The Management Control System Package of IKEA Bäckebol -a Case Study

Abstract

Background and problem: In an article from 1984, Kaplan concluded that the research that had been developed in the area of management accounting and management control from 1925 to that point had little or no influence on the real organizations, who should be the beneficiaries. As of today the opposite problem from what Kaplan found in 1984 can be spotted, there are almost too many choices in accounting and management control. With the background just proposed we found it interesting to see how a company like IKEA, which opened their first store as early as 1958 (IKEA, 2010), works with management control today. Purpose: The first objective of this thesis is to describe the management control system package of IKEA Bäckebol. The second objective is to describe what management control systems are used at various organizational levels and analyze how the different management control systems in the company relate to each other. Methodology: With a qualitative approach we interviewed five managers at IKEA Bäckebol and one employee at the Swedish head office. The interviews were done with managers on various levels which had responsibility for personnel, business, sales and/or financially related issues. Since the thesis is focused on one single company there are no intentions to make any general assumptions of the results. Analysis and conclusion: IKEA Bäckebol has a strong corporate culture but they use a large amount of more detailed and specific measurement systems to further enhance their management control system package. They also use guidelines and procedures, even though the staff is encouraged to take responsibility and make their own decisions. Cultural controls, results controls and action controls are used at all levels of the organization, but action controls are slightly more frequently used at the sales staff level. IKEA Bäckebol’s MCS package includes many different management controls and MCS, where we think that some are complementary and some overlap. Suggestions for further studies: We think that management control systems as a package and how the various systems interact and relate to each other, needs more research since we had problems to find suitable theories concerning this area. Another suggestion for further studies would be to analyze how cultural control is managed in different countries by multinational corporations. Our last suggestion is to study several companies in the retail industry to be able to make comparisons, which would enable patterns to be discovered.