responsive such as the code of conduct IWAY. However, in the coming section on social dimensions of competitive context we will see that although the code of conduct is responsive per se, it is implemented in a strategic way that transforms competitive context as IKEA assists in implementation. A social impact which is more of a responsive nature is the building of schools and pre-schools next to factories as it is meant to show IKEA’s commitment to working against child labor and instead encouraging them to attend school. This activity can, however, also be seen as an action, which influences the competitive context and is thereby strategic (see section 220.127.116.11). Nevertheless, responsive actions in the value chain create legitimacy, which we see in the motivations part is vital for IKEA. However, most of IKEA’s CSR efforts can be considered very strategic as they ensure TQM. Throughout the whole value chain, IKEA attempts to minimize the use of raw materials, energy and other resources as it benefits the community as well as ensures low costs. This is propagated through large projects such as “IKEA goes Renewable” or “Better Cotton Initiative” (BCI). BCI transforms value chain activities as it enables IKEA to reduce the use of water and chemicals in the cotton production of its suppliers whilst benefiting the environment. Simultaneously, there are also social impacts as IKEA educates cotton farmers about these methods, which enables the farmers to increase the income from their harvests and educate others.303 This shows that IKEA has been able to integrate CSR in its capabilities. By controlling how much resources used, IKEA also controls the amount of money spent and the quality of its products.
K.2.1.3 Social dimensions of competitive context In the case of social dimensions of competitive context, companies invest in social aspects of context
that strengthen company competitiveness.304 Competitive context encompasses four areas: quantity and quality of business inputs such as human resources, the rules and incentives that govern competition, sophistication of local demand and lastly the availability of supporting industries such as service providers etc. One of the most prominent examples of how IKEA affects the competitive context in the countries it enters is the close co-operation and support of local suppliers in order to implement quality standards and IWAY. When it comes to suppliers, a significant constraint for IKEA, when first entering different countries, is that many suppliers do not comply with the quality, environmental and social standards stipulated by IKEA. However, instead of IKEA choosing not to work with these suppliers because of their inability to comply with practices, IKEA chooses to educate the suppliers and assist them in complying with IWAY requirements through holding workshops etc. IKEA does not act responsively and punish suppliers if mistakes are made, but instead help them in improving if they within 24 months implement corrective action and show commitment to change305. In this way, IKEA is able to improve its own competitiveness through entering new markets, lowering costs and reaching quality standards. At the same time, the supplier benefits by becoming IWAY-certified and educated, which makes them more attractive for other companies and sets new national industry standards306. I. Hrdlickova mentions that in many cases IWAY-certified factories often receive substantial attention from the local community and become the model factory, to which other factories then aspire to resemble.307 IKEA’s co-operation in helping factory owners improve their factories also instills great pride in the employees.308 The fact that IKEA builds schools close to factories as discussed earlier can also be considered a social dimension of competitive context, as it enables the children of factory workers to go to school instead of working in the factory and
303 304 305 306 307 308
http://www.ikea.com/ms/sv_SE/about_ikea_new/our_responsibility/cotton/index.html. Porter, M. & Kramer, M. (2006). Interview, Fredriksson, Å., 2008-11-10, Interview, Bergmark, T., 2008-05-26. Interview, Stål, E., 2008-05-13. Interview, Hrdlickova, I., 2008-12-23. Interview, Hrdlickova, I., 2008-12-23.