Case Study: Oticon

Decent Essays
The first approach to organisational change in the Oticon case happens within the understanding of continuous improvement: “When Kolind arrived in 1988, he took a number of swift and decisive actions that allowed Oticon to once again become profitable.” (IMD international (2005) p. 2). One could think, that Kolind wanted to change the organisation in small steps to avoid taking high risks. He laid off 15 % off the workforce and took control of all investment decisions. As a result, Oticon had fewer employees to pay, less costs and in return, Oticon’s profitability increased but sales still stalled. This organisational change did not work out thus it only focused on the short term results. Oticon did manage to return to profitability,
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3). He is preparing for the change (MERE). Second, the changes were made “We removed the entire formal organisation. We took away all departments.” (IMD international (2005) p. 4). The organisation transformed from being unmovable to be flexible and mobile (IMD international (2005) p. 1). Third, Oticon was ‘refreezed‘ with all the changes implemented. A whole new organisational structure was created with a new value and belief system and as a project-based company. Kolind believed that change was necessary for the company to succeed: “In my opinion, you must change everything at once -- organizational structure, culture, physical settings and the very nature of work itself (IMD international (2005) .p. 4) Kolind seemed to be motivated and determined about implementing changes and thought that change itself should be the mindset for everyone in the company. A part of their belief system was: “One thing is for sure: Oticon will change. We will create a flexible organisation, where everyone realizes that the only certain thing is change.” (IMD international (2005) p. 1). A reason for the successful change could be the specified focus on the formal structure. Kolind changed location, removed all doors, never allowed the use of paper and made all information within the company available for everyone. In other words, he…show more content…
He knew that the core of the organisation was built upon trust, teamwork, flexibility and change without any exceptions. The whole organisation was turned upside down, every employee got the job to “´fit each employee’s capabilities” (IMD international (2005) p.5). The formal structure allowed all employees to create their best working environment which again forced the informal structure to change. Because the employees aligned their values with the company’s, the new informal structure was also aligned with the company’s formal structure. In other words, Kolind forced the informal structure, the employee’s actions and opinions and their beliefs and values, to fit the formal structures value and belief system. The changes within the formal, as well as the informal organisation structure, could have been a necessary factors in order to successfully help the proceedings of restructuring the
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