Case Study: “How Ingvar Kamprad Succeed to Adapt the Different International Markets Only Changing the Structures?”
“How Ingvar Kamprad succeed to adapt the different international markets only changing the structures?”
The evolution of Ikea’s organization structure changed through the years. First, it used to have an horizontal organization structure, with just one boss taking the decisions, Ingvar and the employees, manufacturing the products (Exhibit 1). Most businesses begin as simple structure with only two levels: the strategy apex and an operating level.(P79)This is an original Swedish model and it is normally used in small companies. A successful horizontal structure allows each employee to have and affirm his own perspective. Thus all the employees shape a society in their company. Eliminating the hierarchical structure deemphasizes the value of power, and accentuates the collaboration. It allows balancing the power in the structure. The first problem appeared in the 1970s:growth in the Swedish furniture market was stagnating. Kamprad felt it was time for IKEA to expand internationally. Refer to the theory from class, one of the reason why restructure is the growing of organizations.(P89) Then, the structure had to be adapted since the horizontal one was now too simple. That’s the reason why it evolved from the horizontal form to a more vertical way (Exhibit 2). As noted, vertical coordination rests on top-down command and control. (P59)As in the horizontal one, the boss is situated at the top. However, the management was split up into two different “departments”: the Swedish and the European management. This division will be the base of the Ikea’s successful future. Dividing the management into these two segments, gave them the possibility to keep on going with the traditional Scandinavian culture; and on the other hand, improve and innovate in the European market.
In the 1980s, Ikea wanted to start doing business not only in Europe but all over the world, in the USA, Canada and Asia, for instance. According to the knowledge we
The evolution of Ikea’s organization structure changed through the years. First, it used to have an horizontal organization structure, with just one boss taking the decisions, Ingvar and the employees, manufacturing the products (Exhibit 1). Most businesses begin as simple structure with only two levels: the strategy apex and an operating level.(P79)This is an original Swedish model and it is normally used in small companies. A successful horizontal structure allows each employee to have and affirm his own perspective. Thus all the employees shape a society in their company. Eliminating the hierarchical structure deemphasizes the value of power, and accentuates the collaboration. It allows balancing the power in the structure. The first problem appeared in the 1970s:growth in the Swedish furniture market was stagnating. Kamprad felt it was time for IKEA to expand internationally. Refer to the theory from class, one of the reason why restructure is the growing of organizations.(P89) Then, the structure had to be adapted since the horizontal one was now too simple. That’s the reason why it evolved from the horizontal form to a more vertical way (Exhibit 2). As noted, vertical coordination rests on top-down command and control. (P59)As in the horizontal one, the boss is situated at the top. However, the management was split up into two different “departments”: the Swedish and the European management. This division will be the base of the Ikea’s successful future. Dividing the management into these two segments, gave them the possibility to keep on going with the traditional Scandinavian culture; and on the other hand, improve and innovate in the European market.
In the 1980s, Ikea wanted to start doing business not only in Europe but all over the world, in the USA, Canada and Asia, for instance. According to the knowledge we