Culture, Communication, and IKEA: An Organizational Analysis Report

This report delves into the critical role of culture within organizations, focusing on intercultural business communication and its implications. Using IKEA as a case study, the report analyzes how Swedish culture influences the company's operations and values, including principles of simplicity, teamwork, and diversity. It explores the challenges IKEA faced when entering different markets, such as the US and China, and how the company adapted its strategies to align with local cultural nuances. Furthermore, the report applies Hofstede's cultural framework to understand the deep drivers of Swedish culture and their impact on IKEA. The report concludes with managerial recommendations for cross-cultural teams, emphasizing the importance of communication, collaboration, and embracing diverse perspectives. The overall analysis highlights the significance of understanding and adapting to cultural differences to achieve organizational success in a globalized business environment.

Running Head: MANAGEMENT 0
INTERCULTURAL
BUSINESS
COMMUNICATION

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Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Implications................................................................................................................................3
Recommendations......................................................................................................................5
Conclusions................................................................................................................................6
References..................................................................................................................................7

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Introduction
According to Dubina, Suzanna and Hector (2016), organisation culture is the driving force
which enables the smooth functioning of any organisation and every enterprise has its typical
culture differentiating it from every other enterprise. Many organisation also focuses on
developing a positive culture that helps to raise the interaction within the teams and also gets
them a common vision of the organisation. Holsapple, Lee-Post and Pakath (2014, 130-141)
also argued that a unified culture brings out various benefits underlying the business
operations such as identity, retention and image. In the same way, a strong corporate culture
also attracts better talent leading to lower turnover and better unity among the team.
According to 2013 survey of culture of purpose undertaken by Deloitte, employees (68 per
cent) and executives (66 per cent) believed that businesses were doing sufficient to instil in
their culture a sense of purpose intend to create a positive influence on all stakeholders
(Deloitte 2013).
This report outlines about intercultural business communication and role of culture in
organisation including some significant managerial recommendations. To explicit understand
this aspect, IKEA is chosen as an organisation and it has been identified that how culture in
Sweden impact organisation functioning and culture in relation with relevant cultural
framework such as Hofstede. In the end, a conclusion is also being drawn on the overall
analysis of the report.
Discussion
Intercultural communication in International Business provides foundational perceptions for
communicating amid cultures and a framework for acknowledging any culture, comprising
one’s own (Bird and Mendenhall 2016, 115-126). Companies using and applying these
concepts will benefit them in improving their intercultural competency, vital to success in a
comprehensive world. Taking an example of a US based brand. If it tries to establish business
in Russia and India it may require to alter its model. Furthermore, if it tries to replicate its US
model then the biggest difficulties it will come across are lingual and cultural. Although to
resolve cultural challenges, an organisation must have deep understanding of the native
culture and companies may require to alter their marketing and branding tactics to adapt to
the culture they are functioning in (Warkentin, Charles-Pauvers and Chau 2015, 229-233).

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The organisation culture of IKEA reflects Swedish roots where nature plays a significant role
and employees working there are hard-working and helping one another. These aspects are
transformed into IKEA values which develops the essentials of IKEA culture (ikea.com.
2019). From past several years, a unique IKEA culture and combination of values have built
from company origins in Sweden and it is the company values and culture that form
everything they do. Hence, upholding a tough IKEA culture is one of the vital aspects behind
the constant achievement of IKEA concept where the business also had changed its culture as
per the different market structure.
The organisation culture of IKEA is also based on certain principles including simplicity and
high level of informality where it is identified that self-effacement in approaching tasks and
simplicity how they accomplishing things reflects cornerstone of the company culture (). For
instance, in IKEA US, the business cards held by only a few executives and all are on a first-
name basis and sits beside at desks of the company and if an individual has an ego that
requires patting, the company is not the place of work for him/her (Kowitt 2016). The next
principle is the value for teamwork where the company ensure that it recruits those people
who share its value while appreciating its culture. This also leads people to give online test
who are want to be a part of IKEA including a series of 10 work based states with a selection
of activities. The test results express whether these candidates are likely to be apt into IKEA
organisation culture.
The next principle concern with embracing diversity among workforce and various ways of
accomplishing things. In relation with internal structure and environment of the company,
there is nearly 40 per cent of management are women considering 70 per cent of all
employees and IKEA also intend to boost the depiction of many minority groups among the
employees and this global leading furniture retailer considers that identifying differences
amid its workforce leads to greater creativity and upkeep the business growth (ikea.com.
2018). The next significant principle is frugality where high level of frugality of founder has
imitated in company corporate culture to a particular where managers at all positions are
stimulated to reduce cost in various significant areas of the business. Considering all, IKEA
has a culture of purpose giving the resolutions to the vital questions and beyond creating a
profit. Company organisation culture of purpose states who they are and why they exist as of
set of sensibly expressed essential views and philosophies.

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Implications
Ingvar Kamprad, a Swedish entrepreneur founded IKEA and when entering into the US
marketplace, the company has confronted a key challenge as the business model it has been
using was not replicable in United States and soon IKEA understood that the native culture
was having of various complexities and there was a certain requirement to acclimate to it.
More significantly, the business model IKEA using in Sweden matched the Swedish
spectators and not the United States. This makes the company change its strategy and initiate
product selling that was more preferred with local tastes and needs of the US. Hence,
customisation solved the issue that was stopping company from being successful in the U.S.
Again when trying to enter into Chinese marketplace, the company has faced the challenge of
legal regulations such as greater bureaucracy and redtape (Chu 2013). While facing such
issues in China, IKEA had to engage in joint venture that helped it overcome the legitimate
barricade. The company also adjusted its pricing strategy so that they could fulfil the local
choice. Together with the pricing strategy, IKEA also has changed its various furniture
models as well as business styles as the Asian consumers perceive the Western brands with
bias and any company can face various difficulties while changing their views and perception
and they are also required to associate with the native culture (Laurin and Fantazy 2017, 309
- 318) . Hence, modifying the cultural perception of a brand, IKEA needs to target the
marketplace segment that best suited its brand like in India and China, the customers are
highly pricing sensitive and so, international organisations can use different sort of pricing
tactics as a marketing way to influence their native consumers and they would automatically
pay for the products company is pulling in the market. The other significant factor that is
affected by culture is taste.
The business model widespread in Europe or Americas would not be beneficial in the Asian
markets as of the native taste and culture. When a business expands in such markets, it has to
come across certain cost and cultural challenges like in India, IKEA has collaborated with
native e-retailers to generate more sales. Today, IKEA has achieved well by emphasizing
appropriately on the cultural challenges with its more than 313 provisions globally and thus,
establish its position as a leading home furnishing brand (ikea.com. 2019a).
In relation with Hofstede cultural framework, the deep drivers of Swedish culture can be
identified and with the first significant factor i.e. power distance, it can be defined as the level

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to which less powerful associates of IKEA within a nation assume and accept that power is
divided unevenly. There is a low score to Sweden on this aspect (i.e. 31) and this can impact
IKEA with having direct and participative communication as well as decentralisation of
power. The next factor is individualism, where Sweden score 71 implying the degree of
independence a society maintains amid its associates (hofstede-insights.com. 2019).
Considering organisations, it often comes across with association of employer and employee
based on mutual benefit and employing and marketing decision are projected to be relying
upon merit only and other individualistic decisions. However, this culture and views are
having less influence on IKEA as company managed to work interdependently in various
nations and believes more on workforce diversity and all people benefits.
The next key factor of the framework is Masculinity where Sweden scores very low (i.e. 5)
on this dimension, and the key issue here is what inspires individuals and the decision making
is attained via involvement, conflicts solved via negotiation and compromise and flexible
working hours s also being considered (hofstede-insights.com. 2019). The same can be seen
in IKEA as a part of their corporate culture that helped the company to expand internationally
strategically. The uncertainty is the next dimension where country scores 29 and hence have a
very low preference for evading uncertainty. According to this dimension, Sweden
organisations did not perceive innovation as a threatening factor and employees believe that
there should be no more rules than are important. The next dimension of Hofstede cultural
framework is long term orientation, where Sweden has an intermediate score of 53 expressing
organisations taking more pragmatic approach while encouraging efforts and thrifts in
contemporary learning to prepare for the upcoming challenge and environment. Ultimately,
indulgence is the last known factor of the framework where the country scores 78 indications
it’s as one of indulgence exhibiting a willingness to realise their desires and impulses and
also have a positive attitude with propensity near optimism (hofstede-insights.com. 2019).
This cultural insight help IKEA and other organisations to solve intercultural and
organisation culture challenges with considering on these necessary dimensions classified
different under different countries.
Recommendations
The cross cultural team has to consider various factors as of differences in employees’ styles
of communication, beliefs and commitment towards the vision of a firm. Cross-cultural teams
can be modelled to deliver numerous benefits while ensuring working together for the

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achievement of corporate vision (Przytuła et al 2014, 14-24). In relation with managerial
recommendations, team members of the company can be encouraged more using their skills
and knowledge in a collaborative way as various personnel in their multicultural teams have
different sort of unique skills that still uncovered. It also related to getting to know one
another so it will help not to ignore specialised skills. The next recommendations for the
multicultural teams of IKEA to facilitate a persuasive and clear direction and associates of the
team require access to information and resources to undertake the task or role efficiently.
When handling multicultural team and seeing various work styles in play, various necessary
norms and standards can be established and once developed, the company required to ensure
that each and every employee stick to this regardless of what their individual default (Ruvio
et al 2014, 1004-1002). IKEA can implement practices from other cultures that going to
benefit employees and whole tea in the longer run. The theme of hard work signifies a vita
aspect of IKEA business model and culture and with putting customer to work in the shop,
the company also underlines a significant attributes of the highly secularised Swedish culture
and to gain further achievements, managers can bring furthermore changes and achievements
as success depends on frugality.
Conclusions
In the limelight of the above discussion, it can be said that IKEA successfully adapted to
various cultural aspects of different countries with having consistency in its marketing and
promotional strategy. Projecting native customer expectations and objectives is well for
organisation health and in this condition, developing innovative strategies and policies
favouring local consumer needs is an add-on to an organisation competitive strategy. In
relation to rapid growth of the company, IKEA may strategically use Sweden in its
communication efforts with the other countries culture while promoting necessary values to
the market.

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References
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Evolution and adaptation." Journal of World Business 51, no. 1 (2016): 115-126.
Chu, V. 2013. “Crouching tiger tames the dragon" BusinesToday.
https://www.businesstoday.in/magazine/lbs-case-study/how-ikea-adapted-its-strategies-to-
expand-in-china/story/196322.html
Deloitte.com. 2013. “Culture of purpose: a business imperative 2013 core beliefs & culture
survey “Deloitte. https://www2.deloitte.com/content/dam/Deloitte/us/Documents/about-
deloitte/us-leadership-2013-core-beliefs-culture-survey-051613.pdf.
Dubina, Igor N., Suzanna J. Ramos, and Hector Ramos. "Culture as a Driving Force of
Individual and Organizational Behavior." In Creativity, Innovation, and Entrepreneurship
Across Cultures, pp. 1-27. Springer, New York, NY, 2016.
hofstede-insights.com. 2019. “Country comparison" Hofstede. https://www.hofstede-
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Holsapple, Clyde, Anita Lee-Post, and Ram Pakath. "A unified foundation for business
analytics." Decision Support Systems 64 (2014): 130-141.
ikea.com. 2018. “IKEA SUSTAINABILITY REPORT FY18 “Annual Report.
https://www.ikea.com/ms/hu_HU/pdf/sustainability_report/IKEA_Sustainability_Report_FY
18.pdf
ikea.com. 2019. "Culture & Values” IKEA. https://www.ikea.com/in/en/this-is-ikea/culture-
and-values-pubd0e72f31.
ikea.com. 2019a. “About the IKEA Group" IKEA.
https://www.ikea.com/ms/en_JP/about_ikea/facts_and_figures/ikea_group_stores/index.html
Kowitt, B. 2016. "At Ikea, Everybody Is Equal” Yahoo News.
https://in.finance.yahoo.com/news/ikea-everybody-equal-113000092.html

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Laurin, Francine, and Kamel Fantazy. "Sustainable supply chain management: a case study at
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