Effective Organizational Development - Case Study Example

Globalization and internationalization necessitates changes in an organization. An organization is a social entity pursuing definite goals and is linked to the external environment. An organization brings together resources to achieve the desired goals, facilitates innovation, uses technology to produce goods and services efficiently (Baker, n.d.). An organization can adapt to and influence a changing environment apart from creating value for stakeholders. An organization even accommodates challenges of diversity and ethics and the motivation and coordination of employees. An organization comprises of five basic parts – the top management, the middle management, the technical core, the technical support and the administrative support. To create value every organization has to seek, generate, distribute knowledge and bring about effectiveness. Organizations are constantly being challenged to develop new dynamic, adaptable structures. Managerial actions can bring about positive changes through modification at various levels. The essentials for the development of any organization would include how the organization maintains relations or enters into contracts with others including the stakeholders, the structure of the organization, the culture of the organization, how it sets goals and missions, how it keeps its employees motivated, its development in a global setting, group dynamics and it also includes diagnosis of the state of the organization. Effective organizational development (OD) can begin with the right diagnosis. Organizational diagnosis is a process based upon behavioral science theory for publicly entering a human system, collecting valid data about human experiences with that system, and feeding that information back to the system to promote increased understanding of the system by its members (Alderfer cited by Dutta Roy, 2001). Diagnosis is not merely data collection but to arrive at a conclusion as to what the data meant. Hence diagnosis assigns meaning, weight, priority and relationships to facts (Porras, n.d.). It establishes a widely shared understanding of a system and based upon that understanding it determines if change is desirable. The focus of attention in diagnosis should be on the sub-system areas (top management, department, group, individual unit), and the organization processes which include the decision-making process, communication system used, change management, managing conflicts, managing relationships, setting of goals and planning (Dutta Roy, 2001). The general process of OD takes place in four phases (Porras): 1. Diagnosis of the ‘state’ of the organization. 2. Actions/interventions to correct the problem. 3. Evaluation of the effects of the actions. 4. New actions/interventions as needed. Observing the internal environment in an organization is valuable means to ascertain how the organization really functions. An individual, the team and the organization are the three dimensions of an organization (Castka, Bamber, Sharp & Belohoubek, 2001). Hence the three primary tasks for the team development models are purpose, partnership and process. Teamwork is a critical factor in most successful companies especially as total quality management (TQM) and total productive maintenance activities are based on teamwork. Effective use of teams can bring significant improvement in productivity, creativity and employee satisfaction. Teams can bring together skills and experience that far exceeds those of any individual. Team communications support real-time problem-solving and initiative. Organization’s today face turbulent changes and the outcome depends on the individual and team responses. In a team each individual contributes their knowledge or expertise to solving a jointly owned problem which no individual can solve on his own (McGreevy, 2006). A team is like a jigsaw puzzle of complimentary parts fitting perfectly together. Organizations today have to coordinate across departments and even across a variety of intra- and inter organizational boundaries. Furst, Blackburn and Rosen (1999) contend that virtual teams can bridge these boundaries and provide a considerable competitive advantage. Virtual teams enable organizations to improve efficiency and productivity, and procure expert knowledge from internal and external sources. Virtual teams or organization are composed of coworkers geographically and organizationally linked through telecommunications and information technologies attempting to achieve an organizational task (Kayworth & Leidner, 2000). In virtual organization the core competencies can be organized together and serve the customers whom the companies individually would not be able to serve (Gulati, 1996). The expenses on technology, resources and facilities can be shared and it leaves the company more resources to spend on customizing product features and services leading to competitive advantage. Each member of the organization provides some unique contribution which is essential to meet the customer requirement. A company gets access to specialized competencies which are not possible by one organization and hence they can engineer many more products. An organization’s culture determines the organization’s behavior. According to Schein (1998) culture is freely referred to anything that has to do with beliefs, values, norms, ideology and managerial style. If a change is to be given importance or resistance to change is encountered, managers speak of it as a cultural change. Culture according to Schein is a property of a group. It is the accumulated learning that the group has acquired over a period of time. This learning enables the organization to cope with the external adaptation and internal integration. Once these assumptions have been found to be valid and acceptable, they are transferred to the new members. How the culture is integrated depends upon the stability of the group. Hence culture remains largely unconscious and embedded in an organization’s daily actions. Thus organizational culture includes the artifacts (organizational structures and processes), values (strategies, goals and philosophies) and the underlying assumptions that are unconsciously taken for granted. Organizational culture is the key to organizational excellence and to understand the culture is to understand the organization. According to Handy (1993) culture can be strong or weak depending upon the staff response to the stimulus. The right combination of people and culture can mean the difference between the financial success and failure. Culture further serves as an informal control mechanism which defines acceptable behavior within an organization. Resistance to change in the face of environmental pressure and uncertainty is caused by the organization culture, says Schein (Lakomski, 2001). In order to change the culture, organizational learning needs to take place, which would help the organization to deal with the internal and external environments. The leader can transform the current stagnating culture into a productive culture. Organizational change management requires processes and tools for managing the people side of the change at an organizational level. The management needs to first detect the trends in the macro and micro environment. Change in an organization can be due to downsizing, redundancy, change of management through mergers and acquisition, change due to expansion, and most important due to the advancements in technology. According to Worrall, Campbell & Cooper (1999) redundancy is the most evocative and fear inducing form of organizational change for many workers. Landale (2004) believes motivation is the key to empower the staff and get the front line managers to take collectively responsibility. The success of change management relies heavily on employees making a smooth process of transition. Most initiatives involve human capital, which makes the role of HR crucial in helping the organizational leaders determine the effects that change initiatives could have on the labor force. Consumer tastes, expectation and cultural norms are all undergoing change. People are an important factor in understanding needs and trends and in fostering innovation. Communication, training programs and plan for resistance to change has to be in place before change is actually applied. It has to be an integrated plan where the management understands the change management model, how to use it to coach their employees and how to integrate the plan. Timing for change management is also important as according to Woodward (2007) research suggests that change management should start during the problem identification phase of the project. Training too needs to be just-in-time and not a one way communication. People need to know why they need to understand something. Managers worry that change may cause them to lose power or control which they have so far enjoyed. This requires that managers be trained ahead of time as there is a tendency to drift towards negativity during change. To manage change requires a leader to steer the company through the crisis or change. Change in an organization can be brought about for different reasons. Leadership requires trust and commitment of others, which they can achieve through their own behavior and integrity. Leaders create and deal with change; leadership requires vision, direction, strategies, motivation and inspiring. Leadership is the essential element that holds an organization together while moving it forward (RIG, 2005). The leadership style and approach would largely depend upon the situation. The model of leadership developed by Kouzes and Posner is known as The Five Practices of Exemplary Leadership. These qualities include modeling the right way, inspiring a shared vision, challenging the process, enabling others to act and encouraging the heart (Wiley, 2000). The strength of a leader lies in his ability to inspire others to give their best. A leader plays a crucial role in such cases where he has to inspire them to understand and accept the vision or the corporate goals. The individuals have to be inspired to deal with the external and internal environment. The leader can transform the current stagnating culture into a productive culture. When the resistance to change appears to be non-rational, the dynamics of culture have to be understood. The leader would first need to unfreeze the old assumptions after which cognitive restructuring takes place. Thereafter refeezing takes place which means that changed behaviors and new assumptions become embedded and reinforced as the new culture through which the organization can solve the problems. In this change model, the role of the leader in managing change becomes important as he should be competent to diagnose and respond appropriately to changes in the environment on an ongoing basis. Organizations are political arenas in which various forces and coalitions compete. The stakeholders are those individuals or groups that have an interest in or are affected by the performance of the company or the way it uses its resources (Joyce, 2005). Stakeholders include the owners (who have invested a portion of their wealth or the shareholders), employees (who seek fair and respectful treatment by the company), the government (who has to ensure that companies comply with all rules and laws), customers ( who are looking for reasonably priced quality products that are safe), community (local, regional and national), competitors ( keep the company abreast of developments and helps to avoid unethical business practices), and social activist group (going against them may give rise to negative media attention for the accountant). Thus an organization exists in the community and hence has to be cognizant of its relationship with each of the stakeholders. Organizational communication is an important aspect that determines the success. Communication is the transfer and understanding of meaning. According to Athanasios (2005) interpersonal communication is usually with intent to influence or motivate. Understandable messages are sent through a channel of a sender to the receiver. Successful communication also means that the transmitted message should be properly decoded. This is a key factor in the cohesion of a group of people working together to achieve common objectives. Communication can take place in organization in written, spoken, through emails or through the telephone. Thus the development of an organization starts from the process of problem identification through the right diagnosis using the right tools. The decisions are thereafter based on the outcome of the diagnosis. The organizational structure can be determined based on the size and nature of the firm. Organizational culture plays an important role in shaping the future of the organization and resistance to change is very common. Resistance can be handled if the organizational culture is effective. Change management requires the right insight into the problems. Communication too plays a vital role in information sharing. Leadership style too is determined based on the outcome of the diagnosis. In the changed global environment to remain competitive it is essential that development of an organization be an ongoing process. This requires effectively managing change and transformation through the right leadership and culture adaptation process. References: Athanasios, L. (2005). Communication problems in professional sports: the case of Greece, Corporate Communications; 2005; 10, 3; ABI/INFORM Global, pg. 252 Baker, G. (n.d.). Organizations and Organization Theory. Available from: http://www.unf.edu/~gbaker/Man4201/Chapt001a.PDF [accessed 25 June 2008] Castka, P. Bamber, C. J. Sharp, J. & Belohoubek, P. (2001). Factors affecting successful implementation of high performance teams. Team Performance Management, Vol. 7 No. 7/8 pp. 123-134 Dutta Roy, D. (2001). ORGANIZATIONAL DIAGNOSIS. 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