MMH733 : IKEA Corporate Social Responsibility

Added on - 31 Oct 2019

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Ethical Responsibilities for IKEA1ETHICAL RESPONSIBILITIES FOR IKEANameUnit nameStudent ID no.Professor’s NameUniversityCity (State)Date
Ethical Responsibilities for IKEA2ABSTRACTThis research is aimed at finding out the ethical practices in IKEA. The study reveals differentunethical activities that have happened in the past and how they were resolved. It also finds outhow IKEA treats its various stakeholders in relation to the Caroll’s four-part model on CorporateSocial Responsibility. Moreover, it analyzes IKEA's vision, mission, and code of practice to findout how they influence the way it carries out various activities. The research shows that IKEA'sprimary focus is to its customers to enable them to create a better life at low costs. Finally, thereare recommendations on how IKEA can improve its practices to be more ethical.
Ethical Responsibilities for IKEA3Ethical responsibilities for IKEABusiness ethics refers to moral principles that are followed by a business that control theway it operates. Unethical business practices can be very easily identified. Incidentally, childlabor should not be employed in business, bribery should not take place in business, andcopyrighted materials should not be unlawfully used in business(Goodstein & Wicks 2014).IKEA is a company that has very many stores across the world. This report has three majorobjectives;1. To determine if IKEA practices business ethics.2. To find out if IKEA shows corporate social responsibility using Carrol’s CSR model.3. To see how IKEA treats its different stakeholders.Any company that has business ethics also employs corporate social responsibility for itsactions. This is to its shareholders and its employees. It should make good returns for itsshareholders, and it should also respect its employees and treat them fairly. These businessesadditionally take responsibility for the environment and prevent all forms of pollution(Boons &Wagner 2009).Ethical Issues IKEA Has FacedIkea is a company that has a strong reputation due to its sale of high-quality products thatare cost effective. The company has a competitive advantage due to its ability to produce highlyinnovative products. This company is top-rated in the united states as well as Europe. It is acompany that is also involved in philanthropy and has had sustainable growth. However, IKEAlike many other organizations has faced some ethical problems(Fund & Initiative 2014).There was evidence of the company was spying on its employees. This was reported inFrance. Upon further investigation into the matter, it was revealed that IKEA had putinvestigators to follow up on employee misconduct, customer complaints, and job applicants intothe company. There was one senior employee was on sick leave but was later terminated when itwas determined that she was not ill through the use of an investigator. Upon learning of theevents that transpired, the employee filed charges against IKEA for infringing on her privacy.
Ethical Responsibilities for IKEA4Some top executives in the company were terminated, and IKEA was required to post a bond offive hundred thousand Euros(Lindgreen 2017).Another ethical scandal that involved IKEA happened during the communist regime.Upon questioning about the incidence, IKEA admitted that to build its furniture, it had used laborfrom political prisoners from East Germany. Moreover, inmates who refused to carry out thistask were punished. This revelation by the company showed that it been unethical and violatedhuman rights. However, the fact that the firm admitted to the allegations and put down measuresto respect human rights in the future show that it wishes to avoid the semblance of the same(Wadsworth 2007).Some critics have cited IKEA's corporate structure as unethical. This is because thestructure of management is seen as highly complex and hierarchical. The company is run by aprivate company that is then run by a non-profit company in Dutch. There are others who findKamprad to have excessive power because he is the chairman of the company that oversees thenon-profit company. Another claim is that IKEA involves the non-profit company in a bid tododge taxes. IKEA has however denied these accusations and said that its reason for using a non-profit company is to increase its level of competitiveness. To prove that it is not unethical, IKEAagreed to publicize its financial information(Render 2012).In 2013, there was yet another scandal that involved the quality of IKEA’s products.There were accusations that IKEA was selling meatballs that were made from horse meat. TheCzech Republic authorities confirmed that they had tested the meatballs and they tested positivefor horse DNA. IKEA investigated the issue, and sure enough, it was true. The investigationrevealed that one Swedish supplier had, in fact, supplied the horse meat which was, in turn,traced back to slaughterhouses in Poland(Render 2012). The meatballs were removed from theshelves, and a police report was filed against the supplier. To reassure its customers and ensuresuch an occurrence does not happen again, IKEA provided DNA testing of the meatballstemporarily. It also informed the people that horse meat was not poisonous(Ben Brik et al.2011).These are just a few of the ethical challenges that IKEA has faced over the years. It is,however, important to note that IKEA responded to the claims with the immediate investigation
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