1 Playing Market in Oticon: Problems of Disaggregating Internal Organization Nicolai J Foss Department of Industrial Economics and Strategy Copenhagen Business School Preliminary draft, 6 July, 2000 Abstract At the beginning of the 1990s, Danish hearing aid producer, Oticon became world famous for its radical empowerment and delegation experiment, called the spaghetti organization. Almost a decade later, most of the more radical elements of the spaghetti organization have been changed. This paper tells the story of the spaghetti organization and its subsequent transformation, and speculates on the causes of the transformation.
2 Introduction The ongoing restructuring of organizational forms as a response to changes in fundamental drivers such as IT, measurement methods, internationalization and the increased emphasis on shareholder value has become a topic of strong academic as well as managerial interest. Thus, firms are argued to increasingly adopt network organization (Miles and Snow 1992) and engage in corporate disaggregation (Zenger and Hesterly 1997), so as to become information age organizations (Mendelsson and Pillai 1999). Much of this discussion has been phrased as a matter of bringing principles that are characteristic of the market for example, high-powered incentives, open competition over resources, flexibility, etc into hierarchical organization (Jensen and Meckling 1992; Jensen and Wruck 1994), and of infusing market exchange with characteristics of the hierarchy, such as information exchange, relations of trust, etc. (e.g., Zenger and Hesterly 1997). An underlying message clearly is that the boundaries between markets and firms are fading into insignificance. However, much of this discussion has neglected that it is far from unproblematic to mix principles that are characteristic of the market with principles that are characteristic of the hierarchy. To be sure, it can be done hybrid forms in a broad sense are clearly viable governance structures for some types of economic activities but at other times the respective principles collide. In particular, firms may often find it difficult to play market, that is, introduce high-powered incentives, various bidding-schemes, self-organizing project groups, etc. into their internal organization. This is not only a matter of the wellknown accounting difficulties associated with internal transfer prices. It is a more fundamental problem of trying to harmonize conflicting aims. This problem has many manifestations, chief among which are the problem of combining the centralized hierarchical authority which must in the nature of things always characterize a firm with the delegation of authority which accompanies the attempts of firms to mimic the market. In the ensuing, these problems are discussed and illustrated with reference to decision-making processes and changes of organizational structures in the Danish electronics (primarily, hearing aids) company, Oticon (now William Demant Holding A/S). In the beginning of the 1990s, Oticon became worldfamous for its radical decentralization and empowerment experiment appropriately marketed as the spaghetti organization, and for the speed and radicality with which then CEO, Lars Kolind managed to accomplish a major organizational turn-around, particularly in the corporate headquarters/development parts of the Oticon organization. It was taken as an outstanding exemplar of change management (being generously cited by Tom Peters 1992), business process re-engineering (Obolensky 1994), and visionary
3 leadership and strong corporate culture (Yamashita 1998). 1 Kolind s dramatic and symbol-laden way of implementing the Oticon spaghetti structure as well as the structure (or, perhaps, non-structure) itself are still being given extensive treatment in management textbooks (e.g., Boddy and Paton 1998). In the present context, it is notable that the market metaphor was clearly involved, being used explicitly by Oticon insiders (e.g., Lyregaard 1993) and a market it seemingly was: Employees (particularly project leaders) were given very given many and wide decision-making rights; development projects could be initiated by any employee just like entrepreneurs in a market setting; project groups were self-organizing; the setting of salaries was decentralized to project leaders; most hierarchical levels were eliminated and formal titles done away with, etc. Thus, the intention was that the organization should mimic the market in such dimensions as flexibility, autonomy, flatness, etc. The decentralized market is made coherent that is, individual decisions and plans are coordinated by means of the price mechanism, various contractual institutions and norms and mores. In lieu of a distinct price mechanism, the market-like spaghetti organization was to be kept together by a shared set of values, the charismatic leadership of Lars Kolind, and by a committee, staffed by Kolind and three other managers, the primary purpose of which was to approve of or reject proposed projects. Although the spaghetti organization continues to be widely cited in management books and newspaper articles alike, that particular mode of internal organization does not exist anymore in Oticon it has been superceded by something far more structured. The introduction of the spaghetti organization made tremendous media (cf. Morsing and Kristensen 2000) as well as academic impact. However, the fact that the organizational design has been drastically modified since its introduction in 1991 has, in contrast, not been generally noted, much less analyzed. The purpose of the ensuing is to take some steps towards an understanding of why the change happened and in the process learn something about the limits to decentralizing an organization when the CEO and other topmanagers keep ultimate decision rights. Thus, the following is an attempt to address, using a concrete case and building on organizational economics insights, why organizational change, aimed at making an organization more decentralized, flexible and on the whole market-like, may be difficult to accomplish. Simulating the Market in Oticon Disaggregation as a Contemporary Business Practice There is accumulating empirical evidence that firm sizes have been falling throughout the world during the last two decades (Zenger and Hesterly 1997), as firms have engaged in downsizing, spin-off and outsourcing exercises. Thus, 1 The Oticon case is reported to be the best selling IMD case ever (Børsens Nyhedsmagasin 8. november 1999).
4 established firms have increasingly left activities to the market, meaning other (often new) firms. Fundamental advances in IT and measurement technologies have facilitated these changes (Zenger and Hesterly 1997); equally fundamental developments in the organization and motives of capital markets as well as increasing internalization have made them necessary. Cutting size, spinning off business units, etc. reduce coordination costs, improve incentives and help to clarify the nature of the businesses the firm is in. Improvements in entrepreneurship as well a better ability to produce, share and re-produce knowledge often result (Day and Wendler 1998). However, firms can reach these goals in a very different way namely by disaggregating internal organization (internal disaggregation) rather than disaggregating the corporation itself (external disaggregation). A number of contemporary management practices, notably TQM and knowledge management techniques, are basically internal disaggregation devices. 2 From a short-run perspective these may have the benefit of involving fewer lay-offs relative to external disaggregation. Moreover, spin-offs, carve-outs and the like are often legally quite complex operations, so internal disaggregation may be a quite attractive alternative in terms of ink costs expended on corporate lawyers. Add to this that management may have a sometimes quite justified fear that leaving too many activities in the hands of other firms may lead to a hollowing out of the corporation in the longer run. Finally, considerations of protecting valuable knowledge may enter the picture. When presented in this way, one may wonder why firms should ever disaggregate externally: The two alternative means of disaggregation are very imperfect substitutes and external disaggregation appear to be both more painful (e.g., in terms of employee dissatisfaction), more costly (e.g., in terms of lawyer bills) and more risky (e.g., in terms of losing the firm s crown jewels, i.e., its strategic resources and capabilities). However, internal disaggregation also has its distinctive problems. The spaghetti experiment in Oticon illustrates some of these. 3 2 The potentials and pitfalls of these practices and techniques must be understood in the light of the potentials and pitfalls of the general phenomenon of internal corporate disaggregation. Thus, the reasoning of this paper also applies to these practices. 3 In terms of the distinction between external and internal corporate disaggregation (Zenger and Hesterly 1997), Oticon clearly put all the emphasis on internal disaggregation. The possibility of strengthening incentives and trimming the organization by relying on the real market that is to say, spinning off functions and departments never appears to have been seen as a serious alternative to internal disaggregation. In fact, the company remains strongly vertically integrated. For example, many of the machines used in the production plant in Thisted, DK, are actually produced in a special department in the headquarters in Hellerup. Although a number of potential suppliers are available, management questions their ability to deliver the right quality.
5 Oticon: Background 4 Founded in 1904 and based mainly in Denmark, Oticon (now William Demant Holding A/S) is a world leader in the hearings aids industry. 5 For a number of years in the beginning to the mid-1990s, Oticon became one of the bestknown and admired examples of radical organizational turnaround. The turnaround aimed at reaching the complementary goals of increasing employee empowerment and responsibility, reducing product develoment cycles, increasing contact to customers, mobilizing dispersed and hidden existing knowledge, and building new knowledge. Oticon CEO Lars Kolind, the architect of the spaghetti organization turnaround, became a favorite of the press. In many respects, the strong publicity received by the spaghetti experiment was completely justified. First, the experiment embodied virtually all of those non-traditional management practices that were gaining currency at that time. Second, although other firms adopted similar decentralization and delegation exercises and had done so earlier, the turnaround in Oticon was remarkable for the quickness with which it took place. Finally, the spaghetti organization very quickly demonstrated its prowess by re-vitalizing important, but forgotten projects, that, when implemented in the production of new hearing aids, produced significant financial results, essentially saving the firm from a threathening bankruptcy. The background to all this was the following one. From being the world leader in the late 1970s (at a 15 % market share in 1979), that position was lost in less than a decade (market share had fallen to 7% by 1987). The effects were to produce massive financial problems. Management had to realize that in an industry where the race to bring the next technologically sophisticated product to the market was fast becoming the competitive criterion, the competition, notably other Danish hearing aid companies (Danavox, Widex), had leapfrogged Oticon in terms of technological developments and in terms of reducing the time length of product development. Oticon was left behind. However, realizing this took time and was painful; acting on the realization was apparently even more painful. On all accounts (Poulsen 1993; Morsing 1995; Foss and Hertz 2000), Oticon was locked into a competence-trap which was reinforced by strong groupthink, characterizing both the management team and the employees. A symptom of this was that around 1980, the dominant opionin among managers and people in development at Oticon was that the in-the-ear hearing aid would turn out to be a commercial fiasco. At any rate, in-the-ear hearing aids weren t Oticon turf. The self-image of the company clearly was one being an industrial company with 4 The material in this paper on Oticon builds primarily on Foss and Hertz (2000), and secondarily on Lyregaard (1993), Poulsen (1993), Morsing (1995), Eskerod (1998), and Morsing and Eiberg (1998). 5 See Lotz (1998) for a careful analysis of the hearing aid industry, with particular emphasis on patterns of innovation.
6 massive production facilities specialized in mass-producing the behind-the-ear hearing aids and developing that technology incrementally. The dominant ethos in the company was one defined by engineering people, not by marketing people; technology, not customers, was central. When problems began to accumulate, various attempts were made to change the situation; however, they were either too insignificant and incremental or didn t survive political jockeying inside Oticon. 6 The executive team had been in control of Oticon for just about thirty years. It was the same team who had taken the company to a number one position in the world market in the late nineteen-seventies. As a consequence of the mounting difficulties, the team collectively stepped down from their positions. The new CEO became Lars Kolind. Holding degrees in mathematics and management, an important part of his background was the international scout movement. It is telling that Kolind was particularly impressed by the ability of that movement to organize and coordinate efficiently, flexibly and rapidly large-scale gatherings (e.g., international jamborees), not as a result of detailed management but rather as a consequence of a strong and shared set of values. Upon assuming his new job in 1990, Kolind basically concentrated all decision-making powers in his hands; for example, virtually all expenses, even trivial ones, had to be approved of by him. He used this centralization of power to cut costs dramatically. However, in a almost paradoxical way, he combined almost dictatorial concentration of power with a great open ness and with great communicative skills. For example, the rather drastic cost-cutting measures were very openly communicated, and their necessity carefully explained. About a year after assuming his position, Kolind realized that the cost-cutting measures, which quickly improved the company s financial situation, had been fully exploited. Although the measures were necessary and yielded substantial financial results, they were only short-term measures. Something more radical was needed trying it was made possible by the accumulation of substantial slack resources which the cost-cutting exercise had produced. Trying Spaghetti That something was embodied in a 6 pages memo, presented to Oticon employees on April 18, 1990 under the heading, Think the Unthinkable (Kolind 1990). The objective of the vision was to create an increase in profitability by 30% over the next three years ( Project 330 ). This required a change of corporate vision and mission: The company should be defined broadly as a first-class service firm with products developed and fitted individually for customers, rather than narrowly, as a manufacturing company producing traditional high- 6 For example, the executive of the international division launched a campaign to renew Oticons image, called the Partner Project. The idea was to create a close relationship with hearing care professionals all over the world, and to try to get a better idea of the customers needs in this way. The project died when the three Oticon executives did not support it.
7 quality standard hearing aids. Customer orientation should be key. In order to meet these objectives, the document laid out a complete overhaul of the Oticon organization. Kolind named the new organization the spaghetti organization, in order to underscore the point that the new organization should be able to change rapidly, yet still possess coherence. It would be explicitly knowledge-based (Kolind 1990) and anthropocentric, yet based on free market forces (Lyregaard 1993). The aim was to build a new creative, innovative, knowledge-based, and completely flexible organization, primarily in the Oticon headquarters, although various aspects of the spaghetti-organization were also implemented in the production plant in Thisted (DK) and in various sales offices outside of Denmark. In order to symbolically underscore the fundamental transformation of Oticon, the company headquarters moved, at 8 am on 8 August 1991, to a completely new location. All of the furniture of the old headquarters was auctioned off. In the new building, all desks were placed in huge, open office spaces. Employees were not supposed to be permanently located at particular desks, but should move flexibly from desk to desk, bringing only a trolley with necessary paper with them. Inside a huge glass tube, placed in the lobby of the company headquarters, a steady stream of paper fell down, emphasizing the ambition to run the headquarters in a virtually paper-less way. Finally, all formal titles were done away with. Although symbolism clearly loomed large, some of these innovations were also quite functional in their own right. Thus, the huge, open office landscape constituted the physical infrastructure of an almost completely flat organization that was supposed to work by means of principles that emulated the market. For example, rather than being assigned tasks, employees now had a choice to decide which projects they would join. All projects were to be announced on an electronic bulletin board, where employees who would like to join them could sign in. The multi-job principle meant that employees were not restricted in the number of projects they could; on average each Oticon employee in the headquartes participated in 1,5 projects. Each project would hold employees with different skills coming from development, marketing and the production units. Project managers were free to manage the project, as he or she preferred. The project tema was required to undertake all the tasks connected with product development until the product was successfully introduced in all markets. To make it possible for project teams to rapidly combine the right competencies, the new organization was founded on four fundamental ideas. First, the traditional department structure was eliminated. Instead, all activities were now supposed to be organized by projects. The philosophy behind this was not only to make it more easy to combine complementary skills on projects, but also to eliminate department-specific group-think, a problem that had plagued the old organization. Second, new information technology systems were designed and implemented to make it possible to coordinate plans and actions in such a decentralized organization. The aim was to create a firm-wide
8 information flow, increasing employee understanding of company activities and making it easier for project teams to form. Moreover, the informationdissemination policy also helped to break knowledge-monopolies left over from the old organization, although this does not appear to have been an explicit aim. To obtain the end of creating a truly knowledge-based company, Kolind dictated a no paper policy. In principle, every document had to be scanned into a computer and filed there. Everybody was to have the same access to information. The goal was an elimination of 95% of all paper. Third, in a move called the breakdown of the palace, the traditional office was abandoned. No one had private offices or fixed desks all employees were located in one large office. At each desk there was a workstation, including a cellular phone and a computer with access to all information on the Oticon network. The employees physical locations changed according to the projects they worked on. Coffee bars were strategically located around the building to stimulate and encourage discussion, and a central spiral staircase that was wide enough to permit chance encounters and dialogue, replaced the elevators in the building. Finally, Kolind worked hard to develop and install a value base that stressed responsibility, personal development, freedom, understanding, growth, partnership and safety. These fundamental organizing principles were backed up by other measures. For example, Kolind introduced an employee stock program, which was motivated by the need to raise needed additional money for the transformation. Kolind invested 26 millions DKK of his own funds in Oticon. Project managers throughout the organization received a considerable amount of decision making power. Wage negotiations were decentralized. The project managers that is, those managers who were supposed to possess the most intimate knowledge of employee skills and efforts received the right to negotiate salaries. Finally, although project teams were self-organizing and basically left to mind their own business once their projects were ratified, they were still to meet with a Project and Product Committee once every three months for ongoing project evaluation. One of the things soon to be realized when the spaghetti organization became a reality was the Oticon actually already had almost fully developed the in-the-ear hearing aid back in As one employee said: We had created a good structure with five people each with their own area of responsibility I was responsible for the ear plug. But at that time the organization simply wasn t functioning. No-one really believed in it and there was no support. Yet another positive outcome of the spaghetti organization was that the development time of new products became half of what it used to be. Thus, typical time-to-market was reduced to three years. Customer orientation, another explicit aim of the spaghetti, also dramatically improved. In 1993, half of Oticon s sales stemmeed from products introduced in 1993, 1992 and A total of 15 new products had been introduced since the introduction of the new organization. Moreover, the ambition to broaden the business areas of Oticon was successful; it was characteristic of the new products that they were not just hearing-aid hardware, but complete integrated hearing solutions.
9 The Organizational Economics of the Spaghetti Organization A major problem that besets centralized decision-making systems in large firms, as well as in centralized economies, is that they have difficulties efficiently mobilizing and utilizing the local knowledge, such as the precise characteristics of specific processes, employees, machines or customers. As Hayek (1945) clarified, the main problem is that much of this knowledge is costly to articulate and transfer to a (corporate) center. Group think may exacerbate these problems, that is, make it even more costly to transfer knowledge to those who are supposed to make decisions based on this knowledge (Janis 1983). Markets are not plagued by these type problems, at least not to the same extent. Rather of involving a transfer of costly-to-transfer knowledge to those with decision rights, they tend to economize on the costs of transferring knowledge by instead moving decision rights to those who possess the relevant knowledge (Hayek 1945; Jensen and Meckling 1992; Jensen and Wruck 1994). In the process, markets ensure that, at least as a broad tendency, rights to make use of resources will move towards those who put the highest valuation on these rights. Moreover, because people interacting under market conditions are residual claimants on their own actions, effective use will be made of those rights. The Oticon spaghetti organization was very much an attempt to mimic the market in these dimensions. Thus, a basic problem in the old organization had been that commercially important knowledge simply didn t reach the relevant decision makers. A reflection of this is the example, mentioned earlier, of Oticon employees already having invented the in-the-ear hearing aid, that invention basically being shelved and forgotten until the spaghetti organization recovered it. By giving project teams extensive decision rights, making ideas for projects public and encouraging the composition of teams to make sure that the necessary complementary skills, the spaghetti organization stimulated a co-location of decision rights with local knowledge. Those who held the relevant knowledge should also have the authority to decide over the use of company resources, at least within limits. It is much the same co-location that places in a well-functioning market. Of course, the analogy is not complete. Oticon remained a firm. And firms confront a problem that markets confront to a smaller degree, namely that of making sure that decision rights are utilized efficiently, in other words, the problem of moral hazard. There was no apriori guarantee that project leaders and other employees would act in the interest of Oticon (and Oticon s owners). Several of the components of the spaghetti organization may be seen as responses to this fundamental agency problem. It is convenient to break the right to allocate resources to a particular project down into groups of decision-making rights, namely rights to 1) initiate a project, 2) ratify projects, 3) implement projects, and 4) monitor and evaluate projects (cf. Fama and Jensen 1983). Decision-making processes in project-based firms involve the exercise and allocation of such rights.
10 Usually, firms don t concentrate these rights in the same hands; rather initiation and implementation rights may be controlled by one person (or team) while ratification and monitoring rights should be controlled by other persons, usually hierarchical superiors. 7 As we have seen this is exactly what took place in Oticon. Thus, anybody could make initiate a project, in the sense of sketching, making preliminary plans, doing the required calculations, making contacts, etc. However, projects had to be evaluated by the Products and Projects Committee (henceforth, the PPC ), which was staffed by Kolind, the development manager, the marketing manager and the support manager. The PPC either rejected or approved of the project. Although the criteria for getting a project accepted by the PPC were not that harsh or encompassing projects basically only had to somehow relate to the business areas of Oticon and to yield a positive return over a three years period and with a discount rate of 30 % the PPC was the real holder of power in Oticon. Thus, projects were required to report to the PPC on a three months basis, and the PPC could at any time halt or close down projects. Thus, decision management (i.e., initiation and daily project management) was very strongly separated from decision control (i.e., project evalution and monitoring). In other words, the internal market was very much a managed one. From an organizational economics perspective, another notable feature of the spaghetti organization is the extent to which it was characterized by complementary elements, that is, organizational practices that formed an interlocking system, feeding on each other (Milgrom and Roberts 1990; Baron and Kreps 1999). Thus, widespread delegation of rights was accompanied by making incentive systems and employee monitoring much more fine-grained than they had been under pre-spaghetti structure. Thus, much wider dispersal of wages were allowed for, employee stock ownership was strongly encouraged, and employees were monitored by an elaborate system of evaluation, where their performance in 3-8 different dimensions (depending on the type of employee) was examined (Poulsen 1993). The fact that these organizational practices constituted a complementary system also helps accounting for the speed and roughness with which Kolind managed the transition from the old organization (also made up of complementary, yet different organizational practices) to the new system. It had to be in the big bang way; complementary systems simply are very hard to change efficiently in an incremental manner (Milgrom and Roberts 1990). In particular, vested interests, the efforts of rent-seekers who try hold to established priveleges, etc. may make transition hard. The change was clearly assisted by the symbolic acts undertaken by Kolind. More precisely, these helped to signal his commitment to the change. For example, Kolind s 26 million Dkr investment was such an act of commitment. Finally, his attempt infuse the organization with a strong set of shared values may also be seen as a an attempt to assist the 7 Exceptions may occur when giving subordinates more extensive rights (e.g., a package of initiation, ratification and implementation rights) strengthens employee incentives (see Aghion and Tirole 1997 and Baker, Gibbons and Muphy for analyses of this).
11 coordination of multiple efforts in a decentralized setting while simultaneously keeping agency problems at bay (Miller 1992). Thus, apparently Kolind did exactly what basic organizational economics reasoning would instruct him to do: He implemented changes in a big-bang fashion so as to effectively break old commitments, ensure coordination, make life hard for rent-seekers, and create new organizational expectations; he rightly separated decision-management (the project teams) from project control (the Product and Project Committee; he signaled his commitment to his vision and to the company by putting his own fortune at stake (Hermalin 1998); he worked hard to create a corporate culture that could keep opportunism at bay; and he made employees residual claimants through the employee stock schemes. Yet, today the spaghetti experiment is over. Although Oticon headquarters is still by any reasonable standard an organization characterized by substantial freedom, there has decidedly been a retreat from the spaghetti. What happened? Spaghetti and Beyond: Some Problems of Bringing Markets into Hierarchies Retreating From Spaghetti The spaghetti organization is no longer a valid description of Oticon s organizational structure. Somewhere along the line (particularly after 1995), Oticon began to abandon the spaghetti. Lars Kolind s vision for Oticon was never fully implemented, and Kolind is no longer the CEO of Oticon, resigning in 1998, because he felt that his task of making Oticon profitable was accomplished. Most notably, Oticon headquarters have essentially been divided into three business teams, Team Advanced, Team Technology and Team High Volume that serve as overall administrative units around the development projects marking a break with the idea that the necessary structure was to have temporary projects being managed by the PPC. 8 Each business team is managed by two team leaders, namely a technician and a person with marketing or human resource skills. In turn, the business teams refer to a competence centre which is staffed by the CEO and 9 managers. The competence centre is in charge of all projects and their financing and of an operational group controlling administration, IT, logistics, sales and exports. The competence centre is a successor to the PPC, but its style of managing the projects is very different. Moreover, it holds more formal authority than the PPC. Most of the initiative with respect to starting new projects is taken by the competence centre, although the need for employees to provide inputs in the form of new project ideas is still strongly stressed. Many of the decision-making rights held earlier by project leaders have now been concentrated in the hands of the 8 The division into the business teams actually happened before Kolind left Oticon. He acknowledged that the organization had evolved and seemed unmanageable.
12 competence centre or individual managers. For example, project leaders don t have the right to negotiate salaries anymore; this right has been concentrated in the hands of the HRM manager. Project leaders are appointed by the competence centre; the right to be a project leader is not something that one grabs, as under the spaghetti organization. Although multi-jobs/multi-tasking are still allowed, they are not directly encouraged, and their prevalence has been much reduced. The norm is to work on only one project at a time. The electronic job bourse where anybody in the old spaghetti organization could advertise projects and seek coworkers has been dropped. Thus, although Oticon remains in all relevant dimensions an unusually relaxed and empowered organization, many of the crucial elements of the spaghetti organization have been left. What happened? Some Possible Causes of the Partial Failure of the Spaghetti Experiment Note: This section of Foss s paper is what we will discuss in class, so it is not presented here, but it will be made available after class.
13 References Aghion, Philippe and Jean Tirole Formal and Real Authority in Organization, Journal of Political Economy 105: Baker, George, Robert Gibbons, and Kevin J. Murphy Informal Authority in Organizations, Journal of Law, Economics and Organization 15: Baron, James N. and David M. Kreps Consistent Human Resource Practices, California Management Review 41: Boddy, David and Robert Paton Management: An Introduction. London: Prentice Hall. Bowman, Edward H. and Harbir Singh Corporate Restructuring: Reconfiguring the Firm, Strategic Management Journal 14: Børsens Nyhedsmagasin. Opgør med Kolinds kaos, 8. November 1999: Coase, Ronald H The Nature of the Firm, Economica (N.S.) 4: Cowen, and Parker Markets in the Firm: A Market Process Approach to Management, The Institute of Economic Affairs: London. Day, Jonathan and Jim Wendler The New Economics of Organization, McKinsey Quarterly : Eskerod, Pernille Organising by Projects: Experiences From Oticon s Product Development Function, in Morsing, Mette and Kristian Eiberg, eds Managing the Unmanageable For a Decade. Hellerup: Oticon. Fama, Eugene and Michael C. Jensen Separation of Ownership and Control, Journal of Law and Economics 26: Foss, Nicolai J and Kirsten Foss Economic Organization and the Trade- Offs Between Productive and Destructive Entrepreneurship, LINK Working Paper (downloadable from Foss, Nicolai J. and Louise Hertz Cogitate Incognita The Rise and (Partial) Decline of the Oticon Spaghetti Organization, case, Copenhagen Business School. Hart, Oliver Firms, Contracts and Financial Structure. Oxford: Clarendon Press. Hayek, Friedrich A. von The Use of Knowledge in Society, in idem Individualism and Economic Order, Chicago: University of Chicago Press. Hennart, Jean-Francois Explaining the Swollen Middle: Why Most Transactions are a Mix of Market and Hierarchy, Organization Science 4: Hermalin, Benjamin Toward an Economic Theory of Leadership: Leading by Example, American Economic Review 88: Hodgson, Geoff Economics and Utopia. London: Routledge. Holmström, Bengt The Firm as a Subeconomy, Journal of Law, Economics, and Organization 15:
14 Janis, I.L Groupthink: Psychological Studies of Policy Decisions and Fiascos. Boston: Houghton-Mifflin. Jensen, Michael C. and William H. Meckling Specific and General Knowledge and Organizational Structure, in Lars Werin and Hans Wijkander, eds Contract Economics. Oxford: Blackwell. Jensen, Michael C. and Karen Wruck Science, Specific Knowledge and Total Quality Management, in Michael C. Jensen Foundations of Organizational Strategy. Cambridge: Harvard University Press. Kolind, Lars Think the Unthinkable, in Mette Morsing and Kristian Eiberg, eds Managing the Unmanageable For a Decade. Hellerup: Oticon. Kunda, Gideon Engineering Culture: Control and Commitment in a High-Tech Corporation. Philadelphia: Temple University Press. Laffont, Jean-Jacques and David Martimort The Firm as a Multicontract Organization, Journal of Economics and Management Strategy 6: Lotz, Peter The Paradox of High R&D and Industry Stability: Technology and Structural Dynamics in the Global Hearing Instruments Industry, Industry and Innovation 5: Lyregaard, Poul-Erik Oticon: Erfaringer og faldgruber, in Steen Hildebrandt and Leif H. Alken, eds. På vej mod helhedssyn i ledelse. Ankerhus. Mendelson, Haim and Ravindran R. Pillai Information Age Organizations, Dynamics, and Performance, Journal of Economic Behavior and Organization 38: Miles, Raymond E. and Charles C. Snow Causes of Failure in Network Organizations, California Management Review: Milgrom, Paul Employment Contracts, Influence Activities and Efficient Organization Design, Journal of Political Economy 96: Milgrom, Paul and John Roberts The Economics of Modern Manufacturing: Technology, Strategy and Organization, American Economic Review 80: Miller, Gary Managerial Dilemmas. Cambridge: Cambridge University Press. Mises, Ludwig von Human Action. San Francisco: Fox and Wilkes. Morsing, Mette Omstigning til Paradis? Oticon i processen fra hierarki til spaghetti. Copenhagen: Copenhagen Business School Press. Morsing, Mette and Kristian Eiberg, eds Managing the Unmanageable For a Decade. Hellerup: Oticon. Obolensky, Nick Practical Business Re-engineering. London: Kogan Page. Poulsen, Per Thygesen Tænk det utænkelige revolutionen i Oticon. Copenhagen: Schultz. Prendergast, Canice The Provision of Incentives in Firms, Journal of Economic Literature 37: Schaefer, Scott Influence Costs, Structural Inertia, and Organizational Change, Journal of Economics and Management Strategy 7:
15 Williamson, Oliver E The Mechanisms of Governance. Oxford: Oxford University Press. Yamashita, Hideo Competitiveness and Corporate Culture. Aldershot: Ashgate. Zenger, Todd and William S. Hesterly The Disaggregation of Corporations: Selective Intervention, High-Powered Incentives, and Molecular Units, Organization Science 8:
Organizational Design Dr. Marco Weiß email@example.com Winter 2007/08 Content and structure of the course This course provides an overview of the theory and practice of organizational design.
Strategic Succession in Family Businesses: Evidences from Bio-energy companies in Brazil Fabio Matuoka Mizumoto Professor at Fundação Getúlio Vargas EESP firstname.lastname@example.org Matheus Kfouri Marino Professor
GEORGE P. BAKER RESUME September 2003 Address Harvard Business School 90 Leeson Lane Mellon A4-4 Newton, MA 02459 Boston, MA 02163 (617) 527-2795 (617) 495-6119 Current Positions Herman C. Krannert Professor
Center for Effective Organizations WHAT MAKES HR A STRATEGIC PARTNER? CEO PUBLICATION G 09-01 (555) EDWARD E. LAWLER III Center for Effective Organizations Marshall School of Business University of Southern
TRAINING AND EDUCATION IN THE SERVICE OF MILITARY TRANSFORMATION Ecaterina Livia TATAR Lecturer, Regional Department of Defense Resources Management Studies, Brasov, Romania The magnitude and challenges
Leadership Case Study: Babcock University New Department Chair Leaders Dilemma by, Brandon Garber, BS Submitted to Robert Dibie, PhD. In Partial Fulfillment of the Requirements of V566: Executive Leadership
61-03-63 IMPLEMENTING EMPLOYEE EMPOWERMENT James A. Ward Total quality management (TQM) is built on the four cornerstones of customer focus, continuous process improvement, management leadership, and employee
Spinning Off - Effective Transitions: Lessons to be applied when an organization creates a new nonprofit or for-profit spinoff Abstract By: Warren Tranquada and John Pepin In a preliminary study of successful
GLOBAL EXECUTIVE MBA ELECTIVE COURSES The Elective Courses allow you to go deeper into some of the disciplines covered in the Core Courses and a few new areas, depending on your personal interests. Choose
SMART HR Manager By : Irene Dhanavathi Abstract: Human resource management (HRM), the management of work and people towards desired ends, is a fundamental activity in any organization in which human beings
MANAGEMENT LEVELS 2 Management levels Managers are organizational members who are responsible for the work performance of other organizational members. Managers have formal authority to use organizational
Center for Effective Organizations TOTAL QUALITY MANAGEMENT AND EMPLOYEE INVOLVEMENT: SIMILARITIES, DIFFERENCES, AND FUTURE DIRECTIONS CEO PUBLICATION G 92-16 (219) EDWARD E. LAWLER III University of Southern
FORUM The New Human Resource Department: A Cross-Functional Unit Joan F. Marques As new trends in business operations take hold, the need for a redefined human resource department, including what it should
ACCOUNTING MODERNIZATION PREMISE OF AN EFFECTIVE GOVERNANCE SYSTEM OF ENTERPRISE MIHAELA UNGUREANU ALEXANDRU IOAN CUZA UNIVERSITY OF IASI email@example.com Abstract: Value of company is maximizing insofar
Anti Drugs Association Belgrade Operations Branch www.stopdrogama.org (Drustvo za borbu protiv narkomanije Beograd) UNODC Global Youth Network member UNODC Vienna NGO Committee on Narcotic Drugs member
Open Innovation and Intellectual Property Rights The Two-edged Sword 1 Bronwyn H. Hall 2 A paradox? Open innovation implies an innovation ecosystem where ideas and knowledge flow across firm boundaries.
12-ICIT 9-11/4/07 in RoC Going for Gold ~ Best Practices in Ed. & Public Paper #: 07-08 Page- 1 /7 Challenges of Intercultural Management: Change implementation in the context of national culture Prof.
What to do about HR Drysdale. L (1998) What to Do About HR Prime Focus November Volume 4 Number 5 pages 28-29 What to do about HR Lawrie Drysdale The role of Human Resources (HR) in schools is in crisis
THE OPEN UNIVERSITY OF TANZANIA FACULTY OF BUSINESS MANAGEMENT OME 212: BUSINESS ENVIRONMENT AND STRATEGIES COURSE OUTLINE 2010 1 INTRODUCTION This course focuses on the external and internal environment
Restructuring an MBA Program: What Becomes of the CIS Option? Doris G. Duncan California State University, East Bay firstname.lastname@example.org Abstract Leaders at California State University, East Bay,
STRATEGY DIRECTIVE (MA 208-2) 6. 3 STEPS OF TICHY FOR CHANGE IN ORGANIZATIONS 6.2 Analysis of the Three Systems Change has become a way of life in America and within the diagnostic model, changes exist
EMPLOYEE EMPOWERMENT Empowerment Defined Webster dictionary defines empowerment as : giving the means, ability or authority To empower someone is to give the individual authority To make decisions To contribute
THEORETICAL ASPECTS OF INNOVATION DEVELOPMENT Evelina Šakalytė Mykolas Romeris University, Lithuania Ilona Bartuševičienė Mykolas Romeris University, Lithuania Abstract Purpose Innovation is defined as
Marketing Strategy for Small Business Knud B. Jensen Ryerson Polytechnic University PREFACE Small business is the engine of growth for the Nineties. This book tries to provide a guide to marketing strategy
EXECUTIVE MASTER IN CORPORATE COMMUNICATION Increasing corporate value in today s complex digital world through reputation management and communication with stakeholders. COURSE DESCRIPTION At a Glance
Center for Effective Organizations WHO NEEDS MBAS IN HR? USC'S STRATEGIC HUMAN RESOURCE MANAGEMENT MBA CONCENTRATION CEO Publication G 98-10 (338) PAUL S. ADLER Marshall School of Business EDWARD E. LAWLER
Purpose: To focus on three styles of leadership, the importance of developing a flexible style and to help you understand your natural leadership style. Learning Objectives: 1. To understand three styles
CHANGE MANAGEMENT: HOW TO ACHIEVE A CULTURE OF SAFETY SUBSECTIONS Eight Steps of Organizational Team Member Empowerment Creating a New Culture Planning for Teamwork Actions MODULE TIME: 2 hours 15 minutes
Invest in People! Project co-financed by European Social Fund through the Sectoral Operational Programme Human Resource Development 2007 2013 Priority Axis: 1. Education and training in support for growth
Improving the Relationship between Continuing Education Leadership and Marketing Directors Jim Fong Diagnostics Plus Introduction In this economy, college and university continuing education units will
Project Management Organization Article Info:, Vol. 3 (2008), No. 1, pp. 003-009 Received 12 Januar 2008 Accepted 24 April 2008 UDC 005.8 Summary In our work we will try to show, according to recent and
Extracted from Strategic Planning for Political Parties: A Practical Tool International Institute for Democracy and Electoral Assistance 2013. International IDEA, Strömsborg, 103 34 Stockholm, Sweden Phone
1 Ethics: Organizational Culture and Leadership Introduction Business ethics has been discussed as a very important part of the existence of the business. There are lots of issues surrounding the topic
2 nd EUA Funding Forum: Strategies for efficient funding of universities Bergamo, 9-10 October 2014 Forum report Liviu Matei, General rapporteur Table of contents I. Executive Summary 3 II. What is the
Profiting from Non-Technological Innovation: The Value of Patenting Business METHODS Novak druce centre insights No. 8 contents 01 Introduction: An Unexplored Area 02 Patenting Non-Technological Innovation
Lecture Note: Digital Innovation Value Maximization by Robert G. Fichman, for MI720 IT for Managers, Boston College, 2012 Introduction In the late 1990 s, Harrah s Entertainment invested $100 million to
KNOWLEDGE MANAGEMENT TALKS: 3 rd GENERATION KNOWLEDGE MANAGEMENT and Beyond! Even given its short life span, Knowledge Management has clearly evolved through three distinct eras, and is already entering
Page 1 Entrepreneurial Finance MGT 4072 Fall 2013 Instructor Robert N. Thomas, PhD Institute for Leadership & Entrepreneurship Professor of the Practice Scheller College of Business Email: email@example.com
Conflicts Between ERP Systems and Shared Services Can Inhibit Return on Investment The proliferation of ERP systems may not be a problem for individual business units, but it can represent a significant
Change Management Developed by NHS South East Coast in conjunction with the Department of Health LEARNING OBJECTIVES Understand more about Change Management Be able to debate methodology WHAT IS CHANGE
The Rockwool Foundation Research Unit Study Paper No. 99 Introduction to the project: Employment Effects of Entrepreneurs Johan M. Kuhn, Nikolaj Malchow-Møller and Anders Sørensen University Press of Southern
White Paper LEADERSHIP DEVELOPMENT The 11 Components of a Best-In-Class 360 Assessment Crucial elements for your 360 assessment 360-degree assessments are the backbone of most corporations leadership development
Five Core Principles of Successful Business Architecture STA Group, LLC Revised: May 2013 Executive Summary This whitepaper will provide readers with important principles and insights on business architecture
Business Management, Personnel Management, and Industrial Relations of Foreign-Affiliated Pharmaceutical-Related Firms Summary Contributing authors (in order of authorship) Takeshi Inagami Professor, Graduate
This PDF is a selection from a published volume from the National Bureau of Economic Research Volume Title: Labor in the New Economy Volume Author/Editor: Katharine G. Abraham, James R. Spletzer, and Michael
ISSN 1744-7038 (online) ISSN 1744-702X (print) Research Executive Summaries Series Management accounting practices in the UK food and drinks industry Vol. 2, No. 8 By Magdy Abdel-Kader University of Essex
Company Profile turning good little businesses into great businesses ABOUT THIRD EYE MANAGEMENT Third Eye Management Third Eye Management works with business owners to achieve their dream by helping them
CSS CENTRE FOR SERVICE STUDIES RESEARCH 10:2 REPORT Jon Sundbo Cases in Public-Private Network Collaboration and Servcie Innovations Local Tourism Development Center for Service Studies Roskilde University
Coast Guard Leadership Competencies Leadership competencies are the knowledge, skills, and expertise the Coast Guard expects of its leaders. The 28 leadership competencies are keys to career success. Developing
For UHR website An HR Metamorphosis at City University London Summary Since 2009, a challenging, rolling programme of parallel and integrated HR initiatives has transformed the efficiency and effectiveness
Module 2: A Strategic Approach to Energy Management As in any important organisational undertaking, implementing energy management requires strategic thinking along with an understanding of how to achieve
Strategy Stephanie Felgentreff, Jutta Funk Social Media You steer but I ll shift gears! Measuring the success of social media activities The implementation of social media as a communication channel requires
Copyright Notice: Materials published by Intaver Institute Inc. may not be published elsewhere without prior written consent of Intaver Institute Inc. Requests for permission to reproduce published materials
1905 Harney Street, Suite 700 Omaha, NE 68102 402-345-5025 www.aiminstitute.org Change Management in Highly Integrated Organizations 21 Large Omaha Firms Robert E. Sweeney, Ph.D. June 2008 Table of Contents
STRATEGY FORMULATION Stated simply, strategy is a road map or guide by which an organization moves from a current state of affairs to a future desired state. It is not only a template by which daily decisions
Full Time Master of Science in program Core concepts and disciplinary foundations of the courses Specialization Courses during the adaptation phase (Pre-Master) Deep Dive Business Strategy Managerial Economics
Corporate Performance Management - Tool for New Public Management JAN FUKA, PETRA LEŠÁKOVÁ Faculty of Economics and Administration University of Pardubice Studentská 95 CZECH REPUBLIC firstname.lastname@example.org,
PLANNING FOR GENERALIZED BUStNESS SYSTEMS Robert V. Head Touche, Ross, Bailey & Smart Los Angeles, California INTRODUCTION The systems and programming staffs which have grown up within many large organizations
EMBA in Real Estate Leadership Curriculum (45 credits) Level A - Foundation Courses (30 credits): EMBA 7000 EMBA 7005 EMBA 7010 EMBA 7015 Orientation The purpose of this course is to provide students with
Technical Briefing DEVELOPING AND PROMOTING STRATEGY APRIL 2001 Activity-based Management An Overview IN THIS BRIEFING Part 1 General FAQs Part 2 Practical guidance on implementing ABM Part 3 Checklist
Abstract Applying Value Management to organize and improve the Claim Management activities of a company by Dipl. rer. oec. Axel Peter Ried and Dipl. Kfm. Christian Ried Many companies are losing a tremendous
HUMAN RESOURCE MANAGEMENT IN BULGARIA DURING THE TRANSITION TO MARKET ECONOMY Vatchkova E. (1997). Human Resource Management in Bulgaria During the Transition to Market Economy, European Conference: Human
Strategy and Performance Management in the Government A White Paper By James B. Whittaker Retired Rear Admiral, U.S. Navy, and author of President s Management Agenda: A Balanced Scorecard Approach 444
Interview Questions Behavioral Personal ------------------------------------------------------------------------------------------------------------- 1 Behavioral General ---------------------------------------------------------------------------------------------------------------1
Leadership, Change, and Organizational Effectiveness Martin M. Chemers University of California, Santa Cruz What is leadership? Most organizational theorists agree that effective leadership is one of the
Nonprofit Organizational Life Cycle Program And Services Staff Leadership/ Management Staffing Governance/ Board Extremely informal or not yet a concern Perceived need for a program or service Entrepreneurial
Module 1: Basic concepts of management accounting Required reading Chapter 1, pages 4-23 ERH, Section C3: "Code of ethical principles and rules of conduct" Reading 1-1: "Moral responsibility within the
Contract Management Part One Making the Business Case for Investment Executive Summary This paper is the first in a short series of three which will look at the business case for organisations to invest
E-MAIL email@example.com PHONE 310 471-4865 WEB SITE www.paypeopleright.com SUPPORTING TEAMS WITH MULTI-RATER PERFORMANCE REVIEWS Patricia K. Zingheim and Jay R. Schuster Article published in Compensation
EFFECTIVE STRATEGIC PLANNING IN MODERN INFORMATION AGE ORGANIZATIONS Cezar Vasilescu and Aura Codreanu Abstract: The field of strategic management has offered a variety of frameworks and concepts during
Progress Test 2 Advanced Financial Management P4AFM-PT2-Z14-A Answers & Marking Scheme 2014 DeVry/Becker Educational Development Corp. Tutorial note: the answers below are more comprehensive than would
Perfecting Retailer-Supplier Execution Journal of Trading Partner Practices January February March 2008 What is SRM and Why Does it Matter to the Retail Industry? Reprinted with permisson Journal of Trading
Best Practices in adopting a Shared Services Model August 2013 22011YYYY In their endeavors to become high performing organizations, businesses are pushing all innovation frontiers to do more with less
White Paper TALENT MANAGEMENT AND SUCCESSION PLANNING The CEO s and Chairman s role in talent management and succession planning is huge it should never be just a function of HR, because this is a top-down
Organizational Behavior and Development Michael Beer Harvard University Organizational studies is a fragmented field. Its foundations are the disciplines of Psychology, Sociology, and Economics and applied
Milica Jaksic, and Milos Jaksic: 85 MILICA JAKSIC 1, and MILOS JAKSIC 2 JEL Classification: J 63; L 25; M 52; M 54; Review Received: April 14, 212 Accepted: February 21, 213 Abstract In modern organization
Appendix B PRINCIPLES OF ORGANIZATIONAL STRUCTURE At its most basic, organizational structure is the configuration of the hierarchical levels and specialized units and positions within an organization,
Leading Change Hans Fritz at Novartis Thailand Maintaining Strategic Alignment Adapted from Mark Moore, Creating Public Value (Harvard University Press, 1995). Task Environment Public Value, Mission Authorizing
We are often asked the question, What should I do to improve our staff engagement? Culture change is a difficult task to achieve for any leader. Leaders we work with to help transform their organizational
第 1 頁, 共 13 頁 Organizational Change and Development Jeaw-Mei Chen /Mein-Woei Suen /Mei- Jong Lin /Fu-An Shieh Abstract Organizational change is an important issue in organizations. It is actually a process
PROMOTING ACCESS AND MEDICAL INNOVATION: INTERSECTIONS BETWEEN PUBLIC HEALTH, INTELLECTUAL PROPERTY AND TRADE Joint study by the WHO, WIPO and WTO Secretariats Outline and overview The WHO, WIPO and the