Bussiness Ethics Essay Example | Topics and Well Written Essays - 2250 words

Bussiness Ethics - Essay ExampleAlthough, some manufacturers made deliveries to IKEA, mostly at night to avoid being seen, IKEA thought of other strategic options to counter this problem, and one among them is outsourcing.This made IKEA to go scouting abroad for manufacturers and Kamprad entered into contracts with number of factories in Poland, thus seeding more outsourcing. It was this early conclusiveness of Kamprad to seek least(prenominal) expensive alternatives to domestic manufacturing of the products turned out to be a more profitable avenue for IKEA to take. As, this outsourcing strategy reduced the costs of production, it is able to offer affordable or cheap prices to the customer, thereby bringing in more customers. IKEA currently works with 1,300 suppliers in 53 countries, but Kamprad made the pioneering decision to source furniture from communist Poland as early as 1961. Since manufacturing costs were 50% lower in Poland than in Sweden, his decision looks brilliant i n hindsight. (Barthelemy 2006). Importantly, IKEA continued as well as extended its outsourcing strategy to other countries peculiarly 1980s and 90s, particularly to Asian countries like India, China, Pakistan, Philippines, etc, where they can access cheap labour. Although, outsourcing to these countries gave IKEA a cost-efficient option, it also led to the rise of ethical issues and controversies, both from the economic as well as policy-making perspectives, thereby making or even forcing IKEA to come up with Corporate Social Responsibility (CSR) establish activities.IKEA outsourced to the Asian countries many of its manufacturing processes including making of carpet, rugs, wicker baskets, etc. That is, in starting from 1970s and more prominently from 1990s, they found many local manufacturers cum suppliers, who would manufacture the products and supply to them with IKEA label. This turned out to be a productive and profitable option, as IKEA was able to get good productivity f or cheaper prices, when compared to the