BUILDING AND DEVELOPING TEAMS-B

FT - 12

INSTRUCTORS: NIKOS BOZIONELOS

KONSTANTINOS KOSTOPOULOS

INDIVIDUAL ASSIGNMENT
“Case Study: Oticon – Spaghetti for the ears”

Name: Georgios Gousias

(Student ID: 09121-640)

ATHENS 2010
Introduction:

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 Oticon, which was founded in 1904 by William Demant, is a
Danish firm, and a leader in manufacturing hearing aids in Europe
and the rest of the world, as well. However, during the 1980’s, a
new small American company, which designed a new and innovative
model of hearing aids, entered aggressively the market, and caused
decreased sales for Oticon.
The reaction of Oticon was immediate, as they decided to
reconstruct the whole structure of the company, so as to boost their
efficiency and profitability. This process lasted for almost three
years, and resulted to dramatic changes, which helped Oticon to
regain profits, and become again a leader in their sector.

Many companies (e.g. Levi’s Strauss) have tried to

implement teamwork unsuccessfully. What were the key
elements that were responsible for the success of teamwork
in Oticon?

A lot of companies want to implement teamwork in their

processes, as working into teams has several advantages such as
creativity, innovation, speed, and better productivity. Moreover,
teams with more freedom in their ideas and way of working, seem
to be more productive and creative than others with stricter rules.
Nevertheless, there are several pitfalls in the implementation of
teamwork in their everyday activities, which have to be taken into
account from the management so as to avoid lower efficiency and
disorder in the operations.
In our case of Oticon, there are several key elements which
were responsible for the successful implementation of teamwork.
Firstly, the employees were fully informed about the changes
and the new working situation. In addition to this, some of them
participated to the process of restructuring the company. Even in

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the meetings there was the employees’ presence so as to be closer
to the new decisions. It is important to be mentioned that it was
necessary for the employees to practice in PC use, so they were
encouraged to take a PC home so as to practice in their free time
too.
Another aspect of this change was that because of the
spaghetti organization, all the departments were abolished, and the
company’s structure was based on the projects. By this, employees
were motivated, as they were encouraged to come up with new
ideas for new projects, and become leaders of these project teams.
So, the company promoted creativity and innovative ideas among
their workers and gained in productivity, as the employees felt
satisfied and ready to contribute more, because they were active
members in the development of the organization. They organization
of the company became more elastic, that gave freedom to
employees’ duties, as they could co-operated and even more, work
in the same offices, by moving their desks.
Another critical factor that differentiates Oticon and Levi’s, is
that Oticon gave the freedom to project leaders to select on their
own the team members, according to their specifications, in a more
informal way. What is more, the selected team members had the
right to refuse to take part in the project. This means that the
people who are in the team, are by their will, so they are more
dedicated in the goal, and loafing effects are avoided.
Furthermore, it is important to be mentioned that team
meetings were frequently arranged, and the way the meetings were
conducted, were organized by the team itself, in the frame of given
freedom. So, teams decided in which way they could be more
productive, and, be frequent meetings and good communication,
the success was inevitable. On the contrary, meetings between
senior management, and project groups had taken place only once
every three months in order to present their results and take
feedback.

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 A three year preparation period before the completion of the
new structure was enough time for the idea to mature, and the
organization’s members to adapt to the new working conditions.
Finally, the fully autonomous groups were one of the most important
factors of success, as strong connections were built between the
team members, which ameliorated the collaboration. Moreover,
team members had the opportunity to work in several projects
simultaneously, which allowed them to exchange and share ideas
and information between “connected” projects. All in all, the not
formalized structure encouraged all employees to contribute in the
development, be having the right to give to their employers, new
ideas and projects, without the fear of criticism.

Would you use the same form of teamwork (e.g. In the

lines of “spaghetti” structure) and the same implementation
procedure if the company was based in China?

A lot of West countries’ companies take advantage of the

advantages of teamwork in order to boost their productivity and
efficiency. On the other hand, implementing these ideas, in Eastern
countries may have several pitfalls which have to be avoided. In our
case, Denmark and China have enormous differences especially, in
culture and way of life.
Chinese culture has a collectivist orientation (contrasting with
individualism that prevails in Denmark) that emphasizes on the
importance of the group structure, rules and values. It contains
aspects of teamwork, like a common goal, and cooperative effort. In
a collectivist society it is common to people to form groups, and
promote the group goals, even more than their individual benefit.
These teams are to be more productive under a strong leadership,
and straight rules and procedures.

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 Although, Chinese employees are encouraged by their own
culture to form teams and learn to cooperate with others effectively,
they cannot work efficiently if they are not under strong leadership
and outside rules and limits. Moreover, Chinese are risk averse (low
score to uncertainty avoidance), so they for rules and processes in
order to provide security, while in Denmark, where spaghetti
structure was implemented, people are more familiar in taking risks.
These are the reasons why this specific type of organization and
way of implementing it in a company, will not be successful in
Eastern countries, as China. Under this freedom, Chinese employees
would not be productive, as they have to follow the rules, and to do
a straight job. So, it is obvious that this type of organization must be
transformed in order to fit in this collectivist culture. For example,
the team leaders must be specific persons, selected by senior
management, and rules of the way the team is working, must be
specific, well-organized, and applied in all the project groups of the
company.
Some cross-cultural differences will not disappear so easily and
managers will have to understand and appreciate these cultural
oddities if they wish to run a successful business.

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 (Total words of the project = 1079)
References:

 Damien Power, Tobias Schoenherr, Danny Samson, “The

cultural characteristic of individualism/collectivism: A
comparative study of implications for investment in operations
between emerging Asian and industrialized Western
countries”, Journal of Operations Management, 2009.
 Tjosvold Dean, Poon Margaret, Yu Zi-You, “Team effectiveness
in China: Cooperative conflict for relationship building”,
Human relations, 2005, vol. 58.
 Dean Tjosvold, Chun Hui, Kenneth S. Law, “Constructive
Conflict in China: Cooperative Conflict as a Bridge between
East and West”, Journal of World Business, 36(2), 166–183.
 Thomas L. Quick, “Successful Team Building”, American
Management Association, 1992.
 Miu Chung Yan, Sheng-Li Cheng, “Searching for Chinese
characteristics: a tentative empirical examination”, China
Journal of Social Work, 1752-5101, Volume 2, Issue 1, 2009.
 Pernille Eskerod and Per Darmer, Oticon-Spaghetti for the ears

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