13 – Organizational Development

Introduction

“Everybody has accepted by now that change is unavoidable. But that still implies that change is like death and taxes—it should be postponed as long as possible, and no change would be vastly preferable. But in a period of upheaval like the one we live in, change is the norm.” —Peter Ducker, Management Challenges for the 21st Century.

Organizational Development (OD) is a subset of organizational change methods. It is a planned, systematic approach based on behavioural science research and theory. The purpose of OD is to produce adaptive organisations capable of adapting and reinvesting to remain effective. Psychology, sociology, and anthropology all influence OD. It is founded on several well-established ideas concerning the behaviour of individuals and groups inside organisations.

What was previously known as Organization Development (OD) is now recognised as Organizational Change and Development (OCD), although such a title is frequently used in academic institutions, primarily to emphasise the changes that organisations are expected to accept and their position as “change drivers.”

In the late 1950s, the field of OCD evolved as a distinct discipline. Using “insights from group dynamics and the theory and practice of planned change,” it has evolved into an applied behavioural science that is effectively employed to tackle the critical problems confronting the different facets and dynamics that are both internal and external to organisations today.

In other words, the planned modification to a corporation allows for effective growth (or change). In terms of consulting,.

The concept of an organisation, defined as two or more individuals working together towards one or more shared goals, is central to OD. In this sense, development refers to the idea that an organisation can attain its goals over time more effectively. OD is a long-term effort to improve an organization’s problem-solving and renewal processes, mainly through more effective and collaborative organisational culture management, often with the assistance of a change agent or catalyst and applying applied behavioural science theory and technology.

13.1 Organizational Development Definition

Organization development is a system-wide application of behavioural science knowledge to the planned development and reinforcement of organisational strategies, structures, and processes for improving an organisation’s effectiveness. (Cummings and Worley, Organisation Development and Change, Sixth Edition, South-Western Publishing, 1997, p.2.)

Organization development, according to Richard Beckhard, is defined as:

• A planned effort
• Organisation-wide
• Managed from the top
• To increase organizational effectiveness and health

Using behavioural science knowledge through planned interventions in the organisation’s ‘processes’.

According to Warren Bennis, Organization Development (OD) is a complex strategy intended to change organisations’ beliefs, attitudes, values, and structure so that they can better adapt to new technologies, markets, and challenges.

Warner Burke emphasises that OD is not just “anything done to better an organisation”; it is a change process designed to produce a specific result.

OD is a systematic application of behavioural science knowledge to the planned development and reinforcement of organisational strategies, structures and processes for improving an organisation’s effectiveness. (Cummings and Worley, 1993)

Definitions Examination

The important elements of OD are included in the definitions that have been analysed. To summarise, the following are the key distinguishing features of organisational development:

-OD is concerned with culture and procedures.

-OD is concerned with the human and social aspects of the organisation.

-OD is based on the action research approach, with considerable client system participation.

-OD takes a developmental approach to improve the individual and the organisation, i.e., “win-win” solutions.

-It promotes all levels of the organisation to be involved and participate in problem-solving and decision-making.

13.2 OD’s Nature and Scope

1. OD is a Long-Term Effort: Organizational change and development take time, and they are a never-ending journey of continual transformation for organizational effectiveness.

2. Top Management Support: The OD programmers seek considerable attention and commitment from top management to achieve their improvement objectives.

3. OD is a Learning Process: This refers to interaction, listening, and self-evaluation that promotes individual, team, and organisational learning.

4. OD involves visioning Processes. This means that the organisation’s people create an image of the desired future that includes a humanistic approach to making that picture a reality.

5. OD is an Empowerment Process: This refers to the leadership behaviours and human resource practises that enable organisation members to develop and use their abilities to the greatest extent to contribute to the organization’s growth and success.

6. Contractual Relationship: Although neither the sponsoring organisation nor the change agent can be specific at the outset of the exact nature of the problem or problems to be addressed or how long the change agent’s assistance will be required, some tentative agreement on these matters is required. The sponsoring organisation should be aware of the change agent’s preliminary plan, personal commitments and programme responsibility, and the change agent’s fee. The change agent must ensure that the organization’s commitment to change, particularly senior executives, is strong enough to support the type of self-analysis and personal involvement required for the program’s success. Recognizing the uncertainty ahead for both parties, a termination agreement that allows either party to leave at any moment is typically included.

7. Change Agent: In this context, a change agent is not a technical expert competent in functional areas like accounting, production, or finance. He is a behavioural scientist who understands how to get people in an organisation involved in problem-solving. His key skill is a thorough understanding of human behaviour, which he supplements with various intervention strategies. The change agent might be either external to the organisation or internal to it. An internal change agent is typically a member of staff with competence in behavioural sciences and OD intervention technology. Qualified change agents can be found on university faculties or as private consultants with organisations such as the National Training Laboratories Institute for Applied Behavioural Science in Washington, University Associates (San Diego, California), and others. The change agent could be a member of the organization’s staff or a line member trained in OD theory and technique. In such a circumstance, the “contractual relationship” is an internal agreement that, except for the price, should be explicit about all the conditions involved.

8. Sponsoring Organization: The initiative for OD programmes originates from a problem-solving organisation. This indicates that top management, or someone authorised by top management, is aware of an issue and has sought assistance in resolving it. The client or patient must actively seek help finding a solution to his difficulties, which is a direct analogue to psychotherapy. This demonstrates the client organization’s openness to accept assistance and assures the organisation that management is actively involved.

9. Applied Behavioural Science: One of the distinguishing features of OD that sets it apart from most other improvement programmes is that it is focused on a “helping relationship.” The change agent does not examine the “patient,” make a diagnosis and prescribe for the organization’s ailments. He also does not attempt to give organisational members a new inventory of information that they can subsequently apply on the job. The change agent’s major purpose is to assist the organisation in defining and solving its problems by applying theory and methods from behavioural sciences such as psychology, sociology, communication, cultural anthropology, organisational behaviour economics, and political science. The fundamental method employed is known as action research. This approach discussed in detail later, comprises a preliminary diagnostic, data collection, data feedback to the client, data exploration by the client group, data-based action planning, and action.

10. System Context: OD is concerned with a complete system—the organisation as a whole, including its relevant environment—or with a sub-system or systems—departments or work groups—within the context of the overall system. For example, individuals, cliques, structures, norms, values, and goods are not treated in isolation; the principle of interdependence, i.e., that change in one aspect of a system impacts the other parts, is clearly understood. Thus, organisational development interventions concentrate on organisations’ overall culture and cultural processes. The emphasis is also on groups because significant conduct in organisations and groups is often a result of group effects rather than personality.

11. Improved Organizational Performance: The goal of organisational development is to improve the organization’s ability to manage its internal and external functioning and interactions. Improved interpersonal and group processes, more effective communication, enhanced ability to deal with all types of organisational problems, more effective decision processes, a more appropriate leadership style, improved skill in dealing with destructive conflict, and higher levels of trust and cooperation among organisational members are all examples of this. These goals originate from a value system based on an optimistic view of man’s nature—that man can achieve higher levels of development and accomplishment in a supportive environment. The scientific approach—inquiry, a rigorous search for reasons, experimental testing of hypotheses, and outcomes analysis—is also critical to organisational development and performance. Finally, the democratic process is seen as legitimate, if not dominant, in a highly effective organisation.

12. Organizational Self Renewal: The ultimate goal of the outside OD practitioner is to “work himself out of a job” by providing the client organisation with a set of tools, behaviours, attitudes, and an action plan to monitor its state of health and take corrective steps toward its renewal and development. This is compatible with the concept of feedback in systems as a regulatory and corrective mechanism.

13.3 Organizational Development in Historical Perspective

13.3.1 Early Childhood Development

Behavioural scientists and practitioners have made significant contributions to the history of organisational development. Systematic organisational development initiatives are relatively new.

Kurt Lewin was pivotal in the evolution of organisational development as we know it today. Lewin experimented with a collaborative change process (including himself as a consultant and a client group) as early as World War II, based on a three-step process of planning, taking action, and measuring results. This was the predecessor of action research, an essential component of OD, which will be described further below. After that, Lewin was involved in the early stages of laboratory training, or T-Groups, and after he died in 1947, his close acquaintances assisted in developing survey-research methodologies at the University of Michigan. As innovations in this field developed at the National Training Laboratories and an increasing number of institutions and private consulting businesses across the country, these methods became significant components of OD.

One of the significant causes driving OD’s development was the lack of off-site laboratory training to live up to its early promise. Laboratory training is all about learning from a person’s “now and now” experience as a part of a continuous training group. This kind of gathering frequently meets without a set agenda. Their goal is for members to learn about themselves by responding to an unclear hypothetical circumstance in the “now and now.” In such a group, issues of leadership, organisation, status, communication, and self-serving conduct are common. Members learn about themselves and practice skills such as listening, observing others, and functioning as successful group members. Laboratory training used to be done in “stranger groups,” or groups of people from diverse organisations, situations, and backgrounds. This is still done on occasion for particular objectives.

However, transferring knowledge obtained from these “stranger labs” to the actual situation “back home” proved a big challenge. This necessitated a cultural transition between the comparatively safe and protected atmosphere of the T-Group (or training group) and the give-and-take of the organisational environment with its established values. As a result, the early adopters of this learning style began to apply it to “family groups,” that is, groups within an organisation. The notion of organisational development arose due to this shift in the location of the training site and the recognition that culture had a significant role in influencing group members (along with some other discoveries in the behavioural sciences).

Systematic organisational development initiatives have a recent history and use, for example, at least four significant trunk stems. These are their names:

Laboratory Training Stem: Laboratory training began around 1946 due to numerous experiments. It is crucial to include unstructured small-group circumstances in which individuals learn from their actions and the growing dynamics of the group. Kurt Lewin, a behavioural scientist, made the most significant contributions to this notion, followed by experts Robert Tannebaum, Chris Argyris, Douglas McGregor, Herbert Shepard, Robert Blake, Jane Mouton, and Richard Beckhard.

Survey Research and Feedback Stem: This is the second-most important stem in the history of organisational growth. It entails a subset of organisational research. The University of Michigan’s Survey Research Centre staff members worked on the study for years.

These studies were more effective than typical training courses because they addressed the entire system of human interactions and dealt with each manager, supervisor, and employee in the context of his or her particular job, difficulties, and work relationships.

Rensis Likert, Floydd Mann, and others were key contributors.

Action Research Stem: The third stem is action research, a collaborative, client-consultant investigation. William F. Whyte and Hamilton were the academicians and practitioners who devised and used action research to create OD. In the mid-1940s and early 1950s, Kurt Lewin also conducted several tests. Today, this strategy is regarded as one of the most essential methods for OD interventions in organisations.

Sociotechnical and Socioclinical Stem: This is the fourth stem of OD that assists groups and organisations. W.R. Bion, John Richman, Eric Trist, and others contributed significantly. The socio-technical approach concentrated on the non-executive levels of organisations, particularly on redesigning work.

13.3.2 Second Generation OD: Modern Development

In recent years, major doubts have surfaced concerning the usefulness of organisational development in managing change in modern organisations. The necessity to “reinvent” the discipline has become a contention among some of its “founding fathers.” Since the environment has become more volatile, the background of OD has altered dramatically over the 1980s and 1990s. The second generation of OD focuses on organisational transformation, organisational culture, learning organisations, increased interest in teams, Total Quality Management (TQM), quality of work life, and so on.

13.4 OD Values, Assumptions, and Beliefs

A collection of values, assumptions, and beliefs is essential to organisational development, determining the field’s aims and techniques and separating OD from other improvement efforts. Let’s define values, beliefs, and assumptions.

A belief is a notion about how the world works that an individual accepts as true; it is a person’s cognitive fact.

Values, like beliefs, are “beliefs about what is desirable or good and what is unwanted or bad” (e.g., dishonesty).

Assumptions are beliefs that are so valuable and clear that they are taken for granted and rarely explored or questioned.

13.4.1 Assumptions about OD

1. People behave in response to how they are treated. (Better treatment leads to increased production.)

2. Work must suit the needs of both the individual and the organisation.

3. Threats and punishment rarely motivate people; tough and essential work does.

4. Because groups are the basic building blocks of an organisation, they are also the units of change.

5. Organizations stifle impulses, but they also stifle dedication.

6. Groups that learn to work together by providing honest and constructive feedback become more productive.

7. People do best in situations that are encouraging and trustworthy.

8. Change is most effectively accomplished when people are involved.

13.4.2 OD values

Values have always been an essential component of OD. The three most important early assertions about OD values that had a significant impact on the field are as follows:

1. According to Warren Bennis, OD practitioners or change agents share normative ideals based on their humanistic or democratic ideology. He listed the following normative goals:

2. Enhancement of interpersonal competence.

3. A movement in ideals in which human aspects and feelings are legitimate.

4. Improving understanding between working groups in organisations is being developed to decrease tensions.

5. Improved dispute resolution strategies are being developed.

6. Development of an organic system as opposed to a mechanical system.

7. According to Richard Beckhard, OD practitioners uphold the following values: Teams are the basic building blocks of organisations, and everyone affected by the change should be allowed active participation and a sense of ownership of the change.

8. According to Robert Tannebaum, significant transformations in values were taking place. He listed the values in transition as follows: away from a view of humans as essentially terrible and towards a view of people as essentially good.

9. Away from the avoidance of negative evaluations of individuals and towards their confirmation as human beings.

10. A shift away from fear of taking risks and toward a readiness to do so.

These ideals and assumptions may not appear significant today, but they were a radical break from conventional beliefs and assumptions in the 1950s.

13.5 OD System Theory

System theory, which views organisations as open, systemic, active exchanges with their environments, is a second cornerstone of organizational growth. This theory describes how its implementation improves OD practice.

System theory is one of the most influential conceptual frameworks for understanding organisational dynamics. Fagen describes a system as “a collection of items linked together by relationships between the objects and their properties.”

The term system refers to the interdependence, interconnection, and interrelatedness of elements in an asset that form a recognisable whole or gestalt.

13.5.1 System Structure

The open system’s nature, dynamics, and characteristics are well understood. Organizations operate on an open system. Katz and Kahn defined the following system characteristics:

1. Input-throughput-output Mechanism: This describes how a system accepts inputs from the environment through energy, information, money, and people, processes the inputs through throughputs, conversion, or transformation, and exports products to the environment as outputs.

2. Each System Has a Boundary: Each system has a boundary to delineate the inside from the outside; however, the boundaries of an open system are permeable, allowing for the exchange of data, resources, and energy between the system and the environment.

3. Open systems exist to serve a function and achieve a goal.

13.5.2 System Elements’ Congruence

Delta Consulting Group’s David Nadler and Associates created the congruence model to understand organisational dynamics and change better.

In this model, the organisation is depicted as an input-throughput-output system. The three key input factors, according to this approach, are:

1. Environment

2. Resources

3. History consists of recollections of past accomplishments, disappointments, and significant events.

On the other hand, outputs are overall organisational, group, and individual performance levels.

The value of the congruence model is an analytical tool for:

1. Assessing the qualities and functionality of each piece.

2. Assessing the goodness of fit, or how well the pieces fit together.

13.5.3 Open System Planning and Socio-technical System Theory

Socio-technical system theory (STS) and open system planning are prominent forms of open system theory.

Trist and others at the Tavistock Institution developed socio-technical system theory in the 1950s. According to this theory, organizations are made up of two distinct systems: a social system and a technical system and changes in one affect the other. It serves as the conceptual framework for OD’s efforts in work redesign and organizational reorganisation.

According to open system planning, the following steps are taken:

1. Scanning the environment to determine the expectations of external organisations and stakeholders.

2. Creating realistic and ideal scenarios of possible futures.

3. Creating action plans to accomplish the desired outcome.

OD practitioners on redesign initiatives typically blend socio-technical system theory and open system planning.

Other OD theories are classified into four basic categories:

1. The life cycle

2. Teleology

3. Dialectical

4. Theories of evolution

When and where do these theories apply to explain organisational development? To answer this question, it is important to highlight four unique traits from the previous consideration of the four theories. Every theory:

(1) considers process in terms of a distinct cycle of change events,

(2) which has a distinct “motor” or generating mechanism,

(3) acts on a distinct unit of analysis, and

(4) reflects a distinct mode of change.

The unit of change or the mechanism of change distinguishes the four groupings. The unit of change is either a single individual identity, interpersonal interactions, or the link between organisations. The change mode is either mandated or constructive:

A life cycle model represents an organism’s change process as moving through a set of stages. An institutional, natural, or logical programme prescribes the particular contents of these stages.

A teleological model sees development as a cycle of goal formation, implementation, evaluation, and goal revision based on what the entity has learned. This sequence arises due to intentional social formation among individuals within the entity.

Conflicts happen in dialectical growth models between entities proclaiming conflicting thesis and antithesis, which collide to generate a synthesis, eventually becoming the thesis for the next cycle of dialectical advancement. This dialectical loop is created through confrontation and struggle between opposing elements.

An evolutionary model of development is a recurring process of variation, selection, and retention events among organisms in a defined population. Competition among creatures living in a population for limited environmental resources is the root cause of this evolutionary cycle.

Theory of the Life Cycle

Many management researchers have used the metaphor of organic growth as a heuristic method to explain the evolution of an organisational entity from its inception to its demise. For example, consider the frequently used allusions to the life cycle of organisations, goods, and projects and stages in the development of individual careers, groups, and organisations: startup births, adolescent growth, maturity, and decline or death.

According to life cycle theory, change is inherent: the developing entity contains an underlying form, logic, programme, or code that regulates the change process and pushes the entity from a particular point of departure toward a subsequent end already prefigured in the present state. What is latent, premature, or homogeneous in the embryo or primitive condition becomes more realised, mature, and differentiated as time passes. External environmental events and processes can impact how the inherent form presents itself, but the governing logic, rules, or programmes always mediate them.

The technique of the gross anatomist in biology, who watches a sequence of developing foetuses and concludes that each succeeding stage originated from the previous one, is analogous to life cycle theory. As a result, it is believed that development is governed by a genetic code or a pre-programmed programme within the developing creature.

Organizational life cycle theories frequently explain development in terms of institutional rules or programmes that require developmental activities to go in a prescribed sequence.

For example, the United States Food and Drug Administration regulates a series of processes that all companies must take to develop and commercialise a new drug or biomedical product.

Theoretical Teleology

Another school of thought explains development by depending on teleology, or the philosophical notion that purpose or goal is the ultimate cause of an entity’s movement. This approach is based on many organisational change theories, including functionalism, decision-making, epigenesis, voluntarism, social construction adaptive learning, and most strategic planning and goal-setting models.

Teleology is based on the assumption that growth progresses towards a goal or end state. It presumes that the entity is intentional and adaptive; it develops an envisioned end state, takes action to achieve it, and checks its progress alone or in collaboration with others. Thus, according to this theory, development is a recurrent series of goal formation, implementation, evaluation, and goal revision based on what the entity has learned or meant. The idea functions in a single person or among a group of collaborating individuals or organisations sufficiently similar in their beliefs to behave as a single collective entity. Teleology inherently allows for innovation because the entity, an individual or a group, can pursue any desired goals.

It does, however, provide a criterion for measuring change: development is that which drives an object towards its end state. Some teleological models include the systems theory premise of equifinality, which states that multiple equally effective ways exist to attain a given objective. In a teleological process, there is no predetermined rule, logically necessary direction, or established sequence of steps. Instead, these theories concentrate on the requirements for achieving the goal or end state: the roles that must be fulfilled, the accomplishments that must be attained, or the components that must be produced or purchased for the end state to be realised. These criteria can determine when an entity is evolving: when it becomes more complicated, becomes more integrated, or fills out a particular set of functions. We may make this judgement because teleological theories provide an envisioned end state for an entity, and we can see movement towards that end state about this criterion.

Theoretical Dialectic

A third school of thought, dialectical theories, begins with the Hegelian concept that the organisational unit exists in a pluralistic environment of colliding events, forces, or contradicting ideals competing for dominance and control. These oppositions may exist within an organisation because it has numerous competing goals or interest groups contending for priority. External opposition may also occur as the organisational body pursues directions that conflict with those of others. In every instance, a dialectical theory necessitates confrontation and engagement in conflict between two or more separate entities that express these oppositions.

Dialectical process theories use the relative balance of power between opposing entities to explain stability and change. Struggles and concessions that maintain the status quo between opposing parties lead to stability. Change occurs when opposing values, forces, or events amass enough power to confront and engage the status quo. The relative power of an antithesis may mobilise to such an extent that it challenges the current thesis or state of affairs, paving the way for the production of a synthesis.

Theoretical Evolution

Although evolution and change are commonly used interchangeably, we use evolution in a more limited sense to refer to cumulative changes in the structural forms of populations of organisational units throughout communities, industries, or society. Like biological evolution, change occurs in a continual cycle of variation, selection, and retention. Variations, the emergence of fresh forms, are sometimes considered the result of blind or random chance; they happen. The environment selects those forms that best suit the resource base of an environmental niche. Selection happens primarily through competition among forms for scarce resources, and the environment selects those forms that best match the resource base of an ecological niche. Retention refers to the forces (such as inertia and persistence) that sustain specific organisational systems.

Thus, evolution explains the change as a recurring, cumulative, and probabilistic development of organisational entity variation, selection, and retention. Evolutionary theory is frequently utilised in organizational and management applications to represent global changes in organizational populations.

13.6 Consequences of OD Values and Assumptions

The consequences of OD values and assumptions may differ when dealing with individuals, groups, and organisations.

1. The Implications for Individuals

It is founded on the notion that most people desire personal growth and development if given a supportive and favourable environment.

2. Consequences of Working with Groups

It is based on the assumption that most people want to be accepted and interact with at least one small reference group and are capable of making greater contributions to the effectiveness and development of a group.

3. Implications for Organizational Management

The needs and desires of human beings are the motivations for organised activities in society, according to a significant assumption in organisational development. The concept is that people may grow and develop in terms of personal and organisational competencies to achieve the desired outcome.

The fundamental value of OD philosophy and practice is choice.

Learning is regarded as an essential component of choice. As a result, OD employs various strategies to intervene in the organisation’s ongoing activities to facilitate learning and assist the organisation (groups within it as well as individuals who comprise the groups) in making better decisions about alternative ways to proceed more effectively. Because choice is a fundamental principle, OD collaborates with the organisation to determine how it wishes to go. In its purest form, OD is not prescriptive. (In times of crisis, organisations typically require a more prescriptive approach, which is always a difficult decision for the OD practitioner to make.)