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Oticon Case Study

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Leonor Jardine

on 23 April 2013

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Transcript of Oticon Case Study

About the company Small Danish company which competes successfully with larger firms
produces hearing aid devices Diogo Valdez and Leonor Neto
Fundamentals of Management Oticon Case Study Thank you!

Oticon had a conventional hierarchical structure, and a horizontal structure of separate functional departments.

“People were locked into specific tasks and were rewarded only for those – nobody took initiatives.” (Boddy, 2008) Functional Structure
Grouping jobs in teams

Board = ten-person management team
Each team is in charge of a project, and has a project leader
An organization where there are only project members, project leaders and project owners. Oticon’s New Organisational Structure Workers are required to be active in at least three specialties – one based on professional qualification and two others unrelated to the first
Example: “A chip designer could develop skills in customer support and advertising.”

The absence of departments avoids people protecting local interests. Oticon’s New Organisational
Structure (2) Results Oticon’s Organic Structure “Hardware companies have organisations that look like machines: a company that produces knowledge needs an organisation that looks like a brain, i.e. which looks chaotic and is unhierarchical.”
Lars Kolind Oticon’s Organic Structure Competition intensified during the 1980s

Lars Kolind was appointed CEO in 1988

Turn Oticon from an industrial organisation into a service organisation with a physical product Turning Point Structure and Performance: Correlation Business Contingencies strategy


environment Decisions are noted on the computer (accessible by everyone) There are no titles
Flexible tasks
“The better your processes are defined, the more flexible you can be.”

Kolind believed that conversation was better than email.
´Buildings were designed to improve face-to-face dialogue between staff MANAGED CHAOS In 4 years:
1/2 product development time
x2 sales
= staff
x2 product developed Problems in the long term Low Profitability

Lack of Control

Excess of Creativity

Difficult to Manage Limiting the risks Oticon started a new process of restructuration that would return some hierarchical order improving the control controlling the risks and the costs associated with the radical structure. http://www.oticon.com/about/our-group/history/founded-on-care.aspx “No titles. No offices. No paper. How Denmark’s Oticon thrives on chaos.” "We have become a company of firsts by putting people first."
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