Organizational Theory Case Study #3

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University Of Jordan Organizational Theory Case study chapter #3 Alaa Jamal Zain AlAbdeen 8132150 Question 1: From our point of view IKEA managed its global environment by managing and controlling some internal forces (employees) and managing some forces I its specific environment (customers and competitors). As for employees: * IKEA managed to encourage every employee to participate in problem solving which created a common interest and responsibility between the organization and its employees (all in business together). * Also IKEA adopted career path and promotion system as reward system for the good enthusiasm and togetherness. * IKEA, due to its owner personal beliefs, created an economizing culture (no-frill, cost-conscious way) on all aspects such as traveling in coach class, minimizing traveling expenses and staying in inexpensive hotels. So the culture, control system, promotion and career path system lowered management cost, lowered operating cost, increased the effectiveness and efficiency of the employees and thus over all organizational effectiveness in its global environment. Also the structure and internal system of IKEA created a good reputation in the communities it exists which offered a rich environment with human resources. As for customers: * The culture of IKEA made the customer its top priority and promoted this belief among its employees and managers * IKEA provided customers with well-designed, well-made affordable contemporary furniture (simplicity, attention to details, cost consciousness and responsiveness). So due to these customer oriented culture and behavior, IKEA built a good reputation and trusted brand name among its customer which raised the switching cost and reduced uncertainty with this informal linkage between customers and IKEA, all that helped IKEA getting a competitive advantage

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