IKEA Child labour case

Essay by shailesh1401University, Master's October 2014

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The Swedish company IKEA designs and sells reasonably priced, 'ready to assemble' furniture. The company is on the way to becoming the world's largest furniture retailer (Normann and Ramirez, 1993). In 1994, IKEA were first confronted with the issue of child labour in Pakistan, following accusations from a Swedish television documentary that IKEA suppliers were using child labour in the production of carpets. One year later, in 1995, a German documentary producer notified the company that a documentary would be broadcasted on television exposing the use of child labourers in Rangan Exports, one of IKEA's carpet suppliers. At that moment, IKEA were dealing with the previous accusations and trying to manage the unethical issues occurring in its suppliers. The documentary producer notified IKEA about the documentary and invited IKEA to send a representative to the broadcast. IKEA were denied a preview of the documentary. An assessment is needed of how IKEA should best react to this situation.

We will begin by analyzing the documentary producer's request of IKEA to appear at the broadcast. Recommendations will then be provided regarding the relationship with Rangan Exports. A final strategy advising IKEA on the sourcing of carpets will be provided and a framework to avoid similar issues in the future will be advised.

Response to the broadcast invitation

Regarding the response to the invitation to have an IKEA representative appear on the broadcast, we recommend that Marianne Barner, IKEA Business Area Manager for carpets, should not accept the proposal.

There are three main factors that support this suggestion. Firstly, it is clear from the confrontational and aggressive approach that the video is targeting IKEA and its supplier specifically (Bartlett, 2006). The appearance of IKEA representative at the program is probably part of the media strategy to directly attack the company. Secondly,