IKEA Competing Stakeholder Priorities and Values

IKEA competing Stakeholders Priorities and Values

Lesley Chubick
Unit 2
GB590
With Professor Christine Pence

IKEA Competing Stakeholder Priorities and Values

Introduction
IKEA is as a store that sells well-designed home furniture at a reasonably low price. The
furniture sold at IKEA is a ready build furniture and home appliances in stores and online. IKEA
is the largest furniture retailer in the world with more than 140,000 employees in more than 40
countries. The largest markets for this furniture retailer start with Germany, then United States
with France coming in third. The IKEA stores sell furniture, large and small appliances,
kitchenware and cabinetry.
The large selling point of IKEA is that it sells well-designed furniture products at a lower
price than mainstream furniture stores. All the stores are designed for families to come drop their
kids off at an in-store daycare center while the parents walk around and look at furniture.
Because of this type of environment and shopping experience the stores have over 40 billion in
sales annually.
IKEA Beginnings
IKEA started in 1943 by Ingvar Kamprnad in Argunnaryd, Sweden at the age of 17. Ingvar
stared doing business by selling small items such as pencils, pens, wallets and watches at
reduced prices. The IKEA name is made up of letters fro his family name and the town he grew
up in called Eltaryd, Agunnaryd. In 1945 Ingvar started selling small furniture along with this
small items by catalog. This way of offering product quickly took off and the affordable furniture
portion of his business took off. He had so much business from selling small furniture that he
eventually dropped the small items to sell exclusive furniture. Most of his local deliveries were
made with a local milk truck that wasnt being used in the off hours. The company grew so fast
Ingvar opened his first, one of a kind, furniture store in 1953. No other furniture store had a
showroom and people would travel by train to see the showroom and purchase goods.

IKEA Competing Stakeholder Priorities and Values

Stakeholders
IKEA goal is to create a better life for all of their shareholders, stakeholders, customers,
suppliers, and communities. It achieves this through the implementation of 10 core values, a
strong vision statement, and its supplier code of conduct.
1. Leadership by example
2. Constant desire for renewal
3. Togetherness and enthusiasm
4. Cost-consciousness
5. Striving to meet reality
6. Humbleness and willpower
7. Daring to be different
8. Accept and delegate responsibility
9. Simplicity
10. Constantly being on the way
Stakeholders are people who affect an organizations actions either directly or indirectly.
Stakeholders are the foundation of a company and the driving force that that keeps companies
open and functioning. Without stakeholder companies wouldnt be profitable and more than
likely would never open. The stakeholders are the shareholder, customers, managers and the
employees of a company. Without these stakeholders a company of any size would not function
or last. To just sell a product or service is not enough, a company has to recognize, notice and
validate the efforts being made by the stakeholders. Each co-worker is considered equal on the
sales floor. Commissions and quotas are not a factor as the co-worker earns the same dollar

IKEA Competing Stakeholder Priorities and Values

amount and its based on length of time employed. This helps to cut issues on competition
between sales personnel.
IKEA, being one of the world's largest multinational retail chains has a high profile
marketing campaign. IKEA also offers greater simplicity in competitive situations between coworkers compared with larger furniture manufacturers and retailers. IKEA performs employee
appreciation days such as the one in 1999 that was called The Big Thank You day. All sales
completed on that day, nationwide, were divided between all employees of IKEA. The total
dollar amount divided between the employees was approximately 85 million euros or
106,368,993.74 million U.S. dollars.
Because IKEA wants to understand their co-workers and the environment they work in,
IKEA has started a co-worker survey line to gather the employee point of view of how the
company is running and to give any suggestions on improvements. IKEA wants the employees to
understand their sustainability and this helps them while feeling proactive. IKEA has training
courses on sustainability that is a required course for all co-workers.
Social Responsibilities
IKEA has worked hard to create a better life for the customers and employees. IKEA
partnered with several organizations such as UNICEF and Save the Children working to abolish
the use of child labor in countries. Every year IKEA raises money through donations to support
UNICEF and Save the Children hoping to abolish the child labor problem. IKEA is also a
supporter of programs in India that promotes education for children.
IKEA also works hard to promote sustainability in areas that directly affect them such as
sourcing of wood and paper materials. Being a furniture store and wood being a primary material
for their product inventory IKEA wants to make sure that wood is replenished as its being used.

IKEA Competing Stakeholder Priorities and Values

In 2013 IKEA had a total of one third of its wood product was certified by a non-profit
organization called Forest Stewardship Council and approximately 96 percent of the products in
IKEA are made from recycled, renewable products. IKEA also has promoted and invested in
wind farms and residential solar paneling. IKEA will give a discount to any consumer that
purchases and installs solar paneling in their homes or business. With this in mind all IKEA
stores recycle 89% of their waist, this is up from the 72% from the prior year. Many of the IKEA
stores have electric car charging stations in their parking lots for those that will utilize them. All
of the sustainability IKEA works towards is directed and controlled by a Chief of Sustainability
Officer.
Global vs. Social, Stakeholders and Values
A global corporation has just as large shoes to fill as a national corporation when
considering social responsibilities and supporting the companys stakeholders. On both the
global and national level accompany has to consider the environment and the people that make
the company function and operate from day to day. A global company has the same
responsibilities but on a larger scale crossing different cultures and languages where as a national
company also have different cultures within a country, languages and lifestyles just on a smaller
scale. In looking at the stakeholder this is a general label that includes the stockholders,
management, employees and customers all alike. In reality no one person or job title is more
important than the other as all make the company work and function. Sr. management handles
the accounting, ordering, scheduling and day-to-day functions where as the employees are the
front lines to the customers that purchase the end products. The national and global laws are one
IKEA has had difficulty with since the inceptions in the early 1940s. What is perfectly
acceptable in manufacturing in one country may not be acceptable in another. An example of

IKEA Competing Stakeholder Priorities and Values

their efforts in this is the use of child labor. In some countries the use of child labor is acceptable
and an every day occurrence but for the rest of the world its not socially acceptable.
Conclusion
IKEAs reputation was built on quality and affordable furniture and home products. The
companys innovative designs and low pricing is what made the difference when competing in
the furniture industry. Along with the growth IKEA has worked to provide a product that makes
the customer happy while treating the co-workers with respect and instilling a relaxing
environment to work in that helps the teamwork. With the growth and the innovative thinking
Ingvar had kept pushing the company and its co-workers with positive re-enforcement along
with letting them speak their minds and give input on how the company is run.

IKEA Competing Stakeholder Priorities and Values

References:
Bartlett, C., Dessain, V., & Sjoman, A. (2006). Ikea's Global Sourcing Challenge. Indian Rugs
and Child Labor, 9-906-414, 13-13. (November 17, 2014).
Brad Tuttle, Everything at IKEA Is Getting Cheaper, Time, July 6, 2011,
http://business.time.com/2011/07/06/everything-at-ikea-is-getting-cheaper/ (November
16, 2014).
IKEA, People & Planet: IKEA Group Sustainability Strategy for 2020,
http://www.ikea.com/ms/en_GB/pdf/people_planet_positive/People_planet_positive.pdf
(November 16, 2014).
The Economist staff, Flat-pack accounting, The Economist, May 11, 2006,
http://www.economist.com/node/6919139 (November 17, 2014).