2. IKEA’s
&
Innovative HRM Practices
Work Culture
Presented by
Jaskaran, Prithvi, Stuti,
Sona, Prashant, Sweta

3. Content
1 Company Background
2 Organizational Structure
3 Products
4 HRM Practices
5 Values
6 Complaints
7 Work Culture
8 Reasons Why People Stay @ IKEA
9 Best Employer
10 Values Offered At Workplace
11 Payoff
12 Sustainability Initiatives
13 Culture & Innovation
14 Some Innovative Products

4. Company Background

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IKEA is a Swedish company registered in
the Netherlands that designs and
sells ready-to-assemble furniture
appliances, and home accessories.
Founded in Sweden in 1943 by a 17-yearold Ingvar Kamprad.
The first IKEA store was opened
in Älmhult, Småland in 1958.
Name is an acronym of Ingvar
Kamprad, Elmtaryd (the farm where he
grew up), and Agunnaryd (his hometown
in Småland, South Sweden).
Furniture work is often associated with
an eco-friendly simplicity.
The firm is known for its attention to cost
control, operational details, and
continuous product development,
corporate attributes.
LEIDEN in the World Map
Ingvar Kamprad

6. Global Expansion
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First stores outside Sweden were opened in Norway (1963)
and Denmark (1969).
In the 1970s, the first store outside Scandinavia opened in Switzerland (1973)
followed by Germany (1974)
Later that decade, stores opened in other parts of the world, such as Japan
(1974), Australia and Hong Kong (1975), Canada (1976), and Singapore
(1978)
IKEA further expanded in the 1980s, opening stores in countries such as
France and Spain (1981), Canada (1982), Belgium (1984), the United States
(1985), the United Kingdom (1987), and Italy (1989)
Germany, with 44 stores, is IKEA's biggest market, followed by the United
States, with 37 stores
The first IKEA store in Latin America opened on February 2010 in Santo
Domingo, Dominican Republic.
With 70 years of experience IKEA is serving in 42 countries to approx 552
million customers

7. IKEA Numbers

8. Recent Expansion
•Doha, Qatar (Mar 2013)
•Johnson, Kansas (May 2013)
•Lithuania, Baltic (Aug 2013)
•Missouri, US (Dec 2013)
Location
Worldwide
Stockholm Kugens Kurva,
Sweden, 55200 m2
Sanghai Baoshan,
China, 55032 m2
Montreal, Quebec
Canada, 43636 m2
Sanghai Pudong Beicai
China, 49400 m2
Tempe, Sydney,
Australia, 42000 m2

9. Co - Workers
Co – workers per function
Co – workers per region
Retail
106,500
Europe
99,000
Purchase & Distribution
14,500
North America
18,000
Industry Group
18,000
Asia & Australia
11,000
Total
139,000
Russia
11,000

11. Ownership Structure

12. Shops & Factory
INGKA Holdings
(Netherlands)
Stitching INGKA Foundation
(Netherlands)
Franchise &
Trademark
Inter IKEA Systems
(Netherlands)
Inter IKEA Holding
(Luxembourg)
Interogo Foundation
(Lichtenstein)

14. Products

15. IKEA’s around 9500 products, that are identified by one word
(mostly Scandinavian)
Articles
Name derived from
Upholstered furniture, coffee tables, rattan
furniture, media storage, doorknobs
Swedish Place names
Beds, wardrobes, hall furniture
Norwegian Place names
Bookcase ranges
Occupation
Bathroom articles
Scandinavian lakes, bays and rivers
Kitchens
Grammatical names
Chairs, desks
Men’s names
Garden furniture
Swedish Islands
Lighting
Terms from music, chemistry, seasons
Children items
Mammals, birds, adjectives
Kitchen utensils
Spices, herbs, fish, mushrooms, berries
Curtains, carpets, bed accessories
Mathematical & geometrical terms

16. Guess What ??

17. DUKTIG (well-behaved)
KASSETT (cassette)
BILLY (Swedish Male Name)
DINERA (to dine)
SKARPT (Sharp)
OSLO (capital of Norway)

18. Funny items !!

20. Other Businesses

21. Restaurants And Food
Markets
IKEA Family –
Loyalty Card
Samaland - The Play
Area
IKEA Mobile Catalogue
BoKlok – Houses And
Flats
Family Mobile

22. IKEA’s Vision
“To create a better everyday life for the many
people”

23. HR Management Practices
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People – Employees, customers and the community.
Philosophy subscribed to the belief that employees were
more productive and committed when the company
took care of them and their needs; paternalistic stance
Promoted employee empowerment
Grievance procedure “VOICE”- company-wide survey
Encountered a problem – Application
was standardized, uniformly applied policies to all
Didn’t work well – differing needs of employees;
maximum benefit not being derived
Late 1990s – Spiers-Lopez became HR head at IKEA
North America; realized that greater flexibility was
needed
She conducted comprehensive employee surveys, asked
detailed questions about their needs, expectations,
preferences.
Survey showed that although all IKEA’s employees were
committed to IKEA work culture, each had different
needs.
Spiers-Lopez

24. Flexibility Policy
• Initiatives that supported ‘life balance and
diversity’ were created
• Flexibility – foundation of IKEA’s HR
management philosophy.
• Eg - 1. Flexible six-holiday schedule
• Eg - 2. Flextime introduced – employees to
choose when to start and end workdays,
subject to requirements of store or office
• Condensed work-weeks, job sharing,
telecommuting, video conferencing also
introduced
• IKEA allowed employees to coordinate
schedules with spouses’ work hours, in
case of small children

25. Flexibility Policy(contd.)
• Willing to transfer employees between
locations if there was a matching opening
• Aim of the policy was to ensure employees
didn’t have to sacrifice careers due to
personal commitments
• Spiers-Lopez said “If an IKEA co-worker
needs to take time off to find a nursing
home for an aging parent, be home to kiss
their child before bed, or telecommute to
better juggle caring for a newborn, they can
actually do that without feeling guilty or
worrying about risking their career
aspirations”
• Led to employee motivation and improved
work life quality

26. Other Initiatives
• Substantial investment in making stores
more comfortable during nonworking hours
1. Quiet rooms to pray or meditate
2. Lactation rooms for nursing mothers
3. Onsite childcare facilities
4. Entertaining rooms to receive visiting friends
and family
5. Resource rooms for employees to access
computers to browse IKEA approved
websites containing health information, selfimprovement tips, forthcoming training
details, development programs, job openings,
etc
• Also received substantial discounts at IKEA’s
onsite restaurants

27. Benefits Policy
• Full medical and dental insurance to all
employees working 20 hours or more per
week
• Discounts for weight reduction, smoking
cessation services, free subscription to health
& wellness magazines
• Parental benefits – 7 weeks’ maternity leave
with full pay for women; men and adoptive
parents got 1 week with full pay
• Employees encouraged to take a vacation
every year and could carry vacation time to
the next year
• All employees were eligible for 15% discount
on IKEA merchandise
• At annual ‘Coworker Appreciation Day”- upto
40% discount on store purchases depending
on the performance of their store

28. Additional Benefits
• Tuition reimbursement for graduate and
undergraduate courses for all employees regardless of
how many hours they worked-contributed to
continuous development of employees
• Employees were encouraged to take up study of
languages and pursue courses of potential application
in retail sector like accounting, interior design, etc
• IKEA paid 75% of the course fee upfront and
remaining after the course was done
• Gave special bonus of $1000 to employees who stayed
with the company for one year after completing the
course
• Policy also benefited IKEA as it required skilled
candidates for future promotions
• Not just full time but part timers were also eligible for
the program
• IKEA didn’t lay minimum service conditions for
employees to become eligible for benefits

29. Important Elements of IKEA’s HR Management
Policies & Their Effect on Employee Morale
1. Flexibility in all areas :
• Employees could achieve better worklife balance
• Enhanced trust in the company
• Greater productivity
2. Benefits policy :
• Greater organizational commitment
and job satisfaction
• Greater perceived organizational
support – IKEA cared about employees’
well being- onsite childcare facilities
provided by IKEA
• Low employee turnover
• Greater employee engagement –open
communication, enhanced motivation
and commitment

30. Employee Development
• Policy on training and development
– Employees could use several resources
to sharpen their skills and gain knowledge
– Had specialized training programs
in various areas
• Mentoring
– Launched a program called ‘Partners for Growth’
– Prepare them for greater responsibility, leadership needs
– This made employees supported helped them grow
• ‘Paddle Your Own Canoe’
– Take responsibility for their own careers
– Worked with mangers to know the skills required
– Training done according to the requirements

31. • I Want Your Job
Train with the person whose job
they want
• The development programs were
designed so that IKEA can have a
ready pool of candidates for future
• All the employees were given the
chance to advance
• Programs were two way activities

32. • ‘Open IKEA’- told employees of new job openings
within IKEA
• Openings were put on websites, advertised
through catchy stickers on mirrors, soft drink
machines
• ‘Enterprise’- E-recruiting system which reduced
the delays in hiring at global level
• Responsibility of hiring recruits with store
managers

33. Employees Chosen
• Practical skills
• Ability to understand and get along
with other people
• Ability to ask questions and give
inputs
• Encouraged employees to question
the management and express their
ideas and belief
• Co-workers who had mastered their
current jobs were encouraged to
seek new challenges
• Job enlargement or enrichment
• Value fit was the selection criteria

34. • ‘Why Savers’- ideas to improve store
• The company even gave an
advertisement inviting ‘Why Savers’ to
join the company
• ‘Express Yourself’- share companies
concerns and complaints with Spiers
Lopez
• This improved the morale within the
company as she responded to their
complaints personally
• It had a comprehensive
communications system for employees
like IKEA Radio and intranet.
• It also reached employees through
printed material as well

35. IKEA’s Values
Togetherness and enthusiasm
Constant desire for renewal
Humbleness
Willpower
Cost consciousness
Leadership by example
Diversity is part of life
Simplicity

36. Complaints Against IKEA
• In USA- workers complaint of
eliminated raises, a frenzied pace,
racial discrimination, mandatory
overtime
• In Turkey- they were against union
forming by its employees, they
terminated employees who were
unionising and put pressure on others
to quit.
• In France- it caused an outrage as it
spied on its employees

37. Work Culture
“At IKEA, we think of ourselves as a family. Just as one would
look after their parents, siblings or children, our coworker
family is encouraged to and excels at supporting and taking
care of each other.”
-Spiers-Lopez

38. Work Culture
• IKEA called all its employees, regardless of rank,
“coworkers”.
• To promote open communication, IKEA adopted
a structure with no hierarchical distinctions.
• Employees were encouraged to express their
opinions and ideas directly to the top
management .
• Employees were
rewarded with high
level of empowerment.

39. Work Culture
• Cost consciousness was deeply embedded in IKEA’s
culture.
• IKEA’s culture promoted diversity.
• Openness to change and adaptability were stressed at
IKEA.
• Week-long orientation program
in Sweden on the “IKEA WAY”.

40. 8 Reasons People Stay With IKEA
We hire the right people.
They’re inspired!
Making mistakes is okay-really.
An up, Down and sideways career.
Sweden today, China tomorrow.
Egos parked at the door.
The rewards of a never ending job.
A parent friendly environment.

42. Best Employer

43. Awards & Achievements
• In 2005, 100 Best
companies to work for In
Fortune magazine.
• In 2004, listed as 100 best
companies for Working
Mother
• Lowest attrition rate in the
US retail sector.
• In 2000, largest privately
held companies.

45. Payoff
• IKEA involved substantial costs
• But payoff outweighed the costs due to low
employee turnover
• So this reduced the cost
of repeated hiring and
training cost.

46. Sustainability Initiatives
• Non-renewable material
used at IKEA
• Recycling of nonrenewable materials
• Investment in Renewable
energy
• UTZ- Certification
programme for sustainable
growth of coffee, cocoa
and tea.
• Better Cotton Initiative
(BCI)

48. Culture & Innovation at IKEA

49. • Ikea has great products, no doubt.
• But that is not the only reason
why Ikea is successful.
• Ikea has a successful concept of
coming up with innovative and
new products.
• This is does successfully by its
culture, which fosters and
promotes innovation.

50. • There is absolutely an expectation at IKEA
that, with the flat organization structure,
everyone contributes. Everyone is expected
to contribute their ideas. It doesn't matter
what the idea is, it is simply important that
everyone contributes. This way, more ideas
come up and this helps in more ideas
coming up.
• Ikea is a very process-oriented company,
with three basic processes: creating,
communicating and selling the homefurnishings offer.
• Each of these three processes has a matrix
structure, and someone called a matrix
partner is responsible for “communicating
the offer” in every country in the world.
Since everyone is equal, and constant
communication, ideas spread faster.

51. • Ikea operates by itself
when it comes to product
development. It is
completely independent,
and is not involved with
any external sources.
• Ikea tries and explore new
avenues, and tries to
operate outside standard
operating procedures. By
doing so, IKEA manages to
hold and maintain its
culture of innovation.

52. Store Layout & Innovation
• Everybody has the same desk
arrangement. This leads to an
accessibility that is rarely found in
companies. Even the CEO shares
his/her office space with other
employees, thus making it an
extremely open policy.
• Ikea has a dedicated gathering
space. By doing so, it ensures the
free flow of ideas and thoughts,
which otherwise would not occur as
easily.
• A new concept called ‘huddle
rooms’ has been introduced in IKEA,
wherein meeting rooms can be
arranged for spontaneously and
without prior permission. This
promotes easier and spontaneous
flow of ideas and thoughts.

53. Innovative Products by IKEA

54. IKEA Bus Terminals

55. Adhesive-Free Furnishings

56. Side Table Sofas

57. The Table Vase

58. Severed Seat Storage

59. THANK YOU