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Organization Development

The Challenge for Organizations:The Growth and Relevance of OD Next >>>
OrganizationDevelopment ­ MGMT628
Lesson 01
The Challenge for Organizations
We live in a world that hasbeen turned upside down.Companies are pouring money, technology, and
managementexpertise into regions thatwere once off limits, acquiring new enterprises, formingjoint
ventures,creating new global businessesfrom the ground up. Many major companies are goingthrough
significant changes, including outsourcing, downsizing, reengineering, self-managed workteams, flattening
organizations,and doing routine jobswith automation and computers.Some experts contend that if you
candescribe a job precisely or write rules for doingit, the job will probablynot survive.
Change is avalanching down upon ourheads and most people areutterly unprepared to cope withit.
Tomorrow'sworld will be different fromtodays, calling for new organizational approaches. Organizations
willneed to be adapting to these changesmarket conditions and at the same time coping with the needfor
a renewing rather than reactive workforce.Every day managers areconfronting massive andaccelerating
change. As one writer comments,"Call it whatever you like­ reengineering, restructuring, transformation,
flattening, downsizing, rightsizing, a quest forglobal competitiveness ­ it's real, it's radical and it's arriving
everyday at a company nearyou."
Globalcompetition and economicdownturns have exposed a glaring weakness in American organizations:
the fact that many organizationshave become overstaffed, cumbersome,slow and inefficient. To increase
productivity,enhance competitiveness and contain costs, organizations arechanging the way they are
organizedand managed.
Thesuccessful twenty-first century managermust deal with a chaoticworld of new competitors and
constantinnovation. In the future the onlywinning companies will be the ones that respond quickly to
change.Preparing managers to copewith today's acceleratingrole of change is the centraltheme/purpose
of my lectures (concern of this book).Modern manager must notonly be flexible andadaptive in a
changingenvironment but must also be able to diagnose problemsand implement changeprograms.
TomPeters suggests that "the time for 10 percent staffcuts and 20 percent quality improvement is
Organizationsare never completely static. They are in continuous interaction with external forces (see
figure below). Changing consumer lifestylesand technological breakthroughs all act on the organization to
cause it to change. The degree of change may vary from one organization to another, but all face the need
for adaptation to external forces. Many of these changes are forced upon the organization, whereasothers
aregenerated internally. Becausechange is occurring so rapidly, there is a need for new ways to manage it.
Figure: 01 The OrganizationalEnvironment:
The Growth and Relevance of OD:
Organizationsmust adapt to increasingly complex and uncertain technological, economic,political, and
cultural changes. The rapidlychanging conditions of the past few years have shown that the organizations
are in the midst of unprecedented uncertainty andchaos, and nothing short of a management revolution
willsave them. Three major trendsare shaping change in organizations: globalization, information
technology, and managerialinnovation.
OrganizationDevelopment ­ MGMT628
First: globalization is changing the markets and environments in which organizations operate as the way
they function. New governments,new leadership, new markets,and new countries areemerging and
creating a new global economy. Thetoppling of the Berlin Wallsymbolized and energized the reunification
of Germany: entrepreneurs appeared in Russia, the Balkans, andSiberia as the former SovietUnion
evolves, in fits and starts, intoseparate, market-oriented states; and China emerged as an open marketand
as the governance mechanism overHong Kong to represent a powerful shift in global economic influence.
Second:information technology is redefining the traditional business model by changing how work is
performed, how knowledge is used, andhow the cost of doingbusiness is calculated. Theway an
organization collects, stores, manipulates,uses, and transmitsinformation can lower costs or increase the
valueand quality of products andservices. Information technology, forexample, is at the heart of emerging
e-commercestrategies and organizations.Amazon.com, E-Trade, areamong many recent entrants to the
informationeconomy, and the amount of business being conducted on the Internet is projected to grow at
double-digitrates for well over ten years. Moreover, the underlyingrate of innovation is notexpected to
decline.Electronic data interchange, a state-of-the-art technology application a few yearsago, is now
consideredroutine business practice.The ability to move informationeasily and inexpensively throughout
andamong organizations has fueled the downsizing, delayering, and restructuring of firms. The Internet
and the World Wide Web haveenabled a new form of workknown as telecommuting; organization
memberscan work from theirhomes or cars without ever going to the office. Finally,information
technology is changing how knowledge is used.Information that is widelyshared reduces the concentration
of power at the top of the organization. Organization members now share the samekey information that
seniormanagers once used to control decision making. Ultimately,information technology willgenerate
newbusiness models in which communication and information sharing is nearly free.
Third:managerial innovation hasresponded to the globalization andinformation technology trendsand
hasaccelerated their impact on organizations. New organizational forms,such as networks, strategic
alliances,and virtual corporations, provideorganizations with new ways of thinking about how to
manufacturegoods and deliver services.The strategic alliance, forexample, has emerged as one of the
indispensable tools in strategy implementation. No single organization, not even IBM,Mitsubishi, or
General Electric, can control the environmentaland market uncertainty it faces.Sun Microsystems'
network is so complex that some products it sellsare never touched by a Sunemployee. In addition,new
methods of change, such as downsizing andreengineering, have radically reduced the size of organizations
andincreased their flexibility,and new large-group interventions,such as the search conferenceand open
space,have increased the speedwith which organizational changecan take place. Managers, OD
practitioners, and researchers argue thatthese forces not onlyare powerful in their ownright but are
interrelated. Their interaction makes for a highly uncertain and chaoticenvironment for all kinds of
organizations,including manufacturing and service firms and those in the public andprivate sector. There
is no question that these forcesare profoundly affecting organizations.
Fortunately, a growing number of organizations are undertaking the kinds of organizational changesneeded
to survive and prosper in today'senvironment. They are making themselves more streamlinedand nimble
andmore responsive to external demands. They are involving employees in key decisions and paying for
performance rather than for time. Theyare taking the initiative in innovating and managingchange, rather
than simply responding to what has alreadyhappened.
Organization Development is playing an increasinglykey role in helpingorganizations changethemselves.
It is helping organizations assessthemselves and their environments, and revitalize and rebuildtheir
strategies,structures, and processes. OD is helping organization members go beyond surface changes to
transform the underlying assumptions andvalues governing theirbehaviors. The different OD concepts
andmethods increasingly arefinding their way into government agencies, manufacturing firms,
multinational corporations, service industries,educational institutions, andnot-for-profit organizations.
Perhaps at no other time has OD beenmore responsive and practically relevant to organizations' needs to
operateeffectively in a highly complex andchanging world.
What is Organization Development(OD)?
Whatmakes one organization a winner,whereas another fails to makeuse of the same opportunities? The
key to survival and success liesnot in the rational, quantitativeapproaches, but rather in a commitment to
irrational, difficult-to-measure things like people, quality,customer service, and moreimportantly, develop
the flexibility to meet changing conditions. For example, in a study thatexamined the "high tech-high
touch" phenomenon at Citicorp, the crucial component in adapting to technological change was the human
factor. Employee involvement and commitment is the true key to successfulchange.
OrganizationDevelopment ­ MGMT628
DefiningOrganization Development(OD):
Thewords organization development refers to something about organizationsand developing them. "An
organization is the planned coordination of the activities of a number of people for the achievement of
some common explicit purpose or goal,through division of laborand functions, and through a hierarchy of
authorityand responsibility." Organizations aresocial systems possessingcharacteristics and OD effortsare
directedtoward organizations or major subparts of them.
Development is the act, process, result, or state of being developed ­ which in turn means to advance, to
promote the growth of, to evolve the possibilities of, to further, to improve, or to enhance something.
Twoelements of this definition seemimportant: first, development may be an act, process, or endstate;
second, development refers to "bettering'something.
Combiningthese words suggests that organization development is the act, process, or result of furthering,
advancing, or promoting the growth of organization. According to this definition, organization
development is anything done to "better" an organization. But this definition is too broad and all-inclusive.
It can refer to almost anything done in an organizational context that enhances the organization ­ hiring a
personwith needed skills, firing an incompetent, merging with another organization, installing a computer,
removing a computer, buying a new plant,and so on. This definitionserves neither to identifyand specify
nor to delimit (perhaps something done to "worsen" an organization would be ruled out). The term
organization development must be given added meaning,must refer to something morespecific, if
productivediscourse on the subject is desired.
Anotherway of defining OD is to examine the following definitions whichhave been (suggested in the
Definition of Organization Development(OD):
OD is an effort (1) planned, (2) organization-wide, and (3) managedfrom the top, to (4)increase
organization effectiveness and health through(5) planned interventions in the organization's "processes,"
using behavioral science knowledge. (RichardBeckhard)
Analysis of the definition suggests that OD is not just "anything done to better an organization"; it is a
particular kind of change processdesigned to bring about a particular kind of end result.
OD thus represents a unique strategyfor system change, a strategy largely based in the theory and research
of the behavioral sciences, and a strategy having a substantial prescriptive character. OD is thus a
normative discipline, it prescribes how planned change in organizations should be approached andcarried
out if organization improvement is to be obtained.
In summary, OD is a process of planned system change that attempts to make organizations (viewed as
social-technicalsystems) better able to attain their short- and long-term objectives.This is achieved by
teaching the organization members to manage their organization processes and culture moreeffectively.
Facts,concepts, and theory from the behavioral sciences are utilized to fashion both the process and the
content of the interventions. A basic belief of OD theorists and practitioners is thatfor effective, lasting
change to take place, the systemmembers must grow in the competence to master their ownfates.
Finally, it is important to note that OD has two broad goals: organization development and individual
development. Although it is not statedexplicitly in the above definitions,improving the quality of lifefor
individuals in organizations is a primary goal of organization development. Enhancing individual
development is a key value of OD practitioners and a key outcome of most OD programs.
Table of Contents:
  1. The Challenge for Organizations:The Growth and Relevance of OD
  2. OD: A Unique Change Strategy:OD consultants utilize a behavioral science base
  3. What an “ideal” effective, healthy organization would look like?:
  4. The Evolution of OD:Laboratory Training, Likert Scale, Scoring and analysis,
  5. The Evolution of OD:Participative Management, Quality of Work Life, Strategic Change
  6. The Organization Culture:Adjustment to Cultural Norms, Psychological Contracts
  7. The Nature of Planned Change:Lewin’s Change Model, Case Example: British Airways
  8. Action Research Model:Termination of the OD Effort, Phases not Steps
  9. General Model of Planned Change:Entering and Contracting, Magnitude of Change
  10. The Organization Development Practitioner:External and Internal Practitioners
  11. Creating a Climate for Change:The Stabilizer Style, The Analyzer Style
  12. OD Practitioner Skills and Activities:Consultant’s Abilities, Marginality
  13. Professional Values:Professional Ethics, Ethical Dilemmas, Technical Ineptness
  14. Entering and Contracting:Clarifying the Organizational Issue, Selecting an OD Practitioner
  15. Diagnosing Organizations:The Process, The Performance Gap, The Interview Data
  16. Organization as Open Systems:Equifinality, Diagnosing Organizational Systems
  17. Diagnosing Organizations:Outputs, Alignment, Analysis
  18. Diagnosing Groups and Jobs:Design Components, Outputs
  19. Diagnosing Groups and Jobs:Design Components, Fits
  20. Collecting and Analyzing Diagnostic information:Methods for Collecting Data, Observations
  21. Collecting and Analyzing Diagnostic information:Sampling, The Analysis of Data
  22. Designing Interventions:Readiness for Change, Techno-structural Interventions
  23. Leading and Managing Change:Motivating Change, The Life Cycle of Resistance to Change
  24. Leading and managing change:Describing the Core Ideology, Commitment Planning
  25. Evaluating and Institutionalizing Organization Development Interventions:Measurement
  26. Evaluating and Institutionalizing Organization Development Interventions:Research Design
  27. Evaluating and Institutionalizing Organization Development Interventions
  28. Interpersonal and Group Process Approaches:Group Process
  29. Interpersonal and Group Process Approaches:Leadership and Authority, Group Interventions
  30. Interpersonal and Group Process Approaches:Third-Party Interventions
  31. Interpersonal and Group Process Approaches:Team Building, Team Building Process
  32. Interpersonal and Group Process Approaches:Team Management Styles
  33. Organization Process Approaches:Application Stages, Microcosm Groups
  34. Restructuring Organizations:Structural Design, Process-Based Structures
  35. Restructuring Organizations:Downsizing, Application Stages, Reengineering
  36. Employee Involvement:Parallel Structures, Multiple-level committees
  37. Employee Involvement:Quality Circles, Total Quality Management
  38. Work Design:The Engineering Approach, Individual Differences, Vertical Loading
  39. Performance Management:Goal Setting, Management by Objectives, Criticism of MBO
  40. Developing and Assisting Members:Career Stages, Career Planning, Job Pathing
  41. Developing and Assisting Members:Culture and Values, Employee Assistance Programs
  42. Organization and Environment Relationships:Environmental Dimensions, Administrative Responses
  43. Organization Transformation:Sharing the Vision, Three kinds of Interventions
  44. The Behavioral Approach:The Deep Assumptions Approach
  45. Seven Practices of Successful Organizations:Training, Sharing Information