The Creator Of The Lego Brick Business

The Ole Kirk Christiansen, a maestro carpenter and joiner founded LEGO Group in 1932. He established a little concern in the small town of Billund in Denmark. The company produces step ladders, pressing boards and wooden plaything. The name ‘LEGO ‘ is an abbreviation of the two Danish words “ leg godt ” , intending “ drama good ” ( Lego, 2009 ) .

Lego is a celebrated name between the kids. It is really reputed multinational company which operates in 130 states in the universe. It is the universe ‘s 6th largest organisation produces playthings. Lego quickly enlarge in last few old ages and gaining control a immense portion of market portion. Lego basically changed the construct of amusement and drama by presenting the event of larning and development. By making this the company offers a healthy adulthood, using scientific manner and by increasing the imaginativeness power in their childhood. Hence fulfilling its corporate societal duty.

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Lego innovated winning scheme. They have suffered the manner from bankruptcy to one of the universe top plaything manufacturers. Organization civilization, its design which changed the face of the organisation is unbeatable. The aim of this study is to understand how this alteration Tookes topographic point.

Lego group has produced many playing sets of automaton, infinite, plagiarist, Viking, knight ‘s land, dinosaurs, Wild West, the north-polar, spider-man, harry thrower and many more. It has late announced the procurance of international plaything rights with the overseas telegram Television channel Nickelodeon for making sets with subjects from two hit Television shows such as SpongeBob Square Pants and Avatar: The Last Air bender ( Brickipedia, 2009 ) .

This literature is carefully customized about the operation and construction of an organisation known as “ LEGO ” . This work provides a comprehensive survey of construction of Lego and what, why executing of alteration has been practiced in the organisation. It provides the brief survey of the alteration they brought in their organisational construction and alter it form a tall organisation to a semi-flat organisation. It will demo some of the features a tall and level organisation exhibits.

Organizational Design

Today universe is really volatile ; alteration of organisational design is a regular, on-going activity and challenge for every director, whether pull offing a planetary endeavor or a little work squad. Globalization increased competition, deregulating, and ever-new engineerings drive the on-going reappraisal of the organisation. Many new signifiers of organisational design: practical, acquisition, modular, cellular, web, confederation, or spaghetti came in to existence. Still organisations require a formal design. The necessities are: what are our ends? ( Burton et al. , 2006 ) .

Organizational design – is the procedure by which directors select and manage assorted dimensions and constituents of organisational construction and civilization so that an organisation can accomplish its end ( Lamar, 2009 )

Contingency Theory

Contingency theory believes the organisation analytically as a concerted web of functional necessities bound together in hunt of a common intent. Each facet is indispensable to the success of the organisation, and the demands of each component must be convene within the context of the organisation. In other words, an appropriate balance must be required between the elements. ( Donaldson, 1995 ) .

Harmonizing to Jackson ( 2000 ) , there are five “ Strategic eventualities ” which affect each other and act upon the pick of organisation construction. They are:



Technical factors

Managerial factors


1. Goal: The end is a portion and it is concerned with the endurance of the organisation in both the long and the short term – with normative, strategic and operational aim. These ends need to be run intoing up the aspiration of the stakeholders, which in bend demands to be reflected in the decision- devising construction. Lego set its end and created schemes on the footing of following invention techniques.

2. Peoples or Human: Peoples are concerned chiefly with the turning demands of the employees of the organisation. These demands must be fulfill within the organisation, so that they can be attracted to it and can be motivated for their work. These demands will change with the circumstance in which the persons are employed. Basically, the design of the organisation must take history of the demands and capablenesss of the staff. Lego is acute to concentrate on its employees demands and carry through them to accomplish its ends ; to accomplish productiveness staff satisfaction is mandatory.

3. Technical Factors: It refers to the engineering utilized by the organisation in transporting out its work. Typical organisational signifiers developed in a specific industry and successful houses utilised these constructions, it is called benchmarking. Lego usage engineering to work swimmingly and to supply high category service to the clients, they use engineering in retail concatenation, on-line shop, and educational market offering. They created on-line drama experiences to maintain clients engaged with their merchandises and concern.

4. Managerial Factor: The function is to co-ordinate and enables the activities of the others. Current research identify that the direction of an organisation can enable it to react efficaciously. It consists of planning, forming, staffing, directing, organizing and commanding the activities of the assorted subsystems. Lego formed four groups to pull off its operations ; they created team-based construction that helped them to accomplish invention marks.

5. Size: It refers to the size of the organisation. It effects structural distinction in the mode of eventuality tantrum theory, on the horizontal and perpendicular facets of structural distinction. On horizontal facet, increasing size adds employees, who at the start stand idle or extra and keep up with the undertaking executing of other employees. In the perpendicular facet increasing size extend the span of control of a director to the point where it becomes excessively broad and public presentation sick person. So that new degree debut becomes necessary which guarantee consequences. ( Donaldson, 2001 ) . Lego used perpendicular construction, when they were close bankruptcy ; they split invention attempts to eight types, by these new types and degrees they managed to come out of job and sustained their place in the market.

Best pattern of procedure invention

AA Best practiceA is aA technique, method, procedure, activity, inducement, or wages that is understood to be effectual in presenting a specific result than other technique, method, procedure, etc. when applied to a peculiar status or circumstance. It is a procedure invention technique. The inspiration is that with proper procedures, cheques, and proving, a preferable result can be conveying with lesser jobs and unanticipated complications. Best patterns can besides be defined as the most efficient ( least sum of attempt ) and effectual ( best consequences ) manner of carry throughing a undertaking, based on quotable processs that have proven themselves over clip for big Numberss of people ( Zairi, 1999 ) .

Lego used invention as a best pattern, they took a wide position of invention and applied it on new merchandises, pricing programs, community edifice, concern procedures and channels to market.

Team based construction

Team-based organisations prosecute an unusual sense from traditional hierarchal organisations that rely chiefly on persons as the cardinal acting unit. Organization design and procedures are involved when organisations convert to a team-based organisation, or they reinforce the capablenesss of an organisation that already performs its work in squads ( Fogg, 1994 ) .

Use of the complementary expertness with new technological alterations in the country of fabrication, distribution, HR, selling and CRM helps companies in recognizing the full return from their technological resorts. To take these expertness development attempts, A cross-functional squads, either formal or informal, necessitate to be formed. Cross-functional squads are teams work in different working countries but for the same end. ( Fogg, 1994 ) .

Lego created four cross-functional squads ‘ Functional groups, Concept lab, Product and selling development and Community, instruction and direct. All squads focus on their country but to accomplish organisational end that is invention.

There are three chief organisational designs which are authorization, bureaucratic, authorization and communicating flow, used by the Lego. The construction that is used by the Lego squad based construction. The squad based construction has a really level extent of control. Due to this, the procedures are organized decently, by this it straight affects to the behaviour of each individual in the squad. The construction of the organisation straight affects to the behaviour, motive, public presentation and squad work. Therefore the public presentation of organisation is depending on the organisational construction and its design.

Chapter 2 Organization Culture

McKinsey define Culture as “ How we do things around here ” . In other word it is the personality of the organisation. Culture is incorporating of the premises, values, norms and touchable marks of the organisation members and their behaviour.

The turnaround of LEGO Group was stand on the belief that ‘only the best is good plenty ‘ because it recognizes the unexpected value that the LEGO Group brings to the universe. What the LEGO Group is all about, translates into the five company values: “ Creativity, Fun, Learning, Quality and Care ” . Lego has a squad edifice civilization with focal point on invention.

Trompenaars ‘ four diverseness civilizations

This theoretical account presume major magnitude of individual vs. undertaking and centralized ( which is besides assumed to be hierarchal ) vs. decentralized ( which is assumed to be more classless ) . These dimensions are really common steps and both can be usually merely determined ( Kutschker et al. , 2006 ) .

Lego is a household concern and Centre is an person, it followed a decentralized organisational civilization, even though they made different groups for the operations but determinations come from the corporate degree direction.


Person/Informal manner


Guided Misile

Task/Formal manner


Eiffel Tower


Following are the four manner of civilization in elaborate.


Focused on Individual Relationships.

Hierarchical with derived functions authorization construction

Lego wage attending on household civilization, they have created a squad called CED which is accountable for community edifice with Education and Direct. They hold the patronage into the organisation by educating them about the organisation.

Eiffel Tower:

Authority focused on allocation of labour and coordination.

Emphasized on be aftering to accomplish its corporate ends.

Lego created four cross-functional squads for those, who are divided as per undertakings put work in the class to accomplish the same organisational end.

Guided missile:

Unrestricted, unfriendly, undertaking oriented

Lego followed and independent organisational civilization, based on the power allotment with cardinal control with corporate degree direction ; they have four squads and delegate them undertakings to accomplish organisational ends.


enterprise to decrease organisational construction and civilization

Lego followed perpendicular organisational construction and importance given on invention with the current organisational hierarchy.

The purpose of the analysis is to measure the extent to which the prima civilization reflects the existent desires and restriction of the organisation

The LEGO Group wants to promote an organisational civilization base on the LEGO spirit and nucleus values. A civilization promotes concern unity by increasing consciousness of the significance of high criterions of personal behaviour. The aim is that LEGO Group employees universal make determinations in conformance with LEGO concern rules and in association with the LEGO spirit and values. The civilization portrays the three to four major features of the organisation. These are the Power, The Role, The Task and The people. But in Lego, the chief attending is on the Power and the Role. It besides describes the different theoretical accounts like Handy and the Trompenaar theoretical account, each of which have separate maps. There is besides holding small account about the procedures of the organisation.

Chapter 3 Learning Organizations

Harmonizing to Senge, Kleiner et Al ( 1994 ) A learning organisation is “ an organisation that is continually spread outing its capacity to make its hereafter ” . For them, it is non sufficient to merely last. ‘Survival larning ‘ or what is often termed ‘adaptive larning ‘ is important truly it is indispensable. But for a learning organisation, ‘adaptive acquisition ‘ must be attached with ‘generative acquisition, ‘ larning that increase our ability to make. ”

In the LEGO Group it is believed that kids learn best when they are holding merriment. Motivating larning with the creativeness and imaginativeness is considered by specializers in the field of child advancement to be more relevant at nowadays than of all time before. The natural advice to larn is merely the key to booming in a ambitious universe.

Pedler et Al ( 1997 ) discovered 11 characteristics for an organisation to go a learning organisation. Following are the characteristics which exist in Lego.

Participative policy-making: Company policies of the Lego retroflex the values of all members & As ; non merely top direction ‘s. Stakeholder ‘s analysis besides has strong control in Lego turnaround scheme. There is committedness in all Lego members to discourse differences and trade with the struggles.

Enlightening: Lego utilised Information Technology non merely to use to mechanise but to do information loosely available to look line employees to authorise them to move & amp ; take enterprises. Databases and communicating systems help everybody in to acquiring feedback and doing sound determinations.

Internal Exchange: Internal units of the Lego dainty themselves as internal clients and providers as a terminal users in a supply concatenation or client in computation catching with and larning from other sections. All the sections of Lego expression for to please their internal clients and come to understandings on quality, cost & A ; bringing at the same clip as staying aware of the demands of the company as a whole.

Enabling Structure: In Lego functions and callings are flexibly controlled to let for tests, growing and fluctuation.

Boundary Workers: Environmental scrutinizing is carried out by all those who have contact with clients and all stakeholders. There are organisational systems and events for having, piecing & A ; sharing information from exterior of the company. Meetings ever include reappraisals of what ‘s traveling on in the concern environment.

Self Development Opportunities for All: Resources and installations for self-development are made available to all members. Persons are encouraged to take answerability for their ain acquisition and development. Opportunities, stuffs & A ; resources are voluntarily accessible for ” unfastened entree ” acquisition ; people possess their ain self-development budgets & A ; take what preparation and development they require.

The LEGO Group continues to divide up bing norms and alter them into creativeness and imaginativeness on a kid ‘s ain footings. That is the ground I portrait the LEGO trade name as the universe ‘s strongest trade name among households. May non be the biggest, but the best. I envision the LEGO name known by all as a trade name acquaintance lending as an incorporate creative activity of drama designed to animate kids ‘s creativeness, imaginativeness and acquisition.

Chapter 4 Inventions

Five old ages before, the LEGO Group was in forepart of bankruptcy. a batch of of its invention difficult work subject Parkss, an action figure called Galidor supported by a telecasting show and it were non doing money or had failed complete. Today overall plaything market diminutions, LEGO ‘s grosss and net incomes are increasing by 19 % and 30 % severally in 2008.

LEGO ‘s turnaround is a new construction for strategically organizing invention activities, led by a cross-functional squad: the managerial Innovation Governance Group. LEGO directors take a broad position of invention which comprises new merchandises, pricing programs ; community edifice, concern procedures, and channels to market, all of can be powerful concern drivers. The company allocates undertakings for invention in all countries across four groups and expects different grades of innovativeness from each of them.

New Product invention

Product/service invention is the consequence of carry out an advanced manner to work out the consumer ‘s job that benefits both the client and the company. In other words advancement of new merchandises, alterations in design of well-known merchandises, or usage of new stuffs or constituents in production of established merchandises. ( Kuczmanski, 1988 ) .

Merchandise Invention

New Product types


New to the universe

Degree of engineering newness

New to the company

and local market

Line extension/ Flanker

Revision of betterment


& A ;


Cost decrease and repositioning



Degree of newness to the market


The key to accomplishments are harmonisation and ordinance. Following factors are of import to see while make up one’s minding new merchandise ( Leonard & A ; Sylvia, 1998 ) : –

EngineersA have to conceive of and contrive the merchandise, utilizing client input provides viaA gross revenues work forces, so

Marketing expertsA must mensurate the merchandise ‘s possible and aid in determining its exact characteristics.

Fiscal personsA have to analyse the cost of marketing it and decideA a competitory monetary value.

Manufacturing expertsA have to make up one’s mind how to do the merchandise in a big volume.

LawyersA have to mensurate how it can be protected from rivals.

Lego Concept Lab is responsible for the development of new merchandises, located in its ain edifice, they have high degree of invention with messaging, offering and platforms.

Pricing program

LEGOs by the lb by and large sell for around $ 6. Generic LEGO Minifigs sell for approximately $ 1 each.A A little more with accessories.A Minifigs From Theme: Western, Space & A ; Pirate $ 2- $ 3, Castle $ 2- $ 10, Star Wars $ 4- $ 75. Used sets in the undermentioned subjects sell for approximately 70 % -90 % of the Original Retail Price. ( Please observe there are some exclusions ) A Newer Castle Themes, Rock Raiders, Adventurers, Western, Old Pirate Themes, Space.A Older Castle sets tend to sell for 120 % -200 % ! A ( You can happen the Original Retail Price ( ORP ) A at )

New sets from the subjects listed supra sell for approximately 110 % -200 % . ( They are listed in order of lowest to highest monetary value compared to ORP. ) A Brand New Older Castle sets sell for aroundA 200 % -500 % . Star Wars Sets ( before 2007 ) A sell for approximately 90 % -130 % in used status or 150 % -250 % in new. Star Wars Sets ( 2007 and after ) A sell for approximately 80 % -120 % in used status or 90 % -150 % in new. All other set subjects sell for about 30 % -60 % in used status or 70 % -100 % in new.


It is a key to hold close contact with its fans and consumers throughout the universe the Lego Group. For this, the Group holds in a batch of enterprises to beef up bind between Lego partisan and the Group. is the official web site of the Lego Group. The purpose of is to do a practical Lego existence in which users can bask one of the most powerful Lego experiences. is more than merely an online store. It is a topographic point where kids, parents and Lego fans of all ages can play and larn about Lego Group values and thoughts through games, narratives, activities and experiences.

Channelss to market

Organization utilised different channels of market to sell their merchandise or service. Excess market channels may perchance be usage to introduce the selling and merchandising procedure ( Businesslink, 2009 ) .

Direct Selling: Position a direct gross revenues operation so that the consumers do n’t necessitate to travel through a 3rd party, such as a retail merchant or jobber. Lego sells their merchandises at their subject Parkss.

Using jobbers or distributers: by utilizing it you can broaden your base. This will mean you are efficaciously ‘piggybacking ‘ on their client bases. Lego besides use jobbers and distributer to sell their merchandises because of its well known trade name and high demand.

Agents: ToA addition concern into other geographical countries at smallest hazard, think about naming an agent. This can supply representation in countries that would otherwise be hard to make. However, you will hold to pass clip pull offing the relationship.

Online and e-commerce. To interrupt down geographical barriers e-commerce can assist you out. Lego has online shop and sells their merchandises.

Chapter 5 Lego as a Service Driven Organization

A service-driven organisation means that organisation which gives a better service harmonizing to the consumer demands and perceptual experiences. This ability is instituted merely when there is good client cognition and good client service is available. Listening personally to client demands and responding with solutions that meet these demands more successfully than any other company ( Donovan, P. & A ; Samler, T. , 1994 ) . To run into this challenge, a company requires holding the adaptable concern civilization and flexible proficient substructure to react to alter ( Johnston, K. , 1993 ) .

Gulati and Oldroyd ( 2005 ) says that companies should look for the client focal point: ‘It ‘s a acquisition journey one that fold over four phases, necessitating people and concern units to organize in increasingly more sophisticated ways ‘ . The procedure starts with the formation of a companywide depot incorporating each interaction a client has with the company, planned non by merchandise, purchase or location but by client. Lego realized the demand of the hr is the corporate coordination as each group contributes its information to the informations pool independently from the others and so taps into it as needed.

Lego is a decidedly service driven organisation because the company has made a separate group Community, Education and Direct ( CED ) where they innovate new ways to assist the community and assist the company to hike the profitableness. Lego produces plaything which help the kids to learn which a great service to the community. This scheme of associating community in merchandise thoughts has proven successful for Lego turnaround. The degree of invention varies from low to high. They have to interact with client, gross revenues channel and concern theoretical account. The chief focal point of the LEGO is clients and their demand which makes it a service-driven organisation and consequences in deriving competitory advantage in the market.

Chapter 6 Decision

In this high competition epoch information is saturated in the environment. It is indispensable to seek to stay dynamic, competitory, and to go on to look for ways to better the organisation. As David Garvin of Harvard University writes, “ uninterrupted betterment requires a committedness to larning ” ( Garvin 1994,19 ) .

Lego entered in to the service industry by supplying a platform for competition in construction design, online. They besides entered into the package support market to force its service sector. They besides established the kids amusement topographic points called LEGOLAND, like Disney. Their innovation is merely a mixture of both their ware and their service they provide with it. They believe as their mission statement, merely the best is good plenty, and tried at that place best to accomplish expertness is all Fieldss they operates in. They had wholly satisfied their corporate societal duty by giving kids an chance to larn while they play. It enhances their capacity of thought, bring forthing thoughts and escalates their cognition, as kids are the hereafter of the state.

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The Creator Of The Lego Brick Business. (2016, Nov 15). Retrieved from