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The secret behind IKEA lies in its employees

Why do some companies succeed in getting established abroad while others don't? Internationalization experts have long maintained that the key to success lies in knowledge about the new market.

On Friday business analyst Anna Jonsson at Lund University will submit a dissertation with new findings: A good system for transmitting knowledge among various co-workers is just as important if not more important than knowledge about new markets.

For five year Anna Jonsson has been studying IKEA's establishment in Russia, China, and Japan in order to understand why they succeed so well with their new establishments. She has found that the secret lies in the fact that the company associates are good at sharing their knowledge and that the knowledge flows readily among all levels. Anyone wishing to pursue a career with the company has to try out many different positions and zig zag their way up.

"In many companies a person's career can benefit from them not sharing their knowledge," says Anna Jonsson. "At IKEA it's just the other way around: you can't pursue a career there unless you share."

Today knowledge management is a buzz word among company developers. The concept is often associated with strategies that include expensive IT solutions and intranets, but Anna Jonsson maintains that people often focus on the wrong things:

"In the case of IKEA knowledge management has been a built-in component of the company culture. When foreign stores are to be established, a large team travels around and assists. Contrary to what most internationalization experts say, the company has not put much effort into adapting to new markets. Anyone with a good knowledge of the company and who has been involved in starting new stores can quickly get established on a new market anyway."

In principle IKEA simply follows that same concept for success, but this does not mean that the company is not willing to learn new lessons. Unlike many other countries, new knowledge is communicated not only between the head office and subsidiaries but also among the various subsidiaries.

"By not having hermetically sealed compartments between different regions, levels, and functions within IKEA, associates utilize each other's knowledge in the best possible manner," says Anna Jonsson. In this way, they assist each other on markets where they are facing the same problems even though they might be remote from each other geographically and organizationally. When stores were established in Japan, for instance, they looked more at IKEA in Germany than at their activities in China since the two former markets involve more comparable challenges than China and Japan do, for example.

For more information, speak with Anna Jonsson at cell phone number: +46 (0)708-69 89 99. Anna Jonsson will defend her thesis on Friday, January 25. It is titled Knowledge sharing across borders­A study in the IKEA world. The public defense will take place at 1:15 p.m. in Crafoord Hall at the School of Economics and Management.

Ulrika Oredsson | idw
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