IKEA's Crosscultural Capability: Challenges and Opportunities Report

This report examines the development of cross-cultural capability within a business context, using IKEA's potential expansion into New Zealand as a case study. It addresses challenges such as culture shock, cross-cultural communication barriers, and the impact of cross-cultural conflict on business operations. The report explores the specific challenges IKEA might face, including differing employee expectations, language nuances, and labor practices. It also highlights the importance of effective team building strategies in diverse locations. The analysis covers factors such as language differences, non-verbal communication, and stereotypes, which can influence the company's operations. The report concludes with recommendations for managing these challenges, emphasizing the need for strong communication, cultural sensitivity, and strategic planning to gain a competitive advantage in the new market. References to academic sources support the analysis.

DEVELOPING CROSS-
CULTURAL CAPABILITY

TABLE OF CONTENT
 INTRODUCTION
 CHALLENGES ASSOCIATED WITH CULTURE SHOCK
 CHALLENGES OF CROSS CULTURAL COMMUNICATION
 CROSS CULTURAL CONFLICT IMPACT ON BUSINESS
 TEAM BUILDING IN DIFFERENT LOCATION
 CONCLUSION
 REFERECNES

INTRODUCTION
 Cross cultural capabilities would occur in an organization
which is expanding themselves globally.
 These factors must be controlled and understood well so that
there are future decisions which can be taken by the
business.
 Ikea has been operating since 1943 in retailing industry and
there are 450 physical stores which the organization is
having.

CONTINUE…
 The presentation consists of challenges
which a business would face while they
expand themselves related to conflicts,
culture, team building, etc.
 Good planning and decisions must be taken
in order to be able to work effectively and
make the company be able to gain
competitive advantage as well.

A. CHALLENGES ASSOCIATED WITH CULTURE
SHOCK
 Cultural shock is confusion, anxiety and uncertainty which is
present in an organization which is going to impact the
performance of the business for a long run.
 In simpler words, culture shock is moving from familiar location
to an unfamiliar location.

CONTINUE…
 The challenges which Ikea is going to have when
they expand from UK to New Zealand is that the
employees of New location would be more involved
and need more transparency since they are more
hard working.
 There is more flexibility which is going to be
expected from the employees as well in New
Zealand which needs to be well analysed and
worked upon.

CONTINUE…
 Energy and health of employees in New Zealand is going to make the company be able to have
higher productivity and the enthusiasm is going to be higher as well which the organization will
have to control in order to be able to maintain the reputation and standards of Ikea in a new
location.
 Economic and geographic factor have to be controlled in the organization so that there is going
to be higher functioning.
 Influence of cultural factor must be unique and there are a lot of economic benefits which Ikea
can have after expanding themselves in New Zealand.

CONTINUE..
 The legislatures and laws are going to be different which the
organization will have to consider and make sure that they
are providing the best of environments for the workforce to
work within.
 There is going to be an acsent change in the English
language but understanding that is not going to be all that
difficult.

CONTINUE…
 Contract labour is going to be found by Ikea in New Zealand
because the employees there are not in any business for a long
run and they work in flexible works which is a great cultural
difference which would come in the organization.
 It is according to hourly wages which are going to be
provided to the employees and the company will have to adapt
to this change according to the mentality of the location in
which the business is expanding themselves.

B. CHALLENGES OF CROSS CULTURAL
COMMUNICATION
 The challenges are not going to be many when Ikea would
be shifting from United Kingdom to New Zealand because
the language remains the same which is spoken
commonly.
 It is just the acsent which is going to be a little trouble but
with time that can be overcome and make the organization
have higher operations and productivity in the
organization which is a great factor for gaining
competitive advantage.

CONT..
 Employees of New Zealand are strong workers which
would make the processing of the company be present
and make sure that the company is being able to
compete with the competitors in the country.
 There has to be good respect for one another which is
going to make the working together factor be stronger
and make sure that the company is being able to have
higher operations and working which is going to be
present.

CONT…
 Cross cultural communication
 The difference according to Laray Barna's sources
are that assumption of similarities, language
differences, non-verbal misinterpretation,
preconceptions and stereotypes, tendency to
evaluate and high anxiety are few of the factors
which is going to influence the working and
processing of the company.