The purpose of this study is to investigate how IKEA succeeds in a business world by using Corporation social responsibility (CSR) as a long term strategy.

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  Social Responsibility of Ikea

Executive Summary

The purpose of this study is to investigate how IKEA succeeds in a business world by using Corporation social responsibility (CSR) as a long term strategy. This research considers CSR strategy in terms of how this company can run business by using innovative technologies to increase the products and reduce costs and no damage to the environment.

This research uses secondary research methods and primary method to get the information about the CSR of IKEA. And use Internet find out the bases information about IKEA, and look for similar case in books, in order to know more accurate information about its CSR, this research will interview the employee of IKEA. And this study will focus on secondary data base on the information from the company such as announce report.

In this study will use social analysis, environment analysis and stakeholders analysis explain how IKEA using CSR to run their business. The social analysis will involve three aspects, charity activities, sponsorship and community. Environment analysis including protect climate, water and decrease waste. Stakeholders’ analysis consists of benefits of customer, suppliers and employees.


Contents


Introduction

From 1940 to 1950, a root of furniture dealers, Ingvar Kamprad made IKEA furniture retail idiosyncratic. Because he brought in a new idea that self-assembly, advertising, exploration by use a catalogue and furniture. (IKEA, 2011)

Nowadays, CSR is an important part of many business organizations. It is concerned with how a company tries to be beneficial to all its stakeholder groups. Many companies today run businesses with CSR especially big companies. They try to involve in activities that will keep both the business and social environment sound. The effects of CSR cannot be overemphasized. They range from companies running business well to environmental improvements. CSR can also go a long way to improve on product quality and service to customers. And wonder how companies run businesses with CSR in an adverse competitive business world. Today, competitors of some businesses already practicing CSR and beginning to embrace this new philosophy of business.

In this study will present how IKEA has succeeded in a world of business with CSR, such as the social, environment and stakeholders aspects. And this research will investigate why IKEA engages in CSR and what definition this company gives to CSR, and what facts can reflect IKEA’s CSR. There has been so much news out there about IKEA, many consumers and employees satisfied with their good sense of CSR.


Statement of the facts

1. Social

1.1 Charity—social initiative

1.1.1 Mission of IKEA Social Initiative

“IKEA Social Initiative was formed in 2005 and is operated by INGKA Foundation to address the company’s commitment to investments in social programmes on a global level. What once started as IKEA’s fight against child labour in the supply chain has developed into a broad commitment “to create a better everyday life for the many” children. The overall mission is to improve children’s rights and opportunities.” (IKEA, 2011)

1.1.2 Task of IKEA Social Initiative

The task of IKEA Social Initiative is to handle all global donations for social projects. The current projects are concentrated in South Asia. In these countries the needs of children and their families are great. They are also countries where IKEA has a long business experience. IKEA Social Initiative strives to achieve a lasting change of the situation in areas where IKEA is doing and will continue to do business.

“The interventions can be divided into three main areas:

  • Holistic and long-term projects addressing children’s needs to achieve lasting change. In addition, special emphasis is put on the empowerment of women, as they are an important catalyst for change in the community.
  • Emergency aid – in-kind donations at first, as part of immediate relief actions, and, at a later stage, financial aid for long-term reconstruction projects.
  • In-kind donations, originating from meeting special requests from co-operating organizations or meeting IKEA needs, e.g. overstock.” (Mike ,2011)

1.1.3 Partners of IKEA Social Initiative----UNICEF and Save the Children

IKEA Social Initiative has chosen UNICEF (United Nations International Children’s Emergency Fund) and Save the Children as its main partners. Both organizations are specialized in helping children and promoting their rights. The co-operation with these organizations builds on a partnership committed to long term projects designed to create lasting change in the communities.

“During 2000-2007, IKEA Social Initiative supported a UNICEF project to prevent and eliminate child labor in the “carpet belt” in Uttar Pradesh, India, by addressing root causes such as debt, poverty and lack of access to education. During that period 500 villages with over one million inhabitants were included in the project. More than 80,000 children got an education they would otherwise have been denied. IKEA Social Initiative and UNICEF plan to expand the project to cover more than 6,000 villages by 2012.” (IKEA, 2011)

1.2 Community

The core strategy of IKEA is to enable the customers and communities to be their advertisers rather than the brilliant advertisements. This does not only need to satisfy their customers’ needs, but also establish a perfect image in front of them. So IKEA believes that business can and should have a positive impact on the communities they serve.

1.2.1 Preserve women’s rights

Women are key to improving the well-being of children and achieving lasting change in society. This is why all the programs that IKEA Foundation supports include community-based actions that empower women to create a better future for themselves, their children and their communities.

In 2009, IKEA Foundation partnered with the United Nations Development Program (UNDP) to empower 50,000 women in 500 villages of Uttar Pradesh, India to become leaders, role models, entrepreneurs and agents of change. This carries forward work initiated under a Child Rights Project implemented by UNICEF in partnership with IKEA Foundation in the same villages. IKEA helps them to:

  • Gain strength and make decisions
  • Leaning about health and diet
  • Leaning about business skills
  • Better access to money

1.2.2 Participate local activities

IKEA participates into global, national and local communities’ projects and provide financial aid to these projects. The efforts of IKEA to be a good neighbor in the local communities are reflected in a wide range of activities initiated by IKEA stores, distribution centers and offices.

  • Canada: All Canadian IKEA stores and their 4,500 co-workers help “Make-A-Wishh@ Canada” grant room makeover wishes to children living with life-threatening medical conditions.
  • Germany: “In Germany, “Operation Daywork” offers students aged 15 and over a day off school to support children around the world. Their wages are donated towards building schools in countries such as Rwanda, Sudan and Angola. In FY10, IKEA provided 330 students with work as part of operation daywork and donated 20,000 euro.” (IKEA, 2011)
  • Supporting SOW A SEED in Borneo: “IKEA supports SOW A SEED, a project aiming to reforest and maintain 18,500 hectares of lowland forest in Sabah in Malaysian Borneo, and to protect the area from logging for a period of 50 years. This project has also contributed to the building of homes, meeting places for social events, and field accommodations for more than 150 local workers and their families.” (IKEA, 2011)
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2. Environment Stewardship

2.1 Forestry

According to IKEA Sustainability Report 2010, wood has always been one of the most important raw materials for them. Their IWAY Forestry requirements demand the legality and traceability of the timber used in their products, which means that the IKEA standard is applied throughout the supply chain. In addition to these minimum requirements, their certified wood volumes increased substantially in FY10. The decision has also been taken to apply IWAY Forestry requirements to suppliers of board materials.  

2.1.1 Substantial increase of certified wood volumes

The share of certified solid wood ...

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