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IKEA Company’s Organizational Culture Case Study


The formation of organizational culture is a multi-step process that requires the joint work of staff members, units, and leadership. Building a positive organizational culture proceeds in several consecutive stages; however, the duration and content of each stage is different for each enterprise. As for IKEA, the most essential part of the corporate culture comes from the identity of the founder, Ingvar Kamprad. He has clearly defined the company’s mission and values, which have become the core postulates for all IKEA employees. Moreover, the company has always sought to bring these values—which include modesty, simplicity, and control over costs—to its consumers. Thus, every worker is a carrier of the propagated IKEA culture, which in turn forms the basis for the success of the organization as a whole.

Input Components

One key fact about IKEA is that it is an enterprise that was developed into a large-scale company from a small business. At present, it is a firm with a robust vision and a strong value proposition. Notably, the company aims to deliver essential home goods and commodities at reasonable prices while offering high levels of quality and reliability to its customers. The Congruence Model is an approach that can be applied to evaluate and analyze both the technical and social strengths that contribute to and have an impact on company performance. The three input components that could be employed by the enterprise include its environment, its resources, and its organizational history. An understanding of these three constituents will display the essential core of the organization. Apart from the organization itself, this tool enables a review of the unit and individual efficiency as well.

In terms of the first component, which is the environment, it is essential to consider it from both outside and within the enterprise. The outside setting includes the company’s market and population, its rivalry within the industry, technological advancements, and changes in the environment. The second subcategory, within the enterprise, includes the policies that the organization employs and applies as well as coworker treatment. The resources category is mainly concerned with tangible and intangible resources. More specifically, increased sales, earnings and income, market share, and an awareness of consumer needs make up the tangible resources group, while client perceptions, a charitable organizational culture, and employee loyalty and fidelity are the key intangible resources. Regarding IKEA’s history, the company emerged in 1943 as a small firm that was run in a village to meet the needs of its own population. Further, the company is based in Sweden and has particular company colors that are instantly recognizable by its customers. Importantly, the first product range was made and published in a catalog in 1951, and a few years later, the company started delivering its own furniture. In 1985, the enterprise made it to the American market; a few decades later, the number of stores exceeded 300. Currently, the firm employs almost 120,000 workers in more than 40 countries around the world.

Organizational Culture Factors

As stated by Schein, the core organizational culture factors are myths/stories, rituals, language, and symbols/artifacts. In IKEA’s case, the story of Ingvar Kamprad—a man who owned a small store of essentials and delivered to the village dwellers and later was able to develop it into a large and successful international company—plays a key role in the company’s organizational culture. Indeed, this background has influenced many of the rituals employed by the organization. Examples include the company’s hiring processes and the fact that the constitutor makes systematic visits to check on how the company is functioning in reality. Furthermore, language is another one of the major aspects for IKEA. All of the products offered to consumers are named in Swedish, the language initially used within the company. Moreover, symbolism contributes to the company culture quite powerfully. The decorations, the store settings, and even the buildings themselves are known and recognized by IKEA visitors. Each of these four factors is equally significant in making IKEA’s corporate culture strong.

Type of Organizational Culture

Bearing in mind the technological complexity and the unstable condition of the environment, it could be suggested that the organizational structure of IKEA should have three corresponding tiers: horizontal, vertical, and spatial complexities. For instance, vice presidents should be liable to the president of the company. Further, all decisions should made be in accordance with management and legal requirements. Apart from that, accounting, HR, and marketing should be interconnected and influence the performance and strategy of one another.

Conclusion

Different factors have an impact on the efficiency and prosperity of a firm at particular levels. IKEA is a company with strong organizational culture. The enterprise’s leadership ensures that this company culture is sustained at all basic levels including individuals, units, and the entire company performance. Importantly, various models, approaches, and processes could be applied to create a positive environment and staff dedication in the enterprise. It is essential that leadership employ distinct techniques to support its strong and unique organizational culture. A thorough understanding of the factors inside and outside the company would allow management to maintain a structure that is pliable and adaptive towards the unstable business environment.

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IvyPanda. (2020, November 21). IKEA Company's Organizational Culture. Retrieved from https://ivypanda.com/essays/ikea-companys-organizational-culture/

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"IKEA Company's Organizational Culture." IvyPanda, 21 Nov. 2020, ivypanda.com/essays/ikea-companys-organizational-culture/.

1. IvyPanda. "IKEA Company's Organizational Culture." November 21, 2020. https://ivypanda.com/essays/ikea-companys-organizational-culture/.


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IvyPanda. "IKEA Company's Organizational Culture." November 21, 2020. https://ivypanda.com/essays/ikea-companys-organizational-culture/.

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IvyPanda. 2020. "IKEA Company's Organizational Culture." November 21, 2020. https://ivypanda.com/essays/ikea-companys-organizational-culture/.

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IvyPanda. (2020) 'IKEA Company's Organizational Culture'. 21 November.

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