External factors like changing customer attitudes, new legislation, and technological breakthrough cause an organization to change. Thus the organization should not be static. Many times these changes are forced upon, while in some cases the organization undergoes change internally and inherently. The external environment is changing continuously and at a rapid pace. Hence the organization has to change itself continuously. The modern manager must be flexible and adaptive in a changing environment and should able to diagnose the implication of the changes. Organisational Development (OD) is a management discipline which uses behavioural sciences to help organisations adapt to these changes.
Organisational Development (OD) is a planned approach to improve employee and organisational effectiveness. This can be achieved by conscious interventions in those processes and structures that have an immediate bearing on the human aspects of the organisation.
Beckhard (1969), defines Organisational Development as “it is an effort planned, organisation wide, and managed from the top to increase organisation effectiveness and health through planned interventions in the organisations “processes” using behavioural science knowledge”. Bennis (1969), defines Organisational Development as “It is a response to change, a complex educational strategy intended to change the beliefs, attitudes, values, and structure of organisations so that they can better adapt to new technologies, markets, and challenges, and the dizzying rate of change itself”.
French & Bell, (1978) describes Organisational Development as “In the behavioural science and perhaps ideal, sense of the term, organisation development is a long-range effort to improve an organisations problem- solving and renewal process. This is done particularly through a more effective and collaborative management of organisation culture. Special emphasis is laid on the culture of formal work teams – with the assistance of a change agent, or catalyst, and use of the theory and technologies of applied behavioural science, including action research.”
Cummings and Worley (1997) define Organisational Development as “A system-wide application of the knowledge of behavioural science to planned development and reinforcement of organisational strategies, structures and processes aimed at improving organisations’ effectiveness.”
Organisational Development includes methodologies and approaches to strategic planning, organisation design, leadership development, change and performance management, coaching, diversity and work-life balance.
From the above definitions, we can conclude that Organisational Development is a collection of methodology and various procedures to increase the productivity and effectiveness of an organization. It is a change process designed to bring about a particular kind of end result.
Difference Between Human Resource Management and Organisational Development:
HR management is associated primarily with the more traditional personnel-type functions concerned with legislation and regulation. Most of the activities of HR have been designed to ensure that things run smoothly for the organisation ensuring that people get a fair deal, are adequately rewarded, have the opportunity for personal development, are happy and motivated at work and are well managed, while OD is associated with the behavioural change of the personnel. It is using behavioural science – psychology, sociology and anthropology and is concerned with applying that knowledge to help organisations develop and improve.
HR processes include recruitment and selection, employment legislation, codes and regulations, pay strategies and mechanisms, appraisal, performance management, disciplinary action, compensation and benefits, appraisal procedures, and talent management etc., while OD includes methodologies, processes, and approaches to strategic planning, organisation design, leadership development, change and performance management, coaching, diversity and work-life balance.
HR Manages employee attraction, retention, development, and performance management, while OD Improves the effectiveness of the organization within the values and culture of the organization
HR develop and manage programs for employee relations, staff well‑being, workforce planning, and workload management, while OD maximizes the potential of human beings and their contributions to the organization
HR ensures equity and diversity, reduction in labour costs, litigation avoidance, while OD aligns strategy, structure, business processes, and the behaviour into an effective corporate culture.
HR enforces corporate policies, while OD models and fosters the organization’s values into the workplace.
What is Organization?
An organization is a set up which brings together individuals from different backgrounds, of varied interests and specializations on a common platform for them to work as a single unit and achieve certain predefined goals.
Katz, Kahn and Hanna see an organization as a system. An organization is an open system (in science open system is that system which can exchange both the matter and energy with the surroundings), of a biological type (it thas birth and can progress/regresses later on; can adapt to the environment). The concept of “system” indicates interdependence, interconnectedness, and interrelation between the elements of the organization and its external environment (surroundings). .
Every system has an identifiable boundary that acts as an interface between the system and its environment. These boundaries are permeable, but most of the changes and activities take place within the system. Thus the system‟s activities are mostly internal, and its relations with the environment are a small fraction of the total process of change.
An open system has goals and objectives that indicate the reasons for which that particular entity exists and functions. The outputs from organization represent the most accurate reflection of its objectives, goals, and purposes.
Every system is different from another, depending on its features, the type of environment, and on the system-environment relations, but are always influenced by the environment.
In chemistry, it is said that the entropy (It is the degree of disorder or randomness in the system) of a system always increases. The increase in entropy results in chaos and may lead to the disintegration of the system. Thus it is management duty to keep the entropy under control.
The feedback is important for any organization. Feedback is a response or the information that the system receives from its environment regarding its activities. It may be positive or negative. The negative feedback measures the extent to which the output corresponds to the goals and objectives set. It is also known as feedback for correcting deviation. Positive feedback refers to the extent to which the goals and objectives correspond to the requirements of the environment.
Systems are continuously dumped with very large amounts of information of which a part is useful, and another useless to the corresponding systems. A system should able to “encode” the useful information and to include it in its activities, and at the same time, to ignore the useless data.
One other feature of the open system is the dynamic homeostasis (self-preserve). Homeostasis refers to stability, balance, or equilibrium in an organization. The system reaches a certain state of equilibrium and tends to maintain it, against the inner or outer forces that attempt to change it.
The features of the open system can clarify a lot of problems related to organizational change. Resistance to change may be explained by the systems‟ homeostatic nature, The death of organization is explained on the basis of negative entropy. The growth and a natural tendency of bureaucratization of organization can be explained on the basis of differentiation.