The Effects of Diversity on Multinational Organisations : An exploratory case study investigating the cross-cultural management and organisational culture of IKEA

University essay from Umeå universitet/Företagsekonomi

Abstract: Nowadays, multinational organisations face the challenge of managing a diverse workforce. The role of diversity has become increasingly important in a world that is influenced by the outcomes of globalisation. Organisations operate worldwide and therefore recruit their employees from all around the world, which leads to diverse workforces. It is essential for an organisation to be aware of differences within the workforce and to manage diversity actively in order to benefit from its positive potential. The purpose of this study is to analyse the impact diversity has on organisations such as IKEA. Especially how the everyday business life is affected by diversity and if the positive or negative aspects prevail. Further, it is investigated how cross-cultural management can be used as a managerial tool to influence and adjust diversity in a certain way. The organisational culture of an organisation was identified as the third important cornerstone in that relation. The researchers presumed a correlation between those three phenomena. The aforementioned assumptions led to the construction of the following research questions for this study: What impact does diversity have on an organisation such as IKEA? and How does cross-cultural management influence outcomes of diversity and what role does organisational culture play in that context? To answer these research questions, an exploratory study was carried out. An abductive approach was chosen that allowed for adding new theories throughout the research process. The data was collected through nine semi-structured interviews with experienced IKEA managers. Additionally, scientific articles and books were used as support to develop theoretical and practical contributions to the fields of diversity, cross-cultural management and organisational culture. The study revealed that diversity has a large impact on organisations such as IKEA. Furthermore, a correlation between diversity, cross-cultural management and organisational culture was identified. The findings led to the conclusion that diversity within an organisation creates the need for cross-cultural management. Organisational culture, in that context, builds a foundation for values and perceptions that are shared by the workforce. Therefore, a strong organisational culture helps to utilize the positive aspects of having a diverse workforce. In the case of IKEA, successful organisational socialisation and institutionalisation function as tools for preserving institutional memory, in terms of values and ethical business behaviour.

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