Oticon -- disorganized company Oticon a long established company credited pioneering work hearing instruments. The case study attached. The aim paper explain actions behaviors company, Oticon, president, Lars Kolind, committed fundamental behavior entrepreneurship.
Under the leadership of CEO Lars Kolind, Oticon, a Danish company specializing in hearing aids and hearing aid technology, decided to revitalize its business through a complete new approach to the way it positioned itself on the market. The innovatory approach had a two-tier dimension. On one hand, the company would transform from a manufacturing corporation to a service organization, one where the focus would not be necessarily and entirely on the products it brought on the market, but rather on the idea that the service it offered improved the quality of life of its customers and potential clients.
The second dimension was a transformational one: in order to fulfill its first objective, the company would transform into a knowledge organization, one where the focus would be on decentralizing the company and on ensuring a free flow of ideas, projects and communication between the different employees within the organization. This transformation implied a concerted effort at all levels in already to implement the necessary changes. The results showed almost immediately, with Oticon producing more products for the market, with an increased market share throughout the years following the transformation.
This paper will focus on analyzing the different approaches that Oticon management proposed and how these approaches connect with entrepreneurship theory and whether the strategy and vision that CEO Kolind proposed were committed and aligned with the fundamental behavior of entrepreneurship.
Analysis
The analysis should probably start with the initial theories of entrepreneurship, as proposed during the first decades of the 20th century by economists such as Joseph Schumpeter
. Schumpeter argued that entrepreneurship transformed an idea into an innovation and that entrepreneurship is, essentially, both a creative and a destructive force, changing the established rules of the game and ensuring that something else replaces the old way of doing things
Following this fundamental theory of entrepreneurship, it seems that Oticon and CEO Lars Kolind indeed abided by the fundamental behavior of entrepreneurship. There are several aspects worth investigating from this point-of-view. First, Kolind had an idea that he was willing to commit to and transform it into an innovation. His idea was to transform the company from technology-based manufacturing company to a knowledge-based service business. The innovation resulting from this idea was that he turned Oticon around so that it became a knowledge organization, the appropriate framework that would support the new vision that Kolind had for the company.
The second interesting aspect worth discussing is the creative destruction of his actions, as part of entrepreneurship behavior. It is true that Schumpeter's theory refers to the outside environment and the market in which the company operates rather than the organization's internal environment. However, in this case, this creative destruction is wholly applicable to what Kolind did. He destroyed the previous structure of the company completely, at all levels. From a human resource perspective, job descriptions were given up on, managerial positions no longer had the same meaning as previously, while people were no longer assigned specific positions or projects to work on within the company. In its place (following the destructive), Kolind created an organization with loose connections between employees, with no top-down decision making processes and with an ability to be more flexible and react more quickly to the challenges on the market.
This creative destruction manifested itself in the smallest of details, including in terms of the physical working environment in which the company operated. The offices were destroyed and replaced with simple filing cabinets that the employees carried around with them as they moved between projects and groups of employees working on different. Walls were knocked down so that the employees could interact more easily with each other and produce ideas and concrete projects. The creative destruction reflected the innovation process on which Oticon had embarked.
The result, according to Schumpeter, should be a new industry. In Oticon's case and reported to the microenvironment of the organization, it resulted in a new process and a new way of doing business. From Schumpeter's theoretical perspective, it is clear that Kolind's approach matches the behavior of a true entrepreneur, ready to embark on an innovatory process.
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