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Case study: IKEA’s organizational culture and rewards management
Research · June 2021
DOI: 10.13140/RG.2.2.30263.44969
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1
Case study
IKEA’s organisational culture and
rewards management
By:
Mohammed Ziyad Al-Zghool
Manager, Project Management, Facilities management, Strategic
management
FMP®, PMP®, LEED® Green Associate™
Dammam, Saudi Arabia
[email protected]
00966-58-2415919 00966-53-5876490
2
Table of Content
Table of Content…………………………………………………………………..2
Introduction and company overview…………………………………..3
IKEA organisational culture ………………………………………………..6
Applying Schein’s Iceberg model to IKEA:………………………7
– Basic Assumptions……………………………………………………….7
– Values ………………………………………………………………………….8
– Artefacts……………………………………………………………………….9
Organizational issues vs organizational culture ……………10
– IKEA digital transformation………………………………………….11
– Towards more ethical and sustainable IKEA ……………….12
IKEA rewards management ……………………………………………….14
Applying Maslow’s hierarchy of needs to IKEA: ……………16
Inconsistencies in IKEA culture, motivation and people
hierarchy of needs …………………………………………………………..18
Conclusion………………………………………………………………………….19
References………………………………………………………………………….21
3
Introduction and company overview
IKEA is the world-leading design-sell and ready-to-assemble furniture, applicants
and accessories retailer, it was established in Sweden in 1948 and grown since then
to have 433 stores, 211,000 co-workers in 50 countries. IKEA was 39th world top
brand with $15.3 B value (Forbes, 2019). IKEA adopts Franchising that gives the
company the ability to grow internationally, maintain an entrepreneurial spirit,
safeguarding underlying concept and serve their and people’s best interest (IKEA,
2021).
They own and operate stores in only 24 countries only, the remaining stores are
franchised (Shoulberg, 2018) for 3% of franchisees annual net sales (IKEA, 2021).
Figure (1): IKEA logo transformation (IKEA, 2021).
Figure (2): IKEA global presence (Google maps, 2021).
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IKEA is an organization with mature product life cycle, it experienced rapid growth till
reaching the current stable position in global market, they are also pioneering their
products with technological transformation, innovation, quality and cost-leadership
that enabled them to reach a niche in the furniture/fitting industry (Ayodele, 2013).
Below SWOT and Ansoff’s matrix analysis used to better understand IKEA global
position and strategy.
Figure (3): IKEA group activities and sectors (Inter IKEA Systems B.V, 2021)
IKEA is not just a retailer; IKEA group operates in different sectors to support the group business
IKEA Systems B.V. and its subsidiaries. Inter IKEA Systems B.V., it is the franchisor and owner of the IKEA Brand.
IKEA Supply AG, IKEA Industry AB and related businesses make IKEA Core business Range that is responsible
for developing and designing the overall IKEA product range.
IKEA Supply AG to source and distribute IKEA products to IKEA franchisees. IKEA Industry AB, a strategic IKEA
manufacturer owned by Inter IKEA Group, is closely integrated with Core Business Supply.
IKEA Group functions for legal, finance and other activities to support the core businesses, like IKEA Älmhult AB that
owns and operates the IKEA Hotel and Museum.
Other IKEA Group support businesses that support group activities locally and globally.
Figure (4): IKEA analysis using Ansoff’s matrix
Market
penetration
• IKEA penetrates markets
using their strong brand
name and selling cheap,
high quality and
standardised products.
They offer wide range of
innovative designs and
exploits economics of
scale and huge
distribution network
(IKEA, 2020).
Product
development
• IKEA is continuously
developing new products
to sell to their existing
markets; they have
12,000-product range
with 2000 new products
yearly. IKEA heavily
investing in R&D, using
unique franchising model
and strategic
partnerships (IKEA,
2020).
Market
development
• IKEA seeks to find new
markets for the existing
products; they plan to
enter developing markets
soon. IKEA heavily
invests in technological
solutions, consumer
engagement to enjoy
advantage over their
competitors (IKEA, 2020).
Diversification
• IKEA is developing new
products to sell to new
markets and IKEA
restaurants and children
play areas and day-care
within furniture retail
shops can be classified
as an example of
diversification.
5
Globalization transformed business fundamentally, franchising became an
acceptable format for global market penetration and expansion (Arboleda, 2010).
Franchising enabled IKEA to grow globally, develop their concept, setting strong
brand, increase their sales, exploit economies of scale and keep attractive prices
(IKEA, 2021). Additionally, IKEA enjoys a strong supply-chain that contains 1,800
suppliers in 50 countries and 42 trading service offices worldwide (TradeGecko,
2018). However, culture, managing intercultural differences, motivation, assurance of
ethical and sustainable business are challenging in franchising. That is because of
the difficulty to separate between the franchisee and the franchisor that often reach
to a level where the cultures, standards, policies, practices and norms are becoming
highly detached (Sharland, 2019). Despite the strong Swedish IKEA culture and their
endeavors to spread/enforce their organizational culture within their branches, IKEA
faced issues contradictory to their claimed culture and to their ethical and
sustainable business which show underestimation and poor enforcement of cultural
differences (Arboleda, 2010; Milne, 2013; SAKELLARIOU, 2019; Sharland, 2019).
Figure (5): SWOT analysis of IKEA, Source: (Tyler, 2018), (Amine, 2015), (Leob, 2012), (Kelly-Detwiler, 2014),
(PaulShepherd, 2020), (IKEA, 2021), (Frue, 2018, (Şahin, 2015), (Ringstrom,2020) and (Clifford, 2019).
Strengths
• Innovative and functional designs; products standardization; long-term planning, huge automated
distribution centres; ability to furnish the entire home; adapting local market tastes; aggressive approach
to sustainability; cost leadership; economies of scale; strong franchising system; long-term relationship
with suppliers; strong global brand, direct interaction between design and manufacturing teams.
Weaknesses
• Weak marketing-advertising-promotions techniques; poor balance of low-cost products and good quality;
limited Visibility, remotely located locations; relatively complicated furniture assembly; high delivery and
assembly prices.
Opportunities
• Brand visibility improvement; strengthen their marketing activities; strengthen their online shopping
experience; creating a platform for furniture assembly training; worldwide demand for greener products;
more demand for low prices; possible worldwide expansion; opportunities in R&D and innovation.
Threats
• Emergence of substitute products; increased competition; increased trade barriers; shifts in consumer
tastes; shortage of skilled workforce; damaged reputation due to a series of incidents, lack of
differentiation, increasing costs of raw materials; global economics and financial crisis, economic impacts
due to COVID-19.
6
IKEA organisational culture
Organizational culture reflects the overall corporate behavior, how they want to be
seen by the world and determines how the corporate moves (Clarke, 2021). It is the
set of shared values, beliefs, and norms that influence the way employees think, feel,
and behave in the workplace (Schein, 2011). One of the influential models used to
study, analyze and represent organizational cultures is the iceberg metaphor of
organizational culture developed by Edgar Schein in 1984 which stresses three
levels of culture: artefacts and creations, underpinning values, basic assumptions.
• Figure (6): Schein’s (1984) metaphor of organizational culture.
1. Artifcats and
creations (visible):
like objects, buildings,
uniforms, technology,
including behaviours,
etc
2. Underpinning values
(Not clearly visible):
requires great level of
awareness to be seen
and recognized.
3. Basic assumptions
(Not visible):
taken for granted,
invisible, preconscious
and hard to access.
7
Schein’s Model is a dynamic model which aims to explain culture, the way it affects
organizations, why people behave differently in organizations and the way this affect
organizations (DTU, 2019). The Model provides opportunities to recompose
organizational culture through highlighting the different culture levels (Schein,1984).
Schein’s model is based on workplace’s psychological traits and the accumulated
experience over time. However, there are ethical dilemmas related to the imposition
of a culture by dominant leaders on other members of the organization (Hofstede
and Bond, 1988, Morgan, 1997). Additionally, assuming that dominant leaders can
determine and influence organisational culture, they can’t ensure the emergence of a
monoculture and desired values (Morgan, 1997). Despite that, Schein’s Model
stands to be one of the most influential models used to study, analyse and
understand organisations.
Applying Schein’s Iceberg model to IKEA:
– Basic Assumptions
Basic assumptions form the core of the organisational culture, they are the cultural
part that can’t be seen nor understood easily, they are hidden beneath artefacts and
values. Schein (1984,1992, 2004) explained that basic assumptions are the source
of values and artefacts and they are made and shape both of them even no obvious
patterns or even if they are contradictory.
IKEA basic assumptions are based on its Swedish origins founded and impacted by
Ingvar Kamprad who was dedicated to define, establish and maintain IKEA’s
corporate culture (Warren, 2019; IKEA, 2021). Kamprad was Swedish, simple, farmraised, hardworking, fiercely cost-conscious, thrifty, innovative, daring for difference,
8
and valued human interaction (DW, 2016; Warren, 2019; IKEA, 2021; Europeanleaders, 2021). Swedish are in welfare, simple, humble, curious, with low power
distance, believing in equality, delegating responsibilities and encouraging initiatives
(Commisceo, 2021; Everyculture, 2021; Lund university, 2021). Accordingly, we can
understand that values and artifacts are expected to be shaped by the base of basic
assumptions that were rooted to the Swedish origins and the founders’
characteristics.
– Values
Values represent the invisible part of the organizational culture that require great
level of awareness to be recognised and includes vision, mission, business ideas,
norms and beliefs. Values are rooted to basic assumptions, it explains and reflects
the how to do things and also what is desirable or undesirable (Schein, 1992 and
2004). IKEA believes in strong set of values in their culture and considered as a
compass that guides them to create a positive change for people and the planet
(IKEA, 2021).
IKEA’s vision is to create a better everyday life for all people by offering a wide range
of products at prices so low that as many people as possible will be able to afford
them (IKEA, 2021). IKEA’s is focusing on being successful and long lasting with their
unique culture of the heart that combines enthusiasm, togetherness and willpower to
bring people together while helping them to have a community feeling with the help
of their co-workers who share their culture (Clarke, 2021). IKEA is focused on
workplace equality with an informal, open and caring management style that offers a
pleasant working environment, job security and the caring attitude towards the
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individuals whom encouraged to take initiatives, to express their ideas and to take
responsibility (Hodgetts et al, 2018). IKEA is sustaining profitable and low-cost
business model without compromises on quality (IKEA, 2021).
It is clear how IKEA values are rooted to their base of basic assumptions and the
roots of Sweden and Kamprad the founder.
– Artefacts
Artifacts represents the visible part of the organizational base (Schein,1994 and
2011) and includes components like corporate identity, brand, colors, uniforms,
products and technology. IKEA artifacts should reflect both IKEA’s values and basic
assumptions.
Figure (7): The 8 IKEA Key Values
Togetherness
• Togetherness is at the heart of the
IKEA culture. We are strongest
when we trust each other, pull in
the same direction and have fun
together.
Caring for people and
planet
• We want to be a force for positive
change. We have the possibility to
make a significant and lasting
impact — today and for the
generations to come.
Cost-consciousness
• As many people as possible should
be able to afford a beautiful and
functional home. We constantly
challenge ourselves and others to
make more from less without
compromising on quality.
Simplicity
• A simple, straightforward and
down-to-earth way of being is
part of our Smålandic heritage.
It is about being ourselves and
staying close to reality. We are
informal, pragmatic and see
bureaucracy as our biggest
enemy.
Renew and improve
• We are constantly looking for new
and better ways forward. Whatever
we are doing today, we can do
better tomorrow. Finding solutions
to almost impossible challenges is
part of our success and a source of
inspiration to move on to the next
challenge.
Different with a meaning
• We are not like other companies
and we don’t want to be. We like to
question existing solutions, think in
unconventional ways, experiment
and dare to make mistakes –
always for a good reason.
Give and take responsibility
• We believe in empowering people. Giving and
taking responsibility are ways to grow and
develop as individuals. Trusting each other,
being positive and forward-looking inspires
everyone to contribute to development.
Lead by example
• We see leadership as an action, not a position.
We look for people’s values before competence
and experience. People who ‘walk the talk’ and
lead by example. It is about being our best self
and bringing out the best in each other.
10
IKEA corporate brand, name, colors and product range are attached with its origins
and can be easily tracked and understood. IKEA was named after the initials of its
founder, the farm where he grew up and the nearby village consequently:
Ingvar Kamprad, Elmtaryd, and Agunnaryd (IKEA, 2021). IKEA logo and employees’
uniforms contains blue and yellow colors, the exact colors of the Swedish flag (IKEA,
2021). Additionally, their products which contains blond woods, natural textiles,
untreated surfaces and Swedish names to the Swedish life style (IKEA, 2021).
Technology is an artifact as well because it helps reflect and achieve the imbedded
values and assumptions. IKEA investing in technological shifts that sponsor their
growth like self-check outs, IoT products, smart homes convergence, connected
home over IP and manufacturing robotic Furniture (Banerjee, 2020). The IKEA
famous catalogue is one of their great artifacts that played significant roles in their
success (BBC, 2020), it was first published in 1951 (IKEA, 2021). However, the last
edition of this catalogue will be in 2021 to focus on online catalogue and other digital
alternatives that is aligned with their digital transformation (BBC, 2020).
Organizational issues vs organizational culture
Cultures can be barriers or facilitators based on how organisations understand and
exploit them (Pratap, 2016). IKEA faced different issues and risks of being oldfashion, irrelevant, unethical and unsustainable. However, IKEA managed to
overcome different issues by exploiting human, digital, ethical and sustainable
opportunities to upgrade their culture without compromising their original identity and
unique culture, they merely improved themselves to also keep them relevant and
warrant further advancement and growth (Moon, 2005).
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– IKEA digital transformation
IKEA technology and digital transformation highlighted an embedded organizational
issue of IKEA becoming irrelevant because of their 80 years analogue business that
didn’t satisfy the status quo of the contemporary digital world (Marr, 2018; Stackpole,
2021). Additionally, global events like COVID-19 outbreak eroded traditional
commerce and sponsored huge opportunities for ecommerce (Montenegro, 2021).
IKEA chose Barbara Coppola to lead and guide a digital transformation embedded of
all IKEA aspects and changing how things are done without touching IKEA’s soul
(Stackpole, 2021). Accordingly, IKEA technologically revolutionized their supplychain, logistics, fulfilment, inventory mechanisms, handling big-data, increasing their
speed, using analytical decision-making, upgrading ecommerce channels, investing
in integrated traditional/digital commerce with initiatives like shop-and-go (Stackpole,
2021). IKEA DIY assembly application, digital offerings, online catalogue, space10
innovation lab, mobile technology and deep learning are examples of IKEA
technological innovation and transformation (Marr, 2018 and Lunny, 2020).
Additionally, IKEA is developing VR initiative and AI technology that allow customers
to visualize how a piece of furniture fits in a room (Marr, 2018; Milne, 2019;
Stackpole, 2021). IKEA’s technological implementation shows how innovative and
anti-status-quo they are and proves their connection to their cultural values while
also transforming into technology-company (Stackpole, 2021).
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– Towards more ethical and sustainable IKEA
Despite the well-known and rich Swedish culture of IKEA and their endeavor to
spread and enforce their organizational culture within their branches that are
operated directly by them or by their franchisees, IKEA faced issues worldwide that
are contradictory to their claimed culture, basic assumptions and values (Arboleda,
2010; Milne, 2013; Sakellariou, 2019; Sharland, 2019). Ethicalconsumer.org (2021)
stressed continuous issues related age discrimination, violation of the right to
unionize, and other serious workers’ rights issues in their supply chain in addition to
concerns about approach to tax, lobbying, animal rights, habitats and resources and
the environment. In fact, IKEA was found guilty in cultural, ethical and reputational
issues like the scandals of gathering and storing employees’ data, the use of
Ukrainian illegally felled wood and the flawed green labels (Business and Human
Rights Resource Centre, 2021). Additionally, BBC (2017) reported low incomes and
bad working conditions for IKEA lorry drivers. IKEA also faced issues related to their
marketing, examples are the sexist China advertisement against single women
(BBC, 2017), offending women in Saudi catalogue (Quinn, 2012), the catastrophic
Thai translation of products sounded like sex acts (Hughes, 2012) and publishing a
homosexual advertisement Russia which is rejected there (Anand, 2019).
There is an increased people awareness toward the issues related to
surrounding social, environmental, human and cultural issues (Boström et al.,
2018; Vessio, 2019; Copeland and Boulianne, 2020; Alzghool, 2021),
consumers are transforming from rational consumers driven by quality and price
(Berry and McEachern 2005) to ethical consumers who prioritize their choices
around ethical values and responsible consumption decisions (Raisborough,
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2010; (Oh and Yawn, 2014). Accordingly, IKEA needed to adapt and change to
stay relevant, competitive, keeping-up with fierce competitors and accountable
for people and planet (Moore, 2018; Lua, 2020; IKEA, 2021). Moreover, IKEA
claim to create a better everyday life for people and planet (IKEA, 2021). So, a
wakeup call to their cultural roots that cares about people and planet was the
reason why IKEA adopted different approaches as follows towards ensuring an
ethical and sustainable business shown in figure (8):
It is clear that IKEA is doing a lot of efforts to keep connected to their culture.
However, they still need a lot of efforts to overcome cultural and ethical issues to
ensure and maintain their culture, especially in terms people and planet welfare.
Figure (8): Some of the different approaches adopted by IKEA to create a better everyday life
for people and planet and stay connected to their origins and cultural iceberg as highlighted
by Bartlett (2006), Reuters (2018), Ringstrom (2018), Cole (2019), Lua (2020), Afreen
(2021), Strategy (2021) and IKEA (2021).
Adopting diverse recruitment policies and striving for inclusion to overcome differences in
cultures, genders, ethnic backgrounds.

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IKEA rewards management
People behaviors are guided by what motivate them to achieve certain goals (UOY,
2021). Rewards and recognition are vital component of organizational (Tyfting, 2020)
to motivate employees, enhance productivity, encourage loyalty and increase
satisfaction/morale which will positively contribute to the organization (Craig, 2017;
Tyfting, 2020; eHRMS, 2021). Organizations mostly use monetary incentives for
motivation. However, good working environments, equal opportunities and career
development are as important as monetary incentives (Devendra and Kumar, 2013).
There are basically extrinsic and intrinsic motivations/rewards that motivate people
(UOY, 2021). Extrinsic rewards are physical rewards that satisfy basic human needs
like enhancements to employees’ income and working-conditions (Bénabou and
Tirole, 2003; Bajracharya, 2018; BBC, 2021). Intrinsic rewards are non-physical
rewards emotionally connected with the employees and satisfy higher needs like
development and esteem (Bénabou and Tirole, 2003; Bajracharya, 2018; BBC,
2021).
Process theories like expectancy and equity theories attempts to explain how
motivation occurs, they emphasize the cognitive differences between individuals
(Devendra and Kumar, 2013; UOY, 2021). Content theories like Maslow’s Hierarchy
of needs, McGregor’s X and Y theory emphasize specific factors of motivation that
fulfills psychological needs assuming that people have similar needs (Devendra and
Kumar, 2013; UOY, 2021). Maslow’s needs hierarchy theory suggests a hierarchal
importance order of human needs (UOY, 2021) and stresses pursuit of five levels of
human needs where motivation between levels occurs only if the needs of the
preceding level is satisfied with the goal to reach the fifth level of the hierarchy: self
15
actualization (CFI, 2021). Figures (9, 10) shows and explains Maslow’s hierarchy of
needs levels ordered respectively.
The hierarchy takes into account human nature, it is also simple to understand and
relevant to all Fields. It integrated different motivational aspects while recognizing
people needs (CFI, 2021). However, life isn’t linear nor hierarchal, people recognition
of basic needs may not follow the assumed order because of the
unpredictable human minds and the complex and different cultural and economic
backgrounds (Rutledge, 2011; Fieldman, 2020). Some people consider
physiological needs as basic need while others consider self-actualization or other
Figure (9): Maslow’s hierarchy of needs (CFI, 2021).
Figure (10): Explanation of Maslow’s hierarchy of needs (Denning, 2012; Fieldman, 2020; CFI,
2021).

16
levels as basic as physiological needs, also different needs don’t necessarily follow
or move in linear/hierarchical order (Rutledge, 2011; Fieldman, 2020). Additionally,
some aspects like belongingness can’t be considered secondary since it is
considered the driving force of human behavior (Rutledge, 2011). However, the
model stands to be one of the most influential models used to study, analyse and
understand people motivation.
Applying Maslow’s hierarchy of needs to IKEA:
IKEA’s vision is to create a better everyday life for people and that includes their
employees, they believe in their employees, involve them, care about them and
making sure that they feel welcome and valued (Anjum, 2013; IKEA, 2021; Nielson,
2021). IKEA’s reward policies stem from their organizational culture and it’s
standardized and applied to all employees to guarantee equal, uniform treatment
(IBS, 2014, IKEA, 2021, Nielson, 2021). Additionally, human resources policies
including rewards safeguard and strengthen IKEA cultural artifacts, values and
assumptions (Hiền, 2021). IKEA strives to measure and understand employees’
needs and motivations through effective feedbacks to implement the needed
extrinsic or intrinsic rewards (IKEA, 2021). They are integrating financial and nonfinancial rewards and implementing initiatives that supports life balance while
creating a working condition that values and understand employees’ needs, they
created rooms for entertainment, nursing, relaxation, prayer/meditation (Devendra
and Kumar, 2013; Cirillo et al., 2018; Hiền, 2021; IKEA, 2021;). Such rewards and
recognition policies resulted in fostering employee’s motivation, engagement, selfdetermination, retention; reducing operations costs; creating a sense of belonging
17
and security; reducing absenteeism; and of that subsequently resulted in better
performance (Anjum, 2013; Cirillo et al., 2018; IKEA, 2021; Nielson, 2021).
IKEA’s human resources management (HRM) strategies are aligned with their vision
by attracting and inspiring people and creating stimulating and enjoyable work
environment. Connectiveness, unique recruitment, training and development,
embracing “happy employees=happy customers” are some of IKEA’s great values
(Kats, 2014). Additionally, IKEA embraces employee initiatives to such as equal and
fair environment, daycare facilities, parental leave, transport, training and
development, and pension support (Lamba, 2018). Work from home, job sharing,
part time working, shift swapping are examples of IKEA’s workplace flexibility that
supported hiring and retaining their skilled co-workers (IKEA, 2021). Furthermore,
co-workers to move within the company in planned career baths to reach 80%-90%
internal promotion (HRD, 2018). IKEA seek to embrace and respect the fundamental
differences of individuals, while on the other hand enforcing a strong unified
corporate culture (Korsgaard, 2007).
IKEA was named Best Employers for four years in a row and was ranked 72th in the
best 100 to work with in 2017 (Fortune, 2018; IKEA, 2019). It was also classified as
certified great place to work as 79% of staff thinks that IKEA is a great place to work;
88% of staff thinks that IKEA have great benefits; 83% of staff feel proud that they
work at IKEA (Great Place to Work, 2018). IKEA also has unconventional way to
deal with underperformers, such employees are not penalized, instead they are
receiving continuous feedback and open dialogue to overcome reasons of
underperformance (Cirillo et al., 2018). Figure (11) represents IKEA motivational and
rewards aspects using Maslow’s hierarchy of needs.
18
Inconsistencies in IKEA culture, motivation and people hierarchy of needs
It is clear that IKEA is doing a lot of efforts to stay consistent with their culture while
also keeping their employees motivated. However, they still need a lot of efforts to
prevent the inconsistencies in rewards and motivations policies worldwide. Some
Figure (11): Illustration of IKEA rewards and recognition system using Maslow’s needs hierarchy
(Anjum, 2013; Devendra and Kumar, 2013; Cirillo et al., 2018; Hiền, 2021; IKEA, 2021; Nielson,
2021).

discussing individual personal goals and career opportunities

19
issues showed breaches to basic needs and human rights which is totally contradict
their culture.
Ethicalconsumer (2021) and WILSON (2019) stressed continuous issues related age
discrimination, denying the right to unionize. In fact, IKEA was found guilty in issues
like age discrimination, the spying on employees’ scandal, the lorry drivers bad
wages and working conditions (Zoe, 2017; Business-and-Human-Rights-ResourceCentre, 2019,2020,2021) and the sick pay policy scandal and sacking the employees
who chose to unionize and protest (Kerr, 2020). Additionally, Ikea refused to honor
the 20 pence per hour increase announced by LWF in 2020 (GMB Union, 2021) and
denied polish employees the right of reasonable wages and accessible
transportation (BWI, 2021).
IKEA also had inconsistencies in wages for their employees and suppliers who work
in Bangladesh and Vietnam factories and in rattan supply-chain, workers and
suppliers were getting very low and delayed wages that compromised their basic
human needs, safety and security (Haan and Dijk, 2006; ILO, 2015). Additionally,
ITUC (2016) reported forced labour in IKEA supply-chains.
Conclusion
Schein’s Model of organizational culture provides a generic framework to
recompose, better understand and explain organizational culture by introducing the
iceberg three-levels model based on workplace’s psychological traits. Maslow’s
needs hierarchy theory is one of the psychological frameworks that takes into
account human nature and helps understand individual development and motivation
20
and it is based on levels that starts with basic needs till reaching the ultimate selfactualization. Both Schein’s Model and Maslow’s hierarchy were used to uncover,
investigate and understand IKEA culture and rewards management and integrating
them with organizational issues to capture a good case study based on theoretical
and practical and organizational issue-based approach.
The case study showed that IKEA has rich and unique pillars of culture, rewards and
motivation management that were built to achieve and maintain additional success
and better performance while still caring for people and planet. However, IKEA faced
different difficulties worldwide related to enforcement of their culture; managing
cultural differences; and maintaining standardized rewards and motivation policies
and systems. Accordingly, IKEA different issues manifested and touched the heart
and core of their culture, basic assumptions and values and their endeavours for
better planet and people. This suggests that there is plenty of improvement to be
made in managing cultural differences and motivations while also maintaining and
enforcing their core cultural iceberg especially in their franchised locations and
supply chain. Additionally, IKEA should continuously assess their external and
competitive environment, capitalize on their strengths and opportunities, strengthen
their weak areas, and mitigate and minimize the bad implication stemmed from
underestimating cultural differences and poor cultural enforcement. Finally, IKEA
need to be careful in forcing a certain cultural element because other elements can
be compromised, cost-consciousness sometimes transforms to extreme frugality that
badly impacts the welfare of employees, suppliers, customers and the planet.
21
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