Organization Development and Change Shailaja Karve Introduction to Organization Development

Learning Objectives  To provide a definition of Organization Development (OD)  To distinguish OD and planned change from other forms of organization change  To describe the historical development of OD

Burke’s Definition of OD OD is a planned process of change in an organization’s culture through the utilization of behavioral science technology, research, and theory.

French’s Definition of OD OD refers to a long-range effort to improve an organization’s problem-solving capabilities and its ability to cope with changes in its external environment with the help of external or internal behavioral-scientist consultants.

Beckhard’s Definition of OD OD is an effort: (1) planned, (2) organization-wide, and (3) managed from the top, to (4) increase organization effectiveness and health through (5) planned interventions in the organization’s “processes,” using behavioral science knowledge.

Beer’s Definition of OD OD is a system-wide process of data collection, diagnosis, action planning, intervention, and evaluation aimed at: (1) enhancing congruence between organizational structure, process, strategy, people, and culture; (2) developing new and creative organizational solutions; and (3) developing the organization’s self-renewing capacity. It occurs through collaboration of organizational members working with a change agent using behavioral science theory, research, and technology.

Cummings Definition: Organization Development is... a systemwide application and transfer of behavioral science knowledge to the planned development, improvement, and reinforcement of the strategies, structures, and processes that lead to organization effectiveness.

Distinction between OD from other forms of Organization Change (consulting, technological innovation, operations management, T&D, & Change mgt.  OD applies to strategy, structure & processes of an entire system (dept., SBU, or organization in totality)  Technological innovation, operations management, T&D focus on one or few aspects of the system. The attention is limited to product, process or service delivery systems.

Distinction between OD from other forms of Organization Change (contd..)  OD is based on behavioral Sc. Knowledge (eg. Micro variables – leadership, group. dynamics, work design & macro variables– strategy, org. design, international relations)  Focus on eco, financial & technical aspects and neglect the personal and social characteristics of the system.

Distinction between OD from other forms of Organization Change (contd..)  OD is concerned with planned chance which is adaptive in nature & undergoes revisions as new information comes in  Other types of changes are more programmatic, expert driven & having a blue print as to how things are to be done

Distinction between OD from other forms of Organization Change (contd..)  OD involves the creation & subsequent reinforcement of change  It not only implements change but also stabilizes and institutionalizes change  This initiative is not found in other change initiatives (except T&D) which do not institutionalize change

Distinction between OD from other forms of Organization Change (contd..)  OD aims at improving organization effectiveness  It is based on two assumptions  1). An effective organization is able to solve its own problems  2). An effective organization has both high performance (financial returns, quality products/services, continuous improvement) and high quality of work life  Mgt consulting focuses only on financial performance, T&D only on individual effectiveness

Difference between OD & Change Management (contd..)  OD has a behavioral science foundation which supports values of human potential, participation & development  OD is concerned with transfer of knowledge & skills to be able to manage change in future  Change mgt. is more focused on values of economic potential & the creation of competitive advantage  It does not necessarily require the transfer of these skills  All OD involves change mgt. but change mgt. may not involve OD.

Difference between OD & Organization Change (contd..)  OD can be applied to managing organizational change in such a way that KSAs are transferred to build the organizations capability to achieve goals & solve problems  The aim of OD is to achieve 1. Improved problem solving 2. Responsiveness 3. Quality of work life 4. Effectiveness  Organization change is more broadly focused & can apply to any kind of change including technical & managerial innovations, org. decline, or evolution of the system over time.  These changes may of may not be directed in making the organization more developed in the sense implied in OD.

Growth & Relevance of OD Three major trends are shaping organization 1. Globalization 2. IT 3. Managerial innovation (strategic HRM, organization design, proactivity & customer focus, learning organizations)

Why OD in Indian Settings  With the opening of economy intense competition from internal & external corporate  Indian minds are less systems-driven & more people & relationship driven  Indian mindsets are tradition bound, fatalistic and resistant to change  Tendency to work for short term than long term goals Therefore a need for OD

Today Five Stems of OD Practice Current Practice Laboratory Training Action Research/Survey Feedback Normative Approaches Quality of Work Life Strategic Change

Laboratory Training  Known as T-groups & defined as a small unstructured group in which participants learn from their own interactions & evolving dynamics about issues like interpersonal relations, personal growth, leadership & group dynamics  Began with Lewin & asso. in MIT studying community interrelations of American Jews  Results showed the following. 1. Feedback from group interaction was rich learning experience 2. The process of group building had potential for learning that could be transferred to ‘backhome’ situations

Laboratory Training (contd..)  In 1947 NTL was setup in Bethel, Maine  In 1950s three trends emerged 1. Emergence of regional labs. 2. Converting summer program sessions to year round sessions 3. Expansion of t-groups to business & industry with NTL members contributing significantly (McGregor-Union Carbide, Shephard & Blake in Esso Standard Oil now Exxon, McGregor & Beckhard at General Mills)  Application of T group was later called team building exercises

Action Research/Survey Feedback  Began in 1940s, major work by Lewin, Collier & Whyte  Research needed to be closely linked to action if organization members were to use it to manage change  A collaborative effort was initiated between organization members & social scientists to collect research data about organization’s functioning, to analyze it for causes & to devise & implement solutions. After implementation further data was needed to assess the results & thus the cycle of data collection & assessment continued.  Major researches in this field- overcoming resistance to change (Coch & French) & participative mgt. as a means of getting employees involved in planning & managing change.

Action Research/Survey Feedback (contd..)  The chief point of action research was systematic collection of survey data that was fed back to the client organization.  After Lewin, major contribution by Likert (measurement of attitudes, creation of Likert-type scale).

Normative Approaches (Participative Management )  Based on the belief that human relations approach was the best way to manage organizations It was exemplified in the research that associated Likert’s participative management (system 4) style with organizational effectiveness  The four types of management systems are as follows 1. Exploitative authoritative (S1) autocratic, top down, carrot & stick, resulting in mediocre performance 2. Benevolent authoritative (S2) mgt. little paternalistic, employees allowed a little more interaction & freedom in decision making but within limits 3. Consultative (S3) increased employee interaction in decision making but mgt. still makes the final decision.productivity good, employees moderately satisfied. 4. Participative group (S4) fosters high involvement, commumnication laterally & vertically, work groups involved in goal setting, decision making & appraisal.

Normative Approaches (Participative Management (contd..)  Likert applied system 4 mgt. to organizations using survey feedback process with the foll. Steps 1. Employees completing the form of ‘profile of organizational characteristics’ about both the present & ideal conditions of six organizational features: leadership, motivation, communication, decisions, goals & control 2. Data was fed back to different work groups within the organization 3. The discrepancy between the present & the ideal situation was examined using S4 as the ideal benchmark 4. Action plans were generated to move the organization toward S4 condition.

Productivity & Quality of Work Life (QWL)  The impact on OD took place in two phases  In phase I the movement began in Europe (1950) & US (1960)  Based on the works of Eric Trist et al. at Tavistock Institute of Human Relations, London  Developed work designs aimed at integrating technology & people.  Involved joint participation of union & management

Productivity & Quality of Work Life (QWL) contd…  Phase II began in 1979  Chief reason was international competition faced by US at home & abroad  Low cost high quality foreign goods (japanese) & Japanese management expanded the initial focus from work design to reward, management styles, work settings  Led to the rise of quality circles & TQM  Now emphasis has shifted from TQM to employee involvement (EI) to employee empowerment (power to the lower levels)

Strategic Change  Recent influence  Emphasis on competitive strategy,finance & marketing,team buliding & action research

Analysis  Facts.  Problems: Macro, Micro.  Causes of Problems Macro, Micro.  Implications of Problems Macro, Micro.  Manifestations of Problems Macro, Micro.  Systems Affected (Structural, Psychosocial, Technical, Managerial, Goals & Vision).  Systems Affected (Individual, Group, Organization)  Alternatives Macro, Micro.  Recommended Interventions.  Anticipated outcomes on Systems at Macro & Micro level.