Ikea: managing cultural differences

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IKEA : Managing Cultural Diversity


IKEA: Managing Cultural Diversity

1) To what extent does Kampred’s Leadership style and IKEA’s culture, structure, management style, and business philosophy reflect Sweden’s national culture?

To many people around the world, IKEA represents the epitome of Swedish culture. Surrounded by the blue and yellow of the Swedish flag,advertisements in Swedish accents, and even Swedish meatballs, the company proudly displays its Swedish roots. Often characterized by egalitarianism, paternalism, and self-reliance, the Swedish mentality is also very welcoming and open to different cultures. IKEA’s is directly linked to this Scandinavian culture and values simplicity and informality, down-to-earth thinking, humbleness, frugality,creativity, and responsibility.

Using Hofstede’s 5-Dimension cultural model, we will describe to what extent IKEA’s culture, management style, and business philosophy reflect Sweden’s national culture. In the first dimension, Power Distance, Sweden’s score is 31. This reflects a more egalitarian and less hierarchical environment and where superiors are accessible and casual. Leadership is prettylaissez-faire, and managers are more democratic and consulting, often inviting suggestions from subordinates and allowing them to make decisions.

IKEA echoes these characteristics. Employees and managers are referred to as co-workers, managers do not have titles on their business cards, and are even called by their first names. There are only 3 levels of responsibility in a store (co-workers,managers, store manager), hierarchy is not emphasized, and the workplace is casual with jeans and no ties. Managers do not have offices, and are extremely accessible to their workers, encouraged to share information and knowledge with co-workers.

For the Individualism dimension Sweden has a score of 71, showing a medium-high “I” conscious culture where people fulfill individual obligations and aremore task and result-oriented. Business hiring and promotion decisions are supposed to be based on skills and rules are applied universally without favoritism.

IKEA is known for having a caring attitude for the individual and giving employees a high degree of independence. Their application of rules is standardized and policies are applied uniformly to all employees. Management is result-orientedand views problems as challenges to overcome.

Sweden has the lowest published score of 5 for the Masculinity dimension, unveiling a culture where the dominant values are caring for others, solidarity, and the quality of life. This is shown in the welfare state and businesses, where people work in order to live, are interested in employment security and cooperation, managers are expected to beintuitive, and people want to have good relations with their supervisors and colleagues.

IKEA is very much on the same cultural track. Ingvar Kamprad has said, “At IKEA, we think of ourselves as a family. Just as one would look after their parents, siblings or children, our coworker family is encouraged to and excels at supporting and taking care of each other.” Relationships between employeesare strong and open, and IKEA adopts a paternalistic human resource philosophy following the belief that employees are more productive and committed when the company takes care of them and their needs. IKEA workers have shared values of respect, simplicity, and cost-consciousness that create solidarity, and managers are encouraged to be close to their co-workers and share information andknowledge.

As a country, Sweden has an Uncertainty Avoidance score of 29, which is rather low. This shows a willingness to take risks and a tendency for fewer laws and rules. Work environments are less structured and there is a greater capacity for innovation and testing new ideas. Intrapreneurs are valued and people are taught to question accepted solutions and not to be afraid of making mistakes....