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Subject COMMERCE

Paper No and Title 1. MANAGEMENT CONCEPTS & ORGANIZATIONAL BEHAVIOUR

Module No and Title 37. ORGANIZATIONAL DEVELOPMENT

Module Tag COM_P1_M37

COMMERCE PAPER No. 1. MANAGEMENT CONCEPTS & ORGANIZATIONAL

BEHAVIOUR
MODULE No. 37. ORGANIZATIONAL DEVELOPMENT
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TABLE OF CONTENTS
1. Learning Outcomes
2. Introduction
3. History
4. Core values
5. Objectives of OD
6. Change agent
7. Sponsoring organization
8. The holistic and futuristic view of organization
9. Modern development
10. Summary

COMMERCE PAPER No. 1. MANAGEMENT CONCEPTS & ORGANIZATIONAL

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MODULE No. 37. ORGANIZATIONAL DEVELOPMENT
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1. Learning Outcomes
After you study this module you will be able to:
1. Know the concept of Organizational Development;
2. Know the history of the concept;
3. Understand the core values;
4. Know the objectives of OD;
5. Visualize a futuristic view of the organization;
6. Know about modern developments in the field.

2. Introduction
Organization development (OD) is a deliberately planned, organization-wide effort to increase an
organization's effectiveness and/or efficiency, and/or to enable the organization to achieve its strategic
goals. OD theorists and practitioners define OD in various ways. Its multiplicity of definitions reflects the
complexity of the discipline and is responsible for its lack of understanding. For example, Vasudevan has
referred to OD being about promoting organizational readiness to meet change, and it has been said that
OD is a systemic learning and development strategy intended to change the basics of beliefs, attitudes and
relevance of values, and structure of the current organization to better absorb disruptive technologies,
shrinking or exploding market opportunities and ensuing challenges and chaos. It is worth understanding
what OD is not. It is not training, personal development, team development or team building, human-
resource development (HRD), learning and development (L&D) or a part of HR - although it is
often mistakenly understood as some or all of these. OD interventions are about change and so involve
people - but OD also develops processes, systems and structures. The primary purpose of OD is to develop
the organization, not to train or develop the staff.

Organization development is an ongoing, systematic process of implementing effective

organizational change. OD is known as both a field of science focused on understanding and
managing organizational change and as a field of scientific study and inquiry. It is
interdisciplinary in nature and draws on sociology, psychology, particularly industrial and
organizational psychology, and theories of motivation, learning, and personality. Although
behavioral science has provided the basic foundation for the study and practice of OD, new and
emerging fields of study have made their presence felt. Experts in systems thinking and
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organizational learning, structure of intuition in decision

making, and coaching (to name a few) whose perspective is not steeped in just the behavioral
sciences, but a much more multi-disciplinary and inter-disciplinary approach, have emerged as
OD catalysts or tools. Organization development is a growing field that is responsive to many
new approaches.

3. History
Kurt Lewin (1898–1947) is widely recognized as the founding father of OD, although he died before the
concept became current in the mid-1950s. From Lewin came the ideas of group dynamics and action
research which underpin the basic OD process as well as providing its collaborative consultant/client ethos.
Institutionally, Lewin founded the "Research Center for Group Dynamics" (RCGD) at MIT, which moved
to Michigan after his death. RCGD colleagues were among those who founded the National Training
Laboratories (NTL), from which the T-groups and group-based OD emerged.

Kurt Lewin played a key role in the evolution of organization development as it is known today. As early
as World War II, Lewin experimented with a collaborative change process (involving himself as consultant
and a client group) based on a three-step process of planning, taking action, and measuring results. This
was the forerunner of action research, an important element of OD, which will be discussed later. Lewin
then participated in the beginnings of laboratory training, or T-groups, and, after his death in 1947, his
close associates helped to develop survey-research methods at the University of Michigan. These
procedures became important parts of OD as developments in this field continued at the National Training
Laboratories and in growing numbers of universities and private consulting firms across the country. Two
of the leading universities offering doctoral level degrees in OD are Benedictine University and the
Fielding Graduate University.

Douglas McGregor and Richard Beckhard while "consulting together at General Mills in the 1950s, the two
coined the term organization development (OD) to describe an innovative bottoms-up change effort that fit
no traditional consulting categories" (Weisbord, 1987, p. 112).

The failure of off-site laboratory training to live up to its early promise was one of the important forces
stimulating the development of OD. Laboratory training is learning from a person's "here and now"
experience as a member of an ongoing training group. Such groups usually meet without a specific agenda.
Their purpose is for the members to learn about themselves from their spontaneous "here and now"
responses to an ambiguous hypothetical situation. Problems of leadership, structure, status, communication,
and self-serving behavior typically arise in such a group. The members have an opportunity to learn

COMMERCE PAPER No. 1. MANAGEMENT CONCEPTS & ORGANIZATIONAL

BEHAVIOUR
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something about themselves and to practice such skills as listening,

observing others, and functioning as effective group members. Herbert A. Shepard conducted the first
large-scale experiments in Organization Development in the late fifties.

As formerly practiced (and occasionally still practiced for special purposes), laboratory training was
conducted in "stranger groups," or groups composed of individuals from different organizations, situations,
and backgrounds. A major difficulty developed, however, in transferring knowledge gained from these
"stranger labs" to the actual situation "back home". This required a transfer between two different cultures,
the relatively safe and protected environment of the T-group (or training group) and the give-and-take of
the organizational environment with its traditional values. This led the early pioneers in this type of
learning to begin to apply it to "family groups" — that is, groups located within an organization. From this
shift in the locale of the training site and the realization that culture was an important factor in influencing
group members (along with some other developments in the behavioral sciences) emerged the concept of
organization development.

4. Core values
Underlying Organization Development are humanistic values. Margulies and Raia (1972) articulated the
humanistic values of OD as follows:

1. Providing opportunities for people to function as human beings rather than as resources in the
productive process.
2. Providing opportunities for each organization member, as well as for the organization itself, to
develop to their full potential.
3. Seeking to increase the effectiveness of the organization in terms of all of its goals.
4. Attempting to create an environment in which it is possible to find exciting and challenging work.
5. Providing opportunities for people in organizations to influence the way in which they relate to
work, the organization, and the environment.
6. Treating each human being as a person with a complex set of needs, all of which are important to
their work and their life.[6]

Differentiating OD from other change efforts such as- 1. Operation management 2. Training and
Development 3. Technological innovations....etc.

5. Objectives of OD
The objectives of OD are:

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1. To increase the level of inter-personal trust among

employees.
2. To increase employees' level of satisfaction and commitment.
3. To confront problems instead of neglecting them.
4. To effectively manage conflict.
5. To increase cooperation and collaboration among the employees.
6. To increase the organization's problem solving.
7. To put in place processes that will help improve the ongoing operation of the organization on a
continuous basis.

As objectives of organizational development are framed keeping in view specific situations, they vary from
one situation to another. In other words, these programs are tailored to meet the requirements of a particular
situation. But broadly speaking, all organizational development programs try to achieve the following
objectives:

1. Making individuals in the organization aware of the vision of the organization. Organizational
development helps in making employees align with the vision of the organization.
2. Encouraging employees to solve problems instead of avoiding them.
3. Strengthening inter-personnel trust, cooperation, and communication for the successful
achievement of organizational goals.
4. Encouraging every individual to participate in the process of planning, thus making them feel
responsible for the implementation of the plan.
5. Creating a work atmosphere in which employees are encouraged to work and participate
enthusiastically.
6. Replacing formal lines of authority with personal knowledge and skill.
7. Creating an environment of trust so that employees willingly accept change.

According to organizational development thinking, organization development provides managers with a

vehicle for introducing change systematically by applying a broad selection of management techniques.
This, in turn, leads to greater personal, group, and organizational effectiveness.

6. Change agent

A change agent in the sense used here is not a technical expert skilled in such functional areas as
accounting, production, or finance. The change agent is a behavioral scientist who knows how to get people
in an organization involved in solving their own problems. A change agent's main strength is a
comprehensive knowledge of human behavior, supported by a number of intervention techniques (to be

COMMERCE PAPER No. 1. MANAGEMENT CONCEPTS & ORGANIZATIONAL

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discussed later). The change agent can be either external or internal to

the organization. An internal change agent is usually a staff person who has expertise in the behavioral
sciences and in the intervention technology of OD. Beckhard reports several cases in which line people
have been trained in OD and have returned to their organizations to engage in successful change
assignments. In the natural evolution of change mechanisms in organizations, this would seem to approach
the ideal arrangement. Qualified change agents can be found on some university faculties, or they may be
private consultants associated with such organizations as the National Training Laboratories Institute for
Applied Behavioral Science (Washington, D.C.) University Associates (San Diego, California), the Human
Systems Intervention graduate program in the Department of Applied Human Sciences (Concordia
University, Montreal, Canada), Navitus (Pvt) Ltd (Pakistan), MaxFoster Global and similar organizations.

The change agent may be a staff or line member of the organization who is schooled in OD theory and
technique. In such a case, the "contractual relationship" is an in-house agreement that should probably be
explicit with respect to all of the conditions involved except the fee.

7. Sponsoring organization
The initiative for OD programs often comes from an organization that has a problem or anticipates facing a
problem. This means that top management or someone authorized by top management is aware that a
problem exists and has decided to seek help in solving it. There is a direct analogy here to the practice of
psychotherapy: The client or patient must actively seek help in finding a solution to his problems. This
indicates a willingness on the part of the client organization to accept help and assures the organization that
management is actively concerned.

8. The holistic and futuristic view of organization

OD deals with a total system — the organization as a whole, including its relevant environment
— or with a subsystem or systems — departments or work groups — in the context of the total
system. Parts of systems — for example, individuals, cliques, structures, norms, values, and
products — are not considered in isolation; the principle of interdependency — that change in
one part of a system affects the other parts — is fully recognized. Thus, OD interventions focus
on the total culture and cultural processes of organizations. The focus is also on groups, since the
relevant behavior of individuals in organizations and groups is generally a product of the
influences of groups rather than of personalities.[8]

Improved Organizational Performance

The objective of OD is to improve the organization's capacity to handle its internal and external
functioning and relationships. This includes improved interpersonal and group processes, more
COMMERCE PAPER No. 1. MANAGEMENT CONCEPTS & ORGANIZATIONAL
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effective communication, enhanced ability to cope with

organizational problems of all kinds. It also involves more effective decision processes, more
appropriate leadership styles, improved skill in dealing with destructive conflict, as well as
developing improved levels of trust and cooperation among organizational members. These
objectives stem from a value system based on an optimistic view of the nature of man — that man
in a supportive environment is capable of achieving higher levels of development and
accomplishment. Essential to organization development and effectiveness is the scientific method
— inquiry, a rigorous search for causes, experimental testing of hypotheses, and review of results.

Self-managing

Self managing work groups allows the members of a work team to manage, control, and monitor
all facets of their work, from recruiting, hiring, and new employees to deciding when to take rest
breaks. An early analysis of the first-self-managing work groups yielded the following behavioral
characteristics (Hackman, 1986):

 Employees assume personal responsibility and accountability for outcomes of their work.
 Employees monitor their own performance and seek feedback on how well they are accomplishing
their goals.
 Employees manage their performance and take corrective action when necessary to improve their and
the performance of other group members.
 Employees seek guidance, assistance, and resources from the organization when they do not have what
they need to do the job.
 Employees help members of their work group and employees in other groups to improve job
performance and raise productivity for the organization as a whole.

Organizational self-renewal

The ultimate aim of OD practitioners is to "work themselves out of a job" by leaving the client
organization with a set of tools, behaviors, attitudes, and an action plan with which to monitor its
own state of health and to take corrective steps toward its own renewal and development. This is
consistent with the systems concept of feedback as a regulatory and corrective mechanism.[8]

Understanding Organizations

Weisbord presents a six-box model for understanding organizations:

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1. Purposes: The organization members are clear about the

organization's mission and purpose and goal agreements, whether people support the
organization's purpose.
2. Structure: How is the organization's work divided up? The question is whether there is an adequate
fit between the purpose and the internal structure.
3. Relationship: Between individuals, between units or departments that perform different tasks, and
between the people and requirements of their jobs.
4. Rewards: The consultant should diagnose the similarities between what the organization formally
rewarded or punished members for.
5. Leadership: Is to watch for blips among the other boxes and maintain balance among them.
6. Helpful mechanism: Is a helpful organization that must attend to in order to survive which as
planning, control, budgeting, and other information systems that help organization member
accomplish.

9. Modern development

In recent years, serious questioning has emerged about the relevance of OD to managing change
in modern organizations. The need for "reinventing" the field has become a topic that even some
of its "founding fathers" are discussing critically.

With this call for reinvention and change, scholars have begun to examine organization
development from an emotion-based standpoint. For example, de Klerk (2007) writes about how
emotional trauma can negatively affect performance. Due to downsizing, outsourcing, mergers,
restructuring, continual changes, invasions of privacy, harassment, and abuses of power, many
employees experience the emotions of aggression, anxiety, apprehension, cynicism, and fear,
which can lead to performance decreases. deKlerk (2007) suggests that in order to heal the trauma
and increase performance, O.D. practitioners must acknowledge the existence of the trauma,
provide a safe place for employees to discuss their feelings, symbolize the trauma and put it into
perspective, and then allow for and deal with the emotional responses. One method of achieving
this is by having employees draw pictures of what they feel about the situation, and then having
them explain their drawings with each other. Drawing pictures is beneficial because it allows
employees to express emotions they normally would not be able to put into words. Also,
drawings often prompt active participation in the activity, as everyone is required to draw a
picture and then discuss its meaning.

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The use of new technologies combined with globalization has

also shifted the field of organization development. Roland Sullivan (2005) defined Organization
Development with participants at the 1st Organization Development Conference for Asia in
Dubai-2005 as "Organization Development is a transformative leap to a desired vision where
strategies and systems align, in the light of local culture with an innovative and authentic
leadership style using the support of high tech tools. Bob Aubrey (2015) introduced KDIs (Key
Development Indicators) to help organizations go beyond performance and align strategy,
organizations and individuals and argued that fundamental challenges such as robotics, artificial
intelligence and genetics prefigure a regeneration of the field.

9. Summary

OD is a systemic learning and development strategy intended to change the basics of beliefs, attitudes and
relevance of values, and structure of the current organization to better absorb disruptive technologies,
shrinking or exploding market opportunities and ensuing challenges and chaos
A change agent in the sense used here is not a technical expert skilled in such functional areas as
accounting, production, or finance. The change agent is a behavioral scientist who knows how to get people
in an organization involved in solving their own problems
The initiative for OD programs often comes from an organization that has a problem or anticipates facing a
problem. This means that top management or someone authorized by top management is aware that a
problem exists and has decided to seek help in solving it.
The ultimate aim of OD practitioners is to "work themselves out of a job" by leaving the client organization
with a set of tools, behaviors, attitudes, and an action plan with which to monitor its own state of health and
to take corrective steps toward its own renewal and development.

COMMERCE PAPER No. 1. MANAGEMENT CONCEPTS & ORGANIZATIONAL

BEHAVIOUR
MODULE No. 37. ORGANIZATIONAL DEVELOPMENT