1. read article on “Ikea puts it all on the Table with SR” pg 3 and give your thoughts2. read article on “Best Buy in Stakeholder Communication” pg 61 and give your thoughts
IKEA is a favorite among customers searching for
well-designed products at low prices. IKEA stores
sell ready-to-assemble furniture, appliances, and
household goods. Today the firm is the largest fur-
niture retailer in the world, with 139,000 employees
operating in 43 countries. Germany is the firm’s
largest market, followed by the United States and
France. Its diverse variety of products includes furni-
ture, food, large items such as cabinetry, and smaller
items such as kitchenware, decor, and small plants.
IKEA also operates restaurants within its stores.
IKEA is highly focused on design, viewing it as
a competitive advantage. For instance, IKEA stores
have been designed intentionally to what some
describe as a maze that encourages shoppers to
go through the entire store. Some customers find
themselves lost or retracing their steps. This strategy
allows shoppers to see a wide variety of IKEA items,
possibly leading to impulse or add-on purchases.
IKEA was founded in Sweden in 1943 by Ingvar
Kamprad. The culture of the company heavily
reflects Swedish culture, which values hard-working,
friendly, and helpful people. These values helped
create IKEA’s vision, which is “to create a better
everyday life for the many people,” according to the
company’s website. IKEA aims to accomplish this
not only through selling affordable home furnishing
products, but also by helping people around the
world. One way that IKEA hopes to help people is
by helping the planet, by reducing carbon emis-
sions and creating sustainable energy through solar
panels that they sell.
Corporate social responsibility (CSR) is a large
factor in IKEA’s company culture. IKEA uses CSR to
expose its employees to new challenges. Employees
at IKEA are encouraged to mentor young students,
assist senior citizens, and other altruistic actions. By
volunteering for these tasks, employees can learn
valuable skills that they can transfer to their jobs.
IKEA has also found that CSR is a powerful recruiting
tool. Many potential employees look for employers
who share their values. Through CSR, IKEA can help
its community while attracting better talent.
In 1982, IKEA launched the IKEA Foundation.
Initially, the foundation focused on architecture and
interior design, but then it expanded to fight for
children’s rights and education. Recently, the IKEA
Foundation awarded a grant of $2.3 million to the
World Resources Institute to help bring clean elec-
tricity to 1 million people in India and East Africa. In
these areas, many schools, clinics, and agricultural
facilities are without power. The grant will be used to
create a map that shows the demand for electricity
in these areas. Once this map is created, the World
Resources Institute will be able to better identify
areas in need of electricity and other resources.
Another focus for IKEA is reducing carbon emis-
sions. In fact, IKEA’s long-term goal is to become
carbon positive, which means they will remove more
carbon dioxide than they create. IKEA is already
moving toward this goal by switching to electric
delivery trucks. The company plans to switch to
only electric trucks in major cities like New York and
Paris and is committed to completely switching over
to electric trucks in every location by 2025. IKEA
has already invested around $2 billion in renewable
energy. By 2030, IKEA plans to cut emissions from
stores by 80 percent and reduce emissions from
deliveries and customer travel by 50 percent. These
are lofty goals, but the company has invested con-
siderable resources into becoming carbon positive.
For IKEA, CSR is at the very core of its heritage
and current culture. IKEA aims to create value for
customers by selling stylish, low-cost home furnish-
ing products. However, the company doesn’t stop
there. It also feels that to sustain the planet, it must
reduce its environmental impact and encourage its
customers to do the same.1
IKEA Puts It All on the Table with Social Responsibility
Chapter Objectives �O Define the concept of social responsibility
�O Trace the development of social responsibility
�O Examine the global nature of social responsibility
�O Discuss the benefits of social responsibility
�O Introduce a framework for understanding social responsibility
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Responsible Business Debate
Best Buy Excels in Stakeholder Communication Issue: Is communication the key to stakeholder satisfaction?
Best Buy was founded in 1966 by Richard Schulze. Ranking 72 on the Fortune 500 list, it is known for its discounted, high-quality products, customer-centered approach, sustainable outreach, and extensive recycling program. The success of Best Buy over the years can be attributed to a variety of factors, including savvy business decisions and services to increase employee and customer satisfaction.
As primary stakeholders, customers and employees have a major impact on the continued existence and profit of Best Buy; therefore, their satisfaction is a high priority. To meet stakeholders’ interests, Best Buy has implemented methods to foster communication with both customers and employees. The company uses its website to learn more about its customers’ needs and preferences, and customers can use that website to rate every product purchased. It was this type of communication that led Best! Buy to develop its first Corporate Social Responsibility Report in 2007. The report was a response to its customers’ repeated concerns over sustainability, particularly in the area of electronics. It showed customers that the company had received and understood their concerns. Electronic waste was filling landfills, and customers wanted to see this problem addressed. In response, Best Buy implemented a wide-scale electronics recycling program. The company has set a goal to cut carbon emissions by 60!percent in the next year and to be carbon neutral by 2050.
After a period of stagnant growth, Best Buy hired a new CEO, Hubert Joly, in 2012. Under Joly, Best Buy once again became a growth company. Research has shown that Best Buy’s advertisements tend to have more of an impact when they highlight products, which is prompting the company to engage in more product-oriented adver- tising campaigns. For example, the company introduced a
service called “Assured Living” in 2017, which uses smart home technology to allow millennials/caregivers to look in on their aging parents while permitting the seniors to live independently. To communicate this new service to consumers, Best Buy has developed a website and has advisors that can offer more detailed information to customers about the technology. Best Buy’s current CEO, Corie Barry, will work to continue this growth.
Best Buy invests in different platforms to foster its communication with employees. For example, Geek Squad forums provide a way for all Best Buy employees to exchange information and share ideas. In addition, Best Buy has conducted a multitude of interviews with employees to determine issues with usability of the store’s products. In response to these interviews, according to vice president of retail operations, Shari Rossow, Best Buy has invested in everyday products familiar to employees to cut back on necessary training, make employee duties easier, and help employees focus more on customer service than learning arduous programs. This not only benefits the employees, but also benefits customers and Best Buy as a company.
Stakeholder satisfaction is crucial to the success of any business, and communication with stakeholders is the key to that satisfaction. Best Buy has proved that it can listen to its stakeholders and will implement initiatives based upon their feedback. This communication has been integral in allowing Best Buy to develop strong stakeholder relation- ships, allowing the company to compete against online rivals and adapt to an increasingly digital world.
There Are Two Sides to Every Issue 1. Communication is the most important factor in stake-
holder satisfaction. 2. Though communication is critical, it is one of many
factors in stakeholder satisfaction.
Sources: Courtney Reagan, “Best Buy CEO Sees ‘Growth Opportunities’ Ahead, Wall Street Isn’t Buying It,” CNBC, September 19, 2017, https://www. cnbc.com/2017/09/19/best-buy-ceo-weve-fixed-what-was-broken-now-focus-is-on-growth.html (accessed January 6, 2019); Adrianne Pasquarelli, “Why Best Buy Is Reorganizing Its Marketing Team,” AdAge, April 21, 2017, http://adage.com/article/cmo-strategy/buy-reorganizes-marketing-team/308756/ (accessed January 6, 2019); Jeff Bullas, “How Best Buy Energized 170,000 Employees with Social Media,” jeffbullas.com, http://www.jeffbullas.com/how- best-buy-energized-170000-employees-with-social-media/ (accessed January 6, 2019); Best Buy, “Corporate Responsibility and Sustainability,” 2018, https://corporate.bestbuy.com/sustainability/ (accessed January 6, 2019); Corinne Ruff, “Why Best Buy Is Investing in Employees,” Retail Dive, February 7, 2018, https://www.retaildive.com/news/why-best-buy-is-investing-in-employees/516497/ (accessed January 6, 2019); “Fortune 500,” Fortune, 2018, http:// fortune.com/fortune500/list/ (accessed January 6, 2019).
Chapter 2 Strategic Management of Stakeholder Relationships 61
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