1. A critical examination of how the success of IKEA is supported by its organisational culture.
Presentation by:
Mona E Thorvaldsen
Kate Mulvana
Joan Kawalewale
Jodie Evans
Tom A Trosterud

2. Agenda About IKEA History – Key Developments Organisational culture
Cultural web
Tools of analysis
Conclusions

3. About IKEA Global furnishing brand Founded by Ingvar Kamprad
Brand name
Unique organisational culture & leadership style
Kamprad’s Philosophy
Franchisees
Market position & share

4. History of IKEA 1943 – Founded: Individual sales
1945 – First Advertisement
1951 – New product ranges & catalogue
1953 – Furniture exhibition
1958 – First IKEA store
Expansion into Norway
1980’s – USA & Eastern European markets
1997 – Internet

5. “Maintaining a strong IKEA culture is one of the most crucial factors behind the continued success of the IKEA concept”
Ingvar Kamprad

6. Organisational culture
Shared norms, beliefs and values
Leads to collective behaviour
Segmentation of the organisational culture using the cultural web

7. Cultural Web Stories The Paradigm Routines and rituals Control System
Organisational
structures
Symbols
Power
Structures

8. Routines Company customs Production processes Distribution Stories The
Paradigm
Routines and
rituals
Control
System
Organisational
structures
Symbols
Power
Structures

9. Rituals Rites of passage Rites of enhancement Rites of integration
Rites of renewal
Stories
The
Paradigm
Routines and
rituals
Control
System
Organisational
structures
Symbols
Power
Structures

10. Stories Embedded in organisation Reminder of organisational values
The IKEA stories
Entail Kamprads philosophy and accomplishments
Stories
The
Paradigm
Routines and
rituals
Control
System
Organisational
structures
Symbols
Power
Structures

11. Symbols Symbols include acts, objects and Logo’s
IKEA’s symbolic action – simplicity
IKEA Logo – Scandinavian heritage
Stories
The
Paradigm
Routines and
rituals
Control
System
Organisational
structures
Symbols
Power
Structures

12. Power structures Inverted pyramid No barriers
Customer needs and preferences
Stories
The
Paradigm
Routines and
rituals
Control
System
Organisational
structures
Symbols
Power
Structures

13. Organisational structure
Flat structure
Informality
Open communication
Stories
The
Paradigm
Routines and
rituals
Control
System
Organisational
structures
Symbols
Power
Structures

14. Control systems Emphasis on a reward system “Big thank you” event
Stories
The
Paradigm
Routines and
rituals
Control
System
Organisational
structures
Symbols
Power
Structures

15. Paradigm Strong corporate culture Swedish heritage
Simplicity tradition
Functional quality products
Stories
The
Paradigm
Routines and
rituals
Control
System
Organisational
structures
Symbols
Power
Structures

16. Performance-enhancing cultures
Goal alignment
High levels of employee motivation
Better ability to learn from the past
“Fit” theory (Lorsch, 1976)

17. IKEA Strategy Bowman’s Strategy Clock ‘Hybrid’ strategy Low price
Differentiation
DIFFERENTIATION
High
Differentiation
IKEA
Focus Differentiation
Hybrid
Low Price
Low Price/Added value
Low
High
PRICE

18. How does IKEA’s culture support production and distribution?
Emphasis on minimising costs
Flat packaging - frugal beginnings
Economies of scale
Large scale organisation
Highly standardised products

19. How does IKEA’s culture support brand image?
The brand reflects:
A strong focus on low cost and functionality
Scandinavian style and values
Poor customer service and long queues

20. How does IKEA’s culture effect other aspects of success?
Learning from experience
Better knowledge transfer
Globalisation
National cultural differences

21. Hofstede’s Cultural Dimensions
Small Power Distance/ Collectivist
Large Power Distance/ Collectivist
Mexico
Individualism Index
Japan
Spain
Germany
France
Sweden
Small Power Distance/ Individualist
Large Power Distance/ Individualist
USA
Power Distance Index
(Source: Adapted from Harris & Moran, 2000)

22. How does IKEA’s culture effect other aspects of success?
Learning from experience
Better knowledge transfer
Globalisation
National cultural differences
Low cost = large scale retail
Planning permission

23. Conclusion Strong consistent culture
Link between culture and performance
Synergy between culture and strategy
Causality?

24. References
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