Introduction - Company Background
IKEA furnitures, privately held, international, low-cost home products are an inevitable part of interior furnishings at many houses in the world. IKEA furnitures are marked for its modern utilitarian design. The company has 260 retail outlets around the world and more new stores are on the line to be opened in 2008 (Dhanyasree, 2007).
IKEA was founded in 1943 by a 17-year-old Ingvar Kamprad in Smaland, south of Sweden. IKEA formed its name from the founder's initials (I.K.) plus the first letters of Elmtaryd and Agunnaryd, the farm and village where he grew up from a farmer to a businessman. Ingvar sold whatever he found could fill with a product at a reduced price under the brand name of IKEA (Dhanyasree, 2007). When Ingvar Kamprad outgrew his ability to make individual sales calls in 1947, furniture was introduced into the IKEA product range. Local manufacturers in the forests close to Ingvar Kamprad's home produced the furniture. The founder of IKEA soon saw the opportunity of becoming a furniture provider on a larger scale and discontinued all the other products to focus directly on low-priced furniture. (Dhanyasree, 2007).
In 1953 the first IKEA furniture showroom was opened in Älmhult. In 1955, IKEA began designing its own furniture. Its products vary from upholstered furniture, coffee tables, beds, carpets, lightings, and a variety of other household furnitures (Dhanyasree, 2007). Much of IKEA's furniture was designed to be assembled by the consumer rather than being sold pre-assembled. IKEA made a revolutionary change in the interior furnishings by reducing the price of quality furnitures to a minimum amount. The successful saga took a new turn as the first IKEA store in Norway opened outside Oslo in 1963. IKEA store opened at Zurich, Switzerland in 1973, in 1974 at Munich, Germany and the new store opening continued in each succeeding years at a new country (Dhanyasree, 2007).
Role of Culture in IKEA’s Multinational Management Style and Practices In many ways, IKEA developed as an extension of Kamprad and his view of life. “The true IKEA spirit is founded on our enthusiasm, on our constant will to renew, on our cost-consciousness, on our willingness to assume responsibility and to help, on our humbleness before the task, and on the simplicity in our behaviour”, he said (Bartlett & Nanda, 1996, p.4). Overtime, a very distinctive organisation culture and management style has emerged.
The company operated very informally. IKEA’s management style is described by the non-Swedish as informal, open, and caring. Hierarchy is not emphasized and in a typical store there are only three levels of responsibility between the store manager and coworkers (Hodgetts & Luthans, 2005). It was reflected in the neat but casual dress of the employees, in the relaxed office atmosphere, and in the familiar and personal way the employees addressed each other – with the personal “du” rather than the more formal “sie” in Germany, and in France, with “tu” rather than “vous” (Bartlett & Nanda, 1996). Managers are expected to be close to their coworkers, with few if any status barriers, and not to take themselves seriously. This egalitarian approach to management has made it easy for motivated employees to work their way up the organization with little formal training (Hodgetts & Luthans, 2005).
The IKEA management process also stressed simplicity and attention to detail. “Complicated rules paralyze!” said Ingvar Kamprad (Bartlett & Nanda, 1996). Store managers and corporate staff alike were expected to fully understand the operations of IKEA stores. The company organized “antibureaucrat weeks” that required all managers to work in store showrooms and warehouses for at least a week every year. A pragmatic approach to problem solving and consensus-based decision making are also strongly imbedded in IKEA management practice (Bartlett & Nanda, 1996).
Additionally, the search for creative...
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