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What Is Organization Development?

📄 Contents

  1. A Case: Organization Development or Crisis Management?
  2. Definitions
  3. A Total System Approach
  4. Conclusion
The authors of Organization Development: A Process of Learning and Changing, 3rd Edition explain what Organization Development is, provide examples, and explain why it's important to your company.
This chapter is from the book

The term organization development, or OD, the label most commonly used for the field, has been in use since at least 1960. In the ’60s and early ’70s, jokes about what the abbreviation OD meant were common. Today, few people in the world of large organizations associate OD with overdose, olive drab, or officer of the day, however. Organization development as a field may not yet be sufficiently known to be defined in the dictionary or explained in the Encyclopedia Britannica, but it has survived some turbulent times and will be around for the foreseeable future. Although not defined in these well-known standards for definitions, organization development is defined in the Encyclopedia of Management Theory, Volume Two (Kessler, 2013) albeit requiring more than five double-columned pages. Moreover if we do check Webster’s dictionary and look for the definition of development, we will find that part of the definition is as follows:

  • Evolve possibilities
  • Make active
  • Promote growth
  • Make available or usable resources the organization has
  • Move from an original position to one that provides more opportunity for effective use

In other words, we could hardly do better attempting to find a more appropriate lead-in to what OD means.

Explaining what OD is and what people do who practice OD continues to be difficult nevertheless because the field is still being shaped to some degree and because the practice of OD is more of a process than a step-by-step procedure. That is, OD is a consideration in general of how work is done, what the people who carry out the work believe and feel about their efficiency and effectiveness, rather than a specific, concrete, step-by-step linear procedure for accomplishing something.

An example should help to explain. The following case represents a fairly strict, purist stance for determining what OD is and what it is not.

A Case: Organization Development or Crisis Management?

The client organization was a division of a large U.S. manufacturing corporation. The division consisted of two plants, both of which manufactured heavy electrical equipment. The division was in trouble at the time I (Burke) was hired as an OD consultant. There were quality and control problems and customers were complaining. The complaints concerned not only poor quality, but also late delivery of products—inevitably weeks, if not months, later than promised. Several weeks prior to my arrival at the divisional offices, a senior vice president (VP) from the corporation’s headquarters had visited with the division’s top management team, a group of six men. The corporate VP was very much aware of the problems, and he was anything but pleased about the state of affairs. At the end of his visit, he made a pronouncement, stating in essence that, unless this division was “turned around” within six months, he would close it down. This ultimatum would mean loss of jobs for more than 1,000 people, including, of course, the division’s top management team. Although the two plants in this division were unionized, the corporate VP had the power and the support from his superiors to close the division if he deemed it necessary.

For several months before this crisis, the division general manager had taken a variety of steps to try to correct the problems. He had held problem-solving meetings with his top management team; he had fired the head of manufacturing and brought in a more experienced man; he spent time on the shop floor talking with first-line supervisors and workers; he authorized experiments to be conducted by the production engineers to discover better methods; and he even conducted a mass rally of all employees at which he exhorted them to do better. After the rally, signs were placed throughout the division announcing the goal: to become number one among all the corporation’s divisions. None of these steps seemed to make any difference.

The general manager also sought help from the corporate staff of employee relations and training specialists. One of these specialists made several visits to the division and eventually decided that an outside consultant with expertise in organization development could probably help. I was contacted by this corporate staff person, and an exploratory visit was arranged.

My initial visit, only a few weeks after the corporate vice president had made his visit and his pronouncement, consisted largely of (1) talking at length with the general manager, (2) observing briefly most of the production operations, (3) meeting informally with the top management team so that questions could be raised and issues explored, and, finally, (4) discussing the action steps I proposed. I suggested we start at the top. I would interview each member of the top management team at some length and report back to them as a group what I had diagnosed from these interviews; then we would jointly determine the appropriate next steps. They agreed to my proposal.

A couple of weeks later, I began by interviewing the six members of the top management team (see Figure 1.1) for about an hour each. They gave many reasons for the division’s problems, some of the presumed causes contradicting others. What became apparent was that, although the division’s goals were generally understandable, they were not specific enough for people to be clear about priorities. Moreover, there were interpersonal problems, such as conflict between the head of marketing and the head of employee relations. (The marketing manager believed that the employee relations manager was never forceful enough, and the employee relations manager perceived the marketing manager as a blowhard.) We decided to have a two-and-a-half-day meeting of the top management team at a hotel some 90 miles away to work on clarifying priorities and ironing out some of the interpersonal problems.

Figure 1.1

Figure 1.1 Organization Chart: Top Management Team of Manufacturing Division

The off-site meeting was considered successful because much of what we set out to accomplish was achieved—a clearer understanding of the problems and concerns and an agenda for action. The crucial problem did indeed surface. A layer or two of the organizational onion had been peeled away, and we were finally getting at not only some causes but specifics that we could address with confidence that we were moving in the right direction. The key problem that surfaced was the lack of cooperation between the two major divisional functions—engineering and manufacturing.

As the organization chart in Figure 1.1 shows, the division was organized according to function. The primary advantages of a functional organization are clarity about organizational responsibilities because of the division of labor and the opportunities for continuing development of functional expertise within a single unit. The disadvantages also stem from the distinct divisions of responsibility. Because marketing does marketing and manufacturing manufactures, the two rarely meet. In this case, the problem was between engineering and manufacturing. The design engineers claimed that the manufacturing people did not follow their specifications closely enough, while the manufacturing people claimed that the design engineers did not consider that the machinery for manufacturing was old and worn. Because of the condition of the machinery, the manufacturing people were not able to follow the design engineers’ specifications to the desired tolerances. Each group blamed the other for the drop in overall product quality and for the delays in delivery of the product to the firm’s customers.

This kind of conflict is common in organizations that are organized functionally. The advantages of such organizations are clear, of course, but a premium is placed on the need for cooperation and communication across functional lines. Moreover, the pressures of daily production schedules make it difficult for managers to pull away and clearly diagnose the situation when conflicts occur between functions. Managers spend a great deal of time fighting fires—that is, treating symptoms rather than causes. An outside consultant who is not caught up in this day-to-day routine can be more objective. Thus, my primary role as consultant to this division was diagnostician.

The next step was to deal with this problem of intergroup conflict. Another off-site meeting was held about a month later with the top six people from engineering and their equivalent number from manufacturing. These men were predominantly engineers, either design engineers assigned to the engineering function or production engineers working in the manufacturing operation. These two functions were supposed to interact closely. The design engineers sent blueprint-like plans to manufacturing for production of the specified electrical equipment. The manufacturing people reiterated their complaint that the design tolerances were too stringent for their worn-out machinery to handle. Meeting the design specifications would require purchasing new machinery, but the cost was prohibitive. “And besides,” they added, “those design guys never set foot on the shop floor anyway, so how would they know whether we complied with their specs or not?”

These comments and the attitudes they reflect are illustrative and common. Communication is rarely what it should be between groups in such organizations. It is also common, perhaps natural, for functional groups to distance themselves from one another to protect their own turf.

Using a standard OD intergroup problem-solving format, I worked with the two groups to understand and clarify their differences, to reorganize the two groups temporarily into three four-person, cross-functional groups to solve problems, and to plan specific action steps they could take to correct their intergroup problems. The object in such a format is to provide a procedure for bringing conflict to the surface to enable those affected to understand it and manage a solution more productively. An initial exchange of perceptions allows the parties to see how each group sees itself and the other group. Next comes identification of the problems that exist between the two groups. Finally, mixed groups of members from both functions work together to plan action steps that will alleviate the conflict and solve many of the problems. See “Conflict in Organizations” (Burke, 2014a) for a detailed description of this process and see Figure 1.2 for a summary of its application in this case.

Figure 1.2

Figure 1.2 Example of Intergroup Problem-Solving Process

The outcome of this intergroup meeting clearly suggested yet another step. A major problem needing immediate attention was that the manufacturing group was not working well as a team. The design engineers produced evidence that they often got different answers to the same design production problem from different manufacturing people. Thus, the next consulting step was to help conduct a team-building session for the top group of the manufacturing function. Approximately two months after the intergroup session, I met off-site for two days with the production engineers and general foremen of manufacturing. In this session, we set specific manufacturing targets, established production priorities, clarified roles and responsibilities, and even settled a few interpersonal conflicts.

By this time, I had been working with the division on and off for close to nine months. After my team-building session with the manufacturing group, I was convinced that I had begun to see some of the real causes of the divisional problems; until then, I had been dealing primarily with symptoms, not causes. I noticed, for example, that the first-line supervisors had no tangible way of rewarding their hourly workers; they could use verbal strokes—“Nice job, Alice,” or “Keep up the good work, Joe”—but that was about it. They could use negative reinforcement, however, if they so chose—for example, threatening a one- or two-week layoff without pay if performance did not meet standards. This type of action was within the bounds of the union contract.

The hourly employees were paid according to what is called a measured day-work system. Their pay was based on what an industrial engineer had specified as an average rate of productivity for a given job during an eight-hour day. Incentive to produce more for extra pay was not part of the system.

I suggested to the division general manager that a change in the reward system might be in order. At that suggestion, the blood seemed to drain from his face. He explained that the present president of the corporation was the person who, years before, had invented the measured day-work system. He did not believe in incentive systems. The division general manager made it clear that he was not about to suggest to the corporate president, the big boss, that the measured day-work system should perhaps be scrapped. I discussed this matter with my original corporate contact, the staff specialist. He confirmed the origin of the reward system and stated that changing the reward system was not an option. I became extremely frustrated at this point. I thought that I had finally discovered a basic cause of divisional, if not corporate, production problems, but it became apparent that this root of the problem was not going to be dug up. The next step I nonetheless recommended in the overall problem-solving process—to change some elements of the reward system for hourly employees, if not the entire system—was not a step the division general manager was willing to take. The corporate staff person was also unwilling to push for change in this aspect of the system. My consulting work with the division ended shortly thereafter.

The point of this consultation case is as follows: What I used as a consultant was the standard methodology of organization development, but the project was not, in the final analysis, organization development. Having described the case, I will now use it as a vehicle for clarifying what OD is and what it is not.

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