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Organizational Hierarchical
Structure
Vision statement: To create a better everyday life for the many people
A well-known German documentary
maker notified IKEA that a film he had
made was about to be broadcast on
PROBLEM
German television showing children
working at looms at Rangan Exports, one STATEMENT
of IKEA’s major suppliers.
P S E S T E L
Will the alternative leverage the What are the Risks and Returns of each Does IKEA possess the resources and
Opportunities IKEA may realize, and alternative, and will it produce the capabilities required to implement the
address the threats imposed as a result desired Reaction from customers, Alternative?
of this challenge? owners, employees and suppliers?
Does IKEA have the staff required, in
Address the potential loss of revenue Address the loss of sales if the supply of terms of time and skills, to take on the
from a consumer backlash rugs is interrupted project?
Employ existing capabilities of IKEA, Meets Corporate Social Responsibility Does IKEA have the capacity to
including forging strong partnerships Expectations support the capital investments
with suppliers, trade unions and required to support the project?
organisations Aligns with “A Furniture Dealer's
Testament,” the 9 statements IKEA’s
Continue to lead industry standard founder believed is the basis of their
success
Drop Supplier 4 3 6
Elevate Supplier 6 6 5
By choosing to work with Rangan Exports’ to elevate their labour practices and set
a new industry standard for ethical labour, IKEA will be able to:
● Explain the effort already put into ensuring that child labour is not used,
● The shortcoming and challenges of that program, and
● Announce how it will be putting the needs of the child first during the live
television broadcast of the German documentary.
Facing this issue head on will show the public that IKEA plans to be open and
transparent in addressing these very serious issues.
ACTION PLAN
01
Attend the live
discussion
02
Meet with our board and
Rangan’s management to
develop a plan