Leadership Case Study: Oticon

A range of materials have detailed the various approaches to leadership, development of leadership and its management competency structure in a number of organizations. The information provided here is intended to communicate to the readers and markers whether or not actions, activities, and behaviors of Oticon and its President meet entrepreneurial texts. This paper also shows the different kinds of strategies adopted by a leader to help maximize the success of a business.

Leadership as a complex process that concerns the extent to which a set of standards, qualities and or competencies can capture the nature that makes some leaders and organizations thrive and others unproductive (Burns, 1978). In Oticon, the political, structural, and cultural obstacles that are present in many organizations have not been a problem or hindrance to the company in obtaining its set objectives. Oticon has been able to meet its objectives because the leaders are aware of these hindrances and have come up with appropriate solutions to overcome them completely (Hofstede, 1977).

Leadership style is the manner of directing, implementation of plans, and motivation of individuals in an organization. There are a number of theories that have been discussed to show their effectiveness in the organization. Power in Oticon’s leadership style has been streamlined to all managers. They have shown that change is good, but one should take note of the power source which greatly impacts the growth of the business and attainment of organizational goals and objectives. Power in this case leads us to understanding the importance of leadership roles in the organization. In the conclusion, we see the appropriateness of the leadership style used in Oticon Company (Yukl, 1989).

Managing versus leading

Leadership ensures that the organization and all the stakeholders “do the right thing.” It has the authority to set direction, make decisions, and create different policies. They also have the responsibility of ensuring that the organization is well managed, resources available are associated with expectations, and that they are operating within the legal and ethical boundaries stipulated. Management on the other hand, assures that the staff and volunteers of that organization follow to the latter the direction that has been set by the boards of directors and “do things right.” This is achieved through the use of strategic plans that relate to the operational plans which are later presented to the board to explain to them how well the operational plans have been implemented. The management ensures that the board understands the presented data (Vroom and Yetton, 1973).

Lars Kolind displays to his managers and staff certain emotions which have enabled most of them understand and fully accommodate the feelings of others. His high emotional intelligence (EI) has vastly contributed to his role of instilling change in others working in his organization. For those with anger, enjoyment, love, and sadness while working, he has motivated them which have seen to the growth of the business. In the case study, we see that before using the disorganized organization strategy the profits obtained were very low. However, when Oticon started using it, more profits were obtained in a very short period of time. This was achieved by considering the emotional intelligence of its workers who were not sure of how effective the leadership style would help the organization obtain its objectives effectively. These attributes do transfer to leaders outside the business sphere for example, if one is always angry and sad, no one will be able to freely socialize with him/her for fear of being assaulted. Those filled with fear cannot be able to do anything for their own not even engaging in any business.

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Leadership functions

Effective leadership of change means that, when the leader uses new methods of administration to achieve the desired goals, the staff and managers should accept and implement them fully. The contingency or situational school of thought indicates that the style to be used is dependent on factors such as the situation, the people, the task, the organization, and other variables of the environment (Fiedler, 1967). Fielder’s contingency model is a theory under the situational school of thought that clearly postulates that managers do not have a single way that can be described as best for leading the organization. Situations will be the ones creating the different style requirements for managers. The best solution accorded for a managerial situation is conditional on the factors that encroach on the situation. For example, in Oticon, repetitive mechanical tasks have become a norm to the workers (dynamic environment), thus a more flexible, participative leadership style has been used. The leader-member relation is good because both the managers and employees relate with each other on a regular basis. The task is unstructured, but the power position is still maintained (Sims and Lorenzi, 1992)

Variables of the environment can be measured by using favorable or unfavorable terms depending on the task oriented style. Managers do reshape their environmental variables to suit their leadership styles. Leader-member relations are the amount of devotion, reliability, and employee support received by the leaders. In an unfavorable relationship, the task is unstructured and the leader has possession of limited authority. Position power is measured with the amount of authority the manager sees that has been given to him or her by the organization for the sole purpose of directing, rewarding, and punishing those subordinates who fail to adhere to the rules and regulations stipulated. Positioning of power of managers depends on decreasing the favorable and increasing the unfavorable power of decision making of the employees of the organization (Clegg, 1975).

Relationship-motivated style builds interpersonal relations and extends extra help for team work development in the organization. The task- motivated style leader has delight and fulfillment in accomplishment of the task at hand. Oticon Company sees to it that the satisfaction of the customer has been achieved; the company has established a good image which has seen to the increase of the sales record, and has outperformed its competitors. Leadership theories have developed from “Great Man” and “Trait” theories to “Transformational” leadership. These early theories focused mainly on the characteristics and behaviors of leaders who have achieved success, while the modern theories put into consideration the role of followers and the contextual nature of those leading an organization (Hersey and Blanchard, 1977).

Transformational leaders have displayed behaviors that are linked to five basic styles of transformation: Idealized behaviors (living on one’s ideals), Inspirational motivation where leaders inspire others, Intellectual stimulation where others are being stimulated, Individualized considerations that deals with coaching and development of individuals, Idealized attributes which include respecting, trusting, and having faith in others. These leaders are proactive in many unique ways. They optimize on development which includes the maturation of ability, motivation, attitudes, and values of the organization (Likert, 1961).

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Transformational leadership is the approach taken by most leaders in creating a shared vision, develop and coach employees who will become future leaders, encourage innovation in others in the organization, and act with high ethical standards and integrity (Bass & Avolio 1994). Dispersed leadership is an ‘informal’, ’emergent’, or ‘dispersed’ leadership where the leaders’ role has been dissociated from the organizational hierarchy. At all levels of the organizations, individuals have been given the power to exert leadership influence over their workmates hence influence the leadership of the organization. Oticon is a good example. The tasks of the managers have been restructured. A charismatic leader is based on self-belief where people follow others whom they admire (Gordon, 1998). This method of leadership is not a good way of conceptualizing leaders since there are those who don’t have the charisma of attracting individuals but are admired. Leaders do not perform their roles. Their concentration drifts to pleasing individuals at the expense of attaining the organizational goals.

Leaders functions from the above with regard to change addresses the need for the leaders to inspire employees rather than direct them, involve them in decision making rather than divide, encourage diversity and challenging methods rather than accept the old routine that was being used, encouraging employees to think widely, trust in the projects they come up with and support them, and commitment of the leaders in ensuring that their projects are carried out effectively by the organization by providing them with the resources they require are just a few of the functions (Bass, 1985).

Leadership Roles

Oticon Company is different from other existing companies since they instilled change in the workplace for the better by using a different kind of leadership style in leading and managing the organization. In creating a vision for the organization, I will bear in mind the objectives of the organization which are of importance when stipulating the vision. If one does not put it into consideration, the goals and objectives of the organization may not be attained in time. Teams have managed to access shared information that has helped in lifting the performance of the organization, but in places like banks and hospitals, such freedom has been minimized to the leaders only since this will bring about confusion in the organization as it deals with very sensitive matters (Daft, 2002).

Substantive actions and results of management concerning changing the decision making patterns are the decisions that largely result from external constraints and power-dependence. Symbolic action (expressive) is where management uses symbols and political language in legitimizing and rationalizing the policies and decisions of the organization. The effect of symbolic action is participatory decision-making that reflects the occurrence taking place in the current world (Bennis and Goldsmith, 1997).

Oticon Company workers should be given training and education programs that relate to substantial change that is bound to come their way in the next financial year if need arises. Many organizations that try to impose change on the organization end up failing to meet the targets they intend to achieve since the workers are against the form of change being imposed on them. The structure of the organization was changed and needed to be communicated to the workers so that they can be aware of how activities are being conducted in the ‘new’ organization (Byrd, 1987). By communicating to the workers, the leaders were presenting them with the new responsibilities accorded to them by the President of the Company.

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Redesigning of the jobs enabled the organization to have a high quality of work performance since the needs and capabilities of the employees were fully met. Face-to-face dialogue of the management (Campbell, 1970) and employee made communication effective and thus they related on a very common ground that enabled them to exchange ideas and information easily without being distorted at any given time. Not specifying the workstations made it possible for all the workers to mingle and get to know each other well, this contributed greatly to the cohesion that existed among them (Belbin,1993).

The idea of projects made employees more active in the activities of the company and thus they aimed at maximizing profits and satisfying the customers whom they served. Developmental change has been able to reinforce the need for incremental change orientation process because it is people oriented (empathetic). The leader determined that the maturity level of the employees in relation to the task to be accomplished increased greatly thus reduction of the task behavior by the leader had changed and relationship behavior was increased (Bergmann, Hurson, & Russ-Eft, 1999).


Emphasis has been made on the key points of change in leadership as part of the set management functions stipulated, and these functions can be traced back to the works of many philosophers. The functions of leaders in the traditional society have changed due to the shift that has occurred in the sources of personal power (Bunce, 1981). Technology was an attribute associated with the growth of an organization, but it is not the case. The one factor that contributes to an organization’s growth and expansion is effective leadership skills used. Emotional intelligence has also been discussed widely. Theories have also been cited to show how the Company uses the leadership style to manage and lead its employees effectively.

Leadership roles and functions are also seen to be changing with time bearing in mind that if a leader wants to achieve effectiveness in his work, then change of leadership should be looked into. Several skills and attributes that are desired by most leaders are very essential. Strategic and operational, traditional management and leadership styles have been discussed to show how they have managed to embrace the various skills available for an effective change in a leader to emerge (Kreisberg, 1992).

Leadership style effectiveness can be adopted at different levels as discussed depending on the change itself. We are now conversant with the approach to take when situations arise and the type of leadership style to adopt.

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