Ikea Human Resource Management in Chinese Market

Topics: Human resource management, Management, IKEA Pages: 7 (2274 words) Published: July 6, 2013
Candidate Number: 1305248
Year: 21st Mar 2013
Course Code: MN5131
Course Tutor: Dr Yu Zheng
Assignment No: 1
Degree Title: MSc International Management
Question No. and Title: IKEA Human Resource Management in Chinese Market Declaration of Academic Integrity: I promise that submitting this work acknowledges that the assignment is entirely my own work and has not been submitted previously for another course or programme at RHUL or any other institution.

When the art of business management has been concerned by IKEA, the concept “Simplicity is beauty” is popular in IKEA’s company culture. For an international enterprise, IKEA have to seek global expansion and entry foreign market. It has founded that IKEA is perfect in every aspect when it is reported or researched. For instance, IKEA makes some complicated enterprise management into simple principles: according to the consumption demand to design product, or created low price but do not spare significant efforts in reducing costs, created experiencing-style sales terminal and make the global supply chain running smoothly. This paper will focus on the human resource management of IKEA in Chinese market based on the case study of internalizing a brand across cultures: the case of IKEA. (Veronika V and Leslie, 2011). In the early 1980s, human resource management has been proposed by Beer and his colleagues at Harvard Business School. It is stated that departure from the previous views of the nature and purpose of personal management, with a set of prescription for managers to connect the effective human resource management, mostly, with the condition of corporate success and broader positive consequences for society (Beer et al. 1984). With the increasing speed of retail internationalization, the issue of brand identify across borders becomes more and more important. IKEA should communicate their brand visions, values and brand promise to all employees in different locations of stores and ensure among all stores or internal store of employees share the brand understanding (Burt and Sparks, 2002). This paper we argue that human resource management of IKEA in Chinese market. Firstly, the factors which cause problems in Chinese market will be discussed, meanwhile, how IKEA improve its capacity of control those problems through supplier and customer relationship management will be discussed as well. Secondly, IKEA has its own human resource management theories which focus on employee performance and individual ability evaluation. This paper will display those performance methods and express how the performance evaluation used by IKEA for specialized individual characteristic. Finally, conclusion and suggestions are discussed.

Own problems and solution
Chinese market is one of foreign markets of IKEA. In 1998, IKEA entered Chinese market and opened only two stores in Shanghai and Beijing but it has brought tremendous influence. People like to go shopping in IKEA because the fashion factor, even if for people living in cities other than Shanghai and Beijing (IKEA History). However, IKEA has its own problems in Chinese market (IKEA Global Marketing). The first problem is price. IKEA household products got prevailed market reflection in European market by the low price strategy, while this strategy is not suitable in Chinese market. For example, most of Chinese do not willing spend several hundred yuan on a small wooded table or around a hundred yuan on a paper lampshade. It has reported that IKEA’s purchase volume in Chinese market occupied 18% of the global amount. It greater exceeded all other countries of IKEA’s foreign market volume. That is, Chinese market is a great potential market for IKEA. The second trouble is related to the different culture between Sweden where IKEA has been founded and China, which is position of IKEA. It is remarkable and not easily compared with the similar...

References: 1) Veronika V. Tarnovskaya, Leslie de Chernatony, (2011),Internalising a brand across cultures: the case of IKEA. School of Economics and Management, Lund University.
2) Beer M, Bert S, Paul R Lawrence, D Quinn Mills and Richard E Walston, (1984)
3) Burt, S. and Sparks, L. (2002), Corporate branding, retailing, and retail internationalization, corporate Reputation Review, Vol. 5 Nos2/3, pp. 194-212.
6) Lewis, E (2005), Great IKEA. A Brand for all the People. Cyan Books press, London.
7) Edvardsson, B., Enquist, B
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