The rapid technological advancements, as well as highly competitive markets, have created extremely challenging environments for the prosperity of business organizations. Different organizations now bank-on a variety of modern management strategies to not only guarantee their survival in the market but also increase their profitability. Due to the complicated and fast-changing consumer demands, organizations have no alternative except to inculcate a culture of innovation, creativity as well as entrepreneurship into the contemporary business world in order to succeed. Octine is one such organization that has waded through thick mad since its inception way back in 1904 to become one of the best hearing aid producers in the world. The Danish-based company became world’s best producer of the hearing instrument in the 1970s. However, its operations and market control tumbled following an introduction of alternative technology in the manufacture of such instruments by its rival organizations in the manufacturing industry. The development of ‘in-ear’ hearing aids in late 70s by the business opponents subjected the company to massive loss of finance as well as market share due to the fact that its ‘out-of-ear’ hearing aids could not counter the introduced products. Revitalization of this company commenced after the appointment of Lars Kolind as its president in 1988. This paper intends to examine whether the actions, activities as well as the behavior of Oticon and its president are in line with the practice of corporate entrepreneurship in respect to the levels and forms of corporate entrepreneurship module.
Innovation as an element in corporate entrepreneurship
After the introduction of Lars Kolind as its president in 1988, Octine Company has since achieved commendable successes in the manufacturing industry. To begin with, the company adopted entrepreneurial strategies necessary for the survival of the business in the highly dynamic business environment To begin with; Oticon has been aggressive in the manufacturing industry by providing a suitable and conducive atmosphere for innovation. Having faced financial problems in its earlier years of operation, Octine resorted to enhancing innovation in an attempt to introduce new products in the market. In 1980, the company developed industry’s first automatic and self-adjusting hearing aid. This product performed well in the market by increasing profitability of the firm as well as its market share. Additionally, Octine Company introduced another product in the market in 1991. The MultiFocus hearing aid was launched followed by the reintroduction of other three powerful products modified from MultiFocus in the firm’s subsequent years of operation. More importantly, the technology ensured a reduction in the size the MultiFocus by about half its original size. The firm managed to control the market by expanding its market share in 1994 as well as increasing both the capital base and profitability. Oticon launched many products in the market during the tenure of Kolind as president. In total, fifteen products were launched in the late nineties. This was estimated to be twice hearing aid instruments the company had previously manufactured. Such innovations contributed to the improvement of Oticon’s performance in the market (Miller and Friesen, 1982). At the outset, the company recorded an annual increase in sales of about twenty percent contrary to the shrinking of market growth in the industry. Moreover, it had a hundred percent increase in the company turn over as well as four percent increase in the market share in 1995.The company president never rested at that point and instead worked hard to introduce a new product in 2005. The new product was referred to as DigiFocus helped the company regain its reputation which had been dented in the public image. For instance, Oticon won awards on the last product in addition to increasing sales by about twenty percent. This was made possible due to the positive management practices adopted by the then president Kolind Lars. The president pursued a dynamically continuous mode of innovation that encouraged creativity in the firm (Miller and Friesen, 1982). These practices encouraged creativity and innovativeness in the manufacturing firm. To begin with, president incorporated a sense of teamwork, creativity as well as cost effectiveness in the management of the execution of duties and responsibilities by all. Notably, Kolind abandoned traditional organizational structure by adopting an informal organization structure after eliminating a variety of functions in the head office. These functions included marketing, product development, managerial supervisory positions as well as finance. This was meant to facilitate teamwork, cooperation as well as innovation in the company. Octine Company is currently one of the top three world’s best manufacturers of hearing aids. He introduced a positive corporate behavior in the company that included risk taking, innovativeness as well as engaging the employees proactively in the management of the firm. Kolind treated the employees as adults and therefore believed that every worker would make a sound decision on what to do and how to do it. Consequently, the workers were now empowered to pursue their duties and responsibility diligently. According to Miller and Friesen (1982) such suitable atmospheres enhance innovation as workers engage themselves in what they know and do best.
Since his appointment in 1988, Kolind has always believed in risk taking as a suitable management strategy aimed at improving the performance of the firm. The president argued that it’s possible for an individual to be forgiven when s/he experiments something while in doubt. He says that both the outcomes of failure and success would be appreciated rather than not trying. He further laments that it would be difficult for one to get permission for pursuing something than being forgiven after failing in the trial. According to the aforementioned attitude, it is vividly clear that Oticon Company believed in risk taking during implementation of its management strategies (Hopenhayn, 2002). Generally, Lars Kolind is a risk-tolerant entrepreneur with high optimism that investments made at the company would yield satisfactory returns. For instance, Kolind restructured the company’s management system by introducing an informal organization structure compared to the traditional system practice previously. In the new arrangements, a lot of basic things such as physical offices were removed and a face-to-face communication system introduced. A variety of functions had been scrapped from the head office among them; marketing, product development, managerial supervisory posts as well as finance functions. This is an initiative adopted by the leader in an attempt to eliminate barriers to innovation as well as competitiveness. The president risked in the adoption of such an initiative since it had neither been practiced by the company nor other firms in the industry (Hopenhayn, 2002). It is however noteworthy that the returns on such investments were impressive. The management strategy was a success in realizing the goals and objectives of the firm. Oticon increased its performance through increased sales, expanded market share as well as turn over despite the risks involved.
Proactiveness of the management team
Proactiveness entails the ability of an individual or corporate to enforce changes that would counter expected problems and not sitting back till such challenges arise. The management team of Oticone led by Kolind introduced a variety of changes in the company so as to improve the general performance of the organization as well as prepare to tackle unexpected business uncertainties when the time is due (Miles & Morgan, 1999). These changes included rearranging the management system by abandoning traditional organizational structure and adopting a modern informal system without any recognized management structures. Moreover, job titles as well as related policies were eliminated. Kolind argued that such changes would foster innovativeness, cooperation and teamwork among the company workers. The changes enhanced worker relations, creativity and cost-effectiveness in Oticone firm. Surprisingly enough, the president abandoned the company budget and drafted a new plan in 1991 that guided the operations of the firm. Besides, the firm now operated like a project with starting and completion time. The abandoned managers acted as the leaders of such projects. Employees were allowed to join the projects at any time they deemed necessary as long as the leader had endorsed such a move. Moreover, such projects would only require the consent of one of the senior official managers to operate (Morris, Kuratko & Covin, 2008). Such moves by the president created tension and confusion in the company. Firstly, individuals could not clearly understand their new roles and responsibilities. This was attributed to the fact that the original recruitment process never streamlined project management as well as skills in teamwork as qualification requirements before a worker would assume a responsibility in the firm. On the other hand, managers were never willing to give up their position as they would lose their power base as well as the monopoly of information they earlier enjoyed. Generally, Kolind introduced a variety of changes in the management practices which revolutionized the institution to its profitability. He integrated both strategic as well as entrepreneurial actions in the management of the company thereby fostering productivity and excellence. The aforementioned changes in the company improved the performance of the firm enormously given the outcomes witnessed in the subsequent years.
Entrepreneurial intensity entails combination of the extent of a company’s proactiveness, innovativeness as well as risk taking integrated with rate at which the firm engages business adventures (Morris, Kuratko & Covin, 2008). As discussed above, Oticone Company has demonstrated high degree in risk-taking, proactiveness as well as culture of innovativeness as witnessed in the variety and number of new products it has so far launched in the market after the appointment of Lars Kollind. Moreover, Octine has shown aggressiveness in the implementation of its management strategies as seen in the consistent drive to enhance innovativeness, creativeness as well as competitiveness in the market. It is noteworthy that the revival of Oticone Company is attributed to the aggressiveness of the firm’s management led by Kolind. Kolind has been a catalyst of change in the company that once plummeted as a result of lack of competitive advantage against its opponents in the manufacturing industry. However, the company has shown little interest in venturing in other businesses (Morris, 1998).
Forms of corporate entrepreneurship
Forms of corporate entrepreneurship may include corporate venturing as well as strategic entrepreneurship. As discussed above, Oticone Company has not demonstrated interest in investing in other companies or considering joint venture with other like-minded companies. However, strategic management has been deeply considered by the Danish firm. Strategic entrepreneurship involves concurrent behavior of a company of seeking opportunities and advantages which would improve the performance of such companies upon investments in those areas. Kollind has utilized the concept of strategic management to create wealth for the company. Endowed with an entrepreneurial mindset and leadership together with the prevailing entrepreneurial culture at Oticone, the president has employed sound strategic management of the company resources as well as enhanced creativity to develop innovations in the firm. To begin with, the president opted to reconstruct the business model of Oticone in his attempt to revive the company (Katz, & Shepherd, 2004). The restructuring of Oticone system included scrapping of various functions as earlier mentioned, elimination of job descriptions as well as changing of communication modes from use of paperwork to face-to-face approach.
At first, such restructuring process was met by opposition from workers but the outcomes were commendable. According to Katz & Shepherd (2004) a business model is only important to the company when it can be maintained within the financial capabilities of the firm. Construction of a business model is usually based on the current data as well as the expected changes in the business. However, Kollind never adopted any formal method of constructing such business model but rather took all the risks involved in implementing an informal system witnessed in the company. Such risks may be detrimental to the business venture in case of any failure in the system implementation or unexpected uncertainty in the market (Katz, & Shepherd, 2004).
Generally, the desire of an organizational management team to pursue corporate entrepreneurship may be instigated by a variety of factors including the existing or perceived flaws in the traditional systems adopted by a company as well as required innovations, changes, and improvements in the corporate management to enhance performance of such firms (Miller and Friesen, 1982).
Sound management of business ventures is elemental in the success of such organizations. Such management of a business organization would depend on strategies employed by the management team as well as the type of leadership style adopted by the managers. Oticone Company for instance has adopted a democratic leadership style where decision making process involves all workers. Moreover, the employees have been empowered to make decisions in the absence of their superior so long as such moves are worthy. Kollind has revived Oticone Company which had plummeted due to poor management. The leader introduced unique management strategies which have so far improved the performance of the firm enormously. These strategies included restructuring of the business model to enhance innovation; competitiveness as well as team work in the company and eliminate barriers to the accomplishment of such goals and objectives. Kollind has demonstrated positive entrepreneurial competencies including risk-taking ability, proactiveness as well as innovativeness. Such skills and competences has steered the company to greater heights in the manufacturing industry. Notably, the Danish-based company has recorded a lot of achievements including becoming the world’s best producer of hearing instruments in the 1970s as well as winning awards after introducing DigiFocus in 2005. Moreover, the company recorded increased sales when the market growth was shrinking in 1995. Oticon firm also expanded its market share as well as its turn over by hundred percent. Such skills are vital for the survival of any business enterprise in the ever changing and competitive business environment. Generally, the Oticon president has introduced positive corporate behavior in the company that included risk taking, innovativeness as well as engaging the employees proactively in the management of the firm. The outcome is impressive!
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