ORGANIZATIONAL DEVELOPMENT

Lecture 1&2
What is a Organization?
An organization in its simplest form is a person or group of people intentionally organized to
accomplish an overall, common goal or set of goals. Business organizations can range in size
from one person to tens of thousands.

There are several important aspects to consider about the goal of the business organization.
These features are explicit (deliberate and recognized) or implicit (operating unrecognized,
"behind the scenes"). Ideally, these features are carefully considered and established, usually
during the strategic planning process.

Organization is a systematic arrangement of people to accomplish some specific purpose. Every

organization is composed of three elements i.e. people, goals and system. Each organization has
a distinct purpose. This purpose is expressed as goals generally. Each organization is composed
of people. Every organization has a systematic structure that defines the limit of each member.
Some members are managers and some are operatives.

Vision

Members of the organization often have some image in their minds about how the organization
should be working, how it should appear when things are going well.

Mission

An organization operates according to an overall purpose, or mission.

Values

All organizations operate according to overall values, or priorities in the nature of how they carry
out their activities. These values are the personality, or culture, of the organization.

Strategic Goals
Organizational members often work to achieve several overall accomplishments, or goals, as
they work toward their mission.

Strategies

Organizations usually follow several overall general approaches to reach their goals.

Systems and Processes that Are Aligned With Achieving the Goals

Organizations have major subsystems, such as departments, programs, divisions, teams, etc.
Each of these subsystems has a way of doing things to, along with other subsystems, achieve the
overall goals of the organization. Often, these systems and processes are defined by plans,
policies and procedures.

How you interpret each of the above major parts of an organization depends very much on your
values and your nature. People can view organizations as machines, organisms, families, groups,
etc.

Organizations as Systems
It helps to think of organizations as systems. Simply put, a system is an organized collection of
parts that are highly integrated in order to accomplish an overall goal. The system has various
inputs which are processed to produce certain outputs, that together, accomplish the overall goal
desired by the organization. There is ongoing feedback among these various parts to ensure they
remain aligned to accomplish the overall goal of the organization. There are several classes of
systems, ranging from very simple frameworks all the way to social systems, which are the most
complex. Organizations are, of course, social systems.

Systems have inputs, processes, outputs and outcomes. To explain, inputs to the system include
resources such as raw materials, money, technologies and people. These inputs go through a
process where they're aligned, moved along and carefully coordinated, ultimately to achieve the
goals set for the system. Outputs are tangible results produced by processes in the system, such
as products or services for consumers. Another kind of result is outcomes, or benefits for
consumers, e.g., jobs for workers, enhanced quality of life for customers, etc. Systems can be the
entire organization, or its departments, groups, processes, etc.
Feedback comes from, e.g., employees who carry out processes in the organization,
customers/clients using the products and services, etc. Feedback also comes from the larger
environment of the organization, e.g., influences from government, society, economics, and
technologies.

Each organization has numerous subsystems, as well. Each subsystem has its own boundaries of
sorts, and includes various inputs, processes, outputs and outcomes geared to accomplish an
overall goal for the subsystem. Common examples of subsystems are departments, programs,
projects, teams, processes to produce products or services, etc. Organizations are made up of
people -- who are also systems of systems of systems -- and on it goes. Subsystems are organized
in an hierarchy needed to accomplish the overall goal of the overall system.

Definition of Organizational Development

An Old Standard Definition of OD

A definition that was developed in 1969 at a time when an organization was considered to be
much like a stable machine comprised of interlocking parts.

“Organization Development is an effort planned, organization-wide, and managed from the top,
to increase organization effectiveness and health through planned interventions in the
organization's 'processes,' using behavioral-science knowledge.”

New Definitions of OD

Today's organizations operate in a rapidly changing environment. Consequently, one of the most
important assets for an organization is the ability to manage change -- and for people to remain
healthy and authentic. Therefore, the following definition was found ideal

“Organization Development is the attempt to influence the members of an organization to

expand their candidness with each other about their views of the organization and their
experience in it, and to take greater responsibility for their own actions as organization members.
The assumption behind OD is that when people pursue both of these objectives simultaneously,
they are likely to discover new ways of working together that they experience as more effective
for achieving their own and their shared (organizational) goals. And that when this does not
happen, such activity helps them to understand why and to make meaningful choices about what
to do in light of this understanding.”Experts might agree that the following definitions of OD
represent the major focus and thrust of many of today's OD practitioners.

"Organization development is a system-wide application of behavioral science knowledge to the

planned development and reinforcement of organizational strategies, structures, and processes
for improving an organization's effectiveness."

"Organization Development is a body of knowledge and practice that enhances organizational

performance and individual development, viewing the organization as a complex system of
systems that exist within a larger system, each of which has its own attributes and degrees of
alignment. OD interventions in these systems are inclusive methodologies and approaches to
strategic planning, organization design, leadership development, change management,
performance management, coaching, diversity, and work/life balance."

OD Model

Techniques/interventions in Organization Development

Behavioral scientists have been writing about Organization Development for over 30 years. The
science has evolved into many different approaches all aimed at the same objective: to enable
massive improvements in organizational performance through specific and planned
interventions.The four major types of OD interventions

 Action Search
 Appreciative Inquiry
 Future Search
 Whole System Intervention

Most OD work is performed with the assistance of trained facilitators. They have the
professional training to lead groups through the chaos of change to arrive at the objective.
Managers who attempt a “do it yourself” approach to OD work often create more turmoil and
make things worse. This is especially true if the leadership dynamic is part of the problem.

OD work is tricky. It requires the skill of someone trained in this field. Headstrong managers
who decide to undertake massive organization change without help are like critically ill patients
trying to remove their own appendix. It is not a smart strategy. The flip side is that the effort
needs to be owned by the manager rather than the consultant. Leaders who abdicate their
responsibility to be the spiritual leader of the organization pay for it with lower trust.

Action Search

Most organizations contemplating an OD initiative, do so because they are not satisfied with how
things are going. If the current trajectory of business is meeting or exceeding goals, there is little
impetus for change. The idea is to determine what is wrong and fix it quickly.

The first stage is to gather data. What areas of the business are falling short? How can these be
changed to perform better? Unfortunately, many efforts using this technique become “witch
hunts” where management looks for scapegoats. The process becomes one of uncovering ugly
issues, followed by defensive tactics by those in charge.
Most of us have participated in this type of intervention. It takes place on a regular basis in some
companies. Ask yourself how successful these programs have been in your experience. Do they
produce positive change, or simply mask more underlying issues while creating interpersonal
chaos? This technique should be used only under very tight constraints with ground rules
supporting solid values. That does not happen very often. Hence, using Action Research has a
real potential to backfire if not managed extremely well.

Appreciative Inquiry

This approach is the mirror image of the “action research” technique. The process starts by
asking what is working well. Groups focus on what is going right rather than what is going
wrong. The idea is to find ways of doing more of the right stuff, thus providing less
reinforcement for doing the wrong stuff.

This is a much more pleasant process. It feels good to focus on strengths. It also provides a
benchmark for improvement. The danger is that groups who are failing miserably can deceive
themselves into thinking all they need do is clone the few bright spots to succeed.

Appreciative inquiry can be much more powerful than action research, but it needs to be
tempered by reality. A combination of both methods can avoid a kind of “Pollyanna” view of
reality.

Future Search

In this process, the focus is on the vision rather than the current state. The idea is to get groups
engaged in defining a compelling view of the future. When compared to the present, this allows
clarification of the gaps between current practices and organizational goals. Outstanding vision is
the most powerful force for all individuals and organizations.

Without a well-defined vision, the organization has no true direction. Creating vision is
absolutely essential for any group because it gives a common direction and provides a focus for
energy.
Not all vision statements are helpful. Some are relegated to plaques on the wall and ignored. This
is a tragedy because an uninspiring vision breeds apathy and is worse than no vision at all. If
people point to the vision statement on the wall and say, “that is where we are supposed to be
going but they don’t act that way,” you are in trouble.

Getting a great vision is not a 15-minute exercise. Some groups spend months working on
developing a good vision statement. The process can get burdensome if not handled correctly. If
you are adept at facilitating group discussions, you may conduct this yourself. If not, a
professional facilitator would be worth the investment. As the leader, even if you feel qualified
to lead the discussion, you still may want to hire an outside person so you can become one of the
people developing this material. The danger if you lead the discussion is that you could influence
it too heavily.

This leader probably has lost the ability to lead the organization effectively. As the consultant
mucks around trying to understand problems, significant negative energy is unearthed but the
consultant doesn’t have the authority to fix these issues. Meanwhile, the leader is “busy running
the business,” and being micro-managed by superiors. Morale and performance go down even
further until, finally, the leader is simply forced out.

This is why it is important for the leader to be the driving force in creating a vision for the
organization. It cannot be delegated to a consultant or even a high-ranking lieutenant. The leader
is responsible for making sure the vision statement is clear, compelling, memorable, actionable,
and real.

Key ideas for developing a good vision statement:

 Most importantly, make sure your vision tells everyone where the organization is going.
A nice sounding phrase that doesn’t have pull makes a poor vision. For a football team
“We will be number one in the league within 3 years” is a better vision than “We will
improve our position in the rankings every year until we become the top team in the
league.”
 Avoid grandiose sweeping statements that are too broad. “We will become the best in the
world at computer technology” would be too general and vast for a good vision
 statement. A better example might be “Our superior microchips will gain 90% market
share with computer manufacturers in 5 years.”
 Make sure people can connect their everyday activities to the vision. “Every interface is a
chance to bestow great customer service” would allow everyone to view daily activities
with customer service getting top billing.
 Keep it short and powerful. Avoid long lists of items that sound good but don’t create a
picture. For example, being “trustworthy, loyal, helpful, friendly, courteous, kind,
obedient, cheerful, thrifty, brave, clean, and reverent” may be a good motto for the Boy
Scouts, but it would make a terrible vision statement.
 Select colorful words that inspire rather than describe. “Our greeting cards melt the heart
and transform the soul” would be superior to “Our greeting cards are better because they
make people feel great.”
 Keep it short. The fewer words the better. “Absolutely, positively overnight” is better
than “Our packages are guaranteed to arrive by the next day or your money back.”
 Use special words to emphasize your most significant point. “We will never, ever, run
out of stock” is better than “We promise to keep our customers’ needs met by always
having stock on hand.”
 Don’t try to be abstract or cute in order to grab attention. “We have the softest software in
the nation” might be a slogan helpful on a street Avenue, but it makes a lousy vision.
Instead try “Software delivered on time, every time!”

Communicate the organization's values and vision to everyone in it. Do this well and often, as it
forms the basis of everything to come. Frequently demonstrate your alignment with the vision by
naturally working it into conversations. You might say, “Well, let’s call the customer and tell
them about this situation. After all, our vision is to put the customer first.”

 Whole System Intervention

In this case, the activities of the organization are viewed through a “systems” approach. The
emphasis is on getting a critical mass within the organization to redefine the business. Processes
become the focal point for redesign efforts. This is less threatening than the action research
technique because of focuses on the “what” and “how” rather than the “who.”
The challenge with a systems approach is that can get pretty complicated. In systems thinking,
we try to understand the interrelations between things. This is opposed to the usual linear way of
thinking – If we do one thing it results in an effect. In systems thinking we need to understand
not only the direct effect of actions but also the side effects. If leaders are unhappy with
performance, they need to look at their system because it is perfectly designed to give exactly the
result they are getting. Trying to untangle what is hurting the system and streamline the process
for a better result can get convoluted.

Factors affecting OD Programmes

INTERPERSONAL INTERVENTIONS. Interpersonal interventions in an OD program are

designed to enhance individual skills, knowledge, and effectiveness. This type of program
utilizes group dynamics by gathering individuals together in loosely structured meetings. Subject
matter is determined by the group, within the context of basic goals stipulated by a facilitator. As
group members try to exert structure on fellow members, group members gain a greater
awareness of their own and other's feelings, motivations, and behaviors. Other types of
interpersonal interventions include those designed to improve the performance review process,
create better training programs, help workers identify their true wants and set complementary
career goals, and resolve conflict.

GROUP INTERVENTIONS. OD group interventions are designed to help teams and groups
within organizations become more effective. Such interventions usually assume that the most
effective groups communicate well, facilitate a healthy balance between both personal and group
needs, and function by consensus as opposed to autocracy or majority rule.Group diagnostic
interventions are simply meetings wherein members of a team analyze their unit's performance,
ask questions about what the team needs to do to improve, and discuss potential solutions to
problems. The benefit of such interventions is that members often communicate problems of
which their co-workers were unaware. Ideally, such communication will spur problem-solving
and improved group dynamics.

INTERGROUP INTERVENTIONS. Intergroup interventions are integrated into OD programs to

facilitate cooperation and efficiency between different groups within an organization. For
instance, departmental interaction often deteriorates in larger organizations as different units
battle for limited resources or become detached from the needs of other units.Conflict resolution
meetings are one common intergroup intervention. First, different group leaders are brought
together to secure their commitment to the intervention. Next, the teams meet separately to make
a list of their feelings about the other group(s). Then the groups meet and share their lists.
Finally, the teams meet to discuss the problems and to try to develop solutions that will help both
parties. This type of intervention, say supporters, helps to gradually diffuse tension between
groups that has arisen because of faulty communication.

COMPREHENSIVE INTERVENTIONS. OD comprehensive interventions are used to directly

create change throughout an entire organization, rather than focusing on organizational change
through subgroup interventions. One of the most popular comprehensive interventions is survey
feedback. This technique basically entails surveying employee attitudes at all levels of the
company and then disseminating a report that details those findings. The employees then use the
data in feedback sessions to create solutions to perceived problems. A number of questionnaires
developed specifically for such interventions have been developed.

Structural change interventions are used by OD change agents to implement organizational

alterations related to departmentalization, management hierarchy, work policies, compensation
and benefit incentives programs, and other cornerstones of the business. Often, the implemented
changes emanate from feedback from other interventions. One benefit of change interventions is
that companies can often realize an immediate and very significant impact in productivity and
profitability (provided the changes are warranted and implemented appropriately).

Sociotechnical system design interventions are similar to structural change techniques, but they
typically emphasize the reorganization of work teams. The basic goal is to create independent
groups throughout the company that supervise themselves. This administration may include such
aspects as monitoring quality or disciplining team members. The theoretic benefit of
sociotechnical system design interventions is that worker and group productivity and quality is
increased because workers have more control over (and subsequent satisfaction from) the process
in which they participate.
A fourth OD intervention that became extremely popular during the 1980s and early 1990s is
total quality management (TQM). TQM interventions utilize established quality techniques and
programs that emphasize quality processes, rather than achieving quality by inspecting products
and services after processes have been completed. The important concept of continuous
improvement embodied by TQM has carried over into other OD interventions.

Benefits of ODProgramms
1. Output Goals

 Goal attainment: Achievement of main objectives IN STRATEGIC PLANNING

 Outputs-quantity: Productivity (number or value of sales, services sometimes per unit or

cost of labor); profits, revenues

 Outputs-quality: Reliability (e.g., rejects, returns); reputation (customer

satisfaction, expert ratings); institutional standards (e.g., approval by quality assurance
body)

 2. Internal System State

Efficiency and costs : Efficiency measures (e.g., output value + cost with constant
quality); wastage; costs per unit of output

 Human outcomes: Quality of work life (satisfaction with pay, working conditions); work
effort and commitment (low absenteeism, turnover); employee health and safety;
motivation; organizational image; citizenship behavior

 Consensus/conflict:Goal and procedural consensus; cohesion (mutual attraction and

dentification with work group and organization); cooperation within and between units;
conflict behavior (work stoppages, protests, flights)
 Work and information flows:Work coordination (smooth flow of products, Information
between units; few delays and snags); adequacy and quality of information,
multidirectional flows
 Interpersonal relations: Trust; moderation of status differences (reducedprominence of
status symbols and executive perks);openness, honesty of interpersonal
communication,acceptance of diverse backgrounds and orientations

 Employee involvement: Empowerment; participation in decision making

 Fits : Alignment of internal system, components, subcomponents, and Features.

3. System Resources and Adaptation

 Resources-quantity: Size (employees, physical, financial, capital assets);resource flows

(sales, budget allocations)

 Resources-quality: Human capital (training, experience of work force);staff reputation;

knowledge base; desirability of clients(e.g., college selectivity)

 Adaptation: Ability to cope with external change and uncertainty;crisis management

capabilities

 Proactiveness: Impact on environment-clients (e.g., demand), competitors, suppliers,

regulators; entrepreneurialism

 Innovativeness: Technological and administrative innovation; implementation of new

techniques and ideas

 Legitimacy : Support by community and by public agencies or regulators; complianre

with legal, professional, regulatory standards
  Competitive position : standing compared to competitors (e.g., market share); reputation
for leadership in industry or sector

 Fit : Alignment of internal system with environment

4. Multiple Stakeholder Assessments

 Standards : Effectiveness domains and criteria selected and defined by stakeholders

 Satisfaction : Satisfaction with organization on standards specified by stakeholders;
stakeholders' overall level of satisfaction with organization.
Criticism of OD Programs
Organizational development is the ongoing attempt to improve overall company productivity and
efficiency by creating a nurturing atmosphere for employees. It can be used to effect
organizational change, or it can be implemented to improve specific operations. Some of the
elements of organizational development include training, performance rewards, team-building
exercises and improving workplace communication. There are advantages and disadvantages to
using the organizational development method of company growth and change.

Interpersonal Relationships

Organizational development works with employees individually and in groups to facilitate

stronger interpersonal relationships between team members. The process of team building and
developing productive work groups is a significant part of the organizational development
process. Improving employee relationships boosts morale and reduces employee turnover. It
helps employees to better understand what is expected of them and supplies employees the
resources they need to be successful.

Adaptability

A company that uses the organizational development model has developed an extensive network
of contact and communication with all employees. When the company needs to make changes to
adapt to challenges in the marketplace, the personal contact with employees makes adaptability
easier. The company has stable methods in place of communicating and implementing change
that make it better equipped to stay proactive in the marketplace.

Administrative Challenges

Organizational development adds responsibility to the employees and managers to maintain open
communication and constantly reevaluate the needs of the organization. Because organizational
development tends to add elements to the corporate structure, such as managing workplace
diversity, the formation of work groups to address issues and changes in the company's strategic
planning to meet the needs of the staff, it can be a challenge to maintain an efficient
organizational development program.

Time-Consuming

When a company engages in organizational development, there are processes that can become
time-consuming and slow its productivity. Surveying employees on the effectiveness of internal
processes, waiting for customer feedback on a marketing program before moving forward with
changes and evaluating logistics plans to improve shipping efficiency are important to company
growth, but they can also slow down the company's ability to make changes and react to pressing
issues.

Future Directions in Organizational Development

Technological advancement has brought businesses a range of diverse challenges. Technology

solutions are constantly being retired and upgraded this exercise requires on-going change
management and a skilled and flexible workforce to transcend with the changes.

The ageing workforce also presents challenges to organizational development. Some members of
the senior workforce find it harder to grasp the skills required to utilize electronic tools and
processes than their younger counterparts.

As the ageing workforce retires there is great risk that large amounts of corporate knowledge will
be lost. Succession planning needs to form part of an organizations strategic development plan.
Another challenge that faces businesses today is change. Organizations are now competing for
business on multi-national levels. This calls for proactive solutions and flexible workforces that
can adapt and adjust to the constant pace of change required to maintain a competitive industry
edge.

Many businesses now have multi-national operations, this can bring an array of culture
challenges including; various religions, different award conditions, differing values and language
barriers. It is challenging for businesses to align their strategic direction with so many cultural
challenges.

A research conducted by scholars on the future of organizational development came up with Top
Ten issues that organizations should prepare for.

1. Managing performance to increase accountability

2. Building a pipeline of qualified leaders
3. Addressing the career development needs of a multigenerational workforce
4. Strategically communicating organizational priorities
5. Engaging and retaining a diverse workforce
6. Managing remote employees
7. On-boarding new employees
8. Implementing numerous, significant top down changes
9. Developing employees with less funds
10. Succession planning and talent development

The main questions that may come up in organizational development are:

     What is your organization doing to manage the performance of employees to increase
accountability?
     What is your organization doing to build a pipeline of qualified leaders for your
organization?
     What are you doing to address the career development needs of your multi-

OD deals with a total system — the organization as a whole, including its relevant
environment — or with a subsystem or systems — departments or work groups — in the
context of the total system. Parts of systems — for example, individuals, cliques, structures,
norms, values, and products — are not considered in isolation; the principle of
 interdependency — that change in one part of a system affects the other parts — is fully
recognized. Thus, OD interventions focus on the total culture and cultural processes of
organizations. The focus is also on groups, since the relevant behavior of individuals in
organizations and groups is generally a product of the influences of groups rather than of
personalities.generational workforce?