IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor (A), Spanish Version Case Solution
This Case is about CROSS-CULTURAL MANAGEMENT, EMERGING MARKETS, ETHICS, GROWTH STRATEGY, HUMAN RESOURCE MANAGEMENT, OPERATIONS MANAGEMENT, PUBLIC RELATIONS, SOCIAL ENTERPRISE, SOCIAL RESPONSIBILITY
PUBLICATION DATE: May 03, 2006
Follows the history of IKEA’s answer to a TV report that child labor was being used by its Indian carpet providers. Details the growth of IKEA’s powerful culture and values that contain a dedication “to create a better everyday life for many individuals.” Subsequently, in 1994, a recently designated IKEA merchandise manager, Marianne Barner, is surprised by a Swedish television documentary on using child labor by Indian carpet providers, including some that provide the carpets of IKEA. She promptly enforces a strict policy that provides for contract cancellation if child labor is used by any IKEA provider. Subsequently Barner is faced by a German TV producer who guides her that he’s about to air an investigative plan recording using child labor in one of the leading providers of the firm. How should she respond to the disaster? Should the firm deal with the continuing problem of child labor in the supply chain?