by 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
