Management and Operations of IKEA

University: UK college of Business and computing

  • Unit No: 4
  • Level: High school
  • Pages: 17 / Words 4313
  • Paper Type: Assignment
  • Course Code: D/508/0488
  • Downloads: 675
Organization Selected : IKEA
Question :

Some of the assessment details needed to be managed thereunder:

  1. Give the role of manager and leader in IKEA.
  2. Provide the function of leader and manager in IKEA.
  3. Explain the function of managers and leaders in the organization.
  4. Give the relationship of management in leadership in IKEA.
Answer :


In this topic we are taking IKEA as a company, IKEA is a Swedish company that sells and designs ready to assemble furnitures. Its products include home appliances, kitchen appliances and other goods and some occasional home services. It is the one of the largest furniture retailer in the world. In this topic we will study about the Management and Operations of the IKEA and how does it effect the performance of IKEA (Jacobs, Chase and Lummus., 2014). In this topic we will study the differences between leaders and managers, their roles and characteristics. We will also study about various leadership styles like situational leadership, systems leadership and contingency leadership. This study will also lay emphasis on the different approaches of operations management, importance of operations management in the IKEA store, outside factors that effect the operations management of IKEA and hoe these outside factors will impact the decision making of store manager.

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Scenario 1  

a) Differences and similarities between a leader and manager considering their roles and characteristics.

Leaders and the managers are the vital part of the organisation as they help in creating the vision, set directions, inspires the team, focus on the functions. They help in organising the work as per their abilities and skills. But there are some common similarities and differences as per their role which are discussed below.

 Similarities: leaders and the managers of IKEA have some common similarities as per their roles and characteristics like both of them have to supervise a certain group of people or a team which are led by them. Both of them have to critically evaluate their employees as per their performance. Both leaders and the managers are accountable for the results which are achieved through their teams or groups (Ferguson and, 2017). Both use different metrics and procedures to measure the performance of their teams or groups which help them in increasing their team or group performances. Both leaders and the managers have to rely on the effective communication which is two way process. Honesty of leaders and the managers is a great deal in common. Leaders and the managers are good in their in empathy and their self self awareness. Both of them requires a team or a group to lead or manage. Both of them have to guide their groups towards achieving their goals and objectives. Both of them have to influence others and make them to follow them (Song and Parola., 2015). Both of them help in making the plan of specific activities in order to achieve their goals and also help in coordination, controlling for the better organisation.

Differences: leaders of the IKEA have to influence only its sub-ordinates in achieving its determined goals while as manager is managing the entire organisation. A leader has to set the directions which to be followed by his followers while as manager has to formulate the plans. A manager takes the decisions with in the organisation but its the duty of leader to facilitate these decisions. A manager sets the goals but a leader creates as vision to achieve these goals. Leader have to take the risks but the mangers have to control the risks which are faced by the organisation. A quality of a leader is to build the relationships with its followers but the quality of manager is to build the systems and the processes. Leaders provides the coaching while as the manager give the directions about the tasks assigned and also provides the guidance how to achieve these tasks.

b) Functions of a manager according to Fayol and how a manager in your organisation performs these functions.

There are various functions which a manager of IKEA have to perform in the organisation are:

1) Planning: A manager of IKEA helps in formulating a good and effective plan of actions and its is considered the hardest part among the functions of the manager. Through the effective plan it bridges the gap between where they are and where they want to reach. A manager coordinates the plan at various levels by following the  the time, its implementation. Manager has to make the planning on continuous basis and is flexible. Managers planning covers the entire organisation and it divides or segments at various levels of management. For example an IKEA manager plans a vision to create a better ways to serve the people in everyday life by setting a goal that all people should be able to by furniture from IKEA.

2) Organising: An organisation can function properly only when the organisation is well organized. A manages help in the proper organisation of IKEA. It is the function of the manager to facilitate enough capital, proper staff, ensure availability of the raw materials etc which helps in running  the organisation smoothly. A manager manages the appropriate organisation culture of IKEA in order to ensure that the activities and plans are carried out properly. For example,  a manager assigns the qualified employees to work, he delegates various authorities and responsibilities in order to achieve the goals and objectives of  an organisation.

3) Commanding: a manager has to give commands to its employees in order to get the work done and also provide the information what is needed from them. A manager has the integrity to communicate with clarity so that they can understand what is needed from them which help in the clarity of achieving the goals. For a manager commands his employees about the targets to be achieved in month.

4) Coordinating: it is also the function of the manger to coordinate and give an instructions to the employees in order to achieve the goals and objectives of an organisation. A manager motivate the employees and also encourage them ton take the initiatives. It is the essence of the management for sustaining the harmony and the peace within the organisation (Cucoranu., 2015). A manager coordinates both externally and internally too. Internally a manager performs the functions like planning, organizing, actuating and controlling and externally a manager has to coordinate with the constitutions, social, technical factors etc. For example a manger has to set a coordination with his employees in order to achieve the tasks an coordinate at various levels of tasks for the smooth functioning.

5) Controlling: In every organisation there is a system of controlling. A manager also performs the function of controlling. A manager sets a various performance standards which are based on the organisational objectives, a manager assess the reports on the actual performance, manager compares the performance standards with the actual results and based up on these result a manager take the corrective actions or preventive measures. For example, an IKEA manager sets a target to be achieved within a month, after a month a manger cross checks the performance of the employees and takes action accordingly.

c) Situational leadership, systems leadership and contingency leadership using various scenarios in your organisation.

Situational Leadership: Situational leaderships is a type of leadership style in which the leaders or the managers have to adjust his or her style in order to fit the development levels of  its followers in order to influence them. It helps in the motivation and supporting the work environment so that the productivity of the work is increased. It is the main duty of the manager or leader to increase the productivity and the performance of the organisation by applying the situational leadership style he or she builds a morale and enthusiasm which helps in creating productive environment. For example an IKEA applies this style when a employee has fully committed his task, a manager gives him or her a responsibility for leading other members in the team that too without a direct supervision.

Systems Leadership:  Systems leadership is a type of  leadership style that allows the leaders to create a such conditions where the employees at various levels work effectively and productively through their potentials. A leader uses the principles of human behaviour that helps in creating a good leadership, formulating strategies, designing a system and other social processes. It is the a collaboration of leadership networks of the employees at various places and  even at different levels in creating a system of shared attempts and cooperating towards a significant change (Nakagawa, K., 2015). As an organisation is made of interrelated and interdependent parts, system leadership helps in maintaining the barriers between the different systems of an organisation. For example IKEA applies system leadership when an IKEA has small or limited project it helps in achieving the success of limited projects, it also gives the capacity withstand the difficulties from the external factors like political, social, economical factors etc while maintaining its key characteristics.

Contingency Leadership: Contingency leadership theory suggests that, an organisation has no best way to be organized properly or to take the decisions or to lead a company. It also suggests that an effective leadership depends on the matching a kind of leadership at a given situation. It explains a definite situational factors that effects the relationship between dependent as well as independent variable. It focuses on the single aspects of the situation and lead the organisation accordingly. Personality of a leader, his attitude, abilities, skills of a leader is the important factor to lead the organisation. For example in IKEA this leadership is applied when it has to measure the effectiveness or ineffectiveness  of an employee in a particular tasks.

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Scenario 2

1. Different approaches to operations management and identifying their implementation in store.

There are various approaches of operations management that has resulted in the growth and increased the performance of IKEA. Various approaches used by IKEA are

1) Lean Management: Lean management involves the running of an organisation through process of continuous improvements. A lean environment will result in the improving of the quality. If any quality issue arises company implements the problem solving techniques in order to root cause such problems. Its use in IKEA store is that it increase the efficiency, it increases quality standards of IKEA, it reduces the manpower  and is easier to manage. It has enhanced the culture of stores of IKEA as its team members are quickly developed on regular basis. It helps to reduce the space in the store by decreasing wastes through the process of waste reduction. It brings the safer environment in the store and makes the store more organized.

But there are certain challenges which IKEA store have to face, there may high employee resistance and  it may prove costly to the company(Yabuki., 2015).

2) Total Quality Management (TQM): TQM integrates all functions of the organisation like finance, manufacturing, services, marketing etc in order to focus on fulfilling  needs of the customers and achieve the organisational objectives. In stores of IKEA TQM brings higher productivity, eliminates wastages and defects, improves the focus on customers needs. It has enhanced the marketing image of IKEA as customers are satisfied with its products and services offered by IKEA. TQM has resulted in  bringing the innovations and improved the performances of the employees in IKEA stores.  It has also resulted in deduction of costs of production. It has resulted in the better management of IKEA stores.

The main disadvantage of TQM in IKEA store ().e is that it faces the challenges of  proper implementation, if TQM is partially implemented it may not bring the suitable results. It is also expensive as quality brings expenses.

3) Six Sigma: Six sigma is a management technique which improve the capabilities of business process by increasing the performances and brings profits to the company by reducing the defects by applying various organisation tools. It is the methodology which helps to improve the business processes with the help of various statistical tools and techniques. In IKEA store this factor have resulted in much quality and the efficiency within the stores (Burns., 2014).It has increased the quality of its products and resulted in the continuous improvements of its product. It brings perfection by reducing the defects at negligible level.

But the negative point of six sigma is that it requires highly skilled and highly trained employee who can make use of statistical tools and techniques for its implementation, it can not be done by normal or inexperienced employee.   

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2. Role Of Leader

A leader has different roles that he has to perform in an organisation. Every organisation has a different leader; with different qualities. IKEA is an organisation, which is having a very potential and energetic leader, that can perform multi tasks and can motivate the employees in performing their respective tasks with full energy and putting the best efforts so that the organisation can achieve its desired goals and can set a new benchmark of success in front of its competitors (Fera, and, 2015). Leader of IKEA is having the following qualities that, has made him a role leader of that organisation.

  • Coach:- Most important role of a leader is to be a coach of his team. He plays the role of a mentor for all of them. He guides them regarding what strategy they should follow so that, the organisation can reach to its desired height of success (Fera, and, 2015).
  • Strategist:- The another most important role of a leader is to be good strategy maker. He should know, how to make the best strategies for the team, with motive of defeating the competitors in the market. IKEA is the organisation, that, is having such strategies, by framing them an organisation can become one of the leading organisation in the market.
  • Visionary:- A leader should have the ability to, make plans and strategies for the future. A good leader is the one who frames the strategies by keeping in mind the future planning as to at where the company should reach after a particular point of time (Fera, and, 2015).
  • Change Maker:- A team leader is the one who suggests the company, that what are the needs of market, the needs of customer, and the ways in which an organisation, can make its efforts to satisfy them. In short, a leader should show path to the company as, remedies that a company can take.
  • Innovative:- Every time, there is a need of innovation in the market. A leader should always come with innovative ideas that can help the organisation and also inspire the team mates to work with a creative mindset for the enterprise (Tang, 2017).
  • Team Player:- It's very essential for the leader to play in a team. To have the team spirit within himself. Actually, an individual can surely achieve anything and at anytime, but, along with the teammates, he can achieve those targets, in a more efficient and effective way (Tang, 2017).

Functions Of A Store Manager:- In every organisation, the manager has to perform certain function that are part of his job and he is accountable for all the work and responsibilities that has been given to him. So, following are the functions of a store manager at IKEA:-

  • Management Of Employees:- The first and foremost duty of a store manager is to manage the employees of different departments in the organisation.
  • Recruiting, Training And Development:- Since, he is the manager, at an MNC like IKEA so, his first work would be to recruit the right person at the right job at the right time and he should be assigned with the right task (Tang, 2017).
  • Cost Minimization:- A manager like personnel should, work on the cost minimization or the cost cutting of expenses in a very effective and well organised manner. The task of cost minimizing is very crucial in case if, an organisation is running on low cost (Tang, 2017).

3. Importance of operational management in IKEA.

IKEA company UK, is considered as the greatest example of a company that effectively aligns its business model and operating model. Further, it has been determined that to deliver its customer the promise of rendering quality furniture at cost effective prices, the company depends on its value chain to modify its manufacturing and operating cost (Althaher, Mancarella and Mutale,  2015).

Operational management of the company is responsible for managing the process of creation of products and services. Operation management is a process that includes planning, organising, managing, controlling and supervising the production and manufacturing procedures. Furthermore, the key goal of operation manager is to make sure delivery on time of the goods and to effectively turn the raw materials into the finished goods. Therefore, operation management plays critical role in smooth functioning of the business. Below are its major advantages to IKEA company:

  • Likewise, management for every industry or business irrespective of their nature of the operation is involved in operation management. IKEA's operational management is accountable for planning, organising, controlling, etc. Also, it is responsible for company to manage the daily workings smoothly. Apart from this, with the help of operational management organisation is able to make better use of its resources such as; raw material, money, labour and so on.
  • IKEA's operational management will help the company to improve the entire productivity. The ratio of input to output is defined as productivity. It provides a measure of the ability of the manager as well as workers. The is because the discipline concentrates on utilising the existing resources in the best way to attain defined goals, hence, it enhances the overall productivity (MontwiÅ‚Å‚,  KasiÅ„ska and Pietrzak, 2018).
  • Operation management in IKEA contributes in making the goods match with the requirements of customers. It has been discovered that, operation management is considered as the heart of the company as it manages the whole operation.
  • Under the management of operation, there is optimal usage of resources leading to big profits of the company. With the help of OP in the organisation efforts of staff members and various raw materials are efficiently used and transformed into the services and goods required by IKEA. Therefore, crucial role is played by operation management in

4. Key outside factors that can have effect on the operations of IKEA

Operations and management of IKEA can get affected by the outside environmental factors. This can also lay impact on the decision making process of the firm. Company needs to lay keen emphasis on these environmental components. As it can lay impact on the efficiency and productivity of the firm. It can be better analyse by doing PESTLE analysis These factors include the following.

Political factor: Political factor basically includes the laws, rules and regulations given by government that needs to be addressed by IKEA while expanding their business. It includes various acts like consumer protect act, health and safety act that safeguards the rights and duties of customers (MontwiÅ‚Å‚,  KasiÅ„ska and Pietrzak, 2018). Company needs to follow these laws in order to gain competitive advantage. Laws and rules can lay positive and negative impact on the firm. Like for example increase in tax can reduce the demand of the products supplied by industry. This can reduce their profitability. Also efficiency can be reduced by it.

Economical factor: Economic factors includes components like fiscal policy, inflation rate, labour rate and many more. It can lay impact on the working of IKEA. Like for example increase in labour rate can make the creation of products more hectic task. This can lay keen impact on their efficiency. Also, firm should have an idea about the regions economic conditions where they are going to expand. This can help them in gaining competitive advantage. Also firm would be successfully able to get establish in that region. This can also support them in increasing their productivity as well as efficiency.

Social factor: IKEA can also get impact by the social factors that includes beliefs, values and attitude of communities and societies where company is going to expand their businesses. It can lay positive and negative impact on their growth. Firm needs to have proper idea of the attitude and belief of people so that they can better able to identify their needs and demands. Also it makes their image good in the market. If company is engaged in hurting the sentiments of people by not addressing their social issues than this can hamper their growth. Also, it can lay negative impact on the mind of customers. They can lose their consumer base.

Technological factor: With the advancing technology Ikea must also involve in using it. This can support them in gaining competitive advantage. Making use of technologies like social media marketing and promoting their products by the help of Facebook, Instagram and Twitter can support company in exploring wide range of customers. This can support them in enhancing their productivity and profitability. Also it can lay positive impact on the mind of customers. Ikea would be able to establish an unique image in the mind of customers. Apart from this, with the help of operational management organisation is able to make better use of its resources such as; raw material, money, labour and so on.

Legal factor: It means following rules and regulations implemented by government. Ikea needs to address these laws, policies and rules. Not following of the laws like providing trustful products to consumers so that they can gain competitive advantage. Also, good image can be form in the mind of customers. By this they would be able to attract and retain more customers and consumers. This can make their work more efficient. Also, firm would be successfully able to get establish in that region. This can also support them in increasing their productivity as well as efficiency. IKEA can acquire more consumers with the help of it.

Ecological factor: IKEA needs to also make use of ecological factors in order to gain competitive advantage. They must perform corporate social responsibilities so that new and unique image can be form in market. They must use their resources, product and services effectively in order to gain sustainability. Also, ethics must be followed by the firm or industry so that good image can be form in mind of consumers (Talari, Yazdaninejad and Haghifam, 2015). They can involve in doing charity shows and also convince customers to make use of paper bags instead of poly bags. Apart from this, with the help of operational management organisation is able to make better use of its resources such as; raw material, money, labour and so on.

6. Impact on decision making process of IKEA

All the environmental factors lays keen impact on the decision making process of IKEA. Like for example they need to analyse market before making any decision related to price, and design of products. Also, company must get engage in developing products according to the needs and demands of consumers. Decision will be fully based on that. Also it will help them in gaining competitive advantage. Economic factors like increase in rate of price of tabor can lay keen impact on their decision making process. Increase in labour rate can also reduce the demand of their products. This can reduce the profitability and productivity (Espa and,  2016).

Decision can also get effected by technological factors like making use of technologies like social media marketing and promoting their products by the help of Facebook, Instagram and Twitter can support company in exploring wide range of customers.  Also, it can help them in increasing their profitability and productivity. It can also help them in enhancing their efficiency. Legal factors can also impact the decision making process. Not addressing rules and regulations by given by government can hamper their growth and efficiency. Profitability can also get reduced. Ecological factors can also effect the decision making process, company must get engage in corporate social responsibilities.


From the above study, it has been summarised that role of leaders and managers has effected the decision making process of IKEA. Also, legal and political factors has impacted the growth and profitability aspects of firm.  System leadership has helped firm in creating a good leadership, formulating strategies, designing a system and other social processes. It has also helped company in gaining competitive advantages. Also productivity and effeciency has also been enhanced by making use of total quality management.

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