 1943, and since then has been striving to implement ethical conduct. IKEA has demonstrated ethical conduct by its efforts in striving to be environmentally friendly, remaining true to its ‘no bribes’ policy, and its strict rules on child labour. IKEA’s success can be a model by other businesses. Many companies involved with unethical conduct usually face the consequences of their actions in the future. Although the company may be fooled by immediate and positive results from their actions, many have failed because of immoral decisions. Some examples of these failures are bankruptcy, or decrease in customers. Ethical business practices can have a more positive and even long-term impact on a company than unethical business practices. As a company, IKEA prides in itself for delivering affordable, sustainable, and environmentally friendly goods. “The company is doing pretty much everything it can to make its products, and stores, as energy-efficient and sustainably produced as possible as part of its program of ‘never-ending improvements’.” IKEA has implemented many strategies to achieve this...
Words: 1490 - Pages: 6
...909-S02 14 DE NOVIEMBRE, 2006 CHRISTOPHER A. BARTLETT VINCENT DESSAIN ANDERS SJÖMAN El desafío del abastecimiento global de IKEA: alfombras de India y trabajo infantil (A) En mayo de 1995 Marianne Barner se enfrentaba a una decisión difícil. Después de solo dos años de trabajar para IKEA, el mayor detallista de muebles del mundo, y de menos de un año de ocupar su puesto como gerente de área de negocios para alfombras, se enfrentaba a la decisión de prescindir de uno de los principales proveedores de alfombras de India de la empresa. Aunque esa medida perturbaría el suministro de alfombras y afectaría las ventas, ella consideraba muy poderosas las razones que tenía para tomarla. Una televisora de Alemania acababa de transmitir un reporte investigativo que nombraba a ese proveedor como uno de los que usaban mano de obra infantil en la producción de alfombras hechas para IKEA. Lo que frustraba a Barner era que, al igual que todos los demás proveedores de IKEA, esta gran y respetada compañía había firmado recientemente un addendum a su contrato de suministro que prohibía explícitamente el uso de trabajo infantil so pena de finalización del contrato. Aún más difícil que esta decisión a corto plazo era la medida a largo plazo que Barner sabía que IKEA debía tomar respecto a este asunto. Por un lado, se le instaba instando a respaldar una respuesta de toda la industria a la creciente preocupación por el uso de mano de obra infantil en la industria de alfombras de India. Una sociedad...
Words: 7612 - Pages: 31
...English COURSE ANNOTATION This course is designed to facilitate a more “applied/practical” understanding of contemporary issues facing companies who market (or intend to market) their products/services across national boundaries. The course focuses on real-life challenges that companies encounter in the context of their international marketing function (broadly defined). In general, these challenges relate to identifying, evaluating, and making tradeoffs across national, organizational, and personal contexts. Thus, we will discuss formulation- and implementation-related challenges as well as generate solutions to ‘international marketing’ dilemmas. COURSE LEARNING OUTCOMES Learning Methods: Case discussion; Role plays; Mini-debates; Mini-lectures Assessment methods: Class participation; Case presentation; Final exam CLO1. Understand the international marketing environment; Contemplate and analyze international marketing opportunities. CLO2. Gain an understanding of international marketing effort related to the market entry and marketing mix strategies CLO3. Identify, interpret and evaluate information sources related to multinational marketing with the emphasis on information technologies (Internet). CLO4. Understand the principles of global retail management, such as site location, environmental impacts on retail planning and execution, global sourcing,...
Words: 3323 - Pages: 14
