STRATEGIC MANAGEMENT Strategic Management

Strategic Management

Introduction

Oticon, the Danish hearing aid technology company, was a world leader in behind the ear hearing aids in the 1970s but by the 1980s its market share began to decline, as people moved to 'in the ear' models. By 1987, the company's market share had dropped from 15 to seven per cent and it was starting to lose money. Lars Kolind took over as CEO at Oticon in 1988 to turn its performance around.

A former management consultant and associate Professor at Copenhagen University, Kolind embarked on a classic turnaround strategy: he pared the company down, shed staff and improved efficiency. And he re-focused the business on its key markets. By 1989, the medicine seemed to be working and Oticon returned to profit. But Kolind knew that the changes were not enough. “It was clear that we could not survive over the next five years without taking a radical step” he remembers.

It was at that point that we reached a sort of breakpoint. I realised the competitive situation was extremely difficult because we were up against all the big boys you can imagine - Siemens, Philips, Sony, 3M, and AT&T. My analysis was that we could never beat them in financial resources; we could never beat them at marketing or on brand because they all had fantastic brands. That could never beat them on technology, so we had to find something that we could do in a unique fashion. That led me to believe that if we could design a uniquely innovative, fast moving, efficient organisation, then this is something they could never replicate.

Kolind's response to this problem was a radical new organisational model with no formal hierarchical reporting relationships, a resource allocation system built around self-organised project teams, and an entirely open-plan physical layout. He called it the spaghetti organisation, to symbolise the organic and non-formal structure he was trying to create. 

The altering function of FTMs

From a chronicled viewpoint, the function of FTMs can be glimpsed to have gone through several time span of transition. In this part the change cycle, which displays that the FTM's function comprises of four major time span of change, that is, the manager-in-charge (MiC), manager-in-the-middle (MiM), manager-on-the-margin (MoM), and manager-in-charge-plus (MiCP), is discussed. More significantly, interior these time span of transition, the four key components portraying to leverage the FTM's HRM presentation are highlighted.

 

Case setting

The business concerned, cited to as AeroCo, types part of a large British multinational, and uses roughly 300 people. AeroCo commenced as a mechanical expertise development unit interior its parent business - a international expertise business concentrated on the automotive and aerospace commerce and hardworking in more than 30 nations in Europe, the Americas and Asia Pacific. At the end of the 1990s, whereas, it was commenced as a stand-alone enterprise suggesting incorporated expertise answers to purchasers in these industries. Subsequently, it furthermore amplified into engaged with purchasers in the rail commerce and into suggesting recruitment services - providing sub-contract assets to ...