Month: November 2021

Organizational Level

An organization is considered an open system when it is impacted and influenced in many ways by the environment in which it exists. In order to function properly, the external environment must be taken into consideration at all times. The organization must understand the environment to respond to it effectively while accomplishing its mission. This type of organization can be diagnosed at three different levels: Organizational, Group and Individual.

The Organizational level is looked at in three phases: Inputs, System Designs and Outputs. First, the practitioner wants to look at the inputs which require them to understand the general environment and industry structure. Secondly, it is necessary to look at the design components which consist of technology, strategy, structure, human resource systems, and measurement systems that exist internally. This creates a process through which the organization arrives at its goals or outputs.  This is seen in organizational effectiveness, productivity, and stakeholder satisfaction. Once the practitioner and the key stakeholders review this information, they have a useful starting  point to determine how well the organization is functioning.

Group Level

The second level of diagnosis would be on the Group level. On this level the focus would primarily be on the input of organizational design. This speaks to how the organization is designed to function within the general structure of the organization with a greater focus on its inner workings. The internal systems have key components that need to be observed such as task structure, goal clarity, team functioning, group composition, and group norms. The Group level gives the practitioner a closer look at what the culture is, how communication flows, and how well each component is aligned with the overarching design of the organization. The outputs examined in this case are team effectiveness, quality of work life, and performance. Observations on this level must consider whether or not the group design is properly aligned and embedded in the larger group. It is very important that each segment of the organization is in sync and balanced with the other so that all the components of the system flow properly for the most effective results.

Individual Level

Individual jobs have specific designs to accomplish specific tasks that need to be performed through certain processes. Characteristics of individuals working these jobs will be effective based on the level of skills, maturity, education, and experience with the jobs. In addition, individual needs and expectations have to be considered on the Individual level of diagnoses. Individual growth levels can be a factor in self-direction, learning, and motivation when it comes to the job fit. Inputs on the Individual level focuses on organizational design, group design and personal characteristics. Design components consist of skill variety, task identity, task significance, autonomy, and feedback.

Skill variety is the degree to which a job requires a range of activities and abilities to perform the work. Task identity measures the degree to which a job requires the completion of a relatively whole, identifiable piece of work. Task significance identifies the degree to which a job has a significant impact on other people’s lives.  Autonomy indicates the degree to which a job provides freedom and discretion in scheduling the work and determining work methods.  Feedback speaks to the degree by which the job provides employees with direct and clear information about the effectiveness of task performance. The Individual level of diagnosis is important to ensuring that the right people are fitted to the right job which in turn promotes good attitudes and work environments that are conducive to productivity. Ultimately, the goal is to create opportunity for individual effectiveness, job satisfaction, performance, and personal development.

Organization development (OD) is an effort that focuses on improving an organization’s capability through the alignment of strategy, structure, people, rewards, metrics, and management processes. It is a science-backed, interdisciplinary field rooted in psychology, culture, innovation, social sciences, adult education, human resource management, change management, organization behavior, and research analysis and design, among others.

Organization development involves an ongoing, systematic, long-range process of driving organizational effectiveness, solving problems, and improving organizational performance.

Organization development initiatives are typically categorized as:

• Techno-structural initiatives that include restructuring organizations (for example, mergers and acquisitions, flexible work design, downsizing, business process engineering, total quality management, quality of work life, Six Sigma, and Agile).
• Human process initiatives that include team building, interpersonal and group process approaches, and coaching.
• Strategic initiatives that include organization transformation, culture change, leadership development, and attraction and retention initiatives.
• Human resource management initiatives that include employee engagement, employee experience, performance management, employee development, succession planning, coaching and mentoring, career development, and diversity awareness.

Leadership has been defined as the process by which an individual determines direction, influences a group, and directs the group toward a specific goal or mission. In a sense, leadership is what leaders do. The following have been observed:

• Leaders do not just tell people what to do. Great leaders empower people to make decisions that support the goals and vision of the community, ultimately developing smarter solutions. Their job is to inspire and coach. Leaders coach to build a community that is fully participating, both responsibly and accountably. Leaders create buy-in at every level and ensure that all members of their community know that their contributions are important.
• Leadership is a behavior, not a position. Leadership is inspiring people to live the vision, mission and values of the organization.
• Management is not synonymous with leadership. Managers facilitate people, process and product. Good managers implement strategies and find solutions to problems. In contrast, the goal of any leader should be to get as many people living the vision as possible.
• Leaders are not necessarily born; people can learn leadership behaviors. People who excel in performing their job and who take full responsibility within their communities are acting like leaders. Someone who looks to find a better, smarter or faster way of making things happen is acting like a leader. Yet some people are “born leaders,” and they are becoming ever more valuable.

Building a Leadership Development Strategy

Leaders deal with rapid changes brought about by new technologies, globalization, politics, environmental concerns and war, transforming the basic values, beliefs and attitudes of followers to build organizational capacity for positive change.

SHRM research indicates that both HR professionals and executives view leadership development as a major human capital challenge now and in the foreseeable future. In addition, executives would like to see stronger leadership qualities among the ranks of HR professionals themselves.

Challenges

The exponential pace of change creates significant challenges to the development of new leaders. These challenges press against the limits of human capabilities both for leadership candidates and the people charged with nurturing new leaders. Even when the need to develop new leaders is recognized and actively pursued, significant institutional and individual obstacles may impede accomplishing this goal.

• Limited resources, such as funding and time.
• Lack of top management support in terms of priority and mindset.
• Lack of commitment in the organization/culture.
• Leadership development activities being too ad hoc (i.e., lack of strategy and plan).
• Lack of administrative and learning systems.
• The practice of looking for leadership only among employees already at the management level.
• The practice of affording only management-level employees leadership development opportunities.
• Failure to effectively assimilate new executives and new hires into existing leadership development programs.
• Efficiencies of scale of larger organizations versus smaller organizations.
• Lack of knowledge about how to implement a leadership development program.
• Lack of long-term commitment to a leadership development program.
• Lack of or failure to use sophisticated metrics to measure leadership skills or the effectiveness of leadership development programs.
• The tendency to perceive leadership development as a luxury item subject to quick cost-cutting.

Metrics

Organizations should consider different types of data when designing a leadership development scorecard to measure the effectiveness of leadership development programs and activities. Such data may include:

• Participants’ level of satisfaction with leadership development activities and programs.
• Indicators of the scope and volume of leadership development.
• Learning and the acquisition of leadership knowledge and skills.
• Business impact of applying leadership knowledge and new skills.
• Application of leadership skills to various job situations.
• Return on investment comparing monetary benefits with program costs.
• Intangible benefits related to business measures such as work climate, job attitudes and initiative that cannot be converted into monetary values.

An organization may have no other choice but to change. There are many reasons for an organization to change, such as a sudden change of the economic climate or the arising threat of competition. Through understanding the process and theory of organizational change, you and your organization can handle change in the best possible way.

In Gareth R. Jones and Jennifer M. George’s book, Contemporary Management, organizational change is defined as “the movement of an organization away from its present state and toward some desired future state to increase its efficiency and effectiveness.” During organizational change, managers must balance the need to improve current operations with the need to respond to new and unpredictable events.

Lewin’s Force-Field Theory of Change

Kurt Lewin developed a theory about organizational change called the force-field theory. George and Jones describe the force-field theory as follows: a “wide variety of forces arise from the way an organization operates, from its structure, culture and control systems that make it resistant to change. At the same time, a wide variety of forces arise from changing task and general environments that push organizations toward change. These two sets of forces are always in opposition in an organization.” For an organization to change, managers must find ways to increase the forces for change, decrease the resistance of change, or do both at the same time.

Evolutionary Change

Evolutionary change is described by George and Jones as “gradual, incremental, and narrowly focused.” It is not drastic or sudden, but a constant attempt to improve. An example of evolutionary change is total quality management that is consistently applied and shows improvement over the long term.

Revolutionary Change

Some organizations need change fast. When faced with drastic and unexpected change, an organization may have no other choice but to implement revolutionary change. George and Jones describe this as “change that is rapid, dramatic, and broadly focused. This bold shift may be due to a change in the economic climate or a new technological advancement that is integral to the function of the organization.”

Managing Change

Four steps exist in organizational change. First, assess the need for change through recognizing that a problem exists and identifying the problem’s source. Secondly, decide on the change needed to be made by deciding what is the organization’s ideal future state, as well as the obstacles that may occur during change. Thirdly, apply the change and decide whether change will occur from the top down or bottom up, then introduce and manage change. Lastly, evaluate the change by comparing the situation before and after the change or using benchmarking.

Organizational Change Models

According to an article in Forbes, Change Management Guru is the world’s oldest profession. Almost everyone has a few theories about change management.

While there are many change management models, most companies will choose at least one of the following three models to operate under:

• Lewin’s Change Management Model
• McKinsey 7-S Model
• Kotter’s 8 Step Change Model

Lewin’s Change Management Model

This change management model was created in the 1950s by psychologist Kurt Lewin. Lewin noted that the majority of people tend to prefer and operate within certain zones of safety. He recognized three stages of change:

Unfreeze: Most people make an active effort to resist change. In order to overcome this tendency, a period of thawing or unfreezing must be initiated through motivation.

Transition: Once change is initiated, the company moves into a transition period, which may last for some time. Adequate leadership and reassurance is necessary for the process to be successful.

Refreeze: After change has been accepted and successfully implemented, the company becomes stable again, and staff refreezes as they operate under the new guidelines.

While this change management model remains widely used today, it is takes time to implement. Of course, since it is easy to use, most companies tend to prefer this model to enact major changes.

McKinsey 7-S Model

The McKinsey 7-S model offers a holistic approach to organization. This model, created by Robert Waterman, Tom Peters, Richard Pascale, and Anthony Athos during a meeting in 1978, has 7 factors that operate as collective agent of change:

• Shared values
• Strategy
• Structure
• Systems
• Style
• Staff
• Skills

The McKinsey 7-S Model offers four primary benefits:

• It offers an effective method to diagnose and understand an organization.
• It provides guidance in organizational change.
• It combines rational and emotional components.
• All parts are integral and must be addressed in a unified manner.

The disadvantages of the McKinsey 7-S Model are:

• When one part changes, all parts change, because all factors are interrelated.
• Differences are ignored.
• The model is complex.
• Companies using this model have been known to have a higher incidence of failure.

Kotter’s 8 Step Change Model

This model, created by Harvard University Professor John Kotter, causes change to become a campaign. Employees buy into the change after leaders convince them of the urgent need for change to occur. There are 8 steps are involved in this model:

• Increase the urgency for change.
• Build a team dedicated to change.
• Create the vision for change.
• Communicate the need for change.
• Empower staff with the ability to change.
• Create short term goals.
• Stay persistent.
• Make the change permanent.

Significant advantages to the model are:

• The process is an easy step-by-step model.
• The focus is on preparing and accepting change, not the actual change.
• Transition is easier with this model.

Disadvantages offered by this model:

• Steps can’t be skipped.
• The process takes a great deal of time.

ADKAR model

ADKAR is a change management model that’s goal focused. According to the model, everything you do during the change management process is sequential: you must achieve cumulative goals during the process to achieve your overall change goal. Successful change happens when phases of change for your business and your employees happen simultaneously.

Change steps to achieve in the ADKAR model.

A: Awareness

Recognize the need for change.

D: Desire

Participate and support the change.

K: Knowledge

Know how to change and identify what the change will look like in terms of skills and behaviours.

A: Ability

Implement the change on a daily basis.

R: Reinforcement

The organizational life cycle is the life cycle of an organization from its creation to its termination. It also refers to the expected sequence of advancements experienced by an organization, as opposed to a randomized occurrence of events. The relevance of a biological life cycle relating to the growth of an organization, was discovered by organizational researchers many years ago. This was apparent as organizations had a distinct conception, periods of expansion and eventually, termination.

Comparisons between organisations and living organisms originated as early as 1890 by the economist Alfred Marshall who compared firms with trees in the forest, using the metaphor: “But here we may read a lesson from the young trees of the forest as they struggle upwards through the benumbing shade of their older rivals”. Sixty years later, Kenneth Boulding presented the idea that organisations pass through a lifecycle similar to that of living organisms. Shortly after, Mason Haire was among the initial researchers who suggested that organisations may adhere to a certain path of uniformity in their course of expansion.

Subsequently, research has been done on the organizational life cycle for more than 120 years and can be found in various literature on organizations. Examples include the various stages in an organization’s life cycle, phases of growth experienced by an organization during expansion and implications for these phases of growth. Review of the main organizational life cycle theories, with stages, main idea and authors is given in the table below.

Stages

Generally, there are five stages to an organization’s life cycle

Stage 1: Existence: Commonly known as the birth or entrepreneurial stage, “existence” signifies the start of an organization’s expansion. The main importance is centered around the acknowledgement of having an adequate number of customers to keep the organization or business active.

Stage 2: Survival: At this stage, organizations look to pursue growth, establish a framework and develop their capabilities. There is a focus on regularly setting targets for the organization, with the main aim being to generate sufficient revenue for survival and expansion. Some organizations enjoy adequate growth to be able to enter the next stage, whilst others are unsuccessful in achieving this and consequently fail to survive.

Stage 3: Maturity: This stage signifies the organization entering a more formal hierarchy of management (hierarchical organization). A frequent problem encountered at this stage would be those associated with “Red Tape”.[40] Organizations look to safeguard their growth as opposed to focusing on expansion. Top and middle-level management specialize in different tasks, such as planning and routine work respectively.

Stage 4: Renewal: Organizations experience a renewal in their structure of management, from a hierarchical to a matrix style, which encourages creativity and flexibility.

Stage 5: Decline: This stage initiates the death of an organization. The decline is identified by the focus on political agenda and authority within an organization, whereby individuals start to become preoccupied with personal objectives, instead of focusing on the objectives of the organization itself. This slowly destroys the functionality and feasibility of the entire organization.

Limitations

According to the organizational life cycle models, growth in size leads to business issues that firms can solve by adopting only one possible organizational configuration, following a deterministic organizational approach. Recently, scholars challenged this view and propose conceiving of organizational life cycle as an evolutionary process, which calls for a variety of equifinal organizational solutions.

Organizational renewal can occur as an ongoing, continuous process or as episodic change. Organizations need continuous renewal because it adds a level of stability in the midst of internal and external triggers of change.

(1) To emphasize the need for continuous organizational renewal

(2) To elucidate the respective roles of organizational culture, the external environment, and internal organizational processes as well as strategic decisions and actions in both continuous and episodic organizational renewal.

Organizations should be involved in implementing planned organizational renewal initiatives based on standards of excellence, market awareness, people development and the right balance between internal and external environments of the organization. Organizational renewal is a deliberate strategy for organizational performance and long term survival.

Organizational renewal may be sporadic or continuous. If sporadic renewal is a dramatic, rapid response to either an external or internal change, it will require an immediate quantum shift in the organizational leaders’ strategic and tactical thinking in order to achieve short-term as well as long-term, sustainable performance. The need for sporadic, i.e., episodic, as well as continuous organizational renewal may be the result of drastic, rapidly occurring events caused by external or internal triggers. External triggers of organizational renewal may be weather, global events, economic conditions, technological changes (including the internet as well as technology products), political and legal environment (including deregulation and regulation), socio-cultural changes, terrorism, and/or competition. These external triggers can also affect an organization’s capability to change and renew itself continuously. Examples of internal negative triggers of organizational renewal are: the loss of a large contract, failure to do adequate succession planning, theft, violence in the workplace, product safety problems, the loss of key employees, and failure to follow procedures. However, there are many positive internal triggers of organizational renewal. For example, the continuous development of capabilities (product, service, and manpower) can also lead to breakthrough innovations resulting in competitive advantage for the organization.

Strategic Renewal

Peter Drucker’s student, Cohen said that he learned from Drucker “You can’t predict the future, but you can invent it.” Such invention of the future is an integral part of strategic management, i.e., the result of strategic decisions and actions. “Strategic management is the formulation and implementation of strategies to achieve the mission, vision, goals, and objectives of an organization. It includes the analysis of the organization’s internal and external environments, the establishment of the overall direction of the organization, and coordination with all the firms’ functional areas. Strategic and tactical planning is an organization’s process to determine where the organization stands, what it needs to do, where it needs to go, and how it will get there”.

Portfolio theory, Scenario planning, Resource allocation models, Corporate culture, Leadership craft, Metrics that matter, and Strategic alliances). We concur with Pryor, et al. (2010) who stated that they “find it interesting, but not surprising, that strategy implementation or strategy execution did not make the top 10 list. For many years, various authors (e.g., Chandler, 1962/1998, 1977; Mintzberg, 1994; Mintzberg, Ahlstrand, and Lampel, 1998, 2005; Porter, 2008, 1990, 1986, 1985, 1980; and Pryor, et al., 2007) provided in the literature robust examinations of strategic management (particularly strategy formulation). However, Beer and Eisenstat (2000) emphasized that efforts to extend strategic implementation paradigms failed to provide an integrated representation that would be helpful in the effective realignment of “structure, systems, leadership behavior, human resource policies, culture, values, and management processes.”.

Re-energizing

Re-Align Talent: Be sure that your personnel are better aligned to reflect the renewed focus areas. Redeploy the “best and brightest” to the places in your business where they can make the greatest impact. In this way, you stack the deck for success and reduce the risk of investing in growth areas.

Renew Focus: Usually there’s been some “sprawl” in the business during its growth spurts. Examine all of the products and services that your business now offers and determine which ones are most profitable and the ones that hold the greatest potential to grow and prospers. Double-down on those business areas by shifting investments away from lower performing business interests.

Optimize and “Right-Size” Support Functions: During periods of transition, support areas like IT, Marketing, HR, and Finance, often don’t get the attention that they deserve in order to be positioned to continue to deliver the “right” services to their internal customers. Take a look at those support areas, retool their processes so that they’ll align with the firm’s new direction (e.g., what worked when your business was smaller may not work when you’re larger) and retool those areas with people who have the skills and competencies needed to support future growth.

Lose the Dead Weight: Once compensation models are properly aligned, it is essential to recognize that not all boats should rise equally. So, be sure to determine exit strategies for the bottom 10% of your contributors. This exercise can help to move the rest of business out of its comfort zone, too. If a business goes through this “thinning” exercise consistently over time, sluggishness never sets in. New talent is regularly brought in to renew the energy level and raise the business past its perceived limits whatever they may happen to be.

Redefine Compensation Models: Make sure that everyone is working on achieving the same goals. If I’m only compensated on my book of business, then chances are very high that I’m not helping my colleague build hers. If you want to be successful over time, change the mindset of the business to one where staff feel like they are “in it together.” This is done by aligning compensation and rewarding everyone on the growth and profitability of the “whole” business (and, not just on the part of the business that they work within).

Institute “Stickiness”: We all want our businesses to become indispensable. This “stickiness” can be accomplished with a focus on customer intimacy. Define what your customers want from your business by putting yourself in their shoes. Learn what keeps them up at night. Identify their greatest challenges once that’s done, determine how you can help them in some way.

Align Measurements with Desired Behavior People work by what is measured. So, measure outcomes, not effort. Determine which measurements generate the desired change in behavior, while generating growth and profitability. Put those in place, manage to them and monitor results.

Organizational growth and productivity depend to a high degree on a company’s capability to keep up with and implement learning best practices. Learning best practices drive talent development and improve performance. One day or another, this will mean leaving traditional models of learning behind and adopting more impactful solutions many of which involve technological innovations.

Collective Sense-making

The world is changing so rapidly that we need everyone to participate in making sense of it. That’s why in the future, the ability to quickly adapt and apply new information will become more important than any number of hard skills.

Sense-making can be seen as an enduring capability. Deloitte defines enduring capabilities as “observable human attributes that are demonstrated independent of context. These human capabilities can be thought of as universally applicable and timeless.” Other examples of enduring capabilities include team-building, coaching, and learning. Compared with skills, they’re more transferable to different roles and situations.

Collective sense-making helps you create meaning from shared experiences. In the context of organizational change, it takes all perspectives into account to figure out what is changing and what actions are needed next.

No one person can possibly have the collective intelligence of a large organization. But by listening to different perspectives, you should be able to harness the skills, knowledge, and opinions of everyone in the organization, and that way reach your combined potential.

Going Mobile:

Mobile has transformed the way companies work, interact, and collaborate. With global penetration rates skyrocketing, organizations that are not considering mobile in all areas of HCM will have a difficult time competing for talent. Despite this reality, companies are still slow to embrace mobile learning solutions. Only 10 percent of companies are using mobile Web-based learning solutions. Some 8 percent are using mobile learning apps, 5 percent mobile performance Web-based sites, and 4 percent are using mobile performance apps Most companies recognize that mobile learning solutions can improve adoption, expand global reach, and engage users better, but do not understand how to execute a mobile strategy. Additionally, some organizations find it challenging to determine what options are available and which providers to consider. Regardless of the barriers they are facing, organizations looking to improve their learning functions will need to make mobile part of the equation and determine what requirements they have in order to select a technology partner.

Understanding Social:

Companies are quickly embracing social media tools, as well as investing in social collaboration tools to better engage employees and foster a learning culture. Although social has become mainstream, companies still lack the knowledge and insight around how to use these tools for learning and development. Of the 59 percent of companies using social for their learning strategies, only 24 percent say they are effective. One reason is that companies are limited in the social tools they are using. Companies are using document sharing, discussion forms, and blogs, but they aren’t generally using video or micro-blogs which our research shows are more effective to improve their learning functions. Companies must educate themselves on the value of social learning and invest in providers that offer solutions that drive business outcomes.

From one-off change processes to continuous development:

Particularly in the United States, organizational change is seen as a process with a beginning, a midpoint, and an end when the goals have been achieved. But this approach is being replaced by transformation that is, continuous organizational development.

Instead of having the perfect ready-made plan for change, companies want genuine changes where the general direction is known, but the workplace community finds its way to the final destination together.

Transformation is not about having a set goal; rather, the result is created and shaped through learning.

Considering Adaptive Learning:

Adaptive learning is a methodology that breaks traditional models and allows employees to learn at their own pace. It has gained popularity with educational institutions, referred to as “adaptive teaching,” where a teacher will gather information on individual students to learn what they need to do to improve their learning. In the workforce, adaptive learning is conducted similarly. Employees can be monitored individually and in real time to determine what learning approach will best suit their needs. It has advantages for younger generations entering the workforce that have expectations around flexibility and interaction. Adaptive learning can be effective at improving efficiency, as well as employee engagement and retention since it allows employees to build confidence and overall expertise. Companies may want to consider breaking traditional learning methods by introducing aspects of adaptive learning.

Digitalization is transforming even the late-blooming organizations:

Digitalization can hardly be seen as a trend anymore. But the harsh reality is that we’re in the stages where organizations unable to transform and develop are actually going out of business.

In the best of cases, digital ways of working give people real opportunities to participate, and decisions are made collectively. It enables transparent, real-time processes. Digitalization is progressing more rapidly in countries with an existing analogue foundation, such as the Nordics.

Change is digitally driven in countries where traditional hierarchies endure. This was the case when developing countries transferred directly to mobile networks and took the leap onto the Internet, for example. The same will happen with corporate cultures. Communities will be built on real-time technologies and new types of communication practices.

Measuring Effectiveness:

To determine if the learning strategy in place is driving business outcomes, companies must find a way to consistently measure its effectiveness. Companies should determine metrics in advance and include both business metrics and learning/HR metrics. Currently, most companies are considering team encouragement, employee engagement, and employee satisfaction over more concrete business metrics such as retention, turnover, and revenue per full-time employee.

OD is the practice of planned, systemic change in the beliefs, attitudes and values of employees for individual and company growth. The purpose of OD is to enable an organization to better respond and adapt to industry/market changes and technological advances. In today’s post we will focus on five benefits of OD from continuous improvement to increased profits.

Continuous improvement:

Companies that engage in organizational development commit to continually improving their business and offerings. The OD process creates a continuous cycle of improvement whereby strategies are planned, implemented, evaluated, improved and monitored. Organizational development is a proactive approach that embraces change (internal and external) and leverages it for renewal.

Increased communication:

One of the key advantages to OD is increased communication, feedback and interaction within the organization. The goal of improving communication is to align all employees to shared company goals and values. Candid communication also leads to increased understanding of the need for change within the organization. Communication is open across all levels of the organization and relevant feedback is recurrently shared for improvement.

Employee development:

Organizational development focuses on increased communication to influence employees to bring about desired changes. The need for employee development stems from constant industry and market changes. This causes an organization to regularly enhance employee skills to meet evolving market requirements. This is achieved through a program of learning, training, skills/competency enhancement and work process improvements.

Product & service enhancement:

A major benefit of OD is innovation, which leads to product and service enhancement. Innovation is achieved through employee development, which focuses on rewarding successes and boosting motivation and morale. In this scenario, employee engagement is high leading to increased creativity and innovation. Organizational development also increases product innovation by using competitive analysis, market research and consumer expectations and preferences.

Increased profit:

Organizational development affects the bottom line in a variety of ways. Through raised innovation and productivity, efficiency and profits are increased. Costs are also reduced by minimizing employee turnover and absenteeism. As OD aligns objectives and focuses on development, product/service quality and employee satisfaction are increased. The culture shift to one of continuous improvement gives the company a distinct advantage in the competitive marketplace.

The key dimensions of culture are:

Power distance: Power Distance and OD It is the extent to which individuals who are less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally.

Uncertainty avoidance: Uncertainty avoidance and OD It is the extent to which organizational members do not tolerate unpredictability and ambiguity. Fagenson, et al. (2004) found that countries high in Uncertainty Avoidance such as Russia, France and Japan there is less likelihood that OD efforts that require long periods of ambiguity, such as culture change efforts, will be implemented. While, high Uncertainty Avoidance countries, as in high Power Distance countries, hierarchy is respected and decision-making is expected to be top-down. Risk-taking behaviour is discouraged and having clear and stable rules is important.

Individualism/collectivism: Individualism/collectivism and OD It is the extent to which people believe they should be primarily responsible for themselves as opposed to the collective. Countries with high Individualism cultures such as the U.S. and Britain, look to OD for interventions that will promote personal initiative such as executive coaching and the development of performance appraisal and reward systems to promote individual productivity. There has been an explosion of executive coaching services in these countries in recent years and this trend is likely to continue.

Masculinity/femininity: Masculinity/femininity and OD This was the only one of the four original dimensions where Hofstede (1991) found a systematic difference in the answers between women and men. He explains that, “a society is called masculine when emotional gender roles are clearly distinct. Men are supposed to be tough and women are supposed to be tender. A society is called feminine when emotional gender roles overlap: both men and women are supposed to be modest, tender, and concerned with quality of life”

Long-term/Short-term orientation: Long-term/short-term orientation and OD Long-Term Orientation (LTO), “stands for the fostering of virtues oriented toward future rewards; in particular, perseverance and thrift” Example: China, Hong Kong, Taiwan, Japan, Vietnam and South Korea. The Short-Term Orientation (STO) is defined by Hofstede and Hofstede (2005) as, “the fostering of virtues related to the past and present” Example: European countries fall in the mid range, and the U.S., Britain, and other Anglo countries score on the short-term side.

• People in high power distance cultures expect leaders to know what’s best and do not expect openness or transparency, and people in high Uncertainty Avoidance cultures do not feel comfortable with confrontation and tension.
• Collectivist cultures focus on the needs of families and groups, not on the needs or rights of individuals. Cultural values need to be respected and acknowledged if OD is to add value in these cultures.
• Practitioners must be sensitive to the cultural context, as they are working in while grounding our work in values that can guide us to make