Ikea’s Global Sourcing Challenge: Indian Rugs and Child Labor

1548 Words Dec 31st, 2012 7 Pages
IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor
Ethics in Business and Society
Professor Stephen Griffith
Otis West
Tuesday, November 6, 2012

IKEA is the world’s largest furniture store that offers well-designed, functional home furnishing products at low prices. The store offers home furnishings to meet the needs of everyone. The company vision is to create a better everyday life for the many people. Ikea is able to back their vision with their products and prices. In additional to Ikea offering great products, the company also believes in taking responsibility for people and the environment as a pre prerequisite for doing good business. IKEA works actively to reduce its impact on climate change and IKEA products must
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The International Labor Organization (ILO) is the international organization responsible for overseeing international labor standards. The ILO gives an equal voice to workers, employers and governments to ensure that the views of the social partners are closely reflected in labor standards and in shaping policies. According to ILO, there are more than 215 million child workers in the world today, many of them in hazardous environments doing back-breaking work. Millions are forced into slavery or exploited in drug trafficking and prostitution. Most of these children do not attend school or receive the most basic nutrition or medical care that all children deserve (ILO.com, 2012). For a company like IKEA who has operations worldwide, both set of laws affect their business if their suppliers go against the Fair Labor Standards Act or laws implemented by the International Labor Organization. In the case this week one of IKEAs suppliers are using child labor to produce Indian rugs that IKEA sells. Although IKEA is not directly employing these children, the company is employing a third party who is hiring children to produce products for them. This gives consumers a negative perception of the company in a way that says that the company supports child labor when indeed they do not but their suppliers do and therefore, IKEA must take action. A reputation like this could affect IKEA sales tremendously. As part of the company’s code of conduct it states that