Corruption in Russia: IKEA's Expansion to the East (D) Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

This case is useful for business ethics, compliance alongside governance, integrity direction, reacting to and preparing against corruption in the context of internationalization as well as it allows to also briefly discuss the issue of Corporate Social Responsibility (CSR). Instance (A) describes a challenge IKEA was facing, while attempting to enter Russia in 2000. The company was preparing to open its first flagship store on the outskirts of Moscow, only the first of several planned endeavors. IKEA focused on promotion, but immediately faced a sudden issue although after considerable investments in logistics and infrastructure. Its advertising efforts were deemed "tasteless".

IKEA had to quit the campaign because it "couldn't prove" the claim. Shortly Lennart Dahlgren, the first general manager of IKEA in Russia must have recognized that the unsuccessful ad campaign was going to be the least of his difficulties: A few weeks before the planned launch, the local utility company decided not to supply their services for the shop if IKEA chose not to pay extortion money. What options are in IKEA and Lennart Dahlgren’s disposal? What are the alternatives to conducting business in Russian manner, and paying? The following instances (B), (C), and (D) describe IKEA's creative response to the challenges described in case (A), and then report about new challenges with alleged corruption within IKEA and in the legal environment. However, a question would be raised, which would be if IKEA could be deemed to have a social obligation where it has to fight corruption in order to assemble the stage for its own operation in Russia.

PUBLICATION DATE: May 10, 2016 PRODUCT #: ES1721-HCB-ENG

This is just an excerpt. This case is about LEADERSHIP & MANAGING PEOPLE