A business’ success depends on the strategies that it implements. In fact, bad tactics can mean the end of a company, while good ones may be the start of its prosperity. The decision by IKEA to partner with Chinese artisans was part of its plan to penetrate the Asian markets, as well as to increase its presence in the European markets. In addition to this, the collaboration enabled the company to harness on some of the opportunities present in China. Overly, the cultural and business objectives of IKEA led to this decision.
Notably, cultural factors were some of the main reasons that made IKEA to partner with Chinese artisans in the design of Trending. The Chinese culture advocates for hard work and enterprise. This culture is observable in various countries such as Singapore, Taiwan, Malaysia, and Hong Kong, which have Chinese immigrants (Wild and Wild 51). In fact, these people are known to be industrious and highly productive. Given the importance of productivity and efficiency among employees, this attribute was one of the reasons that IKEA decided to collaborate with Chinese artisans.
Moreover, the Chinese culture adores and embraces respect to authority. In part, the respect to authority is the main reason why companies in China do not experience cases of strikes and demonstrations. Therefore, the partnership with the Chinese artists guaranteed the company of obedient, loyal, and hardworking employees.
On the same breath, the Confucius culture in China trains people to be loyal and honest. Actually, the culture that this religion teaches is essential in companies such as IKEA that deal with products that require patency (Wild and Wild 56). Since a lot Chinese embrace this culture, the partnership with these artists guaranteed IKEA of faithful employees who would not disclose its trade secrets. In addition, it gave the company an assurance of a low turnover of staff. This ideology is supported by the fact that Chinese employees, usually, do not shift jobs since this act is a sign of betrayal.
In as much as most of the goods that the artists were to design targeted the European and American markets, a significant proportion was for sale in the Asian market. China on its own presented a robust and lucrative market that IKEA wanted to tap. Indeed, the country’s over two billion people represent almost a quarter of the world’s population (Schweitzer 67-93). Moreover, it had been enjoying a high economic growth rate, which had made most of its citizens wealthy. Therefore, only artisans of Asian origin, specifically the Chinese, had the best understanding of the culture, taste, and preferences of the individuals in this region. In light of this, the choice of Chinese artists was a prudent decision for the company.
Global Business Factors
From a global business point of view, the Chinese artisans presented the company with the best choice due to their technical skills. This thought is based upon the Chinese government decision to promote science, technology, engineering, and mathematics subjects in its education curriculum (Wild and Wild 51). In effect, employees from China are highly competent in technical subjects. Basically, their competence is spread in various fields such as design, architecture, and structural engineering. As a result, these artists possessed various competencies that IKEA wanted to use in the design of complex and unique equipment and furniture.
In addition to this, the complimentary advantages such as the presence of necessary technology, availability of businesses in the same industry, and access to research facilities made Chinese artists be the best option. These advantages are due to the presence of many engineering and electrical industries in the country (Wild and Wild 117-122). For example, an artist in China has the advantage of observing how various designs are made in other industries. In turn, he/she can transfer these skills to IKEA. Moreover, he/she has the opportunity to experiment various designs in the country’s research facilities. Further, he/she is able to share and collect information on various unique structures from the many artists and scientists in the country.
In China, the costs of labor and raw materials are significantly lower than in Europe or the USA. In part, these low costs are due to the differences in purchasing power parity. Since the country manufactures many industrial materials, companies such as IKEA can save costs by having their assembly plants in it. In light of this, local Chinese artists are the best option for the company since they can enable it to achieve this goal. In addition, they are cheaper to hire than artists in Europe or the USA.
Asia and specifically China, present a robust business opportunity for IKEA. Therefore, it is prudent for the company to have artists who understand this market. In general, Chinese artists are more aware of their local market than foreigners (Feldman 145-159). Moreover, they are at an advantaged position of knowing the culture, taste, and preferences in other Asian countries because most of them outsource their production to China. In light of this, these employees enabled the company to position itself strategically in order to supply the Asian market with the right type of commodities.
To sum up, the decision of the kind of employees that a company decides to recruit has a significant influence on its performance. In part, their culture determines their productivity and level of adherence to the company’s policies. Generally, employees who have a positive culture are hardworking, loyal, and hospitable. On the contrary, those with a negative culture are ethnocentric, arrogant, and untrustworthy. In light of this, businesses should ensure that the cultures of their workers conform to their strategic objectives.
Feldman, Steven. Trouble in the Middle: American-Chinese Business Relations, Culture, Conflict, and Ethics. New York, NY: Routledge Publishing, 2013. Print.
Schweitzer, Sharon, et al. Access to Asia: Your Multicultural Guide to Building Trust, Inspiring Respect, and Creating Long-Lasting Business Relationships (1st Ed.). Hoboken, NJ: John Wiley & Sons, 2015. Print.
Wild, John, and Kenneth, Wild. International Business: The Challenges of Globalization (8th Ed.). New York, NY: Pearson Education, 2016. Print.