IKEA's Social Responsibility: A Review Based on ISO26000 Standard

BSC ACCOUNTING AND FINANCE
MODULE ACCOUNTANT IN
BUSINESS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Organisational governance..........................................................................................................1
Human right.................................................................................................................................3
The Environment.........................................................................................................................5
Community engagement..............................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Social responsibility is an ethical framework that emphasis on whether the individuals is
fully accountable toward its action, and undertake activities that are beneficial for the society.
Thus, as per the social responsibility, company needs to maintained balance between economic
growth, environment and welfare of the society. Moreover, in recent scenario, individuals living
in society are enforcing companies to take step toward social responsibility while operating its
business to sustain it for longer time frame. Companies that are highly committed and
determined to take steps toward social responsibilities can easily attract talented employees as
well as maximum customers within the firm. Thereby, it can be stated that CSR activities lead in
fostering positive working environment and productivity in the organisation (Moratis, 2018). In
another words, company through CSR activities is able to developed and retained strong brand
image in mind and hearts of customers and investors.
This report is about IKEA that has been established on 28 July, 1943 having 476 stores
among which one of them is online. It designs and sells kitchen appliances, ready to assemble
furniture, home accessories and other goods and services to customers. Furthermore, this report
will be presented to the investors that are interested to know or evaluate whether the company is
socially responsible or not. So, in order to know whether IKEA is social responsible, ISO26000
corporate social responsibility framework has been applied. Therefore, the report will solely
focus on the way IKEA contribute in growth and development of society so that investors can
take right decision to invest in socially responsible investment.
MAIN BODY
Organisational governance
ABOUT IKEA
IKEA is an international retailer that offers home products such as furniture packs, kitchen
accessories and bathroom in different parts of the world so that wants of customers can be
fulfilled in effective manner. Ingvar Kamprad is the individuals that have started IKEA in 1943,
17 years ago when he was an child. Company is well known for selling designer furniture at
affordable prices so that more and more customers are motivated to be part of organisation.
Likewise, there are around 155,000 employees that are working together so that company can
earn revenue of €32.7 billion. IKEA has emphasis on effective governance with a motivate that
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all task as well as activities can be completed in limited time (Zhao, 2018). Company is most
famous among its customers in terms of selling well designed products at low price thus having
its largest market in Germany, France and United States. In addition to it, IKEA is well known
for taking eco-friendly initiatives and having a friendly and supportive environment where
employees can easily work.
ORGANISATION GOVERNANCE
It has hierarchy organisation structure that helps in completing all task in sequential
manner so that the end objectives are fulfilled. Such as the information flow from top to bottom
in the hierarchy order i.e, the subordinate must have to follow order to superior while
completing its task. Therefore, each superior monitor and control the action and performance of
employees so that firm can achieve and retained competitive advantages in external
environment. Company have global operation, so it has maintained the standard of policies,
procedure and process that has lead in delivery of qualitative services to customers in limited
time frame (Talib, Josaiman and Faisal, 2020). IKEA has emphasis on creating better life for all
the stakeholders of the company such as its employees, customers, community and suppliers so
that they can feel happy and satisfied. Thereby, the firm in order to be socially responsible has
implemented 10 core values, code of conduct related to suppliers and a strong vision statement.
Such as leaders by example, constant desire for renewal, cost-consciousness, striving to meet
reality, humbleness and willpower, daring to be different, togetherness and enthusiasm. Along
with it, there are more values that has been abided by IKEA like, constantly being “on the way,
accept and delegate responsibility and simplicity.
IKEA has also tried to avoid conflict between employees so that they are motivated to
work together as team rather than individuals for achievements of common objectives. It has
also ensured fair and honest relationship with its partners through honesty, transparently,
respectfully sharing all information of the company to them. So that they can take right decision
to be part of the firm or invest in particular organization (Chakroun and et.al., 2019).
RISK MANAGEMENT
IKEA to retained its operation in global environment has taken steps to identify risk
associated with the business and the manner in which they can be mitigated for its betterment.
Company have tried to manage risk through continuously monitoring changes that are happening
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