David Drennan Case

Introduction

What is the organizational culture? Anders Dahlvig (2012) suggests an informal explanation that the way people work and think in the organization. The formal definition is that a system of shared values, meanings, norms, beliefs, and ways of behaving held by a group of people, which differentiates from other competitors (Robbins & Judge, 2007; Linstead et al, 2009; Willmott & Knights, 2012). According to David Drennan (cited in Linstead et al,2009), organizational culture is constructed by twelve factors, such as influence of founder, values and beliefs, history and tradition, and so on. Organizational culture is a very important part of the company no matter what size it is, because it strongly reveals the organizational personality, business idea, positioning and vision (Dahlvig,2012; Nilsson et al, 2009).

IKEA is a well known furniture retailer in the world. Ingvar Kamprad, the founder of IKEA, used an acronym of the initials of his name, Elmtaryd and Agunnaryd (the farm and village where he grew up) to name the company. IKEA was founded in 1943 in the South of Sweden, and it opened the first showroom at Almhut in 1953 (Arrigo,2005). After a few decade, IKEA expanded its business worldwide and has become a successful multinational cooperation which had 118,000 co-workers and 300 stores in 35 countries in 2008 (Ledderhos,2003; Lewis,2008). IKEA's mission, which Kamprad emphasised, is to provide "a wide range of home furnishing items of good design and function, at prices so low that the majority of people can afford to buy them"(Grol & Schoch,1998:7). The most expressive factor of IKEA is its unique corporate culture. IKEA's strong culture which is based upon clear values determines its identity and image successfully (Edvardsson et al,2006).

The essay aims to critically analyse the organizational culture through the case of IKEA. It is divided into three sections. The first section uses Schein's three levels model of culture to analyse the IKEA culture. The second one discusses how IKEA culture interlinks to organizational structure and motivation. The third one analyses the problems and questions of IKEA culture.

IKEA Culture and Schein's Three Levels Model of Culture

The case study mainly uses Edgar Schein's concept and framework to analyse IKEA's organizational culture. According to Schein's view, organizational culture is a pattern of deeper basic assumptions and beliefs which are shared and learned to deal with external and internal problems by members, and maintaining culture among old and new members within an organization is very important (Nilsson et al,2009; Linstead et al, 2009). In order to analysing culture deeply, Schein puts forward a three levels model of culture. The three levels include cultural artefacts, values and basic assumptions. It is also called as the iceberg model of culture visually that artefacts is the visible part of iceberg and the other two are hidden under water but basic assumptions are deeper (Willmott & Knights, 2012). In IKEA case, its culture will be divided into Schein's three levels and analysed from bottom to top.

The deepest level of iceberg model is basic assumptions, which are almost impossible to surface. They are the core of a organizational culture, which are taken-for-granted, unconscious, invisible and accessing difficultly. The most important thing is that they are the source of the other two levels, values and artefacts, i.e. the organization cannot form its values and ways of doing things without basic assumptions. They relate to aspects about human nature and activity, reality and truth, and relationship between human and environment (Willmott & Knights, 2012; Linstead et al, 2009). As for IKEA, The source of its values including simplicity, daring to be different, accepting and delegating responsibilities, cost consciousness, and so on, is the basic assumption-- Swedish culture (IKEA, n.d). It is the most essential foundation of IKEA's culture. Sweden is a welfare society and its government is social-democratic. As for human nature and activity, concerning equality among all people in the society is the premise mission and goal of politics. Thus, the power distance and status differences are relatively small. Simplicity, one of IKEA's values, is formed by this Swedish social thought (Dahlvig,2012; Ledderhos,2003). Moreover, Encouraging children to question and take initiative is a traditional model of nurture in Sweden. Related to this, the IKEA's values, delegating and accepting responsibilities, and daring to be different, are taken-for-granted. Furthermore, Mikael Ohlsson, the former IKEA's chief executive, believes that the soul of IKEA is Almhult where it started the business (Milne,2012). The birthplace of IKEA is well known for the people who are traditionally thrifty, simple and hardworking. Kamprad was greatly influenced by its culture and traditions thus he naturally brings forward IKEA's values. For example, cost consciousness is taken very seriously by him (Dahlvig,2012). Almost all IKEA's values and beliefs are unconsciously generated from Swedish culture. Therefore, strengthening Swedish culture can help co-workers deeply understand and carry forward IKEA's values better. For example, all top managers are asked to go to Almhult for one week every year. They study Swedish culture, social values and IKEA's history, and stay in the hotel where the furniture and decoration are all IKEA's. In the end, they need to convey Swedish culture to employees when they return (Arrigo,2005). In short, Swedish culture is the basic assumption of IKEA's values. It is difficult for other non-Swedish competitors to imitate IKEA's values and approaches because they cannot access its basic assumptions. Therefore, the organizational culture based on its own basic assumptions is a great competitive advantage.

According to Schein's model, basic assumptions are the origin of organizational culture and they generate the organization's values and beliefs. They are the second level of model. They provide answers for employees'