Strategic Human Resources
Management at the example of IKEA
SHRM -- S Foster-Gamble -- IBMP -- IPAG Nice -- Fall 2007
1. IKEA – a short introduction
IKEA is an international home products retailer that sells low-price products
world wide, including furniture, bathroom and kitchen accessories in retail
stores. It is a well-known company by its human resources management that
makes employees feel confident and comfortable within their work environment.
“We don’t just want to fill jobs; we want to partner with people. We want to
recruit unique individual’s who share our values. Co-workers are not restricted
at IKEA; we listen and support each individual to identify his or her needs,
ambitions and capabilities. Our shared values: Togetherness, cost-
consciousness, respect, simplicity.”
The statements mentioned above will help us to understand how IKEA’s Human
Resources Management operates and which strategy they use to fulfill all their
expectations and objectives.
IKEA has implemented several initiatives that promoted life balance and
diversity; these are related to flexible work design, comprehensive benefits,
quality of work life, and employee training and development.
IKEA is aware of the significance of taking care of their employees which
creates loyalty and satisfaction. Thus employees ensure effective work as they
see their current positions important and motivating. IKEA is an employee-
friendly company. IKEA, despite of other companies which contract employees
for low salaries and negligible benefits and expecting people to work long hours,
it provides friendly policies and generous benefits.
IKEA focuses on employee development by creating opportunities within the
company. By this strategy people are engaged and feel committed to their tasks
and the organization.
IKEA culture is also characterized by a family-like atmosphere that makes
relationships between employees stronger and open. This means that the
company agrees on employees to talk, socialize and have a good time during
working hours, that’s what this is all about, make the employees happy, so they
will make the customers happy. They have also realized that when all their
coworkers have the support and flexibility to make their personal life such a
success, they will definitely succeed in the workplace too. The employees look
and act with more confidence and with a lot of commitment when the company
takes care of them and their needs. IKEA is always there for their employees;
they are also available to hear their questions and suggestions and try to give
them a good answer expecting good results.
Benefits are also given to employees. It’s important to mention that year by
year, new IKEA stores are being opened all around the world; this means that
2500 employees will be hired, and if the company grows the number of
employees will do as well, also employees in IKEA are offered low-premium
health and dental insurance coverage.2
So, IKEA is a company that focuses on employee development by supporting
coworkers and encouraging them, letting them use their creativity and
initiatives. This makes this company one of the most recommended firm to work
2. Examples of applied motivation – how IKEA treats its co-workers
As already mentioned, IKEA calls its employees co-workers as it gives a greater
value to people, emphasizing the importance of those co-workers for the whole.
Again the most important element in the communication of strategy is to
underline the above mentioned values such as respect, cost consciousness,
togetherness and simplicity.
Even when hiring people IKEA’s keynote is to take people an board who are
able to grow both individually and professionally. IKEA wants to create a
partnership with its co-workers, listen to their ambitions and hire particularly
applicants that share the company’s values. This implies that people are given
responsibility and that the strategy is to empower people. This shall help people
not to be afraid of making mistakes and thereby encouraging innovative
processes and thinking.3 Fear of mistakes is interpreted as the enemy of
According to a self-portrait of IKEA, its founder Ingvar Kamprad has exemplified
trust in employees through his own life. The company’s motto he shaped is
http://www.IKEA-group.IKEA.com/corporate/PDF/FF2006english.pdf, p. 7
‘What we want, we can and will do. Together. A glorious future.’ This obviously
is a means to create a common sense for achievement and a corporate identity
which is then an important factor for the company’s success story. 4
Actually, there are a lot more factors and not solely to make employees feel like
co-workers. One is to make them feel comfortable in their working environment.
E.g., IKEA permits no status symbols. The current president is known for flying
economy class and using public transport instead of taxis whenever 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. It creates a form of togetherness comparable to
a family. What more can an employee expect from his or her employer? A lot,
but IKEA does not fail to fulfill expectations. For Christmas 2006, IKEA UK has
given a bicycle to all of its 9,000 co-workers and added the message to it, they
could help to cut down pollution suggesting to use the bikes to get to work. The
enterprise has also offered the staff 15% off travel tickets to encourage
employees to use public transport rather than a car in order to protect the
environment. So to please employees and to show its awareness of current
problems were connected to each other, having a positive influence both on the
workers’ motivation and on PR.5
Another aspect is offering training for employees. In 2002, IKEA Scotland
provided IT training although this would in many cases not have been
necessary. “While many of our employees do not use computers directly in their
roles, we recognize the importance of allowing staff to develop in all areas in the
belief that this will help us to create a more motivated, committed and happy
workforce. (…) It’s important to give staff some autonomy over training and let
them take responsibility for personal development.”6 Again, the thought of
autonomy, responsibility and trust in the skills of the co-workers comes to the
So one can say that the success of IKEA is not only based on the cheap prices
but particularly in the treatment of so-called co-workers and the direct outcome
of that. Happy employees that are content with their work situation and well
treated by the employer, that receive from time to time bonuses and have the
feeling of being a precious part of the whole make IKEA what it is and what it is
perceived as by its customers.
3. IKEA’s strategy in theoretical context
Positivist or construct perspective
IKEA is true constructivist because of the following reasons:
IKEA accepts quantitive information and cares for the interpretations perceived.
This means the company is aware of the employees’ opinions, thoughts and
ideas are being dedicated and it is collecting this information in order to improve
customer satisfaction. IKEA is aware that in order to create customer value, it
should start with satisfying and motivating the employees.
IKEA mainly relies on the quantitative data that is received from employees
being allowed to communicate with each other on a casual basis. This enables
IKEA to constantly improve working practices and the employees working
environment. By allowing the interaction overtime and in context, IKEA has
established an effective way to meet customer needs from their workforce.
The workforce culture of IKEA is family-oriented. By this method relationships
up and down the hierarchy are more strongly linked and open. This creates a
more shared understanding; as a result decision-making is more influenced by
the whole workforce rather than individuals. Therefore the future predictions that
the company is going to implement are not determined by only corporate goals
but also by employees’ objectives and needs.
To control the organizational environment to be one that is successful, IKEA
persists to meet the wants in their employee’s personal lives. For example
incentives are used like providing bicycles for transport and 15 percent off for
public travel. Therefore employees are self aware of the company’s intentions
and therefore in turn try to meet corporate objectives.
Contrasting the Paradigms
We believe that IKEA is continuing the trend of the 21st century organization.
Within their sector/market, it is important to meet consumer needs, wants, ideas
and taking into account their opinions, in order to fulfill company objectives and
Theory Of Personhood:
Nowadays people are not only being perceived as resources but are now being
perceived as individuals with needs. Companies like IKEA are now focusing on
fulfilling these needs; however they do expect more flexibility from their
Information And Knowledge:
As there is not a distinct and strict hierarchy, information and knowledge are
highly shared and diffused. IKEA gives the employees the opportunity to gain
knowledge that is irrelevant to their work practices. This is being done in order
to increase the self awareness of its employees.
Purpose Of Work:
IKEA wants for its employees to perceive their work practices as a part of a
strategic life plan. The company offers benefits, incentives and opportunities for
the employees to gain self awareness and to develop themselves, in order for
the employee to reach their potential. Working for IKEA is not just on the basis
As there is no status and everyone in the workforce is perceived as equal, there
is no specific identification with a single person. As stated previously, the
president of IKEA flies economy class and uses public transport. As there are
no status symbols, majority of IKEA’s workforce conclude the same mission, in
order to achieve the same vision.
Since IKEA is perceived as a family-oriented organization, conflicts are being
perceived as normal and will be resolved in a constructive way. Conflicts are
being acknowledged by IKEA and they are aware that it is part of life. Just as
life is unhealthy and unheard off without conflicts, companies without conflicts
are not being perceived as normal and healthy.
Division Of Labor:
Co-workers and managers are not perceived as very differentiated. Decision
making will be delegated amongst both levels of the hierarchy.
As there are no status groups within the organization, Power is diffused
throughout the hierarchy levels. IKEA encourages empowerment amongst the
employees and as stated before, IKEA doesn’t want their employees to be
afraid to make mistakes.
The Emery-Trist Typology Of Organization Environments
The trends of the home product market constantly changes. Consumer tastes,
behaviors also differ according to time. This means it is vital that IKEA has an
organizational structure that is flexible enough to adapt to these ever changing
conditions. They achieve this by the way communication and information is
transferred within the organizational structure, i.e. there is no specific flow of
information up and down the hierarchy.
Mc Gregor’s theory X and Y
Concerning the motivating theories, when we start applying McGregor’s theory
of X and Y, we can safely state that IKEA perceives its employees as theory Y.
Employees are being perceived as individuals who want to work and who can
enjoy their work practices. The company believes that the employees have
needs that need to be fulfilled and that they want to develop themselves. IKEA
therefore provides the employees with benefits and incentives in order to give
the opportunity for the workforce to develop themselves and their careers.
IKEA is aware of the innate cognitive drives that are necessary for the
workforce to motivate themselves, and makes sure that these drives are being
fulfilled on the workplace.
The following innate cognitive drives exist:
Curiosity, Self Understanding and Sense-Making
IKEA is aware that curiosity exists in each living being, and therefore gives the
opportunity for employees to increase basic knowledge i.e. IT knowledge. This
increases self awareness amongst the employees which again lead to a better
understanding of the nature of the world around us.
Order and Meaning
Nowadays there is a high level of insecurity since long term contracts are not
being created as much as a couple of years ago. IKEA’s vision is different and
therefore invests in its personnel and want for each of them to feel secure, safe
Effectance or Competency
Power is a drive that each person desires and motivates, at least to a certain
extent. IKEA is a favour of empowerment because of the family-oriented
organization it contains and during decision making the company involves the
workforce which motivates the employees.
- Lecture Handouts, SHRM, IPAG fall 2007-11-27