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IKEA Company is world famous company in the field of
furniture and home décor accessories. Company is working in the United States,
United Kingdom, and India, turkey, Taiwan, South Korea, China, Canada and other
geographical areas of the world. IKEA Company offers bold and stylish furniture
for the household, offices and industrial use. The prices set for the furniture
are set low to increase their market shares in the Sweden. The organizational
management is contributing in building efficiency in the operations of the
company and to ensure the progress in the market in order to attain the targets
set as the mission statement of the company.
Thesis Statement of IKEA Furniture retail company
The main purpose of the thesis is to introduce the most
appropriate and effective organizational structure and international strategies
for the IKEA in order to bring innovation and achieve the global expansion
strategy of the company.
Organizational Chart of IKEA Furniture retail company
The organizational chart also known as organogram presents
the structure of the organization in accordance with the job positions and
ranks of its several parts. Organizational chart also presents the span of
control of the organizational in the management system. Through the
organizational chart we can understand the positions, delegation of the
authority and power, of the various leaders and employees in the organization.
There are three major kinds of the organizational charts that presents the
organizational structure as divisional structure, matrix structure and
functional structure.
The current organizational chart of the IKEA is presented below in figure 1. The current organizational chart represents the designations and positions of various leaders in the organization. The chart also represents that who is liable to report whom. And who is working under the supervision of whom. Thus briefly speaking organizational chart represents the overall functions and delegation of the authority through the graphical representation.
Figure 1IKEA organizational Chart
IKEA Structure of IKEA Furniture retail company
The organizational chart and structure currently used in the
organization is a major reason for the success of the company in the market.
However the chart is really complex and span of control is wide
In this above mentioned organizational structure projects
that the whole structure segregated in the two major parts. The first part is
operations and the second one is concerned with the franchising of the company.
The organization should have the hierarchical organizational structure rather
than the self-organizing team structure
Fixed structure of IKEA Furniture retail company
Flexible or self-organizing team structure cannot support
the organization in managing operations in a successful way. Because of the
fixed hierarchical organizational structure organization can ensure elimination
of the conflicts and ambiguity in the daily tasks. As because of clear
positioning employees can understand whom instructions they have to follow and
whom they have to report their progress and daily tasks
IKEA’s International Strategies
The new organizational structure support the following
international strategies
Contractual Strategies of IKEA Furniture retail company
The organization is working on the basis of contracts. There
are contracts with the retailing supply chain and suppliers. Company is
enlarging the operations in the geographical region on the basis of contracts
with the suppliers. Contracts (short term and long term contracts) strategies support
the organization to promote their products in the international market.
Investment Strategies of IKEA Furniture retail company
The IKEA investment strategies as international strategies are
also supporting the global expansion of the company as they are investing in
the global market. The IKEA is investing in the other countries to build their
strategic assets. Expansion of the strategic assets in the companies and
countries is also a supportive and innovative strategy for the global
expansion.
Export Strategies of IKEA Furniture retail company
Third but most important strategy towards expansion of the
business in the international market is promotion of export business. Company
is importing raw material, and exporting the ready to sell products in the
international market that is supporting the expansion decision. In order to
rapid increase the business and sales of the company in the global market the
best strategy is to encourage export and trade
The new organizational structure/ hierarchy is developed
with the capability to support the organization in implementing the above
mentioned strategies to expand the business in the world.
Authority Ladder of IKEA Furniture retail company
New structure has
strong and clearly defined authority ladder that will support the employees in
working as a team. Through the clearly defined ladder and authority information
system and communication channel of the organizations gets betterment
Clear Path of IKEA Furniture retail company
Through the new hierarchy management at each level is
responsible for the work performance of their subordinates. Therefore they will
lead, monitor, control and motivate the employees in such a way that ensures
the successful attainment of the corporate level strategies and goals. for
instance the GM operations will get the instructions directly from the
directors and president about the cost cutting strategies or improvement of the
quality and will enforce his subordinates the assistant managers and employees
team to bring efficiency in their performance and reduces the cost and improve
the quality standards for the products. Corporate level management of the
company will also develop the strategies to address the risk factor in the
market that can affect the expansion decision of the company
Skilled Managers of IKEA Furniture retail company
In the new structure skilled management will be given
importance. The staff will be hire on the basis of skills and qualification
related to the job description. In the organizational structure HR department
will support all departments through providing the strategies related to
employees motivation, incentive systems and career development opportunities of
the employees.
The new organizational structure will support the decision
of the expansion in the global market through building performance efficiency
in the employees by improving the monitoring system. In accordance to the Korsgaard,
Ferguson, and Gaddefors resaerch conducted in 2015 the organizations should
understand the market before taking the decsion of investment in internal
markets or expansion
Summary of IKEA Furniture retail company
The IKEA company as the funiture selling company has
business all over the wolrd. After the analysis of the operations of the
business and its current operational system it is concludded that the
organizaaiton is doing well in the market however to expand their business in
the international market thye have bring more imporvement in their
organizational structure. The main focus of the organizaiton is to bring
improvement in their international stratgies and introduce a new organizaitonal
structure that support the current and future operations of the company. in
accordance to the analysis the organization need to bring few changes in their
organizational structure. New orgnaizational structure has capabilties to
improve the communication system and implementation of the international
strategies by the managemnet of the IKEA company.
References of IKEA Furniture retail company
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