IMBA021PO23-16

Individual Case

Case Ikea
Signature: Critical Thinking

Student ID: 354202

Number of words: 1383
Date: 11/25/2023
INDEX
1. Statement 2
2. Introduction 3
3. Solving Ethical Dilemmas 4
3.1. Main Decision: Terminating the Contracts 4
3.2. Secondary Decision: Certification Seal 5
4. Conclusion 7

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1. Statement
This essay is based on the statement proposed as the individual evaluation for the
subject "Critical Thinking", which is replicated below:
“Ronnie, Ikea's Director of Corporate Social Responsibility (CSR), is faced with the
decision to outsource to a consultancy firm that provides a seal of approval that
carpets sold at Ikea and manufactured in India are not made with child labour. The
CSR director is not sure that the seal can certify this, but is afraid of new scandals
such as those experienced in recent years with several suppliers in India. Several
directors on the executive committee advocate the need to cancel all contracts with
suppliers suspected of child labour to avoid reputational dangers. But Ronnie is not
sure that this is the best solution. She always wants to think about corporate
responsibility throughout the production chain and the welfare of all communities,
in particular children. She is not clear about what the consequences of different
decisions might be. Therefore, should you engage the services of an external
accreditation company to certify that companies are child labour free? companies
are "child labour free"? If you were Ronnie, what decision would you make?”

Note: The content in this chapter has not been taken into consideration for the word
counting of the essay.

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2. Introduction
According to the Princonser Philosophy, wisdom is mainly composed by truth, which is
the highest level of knowledge (Gutierrez, 2015). Basing ourselves on the truth will
allow us to reach our objectives easily in ethical dilemmas.

The question is: how do we know what is true in ethical approaches? Furthermore, how
can we argue the resolution in simple terms that can be easily understood?

The solution could be found in simplicity; and, for the purposes of this challenge, I will
try to use axioms as the vehicle to achieve this objective.

I know that axioms are used as a formal element in mathematical models, and not in
critical thinking approaches that can be confused with subjectivity and self-reflection;
however, we are not exploring unknown waters. Baruch Spinoza already understood
the axioms as a “conceptual statute as something non-contradictory and fruitful when
it comes to explaining the plurality of the world” (Spinoza, 2017, p. XLIV).

So, I will follow my instincts and try to make an approach from the perspective of
axioms.

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3. Solving Ethical Dilemmas
3.1 Main Decision: Terminating the Contracts

The executive committee is biased to the idea of terminating contracts with suppliers
suspected of involvement in child labor issues to avoid reputational risks. Ronnie,
however, is not so sure that this is the best solution, as she always thinks about
corporate responsibility across the production line and the welfare of communities. We
are going to recognize this dichotomy as the “Practical Solution Dilemma” or the “Initial
Dilemma”.

Let's use axioms to identify the specifics of the Initial Dilemma:

1. Ronnie is worried about becoming part of new scandals such as those

experienced in recent years with several suppliers in India.

2. Executive committee advocate the need to cancel all contracts with suppliers
suspected of child labor to avoid reputational dangers.

3. Ronnie is not very sure that this is the best solution, since she always thinks
about corporate responsibility throughout the production line and the welfare
of communities, and

4. Ronnie is not clear about the consequences that the decision may undergo.

Starting from the previous axioms, it is easy to determine that Ronnie, before making
any decision, must have a greater understanding of the consequences of the decision
she makes in, at least, two fundamental components of the Initial Dilemma: Ikea and
the communities that benefit from the sale of carpets.

1. Ikea. The company is the main axis of every decision. Terminating contracts
with suppliers with poor reputations may have an effect on Ikea that is easy to
measure; mainly, in two aspects:

a) in case that the carpet sales has an effect much lower than the
average of the products sold by Ikea, we should wonder: what would be
the point of continuing selling these carpets?
b) understanding that suppliers already have a bad reputation for
being involved in child exploitation, is the revenue worth the reputational
risk?

2. Local Community. It is important to understand the effect of contract

termination on the community. If the termination of said contracts affects a very
small number of people, is the contribution to the economy of said community
worth the risk?

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Based on the previous reflections, it is easy to infer that the economic balance in the
company, the economic impact on local communities, and the reputation of Ikea are
the main components in the Initial Dilemma.

If I were Ronnie, the first thing I would do would be evaluate these components that
allow me to have statistical and non-subjective components that can be weighted in
the decision to be made.

In the event that the evaluation of the Initial Dilemma results in the need to consider
the continuation of the contracts, there is a second dilemma that we must focus on,
and that is, the effective implementation of a seal that guarantees the non-involvement
of child labor in the production of carpets.

3.2 Secondary Decision: Certification Seal

Ronnie is faced with the decision to outsource to a consultancy firm that provides a
seal to certificate that carpets sold at Ikea and manufactured in India are not made with
child labor. However, she is not sure that the seal can certify this, and she is afraid of
new scandals such as those experienced in recent years with several suppliers in India.
We will call this dichotomy the “Certification Dilemma”.

At this point we have identified the problem. But it is the solution, which requires
additional effort to establish it within the limits of truth.

If we try to reduce the Certification Dilemma to its minimum expression, through

axioms, we could obtain, at least, the following axiom: Ronnie has the task of finding a
way to obtain a certificate that "guarantees" the manufacture of the carpets without
child labor.

The nature of this axiom is made up of two elements:

1. A process that truly guarantees the manufacture of carpets without child

labor (“Ethical Carpets”), and
2. The person in charge of providing the certificate (the “Certifier”).

Based on the previous understanding of its true origin, we have a better understanding
of the dilemma with at least 5 logical statements:

1. First logical statement: After research, it has been concluded that

guaranteeing the manufacture of Ethical Carpets requires a “Certifier”.

2. Second logical statement: Said certification requires strong evidence that is

difficult to refute.

3. Third logical statement: The evidence can be obtained in three ways:

a) through direct observation of the Certifier,

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 b) through the Certifier's observation through technological
elements (for example, the use of cameras throughout the carpet
manufacturing process), and
c) with the support of an AI that analyzes the images.

4. Fourth logical statement: Despite the evidence, the process is still subject to
being corrupted (both the technology and the Certifier can be corrupted).

5. Fifth logical statement: Certification must be continuous, to guarantee

continuity in the resolution of the Certification Dilemma.

These statements allow us to have a greater understanding of the nature of the

Certification Dilemma, leading to 5 principles as the main components of its nature:

1. The most reliable mechanism to obtain conclusive evidence in the

manufacture of Ethical Carpets.

2. Trust in the incorruptibility of the process.

3. Logistical feasibility in the continuous implementation of the solution.

4. Economic viability of the solution.

5. Find the correct communication strategy that allows Ikea's stakeholders to

understand and trust the proposed solution.

If I were Ronnie, I would make a complete evaluation matrix of each of the principles
that are part of the nature of the Certification Dilemma. I would like to include that, if
possible, I would add an additional alternative: assigning an in-house, instead of a non-
outsourced observer who can issue the certification. This in-house Certifier could also
fulfill additional roles for the benefit of Ikea (local logistical procedures, export
procedures, local representation, etc.).

Due to the limitations of this exercise, I will not be able to develop the matrix
completely, but I provide a small demonstration below:

Evalua&on Matrix on the Nature of the Cer&fica&on Dilemma

Technology
Logis*cal
for recording
Type of Use Corrup*bility Feasibility in Economic Communica*on
the
Cer*fica*on of AI Analysis Con*nuous Viability Strategy
manufacturing
Implementa*on
process
Outsourced All analyzes must be done based on the profile of the external consul*ng firm, its
Cer*fier reputa*on, and its proposals.
In-house All analyzes must be done based on the profile of a trusted person, its reputa*on, and
Cer*fier the implementa*on of the proposals designed in-house.

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4. Conclusion
Ethical problems require an objective and statistical study to guarantee reliability in
their resolution. In the case of Ikea, Ronnie faces two dilemmas: The Practical Solution
Dilemma, and the Certification Dilemma.

To understand the impact of the decision and its viability, it is important for Ronnie to
carry out an analysis of the nature of both dilemmas, which are:

1. Nature of the Practical Solution Dilemma

a. The economic balance in the company
b. The economic impact on local communities
c. Reputation of Ikea

2. Nature of the Certification Dilemma

a. Mechanism to obtain conclusive evidence in the manufacture of the
carpets.
b. Trust in the incorruptibility of the process.
c. Logistical feasibility in the continuous implementation of the solution.
d. Economic viability of the solution.
e. Find the correct communication strategy that allows Ikea's stakeholders
to understand and trust the proposed solution.

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5.Bibliografy (APA/Harvard)
• Gutiérrez Vivanco, F. J. (2015). Filosofía Princonser y su aplicación en la
educación universal [Doctoral dissertation, Universidad Nacional Mayor de San
Marcos].
• Spinoza, B. (2017). Ética (M. Machado & F. J. Ramos, Trads.). Editorial Gredos.
(Original work published, 1677).

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