BUS545 APU IKEAs Indian Rugs and Child Labor Case Presentation

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BUS545

Azusa Pacific University

Description

Capstone

Read Case 8-2 "IKEA's Global Sourcing Challenge: Indian Rugs and Child Labor".

*Using concepts, theories, and terms from the corresponding Chapter discuss the following, in a more expanded depth than the previous 7 weeks:

1. The company background, the current situation and any competitive issues;

2. The potential choices and opportunities going forward.

3. Question: As a Christian business person, what role does Social Responsibility play in Globalization?

Your paper should include an executive summary, 2000-2750 words (7-8 pages), a recommended course of action, and a bibliography of cited sources.

Your Presentation Slides should be consistently formatted, professional, with a balance of text and graphics, and number from 10-15 slides.

***Attach your Paper as a Word document herein***

***Attach your Presentation as a PowerPoint document herein***

This is the Critical Assignment for this course and must be passed at an acceptable rate in order to pass the course.

The student will read and analyze the Case Study this week. This is an expanded, and more comprehensive, version of the weekly Case Studies, covering the entire course. The student will complete a 6-8 page (2000-2750 word count) FINAL Case Study paper to include the following (#1-#3) and a presentation slide deck (#4):

1. Executive Summary: each student will summarize the salient points of the assigned FINAL Case Study as they pertain to topics and theories from all the chapters, as applicable.While the FINAL Case Study will again present much varied information the student is tasked with identifying a comprehensive array of the entire course’s topics. Additionally, each student is expected to provide, and use information found therein, two outside articles as they relate to the FINAL Case Study (proper bibliographic citation is required);

2. Application and Remedies: each student will analyze the FINAL Case Study with the goal of providing an application of that week’s topics and recommending a remedy to several issues (2-3) the student identifies within the FINAL Case Study.There will be several issues that could be addressed, but this assessment is limiting each student to selecting only 2-3 issues to apply to all the course’s topics;

3. Questions and Responses: each student will address the posted questions pertaining to the assigned Case Study.The student is expected to thoroughly and competently answer the questions showing sufficient knowledge of the FINAL Case Study and any of the course’s topics that apply to each question;

4. Presentation Slides: each student will prepare from 10-15 slides, as though in preparation for an in-class Presentation.The slides will detail the Case summary, current situation, issues, opportunities and recommendations consistent with the materials presented in the Paper.The slides should be consistently formatted, professional, with a balance of text and graphics.

* All work submitted for this course must be your own work, must have been developed specifically for this course, and may not have been submitted for evaluation or assessment in any other course. The Critical Assignment must be passed at an acceptable rate in order to pass the course.

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Explanation & Answer

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IKEA'S GLOBAL
SOURCING CHALLENGE
Student’s Name
Institution Affiliation

Company's Background


IKEA was formed in the year 1943 in Sweden.



The founder of the company was Ingvar Kamprad but its started as a
newsletter business.



IKEA have grown globally and own 341 stores in approximately 38 countries.



IKEA is ranked as a private limited company, which is controlled by Kamprad
family

Cont.’


Mission: Offering diverse low prices furniture in order to make it possible for
people to afford them regardless on which class



Vision: Enhancing the living standards of people.



Objective: Manufacturing a diverse and affordable products for customers
who cannot pay for expensive products. Also making available what the
customer is looking for at a low prices.

Current Situation



IKEA in an ethical situation involving Rangan Exports using child labor in
producing rugs for the company.



The supplier signed a contract forbidding the use of under aged children.



Barner, the company's manager for carpets, has to resolve the best course of
action for the company.

Child Labor Issue


Enhanced Social Economic Phenomenon



Cultural differences especially in the Asian culture



Poorly enforced child labor Laws



The company did not implement effective preventive measures. Also
the managers pre-emptive position to ensure children's lives are

globally protected was not strongly held in the company

Competitive Issues


Price Controls by the major players in the industry



Cheap Labour that results to reduction of prices. Cheap labor provides a

chance to cut down the cost thus allowing IKEA to set the prices of furniture
lower for its customers than other competitors thus maintaining a competitive
advantage.

Potential Choices



The first option is terminating the contract with the supplier due to the
breach in contract.



The other possible option is giving the supplier a warning, still maintaining

business relations with a stipulation that the supplier stops using children in
the production of rugs

Going Forward


Alternative course of action

1.

The company embrace policies provided by International Labor Organization

2.

Enforce the no child labor clause to all suppliers

3.

The company should monitor children labor practices with the contracted
suppliers.

4.

Appoint a quality assurance company and programs to carry out unplanned audits
on the use of under aged children at suppliers' factories

Role of Social Responsibility in
Globalization


Globalization: Set of social practices, which create, stretches, intensifies, and
multiplies international social interdependencies while still promoting a
emerging responsiveness among people of developing connections amongst
local and international.



CSR: Refers to the focus or the concept that businesses have as a duty to give
back to society while still maintaining the financial-economic interests to the
stakeholders.

Conti..


For Companies to gain trust from its customers and other stakeholders, they have
to undertake social responsibility such as integrating the ethnic minorities in the
society to the workplace.



Several companies use CSR as an approach to help them gain community backing
for their global markets presence thus supplementing their competition over other
competitors.



CSR plays an important role in globalization since it is an essential public relations
tool for international organizations to convince consumers that it is okay to buy
the company’s goods and services.

Recommended course of action


Marianne Ba...


Anonymous
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