Management Essays on Application of The Responsible Enterprise Model at IKEA

Sample Management Essays on Application of The Responsible Enterprise Model at IKEA

This research paper examines the notion of the responsible enterprise in regards to handling the issues IKEA has been facing and in realizing sustainable development. The paper brings a rational method for defining the critical issues for IKEA that have an impact on sustainability, along with attempting to come up the needed skills and mitigation techniques adopted by the firm. It is apparent that IKEA should adopt the model due to the problem it has been facing in recent years. It will enable the IKEA to become a model company with a favorable public image.

Corporate Social Responsibility (CSR) is a concept that has become fairly common in the 21st century as every organization is talking about it. However, the concept is not a new phenomenon as it has been practiced for numerous decades. Whilst assessing the company, it was important to note that CSR is the strategic presentation and deployment of activities which include customer rights, philanthropy, labor conditions, and sustainable development. CSR activities are manifested in four aspects; legal, economic, philanthropic, or ethical. In each of these factors, the level of responsibility will be disseminated through the dimension.

Corporate citizenship is a complex approach that involves a set of actions which are anticipated to significantly impact workers participation and cost structures to activities that are productive. The concept of corporate citizenship has become increasingly important in the 21st century as organizations strive to make themselves sustainable. Indeed, corporate citizenship has become core constituent of a company’s activities due to its effect on the company’s image and bottom line in the long run.

Despite these divergences, the two concepts are founded on the same tenets. Economic responsibility is founded on the returns of services and goods. Companies are mainly driven by profit, and, thus, economic performance can be present in CSR activities. Economic responsibility is shown in CSR messages by displaying data and information on profitability, market share, profit, sales, value, and prospects. Legal responsibility involves the legal barriers that restrict companies and persevere social norms, like programs aimed at curbing sexual harassment and workplace equality. The legal responsibility factor requires companies to maintain accountability to all local, state, and federal, government regulations and laws . Ethical responsibility reflects and includes the norms, standards, and expectations of a society on a corporation regarding what is just and fair to stakeholders. It includes environment protection, fair reimbursement, equal chance, and protection of consumer’s rights. To adhere to their ethical duty, many companies follow a code of ethics. Philanthropic responsibility entails the voluntary involvement in the well-being of a community and commitment to being an exemplary corporate citizen that goes above the ethical, legal, and economic responsibilities. It includes citizenry by being active community members, philanthropy by donating funds to worthy initiatives, social accountability by protecting the environment, financial integrity and human rights.

Social responsibility refers to the obligations that a business entity has to the community within which it exists. There are several models of social responsibility that illustrate how an organization should perform its duties to a society. The following section of the essay will explain and highlight the similarities and differences between the three models: economic model, the moral minimum model, and the stakeholder model.

The economic model maintains that the sole duty of an organization is to accomplish the economic purpose that businesses were developed to achieve. It states that the social responsibility of a manager is to seek profit within the provisions of the law.  Profit is the measure of how effectively a business is adhering to the expectations of society. The model refutes that an organization has no social responsibilities beyond the legal and economic ones for which it was formed.

Normal Bowie’s moral minimum model states that the quest for profit is hindered by the duty to obey the moral minimum. The model differentiates between the moral duty to cause no harm and the moral duty to prevent harm. Whereas it is sound ethics for managers to do some good or prevent harm, their obligation to stockholders comes above these concerns. For every scenario in which the interests of the stockholder seem to conflict with that of the employees, suppliers, consumers, or society, the management must closely analyze the case to determine ethical responsibility. The stakeholder model implies that every organization affects a wide variety of individuals. Whereas others may benefit from the business, some will be at disadvantaged. Therefore, it rejects the notion that the investors should be the main beneficiaries of business decisions.

There are some similarities and differences between these three models of social responsibility. A similarity between the economic and moral minimum models is that the primary goal of the organization is to pursue profit. However, while the economic model states that a business has no social responsibility, the minimum moral believes the interests of other parties should be considered. On the account of this, a similarity between the stakeholder and moral minimum models is that the interests of other parties are taken into consideration.

In accordance to its description, social responsibility examines the association among economic development, social equity, and environmental quality. The government should play a key role in ensuring all these aspects are met. The economic aspect of sustainable development is called profit. Nonetheless, economic development cannot simply be abridged by the materialistic benefits realized. The development has to be environmentally sustainable and socially inclusive. When the firms involved develop an economic value to their work setting, this is termed as sustainable growth. The real goal of sustainable growth in the industrial setting is when the Real Output, determined by Gross Domestic Product (GDP), increases across time at stable prices. It is also important that sustainable economic growth does not develop economic problems by depleting resources for future generations.

It is looming with increasing population in a certain region or with the industrial development of fertile land, there is a general increase in aggregate demand because of consumer spending. As such, the role of sustainable economic development should not be restricted to creating value. A growth that is sustained is an overall rise in output. Failure to enhance the output would inevitably lead to an increase in prices for the current and future generations. A key role of the transnational firms involved in exploration of oil is generating revenue.

Social responsibility refers to the obligations that a business entity has to the community within which it exists. It is a complex approach that involves a set of actions which are anticipated to significantly impact workers participation and cost structures to activities that are productive. IKEA should place a firm commitment on improving the well-being of communities across the world through its entire media and technology platform.