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Connection among Different Functional Divisions of IKEA

University: Regent College London

  • Unit No: 1
  • Level: Undergraduate/College
  • Pages: 5 / Words 1225
  • Paper Type: Assignment
  • Course Code: M/508/9860
  • Downloads: 608
Question :

This unit state that with the concept of Brexit, the business environment of Europe and UK is going to change and this force companies to change their existing strategies thus IKEA hired a business analyst to find potential competitors who can fight challenge in the upcoming time.

  • Determine the range of different types and size of organizations.
  • Determine connection among different functional divisions of IKEA and their link with objectives of the enterprise.
  • Determine the influence of external business environment on activities of IKEA.
  • Understand the relationship of strengths and weaknesses of IKEA with macro factors.
Answer :
Organization Selected : IKEA


Business environment is known as mix of various internal and external factors that largely impact the decisions taken by a business enterprise to remain competitive in market. Internal factors are known as those elements that remain inside the enterprise and are controllable by the management. External factors are known as those elements that exist outside the entity and impact actions of a business enterprise on large level. These factor are also known as macro environment. Identify and analysis of external elements is most essential function of a business enterprise. One of the main benefit of this analysis is that it make the manager aware about the current market trends which support in offer better products to customers. IKEA, a firm that operate on international level and deal in various type of products such as furniture, home and kitchen appliances is taken under this report for study. Various type of organisations with its purpose and legal structure is all mentioned in this. Further, relationship between various functions of an enterprise and its link with the structure adopted by entity is all described under this. Various tools that can be use by business enterprise to undertake internal and external analysis is also given in this.


P3 Relationship between various functions of organisation and its link with structure and objectives

Various type of functions are perform by a business entity in order to satisfy the needs of its customers and to attain its set goals and objectives. It is very important for every business department to perform its roles and responsibilities in effective way as this help entity in get competitive place (Kolk, 2016). Effectiveness of business activities is based on various factors such as its final objectives and the structure follow by firm. Before assign roles and responsibilities to different department one of the major thing that require to be consider by manager of firm is that the function perform by various department are interlink with each other. With this, manager can bring and maintain cooperation among various business functions and can get better satisfy the needs of its customers. Functional, matrix and divisional are the three most popular type of business structure. Matrix organisational structure is follow by IKEA, all employees are divided into groups which ensure effective monitoring of their actions and activities. Entity follow matrix organisational structure in order in attain its final aims and objectives. Main aim of entity is to increase its profit by achieve economies of scale. Needs and requirements of customers is one of the main focus of entity and various efforts are done by entity to satisfy the same. Relationship between different organisational functions can be understood by the points given below:

  • HRM: This is known as one of the most important department of every organisation. Manager of this department formulate policies in order to manage employees and their actions at workplace so entity can attain its set goal and can generate more number of profits. Performance of staff members largely affect the success of entity as these are the one who manufacture products for satisfy the needs of customers (Li and et. al., 2011). Proper training should be offer to employees so they can perform their job roles in effective manner. IKEA follow a matrix structure and in this it is very important for manager to utilise all its employees in an effective manner. With this, entity can offer better and effective services to its customers.
  • Marketing and sales department: Various promotional activities are carry out by marketing department of entity in order to promote its product and to influence individuals to buy the same. Activities of sales and marketing department are interlink with each other because when promotion activities are carry out by marketing department then in directly increase the sales of company’s product and this support sales department in attain its objective (López-Gamero, Molina-Azorín and Claver-Cortés, 2011). Structure follow by entity encourage sales and marketing department to decide its activities in group which provide benefits to entity.
  • Information technology: In today’s business environment, technology is use by every business organisation for carry out various business activities and IT provide support to all. This provide an opportunity to manager to collect and store large amount of information in one place which help managers in take better decisions which increase effectiveness of business operations.
  • Production department: This department carry out manufacturing of products as per the needs of customers and this activity largely affect success of organisation. As entity follow a matrix structure so this ensure analysis of products and features offer by entity to its customers. This help in get customer satisfaction and help in retain them for a long time period. In this way entity can maintain its market share.


P4 Positive and negative impact of external factors on business environment

There are various elements that impact business in positive or negative way. There are chances that due to change in these factors organizational operational gets effected. Targets can be achieved with the joint efforts of employer and employees which help to achieve activities in specified manner (Al-Swidi and Al-Hosam, 2012). PESTLE is the technique through which they can talk about use of policies which are efficient and effective to perform business related activities in positive manner. PESTLE analysis of IKEA is as under-





There are various policies which are framed by government and it is essential for association to follow them. Political factors means government related element which are associated with business. These are not directly related with business but to make policies in better and effective way. As per requirement, they have to use market and then take actions which help to achieve targets.

Due to excess interfere, there are possibilities of negative impact on image of organization. As regular contact may distract management of IKEA from achieving targets in effective and efficient way.


This is most component company to run business. There is requirement of funds through which actions can be taken in effective and efficient manner. While raising funds, company has to make their financial position in better way. Through which they help company to attain goals. There are various sources of rising funds through which actions are also taken properly because there is need of repayment of loans.

This factors has negative aspects too. In case of increment in interest rate of loans,. Then it affects profits for company. If funds are not readily available, then it creates hurdle in regularity of business. Economic aspects is also related with technological as it may affects requirement of machines.

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