Leadership and Management: A Case Study of IKEA (Module Report)

This report provides an in-depth analysis of leadership and management principles, using IKEA as a case study. It begins with an introduction defining the roles of managers and leaders, highlighting their significance in organizational success. The report differentiates between the roles and characteristics of leaders and managers, emphasizing their distinct functions within IKEA's structure. It then explores how leadership and management apply in different organizational situations, such as slow and fast changes within the company, and discusses how leaders and managers can address such situations. Furthermore, the report delves into various leadership theories, including transactional, transformational, and situational leadership, and explains how these theories support growth and sustainable performance. The report also includes an overview of IKEA’s management structure and organizational design, offering a comprehensive understanding of leadership and management in a real-world context.

LEADERS AND
MANAGEMENT
CONCEPT

Table of Contents
INTRODUCTION...........................................................................................................................3
Q2. Difference between roles and characteristics of a leader and a manager................4
Q4. Different models and theories of approaches..............................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Managers and leaders are an essential part of an organisation. Managers of a firm are
responsible for managing operations and functions of a firm. Leaders help a business
organisation in motivating and influencing employees in achieving their maximum potential.
Leaders play a crucial role in driving a company towards success (Accomazzi and et. al., 2012).
Various management and leadership models and strategies are developed and implemented by
these units which helps organisation in evaluation of its weaknesses and strengths. Such
evaluations help firm in developing strategies that help m to increase profitability. assignment
below is based on IKEA, a multinational retail organisation headquartered in Leiden,
Netherlands. This firm deals in kitchen appliances, ready-to-assemble furniture and home
accessories and serves areas worldwide. assignment involves roles of managers and leaders in
an organisation, roles of management and leadership in application to different organisational
situations. It also includes application of various theories in supporting growth and sustainable
performance in an organisation.
MANAGEMENT STRUCTURE OF IKEA
IKEA Organizational Structure, 2018
Q2. Difference between roles and characteristics of a leader and a manager
Leadership is defined as act of influencing and leading an individual or a group towards
achieving firm's objectives. Leaders in IKEA achieve this by conveying firm's vision to
organisation's employees. They are also responsible towards motivating members of a company
to unify their maximum efforts towards accomplishing overall tasks.
Roles of a Leader:

 Motivation: biggest role leaders of IKEA play is motivating employees. They adopt
different methods and implement different strategies to motivate workforce. These
strategies can be increase in their salaries, promotions or incentives which would
contribute in ensuring employees' commitment towards firm. Link Between management and workers: Leaders establish a link between upper
management and workforce of company (Drake and Spinler, 2013). They provide
workforce with information about company and decisions taken by upper management
of organisation. Adaptive: Leaders at IKEA must be accustomed to change. They must be agile and
flexible to adapt themselves with ongoing changes in business environment and develop
strategies accordingly.
 Initiation: Leaders are responsible for initiating action and take effective decisions about
tasks that are needed to be performed by the workforce.
Management refers to planning, organising, directing and controlling activities of various
functional units of an organisation to increase its efficiency and effectiveness. Management in
IKEA is necessary in an organisation in achieving its overall objectives. It ensures optimum
utilisation of a firm's resources and helps in conducting firm's operations in an appropriate and
profitable manner.
Roles of a Manager: Planning: All plans about working of IKEA are formed by its managers. They plan
policies, strategies and ways in which tasks can be achieved and profitability of this firm
could increase. Organising: Managers organise activities in a systematic manner to remove ambiguity
and enhance organisation's performance (Gimenez, Sierra and Rodon, 2012). y balances
company's resources in a way that they could achieve their maximum potential. Directing: Managers supervises and directs employees towards set goals of the
company. This allows employees to increase their efficiencies.
 Controlling: IKEA managers also control activity and resources of firm and evaluate
these activities to make sure everything goes as per set goals.

IKEA is world's largest furniture retail company founded in 1943. It focuses on conducting
its operations in eco-friendly ways and adopts a modernistic approach in designing
different types of furnitures and appliances. The company previously adopted hierarchical
organisational structure. Due to rigidity in operations, and ineffective communication
system, firm decided to restructure their organisation in which managers and leaders
played a crucial role. Managers in IKEA are ones who plans, directs and controls
functions and operations of a company. Whereas IKEA leaders are people who crafts an
inspiring vision for an organisation, influence and motivates members of firm in achieving
that vision and builds teams that can effectively achieve objectives of a company (Ageron,
Gunasekaran and Spalanzani, 2012). There are notable differences between roles of leaders
and managers which are as follows:
BASIS LEADER MANAGER
NATURE Nature of a leader is
innovative. They emphasize on
developing different and
innovative methods to
motivate employees in an
organisation.
Nature of a manager is
administrative. This means that
they manage and take control
of all activities of a company.
FUNCTION A leader helps in developing
an organisation by proper
influencing and motivating
employees and coordinating
their efforts towards set vision
of company.
A manager functions towards
maintaining organisation's
activities and managing its
resources by ensuring proper
control in their operations.
FOCUS Main focus of a leader is on
human resources of
organisation. They channelize
their efforts and strategies
towards motivating and
Managers emphasize on
organisational structures and
systems followed to achieve
business objectives of a firm.
They effort towards managing

enhancing performance of
employees(Benjaafar, Li and
Daskin, 2013).
and maintaining these systems
in ways which contribute in
company's profitability.
PROSPECTIVE A long term prospective is
possessed by a leader of a
firm. Throughout an
organisation's life, leaders
motivate and support
employees to retain skilled
staff and enhance overall
business performance.
Managers of a company
possess short term perspective
within organisation. They deal
with daily operations and focus
on achieving daily objectives
for firm.
Difference between management and leadership is described below:
 While leadership is purely based on trust inspired by leaders, management operations on
control imposed by managers (Childe, 2011).
 Leadership aims at influencing people in achieving organisation's visions whereas
management aims at conducting operations in a controlled way.
 While changes in practices adopted by firm are encouraged by leadership, management
encourages stability.
 Management is formulation of policies and procedures whereas leadership is formed by
principles and guidelines.
Managers and leaders in IKEA must develop their management and leadership skills
effectively in order to excel in their functions and roles in organisation which are as follows:
Q3. Role of a leader and functions of a manager apply in different situational
context
IKEA is a multinational organisation which is operating all around the world. With such
a huge structure and vast operations, leaders and managers play vital roles in dealing with

different problems. Operations management considers designing and controlling production and
redesigning its operations to effectively produce goods and services. Leaders and managers are
responsible to eradicate ongoing problems and ensure smooth working of organisation.
There are different situations that arise in IKEA which requires expertise of managers
and leaders. There are different changes which require managers and leaders to step in and
effectively take charge of the situation. These can be fast changes or slow. Situations that require
active role of managers and leaders are mentioned below.
SITUATION 1: SLOW CHANGE
There are more than 1, 95,000 employees in IKEA and company expects maximum
output from each of its employees (Griffin, 2013). To enhance performance of these employees,
the firm introduces Performance Appraisal once in every year. This aims at reviewing
performances of employees and evaluating their performance against set criteria. This helps
employees in finding their shortcomings along with methods that could help them enhance their
performance in the organisation.
Role of managers in this situation:
 Setting up goals and objectives: Managers of IKEA introduces orientation programmes
for employees which aim at giving a brief description about the objectives of the
company. In addition to this, managers provide different roles to employees along with
criteria about what is expected of them. This helps in setting up a framework for firm’s
employees to work upon.
 Opportunities: Managers provide opportunities in terms of incentives associated with
excel in each criteria, this helps the employees to channelize their efforts in effectively
accomplishing each task offered to them.
Role of leaders in this situation: Motivation: Leaders would engage the employees by motivating them. This process is
very essential to ensure commitment of the workforce. Motivation is necessary for
employees to perform tasks at their maximum capabilities.
 Transparency: Since leaders tend to develop more personal relation with employees,
employees at IKEA can be engaged in firm's operations by building transparency and
trust (Ham, Hitomi and Yoshida, 2012). Leaders must promote approachability and
'open-door policies' within the firm so that employees are open and honest about issues

they are facing at the workplace. Such transparent practices enhance performance of each
employee working in the organisation.
SITUATION 2: FAST CHANGE
IKEA has always focused on implementing effective technologies to conduct its
operations appropriately and increase its profitability. Since it’s not easy to cope up with such
change, it tends to create complex scenarios and reduction in employees’ efficiencies. Non-
familiar with new technological equipments hinders their productivity which affects their job
satisfaction.
Role of Managers in this situation Training and Development: Managers of IKEA conducts effective training and
development programs to enhance the productivity of employees. These programs aim at
training the workforce with use of the new technological equipments. Direction: Managers of IKEA aim at providing a set direction to employees to put their
efforts into. Evaluation of current technology is made against the new one effectively for
employees to understand the need for such change.
Role of Leaders in this situation Involvement: IKEA leaders involve themselves with employees and guide them through
use of such new technological equipments. Moreover, their performances are efficiently
monitored by leaders and they immediately take action in case of improper use of new
technology(Kerzner, 2013).
 Attitude: It is very important that positive attitude be facilitated during technological
advancements as it would help the employees in coping up with the change. Leaders at
IKEA would support the workforce in working through such complex scenarios.
Transactional leadership
It refers to the leadership style where executive provide reward or punishment to its
subordinates on the bases of their performance. Leaders of IKEA can opt for this leadership style
as reward of tasks help in keeping employees motivate toward performing better. On the other
hand fear of getting punished keep them focused and concentrated toward work that support
them in enhancing the performance of their workforce. In this leadership style, leaders provide
promotion, bonus and wages to those employees who perform better work. By getting promotion
employees feel motivated and perform their task in more effective manner.

Transformational leadership
This leadership includes a process where leaders and their followers raise one another to
higher level so as to motivate each other. In this type of leadership the goals are set at higher
expectations, it is a model of integrity, it provides support and recognition to the organisation. In
the case of IKEA this will enable them to develop a better working environment where the
leaders and their supporters work together to achieve the pre set organisational goals. In this
leadership style, leaders give training to their followers and improve their knowledge and skills
which contribute to an organisation in achieving goals and objectives.
Q4. Different models and theories of approaches
There are different theories of leadership which support in growth and sustainable
performance of an organisation. Explanation of these theories are as follows:-
Situational Leadership
Situational leadership theory of leadership declare that there is no any single leadership
style is best because it is based on situation and task in an organisation. In different situations,
leadership style is change which is best suitable for a task (Kusluvan and et. al., 2010).
According to this model, most effective leaders are those who are capable to accommodate their
style in different condition and task. Situational leadership theory is derived from Paul Hersey
and Ken Blanchardis. This approach states to match two key elements: leadership style of a
leader and maturity level of team members. Leadership style helps to support growth and
sustainable performance of an organisation. In context of IKEA, leaders play an important role in
growth of a firm by adapting different leadership style in various situations. There are mainly
four approaches in this theory which are as follows:-
Telling- In this approach, leaders make decisions and tells to their group members what
to do.
Selling- Leaders still making decisions but also communicate and works to employees
rather then guiding them.
Participating- Leader and group members make decision together. Leader supports and
inspire their employees.
Delegating- In this approach, leaders assign the responsibility of decision making to their
team members and evaluate their performance.
System Leadership

Systems Leadership theory was given by Dr Ian Macdonald end to their career in
administration and structure behaviour. System leadership theory change the leaders in a firm to
create an environment where employees of all levels can work together with effectively and
efficiently to their potential (Laudon and Laudon, 2016). It utilise secure principles of human
behaviour to create concept of organisational structure, good leadership social process and
system design. It provides leaders a technique which helps to forecast employees behaviour in
IKEA. It helps to build an effective system which campaign productive action and also helps to
maintain more effective composition of the company’s goal. Systems theory deals a company as
a system which interact with an environment by the way of input and output. When leaders play
their role of leadership in IKEA, then it can support in growth and sustainable performance of an
organisation.
Contingency Leadership
Contingency theory of leadership refers to a leaders effectiveness is depends on that how
their leadership style is contrast with situation. A leader should find out that leadership style and
circumstances are match with each other. This theory is concerned with that there is no
leadership style is best and if style of leadership and situation are best fit with each other then
leader can be effective. IKEA use this leadership theory for sustainable performance and growth
of the firm. Contingency theory was developed by Frederick Fielder in 1960. there should be a
strong relation between leaders and team members. Leaders should present tasks to their team
members very clearly with goals and objectives (Lewis and Brown, 2012). They have to give
rewards to those employees who done better performance and give contribution in achieving
organisational objectives. In contingency theory leadership is depends on four factors which are
as follows:-
 Influencing power of leader and their goals.
 Expectations of team members.
 Complexity of an organisation.
 Happening and non happening of a task.
Impact of Managers and Leaders in organisation
There is a positive impact of managers and leaders in an organisation. It can be
determined by following points:-

Self-Report Inventory: Managers and leaders of IKEA give positive impact on their
organisational performance. They helps to achieve goals and improve efficiency of firm by
minimizing cost and enhancing production. Managers and leaders make a dynamical structure of
an organisation that helps in uninterrupted betterment and growth of a company. leaders are
improve not only behaviour of employees but also environment of IKEA. They formed a good
company structure that helps in accomplish organisational objectives.
Monitoring of Team- Managers and leader are those who occupied with their employees
and perform different functions in employee engagement and support. Leader and managers
decide a path to their workers to perform a task and then appoint them task to measure their
performance. After completing the work leaders judge their performance and give them
feedback for their activity (Moutinho, 2011). It make a positive impact on IKEA for better
growth and sustainable performance.
CONCLUSION
From above mentioned report it has been conclude that there are different management
structure of IKEA in which managers and leaders play different roles for growth of a firm. There
are different organisational situation in which managers and leaders play different roles to cope
up the situation. There are three types of leadership theories which helps to support growth and
sustainable performance of an organisation. Managers and leaders are very important for a
company in achieving success and sustain long run in market. There are different techniques
used in leadership such as transactional and transformational leadership. These are used to
motivate employees and improve working working environment.
Recommendations for future improvements
There are following recommendations which helps in future improvement of an
organisation. These are given as follows:-
 IKEA have to follow digitalisation for retain long run.
 Proper training is given to employees which helps in increasing productiveness and
efficiency that helps in future improvement.
 organisation has to adopt upgrade technology which helps in future growth and success.
 They have to make proper planning an assessment to retain long run in market.
 A proper management structure should be made and followed by employees of IKEA.

 Employee engagement is also necessary for future improvement because environment is
dynamic. If employees have knowledge about how to adapt changing environment then
they can easily analyse and adopting the changes.
So, these are the recommendations for IKEA for future improvement and sustain long run
in future with maximum growth and profitability.