Implementing Strategy

Topic: IKEA’s Organizational Structure

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IKEA’s Organizational Structure

Organizational structure bridges the gap between strategy and its implementation thus determining the extent of organizational effectiveness (Grant & Jordan, 2016). Companies like IKEA consistently strive to widen footprints across the globe, however, this globalization achievement comes with increased competition. This makes it essential for firms to transform by instilling complex organizational structures that are not only supplemental to effective strategic implementation but also providing the need for middle and operations management involvement (Radomska, 2014). Additionally, an organic structure is ideal as it catalyzes the alignment of processes to systems with aim of reinforcing viable outcomes and behaviors. This formalization of processes promote authenticity, rationality and creates order-oriented decision making. In result, an increased innovation which is coupled with global expansion is bolstered by the deeper efficiency and effectiveness standards (Grant & Jordan, 2016).

Introduction

IKEA Corporation is a world leading furniture and home appliances manufacturer and retail organization. Despite starting as a small company, the firm has grown by leaps and bounds to its currently global presence across 28 countries with a sizeable employee-base. It is renowned for viable business strategies such as the coveted new product development strategy, cost leadership strategy and its latest international expansion strategy. In the same token, it has a robust management style of leadership with example that promotes its vision embracement of creating a better everyday life for many (Dudovskiy, 2017). Its management style has been so crucial in defining strategic guidelines that impact on the extent of employee involvement in strategic execution. It blends employees’ activities with strategy and foster interrelationship between operations and strategy. Despite resource scarcity being a setback, their optimal usage leads to successful implementation. (Radomska, 2014).

Current IKEA Organizational Structure

It is undeniable that IKEA currently has adopted a good hierarchical organizational structure. It has scored several firsts that leverage on its hallmarks such as a solid financial strength, market leadership and democratic design concept. It has conceived a flat hierarchical structure characterized by fewer layers of management between its top level management and frontline employees (Dudovskiy, 2017). This creation makes a supervisor to oversee many employees hence minimizing close supervision but encouragingly deepening the level of freedom of action for the employees. It has resulted in excellent performance enjoyed by IKEA as it has built a welcoming employee attitude of ownership and job involvement. Despite the flat structure heightening the need for greater employee satisfaction and self-actualization (Porter & Siegel, 2006), it is still plagued by role ambiguity, confusion and limited career growth hence the need for structural transformation to actualize its dreams of a more innovative international business model.

IKEA Hierarchical Organization Structure

Inter. IKEA Holding B.V