Beruflich Dokumente
Kultur Dokumente
JNKPING UNIVERSITY
L e a d e r s h i p C h a n g e s i n Fa m i l y
Businesses
A Case Study of IKEA
Borvander, Annelie
Oore, Jasmine
Praski, Trent
Samuelsson, Sandra
Tireus, Carl-Johan
Tutor:
Mllern, Tomas
Table of Contents
1 Introduction..............................................................
1.1
1.2
Problem discussion......................................................................
Methodology................................................................................
2 Theories.....................................................................
2.1
2.2
3 IKEA...........................................................................
3.1
Ingvar Kamprad...........................................................................
4 Analysis......................................................................
5 Conclusion.................................................................
References....................................................................
Introduction
1.2 Methodology
This paper is done based on the intention of giving the reader some
insight in what kind of problems a family business might encounter
when the founder who created culture and have the vision
disappears from the company. To get a deeper understanding of our
chosen topic we decided to focus our study on IKEA and Ingvar
Kamprad. Due to this our choice for the empirical research for the
project became an explorative case study. The case study approach is
appropriate to use in empirical studies with descriptive character. It
makes it possible to use different methods for the collection of data,
like interviews, direct observations and also secondary data like
historical material. (Lekvall & Wahlbin, 1993)
The research was carried out through two semi-structured phone
interviews and gathering of secondary data. Both interviews were
held with employees of IKEA International in Denmark. The first
interview was with Maria Tirus, Assistant to the CEO, and the
second with Ree-Yong Yuen, Developer in the Culture and
Competence Department. The reason for having semi-structured
phone interviews is that it makes it possible to have a more open
conversation while still having some basic guidelines to go from. The
secondary data were collected through books, Internet and other
papers written about the topic chosen. After all the information
gathering and searching the material was systematically compiled,
analyzed and interpreted.
According to Eriksson and Wiedersheim-Paul (1997) there are two
basic requirements that scientific document have to fulfil validity and
reliability.
Validity means how well the researcher succeeds to link the theory to
the empirical evidence, if the study succeeds to study what it was
intended to study. In our case it is important to point out that each
situation of leadership change in family business is different due to
the characteristics of the leader. This inflicts a problem; it is not
possible to write a complete guide for how to act when a strong
leader leaves the involvement of his/her creation. So not being able
to derive more than two interviews should not be seen as all that
negative. It is a paper devised to shed light on a still less travelled
road.
Reliability means that a measuring instrument should give reliability
and stability in the measuring results. A high degree of reliability
presumes that the result must be irrespective of the researcher. One
thing we did to obtain high reliability in the study was the use of
secondary data from Internet, books and other papers. Some
limitations that have to be remembered are the judgements and
ideas presented are highly personal and other people could interpret
the situation differently.
Theories
In this section, we are going to present some theories for later use in
the IKEA case, in order to give the reader an overall view on our
topic and a better understanding of our analysis. First, we will
discuss the culture and characteristics of family businesses and the
problems that can occur when there is a change of leader/owner in
these kinds of businesses. This will later be connected to IKEA to see
if and how they can handle these eventual problems. We will also
discuss the concept of transformational leadership and, in the next
section, apply it to Ingvar Kamprads leadership style.
to learn about the business and end up drifting without assuming any
authority whatsoever. Then, on the date of succession, the heir is
handed over all responsibility and is expected to run the company
successfully. A better approach is to give responsibilities to the
successor incrementally, and provide clear job descriptions for both
the founder and successor during the transition process (Aronoff &
Ward, 1992). The John Deere Company acted in this manner when its
leadership was shifted from and internal to an external position. The
successor had worked in the company for 32 years and had become
well accustomed to the corporate culture and was, therefore,
properly prepared for his leadership duties (Rose, 1995).
The owner him/herself may be at the root of succession problems in
family businesses, primarily due to reluctance to give up authority
held since the inception of the business. As noted in Ward, 1987, the
single most important factor in the success of any transition is the
business owner. Essentially, the owner is the key figure in making
the transition rough or smooth. Ward describes phenomena such as
semi-retirement, which refers to those owners who only take a few
months off from their leadership duties each year, and return of the
parent, where the owner returns to the business after some years of
unfulfilling retirement.
The founder may also experience obstacles of his/her own. Whether
the successor is from within the family or external, it is often difficult
for the owner to resist taking credit for the accomplishments of the
successor, and may even feel like a failure if the successor has
performed exceptionally well. In addition, founders may ask
questions about the business such as what is the value of this
business apart from me? How can I communicate what I do to a new
generation of management? How do I move functions to people?
How can I pass on my skills? How do I transfer my business
relationships? (Aronoff & Ward, 1992). Furthermore, they must
prepare to let go of power and confront the mortality issue in real
terms Consequently, it is important for founders to find new roles,
ones that match their unique capabilities and maximize their name
and reputation (Kets de Vries, 1996)
Reluctance of family business owners to step down has its
consequences on the business. These include confusion among
employees as to whom they should take orders from, and fear that
unclear leadership may mean a potential sale of the business,
resulting in a possible loss of work for the employees and, thus, lack
of motivation. The consequences are not only with employees, but
also with the successors who may have just become accustomed to
their new positions. They may feel reluctant to make changes,
knowing that the owner is always looking over their shoulders. In
fact the largest problem with successors, according to a father-son
study, is the letting go of the older generation (Ward, 1987).
Attributed Charisma
Individualized
Consideration
Intellectual Stimulation
Idealized Influence
Transformational
Leadership
Inspirational
Leadership
IKEA
Ingvar Kamprad founded IKEA in 1943. In 1954, IKEA had 15 coworkers and, since then, IKEA has expanded to include a number of
home furnishings stores and support companies around the world.
Today IKEA has more than 50 000 co-workers around the globe. In
1954 IKEA had an annual turnover of 2 billion USD, and in 97/98 this
figure was 7016 billion USD. The IKEA group today is a mixture of
many
different
companies
and
foundations
(http://www.ikea.com/content/).
Inter IKEA Systems B.V. is the owner and franchiser of the IKEA
concept. IKEA retailers worldwide operate on a franchise basis. Most
IKEA retailers belong to The IKEA Group, which also includes the
product development center, IKEA of Sweden AB and IKEA trading
and wholesaling companies. IKEA Group activities are co-ordinated
by IKEA International A/S in Denmark, while The IKEA Group is
owned by a charitable foundation in the Netherlands. IKEA of
Sweden AB is responsible for the entire IKEA product range on
behalf of Inter IKEA Systems B.V.. All products in the IKEA range are
distinguished by the label "Design and Quality, IKEA of Sweden"
(Ibid).
So what made this story possible? In a book by Stellan Bjrk (1998)
IKEAs success is explained as a triunity or a trinity the
entrepreneur, the business idea and the company culture. And just
like the holy triunity, which is born from the father, IKEA grew from
its founder, Ingvar Kamprad.
The entrepreneur
In 1986 Ingvar Kamprad left his post as CEO of IKEA and was
replaced by Anders Moberg. Today, Ingvar is still very active within
IKEA as a chairman of the boards within the IKEA group. At the age
of 73, Ingvar Kamprad can look back at an exceptional achievement.
The company went from owning one small furnishing shop in lmhult
in 1943, to more than 140 stores around the world today. This makes
him one of the worlds greatest entrepreneurs (Ibid).
The business idea
IKEAs business idea is to help create a better everyday life, which
means offering a wide range of home furnishings that combine good
design, good function and good quality with prices so low that as
many people as possible can afford them.
IKEAs strategy has always been a low-price one and this is why
customers keep coming back. According to Bjrk (1998), there is a
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him that whispers the employees names in his ear so he can address
them by their first names when they shake hands.
So how is this IKEA culture shown?
The dresscode of IKEA is often noted; nobody wears suits or ties and
this is one of, and probably the best known, visible ways that the
IKEA culture is shown. Bjrk (1988) recounts in his book some of the
tools the IKEA management uses to show the IKEA Way.
Position
Tool
Risks
Humility
Leisure-wear
Simplicity
First-name
each other
basis
Almost a uniform
with In some countries this is
too much intimacy
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Ingvar Kamprad
Analysis
15
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leader, in this case Kamprad, can maintain the culture within the
organization, this can also be seen as advantageous.
IKEA sees the cultural issues as their main concern for the future.
According to Tirus, Kamprad is seen as an asset when it comes to
keeping the culture alive. It is, according to her, important that the
culture stay alive, otherwise it is improbable that IKEA will survive.
Kamprad is the symbol of IKEA and the basis of the culture is that he
is the one that knows IKEA by heart. So how does IKEA look at the
future when Kamprad is gone? Who will take over his leadership
role?
Tirus says it is impossible to replace Kamprad and that IKEA is not
even trying. What they are trying to do is to keep the culture alive by,
first of all, documenting the IKEA history and everything that
Kamprad has done. There are several people working full-time with
the issues of the IKEA culture trying to keep records of everything
relevant. Another way of keeping the culture alive is through the
IKEA Way seminars. With these seminars, the management are
taught the culture and history of IKEA and are then certified to give
Mini IKEA Way seminars to their subordinates. In this way, all the
IKEA personnel get the opportunity to learn the IKEA way of doing
things.
Ree-Yong Yuen of the IKEA Culture department is responsible for the
international human resources. Her primary function in this area is
the management of the IKEA way seminars previously mentioned.
In an interview with Yuen, she explained that the seminars are a way
of ensuring that employees actually live the culture, rather than
simply reading or hearing about it. This is established through the
fact that each manager at the seminar is allowed two questions for
Kamprad. Furthermore, these seminars allow the managers to gain a
clear vision of the companys culture and understand the companys
business ideas, which they are then able to translate into their
respective branches.
In addressing the question of who will take over Kamprads
leadership role, Yuen states that no definite answer has been given
as of yet, although the CEO and the cultural and competence
manager will play crucial roles. Also, no specific plans have been laid
out in the event of Kamprads death.
Another important factor for keeping to culture alive is, according to
both Tirus and Yuen, in recruiting the right people from the
beginning. The people that start working within IKEA have to share
the same values as the existing culture. It is very important that the
future personnel share values like cost-awareness and honesty. It is
also important that the existing personnel act as good role models
for the incoming employees.
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Conclusion
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References
Aronoff, C. Ward,J. (1992), Family Business Succession: The Final
Test of Greatness, Business Owner Resouces, Marietta, Georgia
Aronoff, C. & Ward, J. (1992), Preparing Your Family Business For
Strategic Change, Business Owner Resources, Marietta, Georgia
Bass, B.M. & Stogdill, R.M. (1990), Bass & Stogdills Handbook of
Leadership: theory, research and managerial applications, Free
Press, New York
Bjrk, S. (1988), Hur kan han f 12 000 anstllda att tnka
smlndskt?, Ledarskap Ekonomen, nr.3 mars 1988
Bjrk, S. (1998), IKEA, Svenska Frlaget, Stockholm
Dyer, G. (1986) Cultural Change in Family Firms, Jossey-Bass
Publishers, London
Engman, K. & Torstensson, L. (1998) How Rapid Organizational
Growth Can Affect the Corporate Culture, Jnkping International
Business School
Eriksson, L. & Weidersheim-Paul, F. (1997), Att utreda forska &
rapportera , Liber ekonomi, Sverige
Friedman, M. & Friedman, S. (1994), How to Run a Family Business,
Betterway Books, Cincinnati, Ohio
Friedman, S. (1998), The Successful Family Business, Opstart
Publishing Co., Chicago
Johansson, S-E. & Falk, M. (1998), garskiften i Fretag, Ekerlids
Frlag, Falun
Kellerman, B. (1984), Leadership- multidisciplinary perspectives,
Prentice Hall, New Jersey
Kets de Vries, M. (1996), Family Business: Human Dilemmas in the
Family Firm, International Thomson Busines Press, London
Lekvall,
P.
&
Wahlbin,
C.
(1993),
marknadsfringsbeslut, IHM, Gteborg
Information
fr
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Department
of
Electronic sources
http://www.ikea.com/content/
Personal Interviews
Tirus, Maria. Assisant to the CEO, IKEA International, Denmark.
Yuen, Ree-Yong. Developer, Culture and Competence Department,
IKEA International, Denmark. (0045 49 155000)
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