Report on Organisational Change and Multiculturalism in IKEA

The following is an integrative statement on organisational change as a result of multiculturalism in organisations with specific emphasis on the concept of diversity management in relation to organisational culture. With the help of a study on IKEA, the international chain of home and business furniture stores, the report will attempt to analyse the troubles encountered by international professionals in the process of maintaining the demands of multiculturalism, a primary result of globalisation. Although values and methods of IKEA's corporate culture will be discussed in general, in order to narrow the geographic region of research, the article will concentrate more on IKEA's franchise in Dubai, UAE.

The report will make considerable use of relevant books in order to know the issues under consideration by applying the books to the company and in so doing, will try to make further suggestions and significant conclusions.

I. 1 IKEA Background: IKEA prides itself to be the most successful and greatest furniture retailer in the world, and offers provision of everything and anything for a home, having products appropriate for people of all ages, and all this at low prices. The company promises excellent affordability spent with all their products designed with an focus on natural shades to bring a light and airy atmosphere within the home. This concept is based purely on IKEA's Swedish origins, where people pride themselves in residing in harmony with dynamics with simple home designs that offer maximum efficiency in every weathers (http://www. iamaceo. com/marketing/ikea-brand-success-strategy/). IKEA's perspective, "to make a better everyday living for the many people" is apparently largely aimed at the global middleclass which is also noticeable from other business idea, "to provide a wide range of well designed, practical home furnishing products at prices so low that as many folks as possible will be able to afford them"

(http://www. ikea. com/ms/en_GB/about_ikea/press_room/student_info. html).

With 265 stores worldwide, where 235 are owned or operated by the IKEA group as the remaining 30 by franchisees beyond your group, the magnitude of IKEA's extension is obvious (IKEA, 2007).

IKEA's corporate and business culture is dependant on the idea of shared values, some of which, as the organisation proclaims, are togetherness, cost-consciousness, admiration, and straightforwardness. These values job a very democratic form of leadership where considerable freedom is given to employees to contribute to the company's success. IKEA cases to treat all employees, whatever rank they take, as partners in the business. The business also offers no restrictions upon employees in using their own initiatives and offers full support to meet each individual's needs, ambitions and functions.

I. 2 IKEA Dubai and Al Futtaim Trading: The IKEA franchise in Dubai, United Arab Emirates (UAE) was first initiated in 1991 with the neighborhood Al Futtaim Trading Company taking ownership. This collaboration has been, since its inception, a major success account in the UAE and other areas of the Middle East, as many new IKEA outlets have been strategically exposed through the years by the group and also have achieved great competitive advantages and overall production. The Al Futtaim group was initially established in the 1930s as a trading company. Headquartered in Dubai, the group has seen a rapid progress in its functions not only within the UAE but in more than 65 countries across the Middle East, and in various sectors of business.

The group attributes its success to its capacity to respond to the changing needs of customers and the societies where it operates via an entrepreneurial and customer focused way. Employees of the group enjoy a democratic culture made possible through clearly described objectives and ideals, allowed through clear flow of information with a decentralised composition. Al Futtaim also prides itself for the ability to "proactively deal with change whilst upholding the beliefs of integrity, service and cultural responsibility". (http://www. al-futtaim. ae/content/groupProfile. asp; http://www. ikeadubai. com/content/aboutUs. asp)

Apart from handling a lot of IKEA's retail operations in the UAE, the Al Futtaim group hold the only real responsibility of recruiting employees for the franchise, and also providing valuable information about changes in the neighborhood political world, culture, overall economy and other issues like new systems, threats of challengers, legal issues etc, effectively executing internal and external analyses (SWOT and PESTEL) for IKEA. This contribution has greatly helped the IKEA group over the years to align their local operations regarding to changing environments, effectively making a strategic fit between your organisation and the surroundings (http://www. megaessays. com/viewpaper/16374. html).

I. 3 The Culture Change Problem: For an company that boasted fairness in occupation and empowerment to employees via a democratic management and composition, and versatile organisational culture, IKEA had initially applied an ethnocentric methodology of management where only Swedes were recruited for management positions so as to ensure the original 'Swedishness' of the organisation. But this approach eventually achieved with criticism and a short-term setback in IKEA's overseas operations, where the organisation was faced with the task of revising its overseas recruitment policies in order to meet up with the needs of local civilizations and employment laws and regulations (Kling and Goteman, 2003; Kochan et al, 2002). Matching to Bjork (1998), each and every time IKEA was confronted with a struggle anticipated to internationalisation, new ethnic management policies would be implemented, the latest being Variety Management.

IKEA is well known for having an instant internationalisation process from its Swedish roots because of this of globalisation and its rapid growth into countries with civilizations completely different from its original Swedish nationwide culture (Hollensen, 2007). Although held by franchisees in a few countries, like the UAE, the IKEA concept and hallmark are solely held by Inter IKEA Systems B. V in Netherlands, giving the group considerable power over franchises. This means Inter IKEA Systems B. V is the franchiser for all those IKEA stores within or beyond the IKEA group, ensuring uniformity of corporate principles, and the IKEA idea of self built furniture from the centre (IKEA, 2007).

IKEA has had to rapidly change itself from an ethnocentric corporate and business culture to an organisation that embraces folks of all backgrounds, and has in many communiques indicated the importance of experiencing a culturally diverse workforce in order to acquire competitive edge on the global landscape. This is visible from the organisation's recruitment websites in a variety of countries, where emphasis is given for potential employees to 'be themselves', but at the same time adhere to distributed corporate values such as 'simplicity', 'cost-consciousness', 'hard work' etc, but almost all of web sites show an image of a man and female of Scandinavian source (Bjork, 1998). It has created a paradox within the IKEA Group's primary values, where there continues to be a strong focus on the business's Scandinavian record.

Setting up functions in multicultural societies like Dubai designed the IKEA group has had to go through a rapid procedure for internal culture-change. This means a whole internationalisation of organisational culture, where key positions are not restricted to Swedish nationals, and communication systems needed to be presented to break geographical and cultural barriers. The partnership with Al Futtaim has performed a major role for IKEA in reaching this change. In the following sections books related to organisational culture-change, international recruitment processes and the inescapable level of resistance to culture will be studied and analysed.


The purpose of this section is to get a deeper understanding of culture and its own characteristics through metaphorical representation of organizations with the help of relevant literature. This may help us understand the importance of culture change, not simply to gain competitive advantage, but also for the very survival of a business in an ever-changing environment.

II. 1. Group and Society: Attracting the Parallels

Within the process of cultural development there is a significant amount of similarity in the way where culture is manifested in business organizations and in society on the whole (Rollinson, 2005; Morgan, 1998). To understand cultural diversity in organizations, it would be beneficial to understand its roots at a sociological level. Cultural diversity at the workplace is the result of 'multiculturalism' in the world. A multicultural modern culture simply denotes a world in which there exist several ethnicities (Watson, 2002). Culture is thought as,

"A pattern of shared assumptions a group discovered as it resolved its problems of exterior adaptation and inside integration that has worked sufficiently to be looked at valid and, therefore, to be educated to new participants as the correct way you think, understand, and feel with regards to those problems" (Schein, 2004).

The above classification suggests that culture is a distributed activity of overcoming external and inside factors through methods which may have been taught down to the group as satisfactory and functional. An over-all view of ethnical differences is that they have an impact on intercultural encounters, usually by leading to misunderstanding or discord, at both the individual and group levels (Larkey, 1996). Larkey clarifies that at the average person level, as different ideals, values or worldviews are manifested in communication behaviours so that culture creates differing expectations and differing styles or patterns of speech, interpersonal misunderstanding and conflict can arise. On the group level, inter-group processes can be brought about by, for case, an individual's non-verbal behaviour or means of speaking which stereotypically stand for an organization (1996). After that it becomes the duty of the authority of the main society to present a culture and/or change its existing primary culture to accommodate the various dissimilarities earned by the subcultures within an built in manner, where these differences are recognized and appreciated (Neuliep, 2008).

When the above sociological aspects of culture are compared to a business business, the organization is the primary society, and its culture, the central culture. We all make reference to this as organizational culture. Analogically speaking, the organizational (core) culture should be designed in such a way that the employees of the business share a simple set of ideals and assumptions, which tie them to that particular group. But, on the individual or group levels, each staff has his/her own ethnical norms and techniques beyond those they share with other people of the company, that can be safely referred to as the subcultures within the business (Bate, 1995).

II. 2 Cross-Cultural Communication:

"Most of us have an internal list of those we still don't understand, aside from appreciate. Most of us have biases, even prejudices, toward specific organizations" (Lantieri & Patti, 1996).

The above term sums up the main challenge in cross-cultural communication, the fact that people still hardly understand the individuals we speak to on a regular basis. Communication is an intrinsic part of our daily lives, whether it is at our homes, at the office, in the groups we belong to, or in the community, and we can identify that it's hard (DuPraw & Axner, 1997). Regarding to DuPraw and Axner (1997), 'culture' is often at the root of communication problems, and our culture influences how we plan problems and take part in teams and in neighborhoods. Anthropologists Avruch and Black expand these views and dispute that "One's own culture supplies the 'lens' by which we view the world; the 'reasoning' where we order it; and the 'sentence structure' where it makes sense" (1993).

DuPraw and Axner (1997) claim that, becoming more alert to our cultural variances, as well as, exploring our similarities, can help us talk to each other better, and that ethnical differences do definitely not have to divide us from the other person (1997). Within an organisational framework, the similarities lie in the primary organisational culture that is common at the group level.

Morgan (1998) talks about the importance of effective communication and concludes that each organization is composed of people with different cultural traits and specific personalities, and these people are 'organised' in some way or the other through these qualities in order to attain set goals. Thus individuals are the basic building blocks around which a business functions, and communication is the effective cement which holds the organization together. This sets forward the importance of an organisational culture that uses clear communication stations to all degrees of its composition.

II. 3 Group as a full time income Being: Adapting to Change, by Aligning with the Environment

It can be inferred from the preceding portions that change is necessary in order to promote peaceful living between different culture communities, in the societal world. Considering this, it might be safe to suppose that similar changes need to be put in place in the organizational realm as well (Robbins and Judge, 2009; Pettinger, 1996). The question which may occur, however, is whether changing the existing culture means changing the whole group. Culture is such an intrinsic quality of the individual at the individual level, and of a group at the societal level, that though it may take time to change, it may finish up changing more than just a few characteristics (Bate, 1995; Hofstede, 1997). Which means that changing an organization's culture implies changing the behaviour where it expresses itself.

Morgan (1998) interestingly likens a business to the organism, and points out that,

"The image of the organism wanting to adapt and endure in a changing environment offers a robust perspective for professionals who wish to help their organizations move with change. " (Pg 35)

He argues that this analogy promotes us to learn the 'fine art of corporate survival' by expanding active 'organic and natural systems' that remain open to new challenges. In other words, as Brooks (2003) says, it can help us form a far more 'proactive' corporation with a 'prospector' school of thought of operation. Prospectors, he points out, see their environment as ever changing and seek continual strategic and structural changes to handle those changes. These organizations are regularly looking for new opportunities and in the process they could create change and doubt for others in their competitive environment. The contrary of prospectors, known as 'defenders', are usually more 'reactive' in characteristics, as they take action only once environmental changes force them to take action. This kind always sees stability and continuity all around (2003). Research demonstrates reactors are definitely more prone to misperceptions of the environment than are prospectors. According to Morgan (1998), it is because different environments favour different 'kinds' of organisations based on different methods of organising and that congruence with the surroundings is the key to success. So that it is evident that organisations are facing the tremendous task of changing their inner environments in accordance with the external.

II. 4 The International RECRUITING Function:

". . . the International Organisation will be called to operate across a wide variety of competitive environments yet somehow balance these diverse cultural, political and economic contexts with the requirements of the initial home framework. " (Dowling et al, 2008, pg25)

The above declaration re-iterates all the topics reviewed in this report so far, specifically, the task of the organisation to be able to operate in several environments whilst keeping yourself true to its original commercial targets. The international human resources management (IHRM) function, a recently available extension to the standard HRM function within an organisation, aims to do this global competitive advantages by employing impressive recruitment strategies.

The three main issues for IHRM are: the management and development of expatriates; the internationalisation of management throughout the company; and, creating a new corporate culture that could reflect on internationalising the complete organisation, by focusing on increasing the international experience of staff, to have the ability to effectively counter the rate of recurrence of cross-cultural interactions as a result of investing in another country (Hendry, 1994). Because of this, IHRM covers a much wider spectral range of worldwide management of people (Dowling et al, 1999, 2008), and is concerned with how MNC's manage their 'geographically dispersed' workforce by being in a position to dispose their resources to acquire and maintain 'local' and 'global' competitive gain (Schuler et al, 2002).

This clearly indicates IHRM as a means of strategic importance for MNC's, as it is an integral element in obtaining a balance between "the need for control and coordination of overseas subsidiaries, and the need to adapt to local surroundings" (Adler and Ghadar, 1990 & Milliman et al. , 1991, cited in Scullion, 2001, pg5). Quite simply, the need is designed for the company to put into practice common routines, like framework and technology that transcend national differences and form a commonality as to the way the business operates across cultures (Kerr et al, 1973 & Hickson et al, 1979 cited in Mullins, 1999), without ignoring the essential variations in how these routines are communicated and applied to the local workforce of a given overseas subsidiary (Hofstede, 1997; Keeley, 2003).

II. 5 Resistance to Change: When a group looks for change in the way they are doing things, as with culture, you have the inevitability of resistance to this change. Experts like have recognized a few reasons for such resistance: concern with the unknown, referring to people's natural trend to keep away from doubt that creates stress and anxiety. Resisting change is one way to reduce the anxiety; fear of failure, referring to people's concern with whether they are up to the issues being earned by the change; disagreement with the necessity for change, where people genuinely believe that change is not essential; shedding something of value, where people fear either dropping their prominent positions and/or jobs consequently of the change; going out of a comfort zone, in that folks are happy where they are really and wouldn't normally want needless disruption of current state; false values, where people unrealistically believe that change isn't needed and everything will come out fine; misunderstanding and lack of trust, where people don't realize the changes being made and/or do not trust the person(s) initiating the changes; and the actual fact that change may require more time and energy from individuals (Robbins, 1999; Mullins, 2003).

Many ways to overcome amount of resistance have been advised, such as: effective communication and education including training programmes for staff to make them understand the need for change, and its own implications; getting people to get involved in implementing the change process, where they cannot oppose it later as these were partly responsible for it; negotiating with people certain requirements they could have to get the change underway; and perhaps imposing the change by drive if the people enjoy it or not, as level of resistance may mean lack of positions/ careers etc (Robbins, 2009; Mullins, 2003).

III. Software TO IKEA

In light of the above discussions, the business going in the right direction in terms of its emphasis on multiculturalism at the work place, especially among its self-employed franchisees. IKEA in Dubai working along with Al Futtaim has been successful in reaching this target by recruiting local, talented individuals reflecting the diverse cultural demographics of the United Arab Emirates. That is in line with earlier literature discourse of societal and organisational ethnicities where the key culture needs to be made to accommodate specific personal distinctions, but also needs to give employees a framework.

III. 1 Changing the Organisational Culture, a Job: IKEA's attempts to improve its internal culture to align with external factors in Dubai have been a significant project management starting. This is because the company has already established to effectively incorporate its centralised and extremely complex organisational composition (although argued usually by the group) with the more decentralised and adaptable framework of Al Futtaim. This required giving considerable capacity to the last mentioned group in making decisions regarding changes to the way IKEA operated in the centre East. Reduced amount of organisational levels to create a flatter structure itself is a project as time passes constraints. Because of the ever changing dynamics of external ethnic factors, and due to the fact that internal social change is a gradual and progressive process, the project management strategy that IKEA and Al Futtaim may have applied could have been the Adaptive Job Framework.

The adaptive job framework works on the foundation that the opportunity for change is changing, but within specified cost and time constraints. Thus giving the company significant overall flexibility by setting up periodic milestones, where improvement is evaluated at each milestone before ultimate purpose is met. The business has full expert in deciding best business value and gets the opportunity to change guidelines at any milestone if it feels objectives aren't being met by the job. The adaptive platform also works since it is dependant on the assumption that change is inevitable, and is designed to enable changes accordingly. That is especially vital when seeking culture change (Billingham, 2008).

III. 2 Amount of resistance within IKEA: The initial resistance to the changes in IKEAs culture may have come mainly from the fact that the company has had to firmness down its emphasis on Swedish culture at the operational level in Dubai. Changing the organisational framework would have intended dropping some key positions along the structure to allow integration with Al Futtaim's composition. Focusing on recruiting local staff would have meant redundancy and/or repatriation for existing Swedish international managers. This would also have recommended that existing workers would have had to adapt to working alongside with local personnel, which might have induced communication problems, friction between workers etc.

The best methods used for conquering above problems would have been to instruct existing IKEA workers regarding local issues like culture, governance etc, instruct and educate local personnel in return about IKEA's center values and its own Swedish origins, and the value the business places in carrying out the legacy of its creator, provide clear communication between levels, and lowering obstacles through effective information infrastructure.


In bottom line, change management is now able to be securely coined as a field alone in modern businesses, especially in multinational organisations. Considering the study, more and more organisations would reap the benefits of being prospectors alternatively than defenders, as this might prepare them in which to stay tune with their market environments. It appears the group has lived up to their own professed comments when they say, "We see the diversity concern as a matter of creating a far more challenging business atmosphere and undoubtedly broadening the recruitment basic - including everyone and not just Swedish men. In addition, it provides us a diverse labor force with a lot of positive business opportunities" (Kling and Goteman, 2003).

As very good as the job of changing IKEA's culture can be involved, the business has successfully come to its goal of 'reaching the global midsection class' using its products. Whether it is through the IKEA group straight, or through franchises like Al Futtaim, IKEA has realised the value of culture change and has consequently implemented this change within its infrastructure. The business's extraordinary success, even with a thin product range, but a variety that is constantly diversified according to the demands of the regions of procedure, is testament to the success of the project. Through Al Futtaim, IKEA is currently children name all around the Middle East, thus growing the number of its brand through executing a big change in organisational culture.

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