Theories and Principles of Organizational Culture:IKEA (Essay Sample)

IKEA Case Study
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Introduction
A company culture comprises a set of common goals, values, practices, and attitudes that define an organization. They are the shared ethos of the company. It includes the feelings that people have towards their work, the essential values they uphold, the prospects of the organization, and the plans of action to reach the destination. For a company to succeed in its vision, everyone within the organization must uphold the culture from the CEO to the newest employee. The company's management must ensure that each person knows the expectations of the organization and move in the correct direction. Good company culture should promote values such as respect, curiosity, teamwork, and the employees' health. Diversity and inclusion within the company can be used positively to boost the culture of the company. They create an environment where individuals from diverse backgrounds and varied experiences feel some sense of acceptance and safety in freely shoeing their uniqueness as they help the organization achieve its objectives. Strong bonds are created, which bring a sense of satisfaction and motivation to the employees. This paper looks at the IKEA culture and how this helps the company in achieving its objectives. It discusses the principles and theories of organizational culture and how the company applies the theories to promote its business practices.
Theories and Principles of Organizational Culture
The culture of a company comprises all aspects of organizational behavior, their perception by external actors, and how they influence the organization's activities (Pietersen, 2017). These values and beliefs, which are shared by all the employees, together with the norms, dictate the behavior and the direction that the company takes in its operations.
Edgar Schein developed one of the standard theories applied to study organizational culture in 1984. It is referred to as the Iceberg Metaphor of Organizational Culture that emphasizes culture existing at three levels. These levels are artifacts and creations, underpinning values and basic assumptions.
Schein's model is so dynamic in its explanation of culture and how it impacts organizations. It looks at why people exhibit differences in behavior in an organization and how this affects the organization. Under this theory, an organization's culture can be recomposed by considering the various levels of civilization. The approach considers the psychological traits of the company and long-term experiences. On the other hand, there exist ethical issues concerning the imposition of the different cultures to members of the organization. Besides that, the leaders within the organization are incapable of creating purely the same culture and values desired within the company, despite being able to influence and control the culture being practiced in the organization. Despite the weakness, Schein's model is very applicable for investigating, doing analysis, and comprehending the organization's practices.
IKEA
IKEA is one of the leading companies dealing with designing, selling, and assembling furniture and accessories. Formed in Sweden in 1948, the retailer has expanded and currently operates in more than 50 countries globally. According to Mydlarz (2019), the company was ranked 39th overall globally with a net worth of over $15 billion. IKEA has managed to a franchising strategy that has led to its internationalization and keeping the momentum in penetrating new markets, keeping its brands, and meeting the needs of its clients. The company stores are only found in 25 countries, the rest being franchises that account for an average of 5% of its annual revenues.
One of the strengths of IKEA is the vital product cycle of its products. Its growth has been fast, creating a stable market positioning. Such growth has been boosted by innovation, application of technology, cost, and quality leadership in the products taken to the market, causing competitive advantage globally. The company believes in the making of the lives of people better by supplying them with high quality furniture at affordable costs. It does this by ensuring its products are off the highest quality and they constantly made changes to ensure the needs of the customers are always satisfied. It has a team that is charged with the responsibility of doing research and development on the latest trends in the furniture world.
Globalization is another factor that has changed the business model of the company substantially. It has applied the franchising model to help in its market expansion and penetration. It enabled the company to expand in the international market, leading to the strength of its brand, improved revenues, and price advantages. The company has a superior supply chain system with many suppliers in over 50 nations. Regardless of its success, the company's challenges include cultural differences and their management, motivation of the employees, sustainability, and ethical business practices. When the policies, standards, norms, and procedures are differentiated, separating a franchise from a franchiser becomes difficult. Even though there is a relatively strong culture of IKEA within Sweden, the poor management of the cultural differences within the company often leads to unsustainable and unethical business practices.
There are many ways that a company can apply to ensure all the employees work as a team to ensure the company's objectives are met. This is achieved by behaving in a particular pattern and looking at the issues that arise from the company's lens. The firm usually does some activities to measure the cultural responsiveness of the employees. The employees may be graded with the help of belts which are colored to ascertain their standing and position in the company. Such efforts work well in testing the recognition and identifying the starting point. It is also a tradition within the company that makes the employees fully identify with the company.
Application of Schein’s Iceberg model to IKEA
Basic Assumptions
Basic assumptions are fundamental to the culture of an organization. They comprise the cultural aspects that are invisible or hard to fathom, as values and artifacts conceal them. According to Schein (1990), the basic assumptions include the origins of the artifacts and values, shaping one another. The basic assumptions of IKEA rest on the Swedish foundations as stressed by the founder who founded the company's corporate culture. The founder was a Swedish who was a hardworking and simple man raised within the farms. He had virtues like hard work, cost consciousness, innovativeness, and human solid interaction values. Such qualities, among others, influenced the artifacts and values that formed the corporate culture.
Values
The values incorporate the aspects of the organizational culture that are invisible but need more awareness for the attainment of the objectives of the company. They include the vision, mission, beliefs, norms, and the business model applicable within the company. Such values are founded on the basic assumptions and give direction on how matters and issues should be handled within the organization, plus what is acceptable. In the case of IKEA, firm cultural values are believed to be fundamental in impacting positive change among the clients. The company's vision is to establish better daily lives for the people by offering to them products that have very high quality at affordable prices (Ericsson, 2018). When the prices are low, many people can afford them to improve their lives. The company intends to continue applying its cultures to make it continue to create togetherness, enthusiasm, and willpower by bringing people of diverse cultures together. The company also values workplace equality supported by caring and open management, creating a secure and pleasant work environment. The people within the company are also given the freedom to share their ideas freely and take full responsibility in their areas of jurisdiction. The company does not compromise on the quality of its products despite aiming at a low-cost model of doing business and low cost of the products. Therefore, it becomes undisputed that the company's values are based on the fundamental assumptions emanating from the culture of Sweden and the founder.
Artifacts
Artifacts are made up of the aspects of the company that can be seen, such as brands, colors, identity, uniforms, technology, and products. The basic assumptions and the values of the company should e seen in the artifacts. The name, corporate brand, color, and products have their foundation in the company's genesis, which is traceable. The uniforms and the logo for the company have been taken after the yellow and blue colors of the flag of Sweden. On a similar note, the products reflect the lifestyles of the people of Sweden. Another artifact is a technology that helps in achieving the values and artifacts of the firm. It supports the technology that propels its market growth.
Organizational Issues and Organizational Culture
The cultures within an organization can be for the advantage or disadvantage of the company depending on how the organization makes use of them. Issues that have emerged concerning the culture of IKEA are irrelevant, outdated, and unsustainable. But the company has a quick way of responding to such problems so as not to affect the company negatively. It responds by taking advantage of the human and technological resources and other workable opportunities to improve cultural practices without ringing a compromise to the company's core values. The cultur...