1.0 Objectives

The objective of this research is to discover the issues faced by IKEA. IKEA is a Swedish

furniture retail which uses wood as their main component in their furniture line. The company

also deals with chemicals such as lacquer and wood adhesives, which aim to add the finishing to

their products. Because of IKEA’s nature of work, the company is facing several environmental

and public health issues.

Besides that, this research aims to analyze ways IKEA solve its problems. We discover that the

company had come up with a solid solution which literally would solve most of their problems.

However, there are some flaws which the company has ignored.

Basically, this report aims to test our engineering management skills which we had learnt from

Engineering Management class, whether we are able to apply it in real life situations. We did

brainstorming sessions in the search of various alternatives which IKEA could have taken

besides those that had been executed by the organization.

2.0 Background

2.1 The company

IKEA founder, Ingvar Kamprad from Smaland in Southern Sweden was a good example of an

innovative person. His business minded concept was developed when he was only a kid,

whereby he starts selling matches to the local villagers. By age seven, he thought that he can buy

bulk matches and re-sell it, because buying matches in bulk is quite cheap in Stockholm. In the

end, he still makes a good profit with a slight small capital. From there, he started to expand his

business from greeting cards to ball-point pens.

Currently, IKEA has stores all over the world. IKEA’s principle of fostering close supplier

relationship through mutual understanding or exchange enables the company to obtain large

supply contracts and also can get low interest loans. This is an advantage for IKEA because they

gained a competitive advantage over its competitors. Which is why, IKEA can offer affordable

range of furniture and still remains profitable.

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Besides that, IKEA’s strategic business plan makes it the most preferred furniture retail among

customers. The company offers wide variety of home furniture, and also emphasize on customer

value by including grocery stores and children playgrounds in every IKEA stores.

2.2 What is Formaldehyde?

Formaldehyde is a colorless gas with a pungent smell under normal condition. It occurs naturally

in all living cells and therefore also in the human body (IKEA Fans 1998). Synthetically

manufactured formaldehyde is commonly used in the manufacturing industry as well as other

industries such as manufacture building materials and numerous household products. It is an

organic compound with a chemical formula of CH2O. Formaldehyde is commonly known for its

aqueous state, formalin which functions as embalming preservatives. Among all the aldehydes,

the formaldehyde is the simplest chemical compounds which include a terminal carbonyl group.

In its pure form, it is a colorless gaseous compound and is very reactive. Thus, in order to

stabilize it, it is often mixed into chemical compound. Due to its low cost, formaldehyde can be

used for many purposes which makes it a popular chemical. Other than being used in antiseptics,

paints, glues, embalming, film processing, resin, and preservatives, it is also very common in the

atmosphere. Through atmospheric reactions, the byproducts of combustion could produce

formaldehyde and thus, making it a major product of smog (Illinois Department of Public Health

2009).

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3.0 MAIN FINDINGS

3.1 The Health Effects of Formaldehyde

Physical contacts with formaldehyde especially skin and eyes or inhalation of formaldehyde

vapor are the ways by which the chemical can affect human’s health. The effects or symptoms

due to formaldehyde exposure vary with different people. Some may have low tolerance towards

the chemical and show signs of irritation even in contact with very low concentration of

formaldehyde. On the other hand, there are those who can withstand high concentration exposure

of formaldehyde without showing severe symptoms.

Formaldehyde is known to cause cancer in the long term and other health problems such as skin

condition, respiratory problem as well as causes the mucus membranes to inflate. Those who are

allergic to formaldehyde are prone to suffer serious disease and health problems. Children are

more in danger when they come in contact with formaldehyde. Direct exposure to the gas can

cause a burning sensation in the eyes and throat, watery eyes, breathing difficulty and nausea.

High concentration can trigger asthma attacks in people. If liquid formaldehyde is swallowed, a

person will suffer from vomiting, diarrhea and severe pain. And if it enters the bloodstream, the

effects will be the same as drinking plenty of alcohol. Due to this, people are trying to avoid

making any contact with formaldehyde.

3.2 The Environmental effects of formaldehyde

Formaldehyde can form naturally in seawater by photochemical processes. Besides that,

formaldehyde also can be formed by forest fires, animal wastes, microbial products of biological

systems and plant volatiles (Dept of Sustainability, Environment, Water, Population and

Communities, 2009). The nature of formaldehyde which has half-life range from 2 to 20 days

makes it hard to decompose. The module of transportation of formaldehyde in nature is via water

and also contaminated soils. However, according to the Australian Environment Department

report, formaldehyde is the main concern for aquatic life whereby can increase the water’s

toxicity. Several researches discovered that exposure of formaldehyde towards rodent can cause

cancer and other several chronic effect towards those animals.

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So far there are no cases of formaldehyde affecting plants. Therefore, it is safe to conclude that

formaldehyde only affects non-plant being. Nevertheless, there are still ongoing researches to

find long term effects of formaldehyde to plants.

3.3 IKEA’s Formaldehyde Issue

In this case, formaldehyde gas released by IKEA products is only sufficient to pollute the indoor

or closed environment. Most reported cases of formaldehyde contamination occur in houses or

rooms, where the room condition is greatly influenced by the level of humidity and surrounding

temperature. There are no extreme cases whereby the disposal of IKEA furniture in landfills can

affect the outdoor environment.

In relation to that, the main concern for this issue is how IKEA’s furniture is endangering the

health of the public.

The IKEA vision is to “To create a better everyday life for the many people.” This value was

challenged when IKEA was confronted with environmental concerns that rose in the late 1980’s

into the mid 1990’s. These issues were made more complicated because of their procurement

strategy that involved many intricate relationships with suppliers. IKEA worked with more than

2,300 suppliers in 70 countries.

The issue arose from increased environmental awareness by the Danish government. They began

their initiative by limiting the use of formaldehyde in building products. IKEA’s problems

stemmed from the use of formaldehyde in the production of particle board for their furniture.

Particle board is an essential tool from IKEA’s cost cutting strategy and the problem needed to

be resolved. IKEA was fined by the government and the government also took the opportunity to

use the high profile company to publicize the new regulations. This publicity hurt IKEA and

sales dropped significantly following the incident. It is reported that sales dropped 20% in

Denmark.

IKEA quickly put into place requirements limiting the use of formaldehyde by its suppliers. But

IKEA’s suppliers were scattered across nations and many had not established environmental

restrictions such as these. Even though IKEA had impose restriction of the use of formaldehyde,

their suppliers continued to use formaldehyde. IKEA traced this problem back to the glue

companies who sold the binding agent to their suppliers. At this point IKEA needed to use their

influence and work directly with these glue companies in order to fix this problem. Meanwhile

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IKEA had to reassure stake holders that their investment was safe and also concentrate on

rebuilding their company’s positive public image. But in the year 1992, a German newspaper

independently tested IKEA products and found that formaldehyde was still used in a lacquer that

exceeded legal limits.

After this second environmental incident IKEA decided it needed to address wider

environmental issues. This would allow them to rebuild customer trust and credibility while also

promoting social responsibility. After a decade of issues IKEA also wanted to avoid any further

environmental issues which have already cost them millions of dollars. They worked closely

with groups such as Greenpeace, World Wildlife Fund (WWF) and Forest Stewardship Council.

These additional interest groups put a lot of pressure on IKEA to stay active in the campaign for

environmental awareness. Forest Stewardship Council put forth standards that IKEA followed.

Their forestry policy states that IKEA would not accept any timber, veneer, plywood, or layer-

glued wood from intact natural forests or from forests with a high conservation value. This meant

that IKEA had to be willing to trace all wood used in their products back to its source to ensure

compliance from suppliers. IKEA still continues partnerships with Greenpeace and WWF;

together they jointly funded a global forest watch program that maps intact natural forests

worldwide (Owens 1995).

3.4 Customer’s complaint on IKEA’s furniture

There are some customers who had taken this issue seriously by having to deal with IKEA’s

authority personally through phone calls and letters. A customer in United Kingdom made a

complaint on September 2003 about IKEA’s new type of Billy bookcase at that time. It was

suspected to have excessive formaldehyde content in it. The customer made a website where he

documented most of his letters and complaint and IKEA’s way to deal with his complaint for the

public to see.

It was on 13th September 2003 when he bought an 80cm x 202cm Billy bookcase from an

IKEA’s store in Wednesbury, United Kingdom. He assembled the bookcase on the same day he

bought it and placed it beside his bed where he slept that night. The next day in the morning, he

had uncomforted symptoms on eyes, nose, throat and chest of which by his understanding, he

knew it was due to exposure to formaldehyde. Thus, he made a phone call to customer services

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of IKEA and he was told that his problem had been documented. However, when he found out

that his problem was documented under ‘wrong category’ which is so-called ‘strong smell’ from

the bookcase, he took the complaint directly to IKEA’s authority through letter. The long

procedures came to an end results where IKEA promised a lab test and assessment on the

product and kept the customer up-to-date. Nevertheless, IKEA did not promise an assurance in

safety on using the product (IKEA and Formaldehyde 2005).

There are similar cases in Holland, whereby a customer suffered the same symptoms with the

person from the above case.

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4.0 Discussion and Implication

4.1 IKEA’s response towards customer’s complaint

The case above had justified the fact that IKEA furniture is a silent threat. First of all, the

incident occurs on the year 2003, which is after IKEA had developed their IKEA Environmental

Program. The individual in the case above expects IKEA to provide rational answers and also

solutions to avoid similar incident to happen in the future.

IKEA is being unethical when they purposely delayed the testing process and only started after

being urged by the complainer. After the testing process, the company claimed that the test for

formaldehyde emission is within the recommended limit. According to IKEA test group, the test

procedure for formaldehyde was taken within 48 hours for the first session, and another 28 days

if the test result shows no indication of formaldehyde in the 48 hours period to double check.

IKEA responded to the customer, saying that their products are safe.

However, the letter received from IKEA has shown inconsistency in testing for formaldehyde in

their furniture. The test result for formaldehyde can vary depending on the age of the furniture. It

is possible that the company uses furniture which has a longer storage life as a test subject, rather

than using newly-manufactured furniture.

Besides that for the sake of protecting their name in public, IKEA might modify the test result.

This is because, the test was conducted by IKEA themselves instead of consulting a third party.

The test reports also shows perfection in terms of figures and data, which induce possibilities that

the test result was modified.

Since there are more than one complaints regarding to IKEA’s furniture from different countries,

then it is safe to say that complaints made are genuine. Besides that, the complainers all have

similar symptoms as the complainer from the case stated above.

After the final letter, the complainer doesn’t even receive any sort of compensation or token of

apology such as refund from IKEA. This shows that IKEA only responded towards the

customer’s complain for the sake of formality and to fulfill the company’s objective.

In short, the IKEA management is not morally responsible and only reflects their business

based on classical point of view. In this case, IKEA has given a bad impression to an individual,

which is also one of their customers. Based on the company’s response, it is quite certain that,

this particular customer will not purchase products from IKEA anymore because of the health

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issue and how IKEA tackle the problem. Besides that, this particular customer may spread the

news to friends and relatives, giving them a bad perception of IKEA furniture.

4.2 IKEA Environmental Program: How effective is the program in controlling

formaldehyde emission

To meet up their social obligation, IKEA come up with a company’s development plan aimed to

improve their products in terms of quality and safety. So, in year 1992 IKEA came up with the

IKEA Environmental Program. Actually, the IKEA Environmental Program was a follow-up

program after the proposal of the Natural Step Framework. This program is a living program

where the content is subjected to change depending on suitability (The Natural Step 1995).

In order to make this program a success, several top managers are required to attend seminars

conducted by the president of Swedish Greenpeace which is also an environmental legislative

expert. This is to develop each manager’s technical skills and also conceptual skills when it

comes to manage environmental sensitive issues, such as formaldehyde itself.

This plan was sub-divided into six categories;

1. Management and personnel

2. Products and materials

3. Customers

4. Suppliers

5. Building equipments

6. Transport

Among the main highlights of this program are; to standardize IKEA products based on the E1

standard, to replace all potentially harmful materials to a safer ones, and to establish a role in

nature’s conservation efforts.

Based on the IKEA Environment Program achievement, the company is currently following the

German Standard law for formaldehyde (German E-1 standard), which claimed to be the strictest

in the world. Besides that, IKEA is also working closely with their glue suppliers to make sure

that they are using wood glue with low level of formaldehyde content.

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However, IKEA also has stores all over the globe, including developing countries such as

Thailand and Indonesia. If IKEA were to apply the same regulation into their stores in such

countries, this will discourage investors from the host country, which means bad business for

IKEA. Besides that, there are countries which illegally uses formaldehyde in manufacturing

process, for example Indonesia, which proves that there are countries which are not strict when

dealing with formaldehyde (AAP 2006). Therefore, it is possible that such strict regulation is not

fix, and may be adjustable based on the company’s store location and the economic growth of

the host country. Besides that, IKEA is a global furniture retail which has stores scattered all

over the globe. With stores scattered all over the globe, it would be hard work for IKEA to

maintain their quality control standard.

IKEA has decided to work closely with their glue suppliers to monitor the level of formaldehyde.

Their main objective is to keep the volume of formaldehyde as lowest as possible, based on the

European Standard.

Scientifically, formaldehyde is a potential dangerous substance even though is a very small

volume. IKEA might have the quantity of formaldehyde to be minimize to the most extreme

number possible, but different people has different tolerance towards formaldehyde. It doesn’t

change the fact that there are traces of formaldehyde in the wood adhesive. This also means more

labor work and also time consuming since the glue processing needs to satisfy the level of

quality adhered by IKEA based on the German Standard law.

Besides that, there are still some complaints by IKEA’s customers regarding to the release of

dangerous chemical from furniture even after IKEA implement this solution. This shows the

ineffectiveness of this solution.

IKEA has decided to spread their focus on environmental issues, such as Greenpeace and World

Wildlife Fund. In relation to IKEA Environmental Program, the company has followed various

environmental policies; one of it is the policy imposed by the Forest Stewardship Council which

forbids IKEA to accept wood material from forest with high conservation value. Like capturing

two birds with one stone, this is another strategic approach for IKEA to divert the public’s

attention from the past environmental issue, aside from fulfilling their social responsibilities.

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From a public point of view, IKEA is seen as a company which emphasize on keeping the

environment green. Ironically, IKEA is championing environmental issue instead of being

cautions on their customer’s health.

Undeniably, IKEA’s Environmental Program was indeed a brilliant idea. IKEA had developed

solutions which involve wide range of aspect such as management and sustainability of the

environment. However, IKEA don’t really emphasize on long term effect of their customer’s

health as the plan was targeted to gain the people’s trust back.

Judging based on IKEA’s approach; it is safe to conclude that they decided to maintain the use of

formaldehyde in a very control manner. In return, IKEA will give back to the community by

contributing to the environment and also improving social conditions.

The question is; why still use formaldehyde based wood adhesive in their product even though

formaldehyde is scientifically proven to be dangerous even in a small dose. IKEA’s management

team had the authority not to use formaldehyde based wood adhesive, but instead they still use it

but in a controlled volume.

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5.0 Suggestions of Improvement

Based on our point of disagreements of IKEA’s solution, we come up with several ingenious but

practical solutions for IKEA. We applied the decision making process to suggest appropriate

solution for IKEA.

5.1 Identifying the problem

IKEA is synonymous with formaldehyde issue after several incidents, which includes public

defamation by a local German newspaper, stating that IKEA products contain high level of

formaldehyde, and also several customer complaints. IKEA needs to regain the people's

confidence towards their company. In order to do that, IKEA needs to reassure that they are

using safe materials in their furniture. To be an ethical company, IKEA should literally use safe

materials instead of using reactive material. In short, IKEA should stop using formaldehyde

based wood adhesive.

5.2 Identifying decision criteria

There are pros and cons of switching from formaldehyde-based wood adhesive to other. In terms

of health issue, IKEA was able to make sure that their furniture is safe to their customers. From

the long term point of view, IKEA is safe from customers complaints regarding to health issue

arise from their furniture. Besides that, IKEA is able to build a solid foundation of trust between

them and the customers, and a positive image which is good for business. In terms of social

responsibility, IKEA is doing the right thing by not using dangerous chemicals in their products,

which is beneficial to the society and at the same time, still generate profit.

However, change means the company needs to spend certain amount of money. This is because,

IKEA would have to replace previously-made products that uses formaldehyde-based wood

adhesive, with new ones which uses formaldehyde-free wood adhesive.

If IKEA insists of maintaining their type of wood adhesive, then IKEA should think of other

ways to counteract the effects of formaldehyde.

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5.3 Developing alternatives

5.3.1 Replacing formaldehyde with a plant-based adhesive

Obviously, the use of formaldehyde-based binding agent is hazardous. Complaints of discomfort

by customers have proven that the furniture is not as safe as it was claimed to be. One solution

for IKEA is by switching their current wood adhesive, to a plant-based adhesive. Currently,

research and development on improving the quality of organic adhesive has already been

undergoing, and one of the most promising organic adhesive would be the soy-based wood

adhesive. Below stated are some reasons why IKEA should switch to plant-based adhesive:

a. Performance

It was discovered that the soy-based wood adhesive can withstand high shearing stress, and in

fact stronger than most common wood adhesives. According to researches done by the Northeast

Forestry University in China, they concluded that modified soy protein is a potential green

resource to produce high shearing stress besides its biodegradable characteristic and the curing

ability at either high or normal temperature (Northeast Forestry University 2000). Continuous

research to improve the reliability of soybean-based adhesive is currently undergoing.

However compared with formaldehyde-based wood adhesive, soy-based wood adhesive is not

entirely waterproof, which can cause the wood binding to become loose, thus reducing the

lifespan of furniture.

b. In terms of economics

The price of soybean was stable throughout the years, until recently there is a slight increase due

to high demand. Still, the price increase of soybean is considered low compared to

formaldehyde. Based on the stability of soybean price in the market, the cost of soybean-based

adhesive does not requires high cost product. IKEA should see this as an investment opportunity

in terms of saving cost of production. From year 2008, it was reported that there is a depletion of

methanol, which is the main compound for formaldehyde (United Soybean Board 2008). This

means that formaldehyde-based wood adhesive will suffer increase price. If IKEA were to

maintain the usage of formaldehyde-based wood adhesive, therefore the company may have to

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pay a little extra, and also might need to increase some of their product’s pricing, probably

products which uses wood adhesives.

IKEA might need to spend some money for the switch, but from the long-term point of view,

IKEA is actually cutting cost and at the same time reduce health problems caused by their

furniture.

c. Waste management

The advantage of plant-based adhesive is their biodegradable feature. For example, soy-

hydrolyzate and soy-flour adhesive, one of the many products of plant-based adhesive, do not

need hazardous waste disposal procedure. While in the uncured state, the adhesive are aqueous

and easily washed away with water. They are nonvolatile and have a relatively high pH,

requiring only normal protective gloves and safety glasses for safe handling.

If IKEA were to change their current adhesive with safer ones, then it is unavoidable for the

company to spend additional money and time. IKEA needs to reallocate new resource for their

new green adhesive, replacing furniture in their IKEA stores all over the world with

formaldehyde-based adhesive with a green adhesive and so on.

5.3.2 Using sealant in furnitures

Since the use of formaldehyde is inevitable, IKEA can consider the use of sealant. If sealant is

applied on the surface of formaldehyde-containing products, penetration of formaldehyde out of

the product is greatly reduced as sealant has very low permeability which discourages diffusion

of substances.

A sealant is basically a viscous material that changes to solid state when it is applied. Its main

purpose is to prevent penetration of air, gas, noise, dust, fire, smoke or liquid from a location

through a barrier into another location. Typically, sealants are used to close small openings that

are difficult to be covered with other materials, such as concrete and drywall. Sealants can be

used for floors, cabinetry and furniture, decking, exterior siding and many more. Besides having

protective ability, sealant also provides aesthetic properties to materials that it is applied on.

There are several types of sealant that can be used. One of them is polyurethane sealant. It is

used as adhesive because of their tear resistance, toughness, and strength. According to K.L.

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Mittal and A. Pizzi in their book "Handbook of Sealant Technology," polyurethane sealants are

among the most popularly used adhesives. The material offers good adhesion to various

substrates such as glass, plastic, wood and concrete--due to its structural properties and elasticity.

Polyurethane sealants are used extensively in the construction, automotive and textile industries.

Hans Rytger Kricheldorf, O. Nuyken and Graham Swift wrote in their book “Handbook of

Polymer Synthesis” discussing the broad usage of polyurethane sealants in the furniture industry

(40 percent of polyurethane sealants are used in the furniture industry, 16 percent in transport, 13

percent in construction and the remainder for other applications). Polyurethane sealants are used

to bond components of various furniture items such as beds, shelving units, chairs, desks and

cabinets. Thus, no doubt sealant can be an alternative to IKEA’s formaldehyde issue in the past.

However, the use of sealants will results in a rise of cost of productions.

5.3.3 Changing the material

Another alternative that could help IKEA manage its formaldehyde issue is to avoid the usage of

materials such as MDF, HDF, plywood and particle board which will give out formaldehyde. A

replacement of materials can be considered by using solid wood, glass and metal. The quality of

products from the replacement materials is normally higher than that of those materials such as

MDF and HDF.

However, dramatic increase of production cost will occur due to this replacement solution. Not

only that, it is understood that IKEA has been using MDF, HDF, plywood and particle board for

most of its products and it is a part of the organization’s cost cutting resolution as those materials

are abundant and low in cost. Thus, having IKEA to take this alternative is a big change to the

organization and will require long and detailed planning and discussions. Management wise, it is

not a very good solution and which is why we can see IKEA did not undertake this path even

though this solution is obvious and apparent.

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5.3.4 Furniture reprocessing

The rate of formaldehyde fumes release was greatly affected by the indoor condition of the

furniture. Slight increase of humidity and temperature may accelerate the release of the

cancerous fume into the atmosphere. Most IKEA furniture is based on Do-It-Yourself concept

(D.I.Y). In fact, most of the usage of formaldehyde-based adhesive is present in D.I.Y concept

furniture. Besides that, furniture for babies such as baby crib and wooden cabinet also contained

formaldehyde, which is very dangerous because babies have low body defense system and an

easy target. Therefore, the wooden materials for the furniture are mostly bare, without any

external decoration finishing or coating. It was discovered that the rate of formaldehyde release

on exposed wood material is faster compared to the ones which has been coated or decorated.

Which is why, IKEA should have all of the wood material to be layered with a pain finish, or

vinyl etc. as a barrier between the indoor atmosphere and the material. However, bear in mind

that external layering of the wood does not stop the release of the formaldehyde; rather it only

decelerates the rate of release. Since the rate is greatly influenced by the humidity and

temperature of indoor atmosphere, the external layer may not be able to sustain the formaldehyde

where indoor temperature and humidity is high.

Aside of indoor conditions, another factor of the release of formaldehyde is because the

incomplete diffusion of the wood adhesive into the wood. Besides the application of external

coating to the material, the rate of release of formaldehyde also can be reduced by reprocessing

the woods again. One of the methods is by exposing the material with high temperature for a

designated period. This is to accelerate the diffusion of formaldehyde into the material, and also

to reduce pollution in later use.

5.3.5 Implement first class customer service

Most of IKEA customers are unaware of the dangers of formaldehyde in their furniture, and

therefore it is IKEA’s responsible to provide information regarding to what their customers is

buying. By providing brochures indicating the recommended indoor temperature for wooden-

based products, customers are able to decide on safer and suitable furniture.

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IKEA also should provide sincere follow-up service to their customers. For example, customer

complaints should be taken seriously and urgently. The company also has to make sure that the

problems faced by their customers are solved permanently, or at least provide satisfactory end

results. This is to regain back customer’s trust on their products. IKEA should provide refund or

replacement of purchased products if customers found out that the purchased product is harming

their lives.

IKEA needs to solve the formaldehyde problem based on their store’s location. For example,

countries such as Malaysia and Australia which is humid will have a different rate of

formaldehyde emission compared to, say Russia which has different climate. Therefore, it is not

accurate to conduct the emission of formaldehyde in furniture based on one country only. IKEA

should reprocess their furniture sold in stores located in high humidity countries.

Besides that, maybe IKEA can provide consultations to customers who decided to bulk purchase

furniture from IKEA.

5.4 Analyzing alternatives

Based on possible alternatives which we had developed, we had decided to select the best based on several criteria:

Practicality: The gravity of logic of our suggestions based on everybody’s interest.

Cost-wise: Whether or not it is wise to invest on our alternative.

Long term aspect: How our alternative can give positive impact to the company and the public in terms of long term effect.

We give the weight-age range from 0 to 5, whereby the higher the figure means the higher importance.

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Decision Criteria Practicality Cost-wise Long term aspect Total weightReplacing formaldehyde with plant-based wood adhesive

4 3 3 10

Using sealant 2 3 2 7Changing material

3 2 2 7

Furniture reprocessing

2 2 1 5

Implement first class customer service

4 2 3 9

5.5 Selecting alternative(s)

Based on the criteria and weights from the table above, replacing formaldehyde based adhesive

to plant based adhesive is the most weighted solution, followed by implementing first class

customer service. The two solutions are weighted very closely together and both have their own

distinct advantages if implemented.

Technically, replacing formaldehyde with plant-based wood adhesive can eliminate IKEA’s

formaldehyde problem. Although the problem can be solved through this implementation,

gaining trust and building reputation back is another issue. It can be seen that implementation of

first class customer service will land an impact in improving IKEA’s reputation and gradually

gaining customers’ trust again.

Thus, for this case selecting both of these highest weighted alternatives will benefit IKEA in

terms of problem solving and reputation building. These two alternatives will result optimally

together while on the other hand, will still be a weak solution if only either one is chosen.

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5.6 Implementing the alternative(s)To implement the replacement of formaldehyde with plant-based wood adhesive, the power

of top management is required. New policy of replacing formaldehyde should be issued by

the top level management to the production line. IKEA’s suppliers should be contacted upon

deciding on this decision. If their suppliers were unable to produce a replacement for the

current adhesive, in this case the replacement proposed is the soy-based wood adhesive, then

cooperation with new suppliers should be considered in order to avoid further delay of

implementation.

As for implementing first class customer service, this new policy should be conveyed to

stores’ managers worldwide whereby they will be responsible for training their subordinates

to practice this new policy. They should be able to coach their subordinates not only to

practice the policy but also to teach them the right way of doing it. This means every

personnel should be able to attend to customers’ demands, opinions, problems and even

critics with friendliness and sincere hearts.

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6.0 Conclusion

IKEA’s approaches in solving the formaldehyde issue could have been more effective if the

company had decided to completely eliminate the use of formaldehyde based wood adhesive.

The IKEA Environmental Program only targeted to improve the environment condition, but not

to ensure the safety of their customers. IKEA’s response towards customer’s complaint could

have been better if IKEA had reacted towards customer’s complaint urgently.

However, it is crude to accuse the company for being unethical because IKEA had done their

contributions to the society; to offer cheap yet beautiful furniture, being environmental conscious

and community reach.

6.1 Recommendation

Based on our proposed alternatives, we suggest that IKEA switch their current wood adhesive to

plant based wood adhesive. It is cost-effective, and shows promising results almost similar to

traditional wood adhesive. Besides that, the market value of soy which is the main ingredient for

plant-based wood adhesive is much lower compared to methane. In the future, the risk of

hazardous chemicals being released from IKEA’s product would be lowered if IKEA had

decided to stop using formaldehyde based wood adhesive.

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7.0 Appendix

Kish, Stacy 2007, Glue Goes Green, National Institute of Food and Agriculture, accessed 9th May

2011, http://www.csrees.usda.gov/newsroom/research/2007/glue.html

Li, Wang and Xiaoping, 2010, Research On Soy Flour-based Wood Adhesive, 2010, accessed 1st

May 2011, available at http://www.forestprod.org/adhesives09wang_weihong.pdf

Owens, Heidi 1995, IKEA: A Natural Step Case Study, The Natural Step, accessed 20th April

2011, http://www.naturalstep.org/en/usa/ikea

Occupational Safety and Health Administration, 2011, Formaldehyde (Published 2011),

available at: http://www.osha.gov/OshDoc/data_General_Facts/formaldehyde-factsheet.pdf

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