IKEA takes Swedish culture global Source: Peng, M. & Meyer, K. (2023). International Business (4th ed). Cengage Learning EMEA. The assemble-it-yourself furniture chain IKEA has developed its corporate culture from its Swedish roots, which not only shape the brand identity, but also stimulate designs - including the very idea of customers building the furniture themselves - and influence the way people treat each other in the organisation. IKEA's corporate culture is grounded in Swedish values and shapes IKEA's operation worldwide. In the words of IS country manager Lars Petersson, a Swedish expatriate, 'We don't make different considerations in different countries. It's not that we aren't appreciative and interested in local culture. We are very much. But there are some fundamental things that we are not negotiating.' In-store employees are called 'shopkeepers' and few executives carry business cards. Pre-Covid-19, everyone sat side by side at no-frills IKEA desks in an open plan floor at the firm's US head office. Employees in Miami were surprised when their country head, during a store visit, sat down with a shopkeeper to discuss how to most effectively move trash from the warehouse to the dumpster. IKEA also does not appreciate workaholics. In the words of an IKEA US head of HR, 'If you can't do your job in a reasonable amount of time, you're doing something wrong.' Few stick around after work hours, and everybody takes weekends off - except those on duty running the stores during weekends, of course. Diversity and inclusion are also a core part of IKEA's culture, including a high share of women not only in the workforce but also in leadership roles. Non-traditional identities are appreciated. For example, some IKEA commercials features gay couples. In the USA, IKEA has been offering domestic partner benefits since 1995 and covering gender reassignment surgery since 2016. Sometimes, its policies are viewed as 'going too far' in more conservative markets. For example, in Italy, a politician called for a boycott after IKEA organised an event in support of gay marriage. However, the long-term commitment to diversity and inclusion pays off: IKEA was recognised as one of the top-10 most diverse companies in Europe along the dimensions of gender, ethnicity, disability, LGBT+ and age by the Financial Times in 2021. IKEA's corporate culture is a clear differentiator in countries where retail workers are normally not well treated. For example, IKEA US offers generous wages and benefits compare with its rivals. Hourly employees receive an average of $15.45 an hour, and entry-level employees $11.87 an hour - 64% higher than the federal minimum wage of $7.25. In comparison, Walmart hourly employees receive an average of $13.38 an hour, and entry-level employees merely a dollar above the federal minimum wage. At IKEA, parttime employees enjoy health benefits for just 20 hours of work per week, while full-time employees annually receive 24 paid vacation days and five sick days and take a 'European-style' long vacation of several weeks. It may be normal in Sweden, but in the USA, it is essentially unheard of, according to Fortune magazine. IKEA also transferred its Swedish-style human resource management practices to Japan and Korea when opening stores there. This was not easy because cultural distances were large. For example, workers looking for jobs tended to be focussed on salaries and not on welfare or workload issues. Also, giving parttime workers equal status and limiting promotion by seniority was not understood by many people in both Japan and Korea. Thus, IKEA's local subsidiaries had to invest heavily in communicating why they did what they did to potential employees and to the public - they even had to appear in Korean parliament to explain the wage-setting policies. Eventually, however IKEA was recognised in both countries for the merit of some of their practices - notably the same pay and status for part-time workers. In Japan, their role model even influenced new legislation aimed at enhancing women's workforce participation and professional opportunities. Yet not all franchisees (local companies owing the shops) fully embraced the spirit of the Swedish culture guiding the IKEA brand. In France in 2021, a manager was convicted to a suspended prison sentence for illegally spying on employees and job applicants. According to court documents, IKEA hired a private BM214 T1 2023 MIT Last Updated T1 2023 security firm to illegally collect personal data and even obtain police records. Even with the best intentions, creating a consistent global corporate culture can be quite challenging, especially at time of rapid growth.

Questions for Discussion 1. Examine the culture of Sweden using either the Hofstede or the Globe cultural model. How do IKEA's HR practices discussed in the case reflect Swedish culture?

2. IKEA is currently not operating in Brazil. Examine the culture (using either Hofstede or the Globe cultural model) and the political and economic environment of Brazil. Based on your analysis of Brazil and understanding of Sweden, should IKEA set-up operations in Brazil?

Essay Structure 1500 words

Cover Page

Table of Contents

Introduction

Body

Conclusion

List of APA STYLE Reference