Corporate Strategy, CSR, and Sustainable Performance at IKEA

This report analyzes the corporate strategy and governance of IKEA, focusing on the influence of Corporate Social Responsibility (CSR) on sustainable business performance. The introduction highlights the importance of corporate strategy and governance in managing sustainable business, emphasizing the role of CSR in balancing stakeholder interests. The literature review explores the concept of CSR, its relationship with corporate governance, and the policies and practices that can foster sustainable growth. The report then outlines the research methodology, including the research design, philosophy, data collection methods, and ethical considerations. The findings are presented in the data analysis section, followed by recommendations for IKEA to improve its CSR practices and achieve sustainable growth. The report also examines the significance of innovation, employee satisfaction, and environmental sustainability within IKEA's corporate strategy. The study aims to develop an understanding of CSR, assess the relationship between CSR and corporate governance at IKEA, and suggest effective CSR policies and practices for managing sustainable growth.

Corporate Strategy
and
Governance
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TABLE OF CONTENTS
CHAPTER 1- INTRODUCTION....................................................................................................3
Background ............................................................................................................................3
Aim and Objectives................................................................................................................4
Problem Statement .................................................................................................................5
CHAPTER 2- LITERATURE REVIEW.........................................................................................5
Introduction............................................................................................................................5
Concept of Corporate social responsibility............................................................................5
Relationship between CSR and corporate governance .........................................................7
Polices and practices of CSR and ethics can be effective for managing sustainable growth.8
CHAPTER 3- RESEARCH METHODOLOGY...........................................................................10
Research Design...................................................................................................................10
Research Philosophy............................................................................................................10
Data Collection.....................................................................................................................11
Data Analysis........................................................................................................................11
Sampling...............................................................................................................................12
Access and Ethics.................................................................................................................12
CHAPTER 4- DATA ANALYSIS ...............................................................................................12
CHAPTER 5-RECOMMENDATION...........................................................................................20
Action plan.....................................................................................................................................21
CONCLUSION..............................................................................................................................22
REFERENCES..............................................................................................................................24
APPENDIX....................................................................................................................................26
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CHAPTER 1- INTRODUCTION
Corporate strategy is the direction an organisation takes with the objectives of achieving
business success in the long term. Recent approaches have focused on the need for companies in
order to adapt to and anticipate changes in the business environment. Growth, stability and
renewal are the main three types of corporate strategies (McCahery, Sautner and Starks, 2016).
Corporate strategy is very important for each and every company as it determines the scope of a
company's activities and the manner in which a company's business processes support the goals
of company. Corporate strategy and governance play a crucial role in managing sustainable
business performance as it offers different ways of serving stakeholder satisfaction.
The system of rules, processes and practices by which an organisation is directed as well
as controlled is called as corporate governance. It significantly involves balancing the
stakeholders of company such as shareholders, employees management, suppliers, government,
financier and the society. Corporate governance is very important for the businesses as it
provides the proper guidelines or plan as how the organisation can be directed as well as
controlled like that it can fulfil its gaols and objectives in a manner that adds to the value of the
organisation which is also very beneficial for the all the stakeholders in long term.
Corporate Social Responsibility is the based on the principles which is conducting the
business with all integrity as well as fairness. They also being crystalline and transparent related
to all the transactions or written records and making all the essential and required disclosure as
well as decision, complying with all the law of the land, responsibleness and accountability
towards the stakeholder as well as commitment to conduct the business in an ethical manner.
Basically, there is level of self-assurance that is associated with the organisation that better-
known to have bang-up corporate governance (Watt and Schwartz, 2018). It is also well known
to be one of the criteria which foreign institutional investors are progressively depended on when
planning on which organisation to invest or commit in. In addition to this, corporate social
responsibility also leads to have an optimistic impact on company's price of shares.
Background
This present dissertation is context to IKEA company which is a Swedish founded
multinational retail group that sells as well as design ready to assemble furnitures, home
accessories, kitchen appliances and other useful goods. IKEA is one of the largest furniture
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company from 2008. It is a private limited company founded in 1943 by Ingvar Kamprad. The
headquarters of the company is located in Leiden, Netherlands. In 2015, the founder of the
company Ingvar kamprad was listed as one of the ten richest people in the world. The present
revenue of the organisation is $40.906 billion. There are 194,000 employees are working in the
organisation. The focus of firm is one managing innovation in wood according to customer
expectation and requirements. It fact that company can not run without contribution of
stakeholders.
The business aim at developing new fresh and new furniture designs to transform lives of
buyers. The vision of the company is to create a life better for many people by offering
innovative and well-designed furniture and home appliances at low price which become easy for
all people can afford it (Miller, and Pisani, 2018). The mission of the company is to maximise
the level of stakeholders and communicate the objectives and goals of company to them. IKEA
also inspires collaboration and teamwork within organisation which is one of the best practices
that leads the company towards the success. The corporate social responsibility of the company
is also very effective as they are very concern about the environment as well as there
expectations and needs of stakeholders.
Aim and Objectives
Aim
“To ascertain influence of corporate social responsibility on sustainable business
performance: A case study on Ikea”.
Objectives
 To develop understanding over corporate social responsibility
 To assess the relationship between CSR and corporate governance of Ikea
 To suggest effective polices and practices of CSR and ethics for managing sustainable
growth of Ikea.
Research Questions
1. Explain the concept of corporate social responsibility?
2. What is the relationship between CSR and corporate governance of Ikea?
3. What polices and practices of CSR and ethics can be effective for managing sustainable
growth of Ikea?
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Problem Statement
IKEA is one the leading retail furniture company in the world. It is a company that sells
as well as design ready to assemble furnitures, home accessories, kitchen appliances and other
useful good. Innovation is the main emphasize of the organisation in the design and style of
furniture as per the needs and expectation of customers and stakeholders. The aim of the
company is to develop a new and fresh furniture in order to change the living standard of the
customers (Grant and et.al., 2014). In accordance with the report of the company IKEA, it is
identified that all the activities of management of organisation is fair and legal but organisation is
lacking in the rendering the employee's satisfaction and motivation. Employees are not happy
with the management. Company is putting extra measures on the providing high level of
satisfaction of the customers such innovation, environment sustainability which in result
company is not focusing on the needs and expectation of employees. Thus, implementing the
practices and policies of Corporate Social Responsibility can assist the organisation in managing
responsible practices with regards to the workers which is directly concerned with the
improvement in the productivity of the business.
CHAPTER 2- LITERATURE REVIEW
Introduction
Literature review is a summary of previous research on any topic. It is a review of article
regarding the current knowledge and it also includes theoretical and methodological finding on
the topic on which it is being written. An area is determined and selected and report is prepared
on the same. The Best articles and journals are used to make a review on the topic on which
research is being made. All the key findings and important things are highlighted in Literature
review so that major highlights can be find out. Thus, Literature review makes it easy to
understand the topic in detail and find out the key areas of the entire research so that further
research can be conducted easily and effectively.
Concept of Corporate social responsibility
According to Shamir, (2017) Corporate social responsibility is that part of organisation
which influence its decision making and behaviour. It is that concept which has arise in 20th
century. This concept has come because at that tine growing companies were thinking of the
corporate effects on environment. Corporate social responsibility is a concept which is the
obligation of every organisation along with the stakeholders to make people understand that it is
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our duty to keep environment clean and pollution free. If an organisation will show Corporate
social responsibility than it will also earn profits by the same.
As per Schwartz, (2017) As customers gets highly attracted towards those organisations
which take care of environment and show their responsibility towards the same. It is highly
concerned topic to taken care of and is also comes under the legal responsibility of the company
to behave as per the law and rules and regulation of social responsibility. Every business should
operate as per the ethics and is accountable for not complying with the given social
responsibility. The business has changed its working patterns and started operating outside the
city areas so that it can harm less to people by its pollution. The organisation has to make it
understand that by complying with the social responsiveness every organisation can react and
respond to social pressures which they need to handle on regular basis.
Author stated that, home appliances companies who manufacturers different kind of
furnitures are very much involved in cutting the tress for the purpose of woods. This has a great
impact on environment as the tress are really precious for entire global system. It is the social
responsibility of such retail outlets to take care of the environment which they need to
understand and follow all the laws and regulation for maintaining the same. It is the duty of the
organisation to adopt all this perception which affect the environment in some or the other way.
Author has also said that there are certain examination made on the past so that relationship
between companies and social responsibility can be made. It has also been determined that it cost
additional for organisation in maintaining the corporate social responsibility because of the
higher investment that are required to done towards the CSR. One of the most important research
has said that there are certain advantages of Corporate social responsibility to both the society
and to the company.
As per Yakovleva, (2017) it is a concept which is beyond the charity and it needs organisation to
think beyond the legal responsibilities. All the companies are contributing large towards the
society by delivering best services to then. But of the company will also give their best towards
the society by fulfilling their obligations. It will help in expanding its operations and crossing all
the boundaries. Other than this, corporate social responsibility is a way by which higher growth
and satisfaction of consumers can be achieved. As every company is affecting society at large
and thus it is the responsibility of the organisation as well to keep the environment clean and
follow all the other rules of social responsibility.
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As per Cramer (2017), today corporate social responsibility is not only about charity and
donations to people. But it goes far where the company needs to make all the policies for
carrying it and take care of entire and society as a whole.
Relationship between CSR and corporate governance
As per the Schwartz (2017), both the concept are such that they one gets confused after
knowing it. But it is not the same both the concept are different from each other but are also
highly interrelated. Corporate social responsibility is entirely based on its own or self principles
which are connected by internal and external management of the organisation. Whereas,
corporate governance is that where it is being ensured that company is running as per its
responsible manner and it is being ensured that all the aims of economic and social related is
fulfilled. Corporate governance says that company should conduct all its framework in ethical
and legal manner. On the other hand, Corporate social responsibility is about giving maximum
benefits to the environment and deliver benefits to the stakeholders as well. But even both
concepts are different but they are somewhere connected with each other.
As per the Lins, Servaes and Tamayo, (2017) both are highly connected with market
forces and their objectives are also non current. Corporate governance has higher risk of
complying as it says to comply management with all the rules and regulations. But Corporate
social responsibility is a major concern of company due to the pressure of society and it is their
responsibility to understand the same. In addition to this, Corporate social responsibility is a
broader concept in which it is being expected form the companies to more and more always than
the law requires. But corporate governance has a little narrow boundaries as it has major focus
on the interest of shareholders. In today's world every establishment requires showing high
responsibilities towards the society as well as among all the stakeholders of the company. In
addition to this, It is the reason that both the concepts are being the priority of the organisation.
There are majorly two models of Corporate governance in which the both the shareholders and
stakeholders are being the major concentration of company. Company can not run without
contribution of stakeholders. So it comes under the obligation of organisation to show some
concern and responsibility towards the same.
According to the Sidhoum and Serra, (2018) it is very hard to make a difference between
CSR and Corporate Governance. As both are very important for every company and it is
difficult to separate them as both are related to each other. The reason behind the high relation
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between them is due to the fact that both are make and followed to make information more
transparent. After reading certain agency theories it has been determined that both the concept
enhances the goodwill and reputation of company. It highly concentrates on the stakeholders and
thus, it makes a strong relationship with them. So in a way it can be said that strong relationship
in Corporate social responsibility will help in effective mechanism for corporate governance.
Corporate social responsibility is that part of organisation which influence its decision making
and behaviour. This concept has come because at that tine growing companies were thinking of
the corporate effects on environment.
Based on the saying of Shamir, (2017) both the Corporate social responsibility and
corporate governance are related also as they create a relationship between managers and
stakeholders. In addition to this, Like expenditure of company gets increased due to the corporate
social responsibilities they need to follow. It will help in addressing that value of firm will be
enhanced and that due to the both the concept will be followed significantly in responsible
manner. On the other hand Saeidi, (2018) says that relationship is positive for people as it gives
high exposure to the companies by fulfilling this both governance and responsibility.
Polices and practices of CSR and ethics can be effective for managing sustainable growth
As per Epstein, (2018) there are certain policies which are being formed by the
companies in order to carry out the effective process of Corporate social responsibility. All those
principles are allowed and applicable on all the activities of business and thus they carry out the
operation in effective manner. These principles are fulfilled so that overall economic
development can be done in the nation by the same. Organisation follows certain principle to
fulfil their Corporate social responsibility so that organisation can be considered as a responsible
social citizen. These will also lead to develop a competition among the different companies.
According to the Visser and Tolhurst, (2017) the major principle followed by the
organisation in retail sector is by promoting sustainable supply chain management. This can be
done by effectively exercising the corporate governance and thus a proper working can be
maintained by the organisation. Preserving public welfare is also a major focus of the
organisation while making or creating policies for the Corporate social responsibility. Other than
this, says that organisation can develop sustainable development by reviewing the same on
timely basis and adjustments in the same can be made by way of implementation of new policies
and procedures.
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As per Shamir, (2017) Policies and practices of utilising all the resources in the most
effective manner is the most important process of corporate social responsibilities. It can save
resources for future generation and helps in developing a brand image of the organisation that it
follows practices of saving resources. It can be done by following the principle of flight safety
and it can help in enhancing the sustainability of new and natural resources. Other than this, As
per Watt and Schwartz, (2018) there are separate departments in the company for making
policies regarding corporate social responsibilities of the company. For the same they make
various research and come to conclude certain policies for the organisation. In addition to this,
retail sector should effectively manage it's supply chain by using the transportation for delivering
products. It will save fuel and this energy is non renewable and thus everyone should take care of
it for the purpose of future generation.
According to the Davies, (2016) there are certain policies which are formed which can give
benefits to the company and society as well. This can be done by way of following the
sustainable growth which should be made by socially and financially sustainable. This will also
result in improving the lifestyle of employees of the company. Like in retail sector organisation
cut many trees for manufacture and making new furniture. Organisation on this forestry sector
have a different societal expectations. It is due to the reason that every organisation has different
Corporate social responsibility and the same are required to be followed by the companies. All
have their own routes of achieving Corporate social responsibility. There are certain social
responsibilities of not employing child labour as it is against law and society. All those
principles like child labour are allowed and applied on all the activities of business and thus they
help in moving out the operation in effective manner.
As per the Saeidi, (2018) These principles are followed and carried effectively so that overall
economical improvement can be done in the country by the same. Organisation follows certain
principle to fulfil their Corporate social responsibility so that organisation can be considered as a
responsible social citizen. This all are applicable on every organisation and thus, the same can be
done by maintaining the policy of customer satisfaction. In today's world consumer not only get
satisfied by quality and prices but along with this, the major reason of its satisfaction is by way
of fulfilling following the principle of corporate social responsibility.
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CHAPTER 3- RESEARCH METHODOLOGY
Research is a logical and systematic investigation for new as well as useful information
on a specific topic. Research methodology is an important part of the dissertation. With the help
of research methodologies research become reliable and valid and it also aids in answering the
research question (Quinlan and et.al., 2019). Research methodology is the process which is used
to collect the data and information for the purpose of making the business decisions.
Research Design
It is the most important part of the research methodology as it gives proper structure of
the research in a meaningful manner. It refers to the overall strategy which is used by the
researcher in order to select and integrate the several elements of the study in a logical and
coherent way. With the help of research design, researcher can easily as well as effectively
answer and address the research questions. Research design also help in managing the research
analysis in a systematic manner (Takhar-Lail and Ghorbani, 2015). There are different types of
research design which are descriptive, semi experimental, experimental, qualitative, quantitative,
etc. In this present study, researcher has used qualitative research design where all the problems
and issues of the research becomes the research questions which is based on the superior
experience of the research. In addition to this, qualitative research design is also based on the
social constructivism perspective. The size of the sample is also small and the data is collected
by the researcher through interview, observation. Interpretation of data is based on the
aggregation of collected data and perspectives of scholar. Thus, with the help of qualitative
research design, researcher can ascertain influence of corporate social responsibility on
sustainable business performance of IKEA.
Research Philosophy
It is also an important part of the research. It is a belief about the way in which data about
a phenomenon must be collected, analysed and used. It is very broad topic because all the
necessary details of the research will be discussed in research philosophies. Moreover, It is a set
of phenomenon with the help of which researcher aim at understanding perspective of
participants to derive valid outcomes. There are mainly two types of research philosophies which
are positivism and interpretivism. In addition to this, philosophy is obsessed with the views about
how the world works (Vannini, 2015). Researcher in the present research used interpretivism
research philosophy. It is also called as interpretivist as it involves scholar to present the factors
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of the study, hence, interpretivism interprets interest of human in the study. With the help of this
research design, scholar can understand the feeling, experience and perception of the participants
which are involved in the survey. In addition to this, researcher can easily and effectively
ascertain influence of corporate social responsibility on sustainable business performance of
IKEA.
Data Collection
Data collection is very essential part of the research without this the research is
incomplete and invalid. It is the systematic process of collecting the information from the
relevant sources in order to find the answer to the all the problems of the research. Data
collection is the vital part of the study. Data in the research can be collected by using tow
methods which are primary and secondary methods. Both the methods are very useful in
addressing the question of the research. Primary collection of data means the data or information
is collected by the efforts of the researcher or by own-self such as interview, questionnaire,
observation, survey etc. Whereas data collected form secondary methods is when information
about the research is gathers form other sources such as books, journals, articles etc. The data
which is gathers from the primary sources are more reliable and valid and it is also fresh data as
it is not used by anyone (John Walker, 2014). On the other hand, data which is collected from
secondary sources are less reliable and it is not fresh data as it is second hand data. In this present
research, research has collected the data from primary sources. Scholar has prepared as
questionnaire and easily and effectively ascertain influence of corporate social responsibility on
sustainable business performance of IKEA.
Data Analysis
This is also one of the most important part of the research study. It is fact that, data has
no meaning if it is not analysed. Data analysis is the process which logically applied to a statical
and logical techtics to describe and measure the information. Scholar also get helps to make
decisions through data analysis (Horvath, Lodge and Hattie, 2016). The meaning of the data is
only be given after it is analysis and measured. In this present research, researcher has used
qualitative method in which thematic analysis has done. Thus, thematic analysis will help
researcher to ascertain influence of corporate social responsibility on sustainable business
performance of IKEA effectively and easily.
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Sampling
Sampling is another one of the most important part of the research methodology.
Sampling is used by the researcher when he/she has to select the small part of the population. It
is fact that, population is very large and this is not possible for the research to study the entire
population. Thus, sampling is a small sub set of the large number of the group. The reliability of
the research is depended on the outcomes of the research study. There are two types of sampling
which are portability and non-probability (Lambert, 2014). In this present report, researcher has
used to non-probability sampling in which simple random sampling has been used. Scholar has
make use of questionnaire which will be used when conducting interview of 20 employees of
IKEA.
Access and Ethics
It is very important that researcher should know the ethics before conducting the
research. It is vital part of the study in order to maintain the reliability and validity of the
research. Adhering to ethics is the first concern of researcher where the individual focus on
seeking consent of contestant of primary data collection for there involvement in data collection
process. The researcher in this present research has seek consent of contestant on paper where
terms and conditions of research will be mentioned in order to protect interest of participants.
Apart from this, secondary information will obtain by taking approval and permission from
responsible authorities (Witt and Lill, 2018).
CHAPTER 4- DATA ANALYSIS
QUESTIONNAIRE
Name of the organisation: IKEA Company
Name of Participants:
Age:
Gender:
1.How long you are working in the company?
 1 to 2 years
 2-6 years
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