Structure And Culture Ikea And Lego Business Essay

In this assignment I am designed to be working for an organization holding a trainee management expert and at the end of my training I must submit a report. My survey will be about two private organizations where I discuss their framework and culture, how it impacts the business enterprise performance. I also need to research how each company deals with their employees and problems faced with employees. A significant figure is picked for every single company and also have discussed the management style used by both. In addition I explore the classical approaches that are being found in the company's' and the various techniques to management used by each organization. In my PowerPoint presentation, I give a consultation to my customer organization on motivational ideas and effective teamwork.


I Sayarah Saleem confirm and acknowledge the fact that assignment was done by me together. I have investigated and studied the duties given and have given the references from where I've obtained the information.

Executive Summary

The two private organizations that I have chosen are IKEA and LEGO in my report because I believe it's they are simply cases of describing the structure and culture of each corporation. They are both different in their own way, with that they deal with staff issues and how the corporation is run. Is family focused and the other, which got an outsider as a CEO in 2004 in order to change the business around.

Table of Contents

Task 1

1. Report

1. 1 Review the structure and culture if the two organizations. In the research you have to engage in an evaluation and contrasting of these structure and culture.

1. 2 Further obviously evaluate the way the structure of each company supports its culture and exactly how this relationship results business performance.

1. 3 Explore and condition what each company will in order to identify and solve staff behavioral problems.

2. Understand different methods to management and management.

2. 1 Select a prominent shape one from each company and compare the potency of their management styles.

2. 2 How exactly to both companies practice the traditional method of management.

2. 3 Evaluate the various methods to management used by the two organizations. In discussing your answer you have to use your knowledge on contingency method of management.

Task 2


References & Bibliography

Task 1

Task 1:Report

Understand the relationship between organizational structure and culture


1. 1

Lego commenced in the early 1930's by a gentleman known as Ole Kirk Kristiansen and till particular date placed with the family, offered by generation to the next technology. Lego has been called double the "toy of the century" and has taken care of the toy, the building brick. The organizational structure that Lego uses which best suits them is the useful structure, this composition is most extensively used by companies. Basically the company has different departments to which they have delegated people to, and heads of that department based on the function. A few of these departments are Sales, Accounts, product development etc. Making use of this structure allows them to show the pyramid of hierarchy. It gives an obvious view of the organizational graph and who are in the highest rank. Lego being located in so many countries uses a divisional structure which involves three sections, and they are market, product and physical.

The other company which I have chosen to investigate is IKEA. IKEA was founded in 1943 by Ingvar Kamprad. IKEA is the world's biggest furniture company that concentrates on innovative, popular furniture at inexpensive prices. Mr. Kamprad didn't want any normal organizational composition for the business, instead he created a complex system of foundations, holding companies and trusts. The company's structure then split into three for each of his boy. The reason why he did this was to avoid tax's and also to ensure that the business wouldn't normally be divided credited to family dispute. In fact IKEA has been held with a foundation that includes a group under them that control buttons the firms that runs IKEA's individual procedures. Between your two companies it is evident that while one has a typical corporate and business framework, the other is so determined in creating equality amongst the family and a fool evidence method to ensure that the business will not be divided in the foreseeable future.

1. 2

The same manner that Ikea has created their organizational structure they have also supported the company culture by posting that they not only want to hire people but have a chance of bringing in unique individuals to share the same prices of the company. To create them feel because they are all affiliates in the company. Not only will IKEA measure the person based on skills' and knowledge but also if indeed they have the same culture as IKEA themselves. " The assumption is that skills are much easier to develop than personality attributes, attitudes and principles " This in exchange promises happier employees who feel as if they will work for his or her own. Employees who like, themselves want to buy furniture, take it home and assemble at home will also make the clients feel the same. Lego on the other side concentrated on the Danish prices of hard work, modesty and teamwork. They look after their employee's with value and high specifications, also making use of global principles for those working abroad. Lego is definitely strict about pursuing all laws, rules and regulations in the countries they may be in. Their employee's in return offer their company which is so essentially reputed, great service, hard work and offer nothing but the best to their customers.

1. 3 There are many different management methods which companies take on, IKEA however never have confined themselves to one particular method, instead used the best parts of each method and put together their own. There is the Autocratic style, which is the basic team and supervisor style, Democratic, which allows the employee to believe and make decisions on behalf of the business. Laissez Faire, where employees receive few suggestions and limits to handle activities, gives them liberty but may cause less effective work. Consultative is like the democratic style, very as well. Finally we've paternalistic where in fact the manager, supervisor has rough ideas where he will require input and ideas for growing the business from the employees. Using this method IKEA has had the opportunity to avoid large size worker behavioral problems. This isn't to say that they don't really have employees who've been disappointed either by not keeping their guarantee on pay raises and not even considering their opinions. IWAY which is IKEA's code of do, assures their employees the right to coordinate and order all overtime be voluntary. In addition they ensure pay are paid promptly rather than be withheld. Employees are entitled to medical, sociable insurance and pension. In this manner IKEA allows their co-workers their freedom and gain all legal rights. IKEA hires an attorney called "Jackson Lewis" to encourage workers to attend meetings to be able to discourage unions.

One of Lego's important guidelines was to keep employee's safety, therefore they place a goal to arrive at the very best ten safe places to work with employees by 2015. Their priority was to improve and keep maintaining the work-life balance; this is actually to wthhold the employee's inspiration and satisfaction with the position at Lego.

Lego has their system of adaptable work hours, work from home option which are all ideal mainly for an operating mother has made themselves enter "Working Mom Magazine 100 best companies list". Lego entail themselves in providing wellness programs and leave entitlement for the mom up to 26 weeks of leave using their job promised of. Families seeking to adopt are entitled to $5000 and fertility treatments are fully covered.

Task 2

2. 1


Jorgen Vig Knudstorp is a respected and most prominent shape at lego, he has already established the most challenging role of experiencing revive Lego as the company had taken a change for the worst. Mr. Knudstorp knew that to be able to modify things around he needed to be respected and relied on. Doing this Mr. Knudstorp would be able to incorporate new methods to revive Lego from its low. He was an intelligent man to believe that for what to be done he needed to 'controlling at eyesight level' which supposed liaising with the development workers, engineers, talking about to reduce sales declining with the sales and marketing division. Jorgen Vig Knudstorp reminded the management that these were there to increase the firm's value, this would be identififying why till date the lego group is available. He wished their to be a less strict framework and a more free management style from underneath to the very best, empowering employees to make decisions at all levels. Jorgen Vig Knudstorp used the tactical leadership style, this which made employees reveal ideals, visons and goals, conditioning them to make decisions with lowest monitoring. It is defined a strategic innovator persuades for change and looks for new ways ideas, and improvement to raised the company in order to allow the company to go onward.


Ingvar Kamprad the founder of ikea, being truly a university dropout and began making furniture at the age of 17 uses the democratic style of leadership to perform his company. Mr. Kamprad encouraged parallel management so that every can control their goal effectively. The reason for this same level management was so that employees opinion and feedback can help them feel just like they are required in the company. This in exchange makes the employees want to work harder and feel like they will work for his or her own. Mr. Kamprad however does have a lot of things under his control like the financial details and of the company's structure. He encouraged his employees to work hard with stern business beliefs however to still have fun whilst doing work for IKEA, he preferred supplying guidelines, showing methods of how things should be done instead of disclosing authority and offering orders.

2. 2

Since the classical approach is strictly predicated on acknowledging the idea that only the economical and physical needs of the employee are important and this their personal life and job satisfaction are irrelevant, Lego however is convinced firmly in allowing their employees to work easily within the organization. It is a location where all share the same value, of empowering children to learn. Lego wanted to make an effort to be the best toy company rather than being the biggest. The classical methodology includes medical, administrative and bureaucratic management. The clinical management theory was developed by Frederik Taylor (1856-1915). This theory acquired 4 steps, first of all by sorting the work into smaller pieces, then to choose the most ready employees to perform the job and teach them, finally supervisors are used to keep an eye on them. This theory came about at the time that organizations were large and industrialized to increase efficiency to its maximum.

Henri Fayol ( 1841-1925) developed a fourteen principles of management.

These ideas were:

Division of Labor: to increase production and quality through specialization

Authority and Responsibility: Where specialist is shown, responsibility must be given and this works both ways.

Discipline; Value and order for the agreements between the company and their employees.

Line of Power: Clear view of the company hierarchy

Centralization: Specialist is given only to the best in command line.

Unity of Direction: All are on the same track to lead the organization.

Unity of command line: Employee receives instructions from only one supervisor/manager.

Order: Every worker is put where they might add the most.

Initiative: Creating action designs and undergoing it.

Equity: Take care of all employees pretty with value.

Remuneration of personnel: Payment of salaries to employees appropriately.

Stability of Tenure: to provide long-term employment.

General interest over specific interest: the business's priority will be prior to the employees.

Esprit de corps: Tranquility of the employees brings a strong union.

Mr. Kamprad of IKEA thought that the work place should be like everyday activity, being free and relaxed, instead wearing formal work clothes, addressing colleagues in a personal manner. The company arranges one per year for at least week for the managers to work in the showrooms and warehouses. New ideas and enhancements were always welcome at IKEA, the employees were always motivated to create creative solutions. How did the concept of customers picking right up their purchases arise? That is when they recognized in order to cost lower and offer quick service, to engage in customers in self-selection. The customers choose their items, write them down and go down to the warehouse to acquire their items.

IKEA has a quest of spreading the firms philosophies and procedures throughout the business by assigning "IKEA ambassadors" that were specifically trained and located strategically within the company. They would in turn teach their subordinates and act as role models.

In my survey it is visible that both IKEA and Lego do not have a strict list of management procedures which have brought them to where they are simply today. Bearing in mind that in 2004, when Lego CEO Jorgen Vig Knudstorp joined up with the business he had a need to save the business from the dire state that it was in. This required that whichever practices that were taking place would have to be evaluated and modified in order to revive the company.

IKEA being a family oriented company, is not particularly brain by the founder's sons. Instead created a holdings company that handled the IKEA firm which was run by Mr. Kamprad's sons. By learning and researching both companies it is safe to state that there surely is no exact method of management followed by each. The contingency way also called situational approach supports the thought that there is no one easiest way to management. Each business just like humans and conditions can change and change from time to time. Therefore by studying the current situation of the organization, will the management of the company know what tactics to enforce. Management had to think of environmental factors, for example weather, technology that can alter the organizations productivity.

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