Organization Development and Organization Design Explained
The differences between organizational design and development are crucial to understand and this article will go over these in detail.
Organization Development Definition [OD]
Organization development was founded in the 1960s on humanistic values and ethical concerns like democracy and social justice. Most practitioners would agree that OD tends to emphasize human development, fairness, openness, choice, and the balancing of autonomy and constraint (Burke, 1997)[1]. Today, most OD definitions agree that it concerns system-wide planned change, uses behavioral science knowledge, targets human and social processes of organizations (specifically the belief systems of individuals, workgroups, or culture), and intends to build the capacity to adapt and renew organizations (Cummings & Worley, 2001[2]; French & Bell, 1999[3]).
Within these broad parameters, the definition changes with the person defining OD and reflects a variety of perspectives. For example, some emphasize the process of OD work (Beckhard, 1969[4]; Beer, 1980[5]), whereas others attend to the object of the OD practice (Burke, 1982[6]; French, 1969[7]). In general, there is a strong commitment to the action research process and to the idea that OD is a special case of change management. Purists in the OD field argue to keep the focus on the human process/social systems whereas the pragmatists, want to integrate the work of OD with the analytic and rational approaches to strategy and organization design
Organization Design Definition [OrgDesign]
As with OD, there are many definitions of Organization Design but all agree that it is more than simple restructuring and that the work does not begin and end with an organization chart. Organization Design is the work of aligning all parts of a business to position it to win in the marketplace, ensuring that the business delivers its strategic or competitive advantage. It is the deliberate process of configuring the informal and formal elements of a business including value stream, structure, technologies, management mechanisms & systems, rewards, and people processes, to create a business capable of achieving its business strategy.
Organization Design is a business solution that can be applied in ways completely incongruent and disconnected from both the theory and the practice of Organisation Development. At the extreme, the CEO can sit in their office, redesign the organization using best practice Organization Design theory, and tell the organization to implement what they have decided. Organization Development practitioners will tell the CEO why their efforts will fail. This is where, in Organization Design work, the ‘how’ becomes critically important to the ‘what’. In effective transformation work such as business integration and organization design, the building of cohesive, trusting, and aligned leadership teams is prerequisite and paramount to predicting successful transformations. In fact, depending on which study you choose, it is one of the TOP three predictors of successful business transformations.
The Meaning of OD in Business
In every segment of business, you will find industry jargon and acronyms which are tossed around and used interchangeably assuming that the actual definitions can be drawn from the content of the conversation.
In fact, even when someone understands the difference in terms, they may not understand the difference in the meaning. In a blog written by Rupert Morrison of OrgVue, Morrison discusses the difference in understanding between two practices that are commonly referred to as OD. In the world of Organisation Design, we often hear the acronym of OD and in the world of Organisation Development, the term OD is also used. Organization Development [OD] is not the same as Organization Design [OrgDesign] yet conversationally; both are often referred to as OD.
Difference Between Organization Development and Organization Design
In Morrison’s article, he also cites that in the Business Transformation industry there is often much debate on which comes first in the transformation process, Organization Design or OD (Organization Development). Naomi Stanford’s analogy, which is stated in Morrison’s article, paints a very clear picture of the difference between Design and Development.
“Organizational design consulting is deciding first what is the purpose of the car that you are about to design e.g. is it to cross the desert? Is it to win a Formula 1 race? Is it to transport two adults and three children to a party? Then designing and delivering a car that is fit for that purpose.
Organization development is about keeping that vehicle in the condition necessary to achieve the purpose e.g. using the right fuel, having it serviced regularly, teaching the driver how to drive it to maximize its performance, and so on.’’
To explain organizational design and development in the simplest business terms, the first step is deciding what is the purpose and function of the business: that is the Organization Design part. The next step is deciding how to maintain the purpose and function: that is the OD or Organization Development part.
Now that we know the difference, how do we keep the two straight when making reference to either? The solutions are simple. OD refers to Organization Development and OrgDesign refers to Organization Design, and both are critical components of a holistic approach to business transformation.
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Written by Peter Turgoose and Mark LaScola.
ON THE MARK has been in business since 1987 and is a leading organization design firm. Over our 31 years in business, OTM has completed close to 450 redesigns around the globe across most industries. Our experience and passion for collaborative business transformation are supported by pragmatism, systems thinking, and a belief in people that’s unparalleled.
[1] Burke, W. (1997). The new agenda for organization development. Organization Dynamics, 25(1), 7-21
[2] Cummings, T., & Worley, C. (2001). Organization development and change (7th ed.). Cincinnati, OH: Southwestern College.
[3] French, W., & Bell, C. (1999). Organization development (6th ed.). Upper Saddle River, NJ: Prentice Hall
[4] Beckhard, R. (1969). Organization development: Strategies and models. Reading, MA: Addison-Wesley
[5] Beer, M. (1980). Organization change and development. Santa Monica, CA: Goodyear.
[6] Burke, W. (1982). Organization development: Principles and practices. Boston: Little, Brown.
[7] French, W. (1969). Organization development: Objectives, assumptions, and strategies. California Management Review, 12(2), 23-34.
