What the President Does on the Last Day in Office

What the President Does on the Last Day in Office The peaceful transition of power from one United States president and his administration to another is one of the hallmarks of American democracy. And much of the publics and medias attention on January 20th every four years rightly focuses on the incoming president taking the Oath of Office and the challenges that lie ahead. But what does the outgoing president do on his last day in office? Heres a look at five things almost every president does just before leaving the White House. 1. Issues a Pardon or Two   Some presidents show up at the White House bright and early for a ceremonial last walk through the historic building and to wish their staff well. Others show up and get to work issuing pardons. President Bill Clinton used his last day in office, for example, to pardon 141 people including Marc Rich, a billionaire who had been indicted on charges of defrauding the Internal Revenue Service, mail fraud, tax evasion, racketeering, defrauding the U.S. Treasury and trading with the enemy. President George W. Bush also issued a couple  of pardons in the last hours of his presidency. They  erased the prison sentences of two border patrol agents convicted of shooting a drug suspect. 2. Welcomes the Incoming President Recent presidents have hosted their eventual successors on the last day in office. On Jan. 20, 2009, President Bush and  First Lady Laura Bush hosted President-Elect Barack Obama and his wife, as well as Vice President-Elect Joe Biden, for coffee in the Blue Room of the White House  before  the noon  inauguration. The president and his successor then traveled together to the Capitol in a limousine for the inauguration. 3. Leaves a Note for the New President Its become a ritual for the outgoing president to leave a note for the incoming president. In January 2009, for example, outgoing President George W. Bush wished incoming President Barack Obama well on the fabulous new chapter he was about to begin in his life, Bush aides told The Associated Press at the time. The note was tucked into a drawer of Obamas Oval Office desk. 4. Attends the Inauguration of the Incoming President The outgoing president and vice president attend the swearing-in and inauguration of the new president and then are escorted from the Capitol by their successors. The Joint Congressional Committee on Inaugural Ceremonies describes the outgoing presidents department as being relatively anti-climatic and unceremonious. The 1889 Handbook of Official and Social Etiquette and Public Ceremonies at Washington described the event this way:   His departure from the Capital is attended with no ceremony, other than the presence of the members of his late Cabinet and a few officials and personal friends. The President leaves the Capital as soon as practicable after the inauguration of his successor. 5. Takes a Helicopter Ride Out of Washington Its been customary since 1977, when Gerald Ford was leaving office,  for the president to be flown from the Capitol grounds via Marine One to Andrews Air Force Base for a flight back to his hometown. One of the most memorable anecdotes about such a trip came from Ronald Reagans ceremonial flight around Washington on Jan. 20, 1989, after he left office. Ken Duberstein, Reagans chief of staff, told a newspaper reporter years later: As we hovered for a second over the White House, Reagan looked down through the window, patted Nancy on her knee and said, Look, dear, theres our little bungalow.  Everybody broke down in tears, sobbing.

hedging essays

hedging essays Currency and Hedging As business becomes increasingly global more and more firms find it necessary to pay careful attention to foreign exchange exposure and to design and implement appropriate hedging strategies. Exchange rate risk is the unexpected exchange rate changes creating variability in the domestic currency value of current and future cash flows of a company. Foreign exchange risk management begins by identifying what items and amounts a firm has exposed to risk associated with changes in exchange rates. Exchange rate risk thus depends upon how "volatile" exchange rates are and the size of the "exposure" to exchange rate changes meaning the amount of cash flows whose domestic currency value is sensitive to exchange rate changes. Foreign exchange exposure is usually categorized according to whether it falls into one or more of the following categories, for example there are transaction exposure, economic exposure and translation exposure. Transaction exposure is concerned with how changes in exchange rates affect the value of anticipated foreign currency denominated cash flows relating to transactions already entered into. By failing to cover transaction exposure, a firm may incur a vast loss on a single very large receivable or payable denominated in a foreign currency. This may result in an overall loss for the firm in a particular financial period which could in its turn, lead to financial distress. Economic exposure refers to the possibility that the present value of future operating cash flows of a business, expressed in home currency, may be affected by a change in foreign exchange rates. According to purchasing power parity theory, exchange rate changes are associated with different relative rates of inflation. Translation or accounting exposure arises as a result of the process of consolidation of foreign currency items into group financial statements denominate ...

Business - Business Environment Essay Example | Topics and Well Written Essays - 750 words

Business - Business Environment - Essay Example Profit and not for-profit organizations are very essential and play important role in U.S economy. Although both have some similarities, they also have differences. For-profit organizations are some of the prime movers of the economy in that they are responsible for a big share of capital generation. For-profit organizations utilize natural, artificial and human resources to generate profits. Most of for-profit organizations are involved in generation of products and services for the population. Notably, for-profit organizations are able to harness and utilize resources at a large scale therefore benefiting from economies of scale. Therefore, they are able to provide goods and services at a low cost. For-profit organizations are responsible for provision of employment to the greatest percentage of the U.S workforce. On the other hand, not for-profit organizations provide human empowerment services to the U.S population without generating profit. They play a pivotal role in economy in that they provide free or affordable services that would otherwise have cost the population a lot of money. Additionally, not for-profit organizations provide employment to approximately 10 percent of U.S workforce. Although they do not necessarily make profit, they provide mechanisms in which money flows through the economy. There are two primary ways in which economy can be regulated. The first one is through fiscal policies and the second one is through monetary policies. Whereas monetary policies are implemented by the central bank, fiscal policies are economic regulations implemented directly by the government. Monetary policies have either short term or long-term effects on the economy. Restrictive monetary policies seek to slow down economic activities to avert a possible inflation in the future. On the other hand, stimulative fiscal policies seek such as reduction in tax, increased spending aim at rejuvenating economic activities. Fiscal policies on the other hand, regulate the economy by use of government regulations that are sourced from acts of congress. This is done through regulation of government spending and tax structures both at federal and state levels. It is assumed that business cycles are controlled by aggregate expenditures. This is mostly reflected on business sector and government spending. Therefore, the government implements policies aimed at controlling the flow of capital in business sector as well as government spending. Therefore, the government controls government purchases or spending and taxes on business sector. This way, the government is able to regulate the economy. Air transport service is one of the most widely used forms of global transport. It accounts for the greatest percentage of inter country transport. Whereas air transport is a lucrative and profitable business, accessing global markets is usually a challenging endeavor. This is because the business rests on different market structures with have different and som etimes, contrasting interests. The most appropriate strategy for accessing global market would be to access the travel and transport needs for different countries in which the air transport service is to be provided. Different cultural and societal needs for all countries need to be assessed. It will thus be possible to access these markets by

Proposal Draft-Terence Coursework Example | Topics and Well Written Essays - 3000 words

Proposal Draft-Terence - Coursework Example One demographic routinely passed over when it comes to the benefits conferred by technology: senior citizens. While senior citizens could easily benefit from technology in the sense of improved health care and social outcomes, they have trouble adjusting to it. The compelling evidence in the literature suggests technology is less of a cultural resistance and more of a fundamental lack of accessible training and literacy. The old generation is incapable of acquiring the computer skills. The elderly population, today, did not have computers taught in school (Wood, 2010). The modern world requires everyone to possess basic computer skills. When computer access is necessary to acquire information, senior citizens find difficulty when lacking computer skills (Wood, 2010). Computer technology services may include obtaining government services such as pay slips, banking services, and accessing the performance of their children in school (Suntanto, 2012). The elderly population should learn computers because computers are necessary for adapting to modern society. A cursory examination of the issue introduced above reveals a number of compelling studies provide a meaningful overview of the situation as it stands and its most significant social factors. An examination undertaken in 2011 carried out a survey of large random sampling of senior citizens in order to gauge their views towards interaction with information technology (McMurtrey, 2011). McMurtrey (2011) reveal an important point: even if senior citizens do want to learn how to interface with information technology the restriction of access to training or education. Resistance is an issue, which must consider other studies have chosen to look at the issue (Gilly, 2012). The primary obstacle to acceptance seemed to be the usage: lack of support stemming from a lack of available training and

A ceremonical speech Essay Example | Topics and Well Written Essays - 750 words

A ceremonical speech - Essay Example Why is that you might ask? The reasons are multiple but the most important aspect of the relevance of this day to the rest of your lives is with regards to how it will impact on each and every one of the determinants that have been listed that might otherwise provide a powerful impact upon one’s future and happiness. This is not to say that the emotional and personal triumphs of life should be diminished with respect to something as â€Å"simple† as a graduation ceremony; instead, the understanding and purpose of the importance that this day portends has to do with the level and degree each and every one of you should now conduct yourselves. For instance, take the situation described above as the â€Å"first job†. Certainly, many of you might have already experienced that first summer job; doing something that you might otherwise not have wanted to do just as a means of making a bit of extra spending money. However, when you place it in context with the momentous nature of this day, you can readily see how your college degree will impact upon the way in which you consider work and what work you are suited for the rest of your entire life. In short, although it is quite possible to achieve a degree of success in this life without a college degree, the importance and momentousness of this day is contingent upon each and every one of you reducing such a hurdle to your future success. This is not to state that a college degree alone will be sufficient to pave the streets of gold for you and your loved ones; rather, it merely makes the door that much wider and gives you that much greater of an opportunity to succeed within this life. Similarly, the college diploma that each and every one of you now have will enable you to livea better and more comfortable life than most of the individuals within the current world system. This should not be seen as a means of encouraging arrogance; rather, it should allow for a deep moment of self reflection and introspection with regards to how each and every one of you can work towards bettering the world and seeking to ameliorate some of the miserable conditions that continue to exist within it. From a personal standpoint, the first home purchase, the first new car purchase, or any of the other â€Å"firsts† which will be engaged with as a function of the jobs and salaries you will receive will also be informed by a degree of knowledge that you have learned and must retain as a result of your college studies. In short, although there are a number of key firsts that are experienced within life, it is my understanding, as it should be yours as well, that from a professional as well as personal standpoint, this momentous day ranks very high on the list. Due to the fact that this single moment has the possibility for defining so many personal and professional decisions that you will make for the rest of your life, I encourage each and every one of you to consider the gravity that the current celebration holds. This is not to say that you should not celebrate this moment with your family and friends; quite the contrary. Instead, once the celebration has calmed down and once the procession has left this hall, once the cap and gown are stored in the back of the closets – long after the pictures of this day have made the rounds within the family, this day absolutely will continue to have an impact upon the decisions that you make as well as the means by which other individuals within society view you. In such a way, I implore each and every one of you to conduct yourselves as fully worthy of the honor that this degree has provided you. Most importantly of all, I personally congratulate you on your triumph and wish you all

Chinas One-Child Policy Case Study Example | Topics and Well Written Essays - 2000 words

Chinas One-Child Policy - Case Study Example Environmental Issue: The main reason and environmental science driving the whole policy is considered to be the ‎overpopulation. China covers around one fifth of the world’s population whereas it has quite a ‎lesser proportion when it comes to arable land. ‎ Benefits Due to the One Child Policy: The policy has assisted in economic fields as there has been a decrease in unemployment ‎and natural resources. The rate of exploitation has also drastically dropped down (Fong, 2006). ‎ Detailed Description of Policy: One child policy is overall an extremely controversial topic that is always in debates across ‎the planet. At every place you will find some believers and so as the disbelievers of the policy. ‎ Promotion: The overall scenario by the government was seen and they believed that a birth control policy ‎was extremely significant in order to avoid the problems faced by China then and even to avoid ‎the threats in the upcoming days. ‎ Current Status: In 2010, according to a report and survey it was estimated that these days the policy ‎implementation hasn’t been up to the mark and numerous families are violating it (Hvistendahl, ‎‎2010). ‎ Conclusion: The Chinese government claims that their one child policy had caused about three to four ‎hundred million fewer people in 2008. It is therefore the Chinese leaders and authorities believe ‎it as a great and leaping success towards helping and improving China’s current economic ‎growth. ‎ The essay aims to presents detailed analysis of the case study focused upon ‘China One Child policy’. The policy basically refers to population control measures implemented by the Chinese government with the intention to control the growth of the population of the country. The policy aims to restrict the population growth by putting restriction on the number of children a Chinese couple could have (Merli and Raftery, 2000). The essay presents an overview of

IKEA’s Global Sourcing Challenge Essay Example for Free

IKEA’s Global Sourcing Challenge Essay Indian Rugs and Child Labor (A) In May 1995, Marianne Barner faced a tough decision. After just two years with IKEA, the world’s largest furniture retailer, and less than a year into her job as business area manager for carpets, she was faced with the decision of cutting off one of the company’s major suppliers of Indian rugs. While such a move would disrupt supply and affect sales, she found the reasons to do so quite compelling. A German TV station had just broadcast an investigative report naming the supplier as one that used child labor in the production of rugs made for IKEA. What frustrated Barner was that, like all other IKEA suppliers, this large, well-regarded company had recently signed an addendum to its supply contract explicitly forbidding the use of child labor on pain of termination. Even more difficult than this short-term decision was the long-term action Barner knew IKEA must take on this issue. On one hand, she was being urged to sign up to an industry-wide response to growing concerns about the use of child labor in the Indian carpet industry. A recently formed partnership of manufacturers, importers, retailers, and Indian nongovernmental organizations (NGOs) was proposing to issue and monitor the use of â€Å"Rugmark,† a label to be put on carpets certifying that they were made without child labor. Simultaneously, Barner had been conversing with people at the Swedish Save the Children organization who were urging IKEA to ensure that its response to the situation was â€Å"in the best interest of the child†Ã¢â‚¬â€whatever that might imply. Finally, there were some who wondered if IKEA should not just leave this hornet’s nest. Indian rugs accounted for a tiny part of IKEA’s turnover, and to these observers, the time, cost, and reputation risk posed by continuing this product line seemed not worth the profit potential. The Birth and Maturing of a Global Company1   Certain details have been disguised. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright  © 2006 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School. Working out of the family kitchen, he sold goods such as fountain pens, cigarette lighters, and binders he purchased from low-priced sources and then advertised in a newsletter to local shopkeepers. When Kamprad matched his competitors by adding furniture to his newsletter in 1948, the immediate success of the new line led him to give up the small items. In 1951, to reduce product returns, he opened a display store in  nearby Älmhult village to allow customers to inspect products before buying. It was an immediate success, with customers traveling seven hours from the capital Stockholm by train to visit. Based on the store’s success, IKEA stopped accepting mail orders. Later Kamprad reflected, â€Å"The basis of the modern IKEA concept was created [at this time] and in principle it still applies. First and foremost, we use a catalog to tempt people to visit an exhibition, which today is our store. . . . Then, catalog in hand, customers can see simple interiors for themselves, touch the furniture they want to buy and then write out an order.†2 As Kamprad developed and refined his furniture retailing business model he became increasingly frustrated with the way a tightly knit cartel of furniture manufacturers controlled the Swedish industry to keep prices high. He began to view the situation not just as a business opportunity but also as an unacceptable social problem that he wanted to correct. Foreshadowing a vision for IKEA that would later be articulated as â€Å"creating a better life for the many people,† he wrote: â€Å"A disproportionately large part of all resources is used to satisfy a small part of the population. . . . IKEA’s aim is to change this situation. We shall offer a wide range of home furnishing items of good design and function at prices so low that the majority of people can afford to buy them. . . . We have great ambitions.†3 The small newsletter soon expanded into a full catalog. The 1953 issue introduced what would become another key IKEA feature: self-assembled furniture. Instead of buying complete pieces of furniture, customers bought them in flat packages and put them together themselves at home. Soon, the â€Å"knockdown† concept was fully systemized, saving transport and storage costs. In typical fashion, Kamprad turned the savings into still lower prices for his customers, gaining an even larger following among young postwar householders looking for well-designed but inexpensive furniture. Between 1953 and 1955, the company’s sales doubled from SEK 3 million to SEK 6 million.4 Managing Suppliers: Developing Sourcing Principles As its sales took off in the late 1950s, IKEA’s radically new concepts began to encounter stiff opposition from Sweden’s large furniture retailers. So  threatened were they that when IKEA began exhibiting at trade fairs, they colluded to stop the company from taking orders at the fairs and eventually even from showing its prices. The cartel also pressured manufacturers not to sell to IKEA, and the few that continued to do so often made their deliveries at night in unmarked vans. Unable to meet demand with such constrained local supply, Kamprad was forced to look abroad for new sources. In 1961, he contracted with several furniture factories in Poland, a country still in the Communist eastern bloc. To assure quality output and reliable delivery, IKEA brought its knowhow, taught its processes, and even provided machinery to the new suppliers, revitalizing Poland’s furniture industry as it did so. Poland soon became IKEA’s largest source and, to Kamprad’s delight, at much lower costs—once again allowing him to reduce his prices. Following its success in Poland, IKEA adopted a general procurement principle that it should not own its means of production but should seek to develop close ties by supporting its suppliers in a long-term relationship.a Beyond supply contracts and technology transfer, the relationship led IKEA to make loans to its suppliers at reasonable rates, repayable through future shipments. â€Å"Our objective is to develop long-term business partners,† explained a senior purchasing manager. â€Å"We commit to doing a ll we can to keep them competitive—as long as they remain equally committed to us. We are in this for the long run.† Although the relationship between IKEA and its suppliers was often described as one of mutual dependency, suppliers also knew that they had to remain competitive to keep their contract. From the outset they understood that if a more cost-effective alternative appeared, IKEA would try to help them respond, but if they could not do so, it would move production. In its constant quest to lower prices, the company developed an unusual way of  identifying new sources. As a veteran IKEA manager explained: â€Å"We do not buy products from our suppliers. We buy unused production capacity.† It was a philosophy that often led its purchasing managers to seek out seasonal manufacturers with spare off-season capacity. There were many classic examples of how IKEA matched products to supplier capabilities: they had sail makers make seat cushions, window factories produce table frames, and ski manufacturers build chairs in their off-season. The manager added, â€Å"We’ve always worr ied more about finding the right management at our suppliers than finding high-tech facilities. We will always help good management to develop their capacity.† Growing Retail: Expanding Abroad Building on the success of his first store, Kamprad self-financed a store in Stockholm in 1965. Recognizing a growing use of automobiles in Sweden, he bucked the practice of having a downtown showroom and opted for a suburban location with ample parking space. When customers drove home with their furniture in flat packed boxes, they assumed two of the costliest parts of traditional furniture retailing—home delivery and assembly. In 1963, even before the Stockholm store had opened, IKEA had expanded into Oslo, Norway. A decade later, Switzerland became its first non-Scandinavian market, and in 1974 IKEA entered Germany, which soon became its largest market. (See Exhibit 1 for IKEA’s worldwide expansion.) At each new store the same simple Scandinavian-design products were backed up with a catalog and offbeat advertising, presenting the company as â€Å"those impossible Swedes with strange ideas.† And reflecting the company’s conservative values, each new entry was financed by previous successes.b During this expansion, the IKEA concept evolved and became increasingly formalized. (Exhibit 2 summarizes important events in IKEA’s corporate history.) It still built large, suburban stores with knockdown furniture in flat packages the customers brought home to assemble themselves. But as the concept was refined, the company required that each store follow a predetermined design, set up to maximize customers’ exposure to the product range. The concept mandated, for instance, that the living room interiors should follow immediately after the entrance. IKEA also serviced customers with features  such as a playroom for children, a low-priced restaurant, and a â€Å"Sweden Shop† for groceries that had made IKEA Sweden’s leading food exporter. At the same time, the range gradually aThis policy was modified after a number of East European suppliers broke their contracts with IKEA after the fall of the Berlin Wall opened new markets for them. IKEA’s subsequent supply chain problems and loss of substantial investments led management to develop an internal production company, Swedwood, to ensure delivery stability. However, it was decided that only a limited amount of IKEA’s purchases (perhaps 10%) should be sourced from Swedwood. b By 2005, company lore had it that IKEA had only taken one bank loan in its corporate history—which it had paid back as soon as the cash flow allowed. The Emerging Culture and Values5 As Kamprad’s evolving business philosophy was formalized into the IKEA vision statement, â€Å"To create a better everyday life for the many people,† it became the foundation of the company’s strategy of selling affordable, good-quality furniture to mass-market consumers around the world. The cultural norms and values that developed to support the strategy’s implementation were also, in many ways, an extension of Kamprad’s personal beliefs and style. â€Å"The true IKEA spirit,† he remarked, â€Å"is founded on our enthusiasm, our constant will to renew, on our cost-consciousness, on our willingness to assume responsibility and to help, on our humbleness before the task, and on the simplicity of our behavior.† As well as a summary of his aspiration for the  company’s behavioral norms, it was also a good statement of Kamprad’s own personal management style. Over the years a very distinct organizational culture and management style emerged in IKEA reflecting these values. For example, the company operated very informally as evidenced by the open-plan office landscape, where even the CEO did not have a separate office, and the familiar and personal way all employees addressed one another. But that informality often masked an intensity that derived from the organization’s high self-imposed standards. As one senior executive explained, â€Å"Because there is no security available behind status or closed doors, this environment actually puts pressure on people to perform.† The IKEA management process also stressed simplicity and attention to detail. â€Å"Complicated rules paralyze!† said Kamprad. The company organized â€Å"anti-bureaucrat week† every year, requiring all managers to spend time working in a store to reestablish contact with the front line and the consumer. The workpace was such that executives joked that IKEA believed in â€Å"management by running around.† Cost consciousness was another strong part of the management culture. â€Å"Waste of resources,† said Kamprad, â€Å"is a mortal sin at IKEA. Expensive solutions are often signs of mediocrity, and an idea without a price tag is never acceptable.† Although cost consciousness extended into all aspects of the operation, travel and entertainment expenses were particularly sensitive. â€Å"We do not set any price on time,† remarked an executive, recalling that he had once phoned Kamprad to get approval to fly first class. He explained that economy class was full and that he had an urgent appointment to keep. â€Å"There is no first class in IKEA,† Kamprad had replied. â€Å"Perhaps you should go by car.† The executive completed the 350-mile trip by taxi. The search for creative solutions was also highly prized with IKEA. Kamprad had written, â€Å"Only while sleeping one makes no mistakes. The fear of making mistakes is the root of bureaucracy and the enemy of all evolution.† Though planning for the future was encouraged, overanalysis was not. â€Å"Exaggerated planning can be fatal,† Kamprad advised his executives. â€Å"Let simplicity and common sense characterize your planning.† In 1976, Kamprad felt the need to commit to paper the values that had developed in IKEA during the previous decades. His thesis, Testament of a Furniture Dealer, became an important means for spreading the IKEA philosophy, particularly during its period of rapid international expansion. (Extracts of the Testament are given in Exhibit 3.) Specially trained â€Å"IKEA ambassadors† were assigned to key positions in all units to spread the company’s philosophy and values by educating their subordinates and by acting as role models. In 1986, when Kamprad stepped down, Anders Moberg, a company veteran who had once been Kamprad’s personal assistant, took over as president and CEO. But Kamprad remained intimately involved as chairman, and his influence extended well beyond the ongoing daily operations: he was the self-appointed guardian of IKEA’s deeply embedded culture and values. Waking up to Environmental and Social Issues By the mid-1990s, IKEA was the worlds largest specialized furniture retailer. Sales for the IKEA Group for the financial year ending August 1994 totaled SEK 35 billion (about $4.5 billion). In the previous year, more than 116 million people had visited one of the 98 IKEA stores in 17 countries, most of them drawn there by the company’s product catalog, which was printed yearly in 72 million copies in 34 languages. The privately held company did not report profit levels, but one estimate put its net margin at 8.4% in 1994, yielding a net profit of SEK 2.9 billion (about $375 million). 6 After decades of seeking new sources, in the mid-1990s IKEA worked with almost 2,300 suppliers in 70 countries, sourcing a range of around 11,200 products. Its relationship with its suppliers was dominated by commercial issues, and its 24 trading service offices in 19 countries primarily monitored  production, tested new product ideas, negotiated prices, and checked quality. (See Exhibit 4 for selected IKEA figures in 1994.) That relationship began to change during the 1980s, however, when environmental problems emerged with some of its products. And it was even more severely challenged in the mid-1990s when accusations of IKEA suppliers using child labor surfaced. The Environmental Wake-Up: Formaldehyde In the early 1980s, Danish authorities passed regulations to define limits for formaldehyde emissions permissible in building products. The chemical compound was used as binding glue in materials such as plywood and particleboard and often seeped out as gas. At concentrations above 0.1 mg/kg in air, it could cause watery eyes, headaches, a burning sensation in the throat, and difficulty breathing. With IKEA’s profile as a leading local furniture retailer using particleboard in many of its products, it became a prime target for regulators wanting to publicize the new standards. So when tests showed that some IKEA products emitted more formaldehyde than was allowed by legislation, the case was widely publicized and the company was fined. More significantly—and the real lesson for IKEA—was that due to the publicity, its sales dropped 20% in Denmark. In response to this situation, the company quickly established stringent requirements regarding formaldehyde emissions but soon found that suppliers were failing to meet its standards. The problem was that most of its suppliers bought from subsuppliers, who in turn bought the binding materials from glue manufacturers. Eventually, IKEA decided it would have to work directly with the glue-producing chemical companies and, with the collaboration of companies such as ICI and BASF, soon found ways to reduce the formaldehyde off-gassing in its products.7 A decade later, however, the formaldehyde problem returned. In 1992, an investigative team from a large German newspaper and TV company found that IKEA’s best-selling bookcase series, Billy, had emissions higher than German legislation allowed. This time, however, the source of the problem was not the glue but the lacquer on the bookshelves. In the wake of headlines describing â€Å"deadly poisoned bookshelves,† IKEA immediately stopped both the production and sales of Billy bookcases worldwide and corrected the problem before resuming  distribution. Not counting the cost of lost sales and production or the damage to goodwill, the Billy incident was estimated to have cost IKEA $6 million to $7 million.8 These events prompted IKEA to address broader environmental concerns more directly. Since wood was the principal material in about half of all IKEA products, forestry became a natural starting point. Following discussions with both Greenpeace and World Wide Fund for Nature (WWF, formerly World Wildlife Fund) and using standards set by the Forest Stewardship Council, IKEA established a forestry policy stating 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 take on the task of tracing all wood used in IKEA products back to its source. 9 To monitor compliance, the company appointed forest managers to carry out random checks of wood suppliers and run projects on responsible forestry around the world. In addition to forestry, IKEA identified four other areas where environmental criteria were to be applied to its business operations: adapting the product range; working with suppliers; transport and distribution; and ensuring environmentally conscious stores. For instance, in 1992, the company began using chlorine-free recycled paper in its catalogs; it redesigned the best-selling OGLA chair— originally manufactured from beech—so it could be made using waste material from yogurt cup production; and it redefined its packaging principles to eliminate any use of PVC. The company also maintained its partnership with WWF, resulting in numerous projects on global conservation, and funded a global forest watch program to map intact natural forests worldwide. In addition, it engaged in an ongoing dialogue with Gr eenpeace on forestry.10 The Social Wake-Up: Child Labor In 1994, as IKEA was still working to resolve the formaldehyde problems, a Swedish television documentary showed children in Pakistan working at weaving looms. Among the several Swedish companies mentioned in the film as importers of carpets from Pakistan, IKEA was the only highprofile name on the list. Just two months into her job as business area manager for carpets, Marianne Barner recalled the shockwaves that the TV program sent through the company: The use of child labor was not a high-profile public issue at the time. In fact, the U.N. Convention on the Rights of the Child had only been published in December 1989. So, media attention like this TV program had an important role to play in raising awareness on a topic not well known and understood—including at IKEA. . . . We were caught completely unaware. It was not something we had been paying attention to. For example, I had spent a couple of months in India learning about trading but got no exposure to child labor. Our buyers met suppliers in their city offices and rarely got out to where production took place. . . . Our immediate response to the program was to apologize for our ignorance and acknowledge that we were not in full control of this problem. But we also committed to do something about it. As part of its response, IKEA sent a legal team to Geneva to seek input and advice from the International Labor Organization (ILO) on how to deal with the problem. They learned that Convention 138, adopted by the ILO in 1973 and ratified by 120 countries, committed ratifying countries to working for the abolition of labor by children under 15 or the age of compulsory schooling in that country. India, Pakistan, and Nepal were not signatories to the convention.11 Following these discussions with the ILO, IKEA added a clause to all supply contracts—a â€Å"black-andwhite† clause, as Barner put it—stating simply that if the supplier employed children under legal working age, the contract would be cancelled.