Human Resource Management and Development in a Global Context

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Human Resource Management and Development in a Global Context

Introduction

Organisational Design and Development (ODD) is central to aligning a company’s structure, processes, and workforce with strategic goals, ensuring both technical efficiency and human resource effectiveness. Defined by the Chartered Institute of Personnel and Development (CIPD, 2015) as the process and outcome of shaping an organisational structure to fit its business purpose, ODD facilitates organisational adaptation, realignment, and continuous improvement. For this ePortfolio, IKEA, the Swedish multinational furniture and home goods retailer, has been chosen as the focus of observation due to its complex global operations, unique organisational culture, and proactive approach to workforce development. This essay evaluates the function and relevance of ODD in IKEA, explores organisational learning during the ODD process, analyses strategies for organisational restructuring and realignment, and critically evaluates the importance of global ODD strategy in a multinational context.

Function of Organisational Design and Development (ODD) and Its Relevance to Organisational History, Culture, and Life

ODD is a systematic approach to improving both the structural and human aspects of an organisation. It focuses on aligning organisational strategy with processes, workflows, and people management practices. In the context of IKEA, which was founded in 1943 by Ingvar Kamprad in Älmhult, Sweden, ODD has played a pivotal role in sustaining global growth while preserving the company’s core culture of cost-consciousness, innovation, and sustainability (Jonsson, 2016).

Historically, IKEA has evolved from a local mail-order business into a global retail giant, with operations in over 50 countries. This growth necessitated a deliberate approach to ODD to ensure that structural complexities, such as multi-tiered supply chains, international stores, and diverse employee populations, were managed effectively. For example, the company has adopted a functional organisational structure at headquarters while decentralising decision-making in stores to foster responsiveness and local adaptation (Baraldi et al., 2012).

Culturally, IKEA emphasises egalitarianism, teamwork, and employee engagement, which requires ODD to not only optimise technical processes but also ensure that human behaviours, interactions, and organisational norms are aligned with strategic objectives. Effective ODD ensures that employees understand their roles, that decision-making processes are clear, and that cultural values are embedded throughout the organisation (Björkman et al., 2014).

From a contemporary perspective, the function of ODD at IKEA also involves fostering agility and resilience. Globalisation, technological innovation, and changing consumer preferences necessitate frequent evaluation and realignment of organisational structures. For instance, digital transformation initiatives, such as e-commerce integration and smart logistics systems, require structural adaptations, workflow re-engineering, and new skills development among staff (Jonsson & Foss, 2011). This demonstrates the ongoing relevance of ODD in supporting both historical and contemporary organisational imperatives.

Organisational Learning During the ODD Process

Organisational learning is a critical component of ODD, facilitating adaptation, knowledge creation, and the embedding of best practices within the company. Theoretical perspectives provide insights into how learning occurs during organisational development. Argyris and Schön’s (1996) concept of double-loop learning, for example, emphasises the importance of questioning underlying assumptions and values, rather than merely correcting errors. In IKEA, double-loop learning occurs when management evaluates not only operational inefficiencies but also strategic assumptions about global expansion, market segmentation, and employee engagement.

Similarly, Senge’s (1990) learning organisation framework highlights five disciplines, systems thinking, personal mastery, mental models, shared vision, and team learning, that support organisational learning. IKEA demonstrates these principles through structured knowledge-sharing mechanisms, such as cross-functional project teams, internal training academies, and global forums for best practice exchange. These learning processes ensure that lessons from one part of the organisation, such as supply chain innovations in Asia, are effectively transferred to other regions, enhancing global operational efficiency.

The role of HR in supporting organisational learning is crucial. Learning and development programmes, performance management systems, and career progression pathways are designed to align employee growth with organisational objectives (CIPD, 2021). For example, IKEA University offers comprehensive training to employees at all levels, integrating technical, managerial, and cultural learning. This ensures that staff not only develop skills for current roles but are also prepared for future organisational changes.

Organisational Restructure and Realignment Strategies

Organisational restructuring and realignment strategies are mechanisms to optimise performance, enhance agility, and ensure strategic alignment. In a global organisation such as IKEA, multiple strategies are employed depending on the nature and scale of operational changes:

1. Functional Realignment: This involves structuring departments around core functions such as procurement, marketing, logistics, and retail operations. IKEA’s headquarters utilises functional structures to coordinate global strategy, standardise policies, and ensure efficient resource allocation (Jonsson, 2016).

2. Divisional Structure: For international operations, IKEA employs a divisional structure based on geographic regions. Each division operates semi-autonomously, allowing adaptation to local market conditions while maintaining alignment with global strategy (Baraldi et al., 2012).

3. Matrix Structure: Certain projects, such as sustainability initiatives or digital transformation programmes, utilise matrix structures that combine functional expertise and regional knowledge. This enables the integration of diverse perspectives and facilitates organisational learning (Björkman et al., 2014).

4. Agile Realignment: In response to technological disruption and consumer trends, IKEA adopts agile principles in store operations, project management, and e-commerce development. Agile realignment involves iterative processes, cross-functional teams, and rapid feedback loops to adapt to changing conditions (Rigby et al., 2016).

Each strategy is selected based on organisational needs, environmental pressures, and cultural considerations. HR and OD professionals play a central role in implementing these strategies, ensuring that workforce capabilities, communication channels, and cultural norms are aligned with structural changes.