Analysis of Leadership and Management in IKEA's Operations - Report

This report provides a comprehensive analysis of leadership and management within IKEA's operations. It begins by comparing the roles and characteristics of leaders and managers, referencing Fayol's theory and transformational leadership. The report then examines the relationship between managerial and leadership roles in various situational contexts, such as conflict management, technological changes, and labor turnover. Furthermore, it explores the application of different leadership theories, including situational leadership, along with their respective strengths and weaknesses. The report also delves into approaches to operations management and highlights its importance, concluding with a discussion of factors that influence decision-making by leaders and managers within IKEA. The report uses various illustrations to explain the concepts and theories in the context of IKEA, offering practical insights into the company's management practices.

MANAGEMENT AND
OPERATIONS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
LO 1.................................................................................................................................................3
P1 Comparison between roles and characteristics of leader as well as manager .......................3
LO 2.................................................................................................................................................6
P2 Relation of managerial and leadership roles in situational context.......................................6
P3 Application of different theories along with strength and weakness.....................................7
LO 3.................................................................................................................................................9
P4 Approaches to operation management...................................................................................9
P5 Importance of operation management.................................................................................10
LO 4...............................................................................................................................................12
P6 Factors impacting decision-making by leaders and managers.............................................12
CONCLUSION .............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Operations management is mainly concerned with controlling as well as designing the
production process and thus redesigning the business operations for development of products and
services. IKEA is basically a multinational group being established in 1943 by Ingvar Kamprad
and headquartered in Delft, Netherlands. It primarily deals in furniture, home and kitchen
appliances as well as other accessories.
This report gives a brief about comparison between roles and characteristics of leader as
well as manager, Relation of managerial and leadership roles in situational context, Application
of different theories along with strength and weakness, Approaches to operations management,
Importance of operations management and factors impacting decision-making by leaders and
managers.
MAIN BODY
LO 1
P1 Comparison between roles and characteristics of leader as well as manager
Leader is basically the individual who influences the people or the group of people for
achieving the particular goal or task. On the other hand, manager is the individual who remains
the in charge of various tasks and activities and thus consist of the group of individuals under
them.
Fayol Theory
This is one of the most important management theory given by Henry Fayol and thus
stresses upon the fourteen principles which eventually helps the management to take various
decisions. This is the administrative theory and based on the fourteen principles, the leaders as
well as the managers of the organization are able to take the decision regarding various aspects.
Besides the fourteen principles of management, this their mainly addresses that the management
whether top or lower should communicate with each other and with the personnel in five ways
namely
Planning- In this function, the management are required to plan and schedule the various
activities which are essential for the organization. In this, the manager prepares the proper action
plan highlighting the details whereas leader follows the action plan and encourages its employees
to contribute equally in each activity.

Organizing- In this, according to Fayol planning is not enough thus organizing in the right way
by using all the available resources is important. Here the manager ensures that all the resources
which are required for implementation of plan are present and in right manner. Leader makes use
of these resources to take the plan into action.
Commanding- In this, as per Henri Fayol, the management should encourage and motivate their
employees in positive way. The manager set the direction for their leaders and employees and
leader on the other hand follows the direction and encourages employees to follow the direction.
Coordinating- According to Henry Fayol, the management should inculcate a sense of
coordination and team work within their employees to increase their productivity. Leader are
mainly responsible to coordinate the various task of their employees and the manager is
responsible to motivate the employees by designing various rewards for them.
Controlling- In this, it is the basic function of management to control and monitor the various
activities as they are on the right track or not. The manager monitors the various activities of the
organization and keeps and eye on it. On the other hand, leader tracks the performance of their
employees and thus exercise control over them.
Illustration 1: Five functions of management
(Source: 14 principles of management, 2018)
Role of leader Role of manager
Guidance and mentoring
This is one of the kits important role
which a leader plays in IKEA for achieving the
Monitoring
The main role of manager in IKEA is to
monitor the various activities and thus receives

goals of company (Anand and Gray, 2017). In
IKEA, the leader is mainly responsible for
providing the right guidance to their followers
and thus by utilizing their experience for
soliciting their opinions in every decision.
the information on various internal and
external events. They act as the centre of the
organizational circle and thus is involved in
preparation of various reports.
Communicator
This is another significant role of leader
in IKEA where the leader is involved in
communicating their ideas to their employees
by sending e-mails, running meeting etc.
Besides this, the leader is also engaged in
communicating with them on one to one basis
for improving their efficiency.
Liaison
Besides monitoring the various
activities of IKEA, the manger of this company
is also involved in performing functions like
motivation, communication, strategist etc. and
thus is required to coordinate these activities in
proper manner.
Transformational leadership
The transformational leadership is basically the theory which results in the changes
within an individual as well as the social system and thus creates the positive change in
employees by developing their competent skills. According to this theory, the leaders and
managers in their own way encourages the employees and followers to innovate and bring
change which will eventually help in shaping their career and will also help organization to
achieve their goals.
Characteristics of leader Characteristics of manager
Honesty
The significant characteristics of leader
is to remain honest with their employees as
well as to the management. Thus, the leader of
IKEA are highly honest and thus transparent in
various activities like regarding the
Creativity and innovation
A successful manager is the one who is
constantly involved in innovating the various
projects and products through their excellence.
The managers of IKEA forms the core
competence of the organization where they

performance, outcomes etc. (Formentini and
Taticchi, 2016).
continuously bring creativity in the culture of
company and hence the products. The
managers of the company due to their
innovative attitude motivates the employees
inculcate the culture of creativity at the
workplace.
Empathetic
The leaders of IKEA are highly
empathetic in the sense that they understand
the view points of their followers by stepping
into their shoes. Being respectful and
trustworthy to their employees, the leaders of
this company are able to positively influence
their employees.
Commitment
The managers of IKEA are highly
committed to meet the long as well as short
term goals of the company (Gerasimov and
Gerasimov, 2015). They remain focussed
towards their vision which is to serve the
customers better and hence create a culture of
collaboration in company. Besides this, their
remain committed towards themselves which
helps them to meet the organizational
outcomes and achieve their individual goals.
Positive attitude
It is another remarkable characteristics
of the leaders and thus the successful leaders
have positive attitude within them. The leaders
of IKEA have a positive outlook on every
aspect and thus this helps them top improve the
productivity of their employees by appreciating
them for their work and thus solving their
problems.
Delegation of task
Effectively delegating the tasks and
activities to the employees is one of the
important characteristics of managers. The
IKEA managers delegate the various activities
to their employees according to their skill level
and knowledge. Like for highly technical
individual, the activities related to innovation
are being delegated.
Critical evaluation of both theories
The main advantage of the Fayol theory is that it facilitates the organizational structure.
The theory of Fayol encompasses the hierarchical structure where top lop management serve as

the powerful leaders. Besides this another advantage which leaders and managers derives from
this theory is that it boosts team concept. The principles of this theory stresses that employees
need to subordinate their individual interest to the with the organizational interest and thus
should work together.
On the other hand, the primary advantage of transformational theory is that it lowers the
turnover ratio. It is basically the ability of managers to retain the employees by fully engaging
with them, and satisfying their needs and wants. Another advantage is that this leadership is
responsive to change. The leaders in order to adopt the leadership as per the scenario changes
according to the changing environment and thus enables them to oversee the needs of employees
and organization.
Illustration 2: Characteristics of leader
(Source: 10 Characteristics of good leader,2018)
LO 2
P2 Relation of managerial and leadership roles in situational context
There are different situation which the organizations face while performing their
activities and the various operations.
Conflict management
The main situation which IKEA faces is the conflict between employees and management
and the employees with different level of hierarchy. In thus situation., the role of leader is
imperative and thus the leaders finds various ways to resolve the conflict. On the other hand, the
function of manager to communicate effectively will eventually help in conflict management.
For example, there has been a conflict in IKEA regarding understanding the cross culture

difference then the role of leader calls for respecting the differences and thus inculcating the
sense of collaboration within them (Harrison and Lock, 2017). On the other side, managers will
resolve this conflict by claiming the meeting and thus providing training on cross culture
difference which will helps employees to understand the different cultures.
Technological change
For example the management of IKEA has advised the mangers as well as leaders to
incorporate new technologies within the employees and make them aware of the market trends
and the advance technology. In this case, the main managerial function which is planning and
organizing is highly significant. The manager will plan the various activities as well as the
workshop regarding the emerging technology as well as the different operations. Besides this,
another function of manager which is controlling where the managers of IKEA will monitor
whether the corrective actions have been implemented and the technology have been applied at
the work or not. On contrary to this, the main role of leader is to motivate the employees thus
leader will encourage the employees to attend the workshop wand thus will provide appropriate
guidance to freeze the behaviour outcomes from training. Along with this, the leaders of IKEA
will continuously monitor the performance of their followers to keep them on the right track.
Labour turnover
For example IKEA is being faced with the increasing labour turnover and it has become
difficult for the organization to retain the employees at high level. Thus, in this situation, the role
and function of manger will be significant. The main role of leader which is to communicate
with the employees and thus adopt the appropriate leadership style which will increase the
productivity of employees will helps in this. The leaders will interact with the employees
regarding the problem they are facing and what they expect form the company. Based on this, the
leader will provide the proper guidance direction which eventually will motivate the employee to
work with greater performance. On the other hand, the main managerial function which is
leading will helps IKEA to retain a large number of employees. Managers are responsible for
leading the staff in correct direction when leaders fail to do so (Choi and et.al.,2018). Thus,
managers will influence the employees in positive way and thus will communicate with them on
the regular basis. Managers will also provide regular feedback to their employees which will
helps them to know in which area they need improvement and thus will increase their
confidence, and they will want to stay with the company.

Critical evaluation
There are wide range of situations which IKEA faces and thus affects their functioning
like conflict management, technological changes etc. The main advantage of these situations
which they face is that it helps the company to become stronger and powerful in dealing with the
change and thus assist them to know the various aspects which they need to work upon.
P3 Application of different theories along with strength and weakness
Situational leadership
This theory mainly states that the leaders and managers of the organizations adopts
different leadership styles which suits the situation the best instead of the adopting the specific
leadership style. When the leaders and managers are confronted with the situation then the style
adopted by leaders and managers differ form each other according the requirement of the
problem. For example When IKEA confronts with the situation of decreasing sales of the
marketing department then the leaders as well as managers will react differently. The leader
might adopt participative leadership style where they will seek the opinion of their employees for
increasing sale. On the other hand, managers of the company in this scenario might adopt
autocratic style where they will exercise strict control over the employees for working more
productively (Yahaya and Ebrahim, 2016). Thus, as per this theory, the leadership style changes
according to the problem of both managers and leaders.
Contingency leadership
This theory mainly states that there is no particular leadership style which is suited for the
organization and lead the effective decision-making thus the particular leadership style depends
on the skills and knowledge of leaders and mangers. For example, the strong presence of the
competitors is being the problem faced by IKEA thus in this scenario for effective decision,
leaders might adopt laissez-faire style where the leader will allow the employee to do their work
according to them in order to increase the competitive advantage. Managers might adopt
democratic style where they will encourage and motivate the employee to enhance their
productivity to achieve the organizational goals. Thus, in this, no particular is best for the
situation and thus depends on the skills of leaders and managers.
Strength and weakness

Situational leadership
Strength
The main strength of this theory is that the leaders and managers do not depend on the
particular style of leadership and hence modulate according to the problem. Like in the situation
of decreasing sales, the leaders and managers adopts the different style to increase the sale thus
this increase the excitement in the leaders as well as managers to select the best style. Another
strength is that it helps in boosting the morale of employees in IKEA because sometimes it
involves employees in decision-making like the leaders selected participative style for increasing
the sale (de Leeuw and et.al.,2015).
Weakness
The major weakness of this theory is that sometimes it decreases the productivity of
employees due to the selection of stringent style of leadership by mangers and leaders which
eventually decreases their motivation level. For example for boosting the decreasing sales in
IKEA, managers adopted autocratic style which might reduce the performance of employees due
to strict control. Another weakness is that it mainly focuses on the short terms goals like boosting
sales and thus emphasize on only on current scenario (Hübner, Holzapfel and Kuhn, 2015).
Contingency theory
Strength
The main strength of this theory in IKEA is that it is dynamic in nature and thus changes
and fluctuate according to the changing situation. It enables the leaders and managers to change
their policies as per the situation (Anderson and Sun, 2017). Like due to increased competition,
leaders of IKEA can change the way of leading their followers and thus change the nature of
their work. Managers can change their technological policies and thus can bring new technology
in the company to gain competitive advantage.
Weakness
The primary weakness which has dominated the company is that it sometimes become
complex for the managers to handle the situation and thus they face various inadequacy in their
decision-making. Besides this, it sometimes leads to the poor judgement due to the complexity.
Like changing the technological policies might not be that successful for gaining the edge over
the competitors. Another weakness of this theory is that there is lack of innovation and creativity

within the working if employees because there is no provision of the training as well as
development.
LO 3
P4 Approaches to operation management
Operation management is basically the administration of the various business practices in
order to create and build the high level of efficiency within the organization.
Total quality management
It is the approach of management through which the organizations eliminate the errors
and thus focuses on enhancing the overall quality for the customers. There are mainly seven
principles which comes under TQM namely customer focus, strong leadership, people
involvement, continual improvement, systematic approach of management, facts based decision-
making and relationship management (Arnold and et.al.,2015). Through the use of these seven
principles, IKEA are able to provide the quality services to their customers and thus satisfy their
suppliers by reducing the overall cost and eliminating the defects. The main role of IKEA leaders
in TQM is managing and utilizing the overall workforce. Besides this, the leaders establishes the
performance measurement for the process and guides their employees towards improving
quality. On the flip-side, role of IKEA managers is to provide the effective training to the
employees regarding the techniques of total quality management and the proper use of them.
Apart from this, they are responsible for treating the suppliers as the business partners and thus
managing the supply chain.
Lean manufacturing
It is the systematic process through which the organization eliminates the wastage in their
manufacturing system and thus optimizes the process by cutting cost and reducing the errors.
The implementation of lean manufacturing helps IKEA to improve the visual management and
reduce the excessive manpower. It generally involves the overall company and helps in the
mitigation of space, offers safer environment as well as enhances the morel of the employees
(Sarmiento, Whelan and Sprenger, 2018). The primary role of IKEA leaders in this process is to
provide the right direction to employees regarding increasing the production. Along with this,
another role is to monitor the overall process by overseeing the activities and responsibilities of
employees. One more significant role of the lean leaders in IKEA is to ensure that each and

every employee contribute equally and thus complies to the standards of the reduced production
waste as well as time. Managers of IKEA are mainly responsible for carrying out the analysis
relating the product effectiveness that which product will bring favourable outcome. Another
role is that to check the progress of the process and thus checking that useful materials are not
eliminated. Besides this, the lean manager is also responsible to report to higher authority about
the process.
Six sigma
This is basically the approach which is highly disciplined and also data driven and thus
serves as the methodology for reducing as well as eliminating the defects within any process
whether manufacturing or selling of products and services. This is the most important approach
of operational management. In short, it is the well through process through which organization
enhances the customer satisfaction along with profitability through streamlining the various
operations (Nawaz and Khan_ PhD, 2016). By implementing this approach, IKEA can easily
attain the customer satisfaction through improving the return on sales, investment and thus by
improving the growth of stock value. The main role of the IKEA leaders in this is to invest a
considerable amount in different six sigma resources as well as training. Another important role
of the leaders of this company for achieving the business objective is to encouraging and thus
motivating the employees for their participation in the process. One ODF the mots significant
role is to drive and thus monitor the project of six sigma in the correct direction and controlling
its various constraints. Besides this, the major role of the manager of IKEA in driving six sigma
is to indicate the cost saving and expenses in their management goals and communicating it to
their employees. Another major responsibility of manager is to constantly monitor the
formulation of the approach of six sigma and thus making it effective. The major role played by
IKEA managers is supporting the employees as well as the top management while the
continuation of overall process.
Just-in-time inventory
It si the another approach of operational management and thus is the strategy which
eventually enhances the efficient and effectiveness as well as decreases waste through receiving
goods whenever needed within production process hence decreasing inventory cost. The
application of this approach helps organizations in decreasing storage space as goods and
services acre stored at the tome of their utilization and thus aves money or organization. The role