Internalization a Brand across Cultures - IKEA - Case Study Example

International Human Resource Management Internalising a brand across cultures: the case of IKEA (Case 2) Contents Introduction 3 Analysis and Discussion 3 Conclusion 8 References 10 Introduction This study would be centred towards analyzing various dimensions of internalization. Globalization or internalization is a highly profitable strategy for any organization. A company needs to be highly competent for sustaining business operations in global platform. There are multiple resources that support a company in context of expanding their business operations and acquiring high revenue margins. Human resources play an integral role in internalization process. This resource needs to be enhanced through effective managerial principles. Human resource can be stated as an invisible asset for any company. Cross-cultural issues are a common factor when it comes to internalization. This is simply because cultural factors are highly distinguishable across borders. Management can tackle this issue only through designing human resource management strategies. In this study a thorough analysis will be conducted on IKEA which is a multinational group, selling and designing furniture, home accessories, appliance and motor vehicles. Brand internalization is often considered to be a critical aspect since it requires clear brand understanding by employees. This study highlights the scenario of IKEA’s entry into Russian and Chinese markets. Analysis and Discussion The case study on IKEA states the various aspects associated with brand internalization. Brand identity can be well represented only through organizational core values. It is essential that brand experiences and benefits are efficiently communicated to all stakeholders. Sustainable brand strategy is one which can be well understood or interpreted by team members. Human resource management is the central component in context of communicating brand message to employees. There are certain intangible attributes of brand identity like staff behaviour in an organizational system. This kind of behaviour is usually regulated through human resource management policies. Shared brand understanding can be facilitated through HR managers and top management. They play a vital role in conveying brand message to target audience. IKEA’s case study outlines a key issue which was being faced by managers. It reflected upon tasks undertaken by managers to enable brand understanding, brand interpretation and communication to other team members. Managerial sense-making usually differs in real time scenario in comparison to organizational context. There was interview conducted in IKEA to determine different strategies implemented by managers. These managers usually belong to various sub-categories like brand deciders, brand enactors and brand influencers. The human resource management functions in IKEA are controlled by HR professionals, store managers, country managers, etc. Internationalization issue with regard to IKEA was brand internalizing. Multinational firms like IKEA are often not able to communicate effectively brand message and attributes to employees. This results into confusion since employees are not well aligned with common organizational goals. Responsibility level of management is basically high because they not only need to frame internationalization strategies but even have to initiate collaborative work style within the system (Tarnovskaya and Chernatony, 2011). Their overall process of sense-making can be subdivided into three elements like conceptualizing, activating and comprehending. Cultural contexts of Russia and China are completely different and in such situation human resource have to be managed appropriately. Individual behaviours usually change across different cultures. This shall be taken into consideration by management as team productivity is dependent on high motivational level of employees. Human resource management is not only inclined towards recruitment and selection of individuals but even includes retaining talented individuals within the system. The major internationalization issue is related to managing cross cultural diversity. Workplace diversity can be regarded as the major strength of an organization. However at times it can create problems because local cultural conditions might not be similar to home country conditions. Perception and attitude is an important concept within human resource management. Employee perception if understood well can enhance level of productivity as it had happened in IKEA’s case. IKEA’s operations were expanding into new markets like China and Russia. In this situation it was essential that employee perception about brand building can be well understood by managers. Brand conceptualizing was the first approach adopted by the HR managers in the form of sense-making and sense-giving. The vision of this firm is to develop a better life for all employees. IKEA aims at achieving this vision through cost minimization and acquiring high profit margins. IKEA’s human resource policies are such that it provides employees with wide set of opportunities (Boselie, 2010). These opportunities facilitate overall growth and development of employees. Corporate values to a certain extent regulate organizational culture. Innovative and hard working environment helps to reduce maximum percentage of internationalization issues. To be more precise this type of workplace environment can be developed by human resource management department. Employees should always be motivated towards learning new concepts and sharing knowledge amongst team members. Cross-cultural diversity basically indicates that a firm possesses wide set of knowledge. For instance many global companies have been observed to fail in foreign markets. This is simply because employees are not aware of brand identity and are not able to connect easily with local conditions. Human resource management at IKEA had designed certain norms in order to address internationalization issues related to brand failure, communication gap, etc. These norms were simplicity; enthusiasm and togetherness, cost consciousness, willingness towards taking team responsibility, willpower, being constantly aligned with reality, contributing innovative ideas and being an effective leader (Brewster, 2008). Brand’s longevity at IKEA is facilitated through company’s culture of focusing on innovative ideas or opinions. There is a strict control exercised by the firm on brand enforcement and it is held mandatory for all IKEA’s stores. Employees are considered to be most valuable asset of this organizational system. They play critical roles in terms of brand security and maintenance. Over the years the company has considered staff as stalwarts and pillars of the company whereas store managers are generally referred to as shopkeepers. Comprehending the brand is a key aspect in managing human resources. IKEA offers a challenging workplace environment for all employees. Recruitment is based on cultural understanding of individuals so as to ensure that they are capable of being aligned with IKEA’s culture. The major objective of this company is to select right people who are best fit for IKEA. Working contract of IKEA encompasses the goal of engaging employees within the same task. Globalization leads to increased workload which can be managed by a productive team. Human resource management comprises of an important concept known as group dynamics. This approach is linked with understanding group nature and setting objectives accordingly. Group development model have been structured by Bruce Tuckman. They were four important stages as per the model such as forming, storming, norming and performing. At the first two stages focus is on understanding group behaviour and interacting with one another to determine key strengths or weaknesses. Performing stage is reached when all team members are aligned with common goal eradicating individual interests (Price, 2007). In overall context group behaviour helps to resolve much of internationalization issues because it is all about bringing forth all employees to collectively perform assigned tasks. Apart from employees, suppliers play an essential role in stakeholder management. Internationalization process mainly refers to dealing with supplier base globally and developing innovative strategies. Suppliers are at times witnessed to create problem since they are not able to understand intricacies of brand identity. IKEA has implemented creative human resource management strategy in the form of developing contract with suppliers. Suppliers are provided with a code of conduct which forms the basis of their operations. They are given equal opportunities in terms of contributing towards supply chain operations. All operations are aligned with ISO certification so as to minimize any form of quality issues associated with internationalization process. The company organizes a survey for employees every year. In this survey employee’s opinions are gained in terms of their job satisfaction level in the company. This even reveals the areas which needs further improvement in coming years. Employee survey is a unique approach in human resource management that helps in analyzing percentage of employee retention. During internationalization process, it is commonly observed that employees tend to leave job position since they are not comfortable in new cultural scenario. However human resource management principles enable an organization to tackle such situation, by structuring training and development sessions, motivational programs through performance appraisal, reward systems, etc. Brand activating incorporated in IKEA can be regarded as another tool of human resource management. International managers who are actively involved in global expansion process have clear understanding about brand attributes and communicate it to team members (Paauwe, 2009). IKEA have been able to overcome cultural barriers in Russia through recruiting some experienced individuals on board. This has enhanced growth percentage in new market. Often it is observed that companies find it difficult to operate in a new market due to lack of expertise. IKEA have been able to resolve this issue through its efficient recruitment process where talented and experienced individuals are chosen for global expansion strategy. Brand internalizing at IKEA was also linked with eradicating cultural constraints between Russian and Swedish staff. To a great extent it was accomplished through a recruitment program based on strict values. The company opted for removing stubbornness from Russian staff by designing an informal workplace atmosphere. In this organizational system employees were encouraged to share their ideas and were treated as an essential component in overall success. Managers were highly efficient since they carried core brand value to local level. Brand internalization on basis of sense-making was to draw a relationship between brand value and local cultural value. Communicating best possible practices in the organizational system is a way through which internationalization issues can be resolved. Living brand identity and focusing on mutual interests are some common human resource management policies in IKEA. Conclusion As per the case analysis, there are couple of factors that are directly associated with the concept of internationalization. Human resource management strategies are a medium of solving such issues. It has been identified that major problem revolves around recruiting right talent. Recruitment process play a significant role in internationalization since members being hired have to be aligned with new cultural norms and core brand values. Brand internalizing is all about proper brand understanding possessed by employees. Managers are solely responsible not only for selecting right candidates but even conveying brand message efficiently. It is evident that only those employees can deliver appropriate results who are convinced with brand values and company culture. There are different stages of brand internalizing as discussed in case analysis like conceptualizing, comprehending, brand activating, etc. On the other hand, group behaviour facilitated by human resource management is a technique to mitigate internationalization process. Team work and simplicity are the core values which are followed at IKEA for long term success and growth. References Boselie, P., 2010. Strategic human resource management: a balanced approach. New Jersey: McGraw Hill. Brewster, C., 2008. Contemporary issues in HRM: Gaining a competitive advantage. Oxford: Oxford University Press. Paauwe, J., 2009. HRM and performance achievements, methodological issues and prospects. Journal of Management Studies, 46(1), pp 129–142. Price, A., 2007. HRM in a business context. London: Thomson Learning. Tarnovskaya, V. V. and Chernatony, L., 2011. Internalising a brand across cultures: the case of IKEA. International Journal of Retail & Distribution Management, 39 (8), pp. 598 618. 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