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Ikea Global Retailer Essay

AN UNDERSTANDING OF THE COMPLEX PROCESS OF CULTURE BUILDING IN AN ORGANIZATION AND ACROSS BORDERS – USING THE EXAMPLE OF IKEA BACHELOR THESIS Authors: Emilie Martens (19860203) Tobias Mauelshagen (19810623) Course: IBO 348 – VT 2007 Examiner and Tutor: Richard Nakamura Vaxjo universitet Ekonomihogskolan 31st of May 2007 ABSTRACT i Abstract Nowadays, companies face many difficulties due to the much competitive environment they have to evolve in.

Therefore, multinational ones, particularly dealing with customers and employees, as well as competitors worldwide, have to take all the tools available into consideration to be able to stay afloat, or, at best, to be successful. Culture can be one of those efficient tools that can be used to make sure that the company will gain competitive advantages on the long run. However, the development of a strategy based on cultural aspects is not that easy as culture is a very complex and hardly understandable phenomenon – no matter if it is national culture, or, as here in this thesis, corporate. Thus, as this thesis focus on the employee’s side, it is obvious to imagine that the more numerous the countries, in which IKEA as the focused company wants to be present, are, the harder it will be to deal with cultural aspects and then to be successful thanks to a correct understanding on every side. How does a multinational company deal with culture within the company and across borders? This above research question is the base of our research process. It seems indeed to be interesting to focus on a company implemented ll over the world to wonder then whether this company manages to deal with cultural differences when crossing borders IKEA as a multinational company is then an example that can be used to write such a thesis. On the one hand, it is a company which deeply plays with its image and culture and broadcast a particular corporate culture based on Swedish roots. On the other hand, IKEA, since the 1970’s, has successfully tried to cross borders first in Europe and then in Asia facing then unexpected problems among the employees, for instance. 1

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Schein E. H. 2004 ABSTRACT ii As culture is not a notion that implies easily calculation and numbers, it seems natural to use meetings and interviews to lead the research. To feel the culture and to understand its process, a direct access into the Swedish company has to be part of the method used for this thesis. Otherwise, the thesis would be only based on secondary data which should be avoided in order to ensure reliability and validity. The theoretical framework for this thesis will contain the ideas and theories of researchers like E.

H. Schein and R. Daft with the main focus on organizations, culture building and leadership as well as Jackson&Carter with their view on semiotics. Furthermore, regarding the transmission of cultural aspects, the ideas of “The Three Faces of Leadership” from Hatch and Kostera will also be taken into consideration. Furthermore many researchers in the past noticed that culture is more a source of conflict and complex outcome and situations rather than a mean to gather employees, people in general2.

The results of this thesis are that IKEA, in spite of its so called unique global culture is not totally successful in dealing with this complex notion of culture especially among employees across borders. Indeed, IKEA’s managers tend to forget to take the many particularities of national and regional cultures into consideration, they deal with everywhere in the world. Although it came out that in many countries which are culturally close to Sweden the leader and managers efficiently transmit the core beliefs and values to the employees. 2 http://www. geert-hofstede. com 2007-05-08 ACKNOWLEDGEMENTS ii Acknowledgements The thesis is done. The last ten weeks have been very tough, full of work and selforganizing. It was a very interesting time and a great completion of our studies abroad here in Sweden. Finally it came out that the thesis was an enormous project for us, more work then expected before. Nevertheless, no one of us had many experiences in writing a thesis, so we both gained a lot from it for our abilities and scientific education. It was very challenging and exciting for us, in the beginning, to choose IKEA as our research area. We would like to express our gratitude to

Marie Camps (Manager, IKEA Kundservice, Almhult Sweden) for a great interview and insight into the IKEA world Daniel Waidzunas (Manager, IKEA Lithuania) for the interview with him, the support via email and the second great and exciting insight into IKEA Richard Nakamura (Tutor of our Thesis) for his support and comments during the whole research process Our PM seminar-groups for their ideas and comments during the opposition seminars (Emilie Martens) (Tobias Mauelshagen) Vaxjo, May 2007 TABLE OF CONTENTS iv Table of contents Abstract ………………………………………………………………………………………….. Acknowledgements…………………………………………………………………………. iii Table of contents…………………………………………………………………………….. iv Figure index…………………………………………………………………………………… vi 1 Introduction…………………………………………………………………….. 1 1. 1 1. 2 1. 3 1. 4 1. 5 Background ………………………………………………………………………………………………………………… Problem Formulation……………………………………………………………………………………………………. 1 Purpose of study ………………………………………………………………………………………………………….. 2 Limitations of the Study ……………………………………………………………………………………………….. 3 General facts about IKEA …………………………………………………………………………………………….. 3 2

Methodology ………………………………………………………………….. . 5 2. 1 2. 2 2. 3 2. 4 2. 5 2. 6 2. 7 2. 8 Time Schedule…………………………………………………………………………………………………………….. 5 Research Journey…………………………………………………………………………………………………………. 6 Place and Access …………………………………………………………………………………………………………. 6 Scientific Paradigms – Positivistic vs.

Hermeneutic …………………………………………………………. 7 Deductive, inductive and abductive approaches……………………………………………………………….. 8 Research Approach: Qualitative vs. Quantitative……………………………………………………………… 8 Data Collection……………………………………………………………………………………………………………. 9 Validity and Reliability of the Study…………………………………………………………………………….. 10 3

Theoretical Framework…………………………………………………… 12 3. 1 3. 2 3. 3 3. 4 3. 5 Theories of organizational culture………………………………………………………………………………… 12 How the culture is developed and transmitted………………………………………………………………… 15 Semiotics after Jackson & Carter …………………………………………………………………………………. 15 Three faces of leadership: story telling, mythmaking and dramatizing………………………………. 8 Power distance after Hofstede ……………………………………………………………………………………… 20 TABLE OF CONTENTS v 4 Data ……………………………………………………………………………… 22 4. 1 4. 2 First Interview round in Almhult………………………………………………………………………………….. 23 Second Interview round in Almhult ……………………………………………………………………………… 25 5 Analysis………………………………………………………………………… 27 5. 1 5. 2. 1 5. 5. 3 5. 4 5. 5 5. 6 5. 6. 1 5. 6. 2 5. 6. 3 The process of culture building within an organization – The example of IKEA ……………….. 27 The role of the leader on the corporate culture……………………………………………………………….. 27 Semiotics – A tool to look differently at IKEA’s culture …………………………………………………. 30 Storytelling, a manager’s tool to transmit the culture………………………………………………………. 31 The founder selling matches………………………………………………………………………………………… 3 “From doers to Thinkers”……………………………………………………………………………………………. 34 Culture across borders – Cases within the IKEA world …………………………………………………… 35 IKEA in France – An example of cultural difficulties abroad…………………………………………… 36 IKEA in Japan – All but a simple challenge…………………………………………………………………… 40 Reflection on the cases ……………………………………………………………………………………………….. 4 6 Conclusion ……………………………………………………………………. 46 6. 1 6. 2 6. 3 Results ……………………………………………………………………………………………………………………… 46 Final Conclusion………………………………………………………………………………………………………… 49 Recommendations for further research………………………………………………………………………….. 50 7 List of References ………………………………………………………….. 2 Theoretical Books…………………………………………………………………………………………………………………… 52 Methodology Books………………………………………………………………………………………………………………… 53 Articles ………………………………………………………………………………………………………………………………… 54 Websites………………………………………………………………………………………………………………………………… 5 Interviews ……………………………………………………………………………………………………………………………… 55 8 Appendix………………………………………………………………………. 56 IKEA Group in figures ……………………………………………………………………………………………………………. 56 Interview guides……………………………………………………………………………………………………………………… 57 FIGURE INDEX vi

Figure index Figure 2-1: Milestones during the process………………………………………………………………………………………… 5 Figure 2-2: Comparison between different approaches ………………………………………………………………………. 8 Figure 3-1: Model of organizational culture……………………………………………………………………………………. 13 Figure 5-1: Ingvar Kamprad …………………………………………………………………………………………………………. 7 Figure 5-2: IKEA hugely spread in France……………………………………………………………………………………… 36 Figure 5-3: Power Distance Scores as a “Degree of Hierarchy” – according to Hofstede ………………………. 38 Figure 5-4: France and Sweden analyzed after Hofstede ………………………………………………………………….. 39 Figure 5-5: Japan and Sweden analyzed after Hofstede ……………………………………………………………………. 1 Figure 5-6: Comparison of Sweden with different countries where IKEA is located ……………………………. 45 1 INTRODUCTION 1 1 Introduction This introductory chapter will point out the main focus and aspects of the thesis. The reader will be introduced to the special circumstances of the authors as well as the objectives and limitations of the work. 1. 1 Background These days, in the course of globalization and internationalization, business for companies and organizations become quicker and riskier. The threat of failure is omnipresent and has to be confronted with well balanced corporate strategies.

An efficient corporate culture can be one way to keep an organization, its ideas and values, together, even across borders. The organization of IKEA with its Swedish background, therefore, is a perfect example to examine cultural aspects within a global company, and was the focus during the research process which is described in this thesis. Personal backgrounds We, as the authors of this thesis, have both gained experiences in our former studies here in Sweden concerning IKEA in different areas such as logistics and marketing. Thus, this background led us naturally to study IKEA this time from another perspective: its cultural foundation.

We both had our impressions and biased ideas about this famous company, however these aspects of our background appear to be a tool in the writing of this thesis. The fact that we come from two different countries, Germany and France, will bring us forward to point out cultural differences within IKEA and to detect problems, which can appear. 1. 2 Problem Formulation In an organization, the basement could be what is called the corporate culture or its identity. Indeed it is always what the different stakeholders perceive from outside of the 1 INTRODUCTION 2 company.

For this reason, culture in an organization is an interesting aspect of both organization theory and leadership, two fields of study, which help to have a clearer and broader view of the way a company is organized. One can also focus on some aspects of the culture within a company using an example of a precise one. We therefore decided to use the concrete example of the Swedish company IKEA to illustrate our study. To gain this concrete view of IKEA one has to take into consideration Ingvar Kamprad – as its founder and leader – with his influence on the creation of IKEA’s culture.

A central aspect of this work will be to define whether the process of culture building in an organization is rather a top management process or is more related to the day-to-day work, to the employees in other words. On the other hand, going further into the global context: Is it necessary for IKEA to accept compromises by spreading its culture and, more precisely, its values around the globe? Finally such a broad study could need a field study within a company. IKEA is one of those companies which has developed what could be seen as a culture.

All the above questions are to be answered using both theories and the example of IKEA through interviews with employees from the top or the bottom of the organizational ladder. The research question above this work will than be: How does a multinational company deal with culture within the company and across borders? 1. 3 Purpose of study The purpose of the study is to point out the aspects of the corporate culture within IKEA from the roots of its creation to nowadays in a global perspective. More precisely the study aims at showing how the culture is influenced and who those who are influencing it are.

The idea of IKEA nowadays is to be present around the globe with the same products. So the idea could be just to open stores around the world and sell the same range in China or Japan for instance as is done in Sweden or Germany. But is it really 1 INTRODUCTION 3 that simple? Or does IKEA have to take regional cultural aspects and differences into consideration? Do they have to adapt their range to each market for instance? Questions such as these, as well as their potential solutions will be discussed during the research process.

We are also going to detect more concretely problems with local cultures which came up as well as the solutions found by IKEA to face them. Finally, and more general, this case study will be also a mean to gain a broader knowledge of the notions of culture and leadership. 1. 4 Limitations of the Study IKEA as one of the most important and interesting companies in Sweden is therefore also a very popular company to write papers and theses about. Thus, creating access and recruiting interview partners can be a crucial problem when using IKEA as the focused company.

To concentrate on the inner part of the company it is not easy to keep the customers perspective, which is not the focus of this thesis, out of the research process and the analysis. Besides, to meet the tight time schedule it will be necessary to be concentrated well on important theories and references in order not to miss deadlines. Furthermore, we will have to be focused all the time on our research question while we work with our material in order not to lose the central theme because in this scientific field the danger is quite high. 1. 5 General facts about IKEA

In 1943 Ingvar Kamprad started his own business called IKEA. The name derived from his initials and the place where he grew up (Ingvar Kamprad, the farm Elmtaryd in Agunnaryd). Firstly, he installed a mail-order service for all kinds of goods. In 1947 he entered the furnishing sector. The same year, the first catalogue was published. Since 1952, IKEA has exclusively concentrated on furnishings in a national market that was highly fragmented and specialized at that time. He had noticed that high prices would ensure high margins for distributors and prevent people from buying new items. The first 1 INTRODUCTION 4

IKEA store was opened in Almhult in 1958 offering low-price furniture. The first store outside Sweden was opened in Oslo, Norway in 1963. 3 Today, the IKEA Group operates 210 out of 237 stores in over 44 countries, while the rest (27 stores in 15 countries) belong to franchisees. Currently about 104,000 people are employed by the IKEA Group. Every year about 450 million people visit IKEA stores all over the world making IKEA the largest furniture retailer of the world. In 2006, a total of 175 million copies of the IKEA catalogue were printed in 55 editions and 27 languages. The same year, the total revenue amounted to 17. billion Euros. Sales numbers of the last ten years proof the rapid growth of the company. Since 1996 (4. 4 billion Euro), the sales went up by 293,18 percent. 4 Europe is still the leading market with 80 percent of all sales. North America (17 percent) and Asia and Australia (3 percent) make up the rest of the market. 5 Its founder Ingvar Kamprad, who controls the company through the INGKA Foundation, based in the Netherlands, still privately holds IKEA through this construction. More facts inn detail about IKEA can be found in the Appendix in chapter 8. 3 4 5 Facts & Figures, Corporate PR, IKEA Services AB, 2006, p. 0-11 Facts & Figures, Corporate PR, IKEA Services AB, 2006, p. 4 Facts & Figures, Corporate PR, IKEA Services AB, 2006, p. 15 2 METHODOLOGY 5 2 Methodology In this chapter, the methods and scientific approaches which were used and followed during the process will be presented briefly. Further, a description of our research journey is given as well as an introduction about our data collection. The chapter starts with an overview of our time schedule for the whole process. 2. 1 Time Schedule 8 6 4 2 Week 12 13 14 15 16 17 18 19 20 21 22 23 1 3 5 7 9 10 1. Problem finding and formulation 2. Methodology and Theories 3.

PM1 Seminar 4. Interviews and empirical work 5. PM2 Seminar 6. Analysis of Empirical work 7. PM3 Seminar 8. Analysis and conclusion 9. Final Paper 10. Final Seminar Figure 2-1: Milestones during the process 2 METHODOLOGY 6 2. 2 Research Journey The purpose of this part is to introduce the reader of this thesis to our process of problem-finding and –formulating. It seemed obvious for us as exchange students in Sweden to try to find a possible topic to discuss within a thesis in the field of a Swedish company like IKEA, as it is one of the most popular things one can relate Sweden to, at least in the rest of Europe.

It was all the more obvious to choose IKEA as we already analyzed and discussed the organization from other perspectives in past courses. The semester’s program started with Organization Theories and Leadership. In both of these lectures, many new theories and viewpoints in the field of organizations were introduced to us. It was therefore obvious to use this basis of knowledge to find and create a research topic by taking all these aspects in consideration. Nevertheless, IKEA, being a huge and enormous organization, offers a wide range of interesting topics.

However, the field of corporate culture was the most interesting one for us, because it became clearer and clearer, that this aspect and everything that is linked to it within the organization are finally the basis of all of that which constitutes IKEA. Besides, the fact that Almhult, as the heart of IKEA, is only 40 minutes away from Vaxjo was also a key aspect of our research topic construction. 2. 3 Place and Access As mentioned before in chapter 1 in the limitations of the study, it was crucial to create a direct access to IKEA in order to be able to generate a proper and relevant study.

However, due to the popularity of IKEA in Sweden it can easily take months to manage to enter the firm. Therefore, we were glad to create a first contact and direct access at the very beginning. Another positive aspect of the importance of Almhult within the whole organization is that many managers are used to coming there several times a year for different reasons. Consequently it was possible to meet our second contact, a former guest lecturer from Vaxjo University, who actually works in Lithuania, but who has to 2 METHODOLOGY 7 come to Almhult several times a year and was therefore able to meet us there during our time schedule. 2. Scientific Paradigms – Positivistic vs. Hermeneutic After having developed in a more personal way what led us to choose this topic, it is necessary to come back to a theoretical point. To ensure indeed a clear understanding of the purpose of this research work, it is essential to point out the methodological perception of the authors. 6 According to Gummesson (2000) the positivistic approach exhibits a quantitative and empirical complexion – so to speak down to numbers and businesslike facts – which is therefore mostly based upon statistical or functional analysis data that is obtained through descriptive and comparative studies. A researcher in the positivistic approach can be seen as an external observer of the research field, more detached from the original topic. 8 In contrast, the hermeneutic approach has more of a personal and individual perspective on data. It is more seen as an interpretative process to understand observed actions. The hermeneutic approach has to be regarded as a counterpart towards the strictness of the positivistic approach. 9 The current study process will be based on the hermeneutic approach.

The data, which will be collected, will be qualitative, more than quantitative due to the studied topic. Based on empirically grounded theories, we will for instance interpret, thanks to our own vision and past experience as well as theories found for the thesis, the interviews we are going to arrange. Tools such as exploration, analyzing, interpretation and reflection will be major tools of our study process. 6 7 8 9 Gummesson E. 2000, p. 172 Gummesson E. 2000, p. 177 Gummesson E. 2000, p. 178 Gummesson E. 2000, pp. 177 2 METHODOLOGY 8 2. 5 Deductive, inductive and abductive approaches

Alvesson & Skoldeberg (2000) et al stress the character and perspective of a research process by differentiating between three main categories which are the deductive, inductive and abductive perspectives. Figure 2-2 shows below the main differences between these three perspectives regarding their composition and progress of a research process. Figure 2-2: Comparison between different approaches10 Our research process will follow the deductive approach in order to analyze and interpret collected data based upon relevant and existing theories. 2. 6

Research Approach: Qualitative vs. Quantitative Quantitative data on the one hand correspond to numbers, based on surveys for example. Assessments have to be avoided in every case, in order to generate quantitative data. Qualitative data, on the other hand, can be analyses or comments for instance. Thus, assessments are a crucial factor when generating qualitative data. 11 10 11 Adapted from Alvesson M. & Skoldberg K. 1994, pp. 45 Gummesson E. 2000, et al 2 METHODOLOGY 9 The topic we chose is naturally based on interpretative and analytic researching.

Therefore the thesis will be based on qualitative approaches, more than quantitative ones, because collected data will be analyzed with tools and theories of former scientific approaches. 2. 7 Data Collection To answer a research question, in general, the access to and the use of data with high quality is of capital importance. To be able to understand what is happening inside of an organization it is necessary to create a direct access to it, in order to be as close as possible to the origin research field. 12 In order to create an appropriate basis for this research process, two kinds of data were collected: theoretical and empirical data.

Theoretical Data As was stated before, the background of the modules, we studied before starting this thesis generated many sources for us and introduced several useful books and articles for our work. Besides this, we used the facilities of the library and the internet as well as sources which were used in past theses for our theoretical data overview and final data collection. We also received numerous data sources from IKEA directly during the study work. Thus, these kinds of data were generated directly from IKEA itself, to keep the neutrality of the thesis they were used more as an inspiration than as a direct source.

Empirical Data Following the theory, six fundamental sources exist from which to generate empirical data from: documentation, archival records, interviews, direct observations, participant 12 Gummesson E. 2000, p. 25 2 METHODOLOGY 10 observations and physical art facts13. During the research process we generated also data by interviewing managers and co-workers directly in Almhult. The guidelines of the interviews were formulated concerning the aspects we dealt came in touch with during the methodology lectures to this course.

The interviewees were a female manager from the customer service department and a male manager who is responsible for the purchasing into and throughout the Baltic region. The details of the interviews will be discussed extensively in chapter 4; their underlying guidelines can be found in the appendix. 2. 8 Validity and Reliability of the Study The matter of validity and reliability of a research process is of capital importance. The reader or ‘consumer’ of such results has to be convinced of their existence14. Therefore, transparency of underlying sources is a number one criterion of every research process.

The literature defines ‘Validity’ through a differentiating description. According to Yin15, it is necessary for good research to cover the following two sequential steps in order to pass a test of validity: o Select the specific types of changes that are going to be used o Demonstrate that selected measures of the changes do indeed reflect the specific types of change that have been selected The aspect of validity has then to be distinguished into different fields. To construct validity means that in a research process, in order to confirm a statement or theory, multiple sources of evidence ought to be used.

Internal validity otherwise is more 13 14 15 Gillham B. 2000, p. 21 Merriam S. B. 1998, pp. 198 Yin R. 2003 2 METHODOLOGY 11 relevant for those studies, which construct a causal relationship within the work. Thus, external validity is linked with the feasibility of generalization of the own research results, which is by no means obligatory. To introduce Reliability in addition, one could also use repeatability in order to explain it. The research process has to be done in a way, that later or other examiner would come to same – or at least very similar – findings and results, taken for granted the same boundaries are presumed. 6 The stress of reliability is to minimize errors and bias of a research process. So how are we actually trying to ensure reliability and validity in our own research process? Writing about IKEA is difficult so far, as it is not easy to create a direct access to the organization. But for us, the data we get through IKEA and their employees directly through such an access seemed to be so valuable for us (next to the fullness of publicly available secondary material about IKEA) that we really focused in the beginning to create this direct contact. 6 Yin R. 2003 3 THEORETICAL FRAMEWORK 12 3 Theoretical Framework The following chapter develops for the reader the underlying theoretical framework of this research process which is essential to build a solid and valid answer to the research question. 3. 1 Theories of organizational culture A company can be looked at from two different views. One of them is based on the observation of the way the company is organized inside, through the day-to-day activities and the relationship between the employees and the managers.

Another way of looking at a company and of studying it is to consider the organization as a system. 17 Thus, as the system theory after Daft (2007) further says it, the organization is embedded in a context, an environment and is continuously influenced and influences the different parts of this system, their stakeholders. 18 Complex relationships exist between the organization and its members and the outside these is the environment. The company cannot be seen indeed as a closed system without being influenced by anything, especially in a continuously changing and competitive environment.

A study of the corporate culture in this point of view would be more focused on how a company manages to maintain its culture coherently while crossing borders. First and foremost, it seems necessary to define and develop the concept of organizational culture. What is culture within an organization? Different authors have worked on organizational culture but one of them has influenced much of the research on corporate culture and how we define it. Edgar Schein19 developed a theory explaining clearly what organizational culture is. Indeed the term or concept of culture within an organization appeared in the 1980s, and it was thus 17 18 19

Daft R. L. 2007, p. 14 ff. Daft R. L. 2007, p. 23 Schein E. H. 2004 3 THEORETICAL FRAMEWORK 13 necessary to try to give a definition. According to Schein a corporate culture or organizational culture is “…a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as a correct way to perceive, think and feel in relation to those problems…”20 Culture to that sense is in a great extend unconscious in so far as it is made of three different parts.

Besides, just like it is the case of an iceberg, 90% of it is hidden. Figure 3-1: Model of organizational culture21 As figure 3-1 above shows it, organizational culture can be understood into three parts which makes it hard to understand it as a whole. The first layer we can say is, according to Schein, made of artifacts which are visible and are related to behaviors, dress-codes and day-to-day activities which can provide signs of what the company’s culture is all about. It refers to the building and concrete components 20 21 Schein E. H. 2004, p. 7 According to Schein E. H. 2004, p. 26 3 THEORETICAL FRAMEWORK 14 of the organizations also. According to Schein, however, this level is not so easy to understand, in so far, as it is the most superficial level and most of its components like the behaviors and attitudes are influenced by different others factors. 22 The second level corresponds to the espoused values which are the values that influence the behavior of the organization’s members. The attitudes are indeed based on those values and norms that are defined by the leaders in an organization.

They are linked to the strategy, the philosophy and used correctly they can be really useful to reach effectively the goals of the company. 23 Nevertheless although those values are clearly claimed by the top management in speeches and public meeting the main component that one has to understand to get a broad image of the company’s culture is the underlying assumption24. Those assumptions are unconscious. According to Schein, they are made with beliefs and feelings. Necessarily it is hard to get to know one’s feelings and impressions. However the culture is above all based and influenced by those assumptions.

Those assumptions provide the member with ways to solve problems within the company25. One can also add and suppose that they greatly vary from one country to another as they seem to be embedded in a broader social context and in the national culture. 22 23 24 25 Schein E. H. 2004, pp. 25 Schein E. H. 2004, pp. 28 Schein E. H. 2004, p. 30 Schein E. H. 2004, pp. 34 3 THEORETICAL FRAMEWORK 15 3. 2 How the culture is developed and transmitted Values based leadership As Richard Daft26 points out the corporate culture can be created and then spread through the role of the leader. 27 This is what Daft calls values based leadership.

It is part of the leader’s role in an organization to provide its members with a strong corporate culture defining values, rules and norms using stories and myths among other tools. Thanks to the relationship between the leader and the follower, the leader will be able to spread the values he or she has created and to strengthen them later in the long run through a continuous sharing of norms. The followers, in this case the employees of the company will internationalize the values which will become theirs. A strong cohesiveness will emerge and will become then a strong asset for the company.

The leader developing a strong appealing vision will then influence greatly the followers who are likely to imitate the leader’s attitude, beliefs or behavior. 28 To that extend, the influence of the leader seems to be positive. However other authors have developed theories which tend to prove also that the organizational culture is created by the top and not the bottom as a mean to control and even manipulate. 3. 3 Semiotics after Jackson & Carter According to Norman Jackson and Pippa Carter, in “Rethinking Organizational Behavior”, semiotics corresponds to the art of symbols29.

Indeed, the world in which we 26 27 28 29 Daft R. 2007 Daft R. 2007, p. 258 ff Daft R. 2007, p. 15 Jackson N. & Carter P. 1999, p. 14 ff 3 THEORETICAL FRAMEWORK 16 are living and in which organizations are evolving is made with symbols. Nevertheless, those symbols are not understood in the same way by everyone. The meaning they are given depends highly on different influences such as national culture, individual characteristics, education. An issue such as the interpretation of symbols is crucial, in a topic like corporate culture, as culture is made with symbols, as Schein previously said.

Consequently one, when working on the notion of culture and wondering whether it is possible to share a global culture across borders and within a company, one has to take into consideration the notion of semiotics which deals with the more precise notion of symbols. A symbol is something that conveys a meaning; it is a signifier which represents something absent – the signified. 30 More than this definition, one thing to remember from Jackson and Carter’s theory is the fact that those symbols are characterized by different things.

One of them is that the choice of symbols is totally arbitrary; which means that different symbols can be chosen to transmit a meaning depending on the people who wants to communicate the information. 31 For example, the color “red”, would be chosen in China to convey a meaning of happiness whereas in Europe it’s more related to blood, war and negative meaning. This example shows clearly what the authors aim at explaining, the meanings given to each symbols are context dependant. Depending on the country, the individuality it deals with, the meaning and above all the understanding will change.

As common users of symbols, according to Jackson and Carter, we handle quiet easily this science of symbols in our everyday life without too much complexity and misunderstanding. The reason? Intersubjectivity32. It means that although those symbols are totally arbitrary, there is generally speaking a common agreement upon the meaning of some symbols. Thus, people can easily communicate using symbols without too many problems despite their cultural 30 31 32 According to the course slides of “Organization Theories” from Daniel Ericsson, p. , 2007-01-22 Jackson N. & Carter P. 1999, p. 14 ff Jackson N. & Carter P. 1999, p. 26 3 THEORETICAL FRAMEWORK 17 differences. However one can qualify this statement, saying that the symbols used by an individual will be understood by the other individual using his or her own past experience and perception of his or her own reality. Thus, there is no guarantee that the communication will be efficient. Jackson and Carter give the example of Frederick Taylor’s expression, commonly used in his company: “a fair day’s work for a fair day’s pay”33.

This famous objective for scientific management can be understood differently depending on the meaning given to the word fairness. Consequently, one would not be surprised to see workers, reacting differently from the managerial point of view. “But since all language is metaphoric, because the connection between signifier and signified, word and meaning, is arbitrary, such ‘imperfection’ are an inevitable feature of communication. ”34 This ambiguity leads the two authors to talk about the notion of culture within a company or at least an organization.

Indeed, semiotics has influenced greatly the field of organizational culture among others topics. An organizational culture can be seen as “aggregations of symbolic meanings, shared by groups and used by them to give and sustain group identity, and to delineate appropriate patterns of behavior for group members. ”35 Indeed, even if one can talk about intersubjectivity for some particular cases, it is obvious according to the authors that these shared understandings are not the rule. Jackson and Carter end their explanation mentioning theories about the process of culture building with a company.

One of them is the “cultural engineering”36 approach which states that the culture in a company is first of all a management culture. It means that the corporate culture is created by the top management and managed by the top. This theory totally denies the power of semiotics in this process and assumes that it is possible to 33 34 35 36 Jackson N. & Carter P. 1999, p. 19 Jackson N. & Carter P. 1999, p. 21 Jackson N. & Carter P. 1999, p. 27 Jackson N. & Carter P. 1999, p. 28 3 THEORETICAL FRAMEWORK 18 enforce meanings of cultural symbols to be accepted by the employees.

For Jackson and Carter, this is not true in so far, as, the symbols contained in the culture are given meanings depending on everyone’s perception and interpretation. Thus, the culture is made through a complex process of shared meanings and understandings and shared influences coming from both the bottom and the top of the organizational chart. 3. 4 Three faces of leadership: story telling, mythmaking and dramatizing As Mary Jo Hatch and Monica Kostera noticed, story telling is a very useful tool for managers to lead efficiently the employees of a company, to motivate them and to create certain cohesiveness necessary to the goal achievement. 7 Life is made with a beginning, an end and above all a plot, exactly like stories; this is one of the reasons why, according to the authors, below, people are so sensitive and affectively connected to stories38. Among the reason why leaders use business stories, one corresponds to the fact that it can convey corporate history. In other words, using stories helps a leader and later on managers, once those stories are spread in the company, to appeal emotions and shared values among the employees.

A good leader needs this quality among others to develop and convince people of his vision of the company in the global context. 39 Each successful leader tends to have this skill and the ability to develop aesthetic values more common among artists normally. Mary Joe Hatch and Monica Kostera say it clearly: a leader can develop the corporate culture and create a real family among the employee by using stories as one of their characteristics is to make people feel involved because the story teller. 40 37 38 39 40 Hatch M. J. & Kostera M, 2005, p. 13 ff Hatch M.

J. & Kostera M. 2005, p. 13 Hatch M. J. & Kostera M. 2005, p. 4 Hatch M. J. & Kostera M. 2005, p. 13 3 THEORETICAL FRAMEWORK 19 Because stories can inspire and motivate people, this is a crucial tool for leaders to implement a strong corporate culture. Besides, stories allow the leader, the teller, to create a connection between himself and the follower which can help him to develop a strategic vision. 41 To achieve this, the leader can use different kind of stories genre, with the same narrative approach, like comic, tragic, epic or romantic genre.

It all depends on the effect and impact the story teller aims at having on his followers. However, as the authors of “Three Faces of Leadership” point out, whatever the genre chosen, the use of storytelling can strongly influence the employees’ attitude, and strengthen the leader’s power. 42 As the authors explain it finally, managerial culture needs to create its heroes through for example the use of epic stories which is quiet common among the most successful business leader nowadays. The different success, stories, we hear of in the everyday life, are a powerful mean to stimulate and motivate people. 3 Furthermore, one reason why those stories are used, is that it creates “more engaging and memorable” messages which are used later on and told to others among the organization. After a while one can realize the impact of this, sometimes very simple story, told by the leader. The social contagion, the spread of the message can be much powerful than a simple, rational analysis made with a monotonous tone. 44 In other words, storytelling is a very efficient tool to share values with people in a more appealing way that rational report.

It can bring symbolic meaning to organization, which is needed by its members to find a motivation in their day-to-day activities. “A beautiful dramatic message has a much more powerful impact than does a dry and dull analysis”45. By saying that, Hatch and Kostera mean that the use of stories by managers and leaders are undoubtedly much more efficient than a rational way of 41 42 43 44 45 Hatch M. J. & Kostera M. 2005, p. 20 ff Hatch M. J. & Kostera M. 2005, p. 5 ff Hatch M. J. & Kostera M. 2005, p. 7 ff Hatch M. J. & Kostera M, 2005, p. 41 ff Hatch M. J. & Kostera M. 2005, p. 8 ff 3 THEORETICAL FRAMEWORK 20 thinking when it deals with addressing the essential message about the organization to employees. Story telling is, thus, clearly a strong assets and tool for a leader to share the organizational culture and develop a strong and appealing vision. As an example, authors like Alvesson & Berg (1992) talk about storytelling defining more precisely a common tool used by a leader, which is the corporate saga. 46 It corresponds actually according to them, to an organization’s epic description of the living and the achievements of the organization.

It is, thus, related to mythmaking and heroes and it provides the listener of theses stories with a clearer and more appealing idea of what the organizational culture and simply the company is all about. 3. 5 Power distance after Hofstede Another interesting theory, to study in a field like culture, is the one of Hofstede who worked on the new notion of power distance47. He worked on the case of more than 70 countries interviewing employees, using data collected by IBM, a company in which he used to work for. He could then define fundamental differences between countries48.

As an example, according to his researches and results, one can regard Sweden and France, two European countries as the most different countries in Europe. Indeed he based his researches and studies on four notions or instruments: power distance, masculinity, individualism and finally uncertainty avoidance49. The first one is basically the notion that will be used to illustrate this thesis. However, the other notion Hofstede decided to use, explains largely also why it is so hard to implement a corporate culture abroad according to the variation of these notions.

One main thing to remember, if we consider Hofstede’s theories and studies, is that a culture is always embedded in a broader social context, a national history which tends to influence highly people’s behavior and ability 46 47 48 49 Salzer M. 1994 Hofstede G. 2001, p. 79 ff Hofstede G. 2001, pp. 84 Hofstede G. 2001, p. xix 3 THEORETICAL FRAMEWORK 21 to adapt. Hofstede actually used the notion of power distance to describe the relationship between people and the notion of power in a society. Besides, he studied also the way people deal with the inequalities of power, and related to that, the notion of hierarchy50.

This way of looking at power according to the author, depends largely on the mentality, the cultural backgrounds, social position. Hofstede reminds us that a corporate culture is always embedded in a broader social context. Thus, however hard a company tries to implement its own values and more generally speaking, culture in a new country, problems are likely to appear based on cultural differences, and difference degree of acceptance of power, hierarchy, risk taking, initiatives. 51 50 51 Hofstede G. 2001, pp. 82 http://feweb. uvt. l/center/hofstede/page3. htm 20070508 4 DATA 22 4 Data In this chapter, the reader will discover the different steps of that research process part which includes the interviews that were made in order to collect primary data. The interviews will be described in detail as well as the problems which showed up. The interview guides can be found in the Appendix. After having chosen our topic and the research question, related to the notion of culture in a company, it was logical to choose to follow a qualitative approach to find proper data and information.

Indeed, it is hard to find figures, concerning the notion of culture. This topic leads us naturally to a commonly used method – interviews. Studying a multinational company – as IKEA is – it was obvious that we had to interview managers or at least co-workers in the company. Such a direct contact was needed if we were to keep on writing the thesis about IKEA. Our supervisors and lectures made it clear, first and foremost, that without a contact within the Swedish firm we should have given up the case study to find a more accessible company, at a local scale maybe.

However, none of us, wanted to stop studying the case of IKEA related to culture, as it seemed to be promising of interesting findings. Nevertheless, the teachers during the lectures said clearly how hard it was for students to contact and get interviews with managers, especially in IKEA, in so far as numerous students from universities in Sweden are likely to study IKEA as well. First negative attempt Conscious of the pressure we had, we then decided to contact the writer of a thesis about IKEA, written 10 years ago in Linkoping, which was the object of a real involvement in the IKEA world for one year.

It would have been really helpful to get to know an outsider’s point of view who became a native in the Swedish company. As time goes by so fast, the phone number was the only quick way to have a fast and definitive answer to our request. However, it was far from being easy for us, one of us being French to call 4 DATA 23 the writer. Indeed, how come could we call her saying simply, “Hej Miriam? ” It seemed so weird and impolite. But that is the Swedish way, and contacting people this way helped a lot to get to know the Swedish culture.

However unsurprisingly, Miriam Salzer gave us a negative answer to our request. Indeed, her thesis was such a long time ago, so she had no contact with anyone at IKEA anymore. Besides, she could not even give us an interview because of her busy schedule. 4. 1 First Interview round in Almhult Somehow, still at the beginning of the work, still reflecting on the research question and methodology, we got an encouraging and positive answer from IKEA, Almhult, from a manager in the customer service. The manager was ready to help us being interviewed.

Whereas, normally it seemed that months were needed before being able to enter the company, we were about to enter the traditional IKEA’s house, IKEA’s heart. Almhult – A real insight and a key start for the interviews The fact that the first interview would be given in Almhult was meaningful for us as students on IKEA. Indeed, discovering IKEA step by step, we realized how important this place is in IKEA’s history, that although some of the headquarters are not there any more, the roots, the heart of IKEA still remains in Almhult, in the county of Smaland.

IKEA’s store in Almhult is for sure one of the smaller ones, but coming there was a mean to get to know and feel the real atmosphere of IKEA entering the backstage, where all started. The first interview we made, described later on in the analysis, was enriching and a very good start. We learnt many more things than expected. The interviewee, on top of that, was warm full, sincere and honest, sharing her feelings, fears about IKEA’s future and drawbacks of IKEA’s culture.

Besides, we did not only get an interview but we were also offering the common fika, shared by the staff at IKEA, providing us with interesting observations. 4 DATA 24 Find interviews of managers using all means available Another way of entering IKEA was to contact a guest lecturer who gave a lecture in a course of logistics last semester at Vaxjo University. Of course, the field of study differs but one might regard an interview with this manager of IKEA Lithuania as on the contrary a mean to have another insight.

Indeed, both the country the manager is working in and the field he’s specialized in, could bring us, another interesting aspects of the Swedish company. To join, this guest lecturer, one had to contact first and foremost the teacher responsible for the course, to get the e-mail address of the guest lecturer later on. Then, patience was the key work as students we are dependant on others’ schedules which can be really tough in such a big company. However, another time, the answer was positive although the manager had doubts about the help he could bring us. Anyway, it would have brought us something for sure.

One thing to be noticed during this search for interview and contact in IKEA is that the fact that we wanted to join Swedish managers obviously was an advantage. Indeed, the lack of formality required writing e-mails to them and talking to them was helpful. Besides, it seems that Swedish people although very busy for sure, were really accessible and easy to talk to. In comparison, it wouldn’t have been the case when joining French managers in so far as the heavy degree of formalization and the numerous administrative procedures and the bureaucracy would not favor easy contact and access to a big company.

It would then require months. Relevant or not, the choice of method to use Another way of finding interesting and relevant information and data could have been to make a survey on the topic of culture. We then decided, to create a survey which objective was to ask customers to get their point of view on IKEA’s culture. The target was customers from different ages and from different part of the world including Japan, China, Germany, Sweden and France. However shortly after having determined the questions of the survey, our supervisor made us realize that it might not be as relevant as we thought it could be.

Indeed, a better way of answering our research question was to 4 DATA 25 focus on our two main topics culture within the company and across borders interviewing then managers etc. Besides, talking to Japanese people, we realized also that in spite of the recent arrival of IKEA in Japan and even in Asia, it was too early to imagine that the Japanese people could already have a concrete idea of what IKEA’s culture is all about. The only image they have about IKEA is the one influenced by IKEA’s Swedish stores and not the one broadcast all over Asia.

We then gave up the idea of the surveys; interviews could have brought already interesting and relevant primary data. Besides, an additional survey would have brought us far from the main research topic and purpose. 4. 2 Second Interview round in Almhult The second interview that we realized was also in Almhult, the heart of IKEA. Daniel Waidzunas manager of IKEA Lithuania, responsible for the business development, accepted to give us an interview. His background and his career, was an asset for our thesis in so far as he is used to working in Lithuania, and thus the notion of culture and its implementation are totally familiar to him.

Besides, as Daniel is not originally from Smaland but from Stockholm, he could have another interesting view of IKEA’s culture to share with us. We prepared different questions almost sure of the answers we would be given. However, Daniel’s managerial point of view on IKEA’s culture crossing borders in this case Lithuanian borders was not the one we expected. It was all the more interesting as we both took for granted some points, based on our biased ideas. We both had our own ideas about Lithuania, its culture and the potential employee’s reactions to IKEA’s culture.

We were wrong and that is why having such an interview was that much so enriching for both the thesis and the researcher that we were. First and foremost, the interviewed manager invited us to discover the work place of the purchasing service among other services, providing us with a real insight of IKEA’s 4 DATA 26 atmosphere, discovering the posters of Smaland everywhere, the sentences as a reminder of IKEA’s principles. Smaland is everywhere One realizes then strongly how the company is embedded in a broader Smaland culture, maybe much more in Almhult than everywhere else.

The atmosphere during this second interview was different from the first one which occurred one month before. Although the manager seems to like working for the Swedish company, the excitement, the enthusiasm was obviously not as strong as that of Marie Camps our first interviewee. Consequently one can have the impression that Daniel might have maybe a more objective point of view on the company and its culture. Besides, not only did Daniel answer our questions, he also shared with us his personal opinion and background trying to let us know what brought him here to Smaland, in Lithuania and simply to IKEA.

Later an unexpected offer came, Daniel, booked for us the IKEA museum. Firstly, we had both ignored the existence of such a museum. Second, we were really pleased with such involvement from the managers we met in IKEA. Not only was it quite easy to get contacts within the firm but we also met people ready to be really helpful and to give us some of their time. The IKEA museum is actually only opened to the employees, who visit the place every year for example. Then they get to know how everything started, and the evolution of IKEA decades after decade. It is a real IKEA history in live that we discover in this museum.

At that moment, we realize clearly how fruitful the choice of Almhult to make interviews was for our topic. It seemed indeed impossible to get to know deeply the culture of the company being in Stockholm far from the place where everything really started. After having talked to Daniel, we decided to prepare some written interviews to Daniel’s Lithuanian co-workers, to get their point of view too. However, for a timing reason this idea had to be given up. 5 ANALYSIS 27 5 Analysis In the following chapter, the empirical data will be analyzed within the framework of the underlying theories.

Further several cases of IKEA across borders are presented and reflected upon the research question. 5. 1 The process of culture building within an organization – The example of IKEA After being introduced to managers within the Swedish multinational firm, IKEA, and after reading studies and essays from its founder, one can get a better idea of how the culture in a company, can be created. Can we indeed consider that this process of culture building is only influenced by the top management or even by its leader and founder, Ingvar Kamprad or do the employees also have an influence on the culture?

As Marie Camps, manager at IKEA says, the corporate culture is above all created and largely influenced by the leader. The more charismatic the leader is the greater the influence, he will have on the organizational culture, will be. 52 5. 2. 1 The role of the leader on the corporate culture As numerous authors in organization theory or in the field of leadership explain, the leader of whatever organization one talks about, because of special qualities and characteristics, has a great impact on his organization and on the society even sometimes, as a whole.

Figure 5-1: Ingvar Kamprad 52 Interview with Marie Camps, April the 3rd, Almhult Sweden 5 ANALYSIS 28 As for IKEA, the leader is undoubtedly Ingvar Kamprad, a farm boy who became influenced by a strong and appealing vision and willingness, one of the most successful business men and leaders of the 20th century. Growing up in Smaland, a region in the south of Sweden in which life was really hard in the past, characterized with these famous walls of stones and strong values linked to this. Ingvar grew up with the idea that one should always try to obtain the best with small means.

Reaching good results with small means is actually the title of the 4th chapter in Ingvar Kamprad’s testament53 in which he clearly states that cost consciousness has to be the engine of IKEA’s employees. These values, he was experiencing in his little farm in Smaland more that 70 years ago, are still alive and have been transmitted to all the top managers and later on to the middle managers before being adopted by the bottom of the organizational chart. This value is an example; however, all the values which constitute IKEA’s culture nowadays come from Ingvar’s vision, and beliefs.

He believes strongly in simplicity, humbleness and on learning by mistakes. IKEA has thus adopted naturally a culture based on those values and beliefs. Ingvar has always been convinced that simplicity was the most efficient to reach objectives both in business and with people. Thus this has been traduced within IKEA by the refusal of bureaucracy. “Simple routine means greater impact” claims Ingvar Kamprad in his testament. 54 IKEA’s culture is thus logically based on the leader’s point of view and way of looking at efficiency, with simple day to day relationship between manager and employees, the lack of paperwork. No method is more effective than the good example. ”55 This quotation clearly shows how the leader tries to influence the corporate culture and to develop it with the company all over the world. Giving the right example and adopting a behavior in agreement with all the values he believes in, Ingvar Kamprad has managed to convince 53 54 55 Kamprad I. 1976 Kamprad I. 1976, chapter 5 Kamprad I. 1976, chapter 1 5 ANALYSIS 29 people around him of the efficiency of these simple values coming from Smaland in Sweden. 56 He has managed to transmit this Swedish way of life and way of thinking. There are hundreds of anecdotes showing that Ingvar really ives with his values, driving the same old Volvo car for years, visiting himself his stores all over the world and having lunch among the employees in the IKEA restaurants. This coherence has allowed Ingvar Kamprad as IKEA’s founder to be an effective leader in implementing and developing a strong and corporate culture based of truth worthy values and convincing core beliefs. One can always regard Kamprad as not only the leader and creator of IKEA’s culture within the company but also as an ambassador of the Swedish culture and values all over the world in millions of homes in which IKEA arrives.

It is not only the Scandinavian design that people buy visiting IKEA’s store, it is also a way of thinking , of looking at environmental issues, at prices, at services and quality, at the way of living in general, the Swedish way. People visiting IKEA more and more often, finally, believe also in Ingvar Kamprad’s vision and dream which lies in the following sentence: “to create a better everyday life for the many people”57. They adopt the Swedish design for sure but also Ingvar Kamprad’s ideas and values to some extent.

When looking at IKEA’s culture in this way, one realize how great the influence and impact of Ingvar Kamprad as a leader was and still is. Anders Dahlvig, himself IKEA’s CEO nowadays, shows that the values which remain nowadays in IKEA are the one taught years ago by Ingvar Kamprad. “We’re moving in the right direction, but we must remain humble (… ) We should remain humble about what has been accomplished so far, because there is so much more that still remains to be done.

We can not change the world on our own. All we can do is to take small steps in the right direction. “58 56 57 58 Interview with Marie Camps, April the 3rd, Almhult Sweden Kamprad I. 1976, chapter 1 Kling K. & Gotemann I. 2003 5 ANALYSIS 30 However one can wonder legitimately if IKEA’s culture, being so influenced by its leader, will remain the same once Invar is gone. 5. 2 Semiotics – A tool to look differently at IKEA’s culture The process of culture’s creation, a process of shared influences.

Previously, in the theoretical chapter, it was pointed out that the symbols included in the corporate culture are understood differently depending on the personality, the personal background of the message receiver. Indeed, our perception of symbols will differ greatly from our neighbour’s perception as we, as individuals have our own way to give symbols a meaning. For those reasons, it seems that one can look at the process of culture creating from another point of view. This process has often been seen to be a top management process undergone by the employees who could not have any influence on it, and on the meanings given to the symbols.

To some extent, discovering IKEA’s culture, one can realize that it is true in so far as, managers and leaders as it is mentioned before have undoubtedly an impact, or even a big influence on the organizational culture and all the values it includes. However, if one looks at the notion of culture within a company keeping in mind the theories developed in the field of semiotics it seems

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