Oticon Case Study

Case Study

OTICON

Today's knowledge special: spaghetti

Knowledge has been recognized as a valuable resource necessary for organizational growth and sustained competitive advantage, especially for organizations competing in uncertain environment. Grant (1996) and Liebeskind (1996) argued that knowledge is an organization's most valuable resource because it represents intangible assets, operational routines and creative processes that are hard to imitate. This is probably why Oticon focuses so much on knowledge assets and the management. Because it is an innovation based industry whereby a single ingenious innovation can truly gain it an upper hand in the market it operates in. Most organizations do not possess all the required knowledge that needed within their formal boundaries and must rely on linkages to outside organizations and individuals to acquire knowledge.

In Oticon, they do so free from hierarchy and local rules. Though it has many different teams working on different projects, informal and reciprocal knowledge sharing between individuals are sustained through team mixing and no set team structure.

Traditional organisational structures are less conducive to information sharing; Oticon's approach 'resembling a plate of spaghetti' enables barriers that may exist under the traditional approach to be eliminated and the transfer of knowledge seems to flow easily between business units. Oticon encourages the sharing of information, via cross-functional and cross-hierarchical. Team members work in open areas and are not confined with whom they may relate, as is the case within a traditional organisational structure.

On the other hand, there are of course risks prevalent in Oticon, which is such a free form structure may not allow for dynamism or a strong figure to emerge to lead individual teams to breakthrough success as there is no status, or roles to be played by anyone. It seems that everyone is equal and a difference in opinions within members may lead to conflict within teams that may not be easily resolved. Furthermore, with such constant exchanges of members within various teams, there may not be enough time spent working together to create dynamic working partnerships. Some people just tend to work better when paired up with suitable colleagues and Oticon's structure does not allow for this.

In dynamic industries, organizational innovation derives from knowledge exchange and learning from network connections that span the company. Oticon sustains continuous innovation, by learning from within through communication systems or tools like bulletin boards or networks. Organizational members benefit from such internal network connections because they are able to gain access to new information, expertise and ideals not available within their boundaries.

Oticon's knowledge management approach in this case study is primarily human focused. It is based on the transfer of knowledge via relationships rather than systems & I.T. Oticon current approach to knowledge management seems to focus on Tacit Knowledge transfer. Through the establishment of Project Teams staffs are encouraged to share ideas and information. Also employees rotate routinely, expanding and disseminating their knowledge. This process ensures that knowledge, which is deeply embedded in the minds of staff, is shared freely. The adoption of this type of knowledge sharing seems to motivate employees to freely share information. As it is just as important for the "Push" factors to be present, that is, senior managements endorsement, it is vitally important that the "Pull" factors, that is employees wanting to share knowledge, is present within the culture of a company. It seems to have successfully developed such a culture.

Knowledge creation and sharing is central to strategic and operational success (Trudell 2006). Oticon has established an organisation and cultural means of promoting knowledge creation and sharing. It has created an environment that encourages knowledge management success. This is not an end in itself and does not guarantee a successful outcome; however, it improves the likelihood of success. It achieves this by establishing groups with all of the experts required to successfully complete a project, along with staff routinely rotating between projects. This encourages the sharing of ideas amongst the assembled experts and generates a flow of knowledge between individuals and across the organisation. It also provides opportunities to gather unique information and consider diverse perspectives.

However, Oticon seems to focus primarily on the dissemination of knowledge via relationships. It is vital that companies have mechanisms to capture, manage and share knowledge. Knowledge Management is not just about people but also about strategies, processes and systems. Oticon does not seem to have the processes or the technological infrastructure in place to gather and manage information. It is vital that a company has the systems to capture and communicate Tacit and Explicit knowledge.

In order to keep knowledge in the organization, Oticon should develop corporate portal (Benbya, Passiante & Belbaly 2004) which can allow employee to access and search the materials that they need. It is a strategy of explicit knowledge. Explicit knowledge is knowledge base that has been committed to some form of communication medium. Capture and Disseminate knowledge via handwritten document, computer program, analysis report or design. Use knowledge management electronic repository to codified and stored knowledge in computer or knowledge bank is a good idea. Many new ideas are based on old information that is preserved. Whenever necessary, staffs can, in retrospect, improve, update and rectify the knowledge leading to effectiveness, correctness and consistency. This is very important for an industry dependent on knowledge base asset and has a positive impact on projects earned value. It is a vehicle to recycle knowledge. Also, team consultation with experts can happen through phone calls, email or videoconferences. There is not necessary have to face to face. It can be face to document as well.

Tacit and explicit knowledge is a vital item in any company