Organizational Structure Of IKEA

The present organizational structure for IKEA can be defined as highly functional with a global market strategy. On that account IKEA is able to maintain centralized control over functional activities and that the same time takes advantage of low cost and enhanced quality from internal suppliers. On top of that, control over strategic direction is improved and functional lay-offs are minimized. In order to ensure efficiency in the logistic process, the organization has integrated purchasing and distribution processes under one umbrella function. As IKEA continues to expand overseas, the importance of strategic direction will increase. The rapid internationalization triggers a range of challenges imposed on the headquarters of Sweden. These

In this type of organization, for example, there may be a marketing department, a sales department and a production department. The functional structure works very well for small businesses in which each department can rely on the talent and knowledge of its workers and support itself. However, one of the drawbacks to a functional structure is that the coordination and communication between departments can be restricted by the organizational boundaries of having the various departments working separately.

Centralized structure is a management structure where decision making is done at higher consolidated levels by those with a broader perspective that includes having amassed considerable knowledge and information about what needs to be done. In a centralized organization, decisions made by higher management are typically communicated to lower organizational tiers who are then expected to accept and move forward in a way consistent with those

Most customers follow the “green” trend. IKEA is keen on protecting the environment and trying to minimize any possible damaging effects on it. Therefore IKEA’s suppliers have to follow some rules; they have to reduce the produced waste polluting the air, water and ground, they have to use recycle or recyclable materials and they have to use wood from known areas. Additionally, suppliers may not use components that are on the list of chemical “compounds and substances” and they may not use woods from national parks or nature reserves or areas with high conservation values. They may only use the woods if they are certified for their use. Ikea also operates with a few companies such as trade unions, NGOs and it has partnerships with UNICEF, save the children and WWF (the global conversation organization). IKEA and these organizations focus on improving children’s rights and they are promoting responsible forestry, better cotton cultivation and reduce CO2 emissions. (IKEA 2011). IKEA’s founder Kamprad had once written in a manifest that the true IKEA spirit is still founded under enthusiasm, on our constant will to renew and our willingness to assume responsibility and to help, on our humbleness before the task and on the simplicity in our behavior. (Daft, 2010). IKEA tries to give employees a family friendly feeling. There is no the outside noticeable hierarchy among workers, so e.g. managers also