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Business Ethics Assignment IKEA Systems Company

   

Added on  2020-04-01

12 Pages3722 Words63 Views
UNIVERSITY NAME Student’s name Student’s ID Business Ethics

AbstractThe purpose of this project is to study the topic of business ethics in relation to Inter IKEASystems Company. The main findings are that the company is by great extend an ethicalcompany in manner in which it carries out its business and handling of its major stakeholderssuch as customers, employees and suppliers.Introduction Business ethics can be defined as the way a company does its business in terms of its policiesand practices related to potentially controversial business dealings such as discrimination,corporate tax, and insider trading and corporate social responsibility. (Shaw, 2017). This paperattempts to discuss business ethics in relation Inter IKEA Systems, a company based in UK and dealswith a wide range of domestic products such as furniture as well as food industry. This paper willprovide future research with background information relating to business ethics.Objectives (a)To examine the nature of business ethical issues at Inter IKEA Systems company.(b)To make recommendations about IKEA in order to be more ethical company in future.The most significant ethical issues that the company IKEA has faced recently and how itaddressed them.Ethical issue in business can be said to be principles and values that defines organization’sdecision making process with regards how it runs its business. This is a one of the keydeterminants in building trust between an organization and its stakeholders. In the recent pastIKEA has faced a number of ethical issues in business and from the information gathered fromthe reports the company addressed these issues adequately and satisfactorily.In the year 2014, there was a plan for inter IKEA group to acquire IKEA range, supplyand production activities from INGKA group, before the company actualized this transaction,

Inter IKEA Systems Holding B.V signed a letter of intent to signal commencement of theacquisition process. (Gini and Marcoux, 2009) This gave an opportunity to all interested parties orstakeholders to voice any concerns that they may be having regarding the acquisition before it isactualized. This is an ethical issue and the company did well in the manner in which in handledit. Without giving stakeholders a right to be heard and ample time to interrogate the processbefore finalization, the company would have infringed on the ethical rights of the stakeholdersand thus the acquisition could have been taken as suspicious because of the manner in which itwas done in secrecy and without proper notification to the company stakeholders. IKEAtherefore re-affirmed its fidelity to high level of ethical standards that raises confidencestakeholders would have on the company. (Tittle, 2013)In the year 2016 when the acquisition was finalized the company announced it through apress a release detailing all the information necessary to brief its stakeholders including thepublic who had no investment in the company. By so doing the company closed the matter it hadopened through signing of the letter of intent. Inter IKEA Systems, as the company came to beknown after the acquisition gave the new structure of the company and went ahead to mentionhow the new structure will help meet the overall objective of the company. In the press releasethe company goes ahead to disclose how it arrived at its profits. For example the company saysin its report that its franchise division was able to realize an increase of 14% in profits mainlydue to positive foreign currency movement in Euro. (Torekull and Kamprad, 2008)Many of thecompanies would like to attribute its profits down to the company making and not throughunsustainable methods or avenues such as positive currency movements. The reason behind thisis that not many companies would want to risk the confidence investors have in them byhighlighting areas of weakness especially if it contributed to profits of the company. (EmergingTechnologies and Ethical Issues in Engineering, 2008)

In conclusion, Inter IKEA Systems ethical standards have been beyond reproach going bythe press release it does from time to time. The company is keen in sharing all the informationrelevant that it could have easily chosen not to make it available to the public and the will still bewithin the legal requirements guiding companies in UK regarding sharing of pertinentinformation to the stakeholders and general public.How the company’s vision, mission and code practice influence its actions withexamples.Inter IKEA Systems’ vision is to create a better everyday life for the many people, while itsmission is to offer a wide range of well-designed, functional home furnishing products at pricesso low that many people as possible will be able to afford them. IKEA way abbreviated asIWAY, is the Inter IKEA Systems code of practice. The policy tenets are based on internationalconventions and declarations with regard to purchasing products, materials and services by thecompany. The policy also covers working conditions, prevention of child labor and zerotolerance to corruption. Contractors to the company are responsible for communicating the sameto its employees and sub-contractors. (Torekull and Kamprad, 2008)The company the company increases its range of products by introducing about 2,500 newproducts every year in line with its vision of creating better everyday life and in a way that isaffordable to many. The products are designed by its in-house designers or contractedprofessionals that come up with designs that help to better life of many people. The company

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