UNIT 1

Cross-cultural issues
Intro – copy
Cultural differences significantly influence workplace dynamics, and I-O psychology emphasizes addressing
these disparities to enhance effectiveness. Examples of these cultural contrasts include:
1. Time Perception - Asians have a different understanding of time compared to Americans, affecting
time management and scheduling in workplaces (Brislin & Kim, 2003).
2. Reward Allocation - Chinese managers consider employees' personal needs when distributing
bonuses, while American managers base such decisions on individual performance (Zhou &
Martocchio, 2001).
3. Problem Solving and Rewards - Japanese managers are more cooperative and focus on shared
rewards, contrasting with the win-lose strategies often employed by American managers (Wade-
Benzoni et al., 2002).
4. Motivation from Interpersonal Dynamics - Salespeople in the Philippines are motivated by
feelings of shame from poor interactions, while Dutch counterparts are demotivated by similar
situations (Bagozzi, Verbeke, & Gavino, 2003).
5. Collegial Assistance - American software engineers help colleagues only if they expect future
reciprocation, whereas Indian engineers provide help without expecting a return (Perlow & Weeks,
2002).
The Cultural Mosaic - Chao and Moon (2005) describe individuals as mosaics of multiple cultural
influences, with each "tile" representing a cultural aspect such as gender, nationality, or generation. For
example, a South African manager might embody a competitive, individualistic corporate culture but
embrace collectivism in their home community.
Case Studies and Research Examples
 Cultural Consequences in Leadership:
Zhang Shuhong, a Chinese factory manager, hanged himself following a scandal involving lead-
tainted toys, despite the issue being caused by a subcontractor. This reflects cultural norms of
accountability and shame unique to Chinese corporate and societal culture (Telegraph.co.uk, 2007).
 Cultural Diversity in Workplaces:
At Holden’s Australian automobile assembly plant, employees spoke 57 first languages. While all
communication was in English, these languages represented diverse cultural backgrounds,
influencing workplace dynamics beyond language alone.
Cross-National Issues in the Workplace
1. Global Economy and Cultural Connectivity
The global economy integrates nations economically, socially, and politically. Some key statistics underline
its magnitude:
 U.S. companies manage ventures worth over $1 trillion, employing 60 million overseas workers,
with $400 billion invested abroad (Cascio, 2010).
 One in five U.S. jobs is linked to international trade, and foreign nationals often occupy senior
positions in American firms, mirroring Americans in European companies (Cascio, 2010).
This interconnectedness fosters opportunities but poses challenges for workplaces, as multinational
corporations must navigate diverse cultural expectations and practices.
2. Cultural Differences in the Workplace
As workplaces become culturally diverse, understanding differences is essential. Examples include:
 Reward Systems: Swedish and Japanese managers focus on collective rewards, value team-based
recognition and cooperative problem-solving, in contrast to American managers' preference for
competition and individualism (Wade-Benzoni et al., 2002).
 HR Challenges at McDonald's: Almost half of its restaurants operate outside the U.S., requiring
culturally sensitive HR policies (Cascio, 2010).
4. Levels of Cultural Influence
Erez and Gati (2004) outlined cultural influences across five levels:
1. Global Culture: Dominated by Western values like individualism and competition.
2. National Culture: Work practices align with the domestic cultural context.
3. Organizational Culture: Each company’s unique practices shape workplace behavior.
4. Group Culture: Team norms influence how tasks are approached.
5. Individual Core Identity: A combination of personal, national, organizational, and global values.
3. Implications for I-O Psychology
Industrial-organizational psychologists face unique challenges due to cultural diversity. They must design
systems for training, motivation, and rewards compatible with different cultural perspectives. For instance:
Implications for I-O Psychology
 Cultural differences can result in misunderstandings, ineffective strategies, and counterproductive
HR practices. Addressing these differences is vital in today’s globally interconnected workplaces.
 For instance, understanding cultural preferences can enhance leadership strategies, improve cross-
cultural teams, and tailor HR policies to diverse employee needs.
 Virtual workplaces bring workers from varied cultural backgrounds together, demanding flexibility
in communication and collaboration strategies.
 Ex- McDonald's central management adapts HR policies to balance cultural expectations across its
international locations.
Understanding these cultural dynamics is vital for creating harmonious, effective, and inclusive work
environments in an interconnected global economy. By fostering cultural awareness and applying insights
from I-O psychology, organizations can navigate these complexities, creating more inclusive and effective
environments.
Importance of Multiculturalism in I-O Psychology
Multiculturalism is vital for industrial-organizational (I-O) psychology because of its global relevance in
understanding and improving workplace behavior across diverse cultures. Historically, psychology has been
dominated by American researchers, whose theories primarily address U.S.-specific contexts. However, the
increasingly globalized nature of work demands multicultural approaches.
1. Inclusive Understanding of Human Behavior
Psychology studies human behavior scientifically, which necessitates global inclusivity. Work psychologists
must explore theories of motivation, selection, and performance that apply universally rather than solely in
industrialized nations (Triandis & Brislin, 1984). This ensures theories are relevant to multinational
workplaces and culturally diverse employees.
2. Avoiding "West vs. the Rest" Bias
The "West vs. the Rest" mentality (Hermans & Kempen, 1998) highlights how Western-centric theories
often fail in non-Western contexts. Cultural factors significantly moderate the success of HRM initiatives,
emphasizing the need for adapting theories for diverse cultures (Earley & Erez, 1997).
3. Acknowledging Cultural Diversity
Traditional "color-blind" psychology has overlooked authentic cultural differences. This approach, intended
to ensure fairness, often perpetuates discrimination by ignoring the unique experiences of minority groups
(Fowers & Richardson, 1996). U.S. employers and multinational corporations must balance cultural
acknowledgment with fairness to avoid imposing "one-size-fits-all" practices.
4. Insights from Non-American Scholars
Non-American researchers contribute valuable perspectives on work behavior, offering insights applicable
globally. For example:
 Studies on collectivist cultures like Japan provide strategies for enhancing team-based performance,
contrasting with individualistic models dominant in the U.S.
 Cross-cultural research reveals differences in job satisfaction drivers, decision-making styles, and
leadership effectiveness.
5. Expatriate Selection and Training
Managing expatriates is a practical example of the importance of multiculturalism. American managers often
fail in foreign postings due to cultural misadaptation, causing financial and productivity losses. Key
initiatives include:
 Personality-based Selection: Emotional stability and openness to novel experiences improve
expatriate success (Caligiuri, Tarique, & Jacobs, 2009; Ones & Viswesvaran, 1999).
 Adjustment Models: Frameworks for cultural adaptation enhance expatriate productivity and
satisfaction (Takeuchi, 2010).
 Perceived Fairness: Understanding fairness perceptions in new cultural contexts ensures smoother
transitions (Garonzik, Brockner, & Siegel, 2000).
6. Applications Beyond Expatriates
Theories developed for expatriates also inform domestic relocation and workplace diversity management.
For instance:
 Relocation within culturally diverse regions of the U.S. benefits from similar personality-focused
selection strategies.
 Training programs incorporating cultural sensitivity improve team cohesion in multinational and
multicultural settings.
Hofstede’s Cultural Dimensions Theory: Importance and Workplace Implications
Geert Hofstede's cultural dimensions theory provides a framework for understanding cultural differences and
their impact on workplace behavior. Developed from extensive research with over 116,000 IBM employees
across 72 countries, the theory identifies five key cultural dimensions that shape organizational and national
cultures.
1. Individualism vs. Collectivism
This dimension measures the degree to which individuals are integrated into groups. In individualistic
cultures (e.g., U.S., U.K.), personal achievements and individual rights are prioritized. In collectivist
cultures (e.g., Japan, Colombia), group harmony and collective well-being dominate. These differences
influence workplace practices, such as hiring decisions. In the U.S., technical skills are pivotal, whereas
collectivist cultures emphasize group fit (Noe et al., 2010). Ex - At Toyota, team-based problem-solving
techniques like "kaizen circles" reflect this collectivist approach, fostering continuous improvement through
collective efforts.
2. Power Distance
Power distance reflects the acceptance of unequal power distribution. Low power-distance cultures like
Denmark value equality and participative leadership, while high power-distance cultures like India accept
hierarchical structures. Leadership styles and decision-making expectations differ significantly across these
cultures, necessitating tailored managerial approaches. Ex - For example, in an Indian subsidiary of a global
firm, employees may expect clear instructions and authority-based decision-making, while the same firm in
Denmark would adopt a more democratic leadership style.
3. Uncertainty Avoidance
This dimension assesses a culture's tolerance for ambiguity. Cultures like Singapore and Jamaica are
comfortable with uncertainty, adapting to changing circumstances with a "go-with-the-flow" mindset,
whereas Greece and Portugal prioritize stability and clear rules. This impacts organizational policies, such as
risk management and strategic planning.
4. Masculinity vs. Femininity
Masculine cultures (e.g., Japan, U.S.) emphasize competition, achievement, and wealth accumulation, while
feminine cultures (e.g., Sweden, Norway) prioritize quality of life, relationships, and environmental well-
being. This dimension influences reward systems, with masculine cultures favoring performance-based
incentives and feminine cultures valuing team-oriented rewards. For instance, Swedish organizations often
provide generous parental leave and prioritize employee well-being. Conversely, in Japan, long working
hours are more normalized, with success defined by career advancement and economic achievements.
5. Long-Term vs. Short-Term Orientation
This dimension differentiates cultures based on their temporal focus. Long-term-oriented cultures like China
emphasize persistence, thrift, and future planning. Conversely, short-term-oriented cultures like the U.S.
focus on tradition, immediate results, and the present. Organizational strategies, including resource
allocation and goal-setting, are shaped by this orientation. For example, Huawei's global expansion strategy
involves investing heavily in R&D and establishing long-term partnerships, contrasting with the short-term
profit-driven strategies observed in countries like the U.S.
Workplace Implications
Hofstede's dimensions offer critical insights into cultural dynamics that affect human resource management,
leadership, and decision-making:
 Leadership Styles: Subordinates in low power-distance cultures expect participative leadership,
whereas high power-distance cultures value directive leadership (Noe et al., 2010).
 Compensation Practices: In individualistic cultures, income inequality is higher (e.g., U.S.), while
collectivist cultures limit income disparities to preserve social harmony.
 Decision-Making: Collectivist cultures prefer group decisions, which can clash with the individual
decision-making norms in individualist cultures.
Challenges and Benefits of Diversity
Cultural diversity can lead to communication barriers and conflicts but also drives innovation and
organizational growth. Effective diversity management involves recognizing cultural dimensions and
implementing training programs to foster intercultural competence.
In conclusion, Hofstede's theory highlights how cultural differences shape workplace behaviors and
expectations. Managers and I-O psychologists must leverage these insights to develop culturally sensitive
practices that enhance productivity and inclusivity in diverse work environments.
Cross cultural training - copy
Organisation structure
An organizational structure defines how job tasks are formally divided, grouped, and coordinated.
Work specialization
 Work specialization, or division of labor, defines the degree to which tasks in an organization are
divided into specific roles.
 Early 20th-century industrialist Henry Ford illustrated its effectiveness by implementing assembly
lines where workers performed repetitive, specialized tasks. This system enabled rapid production,
such as assembling a car every 10 seconds, using employees with limited skills.
 Specialization increases efficiency by utilizing employees’ expertise, reducing task-switching time,
and fostering skill improvement through repetition.
 However, by the 1960s, the drawbacks of excessive specialization became apparent. Issues such as
fatigue, stress, lower productivity, absenteeism, and high turnover began to outweigh its benefits.
 Broadening job roles, providing diverse activities, and incorporating teamwork emerged as solutions
to increase both productivity and employee satisfaction.
 Despite its challenges, work specialization remains relevant in various industries. For instance, fast-
food restaurants rely on it for efficient operations.
 Additionally, advancements in technology have expanded the concept through microspecialization
and e-lancing platforms like Amazon’s Mechanical Turk, where small tasks are outsourced globally.
 Automation and information systems have also created new forms of specialized work.
 While modern specialization leverages technology, expertise, and regional differences, the
fundamental principle of breaking down tasks for efficiency remains unchanged, benefiting both
organizations and employees,
Departmentalization
Departmentalization groups jobs after work specialization to coordinate tasks and simplify organizational
complexity. Common methods include functional, product, geographic, process, and customer
departmentalization.
 Functional departmentalization groups jobs by functions such as engineering, HR, or accounting,
as seen in manufacturing plants, hospitals (e.g., research or surgery departments), and football
franchises (e.g., player personnel or ticket sales). This enhances efficiency by placing specialists
together.
 Product departmentalization organizes roles around products or services, such as Procter &
Gamble assigning global responsibility for products like Tide or Pampers. This ensures
accountability but requires broader organizational awareness.
 Geographic departmentalization divides functions by regions, such as Toyota’s regional
management approach for better local customization. It works well for dispersed customers but
requires strong inter-region communication, supported by virtual tools and knowledge-sharing
systems.
 Process departmentalization organizes tasks sequentially, as in motor vehicle offices, where
applicants go through validation, licensing, and payment processes.
 Customer departmentalization tailors job structures to customer types, enabling organizations like
Microsoft to focus on consumers, corporations, developers, or small businesses.
Organizational structures evolve with goals. Microsoft shifted to functional departmentalization in 2013
under CEO Steve Ballmer, grouping jobs into engineering, marketing, and research to drive innovation.
However, challenges arose, leading to further changes like reorganizing PowerPoint and Excel teams into
broader "content creation" and "data visualization" groups, highlighting the complexities of adapting
departmentalization to organizational needs.
Chain of Command
1. The chain of command, once a cornerstone of organizational design, is less critical today but remains
relevant in specific industries, especially those requiring quick decision-making in life-or-death
situations.
2. It represents an unbroken line of authority from the top to the lowest level, clarifying reporting
relationships.
3. Key elements include authority—the managerial right to give orders—and unity of command,
which ensures each employee has one superior.
4. Unity of command reduces conflicts caused by multiple supervisors, though dotted-line reporting
relationships exist in some organizations.
5. Employees reporting to multiple managers must manage workloads, resolve conflicting priorities,
and foster communication among supervisors to maintain efficiency.
6. Changes in organizational dynamics have reduced reliance on the chain of command. Technology
provides employees with instant access to information previously reserved for managers, and self-
managed or cross-functional teams blur hierarchical structures. Yet, many organizations find
enforcing a chain of command enhances productivity.
7. A survey showed that 59% of managers perceive a divide where strategy is created by higher-level
employees and executed by lower levels, but hierarchy-dependent decision-making can hinder buy-in
from lower-level employees.
8. Reimagining the chain of command as a pyramid rather than a strict line may better reflect collective
contributions and improve group performance.
9. This perspective fosters recognition of lower-level employees’ roles and enhances social
relationships within organizations.
Span of Control
 The span of control refers to the number of employees a manager can effectively oversee. Wider
spans reduce organizational levels, save costs, and improve efficiency.
 For example, with 4,100 employees, a span of 8 compared to 4 can save $48 million annually in
salaries by requiring fewer managers.
 However, overly wide spans can hinder leadership quality and reduce employee performance if
supervisors lack time for adequate support.
 Narrow spans allow closer supervision but have significant drawbacks: they are costly due to
additional management layers, slow decision-making through complex hierarchies, and limit
employee autonomy.
 Organizations increasingly favor wider spans to reduce costs, increase flexibility, and empower
employees.
 To ensure effectiveness, these wider spans often require significant investment in employee training
and fostering collaboration, enabling workers to manage tasks independently or seek peer support,
reducing the need for constant managerial oversight.
Centralization and Decentralization
 Centralization concentrates decision-making at the top levels of an organization, where senior
managers make decisions that lower levels implement. In contrast, decentralization pushes decision-
making authority closer to those directly handling tasks or problems.
  Centralization emphasizes formal authority tied to managerial positions, while decentralization
fosters quicker problem-solving, broader input, and greater employee engagement.
 Centralized organizations excel at avoiding bad decisions (commission errors) but may miss
opportunities (omission errors). Decentralized structures are more flexible and innovative.
 For instance, Procter & Gamble empowered teams to make product development decisions, speeding
market readiness. Finnish organizations with decentralized R&D produced more innovations than
centralized counterparts.
 However, decentralization can lead to challenges like role overload or ambiguity, as seen in Italian
physicians.
 Companies with offshore operations often balance decentralization for regional responsiveness and
central oversight for accountability.
 Effective decentralization requires clear roles and limits to avoid inefficiencies or strained external
relationships.
Formalization
 Formalization refers to how standardized jobs are within an organization.
 Highly formalized jobs leave employees little discretion over tasks, timing, or methods, ensuring
consistent and uniform output.
 These roles are governed by explicit job descriptions, strict rules, and detailed procedures,
eliminating alternative approaches.
 Conversely, low formalization allows employees greater freedom and discretion in how they perform
their work.
 The degree of formalization varies across roles and industries. For instance, publishing
representatives may follow a loose framework with flexibility in sales pitches and minimal rules
beyond submitting weekly reports. Meanwhile, clerical and editorial staff in the same company may
adhere to strict schedules and procedures.
 Research on Chinese high-tech firms shows that formalization can hinder team flexibility,
particularly in decentralized and interactive settings requiring innovation.
 Thus, while formalization provides structure and consistency, it may not suit roles demanding
adaptability and creativity.
Boundary Spanning
 Boundary Spanning bridges divisions within or between organizations, fostering collaboration and
mitigating rigidity caused by formal structures.
 Internally, boundary spanning occurs when individuals form connections outside their assigned
groups, like an HR executive collaborating with IT or an R&D member implementing production
ideas. These roles enhance creativity, knowledge sharing, decision-making, and performance.
 Externally, boundary spanning involves inter-organizational relationships, such as ties between
salespersons and buyers.
 Research on Chinese manufacturer–distributor dyads shows these ties improve relationship quality
more effectively than executive connections, although robust executive-employee relations foster
cooperation and conflict resolution.
 Organizations facilitate boundary spanning through mechanisms like formal liaison roles, cross-
functional committees, and job rotation programs.
 For example, employees with multi-functional experience are more likely to engage in boundary
spanning.
 Highlighting overarching organizational goals, like innovation or efficiency, can also strengthen
shared identity and promote collaboration.
 By encouraging boundary spanning, organizations ensure coordination and adaptability, vital for
addressing complex challenges.
 Organisational Design
A mechanistic structure refers to a highly rigid and bureaucratic framework in an organisation. It
characterises rigidity, high level of specialisation, vast formalisation, centralisation, and clear lines of
hierarchical authority.
A mechanistic organisation follows a strict hierarchy with high levels of control and complex formal rules.
Tasks are broken down and divided, allowing specialisation. Communication typically follows the
hierarchical chain, meaning information circulates top-down or bottom-up. In a mechanistic structure,
 Work division is precise and, often, narrowly defined.
 The power and authority primarily lie with the top management.
 There is a formalised method of control and coordination.
 Pre-defined roles and responsibilities exist, with limited scope for modification.
An example of a mechanistic model is the Department of Motor Vehicles. When you get your new driver’s
license, you go from one department to another, taking a written test, taking an eye exam, taking an actual
driving test, filling out the paperwork, and then finally, getting your driver’s license.
Organic model
An organic structure promotes flexibility, adaptability, decentralisation, teamwork, and open lines of
communication. It's most suitable for dynamic, uncertain environments that demand creativity and
innovative responses.
An organic structure presents a stark contrast to the mechanistic model. It emphasizes flexibility and shared
tasks. The hierarchy is more relaxed, and there are fewer rules and procedures. In an organic setup,
 Tasks are function or project-oriented and are adaptable in response to changing situations.
 There is a broader distribution of decision-making authority.
 Communication channels are more informal and flexible.
 Roles are often not rigid but adaptive and evolving
Major Determinants of Organisational Structure
Organizational Strategies
The structure of an organization should evolve alongside its strategy to support its goals. If a company shifts
its strategy or values, the structure should change accordingly. For instance, organizational culture plays a
significant role in the success of initiatives like corporate social responsibility (CSR). A well-aligned
structure enhances the implementation of these initiatives. Three primary strategy dimensions—innovation,
cost minimization, and imitation—dictate the type of structure that works best for an organization.
 Innovation strategy focuses on developing unique and meaningful products or services. Innovative
firms like Apple and 3M emphasize risk-taking and competitive pay to attract top talent. These firms
may incorporate some elements of a mechanistic structure for stability, but flexibility and
communication channels are key to managing rapid changes.
 Cost minimization strategy targets tight cost control, efficiency, and low prices. Walmart is a prime
example, focusing on minimizing expenses to offer basic products at low prices. Organizations
pursuing this strategy typically avoid excessive employee commitment programs, favoring
streamlined processes and clear directives.
 Imitation strategy involves minimizing risk by copying successful innovations once proven viable.
Firms like Hewlett-Packard and Moleskine expand cautiously, following innovators after market
viability is established. Imitators often combine mechanistic and organic structures, using the
former for operational efficiency and the latter for exploring new opportunities.
Each strategy requires a specific structural approach, from rigid control in cost minimization to flexible
structures for innovation.
Organization Size
 An organization’s size significantly affects its structure. Organizations that employ 2,000 or more
people tend to have more specialization, more departmentalization, more vertical levels, and more
rules and regulations than do small organizations.
 However, size becomes less important as an organization expands. At around 2,000 employees, an
organization is already mechanistic; 500 more employees won’t have much impact. But adding 500
employees to an organization of only 300 is likely to significantly shift it toward a more mechanistic
structure.
 Basecamp (under 200 employees) has a flat, flexible structure with minimal specialization, allowing
employees to collaborate across departments and make decisions independently.
 Walmart (over 2 million employees) has a mechanistic structure with high specialization, multiple
management levels, and strict rules, ensuring efficiency and consistency across its global operations.
Technology
 Technology describes the way an organization transfers inputs into outputs.
 Every organization has at least one technology for converting financial, human, and physical
resources into products or services.
 For example, the Chinese consumer electronics company Haier (the owners of GE Appliances) uses
an assembly-line process for mass-produced products, which is complemented by more flexible and
innovative structures to respond to customers and design new products.
 Regardless, organizational structures adapt to their technology—and vice versa. Organizational
structure and culture can become inscribed in the data structure, software, and hardware that an
organization uses.
Environment
An organization's environment includes external factors like suppliers, customers, and competitors, which
influence its structure. Environments can be categorized by three dimensions:
1. Capacity – the ability of the environment to support growth (e.g., rich environments offer resources
that help buffer the organization during times of scarcity.).
2. Volatility – the instability and unpredictability of the environment. High volatility means rapid,
unpredictable changes, making it difficult for managers to predict future trends. For example, the fast
pace of technological change
3. Complexity – the diversity and concentration of environmental elements. Simple environments are
more homogeneous, (e.g., the tobacco industry), while complex environments are diverse and have
multiple elements to monitor (e.g., the broadband industry).
Organizations in scarce, dynamic, and complex environments require organic structures to respond
flexibly, while those in abundant, stable, and simple environments benefit from mechanistic structures.
For instance, companies like Pepsi and Southwest Airlines adapt their structure by adding social media
departments to handle environmental volatility
Institutions
 Institutional factors, such as cultural norms and regulatory pressures, significantly influence
organizational structure. These factors are guided by societal expectations rather than performance
needs.
 Institutional theory highlights how organizations often adopt similar structures due to external
pressures, even when these structures may not be the most efficient or adaptive.
  For example, industries under government contracts may require strict reporting and information
controls due to regulatory demands.
 In cultures with high power distance, organizations often adopt hierarchical structures with clear
authority relationships, which are seen as legitimate in that context.
 Additionally, organizations may adopt certain structures simply out of inertia or to conform to trends,
such as copying the organic structure of successful companies like Google, even when it's not a good
fit for their environment.
 These pressures, though sometimes unnoticed, play a powerful role in shaping organizational
behavior and structure.
Work environment and culture
copy
Organisational development and change
 Organizational development (OD) is a set of change methods aimed at improving organizational
effectiveness and employee well-being.
 OD methods prioritize human and organizational growth, collaborative and participative processes,
and a spirit of inquiry.
 Contemporary OD draws significantly from postmodern philosophy, placing a strong focus on the
subjective ways individuals perceive and make sense of their work environment.
 While the change agent may take the lead in OD, collaboration remains a central emphasis.
Sensitivity Training
1. Sensitivity training, also known as laboratory training, encounter groups, or T-groups, is an early
method of behavior change through unstructured group interaction.
2. It serves as the basis for modern organizational interventions such as diversity training, executive
coaching, and team-building exercises.
3. In classic sensitivity training, participants gathered in an open environment to discuss themselves and
their interactions. A behavioral scientist guided the process but did not take a leadership role. The
group was process-oriented, emphasizing learning through participation and observation rather than
direct instruction.
4. While effective, caution is required to ensure the environment remains supportive and does not
become intimidating, chaotic, or harmful to work relationships.
Survey Feedback
1. The survey feedback approach is a tool for assessing organizational members' attitudes, identifying
discrepancies in perceptions, and addressing conflicts.
2. It involves everyone in the organization, with a focus on the "organizational family"—managers and
their direct reports.
3. Participants complete a questionnaire covering topics such as decision-making, communication
effectiveness, coordination, and satisfaction with the organization, job, peers, and supervisors. The
collected data are analyzed, comparing responses from individual units and the entire organization,
and then shared with employees.
4. These results help identify problems and clarify issues affecting the organization. Emphasis is placed
on encouraging discussion that focuses on solutions rather than personal attacks.
5. For example, questions may explore whether employees are listening, generating new ideas, or
improving decision-making and interpersonal relations.
6. The goal is for the group to commit to remedies for identified issues. While useful for gauging
employee attitudes, the approach can be influenced by factors such as current events, affecting the
reliability of the findings.
7. Managers should monitor these factors and response rates for better results.
Process Consultation
1. Process Consultation (PC) helps managers identify ways to improve unit performance when they are
unsure of what or how to improve.
2. An outside consultant works with the client, usually a manager, to build a collaborative relationship.
This involves a continuous effort to understand what is happening within the unit and make
coauthored decisions about future actions.
3. Areas such as workflow, informal relationships, and communication channels may be examined.
Similar to sensitivity training, PC focuses on improving organizational effectiveness by addressing
interpersonal issues and encouraging participation.
4. However, PC is more task-oriented, with consultants guiding the client to solve their own problems
rather than solving them directly.
5. Through this process, the client gains the skills to analyze and improve processes independently,
ensuring long-term improvement.
6. Active involvement in both diagnosing and developing solutions enhances the client’s understanding,
making them more committed to the action plan and reducing resistance.
Team Building
1. Team building involves high-interaction group activities designed to enhance trust, openness,
coordination, and performance among team members.
2. It focuses on intragroup dynamics within organizational families, committees, project teams, self-
managed teams, and task groups.
3. Activities typically include goal setting, improving interpersonal relationships, clarifying roles and
responsibilities, and analyzing team processes. The specific emphasis of these activities may vary
depending on the team's goals and challenges.
4. Overall, team building fosters interaction among members to strengthen trust and collaboration.
5. Given the increasing reliance on teams within organizations, team building has become a crucial
aspect of organizational development.
Intergroup Development
1. A key concern in organizational development (OD) is dysfunctional conflict among groups.
Intergroup development aims to address this by changing attitudes, stereotypes, and perceptions
between groups.
2. Unlike diversity training, which focuses on demographic differences, intergroup development deals
with conflicts between occupations, departments, or divisions.
3. For example, engineers may view the accounting department as conservative and HR as overly
focused on protecting employees’ feelings rather than company profits. Such stereotypes hinder
coordination and collaboration.
4. To improve intergroup relations, a common approach is problem-solving. Groups first independently
list their perceptions of themselves and other groups, then share and discuss these lists to identify
similarities, differences, and the underlying causes of the conflict.
5. Questions may explore whether goals are misaligned, if perceptions are distorted, or if
misunderstandings are present.
6. By addressing these issues, groups can identify the root causes of conflict. Once the discrepancies
are understood, the groups work on developing solutions to improve relations.
7. Subgroups of conflicting groups may further diagnose issues and propose alternative solutions to
foster better collaboration and communication.
Appreciative Inquiry
Most organizational development (OD) approaches are problem-centered, focusing on identifying issues and
finding solutions. However, Appreciative Inquiry (AI) stands apart by focusing on identifying and
leveraging an organization's strengths rather than attempting to fix problems. AI aims to enhance
performance by building on the unique qualities that already exist within the organization.
The AI process consists of four main steps: discovery, dreaming, design, and destiny. These steps are
typically carried out in a large-group setting over 2-3 days, guided by a trained change agent.
1. Discovery: Participants identify the strengths of the organization by reflecting on past successes and
experiences when the organization functioned at its best. Employees share these moments to create a
foundation for improvement.
2. Dreaming: Using insights from the discovery phase, employees envision possible future scenarios
for the organization. This phase focuses on imagining what the organization could look like in 5
years.
3. Design: In this phase, participants collaborate to create a common vision for the future of the
organization, agreeing on its core values and attributes.
4. Destiny: Finally, participants develop action plans and implementation strategies to bring their vision
to life and ensure its success.
AI has been effectively used in organizations like American Express to drive change. During a lean
economic period, American Express used AI to revitalize its organizational culture. Employees were
encouraged to share positive experiences and contribute ideas for the company’s future. This process led to
improvements in financial forecasting, IT investments, and the development of new performance
management tools. The result was a renewed culture with a focus on growth, positive attitudes, and
achieving business success.