BMS Essay 2

NAME
: AMIERA AMANI BINTI AHMAD
CLASS
: M14C
How cultural differences and ethical considerations affect leadership

and management style of an organization?
In the business world, cultural diversities is one of the main issues
managers find rather intrinsic to deal with especially multinational companies
that hire employees from all sorts of backgrounds. With employees coming from
different cultural backgrounds, comes different mentality and hence ethical
considerations on certain acts or conducts that the company does. Hence,
understanding cultural differences and overcoming the issues that arises from
them are some of the considerations managers should have when dealing with
their employees in order to increase organizational effectiveness. This essay will
therefore yield examples of how cultural differences, particularly in German and
France and different ethical considerations by the employees affect IKEAs
management approach and how the company tackles those issues as a whole.
IKEA s management style is described by non-Swedish members as
informal, open, and caring whereby hierarchy is not emphasized and in a typical
store there are only three levels of responsibility between the store manager and
the co-workers. On top of that, pragmatic approach to problem solving and
consensus-based decision making are also strongly imbedded in IKEA
management practice.
IKEAs management style was unfortunately perceived differently by the
Germans and in fact, dismayed by them. The Swedish notion of "taking on
responsibilities for yourself," the cornerstone of their work policy, is not
perceived in the same way by the Germans, who are very well-disciplined and
have a tendency to adhere very closely to precisely defined instructions in which
is not how IKEA works. On top of that, this disapproval also stems from the fact
the Germany carries out high power distance culture in contrast to Sweden,
resulting in discomfort among them when there is no differences in
organizational rank or social class in the workplace. As a result, IKEA experienced
low productivity and effectiveness in the workplace due to the lack of
cohesiveness among them.
On the other hand, the main challenge for IKEA management in France is
the French tendency to judge informality as a sign of weakness, or
indecisiveness. French people are accustomed to formal rules and strong
hierarchy and therefore prioritise individualism at work as they believe in
individual rights and personal achievement. The French views informality such as
the lack of formal job descriptions and written procedures as irritating. This has
therefore created misunderstandings and miscommunications among Sweden
managers and the local workers in the country.
To tackle those issues that come hand-in-hand, IKEA has modified and
improved their management and corporate culture to values-based leadership
which is increasingly becoming a cornerstone for building innovative businesses
of the future. IKEA has made efforts by having experienced IKEA co-workers work
together with locally recruited co-workers at countries besides Sweden and U.S
to support and ensure that the values and concept of the company are clear and
well-communicated to the workers while acknowledging their distinct cultural
backgrounds.
Besides that, the company has adopted a clear framework and goals with
structured rules and procedures in the workplace through its IWAY Code of
Conduct to maintain peace and unity amongst all its workers in all countries. This
has proven to resolve most of the cultural clashes and prevent
misunderstandings between workers of different cultures through a uniformed
yet flexible and fair corporate culture.
As we can see, differences in national culture are reflected in business
decisions, such as the change in their management style or approach. The
imperative step for every multinational company is to improve the alignment or
congruence between management practices and cultural contexts among all
countries to yield tangible business benefits. Cultural differences and should not
be a put out to businesses but instead a challenge that can help them to build
international competencies and hence gain a competitive advantage.

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: AMIERA AMANI BINTI AHMAD

How cultural differences and ethical considerations affect leadership

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