1.1. Background Information
IKEA is a well known Swedish company where almost every European person under 30 has
purchased something from to decorate their flats. In only a few decades the company “went
from the woods of southern Sweden to 31 countries around the world”1 and has become a
large Multinational cooperation (MNC) with an interorganisational network.2 Higher tariffs,
transport costs and the loss of economies of scale in domestic production further encourage
production abroad.3 The Swedish market is comparably small and IKEA had to expand in
order to keep their steady growth rates. The success came as a surprise to many since the
furniture business is originally a local business.4 IKEA is the only company in their field, that
has been able to expand so widely. The company seems to offer something that is unique to
people and that appeals to them as something preferable. The background of the company
seems to play a role in managing this uniqueness where Swedish influence on leadership,
corporate culture and product offer leads towards the successful “IKEA spirit”.
While the internationalisation of IKEA is one of the reasons for their great success, it seems
that it is also the source of trouble. It seems that today’s “game of global strategy [is]
increasingly … a game of coordination”5. The difficulties that IKEA faces is to keep their
unique “IKEA spirit” and still be successful around the world.
1.2. Aim of the Paper
The aim of the paper is to look at the sources for IKEAs success where special emphasis will
be given to the Swedish impact on leadership, corporate culture and product offer and the
success they have with it. Internationalisation puts challenges on the above success areas and
those need to be evaluated, as well.
1.3. Delimitations
IKEA is a very complex company and I couldn’t concentrate on all of the given information.
For example, I did not write about the purchasing network and relationships to suppliers.
Also, customer contacts are not dealt with in depth.
1 http://www.IKEA.com/about_IKEA/timeline/splash.asp, (21.02.03).
2 Forgens/Holm/Thilenius (1997). p.477.
3 Buckley/ Casson (1998). p. 555.
4 Grol/Schoch (1998), p.
Table of Contents
1. Introduction
1.1. Background Information
1.2. Aim of the Paper
1.3. Delimitations
2. Analysis of the IKEA Way
2.1. Corporate Culture
2.2.1. Lead in
2.2.2. Corporate culture as reflection of Swedish culture
2.2.3. Success of IKEAs corporate culture
2.2.4. Enforcement of Corporate Culture worldwide
2.2. Leadership
2.2.1. Lead in
2.2.2. Swedish traits in Management style
2.2.3. Enforcing Management Style
2.3. Impact on Product Range
2.3.1. Lead In
2.3.2. Sweden’s national advantage in home design
2.3.3. Sweden’s impact on IKEAs product
2.3.4. Successful spread of Swedish product design
3. Analysis of Problems with the IKEA way
3.1 Lead in
3.2 Scandinavian leadership at all subsidiaries.
3.3. Corporate culture versus cultural sensitivity
3.4. Standardisation versus adaptation to national conditions
4. Recommendations
5. Conclusion
Objectives and Topics
This paper examines the fundamental sources of IKEA's global success, specifically investigating how the company's Swedish roots influence its leadership, corporate culture, and product design. The research question explores whether these distinct Swedish attributes can remain effective as the company undergoes rapid international expansion and faces diverse global markets.
- Analysis of the IKEA corporate culture and its Swedish origins.
- Evaluation of the Swedish management style and its implementation in global subsidiaries.
- Examination of how Swedish design traditions influence IKEA's global product range.
- Identification of organizational challenges related to internationalization and cultural sensitivity.
- Strategic recommendations for balancing centralized standards with local adaptability.
Excerpt from the Book
2.2.2. Corporate culture as reflection of Swedish culture
The way that employees at IKEA handle each other can be compared to the general Swedish culture where emphasis is given to family like attributes with shared responsibilities and informal structures.
Sweden is a very social country where power distance is low. Looking at exhibit one, the results of Hofstedes cultural research on 50 different nations are laid out. There, Sweden is evaluated as the least masculine country. This proves that the country is guided by more feministic traits. The main goal is relationship building instead of achievements and work is done in self-contained social units. Individual careers are less important and managers are modest and helpful. In that sense, Sweden can be seen as a welfare society in which caring for all members is an important goal. Related to this, power distance is also relatively small. The country ranks 6th in this area. In cultures low on the power distance scale, status differences are considered undesirable and openness, directness and two-way communication of superior-subordinate is enforced.
Summary of Chapters
1. Introduction: This chapter provides the background of IKEA’s expansion and outlines the research objective regarding the preservation of the "IKEA spirit" amidst international growth.
2. Analysis of the IKEA Way: This section details how IKEA’s corporate culture, leadership style, and product strategy are deeply rooted in Swedish social values and design philosophy.
3. Analysis of Problems with the IKEA way: This part identifies the challenges IKEA faces in maintaining its centralized, Swedish-centric model while expanding into diverse international markets.
4. Recommendations: This chapter suggests strategies for IKEA to better integrate local needs while maintaining its core organizational identity, including mentoring and "scissor strategies."
5. Conclusion: The summary reflects on the findings, concluding that while IKEA’s success is based on its unique heritage, the company must evolve to address the coordination problems inherent in global growth.
Keywords
IKEA, Corporate Culture, Swedish Management, Internationalization, Global Strategy, Organizational Structure, Scandinavian Leadership, Home Design, Adaptation, Mentoring, Power Distance, Competitive Advantage, Product Standardisation, Cultural Sensitivity.
Frequently Asked Questions
What is the primary focus of this paper?
The paper explores the origins of IKEA's global success by analyzing how its Swedish heritage shapes its leadership, corporate culture, and product range.
What are the core thematic areas?
The analysis covers Swedish management traits, the influence of Swedish home design, the enforcement of corporate culture in global subsidiaries, and the challenges of international expansion.
What is the central research question?
The work investigates how IKEA can maintain its unique "IKEA spirit" and internal consistency while effectively scaling its business globally.
Which methodology is applied?
The author uses a case analysis approach, synthesizing organizational theory—such as Hofstede’s cultural dimensions and Porter’s diamond model—to explain the success and current challenges of IKEA.
What does the main part of the paper cover?
The main body examines the specific components of the "IKEA way," including its informal management structure, centralized design philosophy, and the difficulties of standardizing these in non-Scandinavian regions.
Which keywords characterize the work?
Key terms include IKEA, Corporate Culture, Global Strategy, Swedish Management, and Cultural Sensitivity.
How does the author view the "IKEA spirit" in the context of global expansion?
The author argues that the same factors that led to success, such as strong centralized values, now create challenges when the company fails to adapt to local cultural routines or when it struggles to fill leadership roles with native managers.
What is the "scissor strategy" mentioned in the recommendations?
The "scissor strategy" refers to a suggestion from Kotler to mix native talent with Swedish management teams to bridge the gap between maintaining internal corporate standards and understanding local market requirements.
Why are non-Scandinavian employees sometimes disadvantaged in the corporate structure?
According to the text, the company heavily relies on Scandinavians as "culture bearers" and uses Swedish as the primary working language in key areas like design, which limits the career advancement of non-Scandinavians.
- Quote paper
- Manja Ledderhos (Author), 2003, IKEA. Success and Problems of a Swedish Concept, Munich, GRIN Verlag, https://www.grin.com/document/11506
