Ikea's Global Sourcing Challenge

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IKEA’s Global Sourcing Challenge IKEA, one of the world’s largest specialized furniture retailers, has been presented with a large issue within their operations. In 1995, a German TV station released an investigative report which exposed one of the suppliers for IKEA rugs for exploiting child labor in their factory. A recent addendum was signed by all IKEA suppliers which forbid the use of child labor (Bartlett & Sjoman, p. 1, 2006), so this incident has called the company to make an action based on the accusations at hand. The amount of turnover that is accounted from Indian rugs for IKEA is small on the full scale, and made the company question whether or not the product line was worth the profit potential. The following will be an…show more content…
Rugmark & Child Labor Elimination The use of “Rugmark”, a label that is put on carpets to certify that the product was produced without child labor, is a required action for the suppliers that work with IKEA. Marianna Barner, IKEA’s business area manager for the carpet and tableware/cook-shop products, understood that this is an important “black and white” clause for the company to make as consumer awareness rises (Bartlett & Sjoman, p. 7, 2006). Rugmark makes the goal of their mission to change the market dynamic so that there is no longer a demand for child labor, by educating the marketplace (consumers, designers, architects, importers, retailers) about what they can do to eliminate this social issue (PBS, 2016). The major impact that Rugmark brought to the problem of child labor is providing a strong legal framework which helps protect the children from being put to labor. The complexity of the child labor issue, in relation to IKEA, is that Barner felt the need that the company should do something that would make a difference in the lives of the children affected. This vision was not held universally within IKEA, and brings forth the question of how the company should engage with the German TV station that is broadcasting IKEA’s involvement with suppliers using child labor (Bartlett & Sjoman, p. 7, 2006). Conclusion &
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