Benefits and Limitations

of
Organizational Development
Benefits of OD

•Change throughout the organization

•Greater Motivation
•Higher Job Satisfaction
•Reduced absences
•Increased Productivity
•Lower turnover
•Better quality of work
•Improved teamwork
•Better resolution of conflict
•Commitment to Objectives
•Increased willingness to change
•Creation of learning individuals and groups
Job satisfaction is the extent to which a person is
gratified or fulfilled by his or her work.
A satisfied employee tends to be:
• absent less often
• Make positive contributions
• Stay in the organization
A dissatisfied employee tends may be:
• Absent more often
• May experience stress that disrupts co-workers
• Continually look for another job
Environmental impact
Job satisfaction is one part of life satisfaction. The
nature of a worker’s environment off that job
indirectly influences his or her feelings on the job.
Similarly, since a job is an important part of life for
many workers, job satisfaction influences general
life satisfaction. The result is a spillover effect.
Reduced absences
A satisfied employee tends to be absent less often.
Although the connection is not always sharp. Some
absences are caused by legitimate medical reasons.
Involuntary (medically related) absenteeism can
sometimes be predicted (e.g., surgery) are often be
reduced through thorough pre-employment physical
exams and work-history record checks.
 Turnover
proportion of employees leaving an
organization during a given time period.

Excessive employee turnover can have several

negative effects on an organization
• Separation Costs
• Training Costs
• Vacancy Costs
• Replacement Costs
• Morale Effects
Quality is the total set of features and
characteristics of a product or service that
determine its ability to satisfy stated or implied
needs.
Quality is important because:
• Serves as the basis for competition
• Improving quality tends to increase
productivity (making high quality products
results less waste and rework)
• Enhancing quality lowers costs
 Type of Benefit Specific Benefit
Organizational Examples

Enhanced Performance • Increased Productivity Ampex: On-time customer delivery

• Improved Quality rose 98%.
• Improved customer service K Shoes: Rejects Per million dropped
from 5,000 to 250
Eastman: Productivity rose 70%

Employee Benefits • Quality of Work Life Milwaukee Mutual: Employee

• Lower Stress Assistance program usage dropped to
40% below industry average

Reduced Costs • Lower turnover, Absenteeism Kodak: Reduced turnover to one- half
• Fewer injuries the industry average.
Texas instruments: Reduced costs more
than 50%
Westinghouse: Costs down 60%

Organizational Enhancements IDS Mutual Fund Operation: Improved

•Increased innovation, flexibility flexibility to handle fluctuations in
market activity.
Hewlett-packard: Innovative order-
processing system
 Ingredients of Effective Teams
• Supportive Environment – involves encouraging team
members to think like a team, providing adequate time
for meetings, and demonstrating faith in members
capacity to achieve
• Skills and clarity – Team members must be reasonably
qualified to perform their jobs and have the desire to
cooperate. Members can work together as a team after
the members know the roles of all the other whom they
will be interacting.
 Ingredients of Effective Teams
• Superordinate Goals – A major responsibility of
managers is to try to keep the team members oriented
toward their overall task. Sometimes, unfortunately, an
organization’s policies record-keeping requirements and
reward systems may fragment individual efforts and
discourage team.
• Team rewards – These may be financial, or they may be
in the form or recognition. Rewards are most powerful
if they are valued by the team members, perceived as
possible to earn, and administered contingent on the
group’s task performance.
 Potential Team Problems
• Changing Composition – too many changes and
personnel transfers interfere with group relationships
and prevent the growth of teamwork.
• Social Loafing – (free rider effect) when employees
think their contributions to a group cannot be
measured, they may lessen their output. The causes
includes perception of unfair division of labor, belief
that co-workers are lazy and a feeling of being able
to hide in a crowd and therefore not be able to be
singled out for blame.
 Need for Team Building
• Interpersonal conflicts among team members or
between the team and is leader.
• Low degree or team morale or low team
cohesiveness
• Confusion or disagreement about roles within the
team
• Large influx or new members
• Disagreement over the team’s purpose and tasks
James Surowiecki concludes that groups will produce
better answers to questions and problems than a
single individual can.
To produce the results that he documents, effective
groups need four ingredients.
• Diversity of opinion, information and perspective
• Independent opinion not influence by others
• Access to decentralized knowledge and the
empowerment to make decisions based on that
knowledge
• An aggregative mechanism for producing collective
decisions from private judgments.
 Conflict resolution - occurs when a manager resolves a
conflict that has become harmful or serious.
Conflict stimulation – the creation and constructive use of
conflict by a manager.
Methods used to stimulate conflict under
controlled conditions
• Altering the physical location of groups
• Training programs
• Devil’s advocate – person who challenges the ideas of
others, probes for supporting facts, provides
constructive criticism and challenges logic so as to
improve the quality of group decision.
 Conflict
Management
Use Resolution Use Resolution
under these under this
Condition Condition
Conflict has become Work groups are stagnant
disruptive. Too much and comfortable with the
time and effort are status quo. Consensus
spent on conflict rather among groups is too
than on productive easily reached. Groups are
efforts. Conflict focuses not creative or motivated
to challenge traditional
on internal goals of the
ideas. Change within the
group rather than on
organization is needed for
organizational goals it to remain competitive
 How Organization Learning
Affects Organization
Performance
Competitive
Strategy

Organization Learning Knowledge Management

ORGANIZATION
CHARACTERISTICS Organization
•Structure Learning
Processes: Organization
•Information systems Knowledge
Organization
•Human resource practices •Discovery
Performance
•Culture •Invention •Explicit
•leadership •Tacit
•Production

•Generalization
Organization Learning
enhances and organization’s capability to
acquire and develop new knowledge.

They draw heavily on the social sciences for

conceptual grounding and on OD intervention such
as team building, structural design and employee
involvement.
 Learning is organizational to the extent that:

• It is done to achieve organization purpose.

• It is shared or distributed among members of the
organization.
• Learning outcomes are embedded in the
organization systems, structures and culture
Knowledge Management
Focuses on how knowledge can be organized
and used to improve performance.

They are rooted conceptually in the information and

computer sciences and in practice, emphasize
electronic forms of knowledge storage and
transmissions such as intranets, data warehousing
and knowledge repositories.
Structure
Organization structures emphasize
teamwork, few layers, strong lateral relations and
networking across organizational boundaries both
internal and external to the firm. These features
promotes the information sharing involvement in
decision making, system thinking and
empowerment.
Information Systems
Organization learning involves gathering
and processing information and consequently the
information systems of learning organizations
provide and infrastructure for OL. These system
facilitate rapid acquisition, processing and sharing
of rich, complex information and enable people to
manage knowledge for competitive advantage.
Human Resource practices
Human resources, including appraisal,
rewards and training, are designed to account for
long term performance and knowledge
development; they reinforce the acquisition and
sharing of new skills and knowledge.
Organization Culture
Learning organizations have strong
cultures that promote openness, creativity and
experimentation among members. These values and
norms provide the underlying social support needed
for successful learning. They encourage members to
acquire, process and share information; they nurture
innovation an provide the freedom to try new things,
tor risk failure, and to learn form mistakes.
Leadership
Like most interventions aimed at
organization transformation. OL and KM depend
heavily on effective leadership throughout the
organization. The leaders of learning organization
actively model the openness, risk taking, and
reflection necessary for learning. They also
communicate a compelling vision of the learning
organization and provide the empathy, support, and
personal advocacy needed to lead others in that
direction.
 Organization Learning Processes
Discovery
Learning starts with discovery when
errors or gaps between desired and actual
conditions are detected.
 Organization Learning Processes
Invention
Aimed at devising solutions to close
the gap between desired and current
conditions; it includes diagnosing the causes
of the gap and creating appropriate solutions to
reduce it.
 Organization Learning Processes
Production
This process involves implementing
solutions, and generalization includes drawing
conclusions about the effects of the solutions
and extending that knowledge to other relevant
situations.
 Three types of learning
1. Single Loop Learning – focused on improving the status
quo. This is the most prevalent form of learning in
organizations and enables members to reduce errors or gaps
between desired and existing conditions.
2. Double - Loop Learning – (generative learning), aimed at
changing the status quo. It operates at more abstract level
than does single loop learning because members learn how
to change the existing assumptions and conditions within
which single loop learning operates.
3. Deuterolearning – involves learning how to learn. Here
learning is directed at the learning process itself and seeks to
improve how organization perform single and double loop
learning.
 Structuring Activities to Maximize Learning
(French and Bell)
1. Include people affected by the problem or the
opportunity.
2. Set in motion processes to help people clarify the goals
and ways to reach the goals.
3. Ensure that the expectation are realistic.
4. Involve both people strong on experience and those with
good conceptual understanding to bring in multiple
perspectives.
5. Shape the mood and climate in such a manner that
individuals feel “freed up” rather than anxious or
defensive.
 Structuring Activities to Maximize Learning
(French and Bell)
6. Design the process in a manner that the participants learn
7. Individuals should learn about both task and process.
8. Ensure that individuals are engaged as whole persons, not
segmented persons.
 Ways how to Sequence Activities

1. Maximize diagnostic data

2. Maximize effectiveness
3. Maximize efficiency
4. Maximize speed
5. Maximize relevance
6. Minimize psychological and organizational strain
OUTPUTS OF OD INTERVENTION THAT HAVE
A BEARING ON CAPABILITY BUILDING
1. Feedback. People learn new things about themselves,
others, group processes.
2. Awareness of changing socio-cultural norms or
dysfunctional current norms. People tend to modify
their behavior, attitudes and values when they become
aware of changes in the norms.
3. Increased interaction and communication. When
individuals and groups have an opportunity to
communicate with people that they do not normally
interact with, changes in attitudes and behavior can
result.
 OUTPUTS OF OD INTERVENTION THAT HAVE
A BEARING ON CAPABILITY BUILDING
4.Confrontation. This term refers to surfacing and
examining differences in beliefs, feelings, attitudes,
values or norms to remove obstacles to effective
interaction.
5.Education and participation. Development of
knowledge, skills and attitudes and increasing the
number of people involved in problem solving, goal
setting and generating new ideas increases the
quality and acceptance of decisions, increases job
satisfaction and promotes employee well being.
 OUTPUTS OF OD INTERVENTION THAT HAVE
A BEARING ON CAPABILITY BUILDING
6.Increased Accountability. This result form activities
that clarify people’s responsibilities and that
monitor performance related to those
responsibilities.
7.Increases energy and optimism. Activities that
energize and motivate people through visions of
new responsibilities contribute to effective problem
solving and learning
Limitation of OD
•Major time requirements
•Substantial expense
•Delayed payoff period
•Possible failure
•Possible invasion of privacy
•Possible Psychological harm
•Potential conformity
•Emphasis on group processes rather than performance
•Possible conceptual ambiguity
•Difficulty in evaluation
•Cultural incompatibility
RIGHTS OF PRIVACY – primarily are related to
organizational invasion of a person’s private life and
unauthorized release of confidential information
about a person in a way that would cause emotional
harm or suffering.
Business Activities that may involve Employee Right to Privacy
Lie Detectors Treatment of drug abuse
Personality Test Surveillance devices
Location Trackers Computer data banks
Medical examination Confidential records
Treatment of Alcoholism Genetic screening/biometric data
Monitoring of employee lifestyles Inquiry into personal relationships
• Employers are using email to test to test employee
loyalty (as in the case of the manager who sent false
emails to his workers, pretending to be a recruiter
from a competing firm. Any employee who
responded to that email positively were passed over
for promotion)
• New and more sophisticated software can be legally
used by the supervisors to monitor their employees
email. If this practice is used inappropriately
employees right to privacy can be infringed. Forty
six percent of employers monitor employees emails,
most without the knowledge of their employees.
 Policy Guidelines Relating to Privacy
• Relevance – Only necessary, useful information should be
recorded and retained
• Recency – obsolete information should be removed periodically
• Notice – No personal data system unknown to an employee
should be used.
• Fiduciary duty – the keeper of the information is responsible for
its security
• Confidentiality – information should be released only to those
who have a need to know
• Due process – the employees should be able to examine records
and challenge them if they appear incorrect.
• Protection of psyche – the employees inner self should not be
invaded or exposed unless with prior consent
Some forms of surveillance device
• Electronic sensor devices – are microcomputers in
clip-on ID cards, which emit infrared signals.
Employees wearing these badges can have their
location monitored by sensors scattered throughout a
building .
• Electronic monitoring – takes many forms, including
automatic counting of keystrokes made by data entry
clerks, remote observation s of the screens of desktop
computer operators, surreptitious reading of an
employee’s electronic mail, and voice recording
systems to assess the effectiveness of stockbrokers,
travel agents, or other customer service personnel
References
Cummings & Worley. Organizational Development and
Change (8th ed) (pp. 497-501) Southwestern, Thomson Corp.
Griffin R.W., Moorhead G. (2004). Organizational
Behavior (2004) (pp. 44,99,262,319,303-304) Houston
Mifflin Company
Newstron J.W. (2007). Organizational Behavior (12th ed)
(pp.204-212,228-229,307-310,345) Mc Graw Hill Inc.
Nilakant V., Ramnayan S. (2006) Change Management
(pp.274-277)