IKEA Organizational Culture Term Paper

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Organizational Culture

IKEA Organizational Culture

Strong and Weak Sides of Organizational Culture

Impact of Internal and External Factors

Leadership and Organizational Culture

IKEA Subculture

Values

Employees and Organizational Structure

IKEA Organizational Culture

Every organization has a unique culture that dictates how things are done -- it defines the organization's social and psychological behavior. Though there is no universally agreed definition, organizational culture essentially refers to the values, beliefs, attitudes, assumptions, principles, habits, and customs shared by members of a given organization (Schein, 2010). These behavioral aspects constitute the distinctiveness of the organization (Jain, 2005). Indeed, organizational culture can be an important source of competitive advantage for an organization as it determines its strategic orientation, personnel management approaches, and other aspects of organizational behavior (Schein, 2010; Mullins & Christy, 2010). One organization that has built a distinctive organizational culture is IKEA, a Swedish multinational firm involved in the designing and marketing of furniture as well as appliances and home accessories. Following is a discussion of the strong and weak sides of organizational culture, the internal and external factors that affect organizational culture, and the role of leadership in building organizational culture, this paper provides a description of the culture of IKEA.

2. Strong and Weak Sides of Organizational Culture

The importance of organizational culture cannot be overemphasized. Organizational culture is what gives an organization its unique identity -- it distinguishes the organization from the rest. Literature extensively demonstrates that organizational culture can be a crucial driver of organizational productivity and performance (Schein, 2010; Mullins & Christy, 2010; Odagiu, 2013). This is because organizational culture determines the type of strategy the organization embarks on, how it treats employees and customers, the kind of employees it recruits, how communication is done, how decisions are made, which entities it partners with, how change is managed, the extent to which it pursues social and environmental objectives, management-employee relationships, and so forth. These processes create competitive advantage for the organization in one way or another -- e.g. innovation performance, group cohesiveness, employee morale, employee productivity, and customer satisfaction (Jain, 2005). The positive association between organizational culture and competitive advantage explains why most organizations invest a great deal of time, effort, and resources in building a strong culture. They adopt and maintain values, structures, systems, and procedures that in turn propel the organization towards its strategic goals and objectives in an ever more dynamic environment.

While organizational culture is often portrayed as a positive aspect, there are usually negative aspects. First, whereas some aspects of organizational culture may be acceptable within an organization, they may be harmful or destructive (Mullins & Christy, 2010). For instance, some cultures may create a climate of fear and bullying within an organization. The management may view such an atmosphere as acceptable, but it may be detrimental to employees. Furthermore, even though an organization may have a general culture, sub-cultures may sometimes exist within the organization. For instance, two departments, branches, units or subsidiaries within the same organization may have different cultures. These sub-cultures may often conflict with the overall culture, resulting in detrimental consequences for the organization, such as conflicts as well as inefficiencies in task, process, and strategy execution (Schein, 2010). Another limitation is that organizational culture may keep on changing as top leadership and management changes. This is because different leaders tend to have different styles of leadership, which may often mean introduction of a new culture or abandonment of some cultural aspects.

3. Impact of Internal and External Factors

Organizational culture does not just happen -- it is a phenomenon shaped by factors external and internal to the organization. External factors denote factors beyond the control of the organization such as national culture, technology, laws, industry, and socio-economic factors (Odagiu, 2013). National culture is a particularly important determinant of organizational culture (Mullins & Christy, 2010). Culture theory generally asserts that each country has its own unique culture. Countries exhibit differences in how they perceive relationships, power and authority, uncertainty, time, communication, space as well as success and achievement (Browaeys & Price, 2008).

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In a high-power distance society, for instance, immense value is attached to power, status, and authority. This orientation tends to affect organizational design and organizational behavior. Organizations in such a society would tend to have autocratic, authoritarian, hierarchical, bureaucratic, tall or centralized organizational structures. IKEA has a Swedish origin, which as per Geert Hofstede's national culture comparison tool is a low power distance society (Geert-hofsted.com, n.d). As such, it would not be insensible to expect democratic or participative management styles at the organization.

Technology, politics, laws, industry, and socioeconomic factors shape organizational culture in that they influence an organization's strategy, operations, processes, procedures, and systems (Jain, 2005). For instance, laws mandating or calling for diversity in the workforce may cause an organization to adopt diversity as part of its values. Further, increased competition in the industry may compel an organization to adopt a new structure in an effort to increase organizational efficiency and effectiveness. The impact of an industry on organizational culture is further evident in organizational culture differences across industries. For instance, firms in the banking industry may have a different culture from firms in the technology industry. Socioeconomic factors such as economic recession and consumer behavior may affect organizational culture by influencing decisions relating to aspects such as personnel management and products.

Organizational culture is shaped by not only external factors, but also internal factors. Major internal factors include leadership and management, size of the organization, and geographic dispersion (Jones, 2013). Leadership is arguably the most important determinant of organizational culture (Schein, 2010). Based on their personality, philosophy, and experience, leaders generally choose the kind of culture they desire in their organization. For instance, a leader that espouses participative leadership would create an organizational culture that embodies teamwork, collaboration, and inclusion. The size of an organization and geographic dispersion affects organizational culture by influencing the extent to which values and beliefs are shared across the organization. For instance, a small store with a small workforce and a single location may easily have a strong culture uniform across the organization. Nonetheless, an organization such as IKEA with hundreds of thousands of employees spread across hundreds of locations in tens of countries may not have an easily describable culture.

4. Leadership and Organizational Culture

As mentioned earlier, leadership significantly influences organizational culture. Indeed, leadership and organizational culture are heavily intertwined (Schein, 2010). In other words, organizations with strong or effective leaders tend to have strong or effective cultures. Leaders shape organizational culture by not only prescribing the values, beliefs, norms, and practices the organization should espouse, but also communicating and modeling those values and beliefs (Jones, 2013). They construct social and psychological behavior within the organization, initiate positive changes in cultural practices, and serve as role models for their followers. When leaders exhibit the behaviors the organization considers as acceptable, employees are likely to emulate those behaviors. Leaders also enforce organizational culture by rewarding positive behaviors and punishing negative behaviors (Mullins & Christy, 2010).

5. IKEA Subculture

With an understanding of what organizational culture entails as well as its origin and significance, attention is now paid to the culture of IKEA. Before proceeding, it would be important to have a brief background of the organization. Though it is headquartered in The Netherlands, IKEA was founded in Sweden. Originally established as a mail order business in 1943, the organization ventured into the furniture business five years after inception. Over the years, the organization has grown to a multinational organization with operations in Europe, North America, and Asia Pacific. In addition to self-assembled furniture, IKEA's product portfolio includes home accessories, appliances, as well as retail outlets (Grol & Schoch, 2010). As of 2016, IKEA's global sales exceeded $36 billion, a phenomenal success by any means. The organization's unique culture, as described in the succeeding section, has been a phenomenon of admiration, providing valuable lessons to other organizations in assorted sectors and industries. The organization actually identifies its culture -- which is heavily influenced by its Swedish roots and.....

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