Analysing The Organisational Structure Of Ikea Business Essay
Analysing The Organisational Structure Of Ikea Business Essay
Ingvar Kamprad, the founder of IKEA, as a child, started a profitable business selling matches to neighbours on his bicycle. In 1943, at just 17 using money he received as a gift from his father for doing well in school he formed IKEA(ICMR, 2005) which is an acronym made up of his initials and the first letters of Elmtaryd and Agunnaryd, the farm and village in Sweden where he grew up. In 1947, furniture was introduced for the first time in IKEA's product line in the form of armchairs. Local craftsmen made the furniture using wood from a nearby forest. IKEA's furniture became very popular and the line was extended to include more products. Its interesting at this point in the companies history because Kamprad was based in a very poor area of Sweden, and because of this, the people were naturally frugal and highly resourceful, in other words they had to maximise and be inventive with the limited resources available to them. The author believes that this is the setting and cornerstone for all of IKEA's subsequent success.
IKEA's vision was "To create a better everyday life for the many people." (entrepreneurs, 2010) According to Ingvar Kamprad, the founder of Ikea; "To design a desk which may cost $1,000 is easy for a furniture designer, but to design a functional and good desk which shall cost $50 can only be done by the very best. Expensive solutions to all kinds of problems are often signs of mediocrity." (Chandler, 1993)
Ikea's success is based on the relatively simple idea of keeping the cost between manufacturers and customers down. Costs are kept under control starting at the design level of the value-added chain.
Following on from this the culture of the company emphasizes efficiency and low cost, which cannot be achieved at the expense of quality or service. Bureaucracy is fought at all levels in the organization. Kamprad believes that "simplicity and common sense should characterize planning and
Ingvar Kamprad, the founder of IKEA, as a child, started a profitable business selling matches to neighbours on his bicycle. In 1943, at just 17 using money he received as a gift from his father for doing well in school he formed IKEA(ICMR, 2005) which is an acronym made up of his initials and the first letters of Elmtaryd and Agunnaryd, the farm and village in Sweden where he grew up. In 1947, furniture was introduced for the first time in IKEA's product line in the form of armchairs. Local craftsmen made the furniture using wood from a nearby forest. IKEA's furniture became very popular and the line was extended to include more products. Its interesting at this point in the companies history because Kamprad was based in a very poor area of Sweden, and because of this, the people were naturally frugal and highly resourceful, in other words they had to maximise and be inventive with the limited resources available to them. The author believes that this is the setting and cornerstone for all of IKEA's subsequent success.
IKEA's vision was "To create a better everyday life for the many people." (entrepreneurs, 2010) According to Ingvar Kamprad, the founder of Ikea; "To design a desk which may cost $1,000 is easy for a furniture designer, but to design a functional and good desk which shall cost $50 can only be done by the very best. Expensive solutions to all kinds of problems are often signs of mediocrity." (Chandler, 1993)
Ikea's success is based on the relatively simple idea of keeping the cost between manufacturers and customers down. Costs are kept under control starting at the design level of the value-added chain.
Following on from this the culture of the company emphasizes efficiency and low cost, which cannot be achieved at the expense of quality or service. Bureaucracy is fought at all levels in the organization. Kamprad believes that "simplicity and common sense should characterize planning and