Corporate social responsability

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After this scandal, we think that the firm had a wrongful reaction. Instead of trying to enhance its tarnished image, the managers started to look after the leaks’ culprits. These latter have unveiled other compromising information; Ikea is alleged to be regularly late in the wages’ payment. Besides the previous unfair dismissal would have been one among others. Lastly, the company’s head is rumoured to put a lot of pressure on the employees, even forcing several “suspect resignations”.

Define how you can apply some or all of the best practices:

Our business is not launched yet and today we decide to imply CSR in our project. Thinking about it later, when the production has already started is much less efficient: we want built a project based on the respect of each stakeholders.

First, the environment is one of our priority. Our decoration is a natural light. Our firm don’t need any light bulb: planktons are a substitute to them. The core of our products is thus 100% natural. The rest of the products is made of glass and plastic. We want to use recycled materials. Our product has a long-term utilisation. The only material that has to be regularly changed is the planktons and the water: nothing polluting! Above all, we propose to our client to get back the light if they turn broken or outdated. Thus, we could recycle them.

Today, we don’t want to run for an eco-label. Indeed, they are very hard to get and it’s not our main priority for now.

The respect of employees is of course at the core of our projects. We, as entrepreneurs, are ready to make sacrifices for the lunching of our dream. But we are not the only concerned. Indeed, from the beginning we will hire two persons to build the whole light. We want to use stock options to integrate them to our team. Stock Option Plans are an extremely popular method of attracting, motivating, and retaining employees, especially when the company is unable to pay high salaries. Plus, it permits employees to share in the company’s success without requiring a start-up business to spend precious cash.

Finally, we chose our suppliers depending on their ethical methods. We refuse to work with people that won’t respect the well-being of animals. Since we have to deal with aquariums, our first criterium is the respect of animal being. Indeed, we are looking for rentability, but our product is quite expensive and the margin allows us to be put money in the respect of our values.

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Define how you can avoid adapting some or all of the worst practices:

We think that there are two ways to apply successful CSR practices: whether you try to take your cue from what has been well done and enhance it or you try to avoid replicating some mistakes already made.

As we have already discussed, CSR implies that the company has binding obligations beyond those to its shareholders. That means that it must determine what a company is or does. Thus, the value that are conveyed by the company must be genuinely enforced. That wasn’t the case of Ikea, which used forced prison labour to make furniture. It tarnished its image a lot and compelled some managers to resign. This example is an extreme one since the firm didn’t just lie on its workforce and the provenance of its products but it was outlaw.

This example shows how hard the current global competition is. In fact, Ikea is striving to sell low or middle priced decoration objects. But to achieve its goals, it has chosen during 3 decades to exploit prisoners. We think that this decision has been motivated by the emergence of new highly competitive markets such as East-Asia.

In order to avoid such practices (and scandals), the company should implement a tight control over the working conditions and to foster a culture of transparency. Thus, everyone would be able to be certain that the human and worker rights have been implemented.

Besides, this transparency culture would protect the whistle-blowers that expose fraudulent, unfair, or unethical practices. It would have been beneficial to Ikea after the spying affair. Its image wouldn’t have so much suffered if the employees were free to speak.

Another point would be to assess the quality and the eco responsibility of the products that are manufactured. For instance, more and more companies use the traceability of their wood to give a proof of its provenance and its quality.

This transparency policy could be an opportunity to examine every aspect of the company’s operations: in 2013, 93% of the world’s largest 250 companies published annual corporate responsibility reports, almost 60% of which are independently audited. These independent audits could be led by NGO that strive to fulfil ecological objectives. It’s a good means to attest that the company is eco-friendly and do its best to improve its environmental footprint. That’s why several companies display their energy consumption as a proof to their customers.