From Signals to Solutions: Tracing IKEA’s Crisis Management Journey
The Analysis of IKEA’s Furniture Tip-Over Crisis, Specifically Involving the Malm and Hemnes Dressers
Introduction
In May 2020, a lawsuit was initiated against IKEA in the United States, accusing the company of selling several million units of Malm and Hemnes dressers, despite being aware of their potential to tip over and cause harm to children. (Peachman, 2020) This legal action claims that IKEA failed to adequately notify customers or provide refunds for these dressers, which had been recalled in 2016 (CPSC, 2017) where at least eight toddlers in the U.S. had died as a result of such accidents. This lawsuit highlighted ongoing challenges IKEA faces in managing product safety concerns, related to issues with dresser stability, particularly regarding the effectiveness of their recall processes. However, IKEA has made efforts to reach affected consumers and improve safety standards (CPSC, 2015; CPSC, 2017; Peachman, 2020), the timeline of events in this crisis (Figure 1) shows a struggle with effective recall implementation and ongoing consumer safety concerns. This case study analyzes IKEA’s response to this crisis, exploring IKEA’s crisis management strategies and stakeholder interactions.
Navigating Stakeholder Dynamics in Crisis Response
In the midst of the tip-over crisis, IKEA found itself at the center of a complex interplay, as depicted in the Stakeholder Relationship Management Model (Diers-Lawson, 2020). IKEA was handling both the immediate logistical and safety issues related to the product problem and managing relationships with stakeholders. This required IKEA to engage in a two-way communication strategy that not only recognized the concerns and views of stakeholders regarding the crisis but also communicated the company’s proactive efforts to address and resolve the issue.
In the landscape of IKEA’s furniture tip-over crisis, a comprehensive stakeholder identification process is complex because of the importance of addressing them in this crisis while they are different in many ways (Gilpin & Murphy, 2008). At the same time it is also critical. Affected consumers and families stand at the core of this crisis. The Consumer Product Safety Commission (CPSC), a U.S. regulatory body, has a significant role in terms of enforcing safety standards and oversees recall negotiations with IKEA. Legal representatives and advocacy groups take on the worries of impacted families, influencing both public sentiment and legal results. Another group of stakeholders includes the general public and consumers, who engage with the products and contribute to discussions on consumer safety, making them vital for fully understanding the scope of the crisis. Media outlets shape public discourse and raise awareness by covering product safety issues and presenting the perspectives of impacted families during a crisis. Regulatory bodies and safety advocacy groups add broader context by addressing industry standards and practices. Meanwhile, IKEA employees, as important participants, are affected both by decisions made within the company and by public perception of the company after the crisis.
Figure 1. The Timeline of Events of IKEA’s Furniture Tip-Over Crisis, Specifically Involving the Malm and Hemnes Dressers
In this crisis, effective stakeholder engagement is crucial for managing the crisis and rebuilding trust. According to Vilma Luoma-aho’s framework, there are three key groups of stakeholders: faith-holders, hate-holders, and fake-holders (Luoma-aho, 2015). Faith-holders are loyal customers who trust IKEA; the company should keep them well-informed and reassured about product safety. Hate-holders include those negatively impacted by the incidents or aware of them; IKEA needs to transparently address their concerns, demonstrate empathy, and explain the steps they are taking to fix the problems. Fake-holders are entities that might spread misinformation; it’s essential for IKEA to identify and correct false information to maintain honest communication.
Also, according to Ndlela (2018), the power-interest matrix categorizes stakeholders based on their power and interest levels regarding the crisis, allowing for the prioritization of communication and engagement efforts to develop a plan for effective crisis management. Stakeholders with high power and high interest, need close engagement because of their significant impact on the crisis. Those with high power but lower interest must be kept satisfied. Those who have high interest but low power, should be consistently informed to ensure transparency and maintain public trust. Lastly, stakeholders with both low power and interest, require monitoring since their influence on the crisis is limited, yet their involvement is crucial for shaping industry standards on a broader scale. (Figure 2) The profound understanding of these stakeholders allows IKEA to customize communications effectively and target key groups strategically. This approach is fundamental for resolving the crisis efficiently, minimizing reputational damage, and maintaining stakeholder trust. (Ndlela, 2018)
Figure 2. The Power-Interest Matrix of IKEA’s Furniture Tip-Over Crisis, Specifically Involving the Malm and Hemnes Dressers
Pre-Crisis Stage: Early Warning Signs and Missed Opportunities for Prevention
As Coombs explains, the crisis management process can be divided into three macro-stages, including pre-crisis, crisis, and post-crisis (Coombs, 2021). In analyzing the pre-crisis stage of IKEA’s furniture tip-over incidents, the period from 1989 to 2016 reveals repeated incidents of furniture tip-overs, especially involving the MALM dressers, causing deaths and injuries (Figure 1). Despite this, IKEA generally did not take significant proactive measures in response to these incidents. These early reports could have served as significant early warning signals, indicating that they needed to be addressed before they escalated into a crisis. IKEA did eventually respond to these early warning signals by introducing a repair program in July 2015 for millions of MALM dressers, offering free wall-anchoring kits to prevent tip-overs. This initiative was an attempt to mitigate the risk and prevent further incidents. However, the effectiveness of this action was limited as it was not widely publicized as a recall, sparking criticism for not adequately addressing the safety risks. (CPSC, 2015)
Despite the repair program, the continuing reports of injuries and fatalities indicated that the prevention measures were insufficient, when another fatality was reported in February 2016 (CPSC, 2017). IKEA’s crisis preparation during this stage appeared to be reactive rather than proactive. While they did engage in some aspects of signal detection and prevention, the overall approach lacked the urgency and comprehensive risk management that might have prevented the escalation of these incidents into a major crisis.
Crisis Phase: Tackling Challenges and Mitigating Damage
Another event in February 2016 significantly escalated the situation into a full crisis (CPSC, 2017). It demonstrated a clear recognition by IKEA and the public that there was a systemic problem with the furniture’s design and stability standards. In June 2016, IKEA recognized the severity of the crisis, and recalled 17.3 million dressers, including the MALM line. (CPSC, 2017) The media extensively reported on the recall announcement, covering it from multiple angles, including perspectives from IKEA, the CPSC, and affected families’ viewpoints (Pettersson & Ågardh, 2018).
IKEA’s recognition of the crisis continued with a series of legal and corporate actions, including a significant financial settlement in December 2016 (McPhate, 2016) and a reannouncement of the recall in November 2017 after additional fatalities (CPSC, 2017). These steps highlighted ongoing efforts to manage the crisis and prevent further harm, and focused on restoring public trust. Finally, the settlements offered in January 2020 (Peachman, 2020) to the families affected by the tip-overs were part of IKEA’s crisis containment strategy, highlighting the company’s acknowledgment of its failures and its commitment to resolving the issues.
Beyond the Crisis: IKEA’s Path to Recovery and Improvement
The post-crisis phase of IKEA’s furniture tip-over crisis can be analyzed through the actions taken by the company to not only remedy the immediate effects of the crisis but also to ensure long-term improvements and prevent future incidents. As part of IKEA’s key post-crisis strategy, supporting the STURDY Act in March 2021, which aimed to impose stronger mandatory standards for furniture stability (IKEA, 2021), IKEA took a significant step towards not just internal change but also industry-wide improvements. This action reflects a commitment to higher safety standards beyond the organization, enhancing stakeholder trust and demonstrating leadership in consumer safety within the furniture industry. Also IKEA’s development and introduction of the “Anchor and Unlock” innovation in 2023 (Yap, 2023) is a clear indication of the company’s commitment to continuous improvement in product safety. By pledging to share this technology with other manufacturers, IKEA not only enhances its own products but also contributes to raising the safety standards across the industry. This initiative showcases IKEA’s proactive approach in its recovery phase, focusing on long-term solutions rather than temporary fixes.
Throughout the post-crisis phase, IKEA’s actions have demonstrated a thorough evaluation of the crisis and learning from past mistakes. These actions have resulted in rebuilding trust and affirming the company’s dedication to consumer safety, aimed to leave stakeholders with a positive impression of its commitment to safety and its capability to manage and recover from crises effectively.
In addressing the Malm and Hemnes dresser tip-over crisis, IKEA employed several crisis communication strategies. Initially IKEA blamed the dresser tip-over cases on customers not securing the furniture to the wall correctly, which is a type of Excuse (Distance Strategy) in the crisis communication strategies framework (Cornelissen, 2020). In this case, by suggesting that the customers held some responsibility for not using the anchoring kit provided, IKEA attempted to distance itself from direct responsibility. However, finally IKEA shifted its strategy to more acceptance-based approaches by issuing recalls and offering compensation, which falls under Remediation (Acceptance Strategy) and Rectification (Accommodative Strategy). This change in strategy reflects a move towards taking a higher level of responsibility for the crisis by IKEA.
This crisis would be classified as an “Accident” according to Cornelissen’s framework (Cornelissen, 2020). Accidents are internal and unintentional events stemming from organizational operations. IKEA’s case reflects this as the safety issues were not intentional but still within the company’s responsibility due to product design. IKEA’s response aligns with best practices in crisis communication, emphasizing the importance of recognition, response, and stakeholder engagement in managing a crisis. Also, IKEA’s efforts to support stronger safety standards and innovate safer products are consistent with Cornelissen’s advocacy for learning and adapting from crises to improve future communication and operational strategies (Cornelissen, 2020) .
Moreover, In analyzing IKEA’s response to this crisis, Griffin’s strategic and operational response matrix can be applied to highlight both the long-term strategic planning and the immediate operational actions taken by the company (Griffin, 2014). Strategically, IKEA focused on maintaining its license to operate by initiating a recall in line with safety standards, aimed at protecting its long-term reputation through proactive responsibility, while also handling the financial impacts to limit damage to its profitability. Operationally, IKEA implemented the recall by managing the logistics of returning products, distributing anchoring kits, and directly addressing customer concerns through problem-solving measures that included redesigning the dressers to enhance safety and customer communication strategies.
Figure 3. Strategic and Operational Response Matrix (Griffin, 2014)
References
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