What are IKEA$$s organizational design elements? $[10$ marks$]$

In $1943,$ at age $17,$ Kamprad formed IKEA with initials representing his first and last names, along with that of the family farm $($Elmtaryd$)$ and the nearby village $($Agunnaryd$).$ Anticipating the rising consumerism amid the rebuilding boom that followed the war, IKEA moved quickly to provide families with low$-$cost furniture designs through the convenience of catalog sales. With the opening of the company's first showroom in $1953,$ Kamprad created a model of vertical integration, uniting a variety of suppliers under the IKEA umbrella, coordinating long$-$run production schedules, and controlling distribution. That model expanded in $1964$ with the introduction of the first warehouse store, eliminating an entire step in product distribution by allowing warehouse container pick$-$up by customers,The business lessons Kamprad mastered as a boy entrepreneur were evidenced at the corporate level in many ways. For example, the bulk purchasing of matches in his youth was a forerunner to the bulk purchase of fabric that expanded upholstery choices for consumers and made the luxury of fabric options, formerly limited to the wealthy, available to all customers. Likewise, IKEA used imaginative distribution and delivery options, such as when an IKEA employee cleverly discovered the company's "flat$-$box" approach in $1955.$ While attempting to load a table into a customer's automobile, an cmployee simply removed the table legs, enabling a new vision of selling furniture unassembled. Practical solutions wedded to a lowcost promise created a new IKEA formula of "knock down" furniture, flat$-$box storage and shipping, and assembly by consumers armed with IKEA$-$developed assembly tools and visual instructions. This formula revolutionized the home$-$furnishings industry.A major strength of IKEA lies in its pioneering distribution created through unique corporate$-$supplier relationships. In the earliest days of the company, Swedish fine furniture manufucturers attempted to boycott IKEA and drive it out of business for selling furaiture at such low cost. Kamprad outmaneuvered them by forging new partnerships with other Scandinavian manufacturers, providing assurances of long production runs. Morcover, top managers learned that affordable furniture can be provided without the necessity of owning the factories. IKEA is something of a "hollow" or virtual corporation because nearly all of its manufacturing is outsourced. IKEA uses normal shortterm purchasing contracts with suppliers, which means it can quickly adjust orders to changes in demand and not be saddled with huge unsold inventory. Suppliers also are in competition with one another to keep costs low. IKEA has indirect control over suppliers because it often purchases $90$ to $100$ percent of a supplier's production. Aware of the importance of supplier relationships, IKEA maintains a constant vigilance in working with suppliers to find ways to cut costs while keeping quality standards high, occasionally even agreeing to underwrite supplier technical assistance. That can$-$do attitude with suppliers has served IKEA well over time.

Supplier RelationshipsToday, with $1,300$ suppliers in $53$ countries, IKEA's integrated design, production, and distribution faces new problems. The sheer numbers can weaken long production runs and disperse supply lines. Global reach also means that domestic requirements vary from one region to another or that certain areas, such as Eastern Europe, have few suppliers capable of high$-$quality, low$-$cost production. In addition, furniture competitors have not been idly sitting by but have garnered lessons from the furniture giant. In the face of these challenges, IKEA continues to believe in the power of its ingenuity Design teams work with suppliers in imaginative ways. For example, the need for expertise in bent$-$wood design for a popular armchair resulted in a partnership with ski$-$makers. Likewise, the need throughout Scandinavia for affordable housing resulted in IKEA's expansion into manufactured homes, built on supplier factory floors and delivered to construction sites, ready to be filled with IKEA furnishings, conveniently assisted through $$500$ in IKEA gift certilicates to the homeowner.From the outset, IKEA represented more than catch phrases such as low price and convenience. Looking our for the families of modest incomes leads to IKEA's constant adherence to frugality, which is reflected in a cultural abhorrence for corporate office perks such as special parking or dining facilities. IKEA executives are expected to fly "coach." In his effort to bring "a little bit of Sweden to the world," Kamprad created a lifestyle model that would mold consumer habits and attitudes. True to the rural values of his homeland, Kamprad nurtured the ideal of the IKEA family, referring to employccs as co$-$workers and bestowing the name Tillsammans $($Swedish for "Together"$)$ on the cor