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IKEA Business Ethics Dilemma - Case Study Example

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IKEA is an international home retailer dealing with diverse customer target. In this company, ethical problems arise when a man's assignment forces him to emphasize a single job objective-say, maintaining the profit margin on a particular product. But suppose that in order to meet this objective his only alternative is to sacrifice quality…
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IKEA Business Ethics Dilemma
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Download file to see previous pages Thus, the main dilemma is how to respond to consumer's social demands and expectations and meet social responsibility in marketing.
For IKEA, consumer citizens are pressuring business to achieve higher levels of social and ethical responsibility. Why should corporations, and especially marketers, respond to these new demands Part of the answer lies in business concern with the "threat" of more governmental regulation. This is the argument which goes, "If we don't, government will" (Singer 12). But part of the reason why business is moving to higher levels of social performance is to be found in consideration of the ethics of the situation. Socially responsible behavior on the part of the firm can be justified by standards of rightness as well as of economics and the law. It may be sound business practice, as well as morally right, for a marketer to attempt to meet socially responsible performance standards. The pressures imply the development of rules and standards by which business actions may be judged as "right" or "wrong". In other words, ethical decisions under free enterprise are "moral decisions", impelled by social sanctions, but modified by economics and environmental requirements (Velasquez 45). The growing professionalism in marketing is also stimulating the development and acceptance of pervasive "socially conscious" standards of ethics. Some insights into the changing social and ethical responsibilities of marketing are explored (O'Neill & Hern 129; IKEA Home Page 2008).
In IKEA, expenditure of time and resources on such issues is still regarded by some managers as wasteful or as time spent on peripheral issues. However, allocating resources to such issues is no longer a matter of option. These questions are not on the periphery of corporate planning, but an inescapable part of corporate planning and concern. The partial answers existing in accounting-economics terms do not satisfy growing concern with the corporation as a means to a social end--improving the quality of life. The quality of life issue is the major problem confronting business now (Singer 17). Meeting the issue will require management commitment and time, will be costly, and frustrating, but necessary. Corporate presidents can expect to spend more time on the quality of life issues--on consumer/environmental and social concerns--than their predecessors. Management's new task is to balance traditional profit and rate of returns on investment criteria with new definitions of social costs, social purpose, and social conscience (O'Neill & Hern 129).
The starting point for socioindustrial progress analysis is not to be found in corporate traditions or corporate history or even industrial history. The starting point is to relate social progress of the corporation to national goals and to the social indicators being developed to evaluate the attainment of these goals (Velasquez 32). This approach sounds like socialism to some. It is not. Social progress was once considered to be a national by-product of economic progress. Society believed that social progress was achieved through continued economic growth and progress. The accumulation of material wealth and affluence is no longer automatically equated with social progress by a growing number of influential Americans. Public ...Download file to see next pagesRead More
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