IKEA: Scandinavian Style OVERVIEW In 1943, at age 17, Ingvar Kamprad formed IKEA. Anticipating the rising consumerism amid the rebuilding boom that would follow the war, IKEA moved quickly, providing families with low-cost furniture designs through the convenience of catalogue sales. With the opening of the company’s first showroom in 1953. Kamprad united a variety of suppliers under the IKEA umbrella, coordinating long run production schedules and controlling distribution. That model expanded in 1964 with the introduction of the first warehouse store, eliminating an entire step in product distribution by allowing warehouse container pick-up by customers. Over the decades, IKEA produced a unique global brand famous for innovation. The company’s devotion to lifestyle solutions led to the expansion of product lines and the expansion of global markets. By 2010 there were 332 IKEA stores in 41 countries.. QUESTIONS : 1. What are IKEA’s organizational design elements? 2. How does IKEA approach innovation?. 3. Describe IKEA’s culture. 4. What challenges does IKEA face? Learning outcomes  Understand the basic functioning of organizational design approaches and models.  Evaluate organizational structure on the frame of its strategy  Use basic concepts of systems theory for organizational design  Understand the different elements and issues of organizations development and creating the need for change.

 

Organizational Design and Development

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Question 1

IKEA’s institutional design elements are considered as one the unique and compelling; thus, can be vividly measured through the company’s constant development and success throughout the past decades. The organization has a stable cultural background as they firmly believe that it is the organization duty to provide their customers with quality goods and services at an affordable price and those that are manufactured sustainably. Typically, this is an indication that IKEA is concerned with its customer’s welfare, public representation and the environment in which it operates and shares (Gummesson, Kuusela, & Närvänen, 2014).  Another design element is that of managing departmentalization as the organization has subdivided its operations into an efficient division that strategically pays attention to various product lines and undertakings within the company. The strategy is another design element within IKEA as it has got an effective strategy of strong planning; for instance, it makes many of its goods from sustainable materials such as bamboo and cotton among others.

Question 2

The manner in which this institution approaches innovation is like a boat sailing on a sea as it always strives to discover the next best thing and serve its consumers with some of the great and cheap goods and services. For instance, the organization is continually monitoring and following-up with its customers on how the industry is performing and gets to know some of their weaknesses with the aim of improving on them and ways that will further please their customers. Also, IKEA is innovative through the materials they use more so the sustainable raw material that includes the bamboo, cotton, and other recycled materials among others (Ferrell, & Hartline, 2012). The organization also has stable outsourcing practices regarding the raw materials typically applied in the manufacturing of their products thus allows them to adopt a more competitive price for their consumers.

Question 3

IKEA strategically has a very stable culture with the primary intention being in the delivery of quality products to their esteemed consumers at an affordable price from a sustainable procedure that is friendly. As stated by the founder that coming up with better daily life for many people is the primary intention of the company reflects that it does not only care for their customers but also their trust and happiness with the products offered.

Question 4

One of the most significant challenges affecting IKEA’s operations is within its logistics chain; even though the organization is continuously making an adequate service provision (Ferrell, & Hartline, 2012). Operating with over 1,500 suppliers at times can be tiresome and stressful as are not only suppliers a potential problem but also the international shipping program. The institution strategically provides its products in 43 different nations thus leaving a ton of room for the logistics with a difficult task along with poorly delivered products as they may be affected in one area and not so much in another.

 

References

Ferrell, O. C., & Hartline, M. (2012). Marketing strategy, text and cases. Nelson Education.

Gummesson, E., Kuusela, H., & Närvänen, E. (2014). Reinventing marketing strategy by recasting supplier/customer roles. Journal of Service Management, 25(2), 228-240.