Ikea Management Style

Topics: Ingvar Kamprad, Management, Business Pages: 8 (2981 words) Published: November 28, 2010
Ikea has grown into a worldwide phenomenon with an almost like cult following and the world’s largest furniture retailer due in large part to its founder Ingvar Kamprad’s charismatic personality combined with his own philosophy of business management and the Scandinavian style of open management he has parlayed a fortune that will be left to one of his children who has proven their own business acumen by running one of his many companies profitably. According to Kamprad himself in his July 23, 2008 Acticule published by stoked in Major Companies Kamprad states; Ikea, the world’s largest home furniture retailing company, was founded by Ingvar Kamprad. He built his business empire through developing a distinct corporate culture. The Ikean culture, which was directly linked to Scandinavian culture, valued simplicity and informality, frugality, humbleness, responsibility, and the constant will to renew. 1.

The Ikean Business Principles are founded on informal open and caring management style coupled with a heavy dose of Scandanavian culture and Kamprad’s own personal and business philosophy where hierarchy is not emphasized: 3 levels of responsibility is all that is needed, this is considered a flat form of authority. With a pragmatic approach to problem solving, each and every employee is encouraged to put their input into each and every problem and project that is within their division. The general consensus based decision making, discussion, explanation „learning by doing, in the paper “Building Piece by Piece;” it is stated that “IKEA would run into trouble. Under pressure from its competitors, IKEA’s suppliers began to boycott the company. In response, Kamprad would make a decision that would forever change the company; from now on, IKEA was going to design its own furniture. When one IKEA employee decided to remove a table’s legs so it would fit securely into a car, the company would again be revolutionized. After that point, IKEA began to orient itself towards design for flat packaging. The result of this was both lower prices and easier transportation home.” 3.

The other attribute: an acceptance of mistakes. In the 1970s, Ikea opened a bank in Denmark that nearly went under. When a local journalist asked Kamprad whether the employee running the bank would be fired, Kamprad said no, noting that the employee "learned a lot during the process, so why should he go and practice what he learned somewhere else?" 4.

In the Ikean culture managers share information, knowledge and skills, coworkers are encouraged and made each other feel important. The eliminating of status barriers fosters open and shared communication. Every now and again, usually at fairly long intervals, a new wonder-company is born. The wonder lies less in super-growth or astounding profitability (though these may exist) than in the revolutionary way in which the business is managed it is through this that the Ikean culture and management style are formed. Its founders brazenly challenge the norms of authority, hierarchy, manners, even ownership. Those norms are condemned, both explicitly and implicitly, as outmoded, restrictive and (the ultimate crime) ineffective. IKEA, the world’s largest home furnishings retailer started out as a small business that participated in annual trade fairs and took orders from local Swedish folk. The company’s founder, Ingvar Kamprad encountered many difficulties in starting the business as Swedish manufacturers and retailers of furniture conspired to prevent him from penetrating the market. When the Swedish manufacturers cartel would not sell furniture to IKEA, Kamprad was able to establish sources in Poland that enabled him to offer furniture at a more competitive price. In 1953, Kamprad opened IKEAs first warehouse in Almhult. By 1973, he had opened eight more warehouses and had a multi-million SKr business and the rest is history. IKEA has expanded globally reaching the whole of Europe, USA, and Australia. 1....
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