HANDOUT 3: ORGANIZATIONAL DEVELOPMENT
Learning Outcome:
At the end of the lesson the students can:
a. To describe the activities involved in entering into an OD relationship
b. To describe the steps associated with developing an OD contract
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The Process of Organization Development
The process of organizational development is continuous, with or without the consultant’s involvement,
with the objective of continuously improving the organization, no matter how well it is doing.
Sometimes, phases need to be combined or even skipped because of the demands of the market.
Entering and Contracting
The planned change process generally starts when one or more key managers or administrators
somehow sense that their organization, department, or group could be improved or has problems
that could be alleviated through organization development. The organization might be successful
yet have the room for improvement. It might be facing impending environmental conditions that
necessitate a change in how it operates. The organization could be experiencing particular
problems, such as poor product quality, high rates of absenteeism or dysfunctional conflicts
among departments. Conversely, the problems might appear more diffuse and consist simply of
feelings that the organization should be “more innovative,” “more competitive,” or “more
effective.” Entering and contracting are the initial steps in the OD process since it involves defining
in a preliminary manner these organization’s problems or opportunities for development and
establishing a collaborative relationship between the OD practitioner and members of the client
system about how to work on those issues.
Entering and contracting set the initial parameters for carrying out the subsequent phases of OD:
diagnosing the organization, planning and implementing changes, and evaluating and
institutionalizing them. They help to define what issues will be addressed by those activities,
which will carry them out, and how they will be accomplished.
Entering and contracting can vary in complexity and formality depending on the situation. In
those cases where the manager of a work group or department serves as his or her own OD
practitioner, entering and contracting typically involve the manager and group members meeting
to discuss what issues to work on and how they will jointly accomplish that. Here, entering and
contracting are relatively simple and informal. They involve all relevant members directly in the
process without a great number of formal procedures. In situations where manager and
administrators are considering the use of professional OD practitioners, either from inside or
from outside the organization, entering and contracting tend to be more complex and formal.
A. Entering into an OD relationship
An OD process generally starts when a member of an organization or unit contacts an OD practitioner
about potential help in addressing an organizational issue. The organization member may be a manager,
staff specialist, or some other key participant, and the practitioner may be an OD professional from inside
or outside of the organization. Determining whether the two parties should enter into an OD relationship
typically involves clarifying the nature of the organization’s current functioning and the issues to be
addressed, the relevant client system for that issue, and the appropriateness of the particular OD
practitioner. In helping assess these issues, the OD practitioner may need to collect preliminary data
about the organization. Similarly, the organization may need to gather information about the
practitioner’s competence and experience.
Activities involved in entering an OD relationship;
Clarifying the Organizational Issue. When seeking help from OD practitioners, organizations
typically start with a presenting problem the issue that has caused them to consider an OD
process. It may be specific (decreased market share, increased absenteeism) or general (“we’re
growing too fast,” “we need to prepare for rapid changes”). The presenting problem often has an
implied or stated solution. For example, managers may believe that because members of their
teams are in conflict, team building is the obvious answer. They may even state the presenting
problem in the form of a solution: “We need some team building.” In many cases, however, the
presenting problem is only a symptom of an underlying problem. For example, conflict among
members of a team may result from several deeper causes, including ineffective reward systems,
personality differences, inappropriate structure, and poor leadership. The issue facing the
organization or department must be clarified early in the OD process so that subsequent
diagnostic and intervention activities are focused correctly.
Gaining a clearer perspective on the organizational issue may require collecting preliminary data.
OD practitioners often examine company records and interview a few key members to gain an
introductory understanding of the organization, its context, and the nature of the presenting
problem. Those data are gathered in a relatively short period of time typically over a few hours to
one or two days. They are intended to provide enough rudimentary knowledge of the
organizational issue to enable the two parties to make informed choices about proceeding with
the contracting process. The diagnostic phase of OD involves a far more extensive assessment of
the problematic or development issue than occurs during the entering and contracting stage. The
diagnosis also might discover other issues that need to be addressed, or it might lead to
redefining the initial issue that was identified during the entering and contracting stage. This is a
prime example of the emergent nature of the OD process: Things may change as new information is
gathered and new events occur.
Determining the Relevant Client. A second activity in entering an OD relationship is defining
the relevant client for addressing the organizational issue. Generally, such organization members
are involved who can directly impact the change issue, whether it is solving a particular problem
or improving an already successful organization or department. Unless these members are
identified and included in the entering and contracting process, they may withhold their support
for and commitment to the OD process. For example, if a manager asked for help improving the
decision-making process of his or her team, the manager and team members would be the part of
the OD process. Unless they are actively involved in choosing an OD practitioner and defining
the subsequent change process, there is little likelihood that OD will improve team decision
making.
Selecting an OD Practitioner. The last activity involved in entering an OD relationship is
selecting an OD practitioner who has the expertise and experience to work with members on the
organizational issue. Unfortunately, little systematic advice is available on how to choose a
competent OD professional, whether from inside or outside of the organization. Perhaps the best
criteria for selecting, evaluating, and developing OD practitioners are those suggested by the late
Gordon Lippitt, a pioneering practitioner in the field. Lippitt listed areas that managers should
consider before selecting a practitioner, including the ability of the consultant to form sound
interpersonal relationships, the degree of focus on the problem, the skills of the practitioner
relative to the problem, the extent that the consultant clearly informs the client as to his or her
role and contribution, and whether the practitioner belongs to a professional association.
Certainly, OD consulting is as much a person specialization as it is a task specialization. The OD
professional needs not only a repertoire of technical skills but also the personality and
interpersonal competence to use himself or herself as an instrument of change.
Elements of an effective proposal:
1. Goals of proposed effort. Clear and concise goals to be achieved.
2. Recommended action plan. A description of diagnosis, data analysis process, feedback
process, and action plan process.
3. Specification of responsibilities. What will the various leaders, including the OD practitioner
be held accountable for?
4. Strategy for achieving the desired state. Provide strategies including education/training
political influence, structural interventions, and confrontation of resistance.
5. Fees, terms, and conditions. Online fees and expenses associated with project.
B. Developing a Contract
Contracting is a natural extension of the entering process and clarifies how the OD process will proceed. It
typically establishes the expectations of the parties, the time and resources that will be expended, and the
ground rules under which the parties will operate. The activities of entering an OD relationship are a
necessary prelude to developing an OD contract. They define the major focus for contracting, including
the relevant parties. The goal of contracting is to make a good decision about how to carry out the OD
process. OD processes require some form of explicit contracting that results in either a verbal or a written
agreement. Such contracting clarifies the client’s and the practitioner’s expectations about how the OD
process will take place.
The contracting step in OD generally addresses three key areas:
Mutual Expectations. This part of the contracting process focuses on the expectations of the client
and the OD practitioner. The client states the services and outcomes to be provided by the OD
practitioner and describes what the organization expects from the process and the consultant.
Clients usually can describe the desired outcomes, such as decreased turnover or higher job
satisfaction. Encouraging them to state their wants in the form of outcomes, working
relationships, and personal accomplishments can facilitate the development of a good contract.
The OD practitioner also should state what he or she expects to gain from the OD process. This
can include opportunities to try new interventions, report the results to other potential clients,
and receive appropriate compensation or recognition.
Time and Resources. To accomplish change, the organization and the OD practitioner must
commit time and resources to the effort. Each must be clear about how much energy and how
many resources will be dedicated to the change process. Failure to make explicit the necessary
requirements of a change process can quickly ruin an OD effort. For example, a client may clearly
state that the assignment involves diagnosing the causes of poor productivity in a work group.
However, the client may expect the practitioner to complete the assignment without talking to
the workers. Typically, clients want to know how much time will be necessary to complete the
assignment, which needs to be involved, how much it will cost, and so on. Resources can be
divided into two parts. Essential requirements are things that are absolutely necessary if the
change process is to be successful.
Ground Rules. The final part of the contracting process involves specifying how the client and
the OD practitioner will work together. The parameters established may include such issues as
confidentiality, if and how the OD practitioner will be involved in personal or interpersonal
issues, how to terminate the relationship, and whether the practitioner is supposed to make
expert recommendation or help the manager make
Interpersonal Process Issues in Entering and Contracting
In this final section, we discuss the interpersonal issues an OD practitioner must be aware of to produce a
successful agreement. Negotiating the differences to improve the likelihood of success can be intra- and
interpersonally challenging. Entering and contracting are the first exchanges between a client and an OD
practitioner. Establishing a healthy relationship at the outset makes it more likely that the client’s desired
outcomes will be achieved and that the OD practitioner will be able to improve the organization’s
capacity to manage change in the future.
Entering and contracting constitute the initial activities of the OD process. They set the parameters for the
phases of planned change that follow: diagnosing, planning and implementing change, and evaluating
and institutionalizing it. Organizational entry involves clarifying the organizational issue or presenting
problem, determining the relevant client, and selecting an OD practitioner. Developing an OD contract
focuses on making a good decision about whether to proceed and allows both the client and the OD
practitioner to clarify expectations about how the change process will unfold. Contracting involves
setting mutual expectations, negotiating time and resources, and developing ground rules for working
together.
Example:
