Analyzing Management Practices Of Oticon

Concept and Theories of Change Management

Discuss about the Analyzing Management Practices of Oticon.

The following report is going to analyze effective management plans of Oticon. Being one of the most impactful companies on the business of hearing aid manufacturing Oticon has developed its business to the new genre connecting to the internet thus extending the process of facility to the consumers.  The Danish company was founded in the year 1904 and it has now become a giant in its own business sector.  Hans Demant the founder of Oticon envisioned a certain change in the mindset of venturing of business.   Dreaming of bringing the change in to the management system Oticon has been capturing the wide range of the market in the whole world. The global market of the company has turned in to an utter success. In order to analyze the management policies of the company one needs to develop a succinct concept pertaining to the basic understanding of te change management system.

The paper is going to succinctly elucidate the effective change management system with the effective chances of the company and its management strategy. After the 90s, Oticon has changed its mode of business looking in to the market structure. After the financial crisis of the company in the year 1990, Oticon has brought in to account the process of change and innovation. The case study follows a certain account pertaining to the appointment of the president Lars Kolind in the year 1980 that has led to a certain change in terms of its business management. Lewis’ Change Management Theory has been taken in to certain consideration with the effective changes in terms of creating a scope of future business growth. According to Lewin, change is certainly a common thread running through businesses.  It does not vary on the basis of size, industry and age of the business. Lewin’s change management model has three basic stages

The first stage, the unfreezing one engages preparing the organization for the acceptance of the change. The organization addressed for the change needs to accept the necessity of it thus giving way to the greater understanding of the issues. So far the concept is concerned there is a clear understanding of how the change is addressed by the leaders and how the concept o change is encapsulated to the organizational members. 

The second stage that is the change resolves the perplexities of the customers and the people working in an organization.  New directions are demonstrated to both the external and internal stakeholders of the company so as to specify the process and what change is required to bring n to operation. It includes transition from personal to collective level. As a matter of fact this has to be taken in to certain consideration with the effective chances with a positive approach.

Oticon during the 90s

The third stage refers to refreezing. It refers to the basic changes and the execution of such change that has already been planned. As a matter of fact, this change refers to the outward movement of the organization.  It ensures the effectiveness of the change that has already been planned.   With proper incorporation of the organizational figures this can be taken in to certain consideration with the help of the basic understanding of the entire case pertaining to the basic understanding of the entire case that has to be taken in to certain consideration with the effective changes. In this stage the organizational leader needs to ensure that the change is still prevalent and the relevance al seeds to be taken in to consideration. As a matter of fact, it leads to the greater understanding with the effective case pertaining to the change management.

Organizational Change Management refers to the certain changes that need to be taken in to account for the development and growth of an organization. According to Tripon & Dudu, it is quite complex and difficult to define organizational change management. However, the scholars have afforded to define it in their own ways. According to them, this has been a easier struggle with the effective chances pertaining to the effective cost and operations management system. The change management system is associated with the operational changes. However, comparison of the operational change to the organizational change is often placed with a holistic idea of collectivism, change of in the working competency of the individuals. As a matter of fact, change in the mode of the individuals and change in the level of competency of the working staff of an organization has the positive attitude and approach toward the basic understanding of the cases pertaining to the entire case that has to be taken in to certain consideration with the effective leadership and coordinating facilities.  Since organizational change is nothing but the state o shift or transition between the current state and a newer state having the vision of organizational growth thus ensuring profit maximization the shift needs to be a positive one. The dynamic concept of OCM was first addressed by the post modern industrialists during the 80s.

After having been appointed as the president of Oticon, the first objective that was driven to Lars Kolind was to internationalize the business. This case study provided pertains to the leadership quality of Kolind. Kolind as an organizational leader focused on the human resource management to bring the change in action.  The prime objective of the president was to define job roles to the each and every individual associated with the organization. As a matter of fact, it leads to the greater understanding of Kolind who broadened the scope of organizational culture.  During the 90s Otcon faced the greatest o the wrath of financial crisis.   Many of the business scholars say that the motif of executing the change led to a certain fall of sales and market convincement. 1990 is considered to be the period of transition of Oticon. During the transition period the grip from the market was loosened thus entailing the downward movement of profit graph. Kolind focused on the structural change and emphasized on the change in the mode of studying the market. His motif was not captivated within the concept of making only money through mere manufacturing process. Study of market segmentation was taken in to consideration as one of the strongest weapons of creating the effective market change.

Implementing the Change in the System

The process of revival has been quite interesting in terms of making it effective with the changes made during the years.  The process of revival was burdened upon the basic changes with the help of the entire case pertaining to the understanding of the real sense. As a matter of fact, perception of bringing technology in to account has been taken in to certain usage with the help of the entire case pertaining to the basic changes with the effective chances. Persistency in the model of the change management is the basic model in terms of making it understandable so as to find out how new chances are interpreted. Acceptance of technology with the effective changes has been taken in to consideration. The then president of Oticon had realized that the business of the company was entirely associated with technological improvement. As a matter of fact, this leads to the greater understanding of the effective chances to accept the implementation of technological usages. However, the time period of the 80s did not find effective level of acceptance in terms of technological usages.

In Oticon, problems mounted to a level where it was apparent that fundamental steps had to be taken. The first of them was the selection of their new CEO, Lars Kolind, who was provided with full accountability for bringing in the changes within the organization. After a period of rationalization for two years along with lessening of costs, sales and administration cost were slashed by 20 per cent with the new CEO suggesting a broader ‘package’ of innovative and radical proposals. All these were bundled into a seven page memo, known as the “Think the Unthinkable” that was written by new CEO, disseminated to all the staffs in the 1990 March. Recruiting Kolind as the president of Oticon has been the key driver with the company developing in a growing market for attaining better results. Another key driver is the consistence of the apparition and strategy along with the way it has been positioned through the involvement of the entire workforce, explaining not only the alterations but also the justification (Williams, 2013).

Some of the changes that were suggested were:

Augmenting the competitiveness through proper utilization of resources related to human and technology in effective manner, thereby lessening the overhead costs that exceeded the real cost of production.

Substituting the structure of hierarchical job with project based organization with each of the employees being involved in number of cross-functional and cross-organizational projects at the same point of time.

The change process: Think the unthinkable

Discarding the conventional managerial jobs and featuring the managerial ability to the project groups or to the individual employees.

Assisting the physical mobility through creation of an open office space where each person would be having a cart or a trolley that can be moved around the office.

On the other hand, as per Albach et al., (2015), there were presence of certain opposed forces as after thorough investigation, the CEO realized that there was not much they could do better than to compete. Actual skills along with competencies were not adaptable to the new structure and therefore the culture required a change. Resistance to change was stated to be a limiting factor as they had to struggle in transforming the organization from a technology based one to a knowledge based.

Lars Kolind has been famous for his perception of ‘spaghetti organization’. His commencement of work with Oticon was greeted with the company being in deep trouble and needed some sort of miracle for survival. Oticon has been a conventional, slow moving and departmentalized company, where Lars knew radical changes was essential in steering the company back on track (Hayes, 2014). Lars was instrumental in centralizing the decision making process for radically cutting costs and making the company profitable again.

Even though the first few years of Lars’ approach was successful, he understood that his style of leadership would not take Oticon forward. He felt the time is appropriate for change in further growing the business of Oticon. The change that Lars brought in his style of leadership and within the company was a remarkable feat. The things that he did during the ‘cost-cutting phase’ was completely opposite of what he did during the ‘building phase’. During the second phase, he approved on the new style of leadership, a style that would be beneficial in stimulating innovation, creativity and proper initiative (Sutherland, 2013). He strived hard in stimulating the bottom up change within the company for renewing itself, positioning certain ground rules in places like removal of managerial positions along with formal job titles, employees becoming associates, associates continually being encouraged in learning fresh skills, with communication becoming the center of the new method. Lars believed in conversations rather than communicating through mails with offices being designed for the same.

Leadership can be defined as focusing on setting a track and improving on the strategies required for moving in that same direction through creation of a vision. Their much focus has been on supporting people, communicating the fresh direction and generating coalitions dedicated towards getting there.

Lars Kolind can be stated as a visionary leader making use of the transformational advancement in motivating his employees for delivering as per his vision (Matos Marques Simoes & Esposito, 2014).. He had the ability in making the best use of his personality for motivating his faction to forgo their self-interest in favor of Oticon. The managers also played down their role to a greater extent in delivering the vision of their leader. Simple procedures were being implemented for opening projects like the approval of one senior manager is enough along with the most impacted managers shifting from the hierarchical construction to a more project based organization (Goetsch & Davis, 2014). This obscured changes within their behavior for attracting the best possible staff in their team and retaining the same.

Oticon made the most conscious of decisions in treating their employees as certain responsible adults like the assumptions made in Theory Y. McGregor preserved that there exists two human nature views: one a negative outlook- Theory X; and another the positive view- theory Y. In case of Oticon, under a capaable leadership of Lars Kolind, it has always been the positive observation of human nature, like eager in increasing the responsibility level, staffs keen on sharing their views and using enough creativity to generate something unique. This can only be possible if the leader is stated to be a visionary one, making use of transformational advancement.

Oticon has been a company that witnesses enough success during the 70s and 80s before getting into trouble. It depicts the fact that organizational and technological changes are intertwined in nature, along with the importance of the clear strategic viewpoint while instigating a turnaround. It illustrates the fact that knowledge based organizations have the ability in revealing formerly unexploited human resources through the changing of the working circumstances and the managerial technique. The professionalization of the project managers has been illustrating the ways Oticon has been stressing the biggest possible distance to conventional concepts of management. There have been mix feelings among the employees of Oticon with many expressing that the conventional management issues still exists, of things like hierarchy does not exist, but is present in some way or the other.

`There are certain pros and cons to the spaghetti management style of organization arrangement at the time of developing of an individual’s career. The ‘unthinkable’ proved more realistic and thriving. The firm depicted that it could be successful financially, having an exciting and self-motivated organization at the same time. However, certain adjustments of the fundamental organizational design were being made. For example, the movable workstation idea was comprehended, retaining of the project groups, now supported by proficient project Management Company.

As it has been discussed in the aforementioned analysis the CEO has no doubt worked for the advancement of the technological interference in the business method. He has also focused on the improvement of production. This is how the basic change in the project management plan has to be taken in to certain consideration with the effectiveness of leadership quality. However, some setbacks have been detected while going through the case history.  The lacuna liesin the fact that the two phased method could have been devised separately so as to drive the organizational change in to effectiveness.  Since, sudden revamp could have brought down the single lined focus of the company in to multiple objective methods; it could have been taken in to consideration with the effective changes. On the other hand, the necessity of turnaround could have been focused much earlier that could have averted sudden risk of the company. This risk management plan was taken under certain consideration with the effective changes.

Conclusion:

It can thus be concluded that change management is indispensible for any organization that can ensure improvement and overall development of the company. Change management involves greater leadership quality. Kolind’s leadership quality has no doubt excelled the production level and marketing impact of the company. The transformative leadership quality lay within him has been effective in driving the organization to utter success.  He did not stick to one single phase of his leadership quality rather he has changed his perception about the era in which he was working. This is how it has been proactively impactful to the business management method that has affected the entire mode of marketing and sales category.

Reference:

Albach, H., Meffert, H., Pinkwart, A., & Reichwald, R. (Eds.). (2015). Management of permanent change. Springer Fachmedien Wiesbaden.

Goetsch, D. L., & Davis, S. B. (2014). Quality management for organizational excellence. Upper Saddle River, NJ: pearson.

Hayes, J. (2014). The theory and practice of change management. Palgrave Macmillan.

Hechanova, R. M., & Cementina-Olpoc, R. (2013). Transformational leadership, change management, and commitment to change: A comparison of academic and business organizations. The Asia-Pacific Education Researcher, 22(1), 11-19.

Matos Marques Simoes, P., & Esposito, M. (2014). Improving change management: How communication nature influences resistance to change. Journal of Management Development, 33(4), 324-341.

Sutherland, K. (2013). Applying Lewin’s change management theory to the implementation of bar-coded medication administration. Canadian Journal of Nursing Informatics, 8(1-2).

Williams, C. (2013). Principles of management. South-Western Cengage Learning.