International Human Resource Management in Ikea

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Санкт-Петербургский Государственный Университет Высшая школа Менеджмента

International human resource management in IKEA
Final Group Project

2013
Contents

Description of the company2
IHRM strategy5
IHRM instruments6
Recruitment6
Selection7
Expatriate issues8
Development9
Performance appraisal9
Trainings10
Compensation system11
Special points in IKEA’s IHRM Practice13
Problems and recommendations14
SWOT-analysis14
Problems15
Recommendations16

Description of the company
IKEA is a privately held, international company that designs and sells ready-to-assemble furniture such as beds, chairs, desks, appliances and home accessories. The company is the world's largest furniture retailer. Founded in Sweden in 1943 by 17-year-old Ingvar Kamprad, who later became one of the richest people in the world, the company's name is an acronym comprising the initials of the founder's name (Ingvar Kamprad), the farm where he grew up (Elmtaryd), and his hometown (Agunnaryd, in South Sweden). The company is known for its modern architectural designs on various types of appliance and furniture, often associated with a simplified eco-friendly interior design. In addition, the firm is known for the attention it gives to cost control, operational details and continuous product development, allowing it to lower its prices by an average of two to three percent over the decade to 2010, while continuing its global expansion . The company originated in Sweden. However it is currently headquartered in Delft, Netherlands. IKEA distributes its products through its retail outlets. It has 332 stores in 38 countries. In fiscal year 2012, its revenues exceeded $27 billion, making it the bigget seller of furniture in the world. The IKEA website contains about 12,000 products and is the closest representation of the entire IKEA range. IKEA is the world's third-largest consumer of wood, behind The Home Depot and Lowe's. On the whole, the bulk of IKEA's revenues is received from the sales of furniture, which is the company's main business area. IKEA manufactures its furniture as well as sells it in retail outlets, trying to cut costs and make its porducts affordable to as many people as possible. Appart from the furniture itself IKEA is known for its thouroughly designed stores, comfortable and inexpensive restaurants and food markets, Småland (a play area for children) and different other features that can be met in any IKEA retail outlet. Due to the variety of products and services presented company has to employ thousands of employees over the world, starting from the workers in the plants and ending with cashiers in the stores. Business strategy

The main idea of the company – to offer a wide range of beautiful and functional products for the furnishing of the house at such low price, so that anyone could have an opportunity to buy it. IKEA strives to develop at the expense of expansion of goods assortment, low prices, high quality, advertising products and improving customer service. IKEA seek to reduce costs through introduction of value – simplicity and constant awareness of the costs. For IKEA people play the key role, people, who hold their business and values of the company. Sustainable development is an essential part of IKEA business.

Organizational structure

Organizational culture
IKEA organizational culture is described as informal, open and caring. Co-workers at all levels are encouraged to take initiative and making mistakes is considered a necessary part of “learning by doing”. Managers are expected not only to share information with co-workers but also their knowledge and skills. IKEA wants their co-workers to feel important; they can express their ideas, and should feel responsible for improving the way things are done. While working with staff of the company IKEA follows the policy of equal opportunities, this means that company is trying to build collaboration on the principles of...
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