IKEA way of managing

As you know, the way of managing is partly influenced by the culture of the country. People are unconsciously raised with a certain culture characterized by some customs and habits which have an impact on the human being. Geert Hofstede (2 October 1928 in Haarlem, Netherlands), an influential Dutch social psychologist and anthropologist, has played a major role in developing a systematic framework for assessing and differentiating national cultures and organizational cultures (website link : http://www.geert-hofstede.com).

He classified the countries according five major points, determined by a report studying the behavior of IBM employees in 70 countries, which are:

-         Power Distance Index (PDI) : that is the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally

-       Individualism (IDV) : it measures if people are used to work alone or prefer working in a group

-      Masculinity (MAS) : versus its opposite, femininity, refers to the distribution of roles between the genders which is another fundamental issue for any society to which a range of solutions are found

-        Uncertainty Avoidance Index (UAI) : it measures the level of uncertainty people can accept and to what extent they are willing to take risks

-            Long-Term Orientation (LTO): versus Short-Term Orientation depends on the level managers think, rather in a long term way or in a short one.

A good manager has to be aware of these characteristics before thinking about working with or in another one located abroad. Yet, some companies succeed in applying their way of managing all over the globe which can sometimes be a key of their success.

For instance, the well-known brand IKEA, the world’s larger furniture retailer, presents in 3 countries, has developed its success around its design products and its original ‘Scandinavian lifestyle’ which convinced both customers and employees.

The Swedish model spreads worldwide

According to Hofsede, the Swedish power distance index is low, which means the hierarchy is not that specified with many levels. Besides, masculinity is very low as well, which means people are preoccupied by emotional issues rather than by facts.

This is the way the company is organized, with the minimum of hierarchy. They emphasized the personality of people they hire, with a real will to hire people with their own characteristics.

It has a strong almost ethnocentric Swedish corporate culture following a home based internationalization strategy.  The great challenge of the organization as it becomes larger and more diverse through the years is how to keep the core founding values alive. To make it right, it simply reproduces its way of managing in all the countries, which sometimes has been a real issue.

For example, in the European countries, such as France and Spain (the two tables among) which, even if they have some differences of culture (France has a high power distance index), succeed in adopting the IKEA culture. At the contrary, IKEA have had some difficulties in convincing the US of its corporate culture and struggled to tap the market (consumers have different expectations, competitors are numerous…).

Another question : if and how individuals with differences in background as race, gender, physical ability, ethnicity, sexual orientation and age all can subscribe to the shared corporate values of IKEA and find it a good place to work?

This contradiction is not an error from IKEA, it goes with its orientation of diversity management. There must be non-negotiable differences of gender, ethnicity etc. in order for it to make sense, to speak of diversity. At the same time, these differences must be negotiable in order for it to make sense to manage them in a coherent corporation.

Accepting the paradox, whether explicitly or implicitly opens a field of possibilities, one of which is the practice displayed in the web pages of IKEA. We might inquire, however, if this paradox is specific to the diversity management practice of IKEA.