Case Study : Ikea Case Study

1479 Words6 Pages
Mike Borrelli April 31st, 2015 Global Strategic Planning Dr. Neiva Ethical Analysis Essay – IKEA Case Study IKEA, founded in 1943 by Swedish Ingvar Kamprad, is a global leader in the furniture industry. Starting as a mail-order company when Kamprad was 17 years old, the name IKEA comes from his initials along with his family farm (Elmtaryd) and his family’s parish (Agunnaryd). From this start-up that sold mostly small items like pens and binders, Kamprad added furniture to his mail-order catalog thus removing the smaller items from it. With the success of the addition of furniture to his catalog, Kamprad was able to open his first display store in Almhult village, seven hours from Stockholm, which also decreased product returns. From the…show more content…
IKEA began to face ethical dilemmas when it was publicly realized that some of the company’s products were not meeting environmental laws in the 1980s. By the mid-1990s, IKEA was producing 11,200 products from 2,300 suppliers in 70 different countries with 24 trade service offices in 19 countries. These offices primarily monitored production, tested new ideas for products, checked quality and set prices. With such an international production base, IKEA faced an even larger challenge when child labor accusations surfaced. Through both of these situations, the morals and values of IKEA were tested on an international, public stage. As Danish authorities passed an environmental law in the early 1980s to prevent formaldehyde emissions, a chemical used as a binding glue in plywood and particleboard, which can cause watery eyes, headaches and burning sensations in the throat. As IKEA was expanding at such a large scale, it became a target for these environmental laws. Publicly announcing the results of one test proving that IKEA products emitted more formaldehyde than the law suggested resulted in IKEA’s Denmark sales dropping by 20%. In a proactive effort, IKEA went forward to assure that suppliers were conforming to this law. After some research, the company realized that it was not an issue to be dealt with at the supplier level but at the glue manufacturing level. IKEA assumed responsibility for their products and work directly with glue

More about Case Study : Ikea Case Study

Open Document