Problems with Ikea

Essay by imrannasrUniversity, Master's March 2004

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We have analysed the IKEA case study "Managing cultural diversity" .Our analysis of key problems, recommendations and their limitations are summarised in the following document.


Key problem #1: IKEA suffers from a lack of innovation and faces the possibility of offering a very similar product base. This is due in part to the lack of fresh blood in the organisation. IKEA's policy of hiring the same genre of people leads to inhibiting diversity and innovation to meet change in new markets.

Recommendation: IKEA should broaden its selection base of hiring people. Whilst not changing the core competencies required of key staff, a new emphasis should be placed on the hiring of people from a mix of backgrounds and personalities. This will promote diversity, infusion of new ideas and ensure the richness of the culture.

Limitation: This diversity may however lead to lack of goal congruence and a distraction from the common goals.

There may be a waste of resources to get such a diverse group to agree to a common viewpoint.

Key problem #2: Not enough like-minded managers (Swedes) to manage stores.

Recommendation: There are two options to solve this issue. Firstly, a solution would be to hire more Swedes with similar work ethos and cultural similarities. Secondly, another option is to promote successful managers from various countries to expatriate jobs in other geographies. This would not only achieve strong transplantation of talent but also build strong and committed global managers.

Limitation: There may not be enough capable candidates in the overseas poll of Scandinavian expats. Additionally, looking at the second option of transplanting foreign mangers in businesses outside their home countries may foster feelings of resentment of locals, inhibiting individual advancement.

Key problem #3: IKEA has not been proactive in accepting the specifics of new markets and...