Ikea is an international retailer which has set up outlets which are running successfully all over the world for the last twenty five years. Today Ikea is an undeniable leader in the home product industry in the United States, Asia, Europe and Middle East, thanks to an innovative strategy which is in step with the structure of the company.
All the companies of the Ikea Group are owned by the Ingka Holding B.V. which belongs to the Dutch foundation Stichting Ingka. This foundation is officially dedicated to innovations in architecture and interior design, and is controlled by the Kamprad family . At inception, Ikea was a Swedish company, and was thus strongly influenced by the Scandinavian style and culture regarding design, business and management. Ikea has successfully preserved its identity despite its growing activities overseas, so that the success of the company has led to the formulation of the Ikea way. According to Ikea's managers, there is always a way of doing things better and the Ikea way makes methods and approaches converge to reach this perfect process. There are almost no differences between stores operation in different countries or cultures, so much so that management, structure and organization are very similar from one store to another.
[...] However Ikea has a standardized human resource policy which applies to all employees without taking into account local differences in management and culture. Top managers tend to believe that Ikea's way of managing people has universal appeal, which can be a serious mistake in certain cases. The Swedish management is relatively hard to understand for non-Swedes so that some features of Ikea's corporate culture are weird and jeopardize the efficiency of foreign subsidiaries. For instance, Germans are comfortable with formal procedures so it is very difficult for them to take initiatives and get rid of bureaucracy. [...]
[...] The company tries to learn from its mistakes and problems, to become more efficient in the management of performance and development. “Learning by doing” is a distinctive feature of Ikea because it has led to many innovative concepts which have provided the company with strong competitive advantages such as the new value chain. Ikea also enhances communication, and transfer of knowledge or skills among employees, in order that they may improve their abilities, and thereby the overall performance of the company. [...]
[...] Nevertheless the standardized human resource policy gives a high position to the Swedish culture and denies local specificities. This jeopardizes the overall efficiency of the company. IV Is this approach applicable to other parent or host country contexts? Ikea is an interesting case because the company is an international retailer which has a global strategy, and whose main strengths are its corporate culture and its employees. Ikea could advise many companies on their way of managing a value chain, becoming a learning organization and developing innovative concepts to solve pragmatic problems. [...]
[...] III Valuation of Ikea's strategy in the management of people Ikea is well-known for managing people efficiently from the point of view of managers and workers, since employees are one of Ikea's main strengths and the Swedish retailer is ranked among the “best companies to work However there remain some issues concerning management and human resource development which need to be resolved. Firstly Ikea is a paternalistic company since it capitalizes on employee welfare. Top managers live by the philosophy that “when co-workers have the support and flexibility to make their personal lives a success, they thrive in the workplace too," Pernille Spiers-Lopez. [...]
[...] To conclude, we note that Ikea has a highly functional structure with a global market strategy, and the company has succeeded in marketing standardized products to different consumers. Despite heterogeneous consumer preferences, Ikea has established its own Swedish style and culture so efficiently, that it has succeeded in “becoming a global player in an industry considered local by nature”. II The management of performance and development Ikea has two main approaches to managing performance and development, which directly come from its organizational context and international structure. [...]
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