This paper analyses IKEA's ongoing struggle to prevent its suppliers from using child labor and discusses recommendations for positive change.
Written in 2008; 1,683 words; 1 sources; MLA; $ 54.95
Paper Summary:
This paper is an analysis of IKEA's struggle with suppliers to prevent child labor. The first child labor accusations directed at IKEA came in 1994, however, although IKEA has designed a code of conduct, internal controls, and third-party audits as a way to abolish child labor in its supply chain, this paper states that IKEA's suppliers are still employing child workers. Specifically, the paper discusses Venkat Industries' recent failed audit in which it violated occupational safety measures, mandated overtime, and was using child labor. Furthermore, the paper asserts that Kaisa Mattson, the head of compliance in south Asia, is faced with the decision as to whether or not to terminate Venkat Industries. Either decision carries new issues for IKEA involving its profitability, reputation, and whether it should continue its efforts to manage child labor, which this paper also goes on to discuss.
Outline:
Economic Factors
Non Economic Factors
Alternatives
Recommendations
From the Paper:
"IKEA also faces the dilemma that its code of conduct clearly states that child labor will not be tolerated. Other suppliers have been terminated for substantiated cases of child labor in the past, and being more lenient with Venkat shows that the IWAY Code of Conduct doesn't apply for every company. Terminating the working relationship with Venkat Industries gives a strong message to IKEA's other suppliers: if it will terminate a major supplier on grounds of child labor, no companies are safe.
"IKEA has an internal standard it must uphold to sustain its reputation with employees and suppliers. Job 9 and the IWAY have been clearly described to employees and suppliers. These are objectives the company with which needs to remain consistent. Still, the education of employees and the public is also needed to ensure they understand IKEA's strong hand in eliminating child labor. The IWAY has led IKEA towards its current involvement in the fight against child labor, which therefore puts IKEA in a position to terminate Venkat Industries."
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