Ikea’s Organizational Behavior

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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.

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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 labourissues.
"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 moneybetween 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.

But is it really that equal between men and women? Every department sets its own goals
every year. The goals are based on feeling form the employees but also on measured facts. In
the very top, there are more men than women. A lot of women are working in HR department
and marketing. I'm the only man at the marketing department! It is really well divided
between warehouse bosses though, I would say very close to 50/50 for men and women.