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IKEA had been target by the Local and international media; IKEA was unaware of the
fact that its carpet suppliers were using child labor in their manufactures. IKEA had lost
considerable revenue after the first broadcast in Sweden. Marianne Barner the Manager of the
Carpet purchase department has to take high decisions; as the child labor seems to be
unstoppable. IKEA along with organizations tried to narrow the supply of carpets made by child
labor. Also, it came to Barner’s attention that stopping child labor was very important; however
her concern was how that could accomplished since the issue was not part of IKEA
acknowledgement and how to not jeopardize IKEA image and bringing loss to the company.
Nonetheless, after some attempts, Barner is surprised by a German filmmaker that is about to
broadcast a film made about one of the big IKEA’s supplies “Rangan Export” which shows child
working in its looms. In addition, she had to take a decision about the contract that was violated.
(Bartlett, Dessain & Sjoman, 2005).
It is interesting that, child labor is very common in countries like Pakistan, India and
Nepal; and that these countries were not signatories to the convention regarding Bartlett, Dessain
and Sjoman (2005). Which indicates the high level of non human sense in these countries; the
human rights are not taken in consideration. Thus, what prevails is the deep culture and tradition
of these countries. According to the study of Hofstede, India has an Uncertainty avoidance score
of 40, considered medium level. This study, demonstrates how India has tolerance for the
imperfection, the rules are normally broken or even exchanged for new methods. Likewise,
mentioned by Hofstede “bypass the System”. This study explains why India still accepts child
labor so easily. Even though the government had passed the Act of 1986 which prohibits child
labor under 15 years old in certain defined, hazardous Industries according to Bartlett, Dessain &
Sjoman, 2005).
The Indian system adjusts itself regarding the present necessity; thus the necessity was to
keep child exploited for the low money paid for their labor. Whereas, the unbounded child labor
as a phenomenon that arose from the poverty is a big problem, because children find themselves
responsible for debits incurred for their parents. Therefore, due to the high interests and low
wage the debt takes long time to be paid. Additionally, the inner culture keeps the system strong.
As it was mentioned by Bartlett, Dessain and Sjoman (2005) the government felt that the
majority of the child labor was children working under their parents supervision; likewise the
government understands that is important to keep children learning the handicraft from their
parents which will keep the learning from generation to generations.
It’s obvious that, the government could create specific rules as an example, allowing
children to work just with handicraft at home during certain hours, furthermore, the children
must attend school, and it should be mandatory. For other specifics hazardous roles, children
shouldn’t be allowed to work under the age of 15. However, regarding Bartlett, Dessain and
Sjoman (2005) the exploitive child labor is wide spread because the laws were poorly enforced.
Thus, Barner may did not have enough chance to study the South Asian international
market. To learn about unexpected threats and surprises that may occur within international and
local environment. IKEA as a huge furniture retailer had overcome and conquered a lot of
hurdles, and this has caused IKEA to be target by competitors and media. The media is just a
powerful tool to intimidate and perhaps, take down business if they are not ready to dispute.
Whereas, information is amazingly constructive and destructive:

In all cultures, information creates and reflects power, depending on who has it,
how it is used, and to whom it is transmitted or not transmitted. It distinguishes
the “ins” form the “outs”, thus, whether or not you share the secret reflects your
social standing. And so vice versa, any information restricted to elite is perceived
to be important, perhaps even when it has little instrumental value”
(Varner and Beamer, 2010, pp.294)
Focusing in India as the biggest IKEA supplier, Barner was forced to learn about the
issue that was affecting negatively in the company business, which potentially if not resolved,
would not only bring profit loss; yet put the company image in jeopardy. Barner, acted
instinctively as a professional manager by adding a simply clause to the contract, which states
that if the children are employed under the legal age, the contract would be canceled according to
Bartlett, Dessain and Sjoman (2005). The explanation of the concerns and interests plays an
important role as it may minimize conflicts that may arise due to misunderstanding. (Varner and
Beamer, 2010).
Perhaps, Barner should have added a more powerful clause to the contract that would not
only say to terminate the contract, but also, demanding penalty payment for the non fulfillment
of the contract. Especially because the supplier is considered a country where, rules are easily
bent, according to Hofstede. Even so, Bartlett, Dessain and Sjoman (2005) points out that there is
not severe prosecution to enforce the law. Additionally, it is imperative to specify the interests to
be fulfilled by both parties.
Furthermore, Barner had to rely in a third-party competence to find out more about the
child labor and learn the risks and consequences of continuing business with suppliers that
employs children. What is interesting is that the biggest supplier broke the contract and IKEA
that had already tried a solution for the problem with organizations, faces again the same
problem. The idea of Rugmark creation is already a big accomplishment. However, it may not
work because the supplier may get products from other subcontractors that, perhaps employs
children. It is seem that Ragan exports totally neglects the conflict by simply avoiding not talking
about the issue and continuing employing children. This move, forces the other side “IKEA” to
take a decision. Varner and Beamer (2010) say “Neglect is acknowledging the conflict, but
refusing to do anything about it, and by refusing, forcing the other side to make some resolution
of the conflict” (p.319). What is interesting is that Ragan Exports simply acts with a blind eye,
and Hosftede implies that India has a saying that “nothing is impossible”. Therefore, it was not
mentioned in the Harvard’s journal that Ragan Exports responded accordingly to IKEA’s
concerns.
Moreover, individualist countries see the “Avoiding communication style” as negative
response. Sweden has an Individualism score of 71 higher compared to India score of 48
according to Hofstede analyze. Also, Varner and Beamer (2010) points out, “It shows a lack of
commitment to the goal. Where commitment is important and winning is important, avoiding
communication is a failure to pursue the goal” (p.318). Additionally, India is a collectivist

culture, which uses obliging style; the avoiding style is to the contrary to Individualist positive.
That means that, collectivist does not show a strong concern for the other side’s interest thus,
does not protect the other face. (Varner and beamer, 2010).
Beyond the problems aroused, actions must be taken, as Barner has to figure out whether
IKEA participates or not in the live broadcast; is a matter to be analyzed. However, Barner had
already acquired important information and experience from India about child labor along with
the organizations. Barner should advise IKEA to participate in the live broadcast. Mainly
because the issue of child labor is beyond their control and IKEA have tried to force the supplier
to not employ children to manufacture carpets. IKEA in fact has a lot of information to debate,
especially because they had been working with organizations to get a positive result against child
labor. This demonstrates that IKEA has strong commitment with the society.
Barner, should consider the risk of continuing doing business with India, the evidence
shows that, meanwhile the supplier would employ children, because this is in the Indian culture.
Sweden is considered a low context culture which means that they have the tendency to legislate
risks and liability. (Varner and Beamer, 2010). Regarding the experience obtained, Barner should
terminate the contract with India, once the child labor is an issue beyond IKEA and organizations
control.
It was pointed out by Bartlett, Dessain and Sjoman (2005) that, Indian rugs accounted
for a tiny part of IKEA’s turnover” (p.1). That means that the time and effort combined is not
worth the battle. Not mentioning that such move would conflict Kamprad’s personal believe,
which is to have cost-consciousness. According to Bartlett, Dessain and Sjoman (2005) “Cost
consciousness was another strong part of the management culture” (p.4). Dealing with child
labor in India would incur lots of investment, which in this case may not be applicable. Barner,
should consider to find a new supplier in another country and certify that child labor is not
enforced. Not forgetting, to compose a contract that specify clearly the points and interests to be
accomplished, thus protecting IKEA from eventually dispute.
In conclusion, culture will keep their inner interests even though they grow in business
and internationally: Organizations worldwide are growing more similar, while the behavior of
people within organizations is maintaining its cultural uniqueness” (p.406).
Barner, may get a better deal for IKEA by finding a new supplier, and putting the dispute
with India behind the scene. Perhaps, the termination of the contract would be an example for the
supplier and others to adjust in order to attend the international market. Changes can be positive
in countries with low uncertainty avoidance, and Sweden plays itself in the position of not
fearing changes. Additionally it was inferred by Kamprad that “The fear of making mistakes is
the root of bureaucracy and the enemy of all evolution” (p.4).

References
Varner., & Beamer, (2010a). Information, Decisions, and Solutions: Intercultural
Communication in the Global Workplace (p.294). New York: McGraw-Hill Irwin
Varner., & Beamer, (2010b). Information, Decisions, and Solutions: Intercultural
Varner., & Beamer, (2010c). Information, Decisions, and Solutions: Intercultural
Varner., & Beamer, (2010d). Information, Decisions, and Solutions: Intercultural
Varner., & Beamer, (2010d). The influence of Business Structures and Corporate Culture
on Intercultural Business Communication: Intercultural Communication in the Global Workplace
(p.407) New York: McGraw-Hill Irwin
Varner., & Beamer, (2010e). The influence of Business Structures and Corporate Culture
on Intercultural Business Communication: Intercultural Communication in the Global Workplace
(p.406) New York: McGraw-Hill Irwin
Hofstede, The Hofstede Centre, retrieved from http://geert-hofstede.com/countries.html
Bartlett, A.C., Dessain, V., Soman, A. Y. (2005)IKEA’s global sourcing challenge :
Indian rugs and child labor (A); Waking up to environmental and social issues. Harvard
Business School, (6), 9-906-414. Retrieved from
https://sharklearn.nova.edu/courses/1/201420_INB-5821-
WB2_27075/content/_3023418_1/IKEA%20in%20India%20A.pdf
Indian rugs and child labor (A); Early lessons: A deeply embedded problem. Harvard Business
School, (7), 9-906-414. Retrieved from https://sharklearn.nova.edu/courses/1/201420_INB-5821-
Indian rugs and child labor (A) Harvard Business School, (1), 9-906-414. Retrieved from
Indian rugs and child labor (A); Early lessons: The emerging culture and values. Harvard
Business School, (4), 9-906-414. Retrieved from

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