2. BACKGROUND
● Founded in 1943
● First location in Älmhult, Sweden
● Ingvar Kamprad
○ Founder
○ March 30, 1929 - January 27,
2018
● Began his career at just six years
old selling matches.
● When he was ten, he would ride all
over the neighborhood selling
Christmas decorations, fish, and
pencils.
3. BACKGROUND
● At 17, Kamprad was given some money from his father for
doing well in school, despite being dyslexic.
● Named after his boyhood home, IKEA stands for:
○ Ingvar Kamprad from Elmtaryd, Agunnaryd
● Flat pack
○ A simple, yet revolutionary innovation
○ Sold from his own warehouses
● Thus, the basic IKEA concept was born - simple,
affordable, flat-pack furniture, designed, distributed and
sold in-house.
4. ARTICLE OVERVIEW
● IKEA currently owns 190,000 employees, 411 stores in 49
countries and they have a current revenue of 36 billion euros.
● The structure of IKEA is a mixture of emergence,
haphazardness, and invention through necessity.
● In 1951, when the very first IKEA catalogue came out, similar
businesses had a mail-order business models as well. These
competitors started a price war, looking to bankrupt the
brand.
● As a response to his competitors, Kamprad opened a small
showroom so people could see, touch, and compare the
furniture and the company would win the war.
5. ARTICLE OVERVIEW
● 1,000 people ended up lining up outside the shop. Overnight,
a new business model had emerged that sold through a
showroom rather than by mail. “The IKEA way”
● Another part that influenced the business model was the
launch of the first store, being 31,000 square feet with 18,000
people waiting outside. The popularity quickly turned into
disaster due to too few checkouts, impatient customers, and
stealing.
● It was then that IKEA implemented a new addition to their
business model, self-service.
6. KAMPRAD’S INPUT
● Kamprad instituted strong discipline for financial matters
Improvisation + rigor = company success
● Kamprad was criticized for the complex and opaque company
structure of trusts and not-for profit entities, as well as
accusations of tax evasion and for the mystery of the
company’s financial dealing.
● Yet, later these methods would protect IKEA from corporate
raiders and undue external influence, and provide long-term
protection and continuity.
7. BUSINESS/
MANUFACTURING MODEL
● IKEA’s products are designed in Sweden, yet they are
manufactured in developing countries to keep costs down.
Then, the final assembly is performed by the consumer.
● This method ends up saving space and simplifying the
manufacturing process, as well as reducing the costs.
8. A WINNING FORMULA
● Allen wrench-assembled flat-pack furniture
● Swedish meatballs
● Maze-like shopping routes through its showrooms
9. ● History
● Values & Beliefs
● Rituals & Ceremonies
● Stories
● Heroic Figures
● The Cultural Network
○ Storytellers
○ Gossipers
○ Whisperers
○ Spies
○ Priests & Priestesses
DEAL & KENNEDY’S
CULTURAL FRAMEWORK
10. D&K’S FOUR
CULTURAL TYPES
● Tough guy, Macho
○ Individualists who enjoy risks and get quick feedback on their
decisions
○ Ex: Entertainment industry, sports teams, and advertising
● Work hard/Play hard
○ World of sales attitude, employees take few risks and receive
almost immediate feedback, realizing that one person alone cannot
make the company
○ Ex: High-volume salespeople
● Bet-Your-Company
○ Decisions are high-risk in this environment, usually will be years
before we see whether the risk actually pays off
○ Ex: Pharmaceutical companies, oil and gas companies,
architectural structures
● Process
○ Feedback is slow and the risks are low, as no single transaction has
that much impact on the organization’s success, and it could take
years to figure out the impact of that transaction
○ Ex: Large retailers, banks, insurance companies, and government
organizations
11. IKEA CULTURE
● Kamprad deserves credit for keeping the company focused
on a common purpose:
“To create a better everyday life for the many people”
● He also developed a team of trusted ambassadors to
maintain and develop the company’s special culture set in the
IKEA Bible: The Testament of a Furniture Dealer.
“We shall offer a wider range of well-designed, functional
home furnishing products at prices so low that as many
people as possible will be able to afford them”
● Company values: thriftiness, attention to detail, quality, cost
consciousness, vibrancy, empowerment
12. IKEA CULTURE
● IKEA’s culture “eats strategy for breakfast”
● The culture has maintained itself in the world-leading
organization over the last 70 years.
● The culture has inspired tens of thousands of women and
men worldwide, irrespective of diverse national cultures:
○ Egalitarian culture where all employees are called
colleagues
○ Everyone is encouraged to think every day how they can
improve the company
○ Everyone is encouraged to perform continuous innovation
in customer service and products
● IKEA stands out because they do not follow the crowd.
13. IKEA, DEAL & KENNEDY
● History
○ IKEA has held on to its historical values for over 70 years.
Kamprad’s decisions lead to a successful beginning but an even
more successful future.
● Process
○ IKEA is a huge retailer so instead of receiving immediate
feedback, employees focus on how they do things. Technical
excellence is often valued here.
● Heroes
○ IKEA’s own founder paved the way for IKEA’s success by
enforcing his own moral standards.
14. IKEA, DEAL & KENNEDY
● Storyteller
○ Kamprad told his story to most of the employees that
work at IKEA.
○ His childhood was used as a way to relate his business
to his boyhood.
15. IKEA STANDARDS
● Beneficial resources
○ Enjoy your meals in our co-worker restaurant. IKEA
subsidises all meals served in the coworker restaurant
and provides free tea, coffee, soft drinks and fresh fruit.
The co-worker restaurant offer a daily lunch alternative
including a healthy salad bar and a vegetarian choice.
● Upward mobility
○ You will be rewarded:
○ Casual co-worker - $50 to spend in store
○ Part-time co-worker - $75 to spend in store
○ Full-time co-worker - $100 to spend in store
○ Manager - $200 to spend in store
○ Senior manager - $500 to spend in store
16. WHY DEAL & KENNEDY?
● IKEA has a strong cultures idealism that runs throughout the
company.
● IKEA succeeds over other companies because it does not
follow crowds, it goes to the beat of its own drum.
● Storytelling and history has been injected into the culture,
creating a more personable atmosphere that elevates drive,
persistence, and most of all, quality.
17. QUESTIONS
● Why do you think IKEA has been so successful throughout its
70 years of business?
● Do you think that having a culture like that of IKEA could
stand to benefit more businesses?
● What else besides showroom floors, flat-packs, and Swedish
meatballs do you think distinguish IKEA from that of other
furniture dealers?
● Why would self-service help manufactures simplify the
process of distribution?
18. QUESTIONS (CONT.)
● IKEA has ran for so long under the eye of CEO and founder,
Ingvar Kamprad. If the atmosphere changes due to new
management, what things should stay to implement
excellence within not only the culture, but the shopping
experience itself?
● Do you think IKEA as a company executes a seamless plan,
or do you think they react intelligently to an unanticipated
challenge?
● Do you think the culture that works for IKEA should be utilized
in business schools?
19. FUTURE STUDIES
● Continue to see if IKEA still builds models and strategies
around the ideas of late Ingvar Kamprad. His taste for
success, his much loved tie with boyhood and business, his
push for innovation, and desire to stick to the main idea of
creating furniture that was not only affordable, but
dependable.
● IKEA continues to build its list of employee benefits and
standards. After the new tax reform for many of the larger
manufacturers, it has been shown IKEA was already ahead of
the game. Follow up to see if this tax reform has impacted
IKEA’s involvement with their employees.
20. REFERENCES
Deal and Kennedy's Cultural Model: Understanding Rites and Rituals in
…...Corporate Culture. (n.d.). Retrieved February 13, 2018, from
…...https://www.mindtools.com/pages/article/newSTR_86.htm
Freden, J. (2018, January 29). Founder of IKEA, Ingvar Kamprad - The Real
…...Story. Retrieved February 13, 2018, from
…...https://sweden.se/business/ingvar-kamprad-founder-of-ikea/
Jarrett, M., & Huy, Q. (2018, February 03). IKEA's Success Can't Be
…...Attributed to One Charismatic Leader. Retrieved February 13, 2018, from
…...https://hbr.org/2018/02/ikeas-success-cant-be-attributed-to-one-
charismati…...c-leader
