Human Resources Strategy

1.Introduction

We have chosen this company as its strategy, their development, their functions could be seen as a model for other multinational companies.

Based on a deep knowledge of people’s lives at home, IKEA offers good quality, durable and functional home furnishing products for everyday life today. They are completely committed to our vision to create a better everyday life for the many people.

This commitment extends to their suppliers and all who work for them. The IKEA Way on Purchasing Products, materials and Services (IWAY) is the IKEA Supplier Code of Conduct. It states the IKEA minimum requirements relating to the Environment and Social & Working Conditions, including the prevention of child labour. IWAY and all of its activities are dependent upon co-operation, mutual trust and respect between the supplier and IKEA.

Throughout the years, they have been fortunate to attract highly skilled and motivated co-workers who have made IKEA one of the most successful home furnishing companies in the world. Their work places are not for people with big egos.

Togetherness is important. At IKEA, they can always get a helping hand from colleagues. They take responsibility, learning from their mistakes and sharing their experience and knowledge with each other. That’s how they grow together – co-workers and suppliers.

They also have always avoided wasting resources – to be able to offer low prices, they need to have low costs. Initially, flat packs and smart ways of transport were invented to save money. Over the years, they have learnt that saving money and the environment usually go hand in hand and rarely conflict with each other. During the past 10 to 15 years, they have developed their own Sustainability Programme where they work on responsible forestry, water treatment, cotton grown in a more sustainable way and many more projects, together with partners such as WWF.

2.General description of IKEA

IKEA has its roots in Småland, historically one of Sweden’s poorest regions, so hard work and economising with resources have always been part of their heritage. They’ve been making a lot out of very little for more than 60 years.

Growing up in the Swedish 20th century has influenced their products as well as their value-system. The strong social development during this period, such as democratisation, dramatic improvements in living conditions and women’s rights, including a child care system for all, have shaped it and their way of interacting with customers and co-workers.

They continue to learn from, and develop with, coworkers, customers, suppliers and other partners in 41 countries. Everyone can see their Swedish roots – but hear the accent of each of these countries, too.

Current IKEAsocial projects in partnership with UNICEF, UNDP and Save the Children will have benefited 100 million children by the end of 2015.

The IKEA company culture, built on their values, is the basis for all that they do. They are always “on the way” and constantly see possibilities to improve for the future.

The main financial principles of the IKEA Group are created to make sure they have financial stability, independence and flexibility. This gives them the opportunity to expand from their own resources and make long-term decisions. Over the past number of years, interest in IKEA has increased, following our rapid global expansion. In December 2009, the board decided to present, every year, a summary and comments on their financial results and the most important developments.

Sustained profitability gives them resources to grow further and offer a better everyday life for more of the many people. That is what they do with their profits – grow!

3. General strategy of the company

IKEA has been committed to sustainability for many years, and we are now determined to

take the next big step.

Through the sustainability strategy, “People & Planet Positive”, they use sustainability to drive innovation, transform the business, shape the investments and unleash new business opportunities. It will enable to strengthen the competitiveness by securing long-term access to important raw materials, maintain and develop the supplier base, deepen the relationships with co-workers and customers, and increase productivity.

For IKEA the sustainability should not be a luxury that few can afford or that people should

have to choose between design, function, quality, low price or sustainability.

Sustainability at IKEA means ensuring environmental, economic and social well-being for today and tomorrow. It means meeting the needs of people and society, without compromising the ability of future generations to meet their needs – acting in the long-term interests of the many people and not just the few. It is about living within the limits of the planet and protecting the environment. It means promoting a strong, healthy, inclusive and just society where people can prosper and fulfil their potential.

Across the integrated value chain, they contribute to improving the quality of life of people and communities and support a world that prospers within the limits of one planet. IKEA promotes renewable energy, healthy and safe chemicals, responsible stewardship of forests, water and farmlands, and a fairer society. That is what we mean by people and planet positive.

Togetherness, simplicity and leadership will be key to our success. They will do their best to use sustainability as a driver of innovation and transformational change - from factory and farm, to store, to customers’ homes and all the way to our products’ end of life - and strive towards having a positive impact on people and the planet.

As they deliver on this strategy, they will try new approaches, stretch ourselves and possibly make mistakes along the way.

IKEA identified three change drivers that will transform the business - making it more

sustainable, driving growth, discovering new business opportunities and helping create a better everyday life for the many people.