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Case Title:

Corporate Social Responsibility – The Ikea Way

Publication Year : 2005

Authors: Ms. Mridu Verma

Industry: Retailing

Region:Sweden

Case Code: CSR0031P

Teaching Note: Not Available

Structured Assignment: Not Available

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Abstract:
Ikea has a reputation for low prices and fresh, innovative design. However, it is also keen to develop a reputation for environmental stewardship and sensitivity to social issues. Like most multinationals, Ikea has been plagued with allegations of indirectly using child labour. It sells carpets sourced from India, where suppliers employ children for weaving carpets. Over the years, Ikea has undertaken several initiatives to address the issue, but with limited success.

India's booming carpet belt, which accounts for 85 % of the country's carpet exports and is a supplier - directly or indirectly - for almost every global retail chain, faces a unique problem. Schools set up by foreign companies for former child workers have not had the desired results Unlike Rugmark, a scheme backed by dozens of international companies in which carpets are stamped with a label that "guarantees" that no child labour is involved, Ikea’s new project gives no such assurance. In 2000, Ikea launches a unique child labour initiative, which aims at giving financial independence to the poorer women in India's carpet belt. The project also involves educating their children, most of whom are carpet weavers. Though much appreciated by critics and industry observers alike, the long term viability of the project remains to be seen.

Pedagogical Objectives:

  • The case discusses Ikea’s unique anti-child labour initiative, which aims at giving financial independence to the poorer women in India's carpet belt. The project also involves educating their children, most of whom are carpet weavers. Though much appreciated by critics and industry observers alike, the long term viability of the project remains to be seen
  • The case also discusses the growing importance of corporate social responsibility and the impact of child labour on a company’s sales and image.

Keywords : Corporate Social Responsibility Case Study Child labour, Furniture industry, Corporate Social Responsibility, IWAY

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