Advent of Globalisation and Rapid Technological Advancements - Coursework Example

?Due to the advent of globalisation and rapid technological advancements most organisations that were established decades ago find themselves in difficult situations. They are mostly perplexed by the paradigm of changing their traditional organisational culture and style of management. This is because it involves sensitive implementation of well thought out strategies, consultation and involvement of majority of employees. Moreover, the process is costly and involves a great deal of risk taking. This change is brought forth by various aspects that pull down the capabilities of an organisation as well as its performance (McCarthy, 2003). The same situation was present at Oticon where its activities adversely affected stakeholders. Some of the stakeholders had a direct interest and contact with the organisation while others had an indirect interest and occasional contact with it. For instance, Oticon customers were in need of the products manufactured by the organisation i.e. hearing aids, but preferred one that could be inserted inside the ear. Unfortunately, Oticon only manufactured hearing aids that could be placed behind the ear. On the other hand, Oticon customers demanded products that complied with the digital technology. This highly contributed to the plummet of Oticon’s performance and profit margins since it was a strong holder and advocate of the analogue technology. As a result, the organisation lost favour in the buoyant markets including the Far East and America. In addition, the shareholders wanted to own a fast-paced organisation that had a big market share and equity. Their main interest therefore was in the growth of their shares and dividends. Conversely, the management and employees of Oticon were interested in the growth of the organisation so as to ensure job security, a lucrative remuneration and positive prospects. This was to be achieved by increasing the organisation’s efficiency and implementation of cost-cutting strategies so as to run a more significant, fast and innovative business. This was with the aim of attaining a competitive advantage and market control. The other stakeholders of Oticon that were also gravely affected by the deteriorating state included the government, suppliers, trade unions and pressure groups. With the aim of dealing with the raised concerns Oticon’s President Lars Kolind formulated a viable strategy to enable implementation of management change. The strategy included a decrease in the price of the hearing aid, a reduction of the hearing aid’s size, layoff of some staff, increased efficiency, cost-cutting measures and implementation of a holistic customer care strategy which was to be supported by a spaghetti-organisational approach. This was to be achieved by changing the formal organisation of Oticon into a disorganised organisation. This involved the elimination of job titles and departments as well as the use of informal communication i.e. face-to-face. At first, this change was met with objection from employees where some felt that they did not possess the project management skills and ability to work as a team. Most, especially those that held hierarchical positions were against the loss of authority, status symbol, routine and information monopoly. In order to overcome, the resistance Kolind involved every employee in implementing the changes in the organisation. He ensured that every employee clearly understood the direction of the new management change. In addition he formulated human values that favoured employees and gave them the opportunity to empower themselves. As a result, a solid employer-employee relationship dictated by trust was established. Moreover, a carrot and stick leadership strategy was implemented. It gave employees only two options of either continuing to work at Oticon but under the new changes or resign. Therefore, majority of the employees had no choice but to comply with the stipulated changes than to lose their jobs. This strategy effectively curbed resistance because with time employees started to support the new changes as they were more effective than the traditional management strategy that they were used to (Denhardt, Denhardt and Aristigueta, 2002). The success of the implemented management change was aided by the charismatic and visionary transformational leadership strategy used by Kolind. This leadership style was the contrast of the classical leadership style used by the predecessors of Kolind. The latter enforced the use of job description, hierarchical demarcations and control of employees’ efficiency. Kolind leadership style introduced a flat organisational structure where all employees were equal and no one had clear superior powers over the other. Employees were also not controlled but instead treated with respect, trust and as responsible adults. As a result, Kolind was able to improve on efficiency and productivity of employees as they became more committed to the organisation. This implies that unlike the classical leadership approach Kolind’s leadership strategy was not focused on commanding and controlling employees but it rather gave them the freedom to choose to work in the areas they were comfortable with and most competent. This is a fact that most managers never achieve via their implemented leadership approaches (Roth, 2003) The leadership strategy implemented by Kolind should be adopted by most organisations especially multinational corporations that face a great deal of management challenges and hindrances. This is because Kolind was able to achieve radical changes in Oticon by enabling it to undergo evolutionary change from the traditional culture to a more adaptive modern culture. His leadership skills were inspiring, risk taking and encouraging. In the attempt to lure workers into embracing change and trust his management style constantly changed his leadership strategy from being participatory (where he gave employees the opportunity to air their views) to being directive. An example is when he noticed the organisation was slipping back to the classical management strategy and he relocated the offices of the organisation (Sternberg, Antonakis and Cianciolo, 2004). When Oticon was established in 1904, it held the first position worldwide in production of hearing aids. However, increased innovation and aggressive competition in the global market led to its downfall. Companies that were well adapted to the market fully met the demands of consumers and were well established for example Sony, Panasonic, Phillips, 3M and Siemens. To regain its position Oticon retracted by reconstructing its culture and structure. This was attained by the advocacy of team working which increased creativity, speed, innovation and efficiency (Northouse, 2004). For the success of the team working approach Oticon used a constructive approach as opposed to an authoritative one that also inform the employees about the proposed new changes and allowed them to take part in their formulation and implementation (Northouse, 2004). In addition, there was the use of the spaghetti approach that introduced a flattened organisation. All the departmental hierarchies and the use of routine were abolished as Oticon adopted a project-based working culture. As a result, Oticon adopted a more elastic organisation which led to more cooperation among its employees (McCarthy, 2003). On the other hand, the classical type of formal communication was replaced with informal communication i.e. face-to-face. This further propelled the freedom employees enjoyed. Furthermore, this new management strategy was supported by the fact that Denmark observed a non-formal culture bestowed with equality. References Denhardt, RB, Denhardt, VJ and Aristigueta, M 2002, Managing human behaviour in public and nonprofit organisations, Sage Publications, Thousand Oaks, CA. McCarthy, L 2003, Project leadership, McGraw-Hill, New York, NY. Northouse, P 2004, Leadership: Theory and practice, Thousand Oaks, Sage Publications Inc., CA. Roth, T 2003, Executive leadership attributes relating to transformed organisational HR services. Universal Publishers, Boca Raton, FL. Sternberg, K, Antonakis, L and Cianciolo, M 2004, The nature of leadership, Sage Publications, Thousand Oaks, CA. Read More