Foundations of OD

Dr.Yogananthan
 Content
Part I Part II
• Definition • Objectives of OD
• Theories
• History of OD • Kurt Lewin
• Characteristics • Killman
• Burke Litwin
• Qualities of an effective • Porras & Robertson
org • Systems theroy
• 5 rules • Parellal learning structure
• Action research model
• OD goals • summary
 Definitions
• Organization development (OD) is defined as a
long-range effort to improve an organization's
ability to cope with 'Change and its problem-solving
and renewal processes through effective
management of organization culture which ':
involves moving towards a third wave organization
and an attempt to achieve corporate excellence by fl;
rating the desires of individuals for growth and
development with organizational goals.
• Thomas Cummings- organization development is a
system-wide process of applying behavioral-science
knowledge to the planned change and development
of the strategies, design components, and processes
that enable organizations to be effective.
• OD may be defined as a systematic, integrated and
planned approach to improve the effectiveness of
the enterprise. It is designed to solve problems that
adversely affect the operational efficiency at all
levels (Koontz ET. Al. 1980).
• Richard Beckhard (1969- “an effort [that is]
(1) planned, (2) organization-wide, and (3)
managed from the top, to (4) increase
organization effectiveness and health through
(5) planned interventions in the organization’s
processes, using behavioral-science
knowledge”
 OD – is an effort….which is…
• planned,
• organization-wide, and
• managed from the top,
• to increase organization effectiveness and
health through
• planned interventions
 HISTORY OF OD
• In a little over 50 years, OD has evolved a complex and
diverse body of knowledge and practice. Because this
expertise derives mainly from helping organizations change
and improve themselves, the history of OD can be understood
in terms of the kinds of changes that organizations have
implemented over this time period. These include changes
aimed at:
• (1) social processes;
• (2) work designs;
• (3) human resources; and
• (4) organization structures.
 Social processes
• The earliest applications of OD involved helping organizations improve social
processes including relationships among members, communication, group
decision-making, and leadership.
• OD’s response to these social problems started in the late 1940s with the work of
Kurt Lewin and his colleagues in laboratory training. It began with a training
program for community leaders which included both cognitive learning about
leadership as well as informal feedback about participant behavior (Bradford,
1967). This led to the development of laboratory training, commonly called a T-
group, where a small, unstructured group of participants learn from their own
interactions about group dynamics, leadership, interpersonal relations, and
personal growth.
• They led to an impressive array of interventions for improving social processes in
organizations, such as team building (Patten, 1981; Dyer, 1987), process
consultation (Schein, 1969, 1987, 1998), organization confrontation meeting
(Beckhard, 1967), and, more recently, large-group interventions such as search
conferences and open-space meetings (Bunker & Alban, 1997).
• It showed how feeding back that information to members can
motivate and guide them to create meaningful change
(Mann, 1962). It provided evidence that participative systems
of management were more effective than traditional
authoritative or benevolent systems (Likert, 1967).
 Work designs
• Traditionally, work was designed to promote
technical rationality, resulting in jobs that
were highly specified, fragmented, and
repetitive. (in 1960s)
• Employees complained that work was boring
and meaningless; they felt alienated from
their jobs and the organizations that
employed them.
• Eric Trist & Colleagues- The socio-technical approach, which originated in
Europe and Scandinavia in the 1950s, structured work to better integrate
technology and people. It resulted in work designs that enhance both
productivity and employee satisfaction. Socio-technical systems also
showed that when tasks are highly interdependent and require significant
decision-making, teams comprised of multi-skilled members who can
make relevant decisions are the most effective work design (Cummings &
Srivastva, 1977). Today, such self-managed work teams are the
cornerstone of work design in many organizations.
• Fredrick Herzberg & Colleagues- job enrichment aimed to make work
more productive and humanly rewarding. It approached work redesign
from a motivational perspective, showing how traditional jobs could be
enriched to make them more motivating and satisfying.
 Human Resources – 1970s
• human resource practices needed to produce at higher levels at lower
costs.
• Because people generally do those things for which they are rewarded,
rewards can play a powerful role in promoting performance.
• Unfortunately, many of the reward systems in use at the time were not
linked closely to performance; employees were typically paid for a
particular job level, time at work, or seniority.
• Edward Lawler and his colleagues,- made interventions aimed at making
rewards more contingent on performance.
– Gain sharing
– Profit sharing
– Flexible schemes
 Organisational structure
• organizations have increasingly faced complex,
rapidly changing environments that often demand
radical changes in how they compete and design
themselves (Mohrman et al., 1989).
• This typically includes a so-called ‘SWOT analysis’
where the organization’s strengths and weakness are
compared to opportunities and threats in its
competitive environment.
• These include: ‘high-involvement organizations’ that
push decision-making, information and knowledge,
and rewards downward to the lowest levels of the
organization (Lawler, 1986);
• ‘boundary less organizations’ that seek to eliminate
unnecessary borders between hierarchical levels,
functional departments, and suppliers and customers
(Ashkenas et al., 1995); and
• ‘virtual organizations’ that focus on the
organization’s core competence while outsourcing
most other functions to other organizations who do
them better (Davidow & Malone, 1992).
 CHARACTERISTICS OF
OD
• 1. There is a planned program involving the whole system.
• 2. The top of the organization is aware of and committed to
the program and to the management of it.
• 3. It is related to the organization’s mission.
• 4. It is a long-term effort.
• 5. Activities are action-oriented.
• 6. It focuses on changing attitudes and/or behavior.
• 7. It usually relies on some form of experienced-based
learning activities.
• 8. OD efforts work primarily with groups.
 Qualities of effective orgs…
• a. The total organization, the significant subparts, and individuals manage
their work against goals and plans for achievement of these goals.
• b. Form follows function (the problem, or task, or project deter- mines
how the human resources are organized).
• c. Decisions are made by and near the sources of information regardless
of where these sources are located on the organization chart.
• d. The reward system is such that managers and supervisors are rewarded
(and punished) comparably for:
– short-term profit or production performance,
– growth and development of their subordinates,
– creating a viable working group.
• e. Communication laterally and vertically is relatively undistorted. People
are generally open and confronting. They share all the relevant facts
including feelings.
• f. There is a minimum amount of inappropriate win/lose activities
between individuals and groups. Constant effort exists at all levels to treat
conflict situations as problems subject to problem-solving methods
• g. There is high “con.ict” (clash of ideas) about tasks and projects, and
relatively little energy spent in clashing over interpersonal difficulties
because they have been generally worked through.
• h. The organization and its parts see themselves as interacting with each
other and with a larger environment. The organization is an “open
system.”
• i. There is a shared value and management strategy to support it, of trying
to help each person (or unit) in the organization maintain his (or its)
integrity and uniqueness in an interdependent environment.
• j. The organization and its members operate in an “action- research” way.
General practice is to build in feedback mechanisms so that individuals
and groups can learn from their own experience.
 5 rules to be effective org
• The first rule is that the organization must have an effective
program for the recruitment and development of talent.
• The second rule for the organization capable of continuous
renewal is that it must be a hospitable environment for the
individual.
• The third rule is that the organization must have built-in
provisions for self-criticism.
• The fourth rule is that there must be liquidity in the internal
structure.
• The fifth rule is that the organization must have some means
of combating the process by which men become prisoners of
their procedures (Gardner, 1965).
 OD - Goals
• 1. To develop a self-renewing, viable system that can
organize in a variety of ways depending on tasks.
• 2. To optimize the effectiveness of both the stable
(the basic organization chart) and the temporary
systems (the many projects, committees, etc.,
through which much of the organization’s work is
accomplished) by built-in, continuous improvement
mechanisms.
• 3. To move toward high collaboration and low
competition between interdependent units.
• 4. To create conditions where con.ict is brought out
and managed. One of the fundamental problems in
unhealthy (or less than healthy) organizations is the
amount of energy that is dysfunctionally used trying
to work around, or avoid, or cover up, con.icts which
are inevitable in a complex organization.
• 5. To reach the point where decisions are made on
the basis of information source rather than
organizational role.
OBJECTIVES OF ORGANIZATIONAL
DEVELOPMENT PROGRAMME

1.Individual and group development.

2.Development of organization culture and processes by constant interaction between

members irrespective of levels of hierarchy.

3.Inculcating team spirit.

4.Empowerment of social side of employees.

5.Focus of value development.

Contd..
6. Employee participation, problem-solving and decision-making at various
levels.

7. Evaluate present systems and introduction of new systems thereby achieving

total system change if required.

8. Transformation and achievement of competitive edge of the organization.

9. Achieve organization growth by total human inputs by way of research and

development, innovations, creativity and exploiting human talent.

10. Behaviour modification and self managed team as the basic unit of an
organization.
Implications:

1.For Individuals
a) Most individuals believe in their personal growth. Even today, training and
development, promotion to the next higher position dominates the
organization philosophy.

b) Majority of the people are desirous of making greater contributions to the

organizations they are serving. Achievements of organizational goals are
however, subject to limitations or environmental constraints. It is for the
organizations to tap the skills that are available in abundance.

Contd..
This leads to adopt the following organization strategy for development:

• Ask questions to resolve doubts.

• Listen to superior’s advice.
• Support employees in their venture.
• Accept challenge.
• Leaders to encourage creativity and promote risk taking.
• Give additional responsibility to subordinates.
• Set high standards of quality.
• Empower employees.
• Initiate suitable reward system that should be compatible, if not more
than the industry norms.
2. For Groups

a) One of the most important factors in the organization is the ‘work group’
around whom the organization functions. This includes the peer group and the
leader (boss)

b) More people prefer to be part of the group because the group accepts them.

c) Most people are capable of making higher contributions to the group’s

effectiveness.

Contd..
Following strategy is required to be adopted for group development based on the
above assumptions:

a) Invest in training and development of the group. Money and time spent on this is
an investment for the organization. Leaders should also invest in development
of skills and thus help create a position organizational climate.

b) Let the team flourish. Teams are the best approach to get the work done. Apart
from the above teams enjoy emotional and job satisfaction when they work in
groups.

c) Leaders should adopt team leadership style and not autocratic leadership style.
To do this, jobs should be allotted to the team and not to the individual.
Contd..
d) It is not possible for one individual (leader) to perform both, the leadership
and maintenance functions. It is therefore necessary for team members to
assist leader in performance of his duties.

e) Group should be trained in conflict management, stress management,

group decision-making, collaboration, and effective interpersonal
communication. This will improve organizational effectiveness.
Empowerment is the corner stone of the successful organizations.

f) Leaders should pay particular attention to the feelings of the employees. It

should be understood that suppressed feeling and attitudes adversely
affect problem-solving, personal growth and job satisfaction.

g) Development of group cohesiveness.

3. For Organizations

a) Create learning organization culture.

b) Adopt win-win strategy for sustained growth.

c) Create cooperative dynamics rather than competitive organizational

dynamics in the organization.

d) Needs and aspirations of the employees in the organization must be met. This
leads to greater participation of the employees. Organizations should adopt
developmental outlook and seek opportunities in which people can
experience personal and professional growth. Such orientation creates a self-
fulfilling prophecy.
Contd..
f) People must be treated with due respect and considered important.
The credit of success must be given to the employees unconditioned.

g) Promote organizational citizenship.

4. It is possible to create organizations that are humane, democratic and

empowering on one hand and high performing in terms of
productivity, quality of output, profitability, and growth on the other.
It is the responsibility of every entrepreneur to ensure that the needs
of the society are met.
 Lewin’s Change Model

Unfreezing

Refreezing Moving
 Kurt Lewin Theory of OD

He has provided two principle ideas viz.

1. 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.

2. The second contribution is the change itself. He has described a three- stage
process viz.

(a Unfreezing the old behaviour

(b)Moving to a new level of behaviour

(c )Refreezing the behavior at the new level

 Kurt Lewin’s Three –Stage Model :
as modified by Lippitt & others

1. Developing a need for change. (Lewin’s unfreezing phase)

2. 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
3. Clarifying or diagnosing the clients system’s problem
4. Examining alternative routes and goals; establishing goals and intentions of
actions
5. Transforming intentions into actual change efforts.Phases 3, 4 and
5 correspond to Lewin’s moving phase
6. Generalizing and stabilizing change. This corresponds to Lewin’s refreezing phase
7. Achieving a terminal relationship, that is, terminating the client-consultant
relationship
 Killman’s Five tracks
• Culture track
• Enhances trust, communication, sharing of information & IPR
• Management skills track
• New ways of coping with complex issues
• Team building track
• Infusing new culture, talents, purpose & work objectives
• Strategy structure track
• Aligning divisions, departments work group, jobs &all resources
• Reward system track
• Formulation of new system of Person – pay match based reward
systems
The Burke-Litwin Model of Organizational Change

(a) First-order change- transactional, evolutionary, adaptive, incremental, or continuous

change
(b) Second-order change- transformational, revolutionary, radical, or discontinuous change
n.b.. O. D. programs are directed toward both first-order and second order change with an
increasing emphasis on second –order transformational change.
First-Order Second-Order
1. Structure 1. Mission and Strategy
2. Management Practices 2. Leadership
3. Systems 3. Organizational Culture
(Transactional) (Transformational)

Distinguishing Organizational Climate and Organizational Culture.

Climate- people’s perceptions and attitudes about the organization

Culture- deep seated assumptions about values and beliefs that are enduring, often
unconscious and difficult to change
 ORGANIZATIONAL DEVELOPMENT( First order)
Management
Practices
Systems
Policies &
Structure
Procedures

Work
Unit Climate

Motivation

Task Individual
Individual
Requirements & Individual & Needs
Needs &
Individual & Values
Values
Organizational
Skills/Abilities
Performance
 ORGANIZATION DEVELOPMENT(Second Order)

External
Environment.

Leadership
Mission & Organizational
Strategy Culture

Individual &
Organizational
Performance
The Burke-Litwin Model of Organizational Performance and Change

External
Environment

Leadership
Mission & Organizational
Strategy Culture

Management Systems
Structure Practices (Policies &
Procedures)

Work Unit
Climate

Motivation Individual
Task Requires
Needs & Values
& Individual
Skills/ Abilities Individual &
Organizational
Performance
 Porras & Robertson Model of Organizational Change

Environment

Vision

Physical
Organizing Setting
Arrangements
Technology

Social Factors
1.Goals 1. Culture 1. Space confign. 1.Tools etc.
2.Strategies 2. Mgt. Style 2. Phyl. Ambience 2. I. T. .
3.Structure 3. Interaction 3. Interior Design 3. Job Design .
4.Admn.(p& p) 4. Informal patterns 4. Architl design 4. Work Flow D
5.Adm. Systems 5.Indl. Attributes 5. Tech.Expert.
6.Reward systm 6. Tech. Proc.
7.Ownership 7. Tech. systms
 Systems Framework
• Ludwig von Bertalanffy (1968)
• Offered a more comprehensive view of organizations
• NOT a theory of management - new way of
conceptualizing and studying organizations
• Four Strengths (“promises”) M. Scott Poole
– Designed to deal with complexity
– Attempts to do so with precision
– Takes a holistic view
– It is a theory of emergents - actions and outcomes at the
collective level emerge from the actions and interactions of the
individuals that make up the collective
 SYSTEMS THEORY-foundation of O. D.

•This theory views organizations as open systems in active exchange with their
environments.
•Systems theory is one of the most powerful conceptual tools available for
understanding the dynamics of organizations and organizational change.
Definitions of Systems:
•A system is a “set of objects together with relationships between the objects
and between their attributes.”
•A System is a set of “elements standing in interaction”.
•A system is “ an organized, unitary whole composed of two or more
independent parts,components, or sub-systems, and delineated by identifiable
boundaries from its environmental supra system”
•A system is an “arrangement of interrelated parts.
•A system denotes interrelatedness, interconnectedness and interdependency
among elements in a set that constitutes an identifiable whole or gestalt.
SYSTEM IN INTERACTION WITH ITS ENVIRONMENT

Sources of Transforming
Energy
Materials
Information Inputs
Mechm. Mechan Outputs Users
Human Re-
sources
External Interface
Internal Interface Feedback Mechanisms
Feedback Mechanisms
 Principles of General Systems Theory
• Laws that govern biological open systems can be applied to systems
of any form.
• Open-Systems Theory Principles
– Parts that make up the system are interrelated.
– Health of overall system is contingent on subsystem functioning.
– Open systems import and export material from and to the environment.
– Permeable boundaries (materials can pass through)
– Relative openness (system can regulate permeability)
– Second Principle of Thermodynamics (ENTROPY)
• Entropy must increase to a maximum
• Negentropy increases growth and a state of survival
– Synergy (extra energy causes nonsummativity--whole is greater than sum
of parts)
– Equifinality vs. “one best way.”
Characteristics of Organizations as Systems

• Input-Throughput-Output
– Inputs
• Maintenance Inputs (energic imports that sustain system)
• Production Inputs (energic imports which are processed to yield a productive outcome)
– Throughput (System parts transform the material or energy)
– Output (System returns product to the environment)
– TRANSFORMATION MODEL (input is transformed by system)
• Feedback and Dynamic Homeostasis
– Positive Feedback - move from status quo
– Negative Feedback - return to status quo
– Dynamic Homeostasis - balance of energy exchange
• Equivocality and Requisite Variety (Karl Weick)
– Equivocality (uncertainty and ambiguity)
– Requisite Variety (complex inputs must be addressed with complex processes)
Characteristics of Organizations as Systems
• Role of Communication
– Communication mechanisms must be in place for the organizational
system to exchange relevant information with its environment
• Boundary Spanners perform this function!
• Media Outlets are communication link between system & environment
– Communication provides for the flow of information among the subsystems
• Systems, Subsystems, and Supersystems
– Systems are a set of interrelated parts that turn inputs into outputs through
processing
– Subsystems do the processing
– Supersystems are other systems in environment of which the survival of the focal
system is dependent
• Five Main Types of Subsystems
– Production (technical) Subsystems - concerned with throughputs-assembly line
– Supportive Subsystems - ensure production inputs are available-import raw
material
– Maintenance Subsystems - social relations in the system-HR, training
– Adaptive Subsystems - monitor the environment and generate responses (PR)
– Managerial Subsystems - coordinate, adjust, control, and direct subsystems
Characteristics of Organizations as Systems

• Boundaries
– The part of the system that separates it from its environment
– Four Types of Boundaries (Becker, 1997)
• Physical Boundary - prevents access (security system)
• Linguistic Boundary - specialized language (jargon)
• Systemic Boundary - rules that regulate interaction (titles)
• Psychological Boundary - restricts communication (stereotypes, prejudices)
• The ‘Closed’ System
– Healthy organization is OPEN
– Do not recognize they are embedded in a relevant environment
– Overly focused on internal functions and behaviors
– Do not recognize or implement equifinality
– Inability to use feedback appropriately
– CO-DEPENDENT
Characteristics of Organizations as Systems

• McMillan & Northern (1995) on Enabling Co-dependency

– Asymmetrical communication status of the hierarchy
• Levels of authority
• Fear of Punishment
– The socially acceptable addiction
• Workaholics
• Addiction leads to more co-dependency
– The organization’s selective attention
• Money and power as distractions
• Focus on ends instead of means
– Skilled communication incompetence
• Deprived of useful feedback
• Emotion is masked
• First extension of Systems Theory into Management Practice -
CONTINGENCY THEORY
 ISSUES REGARDING SYSTEMS THEORY

1. All open systems are input-throughput-output mechanisms

2. Every system is delineated by a boundary. What is inside the boundary and what is outside
the boundary.
3. More exchange takes place inside the boundary than outside the boundary.
4. Open systems have purposes and goals
5. The law of entrophy states that all systems “run down” and disintegrate unless they
reverse the entropic process by importing more energy than they use.
6. Information is important to systems in several ways.
7. Feedback is information to the organization from the environment.
8. Feedback can be positive or negative
9. Deviation-correcting feedback e.g. satelite mission off target(negative): or return to earth
(positive)
10. Steady-state or dynamic homeostatis.Systems maintain a steady state or equilibrium point
and seek to maintain this equilibrium against disruptive forces, either internal or external.
11. All systems tend to get elaborated, differentiated,specialized & complex.Called
Differentiation requires coordination & integration
CONGRUENCE MODEL SHOWING ORGN. AS A SYSTEM

INFORMAL
ORGANIZATION

INPUT OUTPUT

Environment System
Strategy
Resources Formal Unit
Work
Organization
History Individual

People
 THE SIX-BOX MODEL-a diagnostic tool(Marvin Weisbord)
How do we manage What business
conflict among people? are we in?
with technologies? How do we
divide the work?
Purpose
Relation-
Structure
ships

Leadership

Does someone keep the

Helpful boxes in balance? Rewards
Mechanisms
Have we adequate
Do all needed tasks
coordinating
have incentives?
technologies?

Environment
 Action Research Model
Entry

Start-up
Adoption Assessment and Feedback

Separation
Action Planning
Evaluation and Change Management

Intervention
 Burke-Litwin
• Transformational factors
– External environment
– Mission/strategy
– Leadership
– Org. culture
• Transactional factors
– Management practices
– Work unit climate
– Structure and systems
– Tasks and skills
 Parallel Learning Structures:
WHAT IS IT?
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.

WHEN TO USE IT
• To develop and implement organization-wide innovations.
• To foster innovation and creativity within a bureaucratic system.
• To support the exchange of knowledge and expertise among performers.
• To capture the organization's collective expertise.

HOW TO USE IT
• Look for existing, informal exchanges that naturally occur among staff members.
• Have interested parties convene and develop a mission statement or list the outcomes.
• Determine what support (e.g., time, facilities, and technology) would facilitate the information exchange and
learning.
• Publicize when and where the exchanges take place.
• Establish a process for organizing and recording the corporate knowledge.
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