Revolution at Oticon : the spaghetti organization (1994)

Résumé du document

Oticon is a famous Danish manufacturer of high-quality hearing aids, which is based in Hellrup in Denmark. It is a niche company which was born in 1904. At that time hearing aids were not available in Denmark. Hans Demant decided to import hearing aids there as his wife was hard of hearing.
The Second World War, made it difficult to source, which is why the company began to produce its own material and commercialize it. In the 1960s and 1970s, Oticon expanded internationally, with subsidiaries in the Netherlands, the United States, Germany, Norway and Switzerland. Moreover it opened its own independent research center in Denmark. Thanks to this research center, Oticon keeps its competitive advantage by innovating constantly.1
Throughout the years, Oticon has also implemented organization change to remain competitive. Management change has involved managers as well as employees. Methods of work have changed. It was a new beginning for everyone, a chance to achieve new challenges.
Changes were made progressively until the ultimate organization was reached: the Spaghetti organization.
How were those changes implemented? In which directions has human resources development moved? Does everybody like this kind of organization?

The case study was written 15 years ago (in 1994), which is why some things are no longer valid.

Extraits

[...] Once installed in the new buildings he invited the press to witness the revolution at Oticon. Employees became the spokesmen of this new organization. Journalists were very enthusiastic and nobody regretted the former Oticon. The Spaghetti Organization Lars Kolind let people do what they want inside the company. By this way employees can create their own job. Nevertheless it is not completely anarchy. Some rules are fixed. A management committee made up the functional directors takes all the strategic decisions. [...]

[...] Revolution at Oticon : the spaghetti organization (1994) Table of content Introduction 2 I. Oticon's new organization 3 A. What is the new organization of Oticon? 3 Structure has progressively changed 3 Staff & work environment 4 Headquarters location and the third culture 4 B. Which aspects of the new organization do improve creativity? 5 Employees involvement for Oticon first changes 5 Results of the employees implementation 5 The Spaghetti Organization 5 How did Spaghetti organization improve employees' creativity? 6 II. [...]

[...] A new organization called “spaghetti organization” was born. What is it? This structure is project-oriented, people are multi-skilled. In fact people do their job, what they were hired for, but they also work on another project. This organization is compared to organization because it is completely “unhierarchical, chaotic, always changing, and with no organization diagram.”[3] People had to create their own job a new context, with their new relationships” declared Torben Groth. He added company changed from a management-driven to a project-driven organization”. [...]

[...] IV.To work or not to work for Oticon I think the Oticon organization have a lot of advantages but also some disadvantages. Letting people doing what they can be fruitful but it can also quickly become a disaster. Yes, I would like to work in this kind of companies Yes, I really would like to work in a company with the same organization than Oticon. The advantages of this organization I keep in mind are: -People are free to do what they want. [...]

[...] Communication was enhanced; employees felt they became a part of Oticon entity. This change had two positive consequences: staff felt more implicated into Oticon's strategy and future, and time-wasted did not exist anymore. Headquarters location and the third culture Lars Kolind required moving Oticon's headquarters. Formerly there were two locations of the headquarters. One was dedicated to marketing and production development, the other one was devoted to corporate management, administration and distribution. Unintentionally, this separation was created two very different cultures. [...]