What Is Ikea Organizational Structure?


Author: Richelle
Published: 23 Nov 2021

The Operations and Franchise Structure of IKEA

The operations and franchising part of the corporate structure of IKEA. The design and manufacture of its furniture, purchasing and supply functions, and the management of most of its stores are overseen by INGKA Holding, a private, for-profit Dutch company. A structure used to organize workers is a functional organizational structure.

The restructuring of IKEA

The organizational structure of IKEA is illustrated in Figure 1 above, and is the result of a major restructuring initiative that was introduced in 2016 The range, supply and production activities of the new Inter IKEA Group were transferred to improve the franchise system and clarify roles. The overview of the franchise system is shown in the Figure 2.

Information Systems as an Organisation

An organisation can be described as a formal structure with a standard operating procedure, politics and culture. Environmental factors affect their outputs. Information systems can be divided into operational levels for transaction processing, knowledge levels for knowledge and office management, management levels for decision and intelligent support and strategic levels for executive support.

Information systems support an information value chain for a variety of businesses. All the systems process data and give feedback to the executive for decision making in planning, monitoring and implementation of strategy and the general workforce. The executive team can choose a relevant key performance indicator.

Leadership Models for IKEA

The Swedish furniture manufacturing company IKEA is one of the largest enterprises. Large companies in the global economy use a variety of different ways of organizational structures and operations to maintain a stable interior environment. Understanding what direction of management an organization is aiming to, what behavior of the workers wants, what attitudes it wants to encourage, and what goals want to accomplish is a basic conflict problem.

If a company explores all that kind of questions, it can design its structure and encourage the development of the cultural values. Managers must have the ability to make decisions under pressure for the good of the company, while leadership models help manage under guidance. Good leaders must have the ability to understand the impact of decision process in order to take the most effective and suitable choices for the organization, according to the principles of good management.

The Stichting Ingka Foundation

Not-for-profit and for-profit corporations run the store. The corporate structure is divided into two parts. The design and manufacture of its furniture, purchasing and supply functions, and the management of most of its stores are overseen by INGKA Holding, a private, for-profit Dutch company.

The INGKA Holding runs 235 of the 36 Ikea stores in 36 countries. The INGKA Holding has 30 stores that are run by franchisees. The Stichting Ingka Foundation is the owner of INGKA Holding, which is not an independent company.

The Ingka Foundation is chaired by a five member executive committee that includes his wife and attorney. Two companies operate the furniture store in Australia. INGKA Holding owns stores on the East Coast.

The IKEA Home Stuff Project

The group is known for its designs for appliances and furniture, and it is also known for its simplicity. The firm is known for its attention to cost control, operational details, and continuous product development that has allowed it to lower its prices by an average of two to three percent. The first part of the sequence involves going through the furniture showrooms.

The customer collects a shopping cart and goes to an open-shelf "Market Hall" warehouse for smaller items, then goes to the self-service furniture warehouse to collect previously noted showroom products in flat pack form. They are sometimes told to collect products from an external warehouse on the same site or nearby after purchase. Customers pay for their purchases at a cash register.

Not all furniture is stocked at the store level, such as the sofa colors that need to be shipped from a warehouse to the customer's home. The layout of the showroom is the same as the marketplace and self-service warehouse downstairs. Some stores have separate warehouses that allow more stock to be kept on-site.

In areas where the cost of land is less than the cost of building a 2-level store, single-level stores are more likely to be found. Large quantities of stock can be accessed throughout the day in some stores with dual-level warehouses. The largest of the company's wood-based products is located in Southern Poland.

Over 16,000 employees work in 50 sites in 10 countries to make 100 million pieces of furniture each year. The furniture is made from the hardwood alternative particle board. The company's sole supplier is a factory in southern Sweden.

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The company is not likely to go public because of its corporate structure. INGKA Holding is a trust based in Holland is the owner of most of the operations. Most of the designs of IKEA products are made in Sweden, but manufacturing has been done in China and other Asian countries.

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