Linear programming
Case Study 6
IKEA: Culture as competitive advantage
Suggested case discussion questions
Q1 Explain how IKEA’s culture contributed to its early expansion efforts
IKEA’s culture is encapsulated in the expression the “IKEA-way.” This is the philosophy Ingvar Kamprad formed during the early years of IKEA and drove its expansion efforts. His non-conformist ways gave him freedom to focus and innovate on all facets of distribution. His obsession with low prices, led to an unwavering focus on keeping costs low. He developed strong reciprocal relationships with his suppliers, such that they could be assured he would purchase whatever they produced. IKEA’s culture has evolved step-by-step and is seen by those within IKEA as being the cornerstone of its operations. This is believed to such an extent that managers as seen as missionaries embodying the “IKEA-way,” explaining to new and older exployees why things are done the way they are. IKEA’s management style is based on these early experiences and co-workers are encouraged to “learn by doing,” where making mistakes is tolerated. Managers are expected to eschew status signifiers and develop close, caring relationships with their co-workers. Interactions between co-workers and managers are characterized by informality and egalitarianism. Managers are encouraged to not take themselves too seriously, to show “equalness,” involve co-workers in decisions and exhibit characteristics of “humbleness” when interacting with others.
Q2 Critically analyse how aspects of the “IKEA-way” have caused problems in its overseas experiences in Germany, France and the United States
While IKEA’s culture has been a strong factor in its competitive advantage, its expansion into overseas locations has also brought challenges, when in-country cultural norms clashed with IKEA’s preferred way of doing business. In Germany, IKEA’s liking for informal relations between co-workers and managers has been interpreted as
IKEA: Culture as competitive advantage
Suggested case discussion questions
Q1 Explain how IKEA’s culture contributed to its early expansion efforts
IKEA’s culture is encapsulated in the expression the “IKEA-way.” This is the philosophy Ingvar Kamprad formed during the early years of IKEA and drove its expansion efforts. His non-conformist ways gave him freedom to focus and innovate on all facets of distribution. His obsession with low prices, led to an unwavering focus on keeping costs low. He developed strong reciprocal relationships with his suppliers, such that they could be assured he would purchase whatever they produced. IKEA’s culture has evolved step-by-step and is seen by those within IKEA as being the cornerstone of its operations. This is believed to such an extent that managers as seen as missionaries embodying the “IKEA-way,” explaining to new and older exployees why things are done the way they are. IKEA’s management style is based on these early experiences and co-workers are encouraged to “learn by doing,” where making mistakes is tolerated. Managers are expected to eschew status signifiers and develop close, caring relationships with their co-workers. Interactions between co-workers and managers are characterized by informality and egalitarianism. Managers are encouraged to not take themselves too seriously, to show “equalness,” involve co-workers in decisions and exhibit characteristics of “humbleness” when interacting with others.
Q2 Critically analyse how aspects of the “IKEA-way” have caused problems in its overseas experiences in Germany, France and the United States
While IKEA’s culture has been a strong factor in its competitive advantage, its expansion into overseas locations has also brought challenges, when in-country cultural norms clashed with IKEA’s preferred way of doing business. In Germany, IKEA’s liking for informal relations between co-workers and managers has been interpreted as