1

Organizational effectiveness
Organizational effectiveness is the concept of how effective an
organization is in achieving the outcomes the organization intends to
produce. Organizational Effectiveness groups in organizations directly
concern themselves with several key areas. They are talent
management, leadership development, organization
design and structure, design of measurements and scorecards,
implementation of change and transformation, deploying smart
processes and smart technology to manage the firms' human capital and
the formulation of the broader Human Resources agenda. If an
organization has practices and programs in the areas above, the OE
group does many or all of the following roles
- Examines alignment between the areas and improves them
- Improves trade-offs between reliability, speed and quality in the above
areas
- Strategizes for higher adoption rates in these areas
- Facilitates/initiates/catalyses capability building : structure, process and
people
Rapid advances in social sciences and technology aided by clever
experimentation and observation is bringing several truths to the light of
society. There are several disciplines of social sciences that help the OE
Practitioner be successful.
Four of them, are outlined below
1) Decision Making - Ways in which real people make decisions,
enabling them real time to make good decisions, improving quality
of decisions by leveraging adjacent disciplines ( for
example- Behavioral economics) and replicating relevant
experiments, creating new ones and implementing their results to
make organizations effective
2) Change & Learning Ways in which real people learn, change,
adopt and align, get affected by dynamics in the environment
and leveraging this knowledge to create effective organizations
that are pioneers of change and learning

3) Group Effectiveness Ways in which real people work well

together, especially in bringing new ideas and innovation, working
of people to people protocols, impact of digitization and
virtualization in organizations on these protocols
4) Self-Organizing & Adaptive Systems Ways in which selforganizing systems and highly networked systems work, learnings
from the them and the tangible ways by which they can be put to
play to make organizations more effective.

Organizational effectiveness can be defined as the efficiency with

which an association is able to meet its objectives. This means an
organization that produces a desired effect or an organization that
is productive without waste. Organizational effectiveness is about
each individual doing everything they know how to do and doing it
well; in other words organizational efficiency is the capacity of an
organization to produce the desired results with a minimum
expenditure of energy, time, money, and human and material
resources. The desired effect will depend on the goals of the
organization, which could be, for example, making a profit by
producing and selling a product. An organization, if it operates
efficiently, will produce a product without waste. If the organization
has both organizational effectiveness and efficiency, it will achieve
its goal of making a profit by producing and selling a product
without waste. In economics and the business world, this may be
referred to as maximizing profits.
The main measure of organizational effectiveness for a business
will generally be expressed in terms of how well its net profitability
compares with its target profitability. Additional measures might
include growth data and the results of customer satisfaction
surveys.
Highly effective organizations exhibit strengths across five areas:
leadership, decision making and structure, people, work
processes and systems, and culture. For an organization to
achieve and sustain success, it needs to adapt to its dynamic

environment. Evaluating and improving organizational

effectiveness and efficiency is one strategy used to help insure the
continued growth and development of an organization.
Measuring organizational effectiveness can be an inexact science,
since each individual entity will have a different list of criteria and
priorities to weight and consider through self-assessment.
Understanding a company's level of organizational effectiveness is
important for several reasons: it serves as a check-in to see how
well internal procedures are meeting an initial vision, it provides
investors, donors, or employees with an idea of the company's
strengths, and it highlights areas of ineffectiveness that can be the
focus of improvements.
In many cases, a business' success or failure cannot be measured
by financial performance as well. Even a company that is currently
making a profit may be ineffective if it is failing to meet the core
values of its mission statement, attract and retain talented
workers, and plan for the next generation of projects.
Organizational effectiveness measures the big-picture
performance of a business, across a broad range of criteria.
Financial performance, long-term planning, internal structure, and
adherence to core values may all be critical components in
understanding organizational effectiveness.
Organization development
Organization development (OD) is a field of research, theory and
practice dedicated to expanding the knowledge and effectiveness of
people to accomplish more successful organizational change and
performance. OD emerged out of human relations studies in the 1930s,
during which psychologists realized that organizational structures and
processes influence worker behavior and motivation. More recently, work
on OD has expanded to focus on aligning organizations with their rapidly
changing and complex environments through organizational learning,
knowledge management and transformation of organizational norms and
values. Key concepts of OD theory include: organizational climate (the

mood or unique personality of an organization, which includes attitudes

and beliefs that influence members collective behavior), organizational
culture (the deeply-seated norms, values and behaviors that members
share) and organizational strategies (how an organization identifies
problems, plans action, negotiates change and evaluates progress).
Organisation Development is a growing field of Human Resource
Management. It has its foundations in a number of behavioural and social
sciences. OD practitioners are unashamedly humanistic in their approach
to change management and delivering sustainable organisational
performance. Organisation Development (OD) is both the field of applied
behavioural science focused on understanding and managing
organisational change to increase an organisations effectiveness and
viability and a field of scientific study and enquiry .

Organization development is an ongoing, systematic process of

implementing effective organizational change. OD is known as both a
field of science focused on understanding and managing organizational
change and as a field of scientific study and inquiry. It is interdisciplinary
in nature and draws on sociology, psychology, particularly industrial and
organizational psychology, and theories of motivation, learning,
and personality. Although behavioral science has provided the basic
foundation for the study and practice of OD, new and emerging fields of
study have made their presence felt. Experts in systems thinking and
organizational learning, structure of intuition in decision making, and
coaching (to name a few) whose perspective is not steeped in just the
behavioral sciences, but a much more multi-disciplinary and interdisciplinary approach, have emerged as OD catalysts or tools.
Organization development is a growing field that is responsive to many
new approaches.
History[edit]
Kurt Lewin (18981947) is widely recognized as the founding father of
OD, although he died before the concept became current in the mid1950s.Douglas McGregor and Richard Beckhard while "consulting
together at General Mills in the 1950s, the two coined the
term organization development (OD) to describe an innovative bottomsup change effort that fit no traditional consulting categories" (Weisbord,
1987, p. 112).[4]

Objectives[edit]
The objectives of OD are:
1. To increase the level of inter-personal trust among employees.
2. To increase employees' level of satisfaction and commitment.
3. To confront problems instead of neglecting them.
4. To effectively manage conflict.
5. To increase cooperation and collaboration among the employees.
6. To increase the organization's problem solving.
7. To put in place processes that will help improve the ongoing
operation of the organization on a continuous basis.

1. Making individuals in the organization aware of the vision of the

organization. Organizational development helps in making
employees align with the vision of the organization.
2. Encouraging employees to solve problems instead of avoiding
them.
3. Strengthening inter-personnel trust, cooperation, and
communication for the successful achievement of organizational
goals.
4. Encouraging every individual to participate in the process of
planning, thus making them feel responsible for the
implementation of the plan.
5. Creating a work atmosphere in which employees are encouraged
to work and participate enthusiastically.
6. Replacing formal lines of authority with personal knowledge and
skill.
7. Creating an environment of trust so that employees willingly accept
change.

According to organizational development thinking, organization

development provides managers with a vehicle for introducing change
systematically by applying a broad selection of management techniques.
This, in turn, leads to greater personal, group, and organizational
effectiveness.
Organisation Development believes that every part of an
organisation is integral to a system that relies on and impacts
other elements of the internal and external environment in
which the organisation operates. OD helps organizations
deliver sustainable performance improvement through people.
Those who practice OD usually have a strong humanistic and
democratic approach to organizational change. People and
collaboration are key features of any OD intervention. To deliver
a sustainable environment for performance there are a number
of organisational development and design elements that may
be relevant to delivering the performance outcomes required.
The OD practitioner will get involved in any number of
intervention including; organization diagnostic,
evaluation, strategic thinking, culture change, change
management, coaching, mentoring, leadership development,
team building, organizational design, evaluation, performance
management, talent management, HR processes, learning and
development, sales effectiveness, and customer services as
part of a holistic OD intervention.
Definition of Organization Development
Organization development is a long range effort to
improve organizations problem solving and renewal processes particularly
through more effective and collaborative management of organizational culture
often with the assistance of a change agent or catalyst and the use of the theory
and technology of applied behavioral science.
Concept of Oganization Development
Organization is a systematic application of behavioral science, knowledge at
various level such as group, organization, etc. to bring about planned change.
Its objectives are higher quality of work life, productivity, adaptability, and
effectiveness it accomplishes this bye changing attitude, behavior, values so that
the organization can adapt to competitive actions and the fast pace of change
with in the environment.

Characteristics of Organization Development

1. Humanistic values- positive beliefs about the potential of employees.
2. System orientation- all parts of organization include structure,
technology, and people must work together.
3. Experiential learning- the Lerners experiences in the training
environment should be the kind of human problem they encounter at
work. The training should not consist only theory and lectures.
4. Problem solving- problem are identified, data is gathered, corrective
action is taken, process is assessed, and adjustment in the problem
solving process are made as needed. This process is known is action
research.
Features of Organization Development

1. Contractual relationship - although neither the sponsoring

organization nor the change agent can be sure at the outset of the exact nature of
the problem or problem to be dealt with or how long the change agent help will
be needed it is essential that some tentative agreement on these matters be
reached.

2. Change agent - a change agent is a sense used here is not a technical

expert, skilled in such functional areas as accounting, production, or finance he
is a behavioral scientist who knows how to get people in an organization
involved in solving their own problems.

3. Sponsoring organization - the initiative for organization

development programs comes from an organizationthat has a problem. This
means that top management or someone authorized by top management is
aware that a problem exists and has decided to seek help in solving it.

4. System context - organization development deals with a total system

the organization is a whole including its relevant environment or with a
subsystem or system departments or work groups in the context of total system.
Organisation Development: Meaning, Characteristics and Objectives
Meaning:
Different people have defined OD differently. According to Koonz et. al,
OD is a systematic integrated and planned approach to improve the
effectiveness of the enterprise. It is designed to solve problems that
adversely affect the operational efficiency at all levels.

Burke has defined OD as a planned process of change in an

organisations culture through the utilization of behavioural science
technology, research and theory.
In the opinion of French and Bell OD is a systematic approach to
organisational improvement, that applies behavioural science theory and
research in order to increase individual and organisational well-being
and effectiveness.
Now, OD can be defined as a long-term, more encompassing change
approach meant to improve individual as well as organisational wellbeing in a changed situation.
Characteristics of OD:
The salient characteristics of OD implied in its definitions are
gleaned as follows:
First, OD is a systematic approach to the planned change. It is
structured style of diagnosing organisational problems and opportunities
and then applying expertise to them.
Second, OD is grounded in solid research and theory. It involves the
application of our knowledge of behavioural science to the challenge that
the organisations face.
Third, OD recognizes the reciprocal relationship between individuals and
organisations. It acknowledges that for organisations to change,
individuals must change.
Fourth, OD is goal oriented. It is a process that seeks to improve both
individual and organisational well- being and effectiveness.

Fifth, OD is designed to solve problems.

Objectives of OD:
The main objectives of OD are to:
1. Improve organisational performance as measured by profitability,
market share, innovativeness, etc.
2. Make organisations better adaptive to its environment which always
keeps on changing.
3. Make the members willing face organisational problems and
contribute creative solutions to the organisational problems.
4. Improve internal behaviour patterns such as interpersonal relations,
intergroup relations, level of trust and support among the role players.
5. Understand own self and others, openness and meaningful
communication and involvement in planning for organisational
development.
Objectives:
The objectives of OD are listed below.
1. To stimulate people to express freely without fear.
2. To increase interpersonal communication.
3. Decision through collective efforts.
4. To have self control.
5. To have self direction and self motivation.

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6. To encourage employees participation in analyzing the problems and

decision making.
7. To develop solutions to the problem.
Advantages:
Advantages of Organisation Development:
1. Organisation development is not a magic to solve all the management
problems but definitely it helps in meeting the challenges thrown by
change and making the organisation effective.
2. OD processes and methods encourage team work, improve
intergroup relationship.
3. It helps employees to understand each other better and promotes
cooperation and mutual understanding.
4. It helps in getting job satisfaction. It helps in improving communication
skills.
5. OD helps in boosting up the morale of the employees. High morale
leads to greater productivity.
6. It helps the employees to accept changes in the technology which
increase efficiency ultimately leading to have an edge over the
competitors and increase the market share.
7. OD frees the employees and subordinates from stress at workplace.
8. Employees become accustomed to accept change. They do not resist
it leading to speedy implementation of policies and programmes and

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adopting new technology and concepts without any hesitation. It

changes the atmosphere which is more conducive for executing
developmental programmes.
OD thus enables the management to implement the changes in the
system, technology, customs, patterns, product, styles etc. to be in tune
with the modernisation to remain in business and face the competition
which will help in developing organisation, its people and society.
The effectiveness of OD programmes depends upon many factors. It is
difficult to say whether a particular action is effective. There are several
factors internally and externally that are responsible for effectiveness of
OD programme.
To assess the magnitude of effectiveness of OD programme, it is
necessary to have the knowledge of the situation prior to the
implementation. OD programmes are now becoming costly because
each company is implementing them and is spending heavy amount by
engaging external consultants to develop the organisation. These
consultants claim success of their services rendered to the
organisations. The consultants are toiling hard but there might be over
estimation in claiming the success.
Concept:
Development is a continuous process and it accommodates in itself
many changes that occur in science and technology, economic, market,
political environment, education, knowledge, values, attitude and
behaviour of people, culture etc. Organisation development is a part of
overall development in general. It cannot remain unaffected by the
developmental process. The organisation has to change the beliefs,

12

values and its structure to accommodate the new ideas, beliefs and new
technologies for progress.
This is very essential. The organisation must respond to changes. So
that it can face the challenges ahead. The management of human
resources depends upon organisational effectiveness. Human resources
form the main plank of any organisation. Humans are affected by
change. Organisation development accommodates and incorporates
variety of planned changes based on humanistic democratic values,
technology that are sought to improve the effectiveness of organisation
and well being of its employees.
According to Dale S. Beach, organisation development (OD) is, a
complex educational strategy designed to increase organisational
effectiveness and wealth through planned intervention by a consultant
using theory and techniques of applied behavioural service.
According to J I Porras and P J Robertson, Organisational Development,
is a term used to encompass a collection of planned change
interventions, built on humanistic democratic values, that seek to
improve organisational effectiveness and employee well being.
According to George R. Terry, Organisational development includes
efforts to improve results by getting the best from employees, individually
and as members of working groups.
As per Werren G. Bennis, Organisation Development is, a complex
educational strategy intended to change the beliefs, attitudes, values
and structure of organisations so that they can better adapt to new
technologies, markets and challenges and the dizzying rate of change
itself.

13

Organisation is an open system and therefore must develop itself by

adopting various changes to meet the challenges thrown out by the
constantly changing environment.
OD incorporates various changes and accordingly takes up
management development and training programmes to cope up with the
situation.
Organisation development takes the help of social sciences such as
psychology and sociology and anthropology. A continuous research and
theory building is the crux for OD because it concerns with people.
It helps increasing organisational effectiveness. OD involves the
changes over a long period of time in systematic and planned manner in
work culture, organisation structure, its people, process, strategy,
objectives etc. The help from various other social sciences is sought to
develop and maintaining organisational health and soothing climate.
Characteristics of Organisation Development:
Organisation development has the following characteristics:
1. Programme is planned involving all the departments and subsystems
seeking their coordination.
2. The top management is committed to the programmes for
organisation development.
3. It is related to organisational objectives.
4. OD is based on research. Continuous research goes on because
interventions are based on findings.

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5. It utilises change agents to motivate the group of people to accept the

changes within the organisation as a part of OD.
6. OD lays stress on changing the behaviour of people.
7. It seeks interaction between various groups to cope up with the
changes that OD will incorporate.
8. Propagation is made so that people should know about the
developments. Feedback is taken.
9. OD through discussions solutions to the problems is sought. All
problem solving research constitute action research.
10. OD takes pretty long time to implement.
Organisation Development Values:
Organisation development constitutes various people, professionals,
technocrats, researchers, managers and a host of other employees
working in the organisation contributing to the accomplishment of
organisational objectives. They behave differently. Authority and power,
conflicts, control takes backseat during OD process.
The following are the values in OD efforts:
1. Respect People:
People are the raison detre of organisation and they are responsible for
creating opportunities for growth. They must, therefore, be treated with
respect and dignified manners.

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2. Confidence and Support:

Organisations are made up of people and they are to be believed and
supported in order to have effective organisation. The healthy
environment prevails when people are trusted and taken into confidence
and a necessary support is extended to them as and when needed.
3. Confrontation:
Any conflict on any issue should not be suppressed. It should be dealt
with openness. Suppression leads to dampening of morale. Identifying
the problem and its causes, discussing it openly and finding out feasible
solution leads to boosting up morale of the employees and creating good
environment.
4. Employee Participation:
The participation of employees who will be affected by the OD should be
sought in decision-making.
5. Expression:
Human beings differ in experience, maturity, ideas, opinions, and
outlook. The organisation is at the receiving end. It gains from the
differences in quality, ideas, opinions and experiences of its people.
Human beings are social animals; they have feelings, emotions, anger
and sentiments etc. They should be allowed to express their feelings and
sentiments. This will result in building up high morale and the people will
be motivated towards hard work ultimately resulting in increased
efficiency.

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6. Seeking Cooperation:
Managers should learn to seek cooperation from each of the employees
working under him in his department. This will develop in creating the
atmosphere of cooperation leading to organisational effectiveness and
willingness to accept change in the event of organisation development
process.
Top 9 Techniques of Organisation Development
1. Survey Feedback:
Information is collected through survey method. This is the most popular
and widely used method of data collection. The managers use this
information collected through survey for making decisions. The wide
range of data is collected regarding working conditions, quality of work,
working hours, wages and salaries, attitude of employees relating to
above.
These data are then analyzed by the team of managers. They find out
the problem, evaluate the results and find out solutions. Information is
collected from all the members of the organisation. Managers conduct
meetings with their subordinates and discuss the information, allow
subordinates to interpret the data. After this plans are prepared for
making necessary changes. This procedure is followed at all levels of
management involving all the employees of the organisation.
2. Team Building:
Team Building is another method of organisation development. This
method is specifically designed to make improvement in the ability of
employees and motivating them to work together. It is the organisation

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development technique which emphasizes on team building or forming

work groups in order to improve organisational effectiveness.
These teams consist of employees of the same rank and a supervisor.
This technique is an application of sensitivity training to the teams of
different departments. The teams or work groups are pretty small
consisting of 10 to 15 persons. They undergo group discussion under
the supervision of an expert trainer usually a supervisor. The trainer only
guides but does not participate in the group discussion.
This method of team building is used because people in general do not
open up their mind and not honest to their fellows. As they does not mix
up openly and fail to express their views to the peers and superiors. This
technique helps them express their views and see how others interpret
their views. It increases the sensitivity to others behaviour.
They become aware of group functioning. They get exposed to the
creative thinking of others and socio-psychological behaviour at the
workplace. They learn many aspects of interpersonal behaviour and
interactions.
3. Sensitivity Training:
It is quite popular OD intervention. It is also known as laboratory training.
Under this technique the employees in groups are asked to interact. The
aim of sensitivity training is to help people understand each other and
gain insight so that they feel free and become fearless.
Abraham Korman has rightly observed that, the assumptions of
sensitivity training procedure are that, if these goals are achieved, one
will become defensive about himself, less fearful of the intentions of

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others, more responsive to others and their needs, and less likely to
misinterpret others behaviours in a negative fashion.
Under this technique the different groups of employees are allowed to
mix up with each other and communicate freely and build up
interpersonal relationship. They learn the reflection of their behaviour
and try to improve it. In the words of Chris Argyris, sensitivity training is
a group experience designed to provide maximum possible opportunity
for the individuals to expose their behaviour, give and receive feedback,
experiment with new behaviour and develop awareness of self and of
others.
The employees through this technique know others feelings and
behaviour and the impact of their behaviour on others. It builds up
openness, improves listening skills, tolerate individual differences and
the art of resolving conflicts. It helps in reducing interpersonal conflicts in
the organisation.
It is up to the executives at the top level of management in the
organisation to take decision regarding appropriateness of this technique
but they must see that the objectives of organisational development are
achieved with the help of this method.
However there is every likelihood that some culprits will exploit the
opportunity to fulfill their vested goals at the cost of organisations
interests. There is one more serious drawback of the method that it may
give rise to groupism in the organisation which will defeat the purpose of
OD. To make this technique effective and fulfill the purpose of OD, the
selection of trainer must be cautiously made. He must be a man of

19

integrity and responsibility and must command respect from the

participating groups.
He plays a crucial role in making the OD programme successful. He
should maintain cordial atmosphere throughout the training programme.
He must see that each member of the groups learn the behaviour of
others and to be creative and get more exposure to group life.
4. Managerial Grid:
This technique is developed by industrial psychologists duo Robert
Blake and Jane Mouton. The concept of managerial grid identifies two
major dimensions of management behaviour. They are people oriented
and production oriented behaviours. Attempts are made to pay
increased attention to both the variables..
5. Management by Objectives (MBO):
MBO is a technique of management development which was put forward
for the first time by Peter Drucker in 1954. It is a method of achieving
organisational objectives and a technique of evaluation and review of
performance. Under this method objectives of the organisation are fixed
and responsibility to achieve them lie on the managers and results are
expected from them.
Achievement of organisational objectives is considered as the joint and
individual responsibility of all managers. It also provides a perfect
appraisal system. Performance of the managers is measured against the
specific objectives. It is result oriented technique.
George Odiorne observed that MBO is, a system wherein superior and
subordinate managers of an organisation jointly identify its common

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aims, define each individuals major areas of responsibility in terms of

the results expected of him and use these measures as guides for
operating the unit, assessing the contribution benefits of its members.
According to D D White and D A Bednar, MBO is a technique designed
to (1) increase the precision of the planning process at the organisational
level and (2) reduce the gap between employee and organisational
goals.
MBO process:
MBO process involves four major steps:
(1) Goal Setting by Top Management:
For effective planning the organisational goals are set by the top
management. These goals provide an outline or base for different
departments to set their goals after making certain modifications etc. if at
all necessary.
(2) Individual Goals:
Organisational goals cannot be fulfilled by a single individual but all the
members cooperative and active participation is necessary. It is
therefore pertinent to assign a target to every individual and he must
attain it.
(3) Freedom for Selection of Means:
A considerable amount of freedom or autonomy is given for the
accomplishment of goals to the managers and subordinates.
(4) Making Appraisal:

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The performance is to be reviewed and appraised in relation to the

goals. This will help the subordinates and employees to make the
corrections if any and make further improvements.
MBO is an effective technique of organisational development and
improving performance. It promotes coordination among superiors and
subordinates at all levels and is an effective tool of planning and control.
It helps to learn problem solving techniques.
6. Brain Storming:
It is a technique where a group of five to eight managers come together
and find a solution to a problem. As the name suggests it involves
storming of the brain to develop creativity in thinking. It gives rise to new
ideas. The principle involves in it is that any idea, thought or plan put
forward in a meeting must be critically evaluated. The participants are
asked to come forward with novel ideas generated in their mind. It works
on a premise that everyone has a creative mind and capability to
generate new ideas.
Participants are closely observed at the discussion and no expert is
provided to conduct the meeting. The participants sit across the table for
close communication. The brainstorming technique can generate an
atmosphere where people can express freely. This encourages group
interaction and creative thinking. The only limitation this method has is
that it is time consuming and hence expensive.
7. Process Consultation:
The technique of process consultation is an improvement over the
method of sensitivity training or T Group in the sense that both are
based on the similar premise of improving organisational effectiveness

22

through dealing with interpersonal problems but process consultation is

more tasks oriented than sensitivity training.
In process consultation the consultant or expert provides the trainee
feedback and tell him what is going around him as pointed out by E H
Schein that the consultant, gives the client insight into what is going on
around him, within him, and between him and other people.
Under this technique the consultant or expert provides necessary
guidance or advice as to how the participant can solve his own problem.
Here the consultant makes correct diagnosis of the problem and then
guides the participants.
The consultant according to E H Schein, helping the client to perceive,
understand and act upon process events which occur in the clients
environment. Process consultation technique is developed to find
solutions to the important problems faced by the organisation such as
decision making and problem solving, communication, functional role of
group members, leadership qualities. Consultant is an expert outside the
organisation.
8. Quality Circles:
Under this system a group of 5 to 12 come together at their own free will
during working hours once in a week and discuss out the problems and
suggests solution to the management for implementation. The
supervisors remain present during the meeting. Quality Circles have
their origin in Japan in nineteen sixties which improved the quality,
reduced cost and heightened the morale of the workers. The success
was due to workers participation. Total quality management or TQM is
the recent development. This concept was adopted by the USA in 1980.

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9. Transactional Analysis:
Transactional analysis helps people to understand each other better. It is
a useful tool for organisational development but it has diverse
applications in training, counselling, interpersonal communication and
making analysis of group dynamics. Nowadays, it is widely used as OD
technique. It helps in developing more adult ego states among people of
the organisation. It is also used in process consultation and team
building.
Organization development is the process through which an organization
improves its internal capacity to be the most effective. It can be in its
mission work and to sustain itself over the long term.
Organization development is a set of activates which may be undertaken
to increase organizational as well as human resource effectiveness.
Many authors have defined organization development as follows:
Organizational Development Definition
1. French and Bell: Organization envelopment is a systematic
process for applying behavioral science principles and practices in
organizations

to

increase

individual

and

organizational

effectiveness.
2. Richard Beckhard: Organization development is an effort (i)
planned (ii) organization wide (iii) managed from the top to (iv)
increase organization effectiveness and health through (v) planned
interventions in the organizations processes using behavioral
science knowledge.

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3. Schmuck and Miles: Organization development can be defined

as a planned and sustained effort to apply behavioral science for
system improvement using reflective and self analytic methods.
4. W.G. Bennis: Organization development is a response to change,
a complex educational strategy intended to change to the beliefs,
attitudes, values, and structure of organizations so that they can
better adapt to new technologies, markets and changelings and
the dizzying rage of change itself.
5. Warner Burk: Organization development is a planned process of
change in an organizations culture through the utilization of
behavioral science technologies, research and theory.
6. Porras and Robertson: Organization development is a set of
behavioral science based theories, values, strategies and
techniques aimed at the planned change of the organizational
work setting for the purpose of enhancing individual development
and improving organizational performance. Through the alternation
of organizational members on the job behaviors.
7. Cummings

and

Worley: Organization

development

is

systematic application of behavioral science knowledge to the

planned development and rein forcemeat of organizational
strategies,

structures,

and

processes

for

improving

on

organizations effectiveness.
8. Michael Beer: The aims of organization development are (i) to
enhance congruence between organizational structure, process,

25

strategy, people, and culture (ii) to develop new and creative

organizational solutions and (iii) to develop the organizations self
renewing capacity.
9. Peter B. Vaill: Organization development is an organizational
process for understanding and improving any and all substantive
processes an organization may develop for performing any task
pursuing any objectives.
10.

Burke and Horrnstein: Organization development is a

process of planned change of an organizations culture form one

which avoids an examination of social processes to one which
institutionalizes

and

legitimizes

this

examination

of

social

processes to one which institutionalizes and legitimizes this

examination.
11.

Newsroom

&

Davis: Organization

development

is

systematic application of behavioral science knowledge at various

levels (group, inter group, and total organization) to bring about
planned change.
12.

Nelson: Organization

development

is

the

attempt

to

influence the members of an organization to expend their

candidness with each other about t heir views of the organization
and their experience in it and greater responsibility for their own
actions and organization members.
13.

Matt Minaham and Associates: Organization development

is a body of knowledge and practice that enhances organizational

26

performance and individual development viewing the organization

as a complex system that exist within a larger system, each of
which has its own attributes and degrees of alignment.
Objectives of organization development
1. To apply behavioral science theories: The first objective of
organization development is to apply some behavioral science
theories

in

the

organization.

By

applying

these

theories

organization development practices hope for development.

2. To improve organizational performance: Another objective of
organization development is to improve the overall performance of
organization. Thus organization can be established as one of the
important institutions in human history.
3. To

ensure

proper

use

of

individual

efforts: Individual

performance should be improved. This is possible by using

individual efforts properly. Organization development ensures
proper use of human efforts and commitment.
4. To

create

awareness: Organization

development

crates

awareness among the people working in the enterprise. They feel

the need for change in comparison with other organizations.
5. To encourage people to solve problems: Every organization
has many problems and challenges. Organization development
encourages people to solve these problems and face challenges at
present and future.

27

6. To establish and maintain interpersonal relations:Organization

development activities may be implemented with a view to
establishing and at the same time maintains interpersonal relations
among the people of the organization. This can insure continuous
growth.
7. To create & maintain work environment: Working environment
must be favorable in the organization. Organization development
practitioners to create favorable working environment and
maintain the same for smooth functioning in future.
8. To increase knowledge & skills: Knowledge on latest methods
and skills can streamline the growth of any organization.
Organization development intends to increase the knowledge and
skill levels through training.
9. To minimize resistance to change: In most of the cases, every
change is resisted, it hampers goal achievement. Organization
development helps minimize the resistance to change in a positive
mood so that management becomes more alert.
10.

To create job satisfaction: Job satisfaction encourages the

people to work hard with joy. Organization development creates

job satisfaction of employees who are involved in organization
development activities.
11.

To increase motivation level: Motivation creates interest for

work among the employees. Therefore another important objective

of organization development is to increase motivation.

28

12.

To crate

supportive

values: Every organization

and

employee has some values and norms. The values and norms can
help the organization to uphold its own culture. Organization
development creates supportive suitable values and norms.
Importance of organization development
1. Contractual relationship: For the establishment of contractual
relationship between the concerned parties in the organization,
organization development can play a significant role. Contractual
relationships help to ensure successful implantation of plans.
2. Change

agent: Very

important

aspect

of

organization

development is change. Agents of behavioral scientists encourage

people of the organization to solve problems. His main strength is
comprehensive knowledge of human behavior.
3. Sponsoring

organization: The

imitative

for

organization

development programs come from an organization that has a

problem. This means that to managements aware that problem
exists and has decided to seek help in solving it.
4. Applied behavioral science: OD process state its activities by
applying behavioral science principles without applying so that
people cannot be made fit for implementing the program.
5. Implement performances: Through the OD process improved
relations, effective commutation, and enhanced ability to copy of all
kinds, more effective decisions etc. are possible. It indicates
improvement of performance of all sides.

29

6. Organization self-renewal: OD program helps self renewals also.

People become conscious about their responsibilities in future for
the organization and society. It minimizes suspension and control
steps.
7. Increased motivation: OD programs increase motivation of
employees. Motivation of employees can ensure high productivity
and sensibility. On the other hand, demotivated employees destroy
the good deeds even.
8. High morale and satisfaction: If reasonable OD programs are
undertaken, morale and satisfaction of employees may be
increased, that can result good performance.
9. Increased competitive ability: Developed organization cans
again competitive ability. This position can be gained by producing
high quality goods. Rendering better services, expanding market,
sending goods at the door-steps of customers and so on.
10.

Research & development: Research and development is

the successful weapon of any organization. It helps innovate,

improve quality of goods and services and increase competitive
strengths.
11.

Quality goods & services: Whether OD has taken part

properly or not, it is proved through quality of goods and services.

If quality dies not improve, OD does not carry and y value.

30

Characteristics of organization development

1. Focus on culture and process: Organization development on
culture and process of proper and organization on following
suitable

and

positive

culture

level

and

process

success

organization development program depend.

2. Collaboration: Organization development encourages heartfelt
collaboration between managers and employees and members
managing culture and processes.
3. Accomplishment of tasks: Various kinds of teams and groups
play

important

roles

for

accomplishment

of

organization

development activities. Thus targets can also be achieved.

4. Human and social sides: Organization development focuses on
both human and social sides. By doing so, it intervenes in the
technological and structural sides also.
5. Participation: Participation and involvement of managers and
players can make the organization development process a
success. It helps to exchange views and ideal related to
organization development.

Characteristics of Organization Development

6. System change: Organization development focuses on total
system change. Because every change is inevitable for the
success of any development program.

31

7. Facilitation: There are three parties to organization development

process. They are facilitators, collaborators and co-learners in the
client system. Cooperation of all these parties can help the
organization to develop.
8. Over arching goals: An overarching goal of the organization is to
make the client system able to solve its problems. It is done by
teaching the skills and knowledge on continuous learning through
self analytical methods.
9. Action research model: Organization development activities are
undertaken following the conclusions and recommendations of
action research members related to client system.
10.

Developmental view: Organization development takes a

developmental view for the betterment of both process and

organization. Another

practice

in

organization

development

programs is to create win-win solutions.

Components of organization development process
1. Long-term effort: It means that organization change and
development take time. It is more accurate to describe
improvement as a never ending of continuous change.
2. Led and supported by top management: Top management must
lead and activity encourages the change effort. Top management
must initiate the improvement journey and be committed ti seeing it
through.

32

3. Visioning process: Through this process organization members

develop a viable, coherent and shared picture of the nature of the
product and services the organization offered.
4. Empowerment process: It means those leadership behavior and
human resource practices that enables organization members to
develop and use their talents as fully as possible.
5. Learning process: It means those interacting, listening and selfexamining

process

that

facilitate

individual,

team

and

organizational learning.
6. Problem solving process: It refers to the ways organization
members diagnose situation, solve problems, make decisions and
take actions on problems, opportunities, and challenges in the
organizations environment and its internal functioning.
7. By ongoing collaborative management: One of the most
important things to manage in organizations is the culture. The
prevailing pattern of the values, attitude, beliefs, assumptions,
activities, norms and artifacts affect organization activates.
8. Liberation Management: Liberation management is that cotemporary bureaucratic structures with their functional specialties
and rigid hierarchies are all wrong for the demands of todays fast
faced market place.
9. Using the consultant-facilitators role: It conveys our beliefs that
leaders can benefit from seeking professional assistance in
planning and implementing OD initiatives.

33

10.

Action research: It means the participative model of

collaborative and iterative diagnosis and taking action in which the

leader, organization members, and OD practitioners work together
to defined and resolve problems and opportunities.
11.

By intact work teams and other configurations: It

recognizes that teams can contribute in accomplishing works in

organizations. The most prevalent forms of teams in organizations
are intact work teams consisting of superiors and subordinates
with a specific job to perform.
ORGANIZATIONAL DEVELOPMENT PROCESS
1. Initial Diagnosis:
If executives recognize that there are inadequacies within
organization which can be corrected by OD activities, it is necessary
to find out the professional and competent people within the
organization to plan and execute OD activities. If competent people
are not available within the organization the services activities are to
be taken. The consultants adopt various methods including
interviews, questionnaires, direct observation, analysis of documents
and reports for diagnosing the problem.

2. Data Collection:
Survey method is used to collect the data and information for
determining organizational climate and identifying the behavioral
problems.

3. Data Feedback and Confrontation:

Data collected are analyzed and reviewed by various work groups

34

formed from this purpose in order to mediate in the areas of

disagreement or confrontation of ideas or opinions and to establish
priorities.

4. Selection and Design of Interventions:

The interventions are the planned activities that are introduced into the
system to accomplish desired changes and improvements. At this stage
the suitable interventions are to be selected and designed.
5. Implementation of Intervention:
The selected intervention should be implemented. Intervention may take
the form of workshops, feedback of data to the participants, group
discussions, written exercises, on-the-job activities, redesign of control
system etc. Interventions are to be implemented steadily as the process
is not a one-short, quick cure? for organizational malady. But it
achieves real and lasting change in the attitudes and behavior of
employees.

6. Action Planning and problem Solving:

Groups prepare recommendations and specific action planning to solve
the specific and identified problems by using data collected.

7. Team Building:
The consultants encourage the employees throughout the process to
form into groups and teams by explaining the advantages of the teams
in the OD process, by arranging joint meetings with the managers,
subordinates etc.

8. Inter group Development:

The consultants encourage the inter group meetings, interaction etc.,
after the formation of groups/teams.

35

Organization development process

1. Data

collection: Surveys

may

be

made

to

determine

organizational climate and behavioral problems. The consultant

usually meets with groups away for work to develop information
from questions such as these:
o What kinds of conditions contribute most to your job
effectiveness?
o What

kinds

of

conditions

interfere

with

your

job

effectiveness?
o What would you most like to change in the way this
organization operates?
o The by-products of data collection include the identification of
performance gaps deficiencies in the way the organization
operates and abseiling in the way the organization operates
and baseline information a portrait of the organizations
current level of operations for later comparison with the
effects of OD (Organization Development) efforts?
2. Data feedback and confrontation: Work groups are assigned to
review the data collected, to medicate areas of disagreement, and
to establish priorities for change.
3. Action planning and problem solving: Groups use the data to
develop specific recommendations for change. Discussion focuses
on actual problems in the organization. Plans are specific,

36

including who is responsible and when the action should be

completed.
4. Use of intentions: Once the action planning is completed, the
consultant helps the participants select and use appropriate OD
interventions, Depending on the nature of the key problems; the
intervention may focus on individuals, teams. Interdepartmental
relating or the total organization.
5. Evaluation and follow-up: The consultant helps the organization
evaluate the results of tits OD efforts and develop additional
programs in areas where additional results are needed.
Nature of Organizational Change
1. The organization change takes place because of internal
and external forces. The internal forces may create instant
change, whereas the external forces may results in the
gradual
change.
2. The effect of change in any one part of the organization
creates about the fundamental change in the entire
organization.
3. The effect of change on various parts takes place in
varying degree and rates.
4. The means the effect of change will not be similar in
every part of an organization.

Importance of Organizational Design

37

1. Dealing with Contingencies:

A contingency can be explained as an event that might occur without any
expectation, and the management should properly plan to meet such
contingencies. One such contingency is the changing business
environment. The design of an organization determines how efficiently it
can control various factors in its environment. Ability of an organization to
attract and skilled employees, permanent customers and government
contracts are the examples of the degree to which it can control those three
environmental factors. The structure of an organization should be designed
in such a manner so as to increase control over its environment.

2. Competitive Advantage:
In the modern competitive age, every organisation wants to design its
structure in such a way as to have the maximum sustained competitive
advantage. Competition allows a company to develop a business strategy
to out-perform competitors by producing better products and services. The
method of designing an organisational structure is the important
determinant in the implementation of an organisations strategy.

3. Diversity in Workforce:
Diversity in workforce on account of differences in race, gender, and the
place or origin of workers has an important impact on organizations
effectiveness. Change in the characteristics of workers such as an influx of
immigrant workers and retirement of current workforce require effective
planning in advance.
The organizations structure should be designed in such a manner so as to
make the optimal use of talent of a diverse workforce with different culture
backgrounds. They should be encourages to work together.

38

4. Innovation and Efficiency:

Those organisations that produce goods and services as per the
expectations of the people are successful. The design and use of new and
more efficient organisational structure is equally important in producing
quality goods and services.
In todays competitive environment, countries with low labour costs are
compelling organisations all over the world to become more efficient and
competent and reduce costs and also increase quality as per the
requirements of the customers.
Designs, research and innovations are being undertaken to attain the
desired efficiency in producing the good and the services. Organisational
design plays a crucial role in innovation and search.
Types of Organisational Designs:
1. Functional Design:
This is the oldest and the most commonly used design.
The organisation is departmentalised on the basis of various functions, viz..,
Materials Management production and Operations Management, Finance and
Accounting, Marketing Management, Hunan Resource Management and Research
and Development etc.
The activities or functions of all these departments are coordinated by the chief
executive of the organization. The salient feature of this design is that there is
specialised division of work. The various activities are carried by the specialised
persons.
The most important advantage of this design is that it permits division of labour
and applies specialization. It is easily understandable by the employees. Each
department works in coordination with each other to achieve the end results.
Hence duplication is eliminated.
The main disadvantages of this type of design are that employees may lose sight
of the organization as a whole. Practically it becomes difficult to have horizontal
integration across the functional departments. Another disadvantage of this
design is that there is no accountability of each function for total results.

39
This design may be applied successfully when an organisation has a narrow
product line, pursues a low cost or focused business strategy. To appoint various
specialised managers may be a costly proportion. It is oldest and the simplest
type of organisational design and often represents as a base from which other
types of design evolve.
2. Place Design:
Such a design is usually adopted by multinational organisations or corporations
to meet the local needs. It involves in establishing an organizations primary
units geographically while retaining significant elements of the functional design.
It is also known as geographic area design. It permits locating different tasks
required to serve a geographic territory under one manager rather, than
grouping various functions under different managers for all tasks in one central
office.
The important disadvantage of this design is that there is duplication of the
functions. The following diagram shows duplication of functions in all locations.
There may be a problem of lack of communication among various divisions.
Moreover, innovation generated in one division may not be adopted by other
divisions.
3. Product Design:
Product design aims at assigning worldwide responsibility for either specific or
certain number of products. Separate operating divisions operate within one
firm. The manager who is in charge of a product division has authority for the
product line on global basis.
A product division is an autonomous unit and operates as profit on global basis. A
product division is an autonomous unit and operates as profit centre. The
managers of the product divisions have requisite authority to make important
decisions. Product design is usually followed in global enterprises multinational
corporations.
Important advantage derived from this system is that company is able to match
its marketing strategy to the specific needs of the customers. Organisations
adopting product design usually begin with functional design and then add some
place design as they begin to serve new geographic markets.
For tackling multiple customers and management problems this is the next
suited method. This system can be successfully followed in case of addition of
new product lines, diverse customers, technological advancements and
uncertainty of the companys business environment.
4. Multidivisional Design:
Multidivisional designs are usually referred as the M-form. In such a design tasks
are organised by division on the basis of the product or geographic area, in which

40
the goods or services are sold. The primary responsibility lies with the divisional
heads to take the operations decisions with regard to their units.
They are also concerned with the strategy formulation, allocation resources to
various divisions, communicating with shareholders and others. The divisional
heads are supported by specialised people in their respective fields like
accounting marketing and sales, etc.

The adoption of multidivisional designs often reduces the complexity of

environment faced by any department of division.