It started by piggybacking its deliveries on milk trucks, and was almost wiped out by a fire. Now it has 186 stores in 31 countries and has made its reclusive founder, Ingvar Kamprad, the world's richest man - while producing the beds on which 10% of Europeans were conceived. What is the secret of Ikea's success? And what exactly is a Mållen clip for? Oliver Burkeman travels to the heart of Kamprad's austere empire to find out

Flatpack furniture was invented by accident. It happened in Älmhult, a remote and snowbound farming town in the province of Småland in southern Sweden, in 1956, and the man who deserves the credit, or the blame, is Gillis Lundgren, a young draughtsman who had recently been hired by a local furniture dealer. Lundgren's subsequent achievements in life might seem more impressive - he went on to establish the design team that created a bookshelf named Billy, and a sofa called Klippan - but that day, he was standing beside a car with a colleague, peering into the boot, and realising that the bulky wooden table he held in his hands was never going to fit. At which point he uttered the 12 words that would come to transform a culture: "Oh God, then, let's pull off the legs and put them underneath."

Taking off the legs didn't only mean that the table would fit in the car. Flatpack, elevated to the status of an all-encompassing philosophy, began to work miracles. It eliminated the cost of shipping vast quantities of air whenever a product was sent from factory to shopfloor. Almost surreptitiously, it offloaded an expensive and time-consuming part of being a furniture salesman - actually putting the stuff together - on to the customer. It meant making home furnishing so cheap that the furniture dealer for whom Lundgren worked, a local farmer's son named Ingvar Kamprad, would arguably become the richest man in the world, relieving people in 31 countries of about £7.6bn each year.

Flatpack meant making things so cheap, in fact, that furniture, instead of accumulating emotional weight as it was passed down the generations, would come to seem transient and disposable - and that one recent soggy Saturday, in a seethingly crowded branch of Ikea at Brent Park, north London, a young couple would gaze at a Lack sidetable, and then, with fond exasperation, at each other, and have the following conversation:

"But it's only £8."

"But we don't need it."

"But it's only £8!"

"But we don't ... OK. Whatever. Whatever."

Cradle of the revolution



In springtime, the main road into Älmhult slices through snow-covered fields bathed in cleansing sunshine, past woodpiles arranged with characteristically Swedish precision. The town itself, according to an enthusiastic leaflet produced by the local council, offers "jazz, hunting and jitterbug activities". An odd place, all in all, for a revolution in domestic design - and odder still that Ikea's global empire is still run from an anonymous complex of buildings on the edge of town, down by the railway track, to which the Guardian was granted rare access. ("You have to stay grounded," Ikea's chief executive, Anders Dahlvig, says, explaining the decision not to move away. "You need your history.")

From this modest background, for more than 60 years, Ikea has gradually locked Europe, north America, Australia, and now Russia and China in its insistent embrace. Beginning with a single store in Älmhult, the company now operates 186 outlets, employing 76,000 employees - though that word is uniformly rejected within Ikea in favour of the term "co-workers". It is frequently observed that, for a broad demographic swathe of Britain, Ikea has designed our lives; it is almost as frequently noted that its customer service sucks, that the traffic jams outside its stores are intolerable, and its assembly instructions indecipherable. We love it and hate it, rely on it and satirise it, often simultaneously - as if it were not a shop at all, really, but something far more emotively substantial: a football team, or the Church of England, or the government.

Attempting to quantify Ikea's spread across the planet is an exercise that swiftly induces dizziness. Last year, 310 million people visited Ikea worldwide. On some Sundays in Britain, according to one estimate, almost twice as many people visit a branch as attend church; it has been calculated that 10% of Europeans currently alive were conceived in one of Ikea's beds. By the end of August, the company will have opened new stores, this year alone, in Amsterdam and Lisbon, in Moscow (the city's third Ikea) and in Kazan, the capital of the former Soviet republic of Tatarstan; in Seville, in Mannheim, in the Swedish city of Gothenburg, and in Naples; in Bloomington, Minneapolis; in Philadelphia, and in upstate New York. (The second Chinese Ikea, in Shanghai, opened last year; 80,000 people visited on the first day.) This brings the proportion of the globe currently covered in Ikea outlets to 3,979,600 square metres; the branch at Kungens Kurva in Stockholm, the world's biggest, occupies 55,200 square metres, making it about as big as eight Premiership football pitches. These figures refer only to retail space, and so do not include the 10,000,000 cubic metres of warehouse that the company owns in places such as Shah Alam in Malaysia, the Maryland town of Perryville, and Peterborough.

The gospel according to Ingvar



Ikea has approached its world domination project with a missionary zeal - and, as far as it is possible to tell, it takes the missionary part literally. In 1976, Kamprad crystallised his thinking in a hyperbolic tract entitled The Testament of a Furniture Dealer, setting out Ikea's "sacred concept", and waxing evangelical on the necessity of salvation. It was, he wrote, "our duty to expand ... Those who cannot or will not join us are to be pitied ... What we want to do, we can do and will do, together. A glorious future!"

The creepy sense that Ikea is something more than just an extremely successful capitalist enterprise - that to work for it is to work for some kind of cult, albeit a cult that worships untreated pine and Allen keys - doesn't take long to make itself felt in Älmhult. "When I came to Ikea, I felt like now I am a complete person," says Peter Keerberg, head of the workshop that produces the Ikea catalogue, his eyes shining. I've arrived just after 9am, in the middle of the fika, the precisely scheduled, twice-daily communal coffee break ubiquitous in Swedish workplaces. Many of the staff have been at work for two hours already. Keerberg cradles his coffee mug in both hands and surveys his stylishly dressed employees paternally. "We have an ambition to make a better life for the many people," he says, giving the strong impression that he really, really means it, but also that this is not necessarily a cause for comfort.

More than 130 million copies of the Ikea catalogue were printed and distributed last year, which is rather more than the Bible. It is the company's chief propaganda weapon, holding out the intoxicating promise that your dowdy home can be transformed into a paradise of Swedish orderliness merely by the addition of an Ingo table here, an Oddvar stool there, and maybe a Klackbo easy-chair over by the hearth, just next to the two cute Scandinavian kids in snowboots playing a board game.

But it is a promise that can never be fully realised. You discover why fairly quickly once you get inside the catalogue studios in Älmhult, a massive space resembling a movie set where around 40 technicians are busy lowering fake pieces of ceiling and wall into place to create rooms for photo-shoots, painting backdrops of snow-covered hills on pieces of muslin to hang behind fake windows. Karin Lundberg, a producer on the catalogue, prowls the studios checking up on the set designers. "The kitchen must be full of joy!" she declares at one point, though she isn't smiling.

This is when it dawns: of course a piece of Ikea furniture is going to look great when the entire room around it has been constructed solely with the aim of making it look great. Just next to the studios, there are whole rooms filled with props to enhance this effect: thousands of entirely green books, entirely red books and entirely blue books - so that even the bookshelves match perfectly with the rugs and the covers of the sofa-beds.

Morality and meatballs



Like at least one other major world religion, Ikea began in a shed. It was 2 square metres, of the kind that might have been used for storing milk churns, and the young Kamprad commandeered it as a base for his nascent mail-order business, delivering matches and cigarette lighters and nylon stockings to the residents of Småland. To save money, he piggybacked his packages on the trucks that delivered the milk. Even today, Småland is a rocky, windswept, hardscrabble place, breeding in its inhabitants an austerity and make-do attitude that Ikea has simply made global: during the 1990s, the company is said to have marketed one line of picture-frames made entirely out of rubber offcuts from a Volvo factory.

A second preoccupation - with the moral value of hard work - seems to have preyed on Kamprad from his youth. This obsession features prominently in the company's founding myth, a bizarre story that many Älmhult employees can recite by heart, and which was retold in a recent issue of the company's internal newsletter, Readme. The setting is Kamprad's father's farm, called Elmtaryd, in the parish of Agunnaryd - the "E" and the "A" that follow Kamprad's own initials in the name "Ikea" - and the tone, typically for the firm's corporate communications, is that of a children's moral fable.

"As a youngster," it begins, "Ingvar Kamprad was always reluctant to drag himself out of bed in the morning to milk the cows on his father's farm in the Swedish province of Småland. 'You sleepy head! You'll never make anything of yourself!' his father would say. Then, one birthday, Ingvar got an alarm clock. 'Now, by jiminy, I'm going to start a new life,' he determined, setting the alarm for twenty to six and removing the 'off' button."

By the time Kamprad wrote The Testament of a Furniture Dealer, his vision had grown more precise, more evangelical, and, you might argue, a fair bit more anally retentive. "You can do so much in 10 minutes' time," he declared. "10 minutes, once gone, are gone for good ... Divide your life into 10-minute units, and sacrifice as few of them as possible in meaningless activity." (This self-improving ethos pervades the company. In the middle of one interview, in an open-plan office, everyone suddenly gathered in the middle of the room and started stretching. My interviewee glanced at her watch. "It is 3.30pm," she announced. "There will now be a short gymnastics.")

Over noodles at Ikea's staff restaurant, I ask one designer whether everyone at the company is really as energetic and hardworking as they seem. Isn't anyone lazy? "Of course there are lazy people," she says. "There are lazy people everywhere. But they're not..." She pauses, as if seeking the correct word in English. In fact, she's wondering whether what she is about to say will cause offence. "They're not Swedish," she says at last.

Kamprad, now 78, has long since ceded day-to-day control of the firm to others, but his obsessive personality, and his zealous frugality, have seeped into every corner of Ikea. Famously, even senior executives travel around Europe on budget airlines such as Easyjet, and always stay, they insist, in cut-price hotels. They recall with approval the rumour that Kamprad himself never takes a fizzy drink from a hotel minibar without also visiting a nearby supermarket, so as to replace it as cheaply as possible.

"Money that is spent unneeded is a disease," says Göran Nilsson, until recently Ikea's UK managing director, when I meet him at the company's pristine new distribution centre in Peterborough. "If I went to a hotel, and they made me pay for something that I would never make use of, and then I had to pay the bill ... Well, then I would have a mental conflict."

Ikea's moral crusade extends uncompromisingly to the customer. Whether you like it or not, it intends to teach you the value of good, honest, simple hard work. Self-assembly, viewed from this perspective, is more than a cost-cutting measure: it's a tool of evangelism, designed to make you sweat for your own edification. (And if all the pieces aren't in the box when you get it home, a cynic might add, well, then, the challenge is simply the greater.) "Why should I clear my own table?" a sign in Ikea's British restaurants used to ask, in the tones of a surly child. The answer given underneath was about keeping costs down, but it was hard not to sense something more insistent and moralistic at work. "Ikea is somewhere that you can't go with both hands in your pockets," Nilsson says. "You have to be active."

The Ikea path to self-fulfilment is not, really, a matter of choice. "They have subtle techniques for encouraging compliance," argues Joe Kerr, head of the department of critical and historical studies at the Royal College of Art. "And in following them you become evangelists for Ikea. If you look at [police] interrogation techniques, for example, you see that one of the ways you break somebody's will is to get them to speak in your language. Once you've gone to a shop and asked for an Egg McMuffin, or a skinny grande latte, or a piece of Ikea furniture with a ludicrous name, you're putty in their hands." Kerr is one of a strident battalion of Ikea critics for whom our compliance with the company's aesthetic is a uniformly bad thing. "People say, well, surely they've raised the standard of design in dull British homes," he says. "But I think they've reduced acceptable standards at the other end. People who might have been slightly more ambitious or critical about their furniture end up accepting something that looks half-modern and OK ... It may be better than the worst, but it's worse than the best."

Only with extreme difficulty can you pick your own route around an Ikea store, breaking free of the glacial flow of customers to take a limited number of predetermined shortcuts between departments. In other shops, you can head directly for what you want; at Ikea, you must see it all. This principle is fiercely enforced, as has become clear during the battle the company has fought for years now with John Prescott, the deputy prime minister. Ikea wants to build more and more stores on massive out-of-town sites, but when Prescott suggested that they split up their operations - opening smaller high-street shops selling only lighting, for example, or only kitchens - executives practically yowled their objections. Did the deputy PM not realise that Ikea had an inviolable sacred concept? Splitting up the stores "will never, ever happen!" Nilsson said. "Never ever. Our vision is a better everyday life for the many people. And it is the whole life. It cannot be separated."

There was one final, somewhat incongruous plank to Kamprad's philosophy: an insistence that it was fine to make errors. "Only those who are asleep make no mistakes," Kamprad wrote in 1976. "Making mistakes is the privilege of the active ... It is always the mediocre people who are negative, who spend their time proving that they were not wrong." On occasion, this approach can be charming: Kamprad has been known to write letters to every staff member individually, apologising for missteps - a missed target here, a wrongly modified product line there. Rivals have smirked. But much later, in the 1990s, when news of Kamprad's youthful political affiliations began to leak to the Swedish press, the argument that making mistakes was acceptable would turn out to be all that stood between Ikea and disaster.

A magazine clip and the art of creating need



"There is a system," Maria Vinka, one of Ikea's 11 in-house product designers, is saying, wedged into an easy chair in Älmhult's own branch of Ikea, as she attempts to explain the fiendishly complex logic by which the company names its products. "For bathrooms, it's Norwegian lakes. Kitchens are boys, and bedrooms are girls. For beds, it's Swedish cities. There's a lady who sits there and comes up with new names, making sure there isn't a name that means something really ugly in another language. But it doesn't always work. We gave a bed a name that means 'good lay' in German."

Vinka, a pink-lipsticked 31-year-old, is a relative newcomer to Älmhult - she hasn't yet achieved the celebrity status that attaches within Sweden to some of Ikea's veteran designers - and she still can't get over the fact that her own designs keep cropping up on television shows. "We have a programme, Fame Factory - it's like Popstars - and they have only Ikea products. It's like, 'There's one from Bathrooms!' That's so cool!" She gestures towards a display rack carrying a range of rubber bathroom products she has designed - a soapdish, a toothbrush holder, and an inexplicable metal clip attached to a small orange rubber ring, which has no immediately obvious purpose. "This range is called Mållen," she says. "I think it must be a lake in Norway."

The Mållen clip doesn't look like much, and yet it represents, in microcosm, a vital Ikea strategy: the way the company decides what you need before you've even realised you might need it. The clip, Vinka explains, is for hanging up magazines in your bathroom: you attach a magazine to the metal clip, then hang the rubber ring over a towel hook. "This is one of the articles that is selling most in the Mållen range today," she says. "You don't want your magazines on the floor, do you? They'd get dirty and wet."

It had never occurred to you, presumably, that you might want to hang up magazines in your bathroom. But Ikea had already decided that you would. And the brilliant but scary part is this: once you've seen a row of magazines hanging up in one of Ikea's showroom bathrooms, each neatly suspended at 45 degrees from a Mållen clip, it takes a will of steel not to find the magazines in your own bathroom, now you come to think of it, almost offensively disorganised. And so you think about purchasing the Mållen clip. At which point another Ikea sales tactic kicks in: the clips only cost 90p for three - so cheap that it's hardly worth not buying them, just in case, especially if you've travelled a long way to get to the store. (In internal documents, Ikea calls such products "hot dogs", because they cost the same as or less than the frankfurters available after the checkout.)

You did not, in other words, come into the store with a need that you wanted to satisfy: you came in, and then you got both your need and the means of satisfying it handed to you simultaneously. You came looking for a sofa, say, but you came out with a sofa and a trolleyfull of impulse buys. Theodor Adorno, the eminent German social theorist, called this "retroactive need" - and it was, he argued, a key means by which capitalism perpetuated itself, while shoring up the illusion that what was being offered was individualised choice. He despised it: he thought it was a tool of subjugation and exploitation. Mind you, the magazines in his bathroom were probably really messy.

Because it so often decides what you're going to need in advance, Ikea does much less market research than many companies, and some strange things have happened as a result. Shortly after the company opened its first north American outlet, in Vancouver in 1976, employees noticed that an inexplicably large number of vases were being sold - so many that they could barely keep up the supply. Eventually they deigned to ask their customers why; it turned out that they found Ikea's European-style glasses too small to drink from.

In praise of problems



The strangest thing about Ikea's eventual dominance of the globe is that things started going disastrously wrong almost from the start. In 1965, the company opened its first Stockholm shop, a 32,000 square metre space barely smaller than any Ikea outlet today, and ludicrously huge by the standards of the time. To mark the occasion, Kamprad erected two Ikea signs on the facade, one in neon, and one that swung in the breeze. Five years later, a gust of wind caught the swinging sign, sending it smashing into the neon light; within hours, the entire store had burned down, taking with it much of Ikea's potential turnover for the year.

But the blaze only compounded a problem that had been dogging Kamprad from the beginning, which was that Sweden's furniture dealers, incensed at the way he was undercutting their prices, had started imposing boycotts on suppliers who dared to do business with him. Ikea responded by developing a covert network to obtain wood and fabric. "The suppliers would deliver in the nighttime so that nobody would recognise that their trucks had been here," says Lars Göran Petersson, an avuncular, woolly-jumpered 34-year veteran of Ikea, and a close friend of Kamprad's, as we tour the company's private museum, an underground shrine to the founder's achievements.

Eventually, the secret supply system proved insufficient, so Kamprad travelled to Poland, buying up wood, as well as developing a taste for the vodka that would turn him into an alcoholic. (The condition, he has let it be known, is under control, rather than eliminated.) "We had the problems in Sweden, so we went to Poland," Petersson says. "This," he adds, in worshipful tones, "is how Ingvar transformed problems into possibility. I sometimes have to ask myself, what if Ikea hadn't had the problems in Sweden? Even today, Ingvar is really worried when we have too few problems."

Stung by his hostile reception in Sweden, and obsessively aware of the risks his new company faced, Kamprad set about creating a business structure of arcane complexity and secrecy. Today, therefore, The Ikea Group is ultimately owned by the Stichting Ingka Foundation, a charitable trust based in the Netherlands. A separate company, Inter Ikea Systems, owns Ikea's intellectual property - its concept, its trademark, its product designs. In a labyrinthine arrangement, Inter Ikea Systems then makes franchise deals with The Ikea Group, allowing it to manufacture and sell products. "The big question is who owns Inter Ikea Systems," says Stellan Björk, a Swedish journalist, who in 1998 wrote a book, never translated into English, detailing the extraordinary opacity of the company's organisation and the extent of its tax avoidance. The answer to Björk's question seems to be that no one knows. "It seems to be owned by various foundations and offshore trusts," Björk says - some based in the Caribbean - "through which the family controls it." The motivation behind all this mystery, the company insists, "was to prevent Ikea being split up after his [Kamprad's] death [and] to ensure the long term survival of Ikea and its co-workers."

When Björk's book was published, he recalls, his publisher sent Ikea a press release that found its way to a meeting of the company's senior executives, which was taking place in London. "I thought it would be quite controversial, and they would be annoyed," Björk says. "But what I heard was that it ended up with Kamprad, and he is supposed to have said: 'Oh! Do we pay that much tax? We must change it!'" ("We have not heard the story," the company responds, adding that, "wanting to lower the tax that Ikea pays underlines Ingvar's commitment to continually aiming to lower prices so the customer benefits.")

There seems little chance of more transparency any time soon. Kamprad has made the continuation of his ethos almost inevitable by placing his three sons, Peter, Jonas, and Mathias, in key positions around the empire, ready for the succession. Ikea executives fiercely denied reports that this was a King Lear exercise, testing each son's readiness to inherit his father's crown.

The secrecy surrounding the firm meant it was impossible to substantiate claims made last month that Kamprad's wealth has exceeded Bill Gates', making him the richest person in the world, with a reported personal fortune of £32bn. Kamprad isn't saying: he refuses requests for interviews, and now lives as a semi-recluse, with his second wife Mar garetha, in Lausanne, Switzerland, again, apparently, for tax purposes. ("Put it this way," one Ikea employee told me, "it's not because he likes the Alps.") On the subject of Kamprad's wealth, Anders Dahlvig, Ikea's chief executive, says curtly: "We don't encourage this kind of speculation. The question is how much money would Ingvar Kamprad have if he sold the company. But it is the trust that owns the company. So he's not going to."