This research paper examines the notion of the responsible enterprise in regards to handling the issues IKEA has been facing to realize sustainable development. It brings a rational method for defining the critical issues for IKEA that affect sustainability and attempts to come up with the needed skills and mitigation techniques adopted by the firm. IKEA should adopt the model due to the problem it has been facing in recent years. It will enable IKEA to become a model company with a favorable public image.
IKEA is a company that has encountered many scandals and it is clear that has failed to engage in to embrace the responsible enterprise model. The concept is to a certain degree a response to the wider movement of corporate social responsibility (CSR), which has been the focus of different international policy programs. Even though IKEA has engaged in various CSR activities over the decades, it has failed to adhere to the responsible enterprise model and this is why the company found itself in murky waters. The model obliges companies to care of its workers, its surroundings, and the broader stakeholder group; this is a key area where IKEA has failed.
Corporate Social Responsibility (CSR) has become fairly common in the 21st century. However, the concept is not a new phenomenon since it has been practiced for numerous decades. Whilst assessing the company, it was important to note that CSR is the strategic presentation and deployment of activities, which include customer rights, philanthropy, labor conditions, and sustainable development. CSR activities are manifested in four aspects; legal, economic, philanthropic, or ethical. In each of these factors, the level of responsibility will be disseminated through the dimension of social responsibility.
Corporate citizenship involves a set of actions that are anticipated to significantly affect workers’ participation and cost structures to productive activities. The concept of corporate citizenship has become increasingly important in the 21st century as organizations strive to achieve sustainability. It has become core constituent of a company’s activities due to its effect on the company’s image and bottom line in the long run.
Despite these divergences, the two concepts are founded on the same tenets.Economic responsibility is founded on the returns of services and goods. Companies are mainly driven by profit, and thus, economic performance can be present in CSR activities. Economic responsibility is shown in CSR messages by displaying data and information on profitability, market share, profit, sales, value, and prospects. Legal responsibility involves the legal barriers that restrict companies and persevere social norms such as programs aimed at curbing sexual harassment and workplace equality. The legal responsibility factor requires companies to maintain accountability to all local, state, and federal governments’ regulations and laws. Ethical responsibility reflects and includes the norms, standards, and expectations of a society on a corporation regarding what is just and fair to stakeholders. It includes environment protection, fair reimbursement, equal chance, and protection of consumer’s rights. To adhere to their ethical duties, many companies follow a code of ethics. Philanthropic responsibility entails the voluntary involvement in the well-being of a community and commitment to being an exemplary corporate citizen, which goes above the ethical, legal, and economic responsibilities. It includes citizenry by being active community members, philanthropy by donating funds to worthy initiatives, social accountability by protecting the environment, financial integrity, and human rights.
Social responsibility refers to the obligations that a business entity has to the community within which it exists. To assess how IKEA can engage in CSR, it is crucial to discuss the components of the concept. CSR is the strategic presentation and deployment of activities which include customer rights, philanthropy, labor conditions, and sustainable development. CSR activities are manifested in four aspects; legal, economic, philanthropic, or ethical. In each of these factors, the level of responsibility will be disseminated through the dimension.
Economic responsibility is founded on the returns of services and goods. Companies are mainly driven by profit, and, thus, economic performance can be present in CSR activities. Economic responsibility is shown in CSR messages by displaying data and information on profitability, market share, profit, sales, value, and prospects. Legal responsibility involves the legal barriers that restrict companies and persevere social norms, like programs aimed at curbing sexual harassment and workplace equality. The legal responsibility factor requires companies to maintain accountability to all local, state, and federal, government regulations and laws. Ethical responsibility reflects and includes the norms, standards, and expectations of a society on a corporation regarding what is just and fair to stakeholders. It includes environment protection, fair reimbursement, equal chance, and protection of consumer’s rights. To adhere to their ethical duty, many companies follow a code of ethics. Philanthropic responsibility entails the voluntary involvement in the wellbeing of a community and commitment to being an exemplary corporate citizen that goes above the ethical, legal, and economic responsibilities. It includes citizenry by being active community members, philanthropy by donating funds to worthy initiatives, social accountability by protecting the environment, financial integrity and human rights.
According to its description, social responsibility examines the association between economic development, social equity, and environmental quality. The government should play a key role in ensuring all these aspects are met. The economic aspect of sustainable development is called profit. Nonetheless, economic development cannot be abridged by the materialistic benefits realized. The development has to be environmentally sustainable and socially inclusive. When the firms involved develop an economic value to their work setting, this is termed as sustainable growth. The real goal of sustainable growth in the industrial setting is when the Real Output, determined by Gross Domestic Product (GDP), increases across time at stable prices. Sustainable economic growth should not develop economic problems by depleting resources for future generations.
There is a general increase in aggregate demand because of consumer spending. As such, the role of sustainable economic development should not be restricted to creating value. A sustained growth is an overall rise in output. Failure to enhance the output would inevitably lead to an increase in prices for the current and future generations. A key role of the transnational firms involved in exploration of oil is generating revenue.
Social responsibility refers to the obligations that a business entity has to the community within which it exists. It is a complex approach that involves a set of actions that are anticipated to significantly influence workers’ participation and cost structures to activities that are productive. IKEA should place a firm commitment on improving the well-being of communities across the world through its entire media and technology platform. The company has been implicated in different scandals across the years and this has harmed its public image. As such, it is imperative that IKEA adopts social responsibility in its business model to enable it to become sustainable in the long run.