IKEA has been the largest furniture retailer since 1990s. According to James (2012), the firm provides various well-designed furnishing products to its clients at very low prices compared to the competitors. As a result, the company has managed to maintain a wide client base because a majority of people can afford its products. In order to cover a wider market, the company decided to use the strategy of standardized mixed strategy (James, 2012). Through the strategy, the firm is able to manufacture its products at low prices and at the same time be able to spread its brand name globally. For instance, the former CEO of the company, Ander Dahlvig, once said that whether the company is in London, Russia, China or Manhattan, its clients buy similar products. This has enabled the company to differentiate itself from the other competitors since it has always maintained its culture. Nevertheless, the current paper addresses a few question based on a case analysis of IKEA Company.
Question 1: How The Company’s Values and Stakeholders’ Treatment Contribute to Its Culture
It is worth noting that the company practices a value-based culture. Accordingly, the mission of the company is to ensure that the life of everyone is better every day. This has contributed to its culture because everyone wants to be treated special. More so, one of the values allied to the company is ensuring that its products are cheap and affordable to all irrespective of the location(James, 2012). This makes the customers feel as part of the company. As a result, the company has been able to expand its market base over time.
Additionally, it is worth noting that the company enhances a strong commitment inregards to ethical behaviors and best business practices. It is also involved in different environmental initiatives like valuing of its employees and appraising them(Nicola, 2013). Most significantly, the company ensures that its suppliers sell products that are eco-friendly. To make its products, the company makes use of renewable materials. As a result, the company is able to recycle most of its products.
It is also worth mentioning that the company manufactures its products in a manner that is reasonable. The methodology and techniques used to make the products is supposed to have the least impact to the surrounding. The people living around the manufacturing plants are therefore, safe. The company also uses solar cells to power stores. This reduces the amount of energy used(James, 2012). The company is also involved in supporting the society. For instance, it saves children through INICEF
Question 2: Ethical issues allied to the company’s complex form of organization
The company has a flat structure. Since the form of organization is complex, the employees fail to get opportunities for guidance and supervision from their managers. This make is difficult to ascertain whether the workers adhere to ethical standards. More so, due to fewer or limited management layers, the opportunities for advancing are limited(Nicola, 2013).
In furtherance to this, the IKEA has the human right issue since the company uses children for labor as in the case of India. The company also employed a political prisoner as a worker. The company is also known for its violation of employees’ privacy.
Question 3: how the company’s reaction to the meat scandal depicts effective crisis management
The strategy used to manage the crisis was effective enough. The company took the issue serious and apologized to its customers for the mistake made. The company also acknowledged its mistakes by apologizing publicly (Nicola, 2013). It also ceased selling the contaminated meat with immediate effect by recalling the products. Additionally, the management made a press release to assure the public that horsemeat was not dangerous for human consumption. After that, the company implanted a DNA testing as part of reassuring customers that the meat was safe and dropped the supplier who had caused all those troubles.
James Angelos, “IKEA Rues Using Prison Labor,” The Wall Street Journal, November 19, 2012, B7. MeghaBahree, “Your Beautiful Indian Rug Was Probably Made By Child Labor,” Forbes, February 5, 204, http://www.forbes.com/sites/meghabahree/2014/02/05/your-beautiful-indian-rug-was-probably-made-by-childlabor/ (accessed June 5, 2014).
Nicola Clark, “Revelations that Ikea Spied on Its Employees Stir Outrage in France,” The New York Times, December 15, 2013, http://www.nytimes.com/2013/12/16/business/international/ikea-employee-spying-case-casts-spotlight-on-privacyissues-in-france.html?pagewanted=1&_r=0 (accessed May 16, 2014).