Ikea

The following article is about Ingvar Kamprad the founder of Ikea, the home furnishings retail giant. Which of the following do you expect Ingvar to do or to be?

• Dive an old car

• travel first class

• be dyslexic

• be formal

• be careful with money

• dress smartly

• love detail

• make sort-term decisions

The Bolt that Holds the Ikea Empire Together

Ingvar Kamprad is no ordinary multi-billionaire. The founder of the Ikea furniture empire travels economy class, drives a 10-year-old Volvo and buys his fruit and vegetables in the afternoons, when prices are often cheaper. Ask him about the luxuries in his life and he says: ‘From time to time, I like to buy a nice shirt and cravat and eat Swedish caviar’.

Mr Kamprad is one of Europe's greatest post-war entrepreneurs. What began as a mail-order business in 1943 has grown into an international retailing phenomenon across 31 countries, with 70,000 employees.

Sales have risen every single year. The Ikea catalogue is the world's biggest annual print run - an incredible 110m copies a year. And Mr Kamprad has grown extraordinarily rich. He is worth $13.4bn (£8.7bn) and is the 17th richest person in the world, according to Forbes, the US magazine.

The concept behind Ikea's amazing success is unbelievably simple: make affordable, well-designed furniture available to the masses. And then there is Mr Kamprad himself - charismatic, humble, private. It is his ideas and values that are at the core of Ikea's philosophy.

Best known for his extremely modest lifestyle, he washes plastic cups to recycle them. He has just left his long standing Swedish barber because he found one in Switzerland, where he lives, who charges only SFr 14 (£6) for a cut. ‘That's a reasonable amount,’ he chuckles.

All Ikea executives are aware of the value of cost-consciousness. They are strongly discouraged from travelling first or business class. ‘There is no better form of leadership than setting a good example. I could never accept that I should travel first class while my colleagues sit in tourist class,’ Mr Kamprad says.

As he walks around the group's stores, he expresses the feeling of ‘togetherness’ physically, clasping and hugging his employees. This is very uncharacteristic of Sweden. ‘Call me Ingvar,’ he says to staff. The informality and lack of hierarchy are emphasized by his dress style, with an open-necked shirt preferred to a tie.

Mr Kamprad has had both personal and business battles. He has fought against dyslexia and illness.

One of Mr Kamprad's characteristics is his obsessive attention to detail. When he visits his stores, he talks not only to the managers but also to floor staff and customers. A recent visit to six of the group's Swedish stores has produced ‘100 details to discuss’, he says.

By his own reckoning, his greatest strength is choosing the right people to run his businesses.

He is determined that the group will not go public, because short-term shareholder demands conflict with long-term planning. ‘I hate short-termist decisions. If you want to take long-lasting decisions, it's very difficult to be on the stock exchange. When entering the Russian market, we had to decide to lose money for 10 years.’

Mr Kamprad has been slowly withdrawing from the business since 1986, when he stepped down as group president. He maintains that he is still ‘too much involved and in too many details’, although he admits to a distinct reluctance to withdraw altogether.

The question is: can there be an eternal Ikea without Mr Kamprad? Does the group depend too much on its founder? Will the empire continue, as control of Ikea gradually moves to Mr Kamprad's three sons?

From the Financial Times

1.Answer the questions

1. Why is the founder of IKEA not an ‘ordinary’ multi-billionaire? What are luxuries for him?

2. How did his company start?

3. How many people are there in the IKEA furniture empire?

4. What’s the main philosophy of IKEA’s success?

5. Prove that Ingvar Kamprad leads an extremely modest lifestyle.

6. What is the best form of leadership according to the IKEA’s executives?

7. How is the company’s feeling of “togetherness” expressed by the author of the article?

8. What is Ingvar Kamprad’s greatest power, according to his own words?

9. What was the company’s prediction when they entered the Russian market?

10. What’s Ingvar Kamprad’s attitude towards short-term decisions?

2.Fill in the gaps using the words given

(specialize, phenomenon, employees, isolating, produce, compete, shareholder,

entrepreneurs)

1. In some ways, this is true, for American and Japanese firms do _____ many of the same goods.

2. Compaq and Toshiba _____ for the same customers in the market for personal computers.

3. Despite this competition, your family would not be better off _____ itself from all other families.

4. Trade allows each person to _____ in the activities he or she does best, whether it is farming, sewing, or home building.

5. Mr. Kamprad is one of Europe's greatest post-war _____.

6. What began as a mail-order business in 1943 has grown into an international retailing _____ across 31 countries, with 70,000 _____.

7. He is determined that the group will not go public, because short-term _____ demands conflict with long-term planning.

3.Find the word and phrases in the text that match these definitions:

1. an awareness of the price of things

2. the feeling you have when you are a part of a group of people who have close relationship with each other

3. a relaxed and friendly situations without many rules of correct behavior

4. the lack of a system in an organization where a group of people have power or control

5. an extremely strong focus on every small piece or detail

4. Discussion

1. What in your opinion are the strengths and weaknesses of Ingvar Kamprad?

2. Would you like to work with him?

3. What is the correct time for a leader to leave his or her company?