Management And Operation - Ikea Assignment

MANAGEMNT
AND OPERATION

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................1
P1 Role and characteristics of leader and manager.....................................................................1
P2 leader and manager role in several business situations..........................................................3
P3 Theories of leadership............................................................................................................5
P4 Operation management approaches........................................................................................6
P5. Importance and value of operations management in achieving business objectives.............8
P6. Factors within the business environment that can impact decision making of leaders and
managers......................................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Operation management (OM) is the process that aids management in managing business
activities in best possible manner and producing high quality goods to meet stakeholder
requirements. Present study is based on IKEA, it offers furniture, homeware items to mass
audience across the world (Chaudhry, 2018). Company has earned 41.3 billion revenues in the
year 2019. Furthermore, it has employed 211000 employees globally. Current assignment will
describe characteristics of leaders and managers. It will explain role and function of leader and
manager in several situations. In addition, report will explain situational leadership theory,
system leadership approach and contingency model of leadership. It will explain the uses of
TQM, lean manufacturing approaches in operation management. In addition, assignment will
highlight value of OM in the organisation and how approaches of OM help the company in
meeting organisational goal. Study will evaluate factors that impact on overall operations of
IKEA and affect operational efficiency of business unit.
P1 Role and characteristics of leader and manager
Leader is the person who is responsible for giving necessary direction to staff members so
that they can understand their job role and can perform it in workplace comfortably. On other
hand manager is the person who has responsibility to manage workforce (Shinde and Fleck,
2015). Each company hires people those who have good leading and managing capabilities. This
skill of them make them different from other people in business unit. IKEA aims to retain its
talented people in the organisation for longer duration and want to make them loyal towards the
brand, for that it always ensures that their leaders and managers put best efforts and contribute
well in accomplishing this goal successfully (Chiu, Balkundi and Weinberg, 2017). Difference
between leader and manager are described as below:
Leader manager
Leaders ask questions with the employees and
ensure that all the employees are performing
their task in effective manner.
Managers are responsible for giving necessary
direction to its staff members so that people
perform duties well and they make minimum
mistakes at workplace.
Leaders make followers, as people admire
their work and they start following their path
which makes them able to finish their allotted
Managers work at top level and they make
subordinates those who manage work in the
absence of manager. These subordinates are
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with quality and on time (Hamilton, 2017). allotted work by mangers and they have to
look upon the lower level employees
Leaders implements motivational style where
they encourage people and ask their opinion.
This type of leading styles makes them able to
gain trust of people and making them loyal.
By this way they follow instruction carefully
and perform well in IKEA.
Managers always implements authoritarian
style, they give instruction to lower level
employees and ensure that they work
according to given guidelines only. Managers
do not give much power to employees hence
sometimes workers have to work under
pressure (Burgess, 2016).
Leaders always encourage new ideas and
implement these ideas into working practices.
This type of approach help them in
performing well in organisation and gaining
desired result in IKEA (Rolff and et.al.,
2019).
Managers always have great ideas and all
these ideas are shared with upper level
authorities. On the bases of these ideas
decision are made in the IKEA
Leaders encourage changes so that work can
be done smoothly and can be finish with more
quality.
Managers do not really accept changes so
easily, they face lots of problems hence they
reach on changes
Leaders create vision where all the employees
are clear with this vision and they work
together to achieve this vision.
Managers have to create goal and they set
direct in such manner so that that set goal can
be obtained.
Leaders have unique ideas and they always
work in a unique way that is why they give
the best result to IKEA.
Mangers have to follow the guidelines or
principle of higher authorities hence they just
copy the working practices (Denysiuk,
Opryshko and Strzelecki, 2016).
Leaders implements unique ideas hence they
have capabilities to take risk, this risk taking
ability makes them different from managers.
Managers are responsible to make effective
control over risk; they always ensure to
minimise mistakes so that no future
complications take place in business unit.
Leaders are the person those who have long
term dreams and they work to accomplish
Managers work for achieving short term goal
of firm.
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long term objective of IKEA (Mehralian and
et.al., 2017).
Managers have good communication skill, this characteristics help them in interacting
with rest staff members effectively and making them understand the given task so that they can
perform it well. Confidence is another great characteristics of manager, this confidence develops
trust of employees on managers and they get inspired with the working style of management in
IKEA (Androniceanu, 2017). Leaders behave humble with other staff members that is the unique
characteristic of leader. They lead people by giving different example so that they clearly
understand the task and perform it well. Leaders have great experience of success and failure
hence they continuously work to improve their existing capabilities.
P2 leader and manager role in several business situations
Leader and manager are the key player of business unit, both they work in different direct
but to achieve the common goal of business unit (Kapur and et.al., 20170. Functions of managers
in different situation are explained as below:
 Planning: Managers have to make proper plan in order to accomplish the future goals of
business unit. They are responsible for evaluating contingences that might occur in
future hence they make plan accordingly so that such kind of risk can be minimised. For
example, if new technology is coming to the manufacturing industry and IKEA wants to
implement it then due to technological changes resistance of employee might get
increased which may create situation of high staff turnover. In this condition manager of
IKEA has to make plan to systematically inform them about new technique and
advantage of these equipment’s which will help in handling his situation in effective
manner (Singh and Singh, 20180.
 Organising: This is another most import function of manager, manager of IKEA organise
the employees in structural manger so that work can be completed on time. For example:
if demand is high then managers will have to hire new people and will have to give them
right job so that demand can be met. In this situation managers of IKEA will have to
ensure capabilities of each employees and accordingly allot them work so that demand
can be met (Guruchannabasavaiah and Shankar, 2019).
 Commanding: This is another function of manager where individual has to make strong
command over operations so that mistakes can be minimised. For example if there is
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sales decline then managers would be responsible for commanding over all staff members
so that they put best efforts to raise sales of the company (Vo, Kongar and Suárez
Barraza, 2019).
 Coordinating: managers have to interact with everyone, for example if HR leave policies
are going to be changed then staff members might fail to perform their task effectively
which may create conflict in the company. In this situation manager of IKEA has to
coordinate the detail with them so that they can understand necessity of this changes and
accept new policies properly (Bloom, 2017).
 Controlling: Mangers control over operations so that objective can be achieved time, this
makes them able to meet the demand significantly.
Leaders also perform different role in IKEA, they also have some different function that
makes the firm able to gain competitive advantage. Role and function of leader in IKEA are
described as below:
 Improving motivation of staff members: Leaders are more attach with employees
hence they work to motivate people. For example, if staff turnover is increasing in
company then leaders of IKEA has to encourage workers and build confidence among
them so that they perform their duties well and stay in the firm for longer duration.
This function of leader helps the company in accomplishing its common goal
successfully and retaining staff in the business for longer duration (Function of
leadership, 2019).
 Creating healthy workplace culture: Leaders of IKEA continuously work to create
healthy workplace culture where all the employee feels happy. For example; if
company wants to make changes in its policies then conflict may get arise but due to
having great culture people will listen these new changes and they will start working
in new changed atmosphere as well because of support of higher authorities and rest
peer group members. Every one like to work in the place which is friendly and they
can share their feeling. Hence changes can be handled effective when leaders of
IKEA create healthy workplace culture (Denysiuk, Opryshko and Strzelecki, 2016).
 Giving Direction: Leaders’ function is to give clear direction to all employees so that
they get to know what they have to perform. Right direction assist them in performing
task with full efficiency and managing the work in efficient manner. But if workers
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do not get correct direction then overall organisation performance can get affected.
For example: if new technologies are being implemented by firm then leaders give
direction to employees and make them understand how to work in new equipment’s.
This raises their confidence and they become familiar with leaders (Chiu, Balkundi
and Weinberg, 2017). By this way enterprise become able to manage changes in the
IKEA in significant manner.
P3 Theories of leadership
Leadership is the skill of person to lead group of people and manage their work.
Situational leadership
This theory states that leaders are responsible for retaining staff and raising their working
performance. Leaders have to react as per the requirement of different situations. Each company
faces different situations which many times create problem for organisation. Style of leaders
must be changed continuously by looking at current condition of business unit. Leaders have to
behave in directive manner (Mehralian and et.al., 20170. Leaders have to supervise employees
and leaders of IKEA has to ensure that employees follow their instructions carefully. Selling is
another style in which IKEA’s leaders must get involved in each activity or in daily operational
process. They have to coach them and have to guide them well so that confusions of employees
can be minimised and people become able to perform their work in efficient manner.
Participating or supporting style must be adopted by leaders. Situational leadership states that if
there is conflict situations at workplace then leaders have to give their support to workers and
have to involve them in decision making process. This helps in gaining trust of staff members
and making them loyal towards the brand (Androniceanu, 2017).
This leadership theory focus on creating environment where employees of company can
work comfortably. It ensures that leaders support staff members so that their efforts give best
result to business unit. Situational leadership enhances awareness among leaders and they
understand how to react in several conditions. But sometimes situational leadership fails to
address the human needs properly, as it is unable to work better in the environment which is task
oriented. This theory only concentrates on immediate needs rather than long term requirement of
IKEA (Guruchannabasavaiah and Shankar, 2019).
System leadership
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This is another leadership theory that states that leaders are key player of organisation
hence they have to ensure that productivity level of company gest increased. Leaders must
develop health environment where people feel happy. Effective system drives positive behaviour
of employees which gives positive result to business unit. This states that each activity is
depended on other hence leaders are required to understand business issues and develop working
environment in such manner so that that issue can be resolved easily (Denysiuk, Opryshko and
Strzelecki, 2016).
System leadership theory is more flexible in order to adapt environmental changes in
effective manner. As by implementing this leadership leaders of IKEA can make employees
ready to perform the work in efficient manner. This model is very supportive in order to
understand requirement of changes in the firm by considering macro factors. Effective
coordination between all activities is another main advantage of this theory. But over
conceptualisation sometimes create problem for organisation in managing human resource
(Chaudhry, 20180.
Contingency leadership theory
This theory describes that leader’s effectiveness is much more depended upon how leader
is ready to react on different situations. Leaders are required to understand requirement of
several conditions and use the required style for that. Leaders those who are having great
personal skills can develop healthy relationship with employees. This may support in retaining
skilled people in business unit for longer duration. Task oriented leadership gives best result to
the IKEA, people those who have high power must implement this type of leadership.
Relationship oriented leaders develop relationship with others which makes them able to make
people positive towards the brand (Chiu, Balkundi and Weinberg, 2017).
This theory has adaptive nature, leaders can easily evaluate each situation and can
manage work effectively. It helps in determining situation in effective manner. But it is very
difficult to react different because sometimes it makes workers negative towards the brand.
P4 Operation management approaches
There are various models and approaches which are used by companies to manage their
operations in efficient manner.
Total quality management (TQM)
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This is considered as structural process that aids in measuring quality of products and
make correction in existing production process so that firm can get advantage and can generate
more sales in business unit (Denysiuk, Opryshko and Strzelecki, 2016). Principle of TQM states
that consumers must be focused which may help in analysing their requirements. hence IKEA
can make efforts in the right direction to get best results. Employee involvement is another
principle of TQM that describes that firm has to ensure high employee involvement in business
unit. This can support in creating great culture where all the people feel happy and they work
together to serve to consumer well. Process centred is another essential principle of TQM which
works to handle quality properly by utilising resources well. Leaders of IKEA always ensure to
get innovative ideas so that continuous improvement is quality occur. Apart from this, leaders
involve employees and ask their suggestion. Managers ensure participation of all workers in
decision making process which aids in knowing more about consumer requirement. This model
aids IKEA in minimising production errors and raising quality of goods and services
(Androniceanu, 2017).
Just in Time Inventory (JIT Inventory)
JIT inventory is the model which concentrates on decreasing wastage during production
process, it uses input in proper manner and ensure to get desired output. This process is helpful
in minimising inventory cost and raising profit of the firm to great extent. IKEA is taking support
of JIT process in which it first ensures needs of consumers and ensure to get required amount of
stock that may help in meeting consumer's demand. IKEA buy raw material from such suppliers
that provides them high quality goods and services. This type of strategy aids business unit in
managing the work in effective manner and meeting the quality standards. IKEA implements the
strategy where it keeps the holding cost of inventory lower so that production cost can be
managed (Guruchannabasavaiah and Shankar, 2019). Furthermore, this tactic of business aid in
improving cash flow and minimising cash outflow in the organisation. By this way enterprise
also get benefit to minimise dead stock that means effective utilisation of resources and
inventories. One of the major benefit that IKEA gets by using JIT approach is that it reduced cost
and wastage and improve productivity of company significantly. Managers keep records of
inventory and supply chain activities whereas leaders ensure that each inventory is utilised in
proper manner without wastage (Vo, Kongar and Suárez Barraza, 20190.
Kaizen
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This is the model which is also known as continuous improvement approach, this model
works in the direction where people share their views that aids in making positive changes in
business unit and meeting the quality standards. It works on several principles that are having
assumptions, be proactive, look for the best solution. IKEA can get benefit by using this method,
as this would help in getting employees involve in the decision making process which will aid in
managing the work in effective manner and analysing mistakes as well. Furthermore, this
method is useful in testing each problem and finding great solution of such problems
significantly (Singh and Singh, 2018). Results of tests are analysed in proper manner and
managers make positive changes in existing process so that productivity can be improved and
wastage can be minimised. Leaders continuously talk with staff members and managers monitor
each task so that problems can be identified timely.
P5. Importance and value of operations management in achieving business objectives
There are various approaches of operations management that supports business in easily
establishing and achieving their goals and objectives. Total quality management is one of the
most important approach that can be used by IKEA. This approach can support organization in
improving the quality of products by reducing waste.
Good quality of products always gives every organization a strong edge over its competitors.
It also rewards the business with customer patronage, word of mouth and goodwill. It is because
of these benefits that total quality management has become so important. In total quality
management leaders can engage in bringing out the new processes of manufacturing and making
them understand to people(Singh and Singh, 2018). They must motivate employees to be engage
in doing quality work so that this can help in increasing the productivity as well as efficiency of
firm. This can also support and help firm in growing. Maintain quality in services also help
IKEA in meeting out the customers’ expectations. Quality of firm can also be enhanced by
bringing out better training and development in organization. By better training the quality of
goods provided by IKEA will also be improved(Singh and Singh, 2018).
Just in time approach is the most important method which can be used by IKEA. It is the
strategy which can help firm in maintain optimum amount of raw material. When leaders in
IKEA make use of this strategy of approach they can effectively and efficiently make use of raw
materials. This can also support firm in saving the operational cost by effectively making use of
the raw materials. Just in time approach can also support firm in reducing the burden which can
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be faced by organization because of high inventory. It can assist firm in creating less wastage
that can reduce their operational cost and they can save money which can be invested in other
better opportunities(Singh and Singh, 2018). This is beneficial as excess inventory can result in
inclusion of extra cost. If company will spend extra cost, then it will result in rise in price of
materials which can reduce the satisfaction level of consumers of IKEA. So leaders of
organization need to lay emphasis that there is an effective use of raw materials. If raw materials
are effectively used, then this can help in making the supply chain management better. So this
will also help in increasing the satisfaction level of consumers.
Kaizen approach is also one of the most important approach that can be used by IKEA to
achieve their organization objectives(Singh and Singh, 2018). This method is related to
continuous improvement, so it can enhance the quality of services which is being provided by
company. A firm that uses this approach therefore has to have a culture that encourages and
rewards employees for their contribution to the process. Also leaders of IKEA should motivate
employee to be engage in motivate employees to enhance their performance. This can help firm
in growing and achieving their objectives and goals. This can help them in establishing their
market share.
P6. Factors within the business environment that can impact decision making of leaders and
managers
There are various factors like political, economic, social and many more that can lay impact on
decision making of leaders and managers.
Political factor- This includes various factors like policies and procedures given by government
that can affect working of IKEA(Singh and Singh, 2018). It has been analysed that China and
India have make their acts and laws liberal, so international firm such as IKEA can invest over
there. Leaders and mangers can engage in framing proper plan so that they are easily able to
establish their market in new areas. This will also help company in increasing their market
share(Singh and Singh, 2018).
Economic factor- This includes factors such as inflation rate, fiscal policies and many more. If
labour rate in any country increases, then this can affect the operational aspects of IKEA. It can
increase their operational cost. Economic condition of any market can affect the decision making
of leaders and managers. In order successfully grow, they should be engage in making policies
according to economic conditions of areas.
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Social factor- This can include factors like value, belief, attitude and thoughts of people that can
affect decision making process of leaders and managers. It is important to respect the social and
cultural values of the local market. “Ikea has not always gotten these local nuances right. This
can affect decision making of leaders and managers. So the leaders and mangers needs to make
sure that they do not produce any product that can harm or hurt the sentiments of consumers. As
this can negatively affect the image of IKEA. It can also hinder the growth of organization and
reduce their profitability aspects(Singh and Singh, 2018).
Legal factor- It includes the laws, rules and regulations that has been passed by authorities or
government. Leaders and managers IKEA decision making has been affected by this. They need
to make sure that company addresses all laws which has been given by government. Company
must make sure that they provide safe and secure working condition to employees. This will also
help them in retaining workers(Singh and Singh, 2018). It will create employee loyalty and also
they would be able to attract more workers. It will also create goodwill of IKEA in society.
Company must also engage in not discriminating among workers on basis of caste, colour, race
or religion.
Environmental factor- It includes all the concerns related to environment that can affect
decision making of leaders and managers in IKEA. In this leaders and managers must engage in
following corporate social responsibility (Denysiuk, Opryshko and Strzelecki, 2016). They must
make sure that they are engage in donating 2% of profit to charitable organizations.
CONCLUSION
Above study can be summarised as operation management is the process that supports in
improving production process and managing the resources in efficient manner. This application
gives benefit in analysing problem in existing process and finding the best solution so that
organisation can get the best result and can gain competitive advantage as well. Raising profit is
great benefit that firm can get by using effective operation management tactics. Leaders and
managers are essential part of business unit, both they have different role in the enterprise but
they both work to obtain common goal. Their contribution in business unit gives benefit in
improving process and eliminating mistakes in the workplace. By this way consumers can get
quality goods and services and firm can raise their satisfaction level to great extent. Motivation
by leaders and direction by managers support the company in retaining talent in firm for longer
duration. using JIT approach reduces cost and wastage. It is helpful to improve productivity of
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company significantly. Managers keep records of inventory and supply chain activities whereas
leaders ensure that each inventory is utilised in proper manner without wastage
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