IKEA Organizational Culture: Strengths and Leadership

Introduction to Organizational Culture

Every organization has a unique culture that dictates how things are done — it defines the organization's social and psychological behavior. Though there is no universally agreed definition, organizational culture essentially refers to the values, beliefs, attitudes, assumptions, principles, habits, and customs shared by members of a given organization (Schein, 2010). These behavioral aspects constitute the distinctiveness of the organization (Jain, 2005). Indeed, organizational culture can be an important source of competitive advantage for an organization, as it determines its strategic orientation, personnel management approaches, and other aspects of organizational behavior (Schein, 2010; Mullins & Christy, 2010).

One organization that has built a distinctive organizational culture is IKEA, a Swedish multinational firm involved in the design and marketing of furniture, appliances, and home accessories. The following discussion covers the strong and weak sides of organizational culture, the internal and external factors that affect organizational culture, and the role of leadership in building organizational culture, before providing a detailed description of IKEA's culture.

Strong and Weak Sides of Organizational Culture

The importance of organizational culture cannot be overemphasized. Organizational culture gives an organization its unique identity — it distinguishes the organization from the rest. Literature extensively demonstrates that organizational culture can be a crucial driver of organizational productivity and performance (Schein, 2010; Mullins & Christy, 2010; Odagiu, 2013). This is because organizational culture determines the type of strategy the organization embarks on, how it treats employees and customers, the kind of employees it recruits, how communication is conducted, how decisions are made, which entities it partners with, how change is managed, the extent to which it pursues social and environmental objectives, and management-employee relationships. These processes create competitive advantage in one way or another — through innovation performance, group cohesiveness, employee morale, employee productivity, and customer satisfaction (Jain, 2005). The positive association between organizational culture and competitive advantage explains why most organizations invest a great deal of time, effort, and resources in building a strong culture, adopting and maintaining values, structures, systems, and procedures that propel the organization toward its strategic goals in an ever more dynamic environment.

While organizational culture is often portrayed as a positive aspect, there are usually negative dimensions as well. First, whereas some aspects of organizational culture may be acceptable within an organization, they may be harmful or destructive (Mullins & Christy, 2010). For instance, some cultures may create a climate of fear and bullying. The management may view such an atmosphere as acceptable, but it may be deeply detrimental to employees. Furthermore, even though an organization may have a general culture, subcultures may sometimes exist within it. Two departments, branches, units, or subsidiaries within the same organization may develop different cultures. These subcultures may conflict with the overall culture, resulting in detrimental consequences such as internal conflicts and inefficiencies in task, process, and strategy execution (Schein, 2010). Another limitation is that organizational culture may change as top leadership and management changes, since different leaders tend to have different styles, which may mean the introduction of a new culture or the abandonment of established cultural aspects.