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Oticon case study is analysed and projected on the theories of the culture metaphor.

Oticon case study is analysed and projected on the theories of the culture metaphor.

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Analysis of the case oticon using the culture metaphor Presentation Transcript

  • 1. Analysis of the Case Oticon Using the Culture Metaphor
  • 2. Karlstad Business School Handelshögskolan vid Karlstads UniversitetCourse code: FEAD51Course name: Competence and LeadershipTitle: Analysis of the Case Oticon Using the Culture MetaphorDate of Submission: 2013-02-11Family name Given nameShurrab HafezEl Bouassami MohammedName of the teacher: Markus Fellesson and Sofia MolanderName of the administrator: Frania Johansson
  • 3. TABLE OF CONTENTSTABLE OF CONTENTS ............................................................................................................ I1. INTRODUCTION ..........................................................................................................- 1 -2. BACKGROUND ............................................................................................................- 1 -3. THEORY ........................................................................................................................- 1 -4. ANALYSIS .....................................................................................................................- 2 - 4.1. Oticon as Cultural Phenomenon ..............................................................................- 2 - 4.2. Oticon and Cultural Context ....................................................................................- 2 - 4.3. Corporate Culture and Subculture in Oticon ...........................................................- 2 - 4.4. How Could Oticon Change Culture? .......................................................................- 3 - 4.5. Strengths of the Culture Metaphor ..........................................................................- 4 -5. CONCLUSIONS.............................................................................................................- 5 -6. REFERENCES ...............................................................................................................- 6 - I
  • 4. 1. INTRODUCTION The metaphors of organizations and management have been discussed by Gareth Morganin his book “Images of Organizations” (Morgan, 2006). Morgan exposed eight metaphoricalimages of organizations including machine, organism, brain, culture, political system, psychicprison, flux and transformation, and instrument of domination. Each one of these metaphorscreates insight, but also obscures some corners. They have both pros and cons. They enableseeing, but also not seeing. No one of them is said to be correct and right.2. BACKGROUND Oticon is a Danish company, located in Copenhagen. They used to be one of the best inmarket for global hearing aid industry. The evolution and advancement of the othercompetitors, such as Siemens and Starkey, put Oticon in a critical slippery position in themarket, especially the global one, where Oticon export the majority of its products to. Torectify the situation, the board brought in Lars Kolind, who had great history of science-oriented solutions despite his youngness (30 years old). Kolind analyzed the strengths andweaknesses of Oticon and compared it with the competitors. He found out that no strengthsOticon had to compete with. On the other hand, Kolind found out that the inflexibility andlow responsiveness the competitors had could be a drawback in comparing with Oticon.Therefore, he decided to set a new plan to turn the organization into learning responsiveorganization. He sought improving this advantage to capture larger market share, especiallyglobally, and gain higher profit margins. In this report, the case is analyzed using the culturemetaphor. In other words, it discusses what we could see and reflect when projecting theplane Kolind set and applied on the other principles and approaches of the culture metaphor.3. THEORY When we talk about culture we are usually referring to the patter of developmentreflected in a society’s system of knowledge, ideology, values, laws, and day-to-day ritual(Morgan, 1997). Political scientist Robert Presthus has suggested that we now live in an“organizational society”. This kind of societies has distinctive aspects lay generally in groupsof people build their lives around distinct concepts of work and leisure, follow rigid routinesfive or six days a week, live in one place and work in another, wear uniforms, defer toauthority, and spend so much time in a single spot performing a single set of activities(Presthus, 1978). Organizations could follow different behaviours due their cultural contexts.In other words, some social behaviour could be accepted within a certain cultural context, butmaybe inapplicable for other contexts. For instance, the Japanese organizational behaviour -1-
  • 5. may not differ from the western organizational one significantly. But Japanese culture wasmore fertile to do much work while keeping the positive spirit (Maruyama, 1982).Organizational culture is the collective behaviour of humans who are part of an organizationand the meanings that the people attach to their actions (Smircich, 1983). Corporate culture isthe total sum of the values, customs, traditions, and meanings that make a company unique.Corporate culture is often called "the character of an organization", since it embodies thevision of the companys founders. The values of a corporate culture influence the ethicalstandards within a corporation, as well as managerial behaviour (Montana, 2008). Culturalrule following could be described as the adherence to social norms and customs, whilecultural enactment emphasises that we must root out understanding of organization in theprocesses that produce systems of shared meaning (Morgan, 2006).4. ANALYSIS4.1. Oticon as Cultural Phenomenon Many European countries, as well as Denmark, started to turn into organizationalcountries after the industrial revolution during the 18th century (Johansen 2002). Oticon wasfounded in 1904 by Hans Demant, which means that Oticon, as well as other Danishorganizations, had been regarded as cultural phenomena that time. From the case, there aremany reflections that confirm the similarities between Danish organizational culture and otherEuropean cultures. That may include working hours, quality standards, organizationalstructures, and other aspects of any organizational culture.4.2. Oticon and Cultural Context After entering Kolind to the organization, there were many indicators that could draw towhich context Oticon had been functioning in. Kolind proposed a new plan with many vitalchanges that could move the company toward decentralized style. That was accepted by theteam management, but not warmly welcomed and seen as a new risky style. This indicatesthat the organizational context in Denmark were generally hierarchal. Kolind seemed as if hehad been influenced by the Japanese developing style that time. He had studied the culturalcontext in Oticon, and tried to explore where some positive aspects of the Japanese stylecould be built in.4.3. Corporate Culture and Subculture in Oticon Before Kolind’s age, the corporate culture of Oticon could be characterized byaristocratism, where Demant family had exclusively been owned the company for decades. -2-
  • 6. But after the company had lost its position in the global market, Kolind has been brought in toretrieve Oticon’s position, while preserve its corporate values and culture. The board showedKolind powerful support for his new proposal, which reflects a gradual change in corporateculture. Kolind would have never stepped forward without such support that kept even themanagement team away from complaining him, despite their steady reluctance to the newproposal. Moreover, what could be seen as a significant change in corporate culture is the wayKolind resorted to for financing the new plan. He asked the bank to acquire 17% of thecompany, and some of his colleagues to acquire 3-4%. He also offered the employees sharesat a good price under certain criterion. That reflects a significant change in corporate culture. Kolind has created a great deal when he hired the enthusiastic employee, Helle, to be partof what he called the interior design team. This team had the responsibility of opinion leaders.There were six opinion leaders; none of them had been occupying managerial position.Kolind called the team with that name so that not to threaten anyone in the management team.This reflects how Kolind was well-conscious of dominant culture. This team has growngradually and was a nucleus that multiplies within the organization. It is a great supportingpower that Kolind planted to reduce the resistant potentials of the management team.4.4. How Could Oticon Change Culture? In our opinion, the first change Oticon did was changing people. This started by hiringLars Kolind, who disturbed the flow radically. He might be one person, but very importantone. In point of fact, Oticon became totally different after brining in Kolind. It was in reality ahistorical limestone for Oticon. What Kolind has done to apply strategic changes in Oticon’sculture could be highlighted by some specific and progressive steps. Logically, he had tounderstand the processes within Oticon very well. Then, he diagnosed the strategic changeneeds to investigate the extent of change and identify barriers. That led him to considerchanges in styles of management, organizational routines, symbolic activities, and politicalactivities (Mintzberg & Quinn, 1996). That all contributed eventually in the enactment of ashared realities. Changing places is one of the tactics Kolind has applied. Instead of separatedclassical offices, Kolind turned the company into a very big open office for everybody. Theemployees were free to choose their places. By applying that, Kolind could change thetraditional frame of working places within the organization, and probably in Denmark.Moreover, Kolind needed to change a set of people’s beliefs and attitudes to accept and adopthis plan. He could manage to do that as discussed earlier by creating the interior design team,convincing the board to accept some strategic changes, and imposing fait accompli on the -3-
  • 7. team manage. Kolind tried to create the core idea based of what we can call “Let´s worktogether”. This idea helped to develop a corporate culture that spreads values and principles inall part of the organization. Kolind has also dedicated scientific knowledge concerning withrole models to change Oticon’s reality. Spaghetti model is a clear evidence for that. Hedestroyed the departmentalization by involving different employees in many differentprojects, to perform different roles in each project. There were 100 projects, every project wasowned by somebody on the management team. But ownership there was like being chairmanof the board. The job of project owner was to support and open doors, while the projectmanager ran the show. These were not common changes for any employee to adapt with. Butby training them to play different roles within their teams, Kolind added a new criterion to thefuture employees, who are willing to work at Oticon. Kolind blew up the departmentalstructure and rebuilt a new structure. Kolind has also presented collateral technologicalchanges to the structure changes. Kolind enhanced the principle of continuous improvement,and that could be very clear from the way he dealt with project E36. The world witnessed thenthe first fully automatic hearing aid named MultiFocus and ranked by the company as themost advanced hearing aid that had ever been made. The product was a device offered agenuine advanced to the user with much more comfortable sound delivered by a fullyautomatic system. In order to be a customer service oriented company, Oticon’s strategy hadbeen based on having its own distributors in order to be in direct contact with their customersso that to provide them with original knowledge quantity and quality. Kolind also encouragedall employees to have their own computers by offering very low prices for them. Besides, heimposed the increase of oral and e-based communication instead of paper communication.That was very helpful for employees to merge within the organization and understand the newstyle quickly. For instance, if any employee inquires about a matter, s/he would find it verysimple to ask anyone around, which means a more productive flow of work. Finally, and asdiscussed earlier, the corporate image of Oticon has been totally changed in Kolind’s age. Hecould add a positive social value by increasing the public share in the company significantly.4.5. Strengths of the Culture Metaphor Undoubtedly, the culture metaphor has several strengths, among these strengths is that itdirects attention to the symbolic significance of almost every aspect of organizational life(Morgan et al. 1983). That can be seen in Oticon’s case when there was a focus on eachdetailed aspect that makes the working flow of the organization understandable through thestructures, rules, routines, and hierarchies what are necessary for its daily based functionality. -4-
  • 8. Changing corporate culture is not always easy due the resistance against change, becausein most cases organizations are very structured hierarchically and power oriented (Morgan etal. 1983). In Oticon the management team were extremely negative. Kolind was clear whenthought that department should work in more integrated fashion, by creating a multi-functional organization, where everyone does more than one thing. Therefore, the concept ofa head department didn’t make sense anymore. As a result, Kolind did his best to introducethe idea that the times have changed, and the traditional way managers had used to work withbecame obsolete. The third strength of the culture metaphor is that it supports the relationbetween the organization and its environment (Morgan, 2006). Reflecting this on Oticon, wehave noticed that Kolind has based his decision making strategy by taking advantages overother competitor’s weaknesses due to their heavy reaction and departmentalized structures.Furthermore, the way to understand the organizational change can be also strength. Besideschanging technologies, structures, and employees motivation; change should also cover theimages and values that frame this change (Morgan, 2006). Even though there was sort ofresistance for the change within Oticon, Kolind has managed to setup a bunch of values toregulate the new way of how to achieve goals and targets. No matter which method to adopt,it had to be characterized by values such as fairness and transparency.5. CONCLUSIONS The culture metaphor provides a revolutionary way of thinking about organizations. Inorder to create a new organizational structure, the biggest challenge would be cultural change.When Oticon faced difficulties, there was a need to react to adapt with the globalenvironment. The first step taken by the board was to change the reality of the company beingruled by a family, hiring a new leader from outside (Kolind). Even though it was not a realcultural change, but what corporate culture wanted him to create. Kolind accelerated theintroduction of several cultural changes in the organization. He introduced a new culture ofthinking (thinking the unthinkable) based on his analysis results. He managed to create a newstructure of the organization and developed a new roadmap based on the company futurevisions and goals. Besides, Kolind introduced new shareholders to the company capital,shifting Oticon toward public corporation. He also moved the management and decisionmaking style of Oticon from being centralized to be more decentralized. he also managed tocreate a shared systems of meaning that are accepted, acted and reachable at all levels of theorganization, since this metaphor is meant to be built around people rather than techniques.However, the failure on such tasks can threaten any attempt to introduce a cultural change. -5-
  • 9. 6. REFERENCESJohansen, Hans Chr. (2002). Danish Population History, 1600-1939. Odense: UniversityPress of Southern Denmark.Presthus, R. (1978). The Organizational Society. New York: St. Martin’s.Maruyama, M. (1982). “Mindscapes, Management, Business Policy, and Public Policy.”Academy of Management Review.Mintzberg, B. and Quinn, B. (1996). " Leadership is intertwined with culture formation." TheStrategy Process. Prentice-Hall.Montana, P. and Charnov, B. (2008) Management (4th ed.), Barrons Educational Series,Hauppauge: NY.Morgan, G. P. Frost, and L, Pondy. (1983). “Organizational Symbolism.” Greenwich, CT: JAIPress.Morgan. G. (2006). Image of organization. Schulich School of business, Toronto.Smircich, L. (1983). “Concepts of Culture and Organizational Analysis.” AdministrativeScience Quarterly.Wiener, N. (1967) The human use of human beings. Boston: Houghton Mifflin. -6-