ORGANIZ ATIONAL

DEVELOPMENT
DR. SNIGDHA DASH
PROFESSOR
GALGOTIAS UNIVERSITY
 INTRODUCTION TO ORGANIZATIONAL
DEVELOPMENT
• Organization Development (OD) is applied behavioral science. It is a strategy to develop
people in the organization.
• It aims at improving the people side of the organization by planned change. It focuses on
people, relationship, policies, procedures, processes, norms, organizational structure and
improving the very culture of the organizations.
• It is a mission initiated by the top managers and practiced down the line in the organizational
hierarchy.
• Total involvement makes OD efforts successful. It must be remembered that organizations are
made up of human systems aimed at achieving individual and organizational goals.
 DEFINITIONS: OD
• According to Richard Beckhand: “Organization development is a planned effort,
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.”
• According to Warren H. Bennis: “ Organization development (OD) is a response to change, a
complex educational strategy intended to change the beliefs, attitudes, values, and structure of
organizations so that they can better adapt to new technologies, markets and challenges, and the
dizzying rate of change itself.
• According to Warner Burke: “Organization development is a planned process of change in an
organization’s culture through the utilization of behavioral science technology, research, and
theory.”
 CONCEPT OF OD
1. Application of Change: OD applies to changes in the strategy, structure, and/or processes of an entire system,
such as an organization, a single plant of a multi-plant firm, a department or work group, or individual role or job. A
change program aimed at modifying an organization’s strategy.
Ex: Focus on how the organization relates to a wider environment and on how those relationships can be improved.
2. Problem-solving processes: OD program directed at helping a top management team become more effective
might focus on interactions and problem-solving processes within the group. This focus might result in the improved
ability of top management to solve company problems in strategy and structure. This contrasts with approaches
focusing on one or only a few aspects of a system, such as technological innovation or operations management.
Ex: Improvement of particular products or processes or to development of production or service delivery functions.
3. Application and transfer of behavioral science knowledge and practice: OD is based on the application and
transfer of behavioral science knowledge and practice, including:
(A)Micro-concepts, such as leadership, group dynamics, and work design, and
(B) Macro-approaches, such as strategy, organizational design and international relations.
 CONCEPT OF OD
4. Managing Planned change: OD is concerned with managing planned change, but not in the
formal sense typically associated with management consulting or project management, which
tends to comprise programmatic and expert-driven approaches to change. Rather, OD is more an
adaptive process for planning and implementing change than a blueprint for how things should be
done. It involves planning to diagnose and solve organizational problems, but such plans are
flexible and often revised as new information is gathered as the change program progresses.
Ex: If there was concern about the performance of a set of international subsidiaries, a
reorganization process might begin with plans to assess the current relationships between the
international divisions and the corporate headquarters and to redesign them if necessary. These
plans would be modified if the assessment discovered that most of the senior management teams
were not given adequate cross-cultural training prior to their international assignments.
 CONCEPT OF OD
5. Design, Implementation, and the subsequent reinforcement of change: It moves beyond
the initial efforts to implement a change program to a longer-term concern for appropriately
institutionalizing new activities within the organization.
For example, implementing self-managed work teams might focus on ways in which supervisors
could give workers more control over work methods. After workers had more control, attention
would shift to ensuring that supervisors continued to provide that freedom. That assurance might
include rewarding supervisors for managing in a participative style. This attention to
reinforcement is similar to training and development approaches that address maintenance of new
skills or behaviors, but it differs from other change perspectives that do not address how a change
can be institutionalized.
 CONCEPT OF OD
6. Improving organizational effectiveness: Effectiveness is best measured along three
dimensions:
 First, OD affirms that an effective organization is adaptable; it is able to solve its own problems
and focus attention and resources on achieving key goals. OD helps organization members gain
the skills and knowledge necessary to conduct these activities by involving them in the change
process.
 Second, an effective organization has high financial and technical performance, including sales
growth, acceptable profits, quality products and services, and high productivity. OD helps
organizations achieve these ends by leveraging social science practices to lower costs, improve
products and services, and increase productivity.
 Finally, an effective organization has satisfied and loyal customers or other external
stakeholders and an engaged, satisfied, and learning workforce.
 CHARACTERISTICS OF OD
1. System Orientation: Organizational development is system oriented. It is concerned with
the interactions of the various parts of the organization which affect each other. It lays stress
on intergroup and interpersonal relationship. It is concerned with structure and process as
well as attitudes.
2. Use of Change Agent: Organizational development is generally implemented with the help
one or more change agents, whose role is to stimulate, facilitate, and coordinate change. The
change agent usually acts as a catalyst, sparking change within the system while remaining
somewhat independent of it.
3. Problem Solving: Organizational development is concerned with the problem solving. It
seeks to solve the problems through practical experiences gained on the work and not merely
through theoretical discussion as in a class room.
4. Experimental Learning: Organizational development provides experimental learning to
help the participants learn new behavior patterns through experience. They can discuss and
analyze their own immediate experience and learn from it
 CONTD…
5. Human Values: OD programmes are often based on humanistic values. The values are positive
beliefs about the potential and desire for growth among employees. To be effective and self-
reviewing, an organization needs employees who want to increase their skills and contributions.
6. Contingency Orientation: Organizational development is situational and contingency
oriented. As people learn to develop their behavioral concepts through experience, they can
suggest various ways to solve a particular problem and to adapt any of them most suited in the
present circumstances. Thus, OD is flexible and pragmatic, adapting actions to fit particular
needs.
7. Levels of interventions: OD programmes are aimed at solving problems that may occur at the
individual, interpersonal group, inter-group and total organizational level. OD interventions are
designed for each level as for instance career planning at the individual level, team building at the
group level.
8. Feedback: Organizational development supports feedback to participants so that they may be
able to collect the data on which decisions are based.
 WHAT IS THE RELEVANCE OF OD TO
THE ORGANIZATIONS?
 OD could help an organization to create effective responses to these changes and, in many
cases, to proactively influence the strategic direction of the firm.
 According to several observations of the researchers, there are three major trends are shaping
change in organizations includes:

1. Globalization
2. Information Technology
3. Managerial Innovation
 EXPLANATION
 First, globalization is changing the markets and environments in which organizations operate as
well as the way they function. New governments, new leadership, new markets, and new
countries are emerging and creating a new global economy with both opportunities and threats.
 Second, information technology is redefining the traditional business model by changing how
work is performed, how knowledge is used, and how the cost of doing business is calculated.
The way an organization collects, stores, manipulates, uses, and transmits information can lower
costs or increase the value and quality of products and services. Ex: Information technology is at
the heart of emerging e-commerce strategies and organizations like Amazon.com, Yahoo!, and
eBay.
 Third, managerial innovation has responded to the globalization and information technology
trends and has accelerated their impact on organizations. New organizational forms, such as
networks, strategic alliances, and virtual corporations, provide organizations with new ways of
thinking about how to manufacture goods and deliver services.
 RELEVANCE AND APPLICATIONS OF
OD TO THE ORGANIZATIONS
 OD plays a key role in helping organizations change themselves. It helps organizations assess
themselves and their environments and revitalize and rebuild their strategies, structures, and
processes.
 OD is obviously important to those who plan a professional career in the field, either as an
internal consultant employed by an organization or as an external consultant practicing in many
organizations. A career in OD can be highly rewarding, providing challenging and interesting
assignments working with managers and employees to improve their organizations and their
work lives. In today’s environment, the demand for OD professionals is rising rapidly. For
example, large professional services firms must have effective “change management” practices
to be competitive.
 OD is important to general managers and other senior executives because OD can help the whole
organization be more flexible, adaptable, and effective. Organization development can also help
managers and staff personnel perform their tasks more effectively. It can provide the skills and
knowledge necessary for establishing effective interpersonal relations.
HISTORY OF OD
1. THE LABORATORY TRAINING STEM
 Laboratory training is essentially unstructured small group situations in which participants
learn from their own actions.
 It began to develop about 1946 from various experiments in using discussion groups to
achieve changes in behavior in back-home situations.
 In particular, an Inter-Group Relations workshop held at the State Teachers College in New
Britain, Connecticut, in the summer of 1946 influenced the emergence of laboratory training.
 This workshop was sponsored by the Connecticut Interracial Commission and the Research
Center for Group Dynamics, then at Massachusetts Institute of Technology (MIT).
2. SURVEY RESEARCH AND FEEDBACK
Survey research and feedback, a specialized form of action research constitutes the
second major Stem in the history of organization development.
It revolves around the techniques and approach developed over a period of years by
staff members at the Survey Research Center (SRC) of University of Michigan.
The results of this experimental study lend support to the idea that an intensive, group
discussion procedure for utilizing the results of an employee questionnaire survey can
be an effective tool for introducing positive change in a business organization.
It deals with the system of human relationships as a whole (superior and subordinate
can change together) and it deals with each manager, supervisor, and employee in the
context of his own job, his own problems, and his own work relationships.
 3. PARTICIPATIVE MANAGEMENT
The intellectual and practical advances from the laboratory training stem and the action
research/survey-feedback stem were followed closely by the belief that a human
relations approach represented a “one best way” to manage organizations.
This normative belief was exemplified in research that associated Likert’s Participative
Management style and Blake and Mouton’s Grid OD program with organizational
effectiveness.
The normative approach to change has given way to a contingency view that
acknowledges the influence of the external environment, technology, and other forces
in determining the appropriate organization design and management practices.
Still, Likert’s participative management and Blake and Mouton’s Grid OD frameworks
are both used in organizations today
 4. QUALITY OF WORK LIFE
The First Phase
The first phase of QWL programs generally involved joint participation by unions and management
in the design of work and resulted in work designs giving employees high levels of discretion, task
variety, and feedback about results. Perhaps the most distinguishing characteristic of these QWL
programs was the discovery of self-managing work groups as a form of work design. These groups
were composed of multi-skilled workers who were given the necessary autonomy and information
to design and manage their own task performances.
The Second Phase
The second phase of QWL activity continues primarily under the banner of “employee
involvement” (EI) as well as total quality management and six-sigma programs, rather than of
QWL. For many OD practitioners, the term EI signifies, more than the name QWL, the growing
emphasis on how employees can contribute more to running the organization so it can be more
flexible, productive, and competitive. Recently, the term “employee empowerment” has been used
interchangeably with the term EI, the former suggesting the power inherent in moving decision
making downward in the organization
 5. STRATEGIC CHANGE
The strategic change background is a recent influence on OD’s evolution.
As organizations and their technological, political, and social environments have
become more complex and more uncertain, the scale and intricacies of organizational
change have increased.
This trend has produced the need for a strategic perspective from OD and encouraged
planned change processes at the organization level.
 WHAT ARE THE COMPETENCIES
REQUIRED BY OD PROFESSIONALS?
 1. SYSTEM CHANGE EXPERT

Systems Change Leader — who can comfortably work within a whole system
and advise on strategies for organizational change, transformation, and
alignment.
Culture Builder — who fosters commitment and engagement based on an
environment of trust and promotes the health and vitality of the organization.
Innovator — who sponsors, develops, and can challenge the organization to
create strategies for disruption, breakthroughs, transformation, and innovation.
 2. EFFICIENT DESIGNER
Efficient Designer — who strives for simplicity and designs strategies,
interventions, and processes to facilitate a desired business outcome with the
client and end-user in mind.
Process Consultant — who increases leadership and organizational capacity,
facilitates group dialogue and decision-making by creating a non-threatening
environment.
Data Synthesizer — who operates as an integrator connecting multi-
stakeholder views and translates salient information to create clarity and
commitment.
 3. BUSINESS ADVISOR
Strategic Catalyst — who thinks strategically, takes initiative, and acts to
achieve results tied to the organization’s goals.
Results-Oriented Leader — who understands and applies the principles of
customer service, sets challenging goals, and measures impact and project
return on investment.
Trusted Advisor — who effectively develops trusting relationships and
partnerships through integrity and authenticity and is clear about the outcomes
that are important to key stakeholders.
 4. CREDIBLE STRATEGIST
Credible Influencer — who empathetically relates to clients, understands their
needs, and has the knowledge to translate the business reality into terms that
can be agreed upon and committed to by the client.
Collaborative Communicator — who communicates clearly and concisely,
and tailors communication in ways that meet the needs and motivations of
client groups at all levels.
Globally Diverse Integrator — who can effectively work within diverse
cultures, and creates an inclusive environment for people of all identities to feel
valued, respected, and able to contribute.
 5. INFORMED CONSULTANT
 Exemplary Consultant — who cultivates meaning, working relationships, and commitment
with stakeholders to effect change, and demonstrates an understanding of client expectations,
effectively contracting for goals, outcomes, and resources.
 Emotionally Intelligent Leader — who effectively reads stakeholders, seeks out different
perspectives, and uses emotional intelligence to guide appropriate action, and understands and
reflects on one’s own personal values, boundaries, feelings, biases, triggers, and ethics to
manage their impact on the work.
 Life-Long Learner and Practitioner — who demonstrates leadership in a specialized area of
OD, stays up to date on methodologies and tools, and leverages best practices to drive results in
line with the organization’s needs. The website has about a dozen specific theories listed,
including appreciative inquiry, culture change, diversity and inclusion, organization design, the
science of decision making, systems theory, and team development.”
 KEY BENEFITS OF ORGANIZATIONAL
DEVELOPMENT
OD is the practice of planned, systemic change in the beliefs, attitudes and values of employees for
individual and company growth. The purpose of OD is to enable an organization to better respond and
adapt to industry/market changes and technological advances. In today’s post we will focus on five
benefits of OD from continuous improvement to increased profits.
1. Continuous Improvement: Companies that engage in organizational development commit to
continually improving their business and offerings. The OD process creates a
continuous cycle of improvement whereby strategies are planned, implemented, evaluated,
improved and monitored. Organizational development is a proactive approach that embraces change
(internal and external) and leverages it for renewal.
2. Increased communication:One of the key advantages to OD is increased communication,
feedback and interaction within the organization. The goal of improving communication is to align
all employees to shared company goals and values. Candid communication also leads to increased
understanding of the need for change within the organization. Communication is open across all
levels of the organization and relevant feedback is recurrently shared for improvement.
 CONTD…
1. Employee Development: Organizational development focuses on increased communication to
influence employees to bring about desired changes. The need for employee development stems
from constant industry and market changes. This causes an organization to regularly enhance
employee skills to meet evolving market requirements. This is achieved through a program of
learning, training, skills/competency enhancement and work process improvements.
2. Product & service enhancement: A major benefit of OD is innovation, which leads to product and
service enhancement. Innovation is achieved through employee development, which focuses on
rewarding successes and boosting motivation and morale. In this scenario, employee engagement is
high leading to increased creativity and innovation. Organizational development also increases
product innovation by using competitive analysis, market research and consumer expectations and
preferences.
3.Increased profit: Organizational development affects the bottom line in a variety of ways. Through
raised innovation and productivity, efficiency and profits are increased. Costs are also reduced by
minimizing employee turnover and absenteeism. As OD aligns objectives and focuses on
development, product/service quality and employee satisfaction are increased. The culture shift to one
of continuous improvement gives the company a distinct advantage in the competitive marketplace.
 ORGANIZATIONAL DEVELOPMENT
PROCESS
The organizational development processes can be divided into seven steps. In this
section, we’ll go through these steps one-by-one.
1. Entering and contracting
• The first step starts when a manager or administrator spots an opportunity for
improvement. There are different events that can trigger this, including external
changes, internal conflicts, complaining customers, loss of profit, a lack of
innovation, or high absence or employee turnover. These events are usually
symptoms of a deeper problem.
• The first stage is about scoping the problem. This is usually done through a
meeting between the manager and the OD members. In the case of external OD
consultants, this stage is more formal.
 2. DIAGNOSTICS

In the second phase, diagnostics, the OD practitioner tries to understand a system’s

current functioning. They collect information needed to accurately interpret the
problem, through surveys, interviews, or by looking at currently available data and
try to find the root cause.
According to Cummings & Worley (2009), effective diagnosis provides the systematic
knowledge of the organization needed to design appropriate interventions.
Diagnostics can be done at three levels:
1. Organizational Level
2. Group Level
3. Individual Level
LEVELS OF DIAGNOSTICS
 3. DATA COLLECTION AND ANALYZING

• In the third phase, data is collected and analyzed. Data collection instruments
include existing data from work systems, questionnaires, interviews, observations,
and ‘fly on the wall’ methods.
• Data collection is often time-consuming and critical for the success of a project.
• Important factors to keep in mind are confidentiality, anonymity, a clear purpose
and observer-expectancy bias.
 4. FEEDBACK
• In this phase, it is key for the OD consultant to give information back to the client
in a way that’s understandable and action-driven.
• Information needs to be relevant, understandable, descriptive, verifiable, timely,
limited, significant, comparative, and spur action. Techniques like storytelling and
visualization can be used to do this in an effective way.
 5. DESIGNING INTERVENTIONS
• After providing the client with feedback, an intervention needs to be created. This intervention
should fit the needs of the organization and should be based on causal knowledge of outcomes.
In addition, the organization needs to be able to absorb the changes effectively.

• A major part of the change process is defining success criteria for change. Only when these
criteria are well-defined, progress can be measured.
 6. LEADING AND MANAGING CHANGE

• The next phase is about executing the change intervention. Leading and managing
change is hard.
• Effective change management revolves around motivating change, creating a
vision, developing support, managing the transition, and sustaining momentum.
 7. EVALUATION AND
INSTITUTIONALIZATION OF CHANGE
• Once a system has been implemented, opportunities for improvement start to show.
Implementing these will lead to a better user and employee experience.

• These incremental changes characterize the rapid evolution of technology. Change is becoming
a constant factor, which means that it is near impossible to just implement technology and be
done with it. Systems evolve and this requires a constant implementation.

• Lastly, effective interventions measure their own success and are created in a way that enables
comparison between the state of affairs before and after.
ORGANIZATIONAL LIFE CYCLE
 ORGANIZATIONAL LIFE CYCLE
• The Organizational Life Cycle Model is a process model which identifies how
organizations grow, mature and decline over time. The growth phase of an organization
begins as it establishes a foothold in a market and develops its product or service
offering.
• As the business becomes established within its operating environment, competition
intensifies, leading to maturity as the firm strives to continue achieving higher levels of
efficiency through cost minimization and quality control. In this stage, some firms may
seek opportunities for diversification into new products or services with the aim of
augmenting their current revenue stream or creating a new one entirely.
• Over time, markets can become saturated so that further growth becomes more
difficult, even posing the risk of entering a period of decline where there are no
foreseeable prospects for improving market share. This may lead to organizations
advocating for new growth strategies even if the time is not yet right, perhaps leading to
diversification into emerging markets or the development of new products before they
 ORGANIZATIONAL LIFE CYCLE MODEL
• Start-up / planning
Planning for an organization means determining what type of activity it will engage
in and how it will grow.
• Growth
Growth generally represents the period when an organization becomes more stable
and increases its size and number of employees.
• Maturity
Maturity includes a stable workforce with good working relationships among
employees.
• Decline
Decline is characterized by an aging workforce, fewer customers, and shrinking
profits.
 Organizational Life Cycle of Apple
• Apple as a practical example of the Organizational Life Cycle

• Apple is a company with a long and interesting history. They have gone through many changes in the past few decades, and some of those changes
can be examples of the Organizational Life Cycle.

• The first stage of the Apple’s Organizational Life Cycle was an entrepreneurial start-up. Steve Jobs and Steve Wozniak were focused on creating
new technology and on advancing the state of computers.

• They were successful in doing so, but their success came at a price: they had to sacrifice other things like employee salaries and customer service.
This is all because they chose to focus on the new technology aspect of Apple rather than on customer satisfaction or financial stability

• The second stage comes after Apple became publicly traded for ten years under Jobs’s leadership. At this point, Apple was more focused on the
customer’s experience and their products were more profitable. This second stage was a great success for Apple, but it wasn’t all sunshine and
rainbows: Jobs became increasingly focused on creating better technology rather than focusing on customers, which led to his departure from Apple
in 1985.

• The third Organizational Life Cycle of Apple is what we see today. Tim Cook has taken over as CEO since then, and he focuses much more heavily
on marketing/branding while remaining committed to technological innovation. He’s also been successful with this Organizational Life Cycle
because they have created two new product categories under his leadership (iPad & Smartwatch). However, there are some challenges that come
with being one of the biggest companies in the world: Apple is now facing issues with profitability, and it’s becoming more difficult for them to
innovate in a way that feels fresh.

• This Organizational Life Cycle of Apple can be seen as a microcosm of what happens within most companies when they go from entrepreneurial
start-ups to publicly traded corporations, and finally towards being one of the biggest brands in the world. The only difference is that there are
 ORGANIZATIONAL DIAGNOSIS
Organizational Diagnosis is
an effective way of looking
at an organization to
determine gaps between
current and desired
performance and how it can
achieve its goals.
 THE DIAGNOSTIC CYCLE
• The major steps of a diagnostic cycle include
• Orientation
• Goal setting
• Data gathering
• Analysis/ Interpretation
• Feedback
• Action Planning
• Implementation
• Monitoring/ Measure
• Evaluation
 PURPOSE OF ORGANIZATIONAL
DIAGNOSIS
• Enhancing the general understanding of the functioning of
organizations (i.e. educational or research purposes.)
• Planning for growth and diversification
• Improving Organizational Effectiveness or Planning General
Improvements
• Organizational Problem Solving
 METHODS FOR ORGANIZATIONAL
DIAGNOSIS
There are many ways of analyzing and diagnosing organizations and their phenomena. The
following are the most frequently used methods:
1) Questionnaires
2) Interviews
3) Observation
4) Analysis of records, circulars, appraisal reports, and other organizational literature
5) Analysis of hard data of organizations and various units
6) Task forces and task groups
7) Problem identification/problem-solving workshops
8) Seminars, symposia, and training program
9) Recording and examining critical incidents,