IKEA' s work-life balance in Sweden & China - SIAF

Case Study
Human Resources and Globalisation
How IKEA is promoting its work-life balance culture
across countries and continents
IKEA’ s work-life balance
in Sweden & China
Based on In-depth Interviews with IKEA Managers
Volterra, Dr. Silvia Iacuzzi 1

Going Global – In Theory
Globalisation of goods and services
Convergence of products and marketing strategies
Key issues are flexibility, cost-effectiveness and spillover of bestpractice
Organisation of human resources across more than just borders
Different political and economic systems (Nation states)
Various legal frameworks
Often competing cultures with management styles which are
governed by different values
Localisation of human resources
HR management likely to reflect local circumstances also to promote
acceptance and legitimacy in the host environment
Extension of corporate identity and mission to new local employees
Volterra, Dr. Silvia Iacuzzi 2

HR Management
Recruitment
Attracting the best candidates
Selecting the “appropriate” future employees
Training & Development
Investing into human capital to reap most benefits in the shortest time
Local employees to assume increasing responsibility to manage local
operations while endorsing and spreading the corporate culture
Communication
Managing relationships individually and/or through employee
representatives/unions
Rewards & Promotions
Pay structures should ensure the promotion of productivity while
reflecting company values
Providing the right incentives for people to work efficiently and be
committed to the company and its values long term
Volterra, Dr. Silvia Iacuzzi 3

IKEA’s Identity & Culture
The mission (The dream)
Building a better daily life for the majority of people
The business idea
To offer a variety of modern and functional products at such low cost
that most people will be able to afford them
The humar resource idea:
work-life balance
To provide honest and straightforward
people with the
opportunity to grow personally
and professionally so that they
can create a better daily life for
themselves and for IKEA clients
I
at work
I
at home
Volterra, Dr. Silvia Iacuzzi 4
I
I & the
environment

Some Elements of Swedish Culture
Equality
Small distance between managers and employees
Informal relations
Open and straightforward communication
Care & compassion
Helping attain potential (promotion from within)
Managing through values and vision
Competition
Open to self-criticism
Awards for best customer service
Continuous tracking of sales targets
Thrifty (Småland) – potato field philosophy
Family: celebrations and gifts for Christmas and birthdays
Environment: energy saving, recycling and bio-policies
Leadership
through
consensus
& team work
Hofstede: Swedish managers are among the most “feminine” and with least “distance”.
Examples: Volvo (’70), SAS (’80), IKEA
Volterra, Dr. Silvia Iacuzzi 5

IKEA & internationalisation
1970-1980: Tour of the Vikings; Swedish model exported within Europe
Clients learn how to furnish their house “a-la-Swedish” (blonde, clean lines)
All outlets are blue and yellow; ads recall Nordic images
Employees use informal form and first names
They all help each other, fly economy class and eat Swedish meat balls
Career oriented employees are encouraged to learn Swedish
1990-2000: Metamorphosis; expansion into North America & beyond
New furniture lines, e.g. more classical styles
Managers no longer wear uniforms but now dress casual
Client service identified as key trigger
Marketing becomes more serious; IKEA makes less fun of itself
2000-ongoing: Consolidation; bringing together what was learned
outside of Europe
Additional furniture styles
Dress code becomes casual but trendy
Client service established as a cornerstone (customer satisfaction studies)
Career oriented employees are encouraged to learn English – Swedish is a plus
The “heart” and “brain” – Älmhult & Humlebæk
Volterra, Dr. Silvia Iacuzzi 6

IKEA in China
There are 4 IKEA outlets in China, with plans to open another 20-
25 over the next 5-10 years
Every outlet has ca. 500 employees and the main office in
Shanghai has 50 people
IKEA has carried out several market research studies
On potential customers in China
On the demographic, psychological, attitudinal characteristics of
potential Chinese employees
They have developed a marketing mix to promote a culture of
work-life balance
Volterra, Dr. Silvia Iacuzzi 7

Some elements of Chinese Culture
Confucianism
Absolute respect for superiors and older people
It is imperative to follow instructions word-by-word
Fear of authority (Cultural Revolution)
Passive acceptance of laws and words from superiors
Loosing face: challenging authority will rarely come to a good end
Reserved character: personal activities and dreams are often pursued
covertly
Survival among many
Promotions are based on networks and family status
A family “invests” in the “right” friendships and acquaintances
Individual success is more important than team work
Volterra, Dr. Silvia Iacuzzi 8

Sino-Swedish Work-related Contrasts
Cultural differences
Flat vs. vertical hierarchies
Meritocracy vs. nepotism
Responsibility and accountability vs. doing what one is told without
questioning the boss
Equality: also an occupational and organisational issue
Expatriates - package includes high salary, house, car – often with
driver and baby-sitter (who are sometimes paid more than local IKEA
employees!)
Office set-up: personal vs. common resources
Work environment
Work hours (9am-5/6pm vs. first to arrive, last to leave)
Holidays (25 vs. 10 days p.a.)
Casual dress code rather than business/formal uniforms
Volterra, Dr. Silvia Iacuzzi 9

Reconciling the Two Cultures - 1/3
Work-Life Balance marketing strategy: 4Ps
Product: work-life balance, tangible components:
Working hours with no overtime or weekend work
Open-plan set-up
Open-door policy
Kraft-80: competitions to improve efficiency, idea banks and awards
for new successful ideas
Accepting responsibility and taking personal initiative
More holidays
Casual wear or uniforms: “going native” and “jeans-rolled-up-sleevessnuff-look”
Mistakes are allowed and are punished only if repeated
Volterra, Dr. Silvia Iacuzzi 10

Reconciling the Two Cultures - 2/3
Price: breaking with traditions and normal way of thinking
Chinese employees want precise descriptions of tasks and roles
Applying to jobs is normally based not only on salary level, but also on how
specific the job description is
Promotions are based on performance and not on who you know. Lifelong
efforts to create and maintain a network of powerful people are
now useless
Place: in the office environment in general, but also trainings and
meetings
Foreign managers continuously encourage Chinese colleagues to ask
questions, take responsibility and offer criticism
IRTC – The IKEA Retailing Training Center progamme in every country
UIC training – Understanding IKEA Concept training. A week of training
on the IKEA culture for managers, often at Älmhult (the “heart”)
The IKEA-Way Programme creates “ambassadors”
Volterra, Dr. Silvia Iacuzzi 11

Promotion:
Reconciling the Two Cultures - 3/3
Voice-service: annual survey with employee feedback on improvements
and what does not work for their work-life balance
NB: IKEA outlets with the highest voice-service score are also those with the
highest customer satisfaction (obtained interviewing customers)
Public announcement of individual employee’s achievements
Light newsletter prepared by randomly selected employees
From 1992 global newsletter (IKEA Ideas) translated into all IKEA languages
Separate local newsletter in each country
Both newsletters talk about IKEA people, not only company results
Recruiting campaigns focusing on ability + experience + soft skills
Terminology in line with IKEA culture: the main office in Shanghai is
simply called Service Office offering support, guidance and coordination,
not a Head Office or HQ
A Learning and Development Manager sits on the IKEA Board to bring
together different experiences and harmonise cultural differences as
needed; the ambassadors & Bombers’ Crew then spread the IKEA culture
Volterra, Dr. Silvia Iacuzzi 12

Remaining Difficulties & Contrasts
Environmental issues
Energy saving
Use of biological products
Recycling
Environmental responsibility
Gender issues
Maternity leave
Equal opportunities
Family welfare
Time-off
Healthy and family oriented lifestyle
Expatriate benefits
Volterra, Dr. Silvia Iacuzzi 13

Selected Literature
• Manfred Bruhn, Internal Marketing - Some Theoretical and Practical Issues, in:
Internal Marketing: Integrating Customer Orientation and Employee Orientation,
1995
• Bengt Gustavsson, The Human Values of Swedish Management, in Journal of
Human Values, 1995
• Geert Hofstede, Culture Consequence: International Differences in Work-related
Values, 1980
• G. Hofstede, C.A. Van Deusen, C.B. Mueller, T.A. Charles, What goals do
business leaders pursue? A study of fifteen countries, in Journal of International
Business Studies, (2002) vol. 33 (4), pp. 785-803
• P. Kotler & E. Roberto, Social Marketing: Strategies to Change Collective
Behaviour, 1991
• L. MacFadyen, M. Stead, G. Hastings, A Synopsis of Social Marketing, 1999
• Miriam Salzer, Identity Across Borders, 1994
• Jean-Claude Usunier, Marketing Across Cultures, 2000
Volterra, Dr. Silvia Iacuzzi 14