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Introduction

Oticon, a Danish company founded in 1904 was the first company in the world to invent an instrument to help the hearing impaired. In the 1970’s, Oticon was the world’s number one manufacturer of the “behind the ear” hearing aids. During the 1970’s and 1980’s as the market for “in the ear” hearing aid grew, Oticon’s fortune suddenly declined and they lost money and market share. The main problem for all of this was that Oticon was a very traditional, departmentalized and slow-moving company. Even though Oticon had 15 sites and 95 distributorships around the world, Oticon was operating in a market dominated by Siemens, Phillips, Sony, 3M and Panasonic and most importantly, Oticon manufactured the “behind the ear” hearing aid but its customers preferred the “in the ear” product. Oticon also specialized in analogue technology whilst its customers were moving towards digital technology.

In 1988, a new President of Oticon was appointed, Lars Kolind. With his appointment, he worked hard to turn the situation of Oticon around. Kolind implemented cost-cutting measures; he pared the company down, cut staff and increased efficiency, and reduced the price of a hearing aid by 20%. Nevertheless, this still did not achieve the results he wanted. He never gave up. He had been searching for a sustainable competitive advantage for Oticon. He wanted to create a new way of running a business. One that could be more creative, faster and cost effective and also compensate for technological excellence, capital and general resources which Oticon lacked.

Kolind believed that Oticon could no longer compete with its technologically advanced competitors. By reinventing itself, Oticon showed that it could. Oticon drastically changed its organizational structure, ways of working and culture to let loose the human potential of the company. Kolind created a vision of a service-based organization and pursued it to gain a competitive edge.

Employee involvement is crucial to successful change; especially in situations as Oticon’s that require attitudinal and cultural change. Planned and emergent perspectives stress that this is a slow, learning process. Rapid organizational transformations can only be successful if focus is on structural as well as cultural change. Kanter et al emphasized that an organization’s structure can be changed relatively quickly through a ‘Bold Stroke’ but that cultural change can only be achieved by a ‘Long March’ requiring extensive participation over time. Oticon’s transformation was that of a rapid organizational change, which was based on the vision imposed on the company in a directive fashion by the CEO. This lead to the widespread change of attitudes and behaviours. Kolind’s vision was the reason for this rapid change in attitudes across Oticon. A more planned approach, facilitated by this change in attitudes was used to achieve this rapid structural change. This was then followed by a period of emergent change where staff had to develop and adjust to new ways of working with and behaving towards each other.

Schmuck and Miles (1971) argue that the level of involvement required in a project is dependant on the impact of the change on people concerned. Building on earlier work by Harrison (1970), Huse (1980) developed this difference further. He categorized change interventions along with continuum based on the ‘depth of intervention, ranging from the ‘shallow level’ to the ‘deepest level’. The greater the depth of intervention, Huse argues, the more it becomes concerned with the psychological make-up and personality of the individual, and the greater the need for full involvement of individuals if they are to accept the changes. Therefore, linking levels of involvement to the types of change proposed is necessary. The key is that, the greater the effect on the individual, especially in terms of psychological constructs and values, the deeper the level of involvement required if successful behaviour change is to be achieved.

The theory of cognitive dissonance of Burnes and James (1995) helps in seeking to understand and explain why major rapid attitudinal changes at Oticon were successful without a great deal of initial involvement. The theory of cognitive dissonance states that people want to behave in accordance with their attitudes and usually will take corrective action to alleviate the dissonance and achieve balance. At Oticon, fundamental attitudinal change was achieved relatively quickly because management and employee recognized the need for change and saw why new vision is the only hope for the company’s survival.

Organizational culture, or corporate culture, comprises the , experiences, beliefs and  of an . It has been defined as "the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with  outside the organization.

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An organisation’s culture is affected by a number of factors including:

  1. The environment in which the organisation operates. Internally, this is often conveyed by its physical layout which can, foe example, reflect warm friendliness or cold efficiency.
  2. The beliefs, values and norms of the employees within the organisation, particularly those communicated by top management.
  3. The formal and informal leaders who personify the organisation’s culture.
  4. The procedures that have to be followed and the behaviour expected of people within the organisation.
  5. The network of communications which disseminates the corporate image and culture.
  6. Other factors could ...

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