Organizational development (OD) calls for modifying the way an organization operates so that employees are more candid with each other about the organization and their experience in it. OD also encourages them to take greater responsibility for their actions as organization members.
The assumption behind OD is that when people pursue both objectives at the same time, they are likely to discover more effective ways of working together. If that does not happen, OD can help them understand why and guide them in making meaningful changes, according to Carter McNamara, author of Field Guide to Consulting and Organizational Development: A Collaborative and Systems Approach to Performance, Change and Learning.
According to “Health Behavior and Health Education” published by the Perelman School of Medicine at the University of Pennsylvania, OD dates to the 1930s, when it emerged from a study of human relations as a discipline. Companies that make organizational development a part of their business practice are better positioned to increase profits for a variety of reasons, including cost effectiveness, a clearer understanding of consumer preferences, and the adoption of more productive work methods. There also tends to be more innovation, better products and quality of services, and greater customer satisfaction.
The widespread use of OD illustrates its increasing importance for students planning a business career. In the Organizational Development and Change course taught by Dr. Judy Smetana as part of the online MBA at Pittsburg State University, students learn how organizations and the individuals in them operate. The students also explore the models used in understanding and developing organizations as they work on projects like mind-mapping exercises, reflection journals or organizational diagnoses.
Common undertakings of OD include career development, change management, coaching, e-learning, innovation, leadership development, organizational assessments, talent management, team building and training. The process begins with a thorough analysis of the organization, focusing on its current situation and future requirements. The aim is to help the organization adapt to the rapidly changing marketplace with all of its regulations, rivals, fast-changing consumer preferences, and technologies. This is an ongoing process because the marketplace never stays the same for long.
OD enables managers and employees to create a culture of positive change. It also encourages employees to work together to achieve goals. Implementing OD in a business can help conflicts become constructive rather than destructive. It gives managers more control over results by giving employees more control over how they do their job. In addition, employees and managers have a better work environment.
Human resources historically focuses on the efficient management of the employment process, including recruiting, hiring and termination. It also helps an organization to comply with government regulations and in mitigating employment-related risks.
Conversely, OD is the application of behavioral science to help organizations improve systems and the people who make up those systems. Its goal is to help people function better within an organizational context. An OD practitioner uses two primary tools in his or her work — assessments and interventions.
While OD’s functions differ from those of human resources, the lines are blurring. Management experts now often promote a shift toward strategic HR — a focus on making HR a partner that provides business solutions and strategies instead of only compliance services, according to DecisionWise. This practice has taken root in many companies, where the focus on creating a strategic HR department has become common.