History of Lego
In 1932, Ole Kirk Kristiansen founded the LEGO Group. The name “LEGO” is inspired by two word “leg godt” which means “play well” in Danish.
Actually, since 1916, Ole Kirk Kristiansen has begun his business at his own carpentry workshop which manufactured furniture in Billund, Denmark. His workshop started producing small wooden toys in 1920s. In 1932, his son, Godtfred, started working in business with him at the age of 12. Godtfred worked hard and played an active role in his father’s company. He started creating models when he was 17 years old.
In 1947, the Lego Group bought a plastic injection molding machine and produced some plastic toys. Ole Kirk and Godtfred obtained samples of interlocking plastic bricks produced by the company Kiddicraft. Two years later, Lego began making similar bricks, then developed them, in order to make these brick be able to stick together, but not so tightly that they could not be pulled apart. These produce has been called “Lego Mursten”, or "Lego Bricks” since 1953.
Godtfred Kirk Christiansen was appointed Junior Vice President at the age of 30, when there was around 50 employees worked for the firm at that time. In 1954, Godtfred became the junior managing director of Lego, and he got the idea for a new play platform called “Lego System” including many sets, vehicles and supplementary elements.
In 1958, Lego developed and patented a design that improves the locking ability and versatility of the bricks. Ole Kirk Christiansen passed away that same year, and his son became head of the company.
In 1960, a warehouse fire destroyed almost wooden toys of Lego. Godtfred decided to lead the company to focus on manufacturing plastic toys and removed the wooden line. At that time, more than 450 people worked for the Lego Group.
The 1960s and 1970s years witnessed a dramatic grown of Lego. During this time, the companies continued developing their materials (CA, ABS plastic…), creating new product lines (train system, Duplo system…) and even building several Legoland Parks in some countries around the world. The companies opened branches in many nations.
However, the giant faced troubles at the end of the 20th century, the appearance of computer games made the business of the company become harder. The company nearly bankrupted in the beginning of 2000s.
In 2004, Kjeld, the grandchild of Lego’s founder, appointed Jorgen Vig Knudstorp to become the first CEO that is not belong to the Kristiansen family to run the company. After 2 years, under the management of Jorgen, the company returned profit and continued growing. Jorgen has been playing the role of CEO of the Lego Group until now. Today, Lego is a global company and has more than 9,000 employees around the world.
Strategic of grouping:
Figure 1: Functional structure of the Lego Group
Source: “The LEGO Group - A short presentation 2011”
As can be seen from the Figure 1, the structure of the Lego Group is hierarchical organization...