IKEA AND HOFSTEDEAKA. the cultural relativity of organizational practices and theories and what

it has to do with the chair you are probably sitting on

by Artem Bielorozov and Adam Kecskeméti

Geert Hofstede’s research• His goals: develop a commonly acceptable terminology

to describe cultures and to use systematically collected (scientific) data about cultures

• Between 1967 and 1978 then repeated 1971 to 1973

• From a large multinational corporation, wide array of employees

• 116 000 questionnaires collected

• 50 coutries

4 cultural dimensions

• Individualism vs Collectivism

• Large or Small Power Distance

• Strong or Weak Uncertainty Avoidance

• Masculinity versus Feminity

Individualism vs. Collectivism

• Relation between an individual and his fellow individuals

• Closely related to the countries wealth

• Most thoroughly investigated

Individualism vs. Collectivism

Individualism:

• Self-interest

• Large freedom to individuals in the society

• Autonomy

• Individual achievements

Collectivism:

• Interest of the (in)group

• Ingroup offers protection

• Tightly integrated society

Power distance

• How society deals with unequality

• All societies are unequal but some are more unequal than others

• Rooted in the mindset of the people

• Acceptance of power differences

Power distance

Large power distance

• Ease in following authority

• Centralized command

• Hierarchy with many layers

• Power of rank

Small power distance

• Decentralized

• Less power of authority figure

• Fewer layers

• Authority can be challenged

Uncertainty avoidance

• Way how societies deal with the risk of the future

• How individuals cope with anxiety

• Tends to be rooted in culture and less in mindset

Uncertainty avoidance

Weak uncertainty avoidance

• Tolerant

• Hardly working

• Risks taking

• No real respect for rules and procedures or hierarchy

Strong uncertainty avoidance

• Beating the future

• Higher level of anxiety

• Institutions to create safety against unpredictable

• Technology

• Law (and experts)

• Religion (and ideologies)

• Absolute truths desireable

Masculinity vs. Feminity

• How society deals with the fact that there are men and women

• Gender roles

• Rather social division than biological

Masculinity vs. Feminity

Masculine

• Visible values matter

• „Big is beautiful”

• Men have dominant and assertive roles

• Women have service-oriented and caretaker roles

• Public heroes, the superman is favored

Feminine

• Smaller sex role division

• Relationships before profit

• Helping others and preserving the environment

• „Small is beautiful”

• Individual brilliance, the underdog is favored

Purpose and goal

• Raising awareness that not all theories and methods apply everywhere

• Setting a need for „management/organizational anthropology”

• Helping managers better understand multinational corporations’ employees’ behavior

„The convergence of management will never come. What we can bring about is an understanding of how the culture in which we grew up and which is dear to us affects our thinking differently from other peoples' thinking, and what this means for the transfer of management practices and theories.” ! - Geert Hofstede

Changes begin at home

Russia 14 stores

Europe 227 storesNorth America 49

stores

IKEA Group year 2012

Asia 17 stores

Australia 5 stores

• Unique design capabilities • Unique sourcing • Tightly controlled logistics

INGVAR

KAMPRAD

ELMTARYD 

AGUNNARYD 

Ingvar Kamprad 17 years old

The showroom in Almhult – the heart of furniture empire

The first IKEA store

IKEA mission is to offer a wide range of home

furnishing items of good design and function,

at prices so low that the majority of people

can afford to buy them

The balance and complementariness of:

Strategic Sourcing and the Marketing Mix

IKEA management style

To be close to co-workers

IKEA employees

Opinion, questions

Thank you very much for your attention!