Organisational culture is made on the assumptions and beliefs that construct purpose, recommendations and collectivism. In place strategy displays the organisational culture in the sense it represents the outcome of the 'taken-for granted' assumptions, behaviours and routines of the company (Johnson et. al. , 2005).
IKEA is one of the leading furniture stores of the world and its ground breaking organisational culture and ideals are pooled by all the staff members. In this article, the cultural web model of IKEA will be analysed to look at how it helps IKEA's cross types strategy of cost authority and differentiation. This statement will also aim to recommend cultural and commercial strategy changes for IKEA.
Ikea's Cultural Web Model:
The cultural web model as illustrated in Johnson et al, 2005, p. 202 really helps to break down an organisation's sophisticated culture into different segments to enhance further understanding of a company. Below is the analysed social web model for IKEA:
Routines emphasize by using an organisation's specific way of doing things and Ikea's concept is reinforced in various exercises. Kamprad's shopping at local stores and going throughout the market class, whilst his employees following the suit, are types of their simplicity and cost mindful custom. Stickers such as "turn off equipment and lighting, taps and pcs" are available on the surfaces to immediately remind the employees to avoid wastage of electricity and other resources in an attempt to save cost. This affordable initiative in addition has been identified in IKEA's development process by buying quality, inexpensive and environmental friendly recycleables in volume from the cheapest resources internationally. Ikea's packaging and providing methods also replicate its tradition. Their major discovery was flat presentation, which empowered easy transportation and storage space. IKEA in addition has devised a cost-efficient global syndication network which supports IKEA's focussed low cost command strategy.
Members of staff are urged through induction, training and mentoring. All of the new employees are educated on the Ikea's idea by viewing presentations extolling 'Cost Awareness' and 'Humbleness and can Power' amongst others. 'Lovers for Progress, ' program helps personnel to establish important relationships. Work are also made by IKEA to improve employee desire by recognising good work and supplying rewards that can be regarded as a differentiation strategy.
Stories of Kamprad's entrepreneurial spirit and his involvement in the company, is seen as a commendable method of support the culture. He had realised the value of cost control from the inception of IKEA. For instance, he bought fabrics immediately from textile mills and provided them directly to his network of small furniture manufacturers. This deed displays effective use of differentiation as well as cost control strategy.
Symbols of IKEA include logos, titles, language found in an office layout and they often express simpleness. The Swedish heritage opposes the approach towards category diversification and hierarchal framework. IKEA's philosophy requires symbolic activities such as informal dressing, open-plan office buildings, etc. They maintain Scandinavian tradition throughout as its 'way of life' attitude, which conveys strong differentiation strategy.
IKEA's power composition claims to adhere to "no obstacles between management and co-workers" (IKEA, 2005). Ikea maintains that leadership is based on an inverted organisational pyramid, where the customer is at the top accompanied by the staff, with top management in the bottom.
The control systems of measurements and rewards emphasise what must be monitored in an company (Johnson et. al. , 2005). Ikea's culture emphasises on appraisal and satisfying their employees. Some years back Ikea organised the 'Big Thank You' event whereby Ikea offered away a day's total worldwide sales in the form of equal bonus to all employees within the organisation. The flat structure in an organisation encourages and motivates an employee who in effect gives an outstanding performance and this collaborates in their differentiation strategy.
The Paradigm encapsulates all the elements in the ethnic web culminating in a collective way of performing and convinced that gives compound to the culture of organisation, corresponding to Johnson et al. , (2008) Ikea's strong principles and values are rooted in its Swedish history and escort the company in its workout of business.
Hence, it could be derived from the above mentioned sections that IKEA's social web model supports its current hybrid strategy.
Recommendations on IKEA's corporate and business strategy:
Sweden: Potential in internal cities to support sales growth
In Sweden, Ikea may consider going into inner metropolitan areas through smaller retailers centered on smaller home furnishings to support sales progress. (Eurmonitor International 2012)
Emerging markets arranged to see electric outlet progress in medium term
Brazil, for example would be a nice-looking growth market. The housing industry is flourishing and Brazilians are buying more properties, increasing demand for houses and apartments rentals. (Eurmonitor International 2012)
Internet retailing to aid marketing and sales efforts
The ageing inhabitants in Western European countries favours internet suppliers, as a growing number of "silver surfers" will seek the capability of having huge items sent to the house. (Eurmonitor International 2012)
Recommendations on IKEA's ethnical strategy:
Encourage profession opportunities for non- Swedish employees making corporate office more diverse to cope with customers internationally.
Summary:
IKEA's culture is strategically aligned with its competitive strategy, having the aftereffect of a complementary relationship. Different segments have been discussed to show how IKEA's culture directs its 'cross' strategy and how the two combined, give a source of competitive benefit. IKEA's culture is highly considered within the organisation and supports manufacturing, production and circulation decisions and they have effectively used their traditional components in focussing on their differentiation and low-cost command strategy. It executes a solid and an extremely constant culture which demonstrates to be one of the key success factors.
