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 Organization development (OD) is a planned, organization-wide effort to increase an
organization's effectiveness and viability. Warren Bennis has referred to OD as a response to
change, a complex educational strategy intended to change the beliefs, attitudes, values, and
structure of organization so that they can better adapt to new technologies, marketing and
challenges, and the dizzying rate of change itself. OD is neither "anything done to better an
organization" nor is it "the training function of the organization"; it is a particular kind of change
process designed to bring about a particular kind of end result. OD can involve interventions in
the organization's "processes," using behavioural science knowledge as well as organizational
reflection, system improvement, planning, and self-analysis.



?
"Interventions" are principal learning processes in the "action" stage
of organization development. Interventions are structured activities used individually or in
combination by the members of a client system to improve their social or task performance. They
may be introduced by a change agent as part of an improvement program, or they may be used
by the client following a program to check on the state of the organization's health, or to effect
necessary changes in its own behavior. "Structured activities" mean such diverse procedures as
experiential exercises, questionnaires, attitude surveys, interviews, relevant group discussions,
and even lunchtime meetings between the change agent and a member of the client organization.
Every action that influences an organization's improvement program in a change agent-client
system relationship can be said to be an intervention.
There are many possible intervention strategies from which to choose. Several assumptions
about the nature and functioning of organizations are made in the choice of a particular strategy.

1.c The basic building blocks of an organization are groups (teams). Therefore, the basic
units of change are groups, not individuals.
2.c An always relevant change goal is the reduction of inappropriate competition between
parts of the organization and the development of a more collaborative condition.
3.c Decision making in a healthy organization is located where the information sources are,
rather than in a particular role or level of hierarchy.
4.c Organizations, subunits of organizations, and individuals continuously manage their
affairs against goals. Controls are interim measurements, not the basis of managerial
strategy.
5.c One goal of a healthy organization is to develop generally open communication, mutual
trust, and confidence between and across levels.
6.c People support what they help create. People affected by a change must be allowed active
participation and a sense of ownership in the planning and conduct of the change.[3]
Interventions range from those designed to improve the effectiveness of individuals through
those designed to deal with teams and groups, intergroup relations, and the total organization.
There are interventions that focus on task issues (what people do), and those that focus on
process issues (how people go about doing it). Finally, interventions may be roughly classified
according to which change mechanism they tend to emphasize: for example, feedback,
awareness of changing cultural norms, interaction and communication, conflict,
and education through either new knowledge or skill practice.
One of the most difficult tasks confronting the change agent is to help create in the client system
a safe climate for learning and change. In a favorable climate, human learning builds on itself
and continues indefinitely during man's lifetime. Out of new behavior, new dilemmas and
problems emerge as the spiral continues upward to new levels. In an unfavorable climate, in
contrast, learning is far less certain, and in an atmosphere of psychological threat, it often stops
altogether. Unfreezing old ways can be inhibited in organizations because the climate makes
employees feel that it is inappropriate to reveal true feelings, even though such revelations could
be constructive. In an inhibited atmosphere, therefore, necessary feedback is not available. Also,
trying out new ways may be viewed as risky because it violates established norms. Such an
organization may also be constrained because of the law of systems: If one part changes, other
parts will become involved. Hence, it is easier to maintain the status quo. Hierarchical
authority, specialization, span of control, and other characteristics of formal systems also
discourage experimentation.
The change agent must address himself to all of these hazards and obstacles. Some of the things
which will help him are:

1.c A real need in the client system to change

2.c Genuine support from management
3.c Setting a personal example: listening, supporting behavior
4.c A sound background in the behavioral sciences
5.c A working knowledge of systems theory
6.c A belief in man as a rational, self-educating being fully capable of learning better ways to
do things.
A few examples of interventions include team building, coaching, Large Group Interventions,
mentoring, performance appraisal, downsizing, TQM, and leadership development.
?
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Organization Development (OD) interventions techniques are the methods created by OD

professionals and others. Single organization or consultant cannot use all the interventions. They
use these interventions depending upon the need or requirement. The most important
interventions are,
1. Survey feedback
2. Process Consultation
3. sensitivity Training
4. The Managerial grid
5. Goal setting and Planning
6. Team Building and management by objectives
7. Job enrichment, changes in organizational structure and participative management and Quality
circles, ISO, TQM

: The intervention provides data and information to the managers. Information
on Attitudes of employees about wage level, and structure, hours of work, working conditions
and relations are collected and the results are supplied to the top executive teams. They analyse
the data, find out the problem, evaluate the results and develop the means to correct the problems
identified. The team are formed with the employees at all levels in the organization hierarchy i.e,
from the rank and file to the top level.

 : The process consultant meets the members of the department and work
teams observes this interaction, problem identification skills, solving procedures et. He feeds
back the team with the information collected through observations, coaches and counsels
individuals & groups in moulding their behavior.

 !" !: Each division in an organization sets the goals or formulates the
plans for profitability. These goals are sent to the top management which in turn sends them back
to the divisions after modification. A set of organization goals thus emerge there after.

! ! : This identifies a range of management behavior based on the different ways
that how production/service oriented and employee oriented states interact with each other.
Managerial grid is also called as instrumental laboratory training as it is a structured version of
laboratory training. It consists of individual and group exercises with a view to developing
awareness of individual managerial style interpersonal competence and group effectiveness.
Thus grid training is related to the leadership styles. The managerial grid focuses on the
observations of behaviour in exercises specifically related to work. Participants in this training
are encouraged and helped to appraise their own managerial style.
There are 6 phases in grid OD:
# "$ is concerned with studying the grid as a theoretical knowledge to understand the
human behavior in the Organization.
"$ is concerned with team work development. A seminar helps the members in
developing each member¶s perception and the insight into the problems faced by various
members on the job.
$ "$ is inter group development. This phase aims at developing the relationships
between different departments
#$"$ is concerned with the creation of a strategic model for the organization where
Chief Executives and their immediate subordinates participate in this activity.
# $"$ is concerned with implementation of strategic model.. Planning teams are formed
for each department to know the available resources, required resources, procuring them if
required and implementing the model Sixth Phase is concerned with the critical evaluation of the
model and making necessary adjustment for successful implementation.
!%?&  (MBO) is a successful philosophy of management. It replaces the
traditional philosophy of ³Management by Domination´. MBO led to a systematic Goal setting
and Planning. Peter Drucker the eminent management Guru in 1959 has first propagated the
philosophy since then it has become a movement.
MBO is a process by which managers at different levels and their subordinates work together in
identifying goals and establishing objectives consistent with Organizational goals and attaining
them.
%  ! is an application of various techniques of Sensitivity training to the actual work
groups in various departments. These work groups consist of peers and a supervisor.
Sensitivity training is called a laboratory as it is conducted by creating an experimental
laboratory situation in which employees are brought together. The Team building technique and
training is designed to improve the ability of the employees to work together as teams.

' $% is currently practiced all over the world. It is based on the assumption in order
to motivate workers; job itself must provide opportunities for achievement, recognition,
responsibility, advancement and growth. The basic idea is to restore to jobs the elements of
interest that were taken away. In a job enrichment program the worker decides how the job is
performed, planned and controlled and makes more decisions concerning the entire process.

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What is the appropriate relationship between Strategy and OD? This was an interesting
unanswered question of the 20 century and is a question for the 21th century that must be
answered. Some logical Follow-up questions are: When is OD intervention appropriate during
the strategy formulation, implementation, and evaluation processes? What types of interventions
could or should be employed?
/- 


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Definition of strategy is management's game plan for strengthening the organization's position,
pleasing customers, and achieving performance targets. Strategy is concerned with the long term,
although the definition of the long term may vary considerably depending upon the nature of the
industry.
Î- ?
The concept of mission and vision is a good place to begin a discussion of strategy. While some
argue these two items are different with vision being a more sweeping and generalist look at the
future and mission as being more specific and concerned with the present, others feel the two
terms are closer in meaning. The two are assumed to be synonymous in this discussion for ease
of understanding. What business the organization is in and should be in is the general concern of
mission. The customer groups that are being served represent the "who". The customer needs
that are being met are the "what". Lastly, the methodologies used and the functions performed to
meet customers needs provide the "how".
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Closely related to mission is the establishment of financial and strategic objectives. Financial
objectives are concerned with items like ROI, RONA, EPS, and Credit ratings. Strategic
objectives revolve around concepts such as market share, market rank, quality, customer
satisfaction, and international presence to name a few. Both financial and strategic objectives
must be specific rather than general in nature. They require a timetable for completion and need
to be measurable. Finally, they should be challenging in nature, but not so difficult to accomplish
that they discourage rather than encourage. A financial objective related to the previous jewelry
example could be stated, as a return on investment of 10% is required during the next calendar
year to continue to rent the space in the mall. An example of a strategic objective would be to
acquire a 25% market share of the female preteens in the geographic area also by the end of the
next calendar year. The important point is that both types of objectives are critically important to
the organization and must relate to the stated mission. Objectives exist to drive the organization
towards the fulfillment of its mission. They are standards for performance that should be equaled
or surpassed.
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+
If a product or service can be produced at a cost cheaper than one from a competitor, then the
organization will have a competitive advantage that would be difficult to overcome. An example
would be Southwest Airlines approach to strategy. They have used the same type of aircraft,
quick turnaround gate time, flexible work scheduling, etc. to gain a tremendous cost advantage
over most of their competitors. The key idea is a specific strategy must be chosen by the
organization in order to try to compete successfully. This strategy must also be closely related to
the organization's mission and objectives.
3- . ++
Understanding the industry the organization competes in is also of critical importance. When
looking at an industry, an important start point is the answering of seven diagnostic questions.
1. The industry's dominant economic characteristics are? (Such as market size and growth rate,
number of customers, degree of vertical integration, and scope of competitive rivalry to name a
few.)
2. The competitive forces are at work in the industry: what are they and how strong are they?
This is the use of Porter's Five Forces Model of Competition. The power of the buyers, power of
the suppliers, the existence of substitute products, the ease of entry, and the actual extent of
rivalry among the competing firms in the focal industry are used to determine the degree of
competition within the industry.
3. Driving forces are factors causing the industry's competitive structure and business
environment to change? Some of the most common are changes in the long-term industry growth
rate, changes in who buys the product and how they use it, product innovation, technological
change, entry or exit of major firms, increasing globalization, and changes in costs and
efficiencies.
4. Companies in the strongest and weakest positions. This step is used to begin a comparison of
the major players in the industry. One technique that can be used for analysis is the concept of
group mapping. Two non-correlated variables, such as distribution methods and product image
are used for the x and y-axis. The firms in the industry are plotted on this two variable
graph/map. The companies that fall closely together on the map are considered to be within the
same strategic grouping and major competitors with each other. Firms having no close neighbors
on the map may have no serious rivals. Spaces on the map without any firms marked may be
potentially open market niches. The point behind using a series of strategic maps with different
variables is to find out which of the competitors is favorably positioned to compete against the
focal firm and which is unfavorable positioned and therefore not a major threat.
5. Rivals key strategic moves is a step that focuses on each of a company's major competitors. A
series of diagnostic questions directly related to the each rival is asked. Is the nature of
competition local, regional, national, or global? What is the rival's strategic intent, market share
objective, competitive position/situation, strategic posture, and competitive strategy? The final
question asks why this firm should be watched.
6. Key industry success factors? These factors can run the gamut from having a well-known
brand name (Coke) to owning a patent to having a low-cost production facility to having the best
trained sales force in the business. The point is once the key factors for success are identified, the
focal organization will have to craft its strategy based on which of the success factors it has or
can acquire in a reasonable time for a reasonable allocation of resources. The organization with
the greater number of the key success factors in hand should have an advantage in formulating a
strategy and, hopefully, in implementing one.
7. This final series of questions asks why this industry is attractive or unattractive to current
players and possible future players. It also asks what specific problems and/or issues the industry
faces in the near future. Finally, the profit outlook for the industry is discussed. Appropriate
competitive strategies can vary considerably when analyzing industries that vary from extremely
profitable to those that have low profitability.
The information necessary to begin to create an appropriate strategy for the organization should
derive from the answers to these seven questions. An analysis of the focal company's situation is
the next step in the strategy formulation process.
´-? +.?+
The company analysis is also based upon a series of diagnostic questions.
1. Is the present strategy a low cost producer strategy, a differentiation strategy, a focusing
strategy, or a combination strategy? For many organizations, no consistent strategy may be
found. In others, an ineffective strategy may still be in use. Is the present strategy working? This
question can be answered by analyzing both strategic and financial indicators for the past three to
five years. If the numbers and/or the trends are moving in the wrong direction, there is strong
indication the strategy is not working.
2. An important step requires an analysis of the company's strengths, weaknesses, opportunities,
and threats. Strengths and weaknesses are internal to the organization and the opportunities and
threats are external.
3. What are the costs and pricing structure of the organization? Costs and prices are not
necessarily related and as a result, too often managers base price on cost without regard to the
economics of the market. The concept of value chain is significant and consists of the activities,
functions, and business processes that must be performed to create and deliver the product or
service to the customer. It is along this value chain that cost inefficiencies can be identified and
reduced or removed. A good diagnostic question is to ask where along the value chain is the
organization less cost efficient than its strongest competitor. How can the organization improve
is the follow-up question. An example in the area of production to reduce or even improve our
cost status may be to manufacture our own product parts rather than to buy parts and then
assemble the product.
4. The strength of the company's competitive position can be analyzed by comparing it to its
major competitors on the key success factors determined during the industry analysis. Each
factor is weighted according to its importance. A forced choice scale of 1 to 5 points or some
other reasonable range is employed. The resulting scores on each key success factor as well as
for the total can be used to see how the organization stacks up against its rivals.
5. Questions relating to the specific problems/issues that the organization faces are also
important. Some problems, i.e. an economic downturn resulting in lost sales, may be common to
all the players in the industry while others, i.e. a production bottleneck, may be unique to a
specific company. In any case these problems and/or issues are important places to look for
challenges in crafting a strategy for the future.
È-

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The following series of steps are designed to determine the major strategic issue facing the
organization, develop a strategy to create a sustainable competitive advantage, implement the
strategy, and then evaluate it as to its successfulness.
4- 

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Steps one through five are summarized as basic decision theory.
1. A Strategic Issue statement consists of one to two sentences. Strategic issues can be significant
problems or market opportunities available to the organization.
2. An explanation of the Strategic Issue statement can be written in one or two paragraphs. This
explains why the particular problem exists and what is causing it. In the case of an opportunity,
an explanation of why this is an opportunity is important to state.
3. Reasonable alternatives (solutions if a problem statement, market opportunities if an
opportunity statement) with advantages and disadvantages listed for each one should be created.
The concept of requiring multiple problem solutions or market opportunities is to force the
strategist to stretch the analysis.
4. The best alternative should be chosen and written down.
5. An explanation in detail as to the rational of the choice acts as a check on its validity.
Restating the advantages is not explaining. If the specific choice cannot be related to a specific
strategy, it is probably not very useful and will be difficult to implement successfully.
,5- 

+ 

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6. One strategic model suggests eight managerial components must be covered during
implementation of strategy.
a. The building of a capable organization by selecting the right people and creating the necessary
positions for them, having in place the core competencies upon which the implementation will be
based, and creating the correct structure to support the strategy. The concept that strategy must
precede structure is from Chandler's seminal work Strategy and Structure (1962).
b. Designing a three-year pro forma budget reflecting the specific implementation.
c. Writing detailed policies and procedures supporting the strategy chosen.
d. Installing appropriate systems supporting the strategy. Examples include information systems,
clerical support, accounting, and inventory control systems.
e. Designing reward systems complementing the designated strategy.
f. Finding and installing a system of best practices based upon benchmarking those organizations
performing the key task in the best manner.
g. Preparing the old culture to reflect the values and beliefs of the organization in light of the
specific strategy and implementation chosen. In some instances, a new culture significantly
different from the old may emerge.
h. Providing leadership in a manner supporting the strategy chosen.
,,- 

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7. How is it known that the strategy will work? Standards, both strategic and financial are
provided for a multiple year pro forma used to evaluate the strategic choice and the quality of the
implementation.
8. Monitoring the progress of the implementation can be assisted by the construction of a
multiyear pro-forma time line incorporating the fourteen points from steps 6 and 7 above.
9. The nature of the firm's competitive advantage, its sustainability, and special issues and/or
problems resulting from the implementation should be highlighted. Examples of competitive
advantages are the ability to design a superior product or service, operate at a lower cost, having
a well known and respected brand name, or providing better customer service.
All strategic choices and implementations by there very nature creates new opportunities and
problems. For example, entering a new market segment could create the problem of dealing with
a new set of competitors.
It is important to realize improper management style and/or poor communications are always a
problem with firms in trouble. Generally, they are not acceptable as problem statements. This is
also true of the statement that there are open market niches available for the firm to exploit. This
is so general as to be meaningless. In addition, the analysis must be careful of symptoms and
generalizations. Hire a consulting firm, advertise more or differently, cut prices, do more of the
same, or do nothing, etc. are not strategic solutions or opportunities by themselves. The analyst
must look for the major problem which when corrected will make a significant difference in
direction of the firm or prevent a major market opportunity from being missed. Finally, the
analyst must try to present arguments in a logical and precise style.
,/-?
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There are four groups of interrelated issues that are possible targets for OD interventions
1. Human process issues dealing with the social process occurring among organizational
members.
2. Human resource issues concerned with the attraction and retention of qualified employees.
3. Technology and structure issues regarding how the organization divides and coordinates the
work within the firm.
4. Strategic issues revolving around the markets, products, and environments with which
organizations must deal.
Traditional OD argues that there are three levels within the organization for interventions. These
are the individual, group, and organization. Although various types of interventions are more
prevalent at one of the levels, it does not preclude them from being appropriate at other levels.
  1
Human process issues: T-groups and third party interventions.
Human resource issues: Goal setting, performance appraisal, reward systems, career planning
and development, work-force diversity, and employee wellness.
Techno-structural issues: Work design and high-involvement organizations interventions.

"1
Human process issues: Process consulting and third party interventions, team building,
confrontation meetings, inter-group relations, and the managerial grid.
Human resource issues: Goal setting, performance appraisal, reward systems, and work-force
diversity.
Techno-structural issues: Reengineering, parallel structures, high-involvement organizations,
TQM, and work design are important interventions.
Strategic interventions: Open systems planning, self-designing organizations, and organizational
learning.
?! 6 
Human process issues: Organizational confrontation meetings, inter-group relations, large-group
interventions, and managerial grid development.
Human resource issues: Reward systems.
Techno-structural issues: Structural design, downsizing, reengineering, parallel structures, high-
involvement organizations, and TQM.
Strategic issues: Open systems planning, integrated strategic change, trans-organizational
development, Mergers and Acquisitions, culture change, self-designing organizations, and
organizational learning.
Organizational development interventions are appropriate at more than one level within the
organization. The idea that the reader should only look at strategic issues and the matching
interventions to discover relationships between strategy and OD is inappropriate. From looking
at the strategy formulation and implementation process, it can be seen that not only are
individual and group levels important because individuals and groups participate in the strategy
process, but human process issues, human resource issues, and techno-structural issues are also
important in the strategy process because these type of issues affect formulation, implementation,
and evaluation of strategy
,Î- 

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This section discusses the strategy process and OD interventions that could be employed during
each of its stages.
,0- 

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Mission, Strategic and Financial Objectives
Creation of the organization's mission, strategic and financial objectives is often a group process.
Intervention techniques, such as goal setting, team building, process consulting and open systems
planning can help the top management team decide these crucial issues.
,2- . + ? ++

Researchers, individual or a small group, synthesize information into a format usable to the
organization. Goal setting, team building and process consulting are possible interventions.
Third-party interventions may be necessary for dysfunctional teams.
,3-(?

In addition to the individual and group OD interventions such as goal setting and team building,
organizational interventions of open systems planning, inter-group relations, and large-group
interventions could be used. An organizational confrontation meeting could assist in moving the
company forward if the specific strategic choice is controversial within the organization. The
Table 2 indicates the hypothesized relationships.
,´- 

+ 

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Thompson and Strickland argue that the actual implementation has eight sub-points (2003).
Some possible interventions are listed below.
a. Building the organization: Structural design, downsizing, reengineering, career planning and
development, managing work force diversity, and work design interventions.
b. Budgeting: Team building and goal setting.
c. Policies and procedures creation: Goal setting, performance appraisal, reward systems, career
planning and development, work-force diversity, and employee wellness.
d. Best practices built upon benchmarking: Work design interventions and TQM.
e. Support systems: various human process and human resource interventions.
f. Reward systems: Goal setting, performance appraisals, and reward system design.
g. A revised organizational culture: Cultural change interventions.
h. Leadership: Goal setting, team building, managerial grid development, reward systems, and
the concept of self-designing organizations.
The Table 3 indicates the hypothesized relationships.
,È- 

+
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The evaluation of the implementation via the use of strategic and financial standards or
objectives can benefit from the use of various Human Process and Human Resource
Management OD interventions.
The final step the discussion of the competitive advantage and how it will be sustainable is what
the strategy process is all about. OD interventions such as organizational learning, open systems
planning, integrated strategic change, trans-organizational development, cultural change, and
self-designing organizations are important in the creation of a sustainable competitive advantage.