Case
Unit 16- Human Resource Management
- Institution
- PEARSON (PEARSON)
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P1IKEA’s founder was Ingvar Kamprad and the business was founded in 1943.
Initially, IKEA was mostly a mail-order sales firm, nevertheless a few years
down the line they started to sell furniture. IKEA’s very first store outlet was
established in Sweden, in the year 1958, by the name of Möbel-IKÉA (Möbel,
as in “furniture" in Swedish). The very first IKEA shops outside Sweden were
opened in Norway in the year 1963 and in Denmark in 1969. During the
1970s IKEA had spread out all over Europe. Then a few years later IKEA
decided to expand internationally, opening hundreds of IKEA stores all
across the globe.
Internal Factors
These are the factors that could impact a firm’s activities and operations in a
positive way or perhaps even in a negative way. The main internal factors
are technologies, training, accounting, and corporate culture.
External Factors
These factors are the situations that the firm can’t really regulate that
impacts the business decisions that the business owner and the stakeholders
make. They have many different external factors that would heavily impact a
firm’s ability to attain its desired strategic goals and objectives.
Internal factors to take into consideration while planning the H.R
requirements of an organization
Organizational needs:
Workplaces must adapt and adjust to the shifts. The demand levels for
goods and services could heavily affect the amount of staff required in
certain positions. Firms have the desire to expand into foreign markets that
might imply various skills like a languages that’s needed or perhaps even
staff. When a firm is expanding, it might need more workers to help with the
delivery process. IKEA’s products have extremely high demand levels, and
we can clearly see this from their sales figures as IKEA generates roughly
$42 billion worth of sales each year. IKEA is a huge multinational firm which
that operates across markets all over the globe, with their biggest and most
successful market being the Swedish market. Organizational needs are
governed by expanding as well as contracting, due to the fact that, when a
firm decreases its workforce, many internal factors are impacted by such a
decision.
,Skills requirement:
One of the most essential and vital aspects of H.R preparation is to assess
the expertise and skills of the current staff due to the fact that it would help
the firm in building a knowledgeable profile. In case the sector is labor or
capital intensive, it’s very much required. Within any organization, the type
of job and how complex it is will definitely vary and so will the capability
area and the skills required. During the year 2013, IKEA employed 151,000
employees and this figure kept increasing each year by a rather significant
amount so you can imagine what it’s at now. Majority of the firms out there
conduct their appraisals once in six months with an interim appraisal that
would occur mid-year and also an annual appraisal at the end of each year.
Workforce profiles:
It makes sure that managers are able to monitor the types of employees
that are employed with the firm. Typically, they give data like age or class
etc. Knowing the ages would surely help an organization in preparing
themselves for the future and would also help them in making sure that they
are satisfying the required criteria in terms of the regulations. Huge age
differences between the employees in an organization might cause some
problems, and these problems must be dealt with by the respective authority
figures within the company in the most appropriate way possible. During the
year 2017, IKEA released a statement saying that ethnic minorities are now
a slight majority of IKEA.
Knowing the age of the workforce:
This is vital as it helps the managers in predicting and preparing for then the
hurdles and difficulties that might occur at the workplace in the future, it will
also help them during the hiring procedures, for instance as many
employees retire at the same time. This will definitely help the
administrator’s and managerial staff to plan potential workforce-related
issues and or transition periods when many employees leave at once for
instance. One more issue would be that in case many of the senior or older
employees retire, there will be this group of young staff members that
wouldn’t exactly know how to get the job done correctly. It’s very essential
and vital to have experienced employees on board so that they are able to
train, teach, mentor and guide the younger employees of the organization.
IKEA’s mission statement
IKEA says…“Our mission also goes beyond home furnishing. We want to
create a better every day for all people impacted by our business. At IKEA
our vision is to create a better everyday life for the many people. Our
business idea supports this vision by offering a wide range of well-designed,
, functional home furnishing products at prices so low that as many people as
possible will be able to afford them”. An organization’s corporate mission
statement describes the firm’s fundamental goals.
External factors to take into consideration while planning the H.R
requirements of an organization
Supply of Labor:
On a national scale, the availability of labor heavily depends upon the
unemployment patterns in the area as well as on the types of skillsets that
the employees require to have. IKEA have a very wide variety of staff which
are stationed all across IKEA stores globally. Majority of IKEA’s employees
are from European countries and specially Sweden and this is because
majority of the IKEA stores are located in Europe and moreover, IKEA’s
manufacturing processes take place in Sweden itself and isn’t outsourced to
countries, this is mainly due to the fact that the wage rates were increasing
in other countries so IKEA decided to remain in Sweden. To add to this,
Sweden has high availability of labor so IKEA dint have to source labor from
other countries, and at the same time, IKEA would also be helping to reduce
the unemployment rate in Sweden. Sweden is rather undeveloped compare
to the other European countries so it’s considered as a developing country
where in many people that tend to work for IKEA aren’t exactly the best,
skill-wise.
Labor Costs:
The labor cost which is a part of an organization’s cost will heavily depend
on whether the firm is labor or capital intensive, it will also depend upon the
extent to which the expertise are required by the firm are accessible and
usable. In Sweden, the labor price is under strict regulation by the national
minimum wage. During the year 2015, IKEA came up with a plan to tackle
the labor costs by introducing automation to majority of their factories and
workshops, this basically stuck IKEA like a wake up call after the wages in
France increased significantly. IKEA has always been a labor intensive
business, however, recently, they have switched to a capital intensive
business as soon as they realized that employee wages are way too costly
for them to be able to afford and also, in order to maximize profits and
minimize losses.
Government Policy:
Policy enhancements in education programs would have a huge contribution
to the capacity shortages being addressed. IKEA was severely impacted by
the TPP deal after the president of the U.S Mr. Donald trump refused to sign
the renewed deal that had been signed earlier by the previous president of
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