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IKEA believes that
traditional business objectives and social and
environmental responsibility can work very well together
for the benefit of the many
IKEA CSR activity involves
three main areas:
1. children,
2. better
living and
3.
environmental projects.
IKEA wants its
products to have the minimum impact on the
environment. And for these products to be
manufactured in a socially responsible way.
Bureaucracy is
fought at all levels in the organization
Emphasis on efficiency and low cost inspires
entrepreneurial creativity
Design teams enjoy complete autonomy, but
are expected to design new appealing
products regularly.
Bureaucracy is fought at all levels in the
organization.
IKEA culture emphasizes efficiency and low
cost which is not to be achieved on the
expense of quality or service.
IKEA's success is based on the relatively
simple idea of keeping the cost between
manufacturers and customers down. According
to Ingvar Kamprad, the founder of IKEA, "To
design a desk which may cost $1,000 is easy
for a furniture designer, but to design a
functional and good desk which shall cost
$50 can only be done by the very best.
Expensive solutions to all kinds of problems
are often signs of mediocrity."
Symbolic policies, such as only flying
economy class and stay at economical hotels,
employing young executives and sponsoring
university programs have made cost part of
corporate culture and has further inspired
the influx of entrepreneurship into the
organization.
For instance, all design teams enjoy
complete autonomy in their work, but are
expected to design new appealing products
regularly.
Costs are kept under control starting at the
design level of the value-added chain. IKEA
also keeps costs down by packing items
compactly in flat standardized embalages and
stacking as much as possible to reduce
storage space during and after distribution
in the logistics process
IKEA is a very successful multinational
corporation, which indicates that long-term
strategy of cost leadership and product
differentiation has served it well. IKEA
approaches unknown, small, high risks
markets by franchising. IKEA has a lot of
subsidiaries in many countries of the world.
Franchisees have to carry basic items, but
have the freedom to design the rest of the
products.
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