Should Ikea Send a Representative to the Upcoming Broadcast of the German Video Program

1. Should IKEA send a representative to the upcoming broadcast of the German video program?

IKEA should send a group of representatives to the upcoming broadcast of the German video. By sending a group of representatives, IKEA can prove that they are against child labor. IKEA can use this opportunity to defend their stance against child labor and discuss their past efforts to stop child labor within their supply chain in India, Nepal, and Pakistan. If IKEA doesn’t send anyone to dispute their case, then they may look guilty. IKEA should address this issue before it gets out of control. Moreover, IKEA needs to win over the German market because most of the company’s revenue comes from Germany (Barlett, Dessain, & Sjöman, 2006).

1. Should IKEA terminate their supply contract with Rangan exports based on the broadcast program? Why/why not?

No IKEA should not terminate their contract with Rangan solely based on the information from one broadcast. IKEA should instead send a team from their audit department to investigate Rangan to confirm if there are any issues of child labor in the supply chain. Additionally, IKEA cannot pass judgment without first properly researching the causes of child labor in India. I'm speaking for self when I state that I do not know the living conditions of the people who live in India. Instead, IKEA and Rangan should work together to prevent child labor. IKEA may not have the means to assist all of India to prevent child labor. However, they can prevent child labor for the employees at Rangan by implementing relief programs to help the families in need of financial assistance.  

1. Should IKEA stay or should it exit India?

IKEA should not exit India. IKEA’s carpet business is mainly sourced from India. Therefore, exiting India would not benefit IKEA. If IKEA decides to exit India, the decision will result in the loss of huge profits (Barlett, Dessain, & Sjöman, 2006).  

1. If staying in India, should IKEA sign-up to Rugmark? Why/why not?

Yes, IKEA should sign-up with Rugmark. Starting a business contract with Rugmark would result in more sales. Rugmark strongly opposes child labor (Barlett, Dessain, & Sjöman, 2006). Rugmark’s invitation can help IKEA prevent child labor from reoccurring within its supply chain in the future. Customers may also view this alliance as IKEA's steadfast stance against child labor. Consequently, starting a business contract with Rugmark would benefit IKEA.