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The reaction of Oticon was immediate, as they decided to reconstruct the whole
structure of the company, so as to boost their efficiency and profitability.
The process lasted for almost three years, and resulted to major changes, which
helped Oticon to regain profits, and become again a leader in their sector.
Oticon is a good example of what D. T. Hall (1996) called "The career is dead, long
live the career" and the boundary career construct (Arthur & Rousseau, 1966). Key
features of traditional career management like earmarking of management potential,
formalized development programs, the use of promotions and organizational
symbolism (e.g., privileges) etc. were simply not applicable in the "spaghetti
organization" with no hierarchical structure, no traditional management positions,
no high-flier program and not even an HR function.
The nickname "spaghetti organization" reflects the complex, informal and almost
anarchistic characteristics of the project organization, as it was initially implemented
at Oticon.
The path which Oticon choose to regain its ground and the initiatives taken in terms
of Organizational Behaviour has been assessed in this assignment.
For the purpose of analyzing the focus was laid down on 3 key aspects of organization
behavior which are organizational structure, management of change and
organizational culture and climate which can be correlated to the case.
2. Organizational Structure
According to Sheldon: "Organization is the process of combining the work, which
individuals and groups have to perform with the facilities necessary for its execution,
that the duties so performed provide the best channels for the efficient, systematic,
positive and coordinated application of the available efforts".
Koontz and Donnel have defined organizational structure as 'the establishment of
authority relationships with provision for coordination between them, both vertically
and horizontally in the enterprise structure'.
A good organizational structure has the following features:
The structure should lay down a formal reporting hierarchy from lowest level to
higher level of management.
Identical activities should be grouped for each department so that equipment,
processes and expertise can be developed at one place under the guidance of a
departmental head.
Coordination of various activities is laid down and specification of the coordinating
authority be placed.
Individual, group and departmental goals should be laid down with specific time
frame. Monitoring of goals is essential to achieve the objectives.
Organic form
Comparative evaluation of mechanistic and organic form of organizational structures
can be summarized as under:
This can be achieved by making announcements, meetings and promoting the idea
throughout the organization through bulletin, boards, personal contacts and group
conferences. The unfreezing process basically cleans the slate so that fresh
behavioural patterns, customs, traditions can be imprinted which can then become a
new way of doing things.
2. Moving: Once unfreezing process is completed, moving takes place. Moving is
incorporating change. Persons undergo cognitive restructuring.
The process is carried out by the following three methods as proposed by Kelman:
Compliance: Compliance is achieved by introducing rewards and punishments.
It has been established that individual accepts change if he is rewarded or punished.
This is a behaviour modification tool.
Identification: Members are psychologically impressed upon to select their role
model and modify behaviour. If a leader can act as a role model the change is easier.
Internalization: It involves internal changing of individual's thought processes in
order to adjust to a new environment. Members are advised to carry out soul
searching and adopt a new behaviour.
3. Refreezing: It is related to integrate the new behaviours into the person's
personality and attitude. It is referred to stabilization. The change behaviour must
necessarily fit into the social surroundings. Refreezing takes place when the new
behaviour is adopted in a normal way of life. New behaviour must replace the old on
a permanent basis. New behaviours must be re-enforced continuously so that it does
not diminish. Change process is not a one time process but it is continuous hence
unfreezing, change and refreezing must also be continuous.
Overt factors can be measured and fair assessment can therefore be made about the
intentions of the management and efforts they are putting in to build an appropriate
organizational climate. While on the other hand covert factors can not be quantified
being of subjective nature.
Likert has carried out studies on organizational climate by isolating six different
variables namely decision making, leadership style, motivation, goal setting,
communication and control. Each variable was then evaluated on four dimensions.
Each of the dimensions can then be studied on the five-point scale enumerated
above. Based on the inputs so received on the specific study of a particular variable
an appropriate conclusion of the prevailing organizational climate can be drawn.
Suitable remedial measures then can be initiated to modify the climate to desired
level.
According to Edgar Schein "Culture is the most difficult organizational attribute to
change". He specified three cognitive levels of organizational culture:
What can be seen and known,
Organizational mission and value,
Tacit assumptions which is the deepest level and the most difficult to explicate.
In the years before the change Oticon management had bureaucratic nature of the
organization and corporate culture. It was more off hierarchical organization with
importance given to people rather than position.
Oticon after year 1991 became more task culture, it developed into customer focus
organization and started to be project orientated, where departments disappeared,
individuals were expected to contribute to the organization and got recognized
influence in the group. In short it was made more important what you do and not
who you are.
5. Conclusion
Various companies have tried and tested
teamwork organization unsuccessfully but what
were the key elements that were responsible for
the success of teamwork in Oticon?
was inevitable. On the contrary, meetings between senior management, and project
groups had taken place only once every three months in order to present their results
and take feedback.
A three year preparation period before the completion of the new structure was
enough time for the idea to mature, and the organization's members to adapt to the
new working conditions.
Finally, the fully autonomous groups were one of the most important factors of
success, as strong connections were built between the team members, which
ameliorated the collaboration. Moreover, team members had the opportunity to work
in several projects simultaneously, which allowed them to exchange and share ideas
and information between "connected" projects. All in all, the not formalized structure
encouraged all employees to contribute in the development, be having the right to
give to their employers, new ideas and projects, without the fear of criticism.