Motivation at IKEA - Case Study Example

Table of Contents S-No Contents Page Introduction 2 2 Products 3 3 Motivational theories 4 4 Methods of motivation by IKEA 7 5 Conclusion 9 Introduction IKEA is a privately owned, international based company. IKEA is an international retail that sells flat pack furniture, bathrooms, accessories and kitchens at their retail outlets all over the world. The company when it started of it used to sell flat pack designed furniture at reasonable prices but now IKEA is considered to be the world’s largest manufacturer of furniture. IKEA has somewhere around 278 outlets in 36 countries, most of the outlets are based in Europe, United States, Australia, Canada and Asia. In 2006 IKEA had opened around 16 more stores and by 2008 they plan to at least 30 more outlets or relocate them. IKEA has somewhere around 12,000 products available on their website, which is very near to their products range. In 2005 a survey was conducted and it was reported by the company that they had over 275 million hits on their website. The motto of the company is that are trying to create a better life for many people through their products. Ingvar Kamprad founded IKEA in Almhult, Sweden by in 1943, when he was a17 years old boy. The work IKEA is the abbreviation of Ingvar Kamprad Elmtaryd Agunnaryd. IKEA started out by selling all kinds of products like pens, runners, wallets, photo frames, watches, jewelry, furniture and stockings etc. anything that Kamprad thought that would sell at a reduced but reasonable price. It is the business idea of IKEA that they offer a wide range of home furnishing products at process which are affordable by many people. (IKEA) In 1948 IKEA introduces furniture in their range. The furniture was produced by the local manufactures in the forest closest to Ingvar Kamprad’s home. The response to the furniture was a positive one. Kamprad first started to sell the products out of his home and then he used mail order to deliver the products to his customer’s homes. In 1951 Kamprad saw an opportunity to sell his products through a catalog. The IKEA catalog which we know today was introduced to the world. 1n 1953 the first IKEA showroom was opened in Almhult, Sweden. In 1952 the concept of flat packing takes place and when one of the employees of the company took of a table’s leg so that it would not be damaged in the delivering process and it can also fit in the car. After discovering this, the flat packs and self assembly products were included in the IKEA’s range of products and they became an instant hit. In 1958 IKEA opens its first outlet in Almhult, Sweden. This outlet had 6700 sq meters of home furnishings displayed in that store and that was the largest display of furniture in the Scandinavia at that time. In 1963 IKEA opens its first international outlet in Oslo, Norway. Products There are somewhere around 9,500 products in an IKEA every product range. Every outlet of IKEA has a selection of all these ranges, but it mostly depends on the store size that how ranges of the products they can carry. But the core range of IKEA is the same in all the outlets all over the world. The IKEA products have been given single names and almost all of the products names are in Swedish. The IKEA product ranges names are based upon a special naming system that is developed by IKEA only. IKEA’s products are known for their modern and utilitarian designs and their products are designed in such a way that they assembled by the customer rather than the customer buys is pre-assembled. (IKEA) Swedish place-names would include; coffee tables, doorknobs, media storages and bookshelves etc. Norwegian place-names would include; different kinds of beds, wardrobes and hall furniture etc. Furniture that has been given Finnish place-names includes different kinds of dining tables and chairs etc. Occupation would include bookcase ranges. Scandinavian lakes, rivers and bay would include bathroom articles etc. It has been known that the company’s founder is dyslexic thought that naming the furniture products were much easier to remember than product code or number. Motivational Theories Motivation is a process that is divided into 3 elements and they are as follows intensity, direction and the persistence of effort of an individual or a group towards the achievement of a goal or an objective. But if it is viewed generally motivation is concerned with effort towards any goal and here we are talking about the attainment of an organizational goals and objectives. As we know that there are three elements in motivation they are:- 1. Intensity which is concerned with hard working that is how hard a person tries to achieve a goal or an objective 2. Direction is mostly based with effort that is directed towards the achievement 3. Persistence is mostly based the effort of an individual. Motivational theories are divided into following theories. They are as follows:- Hierarchy of needs theory: this is the most common theory which is used in motivation. This theory is also known as Abraham Maslow’s hierarchy of needs. This theory is based on every 5 needs of the hierarchy. And those needs are as follows:- Physiological need Safety need Social need Esteem need Self –actualization need Theory X and theory Y: theory X is based on the assumptions that employees do not like and would do anything to get out of it. And it also suggests that the employees are lazy and do not like to have any kind of responsibility and must be forced into working. Whereas theory Y suggests that the employees of the company like work and they are creative, they also seek out responsibility and they need little direction to do their work. (Fullmer, 1983) Two factor theory: this theory is based on two elements which are intrinsic and extrinsic factors. The intrinsic factors are related to job satisfaction of the employee and extrinsic factors are related with dissatisfaction of the employee about his or her job. Two factor theory is also known as the motivation hygiene theory as well. The hygiene factors are those factors involve the absence and the presence of job dissatisfies which include working conditions, pay, company policies etc.When the factors are motivators the employees of the company will not be dissatisfied by their jobs and will not leave the company. ERG theory: this theory suggests that there are three groups of core needs. They are as follows:- Existence: suggests that with providing the basic material existence requirements such as hunger, thirst, shelter, safety, protection and security etc. Relatedness: suggests the desire for maintaining important interpersonal relationships. These factors are associated with social and status desires. Growth: suggests that individuals have intrinsic desire for personal development. This would include self-fulfillment, self-actualization etc. McClelland’s theory if needs: this theory is based on 3 factors as well. Achievement need: the desire to accomplish something difficult. A need to achieve. Power need: desire to control and influence others. Affiliation need: this need is based on friendly and close interpersonal relationships. Cognitive evaluation theory: this theory is based in the allocating the rewards for behavior of the employees that has been previously intrinsically been rewarded this tend to decrease the overall level of motivation level of the employees. The major applications of this theory relate to the way in which people are paid in the organization. Goal-setting theory: this theory suggests that with specific goals and goals that are difficult to achieve lead to higher performance of the employees within the organization. Specific goals produce a higher level of output than those goals which are not specific. (Fullmer, 1983) Equity theory: this theory suggests that the employees compare their job inputs and outcomes with each other and then respond so as to eliminate any unfairness done to them. There are four ways that the employees compare their job inputs and outcomes with each other and those ways are as follows:- Self-inside Self-outside Other-side Other-outside Expectancy theory: this theory defines that motivation depends on the employee’s expectations about their ability to perform tasks and receive desired rewards. Expectancy is actually based on the relationship among the individual’s effort and performance.( Robbins, 2000) Methods of motivation by IKEA The management of IKEA approach employee motivation as “you need a job right?” but this is not an effective method to motivate the employees of the company to give their best effort or to perform better. Motivation can be defined as a reason to do something, over here the case would be to provide en employee to perform better on his or her job. In a work environment there are three characteristics that affect the motivation of the employees. Those three characteristics are as follows:- 1. Attitude: attitude can be defined as judgment that concerns an object, people or things. As we know that an individual has different types of attitudes regarding work activities. Therefore the people at IKEA make sure that the employees of the company are motivated in such a way that the employees achieve the stated goals of the company. 2. Expectancy: expectancy can be defined as that there are people who expect that their ability to perform tasks and will gain them to receive the desired rewards. This kind of characteristic is only relevant when it considers excellent performance on the behalf of the employee on the job. The more the management of IKEA is particular about the work activities the more likely the employees of IKEA will work harder to achieve the stated objectives in time. 3. Harmony: harmony can be defined as a pleasant working environment within the organization. IKEA makes sure that there is harmony in its working environment, because if there is harmony then the employee will be benefited with it and their working performance will improve and they will also be motivated. (Employee motivation, 2006) All the companies respect their boundaries of their culture and so does IKEA. Employee motivation is considered important when an organization is building relationships for better communication with their employees. The elements that are concerned with the methods of employee motivation are as follows:- 1) Anticipated rewards: all the employees of the company want to reward for doing a job well done and it is the management’s responsibility to reward the employees. Once IKEA conducted a special bonus for its employees by pledging the entire day’s sales revenue for its employees. That day the sales were doubled and all the employees received $2400 each. 2) Participation: participation can be defined as process where the employees of the company share a certain amount of decision-making power with their immediate supervisors. This kind of participation helps get the employee motivated and their productivity level increases as well as their poor morale. 3) Recognition of effort: IKEA recognizes their employee’s efforts. The supervisor appreciates the efforts that are done by his or her subordinates. Recognition is considered one of the major motivators that motivate the employee towards a better job performance. 4) Communication: there is clear communication between the management and the employees of IKEA. Communication also plays a major role in the motivation of employees. With the help communication it becomes clear to the employees what is to be done and how well they are doing it and what can be done to improve it better still etc. Conclusion IKEA is a privately owned, international based company. IKEA is an international retail that sells flat pack furniture, bathrooms, accessories and kitchens at their retail outlets all over the world. The company when it started of it used to sell flat pack designed furniture at reasonable prices but now IKEA is considered to be the world’s largest manufacturer of furniture. IKEA has somewhere around 278 outlets in 36 countries. Ingvar Kamprad founded IKEA in Almhult, Sweden by in 1943, when he was a17 years old boy. IKEA started out by selling wallets, photo frames, watches, jewelry, furniture and stockings etc. anything that Kamprad thought that would sell at a reduced but reasonable price. There are somewhere around 9,500 products in an IKEA every product range. Every outlet of IKEA has a selection of all these ranges, but it mostly depends on the store size that how ranges of the products they can carry. Motivation is a process that is divided into 3 elements and they are as follows intensity, direction and the persistence of effort of an individual or a group towards the achievement of a goal or an objective. But if it is viewed generally motivation is concerned with effort towards any goal and here we are talking about the attainment of an organizational goals and objectives. As we know that there are three elements in motivation 1) intensity 2) persistence and 3) direction. Motivation can be defined as a reason to do something, over here the case would be to provide en employee to perform better on his or her job. In a work environment there are three characteristics that affect the motivation of the employees. They are as follows 1) harmony, 2) attitude and 3) expectancy. References 1. Robbins, S. P. (2000). Organizational Behavior. Prentice Hall 2. Fullmer, R.M. (1983). The New Management. New York: Macmillan Publishing Company 3. Employee Motivation, (2006). Available from 4. IKEA, Available from Retrieved on July 30, 2008 Read More