Exploring Organizational Culture: A Case Study of IKEA

The analysis investigates IKEA's unique organizational culture, focusing on aspects like customer-centric approaches, effective knowledge management, and a strong ethical foundation. It explores how these cultural facets influence decision-making processes and operational efficiency. Additionally, the assignment looks at the role of diversity and inclusivity in enhancing IKEA’s international presence and adaptability. The synthesis of various research insights reveals that IKEA's culture not only drives innovation but also fosters an environment conducive to continuous improvement and global competitiveness.

Running head: PEOPLE, CULTURE & ORGANIZATION
People, Culture & Organization
Name of the student
Name of the University
Author Note

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Abstract
The business report is discussing about the organizational approach of IKEA towards the people
as well as the organization. In ths regard, an organizational overview of the company has been
provided. The organizational culture of IKEA has also been explained. The literature section of
the report is discussing about the varous theories associated with leadership, motivation as well
as communication and in the next section an analysis as well as synthesis of the application of
the various theories in IKEA has been explained. Moreover, the key challenges as well as
opportunities relating to the organization has been described and finally recommendation has
been cited as to how the organization can make necessary improvements.

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Table of Contents
Introduction......................................................................................................................................3
Literature Review............................................................................................................................4
Leadership theories......................................................................................................................5
Motivation theories......................................................................................................................6
Communication theories..............................................................................................................8
Analysis and synthesis of how literature is applied in the business world......................................9
Leadership theories......................................................................................................................9
Motivation theories....................................................................................................................11
Communication theories............................................................................................................13
Key opportunities and challenges of IKEA...................................................................................13
Recommendations..........................................................................................................................14
Conclusions....................................................................................................................................14
References......................................................................................................................................15

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Introduction
IKEA is considered being a globally recognized home furnishing retailer. In the current
scenario, IKEA is considered being one of the leading furniture and textile retailers in the world.
IKEA is offering more than 9,500 products, which includes an entire range of home and office
furnishings, equipment, lighting as well as accesssories. There is the availability of this broad
range in every outlets of IKEA, and consumers can do the ordering of various products online on
the official website of IKEA. In respect of the customers as well as staffs of the organization,
IKEA is an association of distinctive traits. The organization is also well-known for providing
similar variety of products in every country. The number of organizational products offered at a
single store s ranging from 8,000 to 10,000 products, based on the size of the outlet. Similarly,
the global strategy that the organization has adopted comprises of adjusting to the particular
atmosphere as well as national traditons of the country where the outet is functioning. The
locations of the store, design as well as display are generally adjusted to the overall needs of the
market as well as customer behaviour.
The personnel of the organization is considered being an enormously significant asset at
IKEA, which tries doing the enlargement of the assortment base, improving the product as well
as service quality. The creative approach as well as original designs in addition to the practical
pricing policy will be contributing to the competitive advantage of the organization and will be
explaining the organization’s success to go through the period of crisis.
The organizational culture of the organization will be incuding the key principles such as
simplicity as well as high level of informality, the value regarding teamwork as well as
embracing diversity within the staffs as well as varied means of doing things.

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Literature Review
In accord to the organizational culture of IKEA, it can be stated that humbleness to
approach tasks as well as simplicity in the manner of conducting things are considered being the
cornerstones of the cultural aspect regarding IKEA. In regard to organizational culture regarding
value for teamwork, it can be stated that executives prefer managing as one-man show will not
be fitting into the organizational culture of IKEA. The international furniture retailer wants to
make sure that it does the employment of the individuals who will be sharing its values as well as
do the appreciation of its cultural aspect. In regard to the organizational culture of embracing
diversity among staffs, it can be stated that the almost 48% of the managers at IKEA and 33% of
the Group Management team are considered being women. Women are also doing the
representation of 54% of all the staffs working at IKEA. The international furnitue retailer is
believing that the identification of differences within its staffs will be contributing towards
creativity as well as supporting the business growth (Watson 2017).
There are two kinds of organizational culture, such as strong culture and weak culture.
Within a strong culture, the core values of the organization are both intensely held as well as
shared widely. The core values of the organization are having a strong impact on the behavioual
aspect of the staffs. Employees do the understanding of what is significant within the company.
There exists an increased behavioural control level. The loyalty, commitment as well as
identification of the organization are higher, and as result, there occurs lower turnover of staffs.
Within a weak culture, values are often only shared at the top of the hierarchy of the organization
(Thompson 2017). The staffs might be perceiving conflicting messages regarding what is
significant. The values are having limited impact regarding the behaviour of the staffs and the
loyalty, commitment as well as organizational recognition are lower.

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The functions of culture does the creation of distinctions within organizations, conveying
a sense of identity in respect of the staffs, encouraging organizational commitment, encouraging
behaviours that are expected, impacting the attitudes as well as behaviours of the staffs and
acting as a mechanism of control (Stanford 2014).
In addition, organizational culture does the creation of organizational climate.
Organizational culture is referring to the shared insights that staffs are having about IKEA as
well as the environment regardng work. Organizational climate will be strengthening the impacts
of general feelings that many individuals hold regarding what is significant. According to
research, it was found out that positive organizational climate is having a positive influence upon
staff engagement, staff commitment, satisfaction of job, superior performance regarding work as
well as higher satisfaction regarding the customers (Smith 2017). A positive culture can be
created by building on the stength of employees, through effective communication as well as
effective socialization.
Leadership theories
Trait theories of leadership
This leadership theory does the identification of the particular personality traits that is
distinguishing the leaders from the non-leaders. Scholars undertaking the trait approach is
attempting to do the identification of the physiological, demographic, personality, self-
confidence as well as aggressive behaviours and social traits comprising of the emergence as
well as effectiveness of the leaders. Successful leaders are having interests, capabilities as well as
personality traits that are different from the leaders that are considered being less effective
(Shove 2014). Among the core traits that are recognized, there exists the achievement drive,

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leadership motivation, honesty and integrity, self-confidence, cognitive ability, business
knowledge as well as emotional maturity.
Behavioural theories of leadership
It is focusing on the study of particular leadership behaviours. In respect of the
behavioural theorists, the behavioural leader is the best predictor of their leadership impacts and
therefore, is considered being the best determinant of his or her success relating to leadership.
There exists two behavioural groups, such as consideration as well as initiating structure.
Consideration comprises of people oriented behavioural leaders focusing on motivating,
observing, coaching, as well as mentoring, whereas initiating structure comprises of task oriented
leaders focusing on initiating, gathering of information, clarifying as well as organizing (Riivari
2014).
Situational theory of leadership
The situational theory of leadership is suggesting that no single style of leadership is
considered being the best. Instead, it is depending upon the present situation and which
leadership type as well as strategies are best-suited to the task (Rall 2015). According to this
theoretical approach, the leaders that are considered being most effective are considered being
those that are having the ability to do the adaption of their style regarding the situational aspect
as well as looking at indications like the kind of task, the group nature, as well as other factors
that might be contributing to the aspect of completing the job (Pitts 2014).
Motivation theories
Maslow’s motivation theories

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The motivation theory of Maslow is represented with the help of five stages that includes
the physiological needs, safety needs, social needs, esteem needs as well as self-actualization
needs. The physiological needs will be including the attributes such as hunger, sleep as well as
thirst. The safety needs will be including the attributes such as security, safeguard from danger as
well as relief from pain. The social needs willl be at times referring to the needs for love like
friendship, to give as well as receve love, and to engage in social activities as well as group
membership (Pioch 2014). The esteem needs will be including both self-respect as well as
other’s esteems. The self-actualization needs is relating to the desirability for develping as well
as realizing a person’s complete potential. According to this theory, when one set of needs gets
actualized, the next needs level turns out to be more of a motivator regarding a person. A
satisfied need is not considered being a motivator and only the needs that are not satisfied will be
motivating a person (Owoyemi 2014). An individual is having an inherent desire for working
their way up the hierarchy, and to pursue satisfaction in higher order needs.
ERG motivation theories
This is a theory that is depending upon three primary needs of human beings such as
existence, relatedness as well as growth.
The existence needs comprises of all the material as well as physiological desires. This is
similar to the first two levels of Maslow.
The relatedness needs is encompassing the social as well as external esteem, associations
with significant others such as family, friends, colleagues as well as employers, meaning to get
identied as well as having a feeling of security as part of a group or family. This is similar to the
third and fourth levels of Maslow.

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The growth needs will be including the internal esteem as well as self actualization,
impelling an individual towards making creative or productive impacts on himself as well as the
environment. This is similar to the fourth and fifth levels of Maslow. This will be including the
desires for being creative as well as efficient, and doing the completion of tasks that are
considered being meaningful (Mostafa 2016).
Dual Factor motivation theories
Herzberg’s Dual Factor, also known as Motivation-Hygiene Theory is considered being a
need theory that is having the involvement of the Motivators as well as Hygiene factors. Hygiene
factors are having the similarity with the lower three needs regarding Maslow’s theory and the
Motivators are having similarity with the two higher level needs regarding the hierarchy of
Maslow. It can be stated that a person might be having satisfaction regarding the Hygiene factors
but unsatisfied due to the Motivators. Better pay as well as project conditions do not offset the
project nature itself, or the requirement of a team member or project manager for gaining
individual growth. In other words, there isn’t any possibility for substituting the Motivators with
the Hygiene Factors (Larsson 2016). This is significant for the project managers in realising
when they will do the development of a motivational calculus in respect of the members of their
team.
Communication theories
Berlo’s SMCR Model of Communucation
This is focusing on encoding as well as decoding that occurs before the message is send
by the sender and before the message is received by the receiver in the respective manner. This
model of communication is having majorly, four elements describing the process of

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communication, such as the sender, message, channel as well as receiver. The factors associated
with sender are communication skills, attitude, knowledge, social systems and culture. The
factors associated with message are content, elements, treatment, structure and code. The five
senses of individuals are considered being the communication flow channel and it influencs the
channel’s effectiveness. The five senses are regarded as hearing, seeing, touching, smelling as
well as tasting (Lancashire 2016). The factors associated with receiver are the skills regarding
communication, attitudes, knowledge, social systems, as well as culture.
Shannon & Weaver Model of Communication
The designing of this communication model is done for developing the effective
communication amongst the sender as well as reciever. The model will be dealing with different
concepts such as sender or information source, encoder or transmitter, channel, decoder or
receiver, receiver or destination as well as noise. The sender is the person who is making the
message, choosing the channel as well as sending the message. The encoder is the sender who is
using machines, converting the message into signals. The channel is the medium for sending the
message. The decoder is consdered being the machine used for converting signals into message
or the receiver translating the message from the signals. The receiver is the individual who is
getting the message or the place where the message should be reaching (Hough 2013). The noise
is the physical disturbances such as the environement, individuals and so on that will not be
letting the message being received by the receiver as it was sent.
Analysis and synthesis of how literature is applied in the business world
Leadership theories
Trait theories of leadership

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The advantages regarding trait theories of leadership states that it builds on the basis that
leaders are unique, and this theory is providing the benchmarks regarding the identification of
leaders. Moreover, unlike other theories of leadership, Trait theory is boasting of many years of
research for confirmig the approach. The disadvantages of this theory is stating that it is
considered being leader-centric, and only concentrates upon the leader, not the follower or the
circumstances. Another disadvantage associaed with this theory is that it fails to see in what
ways particular traits does the influcing of outcomes relating to leadership like performance,
productivity as well as the satisfaction of the staffs (Holma 2017). Moreover, certain findings are
considered being vague that leads towards the improbability relating to the validity of the
approach.
Within IKEA, trait theory will be associated with the successful managers who are
having interests, capabilities as well as personality traits that are different from the managers that
are considered being less effective. Among the core traits that are recognized, there exists the
achievement drive, leadership motivation, honesty and integrity, self-confidence, cognitive
ability, business knowledge as well as emotional maturity of the organizatinal managers (Gilles
2015).
Behavioural theories of leadership
The advantages associated with this theory states that the traits of leadership can be
learned with the help of development as well as experience. The disadvantage associated with
this theory is concened with the aspect of adaptability. There exists very limited knowledge as to
how there will occur the use of behaviour theory in different cultural contexts as well as
circumstances (Fröding 2017).

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Within IKEA, the organizational manager following the behavioral theories can be
considered being the best predictor of their leadership impacts and therefore, can be considered
being the best determinant of his or her success relating to leadership within the company
(England 2014).
Situational theory of leadership
The advantages of situational leadership is associated with its ease of use as well as
simplicity. It identifies the requirement in respect of flexbility on the leader’s part and the
follower’s significance as determinants relating to the behaviour of the leaders. The
disadvantages associated with this leadership theory is that it disregards the manner in which the
other cultures are communicating and also does the ignoring of differences amongst the female
managers as well as male leaders (Duffield 2015).
Within IKEA, the organizational managers who will be considered being most effective
are considered being those that are having the ability to do the adaption of their style regarding
the situational aspect as well as looking at indications like the kind of task, the group nature, as
well as other factors that might be contributing to the aspect of completing the organizational
work (Douglas 2014).
Motivation theories
Maslow’s motivation theories
The advantages of this theory is that it is providing an effective summary regarding the
human requirements that can be used in designing of product, positioning of product as well as
pricing. It also assists the marketers in focusing their appeals regarding advertising relating to