Analysis of Human Resource Strategy of IKEA Company-India - Case Study Example

INSTITUTION DATE NAME ANALYSIS OF HUMAN RESOURCE STRATEGY OF IKEA COMPANY-INDIA IKEA is a company that makes furniture brands, and the company is now distributed to more than 41 countries globally. The company has been in operation for an extended period and their main aim is to ensure that people are happy, and they are enjoying their lives (Perrot, B.E., 2015. Pp 41-51). The human resource management has been an integral part in the running of the various branches of IKEA Company. Good management has resulted in a lot of success in this business. The HR strategies has enabled them to win several awards in recognition of best performing NGO’s (Menta et al 2015. N.p). India has set legislative laws that any organization or company settling in the area has to abide. The laws include; Mechanism of disputes settlement The company should have a sound method of settling disputes. Disputes could arise between the customers and the workers, workers and workers or between workers and managers. The act ensure collect mediation, reconciliation and arbitration means are applied (Paul. S.J.,2015. Np). Collective bargaining Collective bargaining aims at settling the already developed disputes. The conflicting parties can resolve their issues directly without involving the third party. They can resolve through legal means where government policies are used. Investigation In case of industrial dispute, the government has recommended for court procedures to be followed in finding justice to the innocent parties. The act describes the court procedures to be employed. Regulation of contract labor India government gets into agreement with the company intending to start operating in the country. The intention of the act is to control the companies from exploiting their citizens or dominating their markets where they will suppress the local markets. The contract bind the companies to operate under the agreed period only (Galpin et al.,2015. Pp 1-12). Employment injury, Health, and Maternity Benefit The policy covers those employee working with the companies. In case of injury or accident during carrying out job activities, the individual gets compensated by the company fully. Also in case one dies during job activities the family is compensated. Nursing mothers are also assured of a maternity leave and paid for the days she is out of job. Hospitalization benefits are also in this laws to protect their citizens( Greer et al., 2015. Pp 2569-2593). Retirement benefits The policy protects those aged people retiring from the company. The policy is designed depending on the duration which the person works for the company. Those who have worked for long periods are assured of lump sum retirement benefits than those who have worked for a short period and any company should adhere to this act (Pollit, D.,2014. Pp 15-17) Women labor and the law Women are not actively involved in job participation or involvement in India. As a result, the government has formed laws to ensure women are equally involved in jobs as well as men. The act protect the women from abuse and misuse during performing job activities. Any sexual harassment is forbidden by the law( Perrot, B. E., 2015. Pp 41-51). Elimination of child labour The act protects children from being employed. Anyone below 14 years of age should not be employed by any company as it will be considered as the child labour (Kumar et al.,2014. Pp 12-15). Any job activity that corrupts the morals, safety or risks the health of young people are against this law and should be avoided (Stephen, N., 2013. Pp 40-42). Fair work act The fair work act creates the conditions of employment and act as a guideline for the employee and the employer. India has set this laws which asks for any company to provide their workers with terms and conditions of employment before engaging them. The act describes the rights and responsibilities of employees, employers and the organization. This act is required to be an agreement between the parties involved where the India government follows the compliance and the enforcements of this act in the company. the act also describe the form of penalties administered to those companies or individuals that violate this laws. Minimum working standard in India India regulates the labour offered to their citizens. They have set laws and policies to protect the workers. The legislative acts provide the rights of the workers not to be misused by the companies. The act state that there should be good interaction between employers and the employees. It commands the companies to keep attendance records, accounts the wages paid and give annual returns. The laws guide on how to handle workers from the list to the highest critical factors in the company. They have their inspectors who regularly visit the companies and in case of violation of this laws, companies are penalized (Greer et al., 2015. Pp 2569-2593). Comparison of fair work act and working standard those in India and Sweden In India the laws are meant for minority number of workers but in Sweden it si found the laws to protect employees is meant for all the workers. The employees in Sweden are informed in advance about any factor that can affect their employment. The Sweden laws unlike in India offer some payment allowances to the unemployed people in the region. The act in Sweden ensure all the employees are been paid fair wages and they are working in good working environments. Any organization or company settling in Sweden has to sign the labour laws and the work environment regulations which contains the work ethics ( Greer et al., 2015. Pp 2569-2593). The analysis of the strategies is carried out using the SWOT analysis. The products sold by the IKEA Company are ready to use and are usually flat packed for easy mobility (Sheykhan et al., 2014. Pp 313-320). Strengths The company has a clear vision of adding value to their customers irrespective of their place of origin. It forms a well-defined strategy where they value their consumers more than any other factor. They have clear concepts in the manufacture of their products that are easy for their customers to assemble. The cost leadership strategy has enabled the company to be among the best performing furniture retailers (Sheykhan et al., 2014. Pp 313-320).. The company uses key performance indicators which ensure maximized use of raw materials and maintaining good relationships with their customers. Weaknesses The company is unable to control standards across all location in the country due to its size and diversity in several areas of the country. They are also unable to maintain uniformity of the quality of product they offer around all regions (Sheykhan et al., 2014. Pp 313-320).. The company is highly focused on cost leadership in all regions. It is difficult to always provide quality products at subsidized prices as it result to losses to the company. Opportunities The company has chances of getting more customers interested with their products due to the increased market gap. They produce furniture which are environmentally conscious and many customers are after purchasing such products (Sheykhan et al., 2014. Pp 313-320).. Due to their strategy on cost leadership, more customers found it worth trading with the company, where they get products worth their money but at the expense of the quality. There are several emerging markets which are creating a market gap and a pool to tap more customers. The company can get large profit from this markets. Threats The company has been offering low cost products at the expense of quality. Their competitors are adopting this cost which needs the IKEA company to be more innovative to compete with them. They need to come up with new strategies which will make it outstanding. Online shopping is posing a threat to the marketing strategies of IKEA company. The online products are usually sold at reduced cost far from what IKEA offers to their customers as they are not incuring transportation cost (Sheykhan et al., 2014. Pp 313-320).. CHALLENGES FACING IKEA COMPANY The diversity of the IKEA Company globally exposes the company to some challenges. The challenges vary from one country to the other. The challenges are both internal and external. Internal challenges include; the need to innovate new ideas, the company is under pressure to innovate new ideas to rebrand their products. Innovation will satisfy the customers needs. The company is also facing competition challenge ( Paul, S.,2013.np ). There are several emerging companies with classy brands that with time are out-doing the Ikea products. Hence, is the role of the company to challenge the new markets and win the loyalty of their customers. There is also the need for cost efficiency, due to the several furniture products in the market, the company needs to change the price tags of their product. Changing of prices will help them maintain the price-oriented customers in the market. The company has been facing the environmental challenges. Due to the diverse countries that the country is operating, it faces a high challenge in the different types of environments. Different employees respond differently to different environments, hence is the role of the company to ensure those working in certain areas are comfortable with the place (Flynn, S., 2014. Pp 1-3). SIMILARITIES AND DIFFERENCE OF THE HR STRATEGIES IN INDIA AND AUSTRALIA India and Australia are among the 41 countries inhabited by the Ikea company. The HR strategies are varying due to the difference in the locations and the environments surrounding. Similarities The company in both countries has observed the following in their HR strategies; employee engagement- they involve their employees fully in decision making, in performance evaluation, and during the remuneration programs. The strategy creates the good relationship with their employees. Flexibility and work-life balance are another strategies enjoyed by both countries. The company ensures they are flexible to changes and innovative ideas that arise. They also create a good working environment for their staffs like good and spacious working rooms, entertainment rooms, and lactation rooms for the nursing mothers (Chatrakul et al.,2015. Pp 25-28).. Differences The mode of technology in the two countries is different. India has advanced in technology. Hence, they need more advanced products in correlation with their technology compared to Australia. The technological advancement needs more innovation and creativity in India than in Australia( Paul, S.,2013.np ).. Government regulations are also a challenge and it is creating the gap between the strategies in the two countries. The democracy and diplomatic relation in India are highly competent compared to that in Australia. The government controls the entry of the products that are imported in the country which act as a barrier to the selling of Ikea products. Religious and ideological strategies are also creating differences in the strategies employed in India and those applied in Australia. India is largely inhabited by Indians and few Muslims whereas Australia is inhabited with Muslims. The two religion has different taste about the type of furniture they purchase. EFFECT TO THE LOCAL CULTURE The company has influenced the local cultures positively and negatively. On the positive effects, the company has provided employment to jobless people in the local areas. The company has improved the communities level of income and standard of living in the local societies (Flynn, S., 2014. Pp 1-3).. On the other hand, the policies lead to the development of personal differences among the staff members. The strategies used can also result in the formation of classes of people, those superior to others (Chatrakul et al.,2015. Pp 25-28).. Recommendations From the headquarters, it is recommendable for the IKEA company to standardize their furniture prices. Price consciousness will result to pulling more customers into their company. The company should also standardize the terms and conditions of employments. They use high profile workers who are rare to get especially in less developed countries. When they standardize the conditions they will create rooms for more employment of the local people. It is also recommendable for the company to adopt other forms of furniture at the local level. Some furniture products like use of bamboo will be cheap to make hence will go at fair prices for the local people. They should also increase the number of goods they offer to the local regions. This regions are the potential parts having most of their potential customers. Conclusion IKEA furniture products and the human resource has proved friendly to the local and the international traders. The company is beneficial to the societies as they offer the products needed by the consumers and they offer employment. Hence, the government from different regions should recommend the company in their countries. REFERENCES Brueller, N.N., Carmeli, A. and Markman, G.D., 2016. Linking Merger and Acquisition Strategies to Postmerger Integration: A Configurational Perspective of Human Resource Management. Chatrakul Na Ayudhya, U., Prouska, R. and Lewis, S., 2015. 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Opening the door to tomorrow's top talent: Three-quarters of organizations neglecting a vital area of HR. Human Resource Management International Digest, 21(5), pp.40-42. Sheykhan, A., Zakeri, S., Abbasi, H., &Mousavi, M. H. (2014). A Proposed Framework for. Selection and Prioritization of the Best Strategies: A Hybrid SWOT Analysis, Fuzzy PROMETHEE II and Porter. Research Journal of Environmental and Earth Sciences, 6(6), 313-320 Read More