Dilfraz Singh, Lovely Professional University Unit 1: Introduction to Organisation Development

Unit 1: Introduction to Organisation Development Notes

CONTENTS

Objectives

Introduction

1.1 Definition of Organization Development

1.2 Nature and Scope of OD

1.3 Historical Perspective of Organisation Development

1.3.1 Early Development

1.3.2 Modern Development – Second Generation OD

1.4 Values, Assumptions and Beliefs in OD

1.4.1 OD Assumptions

1.4.2 Values of OD

1.5 System Theory of OD

1.5.1 Nature of System

1.5.2 Congruence among System Elements

1.5.3 Socio-technical System Theory and Open System Planning

1.6 Implications of OD Values and Assumptions

1.7 Summary

1.8 Keywords

1.9 Review Questions

1.10 Further Readings

Objectives

After studying this unit, you will be able to:

 Define Organisational development

 Explain OD history-covering the early and the modern developments of the concept of OD

 Explain values, assumptions and beliefs in OD

Introduction

“Everybody has accepted by now that change is unavoidable. But that still implies that change
is like death and taxes—it should be postponed as long as possible and no change would be
vastly preferable. But in a period of upheaval, such as the one we are living in, change is the
norm.”

—Peter Ducker, Management Challenges for the 21st Century.

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Notes Organisational Development (OD) comprises of a special set of organisational change methods.
It is a planned, systematic process of organisational change based on behavioral science research
and theory. The goal of OD is to create adaptive organisations capable of transforming and
reinvesting themselves so as to remain effective. OD draws from psychology, sociology and
anthropology. It is based on many well established principles regarding the behavior of
individuals and groups in the organisations.

What was earlier popularly known as Organisation Development (OD) is currently christened
as Organisational Change and Development (OCD), though such label is widely used in the
academic institutions, primarily to focus on the changes the organisations are expected to embrace
and their role as “drivers of change.”

The field of OCD emerged as an independent discipline in the late 1950s. Taking “insights from
group dynamics and the theory and practice of planned change,” it has grown as an applied
behavioral science used effectively to solve the critical problems confronting the various facets
and dynamics which are both internal and external to organisations today.

Notes OD involves organisational reflection, system improvement, planning, and self-

analysis.

In other words, it is the planned change to a company to enable growth (or change) in an
effective way Relative to consulting.

At the core of OD is the concept of an organisation, defined as two or more people working
together toward one or more shared goals. Development in this context is the notion that an
organisation may become more effective over time at achieving its goals. OD is a long range
effort to improve organisation’s problem solving and renewal processes, particularly through
more effective and collaborative management of organisational culture, often with the assistance
of a change agent or catalyst and the use of the theory and technology of applied behavioral
science.

1.1 Definition of Organization Development

Organisation development is a system-wide application of behavioral science knowledge to the

planned development and reinforcement of organisational strategies, structures, and processes
for improving an organisation’s effectiveness. (Cummings and Worley, Organisation Development
and Change, Sixth Edition, South-Western Publishing, 1997, p.2.)

 Organisation development, according to Richard Beckhard, is defined as:

 A planned effort

 Organisation-wide

 Managed from the top

 To increase organisation effectiveness and health

 Through planned interventions in the organisation’s ‘processes’, using behavioral

science knowledge.

 According to Warren Bennis, Organisation Development (OD) is a complex strategy

intended to change the beliefs, attitudes, values, and structure of organisations so that
they can better adapt to new technologies, markets, and challenges.

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 Warner Burke emphasizes that OD is not just “anything done to better an organisation”; it Notes
is a particular kind of change process designed to bring about a particular kind of end
result.

 OD is a systematic application of behavioral science knowledge to the planned development

and reinforcement of organisational strategies, structures and processes for improving an
organisation’s effectiveness. (Cummings and Worley, 1993)

Analysis of the Definitions

The definitions so analyzed contain the elements which are important for OD. To summarize,
here are the primary distinguishing characteristics of organisational developments:

 OD focuses on culture and processes.

 OD focuses on the human and social side of the organisation.

 OD realize on the action research model with extensive participation by client system
participation.

 OD takes a developmental view that aims at the betterment of both individual and the
organisation i.e., “win-win” solutions.

 It encourages the involvement and participation by all the level of organisation in the
problem solving and decision-making.

1.2 Nature and Scope of OD

1. OD is a Long-term Effort: which means that organisational change and development take
long time in fact it is a never ending journey of continuous change for organisation
effectiveness.

2. Supported by Top Management: The OD programmers seeks the serious attention and
commitment from the top management for achieving it’s objectives of improvements.

3. OD is a Learning Process: which means the process of interaction, listening and self-
examining which facilitates individual, team and organisational learning.

4. OD is visioning Processes: which mean the organisation members develop a picture of the
desired future that includes the humanistic approach to make that picture a reality.

5. OD is an Empowerment Process: which means those leadership behaviors and human

resource practices that enable organisation members to develop and use their talents as
fully as possible towards organisational growth and success.

6. Contractual Relationship: Although neither the sponsoring organisation nor the change
agent can be sure at the outset of the exact nature of the problem or problems to be dealt
with or how long the change agent’s help will be needed, it is essential that some tentative
agreement on these matters be reached. The sponsoring organisation needs to know
generally what the change agent’s preliminary plan is, what its own commitments are in
relation to personal commitments and responsibility for the program, and what the change
agent’s fee will be. The change agent must assure himself that the organisation’s, and
particularly the top executives’, commitment to change is strong enough to support the
kind of self analysis and personal involvement requisite to success of the program.
Recognizing the uncertainties lying ahead on both sides, a termination agreement
permitting either side to withdraw at any time is usually included.

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Notes 7. Change Agent: A change agent in the sense used here is not a technical expert skilled in
such functional areas as accounting, production, or finance. He is a behavioral scientist
who knows how to get people in an organisation involved in solving their own problems.
His main strength is a comprehensive knowledge of human behavior, supported by a
number of intervention techniques. The change agent can be either external or internal to
the organisation. An internal change agent is usually a staff person who has expertise in
the behavioral sciences and in the intervention technology of OD.

Notes Beckhard reports several cases in which line people have been trained in OD and
have returned to their organisations to engage in successful change assignments. In the
natural evolution of change mechanisms in organisations, this would seem to approach
the ideal arrangement.

Qualified change agents can be found on some university faculties, or they may be private
consultants associated with such organisations as the National Training Laboratories
Institute for Applied Behavioral Science Washington, or University Associates (San Diego,
California), and similar organisations.

The change agent may be a staff or line member of the organisation who is schooled in OD
theory and technique. In such a case, the “contractual relationship” is an in-house agreement
that should probably be explicit with respect to all of the conditions involved except the
fee.

8. Sponsoring Organisation: The initiative for OD programs comes from an organisation

that has a problem. This means that top management or someone authorized by top
management is aware that a problem exists and has decided to seek help in solving it.
There is a direct analogy here to the practice of psychotherapy: The client or patient must
actively seek help in finding a solution to his problems. This indicates a willingness on the
part of the client organisation to accept help and assures the organisation that management
is actively concerned.

9. Applied Behavioral Science: One of the outstanding characteristics of OD that distinguishes

it from most other improvement programs is that it is based on a “helping relationship.”
The change agent is not a physician to the organisation’s ills; he does not examine the
“patient,” make a diagnosis, and write a prescription. Nor does he try to teach organisational
members a new inventory of knowledge which they then transfer to the job situation.
Using theory and methods drawn from such behavioral sciences as psychology, sociology,
communication, cultural anthropology, organisational behaviour economics, and political
science, the change agent’s main function is to help the organisation define and solve its
own problems. The basic method used is known as action research. This approach, which
is described in detail later, consists of a preliminary diagnosis, collecting data, feedback of
the data to the client, data exploration by the client group, action planning based on the
data, and taking action.

10. System Context: OD deals with a total system — the organisation as a whole, including its
relevant environment — or with a sub-system or systems — departments or work
groups — in the context of the total system.

Example: Parts of systems such as individuals, cliques, structures, norms, values, and
products are not considered in isolation; the principle of interdependency, that is, that change in
one part of a system affects the other parts, is fully recognized.

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Thus, OD interventions focus on the total culture and cultural processes of organisations. Notes
The focus is also on groups, since the relevant behavior of individuals in organisations
and groups is generally a product of group influences rather than personality.

11. Improved Organisational Performance: The objective of OD is to improve the

organisation’s capacity to handle its internal and external functioning and relationships.
This would include such things as improved interpersonal and group processes, more
effective communication, enhanced ability to cope with organisational problems of all
kinds, more effective decision processes, more appropriate leadership style, improved
skill in dealing with destructive conflict, and higher levels of trust and cooperation among
organisational members. These objectives stem from a value system based on an optimistic
view of the nature of man — that man in a supportive environment is capable of achieving
higher levels of development and accomplishment. Also essential to organisation
development and effectiveness is the scientific method — inquiry, a rigorous search for
causes, experimental testing of hypotheses, and review of results. Finally, the democratic
process is viewed as having a legitimate, and perhaps dominant, role in the highly effective
organisation.

12. Organisational Self Renewal: The ultimate aim of the outside OD practitioner is to “work
himself out of a job” by leaving the client organisation with a set of tools, behaviors,
attitudes, and an action plan with which to monitor its own state of health and to take
corrective steps toward its own renewal and development. This is consistent with the
systems concept of feedback as a regulatory and corrective mechanism.

1.3 Historical Perspective of Organisation Development

1.3.1 Early Development

The history of organisation development is rich with the contributions of behavioral scientists
and practitioners. Systematic organisation development activities have recent history.

Kurt Lewin played a key role in the evolution of organisation development as it is known
today. As early as World War II, Lewin experimented with a collaborative change process
(involving himself as consultant and a client group) based on a three-step process of planning,
taking action, and measuring results. This was the forerunner of action research, an important
element of OD, which will be discussed later. Lewin then participated in the beginnings of
laboratory training, or T-Groups, and, after his death in 1947, his close associates helped to
develop survey-research methods at the University of Michigan. These procedures became
important parts of OD as developments in this field continued at the National Training
Laboratories and in growing numbers of universities and private consulting firms across the
country.

The failure of off-site laboratory training to live up to its early promise was one of the important
forces stimulating the development of OD. Laboratory training is learning from a person’s
“here and now” experience as a member of an ongoing training group. Such groups usually
meet without a specific agenda. Their purpose is for the members to learn about themselves
from their spontaneous “here and now” responses to an ambiguous hypothetical situation.
Problems of leadership, structure, status, communication, and self-serving behavior typically
arise in such a group. The members have an opportunity to learn something about themselves
and to practice such skills as listening, observing others, and functioning as effective group
members. As formerly practiced (and occasionally still practiced for special purposes), laboratory
training was conducted in “stranger groups,” or groups composed of individuals from different
organisations, situations, and backgrounds. A major difficulty developed, however, in

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Notes transferring knowledge gained from these “stranger labs” to the actual situation “back home”.
This required a transfer between two different cultures, the relatively safe and protected
environment of the T-Group (or training group) and the give-and-take of the organisational
environment with its traditional values. This led the early pioneers in this type of learning to
begin to apply it to “family groups” — that is, groups located within an organisation. From this
shift in the locale of the training site and the realization that culture was an important factor in
influencing group members (along with some other developments in the behavioral sciences)
emerged the concept of organisation development.

Systematic organisation development activities have a recent history and, to use the analogy of
the mangrove tree, have at least four important trunk stems. They are as follows:

 Laboratory Training Stem: Laboratory training began to develop about 1946 from various
experiments. It is importantly involving unstructured small group situations in which
participants learn from their own actions and the group’s evolving dynamics. The major
contributions to this concept were from behavioural scientists Kurt Lewin followed by
experts Robert Tannebaum, Chris Argyris, Douglas Mc Gregor, Herbert Shepard, Robert
Blake, Jane Mouton and Richard Beckhard.

 Survey Research and Feedback Stem: It is the second major stem in the history of
Organisation development. It involves a specialised form of organisation research. The
research was conducted for years by staff members at the Survey Research centre of the
University of Michigan.

The effectiveness of these studies were more than the traditional training courses as it
involved the system of human relationships as a whole and deals with each manager,
supervisor, and employee in the context of his own job, his own problems, and his own
work relationships.

The major contributors were Rensis Likert, Floydd Mann and others.

 Action Research Stem: Action research is the third stem which is a collaborative, client
consultant inquiry. The scholars and practitioners who have invented and utilized action
research in the evolution of OD were William F. Whyte and Hamilton. Kurt Lewin also
conducted several experiments in the mid 1940’s and early 1950’s. This approach, today is
as one of the most important methods for OD interventions in organisations.

 Socio Technical and Socio-clinical Stem: This is the fourth stem in the history of OD to
help groups and organisations. The major contributions were made by W.R. Bion, John
Richman, Eric Trist and others. The socio technical approach focussed on the non executive
ranks of organisations and especially the redesign of work.

1.3.2 Modern Development – Second Generation OD

In recent years, serious questioning has emerged about the relevance of OD to managing change
in modern organisations. The need for “reinventing” the field has become a topic that even
some of its “founding fathers” are discussing critically. Since the environment is becoming
turbulent the context of OD has dramatically changed throughout 1980’s and 1990’s. The second
generation OD has focus on the Organisational Transformation, Organisation culture, Learning
organisations, intensified interest in teams, Total Quality Management (TQM), Quality of
work life, etc.

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1.4 Values, Assumptions and Beliefs in OD Notes

A set of values, assumptions and beliefs constitutes an integral part of organisation development,
shaping the goals and methods of the field and distinguishing OD from other improvement
strategies. Let us define the terms values, beliefs and assumptions.

 A belief is a proposition about how the world works that the individual accepts as true; it
is a cognitive fact of the person.

 Values are also beliefs and are defined as “Beliefs about what a desirable is or a good and
what an undesirable is or a bad (e.g., dishonesty).

 Assumptions are beliefs that are regarded as so valuable and obviously correct that they
are taken for granted and rarely examined or questioned.

1.4.1 OD Assumptions

People react to how they are treated. (Better treatment results in better productivity.)

 Work must meet the individual’s needs and the organisation’s needs.

 Most people are motivated by challenging and meaningful work; not controls threats and
punishment.

 Basic building blocks of the organisation are groups—therefore the units of change are
groups.

 Organisations suppress feelings, but this also suppresses commitment.

 Groups that learn to work using open and constructive feedback become better able to be
productive.

 People work best in supportive and trusting environments.

 Change is best implemented when people are part of the change process.

1.4.2 Values of OD

Values have always been an integral part of OD. The three important early statements regarding
OD values that had major impact on the field given are as follows:

 According to Warren Bennis OD practitioners or change agents share a set of normative

goals based on their humanistic/democratic philosophy. He listed the normative goals as
follows:

 Improvement in interpersonal competence.

 A shift in values so that human factors and feelings come to be considered legitimate.

 Development of increased understanding between the working groups in

organisations to reduce tensions.

 Development of better methods of conflict resolution.

 Development of organic rather than mechanical system.

 According to Richard Beckhard emphasize on the values held by OD practitioners as

follows:

 The basic building blocks of the organisations are teams.

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Notes  People affected by change should be allowed active participation and sense of
ownership of the change.

 According to Robert Tannebaum the important shifts in values was occurring and he
listed these values in transition as follows:

 Away from a view of people as essentially bad towards a view from people as
basically good.

 Away from avoidance of negative evaluation of individuals towards confirming

them as human beings.

 Away from avoidance of risk taking towards willingness to take risk.

 These values and assumptions may not seem profound today, but in 1950’s they
represented a radical departure from accepted beliefs and assumptions

Self Assessment

Fill in the blanks:

1. According to Warren Bennis, …………………….. is a complex strategy intended to change

the beliefs, attitudes, values, and structure of organisations so that they can better adapt to
new technologies, markets, and challenges.

2. The OD programmer seeks the serious attention and commitment from the …………………
for achieving it’s objectives of improvements.

3. A …………………. in the sense used here is not a technical expert skilled in such functional
areas as accounting, production, or finance.

4. ………………….. focus on the total culture and cultural processes of organisations.

5. The objective of OD is to improve the …………………… to handle its internal and external
functioning and relationships.

1.5 System Theory of OD

A second foundation of organisation development is system theory, which views organisation

as open systemic active exchange with their environments. This theory explains how its
application enhances the practice of OD.

The system theory is one of the most powerful conceptual tools available for understanding the
dynamics of the organisation. Fagen defines system as “a set of objects together with relationship
between the objects and between their attributes”.

System denotes interdependency, interconnectedness, and interrelatedness among elements in

asset that constitutes an identifiable whole or gestalt.

1.5.1 Nature of System

The nature dynamics and characteristics of the open system are well known. Organisations are
open system. Katz and Kahn have described the following characteristics of a system:

1. Input-throughput-output Mechanism: This explains that system takes inputs from the
environment in the form of energy information, money, and people and processes the
inputs via throughputs, conversion or transformation and exports products to the
environment in the form of outputs.

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2. Every System is delineated by a Boundary: This means that each system has boundary to Notes
differentiate the inside and outside of the system, however boundaries of an open system
are permeable, which permits exchange of information, resources and energy between
system and environment.

3. Open system have purposes and goals for their existence.

1.5.2 Congruence among System Elements

David Nadler and Associates at Delta consulting group developed the congruence model for
understanding organisational dynamics and change. It is explained with the help of The diagram
(Figure 1.1).

Figure 1.1: System Approach

Source: Jerry I. Porras and Peter J. Robertson, Organisational Development: Theory, Practice and Research,
p. 729.

This model depicts the organisation as an input-throughput-output system. According to this

model the three major input factors are:

1. Environment

2. Resources

3. History which consist of memories of past successes, failures and important events.

Outputs however are performances at the total organisational level, group level and individual
level.

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Notes The congruence model’s value is an analytical tool for:

1. Assessing the characteristics and functioning of each of the elements.

2. Evaluating the goodness of fit or how well the elements go together.

1.5.3 Socio-technical System Theory and Open System Planning

Two major variants of open system theory are –socio-technical system theory (STS) and open
system planning.

Socio-technical system theory was developed by Trist and others at the Tavistock institution in
1950’s. According to this theory organisations are comprised of two independent systems, a
social system and a technical system and changes in one effect the other. It is the conceptual
foundation for efforts in work redesign and organisation restructuring of OD.
Open system planning explains that:

1. Scanning the environment to determine the expectations of external organisations and

stakeholders.

2. Developing scenario of possible futures both realistic and ideal.

3. Developing action plans to achieve the desired result.

Mostly OD practitioners engaged in redesign projects use a combination of socio-technical

system theory and open system planning.

The other theories of OD are grouped into the four broad categories:

1. Life cycle

2. Teleology

3. Dialectical

4. Evolutionary theories

Where and when do these theories apply to explain development in organisational entities?
To address this question it is useful to emphasize four distinguishing characteristics in the
preceding discussion of the four theories. Each theory: (1) views process in terms of a different
cycle of change events, (2) which is governed by a different “motor” or generating mechanism
that (3) operates on a different unit of analysis, and (4) represents a different mode of change.

The four groups are distinguished from each other either on the basis of unit of change or mode
of change. The unit of change is either the single individual identity, interactions among people
or relationship between organisations. The mode of change is either prescribed or constructive:

 A life cycle model depicts the process of change in an entity as progressing through a
necessary sequence of stages. An institutional, natural, or logical program prescribes the
specific contents of these stages.

 A teleological model views development as a cycle of goal formulation, implementation,

evaluation, and modification of goals based on what was learned by the entity. This
sequence emerges through the purposeful social construction among individuals within
the entity.

 In dialectical models of development conflicts emerge between entities espousing opposing

thesis and antithesis that collide to produce a synthesis, which in time becomes the thesis
for the next cycle of a dialectical progression. Confrontation and conflict between opposing
entities generate this dialectical cycle.

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 An evolutionary model of development consists of a repetitive sequence of variation, Notes

selection, and retention events among entities in a designated population. Competition
for scarce environmental resources between entities inhabiting a population generates
this evolutionary cycle.

Life Cycle Theory

Many management scholars have adopted the metaphor of organic growth as a heuristic device
to explain development in an organisational entity from its initiation to its termination. Witness,
for example, often-used references to the life cycle of organisations, products, and ventures, as
well as stages in the development of individual careers, groups, and organisations: start-up
births, adolescent growth, maturity, and decline or death.

Notes The life cycle theories include developmentalism, biogenesis, ontogenesis and a
number of stage theories of child development, human development, moral development,
organisational development, group decision making, and new venture development.
Next to teleology, life cycle is perhaps the most common explanation of development in
the management literature.

Life cycle theory assumes that change is immanent: that is, the developing entity has within it an
underlying form, logic, program, or code which regulates the process of change and moves the
entity from a given point of departure toward a subsequent end that is already prefigured in the
present state. What lies latent, premature, or homogeneous in the embryo or primitive state
becomes progressively more realized, mature, and differentiated. External environmental events
and processes can influence how the immanent form expresses itself, but they are always mediated
by the imminent logic, rules, or programs that govern.

Life cycle theory parallels the approach of the gross anatomist in biology who observes a
sequence of developing fetuses, concluding that each successive stage evolved from the previous
one. Hence, it is claimed that development is driven by some genetic code or prefigured program
within the developing entity.

Life cycle theories of organisational entities often explain development in terms of institutional
rules or programs that require developmental activities to progress in a prescribed sequence.

Example: The U.S. Food and Drug Administration regulate a sequence of steps that all
firms must follow to develop and commercialize a new drug or biomedical product.

Teleological Theory

Another school of thought explains development by relying on teleology, or the philosophical

doctrine that purpose or goal is the final cause for guiding movement of an entity. This approach
underlies many organisational theories of change, including: functionalism, decision-making,
epigenesis, voluntarism, social construction adaptive learning, and most models of strategic
planning and goal setting.

Teleology assumes that development proceeds toward a goal or end state. It assumes that the
entity is purposeful and adaptive; by itself or in interaction with others, it constructs an envisioned
end state, takes action to reach it, and monitors its progress. Thus, this theory views development
as a repetitive sequence of goal formulation, implementation, evaluation, and modification of
goals based on what was learned or intended by the entity. The theory operates in a single

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Notes individual or among a group of cooperating individuals or organisations who are sufficiently
like-minded to act as a single collective entity. Teleology inherently affords creativity since the
entity, consisting of an individual or group, has the freedom to enact whatever goals it likes.

However, it implies a standard for judging change: development is that which moves the entity
toward its final state. Some teleological models incorporate the systems theory assumption of
equifinality; there are several equally effective ways to achieve a given goal. There is no
prefigured rule, logically necessary direction, or set sequence of stages in a teleological process.
Instead, these theories focus on the prerequisites for attaining the goal or end state: the functions
that must be fulfilled, the accomplishments that must be achieved, or the components that must
be built or obtained for the end state to be realized. These prerequisites can be used to assess
when an entity is developing: it is growing more complex, or it is growing more integrated, or
it is filling out a necessary set of functions. We are able to make this assessment because
teleological theories posit an envisioned end state for an entity and we are able to observe
movement toward the end state vis-a-vis this standard.

Dialectical Theory

A third school, dialectical theories, begins with the Hegelian assumption that the organisational
entity exists in a pluralistic world of colliding events, forces, or contradictory values that compete
with each other for domination and control. These oppositions may be internal to an
organisational entity because it may have several conflicting goals or interest groups competing
for priority. Oppositions may also arise external to the organisational entity as it pursues
directions that collide with those of others. In any case, a dialectical theory requires two or more
distinct entities that embody these oppositions to confront and engage one another in conflict.

Dialectical process theories explain stability and change by reference to the relative balance of
power between opposing entities. Struggles and accommodations that maintain the status quo
between oppositions produce stability. Change occurs when these opposing values, forces, or
events gain sufficient power to confront and engage the status quo. The relative power of an
antithesis may mobilize to a sufficient degree to challenge the current thesis or state of affairs
and set the stage for producing a synthesis.

Evolutionary Theory

Although evolution is sometimes equated with change, we use evolution in a more restrictive
sense to focus on cumulative changes in structural forms of populations of organisational entities
across communities, industries, or society at large As in biological evolution, change proceeds
through a continuous cycle of variation, selection, and retention. Variations, the creations of
novel forms are often viewed to emerge by blind or random chance; they just happen. Selection
occurs principally through the competition among forms for scarce resources, and the
environment selects those forms that best fit the resource base of an environmental niche.
Retention involves the forces (including inertia and persistence) that perpetuate and maintain
certain organisational forms.

Did u know? Retention serves to counteract the self-reinforcing loop between variations
and selection.

Thus, evolution explains change as a recurrent, cumulative, and probabilistic progression of

variation, selection, and retention of organisational entities. In organisation and management
applications, evolutionary theory is often used to depict global changes in organisational
populations.

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1.6 Implications of OD Values and Assumptions Notes

The implications of OD values and assumptions may vary for dealing with individuals, groups
and organisations.

Implication for Dealing with Individuals

It is based on the assumptions that most individuals have drives towards personal growth and
development if provided a supportive and conducive environment.

Implications for Dealing with Groups

It is based on the assumptions that most people wish to be accepted and to interact with at least
one small reference group and are capable of making greater contributions to a group
effectiveness and development.

Implications for Dealing with Organisations

A key assumption in organisation development is then needs and aspirations of human beings
are the reasons for organized efforts in the society. The belief is that people can grow and
develop in terms of personal and organisational competency to produce the desired result.

The basic value of OD theory and practice is that of choice.

Learning is seen as an integral part of choice. Therefore, OD utilizes various strategies to intervene
into the ongoing activities of the organisation in order to facilitate learning and to help the
organisation (groups within it, as well as individuals who make up the groups) to be able to
make better choices about alternative ways to proceed more effectively. Because choice is a
fundamental value, OD works with the organisation to find out how the organisation wishes to
proceed. OD is not prescriptive in its purest form. (Organisations in crisis often demand a more
prescriptive approach and this is always a difficult decision for the OD practitioner to weigh).

Self Assessment

State whether the following statements are true or false:

6. OD is a systematic application of behavioral science knowledge to the planned development

and reinforcement of organisational strategies, structures and processes for improving an
organisation’s effectiveness.

7. Survey research is the stem of OD which is a collaborative, client consultant inquiry.


Case Study Sea side is forced to Modernize

1
991 ushered in a new era for Sea Side, the mail order retailing agent. The billion
Rupees Company was growing faster than ever before and was no longer the small,
homegrown catalog store. Located in South Kolkata, its five thousand employees
reflected the local culture, as did its management practices and the philosophy of its
founder and Chairman, Shantanu Das: “Take care of your people, take care of your
customers, and the rest will take care of itself.” In 1991 Mr. Das decided that the company
Contd...

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Organization Change and Development

Notes
needed to apply modern management principles to keep up with its growth in size and
complexity.

The first step was to recruit a new executive vice president from competitor Mountain
View, Subodh Marwah, to lead the changes. Mr. Marwah quickly made numerous changes
to modernize the management systems and processes, including team based management,
numerous training programs for trainees at all levels, a new multirater evaluation system
in which managers were rated by peers and subordinates as well as their supervisors, and
the use of numerous consultants to provide advice. The company revised its old mission
to provide excellent products and services and to turn every customer into a friend. In
addition, the company created one new international venture and one new business each
year, resulting in solid businesses in UK, Japan and Germany. Mr. Marwah was elevated
to chief executive officer in 1993 and, continuing the modernization, hired seven new vice
presidents, including Ankit Verma as new vice president of human resource to oversee all
of the changes in the employee arena. The first two years, the changes seemed to be
working as the company added 100 million Rupees in revenue and posted record profits.

All was not as rosy as the profit picture seemed to show, however. In spite of the many
programs aimed at employee’s welfare, training, and teams, many employees complained
of always having to meet production and sales quotas. The new employee performance
evaluation system resulted in numerical ratings, which seemed to depersonalize
relationships. No matter how many pieces she monogrammed per day, one employee felt
that her work was never appreciated. Other employees complained of too many meetings
necessitated by the reorganization and the cross-functional teams. One team of catalog
artists, buyers, and copywriters needed numerous meetings each week to coordinate their
activities. A quality assurance manager complained that his workweek has increased
from forty hours to fifty-five hours and that the meetings were taking time away from
doing his real job. Many employees complained that they did not need to go to training
programs to learn how to take care of customers and communicate when they had been
doing that all along.

The doubts grew until late 1994, when the board, led by Mr. Das decided that the new
management was moving the company too far too fast and getting too far away from the
basic philosophies that made the company successful. On December 2, 1994, Mr. Das and
the Vice Chairman Nikhil Rao asked for Mr. Marwah’s resignation and fired Mr. Verma,
citing the need to return to basic and lack of confidence in the new direction of the company.
Mr. Das then chose thirty-four-years-old Vikash Sen as chief executive officer to guide the
return to basic. Mr. Sen, an eleven-year veteran of Sea Side (his entire working career),
immediately started the about-face by dismantling most of the teams, reorganizing the
others, and returning to the basics of the top quality classic clothes and excellent customer
service. Three other executives left the company shortly after Mr. Sen’s appointment.

Shortly after his takeover, however, paper prices doubled, postal rates increased, and
clothing demands dropped sharply. Third-quarter profits dropped by 60 percent. As the
year ended, overall profits were down to Rupees 30.6 million on barely Rs. I billion in
sales and Mr. Sen had to cancel one mailing to save money. Rather than cutting quality and
laying off people, Mr. Sen spent even more on increasing quality and employee benefits,
such as adoption assistance and mental health referrals. His philosophy was that customers
still demand quality products and that employees who feel squeezed by the company will
not provide good customer service. Early results were positive, with first-quarter profits
three times those of the year before.

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 Unit 1: Introduction to Organisation Development

Notes
Critics of Mr. Sen’s return to basic argue that the modernization attempts were necessary
to position the company for global competition and faster reaction to competition in
several of its catalog lines. Its return to growth occurred primarily in acquisition and new
specially catalog lines and not in the main catalog for which it was so famous. Mr. Sen has
put further acquisition and global expansion on hold as he concentrates on the core
businesses. Employees say that they have fewer meetings and more time to do their work.

Questions

1. How would you characterize the two sets of changes made at Sea Side? Which set of
change is really modernization?

2. How did the change processes differ?

3. How do you think employees will view future attempts to change Sea Side?

1.7 Summary

 Organisation development is a contractual relationship between a change agent and a

sponsoring organisation entered into for the purpose of using applied behavioral science
in a systems context to improve organisational performance and the capacity of the
organisation to improve itself.

 Organisation Development (OD) is one of the most significant developments in the field
of organisational behavior in recent years. OD began to evolve as a distinct field of study
in the 1940s when behavioral scientists in the US and Britain made efforts to resolve
problems facing modern organisations.

 OD has been defined in different ways by different behavioral scientists and applies the
knowledge and practice of behavioral science to improve the effectiveness of organisations.

 OD has four prominent approaches: laboratory training, survey research and feedback,
action research, and sociological and socio technical approaches.

 The field of OD rests on foundation of values and assumptions about people and
organisations. The beliefs help to define what OD is and guide its implementations.

 The OD values were considered revolutionary and are widely accepted today.

1.8 Keywords

Change Agent: A behavioral scientist who knows how to get people in an organisation involved
in solving their own problems.

Organisation Development (OD): A planned approach to improve employee and organisational

effectiveness.

1.9 Review Questions

1. Describe organisation development in terms of its characteristics as a valid tool for bringing
about change within the organisation.

2. Discuss briefly the history of OD.

3. Discuss the implications of values, assumptions and beliefs in OD.

4. Describe the role of change agent in the process of OD.

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Organization Change and Development

Notes Answers: Self Assessment

1. Organisation Development (OD) 2. Top management

3. Change agent 4. OD interventions

5. organisation’s capacity 6. True

7. False

1.10 Further Readings

Books Cummings, Thomas G., & Worley, Christopher G. (2000), Organisation Development
and Change, 7th ed., South-Western Educational Publishing.

French, Wendell L., and Cecil H. (1996), Development: Behavioral Science Interventions
for Organisation Improvement (5th Edition), New Delhi, India: Prentice Hall of India.

Hatch, Mary J. (1997), Organisation Theory, New York: OUP.

Senge, Peter M. (1990), The Fifth Discipline: The Art and Practice of Learning
Organisation, New York: Doubleday.

Sinha, Dharni P. (1986), T-Group, Team Building and Organisation Development,

New Delhi, India: ISABS.

S. Ramanarayan, T.V. Rao, Kuldeep Singh, Organisational Development Interventions

and Strategies.

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