MMH733 : Ethics for Managers 1 | P a g e MMH733: Ethics for Managers Assignment 2 Due date: 15th January 2017 (23h59) Submission: online via CloudDeakin Weight: 40% Word limit: 3000 words (+/- 10%) Formatting: 1.5 line spacing; 12 point font; Times New Roman or Arial Referencing: Harvard or APA format Task: Individual Summary of the task Founded in Sweden by a 17-year old Ingvar Kamprad in 1943 and now regarded as one of the largest retailers in the world, IKEA has definitely stood the test of time. IKEA is often in the press and have provided quite a lot of information about the business on their own corporate website and thus provide us with a good opportunity to study an organization from the perspective of ethics. To get you started, you will find a three press articles from the past few years about IKEA: • Article 1 - "Ikea profits up 8% in 2012" by Simon Neville, 24 January 2013 • Article 2 - "Ikea row shines light on role of founder" by Richard Milne, 29 January 2013 • Article 3 - "IKEA set up a model of a 'typical Syrian home' in its flagship store" by Leanna Garfield, 12 November 2016 You will find out more about IKEA here: • http://www.ikea.com/gb/en/this-is-ikea/about-the-ikea-group/ Here is a link to some of the IKEA media releases: • http://inter.ikea.com/en/media/news/MMH733 : Ethics for Managers 2 | P a g e You will find the key figures about Ikea here: • http://www.ikea.com/gb/en/this-is-ikea/about-the-ikea-group/key-figures/ You need to do your own research and consider IKEA from the following ethical perspectives: 1. What are the most significant ethical issues IKEA has faced in the past, and what has the company done to address them? 2. Consider and discuss what (if anything) IKEA discloses in terms of vison, mission and code of practice and what implications this might have from an ethics perspective. 3. Discuss IKEA from the perspective of Carroll's Four Part Model of Corporate Social Responsibility model. 4. According to Mitchell et al's (1997) three key relationship attributes (power, legitimacy and urgency) who are IKEAs key stakeholders? 5. Do you think IKEA is doing enough from the perspective of sustainability? Using examples from your research on IKEA, evaluate its sustainability activities regarding employees, society and the environment. 6. What does it mean for an organisation like IKEA to be ethical in its communications and practice? Discuss with relevant examples, and provide a number of recommendations for the organisation in order for it to be a more ethical company in the future. Assignment 2 - Template Cover Page Ensure a cover page is attached to the front of your report, showing unit name, your name, date of submission, and your student ID number. Abstract (approx. 100 words; not included in word count) Type a short abstract that briefly describes the purpose of the project, and what the main findings are. (You may want to do the abstract once the assignment is done.)MMH733 : Ethics for Managers 3 | P a g e Introduction (approx. 100 words) This section must cover two main things (a) a brief introduction and background to the study For the introduction and background, you must provide a brief introduction to the reader about the assignment, its relevance and importance etc. (b) the objectives of the study You need to clearly state the key objectives (2-3) of the assignment. Analysis of the case study (approx. 2800 words) Using the 6 points provided above discuss IKEA from the perspective of ethics. You should attempt to allocate approximately equal weight to each of the questions (400 – 500 words per questions). Conclusion (approx. 100 words) Write short concluding comments that remind the reader what the main purpose of the research was, how you went about addressing the objectives of the study, what data you used and the main findings were. Also write a short paragraph on the main limitations of the study…i.e. what is/are the main weaknesses of the study which you would like to bring to the attention of the readers. References Include a list of relevant references in alphabetical order. Appendix (optional) Only for supporting information. Additional Information Submission of Report Students are required to submit only an electronic copy of their report (in PDF/MS Word) in the area provided on Cloud Deakin by 23h59 on the due date.MMH733 : Ethics for Managers 4 | P a g e Supporting Diagrams Use tables and diagrams where appropriate. All tables and diagrams must be numbered, labeled and briefly explained in the text of your paper e.g. "Table 2 shows the GDP growth of the main economies ...." Font Use a 12 point font. (Times New Roman or Arial). The report should be 1.5 line spaced with an extra line space between each paragraph. Please use page numbers and indicate at the end of your report the word count. Word Count The word limit is 3000 (+/- 10%) and will be strictly adhered to. A 10% penalty (from the available marks) will apply for deviating from this word limit. The following sections are NOT included in the word count: Cover Page; Abstract; References; Appendices. Research Students are expected to prepare for the report by reading and citing a range of references. These could include journal articles, books, newspaper articles, business reports, and government reports. Extensions Extensions may be granted on the grounds of illness or special consideration (not foreseen possibilities like travel time taken for work). If you need an extension please discuss this with the unit chair as soon as possible. A medical certificate must accompany any extension requests based on illness. Assessment of the report This report is worth 40% of your final grade. The rubric is available on CloudDeakin. You should refer to these criteria when preparing your reportMMH733 : Ethics for Managers 5 | P a g e for submission. Your results and assessor's comments will be returned to you normally within 15 business days of the due date (unless an extension has been granted). You will be notified by an announcement on Cloud Deakin once the marks are ready. Students are expected to regularly check Cloud Deakin for such announcements. Ikea row shines light on role of founder Richard Milne By Richard Milne, Nordic Correspondent 29 January 2013 Financial Times (FT.Com) Ikea may have 139,000 workers. But ever since it was founded exactly 70 years ago, it has been clear that one man alone has the final say over important matters. This is founder Ingvar Kamprad, whose initials are part of the Swedish flat-pack furniture retailer's name. "At Ikea there is ultimately only one person who decides: Ingvar Kamprad," wrote Johan Stenebo, a former assistant of the now 86-year-old founder, in "The Truth About Ikea". That makes the company's public airing of differences over the past few days all the more striking. Ikea's chief executive, Mikael Ohlsson, last week reiterated plans - in interviews including with the FT - to double the pace of store openings from the current 11 a year to 20-25. A day later, Mr Kamprad - now without a formal role at Ikea save for senior adviser to the board of the Swedish company's parent group - shot back. "I rang the chairman and asked how is that possible," Mr Kamprad told a Swedish newspaper, underscoring that about 10 new stores a year should be sufficient, with a bigger emphasis on investing in existing stores. In a later statement to the FT, he confirmed: "I believe that the number of new stores should be less than what was communicated from management." Ever since, Ikea officials have been scrambling to play down the story. They argue that it is largely a media invention. Both Ikea's management and board have decided on one goal - to increase sales each year by about 10 per cent, with half the sales coming from existing stores and half from new ones. Mr Kamprad says he also supports the 10 per cent goal. Mr Ohlsson in turn believes that 20-25 stores are needed to meet that growth. "What has been astonishing is that there is such a focus on the number of stores. The number of stores has not been important in any of the discussions. The [sales] growth is important," said Göran Grosskopf, chairman of the board of Ikea's parent group, Ingka Holding. However, Mr Kamprad rarely speaks in public these days, even less so to disagree openly. But it fits in with how Mr Stenebo describes the founder's way of working. "He is brilliant at standing in the background and allowing others to speak, even if he dislikes what he sees . . . At times, days may pass between the proposals. Sometimes years. But he seems to know exactly when and how he must intervene in the decision process in order for the correct path to be maintained."The story also highlighted several of challenges the world's largest furniture retailer faces in the coming years. The first is about whether Ikea can keep its strong culture and identity while expanding so fast. Former Ikea executives remember previous expansion drives when the Swedish group ran into trouble. In the 1980s Ikea offered mattresses that were too hard and glasses that were too small for American tastes. It garnered a reputation in the UK for poor stock and customer service. Previous bursts of store openings have been followed by years of consolidation. Mr Ohlsson insists that Ikea has learnt its lessons and will expand with care. But some outsiders point to the many scandals during his five years as chief executive as a reason to go slow. A corruption scandal in Russia, allegations of spying on staff and customers in France, and airbrushing women out of its catalogue in Saudi Arabia last year have all kept the company in the headlines for the wrong reasons. Perhaps an even bigger challenge is what happens to the company as the octogenarian founder grows older and his eventual death - something he has long prepared the company for - is more openly discussed in the company. His three sons all have board positions in various parts of the sprawling and complex Ikea empire, but it is unclear which, if any, will wield the ultimate power. Mr Grosskopf argues that Ikea's structure was designed by Mr Kamprad in the 1970s to be not dependent on "any one single person". Some outsiders, however, worry that the current management and board may be trying to minimise Mr Kamprad's massive influence at the company. It is a stance perhaps endorsed by one Ikea official, who asked, after stating that the board and management agreed on the expansion strategy: "Why would you want to listen to an old man?" Mr Grosskopf is shocked by the jibe: "That is nonsense. We should listen to him. He has fantastic knowledge. We could learn a lot." But the worry persists about what Ikea might look like as the influence of its founder fades. Mr Stenebo said: "In the wake of Ingvar's gradual phasing out as the ultimate person formally in charge at Ikea there will inevitably be a power vacuum in the company. Since he is so active as owner and leader . . . this vacuum will be enormous." The Financial Times Limited (AAIW/EIW) Ikea profits up 8% in 2012 By Simon Neville Thursday 24 January 2013 05.38 AEDT Driven by demand for its flatpack furniture in emerging markets, Ikea made profits of £2.7bn last year Demand in emerging markets for Ikea's flatpack furniture has helped the Scandinavian company post an 8% increase in profits in 2012. Worldwide sales last year increased 9.5% to €27bn (£22.6bn) with profits up 8% to €3.2bn (£2.7bn), thanks to strong sales particularly in new markets including China, Russia and Poland. Prices were cut by an average of 0.8%, despite raw materials and transport costs increasing, but sales increased following 11 new store openings in nine countries and a 21.8% increase in website visits. In the UK a £30m investment in stores saw like-for-like sales rise 6.5%. Chief executive Mikael Ohlsson said: "The Ikea business idea is more relevant than ever. People around the world are more value conscious and appreciate beautifully designed and functional home furnishing solutions at affordable prices." He revealed the company aims to double sales by 2020, spending up to £12.6bn on expansion. This includes more than £1bn on opening around 25 stores in India. Ohlsson said recently, however, that the speed at which Ikea can open new stores has slowed in the past few years. He said: "What some years ago took two to three years now takes four to six years, and we also see that there's a lot of hidden obstacles in different markets … that's holding us back. We are planning to increase the establishment speed, but we see that the process to go through all the administrative procedures is taking longer and longer." Indian authorities liberalised retail rules in the country last month allowing foreigners to own 100% of Indian subsidiaries, allowing Ikea to enter the market. Article retrieved on the 23/11/2016 from https://www.theguardian.com/business/2013/jan/23/ikeaprofits-rise-2012 IKEA set up a model of a 'typical Syrian home' in its flagship store LEANNA GARFIELD NOV 12, 2016, 3:30 AM POL/YouTubeRana and her family in Syria. In the midst of the ongoing war in Damascus, Syria became too dangerous for Rana and her four children, so they fled to the relatively safe suburb of Jamarana. But they only had enough money to rent a cinder block-walled home without mattresses or plumbing. A recent initiative by the Red Cross in Norway aimed to help Rana and other struggling families in Syria. Rana's family currently receives food and other donations from the Syrian Arab Red Crescent, a humanitarian organisation that's a part of the International Committee of the Red Cross. The Red Cross partnered with IKEA to build a replica of Rana's home at the flagship store in Stockholm, so that shoppers could explore it and empathise with her story. People could donate in-store or online.POL/YouTube The installation, which was up in October and visited by 40,000 weekly visitors, was part of a larger campaign to support the Red Cross' efforts in Syria. The organisation told CNN that the campaign raised $23.8 million. The project in IKEA, conceived by the advertising agency POL, was called "25 meters of Syria," the size of the home's replica. That translates to 269 square feet, or just a little bigger than the average one-car garage.POL/YouTube Instead of beds, there were foam mats and just a few blankets. IKEA's iconic tags told stories about Rana and her family for shoppers to read. According to IKEA, the goal was to raise money for war victims and show the horrors of war in Syria, amongst the other picture-perfect home set-ups in the store.POL/YouTube Retrieved on the 23/11/2016 from: http://www.businessinsider.com.au/typical-home-in-syria-ikea-2016-11?r=US&IR=T