Cross Cultural Management at IKEA Research Assignment (Research Paper Sample)

Cross-Cultural Management at IKEA
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Institution
Cross-Cultural Management at IKEA
Executive Summary
Business across borders has presented significant challenges for multinational organisations. Due to cultural differences between countries, a multinational organisation is compelled to take the differences into account during important processes such as human resource management (HRM). IKEA, a Swedish multinational firm, is one organization in which the challenge of cross-cultural management is relevant. Significant cultural differences between the U.S. and Sweden may make Swedish practices inappropriate in the U.S. It is crucial for the organisation to be aware of cross-cultural management concepts if it is to successfully achieve its goals and objectives in the U.S. The organisation must be conscious to the cultural differences between the two countries. It must recognise the unique cultural aspects of the U.S., familiarise its workforce with those aspects, and adapt its HR practices to the aspects. Cross-cultural training and education offered by an external cross-cultural management consultant is particularly important for overcoming cultural barriers. The program, which would take the form of deliberately planned seminars and workshops, would equip employees with the knowledge and ability to work effectively in a cross-cultural environment. Implementing the training program would obviously involve a substantial amount of time and financial resources, but the long-term benefits would be worthwhile. Moreover, the organisation must properly motivate and empower expatriates, understand U.S.’s perceptions of corporate social responsibility, and pay attention to country’s unique political, ethical, and legal issues. With a better understanding of these concepts, IKEA is more likely to be successful in its U.S. operations.
Introduction
Today, owing to factors such as technology, globalisation, as well as worldwide political and socioeconomic integration, business organisations have operations in different countries across the world. While this has been beneficial for businesses in terms of expanding their global presence and enhancing their performance, it has presented significant challenges. Different countries tend to have different cultures. Culture literature extensively demonstrates that both individual and group behaviour are dictated by the underlying national or societal culture (Lucas, Lupton & Mathieson, 2006; Browaeys & Price, 2008; Bhattacharyya, 2010). Without acknowledgement of these differences, management across cultures can be a challenging endeavour. A particular style of management, for instance, may be appropriate for one country, but inappropriate in another. It is, therefore, imperative for a multinational organisation to be aware of cross-cultural management concepts if it is to successfully achieve its goals and objectives in foreign markets.
This paper highlights a number of cross-cultural management concepts relevant for IKEA. IKEA is a Swedish furniture and home appliances firm, has operations in over 40 countries across the world, including Europe, North America, and Asia Pacific. Therefore, the topic of cross-cultural management is particularly relevant for the organisation. Without adequate cross-cultural knowledge, the organisation may not effectively manage its multinational operations. Though the organisation has operations in tens of countries of around the world, focus is specifically on the U.S., which is one of its largest markets. Taking into account cultural differences between the U.S. (host country) and Sweden (country of origin), attention is specifically paid to the following areas: culture shock; cultural identity; human resource management across cultures; strategies for overcoming cultural barriers; management across cultures relative to expatriates in an international setting; politics, ethics, and legal issues associated with management across cultures; value management across cultures; as well as future challenges and trends. Taking into account cultural differences between the U.S. (host country) and Sweden (country of origin), the paper pays attention to.
Culture Shock
One of the outcomes of coming across different cultures is culture shock. Culture shock essentially describes the disorientation an individual may experience upon coming into contact with an alien culture (Bhattacharyya, 2010). The disorientation often occurs when the individual moves to a foreign country. Behaviours and norms in the host country may cause the individual to experience discomfort, boredom, withdrawal, homesickness, as well as psychological distress (Browaeys & Price, 2008). The individual may resort to stereotyping or hostility toward nationals of the host country. Whereas culture clash may be a significant source of stress for some individuals, others readily assimilate into the host culture by abandoning their original identity (Bhattacharyya, 2010). Other individuals adopt cultural aspects of the host country they perceive as positive, while maintaining their own identity. Though there are a number of similarities between the American and Swedish cultures, significant differences exist, making culture shock a relevant concept for IKEA. Aspects of the American culture that may shock Swedish nationals include obsession with cars, over-friendliness, fixation with body weight and image, widespread gun ownership, a fast lifestyle, abusive language, censorship, expensive healthcare, extensive use of credit cards, as well as giving tips virtually for every service offered.
Cultural Identity
Cultural identity is also a relevant concept for IKEA. It basically denotes the extent to which an individual identifies with or feels part of a group (Bhattacharyya, 2010). Identity is informed by factors such as nationality, race, ethnicity, language, historical background, religious beliefs, gender, and sexual orientation. Cultural identity is what makes an individual or a group of individuals to perceive themselves as unique from the rest (Browaeys & Price, 2008). Whereas Americans may be defined by a number of aspects, one major aspect that defines them is their determination to achieve their fullest potential and pursue individual happiness. Americans desire to be self-reliant and independent, they are adventurous, and strongly believe that one’s success or failure is directly related to their deliberate choices and actions. For Swedish individuals, the lack of a uniform cultural identity is evident. This may be due to the rich ethnic diversity of Sweden. Swedish people tend to be characterised by acceptance of differences and tolerance for diversity. Owing to the impact of cultural identity on organisations, it is vital for IKEA to consider this aspect. Each cultural group may bring their identities to the workplace, and may want them acknowledged.
Human Resources and the Cross-Cultural Organisation
The implications of cultural differences on an organisation tend to be particularly evident within the realm of human resource (HR) practice. Managing recruitment and hiring, training and development, team building, compensation and benefits, employee recognition and empowerment, performance measurement, and other HR aspects can be quite challenging in a cross-cultural environment. Due to cultural differences, HR practices may not be universally applicable to all cultures (Lucas, Lupton & Mathieson, 2006). Indeed, some practices may be appropriate within the Swedish context, but may be inappropriate within the American context. For example, Americans tend to be goal-oriented, while Swedish people tend to be process-oriented, meaning HR practices in the each culture would ordinarily reflect the orientation of each culture. Typically, American nationals would expect HR practices that compensate and reward them for their accomplishments, while Swedish nationals would be more concerned about consensus, involvement, equality, solidarity, and diversity. Failure to acknowledge cultural differences may be detrimental to employee retention, employee engagement, employee loyalty, and employee satisfaction. Therefore, it is important for IKEA to adjust its HR practices in the U.S. to the American culture.
Strategies for Overcoming Cultural Barriers
To overcome cultural barriers, it is crucial for IKEA to design, develop, and implement a cross-cultural education and training program for its employees. Indeed, cross-cultural education and training has increasingly become a common practice for organisations with multinational organisations (Chebium, 2015). The initiatives are generally aimed at enhancing the ability and effectiveness of employees to work in a multicultural environment. Multinational organisations want individuals who can communicate and negotiate effectively irrespective of the underlying cultural differences. IKEA can overcome cultural barriers by implementing workshops and seminars, especially for individuals assigned international assignments. The seminars and workshops should focus on aspects such as the value of cultural diversity, cross-cultural communication, cultural sensitivity, cultural differences (both visible and invisible), as well as leadership and management across cultures. It is important to note that the motive of cultural education and training is not necessarily to assimilate individuals into the foreign culture. Indeed, the focus of a cultural training program should be to teach employees cultural differentiation as opposed to cultural congruence (Chebium, 2015). In other words, individuals should be taught how to maintain their own culture while at the same time acknowledging the value other cultures can bring to the organisation.
Like any other education and training initiative, the cultural education and training program would involve a significant amount of time, effort, a...