MHR 301.11
1/21/2015
IKEA: Management Practices
Introduction
IKEA is a company based in Denmark, and is currently one of the world’s
foremost furniture, housewares, and home furnishings retailers. This company designs
its own products, which are then sold in over 140 stores, which are spread out over 30
different companies all over the world (Elen 53). Additionally, IKEA also sells its
products through mail orders, which are facilitated by the distribution of extensive
catalog each year in the areas located near its stores. One of the company’s major
selling points is its efforts to create high quality products at relatively low prices.
Currently, the company employs 36,400 individuals, and is owned by Ingvar
Kamprad. Kamprad founded IKEA in Sweden, in the year 1943. We examined IKEA’s
management practices in view of several management principles derived from the
early contributors of management development. We found that three of two principles
tested are relevant to IKEA. Our findings reveal that the validity of conclusions made
by early contributors to the development of the science of management.
Essentially, the IKEA management corporate structure is composed of two
major components. These include operations and franchising, which are further
broken down into production and development, purchasing, distribution, and retailing.
This separation of roles among various management groups in IKEA is primarily
because IKEA’s operations are located all over the world. This leads to a credible
organization of operations, which influences the success of the company greatly (Elen
77). Overall, it is undeniable that the good management practices at IKEA contribute
the most in its good global and domestic performance. The following areas of though
by the early contributors of management science were tested to determine whether
they have relevance at IKEA. The four principles, which are relevant first, are cited
first, followed by the other one, which was found to bear no relevance.
Four Relevant Principles
The first principle tested pertains to Douglas McGregor’s ‘X-Y’ theory, which
he first proposed in his book ‘The Human Side of Enterprise’, released in the year
1960. Essentially, the theory asserts that there are two fundamental ways of viewing
