Academic journal article
By Nattrass, Brian; Altomare, Mary
Journal of Business Administration and Policy Analysis
Sustainability is the key word for the future. Our ambition is to work step by carefully thought-out step, and with great respect, towards a business based on sound ecological principles. It is not enough to be friendly toward the environment -- we must adapt to it. Anders Moberg -- President, IKEA
Riding the intercity express into the beautiful lake and forest country of southern Sweden, we found it difficult to imagine that we were approaching the center of operations for the world's largest retailer of home furnishings. As the pine and birch trees, lakes, and farm lands sped by the rushing train, we could imagine ourselves in the countryside of Wisconsin, Minnesota, or Ontario, where, indeed, tens of thousands of Swedes had settled in the great out-migrations of the 19th century. Today, the outflow is millions of Scandinavian-designed household products destined for the global market place. Founded in 1943 by then 18-year old Ingvar Kamprad as a simple mail order business operated from a farm in this same Swedish countryside, by 1997 IKEA had achieved annual worldwide sales in excess of US $7 billion. One could not help wondering by what intriguing interplay of personality, market and historical forces this home furnishings colossus had arisen from the unlikely and aptly named area of Smaland ("Small Land") in this land of forests and farms in the south of Sweden.
IKEA's Swedish founder, Chairman, and still dominant presence, Ingvar Kamprad has stated many times over the more than half-century life of his creation that the soul of his company is to be found in the traditional and enduring handmade stone fences characteristic of rural Smaland. Each of these solid fences is built from thousands of individual rocks, each lifted one by one from the rocky soil of the Swedish countryside. Rooted in the soil, built one stone at a time, made with intention and much effort over the years, these solid stone walls serve as a continual symbol of IKEA's spirit.
The very name, IKEA, helps co-workers remember their roots as the four letters of the name are derived from the first letters of four words: Ingvar Kamprad Elmtaryd Agunnaryd. Elmtaryd is the name of the farm on which Ingvar Kamprad was raised and Agunnaryd is the name of the village in which the farm was located. IKEA's driving purpose is "to provide a better everyday life for the majority of people." As the company's far-flung operations extend in product lines, complexity, and geography far beyond its humble beginnings in Smaland, its mission statement and the vision of its founder are familiar landmarks by which to navigate through new opportunities, challenges, and markets.
The founding values of the IKEA culture are outlined in a booklet written by Kamprad called Testament of a Furniture Dealer given to every IKEA employee. These values include simplicity, humility, and honesty in internal relations among co-workers and in external relations with suppliers and customers; risk-taking, daring to be different, always questioning assumptions and asking "why"; and daring to take responsibility. For IKEA, grown in the soil of frugal Smaland, doing more with less and providing value for money are key foundation stones. Today this is called "resource efficiency," obtaining good results with minimum inputs. Waste of resources is considered a "mortal sin" at IKEA. In the IKEA family, the core values are to support one another and to exercise freedom of action and the responsibility that goes with it.
Kamprad believes that the fear of making mistakes is the "enemy of evolution." The challenges of a rapidly changing world and expanding markets are viewed as opportunities; the word "impossible" is absent from IKEA's dictionary. "Strategic mistakes", i.e., unsuccessful initiatives in pursuit of the company's goals, are regarded as "learnings." There is a realization and an acceptance that mistakes not only happen, but are necessary in an entrepreneurial company such as IKEA. …