Values‐based Service for Sustainable Business – Lessons from IKEA

Javier Reynoso (Chair, Services Management Research and Education, Monterrey Institute of Technology – ITESM‐EGADE, Monterrey, Mexico)

Journal of Service Management

ISSN: 1757-5818

Article publication date: 7 August 2009

4363

Citation

Reynoso, J. (2009), "Values‐based Service for Sustainable Business – Lessons from IKEA", Journal of Service Management, Vol. 20 No. 4, pp. 473-475. https://doi.org/10.1108/09564230910978548

Publisher

:

Emerald Group Publishing Limited

Copyright © 2009, Emerald Group Publishing Limited


This book breaks new ground raising two fundamental issues in contemporary service literature: the need and importance of values‐based services and the co‐creation of customer value through values. The book is structured in a clear, easy to read way, in seven agile chapters. It cleverly combines the use of a comprehensive collection of research references about IKEA with practical examples and applications as well as useful managerial implications, questions and recommendations in the form of principles and steps for managers to follow. The book is successful in giving a lot of food for thought in only over a hundred pages.

Chapter 1 sets the stage of the book, using notions derived from service dominant logic as value in use and the co‐creation of value as the framework of value‐based service for sustainable business. The book aims to answer two main questions: what is “value‐based service”? And, how can value create value for customers and other stakeholders'? To answer such questions, the authors use lessons learned from IKEA, the furniture world's leader originated in Sweden. This first chapter provides a very good snapshot of the company, which helps the reader to understand the notion of values‐based business by looking into IKEA's vision, business idea and strategy, as well as its store concept and brand. Overall, IKEA's strong service culture and the “IKEA Way”are very good basis for the core argument of the book.

The publication then takes us to some key aspects about IKEA's history and heritage as the basis for the creation of a sustainable business. IKEA's strong culture based on shared values and meanings becomes essential to understand the successful combination of innovation with social consciousness of the company. The “testament of a furniture dealer” given by Ingvar Kamprad, founder of IKEA, is of great importance for such values and meanings. Of particular relevance in this part of the book is the environmental perspective, given some public criticisms around some practices and the reactions and response that followed by the company. Such environmental problems and challenges provided a very good opportunity to transform them into strategic responses for long‐term sustainability. These included the co‐workers, products and materials, supply chain, wood, prevention of child labor, community involvement and stakeholder cooperation, among others. This could be considered a key aspect not only of the book, but also of the overall sustainable business strategy of the company worldwide.

The notion of values‐based service is explored in Chapter 3. It is about building the conceptual basis of a value‐based, sustainable and profitable service business. It touches upon aspects like value co‐created by the customer establishing the difference between value‐in‐use and attributes‐based value. Four pillars of customer value are identified, as the essence of the co‐creation of value through resource integration. An interesting discussion is about the difference between the logic of value – money‐driven‐ and the logic of values – person‐driven‐. The chapter also addresses a debate and critique on corporate social responsibility (CSR); however, this does not touch upon the emergent and important issue of services at the bottom of the pyramid (BOP Services) which could certainly bring an additional flavor to the book. Contributions from Prahalad and Yunus, for example, could include an interesting angle to values‐based services, particularly in the light of informal services in emerging economies.

Based on this conceptual basis, the book continues to explore the value‐based service experience. The case of IKEA provides a number of elements which help the reader to understand how such an experience is possible. Basically, hyperreality and hyperreality services are illustrated by something called by the authors as the “experience room”, a setting used to co‐produce the service together with the customer. Such hyperreality is designed using a variety of tangible and intangible elements and artifacts. IKEA provides very good illustrations about such hyperreal services. A couple of narratives about company stores in the USA and China are included to enrich this topic, as well as managerial implications for other companies.

Chapter 5 integrates the concepts of values‐based management, corporate identity and service brand using IKEA's marketing communication and branding strategy. These in turn are built around the three fundamental values of the company: economic, social and environmental. Particularly interesting is the model of values‐based service brand in action presented in this chapter by the authors, as a result of their extensive research work on IKEA. The chapter continues to discuss the key strategies of the company's marketing communication and brand‐building, including, for example, the notion of democratic design, outlooking, in relation to the price‐product design relationship, and IKEA family which is the customer club, among other marketing strategies and advertising campaigns. The chapter ends with insights from IKEA and implications for other companies. Among them, living the brand is a very illustrative insight which explains a lot the company's values in relation to marketing communication and branding strategies.

The book then turns into values‐based service leadership. It discusses authentic leadership in terms of leaders living and expressing their values. A fundamental element of this becomes knowledge sharing and transfer to employees and customers at all levels in the organization. This part discusses and illustrates values‐based leadership in IKEA at three different levels of analysis: global, national and store level to finish with four leadership principles, which refer to: living company values to create customer values, promote the right people, trust employees and customers and reward learning and innovation. This topic is particularly relevant for the argument of the book, as it reinforces the need of congruent and consistent behavior of company executives, as someone could not lead the creation of value without living and expressing values.

The book ends with a kind of summary chapter about values‐based sustainable service business in which the main lessons from IKEA are integrated by highlighting the main contributions discussed throughout the book. After reviewing the lessons learned, a comparison with other successful service companies is presented, including Starbucks, H&M and Body Shop. This comparison includes the main similarities found in relation to their entrepreneurial business model, the logic of values, the service experience, brand and leadership. This capstone chapter concludes by providing five principles for a sustainable value‐based service business integrated in a proposed business model.

The two fundamental issues addressed in this book: the need and importance of values‐based services and the co‐creation of customer value through values are an important source of reflection about the need of congruence in today's society. The need to understand the success of sustainable service businesses should be based on a balanced integration of economic, social and environmental values. Such values could provide a strong foundation for the co‐creation of value for customers, employees and stakeholders. The framework presented in this book should certainly serve as an initial platform for further exploring and contrasting the notion of values‐based service in regarding to customer values. The challenge to understand and handle different, even opposite values in both sides of the value equation is certainly something that would require additional research in the years to come.

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