Organizational development theory and managerial effectiveness 3d model

Suggestions from the theory of organizational development for the company to grow in a sustainable way.

A.) The problem to be solved

Engeconsult is a successful firm in the field of engineering consulting services (civil and industrial), both locally and internationally. It specializes in complex projects and has around 3,000 employees, the vast majority qualified. It is a young company (15 years of life), but with a large and very fast growth. But thanks to this rapid growth, business management problems began to be notorious in recent years. There is very little connection between functional areas (most of them technical). Each one of them grows and develops in an isolated way. The company's executive management's strategy is to solve problems by making agreements with small sectors, without trying to involve the entire organization in an integrated and cohesive way.There is a notorious and excessive centralization of the decision-making process in the hands of the presiding director; technical directors and managing director are highly dependent on it. Project departmentalization hardly works at the operational level. Many executives (several of them highly qualified) tire of this lack of director-president delegation and leave, which implies high managerial turnover, so few executives actually commit to the company and avoid assuming responsibilities, as they have very little delegated authority.Many executives (several of them highly qualified) tire of this lack of delegation from the CEO and leave, which implies high management turnover, so few executives actually commit to the company and avoid taking responsibility, since they have very little delegated authority.Many executives (several of them highly qualified) tire of this lack of delegation from the CEO and leave, which implies high management turnover, so few executives actually commit to the company and avoid taking responsibility, since they have very little delegated authority.

This diagnosis deserves a look at the Organizational Development Theory (OD), in order to find tools to improve the situation, before it begins to affect the success of the company, which seems to have not yet begun to decline. But this success, we believe, is the main barrier to change… what incentives does the president of the company have to change if it grows and grows, in employees, in turnover and in profits, among other indicators. Undoubtedly, to decide to change when you are successful you have to be a visionary, and we do not know if the director-president of Engeconsult is.

B.) The theory of Organizational Development (OD)

OD theory refers mainly to planned development in organizations, or also to planned change, just what Engeconsult urgently needs, a gradual change (that is, planned) that prevents its growth dynamics as a company from diminishing due to a little effective management. OD theory, with roots in the old theory of human relations (Mayo, Lewin, etc.), is a practical and operational unfolding of behavior theory towards the systemic approach. OD, for example, criticizes to traditional structures, with great emphasis on changes in organizational culture and climate, on the concept of adapting to change permanently, among other aspects, for example, with regard to traditional and centralized structures, such as Engeconsult,The DO maintains that they do not present conditions to stimulate innovative activity, nor to adapt to change. And as regards the issue of sole authority or unity of command, one of the great problems of Engeconsult, the DO maintains that it restricts communication and negatively affects the employee's commitment to the organization Linear authority, the DO maintains, limits the organization to a simple structure and establishes only a top-down communication channel. Each employee has only one supervisor, who is the terminal of their communication. If this channel does not work, the employee encounters a barrier and loses his only contact with the organization. From that moment on, you cannot speak of personal commitment.DO's main goal is to change people and the nature and quality of their working relationships, perhaps the main deficit of the hitherto successful Engeconsult. The OD's emphasis is on changing organizational culture. The OD emphasizes participatory management and team empowerment, both major deficits of the current Engeconsult director-president management style. One of the basic assumptions of the OD is that the Intuitive personal leadership (spontaneous and improvised, such as that of Engeconsult's top executive) should be replaced by organizational leadership, based on diagnosis and decision planning, in which the authority of knowledge prevails over hierarchical authority of the position.In DO there is a clear effort to develop teams and open communication channels, quite the opposite of what is seen in Engeconsult, where the different project areas function as watertight compartments, with teamwork rather at an operational level, not at the level of directors of technical areas (that is, second lines of the company).

C.) An approach to the DO process recommended for Engeconsult

DO is a complex process that can take one or several years to change the company, and that can continue indefinitely. The DO technique is highly recommended for the Engeconsult case, but undoubtedly there must be strong support from senior management so that be productive, an issue that will be difficult to achieve, given the highly centralized management style of its director-president, added to the company's current situation of success, which makes it more difficult to become aware of the need for change; Generally, most companies change when they face crisis situations, not success. A recommendable DO process for Engeconsult, in generic form, would consist of the following eight stages:

Company decision to use OD, selection of consultant: Engeconsult CEO should show interest in the process and also select the external consultant who would lead the process Diagnosis of needs by management and consultant: Director meets -president of Engeconsult and the external consultant to determine the specific DO program to apply. The consultant already begins at this stage with the collection of data (for example, interviews with personnel) Obtaining the appropriate data: the consultant carries out an investigation to know the internal environment and the organizational climate, among other diagnostic variables. and confrontation: the consultant and his work group evaluate and review the data obtained and begin to establish priorities for change.Action planning and problem solution: plans to overcome specific problems detected begin to be formulated. Development of teams: from the beginning of the process, the consultant encourages the formation of groups and the development of teams as a test on how it is today of intra- and inter-group work within Engeconsult Intergroup development: groups are subjected to confrontational meetings to achieve a better relationship between the various teams Evaluation and follow-up: consultant and senior management evaluate the results of the implemented OD program and develop other programs in areas where additional results are needed.From the beginning of the process, the consultant encourages the formation of groups and the development of teams as a test about the current situation of intra and inter-group work within Engeconsult. Inter-group development: the groups are subjected to confrontational meetings to achieve a better relationship between the various teams. Evaluation and follow-up: consultant and senior management evaluate the results of the implemented OD program and develop other programs in areas where additional results are needed.From the beginning of the process, the consultant encourages the formation of groups and the development of teams as a test about the current situation of intra and inter-group work within Engeconsult. Inter-group development: the groups are subjected to confrontational meetings to achieve a better relationship between the various teams. Evaluation and follow-up: consultant and senior management evaluate the results of the implemented OD program and develop other programs in areas where additional results are needed.Consultant and senior management evaluate the results of the DO program implemented and develop other programs in areas where additional results are needed.Consultant and senior management evaluate the results of the DO program implemented and develop other programs in areas where additional results are needed.

OD can be applied at several levels:

at the individual level; for two or more people; at the team or group level; at the intergroup level; for the organization as a whole.

In the case of Engeconsult, we believe the most advisable thing would be to apply it to the organization as a whole, since the failure comes from the first lines, being transmitted to the entire company. In this way, if the DO is approached only at the group or team level (for example, so that the different technical divisions cease to function as watertight compartments), there is a risk of never changing the substance of the problem (the hyper management style -centralized, which comes from the presidency of the company).

The main DO technique advisable for the organization as a whole is data feedback. It is a behavioral change technique that starts from the principle that the more cognitive data the individual receives, the greater will be their ability to organize and act creatively.

The provision of information (data feedback) provides learning of new data that are not always taken into account; Feedback refers to the activities and processes that reflect the way a person, group or organization is perceived by others.

The provision of information starts from the inventory of data obtained through interviews or questionnaires applied to certain sections of the organization to verify certain aspects of its organizational process, such as work morale, the reward system, administrative style, communications, leadership, the decision-making process, interpersonal relationships, etc. After this selection of data, they are analyzed in depth and corrective measures are planned for each level of the organization, specifically, the main alternative models to implement DO in Engeconsult they would be:

DO of the Grid type

Blake and Mouton pioneered an integrated, pre-programmed DO technology. These authors start from the assumption that organizational change begins with individual change and that process improvements at the interpersonal, group and intergroup levels must occur before changes in the strategy and in the internal environment of the organization.

The DO technology adopted by Blake and Mouton rests on three premises about organizations:

Individuals and organizations reduce the dissonance between their self-image and reality. This process initiates the change in the internal environment of the organization (policies, structures, systems, etc.) Organizations achieve "satisfactions" below their potential: both their operation and their performance need to be improved so that they are more competitive and consistent with today's world, which is characterized by accelerated and incessant transformations. A large amount of energy in organizations is spent on dysfunctional behaviors, which causes what is called “cultural drag”, which implies that the organization is unable to adapt and change in response to internal and external problems.A new form of change is needed - systematic change - that offers new alternatives for learning based on experience.

Lawrence and Lorsch's DO model

Lawrence and Lorsch, evolved into organizational development and systems theory. Within this conception, they propose a diagnosis and action model for OD. The main benchmarks of the model are:

1. Concept of differentiation and integration

A system is any unit that processes certain inputs in order to obtain certain products. The organization is the coordination of different activities of individual taxpayers to carry out planned transactions with the environment. In this way, if several individual contributors are going to work in an organization they will necessarily have to divide the work. The division of labor causes the differentiation of the organs and this leads to the need for integration.

The differentiation depends on the internal characteristics that each group must develop in order to carry out planned transactions with the part of the environment assigned to it. But, differentiation requires integration, for which the various parties work together.

Integration brings two problems: which are the units that need to work together and how pressing is the demand and the need for interdependence between them. There is a strong inverse relationship between differentiation and integration: when the units are highly differentiated, it becomes more difficult to achieve integration between them, due to the different ways of thinking and behaving of the individuals that make them up. Hence, the greater the differentiation, the more necessary the integration. The differentiation and integration model provides a set of concepts that enables training and understanding of the characteristics that an organization must have to be efficient in a particular set of environmental circumstances.

2. Concept of confrontations

Every social system can be approached in terms of groups of people engaged in exchanging their resources based on certain expectations. In this exchange of resources, if the feeling of reciprocity disappears or diminishes, a modification occurs within the system. Confrontation can create problems. When you want to change the organization according to the authors, the main problem areas reside in the following relationships: organization-environment, group-group and individual-organization confrontation.

Reddin's 3D model of managerial effectiveness

Reddin presents a theory of managerial effectiveness called the 3D theory. It is based on the fact that the manager is required to be effective in a variety of situations and such effectiveness can be measured to the extent that he is able to adapt his style, appropriately, to the changing situation. Thus, for Reddin, administrative effectiveness is the degree to which the manager meets the "product" (results) demands of his position in the organization, the manager's only task is to be effective. Its main concepts are:

1. Management effectiveness: it must be evaluated in terms of product (result) and not input; in other words, more for what the administrator achieves in terms of results than for what she actually does. Administrative effectiveness is not an aspect of the manager's personality, but a function of managing the situation. Performance is not what the manager does, but what he gets. There is a big difference between the efficient manager and the effective manager, where the latter is clearly superior to the former.

2. Management styles: the core of 3-D theory is the claim that managerial behavior is made up of two basic elements: tasks to be done and relationships with people.

Managers can emphasize one or another basic element. There is the “task oriented” (OT) manager and the “relationship oriented” (OR) manager. Combining both variables (tasks and relationships), the four basic styles emerge: related, integrated, separate and dedicated.

The four basic styles serve as a point of reference since managerial behavior does not always conform strictly to them. The related style is characterized by the unique relationship orientation, while the dedicated style is characterized by the unique task orientation. The detached style is distinguished by poor relationship and task orientation while the integrated style is characterized by integrated relationship and task orientation. These four basic styles can have a more effective or less effective equivalent, thus giving rise to eight additional managerial styles that constitute a respectively more effective or less effective use of the four basic styles. So:

Hence the three dimensions (3-D) of styles of managerial behavior in the 3-D model:

For Reddin, there is no ideal style. Each situation requires its own strategy. Effectiveness is not an administrative quality but the result of applying the most appropriate strategy or management style to each situation.

3. Basic managerial skills

The 3-D theory aims to develop three basic managerial skills:

Situational sensitivity: it is the ability to diagnose situations. Style flexibility: it is the ability to adapt to the forces at play, once analyzed and diagnosed. Situational management skills: it is the ability to manage situations, that is, the ability to modify a situation that needs to be modified.

4. Basic theoretical concepts

3-D theory is based on five basic theoretical concepts:

Organizational change is a process of bringing together managers to exchange criteria on issues that should be discussed in a climate of trust and interest, visualizing the achievement of effectiveness; the executives are the ones who know or should set the direction for the organization. The 3-D program does not give a direction, it only proposes that efficiency be considered as a central value, just what is missing in the style of the director-president of Engeconsult. An answer is sought to the question: what to do to be effective in this situation? Executives do not apply everything they know. The solution is to give executives the opportunity to effectively apply what they know. The 3-D theory aims to create the conditions to achieve this. Change must involve all social units. An organization is made up of individuals, teams, etc. Everyone must participate in the process. Flexibility is a necessary condition for change, it must be encouraged and conditions must be created to establish it, if change is desired.

D.) The suggested model for the Engeconsult case

Although the three variants of DO are applicable to the Engeconsult case, we lean towards the Reddin 3D model, which emphasizes managerial effectiveness, which at the highest levels of a company can be measured in proportion to the capacity of the highest managers to adapt their style, appropriately, to the changing situation, perhaps the main problem facing Engeconsult. The program to apply DO via the 3D approach would have nine stages:

Management effectiveness seminar: all Engeconsult directors and managers (second and third lines) participate, plus the director-president (first line). Work teams are set up so that administrators who usually do not interact with each other. Objective: improve managerial efficiency. Laboratory on the role of the team: each administrative team participates, both superiors and subordinates of each team. Objective: to strengthen team awareness. Awareness of managerial effectiveness: each superior-subordinate pair participates, alone. Objective: mainly to overcome blockages of the superior-subordinate type. Laboratory on business strategy: only the director-president and the four main directors (the three technicians and the administrative-financial one) participate. Objective: review the business strategy.Team effectiveness committee: the same ones from stage 2 participate. Objective: strengthen interpersonal relationships within teams. Inter-team effectiveness committee: those teams that need to improve their interaction participate. Objective: eliminate unproductive blocks between sectors Divisional effectiveness committee: vertical chains of managers with subordinate relationships participate together with selected collaborators. Objective: improve horizontal and vertical interrelationships. Work unit committee: a low-level superior and his employees participate. Objective: to improve interpersonal relationships at the operational level. Business effectiveness committee: Engeconsult president, managers (from all lines), and a group of selected employees participate.The same participants from stage 2. Objective: to strengthen interpersonal relationships within teams. Inter-team effectiveness committee: those teams that need to improve their interaction participate. Objective: eliminate unproductive blocks between sectors Divisional effectiveness committee: vertical chains of managers with subordinate relationships participate together with selected collaborators. Objective: improve horizontal and vertical interrelationships. Work unit committee: a low-level superior and her employees participate. Objective: to improve interpersonal relationships at the operational level. Business effectiveness committee: Engeconsult president, managers (from all lines), and a group of selected employees participate.The same participants from stage 2. Objective: to strengthen interpersonal relationships within teams. Inter-team effectiveness committee: those teams that need to improve their interaction participate. Objective: eliminate unproductive blocks between sectors Divisional effectiveness committee: vertical chains of managers with subordinate relationships participate together with selected collaborators. Objective: improve horizontal and vertical interrelationships. Work unit committee: a low-level superior and her employees participate. Objective: to improve interpersonal relationships at the operational level. Business effectiveness committee: Engeconsult president, managers (from all lines), and a group of selected employees participate.Inter-team effectiveness committee: those teams that need to improve their interaction participate. Objective: eliminate unproductive blocks between sectors Divisional effectiveness committee: vertical chains of managers with subordinate relationships participate together with selected collaborators. Objective: improve horizontal and vertical interrelationships. Work unit committee: a low-level superior and his employees participate. Objective: to improve interpersonal relationships at the operational level. Business effectiveness committee: Engeconsult president, managers (from all lines), and a group of selected employees participate.Inter-team effectiveness committee: those teams that need to improve their interaction participate. Objective: eliminate unproductive blocks between sectors Divisional effectiveness committee: vertical chains of managers with subordinate relationships participate together with selected collaborators. Objective: improve horizontal and vertical interrelationships. Work unit committee: a low-level superior and his employees participate. Objective: to improve interpersonal relationships at the operational level. Business effectiveness committee: Engeconsult president, managers (from all lines), and a group of selected employees participate.Vertical chains of managers with subordinate relationships participate with selected collaborators. Objective: improve horizontal and vertical interrelationships. Work unit committee: a low-level superior and his employees participate. Objective: to improve interpersonal relationships at the operational level. Business effectiveness committee: Engeconsult president, managers (from all lines), and a group of selected employees participate.Vertical chains of managers with subordinate relationships participate with selected collaborators. Objective: improve horizontal and vertical interrelationships. Work unit committee: a low-level superior and his employees participate. Objective: to improve interpersonal relationships at the operational level. Business effectiveness committee: Engeconsult president, managers (from all lines), and a group of selected employees participate.The president of Engeconsult, the managers (of all lines), and a group of selected employees participate.The president of Engeconsult, the managers (of all lines), and a group of selected employees participate.

Objective: improve organizational effectiveness.

Of the nine stages, 1, 4, 6 and 9 are considered by us as the most important, given the specific problems that Engeconsult entails, and which have been discussed at length in different parts of this work. Finally, and as a synthesis of the 3D model, effectiveness is the result of the product, not the input. An executive who accurately identifies his "areas of effectiveness" can set and achieve clear objectives, can measure and increase effectiveness. Reddin proposes that the executive (in this case the president of Engeconsult) also do the same in relation to his subordinates (three or four levels down, for example), finding out their respective “areas of effectiveness” and concentrating on product control. (the result) of each subordinate position,instead of controlling activities (the case of the president of Engeconsult is even more serious, since he not only controls but also participates himself in the activities of the second and third lines, for example in the recruitment of personnel at medium-low levels company, which slows down this process).

E.) Final aspect to take into account: OD is not a panacea

Finally, it must be clarified that the DO technique is not magic, nor does it have 100% proven results (at least with regard to increasing the company's profits); In other words, it should not be “sold” as the panacea for organizational change, but it must be taken into account as a very interesting alternative to adapt a company to change, both in contexts of current success (to maintain said growth in a sustainable way), and also to escape a situation of business crisis (and manage to survive in the market).What does ensure the DO technique, if it is well implemented, are more authentic relationships between staff, which generally results in greater productivity and therefore higher profits, although it seems not always the latter has been achieved in the implemented cases.