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IGNOU MBA MS -10 Solved Assignment 2011

Course Code : MS - 10
Course Title : Organizational Design, Development and Change
Assignment Code : MS-10/SEM - I /2011
Coverage : All Blocks

Note: Answer all the questions and send them to the Coordinator of the Study Centre you are
attached with.

1) Briefly describe different approaches to organizations and explain the 7Ss Model and it’s
relevance.
Solution : The basic elements of organisations have remained the same over the
years. Organisations have purposes (be they explicit or implicit), attract people,
acquire and use resources to achieve the objectives, use some form of structure to
divide (division of labour) and coordinate activities, and rely on certain
positions/people to lead or manage others. While the elements of organizations are
the same as ever before, the purposes o\f organisation, structures, ways of doing
things, methods of coordination and control have always varied widely over the
years and even at the same time amongst different organisations. For example,
public sector organisation in India with there multiple objectives in early years
were not roused by the profit motive but are now required to make surpluses. At a
given point in the time of history. Ford Motors relied more on centralization and
General Motors on decentralization. The crucial aspect that accounts for the
differences is how an organisation adapts itself to the environment. Organisation
being part of the society affects and is affected by the changes in society. The
changes could be social, economic, technical, legal or political; they could be in
input (labour, capital, materials etc.) or output markets.

It is essential to develop a perspective understanding about organisations because

human behaviour and organisational behaviour are influenced by the people in
organisations and the specific characteristics in the basic elements in the
organisations and the way they adapt themselves to the environment. There is
considerable body of knowledge and literature, called organisation theories,
developed over the years reflecting what goes on in organisations. Organisation
theories are sets of propositions which seek to explain or predict how individuals
and groups behave indifferent organisational structures 
and circumstances.

Basically we have the three types of approaches to organisation 

1. Classical
2. neo-classical

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3. modern approach
Now we will describe 

Classical Viewpoint:
these concepts have come to be popularly known as classical concepts or classical
theories of organisation. The structure of an organisation received emphasis under
this school of thought. According to the classical view, “An organisation is the
structure of the relationships, power, objectives, roles, activities, communications
and other factors that exist when persons work together.

The streams of concepts in the “classical” mould are based on the same
assumptions, but are developed rather independently. Bureaucracy as a concept,
first developed by Max Weber, presents a descriptive, detached, scholarly point of
view. Administrative theories not only described macro aspects of organisations
but also focused on principles and practice for better performance. Scientific
management thought focused mainly in micro aspects like individual worker,
foreman, work process, etc. The classical theorists on the whole, with scientific
management stream being a minor exception, viewed organisations as mechanistic
structures. Let us consider the three streams of classical theories briefly : i.e
Bureaucracy, Administrative theory and Scientific Management.

Bureaucracy
Bureaucracy is the dominant feature of ancient civilizations as well as modern
organisations in contemporary world. Max Weber describes an “ideal type”
approach to outline the characterstics of a fully developed bureaucratic form of
organisation. The features that the described as being characterstic of a
bureaucracy are common to all social institutions, be they political, religious,
industry, business, military, educational or government organisations. Size and
complexity produce bureaucracy. As such, the rigid structures, fixed jurisdictions,
impersonal rules and mundane routine, concomitant with bureaucracies often result
in delays, produce inertia, encourage buck-passing, lead to wastage of resources
and cause frustration. As such, in general parlance the word ‘bureaucracy’ has
come to have a negative connotation and many tended to wish it away. But the
features that characterize bureaucracy have become inevitable and ubiquitous with
the growing size and complexity in organisations. There is need, therefore, to
understand and improve bureaucracies than indulge in dysfunctional debates over
their relevance.

Administrative Theory
Administrative theory is another stream of thought in the classical mould. 
Among the several proponents of the Administrative theory, the earliest and

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significant contribution came from Henri F Fayol, a French industrialist, in 1916.

The 14 principles that capture the essence of the administrative theory could be
summarized as follows:

Division of work. Division of work or specialization gives higher productivity

because one can work at activities in which one is comparatively highly skilled.

Authority and responsibility. Authority is the right to give orders. An

organisational member has responsibility to accomplish the organisational
objectives of his position. Appropriate sanctions are required to encourage good
and to discourage poor performance.

Discipline. There must be respect for and obedience to the rules and objectives of
the organisation.

Unity of command. To reduce confusion and conflicts each member should receive
orders from and be responsible to only one superior.

Unity of direction. An organistion is effective when members work together

toward the same objectives.

Subordination of individual interest to general interest. The interests of one

employee or group of employees should not prevail over that of the organisation.

Remuneration of personnel. Pay should be fair and should reward good

performance, decentralization.

Centralisation. A good balance should be found between centralisation and

decentralization.

Scalar chain. There is scalar chain or hierarchy dictated by the principle of unity of
command linking all members of the organisation from the top to the bottom.

Order. There is a place for everything and everyone which ought to be so occupied.

Equity. Justice, largely based on predetermined conventions, should prevail in the

organisation.

Stability of tenure of personnel. Time is required for an employee to get used to

new work and succeed in doing it well.

Initiative. The freedom to think out and execute plans at all levels.

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Espirit de corps. “Union is strength”.

Scientific Management
The third stream of classic school of thought is the scientific management.
Whereas bureaucracy and administrative theory focused on macro aspects of the
structure and processes of human organisations, scientific management concerned
itself with micro aspects such as physical activities of work through time-and-
motion study 
and examination of men-machine relationships. Unlike in the other two, the
scientific management and based its inductive reasoning on detailed study and
empirical evidence. In juxtaposition the principles of bureaucracy and
administrative theory were formed by synthesising experience and observation
with abstract reasoning.

Neoclassical Viewpoint
The neoclassical theory, also referred to as the human relations school of thought
reflects a modification to and improvement over the classical theories. While
classical theories focused more on structure and physical aspects of work the
neoclassical theory recognizes the primary of psychological and social aspects of
the worker as an individual and his relations within and among groups and the
organisation. Though neoclassical philosophy could be traced to ancient times, it
gained currency only after the world War I, particulary in the wake of the
“Hawthrone experiments” at Western Electric Company by Elton Mayo during
1924 to 1932.

The neoclassical viewpoint thus gave birth to human relations movement and
provided the thrust toward democratisation of organisational power structures and
participative management. The emerging changes in social, economic, political and
technical environment of organisations also seems to have provided the rationale
for such shift in emphasis.

The neoclassical viewpoint does not replace classical concepts. The need for order,
rationality, structure, etc. have been modified to highlight the importance of
relaxing the rigid and impersonal structures and consider each person as an
individual with feelings and social influences that effect performance on the job.

Modern (Systems) Viewpoint

Modern theories of organisation and management have been developed largely
since the 1930s. The perspective here is to provide a systems viewpoint. Among
the several persons who contributed to the modern theory, it was perhaps Chester I.
Bernard, who in 1983, provided a comprehensive explanation of the modern view

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of management and organisation. He considered the individual, organisation,

suppliers and consumers as part of the environment. Ten years later, Weiner;s
pioneering work on cybernetics developed concepts of systems control by
information feedback. He described an adaptive system (including an orgainsation)
as mainly dependent upon measurement and correction through feedback. An
organisation is viewed as a system consisting of five parts: inputs, process, output,
feedback and environment .

The GST approach suggests the following nine levels of systems complexity:
1. The most basic level is the static structure. It could be termed the level of
frameworks. An example would be the anatomy of the universe.
2. The second level is the simple dynamic system. It incorporates necessary
Predetermined motions. This could be termed the level of clockworks.
3. The next level is a cybernetic system characterized by automatic feedback
Control mechanisms. This could be thought of as the level of clockworks.
4. The fourth level is called the “open-systems” level. It is a self-maintaining
Structure and is the level where life begins to differentiate from nonlife. This is the
level of the cell.
5. The fifth level can be termed the “genetic-societal” level. It is typified by the
plant and occupies the empirical world of the botanist.
6. The next is the animal level, which is characterized by increased mobility,
Teleological behaviour, and self-awareness.
7. The seventh level is the human level. The major difference between the human
level and the animal level is the human’s possession of self-consciousness.
8. The next level is that of social organisations. The important unit in a social
organisation is not the human per se but rather the organisatonal role that the
person assumes.
9. The ninth and last level is reserved for transcendental systems. This allows for
ultimates, absolute and the inescapable unknowables.

Each level is more complex than the one that precedes it. However, no stage is as
yet fully developed and knowledge about different levels is for varying degrees.
Beyond the second level none of the theories are comprehensive or fully
meaningful. Over the last here decades further developments in research into
organisations may have added to the existing knowledge, but human organisations
continue to be extremely complex.

The systems approach points to the interdependent nature of everything that forms
part of or concerns an organisation. A system is composed of elements which are

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related to and dependent upon one another and which, when in interaction, from a
unitary whole.

Systems framework covers both general and specialized systems and closed and
open analysis. A general systems approach to the management processes deals
with formal organisation and concepts relating to different disciplines such as
technical, social, psychological and philosophical. Specific management systems
deal with aspects relating to organisation structure, job design, specific functions of
management, etc.

A closed system operates in a closed loop, devoid of external inputs. An open

system, in contrast, is a dynamic input-output system “in continual interaction with
environment to achieve a steady state of dynamic equilibrium while still retaining
the capacity for work or energy transformation”.

While the classical theorists recognised only a closed system viewpoint, the
modern theorists believe in organisations as open systems. The work of D.Katz and
R L Kahn provided the intellectual basis to merge classical, neoclassical and
modern viewpoints.

Here below we are describing the different approaches to organisation in relevence

of 7s model.

The 7-S-Model is better known as McKinsey 7-S. This is because the two persons
who developed this model, Tom Peters and Robert Waterman, have been
consultants at McKinsey & Co at that time. Thy published their 7-S-Model in their
article “Structure Is Not Organization” (1980) and in their books “The Art of
Japanese Management” (1981) and “In Search of Excellence” (1982).

The model starts on the premise that an organization is not just Structure, but
consists of seven elements:

Those seven elements are distinguished in so called hard S’s and soft S’s. The hard
elements (green circles) are feasible and easy to identify. They can be found in
strategy statements, corporate plans, organizational charts and other
documentations.
The four soft S’s however, are hardly feasible. They are difficult to describe since
capabilities, values and elements of corporate culture are continuously developing
and changing. They are highly determined by the people at work in the
organization. Therefore it is much more difficult to plan or to influence the

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characteristics of the soft elements. Although the soft factors are below the surface,
they can have a great impact of the hard Structures, Strategies and Systems of the
organization.

Description

The Hard S’s 

Strategy Actions a company plans in response to or anticipation of changes in its
external environment.
Structure Basis for specialization and co-ordination influenced primarily by
strategy and by organization size and diversity. 
Systems Formal and informal procedures that support the strategy and structure.
(Systems are more powerful than they are given credit)
The Soft S’s 
Style / Culture The culture of the organization, consisting of two components:
• Organizational Culture: the dominant values and beliefs, and norms, which
develop over time and become relatively enduring features of organizational life.
• Management Style: more a matter of what managers do than what they say; How
do a company’s managers spend their time? What are they focusing attention on?
Symbolism – the creation and maintenance (or sometimes deconstruction) of
meaning is a fundamental responsibility of managers.
Staff The people/human resource management – processes used to develop
managers, socialization processes, ways of shaping basic values of management
cadre, ways of introducing young recruits to the company, ways of helping to
manage the careers of employees
Skills The distinctive competences – what the company does best, ways of
expanding or shifting competences 
Shared Values / Superordinate Goals Guiding concepts, fundamental ideas around
which a business is built – must be simple, usually stated at abstract level, have
great meaning inside the organization even though outsiders may not see or
understand them.

Effective organizations achieve a fit between these seven elements. This criterion
is the origin of the other name of the model: Diagnostic Model for Organizational
Effectiveness. 
If one element changes then this will affect all the others. For example, a change in
HR-systems like internal career plans and management training will have an
impact on organizational culture (management style) and thus will affect
structures, processes, and finally characteristic competences of the organization.

In change processes, many organizations focus their efforts on the hard S’s,

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Strategy, Structure and Systems. They care less for the soft S’s, Skills, Staff, Style
and Shared Values. Peters and Waterman in “In Search of Excellence” commented
however, that most successful companies work hard at these soft S’s. The soft
factors can make or break a successful change process, since new structures and
strategies are difficult to build upon inappropriate cultures and values. These
problems often come up in the dissatisfying results of spectacular mega-mergers.
The lack of success and synergies in such mergers is often based in a clash of
completely different cultures, values, and styles, which make it difficult to
establish effective common systems and structures.

The 7-S Model is a valuable tool to initiate change processes and to give them
direction. A helpful application is to determine the current state of each element
and to compare this with the ideal state. Based in this it is possible to develop
action plans to achieve the intended state.

Fig: 7s Mckinsey Model

2. Discuss any four organizational structures and how they contribute to fulfill the demands of new
environment. Give examples.
Solution : An organization (or organisation — see spelling differences) is a social arrangement which
pursues collective goals, controls its own performance, and has a boundary separating it from its
environment. The word itself is derived from the Greek word organon, itself derived from the better-
known word ergon. There are a variety of legal types of organizations,
including: corporations, governments, non-governmental organizations, international
organizations, armed forces, charities, not-for-profit corporations, partnerships, cooperatives,
and universities. Ahybrid organization is a body that operates in both the public sector and the private
sector, simultaneously fulfilling public duties and developing commercial market activities. As a result
the hybrid organization becomes a mixture of a government and a corporateorganization.

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In the social sciences, organizations are the object of analysis for a number of disciplines, such
as sociology, economics, political science,psychology, management, and organizational communication.
The broader analysis of organizations is commonly referred to asorganizational structure, organizational
studies, organizational behavior, or organization analysis. A number of different perspectives exist, some
of which are compatible:
From a process-related perspective, an organization is viewed as an entity is being (re-)organized, and the
focus is on the organization as a set of tasks or actions.
From a functional perspective, the focus is on how entities like businesses or state authorities are used.
From an institutional perspective, an organization is viewed as a purposeful structure within a social
context.
Management is interested in organization mainly from an instrumental point of
view. For a company, organization is a means to an end to achieve its goals, which
are to create value for its stakeholders (stockholders, employees, customers,
suppliers, community).
Organization in sociology
Sociology can be defined as the science of the institutions of modernity; specific institutions serve a
function, akin to the individual organs of a coherent body. In the social and political sciences in general,
an "organization" may be more loosely understood as the planned, coordinated and purposeful action of
human beings working through collective action to reach a common goal or construct a tangible product.
This action is usually framed by formal membership and form (institutional rules). Sociology
distinguishes the term organization into planned formal and unplanned informal (i.e. spontaneously
formed) organizations. Sociology analyzes organizations in the first line from an institutional perspective.
In this sense, organization is a permanent arrangement of elements. These elements and their actions are
determined by rules so that a certain task can be fulfilled through a system of coordinated division of
labor.
An organization is defined by the elements that are part of it (who belongs to the organization and who
does not?), its communication (which elements communicate and how do they communicate?), its
autonomy (which changes are executed autonomously by the organization or its elements?), and its rules
of action compared to outside events (what causes an organization to act as a collective actor?).
By coordinated and planned cooperation of the elements, the organization is able to solve tasks that lie
beyond the abilities of the single elements. The price paid by the elements is the limitation of the degrees
of freedom of the elements. Advantages of organizations are enhancement (more of the same), addition
(combination of different features) and extension. Disadvantages can be inertness (through co-ordination)
and loss of interaction.
Organizational structures
The study of organizations includes a focus on optimizing organizational structure. According
to management science, most humanorganizations fall roughly into four types:
Pyramids or hierarchies
Committees or juries
Matrix organizations
Ecologies
Pyramids or hierarchies
A hierarchy exemplifies an arrangement with a leader who leads other individual members of the
organization. This arrangement is often associated with  bureaucracy.
These structures are formed on the basis that there are enough people under the leader to give him
support. Just as one would imagine a real pyramid, if there are not enough stone blocks to hold up the
higher ones, gravity would irrevocably bring down the monumental structure. So one can imagine that if
the leader does not have the support of his subordinates, the entire structure will collapse. Hierarchies

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were satirizedin The Peter Principle (1969), a book that introduced hierarchiology and the saying

that "in a hierarchy every employee tends to rise to his level of incompetence."
Committees or juries
These consist of a group of peers who decide as a group, perhaps by voting. The difference between
a jury and a committee is that the members of the committee are usually assigned to perform or
lead further actions after the group comes to a decision, whereas members of a jury come to a decision.
In common law countries legal juries render decisions of guilt, liability and quantify damages; juries
are also used in athletic contests, book awards and similar activities. Sometimes a selection committee
functions like a jury. In the Middle Ages juries in continental Europe were used to determine the law
according to consensus amongst local notables.
Committees are often the most reliable way to make decisions.  Condorcet's jury theorem proved
that if the average member votes better than a roll of dice, then adding more members increases the
number of majorities that can come to a correct vote (however correctness is defined). The problem is
that if the average member is worse than a roll of dice, the committee's decisions grow worse, not
better: Staffing is crucial.
Parliamentary procedure, such as Robert's Rules of Order, helps prevent committees from
engaging in lengthy discussions without reaching decisions.
Matrix organization
This organizational type assigns each worker two bosses in two different hierarchies. One hierarchy is
"functional" and assures that each type of expert in the organization is well-trained, and measured by a
boss who is super-expert in the same field. The other direction is "executive" and tries to get projects
completed using the experts. Projects might be organized by products, regions, customer types, or some
other schema.
As an example, a company might have separate individuals with overall responsibility for Product X and
Product Y, and different individuals with overall responsibility for Engineering, Quality Control, etc.
Individuals responsible for quality control of project X with therefore have two reporting lines.
Ecologies
This organization has intense competition. Bad parts of the organization starve. Good ones get more
work. Everybody is paid for what they actually do, and runs a tiny business that has to show a  profit, or
they are fired.
Companies who utilize this organization type reflect a rather one-sided view of what goes on
in ecology. It is also the case that a natural ecosystem has a natural border - ecoregions do not
in general compete with one another in any way, but are very autonomous.
The pharmaceutical company GlaxoSmithKline talks about functioning as this type of
organization in this external article from The Guardian.

Organizational structure types

Pre-bureaucratic structures
Pre-bureaucratic (entrepreneurial) structures lack  standardization of tasks. This structure is most
common in smaller organizations and is best used to solve simple tasks. The structure is totally
centralized. The strategic leader makes all key decisions and most communication is done by one on one
conversations. It is particularly useful for new (entrepreneurial) business as it enables the founder to
control growth and development.

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They are usually based on traditional domination or charismatic domination in the sense

of Max Weber's tripartite classification of authority.
Functional structure
Employees within the functional divisions of an organization tend to perform a specialized set of tasks,
for instance the engineering department would be staffed only with software engineers. This leads to
operational efficiencies within that group. However it could also lead to a lack of communication
between the functional groups within an organization, making the organization slow and inflexible.
As a whole, a functional organization is best suited as a producer of standardized goods and services at
large volume and low cost. Coordination and specialization of tasks are centralized in a functional
structure, which makes producing a limited amount of products or services efficient and predictable.
Moreover, efficiencies can further be realized as functional organizations integrate their activities
[11]
vertically so that products are sold and distributed quickly and at low cost   . For instance, a small
business could start making the components it requires for production of its products instead of
procuring it from an external organization.But not only beneficial for organization but also for
employees faiths.
Divisional structure
Also called a "product structure", the divisional structure groups each organizational function into a
division. Each division within a divisional structure contains all the necessary resources and functions
within it. Divisions can be categorized from different points of view. One might make distinctions on a
geographical basis (a US division and an EU division, for example) or on product/service basis (different
products for different customers: households or companies). In another example, an
automobile company with a divisional structure might have one division for SUVs, another division for
subcompact cars, and another division for sedans.
Each division may have its own sales, engineering and marketing departments.
Matrix structure
The matrix structure groups employees by both function and product. This structure can combine
the best of both separate structures. A matrix organization frequently uses teams of employees to
accomplish work, in order to take advantage of the strengths, as well as make up for the weaknesses, of
functional and decentralized forms. An example would be a company that produces two products,
"product a" and "product b". Using the matrix structure, this company would organize functions within
the company as follows: "product a" sales department, "product a" customer service department,
"product a" accounting, "product b" sales department, "product b" customer service department,
"product b" accounting department. Matrix structure is amongst the purest of organizational structures,
a simple lattice emulating order and regularity demonstrated in nature.
Weak/Functional Matrix: A project manager with only limited authority is assigned to oversee the
cross- functional aspects of theproject. The functional managers maintain control over their resources
and project areas.
Balanced/Functional Matrix: A project manager is assigned to oversee the project. Power is shared
equally between the project manager and the functional managers. It brings the best aspects of functional
and projectized organizations. However, this is the most difficult system to maintain as the sharing power
is delicate proposition.
Strong/Project Matrix: A project manager is primarily responsible for the project. Functional
managers provide technical expertise and assign resources as needed.
Among these matrixes, there is no best format; implementation success always depends on
organization's purpose and function.

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3) Describe various approaches to job design and their advantages and limitations. Briefly explain
how relevant they are in today’s environment.
Solution : Job design
The term ‘job design’ refers to the way the tasks are combined to form a complete job. It can be
defined, as building the specifications of the position, contents, methods and relationships of the job so
as to meet with various technological and organizational requirements as well as meet the personal
needs job holders. According to Bowditch and Buono, job design referes to “any set of activities that
involve the alteration of specific jobs or interdependent systems of jobs with the intent of improving the
quality of employee job experience and their on-the-job productivity.

Job design refers to the way that’s a set of tasks, or an entire job, is organized. Job design helps to
determine:
What tasks are done,
How the tasks are done,
How many tasks are done, and
In what order the tasks are done.

It takes into account all factors which affect the work, and organizes the content and tasks so that the
whole job is less likely to be a risk to the employee. Job design involves administrative areas such as :

Job rotation,
Job enlargement,
Task/machine pacing,
Work breaks, and
Working tours.

A well designed job will encourage a variety of ‘good’ body positions, have reasonable strength
requirements, require a reasonable amount of mental activity, and help faster feelings of achievement
and self-esteem.

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Job design principles can address problems such as:

Work overload
Work underload,
Repetitiveness,
Limited control over work,
Isolation,
Shiftwork,
Delays in filling vacant positions,
Excessive working hours, and
Limited understanding of the whole job process.

Various approaches to job design:

Achieving good job design involves administrative practives that determine what the employee does, for
how long, where and when as well as giving the employees choice where ever possible. In job design,
one may choose to examine the various tasks of an individual job or the design of a group of jobs.

Approaches to job design include:

Job enlargement : job enlargement changes the jobs to include more and/or different tasks. Job
enlargement should add interest to the work but may or may not give employees more responsibilities.

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Job rotation: job rotation moves employees from one task to another. It distributes the group tasks
among a number of employees.
Job enrichment : allows employees to assume more responsibility, accountability and independence
when learning new tasks or to all ow for greater participation and new opportunities.
Work design (job engineering): work design allows employees to see how the work methods, layout and
handling procedures link together as well as the interaction between people and machines.

Advantages
Ease in recruitment new workers because fewer skills are required.
Lower production time or higher productivity by the learning curve effect due to repetition.
Lower wage rates due to lower levels of skills requirement and ease of substitutability of labor.

Ease of supervision and training the workers. Simple work instructions and easy production control
because of consistence in work assignment.
Scope for higher degree of mechanization or automation.
Limitations
Certainly the roles of both supervision and specialist advisers are considerably affected and in some cases
eliminated.
Movement of personnel between work groups with high levels of autonomy may be difficult, hence
removing some of management's flexibility.
Difficulties are often experienced in implementation in existing work situations.
A participative design process is not acceptable in many organizations and can be very time-consuming.
Alternative ways of organizing work are not always apparent where existing technology has to be
employed.
Management are often not prepared to take the risk of introducing radically different approaches to
organizing work alongside other changes which already have a high element of disruption and associated
risk.

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Q.4. What is organizational diagnosis? Briefly explain why diagnosis is useful for an organization?
Discuss the role of work-shop and task force in diagnosis and their merits and demerits. Give examples.
Solution : Organizational diagnosis is an exercise attempted to make an analysis of organization. And
analysis of its structure, sub systems and processes in order to identify the strengths and weaknesses of
its structural components and processes and use it as a basic for developing plans to improve and /or
maximize the dynamism and effectiveness of the organization.

Organizational Diagnosis 
Organizational Diagnosis helps organizations identify the “gaps” between “what is” and “what ought to
be.” Once we gain a shared vision of the desired state, we  identify barriers and work toward solutions. 
The   Six-Phase approach to organizational diagnosis is tailored to the specific needs of each co: 
Phase 1: Define 
develop a shared understanding of the task, issue, or problem along with a plan for diagnosis. 
Phase 2: Diagnose 
examine organizational archival reports/documents and utilize information gathered through interviews,
focus groups, questionnaires & surveys, along with objective observations to collect relevant data. 
Phase 3: Analyze 
After collecting the data, use statistical analysis methods to interpret the data and develop practical
recommendations. 
Phase 4: Presentation of Findings 
This phase involves  determining   an effective intervention strategy.  
Phase 5: Action Planning 
We work with key players from the  organization to develop an action plan that: 
Fits the needs of the  organization 
Will yield measurable results 
Will enhance the   organization’s capacity to manage change 
Is catered to the  organization’s situation, culture, context, and maturational cycle 
Phase 6: Reinforce 
maintaining a focus on the desired state and helping organizations sustain change initiatives. The
reinforce phase ensures effective implementation of our action plan and outlines the next steps to take
once the action plan has been implemented. 

Data collection
The primary objectives of data collection are to gather valid information about the nature of the system
systematically and to prepare an analysis of that data for delivery to respondents during feedback.
Collection of data proceeds from less (unstructured observation) to more structured methods
(qustionnaires) to produce more valid data. 
In unstructured observation, researchers will be concerned with the relevant documents offered by the
respondent, newsletters, chairman reports, roaming around relevant selected places, interviewing
individuals or group. He must decide how much emphasis to give to theoretical concepts for
understanding the observational data. Researcher besides observation and theoretical concepts should pay
attention to respondent�s own explanation of the data. Repeated unstructured observation, explanation
of respondents and use of theory lead the researcher to develop hypothesis about the causal relationship of
the specific events, relationships among the independent, dependent and moderating variables.
It is better to take a case history of the organization before observational data collection. The case history
should cover the followings:
Identification data: It includes organization name, location, type of organization, organization affiliation,
size (financial condition, stockholders, employees). 

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Historical data: Cheap complaints, duration and possible determinants, short-range and long-range
problems, major crisis of the organization (natural catastrophy, loss of key personnel, labour problems,
financial emergencies, technological changes), product service history (change and development of
organizational goals, sequence of development in product or service), organizational folklore. 
Structural data: Organizational chart, formal job description, ecology of the organization (spatial
distribution of individuals, activities), financial structure, personnel (size, various educational levels,
average tenure, range or skills, absentee rate, turnover rate, accident rate), structure for handling
personnel (recruitment, orientation, training, growth of the job, promotion, compensation, performance
analysis), rules and regulations (medical, safety, retirement, recreation, other fringe benefits). 
Organizational functioning: Organizational perceptions (alertness, accuracy and vividness),
organizational knowledge (acquisition, use and dissemination of knowledge), organizational language,
emotional atmosphere of the organization and organizational action. 
Attitudes and relationship: Attitudes towards the task agents, relations to things and ideas, attitudes
about self, inter-organizational relationships. 
Analysis and conclusions: Appraisal of the effect of the environment on the organization, appraisal of
the effect of the organization on the environment, reactions, appraisal of the organization, impairments
and level of integration. 
Feedback 
Primary objective of feedback is to promote increased understanding of the client system by its members.
Effective feedback design relates the content of the feedback to the process by which the analysis is
delivered to the system. The process of feedback is the composition of feedback meetings (i.e., who is
present with whom), the ordering of the meetings (i.e., which groups receive information first, which is
second, etc.), the behavior of the system during feedback and the behavior of the researchers within and
between feedback meetings. feedback is probably the period of maximum anxiety during the entire
diagnosis. If the system could tolerate the anxiety, system could learn its self.
In sum, the methodology of organizational diagnosis calls for the researcher to be competent in the
conventional use of social science tools ( observation, interviews, questionnaires and archives) ant to
possess a sophisticated theory and the related behavioural skills to enter, collect and feedback information
to complex multigroup systems. 
CASE STUDIES
1. Improving organizational health and job satisfaction: 
A public sector plant interested to improve organizational health (adequate physical environmnt,
organizational climate and relations with the task environment)and job satisfaction of managers,
supervisors and staffs. Both organizational health and job satisfaction questionnaire administered to the
random samples of three organizational hierarchies. Hierarchical multiple regression analysis shows
managers gave more importance to organizational satisfaction and organizational awareness. To
supervisors, autonomy in decision making, satisfactory relationship between organization and task
environment, awareness of changes in task environment, and organizational need satisfaction were
important for job satisfaction. To staffs, problem solving opportunity and good interpersonal trust were
important for job satisfaction. The results were presented to the authority of the company. The authority
of the plant discussed the results with the colleagues and took some measures.
2. Improving organizational health of the hospital :  
A government hospital is interested to improve present condition of its organizational health.
Organizational health scale was administered to the doctors and nurses following random sampling
procedure. Results show inadequacy in physical (inadequate machines and equipments, high level of
noise), mental(poor interpersonal trust, inadequate awareness of safety rules and regulations, less
autonomy in patient care, inadequate financial growth) and social health (poor satisfaction level of
organization with its task agents) of the hospital. Hospital authority was suggested to (i) introduce quality
circle for efficient housekeeping and for awareness of safety rules and regulations (ii) introduce
sensitivity training programme for interpersonal conflict reduction (iii) introduce vendor development
programme in order to collect quality equipment and tools from various suppliers. 

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3. Improving organizational awareness: 

A public sector plant is interested to improve present status of organizational awareness. Organizational
awareness questionnaire was administered to the employees. Results show relatively poor awareness of
organizational objectives, production process, safety rules. Suggestions were given related to (i)
introduction of written job chart (ii) introduction of suggestion box system in which employees could give
suggestion regarding the improvement of production process, controlling environmental pollution, safety
programme etc. (iii) both way quality circle programme (iv) organizing safety dramma, safety poem and
song writing and safety poster campaign.

Role of Workshops in diagnosis

Workshops for divisions and groups within corporations, businesses and other organizations.
Customized on site negotiation skills workshops enable organizations to:

Provide individuals and groups across the organization with a shared vocabulary and common set of
skills and tools to help them negotiate more effectively
Address organization specific negotiation challenges by using customized role plays and cases based on
participants’ “real world” scenarios.

Focus on particular areas of negotiation effectiveness such as:

Dealing with difficult people and tactics
Building long term, strategic relationships
Communicating effectively
Influencing and persuading others
Managing differences in perceptions
Managing roles in multi-party negotiations
Maximize resources by offering local workshops for groups of employees rather that sending them
individually to public workshops Decide on a convenient time and location for the workshops which
complements the schedule of the employees/organization.

Workshops build each participant’s capacity to transform adversarial approaches to negotiation into
problem-solving collaborations, producing better outcomes for all parties while enhancing log-term
working relationships. Each training workshop is designed to:

Stimulate participants’ awareness of the complexities of negotiation

Equip participants with a framework for understanding, diagnosing and leading the negotiation process
Enhance participants’ skill through hands-on experience and feedback
Provide participants with a process for continued improvement and learning

In order to provide the most relevant training possible for participants in a given organization, MWI
conducts “diagnostic” interviews by phone and/or in person prior to the workshop with a cross-section
of employees who will be participating in the workshop. The goal of conducting the diagnostic
interviews is to gain a better understanding of the internal and external negotiation challenges the
workshop participants are facing and gain a broader understanding of the structure, business and
purpose of the organization in order to:

Effectively address organization specific negotiation challenges in the workshop; and

Create organization specific case studies and role-plays for the participants in the workshop.

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Task forces and internal teams:

Organizational designers and OD consultants make it compulsory to an organization to appoint an
internal task force to assist the facilitator in the change process.
A task force is a group of employees of an organization constituted by the top management and
charged with the responsibility of working on a specific task or assignment in addition to their formally
assigned job.
Each task force has a convener, a secretary and a set of resources to complete the task. The terms of
reference should contain the details of the purpose
why the task force is constituted ,
the methodology they can use,
the flexibility they can have in reformulating or redefining the job given to them,
the resources they have,
the assistance they need/ expect from other employees,
the time frame and office bearers The task forces may work independently or under the general
direction/guidance of the chief executive to a top level manager.
The work of the task force is time-bound. Thus an organization can use any number of task forces
depending on the problems/issues are willing to take up.
Normally, the task forces are constituted for diagnosis of specific problems and working on specific
issues.

Q.5. What is Organizational Development? Describe different stages of organizational development.

Discuss any two interventions and their contribution to organizational development. Give examples.
Solution : Organization development (OD) is a planned, organization-wide effort to
increase an organization's effectiveness and viability. Warren Bennis has referred
to OD as a response to change, a complex educational strategy intended to
change the beliefs, attitudes, values, and structure of organization so that they
can better adapt to new technologies, marketing and challenges, and the dizzying
rate of change itself. OD is neither "anything done to better an organization" nor
is it "the training function of the organization"; it is a particular kind of change
process designed to bring about a particular kind of end result. OD can involve
interventions in the organization's "processes," usingbehavioural
science knowledge  as well as organizational reflection, system improvement, planning, and self-
analysis.
Kurt Lewin (1898–1947) is widely recognized as the founding father of OD, although he died before
the concept became current in the mid-1950s. From Lewin came the ideas of  group
dynamics and action research which underpin the basic OD process as well as providing its
collaborative consultant/client ethos. Institutionally, Lewin founded the "Research Center for Group
Dynamics" (RCGD) at MIT, which moved to Michigan after his death. RCGD colleagues were among
those who founded the National Training Laboratories (NTL), from which the T-group and
group-based OD emerged. In the UK, the  Tavistock Institute of Human Relations was
important in developing systems theories. The joint TIHR journal  Human Relations was an early
journal in the field. The Journal of Applied Behavioral Sciences is now the leading journal in the field.

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At the core of OD is the concept of  organization, defined as two or more people working together
toward one or more shared goal(s). Development in this context is the notion that an organization may
become more effective over time at achieving its goals.
OD is a long range effort to improve organization's 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. Although behavioral science has provided the basic foundation for the study and practice of
organizational development, new and emerging fields of study have made their presence known.
Experts in systems thinking, leadership studies, organizational leadership, and organizational learning (to
name a few) whose perspective is not steeped in just the behavioral sciences, but a much more multi-
disciplinary and inter-disciplinary approach have emerged as OD catalysts. These emergent expert
perspectives see the organization as the holistic interplay of a number of systems that impact the
process and outputs of the entire organization. More importantly, the term change agent or catalyst is
synonymous with the notion of a leader who is engaged in doing leadership, a transformative or
effectiveness process as opposed to management, a more incremental or efficiency based change
methodology.
Organization development is a "contractual relationship between a change agent and a sponsoring
organization entered into for the purpose ofusing applied behavioral science and or other
organizational change perspectives in a systems context to improve organizational performance and
the capacity of the organization to improve itself".
Organization development is an ongoing, systematic process to implement
effective change in an organization. Organization development is known as both a
field of applied behavioral 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, and theories of
motivation, learning, and personality. Organization development is a growing field
that is responsive to many new approaches including Positive Adult Development.
Any organizational development process starts with the identification of problems that can be solved
within the organization. This process progresses through different stages and determines satisfactory
progress made for additional involvement. The procedure is cyclic and terminates only when desired
result is obtained. It can also be a series of trial and error and a discovery of the best practices that can
be implemented in the organization.
Here are the different stages or phases of the organizational development process:  
• Problem identification 
• Situational assessment 
• Action planning/ planning of the intervention  
• Implement plan/ implementing the intervention  
• Gather data/ collect data to evaluate the intervention  
• Determining the results 
• Feedback
Organizational development recognizes and tests the impact of problems on the growth of organization
and changes the system if required. It begins with the leadership as a vision to progress and improve the
organizational activities. It is not always recommended to execute development process when the

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organization in trouble, we can also execute a process to better the performance of the organization.
First decide which parts of the organization require to be changed. Once choice is made, review the
condition to understand the problem better. Reviews are of different types such as citation review,
directorial review, focus review and surveying. Normally, assessments will be performed by the experts
or members of the organization.
Once assessment is understood, the next step is to plan for involvement or intervention. Intervention
can include teaching, improvement and team interventions through training and brainstorming sessions.
Focused group discussions could also be implemented for this purpose. Team intervention in turn
includes structural and individual interventions.
The next step in the organizational development process is to implement the planned interventions. In
this phase, information is collected and goals are created. The data gathered is used to verify the
efficiency of the involvement. Report back the data to the organization's decision makers. If the desired
goals are met the organizational development process will continue but will take on a different focus
until such time that the goals of the organization are met. Chances are, however, organizational goals
change over time, so there is always a need for such a process to continue.
Organizational development process assumes great importance in today's social organizations or non
profit organizations. Since they move from survivability to the sustainability development is necessary.
The OD process is commonly applied to the various phases of the organization such as defining the
organizational purpose, evolving strengths, value creation, strategic intervention and partnership
convergence. Social sector is the best known place to implement the organizational development
process.

OD interventions
"Interventions" are principal learning processes in the "action" stage
of organization development. Interventions are structured activities used
individually or in combination by the members of a client system to improve their
social or task performance. They may be introduced by a change agent as part of
an improvement program, or they may be used by the client following a program
to check on the state of the organization's health, or to effect necessary changes
in its own behavior. "Structured activities" mean such diverse procedures as
experiential exercises, questionnaires, attitude surveys, interviews, relevant group
discussions, and even lunchtime meetings between the change agent and a

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member of the client organization. Every action that influences an organization's

improvement program in a change agent-client system relationship can be said to
be an intervention. There are many possible intervention strategies from which to choose. Several
assumptions about the nature and functioning of  organizationsare made in the choice of a particular
strategy. Beckhard lists six such assumptions:
The basic building blocks of an organization are groups (teams). Therefore, the basic units of change
are groups, not individuals.
An always relevant change goal is the reduction of inappropriate  competition between parts of the
organization and the development of a more collaborative condition.
Decision making in a healthy organization is located where the information sources are, rather than in a
particular role or level ofhierarchy.
Organizations, subunits of organizations, and individuals continuously manage their affairs against goals.
Controls are interim measurements, not the basis of managerial strategy.
One goal of a healthy organization is to develop generally open  communication, mutual trust,
and confidence between and across levels.
People support what they help create. People affected by a change must be allowed active participation
and a sense of ownership in the planning and conduct of the change.
Interventions range from those designed to improve the effectiveness of
individuals through those designed to deal with teams and groups, intergroup
relations, and the total organization. There are interventions that focus on task
issues (what people do), and those that focus on process issues (how people go
about doing it). Finally, interventions may be roughly classified according to which
change mechanism they tend to emphasize: for example, feedback, awareness of
changing cultural norms, interaction and communication, conflict,
and educationthrough either new knowledge or skill practice. One of the most
difficult tasks confronting the change agent is to help create in the client system a
safe climate for learning and change. In a favorable climate, human learning
builds on itself and continues indefinitely during man's lifetime. Out of
new behavior, new dilemmas and problems emerge as the spiral continues
upward to new levels. In an unfavorable climate, in contrast, learning is far less
certain, and in an atmosphere of psychological threat, it often stops altogether.
Unfreezing old ways can be inhibited in organizations because the climate makes
employees feel that it is inappropriate to reveal true feelings, even though such
revelations could be constructive. In an inhibited atmosphere, therefore,
necessary feedback is not available. Also, trying out new ways may be viewed as
risky because it violates established norms. Such an organization may also be
constrained because of the law of systems: If one part changes, other parts will
become involved. Hence, it is easier to maintain the status quo. Hierarchical
authority, specialization, span of control, and other characteristics of formal

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systems also discourage experimentation. The change agent must address himself to all of
these hazards and obstacles. Some of the things which will help him are:
A real need in the client system to change
Genuine support from management
Setting a personal example: listening, supporting behavior
A sound background in the behavioral sciences
A working knowledge of systems theory
A belief in man as a rational, self-educating being fully capable of learning better ways to do things.
A few examples of interventions include team building, coaching, Large Group
Interventions, mentoring, performance appraisal, downsizing, TQM, and
leadership development.

 
Fig: An Action Research Model for Organizational Development
One convenient method of classifying OD interventions is by group size and interrelationship, including:
interpersonal relationships, group processes, intergroup systems, and the entire organization. Typically,
an OD program will simultaneously integrate more than one of these interventions. A few of the more
popular interventions are briefly described below.
INTERPERSONAL.
Interpersonal interventions in an OD program are designed to enhance individual skills, knowledge, and
effectiveness. One of the most popular interventions in this class are T-groups, which help workers
become more aware of their own and their coworker's behavior patterns. A typical T-group consists of

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10 to 20 volunteers. They usually meet at a specific time for one or two weeks. The meetings are
unstructured, leaving the group to determine subject matter within the context of basic goals stipulated
by a facilitator. As group members try to exert structure on fellow members, anxiety ensues and the
group becomes more aware of their own and other's feelings and behaviors.
For example, a group of managers in a marketing department might participate in a T-group together.
The members would then describe their perception of each member's behavior and the group might
suggest improvements. Finally, each member would identify areas of personal improvement and then
act to make changes. The end result would be that the team would become more proficient because of
greater understanding and subsequent efforts to improve.
A second example of an interpersonal intervention is process consultation, which helps a company
understand and alter processes by resolving interpersonal dilemmas. Although they are similar to T-
groups, process consultations are more task-oriented and involve greater input by the change agent. For
example, a change agent may observe an individual manager in meetings and conversations during a
workday, and then make specific suggestions as to how the manager could alter his or her behavior to
improve performance.
Other types of interpersonal interventions include those designed to improve the performance review
process, create better training programs, help workers identify their true wants and set complementary
career goals, and resolve conflict.
GROUP.
OD group interventions are designed to help teams and groups within organizations become more
effective. Such interventions usually assume that the most effective groups communicate well, facilitate
a healthy balance between both personal and group needs, and function by consensus as opposed to
autocracy or majority rule.
Group diagnostic interventions are simply meetings wherein members of a team analyze their
performance, ask questions about what they need to improve, and discuss potential solutions to
problems. The benefit of such interventions is that members often communicate problems that their
coworkers didn't know existed (or were perceived to exist). As a result, many problems are resolved and
group dynamics are improved simply as a result of the meeting(s).
Team-building meetings are similar to diagnostic interventions, but they usually involve getting the
group away from the workplace for a few days. In addition, the group members go a step further than
diagnosing problems by proposing, discussing, and evaluating solutions. The purpose of the meetings is
to formulate specific procedures for addressing problems. The chief advantage of such interventions is
that they help the team reach a consensus on solving problems (away from the pressures of the
workplace), thus eliminating incongruent actions and goals that diminish the group's efficiency.
Role analysis technique (RAT) is used to help employees get a better grasp on their role in an
organization. In the first step of a RAT intervention, people define their perception of their role and
contribution to the overall company effort in front of a group of coworkers. Group members then
provide feedback to more clearly define the role. In the second phase, the individual and the group
examine ways in which the employee relies on others in the company, and how they define his or her
expectations. RAT interventions help people to reduce role confusion, which can result in either conflict
or the perception that some people aren't doing their job. A popular intervention similar to RAT is
responsibility charting, which utilizes a matrix system to assign decision and task responsibilities.
INTERGROUP.
Intergroup interventions are integrated into OD programs to facilitate cooperation and efficiency
between different groups within an organization. For instance, departmental interaction often
deteriorates in larger organizations as different divisions battle for limited resources or become
detached from the needs of other departments.

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Conflict resolution meetings are one common intergroup intervention. First, different group leaders are
brought together to get their commitment to the intervention. Next, the teams meet separately to make
a list of their feelings about the other group(s). Then the groups meet and share their lists. Finally, the
teams meet to discuss the problems and to try to develop solutions that will help both parties. This type
of intervention helps to gradually diffuse tension between groups caused by lack of communication and
misunderstanding.
Rotating membership interventions are used by OD change agents to minimize the negative effects of
intergroup rivalry that result from employee allegiances to groups or divisions. The intervention basically
entails temporarily putting group members into their rival groups. As more people interact in the
different groups, greater understanding results.
OD joint activity interventions serve the same basic function as the rotating membership approach, but
it involves getting members of different groups to work together toward a common goal. Similarly,
common enemy interventions achieve the same results by finding an adversary common to two or more
groups and then getting members of the groups to work together to overcome the threat. Examples of
common enemies include competitors, government regulation, and economic conditions.
COMPREHENSIVE.
OD comprehensive interventions are used to directly create change throughout an entire organization,
rather than focusing on organizational change through subgroup interventions. One of the most popular
comprehensive interventions is survey feedback. This technique basically entails surveying employee
attitudes at all levels of the hierarchy and then reporting the findings back to them. The employees then
use the data in feedback sessions to create solutions to perceived problems. A number of questionnaires
developed specifically for such interventions have been developed.
Structural change interventions are used by OD change agents to effect organizational alterations
related to departmentalization, management hierarchy, work policies, compensation and benefit
incentives programs, and other elements. Often, the implemented changes emanate from feedback
from other interventions. One benefit of change interventions is that companies can often realize an
immediate and very significant impact as a result of relatively minor modifications.
Sociotechnical system design interventions are similar to structural change techniques, but they typically
emphasize the reorganization of work teams. The basic goal is to create independent groups throughout
the company that supervise themselves, including administering pay and benefits, disciplining team
members, and monitoring quality, among other responsibilities. The theoretic benefit of sociotechnical
system design interventions is that worker and group productivity and quality is increased because
workers have more control over (and subsequent satisfaction from) the process in which they
participate.
A fourth OD intervention that became extremely popular during the 1980s and early 1990s is  total
quality management (TQM), which is largely a corollary of Deming's work. TQM interventions utilize
established quality techniques and programs that emphasize quality processes, rather than achieving
quality by inspecting products and services after processes have been completed. The important
concept of continuous improvement embodied by TQM has carried over into other OD interventions.

RECENT DEVELOPMENTS
ORGANIZATIONAL LEARNING.
While TQM has lost some of its popularity since then, other OD trends and theories have come to the
forefront since the early 1990s. One of the major new developments has been the notion of the
"learning organization," oracontinuously adapting and growing organization that actively embraces its
own evolution to develop new capabilities or competencies. A key impetus behind this new approach

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was the critically acclaimed 1990 book The Fifth Discipline: The Art and Practice of the Learning
Organization  by MIT organizational studies lecturer Peter Senge. While the academic study of
organizational learning and related phenomena originated a couple decades earlier, this book did much
to popularize the idea and stimulate a host of academic studies into organizational learning, as well as
corporate initiatives geared toward building learning organizations.
The basic analogy for organizational learning is, of course, human learning. Just as individuals can amass
knowledge and skills through both deliberate attempts to acquire knowledge (reading, attending school)
and inadvertent discoveries (experimentation, failure, insights from experiences), so too can groups of
people, according to the theory. Clearly, the methods by which an organization "learns" are different
from those of the individual, but the process is seen as similar. Various models of organizational learning
posit key stages as knowledge acquisition, knowledge sharing, and knowledge utilization as the core
mechanisms of this collective learning process.
The specific kind of learning that this discipline is concerned with is on a fundamental, organizationwide
level. OD scholars distinguish between singleloop learning, double-loop learning, and triple-loop
learning. Single-loop learning, the most common, is in essence localized learning within departments or
subunits of the organization, but has few if any implications for the entire company. Policies and rules
remain unchanged. This kind of learning goes on in virtually all organizations and isn't sufficient to create
what most OD specialists would term a learning organization. Double-loop learning occurs when a
discovery or insight causes not only localized change, but a general revision in corporate policy or
strategy that takes into account this new insight. Triple-loop learning goes one step further, causing
management to rethink the entire business paradigm and make major organizational changes based on
the new insight. Proponents of organizational iearning focus on ways to create organizational structures,
processes, and policies that encourage second- and third-loop learning.
While in some ways organizational learning has taken on some of the trappings of a management fad, its
disciples, including Senge, bristle at this suggestion because they believe it's an enduring and valuable
principle for understanding and influencing organizational development.
APPRECIATIVE INQUIRY.
A less widely known innovation that also garnered attention in the field during the 1990s was
appreciative inquiry, developed by organizational behavior professor David Cooperrider. First conceived
during the 1980s, the approach centers around examining organizational practices that have proven
successful as a way of addressing broad-based development issues. Cooperrider believed that traditional
OD approaches focused too much on hunting down problems and looking for new solutions, whereas
many organizations have numerous successes or strengths that might hold a better key to an
organization's development.
Appreciative inquiry is still an interventionist approach to OD, but its emphasis is on discovering and
identifying current strengths and envisioning a positive future building on those strengths. Appreciative
inquiry also places marked emphasis on the human experience in organizational development, asking
employees to recount their best experiences in the organization and imagine new possibilities. Usually
this approach is reserved for large, company-wide development issues, including redefining the
corporate mission and strategy.
Critics of appreciative inquiry charge that it's too simplistic to be used in very many contexts. Many
advocates also agree that it is a supplement to, rather than a replacement of, established OD theories
and practices.
OD CASE STUDY
A classic example of how OD can change an organization for the better is the initiative undertaken by
General Motors Corp. at its Tarrytown, New York, auto assembly plant in the 1970s. By the late 1960s,
Tarrytown had earned a reputation as one the least productive plants in the company. Labor relations

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and quality were at an all-time low, and absenteeism was rampant, when GM finally decided to take
action.
Realizing the seriousness of the situation, plant managers tried something new—they sought direct
input from laborers about all aspects of the plant operations. Then they began to implement the ideas
with success, sparking interest in a more comprehensive OD effort. Thus, in the early 1970s, GM
initiated a quality-of-work-life (QWL) program, an OD program that integrates several types of
interventions. The goal of QWLs is to improve organizational efficiency through employee well-being
and participative decision-making.
In 1973, the union leaders signed a "letter of agreement" with management in which both groups
agreed to commit themselves to exploring specific OD initiatives that could improve the plant. The plant
hired an outside consultant to oversee the change process. The initial research stage included a series of
problem-solving training sessions, during which 34 workers from two shifts would meet for eight hours
on Saturdays. Those meetings succeeded in helping plant managers to improve productivity. Therefore,
in 1977 management increased the scope of the OD program by launching a plantwide effort that
included 3,800 managers and laborers.
Although the OD program eventually cost GM more than $1.5 million, it paid off in the long run through
greater productivity, higher quality, and improved labor relations. For example, the number of pending
grievances plummeted from 2,000 in 1972 to only 32 by 1978. Absenteeism dropped as well, from more
than seven percent to less than three percent. In fact, by the late 1970s the Tarrytown plant was
recognized as one of the most productive and best run in the entire GM organization.

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