Introduction to Organization culture
Organization culture is considered as a system of shared assumptions, different values and beliefs which generally governs how employees behave in the organization. Further, every business organization has its own culture which provides guidelines for the members in the company. Culture of organization includes vision, mission, language assumptions, habits, etc. Organization culture is also considered as a set of shared assumptions that generally directs regarding the happening in companies by defining suitable behaviour for various situations (Dirani, 2013). This present report is based on a theoretical framework in organizational culture which organization is facing. In this context, the organization undertaken for the present study is Ikea which is a multinational group of company that designs and sell readily assembled furniture like beds, chairs, desks, etc. Further, mentioned company also deals in appliances, home accessories and motor vehicles. Moreover, the purpose of this report is to focus on issues which organziation is facing and in order to solve that issue practice has been implemented so that company can achieve its goals and objectiv
Brief Background Of Company And Its Environment
Ikea is the world's biggest furniture based company and it is the largest retailer of the same. Mentioned company is generally known for its architectural designs for various types of appliances and furniture. Moreover, the interior design of the company is associated with eco-friendly quality. The organization is so big that around 10% population today in Europe uses Ikea bed. Further, the cited company is known for its cost control, different operational details and nonstop product development (Alvesson, 2012). Further, aforesaid company is focusing on producing best of products for the consumers at an affordable price. However, at the time of global expansion, Ikea has reduced their furniture prices by 2 to 3 percent in order to get attention of their customers.
Furthermore, cited company is having complex organizational structure and are controlled by various foundations. Ikea has its operations in major continents like Europe, North America, Asia, and Africa; it is further focusing on setting their business in some other continents of world as well. Further, by the end of 2015, Ikea owns and operates more than 370 stores in 47 different countries of the world. Corporate revenue and profit is increasing at an unbelieving rate as it is reflecting company’s goodwill and brand image. From a research it has been concluded that Ikea has sold almost 23 billion of goods in the year 2015 which is 7% increase as compared with past half decade performance. Moreover, corporate website contains more than 12000 designs of the furniture and Ikea is focusing on developing many new designs constantly. From a research it has also been evaluated that approx. 470 million customers visited Ikea official website last year.
Rather than selling pre- assembled furniture, mentioned company is focusing on designing furniture in self assembled manner. These ready to assemble furniture is quite popular among consumers who generally tries and wish to save money (GirdauskienÄ— and Ramirez, 2014). Further, this process also helps in reducing the cost and also the shipment charges which further saves the cost of consumer as well. Moreover, Ikea has expanded their products to flat-pack houses by making an effort to cut the prices which is usually included in first time buying home.
Ikea faced plenty of environmental problems in the initial stages of business and since then corporate has taken proactive steps and variety of measures in order to prevent these issues. Further, cited company faces tough competition from their major competitors namely American Woodmark, Walmart, Barn furniture, Sears, etc. Further, Ikea is focusing on their stated vision as they want to create a better life every day for the individuals and company by taking care of all the crucial resources in order to get a sustainable advantage over their major competitors which are stated above. Further, mentioned company have almost 1, 47,000 employees who are giving their productive services throughout the globe (Xiaojian, 2013). Mentioned company is giving an effective contribution in the field of renewable energy as corporate has invested almost £4 million in fitting 39000 solar panels in their corporate offices, factories and also in the retail stores to turn the sun rays into the electricity.
Focus Of Report
Ikea as stated focusing on vision to create an everyday life better for many individuals. Further, the above mentioned people includes organization customers both loyal and the new one whom cited company is attracting and also corporate potentially multi talented employees. Further, it also includes the community in which organization is giving their productive and useful service (Rana and Goel, 2014). Further, it is a universal philosophy that if organization will take care of their employees then employees will also give best of their performance in order to achieve the individuals as well as organizational goals. Mentioned company having effective HR practice which boosts employees morale and they work with more of their dedication affection. Further, Ikea also having paternalistic practice towards their employees in order to satisfy their needs and demands. Further, cited organization focuses on employee empowerment where all the plans and policies are implemented uniformly to all the employees. Further, Ikea's policies are considered as one of the best in the world as mentioned company invest much of their revenue in employees training and development program. Organization generally support the life balance and diversity for employees as with the help of it, employees are easily able to manage their personal and professional life (Joo, 2012). Further, company gives flexible working hours and holidays to employees so that they really get motivated and give best of the performance in the organization success.
Company also gives parental benefit to the employees as they can spend lot more time in the earlier days with their kids. Mentioned company also conduct annual employee appreciation day where employees are rewarded as per the performance they have given throughout the year.
Moreover, company conduct employee development program which includes training program in health, safety & environmental consciousness and Special training program for employees. Further, Ikea's positive and effective HR policies supporting a strong and nourishing culture which generally prompts creativeness and diversity in the organization. Organization has a big working culture as it has almost 1,47,000 employees who are giving their useful service to the consumers throughout the globe. Further, company have a family like culture with their employees as it has made the relationship with one another stronger and open. Further, there is no diversity and all the employees treat each other as co workers. Further, mentioned company having a flat structure and having same uniform for all the employees (Cummings and Worley, 2014).
Moreover, corporate having a business idea to offer wide range of well designed home furnishing products at low prices which attracts lot of consumer to purchase it and with this they become loyal customer base for the organization.
With so much of well diverse infrastructure and goodwill of the company, cited organization facing employees conflict in some of their operational units. Organization have to take some relative steps in order to control such issues as this can harm the mentioned company brand image. Further, these conflicts are the common occurrence which comes into play due to difference in employees personality and their values (Bruno and et.al., 2013). From a research it has been concluded that HR managers in the organization spends almost 25% of their time in solving employees conflicts. Employees in Ikea have strong belief as they do not likely to compromise for anything. Further, style of working also makes a difference as one choosing effective style and finishing all the tasks and duties of the organization in a proper and effective manner.
Moreover, poor communication in the organization is one of the major cause of the conflict as employees are from different background in the organization and thy certainly face the communication problem (Gunsel, 2012). Further, a difference in personality also leading to the workplace conflict as employees comes from different background and experiences and it plays an essential role in shaping up their personalities.
However, there are also employees who are working in the organization from decades and giving a handful contribution to the organization success. However, newly recruited employees have their own attitude and style to perform a task and it certainly leading towards a multigenerational difference within Ikea. Ineffective leadership is also one of the cause which leading towards employees conflict. Further, at times it also leads towards resignation of employees from the job because employees are not getting any sort of motivation and guidance (Rippin, 2007). At last, one of the biggest reason of employees conflict is performance appraisal as one of the employee getting handsome compensation and benefit from the organization and the other employee is stuck on the same. However, employee will not see his contribution to the organization which they had given in the past but they will only see the other person's growth and development. In order to meet this, mentioned company have to take relative approaches in order to improve the conflicts as HR manage can listen to their grievance and can come to a mutually agreed decision. Further, employees conflict can harm the goodwill of the company and significantly reduce the sales and turnover as well.
Choosing a Particular Theoretical Framework
Issues in the company can be overcome by taking proper actions which can be generally accepted by all the parties who are in the disputes. Further, as stated in above point employees conflict in the organization is a major drawback for the organization which subsequently reduces the brand image of the company and affects their functioning. Further, there are some other problems too which organization faces like team problem, working environment and conditions and many others (Chua and Banerjee, 2013). These are the problems can be solved out by the corporate by taking up effective actions precautions. Therefore, major emphasis is given on organization practice which Ikea is employing in order to increase more of the efficiency and productivity. Mentioned company have implemented practice like effective leadership, healthy communication, understanding the business environment and customer service. These all practices can take cited organization to achieve their goals and objectives. Further, with the implementation of all these policies company is able to give tough competition to their major competitors in order to get the competitive advantage and also the customers trust.
Trompenaars and Hampden-Turner's Seven Dimensions of Culture can help IKEA to solve it. This culture identifies that people who come from different culture are not only from each other but also they differ in every specific and predictable ways. This further culture has seven dimensions and it consists of:
- Universalism vs. particularism.
- Individualism vs. communitarianism.
- Specific vs. diffuse.
- Neutral vs. emotional.
- Achievement vs. ascription.
- Sequential time vs. synchronous time.
- Internal direction vs. outer direction.
Management by understanding the issue conducted training and development session for employees and give them training on the weekends in order to improve their communication skills. These employees been also motivated with the help of effective performance appraisals and this has boosted their morale and they are able to work with best of their efficiency and capabilities. Further, cultural difference creates an issue because they vary from different background and they have their own native language and their way of doing a particular task is also different as compared to other employees. In order to solve this too, training and development session will be most approperiate.
Further, mentioned company can implement the Hofstede's culture theory in the organization which is generally a cross-cultural communication and it depicts the effect of society culture on the value of the employees working in the Ikea. The above theory having few dimensions with which cultural values can be analyzed. These are individualism and collectivism; uncertainty avoidance; strength of the social hierarchy and task oriented vs. person orientation. This model establishes crucial research in the field of cross- cultural psychology and it has been severely drawn up by the researchers and consultants in may different fields which are relating with the international business and communication. This theory will help organization in developing an effective culture which will give a core emphasis on the subordinate relationship as employees will be able to understand each others culture and values.
Organizational Culture Practices In Ikea
Organizational culture is a very significant part of the organizational growth and development. This helps the companies in creating a wide impact on overall development of the company within the market. Henley and Caemmerer, (2011) mentioned in one of the theory study that an effective organizational culture of the company proves to the strength of an organization because culture is an integral part of the business unit and that the rival firm cannot replicate the same to enhance the organizational success of the company.
Ikea has developed positive organizational culture within the business unit. This has helped the business unit in creating a wide and effective impact on the growth and development of the company. Organizational culture has a wide impact of values, perception, employee behavior, code or conduct and communication measures within the organization. The organizational practices within helps a business unit in attaining a positive culture (Czinkota and Ronkainen, 2012). The most effective and influential measures which has helped the businesses in creating a wide impact on organizational culture by enhancing its growth prospects within the market include effective HR practices, well developed leadership and highly developed communication.
The effective organizational culture is developed within the business as per Frantz and Carley, (2013) is by developing an influential impact on the employee practices within the company. Bradley, (2005) clearly mentions in researches that the most crucial practices which helps in developing effective organization culture within the organization includes effective leadership practices, positive working environment, well developed HRD practices and well developed communication as well. The impact of these factors on organizational culture is effectively discussed hence forth.
These are the major issues that a company faces while developing an effective culture for working within the economy. The organization faces effective impact on the organizational growth and development if human resource practices are ineffective for the organization. Companies focus on developing effective measures to enhance employee welfare and development within the company. Moreover, HRD practices also focuses on developing influential code of conduct and employee behavior as well. Bradley, (2005) examines in one of the study that Human resource practices of the company helps in developing the foundational base for the organizational culture. It helps in defining the basic code of conduct, employee behavior and organizational regulations as well. The companies must ensure the effective implementation of basic code of conduct to create uniformity and unbiased within the firm. Thus this creates a wide impact on developing organizational culture.
Effective leadership helps in developing a positive growth and development prospects for the employees. According to Lamb and et. al., (2008) leadership is factor which enhanced the employee development. Effective leadership results in creating effective impact on employee learning and proper development as well. Employing proper measures of leadership helps the business in enhancing the effectiveness of the firm. Hence, Dipboye and Colella, (2013) mentioned that effective leadership practices helps the company in developing the employee thus enhancing the productivity and brand image of the company as well. For examples Virgin Atlantic is a successful business venture which has developed a participative leadership approach to enhance employee engagement within the company. R. Branson has developed leadership measures such that employees feel as a part of the family thus enhances their contribution towards the growth and development of the company. On the other hand Steve Jobs was an autocratic leader however the developed a system where the growth of the organization resulted in the overall growth of the company. Thus, employees enhanced their measures of working to enhance organizational growth within the economy.
Working environment is another crucial factor of business growth and development. Xiaojian, (2013) mentions in one of the study that effective organizational environment helps in developing the company highly. Well developed environment for working in terms of physical amenities, infrastructures and working measures helps employee in developing a positive perception for the company. This factor also helps in enhancing employee motivation within the organization. A positive and effective working environment helps the company in attaining high measures of success by creating a positive pace of working.
This is yet another measure which helps the business in creating high measures of growth and success within the market. Communication forms the base of organizational working. Czinkota and Ronkainen, (2012) in one of the research mentions that an individual spends majority of hi/her time in the organization and restrictive communication may lead to ineffective results for the company. In effective communication increases the chances of employee conflicts, chaos and confusion within the business unit. Thus effective communication is the crucial need for the company which helps an organization in growing definitely in this competitive market. Moreover, this measure also helps the companies in enhancing the growth measures for the business.
Analysis Of The Practice And Concepts
Ikea is tremendously growing as the leadership, HRD practices, business environment and communication which it follows helps the firm to increase performance and growth. Different organization follow different leadership styles among which firm shave their leadership style according to the culture and structure organization follows. Each leadership style has their own advantages and disadvantages (Andrew, 2011). Ikea adopts different leadership style according to the situation occurs. Normally, organizations face different types of situation and in order to overcome those situations, leadership styles are very important. Ikea adopts leadership style in accordance with its situation.
Mostly, Ikea follows democratic leadership style, according to this leadership style all the employees are involved in decision making. This leadership style is very helpful in motivating the employees as they feel that they are important for the organization. With this, employees share their ideas, problem or issues which they face. They share it freely as they have the faith that their issues and problems will be solved. In addition to this, the firm also adopts autocratic leadership style, according to this style all the decision is taken by the top management only. This type of style is followed because the firm because management face situation where they have to take quick decision. Situations where quick decision has to be taken, then firm follows autocratic leadership style. Moreover, they also follow Laissez-Faire, according to this leadership style employees are not given proper supervision to their employees and as a result they lack in providing feedback to those who are under their supervision.
From this it can be stated that the culture which the firm follow is very helpful in motivating their employees and in improving their performance. Further, the environment which the organization provides is remarkable as they have provided their employees with healthy environment when they have provided them with health safety and remuneration which is very helpful in providing them satisfaction. The firm has taken many safety measures which helps them in developing a mental satisfaction among the employees (Karlsruhe, Freiburg, Berlin, 2012).
Communication among the management is very effective as they use open door policy in which all the employee are free to share their ideas or any kind of problem directly to the management. This type of policies are very helpful in providing confidence among the employees that they will be heard and management will come up with suitable solution to their problem or issue.
From the above report it is clearly inferred that Ikea is a global brand in furniture industry and organization is focusing on expanding their market around the globe. Further, this report showcases different organizational culture and practices which leads corporate to increase more of their customer base. Further, conflict in the organization has been stated which generally acts as a drawback for the corporate as it leads to fall in goodwill for the company. Further, this report also identifies the different practices in order to increase the efficiency and effectiveness of the company. Moreover, this report will also showcase the implementation of the Hofstede's cultural dimensions theory as this will help the cited organization to develop a healthy subordinate relationship in order to function their business activities in an effectual manner.
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