IKEA Broader Implications
Student Name
Institution Affiliation
Date
For the better part of the decade, top executives ponder strategic objectives and missions, as functional chiefs pinpoint strategies for everything from Corporate Social Responsibility and ethical behavior to the roles of business regulation and strategies for stakeholders’ engagement. Poor planning has lost its glamor as all planners have turned into a strategist. From the case, the strategy is the business buzzword in addressing the social issues at the center of the case with a clearly outlined corporative and government roles in solving these issues and precisely outlined objectives in which corporative should attend to stakeholders as well as shareholders. Through its People and Planet Positive strategy, IKEA group management focuses on three key management areas, including a more sustainable home life for its customers, energy and resources independence for the company, and a better life for communities and people touched by IKEA.
Shareholders are increasingly inserting pressure on IKEA to adopt and execute sustainable practices within the firm and across its supply chain management paradigm. Consequently, the government is a crucial shareholder in this case and has power over the company as it creates and enforces the laws and regulations that have the mandate to excellent the company if it fails to follow the laid rules and regulations. From the case, NGOs are the second most crucial shareholder that exact extensive amount of over IKEA as these NGOs have the authority to protect the environment and restore its natural conditions and have the right to expose the company if it does not conform to environmental set regulations to the government. Moreover, these NGOs have the right to boycott or withhold their spending on IKEA’s products or even encourage others to boycott these products in an attempt to force IKEA to fallow the laid environmental regulations.
From the case, IKEA’s chief sustainability officer highlights the main strategic options relating to corporations and government crucial in solving social issues implicated in the case. The chief sustainability officer constituted a 22 people group to address the company’s sustainability communication strategy, innovation, policy guidelines, and retail work (Rangan, Toffel, Dessain & Lenhardt, 2014). For example, through leasing land to integrate its supply chain vertically, the company can control the sustainable lumbering practices directly and strategically maintain the supply of the forest stewardship council (FSC) certified wood. Therefore, with the full responsibility from resourcing to selling, strategically, IKEA can quickly introduce its resourcing standards. Moreover, for the company to be less resource-intensive, it introduces an option to increase its recycled and particleboard wood from 4 percent to 10 percent and from 55 percent to 80 percent. These introductions directly solve the adverse effects of deforestation, such as redistribution of the ecology and climate change through the reduction of raw materials reliance.
Conclusively, the strategies employed by IKEA posit that to transform all the companies’ aspects of the value chain, such as products design to minimize the use of raw materials, selection of sustainable resource materials with reduced negative environmental impacts and improved working conditions within its supply chain, improved production, and logistics efficiency as well as developing programs that ensure its products can be reused or recycled is crucial. For example, the company planned at the consumer level to convert the entire range of lighting of its products to LEDs by 2016. This was nearly ten times more efficient than lighting in incandescent and twice more effective than compact fluorescents.
References
Rangan, V. K., Toffel, M. W., Dessain, V., & Lenhardt, J. (2014). Sustainability at IKEA Group.