International strategy Essay Example | Topics and Well Written Essays - 1500 words

International strategy - Essay Example Disadvantages of Scandinavian business culture From the case study, it is clear that IKEA has been following a Scandinavian business culture, even in most of its international assignments. Scandinavian business culture is dominated by a direct style and more open culture. Conversations are more liberal and personal, and they prefer not asking questions after meetings or presentations. It should be noted that this culture is opposite to America or Asia, where business meeting are more formal and structured (Warner and Joynt, 2002). A typical Scandinavian culture gives high importance to consensus in every decision they take. Hierarchical structure is more or less flat and decision making can be sometimes very lengthy, because agreement has to be taken from every member of the business. Ingvar Kamprad, the founder of IKEA followed a similar culture. His distinctive style and objective of making a difference in the lives of common people drove his expansions strategy. He followed a non- conformist philosophy and looked at all facets of his distribution strategy, in order to focus and innovate (Politis, 2000). During the initial days, the objective of the company was to keep the costs low, and most of the strategies were made keeping this objective in focus. Supplier relationships were made reciprocal so that the company is above to sell whatever they have produced. Managers were expected to keep caring and close relationships with their subordinates and co-workers. Interactions between the co-workers and managers were characterized by egalitarianism and informality. In the following sections, IKEA business cultural and strategies will be discussed which the company implemented in different international assignments. While the culture of IKEA was a strong factor in contributing for the success of the company in its homeland, the same culture caused many issues and roadblocks when the company went for expansion strategy (Hofstede, and Minkov, 2010). The business cult ure of the host countries was vastly different from the way IKEA was doing business and caused cultural as well as business conflict (Huettinger, 2008). In Germany managers do not call each other by their first names as it is perceived as disrespectful. Business culture in Germany is mostly authoritative where managers takes order from bosses and are not supposed to perform any activity taking their own initiatives. This is vastly opposite from IKEA’s normal way of doing business. Thus, when IKEA entered Germany, its collaborative and opted business culture did not go well with the strict authoritarian German business culture. IKEA’s preference for informal relations between managers and co-workers was misinterpreted as disrespecting the boss and undermining the traditional rule of respecting authority. Also, the business culture is more adaptable to detailed work structure and a lengthy procedure, which is opposite IKEA’s cultural of minimalist bureaucracy and making things less burdensome. Similarly, in case of France, the informal culture of IKEA was interpreted as a sign of indecision and weakness. Also, in IKEA, recognition of status was not considered important, which again was interpreted as a negative sign in Germany. Even though the company was able to reduce communication problems arising in most of its international counterparts,