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  1. 1. Meaning of OD "Organizational development is a system wide application and transfer of behavioral science to the planned development, improvement, and reinforcement of strategies, structures, and processes that lead to organizational effectiveness." Scope The goal of OD is to enable organizations to enhance their effectiveness; to continually mature in response to changes in the external; to improve business performance through positive changes to people management, competence, communication, systems and structures. Weisbord presents a six-box model for understanding, thereby changing and improving, the organization: 1. Purposes: Are employees clear about the organization’s mission, purpose, and goals? Do they support the organization’s purpose? 2. Structure: How is the organization’s work divided? Is there an adequate fit between the purpose and the internal structure? 3. Relationship: What are the relationships between individuals, units or departments that perform different tasks, and between the people and requirements of their jobs? 4. Rewards: For what actions does the organization formally reward or punish members? 5. Leadership: Does leadership watch for "blips" among the other areas and maintain balance among them? 6. Helpful mechanism: Do planning, control, budgeting, and other information systems help organization members accomplish their goals?
  2. 2. Models of Planned Change Lewins planned change steps Lewin proposed an early model of change which described change as a three-stage process including "unfreezing, change and freezing." In this model, Lewin emphasizes that change is not a series of individual processes but rather one that flows from one process to the next. The first stage, or "unfreezing" involved overcoming inertia and dismantling the existing "mind set." The first stage involves getting over the initial defense mechanisms that people put up, such as denial, to avoid making a change. In the second stage, the change occurs. This is typically a period of confusion and transition where people are confused about the change and what may happen in the future. The third and final stage he called "freezing." The new mindset of the change begins to become the standard and one's comfort level returns to previous levels. Although some managers still use Lewin's model, its most important contribution is the idea that change should be thought of as a process instead of individual stages. Interventions An organization development intervention is a sequence of activities, actions, and events intended to help an organization improve its performance and effectiveness. Intervention design, or action planning, derives from careful diagnosis and is meant to resolve specific problems and to improve particular areas of organizational functioning identified in the diagnosis. OD interventions vary from standardized programs that have been developed and used in many organizations to relatively unique programs tailored to a specific organization or department.
  3. 3. This chapter serves as an overview of the intervention design process: It describes criteria that define effective OD interventions and identifies contingencies that guide successful intervention design. Finally, the various types of OD interventions presented in this book are introduced. Parts 3 through 6 of this book describe fully the major interventions used in OD today. The term “intervention” refers to a set of sequenced planned actions or events intended to help an organization increase its effectiveness. Interventions purposely disrupt the status quo; they are deliberate attempts to change an organization or subunit toward a different and more effective state. In OD, three major criteria define an effective intervention: (1) The extent to which it fits the needs of the organization; (2) The degree to which it is based on causal knowledge of intended outcomes; and (3) The extent to which it transfers change management competence to organization members. Designing interventions steps They include situational factors that must be considered in designing any intervention: the organization’s readiness for change, its change capability, its cultural context, and the change agent’s skills and abilities.
  4. 4. Readiness for Change Intervention success depends heavily on the organization being ready for planned change. Indicators of readiness for change include sensitivity to pressures for change, dissatisfaction with the status quo, availability of resources to support change, and commitment of significant management time. When such conditions are present, interventions can be designed to address the organizational issues uncovered during diagnosis. When readiness for change is low, however, interventions need to focus first on increasing the organization’s willingness to change. Capability to Change An organization’s change capability is a function of the change related knowledge and skills present in the organization, the resources and systems devoted to change, and the organization’s experience with change. First, managing planned change requires particular knowledge and skills (as outlined in Chapter 10), including the ability to motivate change, to lead change, to develop political support, and to sustain momentum. Second, change requires an infrastructure to support the transition. Program and project management offices, consulting resources, and shared models of the change process are necessary to oversee execution. Finally, an organization must have experience with and learning from change to have a change capability. If an organization does not have these resources, then a preliminary training intervention may be needed before members can engage meaningfully in intervention design.
  5. 5. Cultural Context: The national culture within which the organization is embedded can exert a powerful influence on members’ reactions to change, so intervention design must account for the cultural values and assumptions held by organization members. Interventions may have to be modified to fit the local culture, particularly when OD practices developed in one culture are applied to organizations in another culture. For example, a team-building intervention designed for top managers at an American firm may need to be modified when applied to the company’s foreign subsidiaries. Capabilities of the Change Agent Many failures in OD result when change agents apply interventions beyond their competence. In designing interventions, OD practitioners should assess their experience and expertise against the requirements needed to implement the intervention effectively. When a mismatch is discovered, practitioners can explore whether the intervention can be modified to fit their talents better, whether another intervention more suited to their skills can satisfy the organization’s needs, or whether they should enlist the assistance of another change agent who can guide the process more effectively. The ethical guidelines under which OD practitioners operate require full disclosure of the applicability of their knowledge and expertise to the client situation. Practitioners are expected to intervene within their capabilities or to recommend someone more suited to the client’s needs.
  6. 6. A group is informal and meets to solve short-term problems. A team solves long- term problems and includes more coordination and structure. Definition of a Team Any group of people involved in the same activity, especially referring to sports and work. A common definition of a team is that it comprises a group of people. § § § A team can involve as few as two people. A team is not a mere aggregate of individuals. A team success depends on the interdependent and collective efforts of various team members. § Team members are likely to have significant impacts on one another as they work together. Def of group A number of things or persons who have some relationship to one another. A subset of a culture or of a society. A common definition of a group is three or more individuals who interact around a common goal and have influence over one another. A group can develop into a team if it has a coordinated effort to reach a common goal. A group doesn't necessarily constitute a team, because a team requires a coordinated effort. A team is a special group characteristic that includes common resources and collective effort.
  7. 7. Intergroup Relations in Organizations Work groups and teams are the building blocks of organizations. Not surprisingly, then, considerable research attention in the organizational sciences is devoted to the study of the functioning and performance of work groups and teams. What Are “Intergroup Relations” Teams and work groups do not operate in a vacuum, they function in a context of interdependent relationships with other organizational groups. Just like team members need to coordinate their efforts for the team to function effectively, organizational groups fulfill a role as players in the team that is the organization. Organizational groups are, for instance, typically interdependent for their task performance. They need other groups to provide them with necessary information, products, or services. They also rely on other groups to take their interests into account and resolve potential conflicts of interest in a constructive manner. Action research: A strategy for generating and acquiring knowledge that managers can use to define an organization’s desired future state Used to plan a change program that allows the organization to reach that state
  8. 8. Steps in Action Research Diagnosing the organization Recognize problems and need to solve problems Gap perceived between actual and desired performance. A complex process to distinguish between symptoms and causes Information should be collected from all levels of the organization and outside stakeholders such as customers and suppliers.
  9. 9. Determining the desired future state A difficult planning process including deciding what the structure and strategy should be Managers need to work out various alternative courses of action that could move the organization to where they would like it to be. Implementing action Identify impediments to change Decide who will be responsible for making the changes and controlling the change process External change agents: people who are outside consultants who are experts in managing change Internal change agents: managers from within the organization who are knowledgeable about the situation to be changed. Decide which specific change strategy will most effectively unfreeze, change, and refreeze the organization Top-down change: change that is implemented by managers at a high level in the organization Bottom-up change: change that is implemented by employees at low levels in the organization and gradually rises until it is felt throughout the organization. Evaluating the action Evaluating the action that has been taken and assessing the degree to which the changes have accomplished the desired objectives
  10. 10. Institutionalizing action research Must become a norm of the organization Necessary at all levels of management Members at all levels must be rewarded for their efforts. The nine steps in the AR process are as follows: 1. Identifying and limiting the topic 2. Gathering information 3. Reviewing the related literature 4. Developing a research plan 5. Implementing the plan and collecting data 6. Analyzing the data 7. Developing an action plan 8. Sharing and communicating the results 9. Reflecting on the process ORG DESIGN Goal is to translate strategies into realized ones The manner in which a management achieves the right combination of differentiation and integration of the organization's operations, in response to the level of uncertainty in its external environment. Differentiation refers to the subdivision of functional or departmental units, each concentrating on a particular aspect of the organization's operations. Integration refers to the linking of
  11. 11. differentiated units to achieve unity of effort in working toward organization's goals. In times of high uncertainty, greater organizational effectiveness is achieved through high differentiation coupled with high integration. In times of low uncertainty, low differentiation and low integration are more effective. 3 COMPONENTS of OD ARE  Structure  Processes  Procedures Components of organizational design An effective organization structure would be one which can successfully cope up with the demand and constraints which the organization faces. A manager must be aware of the building blocks of an organizational structure. What constitute an organization structure is called the components of organizational design. Identification of the factors which would be relevant to organizational design is somewhat complicated because many of these components lack empirical support. Organisational Design: Organizational design is concerned with making decision about the forms of coordination control and motivation that best fit the enterprise. In making these decisions, it is necessary to consider external factors like market and internal factors like need's and aspirations of the members of enterprise. Organizational design is intimately concerned with the way in which the decision making is centralized, shared or delegated and with way the enterprise is governed. “Organization design is a process that involves decisions
  12. 12. about six key elements, work specialization, departmentalization, chain of command, span of control, centralization, decentralization and formalization”. DETERMINANTS OF ORGANIZATIONAL DESIGN The factors which affect the organization in its becoming fit in all conditions for the attainment of organizational goal are called determinants of organization design. These factors may be identified as: A. Strategy and Goals B. Environment C. Technology D. Size/life cycle e. Culture. Strategy and Goals: For the accomplishment of organizational goals and missions, managers have to select specific strategy and design option that will help organization achieve its purpose and goals within its competitive environment. A strategy is a plan for interacting with competitive environment to achieve organizational goals. Strategy goals are defined where the organisation wants to go. Strategy defines it will get that . Goal—15% Annual sales growth Strategy to achieve may be -Aggressive adv. or -Motivating sale people -Acquiring other business that produces same product. Etc -etc any numbers Environment: Everything which surrounds and affect the organization in which it operates is the environment of the organization like, consumers, trade unions, technological breakthroughs, Govt. regulations, international happenings, climatic conditions, political ups and downs. Technology: It refers to the tools techniques and actions used to transform environmental inputs into organizational output. The strategy cannot be translated directly into output. We have to design different technologies for different production process (batch or mass)
  13. 13. systems, differ control, system have to be created to maintain efficiency and efficacy. Therefore, technology will became a determinant for what type of structure is to be designed. Size and life cycle: Generally size of an organization is related to the age of organ. But it is not always true as lifecycle theories feel it. An organization may remain small although it may grow in age. It has been found that organization’s are more structurally differentiated with increase in size. Smaller organizations tend to centralize themselves as compared to large organs. Age of the organization makes it mature. Organization’s culture is the underlying set of key values, beliefs, understandings and norms shared by employees. These underlying values may pertain to ethical behavior, commitment to employees, efficiency, or customer service and they provide glue to hold the organization together. Organization culture is unwritten but can be observed from the stories, slogans, ceremonies, dress and office layout. If the top manager is autocratic by nature, he/she would prefer an organization arrangement which would allow him or he to have closer control over people and operations. Organizational culture may or may not allow him to play autocratic role. The studies of troubled organization revealed that the strategy, organizational structure and culture will often reflect the personality and fantasies of top managers.
  14. 14. ENVIRONMENT INTERFACE FOR CHANGE An organization interacts with the external environment, exchanges resources with it, influences it, and in turn is influenced by the various variables therein. Different elements of the environment interact with the various subsystems of the organization in different ways and to different degrees. Exchange of Information Since an organisation is a part of its environment, it must exchange information with the environment. The organisation as a system, with information processing sub-systems, operates in such a manner as to keep itself fully informed of its environment. It scans the environmental forces and their behaviour and collects important information to be used for decision-making and control purposes. Exchange of Resources An organisation in an open system who gets inputs from the environment and in turn supplies its output to the environment. The organisation receives inputs in the form of finance, materials, labour, equipment and so on from the external environment through contractual and other arrangements. The organisation is dependent on the external environment for the disposal of its output. This is also an interaction process—perceiving the needs of the external environment and catering to them, that is, satisfying the needs and expectations of the customers. Besides customers, the management has to meet the demands of other groups such as shareholders, creditors, workers, suppliers of materials, general public and so on.
  15. 15. Exchange of Influence The external environment holds considerable power over the organisation both by virtue of its being more global and inclusive and also by virtue of its being more global and inclusive and also by virtue of its command over information and other inputs. It offers a range of opportunities, incentives and rewards, on the one hand, and a set of constraints, threats and restrictions, on the other. The influence of environment on the organisation is universal as it depends on the environment not only for procurement of inputs, but also for sale of its output. Sometimes, the organisation may also be in a position to wield considerable power over some of the elements of the external environment by virtue of its command over resources and information. The dependence and influence between the organisation and the external environment is reciprocal to a large extent. Organisational dependence on the environment means environmental power and control over the organisation. Organizational Decision Making Leaders are decision makers. The effort they commit to pursuing their organisation's vision or goal involves direction on how to prioritise effort, which resources can be employed and who should take delegated responsibility for activities. Whether they are the manager of a football team, directing tactics and substitutions, or an executive leader in a manufacturing company or government, they are required to employ decision making skills. In an increasingly complex world with ever improving levels of information connectivity, scarcity of resources and finance, the need to meet stakeholder expectations and the requirement for increasingly
  16. 16. transparent decisions, organisations succeed or fail on the quality of their decision making. Organisational decision making models • “Organizational decision making is the process by which one or more organizational units make a decision on behalf of the organization” – Rational model – Political model – Garbage can model – Process model