CHAPTER 4

ORGANISATIONAL DEVELOPMENT

Meaning of Organisational Development:

Organizational Development (OD) in the context of Organizational Behavior (OB)

refers to a planned, systematic, and long-term effort to improve an organization's
overall effectiveness and health. It involves the application of behavioral science
principles and practices to help an organization achieve its goals, adapt to change,
and enhance its performance. Organizational Development focuses on improving
various aspects of an organization, such as its structure, culture, processes, and
people.

Characteristics of organizational Development :

1. Systematic Approach: OD is a systematic and planned approach to improving the
overall functioning and effectiveness of an organization. It involves a deliberate and
structured process rather than ad hoc changes.
2. Change-Oriented: The primary focus of OD is on facilitating positive change within an
organization. It seeks to enhance the organization's ability to adapt, grow, and thrive
in a constantly evolving environment.
3. Human-Centric: OD places a strong emphasis on people within the organization. It
recognizes that people are a valuable resource and that their involvement,
development, and well-being are critical to the success of the organization.
4. Data-Driven: OD relies on data and evidence to inform decision-making. Data is used
to assess the current state of the organization, identify areas for improvement, and
measure the impact of interventions.
5. Participative and Collaborative: It encourages active participation and collaboration
among all levels of the organization. Employees, managers, and leaders are involved
in the change process and decision-making.
6. Holistic Perspective: OD considers the organization as a whole, looking at the
interconnections between various systems, processes, and people. It seeks to create
alignment and synergy across different parts of the organization.
7. Long-Term Orientation: OD is not a quick-fix solution; it takes a long-term view of
organizational development. It aims to create sustainable and enduring changes
rather than short-term improvements.
8. Continuous Learning: OD fosters a culture of continuous learning and improvement.
It encourages experimentation, reflection, and the ability to adapt based on
feedback and experiences.
9. Open and Transparent: OD promotes open communication and transparency. It
encourages honest and constructive feedback and creates an environment where
problems and issues can be openly addressed.
10.Ethical and Values-Driven: OD practitioners operate with a strong ethical
foundation, emphasizing fairness, respect, and integrity. The values and culture of
the organization are considered in the change process.
11.Flexibility: OD is adaptable and flexible. It recognizes that each organization is unique
and that interventions need to be tailored to suit the specific needs and context of
the organization.
12.Consultative and Facilitative: OD often involves external consultants or internal
facilitators who guide and support the change process. These individuals play a role
in facilitating discussions, providing expertise, and offering an objective perspective.
13.Results-Oriented: While OD emphasizes the process of change, it is ultimately
focused on achieving tangible and measurable results. These results are aligned with
the organization's strategic goals.
14.Conflict Resolution: OD recognizes that conflict can be a natural part of the change
process. It provides strategies and methods for addressing and resolving conflicts
constructively.
Process of Organisational Development
The steps involved in organizational development are :
1. Identifying the Problem or Area of Improvement: Begin by identifying specific
issues, challenges, or areas within the organization that need improvement. This
could be related to performance, culture, structure, communication, or any other
aspect of the organization.
2. Analysis of the Problem: Conduct a thorough analysis of the identified problem.
This may involve collecting data, seeking input from employees, and using various
tools and methods to gain a deep understanding of the issue.
3. Create an Action Plan: Develop a detailed action plan that outlines the strategies
and steps required to address the problem. This plan should specify who is
responsible for what, timelines, and the resources needed.
4. Communicate to Employees: Effective communication is essential. Share the
action plan and the reasons for the changes with employees. Ensure that they
understand the goals and their roles in the process.
5. Implement the Plan: Put the action plan into motion. This involves executing the
strategies and interventions designed to address the identified problem or area of
improvement.
6. Evaluation and Repeat: Continuously monitor and evaluate the progress of the
plan. Use metrics and feedback to assess whether the desired improvements are
being achieved. If the initial plan falls short of expectations or new challenges
emerge, make necessary adjustments, and repeat the process as needed.

Overview of entering and contracting in OD

"Entering and Contracting" is a crucial initial phase in the field of Organizational
Development (OD). It involves establishing a foundation and framework for the OD
process, ensuring clarity, and building the necessary relationships to drive successful
change and improvement within an organization. Here's an overview of the entering
and contracting phase in OD:
1. Understanding the Organization : The first step in entering and contracting is
gaining a deep understanding of the organization. This includes its history, culture,
structure, goals, and challenges. This knowledge is essential for the OD practitioner
to be effective.
2. Identifying Key Stakeholders: Determine who the key stakeholders are within the
organization. These are individuals or groups who have a vested interest in the
outcome of the OD process, such as top management, employees, unions, or
external partners.
3. Building Relationships: Establish and nurture relationships with key stakeholders.
Building trust and rapport is essential because it paves the way for successful
collaboration and open communication throughout the OD process.
4. Defining the Scope and Purpose: Clearly define the scope of the OD project.
What specific areas need improvement or change? What are the goals and
objectives of the OD effort? Having a well-defined purpose is essential for focused
and effective OD work.
5. Contracting: Contracting is a formal agreement between the OD practitioner and
the organization. It involves clarifying expectations, roles, responsibilities, and
boundaries for both parties. This contract outlines what the OD practitioner will do,
what resources will be provided, and what is expected from the organization.
6. Agreeing on Process and Methods: Determine the methods, tools, and
approaches that will be used in the OD process. This includes deciding on data
collection techniques, interventions, and evaluation methods.
7. Setting Communication Channels: Establish communication channels for regular
updates and feedback throughout the OD process. Effective communication ensures
transparency and helps manage expectations.
8. Addressing Confidentiality and Ethics : Discuss and agree upon issues of
confidentiality and ethical considerations. This is particularly important when
dealing with sensitive data or issues within the organization.
9.Managing Resistance: Be prepared to address potential resistance to the OD
process. Some stakeholders may be hesitant or even opposed to change. Developing
strategies to address resistance is a crucial part of entering and contracting.
10. Formalizing the Agreement: Document the terms and agreements reached
during the entering and contracting phase. This formal document serves as a
reference point and a commitment to the OD process.
Successful entering and contracting in OD establishes a solid foundation for
the rest of the OD process. It ensures that all parties involved have a shared
understanding of the goals and expectations, which is essential for achieving
positive and sustainable organizational change. Effective communication and trust-
building during this phase set the tone for a successful OD journey.

ORGANISATIONAL DIAGNOSING

Meaning of “Diagnosing”:
"diagnosing" refers to the process of identifying and assessing the current state or
condition of an organization, typically with the goal of understanding its strengths,
weaknesses, opportunities, and threats. This process is essential for organizations
 looking to improve their performance, address issues, or implement changes
effectively

Organisational Systems / structure :

An organizational structure refers to the framework or hierarchy that defines the
arrangement of lines of authority, communication, and roles within an organization.
It outlines how tasks, responsibilities, and decision-making processes are organized
and distributed among individuals, departments, and levels of management.
Organizational structure serves as a blueprint for how an organization operates, and
it influences how employees interact, collaborate, and report within the
organization.

Types of Organisational system:

1. Functional Organizational System: In a functional system, the organization is
divided into departments based on functions or activities (e.g., marketing, finance,
HR).
Advantages:
a) Specialization and expertise in specific functions.
b) Clear reporting structures.
c) Efficient resource allocation within each department.
Disadvantages:
a) Limited cross-functional collaboration.
b) Slow decision-making across functions.
c) Difficulty in adapting to changes that require interdepartmental coordination.

2. Divisional Organizational System: The organization is divided into divisions based

on product lines, geographic regions, or customer segments.
Advantages:
a) Each division can focus on its unique market or product.
b) Faster decision-making within divisions.
c) Adaptability to diverse markets or products.
Disadvantages:
a) Duplication of functions across divisions.
b) Potential for conflicts between divisions.
c) May lead to inefficiencies in resource utilization.

3. Matrix Organizational System: Employees report to both functional managers and

project managers, promoting cross-functional collaboration.
Advantages:
a) Enhanced cross-functional communication and teamwork.
b) Better project management and problem-solving.
c) Utilizes expertise from different functional areas.
Disadvantages:
a) Complex reporting relationships can lead to power struggles.
b) Confusion about authority and responsibility.
c) Requires skilled management to maintain balance.

4. Flat Organizational System: A limited number of hierarchical levels with open

communication and quick decision-making.
Advantages:
a) Streamlined communication and faster decision-making.
b) Employee empowerment and engagement.
c) Reduced overhead costs.
Disadvantages:
a) Limited opportunities for career advancement.
b) Potential for overburdening employees with responsibilities.
c) May lack clear leadership and accountability.

5. Hierarchical Organizational System: A traditional top-down structure with well-

defined levels of authority and responsibility.
Advantages:
a) Clarity in roles and responsibilities.
b) Efficient control and supervision.
c) Proven stability and reliability.
Disadvantages:
a) Slow decision-making and adaptability.
b) Limited employee empowerment and innovation.
c) Risk of communication breakdowns between levels.

6. Network Organizational System: The organization relies on external partners and

collaborators to achieve its goals.
Advantages:
a) Flexibility and adaptability through outsourcing and partnerships.
b) Access to specialized expertise.
c) Reduced in-house overhead and costs.
Disadvantages:
a) Limited control over external entities.
b) Risk of dependency on partners.
c) Potential for conflicts with external parties.

Comprehensive model for diagnosing :

Diagnosing organizational issues at multiple levels—organizational, group, and
individual—requires a comprehensive approach that can help identify problems and
develop effective solutions. Here's a model for diagnosing issues at each level:
I. Organizational Level:
1. Environmental Analysis: Begin by assessing the external environment to
understand the industry, market, and competitive forces that might impact the
organization. This includes factors like technological advancements, regulatory
changes, and market trends.
2. Internal Analysis: Examine the organization's internal factors, such as its culture,
structure, processes, and resources. Identify areas of strength and weaknesses.
3. SWOT Analysis: Based on the internal and external analysis, perform a SWOT
(Strengths, Weaknesses, Opportunities, Threats) analysis to pinpoint critical areas
for improvement.
4. Goal Alignment: Evaluate the alignment of organizational goals and objectives
with the overall strategy. Ensure that the goals are clear, realistic, and measurable.
5. Performance Metrics: Review performance metrics and KPIs to determine if they
reflect the organization's strategic priorities and provide valuable insights.
6. Stakeholder Feedback: Gather feedback from stakeholders, including employees,
customers, suppliers, and investors, to understand their perspectives on the
organization's performance.
7. Cultural Assessment: Assess the organizational culture and values to determine if
they support the desired outcomes and employee engagement.
8. Change Readiness: Evaluate the organization's readiness for change, as it impacts
the ability to implement necessary improvements.

II. Group Level:

1. Team Dynamics: Analyze the dynamics within teams or workgroups, including
roles, communication, and collaboration.
2. Conflict Resolution: Identify and address conflicts within groups that might
hinder productivity and cohesiveness.
3. Leadership Assessment: Evaluate the effectiveness of team leaders or managers
in facilitating group performance and fostering a positive work environment.
4. Group Goals and Alignment: Ensure that team goals and tasks are aligned with
the broader organizational objectives.
5. Collaboration Tools: Assess the tools and technology used for group work and
whether they support efficient collaboration.

III. Individual Level:

1. Skills and Competencies: Evaluate the skills and competencies of individual
employees to determine if they align with their roles and the organization's needs.
2. Performance Appraisals: Review the performance appraisal and feedback
mechanisms to assess their effectiveness in helping employees improve.
3. Employee Engagement: Measure employee engagement levels and identify
factors that contribute to or hinder engagement.
4. Training and Development: Assess training and development programs to ensure
they address skill gaps and help employees grow.
5. Work-Life Balance: Consider factors affecting work-life balance and well-being to
ensure employees' overall health and happiness.
6. Career Development: Analyze opportunities for career advancement and
development for individual employees.
 Module No. 4: ORGANIZATIONAL DEVELOPMENT

Section A (2 Marks each)

1.What is organizational development?
2. Write the meaning of organizational diagnosis?
3.What is organizational systems?
4.What is group level systems?
5.What do you mean by organizational level systems?

Section B (5 Marks each)

1.Write a short note on organizational development.
2.What is the nature of organizational development?
3.Write the process of organizational development.
4.Write a note on comprehensive model for diagnosing.

Section C (10 Marks each)

1.Identify the nature and process of organizational development
2.Evaluate various types of organizational systems.
3.Explain the comprehensive model of diagnosing.