ASSIGNMENT INDIVIDUAL MGT162 IKEA PDF

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1.0 INTRODUCTION

IKEA is a Swedish-origin Dutch-headquartered multinational conglomerate that designs and sells ready-to-assemble furniture, kitchen appliances and home accessories, among other goods and home services. IKEA was founded by Ingvar Kamprad in 1943 when he was 17 years old. IKEA is named after the initials of the founder Ingvar Kamprad, Elmtaryd, the farm on which the founder grew up, and Agunnaryd, the nearby village. IKEA is internationally known for home furnishing retailer. It has grown rapidly since it was founded in 1943 at forested town of Älmhult, Sweden. Today, it was one of the largest company in the world for home furnishing brand. IKEA was famous for its Scandinavian style. The majority of IKEA furniture is flat-pack and easy for consumer to assemble by themselves. All services that related to IKEA products such as the centers, the retailers, customer fulfillment and other services got taken care by INGKA Holding B.V., who owns the IKEA group that based in Netherlands. At the same time, the IKEA brand is owned and managed by Inter IKEA Systems B.V., also based in the Netherlands, owned by Inter IKEA Holding B.V. Inter IKEA Holding is also in charge of design, manufacturing and supply of IKEA products. There are 422 IKEA stores operating in 50 countries in March 2021. All IKEA stores are operated under franchise from Inter IKEA Systems B.V. but some of them are operated by other independent owners. The IKEA website contains about 12,000 products and there were over 2.1 billion visitors to IKEA's websites in the year from September 2015 to August 2016. The group is responsible for approximately 1% of world commercial-product wood consumption, making it one of the largest users of wood in the retail sector.

2.0 MAIN REPORT The main report is a document that presents information in an organized format for a specific audience and purpose. Although summaries of report may be delivered orally, reports are almost always in the form of written documents.

2.1 PLANNING The primary function of management is planning. Every function on management is based on planning. Planning is an intellectual process of logical thinking and rational decision making. The aim of planning is to enables the management to look into the future and discover suitable alternative course of action. Planning helps the management to have a definite idea about the future and to picture a suitable programme for action. 2.1.1 Vision And Mission Statement A vision statement is an inspirational statement to describe the future of a company or group organization. It is the goals that the organization hopes to achieve in the future. It is, thus, a long-term goals of organization that gives direction for the organization to make strategies and future action to make their goals as a reality. In contrast to the mission, the misson outlines the current state, main goals and objectives of the organization. It provides extensive information about what the organization does. I. Vision Statement IKEA vision is to create a better life for the many people. The many people as in not only for their customers but also for their co-workers and the workers that work at their suppliers company. This vision goes beyond home furnishing. ii. Mission Statement IKEA mission as a business is to offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.

2.1.2 Strategies Planning Strategies planning is a process in which organizational leaders determine their vision for the future as well as identify their objectives and take action that can perform for a long time of period. The process also includes establishing the sequence in which those goals should fall so that the organization is enabled to reach its stated vision. The strategies that IKEA used is a long-term direction which they want to encourage consumer to use modern home furnishing products at affordable price. IKEA has used penetration pricing strategy to promote its products. Penetration pricing strategy is a marketing strategy used by businesses to attract customers to a new product or service by offering a lower price during its initial offering. The lower price helps a new product or service penetrate the market and attract customers away from competitors.

2.2 ORGANIZING Organizing is the function of management which follows planning. It is the process of establishing orderly uses for all resources within the management system of the organization. In case of organizing, it decides on ways and means through which it becomes easier to achieve what has been planned. Therefore, it is a process to determine who, what and how the tasks is going to be done. During the organizing process, managers coordinate resources, employees, policies and procedures to open the door for the goals in the identified in the plan.

2.2.1 Organizational Structure Organizational structure is a system that outlines how certain activities are directed in order to achieve the goals of an organization. These activities include rules, roles, and responsibilities. It has to be divided among the workers so that individuals are responsible for a limited work instead of doing it as a whole. The organizational structure also determines how information flows between levels within the company. 2.2.2 Types Of Departmentalization Departmentalization refers to the organization, consist of various departments and managerial positions also their relationship with each other. As it grows, the departments will also become bigger and the sub-units number will increase also, which in exchange add more levels of management. Based on IKEA organizational structure, the types of departmentalization that it used is hierarchical structure. Hierarchical organization is an organizational structure where every entity in the organization, except one, is subordinate to a single other entity.

CEO

MARKETING

FINANCE

MANAGERS

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TEAM MEMBERS

TEAM MEMBERS

HUMAN RESOURCES

SALES

MANAGERS

MANAGERS

TEAM MEMBERS

TEAM MEMBERS

2.2.3 Chain Of Command The chain of command is the line of authority and responsibility that extends from upper organizational levels to the lowest levels and clarifies who reports to whom. This concludes that an employee within an organization must have a clear reporting relationship to only one superior. This is a term called unity of command. However, this term is only used when organizations are approximately simple. So, IKEA is not suitable for this term because IKEA is a big company.

2.2.4 Span Of Management The span of management is one of the things that organizations pay attention to the most. Most organizations are increasing their span of management. It is because they want to make more effort to increase the span of management to decrease the time for decision making. This goes the same to IKEA, the span of managers for IKEA have expanded widely in the past decades. The span of management obviously can increase by having the employees to have more training and experience in work. This will make them need less direct supervision and managers can function with a wider span. Other variables that can determine the appropriate span of an organization is similarity of employee tasks, the complexity of the tasks, the physical proximity of employees, the degree to which standardized procedures are in place, the strength of the company’s value system and preferred managing style of the manager.

2.3 LEADING...