Managing cultural differences in MNE: a case study on IKEA in China and their staffs

Abstract: Course: EFO703 Bachelor Thesis in Business administration 15 ECTS University: Mälardalen University School of Sustainable Development of Society and Technology, Västerås Authors: Pham Ngoc Binh & Xue Hongyu Examiner: Ole Liljefors Tutor: Per Nordqvist Research question: How has IKEA managed cultural differences regarding their staffs in China? Purpose of the research: The purpose of the research is to describe and analyze the managerial practices of IKEA in China under the influence of Chinese business culture in order to figure out the flexibility in the strategy of the company in the effort of retaining the standardized structure but still be able to adapt to the culture different from its background. Method: The deductive approach was used in this paper and the empirical data was gathered with a qualitative method. Both primary and secondary data was used in order to fulfill the purpose of our thesis. The empirical findings represent the primary data which was gathered through both personal interviews and emails with managers in IKEA Sweden and China, meanwhile the secondary data was gathered from literature, scholarly journals, IKEA’s website and databases of ABI. Conclusion: IKEA is a company with a strong culture base; the company follows the standardized strategy from both marketing perspectives as well as human resource management perspective. This gives IKEA competitive advantages to make them be different when IKEA enters to the new markets as well as is the tool for IKEA to strive for company mission and business idea. However, IKEA has shown their awareness to cultural diversity management. Necessary adjustments have been done in the IKEA Way in IKEA in China in order to adapt to local culture whilst the IKEA’s values are preserved still.