IKEA stands for Ingvar Kamprad, Elmtaryd (his farm), and his county Agunnaryd. This is fitting because IKEA is really an extension of Kamprad himself: IKEA began its flowering from Sweden into Switzerland, then into the rest of Europe, then into Canada and finally into the United States – all under the philosophies set forth by Kamprad which became a company-wide dogma. While usually such centralized decision making would be harmful for a company going abroad so rapidly, it seemed to have worked out for IKEA in its early life, because Kamprad seemed to have all the answers, because the culture could drive the business.
His management style invoked the kind of motivation and loyalty in his subordinate managers that the strong direction and culture that Kamprad had penned nearly flowed effortlessly from Kamprad to the IKEA showrooms. The mythos and legend that had built up around him would keep employees after-hours to fraternize with Kamprad and be inspired.
During expansion in the 1970s, management functioned in a more hierarchal fashion: a European Manager oversaw Expansion/Operations Group managers that ran the business functions in their country. The inherent issue with having one manager overseeing all of Europe is that there are not enough voices close-to-the-market in board meetings. Decision making was more decentralized and the organization more horizontal as expansion continued into the 1980s. This would tend to benefit organizations because having regional voices in corporate strategy-level discussions could help shape strategy to better benefit the subsidiaries and the company as a whole. However, IKEA kept some functions, such as purchasing, relegated to Swedes; the issue being that rather than letting subsidiaries have input into purchasing and possibly exploiting a prevailing trend in their home market, the decisions were made by those who were not