In organizational development, the main stakeholders are both internal and external to the company. Management and employees are internal stakeholders. External stakeholders include customers, investors, suppliers, communities and governments.
Globalization leads to a much greater interconnectedness and opens up organizations to world-wide opportunities and threats.
On top of that, IT is redefining how traditional business models work, creating innovative companies with the ability to scale their services to a worldwide audience in the timespan of only a few years. Just a year after launching, Facebook hit one million registered users. A few years later, Snapchat hit 10 million active users in its first year. This exposes incumbents to disruption.
Finally, business systems become better at measuring relevant data, changing the way success is measured. On top of that, advanced people analytics can help to further drive organizational outcomes.
2. Group interventions. These interventions are aimed at the content, structure, or process of the group. The content is what the group is focused on. The structure is how a group is designed to act on the content. The process is the way in which the group carries out its core tasks. For example, a contact center focuses on taking complaints from customers. The contact center has a hierarchical structure with a director, managers, and customer service staff. The contact center’s process is to record as quickly as possible, all complaints. Only a certain percentage are escalated to management depending on how serious and complex, a complaint is.
3. Third-party interventions. Third-party interventions are often used when there are conflicts. Not all conflicts are bad, but bad conflicts should be resolved quickly. The third-party intervention helps to control and resolve the conflict. Often, the third party is the OD consultant.
4. Team building. Team building is the best-known OD intervention. It refers to activities that help groups improve the way they accomplish tasks. Examples of team-building activities are volunteering, team sports, and Pictionary.
5. Organizational confrontation meeting. A confrontation meeting aims to identify problems and improvement targets, and set priorities. It is a starting point for addressing identified problems, across your organization.
6. Intergroup relations interventions. Intergroup interventions are aimed at diagnosing and understanding in-group relations. Similarly, problems are identified and priorities and improvement targets are set, before working on the identified issues.
7. Large-group interventions. These interventions are somewhat in the middle, of confrontation and intergroup interventions. The aim is to bring a large number of organization members and other stakeholders together. Internal and external stakeholders work together collaboratively. Large-group interventions may address organization-wide problems, or implement changes of structure or direction. For example, if you run a care home, you would seek feedback from service users, relatives, and staff on ways to improve the quality of life for residents. This could be starting new activities or changing the menu options. They are often referred to as “open space meetings”, “world cafes”, “future searches”, and “appreciative inquiry summits”.
Human Resource Management Interventions
These are organizational development techniques that focus on the way the individual is managed. Many of these are part of HRM functions.
1. Performance management. Good performance management includes techniques such as goal setting, performance appraisal, and reward systems.
2. Developing talent. This includes talent management practices like coaching & mentoring, career planning, development interventions, and management and leadership development.
3. Diversity interventions. Diversity is a source of innovation. This includes age, gender, race, sexual orientation, disabilities, and culture, and value orientation. These OD intervention techniques are aimed at increasing diversity.
4. Wellness interventions. Employee wellness interventions include stress management programs, and employee assistance programs. They address social factors and aim for a healthy work-life balance.
How Human Resources and OD relate
You can see that there are many OD interventions, relating to Human Resource Management functions. Policies such as performance management, goal setting, appraisal, and talent management practices are all important in achieving effective organizational development.
However, whereas HRM focuses specifically on people practices, OD takes a more holistic approach. Using tools like organizational design, individual and group interventions, work design, and more traditional people interventions, OD can operate at all levels of the organization. These levels are organizational, group, and individual. However, the focus is always on strategic themes, whereas HR is often a lot more operational.
Sometimes, OD functions are located in the HR function, but not always. Sometimes it’s part of a services department, corporate strategy, or internal consulting. External strategy consultants also frequently utilize OD techniques in change management projects.
Both HRM and OD have their roots in the business strategy – the mission, values, and vision of the organization. Both outline the actions needed to implement that strategy in their respective fields. In addition, many early people analytics initiatives originate from the OD department.
What’s clear is that the OD techniques we listed above are very powerful. For an HR professional, there are huge benefits to mastering them. The term OD emerged in the 1960s, as a way to describe managing the behavioral aspects of people, within organizations. Understanding OD means you can identify which elements of core HR functions need to be focused on, in order to support the organization as a whole, in becoming more efficient. OD provides an integrated way of approaching these challenges.
(d) The components of organisational effectiveness are managerial policies and practices, employee characteristics, organisational characteristics and the environmental characteristics.
Organizational effectiveness means to study the organizational structure in order to understand the basic working. It helps in evaluating and analyzing the performance of the organization. There are various components of organizational effectiveness they are:
1. Managerial Policies and Practices
2. Environmental Characteristics
3. Employee Characteristics
4. Organizational Characteristics
1. Managerial Policies and Practices: It helps to combine the organization as a whole in order to maintain a balance between the various interest groups in an organization and to accommodate them according to the environment of the organization. There are various policies and procedures which need to be formulated and implemented at various occasions of the organization they are:
a) Strategy: It refers to the plan in order to interact between the competitive companies to achieve the goals effectively. These strategies are selected on the basis of environmental needs, and then are redesigned by the top management to achieve the desired results.
b) Leadership: It enables to influence the employees towards the effective goal achievements. Leaders enable to identify the organizational goals and also try to initiate the steps towards them.
c) Decision Making: Managerial decisions play a very important role in the success of an organization which is taken out of the various alternatives available at a given point of time.
d) Rewards: Rewards are given to the employees to recognize their efforts towards effective achievement of the organizational goals. It is done to encourage the employees and boost their morale which enables them to improve the quality and quantity of work.
e) Communication: It contributes a lot in the event of organizational change as it helps in the proper communication and linkage between the members of the organization.
2. Environmental characteristics: The external environment plays a very important role in achieving organizational effectiveness. It has various characteristics of environment which helps in understanding the status of the organization they are:
a) Predictability: It refers to the state of certainty or uncertainty in an organization towards supply of human resources, human, raw material etc. Predictability is an element of external environment.
b) Complexity: It refers to the heterogeneity and the range of activities that proves relevant to the operations in the organizations.
c) Hostility: It is an environment in which the foundation of the organization is threatened. It refers to the view by which people view the organization.
3. Employee Characteristics: It is an important characteristic as the source of human resources can make or break an organization. Employee Characteristics reflects the success and failure of the organization and its major characteristics are goals, skills, motives, attitudes and values.
a) Goals: It refers to the direction in which an organization is inclined to go. They can be termed to as intentions that an individual of an organization would like to accomplish during his course of working. It provides directional nature to behaviour of the people and guides their thoughts and actions.
b) Skills: It refers to ability to engage in a set of behaviour that is related to one another. It is the ability that leads to a desired performance in a specified are and it can be technical, administrative, managerial, behavioral etc.
c) Motives: It is an inner state of mind that helps a person to be energized, motivated and directed towards the accomplishment of a pre-defined goal. It is observed that motivated employees have high zeal and enthusiasm to perform better to achieve their respective organizational goals.
d) Attitudes: They are evaluative statements (favorable or unfavorable) concerning objects, events or people and influences job behaviour as well effectiveness of the organization.
e) Values: It refers to as specific code of conduct or basic sincerity possessed by an individual in the organization. It is highly influential in individual attitude and behaviour. It influences the motivation of an individual as well as his behaviour in the organization.
4. Organizational Characteristics: It refers to the general conditions that exist within an organization. The various characteristics that influence the effectiveness of organizations are structure, technology and size.
a) Structure: It defines the formal division, grouping and coordination of the job tasks within the organization. There are six important elements in an organizational structure that are needed for organizational effectiveness. These six elements are work specialization, departmentation, chain of command, span of control, centralization and decentralization, and formalization.
b) Technology: It refers to the ways and means by which an organization transfers its inputs into outputs. The organizational efficiency is largely dependent on the choice of technology and its use.
c) Size: It refers to the number of people in an organization. In broader sense, it can also be referred to as the physical capacity of the organization, the personnel available to the organization, the organizational inputs or outputs and the optional resources available to an organization. The effectiveness and efficiency of an organization is dependent on the size of the organization.