Research Memorandum
70 • July 2007
Corporate Social Responsibility at IKEA:
commitment and communication
FRANÇOIS MAON
Université Catholique de Louvain
Louvain-la-Neuve, Belgium
VALÉRIE SWAEN
Université Catholique de Louvain
Louvain-la-Neuve, Belgium
ADAM LINDGREEN
Centre for Marketing, Communications and International Strategy
Business School, University of Hull
Cottingham Road, Hull, HU6 7RX, the UK
Email: a.lindgreen@hull.ac.uk
ISBN 978-1-902034-66-9
© 2007 F Maon, V Swaen, A Lindgreen
All intellectual property rights, including copyright in this publication, except for those attributed
to named sources, are owned by the author(s) of this research memorandum. No part of this
publication may be copied or transmitted in any form without the prior written consent from the
author(s) whose contact address is given on the title page of the research memorandum.
2
Abstract
Understanding an organization's commitment to corporate social responsibility
(CSR) policies and its communication of this commitment to its stakeholders
often is difficult, as is understanding stakeholders' complex perceptions and
attitudes toward the organization. Existing literature lacks managerial
guidelines in this important area; previous studies focus essentially on
organizations' commitment and communication to customers, employees,
prospective employees, and financial investors but ignore other important
stakeholders, such as non-governmental organizations, and effective methods
for committing to and communicating with them. This focus on certain types of
stakeholders prevents an overall analysis of CSR commitment and
communication. In response, this study combines qualitative and quantitative
methods to examine how different stakeholders perceive, react to, and
influence CSR commitment and communication. Different types of
stakeholders vary in their perceptions of the organization's CSR; therefore, the
organization must be transparent in its commitments and credible in its
communication. Overall, this study recommends the development of more
comprehensive CSR models that can be tailored to different stakeholders.
Keywords
Corporate social responsibility; communication; stakeholders; IKEA;
skepticism; transparency
Abbreviations
CSR: corporate social responsibility; IFBWW: International Federation of
Building and Wood Workers; NGO: non-governmental organization; WWF:
World Wildlife Fund.
3
INTRODUCTION
For many researchers and observers alike, it remains difficult to understand
fully how organizations design their CSR policies and communicate them to
different stakeholders. They also have trouble determining different
stakeholders' complex perceptions of and attitudes toward the organization,
which means managerial guidelines are virtually nonexistent in this important
area. Although prior work focuses on organizational commitment to and
communication with customers (e.g., Brown and Dacin, 1997; Carrigan and
Attala, 2001; Webb and Mohr, 1998), employees and prospective employees
(e.g., Davis, 1973; Greening and Turban, 2000; Williams and Bauer, 1994),
and financial investors (e.g., Anand and Cowton, 1993; Purcell, 1979; Rivoli,
1995; Webley et al., 2001), it fails to consider other stakeholders, such as nongovernmental organizations (NGOs), whose influence over CSR policies
continues to grow (Argenti, 2004; Doh, 2003; Guay et al., 2004; Ottaway,
2001; Stafford et al., 2000; Teegen et al., 2004). Furthermore, previous
studies generally address one type of stakeholders (e.g., Sen and
Bhattacharya, 2001; Turban and Greening, 1997), which prevents them from
offering an overall analysis of the value of commitment and communication in
CSR. We contribute to the literature by reporting on one organization's CSR
commitments and communications and relating them to different stakeholders.
Specifically, we report on IKEA's CSR commitments and communications and
their relation to the organization's different stakeholders, which enables us to
examine stakeholders' perceptions of and attitudes toward IKEA and its CSR
policies and thereby gain an understanding of how stakeholders themselves
influence CSR commitments and communication. By including a variety of
stakeholders, our case approach provides insight into the dynamics that occur
among stakeholders.
We structure the remainder of this article as follows: First, we review the
literature. Second, we provide details of the case developed for this study.
Third, we present and discuss the findings. Fourth and finally, we identify
some theoretical and managerial contributions and conclude with research
limitations and opportunities for further research.
LITERATURE REVIEW
Being a socially responsible organization seems like a necessary criterion to
do business in the 21st century (Altman 1998), which suggests that
responsible management links inextricably with corporate survival. Together
with the emergence of concepts such as sustainable development (World
Commission, 1987) and global business citizenship (Wood et al., 2006),
pressure from and demands by various stakeholders help explain the key role
of CSR during the past decade. In particular, various entities have gained
ground, such as the anti-globalization movement, NGO campaigns, careful
and thorough examinations of sustainable investments, changing consumption
behaviors that promote ethical buying, city council participation, and
government oversight (Crane and Matten, 2003).
4
Moreover, the widespread distribution of the worldwide web as a global
communications device provides consumers with nearly instant information
about an organization, its products, and services, which increases their
expectations (McIntosh et al., 1998). A 2004 survey of 6,350 European
consumers by Sofinco-Ipsos found that 53 percent believe changing their
consumption behavior means that organizations must change and become
ethically more responsible (Canal IPSOS, 2004). A 1999 survey by NFO
Research of 1,000 U.S. consumers also noted that 54 percent of respondents
consider an organization's labor practices, business ethics, social role, and
environmental impacts very important (Environics International, 1999). As
consumers increasingly adhere to certain ethical values or even a particular
cause, they search for applicable information about the organization, its
products, and services, including employee, social, and environmental issues.
Consumption thus expresses not only product preference but also how
consumers feel as though they can relate to the organization's values or cause
(Lauer, 2004).
Pressure to become a better corporate citizen also stems from business
customers who purchase components and raw materials from suppliers and
want them act in environmentally correct and ethically sound manners. Many
large organizations require suppliers to provide details of their own CSR
policies, and this pressure for better employee, social, and environmental
performance moves along the value chain (Warhurst, 2001). Such pressure
creates a formidable force—large organizations can effectively exclude
suppliers from the marketplace if they are not socially responsible. Within this
context, the use of child labor and social diversity protections have emerged
as crucial issues (Lindgreen and Swaen, 2004).
These developments also have led to widespread changes in how
organizations respond to the pressures and demands they face with regard to
their employee, society, and environment policies.
CSR AND STAKEHOLDERS
Since Bowen (1953, p. 6) argued that businesses have a duty "to pursue
those policies, to make those decisions, or to follow those lines of action which
are desirable in terms of the objectives and values of our society," few have
question the importance of CSR (e.g., Carroll, 1999; Drucker, 1984;
McWilliams and Siegel, 2001; Wood, 1991). As a result, CSR has
mushroomed to such an extent that it comprises a vast plethora of theories
and approaches, some of which use different terminologies (Garriga and Mele,
2004). With little consensus about meanings, CSR remains a hot and
controversial research topic (De Bakker et al., 2005), but carefully distilling
CSR literature suggests a general consensus that it is no longer enough for
organizations to be concerned about increasing profits. In addition to their
economic and legal obligations, organizations have ethical and discretionary
responsibilities to society (Carroll, 1979; Donaldson and Dunfee, 1994), and to
comply with these considerations, they develop CSR policies that endorse
employee, social, and environmental concerns, which provides them with
social legitimacy (Wartick and Cochran, 1985).
5
Carroll (1979) conceptualizes CSR as different obligations, which underlines
the central role that stakeholders play. That is, "CSR represents societal
expectations of corporate behavior; a behavior that is alleged by a stakeholder
to be expected by society or morally required and is therefore justifiably
demanded of a business" (Whetten et al., 2002, p. 374). A stakeholderoriented approach to CSR emphasizes that organizations exist within large
networks of stakeholders, all of which stake claims on organizations. Within
the organization, the interests of these various stakeholders meet and interact
with one another and the interests of the organization. When organizations
face demands from stakeholders to recognize the importance of CSR, they
generally translate those demands into CSR objectives and develop CSR
policies; sometimes, however, organizations attempt to change their
stakeholders' expectations (Lamberg et al., 2003). Within the organization,
managers must integrate stakeholders into the decision-making process,
convince them to support the corporate strategic course, and facilitate
multipartite participation (Dontenwill, 2005).
CSR AND COMMUNICATION
In responding to CSR pressure and demand, some organizations follow a
substantial strategy, whereas others develop a symbolic strategy (Capron and
Quairel, 2004). The former implies that the organization modifies its objectives
and business processes; the latter refers to institutional, opportunistic CSR
communication that does not alter the organization's criticized behavior. In
both cases, CSR communication represents an important issue for managers.
However, several questions remain unanswered in relation to the impact of
CSR communication on stakeholders' perceptions and attitudes. On the one
hand, previous studies report a positive impact of CSR on corporate image
(Mascarenhas, 1995) and consumer goodwill (Murray and Vogel, 1997; Sen,
1993). For example, information pertaining to CSR policies positively
influences consumers' buying intentions (Brown and Dacin, 1997; Creyer and
Ross, 1997), and an organization enjoys an enhanced reputation when
stakeholders perceive it has contributed to the common social good (Fombrun
and Shanley, 1990). A reputation as a socially responsible organization even
can protect an organization during a crisis (Tombs and Smith, 1995). On the
other hand, organizations engaging in the most CSR often are those criticized
the most (Social and Environmental Efficiency, 2001). Those that proclaim
themselves socially responsible must be prepared to deal with criticism when
stakeholders believe they have behaved irresponsibly (Mohr et al., 2001), and if
they choose not to respond to that criticism, they can face a serious crisis, as
Nestlé, Nike, and Shell discovered. Finally, in certain conditions, a CSR
initiative can decrease consumers' purchase intentions toward the socially
responsible organization, for example when consumers' support for a particular
CSR aspect or product quality is low (Sen and Bhattacharya, 2001).
Taking these conflicting findings and lack of guidelines into account, we
attempt three objectives with this study. First, we examine IKEA's CSR
policies and their development in a wider context (i.e., employee, social, and
environmental) by considering the influence of multiple, various stakeholders.
6
Second, we analyze how IKEA communicates its CSR policies and
commitment to various stakeholders. Third, we study the value added by this
commitment and communication and the effect on stakeholders' perceptions
of and attitudes toward the organization.
METHODOLOGY
Qualitative methods are appropriate for complex phenomena and when
numerous variables may influence the issue(s) at hand (Eisenhardt, 1989;
Hamel and Dufour, 1993; Yin, 2002). We select a case study as our research
methodology, in accordance with the principles outlined by Yin (2002). First,
we obtain a comprehensive understanding of IKEA's contextual setting so that
we may develop our theory in context. Second, we use secondary data and
multiple interviews to gather rich insights and provide a basis for the greater
generalizability of our findings.
We select this particular case using theoretical sampling (Strauss and Corbin,
1998). IKEA, the world's largest multinational, flat-pack furniture retail chain,
has enjoyed high-profile marketing successes. Furthermore, it offers greater
simplicity in terms of competitive scenarios and strategic responses compared
with larger, more complex furniture manufacturers and retailers. In addition,
the policies described in the case have largely been developed and entered
an evolutionary phase, whereas during data collection, many other furniture
manufacturers and retailers were undergoing substantial change processes
with uncertain outcomes.
IKEA offers a remarkably fertile case for examining CSR. The organization's
retail turnover has increased by 400 percent during the past decade. Its
business model is based on gaining control over strategic resources,
particularly through logistical coordination of a network that consists of 1,500
suppliers in 50 (often developing and emerging) countries. These suppliers
ignore mediators and deliver directly to IKEA, which minimizes the retailer's
costs so that IKEA can offer low-priced furniture. However, the seeming
eradication of the world's forests has resulted in increasing pressure on IKEA
from environmental activists, and its worldwide perspective has made it a
target of anti-globalization protesters. Therefore, IKEA includes issues of
sustainability specifically in its CSR policies.
Data Collection and Analysis
We collect data for this case using various methods. To increase our
familiarity with the issues, we reviewed more than 200 pieces of written
documentation, including promotional materials, previous case studies, and
IKEA Web sites. These data are comprehensive, particularly with respect to
CSR elements and their implementation. We also rely on and refer back to this
information during and following our depth interviews, which we describe next.
Finally, to determine how IKEA communicates its CSR policies, we visited six
stores in Belgium, France, and the Netherlands on several occasions and
analyzed the 2004–2005 media campaigns by reviewing all of IKEA's 36
national and international Web sites, IKEA catalogs for each individual
7
country, English and French newspaper articles and advertising, television
and billboard displays, and press releases from IKEA and its partner NGOs.
In addition to this document-based research, we interviewed two senior IKEA
managers in depth, both formally and informally. Twenty external
stakeholders, who could impact IKEA's CSR policies in some way, participated
in interviews as well. These stakeholders include nine NGOs (five
international) that dealt with human rights and environment issues; two trade
unions; one interest group for small and medium-sized enterprises; four
organizations specializing in CSR consulting, promotion, and monitoring; three
city councils; and an international research foundation. These latter interviews
serve to corroborate or challenge the findings we obtained in our in-depth
interviews with the IKEA representatives.
For both types of interviews, we kept our questions deliberately broad to allow
respondents as much freedom in their answers as possible (Glaser and
Strauss, 1967). For the interviews within IKEA, the questions focused on the
organization's CSR commitments, the historical development of these
commitments, issues raised by NGOs and trade unions, and CSR
communication and marketing policies. The questions for the external
stakeholders focused on the nature of the relationship between the
stakeholder and IKEA, the stakeholder's perception and knowledge of IKEA's
CSR commitments and communication, and the stakeholder's opinion about
IKEA's CSR policies. Our interviews continued until we reached saturation,
that is, when extra interviews yielded no more additional insights (Strauss and
Corbin, 1998). Each interview lasted an average of one hour (range: 30
minutes to two hours). This process resulted in a transcript of 193 pages (12point font, single spaced). The IKEA interviewees, who had been involved in
developing the organization's CSR policies, represent the richest source of
information for investigating the issues at hand, whereas the external
stakeholders make appropriate interviewees because of their work in dealing
with a variety of CSR issues and, more particularly, because they had been
critical of IKEA's CSR policies.
To obtain customer feedback, we distributed a self-administered questionnaire
to 150 customers who had visited at least one IKEA store in the previous 36
months. We handed out the questionnaire to the general public—people in
offices, on trains, or queuing (convenience sample). Our goal with this
questionnaire is to determine how much customers know about IKEA's CSR
policies, how they come to know about these policies, how they perceive
these policies, and what their attitudes toward these policies are.
Together, these data collection methods improve the robustness of our
findings, compensate for the weaknesses of any one data collection method,
improve the quality of our final interpretation, and help ensure triangulation
(Jick, 1979; Strauss and Corbin, 1998; Yin, 2002). The unit of analysis we use
is IKEA's CSR policies, commitment, and communication. Therefore, we
combine the information from each set of interviews and the secondary
sources into one final case manuscript.
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Next, we analyzed the case using Eisenhardt's (1989) method. That is, we first
attempt to gain a richer understanding of the process IKEA underwent in terms
of its CSR. Therefore, we create a timeline that includes information about
how different stakeholders have influenced its CSR policies. Using open and
axial coding procedures, we elaborate on the emergent theoretical categories
(Strauss and Corbin, 1998). Throughout the analysis, we tacked back and
forward between the literature on CSR and the data, which enables us to
develop five theoretical categories and 141 subcategories (Spiggle, 1994). In
addition, our analysis relies on ATLAS-Ti to keep track of the data, facilitate
coding, and check for relationships.
Throughout this study, we adopted several methods to improve the
quality of the research. Experts helped select the case organization and the
external stakeholders; three independent researchers provided their individual
interpretations of the findings; we conducted multiple interviews; and
interviewees could provide feedback on our initial findings, all of which
reinforces the reliability of our study. Although all the authors performed
independent coding of the transcripts, the interviews were conducted by the
same interviewer, which reduces the potential for bias (Lincoln and Guba,
1985; Strauss and Corbin, 1998).
Findings
Although IKEA's leitmotiv historically has been cost effectiveness, the
organization has now added the element of altruism, so that its guiding
philosophy is to "create a better everyday life for the many people […] and to
offer a wide range of home furnishings with good design and function at prices
so low that as many people as possible will be able to afford them" (IKEA UK
website, 2006). IKEA's stated ambition is to consider and integrate social and
environmental considerations into its daily operations to "make products which
have minimum impact on the environment and [...] manufacture them in a
socially responsible way" (IKEA Group, 2006, p. 2). These CSR policies,
which IKEA established for itself, derive from prevailing norms and institutional
relationships common in Nordic countries, which culturally tend to think of
ethical values, politics, and economics as constituents of a virtuous circle
(Christopherson and Lillie, 2005). Through this virtuous circle, IKEA believes it
can reduce the conflict between CSR and profit functions.
STAKEHOLDERS IN THE CSR DEVELOPMENT PROCESS
IKEA receives pressure from various external stakeholders. To a large extent,
this pressure exists because IKEA's business is modeled on cost
effectiveness and the organization engages in activities in developing
countries. Since the end of the 1980s, these policies have resulted in criticism
from NGOs in particular. For example, IKEA has come under scrutiny with
regard to child labor in Asia, working conditions in Eastern Europe and Asia,
and wood from questionable forests in Indonesia and Russia. For an overview
of the impact of various external stakeholders on the development of IKEA's
CSR policies, please refer to Figures 1a and 1b.
9
Figure 1a. External stakeholders' influence on the development of IKEA's CSR policies 1981-1998 (first code of conduct)
Main
criticisms
and
scandals
faced by
IKEA from
1980 to
1998
1981: Target of
an aggressive
public
campaign in
Denmark
regarding the
presence of
high levels of
formaldehyde in
particleboards.
Sued and
condemned for
violating Danish
law. Temporary
20% loss of
sales in Danish
market
1981…
Reactions
to critical
situations
and main
steps in CSR
policies
development
from 1981 to
1998
1981:
Development
of a large
testing
laboratory for
products.
Introduction of
new supplier
requirements.
Discussions
with BASF
and ICI in
Germany to
find ways to
reduce
formaldehyde
exposure in
IKEA
products
Late 1980s:
Intensification of
criticism about
environmentally related
issues like packaging
wastes and use of PVC
plastics that contain
dioxins (Germany);
catalogs criticized for
amount of waste
generated inproduction,
use of chlorinebleached paper,
andnumber of trees
felled each year to
produce
…Late 1980s…
1990-91:
internal report
about
environmental
impact of
IKEA’s
activities: IKEA
is described as
an
"environmental
gangster.”
Officially
adopts first
environmental
policy in 1991.
1992(a):
Swedish
documentary
blames IKEA
for child
labour in
Pakistani
factories and
shows on
television
children
chained to
weaving
machines.
1990
1991: IKEA,
with the help
of
Greenpeace
, prints
millions of
IKEA
catalogs on
chlorine-free
paper. Also
with
Greenpeace
on PVC
issue.
1992(b): New,
unexpected crisis
linked to
formaldehyde in
Germany
regarding the
world-famous Billy
Bookshelf. Media
coverage is
worldwide with
significant impacts.
Costs are
estimated at $ 6.5
million from
product recalls
alone. It costs
IKEA and suppliers
more than $10
million.
1991
1992 …
1992(a): New business
manager, Marianne
Barner, halts contracts
with the implicated
Pakistani supplier and
adds a standard clause
forbidding child labour
in suppliers’ contracts.
She travels to Pakistan,
India, and Nepal to
check work conditions,
andmeet collaborators
in buying offices,
suppliers, and NGO
representatives.
Cooperation with Save
the Children launched
to find solutions to child
labour issues IKEA
faces.
10
1994: German
documentary claims 5–6
year old children have
made IKEA-carpets near
Delhi, India, since 1990.
The story hits the
international press before
the claims are refuted as
fabrications. The impact in
terms of public relations is
severe. Different
stakeholder groups
(press, unions,
consumers, human rights
activists) initiate
investigations into IKEA’s
practices and call for
boycotts and
demonstrations.
… 1994
1992(b):
Deepens
joint efforts
with The
Natural Step,
initiated in
1990.
Environment
al policy
transformed
to a plan of
action with
concrete
practices.
The
developed
structures
seem
efficient.
1994: Barner
immediately
fires the Indian
company.
Management
feels pressure
and demands
the opinions of
experts,
assistance
unions, and
international
organizations
such as ILO
and UNICEF.
1997(a):
Another
document
ary reports
underage
children
work in
factories in
Vietnam
and the
Philippines
that supply
IKEA.
1997(b): New
allegations
about two
Indian textile
suppliers that
would have
recourse to
child labour.
Evidence of
abuses is not
officially
provided.
1998
… 1997
1997-98(a):
Contract
with
Philippian
supplier
suspended
when it
refuses to
cooperate
and improve
work
conditions in
its factory.
Cooperation
with
UNICEF
deepens.
1998: Nordic
Woodworkers
Federation, with
direct links to
IFBWW,
threatens to
organize a
boycott of IKEA
after a Sunday
Times article
highlights
lamentable work
conditions in
sawmills and
factories of IKEA
suppliers.
1997(b):
Monitoring
of
minimum
working
age
tightened
by IKEA.
1998: Unions
require meeting
with IKEA
executives. At
first sceptical,
IKEA agrees to
adopt ILO
standards for
working
conditions. An
agreement with
the IFBWW is
signed that
covers all
subsidiaries of
the IKEA group
and constitutes
its first code of
conduct.
Figure 1b. External stakeholders' influence on the development of IKEA's CSR policies from 1998 to 2006
Main
criticisms
and
scandals
faced by
IKEA from
1998 to
1998-1999: By end of
the 1990’s, pressures
from environmental
groups intensify,
especially over wood
procurements issues in
Russia and Indonesia.
A lack of clarity and
transparency is
underlined by, among
others, Robin Wood in
Germany (which
employs spectacular
actions) and
Greenpeace.
1998…
Reactions
to critical
situations
and main
steps in
CSR
policies
developme
nt from
1998: IKEA
initiates
partnership
with UNICEF
to prevent
child labour
and
accompanies
families in
their fight
against
poverty in
India.
1999: IKEA in the
centre of a
French crisis
when a polemic
sent by the
French marketing
director mentions
it is preferable not
to recruit coloured
staff for some
functions related
to direct client
contact.
1999
1998-99: After
launching, with a
Malaysian foundation,
the Sow a Seed project
to replant millions of
trees on Borneo, IKEA
works with Greenpeace
and officially commits in
1999 to phase out all
purchases of products
from unknown sources
of wood to ensure that
no wood originates from
ancient forests. Only
exception is wood from
ancient forests coming
from FSC-certified
forestry.
2003: Dutch Foundation
SOMO publishes a study
of labour conditions in
IKEA’s supply chain,
commissioned by the
Dutch union FNV. The
report details several
violations of IKEA’s code
of conduct in different
factories, essentially at
the social level but also
at an environmental
sense (mainly wage
levels, freedom of
association, work hours,
etc.). Impact of the study
is curiously low.
2000
2000: IKEA
injects
$500,000
into UNICEF
programs
aimed at
helping
children in
India and
vaccination
projects in
collaboration
with WHO.
2001
2000: IKEA
engages
with Global
Forest
Watch
(World
Resource
Institute) to
map ancient
forests and
propels the
project by
funding it
with $2.5
million.
11
2002
2001: IKEA
adopts its
own IWAY
voluntary
code of
conduct
pertaining to
social and
environment
al matters.
2002: WWF
and IKEA join
forces in a
formal
partnership to
cooperate in
support of
responsible
forestry at a
worldwide
level. Forest
certification
and education
in forestry
management
constitute the
heart of the
commitments.
2003
2003:
IKEA
launches
a twoyear
global
causerelated
marketing
operation
with
UNICEF
to finance
projects in
Uganda
and
Angola.
2005-2006: IKEA
the target of a
public interpellation
campaign by
Oxfam Belgium,
stressing poor
wage levels in
Southeast Asia and
IKEA consumption
model. Book is
published in 2006:
IKEA: Models to
assemble, a model
to dismantle.
2004
2000-2004: In
2003-2004, IKEA
launches several
cause-related
marketing
operations with
Save the Children
(STC) in different
countries. After
2000, IKEA funds
STC projects in
Kosovo ($500,000
in 2004),
contributes to
studies in Vietnam
and Bangladesh,
and supports STC
literacy programs
in the US.
2005
2004:
IKEA
joins in
the UN’s
Global
Compact
Three elements are apparent from Figures 1a and 1b: (1) the role of external
stakeholders in developing socially and environmentally responsible business
practices and codes of conduct (cf. Maignan and McAlister, 2003), (2) the role
of NGOs in implementing and enforcing CSR agreements and codes of
conduct (cf. Doh and Guay, 2004), and (3) the mix of reactive and proactive
actions taken by IKEA. We consider each element next.
Role of External Stakeholders
External stakeholders play a key part in developing IKEA's CSR policies. For
example, the International Federation of Building and Wood Workers
(IFBWW) prompted changes to its code of conduct in 1998, based on an
agreement reached in 1996 between IKEA and IFBWW through negotiations
among representatives from Greenpeace, Save the Children, and the World
Wildlife Fund (WWF). To gain knowledge about developments in the CSR
field and facilitate its CSR commitments, IKEA has established relationships
with various NGOs (see Figures 1a and 1b). For example, because wood
represents 70 percent of IKEA's raw materials, environmental issues related
to forestry rank among the organization's major concerns, as evidenced by its
certification efforts, planning operations, and collaborations with Global Forest
Watch, Greenpeace, a Swedish university, and the WWF. In the area of child
labor, IKEA works with UNICEF and Save the Children and, as part of this
process, has created a position within its organization that deals specifically
with this issue.
Role of NGOs
IKEA's local purchasing departments monitor the implementation of their CSR
agreements and codes of conduct (the IKEA Way or "IWAY"), such as
whether suppliers adhere to IKEA's requirements, while its internal
compliance and monitoring group follows up with developments on a global
basis. Monitoring is verified by independent auditing companies that
simultaneously play consultancy roles for implementing codes of conduct
(PriceWaterhouseCoopers, 2006). Third-party verification represents an
important element of the internal audit process. In biannual meetings, IKEA
communicates these audit results to the IFBWW and, in a reduced version, to
the wider public through its annual social and environmental report.
Independent organizations continuously assess and challenge the social and
environmental measures implemented by IKEA; for example, Greenpeace,
Robin Wood (a German environmental protection NGO), and SOMO (a Dutch
research foundation) have repeatedly attacked IKEA for not respecting its
environmental, social, and human rights responsibilities. As recently as 2006,
studies identified serious problems in the way that IKEA implemented its
codes of conduct, such as in terms of freedom of association and collective
bargaining, salary levels, work conditions, and workers' rights (Bailly et al.,
2006; de Haan and Oldenziel, 2003).
Reactive and Proactive Actions taken by IKEA
As a result of these external pressures, IKEA has integrated its CSR
objectives more systematically into its management philosophy and business
operations. For example, IKEA decided to adapt in a response to social
demands from public regulators (e.g., in Denmark and Germany), trade
12
unions (e.g., IFBWW, FNV), the media, and NGOs (e.g., Greenpeace, Robin
Wood, Save the Children). Our findings demonstrate that IKEA reacts quickly
when its image or reputation is challenged. For example, at the beginning of
the 1980s, a high proportion of poisonous substances was found in IKEA
particleboards sold in Denmark. The same year, IKEA's management
established large-scale testing of its products and introduced new
requirements for its suppliers. Because of its success in responding to such
external criticism, IKEA has been nicknamed the "Teflon company" (Miller,
2001).
However, IKEA also proactively seeks to anticipate stakeholders' demands. At
the beginning of the 1990s, to transform its environmental policy into an
efficient plan of action with concrete business practices, IKEA initiated a
collaboration with Natural Step, an international, not-for-profit, research,
educational, and advisory organization that uses scientifically developed
system frameworks to help individuals, organizations, and communities take
meaningful steps toward sustainability. IKEA also is a member of various
business networks, including Business for Social Responsibility and Global
Compact. For these and other partnerships, collaborations, and engagements
we refer to Table 1.
Table 1. IKEA's main partnerships, collaborations, and engagements
Environmental
Social and Humanitarian
International Business
WWF
UNICEF
Respect Table Network
In 2002, IKEA and the WWF
joined forces in a formalized
partnership to cooperate,
develop, and implement
responsible forestry
management practices in
different parts of the world.
The cooperation involves
informing and educating
about responsible forestry
management practices.
www.panda.org.
In 1998, IKEA engaged in a
partnership with UNICEF to
prevent child labor and support
families in their fight against
poverty. The work involves 650
villages in Uttar Pradesh in
northern India.
Cause-related marketing –
sometimes involving all IKEA
stores – to finance child-related
programs in Africa.
UNICEF postcards sold in IKEA
stores.
www.unicef.org.
RTN is a discussion forum on
social and environmental
themes defining itself as "a
forum for corporate leaders who
actively seek to create a new
role for business governance in
addressing common challenges
and finding common solutions by
linking the power of markets with
universal principles for a more
just and sustainable world". It
includes companies such as
ABB, DHL, HP, Interface, MTV,
and NCC.
www.respecteurope.org.
Global Forest Watch
Save the Children
BLICC
At the beginning of 2000,
IKEA made a donation of
more than US$2.5 million to
help launch Global Forest
Watch, a project of the World
Resource Institute, with the
objective of mapping intact
natural forests. This
collaboration still operates.
Save the Children contributed to
the elaboration of the code of
conduct concerning child labor
issues.
Collaborations in Vietnam and
Bangladesh through studies aiming
at learning more about child labor
practices and their implications.
IKEA contributed through its
donations to Save the Children
educative projects in Kosovo and
the United States.
Joint cause-related marketing
operations.
www.savethechildren.net.
Business Leaders' Initiatives on
Climate Change is a RTNrelated international program for
industry leaders whose
members officially and actively
encourage their collaborators
and suppliers to reduce their
waste emissions and energy
consumption. It includes
companies such as IVECO,
McDonald's Europe, MAERSK,
and DHL.
www.globalforestwatch.org.
13
www.respecteurope.org.
Environmental
Social and Humanitarian
International Business
Greenpeace
IFBWW
UN Global Compact
IKEA and Greenpeace are not
engaged in formalized
collaborative actions relative
to particular projects but in a
dialogue process, particularly
with regard to forestry.
In the 1990s, collaborations
on the elaboration of a
chlorine-free paper catalogue,
reducing PVC in products,
and an agreement obtained
regarding responsible forestry
represented several
significant steps in developing
the dialogue between both
organizations.
IKEA signed in 1998 an agreement
with the International Federation of
Building and Wood Workers
(IFBWW). The agreement
concerned working conditions and
rights of the workers, with a child
labor code of conduct in the
appendix. This agreement still
applies and gave birth to IKEA's
code of conduct: "The IKEA way on
Purchasing Home Furniture."
IFBWW is the only "external"
organization officially receiving
information related to the
implementation of the code of
conduct through biannual
meetings.
www.ifbww.org.
The United Nations Global
Compact officially brings
companies together with UN
agencies, labor, civil society,
and governments to advance
universal environmental and
social principles to foster a more
sustainable and inclusive world
economy. Global Compact
corporate partners include Shell,
BP, Nike, Novartis, Aventis,
Bayer, BASF, and
DaimlerChrysler.
www.greenpeace.org.
www.unglobalcompact.org.
Swedish University of
Agronomy
BSR
IKEA funds a scholarship
allowing students from
Russia, Poland, and the Baltic
countries to take part in a
sylviculture program at the
Swedish university of Alnarp.
Business for Social
Responsibility is a global
organization that helps member
companies achieve success in
ways that respect ethical values,
people, communities, and the
environment. BSR provides
information, tools, training, and
advisory services to make CSR
an integral part of business
operations and strategies. It
includes participants such as
Coca-Cola, BP, Chiquita, H&M,
Wal-Mart, and McDonald's.
www.bsr.org.
www.slu.org.
CSR COMMUNICATION
Our analysis of IKEA's advertising to the general public through the media
indicates that the organization seldom includes direct references to its CSR
commitments. There is, for example, no mention of CSR in the nine key
messages IKEA conveys to its customers: the "IKEA concept," the "IKEA
product range," "home furnishing specialist," "low price," "function," the "right
quality," "convenient shopping," a "day out for the whole family," and
"Swedish" (IKEA UK website, 2006; Lewis, 2005). Instead, IKEA stresses its
emphasis on the family and the environment, its Swedish roots, and, in turn,
the solidarity and egalitarianism traditionally associated with Sweden.
Explains Jean-Louis Baillot, CEO of IKEA France, "people consider that IKEA
has an environmental behavior" because of its Scandinavian roots, which
means that "it is ultimately not inevitably necessary to speak about it" (Comité
21, 2004).
14
Traditional Means of Communication
Prior to 2005, IKEA used its stores, product catalogs, and product packaging
to communicate its CSR policies to the public. For example, the stores'
brochures contained information relating to various products' environmental
impact, and the 2004 catalog included two pages that centered on CSR
themes. Inside stores, customers could also read about IKEA's cause-related
marketing campaigns and cooperative actions with Save the Children and
UNICEF, as well as review "green panels" that advised them about good
consumption practices. Since 2005 though, such descriptions of IKEA's
environmental and social efforts no longer appear in catalogs. In most
countries, the only ways to find information about the organization's CSR
polices, codes of conduct, brochures, and annual reports are through the
national IKEA Web sites.
Specific Means of Communication
IKEA's first social and environmental responsibility report was published in
2004 (for the year 2003). This report described how IKEA had incorporated
CSR into its entire supply chain and its collaboration with various NGOs.
Anders Dhalvig, CEO of IKEA, declared that IKEA's partners "have been
eager to start working seriously with these issues and have progressed step
by step, but it is only now, when we have accomplished a little more, that it
seems right to start telling the rest of the world about it." The CEO also
stressed that it was best to remain humble about what the organization had
accomplished so far, "because there is so much more that still remains to be
done" (IKEA Group, 2003). Overall, this first report provided transparent
communication about IKEA's CSR.
However, the report lists few numerical objectives and virtually no
performance indicators. The 2005 and 2006 reports contain such information,
though both objectives and indicators remain very general, which makes it
difficult to judge the extent to which IKEA truly integrates CSR considerations
into its business models. For example, its IWAY code of conduct contains
several different performance levels, the first of which details the minimum
requirements a supplier must meet to work with IKEA. But published reports
do not clearly indicate the level of responsibility the organization and its
suppliers have achieved in different areas. Approximations appear to be the
rule rather than the exception in these reports, as illustrated by the following
quote from the 2005 CSR report:
Most suppliers are in compliance with a majority of the issues. An
average IKEA supplier fulfils approximately 90 percent of the
requirements. 47 percent of IKEA suppliers fulfill all the 90 criteria in
IWAY. Most of the violations against IWAY occur in a few areas (IKEA
Group, 2006, p. 26).
When it comes to solutions it has implemented, IKEA remains vague in its
descriptions, though it claims to have set up more CSR objectives and employ
additional CSR indicators to guide its internal operations. On the basis of this
description, the reports might best be regarded as a specific means of
communicating with the general public.
15
Why has IKEA been so reluctant to place social and environmental labels on
its products, even though the products meet criteria for products made of
tropical wood materials? Our findings suggest the rationale is not rooted in
cost and administrative considerations but rather in the organization's
consciousness that the IKEA brand itself should "be a guarantee of
environmental consideration and social responsibility" (IKEA Group, 2006, p.
11). Another reason IKEA has chosen to be cautious in communicating about
its CSR is to avoid promoting "itself as a target for anti-globalization
organizations who focus on big brand names like ours despite our many
community- and environment-friendly policies and contributions" (Marianne
Barner, qtd. in Lewis, 2005, p. 175).
The next logical question pertains to perceptions of IKEA's communication.
We find that the organization has not developed a particularly structured
dialogue with its external stakeholders. Although IKEA states it collaborates
with various external stakeholders throughout the world, NGOs and trade
unions (except IFBWW) are not invited to participate in monitoring and
auditing IKEA's CSR policies. Instead, these organizations receive completed
audits and reports containing CSR information. Thus, these stakeholders (but
not consumers) generally perceive a lack of transparency or clarity in relation
to IKEA's CSR communication and consider it unsystematic, overly general,
and imprecise. In contrast, IKEA's communication with international partners
or formal or legal partners, such as city councils and governmental
organizations, is more transparent and comprehensive. Finally, though 40
percent of the surveyed consumers claim they have received information
relating to IKEA and its CSR achievements, and 77 percent say they do not
know much about IKEA's CSR, these stakeholders rarely ask for additional
CSR communication.
Impact of CSR Commitments and Communication on Diverse
Stakeholders
Although generally appreciated, IKEA's efforts to reduce the negative
environmental impact of itself and its products seem too slow to many
stakeholders. Greenpeace, Robin Wood, and other NGOs specifically assert
that IKEA could be clearer and more transparent in communicating its CSR
commitments. According to one researcher with an organization that analyzes
multinational organizations, including IKEA:
I would like to know what they are doing actually, but it's not very
transparent, not even when we have spoken to them. They were open,
but we didn't know what we could expect from them, they were not really
clear.
Another observer, a member of an German organization that advocates forest
protection and has criticized IKEA's environmental practices, characterizes
the organization's communication as:
A lot of words, but not very concrete. I'm not sure. But they communicate
very little concrete stuff, and therefore it is hard to judge them. This is
what they want. They want to be in the grey zone.
16
With regard to the supply chain, most stakeholders perceive IKEA positively
but criticize those involved in auditing and reporting. Many interviewees, such
as the Belgian trade unionist quoted next, consider the inclusion of trade
unions and NGOs highly important:
IKEA won't work with the unions in developing its CSR policies.
However, it would really be better if they did. Likewise, they don't want to
work with NGOs. They work alone.
Finally, the manner in which suppliers are monitored seems not fully clear or
evident to IKEA's stakeholders.
Frequently, IKEA receives criticism that its stores destroy the local economy
and put local businesses out of work. However, stakeholders also recognize
that IKEA stores offer employment and access to a commercial network.
These stakeholders remain concerned though about IKEA's labor contracts,
which often offer work only when there is an actual need for it.
On a general level, our investigation suggests stakeholders want to support
IKEA in its CSR implementation efforts, even though most of them remain
skeptical about its CSR commitments and communications. In Table 2, we
provide a summary of our findings; we also consider each in turn in Table 3.
17
Table 2. External stakeholders' perceptions and attitude toward IKEA's
CSR policies
Type of
Stakeholder
Perception of IKEA's
CSR Commitments
Perception of IKEA's
CSR Communication
Attitude to IKEA
NGOs with
formalized
partnerships
or
collaboration
with IKEA
Positive
IKEA considered proactive
BUT
- Too slow in
implementation
Positive
High perceived credibility
BUT
Too sporadic communication
with the general public
**
- Supportive
- IKEA considered a
stellar organization
BUT
- Still critical
***
Other NGOs
that only
sometimes
have
partnerships
with IKEA
- Relatively positive
BUT
- Too slow in
implementation
- Not enough involvement
of stakeholders in the
process
***
Lack of transparency
BUT
Too sporadic communication
with the general public
- Supportive
BUT
- Still critical
- Sometimes skeptical
*
**
**
Organization
s that have
publicly
criticized
IKEA about
CSR issues
Public
authorities
(Belgium)
Unions
(Belgium)
- Sincere about its
commitments
BUT
- Too slow in
implementation
- Dangerous strategic
option
- IKEA considered as a
reactive organization
*
- Lack of transparency
- Lack of independent
monitoring
- Demanding
- Skeptical
- Protesting, expressing
opposition to IKEA
O
*
- Positive
- IKEA considered proactive
- Positive
- Perceived transparency
- High perceived credibility
- Supportive
BUT
- Still demanding
***
**
***
- Relatively positive
BUT
- Too slow in
implementation
- Not enough involvement
of stakeholders in the
process
- High perceived credibility
BUT
- Lack of transparency
Too sporadic communication
with the general public
- Supportive
BUT
- Still critical
*
**
**
Specialized
organisms
(e.g., PR,
consultancy)
- Relatively positive
BUT
- Much more to do in the
field
**
- Lack of transparency
Too sporadic communication
with the general public
- Reduced range of strategic
options
*
- Respectful and
supportive
BUT
- Still skeptical
**
Notes: For each stakeholder, the average estimated perception and attitude toward IKEA's
CSR policies uses a scale of 0 (worst) to three (best) stars.
18
Table 3. Excerpts of external stakeholders' opinions about IKEA's CSR
commitments
Type of
Stakeholder
Neutral/Favorable
Opinions
Unfavorable Opinions
Resulting Attitudes
Toward IKEA
Formalized
collaborations or
partnerships
IKEA's CSR policies are
good and serve as an
example to other
companies. They have
very progressive targets
and firm commitments and
strategies in place to
implement them.
I would say pro-active but
hesitant. IKEA are not so
open.
[...] Considered as a stellar
example of CSR.
IKEA really has firm
commitment to social and
environmental issues.
Compared to other
companies, IKEA are
actively using their CSR
policies to improve their
business. They are trying
to create a win-win
situation out of CSR.
Note that IKEA's policies
and commitments are
considered as a stellar
example of CSR.
We are not at a point to say
that IKEA are doing just nice
talks with us. But, how much
it has already changes, I
don't know. They are very
careful and only say
something when they can be
a thousand percent sure that
they can really stick to it. We
still don't know how serious
they are.
I think we would expect
more openness about how
IKEA is managing its
suppliers in terms of working
times and conditions, salary,
etc. More transparency.
However, I don't feel that
many companies do that.
IKEA is still supportive but,
at the same time, critically
watching and observing
what they do.
From our point of view, it
requires regular assessment
of the situation. Also, we
continue CSR as long as we
think it is valuable and that
we feel some environmental
and social progress on the
ground. We are aware that if
it turns out to be mainly a
PR gimmick we would end
the relation. However, we
are often somewhere in a
grey zone.
You can see that IKEA are
trying to be a little bit
better than the average.
Other
collaborations or
partnerships
(e.g., former
partners,
national
divisions of
international
partners)
I think IKEA has an active
approach. They draw on
the knowledge of others,
they engage in
partnerships with NGOs
that can made some of
their needs materialize. It
is an active approach.
I treat IKEA as any other
sponsor − I distrust. That's it
because if they come to us it
means that they have
something to hide or at least
that they want to modify their
image on something they
don't do in a fair way.
Positive opinion, yet
critical.
It's sure that we could
probably say sometimes that
IKEA doesn't move enough
fast. I don't know exactly
where they are today in
terms of CSR.
I have a relatively good
perception of IKEA. I know
they are doing a lot of
responsible work, often
very beneficial, and that is
not always easy.
IKEA is pro-active and
conscious. They find CSR
important − the
environment, the
equilibrium between
economy and ecology.
I had the feeling IKEA was
on the right way, They took
necessary measures, and
this is what we wait for.
However, now I don't really
see improvements because
they are not transparent. I
begin to wonder.
19
Yes, I think that IKEA
develops a CSR policy in
line with what our
organization expects from
an organization of that scale.
I think that critical-skeptical
would be the most
appropriate − not
aggressive, not indifferent,
not considered as an
example.
I don't think IKEA misuses
our organization. I trust the
cooperation between IKEA
and our organization, and I
don't believe it would be
acceptable for us − at the
international level − to
develop such cooperation.
But it right that sometimes
that they are moving forward
too slowly. We trust IKEA.
Type of
Stakeholder
Neutral/Favorable
Opinions
Unfavorable Opinions
Resulting Attitudes
Toward IKEA
Organizations
that have
publicly
criticized IKEA
about CSR
issues
I think IKEA is somewhere
in the middle. I think that
when it comes to forestry
− which is our concerns −
they stay in the middle. In
Germany there is a DIY
organization that is quite
ahead of IKEA. Other
organizations are behind. I
would put IKEA exactly in
the middle.
I think IKEA could be better
when it comes to forestry.
They keep very much their
image in mind and react
accordingly.
Critical-skeptical − I think I
would say offensive.
I think I understand IKEA
much better now than
before we got in contact
with them.
IKEA cannot check their own
labor conditions. What they
call external verifications is
not external. They hire them,
they pay them, and they
make them check their own
labor conditions. Obviously,
we would like another
model.
In my opinion, IKEA is a
multinational organization
that reasons only in terms of
earnings and profitability,
and nothing more.
I think IKEA should state the
directions where they are
going. They don't. They say
they are a responsible
organization. That's it. I don't
have the impression that
much changes.
I think IKEA has many
problems in the supply
chain, and they should really
work on it. It's an
irresponsible organization, a
socially irresponsible
organization.
I think most of the work is
still ahead of IKEA, but that
they have taken some steps
in the right direction. But it is
still far away from our vision
of what a real responsible
organization is supposed to
be.
20
We are not happy with the
actions IKEA has taken so
far.
Protest, critical-skeptical.
No relationship at this time.
I'd like to have one with
IKEA.
Protesting, aggressive, and
demanding.
Type of
Stakeholder
Public
authorities
(Belgium)
Neutral/Favorable
Opinions
It's an organization that to
me has proven that they
are pro-environment and
that they are engaged in
developing CSR.
IKEA is proactive. When I
say proactive, it's
proactive.
Unfavorable Opinions
Resulting Attitudes
Toward IKEA
IKEA wants to respond to
consumers' expectations.
The important thing is then
to pursue and to be more
concrete, to really work on it.
I would like to see it is not
just window dressing. At the
moment, I'm not sure if this
is not the case.
Supportive. IKEA represents
an opportunity for the town
in terms of developing the
local community
Let's say IKEA has
implemented the
Scandinavian philosophy.
Also, they have a
responsible aspect. I
cannot say if it is real,
however.
Very good. This has been
the implementation of any
business plan that was the
easiest for us on all account
− all because IKEA is
proactive.
We support IKEA, but we
keep objective in our
relationship with them.
At the social and socioeconomic levels, IKEA
first of all brings
employment, which is
already valuable.
Now that we have
collaborated, my
perception of IKEA' CSR
commitments is even
more favorable.
I consider IKEA a lot more
favorably than other
organizations in the retail
and furniture sectors.
Unions
(Belgium)
I mean that when IKEA
advance something, they
also do it.
A growing number of
precarious jobs. Full time
jobs have almost
disappeared.
IKEA's CSR policy is
certainly interesting
because it goes deeper
that in other organizations.
However, it stays hidden
in the sense that there is
very little communication
about it.
If IKEA could do without
unions, they would
cheerfully go without them.
At a corporate level, they
don't see a need for unions.
In the field, it is different,
however.
Overall, I have a positive
image of IKEA's CSR
principles and
commitments.
IKEA won't work with the
unions in developing its CSR
policies. However, it would
be really better. Likewise,
they don't want to work with
NGOs. They work alone.
So to which extent goes the
respect of the code of
conduct and of the workers'
rights when you work with
subcontractors that
subcontract to other
subcontractors? It is difficult
to check. This is a real
problem.
21
We support IKEA.
In a certain way, we cannot
expect a lot more for what
concerns CSR. Now does it
meet our expectations? It is
clear that we would like to
see IKEA go further.
At the union level, it is not a
relationship of conflicts. But
there is always the daily little
argument.
Type of
Stakeholder
Neutral/Favorable
Opinions
Unfavorable Opinions
Resulting Attitudes
Toward IKEA
Specialized
organisms
(e.g., PR,
consultancy)
I find it interesting that in
environmental matters,
IKEA have engaged in
several areas that others
never have. And it must
be said that they cannot
do everything.
The 2004 CSR report
illustrates that there are
good initiatives that are
apparently managed with a
certain level of care even if
the global approach is not
inevitably CSR. Therefore, it
is possible that everything
only depends on the
willingness of the ones that
must take care of this or
that, and that it is not really
integrated in the general
orientation and management
of the organization.
I would say respectful and
also maybe in a certain
extent considered as an
example. However, it
doesn't prevent one to keep
a critical attitude and to
cautiously consider the
information brought to us or
which we find.
I have the feeling that
IKEA are quite less
reactive, that they are
more proactive than
reactive.
I have a relatively
favorable perception of
IKEA in terms of CSR
matters.
At a CSR level, IKEA is
committed.
I think IKEA develops a
well founded work.
It's an organization that
bases its philosophy on a
responsible dimension.
But I think it's an
organization that doesn't
look for communicating or
sharing its strategy, its
way of working.
Even if every single
approach could be
improved, IKEA generally
is an example to follow.
CSR is more a risk
management.
I have the feeling that they
are focused on a few points,
on certain responsibilities,
on the topics that are
important to them. But there
are other areas that would
deserve to be treated and
about which they are
absolutely not feeling
concerned.
We support IKEA even if
some approaches can be
improved
We would appreciate having
IKEA in our network. We are
opened to a lot of different
types of organizations. It is
sure that IKEA has a
strategy that could be
interesting for an
organization like ours.
But I think that in details,
there are better to do as well
on the field than on the
communication side. But it is
a personal appreciation.
Consumers
Although they feel they have little knowledge of IKEA's CSR commitments,
consumers consider those commitments somewhat positively, and only 5.4
percent had formed unfavorable perceptions of IKEA's CSR initiatives. Our
survey also identifies that consumers exposed to communication from IKEA
about its CSR initiatives hold a more favorable opinion of IKEA's CSR than do
other consumers (t-test, sig.: 0.017), in support of the importance of
communicating CSR. Our analysis also shows that consumers who most
associate social equity, ecology, responsibility, and ethics with the image of
Sweden (N = 68) have a more favorable opinion of IKEA's CSR than do
consumers (N = 60) who least associate these terms with Sweden (t-test, sig.:
0.0009). This difference appears crucial, in that 95 percent of the surveyed
consumers actually named Sweden as the country of origin for IKEA in a
multiple choice question. Also, though 40.6 percent of the surveyed
customers indicated they would boycott IKEA if the organization performed
badly on the CSR indicators they considered important, a positive impression
22
about CSR initiatives was not sufficient reason for these consumers to buy
IKEA's products. We cannot establish any significant relationship between
appreciation for IKEA's CSR policies and behavioral intentions toward the
brand, which supports the proposition that socially ethical consumption is
more a matter of principles than actual practice.
Long-term Partners
Those NGOs and other organizations that collaborate, often internationally
and formally, with IKEA on social, socioeconomic, and environmental matters
have some access to privileged information that is unavailable to the general
public. Therefore, these partners maintain a positive view of IKEA's CSR
commitments and regard it as a proactive organization that does not want to
exploit its image as a responsible corporate citizen:
IKEA's CSR policies are good and serve as an example for other
companies. They have very progressive targets, and a firm commitment
and strategies in place to implement them (representative of an
international nature protection organization).
Although IKEA has not realized its CSR policies fully, these partners believe
the organization is on the right track, and they
[…] expect more openness about how they are managing their suppliers
in terms of working times, work conditions, salary, etc. More
transparency. But, I don't feel that many companies do that
(representative of the Danish national division of an international child
protection organization).
Partners also support IKEA's attitude toward CSR but simultaneously stress
that they continue to observe the organization's CSR commitment and
communication:
I believe they are on their way, but at the moment we would welcome
more detailed communication on progress toward their social and
environmental goals (representative of an international nature
organization).
Organizations other than Partners
In the past, organizations such as Oxfam Belgium, Robin Wood, and Somo,
with which IKEA has no partnerships, have criticized IKEA regarding its CSR
commitments. Believing that much work still needs to be accomplished, these
organizations blame IKEA's CSR guidelines for being unclear and its
implementation for being too slow. More important, they regard the slow
implementation of CSR policies as a sign of IKEA's lack of determination:
I think most of the work is still ahead of them and that they have taken
some steps in the right direction. But it is still far away from our vision of
what a really responsible corporation is supposed to be (campaigner
from an international nature protection organization that has developed a
regular, but informal dialogue with IKEA since the beginning of the
1990s).
23
In contrast with long-term partners, most of these other organizations regard
IKEA as reacting more than acting when it comes to CSR:
They can't check their own labor conditions. What they call external
verifications is not external. They hire them, they pay them, and they
make them check their own labor. Obviously we would like another
model as sometimes in other industries (researcher with an organization
that analyzes multinational companies' activities and IKEA in particular).
However, similar to long-term partners, other organizations are skeptical
about IKEA's CSR communication, especially when it comes to transparency:
I would ask them to be more transparent.... I think that for a multinational
organization like IKEA, which is sourcing all over the world, the customer
should have the possibility to check what is going on in the shops. Also,
the organization that claims to be socially and environmentally
responsible should give the customer the opportunity to verify this
(campaigner with a German forest protection organization that has
criticized IKEA's environmental practices).
City Councils
Because of its socioeconomic impact, most city councils favor IKEA setting up
stores in their neighborhood; any potential loss for the traditional
socioeconomic network gets compensated for by the creation of economic
clusters around IKEA's massive stores. As one member of a Belgian
economic affairs committed summarized it, "At the social and socioeconomic
levels, they first bring employment, which is valuable."
IKEA's presence affects not only the level of employment (particularly
among unskilled workers) but also regional visibility and commercial
activities. Furthermore, city councils consider IKEA superior to other
large organizations in terms of how it deals with social and
environmental issues:
It's an organization that has proved to me, with facts, that they are for
the environment and that they are engaged. I consider IKEA a lot more
favorably than other organizations in the retail and in the furniture
sectors (representative of a Belgian committee in charge of
environmental and socioeconomic permits).
Trade Unions
Trade union representatives working with IKEA regard the organization's CSR
policies as more developed than those of other organizations. But they also
consider IKEA's communication about its CSR policies insufficient:
The CSR policies are certainly interesting because they go deeper than
in other organizations. But, they stay hidden, in the way that there is very
little communication about them (Belgian trade unionist).
These stakeholders want IKEA to develop their CSR policies further as well:
24
In a certain way, we can't expect a lot more in terms of CSR. Now, does
it meet our expectations? It is clear that we would like to see them go
further (Belgian trade unionist).
Overall, the trade union representatives support and encourage IKEA in its
CSR commitments, though they maintain their somewhat critical attitude.
Organizations S§pecializing in CSR
Many organizations that specialize in CSR consulting, promotion, and
monitoring indicate a positive view of IKEA. They share the feeling that, when
it comes to CSR, IKEA is more proactive than reactive, though they challenge
the organization for focusing on very specific CSR issues, such as child labor
and environmental concerns, at the expense of other issues, such as human
resource management and workers' rights in developing countries. Similar to
other stakeholders, these organizations also see weaknesses in IKEA's
communication efforts:
They have much to develop when it comes to the interface with the
consumers, on the marketing side, because they almost don’t speak.
Also, what they say seems to generate questions and, potentially,
controversies (French senior business consultant specializing in
sustainable development issues).
These organizations also regret that IKEA rarely partakes in local programs
designed to share best practices in CSR. Although IKEA plays an active part
in large, international, CSR-oriented networks, the organization still is
perceived as weak in this area, as:
… an organization that bases its philosophy around a responsible
dimension, which sees itself as really responsible. But, I think it's an
organization that doesn't look for communicating or sharing its strategy,
its way of working (director of a European business and society
network).
Even despite these complaints, these organizations generally respect IKEA
for its CSR commitments.
This contrast among different stakeholders clearly demonstrates that, on the
one hand, NGOs, city councils, and trade unions maintain positive attitudes
toward IKEA and its CSR commitments, largely because they stay in regular
and direct contact with IKEA regarding social or environmental issues. On the
other hand, other organizations, which have publicly criticized IKEA about
CSR-related issues, express relatively serious worries and doubts about its
implementation of its CSR commitments; some (former) partners share this
view as well. Quite a few stakeholder groups express a critical view of IKEA's
CSR communication and the transparency of this communication. This
critique results in a skeptical attitude, especially if the stakeholder does not
engage in direct dialogue with IKEA.
25
MANAGERIAL IMPLICATIONS
This study examines how IKEA commits itself to CSR and how it
communicates its policies to multiple stakeholders. In particular, we identify
the important role that stakeholders play in IKEA's CSR policies and the
added value associated with CSR commitment and communication. We also
note that IKEA often develops its CSR policies in response to criticism. On the
basis of the case study findings and our analysis of these findings, we draw
several key managerial implications.
Analyzing changes in the organization's external environment,
identifying key stakeholders, and regarding CSR as a promising path
Their increasing dependence on financial investors' expectations about their
performance and public opinion means that organizations must demonstrate
their thorough understanding of the changes in their external environments. In
particular, organizations must be aware of who their stakeholders are and
what expectations they hold. Our case study reveals that IKEA has faced
many potential crises, including those related to work safety, wood from
certified sustainable forests, and CO2 emission levels, which prompted it to
engage in discussions and negotiations with trade unions, its supplier
network, NGOs, and the media. In dealing with these different crises, IKEA
has found that its CSR can deliver promising solutions and ultimately lead to
better corporate performance.
Including, engaging, and integrating external stakeholders in CSR
policies
By letting IKEA know how they perceive the organization, whether by
criticizing it publicly or entering into a collaborative, constructive relationship
with it, external stakeholders have influenced IKEA's CSR policies significantly
at various times. In response to external stakeholders' expectations or
requirements, IKEA has changed its business practices. In some cases, IKEA
has been quick to anticipate demands that external stakeholders may place
on the organization, whereas in other cases, it has resolved a situation or a
problem successfully after the crisis occurred and used communication to
inform concerned stakeholders how it was dealing with the problem. IKEA's
strategy thus involves carefully managing its CSR commitments in a strategic
manner. Initially reactive to CSR complaints, the organization has gradually
increased its proactive policies and coupled them with reactive responses
when needed. This dual strategy partially explains why IKEA experiences
crises but never has had to endure them for a prolonged period.
Communicating with external stakeholders using appropriate tools
IKEA has not felt the need to advertise its CSR commitments; rather than
relying on advertising rhetoric, it trusts in factual information. In addition, IKEA
uses appealing elements, such as family, cultural, and ethical values, to
portray its CSR commitments. Furthermore, IKEA carefully and efficiently
maintains its image, then selects some specific CSR commitments, such as
children's rights and reduced environmental impact, to communicate. With
regard to organizational and institutional stakeholders, IKEA uses specifically
adapted communication means, such as its annual CSR report. Our findings
26
highlight the complexity associated with reaching decisions about the nature
and level of communication. For example, the need to communicate varies
depending on the type of stakeholder and the importance that the stakeholder
places on CSR, as well as the stakeholder's potential influence. In the case of
IKEA, NGOs and trade unions have been more influential than consumers, so
communication with these external stakeholders adds more value.
Transparent communications with external stakeholders
Skepticism takes a central role in stakeholders' perceptions of and attitudes
toward an organization. Therefore, modern organizations absolutely must
engage in transparent dialogue with their stakeholders. When they do so,
according to our findings, stakeholders become less skeptical about and
exhibit a more positive attitude toward the organization.
Modest approach: Involving external stakeholders in monitoring and
communicating achievements
Although its commitment to CSR and attempts to communicate that
commitment positively influence IKEA's image in the most cases, its decision
to keep surveys confidential and exclude most external stakeholders from
implementing and monitoring different CSR initiatives means it has missed
some opportunities to improve its CSR policies. Organizations must realize
that engaging with stakeholders in a constructive manner requires both time
and effort. In the case of IKEA, for example, the organization paid
considerable attention to its relationships with WWF and UNICEF. The parties
entered into an ongoing dialogue, trusted each other, and made compromises
along the way, resulting in highly successful relationships. This example
demonstrates the importance of involving external stakeholders in the
monitoring process, which indicates the organization is willing to change its
CSR policies and thereby signals its credibility to the outside world. Similarly
important is the organization's voluntary communication of its progress, and
what remains to be achieved, as it implements its CSR policies. Organizations
should avoid being overly modest in their communication, as IKEA often has
been in the past, because such coyness could be considered an attempt to
fool external stakeholders, which only generates suspicion and unwanted
scrutiny.
CONTINUOUSLY DEVELOPING CSR POLICIES
The developments that have taken place in IKEA's external environment
highlight the need to reconsider CSR policies regularly and through dialogue
with the organization's various stakeholders, who want to be kept informed on
how its commitments to CSR are being honored or improved. If such
adaptations do not occur, organizations risk significant criticism. To achieve
successful communication, organizations should integrate external
stakeholders in the way we depict in Figure 2. First, by including a feedback
loop for stakeholders' perceptions of the organization, organizations
acknowledge that their CSR policy involves a continuous process. Second,
the framework awards a central role to external stakeholders whenever
organizations revisit their CSR policies or communicate with the external
27
environment. Third, the dialogue between the organization and its
stakeholders must be transparent and constructive.
Figure 2. External stakeholders' role in the integration and development
of IKEA's CSR policies
Pressure from the
external
environment
Management
philosophy and
business idea
Organizational
culture and vision
External sources of
information about
organizations
Recognizing CSR within the
organization
Strategic response of the organization
Implementation of
CSR
Communication on
CSR
Transparency of
the stakeholder
dialogue
Feedback
loop
The stakeholders' perceptions and attitudes of
the organization's CSR policies
28
CONCLUSIONS AND DISCUSSIONS
Drawing from our development of the case, we outline some key strategic
implications for IKEA and organizations interested in CSR in general. The
effective influence of stakeholders in the CSR development process and the
variability of their perceptions about CSR activities and communication should
prompt researchers to analyze CSR development issues and conduct impact
analyses in a more comprehensive manner than currently exists. The crucial
role of stakeholders' differential perceptions about the transparency and
credibility of information about an organization's CSR commitments should
remain central to any research effort; thus, our identification of different
stakeholders' unique attitudes toward IKEA represents an important
contribution.
As does most research, this study has several limitations that affect our
interpretation of the findings and suggest directions for further research. First,
our study is based on a single-case approach. Second, though we interviewed
stakeholders from various European countries, the Belgian context
predominates in the interviews of union representatives and local authorities
and therefore may influence or bias the analysis. In addition, though we
gathered information from a representative sample of external stakeholders,
we could not address every category of stakeholder. Third, we integrate end
customer input only through surveys. Direct end customer input, particularly
with regard to ethical attributions, could increase the validity of our customer
value analysis model. Fourth, our research is limited to an a posteriori
analysis of CSR policies in a particular industry, which does not allow us to
observe the formation or shifts in the key stakeholders' perceptions and
attitudes directly. Real time and longitudinal data, rather than historical
information and interviewee recall, would therefore extend our study
effectively.
Moreover, follow-up case studies that address the entire CSR implementation
cycle, as well as other industry contexts, are needed to generalize our results
and establish a comprehensive framework of CSR commitments and
communication. Further research also might consider additional cases to
highlight any similarities and differences across cases and possible reasons
for those differences. For example, researchers might analyze different
organizations in different sectors to distinguish the roles of the content and
nature of CSR policies, an organization's historical background in CSR in
terms of stakeholder perceptions and attitudes, and the organization's origin,
as well as the respective influences of perceived CSR levels and CSR
communication alternatives.
Other potential future research avenues include a comparative analysis of the
role of various stakeholders in the organization's development of its CSR
policies. In this sense, it would be worthwhile to evaluate comprehensively
and systematically the influence of different stakeholder groups on
organizational changes demanded by the integration of CSR principles into
corporate strategy. Related CSR communicational choices thus might be
revised and tailored to the expectations of each particular category of
stakeholders. Finally, the impact of organizational and strategic changes on
29
the perceptions and attitudes of various stakeholders should be highlighted
during different steps of the integration process.
ACKNOWLEDGMENTS
The authors contributed equally. They offer our sincere thanks to the
organizations that participated in the study. They also thank Martin Hingley
and Joëlle Vanhamme for critical comments to an earlier version of this paper.
30
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P Murray (2005) ‘Learning’ with Complexity: Metaphors from the New
Sciences
D Kamala (2004) The Voices of the Poor and Poverty Eradication Strategies
in Tanzania
M R Ryan (2003) Vertical Integration Results and Applications to the
Regulation of Supermarket Activity
M A Nolan, F R Fitzroy (2003) Inactivity, Sickness and Unemployment in
Great Britain: Early Analysis at the Level of Local Authorities
K R Bhattarai (2003) An Analysis of Interest Rate Determination in the UK
and Four Major Leading Economies
K R Bhattarai (2004) Macroeconomic Impacts of Consumption and Income
Taxes: A General Equilibrium Analysis
J Paez-Farrell (2003) Business Cycles in the United Kingdom: An Update on
the Stylised Facts
J Paez-Farrell (2003) Endogenous Capital in New Keynesian Models
P Kitchen, L Eagle, L Rose, B Moyle (2003) The Impact of Gray Marketing
and Parallel Importing on Brand Equity and Brand Value
M Afanassieva (2003) Managerial Responses to Transition in the Russian
Defence Industry
J R Córdoba-Pachón, G Midgley (2003) Addressing Organisational and
Societal Concerns: An Application of Critical Systems Thinking to Information
Systems Planning in Colombia
J Evans, R Green (2003) Why Did British Electricity Prices Fall After 1998?
C Hemingway (2002) An Exploratory Analysis of Corporate Social
Responsibility: Definitions, Motives and Values
P Murray (2002) Constructing Futures in New Attractors
S Armstrong, C Allinson, J Hayes (2002) An Investigation of Cognitive Style
as a Determinant of Successful Mentor-Protégé Relationships in Formal
Mentoring Systems
N O'Neill (2001) Education and the Local Labour Market
A Zakaria, Z Osemy, B Prodhan (2001) The Role of Accounting Information
Systems in Rationalising Investment Decisions in Manufacturing Companies
in Egypt
A Mejía (2001) The Problem of Knowledge Imposition: Paulo Freire and
Critical Systems Thinking
P Maclagan (2001) Reflections on the Integration of Ethics Teaching into the
BA Management Degree Programme at The University of Hull
N R Romm (2001) Considering Our Responsibilities as Systemic Thinkers: A
Trusting Constructivist Argument
L Hajek, J Hynek, V Janecek, F Lefley, F Wharton (2001) Manufacturing
Investment in the Czech Republic: An International Comparison
Gerald M, J F Gu, D Campbell (2001) Dealing with Human Relations in
Chinese Systems Practice
Z Zhu (2000) Dealing with a Differentiated Whole: The Philosophy of the
WSR Approach
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W J Gregory, G Midgley (1999) Planning for Disaster: Developing a MultiAgency Counselling Service
L Pinzón, G Midgley (1999) Developing a Systemic Model for the Evaluation
of Conflicts
G Midgley, A E Ochoa Arias (1999) Unfolding a Theory of Systemic
Intervention
M Brown, R Packham (1999) Organisational Learning, Critical Systems
Thinking and Systemic Learning
G Midgley (1999) Rethinking the Unity of Science
P Keys (1998) Creativity, Design and Style in MS/OR
G Midgley, A E Ochoa Arias (1998) Visions of Community for Community OR
G Midgley, I Munlo, M Brown (1998) The Theory and Practice of Boundary
Critique: Developing Housing Services for Older People
J Clayton, W Gregory (1997) Total Systems Intervention or Total Systems
Failure: Reflections of an Application of TSI in a Prison
L Pinzon, N Valero-Silva (1996) A Proposal for a Critique of Contemporary
Mediation Techniques - The Satisfaction Story
R L. Flood (1996) Total Systems Intervention: Local Systemic Intervention
R L. Flood (1996) Holism and Social Action ‘Problem Solving’
P Dudley, S Pustylnik (1996) Modern Systems Science: Variations on the
Theme?
W Ulrich (1996) Critical Systems Thinking for Citizens: A Research Proposal
G Midgley (1995) Mixing Methods: Developing Systems Intervention
J Thompson (1995) User Involvement in Mental Health Services: The Limits
of Consumerism, the Risks of Marginalisation and the Need for a Critical
Systems Approach
P Dudley, S Pustylnik (1995) Reading the Tektology: Provisional Findings,
Postulates and Research Directions
W Gregory, N R Romm (1994) Developing Multi-Agency Dialogue: The
Role(s) of Facilitation
N R Romm (1994) Continuing Tensions between Soft Systems Methodology
and Critical Systems Heuristics
P Dudley (1994) Neon God: Systems Thinking and Signification
M C Jackson (1993) Beyond the Fads: Systems Thinking for Managers
S M Green (1993) Systems Thinking and the Management of a Public Service
Organisation
M C Jackson and R L Flood (1993) Opening of the Centre for Systems
Studies
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CENTRE FOR ECONOMIC POLICY RESEARCH PAPERS
(PRIOR TO MERGING WITH THE BUSINESS SCHOOL IN AUGUST 2002)
283 Naveed Naqvi, Tapan Biswas and Christer Ljungwall (2002). Evolution of
Wages and Technological Progress in China’s Industrial Sector
282 Tapan Biswas, Jolian P McHardy (2002). Productivity Changes with Monopoly
Trade Unions in a Duopoly Market
281 Christopher Tsoukis (2001). Productivity Externalities Tobin’s Q and
Endogenous Growth
280 Christopher J Hammond, Geraint Johnes and Terry Robinson (2000). Technical
Efficiency under Alternative Regulatory Regimes: Evidence from the Inter-War
British Gas Industry
279 Christopher J Hammond (2000). Efficiency in the Provision of Public Services:
A Data Envelopment Analysis of UK Public Library Systems
278 Keshab Bhattarai (2000). Efficiency and Factor Reallocation Effects and
Marginal Excess Burden of Taxes in the UK Economy
277 Keshab Bhattarai, Tomasz Wisniewski (2000). Determinants of Wages and
Labour Supply in the UK
276 Taradas Bandyopadhay, Tapan Biswas (2000). The Relation between
Commodity Prices and Factor Rewards
275 Emmanuel V Pikoulakis (2000). A “Market Clearing” Model of the International
Business Cycle that Explains the 1980’s
274 Jolian P McHardy (2000). Miscalculations of Monopoly and Oligopoly Welfare
Losses with Linear Demand
273 Jolian P McHardy (2000). The Importance of Demand Complementarities in the
Calculation of Dead-Weight Welfare Losses
272 Jolian P McHardy (2000). Complementary Monopoly and Welfare Loss
271 Christopher Tsoukis, Ahmed Alyousha (2000). A Re-Examination of Saving –
Investment Relationships: Cointegration, Causality and International Capital
Mobility
270 Christopher Tsoukis, Nigel Miller (2000). A Dynamic Analysis of Endogenous
Growth with Public Services
269 Keshab Bhattarai (1999). A Forward-Looking Dynamic Multisectoral GeneralEquilibrium Tax Model of the UK Economy
268 Peter Dawson, Stephen Dobson and Bill Gerrad (1999). Managerial Efficiency
in English Soccer: A Comparison of Stochastic Frontier Methods
267 Iona E Tarrant (1999). An Analysis of J S Mill’s Notion of Utility as a
Hierarchical Utility Framework and the Implications for the Paretian Liberal
Paradox
266 Simon Vicary (1999). Public Good Provision with an Individual Cost of
Donations
265 Nigel Miller, Chris Tsoukis (1999). On the Optimality of Public Capital for LongRun Economic Growth: Evidence from Panel Data
264 Michael J Ryan (1999). Data Envelopment Analysis, Cost Efficiency and
Performance Targeting
263 Michael J Ryan (1999). Missing Factors, Managerial Effort and the Allocation of
Common
39