The LEGO Group is a large multinational company and corporation (MNC) in terms of revenue and employees.
A multinational corporation has facilities and other assets in at least one country other than its home country.
With sales in 130 countries and approximately 17,294 employees worldwide, the LEGO Group is the world's fifth-largest manufacturer of toys. (The LEGO Group Annual Report 2015)
The company's ultimate purpose is to inspire and develop children to think creatively, reason systematically and release their potential to shape their own future - experiencing the endless human possibility.
The company attempts to pioneer new ways of playing, play materials and the business models of play - leveraging globalisation and digitalisation...it is not just about products, it is about realising the human possibility.
The role of the LEGO People Promise is to enable execution of the business strategy and build the long-term health of the company. It defines why people should choose and commit the best they can to the company.
In regards to the core of the People Promise, there are four pillars that determine the LEGO employees...
The LEGO Group was built on the Danish values of hard work, humility and teamwork and its heritage remains a fundamental part of the LEGO corporate culture.
Jørgen Vig Knudstorp believes that a strong company culture means not having to look into a manual or having a rule book but having an intuitive sense on how to do things; a problem does not have one solution to the same problem but having many solutions to the same problem.
"" It is at the very heart of our company to always strive to do better. We aspire to give children the best play experiences, to be the best partner to work with, to be the best workplace for our employees, and to be the best company for society. '' — Kjeld Kirk Kristiansen, third-generation owner of the LEGO Group
Conducting business in a responsible and ethical manner is at the core of the LEGO Group culture and has been ever since the company was established 84 years ago.
The company focuses on the ethical business strategies to live up to stakeholders’ expectations and not least its own expectation of being a leading responsible business.
The organisaiton regularly monitors compliance to the Code of Conduct through dialogue and its audit programme, and also uses third party auditors and a stringent follow-up system.
The organisation works with its suppliers on building their understanding and means to meet the requirements in the Code of Conduct and improve their performance through training and capacity building.
Safe, high-quality play experiences for childreneN
In 2015, the LEGO Group achieved its goal: providing the safest play experience for children, by having zero product recalls. (The LEGO Group responsibility report 2015)
With the opening of the Borkum Riffgrund 1 wind farm in Norden-Norddiech, Germany, the organisation is significantly closer to the goal of balancing its global energy consumption with renewable energy capacity by 2020.
The company intends to achieve the goal by focusing on improving its energy efficiency and by investing in renewable energy.
The California Transparency in Supply Chains Act of 2010 requires manufacturers and retailers doing business in the State of California.
The objective of the act is to disclose information regarding their efforts to eradicate slavery and human trafficking from their direct supply chains.
At The LEGO Group, with its compliance to the California Transparency in Supply Chains Act, the company does its utmost to prevent adverse human rights impacts (i.e. human trafficking and slavery in its supply chain).
The organisation approaches gender diversity as the first important milestone for creating a healthy organisation.
The organisation’s aim is to progress towards its long-term ambition of having a more gender balanced flow of talents contributing to a stronger global organisation.
In 2013, the organisation launched its Responsibility and Human Rights policy, which reflects its commitment to children, employees and workers in its supply chain and in local communities.
The organisation particularly focus on mitigating adverse human rights impacts and capitalising on the positive ones.
Among other things, the organisation is strongly committed to ensuring that all the employees are treated with equal respect and dignity.
The LEGO Group's corporate culture is based on openness, trust, and company’s core values: Creativity, Imagination, Fun, Learning, Quality and Care, which are reflected in everything the company does.
The organisation works purposefully to uphold its long-standing values and to promote high standards at all times through transparent and ethical business practices.
The organisation works with its suppliers to support fair and decent working conditions in the entire supply chain.
In 2015, activities were carried out at 16 LEGO locations around the world; Austria, the Benelux, Canada, China, Czech Repub- lic, Denmark, France, Germany, Hungary, Italy, Mexico, Poland, Russia, Singapore, United Kingdom and USA.
Pioneer responsible business conduct towards children:
To respect and support children’s rights and ensure a
positive impact on children, the company implements and promotes the
10 Children’s Rights and Business Principles.
In 2015, this
work, framed within its partnership with UNICEF, generated
awareness of the principles at relevant external business platforms.
It further strengthened its internal child protection governance supported by UNICEF.
In order to profit and survive, which is still considered the primary goal and responsibility of a company (European Commission 2001), businesses need to identify and act in accordance with the demands and expectations of its stakeholders (consumers, employees, investors, governments, suppliers, local community members, NGOs, etc.) (Neergaard 2006).
In this respect, the responsibilities of a company are defined by its stakeholders.
In relation to the former CSR area, the current Danish government particularly focuses on employees and working conditions, and CSR in the supply chain (Danish Commerce and Companies Agency 2010).
Reduction of energy consumption and green house gas emissions are central elements of the government's CSR agenda (The Danish Government 2008).
Following the national context as well as the general theoretical perception of CSR, the organisation applies the stakeholder approach to CSR and base its CSR activities on stakeholder interests and concerns.
The stakeholder approach is significantly effective in helping to achieve the overall objectives of the Lego Group.
Effects of ethical branding and corporate reputation
The Reputation Institute RepTrak® 100 survey conducted in March 2016 ranks the LEGO Group as the sixth most reputable company globally.
The Reputation Institute RepTrak® acknowledges that Lego Group made a positive impact through the way it operates – from its focus on business ethics to reducing the impact on the environment.
The position among the most highly regarded companies is an acknowledgement of the LEGO Group’s ability to create a strong bond with children and parents globally.
Revenue growth excluding foreign exchange impacts was 19% year over year on a local currency basis.
Revenue increased by 25% in DKK to DKK 35.8 billion against DKK 28.6 billion in 2014.
The year's operating profit increased to DKK 12.2 billion against DKK 9.7 billion in 2014 – an increase of 26%.
Net profit was DKK 9.2 billion compared to DKK 7.0 billion in 2014 – an increase of 31%. –Overall, the LEGO Group delivered a year of exceptional growth in 2015.
As a global company, the company faces global issues and challenges when conducting business in a number of countries where business ethics and standards vary.
It is therefore important that we adhere to the same high standards and regulations across the entire organisation and in all markets.
The business conduct builds on integrity and respect for areas of responsibility that form the very basis of the LEGO Group Supplier Code of Conduct.
With this Code of conduct, the company attempts to engage its stakeholders to always conduct business in a responsible and ethical manner.
THE LEGO GROUP CODE OF BUSINESS CONDUCT In addition to the corporate policy framework, the organisation has its Code of Business Conduct.
The LEGO Group Code of Business Conduct handbook assists in ethical dilemmas and serves as a guide in making the right decisions when working in most countries of the world.
To ensure the necessary awareness of the business conduct and anti-corruption principles, all salaried LEGO employees including directors are required to complete its e-learning training courses on business conduct and anti-corruption every second year.
Following international labour standards and safeguarding the health and safety of the employees, the LEGO Group requires that the maximum allowable working hours in a week must not, on a regular basis, exceed 48 hours with a maximum of 60 effective hours per week, or less if dictated by national law, including overtime and excluding lunch and other breaks.
Overtime hours must be voluntary unless they are planned or agreed on in accordance with applicable national laws or collective bargaining agreements.
Overtime must not be demanded on a regular basis and must be planned in a manner that ensures safe working conditions.
Overtime must be compensated at a premium rate of no less than 1.25 times the normal amount of compensation per hour or more if dictated by national law.
The LEGO Group strongly dissociates itself from child labour.
LEGO suppliers and subsuppliers must not engage in or benefit from child labour.
Employees under the age of 18 must not be involved in hazardous work or night work.
The minimum age for light work must be no less than 13 years (12 years where established by national laws in accordance with the ILO developing country exception).
The minimum age for full-time employment shall not be less than the corresponding age in which completion of compulsory schooling takes place and, in any case, not be less than 15 years (14 years where established by local law in accordance with the ILO developing country exception).
If the child is under the national minimum age for light work, a redundancy payment must be provided by the supplier to the child or its family in combination with education.
The LEGO Group will assist the supplier in implementing a socially responsible corrective action plan and reserves the right to involve local or international organisations in ensuring a correct and appropriate remediation process.
In all types of work, the supplier must establish types of work, work schedules and labour intensity with special consideration to young workers under the age of 18.
The LEGO Group generally encourages the creation of apprenticeship programmes in compliance with national laws and regulations.
The supplier must ensure by training and management systems appropriate to the size of the company that bribes are not offered, promised, given, accepted, condoned, knowingly benefitted from or demanded.
Suppliers must comply with all national laws, regulations and industry standards in force whilst applying the most stringent levels of diligence at all times.
In case of conflict between national law and the LEGO Group Supplier Code of Conduct, suppliers should immediately consult with the LEGO Group.
The LEGO Group, as primarily a Danish and secondly a European country, naturally followed the European and international approach to CSR in which adherence to international legislation and standards are perceived critical.
In exceptional circumstances, where national law is not enforced by the State and where this situation is widely recognised by stakeholders, the LEGO Group will implement international standards while working progressively towards meeting national requirements.
Despite the company’s earliest efforts to phase out ABS bricks by 2030, the majority of Lego’s output is still in ABS—it’s the most common material used to build more than 60 billion bricks every year.
how the organisation’s strategies could be improved?
It is critical for the LEGO company to find an eco-friendly replacement for ABS and other ingredients in the company’s toys.
Collaborating to find alternatives is critical. — It is recommended that the Group collaborates with existing as well as new partners with expertise in the field, which encompass outside companies, chemical engineers, and materials experts to find and implement new replacement materials .
Artterro: This company brings out the creative side in children.
The company's goal is to make it easy and affordable for children to create art pieces with their family and friends.
Each eco art kit is a collection of natural materials and project ideas.
Their kits are assembled at a Goodwill facility in Wisconsin, and their packaging is made of recycled materials that can be upcycled into a frame for child’s finished artwork.
The kits are stocked with items such as: hand-made paper, wool felt, glass and wooden beads, copper wire, batiked fabrics, and cotton.
Wish Bone: This eco-friendly company strives to create sustainable wooden bikes for kids.
Wishbone Design Studio creates wooden bikes that reduce manufacturing material consumption therein helping the environment in a positive, sustainable way.
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University of St.Thomas, Minnesota. 2014.Building Blocks in a Global Economy —LEGO's Strategy for Ethics, Risk and Sustainability. [YouTube] Available at: https://www.youtube.com/watch?v=5d4DsK08f-4 [Accessed 7 August 2016]