On September 27th of 2018, an international coalition of labour union filed a suit at the Hague against the Netherlands based IKEA Company calling into action an investigation into a wide ranging violations of human rights by the various stores of the company around the world. The complaint was delivered to the Dutch OECD National Contact point and outlined the failure by the management of the IKEA Company to deal with various anti-union campaigns in countries like Portugal, Ireland and the United States. Observation of human rights is an essential component for any business because the civil society, the government, investors and shareholders expect companies to respect human rights as a sign of good faith and an observation of the common good. Therefore, IKEA Company must do all in its power to create a practical solution to the challenge of the observation of human rights.
Governments and civil society organizations around the world as well as private citizens are increasingly holding companies accountable to their performance in terms of the observation of human rights. Businesses that are connected to issues of the violation of human rights normally suffer reputational, legal, financial and stakeholder relations risk. Emergent company and corporate practices indicate that human rights are an essential facet of corporate stability and effective performance.
Communication is an essential component in any organization that helps in connecting the staff to the strategies, goals and visions of the organization. Effective internal communication is essential in the way it ensures that all members of the organization are geared towards attaining the goals as set out by the company strategic team. Communication assists in the development of a cohesive culture that aids in employee empowerment and helps them make the right decision in line with the goals of the organization. Furthermore, effective communication aids in fostering organization stability because it keeps all levels of organization in sync and ensures transparency in the management process. Therefore, communication in the IKEA Company is an essential facet that not only keeps all levels of management on the same level but it also ensures transparency and efficient delivery of services.
IKEA Company is a Swedish home furniture retailer founded by Ingvar Kamprad and operates more than 300 stores in different locations in the world. The company specializes in low priced goods produced on order. The products are normally compact and designed for the customer to assemble at home. The flat packing strategy of the company furniture was a concept that was began as a means of cutting down on costs. Due to the many stores the company operates around the world, it employs a relatively huge workforce, all of whom are connected and controlled via effective strategies of company management.
IKEA Corporate Structure
Upon the formation of the company, IKEA was created to sell items like picture frames, pens and wallets. In the year 1958, the company was inaugurated as the leader of selling Swedish furniture. It began by producing local furniture from local manufacturers and later ventured into nation and then international business after gaining positive customer reviews. The company ventured into the furniture making space with the aim of making them more efficient and cost effective in terms to the amount of space used for storage. The company is in the process of expanding into business and kitchenware. The largest furniture display opened its doors to the world in their first store in Almhult, Sweden.
Upon the opening of the first Scandinavian store they opened their subsidiary stores in countries like Denmark, Norway and Germany. The company locates in less expensive areas in the different countries in which they operate and also offer inspiring home solutions for customers and strive to keep the prices affordable.
Recommendations to Respect Human Rights
Respect for human rights for the IKEA Company must be pegged on the promotion of diversity, prohibition of discrimination, prohibition of bullying and harassment, privacy protection, work life balance protection, protection from child labour and promotion of occupational safety and health. Among the complaints launched against the IKEA Company was in complacency to play by the rules of international business albeit understanding them and knowing the full implications of playing by the laws of international relations and business. It was alleged that the top management of the company had ignored the red flags raised by the workers and the various unions
Employees of the company have sought for the formation of unions to handle such issues as sexual harassment, policies on sick leave, unfair or erratic scheduling and stressful working conditions. Wise online business leaders conduct formal and informal research before carrying out and implementing their business ideas. Proper research leads to the creation of proper strategy but again, this is not enough when improperly or poorly implemented. For instance, if an online business is considering offering low prices to the consumers it may consider that this may attract consumers drawn towards value and low price points and this may contribute to the bottom-line.
Traditionally, strategic thinking does not incorporate the stage of strategic thinking as an essential part of the process. Regardless of the type of strategy selected, however, proper implementation of the strategy is all that sets businesses apart and especially with regards to the online business. The use and implementation of the proper strategy have never been more challenging and even more important compared to the present-day environment of internet business. Leaders of any business environment, therefore, have the duty to make and implement proper strategic decisions that will inspire in their businesses a sense of direction and keep them at the top of the competition.
The advent of new technologies and particularly the growth and inadvertent spread of the internet around the globe has seen massive migration of traditional models of businesses into the internet space as the world paves way for the newly emerging online mass audiences. Some companies have solely been born and operate due to the existence of the internet and in a sense; such companies cease to exist should the internet as the primary platform of business performance fail. The use of the internet as a tool of communication, commerce, and business has in itself grown to become one of the leading strategies widely employed by companies across all sectors and industries.
The internet plays an essential role in the marketing and advertisement of products as well as services around the world, enabling wider reach due to the massive online audience. The future of this online commercial space is only likely to grow even brighter because of the increase in the number of smart devices like smartphones, tablets, and computers as well as the improvement of internet services, for instance, the enhancement of computer network technologies. While the developed nations are setting the trend concerning internet technologies, the developing nations are quickly catching up with the global trends. An amelioration of the world literacy levels is also another essential factor that plays a crucial role in promoting internets commerce as the users can interact well with smart devices.
The internet has been instrumental in significantly bringing down the cost of advertising by making it possible for companies to promote their own products and hence reduce the cost of commercial marketing on the press. The interned operates like a global village and allows business owners to make sales off their services and products in using the cheapest means possible. Compared to traditional costs and models of advertising, internet advertising is more secure and even cheaper for modern businesses.
Some of the benefits of internet marketing and advertisement include low costs, the building of lasting relationships, provision of quality content via blogging and access to round the clock marketing. These are some of the factors that the above companies have leveraged on to create a niche for their business.
Internet advertising and marketing is affordable for all kinds of small and big business as compared to traditional marketing costs. Internet businesses employ the use of various strategies to reach out to their online audiences including the use of YouTube Video ads, content marketing, and Facebook ads and many more. The online space has great competition making the costs fairer than TV advertising, magazines, and newspapers. Such business models survive due to the collection of revenue through internet advertising as well as other services they offer online businesses.
IKEA Company can benefit from the implementation of free as well as paid internet marketing tools on their businesses to reach out to global customer audiences.
Increased competition among internet companies makes it harder to gain following, leave alone making the first sale because the companies have to create strategies that reach out to audiences around the globe that they may know nothing about. This makes it harder for companies to know how exactly to appeal to them and attract their attention. In spite of the competition, however, the internet space has created some of the greatest opportunities in the world due to the wide reach and has consequently led to the creation of some of the most powerful companies in the world in terms of revenue and profit creation.
Before actively getting into any type of business, it is essential to create a specific strategy with the aim of attaining a set of goals and ambitions for the company. Strategies normally manifest in different forms and styles and many business owners prefer seeking the intervention of specialists to help them in developing strategies for their businesses. The ultimate secret to creating a sound strategy lies in creating one that is constantly evolving and meeting the changing needs of the consumers or customers for the business. In fact, the primary goal of creating strategies is reaching out and meeting the needs of the customers in a set period of time.
The lack of a proper strategy forces the business to depend on blind luck and unforeseen occurrences. Some of the essential questions about the business that strategy answers include how the business will run, the market for the business, the profit for the business and the client potential. The number of employees required to perform the functions of the business must be consistent with the amount of work involved. The two main factors that influence the type of strategy formed are the goals for the business and the way to reach them. The overarching strategy for the business is the structure of the business as well as the products or services the business offers. Owners and business managers normally set up departments with the aim of handling specific core functions within the organization. After the creation of the large picture strategy through the establishment of the organizational structure, the organization must again form specific strategies around every department. These together with the visions and the mission of the organization, work towards achieving the greater organizational goals.
Baraldia, Enrico, and Milena Ratajczak-Mrozek. "From supplier to center of excellence and beyond: The network position development of a business unit within "IKEA Industry"." Journal of Business Research 1, no. 1 (2019): 1-15.
Baxtera, Marianne, and Anthony Landry. "IKEA: Product, pricing, and pass-through." Research in Economics, 2017: 507-520.
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