Ikea in Saudi Arabia

Case Brief

IKEA in Saudi Arabia

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Jakob Suesser

Master in Management

Fall 2017

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INTB6201

International Business Management

Professor                                                                        

Dr. Alexandra V. Roth, E-mail: al.roth@northeastern.edu

304 Hayden Hall

Abstract

The case discusses the release of Swedish furniture giant IKEA’s catalogue in Islamic Saudi Arabia with all women removed from the pictures. This violation of their core values and the subsequent media outcry and potential loss of reputation for IKEA is discussed extensively. Possible options for IKEA to limit the damage and the sensitivity for businesses when dealing with religion matters is examined in further detail.

Q1: Why, in your assessment, is IKEA in the situation described in the case?

IKEA has put itself in this precarious situation by not attributing enough importance towards their core values and integrity and trying to cater to regional religious beliefs with the sole purpose of increasing revenue.

IKEA underestimated the importance of their corporate responsibility and instead yielded to the pressure of Saudi Arabian Islamic law.

While IKEA definitely should and must adapt to cultural differences in their markets, the sensitivity of religion and gender equality should have been considered more thoughtfully.

The differences in mindset and cultural expectations between Sweden and Saudi Arabia can additionally be pointed out by looking at the two countries’ Globe Smart Profiles, which are on the exact opposite of the spectrum. This impression is further consolidated by regarding the two cultural dimensions, according to Hofstede.

The profiles are shown in exhibit 1 and exhibit 2.        

The actions IKEA took by airbrushing out women out of their catalogue however, strongly contradicts its self-imposed mission statement and claim to fight for equality.

In their code of conduct, IKEA emphasizes equal opportunities, and speaks out against any discrimination against gender, race or religion^[1].

Signing the UN guiding principles on human rights on one hand, and then directly violating these by issuing a catalogue directly discriminating women in the Middle East is too strong of a contradiction to go unnoticed.

Additionally, a company as big as IKEA, which is also often seen as “synonymous” for Sweden, has even more responsibility to act accordingly to its values.