Organization development in its traditional form as ‘OD’ was defined by Rowlandson (1984: 90) as ‘an intervention strategy that uses group processes to focus on the whole culture of an organization in order to bring about planned change’. More recently, the CIPD (2010: 1) defined it broadly as a ‘planned and systematic approach to enabling sustained organization performance through the involvement of its people’. In its original form as ‘OD’ it was based on behavioural science concepts, ie the field of enquiry dedicated to the study of human behaviour through sophisticated and rigorous methods. However, during the 1980s and 1990s a number of other approaches were introduced, and further changes occurred in the following decade, although the behavioural sciences still play an important part in OD
‘interventions’ (in OD jargon, interventions are planned activities designed to improve organizational effectiveness or manage change). It was these changes that led to the broader definition produced by the CIPD.
OD used to be the province of specialized consultants, with HR playing a supporting role if it played any role at all. But HR Magazine (2007) spelt out the close relationship between HR and organization development as follows:
Source review HR and organization development – HR Magazine (2007: 1)
To remain competitive in today’s global marketplace, organizations must change. One of the most effective tools to promote successful change is organization development (OD). As HR increasingly focuses on building organizational learning, skills and workforce productivity, the effective use of OD to help achieve company business goals and strategies is becoming a broad HR competency as well as a key strategic HR tool. While there are variations regarding the definition of OD, the basic purpose of organization development is to increase an organization’s effectiveness through planned interventions related to the organization’s processes (often company-wide), resulting in improvements in productivity, return on investment and employee satisfaction.
The CIPD (2010: 3) stated that: ‘We place considerable importance on OD, seeing it as one of the ten professional areas within the HR profession map which emphasizes its importance as a HR skill’. The CIPD also commented that:
OD is not a new discipline and has always had a focus on people but has only relatively recently become considered as a mainstream discipline of HR. Supporters of OD argue that its strength is its ability to understand the whole organization and as such it may be inhibiting to root it too firmly in the HR function. However, given the increasing need for the HR profession to act as a business partner, OD and its methods have a part to play in developing HR’s strategic role and its involvement in organizational change, organizational culture and employee engagement (ibid: 3).
The strategic nature of organization development as an integral part of HRM arises because it can play a significant role in the implementation of business strategy. For example, business model innovation as a strategy could result in the need for new organization structures and processes. This would involve organization development and change management activities. The aim of this chapter is to explain the strategic purpose of organization development in the light of an analysis of the history of the concept and how it can be applied as part of a strategic HRM approach.