Change management: Oticon

Résumé du document

This assignment is a case study of a small Danish company called Oticon and shows how changes in the organization environment and personnel completely revolutionized the company. I have chosen this company because we have studied it in a previous course in November (Human Resources with Professor Alice Peinado) and this case has attracted my attention. Throughout the 1970's Oticon was the top hearing aid manufacturer in the world. However, in the 1980's, with the advent of digital technology and the entry of top electronic companies such as Sony and Phillips into the market, Oticon was losing money. In the late 1980's the company appointed a new President who decided it was time for change. Instead of trying to compete by improving the technology of their product, the new President looked at other factors including their customers, for ideas on how to improve their products and services. He decided that the company would provide a specialist customer care program that would fine-tune the hearing aid to suit each individual and the environment in which they lived and worked.

Extraits

[...] The old Oticon was elitist. As an example, there were five classes of company cars depending on a person's managerial level. When Kolind joined the company, he was offered a royal-blue Jaguar XJ Sovereign with leather seats and mahogany-panels, which had been driven by the former CEO. He thanked them and said that his old Saab would be good enough. It did not take long before the standard tier of company cars had adjusted itself. It is clear that Kolind is keen to have as little distance as possible between the top and bottom of the firm. [...]

[...] Oticon was not conceived and then implemented. Oticon was not a one time change followed by business as usual. There was no final destination identified in advance and no chart to guide the passage. Oticon evolved and continues to do so. It is dynamic ! [...]

[...] Every single expenditure had to be approved by him personally. However, Kolind realized after a couple of years that all of the benefits of cost cutting had been realized. Only very marginal savings could be achieved from further conventional automation and cost reduction in production, and he turned his attention to a major restructuring of the head office in Denmark. The real issue was to transform Oticon from an industrial organization producing high quality standard hearing aids to a first rank service organization with a physical product. [...]

[...] IV/ Results obtained No formal, independent assessment has been carried out of the organizational transformation at Oticon. Accordingly, we can provide only impressions of the consequences of these changes along with an opinion of their overall affect. One aspect that was not expected has been the difficulty in classifying incoming documents in such a way that they can be accessed by someone else than the person who does the classification. Another unexpected occurrence has been the unwillingness of employees to sign up for new tasks beyond the ones they already have. [...]

[...] Small cafes are spread around to encourage meetings and direct contact. Decisions were not just done on special occasions but were an ongoing everyday event. The information system was built around a common industry standard graphical user interface. General applications include the normal office automation, technical applications include computer aided mechanical, electrical, acoustical software and IC design, simulation and proto-typing. Time management, financial management and quality management systems help integrate the work of individuals and project groups into a coherent whole. [...]