OTICON; The Disorganized Organization. Learning Objectives. Understand how real life organizations develop and implement strategy Describe how organizations can reinvent themselves Discuss the traps that organizations can fall into when seeking to bring about strategic change. Background.
Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.
Oticon, Danish company founded in 1904, first hearing instrument company in the world
In 1970-1980 world’s number one manufacturer of ‘behind the ear’ hearing aids.
In 1987, Oticon lost half of its equity.
The basic problem :
Began to change with the appointment of Lars Kolind as President in 1988.
He change situation with pared the company down, cut staff and increased efficiency and reduce the price of hearing aid by 20%.
In 1990, Oticon made a profit of some 16 million Pound.
He had been searching for a sustainable competitive advantage for Oticon : “I looked at technology, audiology”
Kolind realized that the industry totally technology-focused and the main trust was to make hearing aids smaller.
He believed Oticon was not in the hearing aid business per se; the were in the business of ‘making people smile’
New mission statement :
To help people with hearing difficulties to live life as they wish, with the hearing they have.
To achieve this statement requires a knowledge of people’s lifestyle and how it affects them.
They had to build a learning organization.
Kolind began by redefining himself as CEO, instead of seeing himself as the captain, he saw himself as the naval architect who designs it.
Kolind new disorganized organization would be founded on 4 principles:
Therefore, Oticon got rid of departments, other managerial and supervisory positions.
They need to have a clear direction which everyone understood and believed in. This achieve by discussed and debated the new strategy for the company.
The were summed up at one sentences :
“we build this company on the assumption that we only employ adults, and everything we do will rest on that assumption”
Oticon success appears in 7 factors :