1. How should Marianne Barner respond to the
invitation for IKEA to have a representative appear on the upcoming broadcast
of the German video program?
The
best option would be to ignore the invitation. Appearing in the program would
bring IKEA into the focus. It would then seem that IKEA and the Rangan Export
are the major players in the child labor whereas the case is many other
companies were doing the same.
2. What actions should she take regarding the IKEA
supply contract with Rangan Export?
There
had been a supply contract that any breach would lead into termination. The
best action would be to follow the contract. Otherwise, the media would think
IKEA itself is directly involved in this practice.
3. What long-term strategy would you suggest she take
regarding IKEA’s continued operation in India ? Should the company stay or
should it exit?
On
one hand, since India
is not signatory to international agreement on the child labor, it would be
very hard to have suppliers comply with the agreement. On the other hand, India is a
major supplier for its product. It would wise to stay put in India but
recognizing the local socio-economic differences. One long term strategy would
be employ sub-contracts to purchase from India and making sure child labor
practice are discouraged.
4. For those recommending that IKEA continue to
source carpets in India ,
would you suggest that she:
I would suggest that IKEA
continue its own monitoring and control process. India is too large a supplier to
ignore. On one hand, there are differences in socio-economic conditions. On the
other hand, it is necessary to address the root cause of child labor. Just by
moving out of the market does not solve the problem. Child labor would simply
move from it current supplier to some other area. Only right approach would be
to contain the problem by making its monitoring and control mechanism stronger.
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