Change is necessary for the success and prosperity of the company. However change should not be sharply originated in an organization. Change is major and it affects all the employees of the company. To save the company from continued losses, the new CEO Lars Kolind embarked on a cost cutting mission to enhance reduction of expenses. Lars enabled the company to get back on its feet by significantly reducing unnecessary overhead costs and unprofitable profit lines (Foss, N.J., 2003).
From 1904-1946 Oticon was a small family-run business that sold US – produced hearing aids. In 1946 Oticon started its own production of hearing aids in Denmark this was due to the increasing demand for hearing aids in the years from 1951 to 1958.The third stage 1959-1974 has seen Oticon expand and grow globally.In the foruth stage 1975-1986 Oticon focused on consolidating the results from its global growth and streamlining its R& D activities and manufacturing operations. In 1989 Oticon entered the fifth stage of its development, which was characterised by radical restructuring and change (Larsen and ghoshal, 2000).
Oticon A/S was a well-established Danish company that majored in the manufacture of hearing aids for its customers. Having faired well in the industry and being ranked as number one for a long duration of time, the company began to understanding losses and sales dropped production the company drop to number three in the market. It is therefore essential to inform the employees in advance of the impending organizational reorganisation, why it is necessary and how it is going to affect them as employees and the company as whole.
The move was successful as soon after the company began to display and run make profits once again. Lars, determined to create a sustainable program that will cushion the company from further losses, he adopts to make long term reformation and transformational procedures in the organization. One of the restructuring steps involved the move of the company’s headquarters to Thisted Jutland. This move was strongly objected by the employees as the initial restructuring had by now cost some of the employees their jobs (Foss, N.J., 2003). Though Lars is bound to face continuous resistance, he should push on with his radical restructuring so as to ensure the company remains competitive and profitable in the ever changing market.
Initially Oticon had fanatical on trade of high quality high cost products with snowballing competition the sale of the earshot aid from Oticon would in due course drop again due to the presence of lower cost friendly products. Lars efforts were top change this perspective and make Oticon products, the figure one preferred product. Lars needed to transformation the values of the company to focus on action and dialogue (Foss, N.J., 2003).
Action to ensure that the company remainders inspired, pioneering and stretchy while dialogue will involve all the employees thinking afresh on any new ideas that would be applicable to enhance the company’s’ competitive edge and profitability(Peiperl, & Jick 2007).
Restructuring of the administration was also life-threatening in ensuring that fresh new and pioneering ideas are taken into the supervision of the company. Leadership reorganization refers to the change of ascendency of the company. The presence of effective leaders ensures that the process of organizational change is unnatural and acknowledged by all the employees of the company. With an effective management team Kolind will be able to ensure that the organizational changes that he desires to see on the company are implemented (Peiperl, & Jick 2007). Adaptive leaders who are open to change for the long term good of the company will ensure that there is direction, orientation and struggle rheostat in each of the steps involved in administrative change and restructuring....