Entrepreneurship is about creating new value added products or services by devoting the needed resources and assuming the accompanying risks (Alvarez & Busenitz 2001, p. 760). Realizing this, Kolind decided to design new ways of running the organization and adapted a new mission statement that focused on customers’ satisfaction by offering them value added products and services. Kolind thought that the industry’s total focus on technology was short sighted and noted that the main reason why Oticon was in the hearing business was to satisfy its customers’ needs.
He realized that to meet the needs of his customers satisfactorily, expertise knowledge (Ramachandran, Devarajan & Ray 2006, p. 90) capable of providing each customer with effective hearing aid was necessary. He therefore created a new way of thinking that motivated all employees of the organization to unleash there potential so as to create new avenues for growth and alternative ways of doing the existing business that was focused on customers needs (Brazeal & Herbert 1999 p. 31).
As a result, Oticon realized that they had developed the industry’s first automatic, self adjusting hearing aid some years back but could not successfully implement the system then due to inadequate communication, lack of imagination and
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The organization therefore missed opportunities because it avoided investing its resources in ventures that risked its base business yet had a lot of potential (Alvarez & Busenitz 2001, p. 758). This is clear from the fact that they could not successfully implement the automatic self adjusting hearing aid system which could have increased their revenue and market share significantly. Oticon was therefore forced to move from merely making hearing aid to providing total packages for people with hearing difficulties.
They had to allocate their resources to support entrepreneurial initiatives of many kinds, some of which were totally diverse and unrelated to the core business of the organization (Brazeal & Herbert 1999 p. 32). Oticon also garnered and devoted its resources and skills to processes and activities that added value to its products (Christensen & Raynor 2003). As a result, Oticon’s ability to compete improved significantly because it invested some of its resources in developing and exploiting value creating innovations.
We are told the organization’s market share increased significantly and it introduced fifteen new products in the market twice as much compared to the previous period. Corporate entrepreneurship is a tool that is brought into an organization to enhance business development, revenue growth and to pioneer development of new products, services and processes through creativity and innovation (Ramachandran, Devarajan & Ray 2006, p. 87).
Kolind thus did away with the old business structures and processes that ware inefficient and ineffective. Before Kolind took over the presidency of Oticon, the organization enforced standard procedures and structures that were intended to guard against mistakes and frauds. As a result innovative solutions were blocked and funds misspent on non viable long term projects. Kolind did a way with the formal organization. He abandoned the main office which comprised the marketing, finance, management and product development functions.
Moreover, formal structures, job descriptions and policies were done away with since they were seen as barriers to cooperation, innovation and team work. Kolind saw the control measures and structure of monitoring behaviours and resource utilization to be undermining employees’ creativity and motivation to experiment and take risks (Brazeal & Herbert 1999 p. 35). Another reason for abandoning control systems and structures was because they slowed decision making. This reduced the organization’s ability to identify and exploit new opportunities.