Ikea’s Organizational Behavior
INTRO: IKEA is known for its strong organizational values, which are based on Swedish norms and in particular the opinions and values of the founder himself. It is not unusual to see IKEA employees following the norms and values even outside the working hours, but how important is OB really for IKEA? IKEA’S BRIEF HISTORY 1940-1950 A Swedish 17-year-old man named Ingvar Kampard founded Ikea in 1943. It all began with the Ikea catalogue that was sent from house to house, which is still known today as Ikeas signature. In 1948 the range of IKEA products extended to furniture and by 1958 the first store is opened. 960-1970 By the end of the seventies, Ikea manages to not only open stores all over Europe, but in Canada and Australia as well. 1980s The large cash flow start coming in once Ikea enters the US in1985. By this time IKEA has 10,000 co-workers and 60 stores. Ingvar Kampard retires from Group Management and becomes an advisor to the parent company INGKA Holding B. V. 1990s In 90s IKEA expands in Eastern Europe as well as China. In 1990 the first environmental policy and social responsibility policy is introduced in IKEA.
In 1997 IKEA launches Children`s furniture and becomes a retailer with offers to the entire family. By 1999 IKEA group grows to 50,000 co-workers and has 158 stores in 29 countries. 2000s In the year 2000 IKEA arrives to Moscow, Russia and same year Code of Conduct is introduced, called IKEA WAY. Following years IKEA is actively participates in world donating events and promotion of social responsibility. IKEA AT A GLANCE 287 IKEA GROUP STORES WORLDWITE In 2011 IKEA Group opened 7 new stores in 7 countries. As of 31. 08. 2011 it had 287 stores in 26 countries 13 0888 3 144 49 Top 5 purchasing countries: 1. China 22% 2. Poland 18% 3. Italy 8% 4. Sweden 5% 5. Germany 4% Top 5 Selling Countries: 1. Germany 15% 2. USA 11% 3. France 10% 4. Italy 7% 5. Sweden 6% CO -WORKERS PER FUNCTION * Purchasing, distribution, wholesale, range & other: 14,300 * Retail: 100,000 * Swedwood: 16,000 * Swedp: 700 * Total co-workers in FY11 131. 000 TOTAL SALES: Sales increased by 6. 9% compared to 2010. Total sales amounted to EUR 24. 7 billion. SUPPLIERS IN 2011: 1,018 suppliers in 53 countries
PRODUCTS: The IKEA range consists of approximately 9,500 products. PRINTED CATALOGUES, LANGUAGES & EDITIONS: The IKEA catalogue was printed in more than 208 million copies in 30 languages and 59 editions. STORE VISITS: In 2011, the IKEA Group stores had 655 million visits. IKEA . COM: IKEA websites had 870 million visits in 2011 As for Ikeas competitors, there is Wal-Mart, Howden and Ashley Furniture. Company Employees According to Emil Svallingsson who is an employee at IKEA for 10 years, about 50% of the employees are proud of their jobs.
The other half refers the individuals who do not share the exact same vision about the company, and need to be told how to do things and have a stereotypical “boss”, rather than be all a part of one team. Culture Center – Together In the hometown of IKEA, Almhult, there is a Culture Center called “Together”. It is a place for employees all over the world to attend education, meetings and to learn about the company culture. There is a lecture hall, access to product archives and documents, as well as exhibitions and interactive installations.
Employees are stating that the center is a great help to keep their foundational values alive and that it makes them more motivated in the everyday work life. “Together” works as a meeting place for people working at IKEA as well as a place for developing employment skills. The main idea is to gather the IKEA culture in to one building. Since there are more and more warehouses build over the world, it is not always easy to keep the same values for everyone, and therefore the center is the beginning to keep the company culture as Ingvar first created it to be. Our heart is in Almhult and it’s amazing to be able to have a cultural center here. ” -Ingvar Kamprad “Together” is also a great example of their flat organizational structure. Hopes are that employees, by themselves, will get a deeper understanding for the culture and by that develop IKEAs future together. ” Ikeas center provides different exercises to the employees that show the entire IKEA concept and how it works at its best; how all the employees’ jobs together create one big job structure, and how products are being made and the importance of raw materials.
At IKEA, training is crucial to keep the social work environment functional. From the training sessions, the hope is to develop awareness, knowledge and responsibility. All employees receive this training in order to take charge of their own development. In general, IKEA wants to give the opportunities for co-workers to grow, both at an individual level, but also in their professional roles. In return, IKEA expects their co-workers to do their job as well as possible depending on their ability and experience, take responsibility, and be willing to develop and grow continually and to act in an open and straightforward manner.
Workforce Diversity Gender The gender diversity at IKEA is probably among the best one’s over the world. They have applied special workforce diversity programs in all departments, and are working for a continuing development. The program is based on “stomach feeling” and employee’s opinions in order to fill the positions in a fair way. In the warehouses, there is quite an equal diversity between genders. Right now, globally it is about 54% are women and 46% men. Even among the higher positioned jobs such as warehouse responsible, it’s equally divided, 52. % measured to be women and 47. 5% men. However, when you are getting really high up in the working positions, such as the top board, there are no women. According to Hakan Sandman, the Marketing Director of IKEA France, the gender diversity is very equal overall; but that it also depends on what department one is looking at. Human Resources department tend to be mostly women, as well as the Marketing department where Mr. Sandman is the only man. THE AGE DISTRIBUTION OF CO-WORKERS IN IKEA
This pie chart represents employees’ gender distribution at IKEA globally, but for example in Sweden it looks different: The age distribution in IKEA Globally: Workforce Diversity: Ethnicity Ikeas main philosophy is “The People Philosophy”: though in the past their strategy was “Swedes”, they have abandoned it in 1998 with the rise of globalization. Currently they have a lot of long-time workers from different cultures and backgrounds. IKEA sees the diversity matter as a subject for creating more challenging business atmosphere.
France’s new store in Avignon has staff from 21 different nationalities. Since 1998 they have changed their recruitment base to: including everyone and not just Swedish people. Recruited staff are immediately made aware of IKEA`s cultural diversity philosophy; first day at work new staff get exercise to tell their group members something unique or different about themselves. “As a global player it is very important for IKEA to be aware of what the world looks like today, and how it will change in the future. The only common thing for all of us is that we are different.
If we accept and understand this fact we can start to use this Diversity for the best of ourselves and for IKEA” (Fajtova, 2007) The corporate language of IKEA is English and in their TV commercials they feature a wide variety of different ethnicities, ages, genders and race. Holistic Responsibility: “IKEA is a leader in setting high environmental standards for its product. That means employing strict manufacturing methods and supply processes so that materials, technologies and transportation have the least amaging effects on the environment. “1 – Rene Hausler, Partner, IKEA-San Diego Franchisee. “We consider IKEA to be setting an excellent example for other corporations to follow. IKEA is prepared to go further than just saying ‘no’ to a supplier who exploits children. The company is showing a genuine interest in bringing about improvement for children by assuming a responsibility for child labour issues. “2 – Ingvar Hjartso, UNICEF Representative. It seems as if today everyone is praising Ikea, and it is not without a reason.
Ikea is a remarkably socially responsible company, it sets example to so many other companies that simply are profit driven, and do nothing but destroy the eco system, or poison the environment with chemicals such as “the monstrato”. Therefore, Ikea is rewarded and recognized highly for its CSR, it has received numerous awards, including the one on April 2005, the Outstanding Sustainable Style Achievement (OSSA)3 Award for eliminating the usage of Polybrominated Diphenyl Ether (PBDE),4 a toxic fire suppressor used in manufacturing furniture.
In addition, earlier in 2004, IKEA had received the BUPA Healthy Communities award for Excellence,5 an award funded by the Ministry of Health, UK. The company pays a great deal of attention to different problems in the society and the environment; this did not begin recently, for more than twenty years Ikea has been environmentally conscientious. It began in 1989 when the then president of Ikea said that the “Environment is not just a new fashion, it will not fade away, it is the new reality and we have to adapt to it. And so, in 1990 in association with Karl-Henrik Robert, was initiated The Natural Step (TNS) environmental program in IKEA. And so throughout the years, one by one it began tackling different environmental issues; waste management were the first thing that Ikea took seriously, and so each IKEA store started having an “environmental coordinator” who worked towards waste recycling and energy conservation, and also trained employees on environmental aspects. Since 1999, IKEA has works actively to reduce waste in manufacturing. Where possible, waste from one manufacturing process was to be used in the production of other items.
And it did not end there; most IKEA stores provided collection points for customers to return waste. In the recent years, Ikea has been trying hard to be environmentally friendly, and it began rewarding the same behavior in its employees. It varies throughout the Ikea’s in different countries; IKEA Poland stores provide facilities for bikes, maps of bike paths and tools to repair customer bikes, IKEA Denmark lends out bicycles equipped with trailers at its stores, IKEA UK stores offer interest free loans and a 15 percent rebate to co-workers travelling to work by public transport.
And in May 2007, IKEA Canada launched a Hybrid Parking Program, rewarding customers driving a hybrid or fuel-efficient car, with a premium parking spot. Throughout the years, Ikea’s interest rose in a better future for our children through a better environment rose; when it came to energy consumption, the company’s data showed that IKEA it consumed a huge amount of energy for electricity, but, Ikea did not simply decide to switch off the lights on earth day. The company went a step further; it tried to consciously reduce its energy consumption. Therefore, in 2003 IKEA launched a ‘Kill-a-Watt-Energy Saving Competition. The competition was open to all IKEA stores across the world and it aimed to achieve reduction in energy consumption and also to create awareness among employees regarding electricity costs. By the end of the competition, IKEA had saved energy equivalent to providing electricity to 2,000 households, or two IKEA stores for a year. From waste to energy, Ikea then focused on forestry; around 75% of the raw materials used for Ikea’s furniture, catalogs and packaging came from timber. Hence, conservation of forests was an important environmental issue. IKEA worked with groups such as Greenpeace to formulate policies for sustainable forestry.
IKEA was also a member of the Forest Stewardship Council (FSC). As a result of consultations with these organizations, IKEA banned the usage of timber from intact natural forests. Many companies in industries, such as the diamond industry, choose to be ignorant; companies ignore or lack interest in where their diamonds come from, but often the blood diamonds that they purchase give life to more slavery. And even though there are a lot of different forms of slavery throughout the world, Ikea is one of the companies that does not tolerate it and even though child labor oes exist in countries where IKEA products are manufactured, IKEA does not accept child labor at its suppliers or their sub-contractors, and works actively to prevent it. The company has a special code of conduct called The IKEA Way on Preventing Child Labor, and monitoring of compliance with The IKEA Way on Preventing Child Labor is done by IKEA trading service offices and with unannounced visits by KPMG to suppliers and sub-contractors in South Asia. As listen above, we can see that throughout the years Ikea has demonstrated over and over again that its responsibility goes beyond home furnishing.
It undertook several projects for community development and a lot of its projects were centered on children, such as the one in August 2000, IKEA initiated the Child Rights Program in India in association with UNICEF. The project started in the Indian state of Uttar Pradesh (UP) and the aim of the project was to prevent child labor in ‘the carpet belt’ of UP, by addressing root causes such as poverty, illiteracy and ill health. The company’s CSR extended from the community and environment, to the suppliers. Ikea did not choose to be ignorant about where their suppliers got their goods.
So it launched ‘The IKEA Way on Purchasing Home Furnishing Products (IWAY)’ in September 2000, this way all of Ikea’s 2,000 suppliers spread across 55 countries, had the ‘code of conduct’ to adhere to. Student Support Programs: Ikea helps students of all ages throughout the world; it has aligned with is Save the Children’s Early Steps to School Success (ESSS is designed to assist children with language, social and emotional development); an early reading readiness program that IKEA supports through financial and in-kind product donations.
In addition, since early 2001, the IKEA Group supports one-year scholarships for students from Poland, Estonia, Latvia, Lithuania, Ukraine and Russia to study forestry at the Swedish University of Agricultural Science in Alnarp, Sweden. The purpose of the scholarships is to support competence building in sustainable forestry in countries that are important wood sources for IKEA, and to help future forestry professionals in those countries develop relationships with each other.
And it doesn’t stop there; due to the fact that many IKEA products are made with cotton, they partnered with the WWF to run Farmer Field Schools in Pakistan and India. Ikea over and over again displays its care for the society and the environment, it is because the company is not simply profit driven, it has a vision; and the vision is “to create a better everyday life for the many people. This includes doing what we can to help create a world where we take better care of the environment, the earth’s resources, and each other”. Internal Communication: Communication & Equality
The CEO of the company has a specific culture that has been passed on since Ikea was founded, and this culture is communicated to all of the employees. She states that when she hires a “co-worker,” as IKEA terms employees, her plan is to help the person through his or her slumps. One of her greatest rewards is to see a worker she has worked with excel, and she believes all supervisors and managers should serve as mentors. Every manager is also a team member, “I’m responsible but not the center of the universe. There is always someone who knows more than you do.
And there are always new things that you can learn, which I think is the essence of why I work with IKEA. ” Par Sundqvist Store distribution manager Sweden In Ikea a manager is not “the boss” or the one who commands and rules his department. Due to the low power distance in Sweden, Ikea was founded on the basis that everyone is equal. And based on the chart below of Geert Hofstede’s cultural dimensions theory, one can see that because of the relatively low power distance in the U. S. , it was quite easy to communicate this approach to all the “co-workers” in Ikea North America. Exhibit 1.
A Cultural Dimensions Theory Exhibit 2. A Cultural Dimensions Theory In Exhibit 1. A, one can see the power distance in both Sweden and the United States, though there may seem like there is a difference, once it is compared with Exhibit 2. A one can see that compared to countries such as China who have a high power distance, on average, the power distance is relatively the same in both the U. S and Sweden. Therefore, it can be concluded that Ikea’s Scandinavian way of doing business with the absence of the traditional “boss” was understood and quickly absorbed by Ikea North America.
Equality within the company is emphasized and communicated to all of Ikea’s stakeholders; and though according to “glassdoor” Ikea employees give the company’s ability to communicate an average 3. 5 rating, they give serious leadership a poor rating of 3. 1 because according to the employees “there is a little too much equality”, employees want to be guided and told what to do a little more. It seems that not all employees are ready to be treated equality with their bosses and be all a part of one team. Based on the latest updates on glassdoor, the company rating is a 3. ; the employees say it is “ok”. This company rating is based on eight components; career opportunities, communication, compensation & benefits, employee morale, recognition and feedback, senior leadership, work/life balance, fairness & respect. The lowest scores of 3. 1 were in career opportunities and in senior leadership. Two of the “Top Ten Reasons Why Good Employees Quit” are listed in the components that make up glassdoor’s company rating; employees have given to “Recognition and feedback” a score of 3. , and when it came to rating the “work/life balance”, IKEA employees gave the highest rating to it. Employees believe that better than anything else the company takes good care of their employee’s need of the work/life balance. Even though the rating seems to be solely satisfactory, it doesn’t truly represent the reality. Based on the rating one will assume that the company’s job demand is at a mediocre level, however, IKEA jobs are actually highly demanded; in Florida USA, IKEA had over 10 000 applicants for only 450 job.
And in Sweden, Ikea ranks on the top 5 companies that university graduates want to work for. In addition, Ikea was on the “Top 200 World’s Most Reputable Companies” (#2), Forbes, in 2009 and on the same year it was on the list of “Best Places to Work in Orange County” (Large companies), Best Companies Group, 2009. Pay and Benefits According to glassdoor. com Ikea employee’s rating of Compensation ; benefits is a mediocre 3. 4, however it does not portray the full picture. Where some believe that Ikea does a mediocre job, others are enjoying the vast benefits that Ikea provides them.
Last fall Working Mother magazine named IKEA North America one of the 100 best companies for working mothers and singled out Spiers-Lopez for its Family Champion Award. The award was given for Ikea great paid maternity leave and flexible work schedules. In addition, Ikea provides a number of benefits that are not usually offered to retail workers in the U. S. such as “full medical and dental insurance for those who work as little as 20 hours a week, including coverage for domestic partners and children; tuition assistance; and a 401(k) matching plan”.
In addition, they receive long breaks, free uniform and the company has a food plan, it is known as the “$3 meals”. As for the facilities, there are lounges, relaxation rooms and showers. Ikea has all sorts of benefits from end of the year gift, to long service awards to sick pay and first day of school leave. Lastly, Ikea unlike most companies provides even part time workers with benefit packages. Bonuses in the company may vary, but on average the bonus of a sales associate is $785, and the team leader receives $1,002.
However no all positions receive such high bonuses, when it comes to Ikea cashiers, they receive $50, and customer service associates receive $100. And all full time employees receive a 10% discount; it increases to 15% after 7 years of work. The employee discount comes hand in hand with home delivery and assembly of the furniture, always free of charge. All employees in Ikea receive above the minimum wage rate; most are paid by hour except a few who receive a fixed salary; the team leaders receives $39,908 and the department supervisor $34,712.
Sales associates hourly pay is $10. 39, Ikea cashier’s is $9. 65/hour, customer serve associates receive $9. 38/hour, floor associates receive $10. 00/hour, Safety ; Loss prevention agent’s pay is $12. 69/hour and the pay of a co-worker is $13. 15/hr. On average the pay is around $12 per hour, with exception the interior designer who receives $16. 56 per hour. As for pension, at the moment, IKEA is building a new global pension package where they want to construct a global second-pillar retirement benefit structure. It is planned to be a fixed interest rate of 3. % on contributions. In 2000, IKEA introduced a multi-fund pension arrangement for their employees, which also can be used as a private retirement fund if they leave. The arrangement also offers workers who moves between countries a choice of asset mixes in which they can invest contributions. Co-workers at IKEA are able to transfer money between funds or split contributions between different plans, depending on their age and risk taking profile. It can also be mentioned that even if you choose to leave your job at IKEA, you may remain in the pension agreement. Everyone should have the same amount” – Ingvar Kamprad Ingvar also wishes to start a bonus program for employees over the world, but it is not yet defines how much money we are talking about. IKEA has 131 000 employees so the amount will easily reach very high numbers. So far, there are only 3 principles decided around the future wish; Everyone gets same amount, everyone can take part and its related to Inka holdings financial results. (Inka holdings is IKEA’s Dutch holding company) Improvements and Changes in 2011:
The workforce turnover has decreased to 22% in 2011, and 81% of employees now come back from maternity leave: 100% at management level and 78% of hourly-paid workers. Thirdly, 2011 employee satisfaction survey came up with results that employees` favorability to rewards and benefits boosted by 5% in IKEA. Fourthly, IKEA launched family-friendly benefits such as a staff support program and childcare vouchers, as well as an loan with no interest in order to cover costs a month after birth. IKEA: TRAINING AND DEVELOPMENT IKEA uses mostly 3 different types of training: * Induction training (35%) Mentoring (40%) * Coaching (25%) 85% of training is on-the-job training and only 15% off-the-job training. Differences between IKEA houses per region in relation to Educational background of co-workers IKEA`s workforce has reached already 131,000 employees and these people are an epicenter of IKEA values. Value is a core word for company`s strategy and co-workers` involvement in it. IKEA is doubling their sales every five years; however it does not doubling their staff. One of its keys to such a success lies in training and development programs constantly offered to the employees.
Each employee is offered 40-hour training every year in average. Since the very beginning employees` development was perceived as a non-stop process in IKEA. The first period for all newcomers is training in IKEA’s culture. It usually implicates learning about the company’s history by watching the educational videos. Many co-workers start they way in IKEA as part-time co-workers and shift progressively to full-time, seniors, deputies etc. Along their career path they are getting cultural training and regularly acquire IKEA’s values.
The major part of training is acquiring the core aptitudes and skills such as teamwork, efficiency, mobility, leadership, that were considered necessary for a successful career at IKEA. Networking in IKEA takes important role in training and development. When new employee joins the “family” he/she gets immediate access to a local network. Curt Temin, who works globally with learning and development within IKEA Group, regards “networking as the ultimate tool for professional development”. One of the very first things new employee learns is an ancient Swedish word “fika” (coffee break).
In IKEA they understand that even informal meetings and communication between people lead to knowledge transfer and this is where development starts. “People’s careers are only as limited as they want them to be at IKEA,” concludes Jeff Wilson, learning and development manager for IKEA US. 90% of all positions inside IKEA globally are filled inside, and 35% of those jobs are managing positions. To keep such a high data company has launched a personal development program called “PADDLE YOUR OWN CANOE”, which has 3 components and takes place ones a year.
This program is open to employees who already became aware with companies values, understand their position within the company and ready for self-development. At the first step staff is invited to investigate strengths, weaknesses, self-awareness and career pathways. The second step includes meeting with manager to discuss previous conclusions, perform a skills gap examination and choose position to develop toward desired path. There are online career centers available at this stage to provide all necessary reference materials to complete this stage. Last third step in the program leads to setting goals by employee and making an action plan.
IKEA has created environment for growth founded on belief that good people can be even better. In the year 2002 the “SKILLS ESCALATOR” program was born from this idea. The Skills Escalator is compound of 4 main steps. When employee starts job as a trainee comes the first step. The second comes when employee actually step into planned responsibility. The third step is called “senior” because at this stage staff becomes leading with tasks of coaching others in their specific work. When the employee has become a mentor and expert it means the last fourth step of program has been reached.
This program was created due to willingness of the company to employ people not solely for one role but to take a leading position in long-term. The core idea lies in progress, in order to learn and then train others. In IKEA nobody is a trainee longer than one year. The “SKILLS ESCALATOR” always gives opportunity for staff to get higher skills level. Employees are progressing while working, they perform work and see which skill are necessary and how attain them during the working process and receiving feedback Employees are confronted with a coach, who is not telling exactly what to do, but help to ind an answer by giving few leading questions. Therefore employees receive help and support, but in such a way they describe what they need to know rather told in advanced. It gives employees control over own development. This relates to on-the-job training, which is most used training process in IKEA. In fall 2011 IKEA launched mentoring initiative “PARTNERS FOR GROWTH” which was directed by famous mentoring consultant Dr. Lois Zachary of Leadership Development Services. This program was set up to help co-workers establish vital relationships to maintain them in piloting IKEA and in pursuing their own personal development.
This program targets only to the IKEA`s key management. Jeff Wilson, Leaning & Development Manager in US explains that “Partners for Growth” will have a crucial influence on IKEA, he believes, that among many other programs this one is one of the most important. As IKEA has big expansion plans for next 10 years this program will lie in the very heart of the process. A lot of efforts will be given to co-workers` development programs such this one, due to the need of greater capability for people to take superior responsibilities in US and Canada.
Pernille Lopez, President of IKEA NA admits that Zachary`s knowledge helped to line up a triumphant monitoring strategy with his own. Lopez confirms, that IKEA`s main goal is to help co-workers to do their job better by developing and empowering staff. In IKEA they take extra steps in mentoring program. IKEA base mentoring program on growth of both mentee and mentor holding expectation of creating better employees by making them a partners. Innate result of this program turns IKEA`s mentees to future mentors. Major mentor to IKEA`s mentoring support groups, Dr.
Zachary praises company`s commitment to development processes and finds those innovative and hopes to see mentoring process as a natural aspect of the IKEA`s culture in the next few years. “PARTNERS FOR GROWTH” soothes the progress of individual learning, encourages professional and personal development, and has 4 strategic goals: * Develop Leaders from top to bottom – Support career development across the board – Develop and support diversity through IKEA organization – Strengthen IKEA culture Interest of employees in IKEA for more internal training | Percentage| Yes| 79%| No| 4%| Don`t know| 16%| Totals| 100%|
PASSIONATE CAREER IN IKEA In IKEA at entry level all employees are hired externally, then those employees are making their way up through promotions. Only 10% of employees on higher levels are hired externally mostly because of lack of eligible candidates. Career planning in any organization is based on how the organization may help and helps its employees in planning their careers. IKEA behave as a supportive partner, in managing its employees careers, for example, by lowering the work load while employee is taking any educational program, by giving time off to study, or by paying a part of the tuition fee.
Therefore, career planning may include anything from policies on hiring and promotions and collecting data about personal preferences to Educational Assistance Programs and flexible working hours. Educational Assistance Program gives employees monetary benefits for taking certain training or courses. To be eligible for those benefits the employee must pass the course with the mark of 75% or higher. Those benefits depend on the course taken and on the level at which the employee is. Nonetheless, IKEA offers also its own training and development program.
Whereas the company and the level of employment require certain training programs, others are optional. IKEA says that career planning mostly depends on their employees if they want to be pro-active rather than reactive, if they are willing to take more responsibility and to learn more, positions are always posted in the store and every employee may apply upon meeting certain requirements and having good performance appraisals. IKEA as being in retail industry hires many people on a part time basis, therefore it may offer what is called flexible working hours.
This primarily means that employees have a choice what day to work and what hours to work, since they are not required to work 40 hours a week. Flex work enables co-workers to balance home and work careers as well as to spend more time on personal development. Nonetheless, flex work program depends on where the co-worker is working, for instance, in some departments, such as IKEA Trading, co-workers are required to work 8 hours a day but it does not have to be in straight time as long as they have eight hours a day worked.
Whereas, in other departments it means that co-worker may choose which days to take off and which days to work. Promotions within IKEA may be vertical or lateral. The policy states that in order to be eligible for promotion for a position lower than management position, the candidate must work with the company at least six months, and to be eligible for promotion for management position the candidate must work at least three years. IKEA provides good program for those employees that would like to, and are eligible for, relocation to different country.
Interested co-worker needs to meet certain requirements and be the best candidate for that position. In case of not having the language knowledge IKEA provides language training therefore upon arriving in the new workplace the promoted candidate can communicate with others. This tactic ensures that all employees meeting the requirements may be chosen and the language is not a barrier. IKEA, as a part of career planning of its employees, also does succession planning in conjunction with management. It means that IKEA has charts with listed higher positions, employees on that positions, and relationships between those positions.
In case of any vacancies the chart lists prospective successors that may step up into that position. IKEA in developing such charts takes into consideration performance appraisals, experience, personal characteristics, and personal preferences of the candidate. As mentioned earlier IKEA does it in conjunction with managers, it means each candidate’s qualifications are confirmed by the manager and that manager decides whether the candidate is ready to be promoted or not. Feelings of employees in relation to competences utilized in the right way within the company TAKING CARE OF PEOPLE: EMPLOYEES
IKEA always tends to give greater value to its people by calling them co-workers, in such a way highlighting the importance of workforce in this company. The most important values for communication strategy in IKEA are respect, cost consciousness, togetherness and simplicity. During the hiring process IKEA is willing to take people who are willing to growth both professionally and individually, it is always stressed and emphasized during the recruitment. IKEA wishes to create sort of a partnership with its co-workers, it is ready to listen to their ambitions and particularly interested in hiring people who share IKEA`s values.
In IKEA responsibility is given to co-workers and strategy of empowerment is applied. Therefore co-workers in IKEA are not afraid of making mistakes and are encouraged to innovative way of thinking. Worst enemy or evolution in IKEA is fear of mistakes. One of the factors IKEA using to make their employees feel better at the work place is absolute avoidance of status symbols. This system allows people to feel equal. The inspiration comes from the top management, and particularly from Ingvar Kampard who brings a great encouragement through his own life.
For instance, he always uses public transport instead of taxis or car whenever it is possible. This again sets a good example for cost-consciousness from the highest level on, shows that managers do not expect things from their co-workers that they aren’t willing to do themselves. For Christmas 2006 IKEA has given 9000 bicycles to its employees with a purpose of cutting down the pollution and stick to idea of togetherness and cost-consciousness, which comes from top management. The staff is getting 15% off travel tickets on public transport to sustain same goals.
Another example of how IKEA takes care of its employees is training and learning which not necessarily be important for the jobs performed. In 2002 Scottish IKEA introduced IT training for co-workers even thou most of those employees were not using computers in their jobs. IKEA tries to support co-workers, increase self-awareness and encourage them through continuous motivation and incentives. As mentioned before, preference during the recruitment process is given to people who are ready to grow both professionally and personally in IKEA.
Regarding the motivating theories, when we begin using McGregor’s theory of X and Y, it can be safely stated that IKEA recognizes its employees as theory Y. IKEA consequently supplies the employees with benefits and incentives in order to give the opportunity for the workforce to grow themselves and their careers. Success of IKEA does not lie in cheap prices, but particularly in treatment of so-called co-workers and direct outcome of it. IKEA has two programs directed towards older employees: The duration of notice of termination of employment is increased by one month per year of employment for employees who are 40 years of age or older.
The maximum raise is six months and is in addition to the length of notice according to the law. After ten years of work in IKEA, employees going on pension are allowed to a period of six months of reduced working time with full payment before the retirement. This helps to ease the transition from work to retirement by letting leisure to gradually take the place of work. Differences between IKEA per region in relation to Perceived Stress on the workplace Differences between IKEA per region in relation to how loyal employees feel towards the company
Differences between IKEA per region in relation if they see themselves working in the company in the next 5 years TAKING CARE OF PEOPLE: CUSTOMERS * 1 million customers visit IKEA every day * The average customer makes 3. 5 store visits per year * The average age of a customer is 42 * 60 per cent of them are female * 150 million meatballs a year are served in IKEA restaurants * 145 million catalogues are printed in 48 editions and 25 languages * IKEA staff conduct 50000 yearly “home visits” where they visit customers’ homes (in exchange for an IKEA credit voucher) to find out what frustrates customers about IKEA products.
All business organizations need to make sure that their customers are satisfied with the service they receive because customers are the most important part of any successful organization. IKEA is acting according to the A. R. T. of great service, to carry out a good customer service: Approachable- an organization must create an open and friendly environment that will influence customers to come in with self-assurance so that their matter can be dealt with. Responsive -all staff should take responsibility of their action. Customer service should be flexible and provide precise and honest information, at all times.
Timely – done accurately and efficiently at all time. Many businesses record customer complaints so that, they can review the matter, and to improve its customer service. THE WORK WELL PROGRAM HEALTHY PEOPLE= HEALTHY ORGANIZATION Retention of senior co-workers in IKEA in ways of: * twice a month offered body massage; * specialized course in healthy lifestyle containing a personal diet program, and guidance on losing (or gaining) weight; * help to stop smoking, handle stress or manage situations of conflict; * providing discount on fees to fitness centers; providing comprehensive health insurance coverage providing medical treatment and rehabilitation therapy in private clinics to encourage quick recovery and return to the workplace after illness; * a local project promoting good working attitude through colleague-to-colleague guidance in standing, sitting and lifting correctly Discrimination in IKEA USA Ikea has their way of conduct called the IWAY standing for ‘The IKEA Way on Purchasing Home Furnishing Products’. It defines what suppliers can expect from IKEA and specifies what IKEA requires from its suppliers. Moreover the IWAY guides the work of employees.
It covers working conditions, the prevention of child labor, the environment, responsible forestry management and more. Suppliers are responsible for communicating the content of the IKEA code of conduct to co-workers and sub-contractors and ensuring that all required measures are implemented at their own operations. For example, talking about discrimination the IWAY mentions: ‘The IKEA supplier shall not discriminate with regards to workers based on race, religion, beliefs, gender, marital or maternal status, age, political affiliation, national origin, disability, sexual orientation or any other basis. Discrimination is therefore forbidden not only concerning the race but also the gender, religion, beliefs, marital or maternal status etc. However in April 2011, complaints of racial discrimination were present in Virginia, more precisely in the city of Danville. Six African American employees have filed discrimination complaints with the Equal Employment Opportunity Commission, claiming that black workers at Swedwood’s (an industrial group within the IKEA Group of companies) U. S. actory are assigned to the lowest-paying departments and to the least desirable third shift which means from 11 p. m. to 7 a. m. One of the women, Jackie Maubin, mentioned that white people were more likely to receive more money than black people. Swedwood found solutions to face those issues by showing those complaints through mediation and Ikea had offered Maubin 1000 dollars. The company Ikea is trying to eliminate discrimination by hiring based on workers individual skills and ability to do the job.
CONCLUSION: As shown thoroughly throughout this report, in both theory and practice, OB is IKEA’s top priority; the company pays a great deal of attention and energy to the company’s organizational behavior. It is part of Ikeas foundation, which results in great success. Though of course, whether OB is IKEA’s number one, or number two priority, it varies depending on factors such as the country in which that particular IKEA is located, as well as the culture in which it operates in.
Though the origin of the Swedish IKEA has OB as a number one priority, it slightly varies depending on the location of each IKEA store or warehouse, that is due to the fact that cultures and norm and ways of doing business vary all over the world, and even though IKEA does its best to keep OB its number one priority, it is not the number one priority in every single IKEA all over the world. There is still room for improvement though in comparison to other companies, IKEA certainly never neglects the important of OB, but whether it is the number one or number three priority, that varies all over the world.
Appendix: Interview With Emil Svallingsson, Warehouse Employee at IKEA Sweden for 10 Years According to you, how are employees being treated at the IKEA warehouse? In an equal way? In general, all employees are treated well, even though some bad things has shown during my 10 years at IKEA. If you are complaining, you are risking to not get a promotion. People were always quitting and new were starting, mostly because of annoying costumers and due to a too small number of employees. IKEA is constantly trying to cut down on their staff in order to have the consumers doing as much as possible.
During a very long time, no new people were hired at my department. ?? Additionally, I have to say that there always have been a good diversity between men/women, religion and age. It’s a good mix! Are employees proud about their jobs? ”No, it’s about 50/50 I would say. 50% thinks IKEA is amazing and a wonderful place to work. We call those certain people the “IKEAns”, like Indiens. The other 50% are mostly working there because of a lack of other things to do. ”Is IKEA a good environment for new initiatives? You always have to push yourself forward and be initiative if you want something to happen with your carrier. It is almost expected from the employees to do more than it says in their contract if they want to achieve higher positions. ”Are employees actively involved to develop IKEA, or are they according to you, in need of being “pushed” forward in order to develop? ”Again, that’s 50/50. The ones who believes in the IKEA concept (the IKEA`ns) loves to be a part of the IKEA family and they do not have to be pushed. The rest of us might need a clear goal to be motivated.
I would have liked to just have a small percentage of the extra money I earned if my selling went extra well for example. They don’t have systems like that. Time to time, they did have a small competition or party for the employees though. That was fun. Interview with the French marketing director Hakan Sandman How are decisions in general being taken at IKEA? Ikea is very democratic in general, even though it’s different between different countries. It differs depending on a country’s general values and how the people are looking at the word Trust. It is easy to say, Yes”- we trust our employees! but not as easy to live. I would say that IKEA Sweden trust their employees most of all countries, but in comparison to other companies in France, we are very good at trusting and giving away responsibilities. How are the people at IKEA helping each other in order to move forward as a group? At IKEA, it is important that it’s easy for our employees to understand and live our values and beliefs. In the retail department, there are so many people who comes and goes, so it is important that the new ones are able to learn quickly and that the old ones are willing to teach.
One of our most important slogans is: “Lead by Example” which basically means that you have to live as you learn. When the founder, Ingvar Kamprad, where in his forties, he was driving around in a Porsche, drinking champagne with beautiful women and he was living a very different life from today. He later on realized the importance of guiding people by being the example himself, and started to behave in a more appropriate way for IKEA. So what is “appropriate” for IKEA? It is important for anyone who works at IKEA to be a good example when it comes to money. You have to live as you learn and you are not opposed to waist them.
An example of this is when a person at IKEA Russia once where spending a bit too much, which lead to that the company lost 50 million euro. Ingvar himself then went to the person who was responsible for the act, but instead of yelling at him for what he did, he started to lecture about good behavior and the norms of IKEA. In this case, Ingvar saw that it wasn’t the money that were important in the situation, but the symbolic act to waist 50 millions. It was just not good for IKEAs reputation. At the same time he managed to “Lead by Example” by being a really good and understanding leader. Is it really that equal at IKEA?
IKEA is a flat organization, which means it is not hierarchic. Our decisions may take longer time, but when letting everyone decide, people all over the organization will truly believe in the decision and work more efficient to get through with the new idea. At IKEA, it is important to feel the “We- Spirit”. Since we are doing things together, that leads to more personal energy and everyone will be more effective. Do you prefer it like that or the other way around? Sometimes, it may be hard to take a decision within the overall budget for example, cause we don’t really have anyone who Really decides.
Everyone might want different things and that can require more time and energy than it would have done in a hierarchical organization. But in the end, I really prefer the flat type of organization. How to you get a flat organization to be effective? It’s all about a balance between time efficiency and democracy. In the warehouses, there is somewhat a hierarchy, but as flat as possible. It wouldn’t work otherwise. Ingvar himself is very concerned about his employees though and likes to spend time in warehouses in order to take in the opinions of people working there. He wants them to also have power.
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