Cross-Cultural Management Education and Training at IKEA

Introduction

Business across borders has presented significant challenges for multinational organisations. Due to cultural differences between countries, a multinational organisation is compelled to account for those differences during important processes such as human resource management. IKEA, a Swedish multinational firm, is one organisation for which the challenge of cross-cultural management is particularly relevant. Significant cultural differences between the U.S. and Sweden may make Swedish practices inappropriate in the American context. All the same, the organisation can overcome cultural barriers by implementing a cross-cultural education and training program. Such a program — taking the form of deliberately planned seminars and workshops — would equip employees with the knowledge and ability to work effectively in a cross-cultural environment. It would be most appropriate for the organisation to hire an external cross-cultural management consultant, as it may not possess such expertise internally. Implementing the training program would obviously require time and financial resources; nonetheless, the long-term benefits would be worthwhile.

Today, owing to factors such as technology, globalisation, and worldwide political and socioeconomic integration, business organisations operate in different countries across the world. While this global expansion has benefited businesses by enhancing their reach and performance, it has also presented significant challenges. Different countries tend to have different cultures, and cross-cultural management literature extensively demonstrates that both individual and group behaviour are shaped by the underlying national or societal culture (Lucas, Lupton & Mathieson, 2006; Browaeys & Price, 2008; Bhattacharyya, 2010). Without acknowledgement of these differences, managing across cultures can be a challenging endeavour. A particular style of management may be appropriate in one country but wholly inappropriate in another. Education and training can be a powerful tool for overcoming the barriers that cultural differences present.

IKEA, a Swedish furniture and home appliances firm, has operations in over 40 countries across the world, including Europe, North America, and Asia Pacific. The topic of cross-cultural management is therefore particularly relevant for the organisation. Without adequate cross-cultural knowledge, IKEA may not effectively manage its multinational operations. This paper presents a proposal for the implementation of education and training at IKEA to address the opportunities and challenges associated with managing across cultures. Though the organisation has operations in dozens of countries around the world, the focus here 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), the paper examines culture shock, cultural identity, human resource management across cultures, and strategies for overcoming cultural barriers.

Culture Shock

One of the outcomes of encountering different cultures is culture shock. Culture shock describes the disorientation an individual may experience upon coming into contact with an unfamiliar culture (Bhattacharyya, 2010). This 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, and psychological distress (Browaeys & Price, 2008). The individual may resort to stereotyping or hostility toward nationals of the host country. Whereas culture shock may be a significant source of stress for some individuals, others readily assimilate into the host culture by abandoning their original identity (Bhattacharyya, 2010). Still others adopt cultural aspects of the host country they perceive as positive while maintaining their own identity.

Culture shock is a relevant concept for IKEA. Though there are a number of similarities between American and Swedish cultures, significant differences exist. These differences can be a source of shock for Swedish nationals moving to the U.S. Some aspects of American culture that a Swedish national might find peculiar include an obsession with cars, widespread friendliness, a fixation with body weight and image, a fast-paced lifestyle, widespread gun ownership, abusive language, and censorship. Americans also expect everyone to have a command of English and a robust sense of patriotism. Other notable aspects include expensive healthcare, extensive use of credit cards, the expectation of tips for nearly every service, limited public transportation, and unusually large distances between cities.

The friendliness of Americans can be particularly unsettling for Swedish nationals, who generally prefer to maintain personal space. Whether on the street, at work, or in a store, Americans are fond of greeting and initiating enthusiastic conversations with strangers. Swedish nationals may find this over-friendliness off-putting. At work, for instance, a Swedish employee may be irritated by friendly gestures from American colleagues. Generally, the Swedish individual would prefer to focus on work matters rather than forming friendships or engaging in casual conversation. It is therefore important for IKEA to consider the culture shock its Swedish employees may experience when working in its U.S. subsidiary.

Cultural Identity

Cultural identity is also a relevant concept for IKEA. It denotes the extent to which an individual identifies with or feels part of a group (Bhattacharyya, 2010). This identity is shaped by factors such as nationality, race, ethnicity, language, historical background, religious beliefs, gender, and sexual orientation (Browaeys & Price, 2008). Cultural identity is what leads individuals or groups to perceive themselves as distinct from others. Americans are defined by many characteristics, but one of the most prominent is their determination to achieve their fullest potential and pursue individual happiness. Americans desire self-reliance and independence, are adventurous, and strongly believe that one's success or failure is directly tied to deliberate choices and actions. For Swedish individuals, the lack of a single uniform cultural identity is evident — likely a reflection of Sweden's rich ethnic diversity. Swedish people tend to be characterised by acceptance of differences and tolerance for diversity. Like Americans, Swedish people also strive for independence and self-reliance.

The impact of cultural identity on an organisation cannot be underestimated, particularly in one that brings together individuals from diverse cultures. Each cultural group may carry its identity into the workplace and expect that identity to be acknowledged. At IKEA, for instance, individuals of Swedish origin may expect their tolerance for diversity to be upheld — which could prove challenging in a context where diversity is not yet fully embraced. These differences in cultural identity may impose significant challenges on the organisation, making it difficult for employees from the country of origin to work effectively in the host country.

References

Bhattacharyya, D. (2010). Cross cultural management: Text and cases. New Delhi: PHI Learning.

Browaeys, M., & Price, R. (2008). Understanding cross-cultural management. Harlow: Prentice Hall.

Chebium, R. (2015). How to create an effective cross-cultural training program. Retrieved from https://www.shrm.org/hr-today/news/hr-magazine/pages/010215-cross-cultural-training.aspx

Lucas, R., Lupton, B., & Mathieson, H. (2006). Human resource management in an international context. London: Chartered Institute of Personnel Development.