Revolution at Oticon - Research Paper Example

Revolution at Oticon 1. Introduction a) Abstract Change in an organisation is inevitable and is often necessitated by various internal and external factors and this initiative often affects the operations of the company in many ways. This essay therefore particularly attempts to outline some of the implications of change on the operations of Oticon A/S, a Danish manufacturer of hearing aids which has underscored to revolutionize the way it conducts business where the management has decided to restructure its operations by giving the employees the power to work as one large single team where they are given the autonomy to make necessary decisions that affect their work. This is aimed at suggesting the strategy for human resources for Oticon in order to remain viable whilst undergoing change. Implementing a new order in an organisation is concerned with changing the usual ways of conducting business where there is often resistance from other sections of the employees. There is need to train the employees as going to be shown from the lessons learned from the case study of Oticon. b) Case summary Oticon A/S is a Danish manufacturer of hearing aids in Hellerup, Denmark and has underscored to revolutionize the way it operates where the management has decided to empower the employees by giving them the autonomy to drive change and the opportunity to pursue new challenges. According to the market analysis, the US has been historically the dominant market for audiology and this mature market has also been projected to rise to 90.4 % by 1998. Projections had indicated that since there were a large number of manufactures in this industry coupled with the recession of the late 1990s, prices would generally remain steady and differentiation was going to be key strategy for manufacturers in this mature market. Digitalization of the hearing aids greatly transformed the industry. Oticon being a leading manufacturer of hearing aids with nonlinear amplification sought to establish itself as a leader in programmable and fully digitalized hearing aids. The industry as noted is characterised by competition where Sieman’s Audiologische Tecknik (Germany) and Starkey (USA) are the two leading giants in manufacturing of hearing aids and Oticon being the third largest manufacture of the hearing aids. Other competitors include Philips Hearing Instruments, Dalberg and Phonak and the industry was becoming more competitive with more than 100 companies already in the market. Oticon was targeting the high priced segment. In the late 1980s Oticon encountered a crisis where miniaturization of the ITE took center stage by the other competitors which threatened the position of the organisation. It is against this background that the management at Oticon sought to change its operations in order to achieve sustainable competitive advantage where the organisation would lead in creativity, innovation and flexibility. Thus, in order to be innovative, the company sought to adopt mainly two concepts namely: dialogue and action. This initiative would revamp the whole structure of the organisation where the workers would work as a single team and would be given the autonomy to take a leading role in transforming the company into a productive and competitive entity. The new change initiative would instead vest power in the individuals to know many jobs where the functional lines would be removed in the process. The change initiative sought to remove all the structures and functional lines in the company where the new structure would be comprised of one team where the members would be given responsibility and assisted with career development. However, a critical analysis of the case study shows that the relevant change management issues faced by the organisation mainly includes overcoming resistance to change. One major impediment likely to hamper the initiative to change by the organisation is resistance to change by some employees if not all of them. Indeed, even for the good of the organisation, change is something that is not readily accepted by the workers as a result of various reasons. In order for the management to fully implement a proposed change to the operations of the organisation, there is need for concerted efforts in conscientizing all the workers about the benefits of the intended project as a way of minimizing the negative impacts of issues such a resistance to change that may scuttle noble ideas that can improve the operations of the organisation if carefully implemented. 2. Discussion In modern day business, we have come to accept that things change all the time so it is important for the business leaders to lead and manage the changes that they make. There are various forces that lead companies to change the ways they operate. Some of the factors include social, economic, political, business trends as well as the company’s success factors or failures among others. In this particular case study, Oticon has underscored to change its operations mainly as a result of the business trends defined by its success and failures in the way it operates in the industry that is characterised by competition as a way of attaining a leading role in the business of manufacturing hearing aids. This particular type of change is transformational change where the organisation seeks to transform the way it operates in order to gain a competitive advantage and remain a leader in the manufacturing of hearing aids. Implementing change is often treated with skepticism by many employees in an organisation hence resistance to it. In this case, there is no need to hire a change agent since he may not have knowledge about the organisation but should be done internally where the management should take a leading role in spearheading the change initiative. If the leader is trusted and if the employees are allowed to participate in planning of change, there is a greater possibility that change will happen successfully. Change initiative in this case seems to be from top where Las Kolind wishes to sell his idea of revamping the structure of the organisation into one single entity comprising of one team. In most cases, for change to take place in an organisation, each individual must be given the freedom to express his or her own feelings about the change idea. In this case, it seems the idea of change is not coming from the employees and is the reason why there is some form of resistance. There is need for management at Otican to address the issue of organisational structure in order to achieve its change initiative. An organisational structure defines how job tasks are formally divided, grouped and coordinated (Robbins, Odendaal & Roodt 2001). The structure of the organisation should be flat where many people can contribute in decision making. Decisions can be made at a faster pace as there is open interaction. Adaptive organisational forms which emphasize the flexibility to adapt to change can enhance better performance while bureaucratic structures will inhibit it (Kleynhans 2007). There ought to be open channels of communication where there is free flow of information and the employees should take a role in contributing towards decision making as a way of creating a sense of belongingness. In their quest to find solutions, members of the organisation ought to engage in collective learning that creates norms, shared assumptions and beliefs that become organisational culture. To enhance an organisation’s cohesion, it is imperative to create a culture that promotes innovative ways of identifying a problem and finding a solution Thus, open communication between members of Oticon should be built on the basis of creating mutual trust and an atmosphere of respect. Bates et al (2005), posit to the effect that innovative and supportive culture will encourage better performance and cohesion while controlling and directive culture will hamper it. Performance can be effective where organisational culture can integrate with individual’s values, perceptions and capabilities in the workplace. Another apparent oversight by Kolind in the given case study is that he assumed that all the people will readily share his ideas and accept his views at once. It should be noted that change management models cannot treat the organization as a homogenous mass of people all going through the change process at the same rate. It can be noted that some individuals change faster or slower than others. The change management process adopted by Otican which treats all the individual members of the organisation as a uniform group is not effective since people are different and can react differently to a change process. In this case, there is resistance because some people have not yet seen any benefit of the initiated change. In this case the relevant model that can be used to analyse the structure of the organisation’s operations is Burke –Litwin causal model. This model posits that there are different linkages that hypothesize how performance is affected by internal and external factors. This model provides a framework to assess organisational and environmental dimensions that are key to successful change an shows how these dimensions should be linked causally to achieve change in performance (http://www.reflectlearn.org/discover/a-causal-model-of-organizational-performance-change-burkes-litwin-model ). Basically, this model is concerned with analysing a cause and effect of the relationship between mainly 12 dimensions which include the following: external environment, mission and strategy, leadership, organisational culture, structure, management practices, systems, work unit climate, tasks and skills, needs, motivation and individual and organisational performance. These dimensions need to be effectively monitored during the process of implementing change since these have causal effects particularly on the performance of the organisation. Likewise, this organisation does not operate in isolation from other firms. Of paramount importance is the need to establish if the organisation will be able to maintain its dominance in the market with regards to the quality of its products that have greatly contributed to its success during the previous years while in business. It is imperative to give a critical analysis of the organisation’s environment in order to get a clear understanding of its operations through an analysis of its internal and external environment. As noted in the case study, the business environment is dynamic, changing rapidly and is characterised by strong competition from various players and it seems that the most important goal of business nowadays is to develop and maintain a sustainable competitive advantage. This can be achieved through learning. Carell et al (1995), describe learning as the most viable tool that can be harnessed to ensure a sustainable competitive advantage. It can also be noted that Oticon should pay particular attention on continued learning which can lead the organisation to stay ahead of other rival competitors as far as innovation is concerned as a way of mitigating the chances of resistance to change. Innovation refers to the introduction and application of new ideas and methods that could improve a process, a product or a service (Bates et al 2005).Creativity and innovation are the essential elements for organisational learning and additionally, the ability of an organisation to grow is also dependent on the ability to generate new ideas and develop them into feasible innovative practices. 3. Action planning and conclusion Three necessary conditions to implement change are awareness, capability and inclusion (Carnall 2003). There is need for the stakeholders to understand and believe in the vision of the change plan, the stakeholders should believe that they can develop the necessary skills and they should feel that they value the new initiative. A change initiative that has the support of the stakeholders Recommendations-Motivation It is recommended that the management should constantly review the needs of the employees. For the workers to be fully productive, they ought to be motivated such that they would develop a positive sense of belonging to the organisation rather than just treated as workers who have no needs. The success of an organisation is usually dependant on the production by the workers. In the above case study, workers at Oticon need to be fully motivated in order to positively view the proposed change by Lolind. Somebody who is motivated would feel to be part of the organisation hence he would put more effort in his performance as a way of cooperating with other co workers towards the attainment of the organisational goals. Most importantly, the management should be in a position to constantly review the needs of the workers so as to be able to take necessary action. Leadership It is highly recommended that managers should lead by example. Indeed, they are the ones who set the pace and tone of how the organisation ought to operate and any mistake would be costly to them. Therefore, it would be recommended for management to set the tone for operations where there would be mutual understanding based on respect of authority within an organisation. Accordingly, behaviour of the manager greatly influences leadership styles (Carrell, R. et al 1995). Thus, the basic tenet of managing change is found through leadership which is defined as the ability to influence a group of people towards the achievement of organisational goals (Robins S.P., Odendaal A.& Roodt G. 2001). Basically, leadership is concerned with the vision of the organisation while management is concerned with the practical implementation of that vision. The leaders of the organisation ought to take a leading role in spearheading change such that the subordinates will also be inspired to follow suit. The democratic participatory style is more ideal for Oticon since it is open and accommodative. In order to counteract the negative impacts of resistance to change, leaders must allow for debate and different points of view in preparing the employees for the change. Some of the skills the leaders can use in this case to work effectively with resistance to change include the following: leaders must make resistance known through the establishment of a culture that encourages honest and straight forward communication where employees must feel safe about articulating their fears and feelings about the change. The leaders must also value resistance where they play a great role in actively listening to the concerns of the workers. There is also need to examine the resistance by the employees as a way of gaining a clear understanding with the aim of suggesting a structure that is meant to deal with such kind of resistance. It can therefore be noted that the leaders must be particularly aware of the negative impacts of resistance to change hence if they are able to adopt this strategy, chances of overcoming resistance to change will be very high. Need for open communication channels It is also recommended that Oticon should attempt to put structures in place that clearly define the communication channels and they should be open. Communication is very important in an organisation and there should be a two way communication channel where there is feedback from both ends. Without feedback, it would be difficult for both the management and other employees to understand each other. In some cases, lack of information would tend to complicate otherwise simple situations which would just require the dissemination of correct information like the case of Oticon. There should also be structures that allow the bottom to top communication to take place in a professional manner unlike an informal set up without formal procedures. In essence, communication forms the back bone of all the operations in an organisation. Conclusion Over and above, it can be noted that the environment in which businesses operate during the contemporary period is dynamic which prompts the leaders to adopt new changes. Bringing change to the organisation is often not an easy thing since most of the workers would be sceptical about any development that would bring about changes in the operations of the organisation for fear of various reasons. The action plan that ought to be adopted should be open and accommodative to different views by the workers. Failure to involve the employee in making decisions about change would attract negative consequences to the organisation. References Bates B. et al (2005), Business Management, fresh perspectives, Pearson SA Carrell, R. et al (1995). Human Resources Management: Global Strategies for managing a diverse workforce. 5th Edition. NY. Prentice Hall. Carnall, C.A (2003). Managing Change in Organizations. (4th Edition). Essex. Prentice Hall. Hughes, M. (2006). Change Management: A Critical Perspective. Chartered Institute of Personnel and Development. London. Kleynhans R. et al (2007), Human Resource Management: fresh perspectives. Cape Town. Prentice Hall. Robinson W (1997). Strategic Management and Information Systems. 2nd Edition. London. Prentice Hall. Robins S.P., Odendaal A.& Roodt G. (2001), Organisational Behaviour, Pearson Education Strydom J. (2004). Marketing. 3rd Edition. Cape Town. Juta & Co Ltd. A Causal Model of Organisational Performance and Change (Burke and Litwin Model (n.d). Available at: http://www.reflectlearn.org/discover/a-causal-model-of-organizational-performance-change-burkes-litwin-model Accessed on 28 March 2010. Read More