Organizational Development

CASE STUDY MODULE 17 ORGANIZATIONAL DEVELOPMENT PQHRM/53-025 H E B MARASINGHE Contents Acknowledgement3 Introduction to the case study4 Literature Review5 What is OD intervention ? 5 Factors That Impact the Success of OD Interventions can be listed under two main headings,5 Intervention Categories7 The process of Organizational Development9 Change management11 Report to be given to CEO of Nuran food products12 Implementing an effective and successful OD process12 Impact of Closing down of plant in Kandy15 Recommendations16Acknowledgement I would like to thank all the lecturers at the Institute of Personnel Management, specially to all the tutors who guided and helped me to complete the 17th module case study successfully. And all my friends who helped me in numerous ways to complete the case study and to understand the subject matter. Introduction to the case study Nuran food products (NFP) is supplier of processed bottle food products to leading super market chain. Presently two fac tories are operating one in Kandy and the other plant in Colombo.Both of the plants uses traditional simple techniques in the production process, and these plants are operated by extremely loyal employees to the organization but not very educated and with very limited English knowledge. Presently the company is enjoying a good market share and the management has considered renovating the factories with state of the art equipment with the view of enhancing the production capacity. If new machinery is bought in the Colombo plant itself alone can meet the current market demand, and the Kandy plant could be closed down to minimize the overhead cost and to maximize the revenues.The new processing machinery equipment requires sophisticated skills from production operators including reading technical manuals, operating computerized equipment and performing a wide variety of other tasks. The vendor suggests that the new equipment is most effective when the employees are organized in to self managed teams. Presently the workforce is 65, and with the new modernized plant it will only require 55 employees. A manager who is supporting the modernization process has said that only 10 jobs are affected, and the HR implications are minimal.Under the case study a detail study will be carried out on all implications of the plant modernization in Colombo and Closure of plant in Kandy. Literature Review Considering the above scenario the organization is planning to do a development to the current organization. What is organization development? Organizational development is concerned with the planning and implementation of programmes designed to enhance the effectiveness with which an organization functions and responds to change. Overall, the aim is to adopt a planned and coherent approach to improving organizational effectiveness.An effective organization can be defined broadly as one that achieves its purpose by meeting the wants and needs of its stakeholders, matching its reso urces to opportunities, adapting flexibly to environmental changes and creating a culture that promotes commitment, creativity, shared values and mutual trust. An organization is the planned coordination of the activities of a number of people for the achievement of some common explicit purpose or goal, through division of labor and function, and through a hierarchy of authority and responsibility – (Edgar Shein) An organization development is done through planned organization interventions.What is OD intervention ? The term Intervention refers to a set of sequenced, planned actions or events intended to help an organization to increase its effectiveness. Interventions purposely disrupt the status quo; they are deliberate attempts to change an organization or sub-unit toward a different and more effective state Criteria for Effective Interventions In OD three major criteria define the effectiveness of an intervention: 1. The Extent to Which it (the Intervention) fits the need s of the organization. 2. The degree to which it is based on causal knowledge of intended outcomes 3.The extent to which the OD intervention transfers change-management competence to organization members. Factors That Impact the Success of OD Interventions can be listed under two main headings, 1. Factors relating to Change Situation: These relate to the environment of the organization and include the physical and human environment. 2. Factors Related to the Target of Change: These relate to the specific targets at which OD interventions are targeted. The targets of change can be different issues of the organization and at different levels Factors relating to Change Situation I.Readiness for Change: Intervention success depends heavily on the organization being ready for planned change. II. Capability to Change: Managing planned change requires particular knowledge and skills including the ability to motivate change, to lead change, to develop political support, to manage transition , and to sustain momentum. III. Cultural Context: The national culture within which an organization is embedded can exert a powerful influence on members’ reactions to change, and so intervention design must account for the cultural values and assumptions held by organization members.IV. Capabilities of the Change Agent (OD Consultant): The success of OD interventions depend to a great extent on the expertise, experience and talents of the consultant. Factors Related to the Target of Change: A. Organizational Issues I. Strategic Issues: Strategic issues refer to major decisions of organizations such as what products or services to offer, which markets to serve, mergers, acquisitions, expansions, etc. II. Technology and Structure Issues: These refer to issues relating to how organizations divide their work amongst departments and how they coordinate between departments.III. Human Resource Issues: These issues are concerned with attracting competent people to the organization, setting goals for them, appraising and rewarding their performance, and ensuring that they develop their careers and manage stress. IV. Human Process Issues: These issues have to do with social processes occurring among organization members, such as communication, decision-making, leadership, and group dynamics. B. Organizational LevelsOD interventions are aimed at different levels of the organization: individual, group, organization and trans-organization (for example different offices of the organization around the globe; or between organization and its suppliers, customers, etc. ) Intervention Categories Human Process Interventions A. The following interventions deal with interpersonal relationships and group dynamics. I. T Groups: The basic T Group brings ten to fifteen strangers together with a professional trainer to examine the social dynamics that emerge from their interactions. II.Process Consultation: This intervention focuses on interpersonal relations and social dynamics occurring in work groups. III. Third Party Interventions: This change method is a form of process consultation aimed at dysfunctional interpersonal relations in organizations. IV. Team Building: This intervention helps work groups become more effective in accomplishing tasks. B. The following Interventions deal with human processes that are more system wide than individualistic or small-group oriented. I. Organization Confrontation Meeting: This change method mobilizes rganization members to identify problems, set action targets, and begin working on problems. II. Intergroup Relations: These interventions are designed to improve interactions among different groups or departments in organizations. III. Large-group Interventions: These interventions involve getting abroad variety of stakeholders into a large meeting to clarify important values, to develop new ways of working, to articulate a new vision for the organization, or to solve pressing organizational problems. IV. Grid Organ ization Development: This normative intervention specifies a particular way to manage an organization.Techno-Structural Interventions These interventions deal with an organization’s technology (for examples its task methods and job design) and structure (for example, division of labor and hierarchy). These interventions are rooted in the disciplines of engineering, sociology, and psychology and in the applied fields of socio-technical systems and organization design. Consultants place emphasis both on productivity and human fulfillment. I. Structural Design: This change process concerns the organization’s division of labor – how to specialize task performances.Diagnostic guidelines exist to determine which structure is appropriate for particular organizational environments, technologies, and conditions. II. Downsizing: This intervention reduces costs and bureaucracy by decreasing the size of the organization through personnel layoffs, organization redesign, and outsourcing. III. Re-engineering: This recent intervention radically redesigns the organization’s core work processes to create tighter linkage and coordination among the different tasks Human Resource Management Interventions I. Goal Setting: This change program involves setting clear and challenging goals.It attempts to improve organization effectiveness by establishing a better fit between personal and organizational objectives. II. Performance Appraisal: This intervention is a systematic process of jointly assessing work-related achievements, strengths and weaknesses, III. Reward Systems: This intervention involves the design of organizational rewards to improve employee satisfaction and performance. IV. Career Planning and development: It generally focuses on managers and professional staff and is seen as a way of improving the quality of their work life.V. Managing workforce diversity: Important trends, such as the increasing number of women, ethnic minorities, and phys ically and mentally challenged people in the workforce, require a more flexible set of policies and practices. VI. Employee Wellness: These interventions include employee assistance programs (EAPs) and stress management. Strategic Interventions These interventions link the internal functioning of the organization to the larger environment and transform the organization to keep pace with changing conditions. I.Integrated Strategic Change: It argues that business strategies and organizational systems must be changed together in response to external and internal disruptions. A strategic change plan helps members manage the transition between a current strategy and organization design and the desired future strategic orientation. II. Trans organization development: This intervention helps organizations to enter into alliances, partnerships and joint ventures to perform tasks or solve problems that are too complex for single organizations to resolve III.Merger and Acquisition Integration : This intervention describes how OD practitioners can assist two or more organizations to form a new entity. IV. Culture Change: This intervention helps organizations to develop cultures (behaviors, values, beliefs and norms) appropriate to their strategies and environments. V. Self-designing organizations: This change program helps organizations gain the capacity to alter themselves fundamentally. It is a highly participative process, involving multiple stakeholders in setting strategic directions and designing and implementing appropriate structures and processes.VI. Organization learning and knowledge management. The process of Organizational Development Source : http://roblamothe. hubpages. com The Organizational Development (OD) process is complicated and it takes long time to complete the process. It takes minimum of one year and sometimes continues indefinitely. There are different approaches to OD process but the typical process consists of seven steps, viz. , initial diagn osis, data collection, data feedback and confrontation, action planning and problem solving, team building, inter group development and evaluation and follow up. . Initial Diagnosis: If executives recognize that there are inadequacies within organization which can be corrected by OD activities, it is necessary to find out the professional and competent people within the organization to plan and execute OD activities. If competent people are not available within the organization the services activities are to be taken. The consultants adopt various methods including interviews, questionnaires, direct observation, analysis of documents and reports for diagnosing the problem. 2. Data Collection:Survey method is used to collect the data and information for determining organizational climate and identifying the behavioral problems. 3. Data Feedback and Confrontation: Data collected are analyzed and reviewed by various work groups formed from this purpose in order to mediate in the areas of disagreement or confrontation of ideas or opinions and to establish priorities. 4. Selection and Design of Interventions: The interventions are the planned activities that are introduced into the system to accomplish desired changes and improvements.At this stage the suitable interventions are to be selected and designed. 5. Implementation of Intervention: The selected intervention should be implemented. Intervention may take the form of workshops, feedback of data to the participants, group discussions, written exercises, on-the-job activities, redesign of control system etc. Interventions are to be implemented steadily as the process is not short, quick for organizational malady. But it achieves real and lasting change in the attitudes and behavior of employees. 6.Action Planning and problem Solving: Groups prepare recommendations and specific action planning to solve the specific and identified problems by using data collected. 7. Team Building: The consultants encourage the e mployees throughout the process to form into groups and teams by explaining the advantages of the teams in the OD process, by arranging joint meetings with the managers, subordinates etc. 8. Inter group Development: The consultants encourage the inter group meetings, interaction etc. , after the formation of groups/teams.After identifying organizational development interventions the organization development process needs to be carried out. once the development is done the change process should take place, that is migrating from the old system to the new system. No matter how successful or suitable the OD process is if it fails to manage the transition period. Change management Above change management activities should be given priority. while appointing a change agent to drive the change management through. Report to be given to CEO of Nuran food products To: CEO of Nuran Food ProductsFrom: Harindra Marasinghe of XYZ company Subject: Implications of the proposed plant modernization in Colombo and closure of the Plant In Kandy Company is looking at an organization development process, that is it has shown the interest in improving its existing process in order to maximize the effectiveness and efficiency while gearing itself to meet external environment competition. This report will consist of following three sections, 1. Implementing an effective successful OD process 2. Impacts on closing down of Kandy Plant 3. RecommendationsImplementing an effective and successful OD process This OD process should make sure that it full fills the following, * It should be planned, * Implemented organization wide * Increase health and effectiveness of the organization * Planned interventions * Using behavioral science knowledge to understand people, business systems and their interactions How successful this process will be depending on the following, 1. How well this process suits the organization 2. what is the knowledge we have about the relevance of inputs and out puts o f this process 3.How well we can sustain this change management process Considering the above it is evident that the first two conditions are met beyond doubt, but the question is will it be sustainable? will the employees be able to adopt to the change? it is said by the vendor that the employees should be able to read the manuals which are in English and to operate the computerized equipment to get the most out from the new machinery, with the educational level the current employees have will they be able to cope up with this? Following could be suggested to overcome the present situation,Make the employees ready for change Let the employees understand why this change process is taking place and why it is important, what should be there contribution towards this process to be successful, listen to their suggestions and proposals. Make them a part of this change process. Give necessary skills to face the change situation The new processing machinery equipment requires sophisticated skills from production operators including reading technical manuals, operating computerized equipment and performing a wide variety of other tasks.The vendor suggests that the new equipment is most effective when the employees are organized in to self managed teams. Most of the employees have very limited English knowledge and reading the manuals will be a huge barrier, to overcome this it will be much easier to translate those manual to whatever language that they are familiar with rather than trying to teach them English which will be much time consuming and costly. Cultural Context The process have to suit the current traditional culture where supervisors make decisions and gives orders. his culture is successful in the company and should be maintained. Appointing a suitable change agent A change agent is an event, organization, material thing or, more usually, a person that acts as a catalyst for change. He/she should have a thorough have a understanding of the organization an d the process. Apart from the above following characteristics are vital, 1. Sensitivity to changes in key personnel, top management perceptions and market conditions, and to the way in which these impact the goals of the project. 2. Setting of clearly defined, realistic goals. . Flexibility in responding to changes without the control of the project manager, perhaps requiring major shifts in project goals and management style. 4. Team-building abilities, to bring together key stakeholders and establish effective working groups, and to define and delegate respective responsibilities clearly. 5. Networking skills in establishing and maintaining appropriate contacts within and outside the organization. 6. Tolerance of ambiguity, to be able to function comfortably, patiently and effectively in an uncertain environment. 7.Communication skills to transmit effectively to colleagues and subordinates the need for changes in the project goals and in individual tasks and responsibilities. 8. I nterpersonal skills, across the range, including selection, listening, collecting appropriate information, identifying the concerns of others, and managing meetings. 9. Personal enthusiasm in expressing plans and ideas. 10. Stimulating motivation and commitment in others involved. 11. Selling plans and ideas to others by creating a desirable and challenging vision of the future. 2. Negotiating with key players for resources, for changes in procedures, and to resolve conflict. 13. Political awareness in identifying potential coalitions, and in balancing conflicting goals and perceptions. 14. Influencing skills, to gain commitment to project plans and ideas from potential skeptics and resisters. 15. Helicopter perspectives, to stand back from the immediate project and take a broader view of priorities Above described is contingencies related to change situation. or this process to be implement smoothly following organization development interventions could be recommended, Human Proces s Interventions The following interventions deal with interpersonal relationships and group dynamics. 1. T Groups: The basic T Group brings ten to fifteen strangers together with a professional trainer to examine the social dynamics that emerge from their interactions. 2. Process Consultation: This intervention focuses on interpersonal relations and social dynamics occurring in work groups. 3.Third Party Interventions: This change method is a form of process consultation aimed at dysfunctional interpersonal relations in organizations. 4. Team Building: This intervention helps work groups become more effective in accomplishing tasks. The following Interventions deal with human processes that are more system wide than individualistic or small-group oriented. 1. Organization Confrontation Meeting: This change method mobilizes organization members to identify problems, set action targets, and begin working on problems. 2.Intergroup Relations: These interventions are designed to improve interactions among different groups or departments in organizations. 3. Large-group Interventions: These interventions involve getting abroad variety of stakeholders into a large meeting to clarify important values, to develop new ways of working, to articulate a new vision for the organization, or to solve pressing organizational problems. 4. Grid Organization Development: This normative intervention specifies a particular way to manage an organization. Human Resource Management Interventions 1.Goal Setting: This change program involves setting clear and challenging goals. It attempts to improve organization effectiveness by establishing a better fit between personal and organizational objectives. 2. Performance Appraisal: This intervention is a systematic process of jointly assessing work-related achievements, strengths and weaknesses, 3. Reward Systems: This intervention involves the design of organizational rewards to improve employee satisfaction and performance. 4. Career Plan ning and development: It generally focuses on managers and professional taff and is seen as a way of improving the quality of their work life. 5. Managing workforce diversity: Important trends, such as the increasing number of women, ethnic minorities, and physically and mentally challenged people in the workforce, require a more flexible set of policies and practices. 6. Employee Wellness: These interventions include employee assistance programs (EAPs) and stress management. above attention towards human resource will prepare the employees both mentally and physically to the change process. Above mentioned is the Human resource element of the OD process. ince the organization is changing techno structural intervention is important to the organization I. Structural Design: This change process concerns the organization’s division of labor – how to specialize task performances. Diagnostic guidelines exist to determine which structure is appropriate for particular organiz ational environments, technologies, and conditions. II. Downsizing: This intervention reduces costs and bureaucracy by decreasing the size of the organization through personnel layoffs, organization redesign, and outsourcing. III.Re-engineering: This recent intervention radically redesigns the organization’s core work processes to create tighter linkage and coordination among the different tasks Impact of Closing down of plant in Kandy Out of the 65 employees most of the employees who are attached to Kandy plant must be from surrounding neighborhood. As per HR manager the proposed new work force of 55 is adequate for the new operation, but the problem arises whether employees from Kandy are willing to travel to Colombo on daily basis, and even if they do what will be their output? If we terminate 10 employees what will be the mental impact on other employees? his might create questions about job security among other employees as well, and termination might have a negative imp act from the social perspective. Recommendations Human resource is the most vital asset that an any organization has. Nuran food products have been successful as result of its human resource. Changing the organization overall process will have a huge impact on all the employees and terminating the excess 10 employees will create an additional pressure on the work force. As mentioned above for the employees who are willing to travel from Kandy it is recommended to provide them with accommodation and other benefits.Naturally some of the employees will resign as a result of travelling distance problem, and it should be always kept in mind that this loyal work force have brought the company to its present situation, and it is recommended to keep all existing 65 employees. for future a good planned recruitment process should be laid down, educated people should be recruited and they should be properly trained to maximize the outputs. It is a good strategic decision to close down the Kand y plant provided content of the above report is taken in to consideration.