Understanding OD

As Cummings and Worley (1993) state on page 1,"Organization Development is a process by which behavioral science knowledge and practices are used to help organizations to achieve greater effectiveness, including improved quality of life, increased productivity, and improved product and service quality. Its focus is on improving the organization's ability to assess and to solve its own problems. Moreover, OD is oriented to improving the total system - the organization and its parts in the context of the larger environment that impacts upon them."

Stoner points out that OD is not designed to solve a single or temporary problem in the organization. Its intention is to move the organization to a higher level of functioning - that is, to improve the performance and satisfaction of organization members. (Stoner, 1978:385)

As it is possible to see in the next section, OD has experienced major changes through time; for that reason it is difficult to arrive at a clear and definitive definition of OD. Nevertheless, it is important to point out that OD is a managerial theory whose focus is satisfaction of both people and organizations. In addition, OD techniques are useful in any situation, but especially when a change occurs in the organization.

Evolution of OD

Over the past few decades, the theory of OD has grown larger and more diverse. The variety of new points of view and applications has increased, making it harder to define OD. Today, OD is being heavily influenced by other applied fields, such as human resource management, strategic management, organization design, and organization theory.

During the 1950s and 1960s, OD principles were relatively coherent, and focused mainly on the social side of organizations. Since OD was based on group dynamics, many human process interventions were implemented. The best known are T-groups, process consultation, and team building. The emphasis was on humanistic values promoting openness, trust, and collaboration.

In the 1970s, new concepts emerged, especially influenced by organization theory and the human side of technology. Examples of this period are structural change, employee involvement, and work design. As a result, the traditional OD values favouring humanism expanded to include concerns for organizational effectiveness and bottom-line results.

In the 1980s, OD became a theory that many management consultants wanted to apply because it was relatively new, and successful. Consequently, more new concepts and opinions were aggregated to the current OD theory. Techniques for reward systems, career planning and development, and employee assistance programs showed up. The tools of organization theory and strategic management contributed to OD, along with organization design, corporate culture, strategy formulation and implementation, self-designed organizations, and transorganizational development. Besides, production concepts were incorporated, particularly process control and total quality management.

The 1990s was the decade when the applied disciplines were used broadly by OD practitioners. The addition of new concepts and methods implies that OD is growing. However, the field has lost much of its conceptual coherence and its identification with traditional values. Today, the field is known more by its techniques than its value orientation. OD practitioners have increasingly become involved with action learning.

Like action research, the new perspectives involve collaboration between OD practitioners and organizational members in the process of changing. Thus, it is likely that OD continue to expand conceptually in the future. (Cummings and Worley, 1993:675-681)

OD in Different Types of Organizations

Organization Development is practiced in a number of different types of organizations in both the private and the public sectors; nonetheless, OD is more known to be applied in industries because the published material on OD has focused on applications in industrial organizations.

Many efforts have been made to insert OD principles and techniques into organizations with no industrial activity. The results are remarkable, especially if the humanist side of OD is kept. It is difficult to imagine that OD techniques, once applied to solve problems of production effectiveness, now can also be practiced in such organization' as schools, hospitals, government agencies, and the military. Yet, theaspiration for the improvement of human relations does not know boundaries, although some adaptations have to be made to accommodate OD practice to every particular situation.

Forms of Change

In chapter 6, Kanter et al establish three principal methods in which organizations change their form:

1. Organizations can change their relationship to their environments - the nature of their ties to their markets and major stakeholders - by structuring or redefining their identity and boundaries through mergers, acquisitions, divestitures, or alliances and partnerships.
2. Organizations can change the ways in which they operate, the ways people and units relate to each other, corresponding to their organic development over time, through changes in internal coordination - their culture and structure. This is generally considered the "planned change."
3. Organizations can change the nature of their control structures - the parties involved in the dominant coalition of interests that govern the organization and determine how benefits are distributed among them.

Understanding Organizational Learning

Argyris (1977) defines organizational learning as the process of "detection and correction of errors." In his view organizations learn through individuals acting as agents for them: "The individuals' learning activities, in turn, are facilitated or inhibited by an ecological system of factors that may be called an organizational learning system" (p. 117).

Huber (1991) considers four constructs as integrally linked to organizational learning: knowledge acquisition, information distribution, information interpretation, and organizational memory. He clarifies that learning need not be conscious or intentional. Further, learning does not always increase the learner's effectiveness, or even potential effectiveness. Moreover, learning need not result in observable changes in behavior. Taking a behavioral perspective, Huber (1991) notes: An entity learns if, through its processing of information, the range of its potential behaviors is changed.

Weick (1991) argues that the defining property of learning is the combination of same stimulus and different responses, however it is rare in organizations meaning either organizations don't learn or that organizations learn but in nontraditional ways. He further notes: "Perhaps organizations are not built to learn. Instead, they are patterns of means-ends relations deliberately designed to make the same routine response to different stimuli, a pattern which is antithetical to learning in the traditional sense" (p. 119). Or else, he argues, Organizational Learning perhaps involves a different kind of learning than has been described in the past: "the process within the organization by which knowledge about action-outcome relationships and the effect of the environment on these relationships is developed" (Duncan & Weiss 1979). In his view, "a more radical approach would take the position that individual learning occurs when people give a different response to the same stimulus, but Organizational Learning occurs when groups of people give the same response to different stimuli."

Understanding Learning Organization

Senge (1990) defines the Learning Organization as the organization "in which you cannot not learn because learning is so insinuated into the fabric of life." Also, he defines Learning Organization as "a group of people continually enhancing their capacity to create what they want to create." I would define Learning Organization as an "Organization with an ingrained philosophy for anticipating, reacting and responding to change, complexity and uncertainty." The concept of Learning Organization is increasingly relevant given the increasing complexity and uncertainty of the organizational environment. As Senge (1990) remarks: "The rate at which organizations learn may become the only sustainable source of competitive advantage."

McGill et al. (1992) define the Learning Organization as "a company that can respond to new information by altering the very "programming" by which information is processed and evaluated."

Organizational Learning vs. Learning Organization

Ang & Joseph (1996) contrast Organizational Learning and Learning Organization in terms of process versus structure.

McGill et al. (1992) do not distinguish between Learning Organization and Organizational Learning. They define Organizational Learning as the ability of an organization to gain insight and understanding from experience through experimentation, observation, analysis, and a willingness to examine both successes and failures.

Adaptive Learning vs. Generative Learning

The current view of organizations is based on adaptive learning, which is about coping. Senge (1990) notes that increasing adaptiveness is only the first stage; companies need to focus on Generative Learning or "double-loop learning" (Argyris 1977). Generative learning emphasizes continuous experimentation and feedback in an ongoing examination of the very way organizations go about defining and solving problems. In Senge's (1990) view, Generative Learning is about creating - it requires "systemic thinking," "shared vision," "personal mastery," "team learning," and "creative tension" [between the vision and the current reality]. [Do Japanese companies accomplish the same thing with "strategic" and "interpretive" equivocality"?] Generative learning, unlike adaptive learning, requires new ways of looking at the world.

In contrast, Adaptive Learning or single-loop learning focuses on solving problems in the present without examining the appropriateness of current learning behaviors. Adaptive organizations focus on incremental improvements, often based upon the past track record of success. Essentially, they don't question the fundamental assumptions underlying the existing ways of doing work. The essential difference is between being adaptive and having adaptability.

To maintain adaptability, organizations need to operate themselves as "experimenting" or "self-designing" organizations, i.e., should maintain themselves in a state of frequent, nearly-continuous change in structures, processes, domains, goals, etc., even in the face of apparently optimal adaption (Nystrom et al. 1976; Hedberg et al. 1976; Starbuck 1983). Hedberg et al. (1977) argue that operating in this mode is efficacious, perhaps even required, for survival in fast changing and unpredictable environments. They reason that probable and desirable consequences of an ongoing state of experimentation are that organizations learn about a variety of design features and remain flexible.

Managers' Role in the Learning Organization

Senge (1990) argues that the leader's role in the Learning Organization is that of a designer, teacher, and steward who can build shared vision and challenge prevailing mental models. He/she is responsible for building organizations where people are continually expanding their capabilities to shape their future -- that is, leaders are responsible for learning.

Relationship between Strategy and Organizational Learning

Or, as Mintzberg (1987) says: the key is not getting the right strategy but fostering strategic thinking. Or as Shell has leveraged the concept of Learning Organization in its credo "planning as learning" (de Geus 1988). Faced with dramatic changes and unpredictability in the world oil markets, Shell's planners realized a shift of their basic task: "We no longer saw our task as producing a documented view of the future business environment five or ten years ahead. Our real target was the microcosm (the 'mental model') of our decision makers." They reconceptualized their basic task as fostering learning rather than devising plans and engaged the managers in ferreting out the implications of possible scenarios. This conditioned the managers to be mentally prepared for the uncertainties in the task environment.

Thus, they institutionalized the learning process at Shell.

The key ingredient of the Learning Organization is in how organizations process their managerial experiences. Learning Organizations/Managers learn from their experiences rather than being bound by their past experiences. In Generative Learning Organizations, the ability of an organization/manager is not measured by what it knows (that is the product of learning), bur rather by how it learns -- the process of learning. Management practices encourage, recognize, and reward: openness, systemic thinking, creativity, a sense of efficacy, and empathy.

Role of Information Systems in the Learning Organization

Although, Huber (1991) explicitly specifies the role of IS in the Learning Organization as primarily serving Organizational Memory, in my view, IS can serve the other three processes (Knowledge Acquisition, Information Distribution, and Information Interpretation) as well. One instance of use of IS in Knowledge Acquisition is that of Market Research and Competitive Intelligence Systems. At the level of planning, scenario planning tools can be used for generating the possible futures. Similarly, use of Groupware tools, Intranets, E-mail, and Bulletin Boards can facilitate the processes of Information Distribution and Information Interpretation. The archives of these communications can provide the elements of the Organizational Memory. Organizational Memory needs to be continuously updated and refreshed. The IT basis of OM suggested by Huber (1991) lies at the basis of organizational rigidity when it becomes "hi-tech hide bound" (Kakola 1995) and is unable to continuously adapt its "theory of the business" (Drucker).

Analytical Approaches to Organizational Change

Wilson (1992) summarizes the major organizational change theories on page 22. He states that systematic conflict frameworks include the following theories of organization:

1. Contextualism
2. Population ecology models
3. Organizational life cycles
4. General market and business sector approaches
5. Power in organizations and political models of change
6. Social action theories

The author also states that strategic choice frameworks include the following theories of organization:

1. Organizational Development
2. Planned incrementalism
3. The enterprise culture as normative practice
4. Entrepreneuralism and intrapreneurialism
5. Learning from ëbest practice' (e.g. Americanization and Japanization)
6. The use of external consultants and change agents

The author continues his explanation on page 25 and subsequently defines voluntarism as the framework in which human decisions can make a big difference, and determinism as the close relationship with the economic structure of society. He alludes to a debate in the Academy of Management Review from Bettis and Donalson (1990) who determine that "purely economic approaches can explain only some organizational phenomena. This is because economic models of the firm make unwarranted assumptions about individual human behaviour and organizational processes. Management theory on the other hand is too behavioural in its approach, ignoring the 'realities' of the market such as transaction costs and agency theory.

Economic views of the firm rely heavily on the concept of material self-interest among actors (firms and individuals). This conflicts irresolvable with behavioural concepts such as the roles of intellect, ethics and aesthetics in explaining "strategic change"

To summarize, it is important to make an appropriate balance between the internal factors of any organization and the external ones. This is, incidentally, a key factor in the process of organizational analysis in strategic planning, which is known by the acronyms of SWOT: the strengths, weaknesses, and opportunities of, and threats to the business.

Performance Management

"Performance management is an integrated process of defining, assessing, and reinforcing employee work behaviours and outcomes." (A. Mohrman et al, 1990:216) Performance management includes practices and methods for goal setting, performance appraisal, and reward systems.

Goal setting specifies the kinds of performances that are desired. Based on the features of the goals setting process, OD practitioners have developed specific approaches for implementing goal setting: (Cummings and Worley, 1993:396)

1. Diagnosis. Includes business strategy, workplace technology, and level of employee involvement.
2. Preparing for goal setting. Some training is necessary for managers and employees to engage in goal setting.
3. Setting goals. This step involves establishing challenging goals and clarifying goal measurement. Employees have to have a high participation.
4. Review. This includes assessing the goal-setting process so that modifications can be made, if necessary.

Values of O.D. Professionals

As an O.D. professional, I acknowledge the fundamental importance of the following values for Organizational Development Profession and professional.

• Quality of life -- people being satisfied with their whole life experience;
• Health, human potential, empowerment, growth and excellence -- people being healthy, aware of the fullness of their potential, recognizing their power to bring that potential into being, growing into it, living it, and, generally, doing the best they can with it, individually and collectively;
• Freedom and responsibility -- people being free and responsible in choosing how they will live their lives;
• Justice -- people living lives whose results are fair and right for everyone;
• Dignity, integrity, worth and fundamental rights of individuals, organizations, communities, societies, and other human systems;
• All-win attitudes and cooperation -- people caring about one another and about working together to achieve results that work for everyone, individually and collectively;
• Authenticity and openness in relationship;
• Effectiveness, efficiency and alignment -- people achieving the maximum of desired results, at minimum cost, in ways that coordinate their individual energies and purposes with those of the system-as-a-whole, the subsystems of which they are parts, and the larger system of which their system is a part;
• Holistic, systemic view and stakeholder orientation -- understanding human behavior from the perspective of whole system(s) that influence and are influenced by that behavior; recognizing the interests that different people have in the system's results and valuing those interests fairly and justly;
• Wide participation in system affairs, confrontation of issues leading to effective problem solving, and democratic decision-making.

Ethical Guidelines for O.D. Professionals

Responsibility to Self

• Act with integrity; be authentic and true to myself
• Strive continually for self-knowledge and personal growth
• Recognize personal needs and desires and, when they conflict with other responsibilities, seek all-win resolutions of those conflicts.
• Assert your own economic and financial interests in ways that are fair and equitable to you as well as to your clients and stakeholders.

Responsibility for Professional Development and Competence

• Accept responsibility for the consequences of your acts
• Strive to achieve and maintain a professional level
• Recognize your own personal needs and desires and deal with them responsibly in the performance of your professional roles.
• Practice within the limits of your competence, culture, and experience in providing services and using techniques.

Responsibility to Clients and Significant Others

• Serve the long-term well-being, interests and development of the client system and all its stakeholders, even when the work being done has a short-term focus.
• Conduct any professional activity, program or relationship in ways that are honest, responsible, and appropriately open.
• Establish mutual agreement on a contract covering services and remuneration.
• Deal with conflicts constructively and avoid conflicts of interest as much as possible.
• Define and protect the confidentiality of client-professional relationships.
• Make public statements of all kinds accurately, including promotion and advertising, and give service as advertised.

By: Sanjeev Sharma
BPO Center
GTL Limited
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