Oticon A/S: Spaghetti Organization and Beyond

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Case Details:

Case Code : BSTR318
Case Length : 23 Pages
Period : 1988-2008
Pub Date : 2009
Teaching Note :Not Available
Organization : Oticon A/S
Industry : Hearing aid
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Background Note

Oticon A/S (Oticon) was founded on June 8, 1904, by Hans Demant (Hans). Hans's Oticon venture came by after he bought an American Hutchison hearing aid from London for his wife who suffered from severe hearing-impairment. On coming back to Denmark, he received numerous queries about the hearing aid...

Enter Lars Kolind

Despite the various efforts taken that the Oticon management team took to revive the company's condition, not much could be accomplished. As a final effort, on October 1, 1988, Lars Kolind was appointed the Chief Executive Officer of Oticon...

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The Spaghetti Organization

Kolind's memo received mixed reactions from various quarters in the company.

Along with skepticism among employees and strong opposition from the management, there was agreement among the young managers that the drastic changes were required to revive the company...

The Resultant Transformation

In October 1991, the same year as the spaghetti organization was established, Oticon launched Multifocus - the world's first fully automatic hearing aid. In his book, The Second Cycle: Winning the War against Bureaucracy, Kolind wrote that Multifocus was a BTE hearing aid which was initially designed in 1981 under the name E36...

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