Organizational Development: Importance, Techniques, Types & Examples

Organizational development is a very common term nowadays, often we hear it from business savvies. But, what is it? Let’s discuss that first.

Organizational is a critical, objective, and science-based methodology that helps organizations build their capacity to change and achieve greater effectiveness by developing, improving, and reinforcing strategies, structures, and processes. It is an effort that focuses on improving an organization’s capability through the alignment of strategy, structure, people, rewards, metrics, and management processes.

Organizational Development

Here, there are a few terms used in the definition with which you must be aware for a clear understanding of Organisational Development – 

Critical and Science-based process means it is a structured process about using scientific findings as input and creating a structured and controlled process in which assumptions are tested and the outcomes are reflected by the intention of intervention. Next is building capacity to change and achieve greater effectiveness means organization development includes financial performance, customer satisfaction, organizational member engagement, and an increased capacity to adapt and renew the organization.

The last line that needs to be understood in the definition is developing, improving, and reinforcing strategies, structures, and processes means organizational development applies to changes in strategy, structure, and/or processes and implies a systematic approach.

Importance of Organisational development

Organizational design has become more crucial over time. The scope of organizational development (OD) is vast & diverse. Organizational development is important for the continuous development of entities that participate in organizational development to continually develop their business models, increase and effective horizontal and vertical communication, employee growth, enhancement of products and services, increase profit margins.

The importance and goals of Organisational development vary between organizations. If we talk about corporate companies the chief concern is increasing profits while in health services maintaining good functioning is important.

Let’s discuss some importance that cannot be overestimated – 

  1. Optimization of operations
  2. Improved Efficiency
  3. Improved Effectiveness
  4. Positioning for Future Expansion
  5. Exploration of Market Opportunities
  6. Capacity Building
  7. Improved Operational Quality
  8. Increased Value for Stakeholders
  9. Cost Reduction
  10. Increased Competitiveness
  11. Improved Process Integration
  12. Ease of Embracing Changes
  13. Enhanced Process Sustainability
  14. Enhanced Business Continuity
  15. Creation of Business Relationships

Organizational development is a complex technical field. It is an interdisciplinary field rooted in psychology, culture, innovation, social sciences, adult education, human resource management, organization behavior, and research analysis and design, among others.

Organizational Development is a complex field

In Organisational Development, the management and employees are internal stakeholders while customers, investors, supplies, communities, and government come under external stakeholders. Organisational Development has five phases which are as follows:

  1. Entering and contracting: The manager or administrator spots an opportunity for improvement and scoping out the problem.
  2. Diagnosis is the second phase of the process in which the OD practitioner tries to understand a system’s current functioning and collect information needed to accurately interpret the problem, through surveys, interviews, or by looking at currently available data.
  3. In the data collection and analyzing phase, OD practitioners collect and analyze data
  4. Feedback: In this phase, the OD consultant gives information back to the client in a way that is understandable and action-driven.
  5. Solution: After providing the client with feedback, an intervention needs to be created and that changed intervention is executed.
  6. Once a system has been implemented, opportunities for improvement start to show.

Techniques of Organisational development

There are many techniques of Organisational development. Here, we are discussing these best nine Techniques of Organisation Development:

  1. Survey feedbackIn this method information is collected through surveys. It is the most popular and widely used method of data collection. The managers use this information collected through surveys for making decisions.
  2. Team BuildingIt is the organization development technique that emphasizes team building or forming workgroups in order to improve organizational effectiveness. It consists of employees of the same rank and a supervisor. They get exposed to the creative thinking of others and socio-psychological behavior at the workplace.
  3. Sensitivity TrainingIt is also known as laboratory training. In this technique, the different groups of employees are allowed to mix up with each other and communicate freely and build up interpersonal relationships. They learn the reflection of their behavior and try to improve it.
  4. Managerial GridThe main concept of the managerial grid is to identify two major dimensions of management behavior. They are people-oriented and production-oriented behaviors
  5. Management by Objectives (MBO)It is a method of achieving organizational objectives and a technique of evaluation and review of performance. In this method objectives of the organization are fixed and the responsibility to achieve them lies on the managers and results are expected from them.
  6. In a Brainstorming group of five to eight managers come together and find a solution to a problem. It works on the idea that everyone has a creative mind and the capability to generate new ideas.
  7. Process Consultation, the consultant or expert provides the trainee feedback and the consultant makes the correct diagnosis of the problem and then guides the participants.
  8. Quality Circles: A group of 5 to 12 come together in their own free will during working hours once in a week and discuss the problems and suggest a solution to the management for implementation.
  9. Transactional Analysis: It is also used in process consultation and team building.

Types of Organisational Development Interventions

There are many types of organizational development interventions that are useful for OD practitioners to have in their practice. Typical classification of OD interventions would include human process interventions, technostructure interventions, HRM interventions, and strategic change interventions.

OD Intervention cycle

Examples of Organisational development

There are various factors that affect the success of a small business, including the knowledge and abilities of the employees, technology, customers, competition, and even the political environment. For a small business owner, it is important to make business growth plans and for that, the employer needs organizational development. Examples of organizational development vary by industry and business.

I hope through this article, you will have a complete understanding of the complex area of Organisational Development. The ultimate goal of organizational development is to increase the organization’s competitiveness in order to create a business that has the capability to win in the marketplace.

Robyn Matthews started writing about technology when she was far too young and hasn't stopped. She spends most of his time obsessing over computer software and hardware, and loves talking about herself in third person.