IKEA

IKEA’s rapid growth into international markets, matched with unyielding Swedish cultural values, has led to inflexible corporate structures that are unable to adapt to diverse consumer behaviour in the global context. With the rise of competition in the low-cost furniture industry, IKEA must remain fierce in protecting its market share. Although IKEA has adjusted its ways in North America, much more cultural localization is needed for success in Asia. IKEA must internalize its Swedish values and engage wholly with the wider sociocultural milieu. This direction requires a restructure to allow for a new business division that is modelled after IKEA’s flat virtual organizational structure. Most crucially, this new geographical unit will be controlled …show more content…
The culture of IKEA is reflected in Kamprad’s mantra for the company: “cost consciousness, informal, down to earth, facing reality...” These terms are the principal value system employed at IKEA and are enacted in everyday rituals like executives flying in economy versus first class. This is not only cost-conscious but also representative of frugality and humbleness; this ritualistic avoidance of lavish expenditures is an intensification or enhancement rite, serving to enhance social identities and sentiments toward cultural values. IKEA’s values and corporate culture are also informed by the wider social context of Sweden. In fact, IKEA’s executive team strives to “bring a little bit of Sweden” to every store location (IKEA constitutes Swedish values as “home, frugality, and practicality” which also align with IKEA’s corporate values). Employees are enculturated through programs like the IKEA Way and further enhancement rituals like anti-bureaucracy week, which involves having management work on the store …show more content…
Simply, IKEA is able to sell a wide variety of low priced furniture for the masses by emphasizing efficient procurement and distribution systems. The cost-leadership strategy is typified as having a strong and centralized authority with high supervision among employees and little empowerment. This does appear to be the case at IKEA; recall that decision making is left entirely to the Swedish board of directors. However, IKEA makes attempts to reduce hierarchy by utilizing a flat organizational structure. Further, IKEA’s cultural commitment to anti-bureaucracy suggests that the firm is engaging with potential alternatives to the theoretically ideal vertically controlled