Proposal for Ikea (Corporate Social Responsibility)

Proposal for Ikea (CSR)

1. Executive summary  

The focus of business has changed as it is no longer based on benefit only but also to return the profit to the social. CSR is a strategy to leapfrog from excellence to preeminence to the company, it achieve a win-win situation between stakeholders and company. The core value of the CSR vision is to make environmental and also social responsibility. A company with CSR will able to attract talented people thus leading to incensement on profits and productivity. It also increases shareholders value of company due to the good practices and establishment in the company.

In the contrast, CSR may not be an advantage to company during economic downturn as the company is fighting for survival; they don’t have extra money and time to spend on unnecessarily goods.

2. Introduction

IKEA, keeping prices low is a cornerstone, yet the low prices must never be at the expense of people or the environment. IKEA believes that social and environmental responsibility is a prerequisite for doing good business. The vision is to create a better life everyday to our stakeholders. IKEA also co-operates with companies, organizations and trade unions to develop and strengthen the impact on our work within the social and environmental field. Besides, IKEA collaborate with global conservation organization such as UNICEF, WWF and Save the Children to prevent child labour and supporting responsible forest. (appendix 1)

Child labour is downside aspect towards social responsibility as it damages emotional and intellectual growth in children as well as social. Child labour increased from poverty as the people aren’t able to support survive of the family members.

 Ikea has formed a social initiative in 2005 where to address their practice to investing in a projects on a global average level. They have begun “The IKEA Way on Preventing Child Labour” (IKEA Singapore). The current proposal presents an Action Plan through which IKEA can take into account since they have express their interest in providing long-term commitment to South East Asia, especially India 

2. Action Plan

To improve on the projects in which IKEA Social Initiative has undertaken with Unicef. Since Ikea  is currently donating 18,000 tables for use in schools and health centres in Liberia and Burundi, (UNICEF)  so we have decided to come up with a solution to further improve and address the problem of child labour by building schools in the different states of India to increase the literacy rate is proposed. Furthermore we have decided to build at least 2 schools in each of the different state, every year and this project will be undertaken over a period of 1 year. We decided to choose India as it has almost 23 million children up to the age of 14 working compared to any other country in the world. (One world)

And to increase amount of funds that is required, we would suggest that Ikea donates $0.50 for every transaction made by its customers with a minimum spent of $10.00. The action plan will consists of 4 phases.

Phase 1- Establishing of the foundation 

1. Establish a Volunteer Service Council consisting of employees from Ikea it should also forge partnerships with non government organisation (e.g. international  council for human rights) development aid agencies( e.g. USAID),construction companies(e.g. United Engineers Limited) and even schools (e.g. NUS) in order have the necessary resource support to successfully undertake the main plan of building schools in India.

       (Refer to appendix 1)

2.   Formalise the foundation partnership with Ikea, Unicef and host country in which the community projects will be held in. In order to ensure that Ikea has a good understanding of the cultural issues (e.g. Geert Hofstede Cultural Dimension) in order to work together efficiently and together towards the business objectives of improving social responsibility in a positive and motivating environment. 

Phase 2- Outcome Evaluation

    The Volunteer Service Council will monitor the project outcomes and ensure that they are carried out according to planed. A project management approach can be used with clearly stated objectives, timeframe and responsibility of the various different sub sections of the council( e.g. marketing department, human resource department) in order to achieve expected goal within a particular time frame  (refer to appendix 2)

Phase3- Accountability

A project manager will be made responsible for the overall success of the project. He must successfully manage and control the work such as managing and resolving project issues. There must be proper ways in project information must be disseminated to stakeholders. which include Ikea's Board of directors, government officials of host community? Lastly he must also mange the overall schedule to ensure work is assigned accordingly and completed on time within the company’s budget.

Phase 4- sustainability

Sustainability can be developed by using sustainability indicators to understand the trends and assist with decision making.The sustainability plan has to include a description of the specific department or program, an evaluation of the current practices (related to sustainability), the identification of potential future opportunities to implement best practices, and a summary of key department/program goals, actions and performance measures.

3. Challenges to Implementation

The Volunteer Service Council will face many challenges and by acknowledging these challenges steps can be taken into consideration to minimise their impact.  

3.1 Lack of infrastructure   

Since the building of schools has to take place in the slumps, they might encounter problems with the lack of electricity, lack of fresh water supply and the local labourers may not be equipped with the necessary skills to undertake the project. Thus to overcome this problem, external contractors will be needed to provide assistance for the building of t he schools     

3.2 Lack of manpower

There might be a problem of the lack of volunteers who will be overseeing the project since this will be taken over a period of 1 year, furthermore there may be a problem where contractors may not be willing to wok below cost since it is a community project.

4. Benefits to the Host Communities

Through the successful implementation of the Action Plan, the subsequent benefits to the host community will be realised:

4.1              Empowerment

Members of the community can contribute by identifying and recommending community needs and to partake in planning, and program implementation will positively impact community development initiatives (IPIECA n.d.). This will promote a balanced environment that reduces community concerns regarding lack of power and voice in the progression of their community. (Idemudia 2009).

4.2          Capacity Building

The members of the local community will be used for unskilled labour in the construction of these projects. . Previously disadvantaged individuals are given labor sub-contracts for construction. This will help build social capital and growth in the local economy as financial investments and the costs of labour for the projects will go back into the community. This will help curb unemployment. Unaffected groups within the community such as women and children will also benefit from this movement. Training for adults will also be provided. Women will be trained and employed in the schools. Mothers of students whom are to attend the school are sent to an adobe brick-making workshop where they acquire the skills they needed to help contribute to the building of the school. Later, the mothers will be able to use their brick-making skills to make further improvements to the construction of their own homes. The children will benefit from the educations provided by the schools constructed as an end result. Furthermore, accusations of poorly implemented projects will decrease. Technical staff will visit the projects at regular intervals to ensure desired quality is achieved and specifications are adhered to.

4.3              Stakeholder Partnerships

By enlisting the assistance of development aid agencies, non-government organizations, schools and charitable foundations (UNICEF), long term institutional support for the Foundation can be secured. The establishment of the Volunteer Service Council (VSC) will promote such outcomes. 

5. Benefits to Ikea 

Corporate philanthropy is a key component of a corporation's broader social responsibility and includes cash gifts, product donations, and employee volunteerism. It serves as a major link between the corporation and the communities it serves. It is now regarded as a sound business practice that is in the best interest of shareholders and stakeholders alike, and it is often included as a part of a company's mission and business practices.

·         Enhances reputation as a company that the community can come to trust.  It can also lead to marketing benefits and increase customer loyalty.

·         The joy of giving quickly surpasses the profits as employee morale improves. By engaging the employees, it increases employees pride and responsibility and Ikea  will be getting maximum efficiency from your employees .

·         Great public relations boost- By returning to the community they demonstrates that they are a company with love, not a grim corporation. Therefore they can strengthens relations government, the community, and key stakeholder groups.

·         Gives an opportunity to form new business relationships. By strengthening relationships with old and new customers, vendors and other partners who can be discovered when networking during fundraising functions put on by UNICEF.

·         Provides employee/management training and skill building (e.g. project and time-management, leadership opportunities, teamwork activities, etc.) As it can help to Increases understanding of co-workers and appreciation for diversity.

·         Finally it enlarges sense of community and social obligation throughout the whole organisation. This encourages appreciation for contributions from all levels within the organization.

Conclusion

Thus in conclusion, if this project is able to be carried out appropriately, it will result in a generation of positive community relations will reflect a reduction in the level of child labour while building social credit that will better foster good relationship between Ikea and the host country.

(1483 words )

Appendix 1

Unicef

United Nations Children’s Found (UNICEF) is on the ground in over 150 countries and territories to help children survive and thrive, from early childhood through adolescence.

UNICEF is mandated by the United Nations General Assembly to advocate for the protection of children’s rights, to help meet their basic needs and to expand their opportunities so they’re able to reach their full potential.

UNICEF is funded entirely by the voluntary contributions of individuals, businesses, foundations and governments.

IKEA Social Initiative supports UNICEF in its efforts to improve the quality of education for children from ethnic minorities in Vietnam. Minority children are usually educated in Vietnamese – though few speak the language – by teachers who cannot understand the children’s indigenous tongue. UNICEF works with schools and communities to provide education in a safe, child-friendly environment and to incorporate classes taught in the children’s indigenous language.

The project also involves setting up basic infrastructure such as a safe water supply and sanitation, classrooms and playgrounds, and providing resources such as books and teaching aids. An estimated 120,000 students and 3,000 out-of-school adolescents have participated in the project so far.

An advertisement will be published in the Ikea Catalogs. We will include the implementation of the new plan which is, a donation of $0.50 for every transaction made by its customers with a minimum spent of $10.00. To make it eye catching, we will also include a local celebrity to give his voice on contributing to save the problem of child labour. It will be a 1 page designed advertisement.

Appendix 2

United Engineers Limited

United Engineers Private limited which specialises in property and environmental-related engineering. It is able to , to construction, to asset management and property management when it is eventually built. As such, one of their core values being able to improve the quality of life through their product and services. Another of their core value which is Unrivalled skills which in other words they anticipate, meet and exceed customer’s needs by consistently developing first class solutions. This will very much be in line with the proposal that we are suggesting to IKEA to improve on cooperate social responsibility.

An advertisement will be published in the Ikea Catalogs. We will include the implementation of the new plan which is, a donation of $0.50 for every transaction made by its customers with a minimum spent of $10.00. To make it eye catching, we will also include a local celebrity to give his voice on contributing to save the problem of child labour. It will be a 1 page designed advertisement.