Discussion 2

3

IKEA is a favorite among customers searching for

well-designed products at low prices. IKEA stores

sell ready-to-assemble furniture, appliances, and

household goods. Today the firm is the largest fur-

niture retailer in the world, with 139,000 employees

operating in 43 countries. Germany is the firm’s

largest market, followed by the United States and

France. Its diverse variety of products includes furni-

ture, food, large items such as cabinetry, and smaller

items such as kitchenware, decor, and small plants.

IKEA also operates restaurants within its stores.

IKEA is highly focused on design, viewing it as

a competitive advantage. For instance, IKEA stores

have been designed intentionally to what some

describe as a maze that encourages shoppers to

go through the entire store. Some customers find

themselves lost or retracing their steps. This strategy

allows shoppers to see a wide variety of IKEA items,

possibly leading to impulse or add-on purchases.

IKEA was founded in Sweden in 1943 by Ingvar

Kamprad. The culture of the company heavily

reflects Swedish culture, which values hard-working,

friendly, and helpful people. These values helped

create IKEA’s vision, which is “to create a better

everyday life for the many people,” according to the

company’s website. IKEA aims to accomplish this

not only through selling affordable home furnishing

products, but also by helping people around the

world. One way that IKEA hopes to help people is

by helping the planet, by reducing carbon emis-

sions and creating sustainable energy through solar

panels that they sell.

Corporate social responsibility (CSR) is a large

factor in IKEA’s company culture. IKEA uses CSR to

expose its employees to new challenges. Employees

at IKEA are encouraged to mentor young students,

assist senior citizens, and other altruistic actions. By

volunteering for these tasks, employees can learn

valuable skills that they can transfer to their jobs.

IKEA has also found that CSR is a powerful recruiting

tool. Many potential employees look for employers

who share their values. Through CSR, IKEA can help

its community while attracting better talent.

In 1982, IKEA launched the IKEA Foundation.

Initially, the foundation focused on architecture and

interior design, but then it expanded to fight for

children’s rights and education. Recently, the IKEA

Foundation awarded a grant of $2.3 million to the

World Resources Institute to help bring clean elec-

tricity to 1 million people in India and East Africa. In

these areas, many schools, clinics, and agricultural

facilities are without power. The grant will be used to

create a map that shows the demand for electricity

in these areas. Once this map is created, the World

Resources Institute will be able to better identify

areas in need of electricity and other resources.

Another focus for IKEA is reducing carbon emis-

sions. In fact, IKEA’s long-term goal is to become

carbon positive, which means they will remove more

carbon dioxide than they create. IKEA is already

moving toward this goal by switching to electric

delivery trucks. The company plans to switch to

only electric trucks in major cities like New York and

Paris and is committed to completely switching over

to electric trucks in every location by 2025. IKEA

has already invested around $2 billion in renewable

energy. By 2030, IKEA plans to cut emissions from

stores by 80 percent and reduce emissions from

deliveries and customer travel by 50 percent. These

are lofty goals, but the company has invested con-

siderable resources into becoming carbon positive.

For IKEA, CSR is at the very core of its heritage

and current culture. IKEA aims to create value for

customers by selling stylish, low-cost home furnish-

ing products. However, the company doesn’t stop

there. It also feels that to sustain the planet, it must

reduce its environmental impact and encourage its

customers to do the same.1

IKEA Puts It All on the Table with Social Responsibility

Chapter Objectives �O Define the concept of social responsibility

�O Trace the development of social responsibility

�O Examine the global nature of social responsibility

�O Discuss the benefits of social responsibility

�O Introduce a framework for understanding social responsibility

S hu

tt e

rs to

ck /N

ut W

itc hu

w at

an ak

o rn

C B P _ F errell_ C h01.indd 3 12/9/2019 6:35:24 P M03/18/2020 - tp-70a028a4-6922-11ea-a484-024 (temp temp) - Business and Society