Various Facets of Organizational Development - Research Paper Example

? Organizational Development of the of the The study has decided to shed some light on various facets of organizational development (OD). Key objective of the study is to recommend OD intervention strategies for an organization which can improve its performance in the long run. In the first part, the study has conducted a literature review in order to understand importance of various theoretical concepts of OD. On the basis of theoretical argument presented in the literature review, the study has identified internal and external issues which can force an organization to seek for OD intervention. In the last section, the study has recommended OD intervention strategies for the organization in order to improve its performance. The research paper has also suggested evaluation technique which can monitor the efficacy of recommended OD interventions for the organization. Table of Contents Table of Contents 3 1.0 Introduction 4 2.0 Literature Review 5 2.1 Organizational Context 5 2.2 Theories of OD 6 8 3.0 Organizational Needs 10 4.0 Impact of Environmental and Internal Issues on OD 10 4.1 Labor Pool Diversity 10 4.2 Technological Advancements 11 4.3 Global Expansion 13 4.4 Ethical Standards 14 5.0 Recommended Intervention 14 5.1 Human process based intervention strategies 16 5.2 Techno-structural intervention 17 5.3 Socio-technical intervention 17 5.4 Organizational transformation (OT) 18 6.0 Success Factor for Recommended Intervention 19 7.0 Evaluation of Recommended Intervention 20 8.0 Conclusion 21 Reference 22 1.0 Introduction Gone are the days when organizations can stay at top of both organic and inorganic growth by banking on first mover’s advantage in sustainable manner, in hypercompetitive modern business environment, a particular organization need to be flexible and ready to change in order to keep going. The concept of organizational development (OD) was postulated by research scholars almost 50 years ago. According to supporters of OD, the concept can be used solving pertinent issues of change management for a modern organization as like other neo-classical concepts like business process improvement, business process re-engineering, organizational life-cycles and total quality management (TQM). According to Holland and Salama (2010), OD can be described as sustainable and one way improvement of activities for an organization. The scholars’ duos have also pointed out that, implementing OD process is a challenging task for an organization due to reasons like, First- the organization needs to breakdown its structure in partial or complete manner in order create room for newly implemented system, Second- the organization needs to adopt resource hungry intervention strategies in order to ensure efficacy of the change management process and last- the organization needs to influence its internal and external stakeholders to align their interest with common mission and vision statement of the change process. Holland and Salama (2010) have found that interaction of organization with the external environment decides the dynamics of OD process. Interesting fact is that, academic scholars state that OD is an initiative of top management to develop mid level and lower level organizational members but there are examples where employees develop themselves without seeking intervention from top management (Mulili & Wong, 2011). The concept of job security has changed after the recession during 2007-2009 and sovereign debt crisis and organizational members are enrolling themselves to flexible and lifelong learning process in order to remain employable in changing and harsh economic environment. Therefore it has been observed that employees are embracing various facets of OD process such as, off-the- job education, on-the-job training and many others. Now the question is can an organization improve its performance by using the theoretical framework of OD. Well, answer of this crucial question is the key essence of this research paper. Contextual analysis of OD process reveals that the concept has following five verticals; OD is a planned and proactive process which doesn’t follow the principles of reactive activity. OD is a holistic approach which covers almost entire departments of an organization. OD is a top down approach which is initiated and managed by top level management. Primary concern for OD is to ensure well-being of organizational members. Success of OD process is dependent on organization’s capability to incorporate intervention or planed change by taking help of change agents. This study is influenced by exhilarating nature of OD process; hence the researcher has planned to analyze how performance in an organization can be improved by adapting the theories and concepts in OD. Next sections of this research paper will be devoted for addressing the above mentioned research problem. 2.0 Literature Review 2.1 Organizational Context Although organizational development is one of the most celebrated topic in management but unfortunately, till date, very few researchers have been succeeded in defining every elements in OD process. Historically, concepts and theories of OD process that were proposed by various research are interlinked, which means that research work of various research scholars are focused to one particular area of organizational development. Core concept of OD emphasizes on defining strategies which can ensure growth and development of organization (Chapman, 2002). According to Chapman (2002), organizational development process is directly linked with change management processes such as process change and strategic intervention. Theories related to transformational change, leadership, team building, organizational learning etc are the backbone of OD process and further research is needed in order to co-align all these theories and create a one-dimensional theory for OD. Conflicting definition of OD exist in the literature, for example, one set of research scholars such as Cascio and Aguinis (2005) have defined OD as strategic and system wide application which can improve organizational effectiveness whereas other set of researchers such as Gibb (2003) and Brache (2001) have argued that purpose of OD should be to improve quality of working life of organizational individuals. OD theorists have merely tried to understand whether substantive development of organizational individuals is equivalent with change process which can ensure organizational effectiveness. Although the critical aspect of the intra-level relationship between organizational development and change process is a fascinating topic but the study will not put this topic in the first place because purpose of the study is to define how adapting theoretical concepts of organizational development can help an organization to improve its performance. Employees and other organizational members play crucial role in facilitating the scope for organizational development, hence organizations need to focus on selection and development of employees while planning to incorporate change process. Cascio and Aguinis (2005, p. 44) have defined challenges in the road of OD process as, “any time a person or an organization is confronted with alternative courses of action, there is a decision problem.” According to these scholars, organization is a living object, which is the reason for failure of previous research scholars such as Bradford and Burke (2005) and Jones and Brazzel (2005) in proposing one concrete definition of OD process. 2.2 Theories of OD 2.2.1 Equilibrium Theory Equilibrium model was first theoretical concept in the field of OD. Kurt Lewin has given a three stage equilibrium model which is related to change management process (Simms, 2005). Three stage models can be closely associated with the OD process. Three stages can be explained in the following manner. 2.2.1.1 Unfreezing In the first phase of organizational development, the organization breakdown the existing structure in order to reduce resistance in change process. In this phase, top level management identifies existing dissatisfaction among employees regarding the organizational process. Organizations create an external constraint for would be change agents in order to motivate them to participate in system break down process. 2.2.1.2 Change In this phase top level management works with middle and lower level management in order to open the door for OD process. Organizations use knowledge session, training & development, reward system in order to motivate organizational individuals to take active part in change process. 2.2.1.3 Refreezing In this phase organizations consolidate the positive result of change process and institutionalize employees to align with implemented cultural values. Alignment of work culture and newly implemented organizational system is necessary for ensuring success of refreezing process. On the basis of argument presented in equilibrium theory, OD process has two phases, in the first phase, intervention in directed towards managerial practices, organizational policies and organizational structure while in the second phase intervention is directed towards organizational culture, strategy and leadership. Although the 2.2.2 Integral Theory According to Wilber (2003), integral theory focuses on underlining individual and social development within explanatory framework of organization. The concept of social life improvement of organizational individuals is the key mantra of integral theory. According to promoters of integral theory, organizational development should focus on addressing human equerries related to their social life balance, learning and personal growth. Theoretical model for integral approach of organizational development can be explained in the following manner. (Source: Cacioppe and Edwards, 2005) According to the model, organization is an open ended system and it has both internal and external quadrants. In the external quadrant, organizational structure and organizational behavior are the most prevailing factors. In the OD process, both organizational structure and organizational behavior are needed to be adjusted in accordance with the demand of changing situation. In the internal quadrant, organizational culture and consciousness are the important facets. Organizations need to re-adjust these factors in order develop its human capital and improve their performance. Mutual conjunction of both individual and collective development of organizational individual is needed in order to make OD process a successful one. Care observation of the above OD spectrum reveals that, individual line in representing developments like moral development of organizational individuals, cognitive development of employees and interpersonal development of human resource capital of the organization. 2.2.3 Spiral Dynamics (SD) Although spiral dynamics is psychological and cultural worlds view of management process but modern research scholars such as Cacioppe and Edwards (2005) have successfully integrated the model with OD process. SD defines how organizational development occur in context to social situation for both individual and the organization. (Source: Cacioppe and Edwards, 2005) It is evident from the SD model that it is similar to integral approach; however the model emphasizes more one worldview of particular social orientation of organization or organizational individuals caused by OD process. 3.0 Organizational Needs Literature review of the topic has helped the study to re-examine its purpose. Although theoretical framework of OD is an interesting facet for study but most important thing is how theoretical concepts of OD can direct performance of a firm. It has been already mentioned that key purpose of the study is to understand how organization can improve its performance by using the theoretical framework of OD. Change for the sake of change is not an advisable thing for organizations because changing the existing organizational system not only requires huge amount of financial and non financial resource deployment but sometimes works in destructive manner also. Hence the organization needs to answer question that why it wants to change and go through the OD process. Generally, internal and environmental issues such as labor pool diversity, stringent ethical standards, technological advancements and global expansion can force an organization to go through OD process. In such context, secondary purpose of the study is to identify both internal and external issues which can direct an organization to go through the organizational development process. It has been already mentioned that, interventions by the organization is needed in order to incorporate OD process. Interesting fact is that, selection of intervention mechanism is contextual with the nature of OD is needed by a specific organization. Although different organizations select intervention mechanism according to their requirement but there is no doubt that theoretical basal plane of different intervention strategy is same for all the organizations. In simple words, different intervention strategies are backed by basic theoretical framework of OD process. 4.0 Impact of Environmental and Internal Issues on OD 4.1 Labor Pool Diversity Managing a diversified labor force is a latest buzzword which is increasingly used by OD consultants for improving productivity of the labor force. According to Kamp and Hagedorn-Rasmussen (2004), labor pool diversity can ensure of coexistence of employees who are different in terms of capability, region, nationality, gender etc. According to the scholar duos, managing a diversified workforce means harnessing the differences in terms capability, gender, work style, personality in order to generate a more productive work environment. Other research scholars have suggested that, managing diversified labor pool is related to empowerment of labors to take productive decisions, inclusive growth of all the employees, more hospitable working environment and cost-benefit for organizations. Wrench (2005) has pointed out that, labor pool diversity has linkage with cultural context of OD policies. According to the scholar, appreciating individual, ethnic and demographic differences in the workforce can not only foster structural change in the organization but also bring cultural change. Lorbiecki and Jack (2000) have found that, diversified workforce can help the organization to improve its business performances such as market performance, productivity and financial performance. These research scholars have stressed on the fact that organizations need to recruit capable employees irrespective of their demographic and sociological orientation in order to increase its business performance. According to Konrad (2003), concept of traditional OD frameworks such as team work, organizational learning can be successfully integrated with the diversity management concept. For example, there is possibility that the organizational individuals from varied demographic background will share knowledge among themselves and such free flowing of knowledge and learning will ensure less disruption during the OD process. Hence it can be said that, managing diversified workforce successfully in order improve business performance is one of the internal driver for an organization to go for OD process. The Study will cite example of W. L Gore & Associates, which is a renowned manufacturing company, has adopted OD process in order to use its diversified labor pool in efficient manner. The company has changed its flat organizational structure into Lattice Management Structure, which has helped the company to empower its employees in terms of knowledge sharing and cultural association with the organization. Departments in the W. L Gore & Associates are interconnected and employees from varied demographic background are encouraged to communicate with each other and share knowledge. The OD process has helped the company to improve its productivity and output by two fold within couple of years (Pride, Hughes & Kapoor, 2011). 4.2 Technological Advancements In some cases it has been observed that an organization seeks OD intervention in order to keep pace with technological advancement and achieve competitive advantage over other. For example, deploying internet connectivity in the business process can help an organization to decrease transaction cost with respect to point to multipoint communication. Abouzeedan and Leijon (2004)) have pointed out that emergence of new type of globalization or e-globalization has pushed an organization to rethink about organizational dimension and business orientation in order to survive in a marketplace. Fredberg, Elmquist & Ollila (2008) have found that traditional OD theories needed to be modified in order to link technological advancement as one of the key drivers for OD intervention. According to these research scholars, an organization needs to allocate its resources strategically in order to implement state of art technologies which can improve its performances. Research scholars such as Fredberg, Elmquist & Ollila (2008) have coined the term “innovation capital” while describing the alignment between OD intervention and technological advancement. (Source: Zangoueinezhad and Moshabaki, 2009) According to modern OD theorists, there can be four types of organizational structure such as rational closed system, rational open system, natural closed system and natural open system. Suppose an organization has rational open system which is characterized by open interaction of external environment. Exchange between the environment and organization is dependent of four aspects such as, 1- system capital or technological resource of the company to go for OD intervention, 2- human resource pool, who will be engaged during the technological intervention process, 3- financial resources, which will be deployed during OD intervention and 4- existing open capital or technological advancement opportunities that can adapted by implementing OD intervention process. The study will cite example of Chevron Corporation (Chevron) which has changed has changed its value chain operation in order to proselytize technological advancement in three verticals of operation such as downstream, upstream and midstream. For example, upstream operation of Chevron Corporation includes exploration and production of crude oil and natural gas whereas downstream operations covers oil refining, petrochemicals manufacturing and fuels, lubricants marketing, supply and trading of oil products. The company had found that latest technological application is needed in order extract natural-gas-liquids (NGL) and hydrocarbons; hence they deployed financial and non financial capital in the OD intervention process for implanting the state of art technological application for NGL extraction. 4.3 Global Expansion According to Nankervis (2005) and Zhao (2009), increasing business opportunities in emerging markets such as BRIC nations or Brazil, Russia, India and China has forced marketers to redefine its business policies in order to explore the existing opportunities in those countries. Globalization has increased the scope of cross border commerce, in such context; it has become necessity for an international organization to change its organizational structure in order to remain relevant to foreign markets. International organizations face challenges such as differences in terms of political policies, culture, business norms, demographics etc while expanding its operation in the foreign shores. There is high possibility that business environment in the foreign market might not have similarities with the domestic business environment for a multinational organization, in such cases, the organization should go for OD intervention in order to change its business structure, which can help them to compete successfully with rivals in foreign market. The study will give example of Nokia, which has faced challenges while expanding its operation in USA. Following rigid Finnish culture while developing the Smartphone has not helped Nokia to achieve competitive advantage over major Smartphone makers such as Apple and Samsung in USA; hence the company needs to intervene in its leadership policy in order to change the keep pace with the market competition. Finnish culture is complemented with long approval period for developing a new product whereas American telecom giants follow short approval period for new product development. Hence problems faced by Nokia in USA are more related to managerial and cultural challenges for an organization that is planning to expand business in foreign market (Denison, Hooijberg, Lane, & Lief, 2012). 4.4 Ethical Standards Many organizations change its organizational dynamics in order to follow ethical standards, directed by macro environment. For example, organizations in USA have change business policy in order to prevent financial scam after the financial scam of Nortel, Vivandi, Enron and Lehman Brothers came to the light (Ferrell, Fraedrich & Ferrell, 2012). Corporate governance codes such as Sarbanes–Oxley Act (SOX), Combined Codes and Walker committee recommendation have been used proposed by various research scholars in order to guide organizations to maintain ethical standard in the business operation. In some cases, organizations go for OD intervention in order to follow the ethical standard prescribed by various corporate governance codes. For example, HSBC has set ethical standards such as, 1-maintaining privacy of prospects, 2- permission marketing, 3- detailed specifications of specify “Important Terms and Conditions” to clients for the marketing department of the organizations and also given them training regarding how to comply with ethical standards. These are examples of minor tweaking in the name of OD intervention by HSBC in order to do business by maintaining high ethical standard. 5.0 Recommended Intervention In depth analysis of OD intervention strategies reveal that, there are more than one type interventions strategies can be used in order to help an organization to address environmental and internal challenges. Although there is plenty of OD intervention strategies are available to the organization but all of these strategies can be summarized into four major categories such as, 1- human process based, 2- socio-technical, 3- techno-structural and 4- organizational transformation (Mulili & Wong, 2011). Available OD intervention strategies in terms of above mentioned four strategic pillars can be explained in the following manners. Type of Intervention Strategy Methods of Intervention Human process-based strategies Sensitivity training or T-group training Responsibility charting Confrontation meeting Conflict resolution meetings Team building meetings Identifying a common enemy Organization mirror interventions Work with agenda Force Field Analysis Techno structural strategies Job enrichment Rescheduling the work Job enlargement Socio technical strategies Total quality management Quality circles Organizational transformation strategies Implementation of learning organization concept Business process re-engineering HPWS or High performance work systems (Source: Mulili & Wong, 2011) Now the fact is that, above mentioned OD intervention methods are contextual in accordance with the requirement of a specific organization and it is a challenge for the organization to select right intervention strategy without wasting time and resources on selecting an intervention strategy which might look attractive but cannot solve the problem for the organization. Hence the researcher has decided to analyze the suitable intervention strategies for the organization which is exposed to both macro and micro environmental threats such as labor pool diversity, technological advancements, global expansion, ethical standards and many others. 5.1 Human process based intervention strategies The organization should focus on using intervention strategies in order to improve interpersonal relationship between organization members. The intervention strategy not only helps in developing communication between different groups in the organization but help team members to exploit opportunities. The study will recommend “survey feedback approach” which can help the organization to change its processes which are directly related to human resources. Organization should go for survey process for taking feedback from organizational members regarding existing problem areas in the process and their recommendations for solving the problem. Doing a sample survey by interviewing different organizational members will definitely create consciousness among them that there is something wrong in the existing organizational process. According to Mumford (2011), survey feedback approach is a useful tool to generate awareness regarding process related problem among organizational individuals and also encourage them to be the change agents during the time of OD interventions. In the second stage, the organization should discuss the outcome of the survey during team meeting. Developing team by using the survey feedback approach can help the organization to create initial platform for the next phases of OD intervention and also reduces the scope for resistance from the organizational individuals during intervention periods. Aim of the conjoint model of survey feedback approach and team building is to develop cordial working relationship among team members in the organization. Recommended intervention strategies will help the organization to address issues like managing labour pool diversity in successful manner. For example, team building approach will help the organization to create a bond between employees with different demographic orientations. Developing bond between employees will create an environment of learning and knowledge sharing which will alternatively reduce the chance from resistance from organizational members during OD intervention process. 5.2 Techno-structural intervention Techno-structural intervention is internal OD intervention strategy because in this process, organization goes through change in terms of organizational work culture. In many cases organizations change its organizational structure while going through techno structural intervention. Although there are primarily three types intervention strategies such as job enlargement, job enrichment, job rescheduling comes under the umbrella of techno structural intervention but modern OD experts such as Yeo (2005) has pointed out that concept of learning organization should be incorporated while intervening techno-structurally. However the study will recommend alternative work schedules (AWS) for the organization which is facing challenges from both macro and micro-environment. AWS will help the organization to reschedule the work responsibilities of organizational members by using three methods such as, 1- flexitimes- employees are free to choose time schedule for daily office work, 2- A compressed workweek- working fewer days in contrast to five days a week by working extra time for remaining days and 3- flexi-year- employees are free to choose working months in a year. The model will help the organization to transform its environment into more hospitable one and also help them to create a flexible but committed human resource pool. 5.3 Socio-technical intervention One of the most import OD intervention strategies for an organizational which is planning to adapt new standards like ethical codes for business designed by responsible authorities, corporate governance codes, corporate social responsibility (CSR) in order to satisfy needs of internal and external stakeholders and shareholders. Although there are two types of socio technical intervention strategies such as Quality circles and Total quality management (TQM) but the study will recommend TQM for the organization which can help them to improve efficiency in the business process and ensure quality. Adapting TQM will help the organization to re-examining its existing business process, then finding the flaws in the business process and finally rectifying the flaws. TQM will also help the organization to comply with the ethical standard of business processes. For example, in TQM process, there are qualities standards which can improve the quality of the production output of the organization on the other hand improving quality of the output will also help the organization to comply with the prescribed quality standards of responsible authorities. There are other benefits of using TQM as intervention strategy, for quality improvement in production process and process output will help the organization to offer better product and services to customers which will help them to achieve competitive advantage over other competitors. 5.4 Organizational transformation (OT) According to Small and Minkes (2010), OT is the most prominent and holistic OD intervention strategy. The objective for adopting OT is to articulate new vision statement for the organization which can help them to change its culture and business process in accordance with external environment in the foreign country. In some cases it has been observed that organizations go for OT process in order to implement new technologies in the business process. For example, once P&G has adopted OT process in order to create room for implementing EDM (Electronic data management system) and ERP process in order to speed up the entire value chain process. OT is an important tool for adjusting the organizational structure in accordance to business culture of a foreign country. For example, multinational oil & gas companies de-centralize its organizational structure while operating in Middle East in order to in order to bring speed, simplicity and flexibility in the value delivery process. Hence, it can be said that OT is helpful for an organization that is planning to expand its business in international market. The study will recommend Business process re-engineering (BPR) for the organization in order to satisfy its drive for technological advancement. Implementing BPR and steering group concept will help the organization to identify the weak areas in its business process, then rejecting the existing system which is plagued by weaknesses and finally re-installing a new system which will make the organization flexible enough to adopt new technology. On the other hand the organization should go for implementing learning organization concept which will help them to be flexible enough to change its structural orientation in accordance with the macro-environmental requirements. Adopting learning organization concept will help the organization can create a balance between mechanistic and organic structure. In simple words, integrating everyone in the organization under a common learning platform will not only help the organization to improve group dynamics but also increase the scope for bringing innovation through knowledge sharing. 6.0 Success Factor for Recommended Intervention The study has recommended a conjunction of all four OD interventions such as human process-based strategies, techno structural strategies, organizational transformation strategies and socio technical strategies in order to improve the organization to response positively to environmental and internal issues such as labor pool diversity, global expansion, technological advancements and ethical standards. Recommended interventions have the ability to integrate structural flexibility, strong cultural value and learning within the organization and these three factors will improve performance in the organization. Although it has been already explained how the recommended interventions would improve the performance of the organization in the earlier section of the study but there is further need for explaining the function of the recommended organizational structure which has been created through OD intervention. The study has recommended a mix of mechanistic and organic structure which is popularly known as “Lattice Management Structure” for the organization. According to Solesvik and Encheva (2010), lattice management structure spirally and partially aligns the organizational members with the help of a network which has unique infimum and supremum. Numbers of hierarchies are less in lattice structure and employees can communicate with top level management through horizontal and diagonal channels. A sample lattice management structure can be explained in the following manner. (Source: Solesvik and Encheva, 2010) Suppose in recommended organizational structure, organizational member g1 has the skill set and knowledge of m3; on the other hand another organizational member g2 has the skill set and knowledge level of m2 but doesn’t has the skill set and knowledge of m3. Demographic orientation of both g2 and g1 are different, now associating these two employees through partial alignment will help them to share knowledge and together produce more output in contrast to individual effort. Knowledge sharing will help the organization to gather data from external environment then transform the data into valuable information through the conscious involvement of organizational members and then use the information in collective manner in order to incorporate innovation. It is evident from the functionality of lattice management structure that Recommended OD intervention strategy will not improve the performance of the organization but also help the organization to achieve sustainable competitive advantage through innovation. 7.0 Evaluation of Recommended Intervention According to Corvello and Migliarese (2007), organizations need to use both internal and external knowledge in order to improve its performance. The same concept can be applied to the organization which has undergone OD intervention process and decided to evaluate the intervention process. The organization can go for three types of evaluation of the recommended intervention process, 1- process evaluation, 2- impact evaluation and 3- strategic analysis. Process Evaluation The organization should create a steering committee which will monitor how the implemented system is working after the completion of the intervention and how well the organization has adopted the theoretical model of interventions. The steering committee will prepare a report regarding the process evaluation and submit the report to top management. A separate process map should be created in order to fix any existing discrepancies in the installed process. Impact Evaluation A quality team should be created in order to test the quality of the output produced by the newly implemented process. The quality team will also be responsible to monitor the success of TQM process that was implemented during the OD intervention process. Strategic Analysis Top level management of the organization will conduct the strategic analysis of newly implemented business process that was adapted after the OD intervention. In this phase, top level management will evaluate the efficiency of the organizational structure by monitoring the activity of each sub block in the structure. 8.0 Conclusion It is evident from the above discussion there cannot be one universal intervention strategy which can help an organization to address all the internal and external challenges. Hence, the study has recommended selected OD intervention strategies for the organization which can not only help them to improve performance but also achieve sustainable competitive advantage. Reference Abouzeedan, A., & Leijon, S. (2004). Globalization and impact on entrepreneurial diversity management. Montreal: McGill University. Bradford, D. L., & Burke, W. W. (2005). Reinventing organization development new approaches to change in organizations. San Francisco, CA: John Wiley & Sons. Cacioppe, R., & Edwards, M. (2005). 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