IKEA’s Global Sourcing Challenge

Abstract

This paper discusses how to tackle the problems of child Labor in India’s regions of business. Including how to respond to the negative coverage of German television and similar international public opinions, how IKEA reevaluates and improves supplier contracts or simply chooses to terminate them, and how IKEA decide on its strategy to operate in India. This paper based of the case and reports about IKEA, relating its situation with the methodology of business ethics. IKEA, as an industry leader of the world furniture retailer, plays a role that sells affordable and elegant furniture to consumers around the world. However, IKEA’s rapid development of globalization is not smooth. IKEA’s rapid development of globalization is not smooth. Despite the company’s superior financial performance and market share, some product problems made the company aware of environmental and social problems, which were found to include excessive formaldehyde and child labor The dilemma IKEA faces is that it must work with other suppliers around the world based on suppliers that are not directly controlled by the parent company and the actions of these suppliers have a negative impact on IKEA’s products and reputation such as hire the child labor in South Asian. This paper concludes the need to re-evaluate suppliers and the feasibility of the company’s strategy in South Asia.