Module 2:

Organization Development (OD) Definition

Organization development is an effort

(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

behavioural-science knowledge

– Richard Beckhand

Characteristics of OD

1. Focus on Groups and Processes: OD is more about how people work together and the
processes they use, rather than just the work they do.

2. Team-Based Learning: OD believes that teams are the best way to learn and improve how an
organization works.

3. Collaborative Culture: OD emphasizes working together to create a positive and supportive

work environment within teams and across the whole organization.

4. Systemic View: OD looks at the entire organization as a system, considering how different
parts interact and affect each other.

5. Action-Oriented Research: OD uses practical research to identify problems and find

solutions, then takes action to implement those solutions.

6. Change Agent: OD often involves a trained professional who helps guide the change process
and supports the organization.

7. Continuous Improvement: OD views change as an ongoing process, not a one-time event.

Organizations should always be looking for ways to improve.

History / Evolution of OD

The Four Main Stems of OD Development

OD evolved like a mangrove tree, with four main stems (key developments) shaping its history:

1. Laboratory Training Stem:

o What it is: Learning through unstructured small-group activities where participants

observe and improve their own behavior.
 o When it started: Around 1946, with experiments in group discussions for behavior
change.

o Key event: A workshop in 1946 in Connecticut, sponsored by MIT’s Research Center

for Group Dynamics, influenced its emergence.

2. Survey Research and Feedback Stem:

o What it is: Using employee surveys followed by group discussions to improve

workplace relationships and processes.

o Where it developed: At the University of Michigan’s Survey Research Center (SRC).

o Focus: Improving relationships between managers, supervisors, and employees by

addressing their work challenges collaboratively.

3. Action Research Stem:

o What it is: Solving organizational problems by involving participants directly in the

research and using the findings for change.

o Origins: Action research gained traction through the work of scholars like Kurt Lewin
in the 1940s-50s.

o Integration: It is a recurring method across other OD stems lik

e laboratory training and survey feedback.

4. Socio-Technical and Socio-Clinical Stem:

o What it is: Approaches that address both the social (human) and technical (work
process) aspects of organizations.

o Origins: The Tavistock Institute in England, influenced by psychotherapy and family

therapy, played a key role in the 1920s.

o Applications: Focused on practical help for families, organizations, and communities,

integrating technical and social needs.

Second Generation OD

Second-generation OD represents a more ambitious and transformative approach to organizational

change. While traditional OD focused on incremental improvements, this newer generation aims for
radical transformations.

Key Characteristics of Second-Generation OD:

 Focus on Transformation: Rather than merely tweaking existing systems, second-generation

OD strives for fun’’’damental shifts in organizational culture, structure, and strategy.

 Top Leadership Involvement: Effective transformation requires strong support and

commitment from top leadership.

 Visioning and Experimentation: Organizations need a clear vision for the future and a
willingness to experiment with new ideas and approaches.
  Managed and Cross-Functional Teams: These teams are empowered to make decisions and
solve problems, leading to greater agility and innovation.

 Redefining Managerial Roles: As teams become more self-managed, managers need to

adapt their roles to focus on coaching, mentoring, and strategic thinking.

Fundamental Strengths of OD

• Knowledge of how organisations work

• Knowledge of how change occurs

• Knowledge of how to intervene in organisations to produce desired changes

• Knowledge of how to diagnose and solve problems

Key Principles for Growth and Relevance in OD

1. Change Requires a Holistic Approach:

o Changing one part of the organization (a subsystem) also requires changes in its
environment or other related parts. Everything is interconnected.

2. Alignment Across Levels:

o When changing behaviors in one layer of the organization, complementary changes

need to happen above and below that level to ensure alignment and success.

3. Start Where the Problem Is:

o Changes should begin in areas experiencing stress or dissatisfaction, as these can be

strong motivators for improvement.

4. Begin with Leadership for Big Changes:

o For major changes in hierarchical organizations, it’s best to start with the policy-
making leaders, as they set the tone and direction.

5. Formal and Informal Structures Matter:

o Both the official structures (rules, policies, hierarchy) and informal structures
(culture, relationships, unwritten norms) must be considered when planning
changes.

6. Involve Everyone in the Process:

o The success of planned changes improves when people at all levels of the
organization are involved in:

 Fact-finding: Understanding what’s wrong.

 Diagnosing: Identifying what needs to change.

 Goal-setting: Defining what success looks like.

  Testing: Experimenting with new ideas before fully implementing them.

Importance of Change

• Managing Change in an Organization Efficiently

• Maintain Trust Across the Organization

• Growth of the Organization

• Training Employees Organization-Wide for the Changes

• Employee Resistance Management

• Cost Management

• Employee Burnout Control

Reasons for Change

• Crisis

• Performance gaps

• New technology

• Identification of opportunities

• Reaction to internal and external pressures

• Mergers and acquisitions

• Change for the sake of change

• Something sounds good

• Planned abandonment

What organisations can change?

• Mission, vision and strategy

• Technology

• Human behavioural changes

• Task job design

• Organisational structure

• Organisational culture

Change Drivers

• Global and local

• Environmental

• Technological

• Legal

• Political

• Social

• Cultural

TQM – Total Quality Management

Total Quality Management (TQM) is a management approach that focuses on long-term success
through customer satisfaction. It involves all members of an organization participating in improving
processes, products, services, and the culture in which they work.

1. Customer Focus:

o Meeting or exceeding customer expectations is the central goal.

o Feedback from customers is used to improve products and services.

2. Continuous Improvement:

o A commitment to constantly improving processes, products, and services over time.

o Uses techniques like Plan-Do-Check-Act (PDCA) cycles.

3. Employee Involvement:

o All employees, regardless of their role, are responsible for quality.

o Encourages teamwork and empowers employees to contribute to quality initiatives.

4. Process-Centered Approach:

o Focuses on optimizing workflows and processes rather than just outcomes.

o Emphasizes identifying and eliminating inefficiencies or defects.

5. Integrated System:
 o Quality improvement is integrated into every aspect of the organization, from
leadership to operations.

o Departments collaborate rather than operate in silos.

6. Fact-Based Decision Making:

o Decisions are made using data and analysis to ensure improvements are effective.

o Tools like statistical process control (SPC) are often used.

7. Strategic Focus on Quality:

o Quality is treated as a long-term strategic objective, not a short-term fix.

Benefits of TQM

 Increased Customer Satisfaction: High-quality products and services enhance customer

loyalty.

 Improved Efficiency: Streamlined processes reduce waste and lower costs.

 Better Employee Morale: Employee involvement fosters a sense of ownership and pride in
their work.

 Competitive Advantage: A reputation for quality can set a company apart in the
marketplace.

 Higher Profitability: Better quality leads to fewer defects, lower rework costs, and higher
sales.

Examples of TQM in Action

1. Toyota:
Uses the "Kaizen" (continuous improvement) philosophy to enhance quality and efficiency
across its operations.

2. Apple:
Focuses on innovation and user satisfaction by integrating customer feedback into product
design and development.

3. Coca-Cola:
Implements strict quality control systems to maintain consistent product quality worldwide.

Business Process Re-engineering

Business Process Reengineering (BPR) is a strategy to radically redesign business processes to

improve productivity, quality, customer satisfaction, and employee satisfaction. BPR is often used
when a company is facing challenges like growing competition or declining market share.

Principles of Business Process Reengineering (BPR)

1. Organize Around Outcomes, Not Tasks:

o Focus on the desired results of the process rather than individual tasks.

o Example: Instead of assigning separate teams for order-taking, shipping, and

invoicing, one team handles the order end-to-end to ensure faster and smoother
delivery.

2. Identify and Prioritize Processes for Redesign:

o Evaluate all organizational processes, identify inefficiencies, and prioritize which ones
to redesign based on their impact.

o Example: A manufacturing company might prioritize reengineering its supply chain

to reduce costs and delivery time.

3. Integrate Information Processing with Real Work:

o Combine information-related tasks with the actual work that generates the
information to avoid delays.

o Example: A customer service system where agents input data directly during
customer interactions rather than relying on separate data-entry teams.

4. Treat Geographically Dispersed Resources as Centralized:

o Use technology to coordinate and manage dispersed resources as if they were

centralized.

o Example: A global company using cloud-based tools to manage inventory and

operations across multiple locations in real-time.

5. Link Parallel Activities in Workflow:

o Coordinate parallel tasks rather than waiting to integrate their results after
completion.

o Example: In a product design process, engineers and marketers collaborate

simultaneously instead of working sequentially.

6. Put Decisions Where the Work Happens:

o Empower employees to make decisions at the point of action and build quality
control directly into the workflow.

o Example: A frontline employee in a retail store is authorized to offer discounts to

resolve customer complaints without escalating the issue.

7. Capture Information Once and at the Source:

o Ensure data is collected only once, directly at its origin, to avoid redundancy and
errors.

o Example: A hospital capturing patient data during registration, which is then used
across all departments.
Key Features of BPR

1. Radical Redesign:

o Unlike gradual changes, BPR involves a complete rethinking of processes to achieve

major improvements.

2. Focus on Core Processes:

o It targets the organization’s critical workflows that directly impact customer

satisfaction and business outcomes.

3. Customer-Centric Approach:

o Processes are redesigned with the goal of delivering greater value to the customer.

4. Use of Technology:

o Leverages technology to automate processes and enable innovative ways of doing

business.

5. Cross-Functional Teams:

o Encourages collaboration across departments to eliminate silos and improve

communication.

6. Emphasis on Outcomes:

o Focuses on achieving measurable results like cost reduction, faster turnaround times,
and higher quality.

Steps in BPR

1. Identify Processes to Be Redesigned:

o Select key processes that are inefficient or critical to success.

2. Analyze Current Processes:

o Map out the existing workflows to understand their inefficiencies and bottlenecks.

3. Redesign Processes:

o Create new workflows that are simpler, faster, and more effective, often using
innovative approaches.

4. Implement Changes:

o Introduce the new processes, train employees, and deploy supporting technologies.

5. Monitor and Improve:

o Continuously measure the performance of redesigned processes and make further

refinements if needed.
Benefits of BPR

1. Increased Efficiency:

o Streamlined processes save time and reduce costs.

2. Improved Customer Satisfaction:

o Faster and higher-quality service meets customer expectations better.

3. Cost Reduction:

o Elimination of redundant steps and waste lowers operational expenses.

4. Greater Flexibility:

o Organizations become more agile and adaptable to market changes.

5. Enhanced Innovation:

o Encourages fresh thinking and innovative solutions.

Examples of BPR in Action

1. Ford Motor Company:

o Reduced invoice discrepancies by 75% by reengineering their procurement process

to rely on automation and real-time tracking.

2. Amazon:

o Redesigned its supply chain and logistics processes, enabling fast delivery times and
enhancing customer satisfaction.

3. IBM:

o Streamlined its internal workflows and customer service processes, leading to

significant cost savings and faster response times.

Socio-Technical Systems

A socio-technical system is a framework that recognizes the interdependence of social and technical
elements within an organization. It emphasizes the importance of designing work systems that
consider both the human and technological factors.

Key Principles of Socio-Technical Systems:

 Human-Centered Design: Prioritizes the needs and capabilities of employees.

 Collaborative Work: Encourages teamwork and cooperation.

 Empowerment: Gives employees autonomy and responsibility.

 Continuous Improvement: Fosters a culture of innovation and learning.

 Flexibility: Adapts to changing circumstances and emerging technologies.

Strategies for Implementing Socio-Technical Systems:

1. Natural Work Teams:

o Groups employees together based on their skills and the tasks they perform.

o Empowers teams to make decisions and solve problems.

o Encourages cross-training and skill development.

2. Flexible Work Schedules:

o Allows employees to choose their work hours and locations.

o Improves work-life balance and job satisfaction.

o Can increase productivity and reduce absenteeism.