The IKEA culture
IKEA’s culture was founded by Ingvar Kamprad when he founded IKEA. IKEA culture is based on several factors such as being innovative to help majority of the people have access to quality furniture at an affordable cost. IKEA culture is also based on the spirit of togetherness, which brings together hearty men, and women who work for IKEA in different capacities. This is the reason that the founders, Ingvar Kamprad, called employees co-workers. IKEA views its employees as a family and it creates an environment that helps to foster the bond among the employees. The culture at IKEA encourages simplicity, humbleness, common sense, creativity, and enthusiasm among its employees who can directly relate to the needs of the customers. This is in line with its spirit of being frugal and working around the mountain.
Values, strategy, and structure impacts the performance IKEA in a huge way. To begin with, IKEA is founded on values of hard work, innovativeness, and finding solutions to problems facing people. Right from a tender age, Ingvar Kamprad was able to offer solutions to people in his village through his business of purchasing matches in hulk and selling to people. These values have helped IKEA to grow, expand, and dominate the furniture industry. These values closely connect employees together since they start sharing something common once they step at IKEA. An organization that has no value is deemed to fail since it has no fabric that holds its employees together. It can be compared to a ship without a captain, it is going to hit iceberg and sink.
How values, strategy, and structure impact performance
Strategy also plays as important role in determining the performance of an organization. When an organization has a poor strategy whether in marketing or manufacturing a product it will have poor performance. IKEA had an excellent strategy of its operation and how it obtained its furniture. IKEA was using the outsourcing strategy to get its furniture and this worked in minimizing costs and heling the supplier also to minimize their costs hence making low cost furniture. This translated to the expansion of the company into new territories.
Structure of an organization is also vital in determining the performance of a company. The structure is very important since it determines whether the organization will continue being in operation even after the founder steps down. For IKEA, Ingvar Kamprad had left a solid organizational structure that remained effective even after he retired from IKEA. This structure enabled IKEA to get a new CEO, Mikael Ohlsson, who had IKEA’s organization culture at heart. The structure left no room for cultural or corporate change. The CEO and the cashier on the sales floor are separated by four layers. The structure makes everyone at their level to do their work as expected. Therefore, a strong organizational structure has a huge impact on the performance.
Using Robert Quinn and Kim Cameron’s model of “Organizational Life Cycle I would described IKEA as an elaborate organization. IKEA is a multinational organization that has already penetrated markets beyond Sweden where it was founded. With 1300 suppliers in 53 countries, IKEA is a dominant force to reckon with. It has operations in Asia, America, and Europe and it is continuing to operate in new countries and markets. It is doing homes, furniture and offering services such as home decorating advice to its Chinese customers. Moreover, it has a well laid down structure and division of labor to help in smooth running of its operations. It exercised control over its suppliers by purchasing 90% to 100% of supplier’s productions. This makes, IKEA to have a huge say on the products delivered or made by the suppliers. It also has an integrated design, production, and distribution channel. IKEA is now more focused in creating a positive image and reputation as seen by the response it gave to workers in US who felt were being discriminated.
To ensure a positive future, IKEA should do several things. To begin with, IKEA should be flexible and when it enters, it should supply or sell products that are in line with the culture of that country. This applies to Asian market and African market if it enters this market in future. In china, culture was a big hindrance and derailed its success. Product sold in China should be labeled in Chinese. The people will respond positively to its entry. Swedish culture can apply to some markets in Europe and America but not in Asia. The culture of people there is very different from the one in Sweden. Additionally, IKEA should ensure that its workers across the globe enjoy the same salaries and benefits. This will be a huge step in avoiding law suits and negative publicity. Paying workers same or according to the living standards of a country will help paint a positive image of IKEA. Finally, it should concentrating on offering the best products to customers by carrying out research and asking people what they would want to be manufactured.
IKEA has made strides since 1953 and it has reached a level that the founder did not even think it would when he started it. IKEA has gone through significant stages to reach where it is today. Just like the way other companies are founded, IKEA was founded in a village and started small by serving the people in Ingvar Kamprad’s village. However, it started growing and grew from a local company to a regional company. Through hard work and determination IKEA soon became a national company that was selling furniture to all the parts of Sweden. From here, IKEA started expanding into other countries and within a few decades, it had made an impression across Europe. Today, IKEA is not just in European countries but it is operating in other countries such as China, Australia, and United States. Therefore, IKEA is global company since it not only operates in Sweden but also in 41 other countries across the earth. Some of the factors that have influenced by decision to classify IKEA as a global comp any is the virtue of it having operations in 41 countries. For it to reach that level, it had to grow and become a global company. It has embraced culture in different countries such as the steps it took in China to respond to market demands. IKEA continues to dominate the market because the management discovered that for it to be seem as a global company it has to observe the culture of the people and its product to reflect such culture.
Right from its inception IKEA has utilized its culture as a source of innovation. IKEA culture encourages innovation among employees and this has been utilized to achieve IKEA’s performance. Right from the day of its inception, a culture of innovation was planted by Ingvar Kamprad. He was an innovative person and offered solutions to common people problems. He laid the foundation of innovation by creating a conducive culture that encouraged the employees to be part of a team that helps find solution to people’s problems. For instance, IKEA’s “flat-box” was discovered by an employee who was trying to load a table to a customer’s automobile. This discovery was taken up and today it is utilized in making deliveries to customers. It saves the company money and thus reduces the cost of products. Without a culture that encouraged employees to discover ways of solving problems, this would not have been possible. IKEA’s culture is its DNA and once it is destroyed, IKEA would no longer be the same. The same culture also has facilitated recruitment of employees who come and continue to make the organization grow.
IKEA experiences can help other companies and there are companies, which have already used the same strategy and are now competing with IKEA. IKEA experience can help new companies to learn that growth is in stages and takes time. For instance, for other companies to succeed in whichever industry they are operating in, they just need to offer a solution to common people problems. Any business or company that solves an existing problem always succeeds in the market because people will always buy its products. Another lesson that companies can learn from IKEA is that they should concentrate on reducing costs by being innovative. This should be done while at the same ensuring production of high quality products that meet or even exceed customers’ expectations.