The Diversity Management Paradox in Globalization – the Swedish Ikea Way Essay

The diversity management paradox in globalization – the Swedish IKEA way
Steffen Korsgaard, Morten Rask and Jakob Lauring Department of Management, Aarhus School of Business

IKEA, the global business of retail home furniture and house ware, is often used as a prime example of a firm that have had a rapid internationalization process (Hollensen, 2007b). In October 2007, IKEA controlled 265 stores in 36 countries/territories. The IKEA Group itself owns 235 stores in 24 countries. The other 30 stores are owned and run by franchisees outside the IKEA Group in 15 countries/territories (IKEA, 2007b). The IKEA concept and the IKEA trademark are owned by Inter IKEA Systems B.V. in the Netherlands. Inter IKEA Systems B.V. is the franchiser for all IKEA stores, both within and outside the IKEA Group (IKEA, 2007a), which means a franchising contract authored centrally at IKEA controls all business processes in all stores in all countries (Hollensen, 2007b). IKEA is a king of globalization compared to the many local competitors in the furniture industry (Capell et al., 2005; Hollensen, 2007b), if we understand globalization as a process leading to greater interdependence and mutual awareness among economic, political, and social units in the world, and among actors in general (Guillen, 2001). As such globalization means that big global players like IKEA are exposed to an increased global awareness and interdependence, which is recognised when IKEA promotes the reason for considering IKEA as a future employer. This can be seen at their global website under the title “why work at IKEA?”. In the last point of nine, IKEA explains the background for their diversity management practice: “We encourage an environment where people of different views, age, nationality, gender and ethnic background feel welcome. We believe that a diverse workforce will improve business results, strengthen our competitiveness and make IKEA a better place to work” (IKEA, 2006). This reflects the high...