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Organisation Resource Management Ikea Commerce Essay

Paper Type: Free Essay Subject: Commerce
Wordcount: 2658 words Published: 1st Jan 2015

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History is evident from the fact that for the success of any organisation is very vital to have an alignment between the strategic and human resource objectives of the organisation to ensure both short term efficiency which would ultimately lead to long term profitability. A concept by McKinsey stating 7 S which includes super ordinate goals, strategy, structure, systems, staff, skills and style was a spectacular approach towards setting up an organisation’s performance excellence criteria. Human resource management alignment with mission is simply combining people management with organisational ultimate goal achievement strategy, one way of doing is to grant access to human resources to be a part of planning phase as a company would always prosper if the employees or human resource is given equal importance and utilization as other sectors of decision making. Unlike the traditional strategic planning where human resource department was only considered to be a provider of personnel facility like staffing, pay, training where as sectors like research and development, finance, production and marketing were the major players to be carefully considered neglecting human resource significance completely but the concept was out ruled by the modern sense of strategic planning, in which the importance of human resource is realised together with the actualisation of the fact that ‘the company is known by people it keeps’, as the business world got into the era of intense competition the need for people training and development increased rapidly and time came when for a successfully run company it has to have properly trained and skilled people and also have a system of provision of more trained employees on regular intervals to continuously fill the gap caused by employment turnover, companies opted for the later concept noticed instant improvement not only in the performance level but also the motivational level of staff showed a rapid incline which realistically the only reason for the overall improved performance. It is evident that where ever people in organisation are involved then its inevitable to neglect the presence of HR elements, Human resource also plays a very vital role in bringing cohesion between the employees of any organisation which when achieved could do wonders in terms of goals achievement and has created history at several times.

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A retailer which stands by it’s name IKEA (Ingvar Kampard Elmtaryd Agunnaryd), a home furnishing retailer which was established in 1943, currently IKEA is not only a furniture retailer but a phenomenon, a name which is identified from its unified identity of standardisation no matter what part of the world one steps into its big blue and yellow set of blocks which carries approximately more than 9500 range of home furnishing and relevant products with a restaurant facility as well provided under the same roof. Over the years it has evolved as an identity of its own, a simplified approach towards furniture making with excellent cost cutting strategies, which ultimately has a direct impact on the price offered to customer, price offered by IKEA stands out to be the cheapest in the market which has become so far the best unique selling point this brand can offer, but nothing is worth without a consideration of flat-pack concept back in early days which entirely change the image of furniture industry, it was planning ahead which now proves to be a convenience by coping up with the pace of present days working people life style particularly younger generation

Ikea’s vision is to create a better everyday life for many people is a complete reflection of how company perceives people in mind which not only includes customers but any stakeholder which has a direct or indirect link to the company operation e.g. customers, employees, suppliers etc. on the other hand IKEA follows a very careful path in the pursuit of its business mission which is to offer wide range of home furnishing items of good design and function, excellent quality and durability at prices so low that the majority of people afford to buy them

Therefore it is evident from the mission and vision that IKEA not only relates and base its overall operation to provide a better life for cheap but also focus on the quality and modernisation of the product it sells to keep it desired on affordable prices.

The harmony between the organisational overall strategy and human resource strategy is achieved through a process which in present era been adopted and utilised by almost all the organisation realising the importance of integration of human resource element into overall strategy to ensure excellent results and motivated employees.

To dig further deep it is very essential to realize the political, economical, social, technological, environmental and legal environment of IKEA which basically makes the basis of any strategic objective as external environment together with elements of internal environment that are strength and weaknesses would assist to evaluate ikea’s corporate strategic situation which becomes the basis of ikea’s strategic plan quite carefully phrased in it its vision and mission.

Ranging from political stability. concern for society and social causes together with people concern, day to day technological advancement to overall economic recession faced by the company , the companies strategy to keep the cost low is a great tactic in these times of economic turmoil specially when the retail market is hit by vat increases starting from 04th of january,2011 low price policy with diversity in the nature of product range and business concepts referring to restaurant business IKEA has evolved as an intelligent set of brains and with inclusion of human resource strategy and other functional strengths to align with the overall mission has proved to be a successful and productive idea in terms of sales and employee retention as well.



It’s a kind of a take over when both the firms combine into a new firm with the due permission of the real owners of the company who possess the shares of the company therefore resulting in completely new official entity. IKEA first of all baring the largest share in the home furnishing industry doesn’t find itself in an urgent need of a merger as among the main reasons for merger is the pursuit of better performance or avoidance from decline scale of performance, expansion behind ikea’s one of the vital priorities in next few years might attract the concept of merger with some furniture retailer most probably on high street level to launch its high street outlet , but doing that would require certain changes which could include new payroll system, different pay and other remuneration schemes, new policies for training and development could be settled between the parties to the merger, new staffing methods, new policy could be formed for retirement scheme and benefits, disciplinary procedures could be altered as well etc. in a nut shell relocation of resources is always a part of mergers which could also include relocation of human resources depending on which kind of merger does actually take place.


In case of acquisition as well the whole set of human resource elements would be considered by party purchasing the other to suit their enhanced business and acquired work force requirements together with legal regulations, but in this form of take over if IKEA takes over any company it must be an intention to provide a helping hand to stakeholders of the acquired company, therefore changes like payroll, staff rotation, job rotation, combined training and development, it could also result in human expertise been sent to look after the acquired business resulting in lack of concentration on the main operation which indicated intense care is necessary while allocating the employees efficiently.

Strategic alliances:

This is now being seen in regular practice by various firms all over the world reason being either to achieve competitive advantage like Superdrug and the perfume shop etc. or to plan a reduction of operating cost because of shared resources or purely marketing reasons. IKEA faced by this type of situation would definitely face some changes on immediate basis including maintenance of healthy relationship between the organizations for the achievement of combined goals, changes would require in the decision making patterns in the favor of common interest, allocation of right people on the right job could raise argument between the relevant heads involved from both sides, a methods requires to be developed to ensure data protection of trade secrets which could be at risk if not handle with proper attention. Human resource strategy would also need a bit of alteration in terms of agreement on objectives as both the parties could have different set of overall objectives to follow.

Joint ventures:

It is a kind of project undertaken by the two firms for a common interest and share the rewards or losses from the particular venture, depending on the kind of joint venture the human resource would change to suit the requirement of the venture on both side to be conducted smoothly without bothering the overall objectives of both the firms and ensure all the relevant aspects like allocation of combine resources together with any training and development measures required to carry out the joint venture.



cultural multiplicity is one of the ikea’s prime concern as far its recruitment policy is concerned, IKEA has always abide by the legal employment regulations and also exhibited a very responsible attitude towards its employees and potential employees, with the significance importance been given to the development of multi cultural environment at work place IKEA has established a very strong and constructive multicultural hub for people who IKEA believes only work for people. A suitable candidate is always the one with high motivational energy together with relevant experience or knowledge.


IKEA has a very smart process of communication in-between the employees who allow them express freely their concern about the business and the company, both ways communication is appreciated and practiced which is a prime reason for less percentage of employee turnovers. Together with fair and constructive pay system the company has gained its place in the hearts of its employees and with proper amount of training and development procedures creates a bond between the brand and its very own people. Proper exit interviews are conducted on the exit of any member and both the parties are left with a brilliant image on each other for future reference.


It is a responsibility of an efficient organisation to have a complete provision of training and development facility at work in order to maintain the motivation level of the team and to fulfil the overall strategic objective of the organisation over all quality of work together with amount of loyalty are directly related to company’s performance which are fully practiced in a routine culture of IKEA day to day operations.

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human resource department together with other functional heads and directors establish a strategy for training the team members over a given period of time to achieve future strategic goals with better preparations ensuring all the line managers of the departments are fully informed and trained for the training to be provided on the basis of individual performance and line of direction opted in the company, and together with the same line managers top management develops a plan in order to understand the needs for the relevant process. IKEA has very comprehensive set of performance appraisal system which is conducted on every regular interval constructively to ensure employee satisfaction ultimately leading to customer satisfaction.

IKEA has design a unique format of trading and development pattern with the name of on the job training as organised by IKEA college for the seek of potential managers which could lead the brand to a new era an excellence.

Task 3:

PERFORMANCE APPRAISAL is a technique or a format to review the performance of the employees on one to one basis and comparing it to the company standards to evaluate the areas of strengths and weaknesses in order to improve the performance level and build-up the motivation level of the determined staff, but an alarm bell for below average performing members to come to know their areas of errors and rectify them in a given amount of time ends till next appraisal date which could be from 1 to 6 months depending on the urgency of it .

Appraisal is a very vital tool for the employer being the one of its own kind to assist management of performance level. With the help of performance appraisal it is very easy for the employer to assess their potential inner-hierarchy growth in the company, therefore together with affecting the career path of the employees performance appraisal has also got a quite close relation with the salary increments as well.

It is always recommended for an appraisal to be conducted with the immediate line manager to get the complete and comprehensive feed back for the sake of improvement over the next period of time, the appraisal process must be familiarised by the manager conducting it and be fair by all means as more the feedback being honest more chances of constructive development in an employee concerned provided the appraisal is conductive with ease and the employee has received all the feedback correctly without being offended.

It is very beneficial for human resource department to develop policies also can be utilised to give a chance to employees to express their opinion about anything about their job they wish talk about. Human resource department can provide plenty of assistance and advice with the help of the appraisal form prepared by the HR keeping in view each and every segment of working employee. Overall a very useful tool for employer and employee in relation to performance levels.


The overall idea behind the reward management phenomenon is to support the human resource and mission of the company, it assist the company with patterns how to trains and develop the individuals which ultimately leads to employee motivation, rewards management system enhance the employer employee relationship and bring more harmony and determination among all of them as its about reward in return with self actualization , a proper reward management system has some legal implications to be made sure before drafting it and is also quite smartly looked after.


There are two kinds of rewards:

1) Financial

2) Non-financial

Financial being classified as tangible reward, one could get a monetary return for services but several studies are evident that these type of outer level needs doesn’t keep the person motivated for a long time therefore classified in basic needs scenario, but Non-financial are the ones which although has no material value but have done enough to make histories. Intrinsic rewards ensuring self efficacy, self recognition and self actualization etc. satisfies higher level needs which are also known as motivators. Contradicting to the reward definition in old days, money as matter of fact is only considered to be a material return to fulfill basic needs and then what really works for an employer is when the employee is provided a sense of achievement etc. for a better future for the company and employee as well.


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