UCL
Integration and Communication of CSR
Principles by IKEA.
An Analysis of the Influence of and on
External Stakeholders.
Maon François
Swaen Valérie
Université catholique de Louvain – Belgium
GIN 13th International Conference
Cardiff 2006
Structure of the Presentation
A.
Context and Objectives
B.
Conceptual Background
C.
Methodology
D.
Main findings
E.
Managerial Lessons
Context
•
Stakeholders’ perceptions and attitudes towards companies’
CSR policies are complex and difficult to define in a general
perspective (e.g. Sen & Bhattacharya, 2001)
•
Research focus on certain types of stakeholders: consumers
(e.g. Brown & Dacin, 1999), investors (e.g. Sparkes, 2002),
employees and job applicants (e.g. Turban & Greening, 1997)

•
Impact on other stakeholders (NGOs, unions, public
authorities, …) are rarely analyzed and contrasted
Research often considers only one type of stakeholder at
a time

Prevent any analysis of the potential differential impact
of CSR commitments and communication on different
types of external and ubiquitous stakeholders
Objectives of the study
1.
Analysing how external and ubiquitous stakeholders can
influence the development of CSR commitments
2.
Assessing the differential impact of CSR commitments and
CSR communications on various stakeholders’ groups
How?
•
Through an in-depth case study: The case of IKEA
•
By using an integrative framework providing an integrated
stakeholder orientation for a step by step implementation of
CSR (Maignan et al., 2005)
Conceptual Background (1/3)
Corporate Social Responsibility (CSR)
« the extent to which businesses assume the economic, legal,
ethical and discretionary responsibilities imposed on them by their
various stakeholders » (Maignan, Ferrell & Hult, 1999)”
Stakeholders
« interface and relay between society expectations and the
corporation » (Whetten, Rands & Godfrey, 2002)

Companies develop appropriate strategies to meet, manage
and/or change stakeholders’ expectations
Conceptual Background (2/3)
Stakeholders’ reactions to CSR activities
•
•
•
Enhanced reputation (e.g., Fombrun & Shanley, 1990)
Creation of corporate goodwill on key stakeholders (e.g., Murray
& Vogel, 1997)
Positive consumers’ attitudes towards the company and its
products (e.g., Brown & Dacin, 1997)
BUT
•
CSR initiatives can under certain conditions decrease
consumers’ buying intentions (Sen & Bhattacharya, 2001).
•
Asymmetrical influence of ethical information on attitudes (e.g.,
Carrigan & Attalla, 2001)

Companies hesitate to communicate about their CSR
practices
Conceptual Bakground (3/3)
CSR Implementation Integrative Framework (Maignan et al., 2005)
STEP 1 :
Discovering
organizational
norms and
values
STEP 2 :
Identifying
stakeholders
STEP 3 :
Identifying
stakeholder
issues
STEP 7 :
Promoting
CSR
STEP 4 :
Assessing the
meaning of
CSR
STEP 5 :
Auditing
current
practices
STEP 6 :
Implementing
CSR initiatives
STEP 8 :
Gaining
stakeholder
feedback
Short term feedback loop
Long term feedback loop
Methodology
•
Case study research method (Dufour, 1983; Yin, 1984)
and complementary data collection techniques:
•
Exhaustive inventory of IKEA’s CSR communication
–
Media analysis & store visits in three countries
•
Extensive desk research
•
20 in-depth interviews in 2005 with representatives of
IKEA’s external stakeholders
•
Survey carried out on on a sample of 150 IKEA
customers in Belgium (quota sampling)
Main Findings
1. IKEA’s CSR Commitments
2. IKEA’s CSR Communication
3. Stakeholders’ Reactions to IKEA’s CSR
Policies and Communication
4. IKEA case through the CSR implementation
integrative framework
1. IKEA’s CSR Commitments
• Ambition: “to make products which have minimum
impact on the environment and to manufacture
them in a socially responsible way”
• CSR commitments and policies materialized in
1998 by the creation of a voluntary code of
conduct: The IKEA Way
1. IKEA’s CSR Commitments
Scandals and criticisms faced by IKEA
•
81-92  Product safety and environmental issues in Europe
•
92-97  Child labour in Pakistan, India, Vietnam and Philippines
•
98  Lamentable work conditions in IKEA supply chain
•
98-99  Pressures from environmental groups related to wood
procurement issues in Russia and Indonesia
•
1999- …  Criticisms on the code of conduct implementation in
suppliers’ factories (wages levels, freedom of association, work
hours…)
1. IKEA’s CSR Commitments
Reactive behaviours
•
Different programs of actions aiming at dodging risks,
latent detractors’ criticisms and their potential harmful
impacts

Importance of external stakeholders in the development
and enforcement of socially responsible buying
practices agreements and codes of conduct
•
Code of conduct based on a 1996 IFBWW-IKEA agreement
•
Collaborations in environmental and social matters
1. IKEA’s CSR Commitments
Proactive behaviours
•
Anticipate environmental demands as a part of its
corporate culture and management philosophy

Officially, IKEA does not simply consider CSR policies
as reactions to criticisms and scandals
•
Sustainable development & CSR = market opportunities
•
IKEA presents itself as a CSR-concerned company
 speed of reaction
 humble attitude
 increasingly proactive behaviour
2. IKEA’s CSR Communication
•
Central belief: « Little publicity is good publicity »
BUT
•
Doesn’t want to appear as a distributor achieving low price at
any price
THEN
•
Traditional communication tools
•
CSR-specific communication tools

IKEA tries to keep a low profile and prefers to progress
cautiously by privileging actions instead of communication
in CSR matters

Passive behaviour in terms of CSR communication

Lets potentially interested parties “find” CSR information
about IKEA by themselves
3. Stakeholders’ Reactions
About customers
•
Feeling of not being informed on IKEA’s CSR policies
•
Don’t significantly ask for more CSR information
•
Slightly positive perception about IKEA’s CSR commitments
(mean = 4,3 on a scale from 1 to 7)
•
No significant influence on their buying intentions

Relatively ethical “chastity” of IKEA doesn’t constitute a
determinant factor in IKEA’s consumer behaviour

40,6 % of customers affirm they would boycott IKEA if they
learn about important negligence related to CSR matters
they attach importance to
3. Stakeholders’ Reactions
About other stakeholders than customers
•
Stakeholders’ assessment of IKEA’s CSR commitments
–
•
General perception = relatively favourable
HOWEVER: Interesting differences have been highlighted
according to the type of stakeholders considered
3. Stakeholders’ Reactions
About partner organizations, trade unions and public
administrations which have regular and /or formalized
contacts with IKEA
•
better perception of IKEA’s CSR commitments and policies
About organizations that have only accessed to independent
and external sources of information on IKEA’s CSR
policies
•
often sceptical and critical attitude, sometimes aggressive
Lack of structured dialogue with stakeholders is emphasized

Transparency - demanded by a large majority of
stakeholders – plays a positive role in the development of
positive attitudes towards the firm
4. IKEA Case through the CSR
implementation integrative framework
Step 1: Discovering organizational value and norms
•
IKEA’s Origin, values and culture, as well as IKEA’s business
vision – “to create a better everyday life for the many people”:
 considered as fostering the development of CSR policies
 Fit with prerequisite of openness towards stakeholders
issues

Strong basis for implementing an integrated CSR
program
4. IKEA Case through the CSR
implementation integrative framework
Step 2/3: Identifying stakeholders and stakeholders’ issues
•
Customers, employees and suppliers historically considered as
key stakeholders in IKEA’s environment
•
Crisis IKEA faced:
 importance of other key stakeholders such as NGOs,
unions federation, or the media
 new social and environmental issues considered

Step 1, 2 and 3 allows IKEA to efficiently assess a CSR
meaning that takes into account key stakeholders’
expectations
4. IKEA Case through the CSR
implementation integrative framework
Step 4: assessing the meaning of CSR
•
IKEA’ CSR vision highlights two essential points:
–
The motivation supporting the CSR commitments
–
The stakeholders’ issues considered as priorities
• Better everyday life at home for customers
• Products free from hazardous substance
• Responsible forestry policies
• Fundamental rules to be respected by suppliers:
– No child labour
– « Acceptable » work conditions
– Responsible attitude towards the environment
4. IKEA Case through the CSR
implementation integrative framework
Step 5: auditing current practices
•
Regular market studies on customers, suppliers and employees
•
Batch of « general » key performance indicators
•
Internal audit structure
•
External auditors (KPMG, Price Waterhouse Coopers, etc.)
referring directly and only to IKEA executives

No involvement of external stakeholders in the monitoring
process
Social audits allow IKEA – only to a certain extent – to
progress in implementation of CSR initiatives related to
most valued issues

4. IKEA Case through the CSR
implementation integrative framework
Step 6: implementing CSR initiatives
•
Initiatives with limited adaptations of the existing process
–
•
Focus on child well-being and protection of globe’s forests
New process created with the development of the code of
conduct
–
Transportation issues, energy policies, ameliorated auditing
process, new functions…
4. IKEA Case through the CSR
implementation integrative framework
Step 7: Promoting CSR
•
•
•
•
No structured dialogue
Lack of transparency and clarity
Credibility perceived as high but ‘voluntary blurred’
discourse
CSR communication = too shy

Little is made to encourage to encourage ideas exchange
and interactions with stakeholders

IKEA gauged as too unilateral

Stakeholders’ skepticism
4. IKEA Case through the CSR
implementation integrative framework
Step 8: Getting stakeholders’ feedback
No real multi-stakeholders structured dialogue
+
Confidential audit results and lack of transparency
=
Reduced efficiency of stakeholders’ feedback
+
Limited credibility of the CSR practices
+
Skeptical attitude towards the company
4. IKEA Case through the CSR
implementation integrative framework
STEP 1 :
Discovering
organizational
norms and
values
STEP 2 :
Identifying
stakeholders
STEP 3 :
Identifying
stakeholder
issues
STEP 7 :
Promoting
CSR
STEP 4 :
Assessing the
meaning of
CSR
STEP 5 :
Auditing
current
practices
STEP 6 :
Implementing
CSR initiatives
STEP 8 :
Gaining
stakeholder
feedback
Short term feedback loop
Long term feedback loop
Managerial Lessons
1.
Be conscious of the company's changing environment:
persistently scan the external environment, identify key
stakeholders, and consider CSR as a latent growth vector
2.
Be aware of the role of external stakeholders in the success of
CSR integration process: tackle the raised issues early enough
and engage in multi-stakeholder dialogue
3.
Communicate with the right tools to the appropriate
stakeholders: expectations and perceptions vary from a
stakeholders’ group to another
Managerial Lessons
4.
Give transparency the importance it deserves: it strongly
participates to the building of stakeholders’ attitudes towards the
company
5.
Adopt a humble attitude: involve stakeholders in the monitoring
process and communicate clearly on your intermediary
achievements
6.
Do not rest on present achievements: CSR is a continuous
process
Thank you for your attention
Cardiff 2006
GIN 13th International Conference
IKEA engineers
imagining the strange look on the
customer’s face when he discovers
the new self-assembling system…
Type of
stakeholders
Perception about
IKEA’s CSR
commitments
Perception about
IKEA’s CSR
communication
Induced attitude
towards IKEA
NGOs that
have formalized
partnerships or
collaboration
with IKEA
POSITIVE PERCEPTION
PROACTIVE COMPANY
POSITIVE
PERCEPTION
HIGH CREDIBILITY
SUPPORTIVE
EXAMPLARY
COMPANY
TOO SPORADIC
COMMUNICATION
CRITICAL
Other NGOs
that have only
punctual
partnerships
with IKEA
TOO SLOW IMPLEMENTATION
RELATIVE POSITIVE
PERCEPTION
SUPPORTIVE
LACK OF
TRANSPARENCY
CRITICAL
TOO SLOW IMPLEMENTATION
NOT ENOUGH
STAKEHOLDERS’
INVOLVEMENT
TOO SPORADIC
COMMUNICATION
SCEPTICAL
LACK OF
TRANSPARENCY
DEMANDING
PERCEIVED SINCERITY
Organizations
having publicly
blamed IKEA
on CSR issues
TOO SLOW IMPLEMENTATION
SCEPTICAL
DANGEROUS LINE
REACTIVE COMPANY
LACK OF
INDEPENDENT
MONITORING
PROTESTING
Type of
stakeholders
Perception about
IKEA’s CSR
commitments
Perception about
IKEA’s CSR
communication
Induced attitude
towards IKEA
Public
authorities
from Belgium
POSITIVE PERCEPTION
PROACTIVE COMPANY
POSITIVE PERCEPTION
TRANSPARENCY
HIGH CREDIBILITY
SUPPORTIVE
STILL DEMANDING
HIGH CREDIBILITY
SUPPORTIVE
LACK OF
TRANSPARENCY
STILL CRITICAL
Unions from
Belgium
RELATIVE POSITIVE
PERCEPTION
TOO SLOW
IMPLEMENTATION
NOT ENOUGH
STAKEHOLDERS’
INVOLVEMENT
Specialised
organisms in
promotion,
consultancy
and monitoring
with respect to
CSR
RELATIVE POSITIVE
PERCEPTION
TOO SPORADIC
COMMUNICATION
LACK OF
TRANSPARENCY
RESPECTFUL
SUPPORTIVE
THERE IS QUITE BETTER
TO DO IN THE FIELD
TOO SPORADIC
COMMUNICATION
REDUCED RANGE OF
STRATEGIC TOPICS
SCEPTICAL