Danish company Bang & Olufsen (B&O) is known globally for its high-end audio and video. CEO Kalle Hvidt Nielsen says, “Our mission is to make complex technology very simple to use.” B&O uses contract designers, not organizational design employees, to create the company’s products. And these designers have been empowered to veto any product they don’t like. Lewis and his team of six designers, who all are external freelancers, don’t ever meet.
The design process isn’t really a process. Giving such power to individuals who aren’t employees would frighten most managers. However, it works well for B&O. This “business-by-genius model depends on the instincts of a handful of quirky and creative individuals and the ability of executives to manage them.”
1. Describe and evaluate what B&O is doing.
2. What structural implications—good and bad—does this approach have? (Think in terms of the six organizational design elements.)
3. Do you think this arrangement would work for other types of organizations? Why or why not?
4. The B&O design approach depends on “the ability of executives to manage” the designers. What abilities would managers need in managing in this type of organizational design?
5. What role do you think organizational structure plays in an organization’s strategic capabilities, especially in innovation efforts?