IKEA's Organizational Culture: Practices, Issues, and Frameworks

This report provides a comprehensive analysis of IKEA's organizational culture, focusing on its practices and the challenges it faces, particularly employee conflicts. It begins with a brief background of the company and its environment, highlighting IKEA's global presence and its commitment to providing affordable furniture. The report then delves into the specific issues the company confronts, such as conflicts arising from differences in employee personalities and values. To address these challenges, the report examines the application of theoretical frameworks, including Trompenaars and Hampden-Turner's Seven Dimensions of Culture and Hofstede's cultural dimensions. It explores how these frameworks can be used to improve communication, understand cultural differences, and enhance HR practices within IKEA. The analysis emphasizes the importance of effective leadership, healthy communication, and understanding the business environment to achieve organizational goals. The report concludes by assessing the effectiveness of the chosen theoretical frameworks in resolving the identified issues and improving overall organizational performance.

CULTURE
AND
ORGANZIATION

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
BRIEF BACKGROUND OF COMPANY AND ITS ENVIRONMENT.......................................1
FOCUS OF REPORT......................................................................................................................2
Practice...................................................................................................................................2
Issue........................................................................................................................................2
CHOOSING A PARTICULAR THEORETICAL FRAMEWORK...............................................3
Trompenaars and Hampden-Turner's Seven Dimensions of Culture.....................................3
Hofstede's culture theory........................................................................................................4
ORGANIZATIONAL CULTURE PRACTICES IN IKEA............................................................6
ANALYSIS OF THE PRACTICE AND CONCEPTS.................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
APPENDIX....................................................................................................................................14
Appendix 1 About Ikea........................................................................................................14
Appendix 2: Issues in Ikea...................................................................................................15
Appendix 3: Practices followed in Ikea................................................................................15
Appendix 4: Organizational cultural practices in Ikea.........................................................16

INTRODUCTION
Organization culture is considered as a system of shared assumptions, different values
and beliefs which generally governs how employees behave in the organization. Further, every
business organization has its own culture which provides guidelines for the members in the
company. Culture of organization includes vision, mission, language assumptions, habits, etc.
Organization culture is also considered as a set of shared assumptions that generally directs
regarding the happening in companies by defining suitable behaviour for various situations
(Dirani, 2013). This present report is based on a theoretical framework in organizational culture
which organization is facing. In this context, the organization undertaken for the present study is
Ikea which is a multinational group of company that designs and sell readily assembled furniture
like beds, chairs, desks, etc. Further, mentioned company also deals in appliances, home
accessories and motor vehicles. Moreover, the purpose of this report is to focus on issues which
organization is facing and in order to solve that issue practice has been implemented so that
company can achieve its goals and objectives in significant manner. Here, the present report will
analyse the different HR practices which is being used by the corporation in order to resolve the
issues which are occurring within the enterprises. In this context, it is assessed that conflicts
between employees due to poor communication is being regarded as the major issue which is
being faced by the firm. In addition to this, the report will also provide detailed description
regarding the theoretical framework such as Trompenaars and Hampden-Turner's Seven
Dimensions of Culture and Hosfede cross culture theory which is being used by the Ikea in order
to resolve its issue in an effectual manner.
BRIEF BACKGROUND OF COMPANY AND ITS ENVIRONMENT
Ikea is the world's biggest furniture based company and it is the largest retailer of the
same. Mentioned company is generally known for its architectural designs for various types of
appliances and furniture. Moreover, the interior design of the company is associated with eco-
friendly quality. The organization is so big that around 10% population today in Europe uses
Ikea bed. Further, the cited company is known for its cost control, different operational details
and nonstop product development (Alvesson, 2012). Further, aforesaid company is focusing on
producing best of products for the consumers at an affordable price. However, at the time of
3

global expansion, Ikea has reduced their furniture prices by 2 to 3 percent in order to get
attention of their customers.
FOCUS OF REPORT
Practice
Ikea as stated focusing on vision to create an everyday life better for many individuals.
Further, the above mentioned people includes organization customers both loyal and the new one
whom cited company is attracting and also corporate potentially multi talented employees.
Further, it also includes the community in which organization is giving their productive and
useful service (Rana and Goel, 2014). Further, it is a universal philosophy that if organization
will take care of their employees then employees will also give best of their performance in order
to achieve the individuals as well as organizational goals. Mentioned company having effective
HR practice which boosts employees morale and they work with more of their dedication
affection. Further, Ikea also implemented paternalistic practice towards their employees in order
to satisfy their needs and demands. Further, cited organization focuses on employee
empowerment where all the plans and policies are implemented uniformly to all the employees.
Further, Ikea's policies are considered as one of the best in the world as mentioned company
invests much of their revenue in employees training and development program. Organization
generally supports the life balance and diversity for employees as with the help of it, employees
are easily able to manage their personal and professional life (Joo, 2012). Further, company
gives flexible working hours and holidays to employees so that they really get motivated and
give best of the performance in the organization success.
Issue
With so much of well diverse infrastructure and goodwill of the company, cited
organization facing employee’s conflict in some of their operational units. Organization has to
take some relative steps in order to control such issues as this can harm the mentioned company
brand image. Further, these conflicts are the common occurrence which comes into play due to
difference in employees personality and their values (Bruno and et.al., 2013). From a research it
has been concluded that HR managers in the organization spends almost 25% of their time in
solving employee’s conflicts. Employees in Ikea have strong belief as they do not likely to
4

compromise for anything. Further, style of working also makes a difference as one choosing
effective style and finishing all the tasks and duties of the organization in a proper and effective
manner.
CHOOSING A PARTICULAR THEORETICAL FRAMEWORK
Issues in the company can be overcome by taking proper actions which can be generally
accepted by all the parties who are in the disputes. Further, as stated in above point employees
conflict in the organization is a major drawback for the organization which subsequently reduces
the brand image of the company and affects their functioning. Further, there are some other
problems too which organization faces like team problem, working environment and conditions
and many others (Chua and Banerjee, 2013). These are the problems can be solved out by the
corporate by taking up effective actions precautions. Therefore, major emphasis is given on
organization practice which Ikea is employing in order to increase more of the efficiency and
productivity. Mentioned company have implemented practice like effective leadership, healthy
communication, understanding the business environment and customer service. These all
practices can take cited organization to achieve their goals and objectives. Further, with the
implementation of all these policies company is able to give tough competition to their major
competitors in order to get the competitive advantage and also the customers trust.
Trompenaars and Hampden-Turner's Seven Dimensions of Culture
Trompenaars and Hampden-Turner's Seven Dimensions of Culture can help IKEA to
solve it. This culture identifies that people who come from different culture are not only differ
from each other but also they differ in every specific and predictable ways. This further culture
has seven dimensions and it consists of:
 Universalism vs. particularism.
 Individualism vs. communitarianism.
 Specific vs. diffuse.
 Neutral vs. emotional.
 Achievement vs. ascription.
 Sequential time vs. synchronous time.
 Internal direction vs. outer direction.
5

Management by understanding the issue in the IKEA can conduct training and
development session for employees and give them training on the weekends so that they can
improve their communication skills. These employees been also motivated with the help of
effective performance appraisals and this has boosted their morale and they are able to work with
best of their efficiency and capabilities (Henley and Caemmerer, 2011). Further, cultural
difference creates an issue because they vary from different background and they have their own
native language and their way of doing a particular task is also different as compared to other
employees. In order to solve this too, training and development session will be most appropriate.
Hofstede's culture theory
Further, mentioned company can implement the Hofstede's culture theory in the
organization which is generally a cross-cultural communication and it depicts the effect of
society culture on the value of the employees working in the Ikea. The above theory having few
dimensions with which cultural values can be analysed. These are individualism and
collectivism; uncertainty avoidance; strength of the social hierarchy and task oriented vs. person
orientation. This model establishes crucial research in the field of cross- cultural psychology and
it has been severely drawn up by the researchers and consultants in many different fields which
are relating with the international business and communication (Chua and Banerjee, 2013). This
theory will help organization in developing an effective culture which will give a core emphasis
on the subordinate relationship as employees will be able to understand each other’s culture and
values. In addition to this, with the help of given theory Ikea manager can get the
information about the culture of people and on the basis of this it can mould its HR practices in
an effective way. Thereby, it can make significant action towards the issue in an effectual way.
For example, power and distance relationship depict that the extent to which employees of the
organisation gives importance to the power distance relationship. For example, if firm has
identified that the person who works within the firm resides in low PDP index. This means that
they give importance to the power and distance relationship. Thus, it is required by the Ikea that
it must define the authority of the people who work in the firm in an effective manner. This is
because, if it is not done then in the given circumstance the satisfaction level of the employees
will be impacted (Dirani, 2013).
Furthermore, individualism and collectivism is another dimensions of Hosfede cross
culture approach. The people preference with respect to work in a group also depends upon the
6

given dimension only. For example, the people of UK prefer to work in a individualistic manner
as they do not like to become the part of any group. In the similar way, people who live in Asia
like to work in a collective manner (Chua and Banerjee, 2013). Thus, on the basis of given
information Ikea must frame its HR management strategy. For example, firm must follow group
working type of approach if it is functioning its operation in Asia.
Masculinity and femininity is another dimension of theory. In some culture, people do
not perform any discrimination on the ground of age and gender. The gender discrimination is
not only restricted to the people of society but the given approach is followed within many
organisations. The given aspect will lead to affect the existing structure of firm. For example,
there is a high masculinity score is being seen in the country like Japan. This means that the male
employees who works in Ikea firm based in Japan cannot tolerate instruction from the any
female. Thus, it is recommended to the cited firm that it must consider the given approach while
making the decision about the organisational structure. However, lack of consideration about the
same will lead to hamper the operation of company in a negative way.
The culture of people is further segregated on the basis of long and short term orientation.
The people who follow long terms orientation expect that their culture needs to be valued by
another people or its employers where it is working. But, short term orientation people do not
expect the same (Dirani, 2013). Overall, it can be said that by taking help from the given
approach Ikea manager can enhance the satisfaction level of workers. Thus, it can achieve
success in the markets where it is operating its operation.
The analysis of the model helps in understanding both the above approaches. IKEA can
focus more on Hofstede's culture theory then the Trompenaars and Hampden-Turner's Seven
Dimensions of Culture. This is because Hofstede theory is deeper in context and focus on solving
all the problems and issues in the venture. It creates a broad perspective of different approaches
the company may adopt in order to expand its business operations. On the contrary side,
Trompenaars theory generally emphasizes on improving the communication skills among
employees and leads to develop the motivational level among employees (Girdauskienė and
Ramirez, 2014). Moreover, Hofstede theory having broader concept and emphasis on different
elements like avoiding discrimination in the selection process, promotes harmony and team
working, delegation of authority so that employee can work with best of its efficiency and
capacity to achieve its individual and organizational goals and objectives. As stated in the above
7

description as well that the theory majorly focuses on collectivism then individualism because
firm focusing on promoting the harmony so that mission and vision are easily accomplished.
This theory also gives maximum level of satisfaction to the workers as compared to the
Trompenaars one because it satisfies the employee’s needs along with the rights of the
individuals.
Further, the cited firm can implement the Hofstede's theory to eliminate the conflicts
which exits. These conflicts are the major issue of Ikea which HR manager have to solve in an
effective manner to increase their business operations and profits (Karlsruhe, Freiburg, Berlin,
2012). With the successful implementation of the theory, HR manager will be able to solve the
grievances of the employees as well and there will exist proper harmony and working
environment in the business venture.
ORGANIZATIONAL CULTURE PRACTICES IN IKEA
Organizational culture is a very significant part of the organizational growth and
development. This helps the companies in creating a wide impact on overall development of the
company within the market. Henley and Caemmerer, (2011) mentioned in one of the theory
study that an effective organizational culture of the company proves to the strength of an
organization because culture is an integral part of the business unit and that the rival firm cannot
replicate the same to enhance the organizational success of the company.
8

Illustration 1: Organizational culture
(Source: Czinkota and Ronkainen, 2012)
Ikea has developed positive organizational culture within the business unit. This has
helped the business unit in creating a wide and effective impact on the growth and development
of the company. For this, HR manager of Ikea have also implemented Hofstede theory which
will also result into the growth and development of the business enterprise. Further,
organizational culture has a wide impact of values, perception, employee behavior, code or
conduct and communication measures within the organization. The organizational practices
within helps a business unit in attaining a positive culture (Czinkota and Ronkainen, 2012). The
most effective and influential measures which has helped the businesses in creating a wide
impact on organizational culture by enhancing its growth prospects within the market include
effective HR practices, well developed leadership and highly developed communication.
9

Illustration 2: Organizational culture practice
(Source: Dipboye and Colella, 2013)
The effective organizational culture is developed within the business as per Frantz and
Carley, (2013) is by developing an influential impact on the employee practices within the
company. Bradley, (2005) clearly mentions in researches that the most crucial practices which
helps in developing effective organization culture within the organization includes effective
leadership practices, positive working environment, well developed HRD practices and well
developed communication as well. Hofstede theory also possess all these elements and manager
of Ikea will focus on implementation of the above theory in the business enterprise for achieving
the growth and development in coming time period The impact of these factors on organizational
culture is effectively discussed hence forth.
HRD practices
These are the major issues that a company faces while developing an effective culture for
working within the economy Xiaojian, (2013). The organization faces effective impact on the
organizational growth and development if human resource practices are ineffective for the
organization. Companies focus on developing effective measures to enhance employee welfare
and development within the company. Moreover, HRD practices also focuses on developing
influential code of conduct and employee behaviour as well. Bradley, (2005) examines in one of
the study that Human resource practices of the company helps in developing the foundational
base for the organizational culture. It helps in defining the basic code of conduct, employee
behaviour and organizational regulations as well. The companies must ensure the effective
10

implementation of basic code of conduct to create uniformity and unbiased within the firm. Thus
this creates a wide impact on developing organizational culture. Further, along with different
HRM practices, manager will focus on implementation of Hofstede theory which comprises all
the crucial elements of practices.
Leadership
Effective leadership helps in developing a positive growth and development prospects for
the employees. According to Lamb and et. al., (2008) leadership is factor which enhanced the
employee development. Effective leadership results in creating effective impact on employee
learning and proper development as well. Employing proper measures of leadership helps the
business in enhancing the effectiveness of the Ikea and cited firm will be able to achieve their
goals and objectives in effective and efficient manner. Hence, Dipboye and Colella, (2013)
mentioned that effective leadership practices helps the company in developing the employee thus
enhancing the productivity and brand image of the company as well. For examples Virgin
Atlantic is a successful business venture which has developed a participative leadership approach
to enhance employee engagement within the company. R. Branson has developed leadership
measures such that employees feel as a part of the family thus enhances their contribution
towards the growth and development of the company. On the other hand Steve Jobs was an
autocratic leader however the developed a system where the growth of the organization resulted
in the overall growth of the company. Thus, employees enhanced their measures of working to
enhance organizational growth within the economy. Hofstede theory also comprises this element
and with the practice of collectivism, cited firm will be able to develop effective leader in the
team who will act as mentor for employees (Joo, 2012). This will also boost up the employee's
morale and they will start working with best of their productivity and efficiency.
Working environment
Working environment is another crucial factor of business growth and development.
Xiaojian, (2013) mentions in one of the study that effective organizational environment helps in
developing the company highly. Well developed environment for working in terms of physical
amenities, infrastructures and working measures helps employee in developing a positive
perception for the company. This factor also helps in enhancing employee motivation within the
organization. A positive and effective working environment helps the company in attaining high
measures of success by creating a positive pace of working.
11

ANALYSIS OF THE PRACTICE AND CONCEPTS
Ikea is tremendously growing as the leadership, HRD practices, business environment
and communication which it follows helps the firm to increase performance and growth.
Different organization follow different leadership styles among which firm shave their leadership
style according to the culture and structure organization follows. Each leadership style has their
own advantages and disadvantages (Andrew, 2011). Ikea adopts different leadership style
according to the situation occurs. Normally, organizations face different types of situation and in
order to overcome those situations, leadership styles are very important. Ikea adopts leadership
style in accordance with its situation.
Mostly, Ikea follows democratic leadership style, according to this leadership style all the
employees are involved in decision making. This leadership style is very helpful in motivating
the employees as they feel that they are important for the organization. With this, employees
share their ideas, problem or issues which they face. They share it freely as they have the faith
that their issues and problems will be solved. In addition to this, the firm also adopts autocratic
leadership style, according to this style all the decision is taken by the top management only
(Alvesson, 2012). This type of style is followed because the firm because management face
situation where they have to take quick decision. Situations where quick decision has to be taken,
then firm follows autocratic leadership style. Moreover, they also follow Laissez-Faire,
according to this leadership style employees are not given proper supervision to their employees
and as a result they lack in providing feedback to those who are under their supervision.
From this it can be stated that the culture which the firm follow is very helpful in
motivating their employees and in improving their performance. Further, the environment which
the organization provides is remarkable as they have provided their employees with healthy
environment when they have provided them with health safety and remuneration which is very
helpful in providing them satisfaction. The firm has taken many safety measures which helps
them in developing a mental satisfaction among the employees (Karlsruhe, Freiburg, Berlin,
2012).
Communication among the management is very effective as they use open door policy in
which all the employee are free to share their ideas or any kind of problem directly to the
management. This type of policies are very helpful in providing confidence among the
12