Organisational
Development
What is organizational
development?
Organizational development is a critical and science-based process that
helps organizations build their capacity to change and achieve greater
effectiveness by developing, improving, and reinforcing strategies,
structures, and processes.
Organizational development can be defined as an objective-based
methodology used to initiate a change of systems in an entity.
Organizational development is achieved through a shift in communication
processes or their supporting structure.
Studying the behavior of employees enables professionals to examine and
observe the work environment and anticipate change, which is then
effected to accomplish sound organizational development.
Whatever the objectives of OD for your business, there are common traits:
• Makes changes to the strategy, structure or process of an entire system of an
organisation, department, work group, individual role or job.
• Manages planned change in a flexible way to allow further change in the future as new
information becomes available.
• Institutionalizes change to reinforce change.
• Improves organisational effectiveness.
Benefits of Organizational
Development
Increasing productivity and efficiency comes with many benefits. One of the best
ways to encourage positive results in these metrics is by using a well-thought-out
organizational development structure. Organizational development is used to equip
an organization with the right tools so that it can adapt and respond positively
(profitably!) to changes in the market. The benefits of organizational development
include the following:
1. Continuous development
Entities that participate in organizational development continually develop their
business models. Organizational development creates a constant pattern of
improvement in which strategies are developed, evaluated, implemented, and
assessed for results and quality.
In essence, the process builds a favorable environment in which a company can
embrace change, both internally and externally. The change is leveraged to
encourage periodic renewal.
2. Increased horizontal and vertical communication
Of considerable merit to organizational development is effective communication, interaction, and feedback in an
organization. An efficient communication system aligns employees with the company’s goals, values, and objectives.
An open communication system enables employees to understand the importance of change in an organization. Active
organizational development increases communication in an organization, with feedback shared continuously to encourage
improvement.
3. Employee growth
Organizational development places significant emphasis on effective communication, which is used to encourage employees
to effect necessary changes. Many industry changes require employee development programs. As a result, many
organizations are working toward improving the skills of their employees to equip them with more market-relevant skills.
4. Enhancement of products and services
Innovation is one of the main benefits of organizational development and is a key contributing factor to the improvement of
products and services. One approach to change is employee development – a critical focal point is a reward for motivation
and success.
Successful engagement of employees leads to increased innovation and productivity. Through competitive analysis,
consumer expectations, and market research, organizational development promotes change.
5. Increased profit margins
Organizational development influences the bottom line in many different ways. As a result of increased productivity and
innovation, profits and efficiency increase. Costs come down because the organization can better manage employee turnover
and absenteeism. After the alignment of an entity’s objectives, it can focus entirely on development and product and service
quality, leading to improvements in customer satisfaction.
1. Entering and contracting
The first step starts when a manager or administrator spots an opportunity for
improvement. There are different events that can trigger this, including external changes,
internal conflicts, complaining customers, loss of profit, a lack of innovation, or high sickness
absence or employee turnover. These events are usually symptoms of a deeper problem.
The first stage is about scoping out the problem. This usually happens in a meeting between
the manager and the OD members. In the case of external OD consultants, this stage is
more formal.
In the admin team at the three hospitals, the problem is not having enough staff to cover
sickness in each hospital. The staff are only trained to work at one particular hospital. The
secondary problem is the high cost of this, due to needing to frequently hire agency staff.
2. Diagnostics
Diagnostics is the second phase of the process. The OD practitioner tries to understand a
system’s current functioning. They collect information needed to accurately interpret the
problem, through surveys, interviews, or by looking at currently available data. All of this is
aimed at trying to find the root cause of the issues. According to Cummings & Worley (2009),
effective diagnosis provides the systematic knowledge of the organization needed to design
appropriate interventions.
At the three hospitals, the OD practitioner would look at HR and financial records. This
would provide data on sickness levels and the costs of using agency staff.
3. Data collection and analyzing
In the third phase, OD practitioners collect and analyze data. Data collection methods
include existing data from work systems, questionnaires, interviews, observations, and ‘fly
on the wall’ methods.
The OD practitioner may decide to interview employees in the admin team about why they
take sickness leave, and if any aspects of the organization impact on doing so.
Data collection is often time-consuming and critical for the success of a project. Important
factors to keep in mind are confidentiality, anonymity, a clear purpose, observer-
expectancy bias, and a Hawthorne effect.
4. Feedback
In this phase, it is key for the OD consultant to give information back to the client in a way
that’s understandable and action-driven.
Information needs to be relevant, understandable, descriptive, verifiable, timely, limited,
significant, comparative, and spur action. Techniques like storytelling and visualization can
be used to do this in an effective way.
The OD consultant could present via slide-show, their key findings to management. They
could also provide a detailed report, which management can delve into more deeply,
before deciding which changes to implement at the hospitals.
5. Designing interventions
After providing the client with feedback, an intervention needs to be created. This
intervention should fit the needs of the organization and should be based on causal
knowledge of outcomes. In addition, the organization needs to be able to absorb the
changes effectively.
A major part of the change process is defining success criteria for change. Only when
these criteria are well-defined, progress can be measured.
6. Leading and managing change
The next phase is about executing the change intervention. Estimations put the
failure rate of change between 50-70%. Even though this is not entirely true, no one
can doubt that change is hard.
Effective change management revolves around motivating change, creating a vision,
developing support, managing the transition, and sustaining momentum. Well-known
change models include John Kotter’s eight steps to transforming your organization.
At the hospitals, it is likely that not all staff will want to shift from working at one site
to working across three. Some staff could quit. There will need to be thought given, to
how management will convince staff to come on board to support this change.
7. Evaluation and institutionalization of change
Once a system has been implemented, opportunities for improvement start
to show. Implementing these will lead to a better user and
employee experience.
These incremental changes characterize the rapid evolution of technology.
Change is becoming a constant factor, which means that it is near
impossible to just implement technology and be done with it. Systems
evolve and this requires a constant implementation.
The need for all staff to work across three hospitals, may require the
organization to find a way to reduce travel costs for employees. This could
be via paying staff a bit more, to offset the added costs, or introducing a
low-cost or free shuttle bus for staff.
Kurt Lewin
BORN- September 9, 1890
Moglino, Country of Moglino
DIED- February 12, 1947 Newtonville, Massachusetts
KURT LEWIN CONTRIBUTION
Kurt Lewin also known as Kurt Zadek Lewin was a German-American psychologist, known as
one of the modern pioneers of social, organizational, and applied psychology.
Lewin is recognized as the "founder of social psychology" and was one of the first to study
group dynamics and organizational development.
His contributions in change theory, action research, and action learning earn him the title of the
"father of organization development, 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.
In 1946, social scientist Kurt Lewin launches the Research Center for Group Dynamics at the
Massachusetts Institute of Technology, which moved to Michigan after his death.
Kurt Lewin’s Work
Force field analysis•
Action research
Leadership climates
Change process
Lewins equation – B=ƒ(P,E), is a psychological equation of behavior developed by
Kurt Lewin.
It states that behavior is a function of the person in their environment.
ORGANIZATIONAL DEVELOPMENT –
KURT LEWIN
Organizational Development is planned change in the organizational context. In this context of
change it is necessary to refer to Kurt Lewin.
He has provided two principle ideas viz. What is occurring at any point of time is a resultant in
a field of opposing forces e. g. production level at a particular point of time is the resultant
equilibrium of some forces pushing towards higher levels of production and other forces
pushing towards lower levels of production.
The production levels tend to remain at the same levels as the field of forces remains constant.
Another example could be the level of morale.
The second contribution is the change itself. He has described a three- stage process viz. (a)
Unfreezing the old behavior (b) Moving to a new level of behavior (c ) Refreezing the
behavior at the new level
ORGANIZATIONAL DEVELOPMENT
Kurt Lewin’s Three –Stage Model
as modified by Lippitt & others Developing a need for change. (Lewin’s unfreezing phase)
Establishing a change relationship.
In this phase a client system in need of help and a change agent from outside the system
establish a working relationship Clarifying or diagnosing the clients system’s problem
Examining alternative routes and goals; establishing goals and intentions of actions
Transforming intentions into actual change efforts. Phases 3, 4 and 5 correspond to Lewin’s
moving phase Generalizing and stabilizing change.
This corresponds to Lewin’s refreezing phase Achieving a terminal relationship, that is,
terminating the client-consultant relationship
Herbert Allen Shepard
Herbert Allen Shepard (1930–1985) was an American economist who made a significant contribution to
Organization Development
He held faculty posts at several universities including M.I.T., where he received his doctorate in Industrial
Economics. He founded and directed the first doctoral program in Organization Development at Case
Western Reserve; developed a residency in administrative psychiatry at Yale University School of Medicine,
and was also President of The Gestalt Institute of Cleveland and The Professional Development Institute.
Herb conducted the first large-scale experiments in Organization Development, while at Esso in the late
fifties, and served as principal consultant to TRW Systems in the applications of behavioral science to
organizations and teams.
His research advanced our understanding of human behavior and social systems from dyads (doctor-patient
or consultant-client) to organizations (synergy, alternative dispute resolution, structure, building consensus
and caring about the powerless). It opened the way for further developments in the psychology of teams,
leadership and interpersonal compatibility; cognitive behavior therapy, social cognitive theory (educational
psychology); choice theory; principled negotiation, positive psychology and organization [Link]
management consulting, Herb's clients included Bell-Northern Research, Syncrude, Esso, TRW, Connecticut
General Life Insurance Company, Union Carbide, USAID and most of the departments of the federal
governments of the U.S.A. and Canada.
ROBERT BLAKE & JANE MOUTON: MANAGERIAL
GRID
Robert R Blake
Robert Blake was born in Massachusetts, in 1918. He received a BA in
psychology and philosophy from Berea College in 1940, followed by an MA in
psychology from the University of Virginia in 1941. His studies were broken by
the war, where he served in the US Army. On his return, he completed his PhD in
psychology at the University of Texas at Austin in 1947.
He stayed at the University of Texas as a tenured professor until 1964, also
lecturing at Harvard, Oxford, and Cambridge Universities. In the early 1950s, he
began his association with his student, Jane Mouton, which led to their work
together at Exxon, the development of the Managerial Grid, and co-founding of
Scientific Methods, Inc in 1964. The company is now called Grid International.
The Managerial Grid
In many ways, Blake and Mouton’s Managerial Grid is a development of the
Theory X, Theory Y work of Douglas McGregor. The two researchers were
humanists, who wanted to represent the benefits of Theory Y management.
They did so by defining two primary concerns for a manager:
Concern for People
Concern for Production
(sometimes referred to as Concern for Task)
Although their work is often simplified to a familiar 2 x 2 matrix formulation, it
was a little more subtle. They created two axes and divided each into nine
levels, to give a 9 x 9 grid. It was the extreme corners, and the centre, of this
grid that they labelled and characterised. They recognised that most managerial
behaviours fall within the grid, rather than at the extremes.
The Five Styles on the Grid
Indifferent
Impoverished Management | Low Results/Low People
This is an ineffective management style, in which an indifferent manager largely avoids engaging
with their people or the needs of the job at hand. Such managers reason (wrongly) that if you don’t
do much, little can go wrong, and you won’t get blamed. The Peter Principle suggests managers rise
to their level of incompetence, and here is the style we may see as a result.
This style is only suitable as a calculated decision to be hands off and delegate to a highly capable
and strongly motivated team. Even then, a retreat into the very corner is not appropriate.
Dictatorial
Produce-or-Perish Management | High Results/Low People
Authoritarian managers want to control and dominate their team – possibly for personal reasons, or
an unhealthy psychological need. They don’t care about their people, they just want the results of
their endeavours. Away from the extreme, this Theory X-like approach can be suitable, in a crisis.
The theory X origin of this behaviour mean managers here prefer to enforce rules, policies and
procedures, and can view coercion, reprimands, threats and punishment as effective ways
to motivate their team. Short term results can be impressive, but this is not a sustainable
management style. Team morale falls rapidly and compromises medium and long-term performance.
Status Quo
Middle-of-the-Road Management | Medium Results/Medium People
This is a compromise and, like all compromises, it is characterised as much by what the manager gives up as by what they put in. A little attention to
task and a bit of concern for people sounds like balance, but it also reflects a level of impoverishment – not much concern for either.
This is neither an inspiring, nor developmental approach to management and can only be effective where the team itself can meet the leadership
deficits it leaves behind. A good manager could only legitimately use this approach where this one team is a low priority among other competing
demands, and the manager is confident they can manage themselves to a large degree. If not, mediocrity will be the best result the manager will achieve
from this strategy.
Accommodating
Country Club Management | High People/Low Results
Sometimes, you need to rest your team, take your foot off the accelerator, and accommodate their needs. These may be for a break, for team-building,
or for development, perhaps.
However, as a long term strategy, it is indulgent, and leads to complacency and laziness among team members. There is little to drive them, yet we
know pride in achievement, autonomy, and development are principle workplace motivators. Without a sufficient focus on production, the team will
get little of any of these.
The work environment may be relaxed, fun, and harmonious, but it won’t be productive,. The end point will also be a lack of respect, among team
members, for the manager’s leadership.
Sound
Team Management | High Production/High People
According to Blake and Mouton, the Team Management style is the most effective approach. This is routed in McGregor’s Theory Y. It is the most solid
leadership style, with a balance of strong concern for both the means and the end.
A manager using this style will encourage commitment, contribution, responsibility, and personal and team development. This builds a long-term
sustainable and resilient team.
Peaks and troughs in workload and team needs will mean a flexible manager with stray away from the corner from time to time, either towards
accommodating or dictatorial styles. But this flexibility and their general concern for both dimensions will prevent them from an unhealthy move right
into the corners.
When people are committed to both their organisation and a good leader, their personal needs and production needs overlap. This creates an
environment of trust, respect, and pride in the work. The result is excellent motivation and results, where employees feel a constructive part of the
company.
Two Additional Styles
Opportunistic Management
Some managers are highly opportunistic, and are prepared to exploit any situation, and
manipulate their people to do so. This style does not have a fixed location on the grid.
Managers adopt whichever behaviour offers the greatest personal benefit. It is the
ultimate in flexibility, and is highly effective.
What matters is motivation. Some managers are highly flexible for reasons of great
integrity others for purely self-serving reasons.
Paternalistic Management
The loaded label represents a flip-flopping between accommodating ‘Country Club
management’ and dictatorial ‘Produce-or-Perish management’. At each extreme, this
managerial style is prescriptive about what the team needs and how they will supply it.
The subtlety of sound team management adapting to the team’s needs is not present.
Such managers rarely welcome a team trying to exercise its own autonomy. They will
feel it as an unwelcome challenge.
T-Group
A Training-Group, or T-Group, is a type of experience-based learning.
Participants work together in a small group of 8-14 people, over an extended period. Learning
comes through analysis of their own experiences, including feelings, reactions, perceptions, and
behavior.
Underlying Assumptions
Underlying the T-Group are the following assumptions about the nature of the process which
distinguish T-Groups from other more traditional models of learning:
• LEARNING RESPONSIBILITY. Each participant is responsible for their own learning. What a
person learns depends upon their own style, readiness, and the relationship they develop with
other members of the group.
• STAFF ROLE. The staff person's role is to facilitate the examination and understanding of the
experience in the group. They help participants to focus on the way the group is working, the
style of an individual's participation, or the issues that are facing the group.
• EXPERIENCE and CONCEPTUALIZATION. Most learning is a combination of
experience and conceptualization. A major T-Group aim is to provide a setting in which
individuals are encouraged to examine their experiences together in enough detail so
that valid generalizations can be drawn.
• AUTHENTIC RELATIONSHIPS and LEARNING. A person is most free to learn
when they establish authentic relationships with other people and thereby increases
their sense of self-esteem and decreases their defensiveness. In authentic relationships
people can be open, honest, and direct with one another so that they are communicating
what they are actually feeling rather than masking their feelings.
• SKILL ACQUISITION and VALUES. The development of new skills in working
with people is maximized as a person examines the basic values underlying the
behavior, as they acquire appropriate concepts and theory, and as they can practice new
behavior and obtain feedback on the degree to which the behavior produces the
intended impact.
Goals and Outcomes
Goals and outcomes of a T-Group can be classified in terms of potential learning concerning individuals, groups,
and organizations.
• THE INDIVIDUAL POINT OF VIEW. Most T-Group participants gain a picture of the impact that they make on
other group members. A participant can assess the degree to which that impact corresponds with or deviates from
their conscious intentions. They can also get a picture of the range of perceptions of any given act. It is important to
understand that different people may see the same piece of behavior differently - for example, as supportive or
antagonistic, relevant or irrelevant, clear or ambiguous - as it is to understand the impact on any given individual or
a specific event.
Many people report that they try out behavior in the T-Group that they have never tried before. This experimentation
can enlarge their view of their own potential and competence and provide the basis for continuing experimentation.
• THE GROUP POINT OF VIEW. T-Groups often focus on forces which affect the group, such as the level of
commitment and follow-through resulting from different methods of making decisions, the norms controlling the
amount of conflict and disagreement that is permitted, and the kinds of data that are gathered. Concepts such as
cohesion, power, group maturity, climate, and structure can be examined using the experiences in the group to better
understand how much these same forces operate in the back-home situation.
• THE ORGANIZATION POINT OF VIEW. Status, influence, division of labor, and styles of managing conflict
are among organizational concepts that may be highlighted by analyzing the events in the T-Group. Subgroups that
form can be viewed as analogous to units within an organization. It is then possible to look at the relationships
between groups, examining such factors as competitiveness, communications, stereotyping, and understanding.
Systems Theory
Systems Theory was first introduced by Van Bertalanffy (1950) and was introduced
into the organisational setting by Kataz and Khan (1966).
Systems theory is an approach to organisations which likens the enterprise to an
organism with interdependent parts, each with its own specific function and interrelated
responsibilities.
The system may be the whole organisation, a division, department or team; but whether
the whole or a part, it is important for the OD practitioner to understand how the
system operates, and the relationship the parts of the organisation have.
The emphasis in OD is that that real systems are open to, and interact with, their environments, and it
is possible to acquire new properties through emergence, resulting in continual evolution.
Rather than reducing an organisation to the properties of its parts or elements, systems theory focuses
on the arrangement of and relations between the parts which connect them into a whole.
The organization is an open system, which interacts with the environment and is continually adapting
and improving.
The organisation influences and is influenced by the environment in which it operates
If an organisation is to be effective it must pay attention to the external environment, and take steps to
adjust itself to accommodate the changes in order to remain relevant
All part of the organisation are interconnected and interdependent
If one part of the system is affected, all parts are.
It is not possible to know everything about the system, but if you look hard enough there are plenty of
clues.
Parallel Learning
Parallel Learning Structures (also known as Communities of Practice) promote
innovation and change in large bureaucratic organizations while retaining the
advantages of bureaucratic design.
Groups representing various levels and functions work to open new channels of
communication outside of and parallel to the normal, hierarchical structure.
Parallel Learning Structures may be a form of Knowledge Management.
Knowledge Management involves capturing the organization's collective
expertise wherever it resides (in databases, on paper, or in people's heads) and
distributing it to the people who need it in a timely and efficient way.
systemic organisational development
Seven forces of system organisation is a comprehensive and theoretically sound
framework for understanding organisational development, management and change.
This framework allows managers to diagnose deficiencies in the development of their
organisations and provides the principles according to which these deficiencies can be
remedied.
It also allows managers to contextualise the different change initiatives in their
organisation and to assess their relevance in the context of the organisation as a
whole.
Most importantly, it provides a holistic and synergistic understanding of organisational
functioning appropriate for the information age.
After completing our module on the Biomatrix systems approach to
organisational development and change in their MBA course, delegates
often remark: “Now we understand, how everything we learned during our
MBA studies hangs together.” To transmit such understanding is our aim.
The roots of action research
Argyris et al. (1985) summarize Lewin’s concept of action research:
1. It involves change experiments on real issues in social systems. It focuses on a particular issue and seeks to
provide assistance to the client system.
2. It, like social management more generally, involves iterative cycles of identifying a problem, planning,
acting and evaluating.
3. The intended change in an action research project typically involves re-education, a term that refers to
changing patterns of thinking and action that are presently well established in individuals and groups.
Effective re-education depends on participation by clients in diagnosis, fact-finding and free choice to
engage in new kinds of action.
4. It challenges the status quo from a participative perspective, which is congruent with the requirements of
effective re-education.
5. It is intended to contribute simultaneously to basic knowledge in social science and to social action in
everyday life. High standards for developing theory and empirically testing propositions organized by
theory are not be to be sacrificed nor the relation to practice lost.
Double-loop learning
Double-loop learning will lead to deepen understanding of our assumptions and
better decision-making in our everyday operations.
We also need to notice that double-loop learning leads to organizational learning.
That is very important because organizational learning is one of the most important
factors nowadays.
Basically, double-loop learning requires three skills:
1. self-awareness
2. honesty or candor
3. taking responsibility
