Culture and Organization

[Name of the Institute]

IKEA - Background and its Environment4

Introduction to the Focus of Report6

Theoretical Framework6

Leadership7

Leading by Doing8

Leading by Team Working8

Leading by Inspiring8

Leading by Empowering8

Charismatic Leadership Theory9

Transformational Leadership Theory10

Transactional Leadership11

Diversity and Inclusion11

Risk Taking12

Empowerment13

Justification14

Analysis of IKEA's Practice15

Leadership15

Leadership by Example16

Leadership by Democracy17

Paternalistic Leadership Style18

Diversity and Inclusion18

Risk Taking19

Empowerment20

Conclusion20

References22

Culture and Organization

IKEA - Background and its Environment

IKEA is a leading retailer of high quality furniture across the globe. The Swedish company is based upon the idea of providing its customers with superior quality home furnishing products at the lowest cost possible. This enhances the affordability of premium quality products across the globe. The vision of IKEA is to improve quality life across the globe through its innovative and unique products (IKEA Group, 2012).

The world's leading retailer of home furnishing product operates in 41 countries with more than 24.7 billion in annual sales (IKEA, 2012). IKEA is ranked as 41st world's valuable brand in the year 2013. The brand value of IKEA is $11.5 billion as of November 2013 (Forbes, 2013). IKEA focuses intensely upon customer experiences and value. The utmost focus of IKEA resulted in 9.5 percent increase in sales along with an introduction of 2,000 new products to its existing stores (Interbrand, 2013).

IKEA offered its customers with flat-packs, and the customers had to assemble the products according to the manuals. This clearly reflects that IKEA is quite the opposite of traditional businesses in terms of operations and target market (Gateman et al., 2003). IKEA's inner strength lies within its quality and diverse workforce. The culture of IKEA is unique as it serves as a competitive advantage. The environment at IKEA is considered to be informal, caring and open (Grol, P., and Schoch, C. 2010). IKEA encourages its employees to take decisions based on consensus. IKEA has focused entirely upon employee development and motivation. This is the reason that hierarchy at IKEA is not even emphasized upon. The employees at IKEA are called co-workers and are promoted to take initiatives on the basis of their intuition and experience. IKEA emphasize 'learning by doing' approach, thus the co-workers are provided with all the information, skills and knowledge through the managers. The workforce is considered to be the inner strength of IKEA. This is the reason that co-workers are encouraged to share their ideas, opinions and to feel responsible for bringing change within the organization. Moreover, diversity within IKEA is encouraged at the utmost level. This diversity within IKEA is maintained through values including; cost-consciousness, kindness, simplicity, social bonds and respect (Inter IKEA, 2010).

Introduction to the Focus of Report

The foremost objective of an organization is to enhance its profitability. This can be achieved only through proper management of practices and operations. The organization selected for this report is IKEA. The foremost purpose of this report is to evaluate the organizational culture at IKEA along with its impact upon the overall internal environment of the global retail giant.

Theoretical Framework

Culture plays an important role within an organization. The term culture is defined as shared change within an individual's ...