IKEA: Challenges of Cross-Cultural Management

IKEA is the world’s biggest home furnishings company, with 280 stores in 26
countries and about 127,000 employees (in 2012). IKEA started in 1943 as a one-
man mail order company in a small farming village in the southern part of Sweden
called Smaland. The founder, Ingvar Kamprad, only a 17-year-old boy at the time,
initially arranged for the local county milk van to transport the goods to the nearby
train station. The first attempt to go abroad was made in 1963 in nearby Norway,
outside Oslo. It moved to the U.S. in the mid-1980s and has been targeting Eastern
and Central Europe since the 1990s. In 2003, IKEA opened its first full-scale
standard IKEA store in Shanghai and since then it has been making inroads in the
Asian market.

In Sweden, the company is ranked as one of the most attractive employers for recent
graduates in economics, engineering and IT because it enhances an international
career. IKEA also explicitly identifies with Swedishness and a strong company
culture. IKEA trades heavily on its local origins, a specific place for the emergence of
the company culture: certain values are “non-negotiable” something that according to
Rask et al. (2010) points towards an ethnocentric company culture, where
“Swedishness” is described as a fundamental identity within the company. As a
result, Swedish employees have automatically been regarded as bearers of the
culture and have thus had easier access to managerial positions worldwide (Bjo¨rk,
1998). The founder’s roots in a meagre rural area have fostered an attitude towards
cost-effective measures. The regional origin is a non-negotiable norm expressed in
various ways including a corporate cultural centre in Amhult, Sm°aland called
“Together”. IKEA employees, especially store managers from all over the world, visit
the cultural centre to gain insight into the basis of the company’s fundamental
values.

Corporate culture
“You can take IKEA out of Smaland, but you can’t take Smaland out of IKEA”. This
statement is part of the opening section of IKEA’s corporate website that focuses on
the company’s shared values, themselves an integral part of the company’s culture.
Smaland in Sweden, where Ingvar Kamprad founded the business that grew into the
present day IKEA, is characterised as a place that embodies the company’s values.
IKEA’s website notes that: “Simplicity, humility, thrift and responsibility are all evident
in the lifestyle, attitudes and customs of the place where IKEA began. An example of
the Smalanders’ way of doing things is not to ask others what you should be doing,
but to ask yourself and then get on with it!”.

The company’s leadership is rooted in the values and policy documents provided by
the employer. In interviews, managers refer to the Testament and the values. IKEA
Values is a key document. On the first page the entrepreneur and founder Ingvar
Kamprad is quoted: “Maintaining a strong IKEA culture is one of the most crucial
factors behind the continued success of the IKEA concept”. The rest of the leaflet
tells a story about the entrepreneur and IKEA’s development. The storyline is about
a young boy who starts out with nothing but his own bare hands, ideas and a burning
passion. In a place far from economic centres, the entrepreneur develops a global
company founded on the traditional values from his childhood: humbleness, thrift and
inventiveness.

Ingvar Kamprad is very clear that maintaining a strong IKEA culture is, in his
judgement, one of the most crucial factors explaining IKEA’s success. Values of
togetherness and enthusiasm are supported by the company through open-plan
office layouts and by laying out clear goals that co-workers can stand behind.
Another espoused value, willpower, is defined as first agreeing on mutual objectives
and then not letting anything stand in the way of actually achieving them. It is
alternatively stated as involving a sense of knowing exactly what we want and
exhibiting an irrepressible desire to achieve it.

IKEA’s culture is viewed by the company itself as a strong culture “living and based
on a set of shared values”. The organisation claims that its togetherness and
enthusiasm make it unique. Its recruitment section on the IKEA corporate website
offers potential employees (termed co-workers) the prospect of fun at work and
opportunities to contribute to the development of others. IKEA also wishes to build a
diverse workforce, noting that “we want to attract people from different nationalities,
perspectives and approaches because we believe diversity makes IKEA a better
place to work and to shop”. The recruitment of suitable co-workers is clearly
important to IKEA, as it views culture as emerging and being sustained by people
enacting values.

IKEA has several slogans one which is: “We are all equally different”. This could be
understood as a way to embrace diversity in society in general. However, the slogan
could also be interpreted as a way to capitalise on diversity and profit from a
heterogeneous customer base by creating an environment where customers are
able to identify and feel comfortable with the store and its employees. Training
materials on the values emphasise the importance of diversity as an asset. To recruit
employees and managers working in a global context puts high demands on the
organisation’s ability to interpret and translate the concept of “diversity” to its new
workforce in order to become successful carriers of the company’s values. It also
demands from the organisation to address non-defined norms and values according
to whom are considered as desired workforce and why.

HRM

Employees at IKEA are extensively trained at the entry level. Afterwards, they have
to pass a test with a range of questions assessing their knowledge of various topics
ranging from purchasing to the information technology system of the firm. Product
managers would be trained abroad for another two weeks. If a job vacancy arises,
the position is first opened to current IKEA employees. Furthermore, IKEA also
encourages open communication among its employees, who were welcome to freely
discuss their individual career development needs and plans with their supervisor.
On the whole, IKEA had a very systematic training and internal labour development
system, which strengthens its competitive advantage and resonates with its
corporate culture emphasizing employee empowerment.
A full-press diversity drive was instituted in 2000, with individual stores’ managers
and human resources heads trained intensively in subjects like which organisations
to contact to find qualified minority candidates and how to adjust standard
interviewing techniques to put job applicants at ease. Managers are then evaluated
yearly on how well they ‘ve met the goal of having their workforces mirror the racial
and ethnic make-up of the communities they serve. “We’ve always done it for our
hourly workforce”, says Sari Brody, IKEA’s manager of leadership and diversity. “In
top management we are about halfway there”. The needs of older workers are also
addressed in the form of flexitime, job-sharing and telecommuting programs. It’s
become a well-publicized point of pride that each IKEA facility has a “quiet room”
where nursing mothers can pump breast milk. New mothers receive six to eight
weeks of disability leave plus an additional week of fully paid time off. New fathers
and adoptive parents receive the same week of fully paid leave. There is also a
conscious effort to increase the number of women and minorities in management.
For example, the number of women on IKEA North America’s 14 - member
management board has increased from one to five.

Leadership in IKEA
Former IKEA CEO Anders Dahlvig has commented on the company’s approach to
leadership, thus:
“Leadership for me has to do with motivation. How well my leadership works is
reflected in how much I can energize the people. It is about motivation and energy.
Then the relevant question for me is; What is it that really motivates people? I
believe the way to motivate people is to make sure they have a clear idea of where
you're going and how to contribute to the goal. Having clear goals, visions, and
where the business is going—those are the values that are important to me. Building
trust in the group that I work in is another important issue. I try to have a very open
climate and give a lot of freedom.

Leadership has to reflect our values, the IKEA culture, and there is a connection
between the values and the image the person gives. So if you live the values, you
also reflect the culture image. Within those values it is also important for all leaders
to develop their own style. We don't try to move them into a specific type of
leadership. The framework is our core values, and we allow a lot of freedom
depending on who you are and what your specific skills are.”

This suggests that IKEA encourages their managers to employ a leadership style
which can be adapted to the requirements of the particular context within which they
operate. However, the corporate culture seems to favour a “softer” supporting or
coaching style and managers shy away from a firm, instructive style which is seen to
hinder personal and organisational development. Additionally, in line with the view
presented by Anders Dahlvig, managers seemed to distinguish between leadership
and management where the former is associated with the coaching approach and is
seen as positive whilst the latter is linked to a more autocratic/directive style which
has negative connotations. Dialogue is valued as the main foundation of decision
making and is considered essential to employee empowerment and vital to
maintaining the culture of togetherness.
Nonetheless, evidence suggests that the empowering leadership style advocated by
the company does not fare well with non-Swedish employees (such as those in
China and Japan) who are accustomed to a more direct, instructive style. As a
Swedish manager comments:

“There’s an inflation in coaching leadership because it is absolutely dangerous to

leave people, to have coaching leadership with people who need direction, well, if
they are not ready, and you end up with paralysis, frustration and so on (a Swedish
manager).

Non-Swedish managers also perceive the coaching approach to be time consuming,

weak and ambivalent. While Swedish managers are aware of such criticisms, often
their reflection on the issue suggests a differentiation between native Swedish
employees and employees with other ethnic origin, where the former category is
thought of as a mature workforce, responsible and self-propelling, while the latter
one is considered “immature”, in need of instructions in a more authoritarian and
traditional way. A different view would be to treat the employees’ need for direction
as an expression of responsiveness, to learn the culture and the strong values the
company communicates through its intranet and internal training.

When Swedish managers describe the opportunities IKEA-employment offers the

individual employee and how these opportunities are met by the employees, the
arguments are based on experiences from Swedish context. According to the
Swedish managers, Swedish workers are more interested in individual development
compared to employees in other countries:

“At IKEA, when we talk about pay and benefits, we see learning and training
opportunities as a benefit. And that’s something I think works well in Sweden; people
like being able to learn and feel, you know, that they are developing themselves
through their jobs. Without actually having any expectations beyond personal
learning. People are interested in learning in China, but it’s always with the idea that
it will lead to a new job and higher pay. Not doing it for its own sake and for personal
learning, but because this is going to lead to something”.

The managers revert to IKEA’s internal documents that money should not be the
driving force for wanting to work at the company. The Swedish managers reflected in
the interviews that working at IKEA is so popular and attractive that people in
Sweden actually accept a wage cut to get to work at IKEA. According to the native
Swedish managers the situation abroad is different and the company does not enjoy
the same status. Instead it is regarded as any other retail employer and therefore,
the level of salary and working hours determines whether employees stay or leave.

Moving the company from a Swedish, north-European and Anglo-American context

to East Asia increases the tension of implementing and translating the company
values. The company’s view on monetary compensation has different implications in
China than in Sweden. The value “togetherness” has different levels of significance
according to the different material conditions employees from different national
context face in a global company. Depending on the general standard of living in the
country, employees may have more or less altruistic motives for personal
development at work and may seek out more responsible and demanding positions.

Concluding remarks
IKEA is a hugely successful company whose success is partially built on a strong
corporate culture. The company strives to establish equality among its employees by
using a code of conduct that describes behaviours consistent with the organisations
values. These values are a core focus for manager-employee relationships and
employee-company relationships. The values were formulated in a Swedish context
(specific place bound) and rooted in the time and place years before global
expansion. From a global expansion perspective, no ideas were given in “The
Testament” to the relationship between the company’s various geographical units
and the significance of normative ideas. It was not considered what being a Swede
working in the company implies and what hardship this might bring in the future for
people of other origins than Swedish.

Today, IKEA emphasises its global presence in the world and this position requires
some fundamental ideas of how to identify itself as a modern and global enterprise.
The company has attempted to “solve” this by its slogan: “we are all equally
different”. The intention of including values such as “equally different” might at first
glance communicate a modern and conscious organisation, however, a more carefull
reading reveals that perhaps diversity does not automatically guarantee equality.
This points towards an ethnocentric company culture, where “Swedishness” is
described as a fundamental identity within the company and as a result, according to
some commentators, Swedish employees have automatically been regarded as
bearers of the culture and have thus had easier access to managerial positions
worldwide.