In May 1995, Marianne Barner faced a tough decision. After just two years with I

Question

In May 1995, Marianne Barner faced a tough decision. After just two years with IKEA, the world's largest furniture retailer, and less than a year into her job as business area manager for carpets, she was faced with the decision of cutting off one of the company's major suppliers of Indian rugs. While such a move would disrupt supply and affect sales, she found the rearons to do so quite compelling A German TV station had just broadcast an investigative report namirg the supplier as one that used child labor in the production of rugs made for IKEA. What frustrated Barner was that, like all other IKEA suppliers, this large, well-regarded company had recently signed an addendum to its supply contract explicitly forbidding the use of child labor on pain of termination Even more difficult than this short-term decision was the long-term action Barner knew IK EA must take on this issue. On one hand, she was being urged to sign up to an industry-wide response to growing concerns about the use of child labor in the Indian carpet industry. A recently formed partnership of manufacturers, importers, retailers, and Indian nongovernmental organizations (NGOs) was proposing to issue and monitor the use of "Rugmark," a label to be put on carpets certifying that they were made without child labor. Simultaneously, Barner had been conversing with people at the Swedish Save the Children organization who were urging IKEA to ensure that response to the situation was "in the best interest of the child" whatever that might imply. Finally there were some who wondered if IKEA should not just leave this hornet's nest. indian ru accounted for a tiny part of IKEA's turnover, and to theseo risk posed by continuing this product line seemed not worth the profit potential The Birth and Maturing of a Global Company" To understand IKEA's operations, one had to understand the philosophy and beliefs of its 70- year-old founder, Ingvar Kamprad. Despite stepping down as CEO in 1986, almost a decade later, Kamprad retained the title of honorary chairman and was still very involved in the company's activities. Yet perhaps even more powerful than his ongoing presence were his strongly held values and beliefs, which long ago had been deeply embedded in IKEA's culture Kamprad was 17 years old when he started the mail-order company he called IKEA, a name that combined his initials with those of his family farm, Elmtaryd, and parish, Agunnaryd, located in the

Explanation / Answer

-India has a major role in global value system, being the second most populous country with large market, where poverty is also quite high due to which child labor is prevalent.India has upstream role in global value ssytem. Companies are coming to India for doing business and collaborating with local suppliers. These global companies are carrying lots of value system in their process and their compliance is also high.If they not able to comply those value in India, there credibility is declining. Due to this we can say that India has upstream role in the value system. Ikea was there to enrich and enlarge its supply chain process and get on board more suppliers.

I suggest IKEA not to participate in the program because in the Sweedish program it has seen how it will be grilled. IKEA should take a concrete action against the supplier and to regulate child labor from its suppliers then only it should attend such program.

-Rangan Export should be immediately blacklisted from the suppliers list. It has cheated IKEA and not trustable.

- Company should deal the issue with the supplier because outside interference should not be there is internal affairs of IKEA. It should filed a complaint with the ultimate authority in India for the business malpractice doing by Rangan export.

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