System Report for Oticon

System Report for Oticon

Introduction

The modern business environment requires that organizations make frequent changes to maintain their competitive edge. The organizational change represents all the modification activities carried out on the corporate system to improve performance. These modifications are often as a result of either external or internal factors. According to management experts, businesses are more likely to change their organizational structure due to external factors as compared to internal factors. External factors such as technological improvements, changes in product demands, and market globalization force companies to respond to keep them on a growth path. Challenges encountered by the institution often inform changes in an organization.

Common areas that are subject to change include structure, power hierarchy, and organizational strategy. However, these areas are connected: This means that when a business makes a structural change, they also have to consider making adjustments to the other two remaining factors. Therefore, companies need to look at all the areas before making any organizational changes.

Despite the existence of change around us, some may argue change does not come easy. One of the fascinating challenges that managers face is employee resistance to change. Business executives need to understand that there will always be individuals that will be opposed to changes. And rather than resorting to the old cliché “people resist change,” to explain this resistance, they should devise new ways of getting ahead of the situation. Managers more or less need to understand that resistance to change is healthy and that even the pettiest of resistance can spell doom for their business.

Constant communication and creating awareness are pivotal to carrying out change initiatives within businesses. Given that these changes impact employee and managers’ behavior, companies must promote employee participation. Managers and employees need to understand why these modifications are happening and why they are significant to the company.

This report examines the new system at Oticon and how it may affect the managers’ and employees’ work behavior. Oticon is one of the leading manufacturers of hearing aids and recently underwent organizational changes that saw the company adopt a “spaghetti-organization” structure to adapt to market changes and consequently remain competitive.

While the “spaghetti organization” gives the employees limitless power over their work, the organization also eliminates the chain of command. With no command chain, there exist no vertical and horizontal boundaries within the company. This means that all employees possess equal powers since status and ranks no longer exist. While this move makes communication and decision making easier since minimum time is wasted consulting, the relationship between subordinates and administrative staff is not established. Therefore, there is always going to be friction between the team players. Setting behavioral standards within the company provide an effective solution. These standards can help define boundaries and establish boundaries between the employees and the administrative staff. Also, the system fails to recognize authority and does not delegate responsibilities. Consequently, this may lead to confusion within the organization in case of problems as workers do not know the power to report.

Moreover, the spaghetti organization is the perfect breeding ground for unhealthy competition. Every employee will want their idea approved and funded by the management. However, due to scarce resources, the administration is inclined to support a well-promoted idea. This move fosters a culture of competition within the company where everyone competes with everyone for project funding. Since project leaders prefer accomplished team members, demand for team players who have completed many big projects is often high. This means that those with fewer completed projects will always be overlooked, leading to some employees feeling discriminated and as outsiders.

Similarly, given that project leadership is assigned depending on factors such as who came up with the idea, some employees that are “less creative” but possess exceptional leadership qualities may feel left out. Besides, the fact that project leaders have the authority over who joins their group can result in favoritism, which may be detrimental to the overall performance of the company. A dislike for a particular employee who is more qualified than the other may influence a project leader’s decision on who to join their team.

Conclusion

The spaghetti-organization structure presents the company with an excellent opportunity to grow. However, few adjustments need to be made to ensure that employee and managers’ conduct is positively influenced to achieve productivity.

Recommendations

From the above-stated issues, it is more than lucid that the structure can use some more work for it to function exceptionally.

• First, the top management should define the relationship between ordinary employees and their managers and project leaders and their team members. This recommendation can only be achieved by creating a chain of command, where there will be permanent project leaders whose primary role will be to oversee projects and will be answerable to the project manager. On the other hand, the managers will bear the responsibility of assigning project members to respective groups and providing necessary support to the project groups.
• Establish a channel through which project ideas are submitted to the project manager for deliberation and funding decisions to be made based on the viability of the concept rather than promotion.
• Lastly, project leaders to be selected based on factors such as leadership qualities and experience.