IKEAs flatpack approach to diversity

After our recent discussion of IKEA's role as a public institution  it was interesting to see this week that the company has been in hot water over the last few days after revelations that it removed images of women in its Saudi Arabia catalogue. The evidence, on the face of it, is pretty damning. As you can see in the pictures here, it really is a case of disappearing women. No doubt about it.

There is a feel of something ethically troubling here, with critics arguing that   IKEA should be upholding its values of equality. The Swedish trade ministerhas kicked in by criticising the company while IKEA itself has offered an apology, saying that the practice is "in conflict with company values".

The question we have to ask though is whether IKEA really is doing anything much wrong here? After all, isn't it up to them what pictures they want to put in their own catalogues? And don't they have a responsibility to meet local cultural norms as long as no ones fundamental rights are being infringed? Its not like any women were directly disadvantaged by their actions, we're they?

As far as we can see, though, IKEA hasn't been very smart or subtle in appearing to airbrush its women from Saudi. As far as cultural sensitivity goes, its a pretty basic effort to fit in with cultural norms in the country. But first, let's remember that IKEAs catalogues are increasingly just computer generated anyway, so maybe the women were never actually "there" in the first place. And second, let's not pretend that IKEA catalogues are a glowing example of diversity to begin with. Show us the rich ethnic mix in the catalogue. Or for that matter, the representations of women in hijab that constitute a large part of the female population in many parts of the world where the firm operates.

A global company it may be, but a globally diverse catalogue it is not. IKEA markets a homogenous global product for a global audience with less tailoring to local tastes even than other global giants such as McDonald's or Wall-Mart attempt.  So what are we complaining about here? That IKEA hasn't been 100% homogenous after all and we don't like it? Is homogeneity really the best solution to equality and diversity problems?

That's not to say it doesn't matter what pictures companies use in their marketing campaigns, because in our view, it certainly does. This is especially so for big companies like IKEA because they have such a major impact on the visual world around us. But demanding that they present a unified image across the globe just seems to be missing the point.  Shouldn't we be demanding that they present a genuinely diverse representation of their customers, maybe even one tailored to the societies in which they operate? Disappearing white women from your catalogues in Saudi Arabia certainly doesn't look good, but it's hardly the biggest problem here.

Regular readers of our academic research will know that we have a long standing interest in the role of companies in shaping people's citizenship opportunitiesand experience. IKEA here is clearly failing to promote the cause of women's equality in Saudi, insofar as equality is measured in terms of representation. This is one part of the picture (in the same way that failing to represent ethnic minorities or those with different sexual orientations in advertising presents and reinforces a skewed image of society). But it's not the only important one.

A critical role is also played by the company in its hiring and promotion policies, and in its other efforts to promote (or not) equality in Saudi. If the company isn't doing a good job on these fronts (and this is a question that demands further investigation) then presenting a pretty diversity picture in its catalogues would be little more than window dressing anyway. Let's hope the latest scandal presages some deeper consideration of how to deal with diversity at the company given its increasing global spread. Saudi women, if not the curiously disappearing catalogue models, deserve no less. 

Photo: IKEA
Thanks to Jeremy Sandler for alerting us to the story

Britain's bribery shame to end?

For the past few years, we have watched with sagging spirits the abject failures of the UK authorities to get to grips with overseas bribery by British firms. It's been a real stain on the reputation of the country, its rule of law, and its businesses. With the US pressing ahead with numerous convictions under its beefed up enforcement of the Foreign Corrupt Practices Act (i.e. any firm listed in the US is liable to prosecution for bribery wherever in the world it may have occurred), Britain has become something of an international embarrassment. So much so, that at the end of last year, the former head of Transparency International UK, Laurance Cockcroft bemoaned "Britain's bribery shame".


Cockcroft's article in the magazine Ethical Corporation, written following a damning report from the OECD's working group on bribery, made the case pretty starkly:

"This extraordinarily feeble performance by the UK is regarded as symptomatic of a profound lack of commitment to addressing corruption. The report of the OECD working group suggests the UK government’s inaction is creating a situation where UK-based companies can behave with impunity in the payment of bribes to win overseas business. ... [Earlier] the OECD had raised the question of whether the UK’s failure was effectively “systemic”. This implied that the nexus of inadequate legislation, feeble prosecuting agencies and a political willingness to buckle to an ally (Saudi Arabia) made uncomfortable by a criminal investigation meant that the UK was totally unable to address corruption. This fear was quietly reinforced by the fact that in Transparency International’s corruption perceptions index, published in September this year, the UK fell from 12th to 16th place."

We've talked here before about the huge BAE scandal in the UK, and the country's decline on the TI rankings. In the new edition of our business ethics book, which is just going into production, we explore the events in even more detail. But those of you that want the 2 second overview, the bottom line is that the Serious Fraud Office was forced by the British government to cave in on its investigation of BAE's alleged millions in bribes paid to Saudi Arabian officials after heavy lobbying from the company and the Saudi government. The whole episode spoke of a huge ethical failure - and even a wrenching of the basic rule of law. As Cockcroft put it (and he was among the more reserved commentators): "Ten years ago, the international community relied on the UK to be progressive in this arena. Now, disappointment at the lack of a serious stand has turned to disbelief, and disbelief to anger."

Today though, comes news of a small but significant breakthrough, with the announcement by the SFO of its first conviction of a major British firm for overseas bribery. The firm, Mabey and Johnson, a signifant player in the world of bridge-building firm, was found to have paid bribes totalling £1m to foreign politicians and officials to secure export orders. Operated through covert middlemen, the bribes were paid to officials in a range of developing countries in Africa, Asia and the Caribbean. The SFO, learning something from its US cousins, tconcluded its first plea bargain type conviction which saw Mabey and Johnson slapped with more than £6.5m in fines and reparations to foreign governments.

This can only be good news for the beleagured SFO which only a few months ago had been left dispirited and demoralized by the BAE failure. Its head and the main BAE investigator had both left the organization soon after the government had effectively closed down their biggest ever bribery investigation. Now, media reports suggest that the new director, Richard Alderman, may be ready to push for a plea bargain at BAE too.

Today's news can only be welcomed by those of us with an interest in seeing the UK get back into the driving seat on dealing with overseas bribery. However, it will take more than one prosecution to wash away the shame of its pitiful performance over the past decade. The country's record of investigating and prosecuting bribery is still woeful in comparison to its peers – at the end of 2008, only two cases had been brought, compared with 103 in the US, 43 in Germany and 19 in France. Let's not pretend that this is because British companies are so much more honest when it comes to bribery than their contemporaries - it's more a case of them simply being able to get away with it. And realistically, only a conviction of BAE is going to change the perception of Britain as a soft-touch country, at least in the short to medium term. The SFO has little time to lose - especially if they don't want to be further embarassed by the Americans prosecuting the iconic British firm before they do. But it's still not clear if the ethics will simply get submerged by the politics again.

Diversity in diversity management

You may remember that in one of our posts last month we asked what exactly made women different in a business ethics context. One of the big issues here is the "glass ceiling"that hinders women from getting to the top of the corporate ladder. Discrimination is often invisible but incontrovertible to those that encounter it.

To be sure, this is a problem faced by women everywhere, but at the same time, such institutional discrimination also varies quite significantly between countries. In our business ethics book, we reported on evidence of female held directorships in Europe - where female representation in the boardroom ranged from 0% in Portugal to 29% in Norway. So it was with some interest that we read in the Financial Times last week about evidence emerging of female board memberships in the Gulf region - an area not traditionally known as a leader in diversity management.

The picture painted by the report is of a region that, in terms of diversity management, demonstrates much like Europe quite a bit of, well ...diversity. Some Gulf countries are actually emerging as leaders in the region, with women making up 2.7 per cent of boards in Kuwait, and 3% in Oman. This not only compares favourably to other Gulf states, such as Abu Dhabi (0.6%) and Saudi Arabia (0.1%), but also stacks up pretty well against other ostensibly less conservative countries such as Italy (2%) and Japan (0.4%).

Of course, board memberships do not tell the whole story about gender discrimination in business, but it certainly gives a good flavour of the types of challenges facing women looking to secure advancement to the executive suite. So it's good to see some progress being made in the Gulf, and hopefully will act as a further spur for laggard countries in Europe and elsewhere. Who knows, perhaps even Italy's womanizing PM, Silvio Berlusconi will be able to prompt a greater attention to gender among Italy's boardrooms, especially having appointed the former model and (as the media puts it "ex-showgirl") Mara Carfagna, as Equal Opportunities Minister (pictured right).

But whatever progress is made in Italy or Kuwait, though, such countries will still remain far, far behind the leaders in female board membership. Right now, the place to go for high flying women is Norway, where women now make up 40% of board positions. But we're not talking voluntary social responsibility here; Norway's female friendly pattern is a result of good old fashioned regulation. As the International Herald Tribune reported a couple of months ago, it's not been a easy transition for Norway, but with appropriate mentoring, training schemes, support mechanisms and enforcement, a genuine change in attitudes seems to have accompanied the 2003 law that forced Norwegian companies to fill 40% of board seats with women. Such positive discrimination isn't always popular, but as the chart from the IHT shows, it certainly makes a difference.