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Research Assignment 1: IKEA
Course module: Human Resource Management
Semester: 2025/2026
Module ID: 5000HRM_24
Lecturer: Alexandro Carolina​
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Date: 21.09.2025
Group:
Anwar Merhfour (500982660), Maxwell Jones (500982625), Leszek
Wietrzykowski (500982531)
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Table of Contents
Introduction..................................................................................................................................2
Theme 1. A descriptive study of HR strategies to identify the most suitable approach for
sustainable competitive advantage at IKEA............................................................................. 2
Theme 2. Understanding Competitive Advantage and Its Link to Human Resource
Management.................................................................................................................................4
Theme 3. Analysing the Competitive Advantage of IKEA and Identifying Key
Departments.................................................................................................................................5
Conclusion................................................................................................................................... 6
Bibliography.................................................................................................................................6
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Introduction
The role of human resource management must be highlighted when it comes to finding
strategies that will help shape the organizational success at IKEA. HRM holds a lot of
importance not only for the recruitment, but also to create alignments between the workforce
and the goals set by the organisation. In a global company like IKEA, HR is continuously trying
to sustain a competitive advantage through culture, adaptability and employee engagement.
Our group decided to conduct this review knowing that IKEA is a leading multinational company
known for affordable pricing, innovation when it comes to retailing and strong organizational
culture. IKEA continues to transform itself digitally and sustainably, helping us understand
exactly which HR approach they are using and how they can get the most out of them. We will
start by going over HR strategies with the purpose of finding the most suitable approach for
IKEA, followed by the study of competitive advantages and its link to HRM, and finally we will
analyze and identify the company’s competitive advantages and the key departments enabling
them to have those advantages.
Theme 1. A descriptive study of HR strategies to
identify the most suitable approach for sustainable
competitive advantage at IKEA
The purpose of this part is to assess several HR tactics and identify the one that will help IKEA
maintain a competitive edge over time. The fit approach, overall strategic approaches, and the
agile organization approach are the three main viewpoints in strategic human resource
management that are addressed. This is to determine how HRM may be used as a basis for
sustained competitiveness by examining these structures and applying them to IKEA's
operations.
The fit approach in a HR business strategy is somewhat like a middle ground. This approach
takes into account many things and those being external pressure, internal pressure, HR
strategy, and business strategy (Tyson, 2006). This approach is great at aligning the internal
and external factors with the actual HR policies. When external factors disrupted store
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operations worldwide during the COVID-19 pandemic, the significance of this approach for IKEA
became very evident. By altering HR practices, such as health and safety laws, flexible
scheduling, and hybrid working plans, IKEA was able to maintain employee satisfaction and
operational stability. Fit focused HRM has been shown to help businesses maintain higher levels
of staff dedication and customer service during hard times (Song, 2021). Strategically speaking,
IKEA seems to benefit greatly from the fit method since it keeps the company aware of local
market situations as well as needs for productivity on a worldwide scale. IKEA has long-term
durability and adaptation thanks to its ability to include situational responsiveness into HR
procedures.
Overall strategic approaches are seen as developing internal skills with the end goal of
providing a competitive edge to the company. This is a human resource goal because instead of
just striving for the goal, it goes for supporting a way of working which in the end has a much
better result than the traditional way, just wanting the product and not focusing on the ways the
work is actually getting done. Also, laying down clear intentions with the work so there is
minimal confusion with what is needed (Tyson, 2006). This approach is put into practice by
IKEA through its consistent investment in staff training. The organization demonstrates how
strategic HR promotes skill building through its leadership pathways, organized training
programs, and opportunities for learning. These techniques increase information sharing,
promote innovation, and boost staff retention, according to research on IKEA and similar global
shops (Alipour et al., 2022). IKEA benefits greatly from this strategy since it directly supports its
dual approach to distinctiveness and price dominance. IKEA supports its innovative and
customer focused culture while ensuring operational efficiency by developing skilled and driven
staff. Strategic HRM that builds long-term expertise is a major contributor to sustainable
competitive advantage, according to studies (Battour et al., 2021).
The agile organization approach is very versatile and can be used in a variety of situations to
adapt to change smoothly and naturally. The goal is to develop internal flexibility which allows
companies to adapt to changing situations and circumstances as needed. Other well known
writers have gone over guiding companies in learning how to improvise, twist, dance, and do
whatever it takes to supply goods or services as needed, or even to alter their organizational
structures and outputs (Tyson, 2006). Agility is crucial for IKEA because of shifting supply
chains, changing customer tastes, and rising sustainability requirements. Based on studies on
agile HRM, methods including staff engagement, open communication, and flexible
organizational structures improve adaptability and performance (Moh’d, 2023). IKEA's growing
emphasis on digital transformation and sustainability shows how agile HR procedures could
help the business maintain its flexibility over the long run. The agile approach may benefit IKEA
since it supports innovation and adaptability while bringing staff members into line with
corporate objectives. IKEA improves its capacity to maintain a competitive edge in a retail
environment that is changing quickly by integrating agility into HRM.
Although all three are beneficial, IKEA benefits more from the overall strategic approach since it
directly supports the company's dual strategy of cost leadership and distinctiveness through its
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emphasis on staff development and culture. Fit and agility components round out this strategy,
which gives IKEA a strong and long-lasting competitive edge.
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Theme 2. Understanding Competitive Advantage
and Its Link to Human Resource Management
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Strategic human resource management states that competitive advantage does not come from
one HRM tool but rather in a system of practices. This bundle of practices has to fit the business
goals and be internally consistent. Two types of fit are important: vertical fit (HRM policies align
with strategy) and horizontal fit (HRM practices reinforce each other). When horizontal and
vertical fits are combined, firms develop employee skills and behaviours that competition cannot
copy easily (Wright & McMahan, 1992). Research on high-performance work systems shows
that when companies combine selective hiring and training, give employees voice, pay relative
to results, and create jobs with autonomy, they perform better. They have lower turnover, higher
productivity, and better financial results. This is well shown in the AMO model: HRM raises
Ability (through selection and learning), strengthens Motivation (through fair rewards and
recognition), and creates Opportunity (through job design). Meta-analytic evidence shows HRM
affects results indirectly. First, it improves human capital and employee attitudes/behaviours,
which then increase operational and financial outcomes. However this often happens with a
time lag (Jiang et al., 2012).
Applied to IKEA, this HRM to advantage relation is visible in everyday people practices across
the value chain. IKEA bases HRM decisions according to a shared set of values. Also, IKEA
recruits based on values as part of a values-led employer approach (IKEA, n.d.; Ingka Group,
2022, 2023). The annual reports and progress updates describe values-based recruitment
training for hiring teams and integrating the values into attraction, recruitment, and development
of employes. That is practical evidence of vertical and horizontal fit (Ingka Group, 2022, 2023).
These documents also track internal development, which is hiring from inside the company. Also
link skills to customer experience, underlining the Ability and Opportunity channels in the AMO
model (Jiang et al., 2012; Ingka Group, 2023).​
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Theme 3. Analysing the Competitive Advantage of
IKEA and Identifying Key Departments
Human resource management (HRM) is central in assisting organisations like IKEA achieve
sustainable cost leadership and differentiation as sources of competitive advantage. In the
classic HRM theory advanced by Jackson and Schuler (1987), it is observed that HR systems
aligned with business objectives such as cost reduction, quality improvement, and innovation
encourage role behaviours like adaptability, proactivity, and teamwork. These behaviours are
difficult for competitors to replicate and thus provide a long-term competitive edge.
Empirical research supports this theoretical case.Chen (2023) found that aligning HRM at the
level of organizational strategy through recruitment, training, appraisal, and reward schemes
produces increased efficacity, more committed employees, and stronger market positioning.
Accordingly, other studies proved that groups of clustered HR practices, used collectively rather
than individually, have a larger impact on generating flexibility and improving performance,
especially in unstable environments. For a transnational retailer like IKEA, this alignment allows
the HRM to pursue its dual strategy of cost leadership and differentiation more directly.
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IKEA's organizational culture was identified among the major sources of its competitiveness.
Ericsson (2018) found openness and egalitarianism, alongside empowerment and learning,
increased commitment and loyalty of workers. Such factors also reduce churn and create a
good sense of belongings. Additionally, Al-Zghool (2021) indicated reward and motivation
policies in IKEA strongly correspond to people-related values, encouraging performance and
retaining a communal culture. Internal communications and employer branding keep these
initiatives alive, too.
IKEA also promotes employee participation through targeted HRM programs. Laucirica’s (2009)
study of the VOICE program demonstrated how open feedback systems and active participation
improve performance and align employee behavior with company goals. Numerous studies
highlight the fact that IKEA's commitment towards sustainability goes beyond product and
operational levels and, instead, goes deep into its HR policies. When sustainability is introduced
into the system of HRM, it allows the corporation to cut costs through heightened efficiency and
more ethical sourcing, meanwhile at the same time supporting its brand image and allegiance
among its employees. By aligning business and HR strategies at the corporate level and
promoting an open, empowered work culture, IKEA can introduce sustainability and worker
participation into its workflows on a day-to-day basis and end up utilizing its workforce as a
source of differentiation and operational advantage.
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Conclusion
All in all IKEA’s competitive edge isn’t just about cheap furniture or smart design, it's about how
the company uses HR to drive everything forward. This review showed that by mixing different
HR strategies like fit, agile and strategic approaches, IKEA stays adaptable and efficient in a
fast changing world. More than that, the company builds loyalty and performance by hiring
based on values, investing in people and keeping employees engaged across the board. It’s not
just about having good policies on paper, it's the way HR is tied directly into daily operations,
company culture and long term goals. In the end IKEA shows that when HR is done right, it
becomes a powerful tool for growth sustainability and standing out from the competition. We
recommend the overall strategic approach even if all three are beneficial since it directly
supports the company's dual goal of cost leadership and differentiation through its focus on
employee development and culture. This strategy comes together with fit and agile parts, which
provide IKEA with a strong and sustainable competitive advantage.
Bibliography
1.​ IKEA. (n.d.). IKEA culture and values.
2.​ Ingka Group. (2022). Data and progress FY21.
3.​ Ingka Group. (2023). Annual summary & sustainability report FY22 – Better lives at
home.
4.​ Ingka Group. (2023, November 29). Ingka Group to pay EUR 311 million bonus and
additionally allocate EUR 103 million to co-worker loyalty pension fund.
5.​ Jiang, K., Lepak, D. P., Hu, J., & Baer, J. C. (2012). How does human resource
management influence organizational outcomes? A meta-analytic investigation of
mediating mechanisms. Academy of Management Journal, 55(6), 1264–1294.
6.​ Wright, P. M., & McMahan, G. C. (1992). Theoretical perspectives for strategic human
resource management. Journal of Management, 18(2), 295–320.
7.​ Tyson, S. (2006). Essentials of Human Resource Management. (Fifth). London
Routledge.
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8.​ Song, J.-W. (2021). How MNE subsidiaries transfer HRM practices in distant
environments: A tale of two IKEA subsidiaries. Journal of International Management,
27(2).
9.​ Alipour, N., Nazari-Shirkouhi, S., Sangari, M. S., & Vandchali, H. R. (2022). Lean, agile,
resilient, and green human resource management: the impact on organizational
innovation and organizational performance. Environmental Science and Pollution
Research, 29(55), 82812–82826.
10.​Battour, M., Barahma, M., & Al-Awlaqi, M. (2021). The relationship between hrm
strategies and sustainable competitive advantage: Testing the mediating role of strategic
agility. Sustainability (Switzerland), 13(9).
11.​Moh’d, S., Gregory, P., Barroca, L., & Sharp, H. (2024). Agile human resource
management: A systematic mapping study. German Journal of Human Resource
Management, 38(4), 345-374.
12.​Al-Zghool, M. Z. (2021). Case study: IKEA’s organizational culture and rewards
management. International Journal of Management Studies, 8(2), 45-56.
13.​Chen, Y. (2023). The influence of human resource management on enterprise benefits.
Education, Humanities and Social Sciences, 8(2), 149-156.
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(Master’s thesis). Faculty of Education and Business Studies, University of Gävle,
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15.​Jackson, S. E., & Schuler, R. S. (1987). Linking competitive strategies with human
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16.​Laucirica, A. G. (2009). Business improvement through people: The IKEA VOICE
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