IKEA Knowledge Sharing
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IKEA and SCA Packaging are compared regarding their efforts to share knowledge across boundaries. Both companies share explicit knowledge using intranets and manuals. For tacit knowledge, experienced employees migrate within the organizations. IKEA relies on its corporate culture and training programs to encourage sharing. SCA has a knowledge management program but knowledge is harder to share due to complex production processes. Institutional forces like career incentives, trust, and shared vision motivate employees to share knowledge at IKEA.
IKEA Knowledge Sharing
- 1. IKEA and SCA Packaging Article, Lund University School of Economics and Management, Sweden
- 2. To increase the understanding of how institutional forces and organizational context, in parallel with cognitive issues, impact knowledge sharing within multinational corporations (MNCs). To elaborate on differences between industries by comparing and contrasting a retail firm with a manufacturing firm. Their efforts to share knowledge across national and intra- organizational boundaries. Between IKEA and SCA Packaging firm
- 3. 1) The rationale behind internal knowledge sharing is cost efficiency, a higher degree of trust (e.g. Inkpen & Tsang, 2005), hence providing a uniqueness that can lead to sustained competitive advantage 2)In order to stay competitive and innovative, knowledge sharing is important as firms may create new work methods as well as business opportunities, (Ghoshal & Westney, 1993)
- 4. This is especially important for multinational corporations (MNCs) operating in different markets, where competitive advantage can be achieved by exploiting locally created knowledge worldwide and by sharing this knowledge across intra-organizational boundaries (Schlegelmilch & Chini,2003).
- 5. Knowledge sharing stems from different fields technology and innovation, strategic management, organizational learning knowledge management, stressing different factors for what might make or break knowledge sharing (knowledge factors, organizational context and institutional forces) (e.g. Dierkes et al,2001; Easterby-Smith & Lyles, 2003).
- 6. Focus on knowledge or cognitive issues (tacitness, absorptive capacity, causal ambiguity and cognitive variety), Organizational context (e.g. structure, intra-organizational integration and training, cultural and organizational distance) Institutional forces (individual and group motivation, and norms and values) (Kalling & Styhre, 2003; Ciabuschi, 2005).
- 7. Knowledge factors Barrier to knowledge sharing; absorptive capacity, causal ambiguity, arduous relationships between sources and recipients of knowledge Organizational context Institutional forces
- 8. IKEA is the biggest global furniture retail company With 250 stores in 35 countries, Employing 104,000 people. It was founded by Ingvar Kamprad in 1943 Today owned by a foundation, the Stitching INGKA Foundation. Sales for the IKEA Group for the financial year 2006 totaled 17.3 billion EUR.
- 9. SCAP (a subsidiary to SCA, which is quoted on the Stockholm and London stock exchange markets) is a leading European producer of paper packaging, with an annual sales turnover of 4 billion EUR. It has some 275 production units employs 18,000 people.
- 10. both companies share relatively explicit knowledge The documentation of routines, manuals, and advice are made available electronically by using the intranet and physically by sub networks For more tacit pieces of knowledge, experienced and expert employees play an important role by migrating within the organizations and sharing their specific knowledge IKEA does not have a special program or function responsible for knowledge sharing but SCAP has.
- 11. A lot of the knowledge required to run machines effectively is considered tacit and primarily based on experience( especially for SCAP) It is clear that the IKEA corporate culture is very important both in terms of tacit knowledge and as a method for knowledge sharing. Training is an important tool for sharing the corporate culture and ways of running an IKEA store. This the way of IKEA
- 12. Each new employee gets an introduction program about the organization, history, culture, and forms for working at IKEA, stressing the importance of knowledge sharing, knowledge sharing is supported by a matrix organization ensuring that knowledge is shared throughout the organization for this reason personal networks are crucial for sharing relevant knowledge
- 13. the majority of IKEA’s employees are part-time employees working in the stores. Reaching these employees and encouraging them to share knowledge is a real challenge to IKEA. Ikea have Buddy system, this help educating new employee
- 14. There are a number of other transmission channels that serve as complements; for example, the intranet, manuals, internal magazines, wallpaper information and different meetings within the matrix, In the SCAP case, progress has been driven by the technical department at head office. The will to assimilate new knowledge is stronger among successful plants; they are more active in searching for new knowledge; Successful plants accept that certain pieces of knowledge are tacit, but that energy and commitment can overcome such obstacles Less successful plants ‘’We have a complex process that we can’t write down. There are too many parameters to think of. We once tried to list all the parameters to consider, but it is impossible’.
- 15. Less competition can be found within IKEA since the individual’s motivation to share knowledge with colleagues is rewarded by different career opportunities. In the IKEA case, institutional forces are perhaps even more evident since knowledge sharing actually is part of the corporate culture and concept. Being a foundation with long-term strategies enables the organization to work with knowledge sharing at all levels, ensuring that everybody can identify with the IKEA concept.
- 16. Their HR policy clearly states that ‘As an IKEA employee you are willing to share your knowledge and experience with all IKEA employees’. For SCAP, managing knowledge sharing as a program requires a lot of effort and administrative work, as well as specific incentives related to the program performance. Creating ‘‘One IKEA’’, where all of us pull together in the same direction’ Being an open organization is also important for IKEA and a key factor in their ability to motivate employees to share knowledge (all information about new projects, vacancies, sales etc. is provided in wallpapers and corporate newsletters)
- 17. The career policy and reward mechanisms Encouraging employees to step aside Try learning new tasks , Motivation, trust, shared vision recognition and contribution. These factors all relate to how institutional forces influence knowledge sharing within IKEA.
- 18. Explicit knowledge was considered as important in both cases and both firms invest in making it available using manuals and documents in order to share best practices. IKEA and SCAP are different in many ways. With regard to knowledge sharing the most obvious difference is that whereas SCAP runs a special knowledge management program initiated as a project, IKEA does not have a special program or function responsible for knowledge sharing; it is part of the routine at IKEA.