ORGANIZATIONAL DEVELOPMENT AS A FRAMEWORK FOR CREATING ANTI-POVERTY STRATEGIES AND ACTION A Training Module Prepared for the 5th Urban and City Management Face-to-Face and Distance Learning (Version) Course for Africa October 20-24,2003 Prepared and Presented by: Dereje Getahun, Ethiopian Civil Service College, Addis Ababa Telephone: 0146317 P.O.Box: 2791 Addis Ababa, Ethiopia E-mail: deregeget@yahoo.com 1 ORGANIZATIONAL DEVELOPMENT AS A FRAMEWORK FOR CREATING ANTI-POVERTY STRATEGIES AND ACTION A Training Module Prepared for the 5th Urban and City Management Face-to-Face and Distance Learning (Version) Course for Africa October 20-24,2003 1. Introduction Currently, the changes taking place in urban areas are challenging municipalities to call for more efficient, accountable, and effective local administration. The dynamism of managing municipalities has been escalated from time to time. Managing cities and urban centers at present becomes a complex task due to rapid environmental changes. These changes are stimulated by a number of internal and external forces (Stoner and Freeman, 1989: Gray and Smelter, 1989: Holt, 1993: Coffey, Cook and Hunsaker, 1994). Consequently, City Managers and administrators are required to equip themselves with necessary capabilities to enable their organizations achieve their objectives. That means, up to date knowledge, skill and attitude of managers is fundamentally essential to cope up with and manage changes. Of all changes, the dynamic growth of population in and around urban areas has been recognized as a great challenge for urban local governments. The population of urban areas has increased five fold in the last 40 years. Today, about half the world's population live in or around urban areas. It is also expected that during the next 30 years, 90 percent of population growth will be in urban areas. The major reasons of this growth are rural urban migration and expanding populations. Out of this increase, around 93 percent is expected to occur in the developing world including Africa (Panos Institute, 2000). Specifically, urban population growth in African Countries is aggravating urban poverty. The absolute numbers of the urban poor have been growing much faster than those in rural areas. If current trends continue, the next decade will witness a surge in urban poverty. Under this condition, Africa's urban local governments will face difficulty in satisfying basic services to their citizens ((Tibaijuka, 2001) Cognizant of this fact, different researchers, financial institutions, International humanitarian associations have proposed a number of anti poverty strategies. Decentralization of power and good governance, enhancing public participation and partnership, and building of institutional capacity of municipalities are identified as crucial means's of overcoming urban poverty (Tibaijuka, 2001). This paper tries to address one of the aspects of institutional capacity building programs of municipalities, i.e., organizational development. 2 The paper goes through organizational development and related issues briefly. In doing that, it aims at introducing participants (Mayors, City Council Committees, Urban management professionals and others) to the theoretical and practical framework of OD. The material however, is not an exhaustive explanation of OD; hence readers are advised to consider it as a starting point and not to confine themselves to it. 2. Learning Objectives After reading this material, participants will be able to 1. Describe what organizational Development (OD) means, its values and relevance for urban managers in their ant-poverty efforts. 2. Question their assumptions and realize what is expected of them in terms of promoting municipalities effectiveness and managing changes through the application of OD intervention techniques. 3. Know the importance of management of organizational culture for effective organizational outcomes 4. Relate the topic with gender issues. 3. The meaning of Organizational Development (OD) Organizational Development (OD) is an applied field of study and practice. According to kreitner and kinicki (1992), OD is a branch of applied behavioral sciences that has a short but colorful history. It's roots trace back to the mid-1940s. OD is something about organizations and developing them. It aims at improving the overall effectiveness of an organization. When we come to specific definition of OD, many authors have defined it differently. Here are few definitions. "Organizational development is concerned with helping managers plan change in organizing and managing people that will develop requisite commitment, coordination, and competence. Its purpose is to enhance both the effectiveness of organizations and the well being of their members through planned interventions in the organizations human process, structures, and systems, using knowledge of behavioral science and its intervention method" (Rothwell et.al., 1995). "Organizational development is a system-wide application of behavioral science knowledge to the planned development and reinforcement of organizational strategies, structures, and processes for improving an organization's effectiveness" (Cummings and Worely, 1997). To realize more about OD, an analysis of selected definitions of OD is presented in table 1as outlined by French and Bell (1989:8). 3 A process. A planned & sustained effort. A process of planned change. A Long rage effort. Gordon Lippitt (on OD) Schmuck and Miles Burke and Hornstein French and Bell Apply behavioral science for system improvement. Using reflexive, selfanalytic methods. Change-oriented and self-examining oriented, specifically change of an organization's culture from one which avoids an examination of social processes in organization to one which institutionalizes and legitimizes this examination. A process of initiating, creating and confronting needed changes. Educational. change - oriented 4 Organization culture. Culture of formal work teams. Organization's problem solving and renewal processes. the organization's culture and the social processes in organization, especially decision making, planning and communication. Total system (organization). [Implied] total organization. Beliefs, attitudes, values and structures of organizations. Components of the Organization development process Nature of activates/ interventions Target of interaction/Activities Planned interventions in the Total organization. organization's "processes" Organization's 'processes' Designed to bring about a more effective and collaborative management of organization culture; using assistance of change agent, or catalyst. Adapted from French & Bell (1989) Complex educational strategy. A response to change Nature and scope of the Effort Planned Organization wide. Managed from top. Bennis Beckard Author Table 1 -An Analysis of Selected Definitions of Organization Development The theory and technology of applied behavioral science, including action research. Behavioral science Behavioral science knowledge Knowledge Base Improve an organization's problem-solving and renewal processes. Better ability to adapt to new technologies, markets, and challenges, and the dizzying rate of change itself. Enhance the ability of the organization to become or remain viable. Adapt to new conditions. Solve problems. Learn from experience. Move toward great organizational maturity. System improvement. [implied] continued self-analysis and reflection. [self-examination] or social processes in organization, especially decision making, planning, and communication. Desired Goals, Outcomes, or end states of OD Effort Increased organization effectiveness and health According to French and Bell (1984:17), OD refers "a top management - supported, long -range effort to improve an organization's problem-solving and renewal processes, particularly through a more effective and collaborative diagnosis and management of organization culture-with special emphasis on formal work team, temporary team, and inter-group culture-with the assistance of a consultant facilitator and the use of the theory and technology of applied behavioral science, including action research." In this context, problem-solving process refers to the organization's methods of dealing with the threats and opportunities in its environment. For example, managers might choose to solve the organization's problems on their own, or they might participate with subordinates in problem solving and decision-making. Through a renewal process, managers can adapt their problem solving style and goals to suit the changing demands of the organization's environment. Thus, one aim of OD is to improve an organization's self renewal process so that managers can more quickly adopt a management style that will be appropriate for the new problems they face. Collaborative management means management through subordinate participation and power sharing rather than through the hierarchical imposition of authority. In their comprehensive definition, French and Bell (1984) emphasized the importance of action research in OD. According to Stoner and Freeman (1989), action research refers to the way OD change agents go about learning what aspects of the organization need to be improved and how the organization can be helped to make these improvements. Briefly action research involves: 1. 2. 3. 4. 5. 6. To conclude diagnosis of the problem by OD change agents, Data gathering to support (or disprove) the diagnosis, Feedback of the data to organization members, Exploration of the data by organization members, Planning of appropriate action, and Taking appropriate action, Summarily, OD provides managers with the tools and techniques needed to manage organizational change. But, it is not the only approach, rather one approach to change and long range in perspective. Its values emanate from the philosophical values of the laboratory methods of learning and change (also known as T-groups and sensitivity training) and survey feedback techniques of the 1940's. The techniques used in OD have been expanded through time and present day consultants and researchers have a wide variety of OD techniques to choose from. In all situations, OD uses behavioral science knowledge and techniques to influence people's attitudes, beliefs, values, and behaviors on the job, with the ultimate goal of facilitating organizational effectiveness (Woodman, 1989,Kreitner and Kinicki, 1992). In a related development, different studies have shown that OD focuses on changing an entire system than focusing to only one or a few components. (A system may include a group, department, division, organization, or even a group of organization). It 5 emphasizes on helping people and organizations learn how to diagnose and solve their own problems in contrast to relying on others for solution (Coffey, Cook and Hunsaker, 1994-552). The role of OD as a technique to develop, guide, and implement an organization's strategic planning process has expanded and acquired wide recognition. An OD oriented manager is highly aware of organizational diagnosis, processes and is helping people aware of organizational processes such as communication, interpersonal feedback, group problem solving, leadership styles, decision making and goal setting (Monday et.al.,1990). 2.1. A model of Organization Development Figure 1 reveals that organizational development is a three-step process. OD begins by undertaking an organizational diagnosis. Then an appropriate intervention is prescribed and implemented. The final step of the process is monitoring progress and taking corrective action. Brief discussion of each step is presented in the following paragraphs. Figure 1 A Model of Organization Development Organization Diagnosis . Directly observing people and processes . Studying Internal documents . Interviewing or surveying organization members Monitor Progress and Take Corrective Action Prescribe and implement an Intervention - Source: Kreinter R and A.kinicki, "Organizational Behavior", Second ed., 1992, P.746, Richard D.Irwin, Inc. 6 2.1.1 Organizational Diagnosis Organizational diagnosis has two major purposes. The first purpose is to practically identify future changes that are needed to help an organization meet its strategic goals. Its second purpose is to identify past or current organizational problems that inhibit the diagnostic framework for conducting such an analysis (kreitner and kinick ,1992). To achieve the first purpose consultants and OD practitioners (also called change Agents) apply need analysis method for organizational diagnosis. Need analysis according to kreitner and kinick (1992) consists of figuring out the type of skills or competencies that employees must possess for the organization to accomplish its goals. Surveys, interviews training programs and management development can be frequently used for this purpose. The other aspect of organizational diagnosis is identifying past or current problems that inhibit organizational success. Organization problems can be traced from different organizational areas. To support the discussion the writer adapted the framework developed by Weisbord (1976). The framework can help managers to begin the process of OD and does not provide an exhaustive list of places to look for organizational problems. It only shows the major six organizational problem areas. Figure 2: A Framework for Diagnosing Organizational Problems Environment Purposes What business are we in? Relationships How do we manage conflict among people? with technologies? Support systems Have we adequate coordinating technologies? Structure How do we divide up the work? Leadership Does someone keep the boxes in balance? Rewards Do all needed tasks have incentives 7 Source: Marrin R. Weisbord, "Organizational Diagnosis: Six Places to Look for Trouble With or with out a Theory, "Group and Organization Studies, 1976, P.432, Sage Publications, Inc. Purpose: Organizational problems frequently start with a lack of direction from the top. The prevalence of lack of direction usually leads to the poor allocation of resources and confusion about what people should be doing. It is necessary for top management to establish what business the organization is in order to accomplish their mission. Thus, identifying organizational mission is important to show the direction of the organization. OD in this instance is used to keep organizations on track (Beckhard, 1969). Structure: Organizational structure reflects the reporting relationships within an organization. Structure should support or reinforce the accomplishment of strategic goals. Fore example, organizations adapting a flatter structure may benefit from faster communication processes. Especially organizations working in a highly volatile industry can design this type of structure to maximize the above advantage. In contrast, there are organizations that prefer a centralized structure. This type of structure brings the advantage of reducing duplication of effort that commonly exists in decentralized organizations (French, 2000). Rewards: Different studies of motivation theories have shown that employees exhibit behaviors that get rewarded. Therefore, organizations need to design reward systems that reinforce desired results. Organizations have to reward the right behaviors. For example, group incentives should be applied instead of individual rewards when productivity is highly dependent on teamwork. Organizational problems can be reduced by identifying and rewarding appropriate behaviors and results (kreitner and kinicki, 1992). Support systems: Support systems represent the tools, techniques, and processes that organizations use to achieve efficiency and effectiveness. Organizations should adapt the right system considering the nature of their organization. For example organizations frequently doing different projects can use computerized project control systems, since it helps managers and project teams to complete projects on time. Another example is the adoption of up to date Management Information system to support the decision making process within an organization (French, 2000). Relationships: This diagnostic area focuses on the quality of interpersonal relationships among individuals and groups. Organizations should foster constructive conflict and remove any dysfunctional conflict. Constructive conflict can be sources for organizational development. Creative and innovative peoples within an organization are always looking for grounds to challenge the status quo. These challenges lead to search for alternatives to existing patterns, which lead to organizational change and development (kreitner and kinicki, 1992). Leadership: successful change is unlikely without effective leadership. Leadership is needed to lead the change effort and overcome resistances of change. In addition to this, the existence of quality leadership is important in order to coordinate and manage the change and development process (Monday et.al.,1990). 8 Box 1 - Major Problem Areas of Ethiopian Civil Service Organizations, Including Municipalities Diagnosed Problems of Civil Service Organizations Including Municipalities (The case of Ethiopia) • • • • • • • Concentration of management on the administration and control of inputs and series of related activities instead of focusing on the achievements of municipal objectives and strategies. Highly outdated, rigid, obsolete management system and legal framework. Poor public image towards the rigid bureaucracy, which emphasizes more on rules and regulations. Organization Culture characterized by concentration of power at the top, which leave little room for decentralization of activities and delegation of authority to the lower level operational unit. Unable to attract skilled manpower and qualified due to lack of reward system and low salary. Prevalence of unethical practices such as corruption, embezzlement, fraud, nepotism, favoritism, bribery etc. Lack of quick response to urban service demands. Source: CSRP of Ethiopia 2001, Addis Ababa Discussion Question No 1 Thoroughly study your specific organization and diagnose problem areas. 2.1.2 prescribe and Implement an intervention OD uses a variety of processes, approaches, methods, techniques, applications, etc to address organizational issues and goals in order to increase performance. These are often termed as OD interventions. "To intervene is to enter into an ongoing system of relations ships, to come between or among persons, groups, or objects for the purpose of helping them" (Argyris quoted by French and Bell, 1989:139). Interventions can range in scope from a simple question to a massive and complicated effort. OD interventions can focus on an individual employee, teams, departments or subsystems, and the total organization. The strategies applied for implementing OD can be chosen based on the nature of the problem. Usually, two dominant strategies are widely used either separately or together to implement OD program. These are the human process approach and the techno structural approach (kreitner and kinicki, 1992). 9 The human process approach focuses on identifying and correcting problems within interpersonal, group and inter group processes. Examples of frequently used interventions in the human process approach are role analysis, survey research and feedback, team building and organization culture change. The techno structural approach assumes that organizational problems revolve around issues associated with the match between technology and organizational structure. Common interventions of the techno structural approach involve work restructuring, compensation systems, structural change, and implementing new information technology. To provide more insights, OD interventions are classified and indicated in table 2. (Note that these are not the only OD interventions. There are many different types of OD interventions that qualify as either human process or techno structural strategies. The following classification considers the size and complexity of groups. Intervention Individual Table 2. Widely used OD interventions Intervention Focus Teams Inter-Group Coaching counseling Life and career planning Education and Training stress/ Management Mentoring Delegating Team building Survey feedback Conflict resolution Process consultation Group facilitation HRM systems and rewards Role analysis Inter-group activities Conflict resolution Process consultation Strategic planning activities Total Organization Strategic Management Planning Survey feedback Techno structural Change (TQM, downsizing, outsourcing, etc.) Culture change HRM systems development Source: "Organization Development": Training Material Prepared by Ethiopian Management Institute, OD and HRM Department, Addis Ababa, 2002. To expose readers more on the OD interventions, two most widely used illustrative interventions are discussed in the following paragraphs. Note however that change agents are advised to use multifaceted interventions. Team Building Team building is extensively used as an OD intervention. It is effective at improving interpersonal processes. The word team refers a group of people working together who must significantly relate with each other to achieve common goals. Clark (1994) describes the word "TEAM' as an acronym of: Two or more people working closely together Encouraging and supporting one another to Achieve in an efficient way Mutually agreed upon and appropriate goals 10 Box 2. Common features of a team Common features of team - High interaction among team members - Clear team structure that includes team roles - Diverse skills, abilities, backgrounds and perspectives of team members - Shared Common goals and sense of mission Source: Clark (1994). Teams demonstrate participation, shifting of leadership roles, problem solving, risk taking and creativity. Effective team is characterized by the following behaviors (Stoner and Freman, 1992) Related atmosphere in the team where by members are involved, interested and free to express their feelings; Team leader has good people skills and is committed to team approach, i.e. leadership within the group shifts from time to time and tends to be based on expert knowledge rather than on formal status or position; Team members develop mutual trust, Team members are prepared to take risks; Team is clear about goals and established targets, Team members regularly review team performance and examine mistakes freely without personal attacks; Most decisions are reached by consensus; Team has capacity to create new ideas; Disagreements are fully discussed and either resolved or lived with. Team building involves deliberate action of managers focusing on encouragement of effective working practices and diminishing of difficulties among team members. the ultimate aim of team building is promotion of team effectiveness so that common goals can be achieved effectively. As Maxon (1993:29) puts, effective team building is concerned with the following; • • • Improving performances and results Making greater use of both individuals and team strengths-not simply concentrating on weaknesses Resolving problems about which something can and must be done and which are within the responsibilities of the particular team involved. Building a team involves learning where by a team builder adopts certain developmental approaches that enable team members learn from the process. Effective team building allows the successful accomplishment of fast functions and the development of desirable behavior for organization goal achievement. 11 Box 3 Values of a Team Values of a team - Involvement - Commitment - Cooperation - Support - Integrative communication Source: Clark (1994). Organization Culture Change One major goal of OD in an attempt to increase effectiveness of an organization is to diagnose the organization's culture and replace outdated culture with more productive culture. This demands managers to understand organizational culture and develop cultural awareness competencies. Therefore, this part outlines main features of organizational culture. What is Organizational Culture? As Harrison (1992-11) put: "Organizational Culture is defined as those aspects of an organization that give it a particular climate or feel. Culture is to an organization what personality is to an individual. "The definition of Hanson and Lubin (1995:15) goes as: "Organization Culture describes of regularity in the way the organization functions." Schien (Cited in Hanson and Lubin, 1995) describes: "Organization Culture is a set of basic assumptions and beliefs that reflect how the organization views itself and its environment." All these definitions have one thing in common: describing those elements of an organization, which make it distinct due to a reflection of people working in the organization. Organization Culture includes how rules, regulations and policies are formulated and implemented; how people relate to each other; what behaviors are appropriate or inappropriate; what issues are legitimate or not legitimate for discussion, explanation, and examination etc. The Cultural aspects of an organization can include those aspects, which can be explicitly visible, or those, which are invisible (implicit). Visible parts of organizational Culture include organizational structure, job tiles and description, formal authority networks, operating policies and practices, and the ways in which productivity is rewarded, etc. The less visible part of organizational Culture include patterns of power and influences, norms and loyalties of work groups, perceptions of who you can trust and how much risk you can take, personal values that affect people's perceptions of work rules, feelings and needs of employees (how people relate to each other to their own 12 group and to other departments), Ways in which human talents are identified and rewarded,etc (EMI,2002). Diagnosing Organizational Culture To adapt more appropriate culture it is important to diagnose the existing culture. Organizational culture can be diagnosed following different approaches. However, this part takes into account four types of organizational culture identified by Harrison (1992:31-39) and EMI (2002). These include: a. Power Culture Such culture is based on strength whereby the organization exhibits direction, decisiveness and determination. It is exemplified by the following characteristics. The leader is strong and charismatic, bringing courage to the fainthearted and clarity to the confused. The Leaders take care of their own; they reward and protect loyal followers. The leader is wise and benevolent. He or she acts unilaterally but in the best interests of the organization and its members. The leader is demanding but fair; clear about what is required; and rewarding of compliance. People who get ahead are loyal and put the leader's wishes before their own needs. b. Role Culture Role culture is based on structure and is differentiated whether order, stability and control are demonstrated or not. • • • • • • Individual performance is judged against written description; as long as employees meet requirements, they are safe. People are rewarded for playing by the rules and reliable, dependable service to the firm. Inefficiency, uncertainty, and confusion are reduced by clear objectives, systems, and procedures. Personal abuse of power is reduced by rules limiting arbitrary use of authority. Authority and responsibility of jobs are clearly defined, minimizing power struggles and turf issues. Work methods minimize variability of performance and reduce the need for individual decision-making. 13 c) Achievement Culture Achievement culture bases on competence by which growth, success, and distinction are demonstrated. The following characteristics are observed in such organizations. • • • • • • • People share a sense of urgency in attaining worthwhile goals and values; they feel they are working for something bigger than themselves. People feel stronger and better for being a member of the group; it raises their self-esteem. People manage themselves, doing voluntarily. The rules and regulations aren't allowed to get in the way of doing the work. People work long hours without complaint. There is high morale, a sense of oneness There is a sense of being unique and different-an "elite" with special myths and jargon. d. Support Culture It is based on relationships whereby mutuality, service and integration are observed. People support one another in the work; they go out of their way to cooperate. People value harmony; they make sure conflicts are resolved and that everyone is on board. People give their time and energy to others, they are available, they care, they listen. People trust that they are viewed as individuals’ human beings by the organization. People appreciate one another; they acknowledge one another's contributions. People have a sense of belonging, they feel accepted by those they work with; they like spending time together. The above types of organizational culture have their own advantages and disadvantages. For instance, power and role culture mainly focus on formal authority, control and clarity of functional roles. As a result having a strong leader and clear task structure minimize conflict and confusion, which are the advantages of such organizations. On the other hand fear and anxiety, lack of promoting creativity and culture confined to rules and regulations limit employees to go beyond. These are the disadvantages. Therefore, what is important for managers is to diagnose their organizational culture, identify the strengths and weaknesses and make balance among these cultures or promote those, which are more relevant for their organization in relation to the demands of the internal and external environments. For further understanding please look at figure 3 below. 14 Figure 3 Culture Change as Intervention of OD 4 3 Hiring and socializing members who fit in with the new culture Culture Cultural Communication Removing Members who reject the new culture Changing behavior 5 1 Examining justifications for changed behavior 2 Managers seeking to create cultural change must intervene at these points. Discussion question No 2 To what extent is your organization culture congruent to your organization Purpose? If it is not congruent, please diagnose the culture and propose acceptable culture. 15 2.1.3. Monitor progress and Take corrective action Education and feedback is the final step of OD. Evaluation is undertaken to determine if expected results are being achieved. Interviews, surveys, and performance indices are usually used to evaluate the effectiveness of an organization change. Finally, feedback provides the mechanisms to reinforce and adjust the planned change effort (kreitner and kinicki, 1992). 3. Implication of OD to municipal managers The challenges facing municipal officials as a result of environmental changes can be handled and positively adapted into municipalities through a comprehensive organization development process. Successful application of OD techniques emphasizes on collaborative problem solving approach and decision-making process. Local government officials can facilitate the process of decentralization and good governance at the municipal level through OD. OD is a change effort that affects the entire organization. It is a planned and systematic attempt to change the organization, typically to a more behavioral environment. Municipalities can use OD to develop a more open, productive and compatible work place that can quickly respond to urban service demands. This endeavor however requires qualified change agents who are responsible for ensuring that the planned change in OD is properly implemented. Change agents must analyze the present state and the future state and identify gaps and strategies for successful OD program. In general terms OD can help managers in two ways that are interdependent: improving productivity by increasing effectiveness of the way people do the work, and assessing priorities. An OD oriented manager is highly aware of organizational diagnosis, processes, and is helping people aware of organizational process such as communication, interpersonal feedback, group problem solving, leadership styles, decision making and goal setting. Municipalities should also critically consider the importance of building appropriate organization culture. The Culture that should be established in urban centers has to consider appropriate values of customer service delivery. Employees should develop their organizational identity. 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