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Prize winner
Published by: International Institute for Management Development (IMD)
Originally published in: 1994
Version: 27.12.2002
Length: 30 pages
Data source: Field research

Abstract

In the mid 1985s, Oticon A/S, a Danish manufacturer of high-quality hearing aids, begins to experience significant losses. Lars Kolind, newly named Chief Executive Officer, introduces a vision for company headquarters that would entail a fundamental restructuring and transformation of the organisation. Management and employees revolt and refuse a planned move of company headquarters. Should the Chief Executive Officer proceed with the proposed radical change, or has a recent turnaround been sufficient to restore Oticon to its number one market position? In 1990, Lars Kolind decides to abandon his plan to move Oticon headquarters, but insists on the pursuit of his vision for what he now calls the ''spaghetti'' organisation - so named because of its relative lack of structure. Shortly after implementation the company suffers further financial losses. A new managing director, brought in by Lars Kolind, begins to address the financial dynamics of Oticon A/S, and within six months profitability is restored. By 1993, the company enjoys its greatest profit since it was founded in 1904. Has Lars Kolind achieved the competitive advantage he sought? How can it be sustained in the years to come?
Location:
Industry:
Size:
USD100 million
Other setting(s):
1985-1994

About

Abstract

In the mid 1985s, Oticon A/S, a Danish manufacturer of high-quality hearing aids, begins to experience significant losses. Lars Kolind, newly named Chief Executive Officer, introduces a vision for company headquarters that would entail a fundamental restructuring and transformation of the organisation. Management and employees revolt and refuse a planned move of company headquarters. Should the Chief Executive Officer proceed with the proposed radical change, or has a recent turnaround been sufficient to restore Oticon to its number one market position? In 1990, Lars Kolind decides to abandon his plan to move Oticon headquarters, but insists on the pursuit of his vision for what he now calls the ''spaghetti'' organisation - so named because of its relative lack of structure. Shortly after implementation the company suffers further financial losses. A new managing director, brought in by Lars Kolind, begins to address the financial dynamics of Oticon A/S, and within six months profitability is restored. By 1993, the company enjoys its greatest profit since it was founded in 1904. Has Lars Kolind achieved the competitive advantage he sought? How can it be sustained in the years to come?

Settings

Location:
Industry:
Size:
USD100 million
Other setting(s):
1985-1994

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