IKEA Cross-Cultural Managements Case Study
Introduction
One of the most important aspects to be considered in a business is to be able to manage cultural factors strategically. In the global environment, there are different organisations that face problems in managing culture; one of these is the IKEA. IKEA is being known as one of the largest specialised furniture retailer. The company has the vision of creating a better everyday life for the many people. Hence, the company tries its best to initiate a strategy and business philosophy that would enable them to reach their objective. As the company grows strong in the market, IKEA has encountered different social issues. One of these issues is about the child labor issue. Although the company is not the direct organisation that use children as part of their workforce, the company is still considering themselves as part of the issues since most of their raw materials came from these countries like India and Pakistan.
Knowing the issue of child labors in these various countries, IKEA’s management find themselves accountable for this, since they are also benefiting from the materials created by these children. However, the issue also lies in the differences in terms of cultural factors with these countries. As a European based organisation, IKEA may find it a big problem to enter an issue with countries having different cultures. Primarily, the main goal of this paper is to provide an analysis of the cross-cultural management theories and how it can be applied to IKEA’s case. In addition, this will also provide discussion on how MBI model can be applied to IKEA.
Cross-Cultural Management Theories
As mentioned, one of the factors that must be given emphasis by a industry’s management is the cultural factors, specifically if the company is engaging to various cultures. There are different cross-cultural management theories which have been provided by different theorists:
According to (1973), the vital key for having a successful cross-cultural management system is to have an effective cultural communication. In this regard, the management of an organisation must make it sure that there are always open channels for to communicate effectively. (1976) identifies two categories of culture which have an influence on business and entrepreneurial activity. These include High Context Culture and the low context culture. The first classifications are known to have a very high established homogenous standpoint in terms of nationality, religious values and beliefs (1976). This type of culture can be seen in Japan and Arab countries. Herein, the communication context is given much emphasis such as body language and gestures. On the other hand, in the low context culture, the concept of communication is more recognised in formal written records, like culture which can be seen in the UK and USA.
This cross-cultural management can be used in IKEA in solving the problems of child labor. The company may interact or communicate with their suppliers who are allegedly using child as a part of their workforces. The company may use both high context and low context culture in communicating with these organisations. The effective communication among these companies will enable them to provide solutions for this kind of problem.
The next theorist who formulated a theory for cross-cultural management is Hofstede. According to (1991), culture can be differentiated through different dimensions at a national level. These dimensions are power distance, individualism-collectivism, masculinity-femininity, uncertainty avoidance and Long-term versus short-term orientation. This theory can be applied by IKEA in the issue of child labor by determining which among the dimensions can India and Pakistan be best attributed. Herein, the management may identify the cultural identity of these two countries by using Hofstede’s theory and provide a solution based on the identified dimension.
The next theory of cross-cultural management is the theory provided by Fons Trompenaars. According to (1997), there are seven dimensions of culture which is related to the relationships with individuals. These seven dimensions are Universalism vs. Particularism, Individualism vs. Collectivism (communitarianism), Neutral vs. Emotional, Specific vs. Diffuse, Achievement vs. Ascription, Linear vs. Circular and internal vs. external control. These dimensions are attributed as the elements which can be useful for managing cultural diversities. In this situation faced by IKEA, these seven dimensions can be used to solve the problem of child labor by knowing the dimensions that best described the culture of India and Pakistan and other suppliers who are allegedly using children in their organisation. The company must give respect to the provisions of the government of these countries and establish a good relationship with them before dealing with the issue. For example, since the company is a European based organisation, it is important that IKEA must be neutral rather than emotional in solving the problem. In their culture, they think child labor as a inappropriate but in the culture of India or Pakistan, this issue is relatively appropriate to help poor families to earn a living. Hence, IKEA’s management must also consider the cultural situation of India and Pakistan before making any actions.
MBI Model Applied to IKEA
Aside from the above mentioned cross-cultural management theories, there also exist skills for cross-cultural effectiveness which may result to high organisational performance. This cross-cultural effectiveness is consists of three basis skills. The MAP, BRIDGE and INTEGRATE skills or more commonly known as MIB Model. This MIB model can be applied with IKEA by the following:
First, the management of IKEA must identify the cultures that best described their suppliers. This can be done by using cross-cultural models given by Hall & Hall, Hofstede and Trompenaars. The company must be able to understand the differences of the culture of IKEA to the cultures of their suppliers. After identifying the differences, the company must be able to find ways of bridging these differences. In this regard, the company must determine the most appropriate communication skills to be used in this situation. For this case, the company may use both high and low context culture given by Hall & Hall in identifying the effective communication channels to be used in solving this issue. After communicating with the perspective people involved in this issue, the integration must follow. In this situation, the management of IKEA as well as the people in India and Pakistan must bring the capabilities of their culture together and integrate it properly to establish participation among the key persons and solve the issue faced by the organisation. The proper utilisation of MIB Model may enable the company to solve the issue effectively and be able to have a high performing organisation in the global environment.
Conclusion
All in all, it can be said that an efficient, cross-cultural management is one which is enclosed in a diverse organisation which culture is comprehensive of all of the different groups and constituencies that it intends to serve. Hence, it is important that the organisation must be able to determine which cultures they belong and how they can integrate their cultural strengths to other organisations to perform well in the market and to solve different issues encompassing cultures and cultural diversity.
Credit:ivythesis.typepad.com
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