Its organizational culture can become a demotivating factor for many of its employees.
IKEA’s organizational culture reflects informality. It is non hierarchical, team based and titles
and privileges are taboo at IKEA. Pay is not particularly high and there are no special perks for senior managers. The culture is egalitarian. According to Kamprad, people generally work here because they like the atmosphere. However, there is a downside to this sort of organizational culture. In an egalitarian culture where everyone is equally treated, someone putting more effort and hard work than others might get demotivated since he is being treated the same way as someone whose efforts and inputs are much less than his. He will obviously want something extra for his extra effort. This will lead to demotivation and he might stop putting in that extra hard work for the company.
In today’s competitive world, people work for that special perks associated with designations and
promotions. This is what keeps them going. But all these are missing in IKEA. Another important factor is that, the management style that works in Europe does not work in America or
in Asia. So, IKEA’s American or Asian employees will not like this sort of
organizational culture. Thus, with an organizational culture like this, IKEA might repel future employees.