Organization Development

Organization development (OD) is a long-range effort to improve an organization's problem-solving and renewal processes. OD involves the application of behavior science knowledge to the problems of the workplace. OD consultants tend to look at the organization as a symptom and diagnose not only obvious symptoms, but deeper, more systemic problems. The OD process comprises multiple steps, tends to be long-term, and often includes multiple iterations of the diagnosis, planning, action, and stabilization/evaluation steps. OD interventions are typically more successful if carried out by an external consultant as change agent.

Each generation brings with it new technologies and new challenges. From a business perspective, this means that the organization needs to adapt and change to meet the changing needs and demands of the marketplace, or fail. Organization development (OD) is a long-range effort to improve the organization's problem-solving and renewal processes. OD involves the application of behavior science knowledge to the problems of the workplace.

Sometimes the changes that need to be made in an organization are relatively simple, even obvious. For example, most modern businesses need to have a presence on the web in order to be taken seriously by potential customers. Other changes are less simple to implement. For example, although it may be obvious to most observers that an organization needs to computerize its inventory, the ramifications of this change may be widespread and complex. The organization will have to hire someone to install the system and input the inventory data into the new system. The human resources department will need to develop or contract training for the people using the new inventory system. Old procedures will need to be updated to take into account the new procedures and their requirements. This illustrates the nature of the organization as a system: changes in one part of the system result in changes in the other parts of the system as well.

Organizational Culture: The Informal Organization

Although the installation of a new inventory database system can be a complex task involving most (if not all) of the organization, other changes can be even more complex, such as those that attempt to change the organization's culture or norms. French and Bell (1973) use the metaphor of an iceberg to describe the nature of an organization (see Figure 1). According to this theory, an organization comprises both a formal organization and an informal organization. When a symptom arises in an organization, it may be due to problems in the formal organization, the informal organization, or both. Like an iceberg, the formal organization -- that part of the organization that is easily observable (and more easily fixable) -- represents only a small portion of the organization as a whole. The formal organization comprises the goals of the organization, the structure of the organization (i.e., the design of an organization including its division of labor, delegation of authority, and span of control), the skills of its employees, the technology it employs, and the resources it has to accomplish its tasks. The example of the need to install a computerized inventory system is an example of an intervention within the formal organization.

However, as illustrated in Figure 1, like an iceberg, the majority of the organization is harder to see and diagnose. The informal organization comprises such things as attitudes, values, feelings, interactions, and group norms. These are much more difficult to deal with than the aspects of the formal organization. Often, problems that appear to be part of the formal organization may in fact be related to the informal organization or may be a combination of problems in both the formal and the informal organization. Therefore, it is important for the organization's OD practitioner to separate the symptoms the organization is experiencing from the underlying problems. Although some organizational problems (such as the example of the need to implement a new inventory database) are obvious and relatively straightforward to fix, others are more systemic and thus more difficult to diagnose.

There are many symptoms for which an organization requires an OD intervention. For example, communication or intra- or inter-team conflict is frequently cited as a problem in many organizations. Similarly, managerial strategies are often found to be ineffective or onerous by those who must live under them. Other obvious symptoms of organizational problems include:

• Lack of motivation on the part of the worker,
• Lack of clear or functional structure or roles within the organization,
• Problems with the organizational climate, or
• Problems stemming from cultural norms.

There are some situations where OD interventions should be considered, such as the need to perform strategic planning or cope with a merger. However, for the most part, these are only symptoms. The problems underlying these symptoms are often not the same. Communication problems, for example, might occur because the organization has set two or more groups in competition with each other, and they need to compete for scarce resources. Apparent lack of motivation may be the result of inadequate control, lack of training, or unfair or inadequate rewards. Part of the job of the OD consultant is to determine what underlying problems are responsible for the symptoms being experienced by the organization.

Further Insights

The OD Consultant/Change Agent

Although for the most part, organizations employ their own OD staff, for OD to be effective it requires an outside change agent. This is a person external to the organization who guides an organization through a change effort. To be effective, change agents need to have knowledge of how to conduct a change effort, an understanding of the organization, and sufficient power to be able to implement the change.

There are a number of reasons why an external change agent is more likely to successfully accomplish change within an organization than an internal change agent with the same credentials. External consultants typically have a more clear-cut role than do internal consultants. When an external consultant is hired to do OD for an organization, it is typically with the understanding that his or her purview comprises the activities associated with OD and not with other organizational tasks or objectives. If the external change agent is properly introduced into the organization, everyone will know what purpose this individual serves. An internal consultant, on the other hand, typically has more difficulty articulating his or her role within the organization. Although OD may be part of the internal consultant's role, she or he will often be called upon to perform other human resources activities as well. This makes it more difficult for the organization to see an internal consultant as an expert. It also makes it less likely that the affected employees will be as open with an internal consultant as with an external one, because they will tend to see him or her as part of the organizational hierarchy with loyalties to management rather than to the employees.

External consultants are more likely to be effective as OD change agents because they are less affected by organizational norms than internal consultants. Whereas internal consultants are more ready to accept the organizational system as given, external consultants are more likely to be able to look at the organization objectively and see problems in areas that an internal consultant might take for granted.

An external consultant is also freer to look at the organization from a larger, systems view while an internal consultant is more likely to focus on a micro view of the organization. As discussed above, it is essential that an OD consultant consider the problems in both the formal and the informal organization and to recognize that changing the organization in one area is likely to have a direct or indirect effect on other areas. An internal consultant, however, often is either (a) unable to have that degree of objectivity because she or he is part of the system or (b) is only tasked with very circumscribed activities because she or he is a direct employee of the organization. For example, if the organization is experiencing difficulties in communication, an internal consultant might be tasked with developing and conducting a training course in communication skills. An external consultant, given the same set of symptoms, would more than likely look at the system as a whole and might find out that the communication problem was only a symptom of a deeper underlying problem such as conflict over scarce resources or differing norms between groups. The internal consultant is unlikely to be able to successfully address this problem because she or he has only been tasked with giving a training course.

Finally, external consultants typically have easier access to upper-level management in the organization. Since the support of upper-level management is essential for the success of OD interventions, this makes external consultants more likely to be successful. Internal consultants, on the other hand, are part of the system that they are trying to change. Since they are unlikely to have the same access to upper-level management as an external consultant, they are less likely to have the support necessary to ensure the success of their interventions. As a result, internal consultants typically spend little effort toward organizational renewal, whereas external consultants are free to do so.

OD Processes

Scouting

Organization development is a multistage process (see Figure 2). The first step for both the consultant and the organization is scouting. This is a mutual exploration between the two parties to determine whether or not they can work together. Sometimes, for example, the OD consultant may not have experience or interest in the type of intervention needed by the organization. In other cases, the organization may be unable or unwilling to guarantee the support and resources necessary to ensure that change will occur. In order for the OD intervention to be successful, the organization must be willing to implement the changes suggested by the OD consultant based on the research. Key management within the organization (especially at top organizational levels) must be involved in the change process. Further, those persons who will be affected by the change must be brought on board as soon as possible, and any persons involved must be informed about the change and the reasons for it and motivated to implement it. If the organization cannot make these assurances, it is unlikely that the intervention will be successful.

Entry

If the organization and the consultant mutually decide that working together would be beneficial, they move into the entry stage. During this time, the two parties set roles for the desired change, share expectations for the results of the OD intervention, establish a commitment (typically through contractual arrangement), and establish an effective power base to help ensure that the intervention will be effective.

Diagnosis

The next stage is diagnosis. During this stage, the OD consultant looks at the problems as perceived by the client. Although these are typically symptoms rather than underlying problems, this is usually the most reasonable place to start an intervention. In addition, the change agent at this point will look at the goals of the client and determine how best to meet them. This determination will take into consideration both the resources and commitment of the client to the OD intervention and change process as well as the resources of the consultant.

There are a number of methods that are applied by OD consultants to aid in the diagnostic process. One of the most frequently used is the questionnaire, used in the context of the survey research feedback methodology (see Figure 3). This is a type of research in which data about the opinions, attitudes, or reactions of the members of a sample are gathered using a survey instrument. The phases of survey research are goal setting, planning, implementation, evaluation, and feedback. As opposed to experimental research, survey research does not allow for the manipulation of an independent variable. The questionnaire or survey used in this technique comprises a data collection instrument designed to acquire information on the opinions, attitudes, or reactions of people. The consultant may choose to survey all employees using this instrument or may select a sample of workers who are asked questions concerning their opinions, attitudes, or reactions, which are gathered using a survey instrument or questionnaire for purposes of scientific analysis.

In addition to surveys, the OD consultant may conduct interviews with key individuals across the organization. For example, there are typically individuals who better understand the causes of various symptoms and problems, who can better articulate these, or who are informal leaders within the organization. The OD consultant often includes his or her personal observations of the organization. Fruitful sources of such observations come from staff meetings, interdepartmental memos, and other records of communication. Another source of data that is useful in making a diagnosis of problems is objective data. This can include such the statistics as absenteeism, turnover, antiorganizational behavior, production rates, reject rates, or union activity. Similarly, outside opinions of the organization from customers, clients, and competitors can also be useful in determining underlying problems.

Another useful tool for diagnosing problems within the organization is the confrontation meeting. The purpose of confrontation meetings is to tap management resources within the organization and to apply these to solving the organization's problems. To conduct a confrontation meeting, the change agent starts by establishing the proper climate for the meeting by articulating the goals, philosophy, and other ground rules for conduct of the meeting. She or he then describes the task that the group is to undertake. At this point, the consultant emphasizes the need for problem-solving and brainstorming skills. The meeting then breaks into working subgroups that are usually composed of members from different levels and sections within the organization. These subgroups then identify the major problems facing the organization and come back together to discuss and categorize the problems that were identified. These problems may then be assigned to various subgroups for further study and analysis.

Planning, Action & Stabilization

Once the problem has been diagnosed, the next step in the OD process is to plan the intervention. At this point, the decision needs to be made as to whether the intervention should be system-wide or only implemented at certain levels. Once the nature and scope of the intervention has been determined, the next step in the OD process is to implement it. The consultant next works with the organization to stabilize the change so that it becomes internalized. Once this has happened and the change state becomes the status quo, the consultant then evaluates the effectiveness of the change in solving the problem of the organization. At this point, if it is determined that further action it is necessary, the OD process then continues with further diagnosis, planning, action, and stabilization. Eventually, when it is determined that the underlying problem has been adequately addressed and that the change process has been internalized within the organization, the consultant and the organization dissolve their relationship.

Conclusion

Organization development is more than management consulting. It is the application of behavior science knowledge to the problems of the workplace. OD is a long-range effort to improve the organization's problem-solving and renewal processes and often takes more than one iteration before the underlying problem is properly diagnosed and adequately addressed. Although some organizations have internal OD consultants on staff, in general, an external change agent is more likely to accomplish the longterm change desired by the organization. Properly applied, the OD process can be very effective in diagnosing and fixing deep or systemic problems in the organization.

Terms & Concepts

Brainstorming: A group process used to generate ideas in a face-to-face group problem-solving situation. In brainstorming, team members generate as many ideas as possible, piggybacking on other ideas where possible. The goal of a brainstorming session is to generate ideas, so suggestions are not evaluated during the process.

Change Agent: A person who guides an organization through a change effort. To be effective, change agents need to have knowledge of how to conduct a change effort, an understanding of the organization, and sufficient power to be able to able to implement the change.

Conflict: A situation in which one party believes that its interests are negatively affected by another party.

Management: The process of efficiently and effectively accomplishing work through the coordination and supervision of others.

Management Consultant: A management consultant is a qualified professional who works with upper-level management in an organization to analyze the organization's health and effectiveness, identify problem areas, make recommendations, and assist in implementing the recommendations. Management consultants' activities include diagnosing and making recommendations for existing business problems or in the development of future plans.

Motivation: An internal process that gives direction to, energizes, and sustains an organism's behavior. Motivation can be internal (e.g., I am hungry so I eat lunch) or external (e.g., the advertisement for the ice cream cone is attractive so I buy one).

Norms: Standards or patterns of behavior that are accepted as normal within the culture.

Organization Development (OD): A long-range effort to improve the organization's problem-solving and renewal processes. OD involves the application of behavior science knowledge to the problems of the workplace.

Organizational Culture: The set of basic shared assumptions, values, and beliefs that affect the way employees act within an organization.

Organizational Structure: The design of an organization including its division of labor, delegation of authority, and span of control.

Survey: (a) A data collection instrument used to acquire information on the opinions, attitudes, or reactions of people; (b) a research study in which members of a selected sample are asked questions concerning their opinions, attitudes, or reactions are gathered using a survey instrument or questionnaire for purposes of scientific analysis; typically, the results of this analysis are used to extrapolate the findings from the sample to the underlying population; (c) to conduct a survey on a sample.

Survey Research: A type of research in which data about the opinions, attitudes, or reactions of the members of a sample are gathered using a survey instrument. The phases of survey research are goal setting, planning, implementation, evaluation, and feedback. As opposed to experimental research, survey research does not allow for the manipulation of an independent variable.

Team: A special type of work group in which there is skill differentiation among team members and the entire team works in the context of a common fate. Unlike groups in general, team members are committed to the goal and mission of the team and have a collaborative culture in which the members trust each other. Leadership of a team is shared, and members are mutually accountable to each other.

Bibliography

Anderson, D. L. (2012). Organization development interventions and four targets of post-acquisition integration. OD Practitioner, 44(3), 19-24. Retrieved November 27, 2013 from EBSCO online database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=77415368

French, W. (1969). Organization development, objectives, assumptions and strategies. California Management Review, 12 (2), 23-34. Retrieved April 27, 2010 from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=5049468&site=ehost-live

French, W. L., & Bell, C. H., Jr. (1973). Organization development: Behavioral science interventions for organization improvement. Englewood Cliffs, NJ: Prentice-Hall.

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Rao, T. V., & Ramnarayan, S. S. (2011). Organization development: Accelerating learning and transformation. New Delhi, India: SAGE/Response Business Books. Retrieved November 27, 2013 from EBSCO online database eBook Academic Collection (EBSCOhost). http://search.ebsco-host.com/login.aspx?direct=true&db=nlebk&AN=421044&site=ehost-live

Yaeger, T. F., Sorensen, P. F., & Johnson, H. H. (2013). Critical issues in organization development: Case studies for analysis and discussion. Charlotte, NC: Information Age Pub., Inc. Retrieved November 27, 2013 from EBSCO online database eBook Collection (EBSCOhost). http://search.ebscohost.com/login.aspx?direct=true&db=nlebk&AN=591027&site=ehost-live

Suggested Reading

Akdere, M., & Altman, B. A. (2009). An organization development framework in decision making: Implications for practice. Organization Development Journal, 27 (4), 47-56. Retrieved April 27, 2010 from EBSCO Online Database Business Source Complete http://search.ebsco-host.com/login.aspx?direct=true&db=bth&AN=48656205&site=ehost-live

Bate, P., Khan, R., & Pyle, A. J. (2000). Culturally sensitive structuring: An action research-based approach to organization development and design. Public Administration Quarterly, 23 (4), 445-470. Retrieved April 27, 2010 from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=3709682&site=ehost-live

Burke, W. W., & Church, A. H. (1992). Managing change, leadership style, and intolerance to ambiguity: A survey of organization development practitioners. Human Resource Management, 31 (4), 301-318. Retrieved April 27, 2010 from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=7239411&site=ehost-live

Chattopadhyay, S., & Pareek, U. (1984). Organization development in a voluntary organization. International Studies of Management and Organization, 14 (2/3), 46-85. Retrieved April 27, 2010 from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=5815556&site=ehost-live

Cobb, A. T., & Margulies, N. (1981). Organization development: A political perspective. Academy of Management Review, 6 (1), 49-59. Retrieved April 27, 2010 from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=4287998&site=ehost-live

Dahl, J. G., & Glassman, A. M. (1991). Public sector contracting: The next "growth industry" for organization development? Public Administration Quarterly, 14 (4), 483-497. Retrieved 27 April 2010 from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=7162859&site=ehost-live

Deaner, C. M. D., & Miller, K. J. (1999). Our practice of organization development: A work in progress. Public Administration Quarterly, 23 (2), 139-151. Retrieved April 27, 2010 from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=2794421&site=ehost-live

Gabris, G. T., & King, J. (1989). Making management training more effective and credible through organization development: Results in one city. Public Administration Quarterly, 13 (2), 215-231. Retrieved April 27, 2010 from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=7284954&site=ehost-live

Huse, E. H. (1978). Organization development. Personnel and Guidance Journal, 56 (7), 403-406. Retrieved April 27, 2010 from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=6475520&site=ehost-live

Jaeger, A. M. (1986, Jan). Organization development and national culture: Where's the fit? Academy of Management Review, 11 (1), 178-190. Retrieved April 27, 2010 from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=4282662&site=ehost-live

Lau, C.-M., & Ngo, H.-Y. (2001). Organization development and firm performance: A comparison of multinational and local firms. Journal of International Business Studies, 32 (1), 95-114. Retrieved April 27, 2010 from EBSCO Online Database Business Source Complete http://search.ebsco-host.com/login.aspx?direct=true&db=bth&AN=4564768&site=ehost-live

Marshak, R. J., & Grant, D. (2008). Organizational discourse and new organization development practices. British Journal of Management, 1 (19), S7-S19. Retrieved April 27, 2010 from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=29993787&site=ehost-live

McDonagh, J., & Coghlan, D. (2006). Information technology and the lure of integrated change: A neglected role for organization development? Public Administration Quarterly, 30 (1/2), 22-55. Retrieved April 27, 2010 from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=24117533&site=ehost-live

Miranda, S. M., & Saunders, C. (1995). Group support systems: An organization development intervention to combat groupthink. Public Administration Quarterly, 19 (2), 193-216. Retrieved April 27, 2010 from EBSCO Online Database Business Source Complete http://search.ebsco-host.com/login.aspx?direct=true&db=bth&AN=7151588&site=ehost-live

Porras, J. I., & Berg, P. O. (1978). The impact of organization development. Academy of Management Review, 3 (2), 249-266. Retrieved April 27, 2010 from EBSCO Online Database Business Source Complete http://search.ebsco-host.com/login.aspx?direct=true&db=bth&AN=4294860&site=ehost-live

Sanchez, M. (2013). Maturing toward enterprise organization development capability. OD Practitioner, 45(4), 49-54. Retrieved November 27, 2013 from EBSCO online database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=90602261

Sinzgiri, J., & Gottlieb, J. Z. (1992). Philosophic and pragmatic influences on the practice of organization development, 1950-2000. Organizational Dynamics, 21 (2), 57-69. Retrieved April 27, 2010 from EBSCO Online Database Business Source Complete http://search.ebsco-host.com/login.aspx?direct=true&db=bth&AN=9609134589&site=ehost-live

Terpstra, D. E. (1981). The organization development evaluation process: Some problems and proposals. Human Resource Management, 20 (1), 24-29. Retrieved April 27, 2010 from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=12493291&site=ehost-live

Umstot, D. D. (1980). Organization development technology and the military: A surprising merger? Academy of Management Review, 5 (2), 189-202. Retrieved April 27, 2010 from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=4288717&site=ehost-live

White, B. J., & Ramsey, V. J. (1978). Some unintended consequence of "top down" organization development. Human Resource Management, 17 (2), 7-14. Retrieved April 27, 2010 from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=12493334&site=ehost-live

White, J. D. (1990). Phenomenology and organization development. Public Administration Quarterly, 14 (1), 76-85. Retrieved April 27, 2010 from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=7163655&site=ehost-live