Conflict Management of Oticon

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Date Submitted: 09/25/2012 05:38 AM

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Conflict Management of Oticon


* Background

Oticon is one of the world's largest producers of hearing aids and situated in Denmark outside the capital Copenhagen. The company was established in 1904 by Hans Demant as essentially a trading company, and it began its own production of hearing aids during World War II (Gould, Stanford & Blackmon, 1991).

In the 1980s, the company faced increasing and intractable difficulties in many aspects. Its market share, in 1970s, tumbled from 15 percent to 7 percent, losing its position as market leader to third place (Gould et al., 1991). The interaction and cross-communication inside Oticon was limited due to three different major functional areas structure. In addition, the company was too conservative and lack of innovation and creativity, focusing too heavily on the traditional products and conventional market, with research and development activities declined (Larsen, 2002).

In 1988, Lars Kolind, who became the CEO of the third management team of Oticon, realized that the company need a more open and powerful management to establish a solid base for the long term. Therefore the company has experienced a dramatic revolution on organizational structure, job design, information technology and physical layout since 1990. All these proposals were described as “Think the Unthinkable” (Larsen, 2002).

* Thesis statement

It is the series of rapid and radical changes that triggered the consequential conflicts of Oticon. The following of this article, based on the conflict focus & source model and conflict response behavior model, will discuss the reasons why these conflicts happen due to different changes, and provide some appropriate recommendations and solutions to manage conflicts.


First of all, rapid and radical changes are considered to be the prime culprit of Oticon’s managing problem.

* Changes

The cost-saving measure was the first step taken by Lards Kolind, he implemented...