MMH733: Ethics for Managers | Australian Commercial Law

Running head: AUSTRALIAN COMMERCIAL LAW
Australian Commercial Law
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1AUSTRALIAN COMMERCIAL LAW
Table of Contents
Introduction:...............................................................................................................................2
Analysis:.....................................................................................................................................2
Ethical issue of IKEA.............................................................................................................2
Addressing the ethical issue:..................................................................................................4
Vision, mission and code of practice of IKEA.......................................................................4
CSR action of IKEA...............................................................................................................7
Key relation attribution...........................................................................................................8
Stakeholders of IKEA.............................................................................................................9
Ethical treat regarding the stakeholders...............................................................................10
Recommendation for future of the company........................................................................11
Conclusion:..............................................................................................................................12
Reference..................................................................................................................................13

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Introduction:
The present case is evolved with the Swedish company named IKEA. Ingvar
Kamprad founds the company in the year 1943 and by the year 2008, the company has
become one of the largest furniture companies in the world (Lim, Pirsiavash and Torralba,
2013). The head quarter of the company is situated in Netherlands. The most significant
feature of the company is that it provide furniture with eco-friendly way and the company has
given special concentration on costing and operational perspective (Brown et al. 2016).
Despite of its popularity, the company is facing certain dilemmas regarding its structure and
tax related problems.
The main objective of the subject is based on the ethical dilemma regarding the
company and the measures are taken by the company to address the issues properly (Marston
et al. 2017).
Analysis:
Ethical issue of IKEA
IKEA is one of the brightest names in the history of Furniture industry. Popularity of
the company has been developed regarding the well-designed product with a low price. The
company has decided certain core values to deal with the problem regarding ethical issue.
The core values can be divided in to as follows:
 Create a suitable working atmosphere within the company;
 Meet the demands of the client;
 Deliver quality product to the customer with low price;

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 Chalk out the decision regarding the development of the standard of the
company and such decisions are based on the reality;
 Respect the customers as well as the co-workers;
 Promote the co-workers with certain potentiality.
 Adopt straight forward approaches to face the challenge; and
 Be modest to find new ideas and inspiration.
However, IKEA has been faced a number of ethical issue and these can be categorised
as follows:
One of the most discussed ethical issues confronted by the company is child labour. In
many of the branches of IKEA, the child labour issues have forced the company to face the
criticism. Under the core values, the company has stated certain morality, but the child labour
problem forced the company to face dilemma. It has been alleged that the company is
appointing children as labour to reduce the labour charge. It has also been stated that the
authority of the company had confessed that the allegations regarding the child labour is, to
certain extent true.
There should be a critical analysis regarding the ethical issues of the company. It was
stated by Anders Dahlvig, the CEO of IKEA that the allegation made against the company is
totally concocted and the company is not facing any problem regarding the child labour issue.
However, in the words of Stephen Sackur that the company seeks to recruit people with low
paying rate (Lee and Vachon 2016). It has been reported that the company has appointed
almost 11.3 million labours whose average age is under 15. The social responsibility action of
the company is quite lower in nature. It has also been alleged that the atmosphere of the
company are not green at all and the core details of the company is not real. Therefore, the
company is facing troubles or dilemmas regarding the social responsibility prospect.