IKEA's Organizational Culture: Adhocracy and Competitive Advantage

This report provides an in-depth analysis of IKEA's organizational culture, identifying its core characteristics as an "Adhocracy," similar to Google Inc. The report examines IKEA's historical growth, emphasizing innovation, free-thinking, and employee empowerment. It explores how IKEA fosters new ideas, facilitates direct communication, and utilizes a mixed organizational culture combining hierarchy, clan, and adhocracy elements. The report compares IKEA's structure to Google's, highlighting the use of small, specialized teams and facilitators. It also discusses Schein's four key factors of organizational culture, including myths and stories, symbols and artifacts, rituals, and language, and how these elements contribute to IKEA's competitive advantage. The report concludes by emphasizing IKEA's strong brand perception and its ability to meet market demands through portable furniture and home décor systems, positioning the company for future success.

1
IKEA an “Adhocracy” parallel to Google INC
After reviewing the current working culture and the history of the organization, we find that
primarily it is the organizational culture of the “Adhocracy” that prevails in the operations of
IKEA. The historical facts related to the growth of the organization give us an idea that this
organization purely thrives on the merits of innovation and free will thinking of the
individuals (Moon,2011).
The notes of the case study give us an impression that besides being money-making
production unit, IKEA provides a platform to the free will thinkers, collect their visions,
translate them into meaningful business ideas and deliver them in the market in the form of
an affordable solution for the masses. When an organization allows its employees to come up
with new ideas and provides them a highway to contact the higher authorities directly, then
this type of organizational culture is also known as “Adhocracy” based organizational
culture. After attaining this adhocracy the innovation department of the company takes over
the idea and work upon it, this is the area where the applications of bureaucracy move in.
The notes of the case study give us an idea that the goals and objectives of the organization
are price driven, they want to come up with affordable, durable quality solutions for the
masses. Mass production of the goods is their biggest strength and they have adequate
resources to run a “just in case” assembly line.
All these conditions also give rise to a mixed breed of organizational culture in IKEA. This
mix breed of culture denotes a mix of ideologies from the hierarchy based culture and clan
culture. This type of mix breed culture promotes the concept of the check and balance
between the fractions of an organization while giving them enough space for independent

decision making. We can understand it with the help of the organizational culture which is
prevailing in Google Inc. Google works with the help of small teams that have a
specialization in their own field. The diverse nature of their operations does not allow them to
centralize their operations because it can create an information gap among the fractions of the
organization. Another special trait ofGoogle’s management style lies in the fact that they
don’t have managers, instead of the managers, they have facilitators. These facilitators only
report to the centralized body and create a systematic communication bridge between the
main team and the core team. This straight line of communication allows Google to develop
several small teams under the umbrella of a well-organized mechanism to promote the ideas,
goods and secure their intellectual property rights.
IKEA also does the same thing, it promotes the culture of innovation. After identifying the
creativity it adds the knack of the commerce in it and finally facilitates a secured pipeline
where the furniture designs and interior based ideas are safe under the copyright practices and
the become affordable for the masses because of the mass production of the components
under a single hub (Tarvovskaya et al.,2011).
2
Four Key factors related to the organizational culture and the case of IKEA
Organizational culture is an invisible thread of rituals, artifacts, anecdotes of the success stories,
symbols representing the objectives, symbols representing the success milestones and the
language of communication to serve a different purpose. The above-mentioned theory or the
model of organizational culture is developed by Schein and he presented four key factors. When
we apply the four key factors developed by Schein in the case of a real-world organization, we
find that all these factors are intertwined and dependent on each other. In the case of IKEA, we
can describe them as follows.

Myths and Stories
The success story of a simpleton living in a Swedish village gives us pleasure, it invites us to
be a part of it. The story Ingvar Kamprad and his Eureka moment with a piece of the table
actually promote the USP of the company which is portability along with the durability. In its
present status, we have many avenues to promote the concept of the self-assembled furniture,
however, during the ’50s and ’50s of the previous era, it was a herculean task (IKEA,2013).
The anecdotal value associated with the story of the founder supported the employees’ moral
along with the trust values of the customers. The concept of universal gravitation is a
complex concept and one need to read thousands of the books to understand that. However,
the anecdote associated with it makes it simple to grasp. Almost all of us are aware of the tale
where Sir Isaac Newton was sitting beneath a tree and the fall of an apple forced him to think
about the principle of the gravitation. The car and portable table story associated with the
IKEA holds the same mystique (Hill,2012).
Symbols and Artifacts
While developing an infrastructure for the IKEA building, the promoters of the company made
it sure that they are using blue color prominently and Swedish flag is finding a prominent space
in every communication that they are making. The presence of a Swedish flag can become a
hindrance for certain customers to identify it as an international brand. However, the consistent
success of the products made it an insignia of success for the company. Consistent use of
symbols can enhance the brand value of any product or organization and it can help them in
brand positioning objectives as well (Johannsons et al.,2011)

Rituals
IKEA hosts a lot of traditions that promote the concept of teamwork in the organization. They
regularly organize meets and informal events where employees participate in various activities
that can be considered a team building exercise (Jonsson,2011). The informal environment of
the organization has become a ritual. Apart from it, the regular visits of the founder to all the
places with the help of a random sampling based selection are another ritual that supports the
culture of adhocracy in the organization (Schein,1990).
Language
The nomenclature of the products with the help of Nordic symbols is judicious use of language
for IKEA, during its long journey these words created a separate identity for them. Names like
Klippan sofas and Pablo footstools helps to create a brand perception for the new products and
associate them with a rich legacy (Schein,2010).
3.
Competitive advantage and the distinctive culture at IKEA
The future markets are seeking for strong brand perceptions rather than logistic based presence.
The rich legacy of the IKEA fulfills all these conditions. The segment of home décor and
portable furniture has seen a miss and blink appearance of many players, most of these players
failed to survive in the long run because their designs were not well protected. IKEA has a
strong culture of securing brand identities and float them with rapid impact. This factor will
always work in their favor; they are not doing anything new, it is a culture with them and the
rest of the players are only catching up with it (Sulkowski,2014).

The organizational culture of IKEA has strong undertones of the present day “ Google
Culture.” We are aware of the fact that this Google culture enables a company to handle diverse
cultures and diverse products with great ease. The existing culture at IKEA allows them to meet
the future challenges of the market with great effect because they are already following this
Google model of Small teams and less managerial interventions while attaching the outputs to a
big assembly line (Dowling et al.,2012)
The current organizational culture of adhocracy and the fulfillment of all the pointers of
Shein’s key factor make this organization as a future savvy organization. Apart from the
organizational culture, the offerings given by the production unit are also in synchronization
with the market demands. Portable furniture and home décor systems are the need of the
hour. In order to expand its business at an international level, the company took the support
of the perception of the market forces in the past. Now the company is in synchronization
with the present marketing practices where brand perception plays a key role in the
establishment of the brand (IKEA,2017). This is the area where IKEA scores, the stories
associated with this brand, their attempts to create an insignia for the brand and most
importantly the nomenclature of the other products, are factors that will support them in the
market(Kowit, 2016).
This presence of positive brand perception and the stamp of being a trusted organization will
help them big time in the world where individuals are searching for tangible products on an
intangible medium like the internet (Bryman et al.,2012).

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