Research IKEA International Organizational Structure (Research Paper Sample)

IKEA International Organizational Structure
Name:
Institutional affiliation
IKEA International Organizational Structure
Thesis
The structural changes needs to address the progress of the furniture industry which is already matured.. By 2001, the company had opened foreign subsidiaries in 32 nations. Currently, the group operates in 43 nations and has 328 stores in 28 states across the globe (Inter IKEA Systems B.V. 2016). This include geographical location such as the West Europe, Scandnavia, North America, East Europe, Asia and Australia. The expansion strategy of the company intends to venture into the Japanese market. Currently, the group is led by Peter Adgnefjail who is the president and the CEO. Agnefjäll t ishe Group Management of IKEA (White, 2004). Following the ambitious intention of the IKEA to expand globally, the leaders of the group ought to adopt an innovative geographical area organizational structure to support its international operations and administrative process.
Organizational Chart
This design will focus on bringing the divisional structure of the group together according to customer and products that will be distributed. The geographical area division structure allows the multinational to operate using division that takes care of various business functions including production, marketing, sales, and finance. In this case, the regions represent the divisions of the group that will allow IKEA to establish its operations in various nations under the 6 regions. A geographical area division structure would be ideal for the company to implement a global expansion strategy. Therefore, the following chart would enhance the innovation the group intends to pursue.
Implementation of the Structure
Multinational companies use the structure beacuse their operations are wide and not dominated a single region or nation. Besides, the manager will gain an opportunity of gaining economies of scale in the regions it has opened stores. The President and CEO based on head quarter, Nertherlands, will still head the managament of the group. The head of the regions will take responsibility in responding to the needs of the foreign subsidiaries. They will also directly answer to the top executives of the group. The top executives can then liaise with the CEO to make the final decision regarding the progress of the regions. Managers based on the national level will report directly to the regional executives.
The implementation strategy will allow the executives of the group to direct and oversee the unctions played by the international stores. This is possible because executives can easily monitor each geographical regions by taking responsiblity for the finances and the entire operations of the international stores.
The geographical division structure is ideal for multinational companies that focus on one line of production to maintain the central functional work at home country. Further, the structure help improve coordination and functions of a firm because employees focus on a specific geographical region and customers. This is a beneficial strategy as it would enable the IKEA group to respond to environamntal changes within the regions. Besides, it is possible for the group to downsize of grow because the structure provides opportunity for deleting or adding divisions as required (Phillips & Gully, 2013).
Regions that record low performance in certain products could be easily deleted , while those that record impressive performance can be a viable region to add more stores. Areas that fail to provie economic benefits including high level of of inflation and constant political interruptions will be easily deleted to maintain a healthy financial condition of the group.
Further, the structure will enable the group to monitor the performance of each region. Each division has the opportunity to establish performance criteria (Kumar & Meenakshi, 2012). This will create competition among the regions. Competition among the regions will provide a chance for the IKEA group to achieve significant improvement in performance of managment and employees in national level.
The implementation of the structure will demonstrate the strength of strategic thinking of the group. Strategic thinking is proactive, innovative and forward thinking. This also includes creating future scenarios that will produce the desired results (White, 2004). In this case, the strategic thinking entails creating an innovative organizational structure that will address customers needs with affordable furniture products across the globe. To impress the foreing target market, the management has to identify an organizational structure that will address customers’ needs quickly and efficiently. If the regions offices coordinate the distribution process, there is a high chance that many customers would access the group’s product. The marketing and sales units can easily identify target market in national level. In addition, marketers at national level will have an opportunity to identify a competitive price of the furniture.
IKEA depends on its stores to distributes its products across the world (White, 2004). Therefore, this structure will enable the international stores to distributes its products to foreign customers while complying with values and polices of the firm.
Summary
In summary, would be ideal for the IKEA leader to consider adopting an innovative organization culture that will support the group’s international strategy. This will imply that the groups’s strategic planning will portray ambitiousness in investin...