Menu

Safe Water Network In India Harvard Case Analysis

Home >> Finance >> Safe Water Network In India

Safe Water Network In India Case Study Solution and Analysis


Introduction:

Safe Water Network In India Case Study Solution is a global business in Sweden. It is mainly a house providing company founded by Ingvar Kamprad in 1943. When he initiated his first mail-order company, he called the company at the age of 17. It was called as IKEA by a combination of terms associating with his individual life from his personalizes to his household farm i.e. Ignvar Kamprad Elmtaryd Agunnaryd. He began his vision to make true by selling his some goods procured by a low-cost source for the regional merchants by newsletter advertisement. In 1948, by the additional ad in the newsletter about the furniture has matched the criteria with its rivals. It has caused renounce the products sale and begin with furniture. For the consumer satisfaction and reduce the rate of returns, he intentionally opened a store in an Almhult named municipality near his hometown. Later, the little newsletter advertisement transformed into a brochure.

The rivals due to declined sale threatened the providers of IKEA to not take orders at low rates. In 1961, IKEA contracted with many of the factories producing furnishings and therefore it once again came up with low expenses. On the other hand, Safe Water Network In India Case Study Help divided its shop in a number of departments like inexpensive price cafeteria, children play-area, as well as a Sweden Store for the cuisines making it a popular exporter of food.

The intention of the company was to sale quality items with sensible prices with variation in products internationally based on a vision to create a much better lifestyle for nearly everybody. Every year, the business celebrates an anti-bureaucrat week to establish better contact between the providers and consumers.

In the mid duration of 1990s, IKEA has a broad working connecting with about 70 countries locating its items about 11,200. It worked with almost a larger variety of providers around 2300 worldwide (see Display 2). When there were eco-friendly issues occurring about IKEA's items concurrently the issuance on the child labor emerged. This has actually led the business to face the difficult scenario in the maintenance of their relation with suppliers. Due to this factor, IKEA's appeal reduced dropping the 20% of its sale in Denmark. .

Secret Players.

There are two key gamers in this case one is IKEA Company and other is its suppliers. IKEA's technique is to outsource its item manufacturing to suppliers. These suppliers are normally 3rd party and based throughout the world.

Problems.

The strategy of outsourcing has some issues like rules and policies of these countries. Sometimes suppliers from these underdeveloped countries does not follow required standards as compare to industrialized countries. These weak guidelines and guidelines can result in weak environment policies or child labour. There is unfavorable impact of these issues on revenue of the business and likewise reputation of the business. Since the majority of the business's consumers are based in industrialized countries. These consumers have high expectations from Safe Water Network In India Case Study Solution in regards to good quality products with low expense. (Marianne Baxter, 2012) These consumers have also high expectations from IKEA in aspect of social duty. They wanted IKEA to be socially accountable and wanted that it did not have any connection with kid labour or any other environment issue. As IKEA got its supply of carpets mostly for under developed countries like India, Pakistan, Nepal. These under developed nations have unrestrained child labour. So this is main issue that IKEA is dealing with recently. The business is not controlling its suppliers successfully. Also underdeveloped countries enable child labour due to the fact that of hardship. So business can not depend upon local government for solving this issue. IKEA strategies also did not work well adequate to resolve this issue (see Exhibition 3).

Approaching Concern of Kid Labour.

Since it is one of the substantial catalyst in success of company, IKEA method is to keep high level of social obligation. Safe Water Network In India Case Study Help is worried on child labour concern and other environmental issues to support this technique. There was element of social duty which was engrained in the culture of IKEA's creator Ingvar Kamprad (Exhibit 2). People from India had conflicting views concerning child labour and social obligation. According to Indian individuals kid labour is okay if it is enabled by parents or if children are working under supervision of their parents. There is common practice of kid work in India and federal government is also relaxed over this matter if it is unbounded kid labour or if their parents are agreed and permitted their kids to work. Children are also permitted to operate in craft markets to ensure that abilities from earlier generation are not lost.( Naidu & Ramaiah, 2006) In Addition, IKEA was also motivated by Swedish Save the Kid company to act "in the best interest of child".( Odenbring, 2018) According to this they would be doing just that work which remains in the very best interest of children. They would not be associated with any deal in which child labour is utilized or there is any possibility of environment problem. Since they are reliant of child labour, many of the households would be lacking important source of earnings. Their fundamental expenditures like food, clothing are pleased through their working of child.( Duflo, 2006) Also laws are not rigorous sufficient to deal with problems of environment or social issues like child labour so companies require to fret whether it is suitable to carry out business in India or not. They required to make certain that their business does not participate in any activity which is against social obligation. The decision needs to be taken by also integrating approach of social duty from the point of view of customer not from point of view of providers. Customers need to not be having doubt their business is participated in any undesirable activity. There might be negative outcome if standards regarding social responsibility from customer point of view are not followed. There was case occurred in 1980's. IKEA had actually stopped working to satisfy required standards on formaldehyde for some of its products. Because case IKEA had actually lost its profits by 20% in Denmark. Since company's track record in the eyes of consumers had declined. In 1992 there was likewise loss of around $6 to $7 million. This loss was resulted from discontinuation of a popular bookcase series since it was not according to needed level of formaldehyde. This likewise harm business's reputation considerably.

Action to German manufacturers on Video Program:

In action to the invitation of German producers for IKEA, the invitation ought to require to be accepted. Specifically, Barner can perhaps show her idea of mind with a clear justification letting people know that for her it is more important to be more concerned about the IKEA credibility as she is just accountable for this. It also offers Safe Water Network In India Case Study Solution to mindful the German manufacturers to fight against the child labour.

As the German Producers had just provided IKEA to view some of the shots from their documentary. They should be requested to let them see the whole movie instead of some shots which shows certainly an uncertain image of the reality. This might be the technique of German producers to prove themselves right versus the allegation however leaving IKEA behind loaded with doubts about their relationship with the companies of India on the concern of child labour.

On the contrary, the IKEA has been positively portrayed about the issue of Child labour when the issue was initially put up by the Swedish Television. There are a set of details on child labour by IKEA which was considerably gathered by ILO and UNICEF.

As the television industry has terrific possible to show false news as the truth by their excellent capability to customize any lie into a fact and makes people think on it without any doubts. It seems quite difficult for Barnerto assess the documentary prior to the session. As the German producers declined to show their documentary to Safe Water Network In India Case Study Solution prior to it is telecasted simply indicates there evil intention of point the finger at somebody and their relationships with IKEA potentially. There might a strong contradiction that the IKEA is fearlessly engaged with an organization which utilizes child as their labour and continue their relations to earn incomes with the suppliers while knowing the truth.

Barner has a strong point of justification which is their philosophical statement i.e. everybody makes errors but one takes its duty. The responsibility of the errors taken by anyone is considered as the best source of pride.Despite of the fact that Safe Water Network In India Case Study Solution was not conscious about the growing concern over the kid labour in addition to the involving kid's as labours by the industries, the providers of the IKEA. During the acceptance of contract, IKEA started investigation against its supplier industries around the globe. If revealed in the documentary by German manufacturers, the management of IKEA is not scared of accepting its mistakes. It will accept its error and take procedure to put it right again.

Barner can likewise create another reason on the ineffective obligation over social issues. It is meaning to be included with the social issues but has not taken such procedures yet. In the field of marketing, IKEA is on top with exceptional concepts along with its attractive products.

The concerns of the IKEA is towards leading long term relationships with its network of distribution globally. IKEA is not just recently associated with any of the social activities about the rights and issues of each private working in the industries and earning them a handsome revenue. In future, IKEA will plan to be part of obligation over the social issues.

It can be concluded that as per the issue for the company's track record and share of share should accept the invite and present it legitimate thoughts only in case if everything in documentary is versus the Safe Water Network In India Case Study Analysis. Specifically, IKEA had actually started a Foundation based on the concept of protecting rights of child labour and to supply them with free environment to educate themselves. (Barlet, 2006).

Actions on Supply agreement with Rangan Exports:.

Under the IKEA concerns about the most rational and strategic technique in referral to the child labour problem need to provide Rangan Exports with another possibility to help them in overcoming this dilemma.

IKEA needs to take some steps in order to identify of the fact. , if the evidence versus the Rangan export is real hence leading it in the failure on the moral level which were outlaid by IKEA.. This plainly shows that on IKEA, the supplier market resulting in conflict on the child labour concern.

Consequently, IKEA deals with a vision of creating better way of life for each person which is a strong representation for the business to mean the rights of workers of Rangan Exports. The principle of kid labour does not involve a single business as a large network of companies are responsible in putting it ahead. This is among the most important issue of social concerns and it would be injustice to blame a single one.

If the management of Safe Water Network In India Case Study Help not decides for the contract termination, this brings a hazard of losing brand name position and reputation. This may result in the monetary decline state of IKEA by decreased ratio of sale, less appeal of the brand name and the issues over social duties. The primary downside of this replacement is the IKEA deprivation with a worthwhile association and may result in the terminating relations with the sources of rug by India.

The second alternative is to caution the provider industry with extension of the links with a promise to let refrain from doing this error again and definitely hinder the child labour. This will help in upkeep of the healthy association between the provider and the Safe Water Network In India Case Study Analysis. This likewise provides an opportunity to much better teach the providers about the downsides of the child labour. This choice is made on the basis of IKEA's self-created policy. This makes apparent for the all providers that IKEA is strictly against the child labour and truly condemn it. This may have a bad effect on the marketplace credibility of Safe Water Network In India Case Study Analysis by the generation of false promotion.

As it is for the second time that IKEA became a victim of kid labour which has actually considerably harmed its track record. For this function, Barner must pursue the aid by ILO and UNICEF as well as NGOs which may assist Rangan in getting away the requirement to used child labour for the carpets production. It might pick to spread out awareness amongst the citizens worldwide about the social issues and how one's life is affected by in regards to social, and ethical values.

Safe Water Network In India Case Study Help by the adoption of very first alternative, ends its relationship with thesupplier infraction. If lead to the failure then depict a bad effect on all suppliers by the increased power of bargaining and the offense of the policy of IKEA. Furthermore, it can make a charge for the behaviour which is not fairly right. Therefore, Barner ought to decide of disuniting with Rangan public. The press must be hired for the statement of their decision with its factor with the summarization of the policy of IKEA on the use labour of child. She ought to report all the entire circumstance of the problem emerged and be sure that all the providers are strictly following the rules of the agreement. If any of the provider found in compliance to exploitation of the any of the contract guideline offering labour of kid must be fired.

In amount, the business can keep its track record in the market and somehow can bear the loss created by one supplier. With the steady credibility in the market, Safe Water Network In India Case Study Solution will undoubtedly cover up its monetary crisis within a short time period.

Strategy Concerning IKEA's Operations in India

Safe Water Network In India Case Study Solution technique is essentially focus on long term relationship with its providers rather than short term. The exact same strategy that was used by IKEA in Poland might be borrowed. IKEA also requires to make sure that they involve public through its marketing actions which ought to be valuable in understanding IKEA's objectives.

Their intents ought to also be validating company's policy. Their actions need to likewise be according to Kamprad's view i.e. "create a better everyday life for many people". They think that they can achieve this goal by supplying highest items with low cost. At earlier time IKEA had no focus on ecological and social problems which also contains kid labor they utilized to focus on just one strategy i.e. providing affordable and quality products to customers. As time passed they needed to include other values too to their focus. That improved focus could assist IKEA in improving its track record towards its customers. The brand-new focus included the viewpoint "in the best interest of the child". For that function it requires to be make sure that engagements in India would be fulfilling the required purpose too i.e. they did not engage any activity which includes child labor. Bulk of population in India is listed below poverty line so there is culture of child labor and also kid loan. Parents utilized to allow their children to work in compensation with money. Stopping operations from India would not guarantee solution to kid labor however also negative reputation would be built that IKEA is not taking any trustworthy action to fix fundamental problem i.e. kid labor.

There would be likewise another unfavorable effect i.e. dispute from public. As there prevails view point that huge business are constantly selfish and have an interest in just generating revenue and consumers would be believing that IKEA is one of them. Public has typical view that these companies need to be socially accountable to society as like they are needed to be responsible to its shareholders. If IKEA did not take any possible action to solve issue of child labor then it would lead to loss of sales and IKEA's worth too. For a company like IKEA reputation loss is big loss since value of company also based on it and likewise there would be decrease in revenues and goodwill if there is any credibility loss.

If IKEA think about just sales figure then getting out from Indian market is more suitable. Due to the fact that sales from Indian market only contributes small part to IKEA's profits. In an economical/capitalistic view threat is more than benefits. However to accomplish company's long term goal i.e. "to create a much better everyday life for many people" and "in the best interest of the kid" it is suggested to not get out from Indian market and continue operations in Indian market with taking needed precautions.

IKEA required to make sure that kid labor is not utilized for their items. For that purpose IKEA requires a system that can keep an eye on whole treatment. As provider has absence of monetary resources to provide education to kids, so IKEA needs to help supplier financially and offer them financial aids and ask to offset by future deliveries.

There might be one other option for this problem that IKEA might install its own production company integrated with school. IKEA ought to run this school by itself and its auditing task must be given to any other institute like Rugman to make sure it is working effectively for best interest of kids.

Safe Water Network In India Case Study Analysis Must Register to Rugmark.

IKEA believes that every business has its own strengths and weak points. As IKEA has no experience relating to kid labor so brand-new staff would be required for this purpose. It ought to register to Rugmart becausethey are experienced in this field of kid labor and ask Rugmort to develop and monitor process suggested by Safe Water Network In India Case Study Analysis. Apart from this there need to be also random tracking from IKEA to make certain that necessary purpose is accomplished.

Resolving Origin of Child Labor.

IKEA needs to resolve origin of kid labor in order to support its long term vision. For that purpose child welfare and education requires to be promoted. There ought to be collaboration with suppliers and encourage suppliers to execute programs for kid well-being and education. As providers had absence of resources so they ought to be supplied financial aid and asked then to offset by future orders. This is long term technique not short term service. (Martin, 2013) So it might not be performed by IKEA alone. Safe Water Network In India Case Study Analysis beginning performing its method in multi methods. There was collaboration in between UNICEF and IKEA. The purpose of this collaboration was to supply education to all kids who are operating in carpet producing cluster. For example some alternative learning centres were developed for those kids who were not allowed to get education from public schools. Neighborhood well-being was also promoted through this program. Partnership they likewise partnered with their providers in order to create option for issue of kid labor. There was program developed with supplier. The considerable quality of program was audit of providers on regular basis. Restorative action strategy would be required if there was any kid labor discovered during audit. In restorative action strategy child labor is required to be gotten rid of and provider is required to make up for welfare and education of that child. There would be proper follow up from IKEA to make sure that in genuine needed corrective action plan is implicated. Nevertheless if it is found that supplier did not take any restorative action plan then IKEA would broke agreement with that provider and there would be no trade with that specific supplier in future.

Examination of Safe Water Network In India Case Analysis Strategy.

Safe Water Network In India Case Study Help has commitment to its customers to supply high quality products with low rates. Their method would make full use of engaging providers and collaborate to solve issue of kid labor. Nevertheless according to my personal perception as from investors perspective, business is not using its resources effectively through this technique. They would be having hard option in future from deciding that whether to increase return on investment for shareholders or continue involvement with social obligations of Indian and UNICEF. Shareholders would be having negative image of IKEA because of less return of financial investment if is heavily invests for social welfare. If IKEA stayed in Indian market then it would lead to higher costs for consumers. Conflicts of interest for society and management would be resolved. A customer would not feel comfortable when he familiarized that he acquire a rug which was woven by child but is now getting informed by provider of IKEA. However he would be feeling more comfy when he familiarized that he acquire a carpet on slightly higher price which was not woven through kid labor.

Conclusion.

The primary issue that IKEA is dealing with currently is child labor since a German documentary maker makes documentary of a provider of IKEA that was utilizing child labor for production of items. It was likewise concluded that Safe Water Network In India Case Study Solution should sign up Rugmart because IKEA has no any knowledge regarding child labor and Rugmart is professional having understanding relating to issues of child labor. As IKEA has no experience concerning kid labor so brand-new staff would be needed for this function.