Professional Documents
Culture Documents
IKEA: Managing Cultural Diversity
IKEA: Managing Cultural Diversity
IKEA: Managing Cultural Diversity
IKEA
• IKEA was founded by Ingvar Kamprad in Sweden.
• IKEA provides low price furniture all over the globe, being local.
• It is visited by 120 million visitors in 125 stores with distributing 35
million catalogs annually.
• Has good bonding with customers and always stay close to the
customers.
• Vertical integration of doing things differently.
• Key aspects of value chain –
a) Unique product design capabilities.
b) Unique sourcing.
c) Strong Logistics.
Organizational culture-
IKEA(Incubator culture)
• Have less formal hierarchy, believes in self expression and
fulfillment.
Only three level of responsibility between store manager and worker.
• All employees are expected to have good bonding with each other.
In Germany
• Lack of formality
• Adhere to precisely defined rules & regulations
• Require procedures & norms-provides security.
• Organized & prefer orders to be given
In USA
In France
• Strong hierarchy system: Because of Ikea’s informal system,
employees did not take orders seriously
• Lacked in formal job descriptions & written procedures
• No status recognition
• French labour unions distrusted Swedish management style
because of their tendency to seek consensus
Issues in front of IKEA
• Cultural differences and emphasis on being Swedish made IKEA too
complicated and difficult to adapt for Americans.
• IKEA attracts & selects people who value security, job enrichment &
benefits which are more generous than typical American employers.
• IKEA attracts & selects people who value security, job enrichment &
benefits which are more generous than typical American employers.
• Americans look for convenience for which IKEA had to redesign its store
layouts, providing more directions & short cuts for people
• IKEA redesigned its store layouts in US, providing more directions & short
cuts for people
•
• More autonomy was given to American country management to adapt in
the US market