Read article ‘Ikea puts it all on the Table with SR’ pg 3 and give your thoughts (one paragraph for 150-200 words) [Ch1] 2. read article ‘Best Buy in Stakehold

1. read article on “Ikea puts it all on the Table with SR” pg 3 and give your thoughts

2. read article on “Best Buy in Stakeholder Communication” pg 61 and give your thoughts

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3

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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