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Importance of Organizational Development

Importance of organizational development

Have you loved every one of your jobs and thought the organizations functioned to their fullest potential? Most likely, your answer would be no. Every organization has room for improvement. And at times organizations must quickly react to environmental challenges, whether from competing companies or economic disruptions. The business world changes constantly. Successful businesses have long used a process called organizational development (OD) to adapt to these changes, increasing their effectiveness and making the most of their resources.

OD is not simply what businesses do to change and grow or to react to external factors. OD is a strategic process of organizational improvement, addressing an organization’s changing needs through careful assessment and planned intervention. Once generally considered its own field or department in an organization, OD is now often paired or combined with strategic human resources (HR) management.

Northwest Missouri State University’s online MBA in HR management program offers courses in organizational development and behavior to help HR professionals fully grasp the intersection and application of these aligned fields.

What Is Organizational Development?

Although many have defined it differently over the last six decades, its original definition by Richard Beckhard, as a developer of OD in the 1950s, still remains fairly appropriate. He defined organizational development as:

“an effort (1) planned, (2) organization-wide, and (3) managed from the top, to (4) increase organization effectiveness and health through (5) planned interventions in the organization’s ‘processes,’ using behavioral-science knowledge.”

The business world moves at a much faster pace than when OD was first conceptualized. So current OD theory and practice has adjusted according to modern company organizational structures and business models, as well as the rapidity of change and globalization of the economy. But the basis of it remains the same: using interventions based in behavioral science concepts to facilitate positive change in and increase the effectiveness of an organization and its employees.

Why Is Organizational Development Important to Businesses?

The answer to this question may seem obvious: because it addresses and fixes a problem, thereby increasing a business’s effectiveness. While this can be true, OD works to improve organizations in a more systematic way, organization-wide, as Beckhard put it. The purpose of OD is to balance the strengths and weaknesses of a business, restructuring the employment of that business’s resources (i.e. human capital) accordingly to use them most efficiently and productively. This means thorough assessment, planning, employee engagement and training where necessary, and incremental measures to maintain employee performance.

What Does Organizational Development Mean for HR Managers?

HR management used to deal primarily with issues of employment and employment law. Previously, the duties of HR staff included recruiting, organizing training, filling vacancies, and advising department heads on hiring and firing. But these days, HR management has begun to play a more substantial role in the strategic development of organizations. This partly involves integrating OD into more traditional HR activities. And, when thought through, it is a natural combination.

Beyond the bottom line of an organization’s efficiency and productivity, OD can help create an environment of engaged employees living up to their potential. HR managers use OD principles to design jobs which best suit the company’s needs, recruit employees who best fit those jobs, and give them all the tools they need to perform at high levels. HR managers may find a more fitting role for an employee who is performing poorly — one that better suits that employee’s skill set. In turn, the employee is motivated, engaged, and works harder toward the company’s vision.

The fact that OD focuses on the health of both the individual and the entire organization is important for HR managers. One cannot exist without the other. Effective OD works to ensure every individual’s goals and vision are aligned with that of the organization.

Clearly, there is a great deal of overlap between HR management and OD. And, more and more, strategic HR management is involved with or responsible for implementing OD. An in-depth understanding of OD and its underlying behavioral science can be very useful for those looking to enter HR at the managerial level.

Learn more about Northwest’s online MBA in HR Management.


Sage Publishing: What Is Organization Development?

Organisation Development: The Theorists – Richard Beckhard

Houston Chronicle: 10 Reasons HR Is Important to an Organization

Houston Chronicle: The Importance of Organizational Development

Career Trend: Roles of HR in Organizational Development

Keka: How to Fit Organizational Development in HR Roles

Forbes: HR Should Own Organizational Effectiveness

DecisionWise: What’s the Difference Between Human Resources and Organization Development?

Beckhard, R. (1969). Organization development: Strategies and Models. Reading, MA: Addison-Wesley

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