IKEA Analysis
IKEA’s vision is to create a better everyday life for many people. Providing quality and affordable furniture to all social status of people is the main goal of IKEA.
Linkage of vision/mission and goals to company/organization’s global supply chain operations
a) The linkage between IKEA’s vision and mission to its global operation chains can be rated as very high. IKEA has managed to improve the quality of its products maintaining the price at a constant, thereby, ensuring that many people are able to afford the product, thus, creating a better everyday life for many people.
b) IKEA has a compliance function team of five managers whose primary responsibilities are to ensure that the company does not derail from its global vision and mission. However, the compliance function team has faced such risks as poor evaluation of the foreign market in terms of political, ethical and cultural grounds. The compliance function operations of IKEA in linkage to its global vision can be rated as medium.
IKEA’s global supply chain strategy
c) IKEA deals in high quality designed furniture and other home related accessories. The global supply strategy of IKEA involves three main sectors or steps (Elmnasy, 2015). The primary sector is the first supply strategy step which involves assembling raw materials. The secondary sector involves the manufacturing of the products following different design solutions to cut on the cost of raw materials. Finally, the tertiary sector involves supplying the final products to different stores located all over the world.
Stated/published strategies linked to organizational vision/mission and goals
d) First, IKEA has ensured that its products are available everywhere in the global market through opening their stores internationally. Another IKEA’s strategy that has ensured has promoted its vision and goals are the production of high-quality products at a low price. These strategies can be rated as high since they have made IKEA to win and lead the market (Elmnasy, 2015).
Actions/Practices reflecting strength/weakness to linkage with attainment of vision/mission and goals
e) According to Fayol’s principles of management, planning is a very important part of a company to b able to succeed in the market. IKEA has done the exact through planning; controlling and staffing their stores to make sure that their global market meets their vision and mission. Apart from good planning that can be rated as high, IKEA is socially responsible and has proper decision-making strategies just as suggested by Hofstede in his research. IKEA has been an all inclusive company which appreciates people of different culture and work with teams to meet their vision and mission in the market.
Global Supply Chain Compliance Organizational Structure
f) IKEA has widespread stores which as mentioned before, either participate in manufacturing or supply of furniture. To ensure compliance, IKEA has a compliance function team which monitors all sectors of the supply management to ensure high compliance. Suppliers are rated by how well they are compliant to their clients that can make them earn higher.
IKEA’s compliance function
g) IKEA’s has compliance department called the department of Quality Compliance Standard (GO/NOGO) head by Martin Schwarzbartl. IKEA does not provide an official compensation of their credential officer; therefore, it is difficult to compare it with that of the C.E.O and the company’s global revenue.
Evidence of IKEA commitment to compliance
h) IKEA has a rich history of compliance functions. Since its establishment in 1943, IKEA has ensured that they comply with the demands of their clients through a compliance department. Though it is not clear when IKEA established its official office, the department has seen a growth in the number of employees in the department. IKEA has one compliance officer in all countries they have ventured into. At the headquarters, there are five managers who act as the overall decision makers in the compliance department. The compliance budget as per 2012, stood at $3 million annually (Kasabov, 2012). IKEA applies a cost saving strategy where the compliance officers are to report on how they manage the stores and ensure that suppliers do not hike the prices.
Overall assessment of compliance department’s
i) Overall, it can be concluded that IKEA has one of the most socially responsible compliance team in the world. The team is rated robust bearing in mind that it has masterminded a responsible organization that provides its clients with high-quality products at a harmonized price.
Compliance Control Features used by the company/organization
Powers of compliance department to act and types of controls used in global supply chain management
a) The IKEA compliance department has the power to stop a supplier from dealing in the products of the company in case the supplier in question violates the stipulated compliance rules and regulations. The compliance team uses controls such as price and quality controls to ensure that clients are not misled in buying products at a very high price. The effects of these compliance control strategies have made IKEA become one of the best customer choices due to their consistently high-quality products at low cost.
Effect of compliance metrics used and published/benchmarked
b) The compliance metrics used by IKEA include making their clients understand how they should be served in terms of price and ethics. Such metrics has had positive effects on both sides of IKEA and their clients as they get better services from the suppliers. It makes work easy when both the service provider and the client understand the metrics through which they should be served. This is what exactly happens at IKEA.
Effect of compliance a factor of individual/team/departmental/division performance
c) IKEA’ s compliance towards their customers and the environment has not only have a positive impact on individual clients but also to how teams are awarded and compensated at IKEA. Compliance factors affect the supplier's department heavily. They are under pressure to provide clients with the best services and hence increasing their productivity.
Compliance performance linkage to organizational sustainability
d) IKEA’s stability in the market can be linked to how compliant they are in the market. First, through being compliant to environmental and social requirements of the communities they are based, IKEA has reduced the possibilities of lawsuits. Additionally, IKEA’s customer base has been stable since the company has a compliance team that ensures their demands are met.
Evidence of communication of the value, importance, effectiveness of the compliance function
e) The most important tool that IKEA uses to win the market is its efficient communication strategies. IKEA ensures that it communicates its policies on compliance requirements effectively and through a medium well understood across various cultures, thereby thriving in the market where most companies have failed.
Internal/external artifacts of compliance
f) Internally, IKEA has compliance artifacts such as the company’s policy book. The policy book is an important document at IKEA as it stipulates the rules and regulations that suppliers must follow. Externally, IKEA complies with different rules and regulations set aside by either government officials such as the constitution and the bylaws of different worker’s organization.
Evidence of compliance initiatives specific to organizational intercultural and ethical issues
g) Respecting and appreciating various cultures is the main goal. To make this goal a reality, IKEA has applied different intercultural and ethical compliances that include hiring local citizens in the foreign country. Apart from working together with the locals, IKEA offers products that give their clients a sense of acceptance (Kasabov, 2012). This compliance strategy together with a panel that regulates price has made IKEA a global winner.
Compliance initiatives evidencing enterprise-level stakeholder/holistic partnering and collaboration to achieve organizational or industry goals
h) At the enterprise level, IKEA has portrayed a great sense of collaboration and partnership with various departments and organizations to achieve its compliance and global goals. Some of these departments include different worker’s unions and government officials to promote an environment which complies with the law requirements of the land. Through collaboration with different customer’s organizations, IKEA has managed to understand the demands of the global market hence high-quality products just like their vision stipulate.
References
Elmnasy, R. (2015). Guide to IKEA’s Sustainable Design Strategy (Part 1). Retrieved from <<http://www.designorate.com/ikea-sustainable-design-strategy/>>
IKEA. Supplier Portal. Partner for Growth. Retrieved from http://supplierportal.ikea.com/doingbusinesswithIKEA/quality/GONOGOrequirements/Pages/default.aspx
Kasabov, E., & Warlow, A. (2012). The compliance business and its customers: Gainging competitive advantage by controlling your customers. Basingstoke: Palgrave Macmillan.
