Organization development

DEFINITION
 Organization Development is a top management
supported, long-range effort to improve an
organization’s problem-solving and renewal processes,
particularly through a more effective and collaborative
diagnosis and management of organization culture –
with special emphasis on formal work team,
temporary work team and intergroup culture – with
the assistance of a consultant-facilitator and the use of
the theory and technology of applied behavioural
science, including action research.

DEFINITION
 Another definition of Organization Development is
that it is a systematic application and transfer of
behavioural science knowledge to the planned
development, improvement and reinforcement of the
strategies, structures, and processes that lead to
organization effectiveness.

FEATURES OF OD
 1. It applies to changes in strategy, structure, and/or
processes of an entire system of an organization, a
single plant, a department or work group or an
individual role or job.
 2. It is based on the application and transfer of
behavioural science knowledge and practices, such as
leadersip, group dynamics, work design.
 3. It is concerned with managing planned change, it is
more adaptive approach. The planned change can be
modified and redesigned if necessary.

FEATURES OF OD
 4. It involves both creation and reinforcement of
change. It goes beyond initial stage till stabilizing new
activities.
 5. It is oriented to improving organizational
effectiveness – effective organization is able to solve its
own problems and focuses on achieving key goals.

RELEVANCE OF 0D
 3 major trends are shaping the changes in
organizations:
 1. Globalization – changing markets and environment
and the way they function.
 2. Information Technology – has changed the
traditional way of doing business, how work is
performed, how knowledge is used, etc.
 3. Managerial Innovation – new organizational forms,
such as networks, strategic alliances, large
corporations, etc. are leading to new methods of
manufacturing goods and providing services.

WHAT OD CAN DO
 Helps in bringing change in organization
 Helps organizations to assess themselves and their
environment and build their strategies, structures and
processes.
 Helps in changing the assumptions and values in their
behaviour.
 Helps in making organizations more responsive to the
needs of operating in highly complex and changing world.
 Helps managers and staff to perform their tasks more
effectively. It can provide skills and knowledge necessary
for effective relations.

PLANNED CHANGE
 Definition of Change: Change means the new state of
things is different from the old state of things.
 Change should be viewed as an understandable
process that can be managed instead of as a
mysterious event.
 Planned Change: Focuses on how change can be
implemented in organizations.

THEORIES OF PLANNED CHANGE
 1. Kurt Lewin’ Change Model
First stage – Unfreezing
Second stage – Moving
Third stage - Refreezing

 2. Action Research Model
a. Problem identification
b. Consultation with behavioural science
experts
c. Data gathering and preliminary diagnosis
d. Feedback to a key client
e. Joint diagnosis of the problem (with the
management by OD expert)
f. Joint action planning
g. Data gathering after action

 3. The Positive Model – focuses on “what the organization
is doing right” and not problems.
a. Initiate the inquiry
b. Inquire into best practices of the
organization and get details of the same
c. Discover the themes – based on stories of
people, i.e., how managers managed
d. Envision a preferred future – employees
identify themes and change status quo
e. Design and deliver – design & deliver ways to
create future – describe activities and create plans
to bring about the vision.

 4. General Model of Planned Change
a. Entering & contracting – with OD expert with the
organization.
b. Diagnosing issues– at organization level, group level
and individual level
(Gathering, analysing and feeding back data are
the central change activities in diagnosis)
c. Planning & Implementing change – to be carried out
jointly by the OD expert and the organization.
d. Evaluating and institutionalizing change – providing
feedback and evaluating the effects of change, and make
it regular feature which should continue

PROCESS OF OD
 DIAGNOSTIC PROCESS
It is the process of understanding how the
organisation is currently functioning, and it provides
the information necessary to design change
interventions.
It is a collaborative process between organization
members and the OD consultant to collect pertinent
information, analyse it, draw conclusions for action
planning and intervention.

DIAGNOSTIC MODELS
 Open System Model
a. Open systems exchange information and resources with
their environment
b. Open systems display a hierarchical order. Each higher
level of system comprises lower level system – society,
organizations, groups (departments) and individual level
c. The systems at different levels are different in many ways
– in size and complexity.
d. The common inputs of all systems are – inputs,
transformation, output, boundaries, feedback, equifinality,
and alignment .

Open System Model

 1. Inputs – human or other resources, such as information,
energy, materials, etc.
 2. Transformation – processes of converting inputs into
outputs.
 3. Output – transformed input into output
 4. Boundaries – to distinguish between systems and
environment
 5. Feedback – information about the actual performance.
 6. Equifinality –not necessary to have same cause and effect
relation in open systems
 7. Alignment – perfect fit between inputs, transformation
and out and among sub-systems.

SOCIETY LEVEL SYSTEM DIAGNOSIS
 The Open system approach is applied to diagnose to point out what
areas to examine and what questions to ask to assess functioning of the
society/organization/group/individual.
 Diagnosis can occur at all levels or may be limited to issues occurring at
a particular level.

OPEN SYSTEM APPROACH TO THE SOCIETY
1. Environment - external
2. Input – Information & energy from the environment of the society
3. Transformation – technological components and social components
4. Output – finished goods, services and ideas given back to the
environment of the society.
5. Feedback – future improvements.

DIAGNOSING ORGANIZATIONAL
SYSTEMS
 Open system can help in diagnosing at the
organizational level as under:
 I. Inputs – (i) General Environment – social,
technological, economic, ecological, political
(ii) Industry Structure or Task Environment – supplier
power, buyer power, threats of substitutes, threat of
entry new companies, rivalry among competitors.
Note: Dynamic environments change rapidly and are
unpredictable, strategy should be flexible, keeping in
view the Industry Structure.

SYSTEMS
 II. Design Components (Transformation) – which converts
inputs into outputs.
 There are 5 major design components :
 1. Strategy – the way an organization uses its resources to achieve
its goals.
 2. Technology – the way an organization converts inputs into
products/services – methods of production, equipment, etc.
 3. Structure – how to (i) divide the work, (ii) how to coordinate
the divided work to coordinate
 4. Measurement Systems – data for control
 5. Human Resource Systems – mechanism for selecting,
developing, appraising and rewarding
 Note: Organization Culture guides members’ perceptions,
thoughts and actions in regard to the above design components.

SYSTEMS
 III. Outputs – (i) Organizational performance –
financial – profits, sales, ROI
(ii) Productivity – sales per employee, waste, error
rates, quality or units produced
(iii) Stakeholders – customer satisfaction, employee
satisfaction, investor satisfaction.
 IV. Alignment – a. does the organization’s strategic
orientation fit with the inputs?
(b) do the design components fit with each other

SYSTEMS
 ANALYSIS WITH THE HELP OF ORGANIZATIONAL
SYSTEM
 1st step – is the organization performing well
 2nd Step – understand causes by assessing inputs and
strategic orientation
 3rd Step – evaluate alignments among different parts.
 NOTE: how well the – Inputs, Design Components,
Outputs - fit together, will determine the performance
of the organization

DIAGNOSING GROUP LEVEL
SYSTEMS
 I. Inputs: Organization Design is the major input to Group
Design Level.
Group Design is conditioned by technology, structure,
measurement systems, and human resource system and
organization culture.
 II. Design Components (transformation) are
a. goal clarity – understanding of group goals
b. Task Structure – how work is divided
c. Group Composition – age, education, experience, skills,
abilities.
d. Team Functioning – quality relationship in group
e. Performance – performance norms – how work is to be
performed and standards of performance

DIAGNOSING GROUP LEVEL
SYSTEMS
 III. Outputs: Group effectiveness – (a) Performance –
group’s ability to control or reduce costs, increase
productivity or improve quality
(b) Quality of Work Life – effectiveness is also indicated by
the group members’ quality of work life.
 IV. Fits – Group Design components must fit inputs if
groups are to be effective.
 Basis of diagnosis of group’s design components
a. how clear are group’s goals, b. what is group’s task
structure, c. what is the composition of group, d. what is
group’s performance norms, e. what is nature of team
functioning (quality of work life)

INDIVIDUAL JOB/POSITION LEVEL
DIAGNOSIS
 I. Inputs: (a) Organization Design of the organization in
which the individual job is the smallest unit – technology,
structure, measurement systems, human resource systems
and culture have powerful impact on the ways jobs are
designed and on people’s experiences in jobs.
(b) Group Design is an essential part of the job context –
group task structure, goal clarity, composition,
performance norms, and group functioning serve as inputs
to job design. These have direct impact on job.
(c ) Personal Characteristics of the individuals occupying
jobs – age, education, experience, skills and abilities. All
these can affect job performance and how people react to
job.

DIAGNOSIS
 II. Design Components: Individual jobs have 5 key
dimensions:
a. Skill variety – identifies the degree to which a job requires a
range of activities and abilities to perform the work.
b. Task Identity – degree to which a job requires completion of a
relatively whole piece of work.
c. Task Significance – job has a significant impact on other
people’s lives.
d. Autonomy – freedom in scheduling work and determining
work methods.
e. Feedback – provides direct and clear information about the
effectiveness of task performance.
The above 5 Dimensions put together lead to job enrichment –
enriched jobs motivate and satisfy employees.

DIAGNOSIS
 III. Output – completion of task as per performance
standards.
 IV. Fits – i. Job design to be congruent with organization
and group design. ii. Job design to fit personal
characteristics of job holders, if they are to perform
effectively and derive satisfaction.
 Diagnosis of Individual Level inputs –
i. what is the design of the larger organization within which
the individual jobs are embedded
ii. What is the design of the group containing the
individual jobs.
iii. What are the personal characteristics of job holders

COLLECTING AND ANALYSING
DIAGNOSTIC INFORMATION
 OD is dependent on diagnosis. Diagnosis is carried out by
collecting information pertaining to assessing the functioning of
organization. Based on diagnosis, the intervention to be used to
bring about change, is decided.
 The process consists of:
1. establish relationship with OD practitioner by the client and
establish relationship between OD practitioner and those from
whom data is to be collected.
2. Methods of Data Collection – questionnaire, interviews,
observation and unobtrusive measures
3. Analyse the information to make clear causes of organization
problems and to identify areas for future development.
4. Provide feedback to the client
5. Follow up

COLLECTING AND ANALYSING
DIAGNOSTIC INFORMATION
 What OD Practitioner should do before collecting
information?
a. introduce himself
b. State the purpose – what he will do
c. For whom he works – establish rapport with those
who would provide the data
d. Confidentiality to be maintained by OD
practitioner
e. Explain how the data provider will be benefitted
f. OD practitioner should be trusted.

DESIGNING INTERVENTIONS
 Interventions are planned actions or events or tools to bring
about desired improvement in the organization.
 What is an effective Intervention? Following is criteria to
define effective Intervention:
 1. Fitment – fitment is based on valid/accurate diagnosis of
the organization. Employees to be involved in making
decisions about changes which will affect them. Employees
should accept and take responsibility for its implementation
 2. Knowledge of Outcome – clear relation between the
intervention and outcome may not be there but some
evidence should be there.

DESIGNING INTERVENTIONS
 3. Organization’s capacity to manage change –
employees should be able to management the change
themselves, ultimately.
 4. Result Driven – to what extent intervention will
achieve the goal
 5. Cost benefit analysis
 6. Acceptability by the client organisation
 7. Shared ownership – is it explained and
communicated to all.

HOW TO DESIGN EFFECTIVE
INTERVENTION
 Designing of effective interventions depend :
 A. Conditions prevailing in the organization that can affect
success of intervention – (1) politics, management style,
structure, top management support.
(2) Capability of the OD Expert
(3) Readiness for change – pressure for change,
dissatisfaction with status quo, availability of resources and
commitment of time.
(4) Capability to change – knowledge & skills to motivate
for change
(5) Cultural context – modify intervention to fit the culture

HOW TO DESIGN EFFECTIVE
INTERVENTION
 B. Targets of Change –
 1. Organizational Issues – i. strategic issues (most
crucial), ii. Technology & structures issues, iii. Human
resource issues – attracting competent people, setting
goals for them, rewarding, iv. Human process issues –
communication, leadership, decision making.
 2. Organizational Levels – organizations function at
different levels – individual, group, organization and
transorganization. Interventions should be level
specific and try to integrate interventions affecting
different levels to be successful.

CATEGORIZATION OF
INTERVENTIONS
 1. Human Process Interventions – coaching, Training
& Development, consultations, third party
intervention, team building.
 2. Technostructural Interventions – structural design,
downsizing, re-engineering
 3. Human Resource Management Interventions – goal
setting, Performance appraisal, reward system, career
planning
 4. Strategic Interventions – strategic change, mergers
& acquisitions, alliances, networks, culture change,
organization learning and knowledge management

INDIVIDUAL, & INTERPERSONAL
LEVELS INTERVENTIONS
 Individual Level Interventions to improve skills,
knowledge and capabilities of employees:
a. Coaching
b. Training and development
 Coaching – involves guided inquiry, active listening,
reframing and other techniques to help individuals see
new or different possibilities and to direct their efforts
towards what matters most to them. It assists an
executive to change and make him improve
productivity and effective.

 A. The Process of Coaching:
 1. Establish the principles of relationship – establish goals of
coaching and decide parameters such as resources,
compensation and ethical considerations.
 2. Conduct an Assessment by administering psychological tests
or use 360 degree feedback process.
 3. Debrief the results - feedback to enable client to take action
 4. Develop an action plan – new actions by client and coach for
goal achievement.
 5. Implement the action plan through one-to-one meetings. It
requires skills to confront, challenge and facilitate learning.
 6. Assess the results – action of client are reviewed and
evaluated. Based on this, action plan can be revised or process
can be terminated.

 B. Training and development:
 1. Identify Training and development needs through
performance appraisal.
 2. Develop the objectives of the Training and development
Programme
 3. Design the Training and Development Programme –
contents, methods, trainer
 4. Deliver the training and development programme by
organizing it at suitable date and place.
 5. Evaluate the effectiveness of training and development
programme

 The Interpersonal Level Interventions:
 1. Process Consultation – to carry out helping relationship
for managers, employees in areas of communication,
interpersonal relations, decision-making and task
performance.
 Principles of Process consultation: 1. be helpful, 2. be in
touch with client’s beliefs, emotions, reactions, 3. to act as
agent of change, 4. help client to solve own problem, 5.
understand client’s motivation and perceptions, 6. timing
is crucial when client is ready to receive suggestion, 7. when
consultant in doubt share the problem with client.

 Problems in Process Consultation – a. in most cases
field studies did not directly measure the effect of
process consultation as compared with other methods.
 b. most studies have used people’s perception and not
measured success scientifically.
 2. Basic Process Intervention – Johari Window – to
make people more effective in their communication
with others by increasing the individual’s awareness of
how their behaviour affects others

GROUP LEVEL INTERVENTIONS
 The Group Level Interventions are aimed at:
a. Process Interventions – to sensitize the
group to its own internal processes
b. Content Interventions – help the group to
determine what it works on
c. Structure Interventions – examine methods
used to accomplish tasks and deal with external
issues.
 These interventions are carried out by OD expert by
making comments, raising questions and
observations.

 2. Third Party Interventions focuses on conflicts arising between
two or more people within the organization.
 Conflict can arise due to a. personality, 2. task orientation, 3. goal
interdependence, 4. perception among group members.
 At times issues underlying a conflict are latent and are not
manifested. Then something triggers the conflict and brings it
into open. Then scared of the consequences of open conflict it
becomes latent again and again gets triggers.
 Strategies to Handle conflict – help to prevent triggering by
understanding factors which can trigger – by warning, lay down
rules under which the parties can interact, use of consultants
who would help in giving vent to their grievances, developing
emotional support, attempt to eliminate or resolve the basic
issues causing
conflict, at times it may be difficult.

 Third party interventions help the parties interact with each
other directly to diagnose causes of conflict and its resolution.
 Consultants help employees resolve interpersonal conflicts
which arise during team building or process consultation.
 3. Team Building – Planned activities that help groups to
improve the way they accomplish tasks, enhance their
interpersonal and problem solving skills.
 Team building activities – diagnostic tools – instruments,
interview and feedback to understand motivation of group,
surveys and team meetings. Development tools – coaching, 360
degree feedback, third party intervention, role clarification,
mission and goal development, strategic planning and outdoor
games.

Organization development

Organization development

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