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WiUiam Halal

Organizational Developmentin the Future with which orgartizational de-

program s have usually n ot been econom ically

Although most prganizations

loy a mo re objective, quan titative focus.

organizations in a dynam ic Environment?

describing th e future of OD : Th e socio-

SPRING / 1974 / VOL. XVI / N O . 3

trends that should determine the future direc-tion of OD; the character of the OD projr^amsthat are likely to evolve will be elaborated; andsome of the implications these developr ipntsmay have on organizational life in the fiiturewill be explored.A Scenario for Organizations in the FuturePredictions of the future are insightful,taining, and often hopelessly wrong. HOIAsome extensions of present trends can bedently made, especially if we restrict our:to the fairly near future prior to the

nter-ever,onfi-:elvesyear2000.2 Yhe following trends, which havei beenclearly visible for some time, strongly inciCatethat organizations will be urgently involvedbehavioral concerns and that increasingljimalized approaches will be employed fopurpose.Larger organizations.Increase? in the si:organizations since World War II havedramatic. This has been partly the result ofincreases in the population itself b u tmainly due to the increased concentrati '

withfor-this;e ofbeenit ism ofpersons into larger organized units. One conse-quence of this trend toward large organizations isdescribed by wh at Davis has called th em ot h syndrome .3 With increasing si:je, theconcomitant complexity and formality of organi-

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zations seem to exacerbate human and socialproblems. Study findings generally show thatbehavioral factors such as turnover, accidentrates, and employee dissatisfaction are relatedto organizational size. Since such behemothscan be expected to be more common in thefuture, it seems reasonable to expect that theseproblems will also become increasingly urgent.We have also witnessed the increased dispersionof organizations over wide r geographic areasand this trend is expected to continue. Eorinstance, universities are establishing extensionsin other countries, govemment agencies arecreating netw orks of local offices to reach clients,and corporations are becoming multinationalin their operations.With this growth in size of membership and ofgeographic area, it becomes harder for executivesto obtain information within the organizationusing informal means. The old notion of en-couraging the company president to take anoccasional stroll through the shop fioor inorder to keep in to uc h with the operatinglevel seems rather quaint now in an economydominated by conglomerates and multinationalfirms. As a result, formalized information sys-tems are becoming essential for all aspects oforganizational operations. *Increased affluence.During the past, nationalattention has focused on the economic andtechnological spheres of society since solving m ateria l problems was most urgent. I t seemsclear, however, that these are not the mostcritical areas in our post-industrial society. Atthis advanced point of industr ial development,the frontier of progress shifts to social issuesthat now pose the major challenge to humanwelfare.This emph asis on social proble ms can be exp ectedto do min ate ou r atte ntio n in a similar fashionto the manner in which economic factors suchas GNP growth rates, unemployment levels, andinfiation rates did in the past. Social problemstha t perm eate all aspects of life, such as con-

William E Halalis an ssociate Professorof Managementand Director of the Management Program at AmericanUniversity in Washington D.C. He also has worked forvarious public and priva te organizations is active as aconsultant and is an author.

flict, mental health and education, are increingly likely to receive major attention.Within organizations, comparable interest cbe expected to focus on social problems suas jo b dissatisfaction, in equities in pa y aprivileges, and demands for participation. Thconcems are likely to seriously affect organitional performance, thereby creating strong mands for corrective action.More complex technology.-One of the mstriking trends in modem organizations is rapid development of complex problem-solvtechnologies. Many new scientific and analytifields such as computer science, operatioresearch, and behavioral science are rapidpervading management thought and practiOne of the effects of this trend-and the geneincrease in all forms of technologywill be create a greater diversity of highly specializwork groups because of widely differing exptise in these numerous new fields. With tdissimilarity of functional groups in organiztions, we can also expect concomitant barr ieto communication, intergroup rivalry, confiiand other such problems.An additional result of this more complex maagement technology will be its widespread appcation to new problems because the availabiliof these techniquesin terms of knowledgeabstaff mem bers, com pute r facili ties, and b ud ge tshould facilitate their use. Problems which wetoo complex and un stm ctu red for solution usiolder tec hniq ues, such as mo st proble ms organizational behavior, will increasingly yieto these more sophisticated methods. The upshof this sophisticated management technolowill beas others have arguedS-to raise tproblem-solving capabilities of management tolevel of complexity which would have staggerthe imagina tion of pre-World War II manag ers.This more complex technology, therefore, walso add to the social trauma organizations wface, but it will simultaneously provide the capbility for solving these problems using quantittive analytical techniques.The Nature of Future OD ProgramsBecause of these various infiuences, it seems likly that OD programs will be urgently needed an

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will become increasingly formalized in the fu-ture. The following three main features are ex-pected to characterize these formal OD pro-grams: they will em ploy a com prehensive systemsapproach, they will utilize an OD m,anagementinformation system (MIS), and they will bescience based.Comprehensive OD systems M thow^ OD ef-forts of the past have employ ed a variety ofappro aches to improving organizationail effective-ness, most OD programs seem to have stressed proc ess approa ches such as the use of sensiti-vity training or T-gro ups, team developm ent,and conflict resolution, in an attempt to focuson changing the interpersonal behavior pattemsand culture of the organization. We seem now tobe realizing th at this former emphasis was lim itedin its effectiveness because other factors, such asorganizational technology and stmcture, are alsostrong determ inants of organizational behavior .As a result of this broader perspective, OD mayincreasingjy encompass a much wider range ofoperations including the many behavioral activi-ties which have traditionally concemed manage-me nt such: as stmc turing reporting relationships,changing job incumbents, developing communi-cation sy stems, forming policies and th e like, inaddition to the use of process techniques. Thatis , OD programs will include any method formodifying the behavior of organizations, th erebyencompassing the entire spectrum of appliedbehavioral science.No t only w ill OD encom pass a brpad er scope ofactivities, it will do so in a more systematicfashion. In an ideal OD system, all causal rela-tionship s am ong various aspects of orga nizationaloperations should be taken into account in orderto determine the ultimate effects on organiza-tional effectiveness. However, this integration oforganizational relationships is usually not achiev-ed. M ost organizations emp loy a collection ofassorted organizational techniques such as per-sonnel selection tests and training programswhich have evolved in a pieceme al fashion overthe years. As a result, they usually comprise afragmented patchwork of tools that are intendedfor specifii;, unrelated purposes, thereby causingserious problems of suboptimization. A typicalexample is the tenden cy in man y o rganizations

to advocate popular leadership styles siich asparticipative ma nage me nt as goals for super-visory training programs. It is very possible,however, that such styles of leadershifl maycause a decline in organizational perfortnancebecause they are inappropriate for paricularorganizations (a military fighting unit, for ex-ample) where the goals and technology domandmore directive leadership.Because of disadvantages such as these,is a strong need for integration of eorganizational activities into a comprehsystem. As the increased importance of

theredsting;nsivebeha-vioral problem s results in a greater num oer offonnal technique s, these interactions betweenrelated part s of the o rganizational system ul^ouldbecome more evident. The advantages df har-nessing such synergisms of the system ars thenlikely to force comprehensive planning of allrelevant organizational activities.The evolution of this trend may culminate inanalytical models simulating entire orjjaniza-tions that are now being developed to the pointof feasibility. Behavioral models of coiripleteorganizations have been constmcted and testedby Stanley Seasho re, Charles Rice, and TtiomasMahoney^ attempting to establish relationshipsbetween such behavioral factors as leacershipstyle, and the ultimate effectiveness (if theorganization. Generally, these initial attemptsat simulating organizations appear to be fairlysuccessful since they are able to account forabout half of the variance in organizationalper formance.With continued development, i t is l ikely thatorganizational models will approach sibstan-tially higher levels of accuracy, perhaps accoun-ting for as mu ch as 90 percen t of the tota lvariance. As this occurs, their use should bsComewidespread because of the advantages they willoffer in evaluating and controlling beh.iyioralproblems within organizations. After all sinceeconomists have been quite successful in de-veloping macroeconomic models of entire na-tional ec ono mies , it should no t be mucl: pi oredifficult to deve lop b ehav ioral mod els of oi gani-zations.The OD M/S . -Al th oug h some OD programshave employ ed m od em comp uterized data-

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handling techniques, especially for attitude sur-veys'^ and the like, mo st OD appro aches arerather primitive in this regard since they mainlyrely on shuffling pap erwo rk to hand le infor-mation . As com plex, formal O D systems areintroduced, the need for util izing computer-ized data-handling techniques should becomeunavoidable and thus result in a managementinforma tion system (MIS) fot behavioral as-pects of the organization.This OD MIS will probably come about fromthe extension of existing software systems whichhandle ha rd personnel data such as employeebackground and salary information. These sys-tems will probably be extended to include the softer data of organization measures. Thus,the OD system of the future will probablyutilize its own information system in a similarmann er to the n um ber of other MISs tha t nowexist for financial acco unting , distrib utio n, andma rketin g. All of these MISs will con cem dif-ferent aspects of the organization's operationsthat will be integrated where they all ultimatelymerge on comm on broadly defined organizationalgoals.The OD MIS will probably evolve into a rathercomplex system since comprehensive OD pro-grams will involve handling much complicateddata. A variety of measurements must be col-lected from throughout the organization, trans-mitted to some central location, processed intomachine form, tabulated and analyzed, andreports disseminated to users throughout theorganization. The system will probably aggre-gate data and report results on several bases:by level of hierarchy in the organization, bygeographical location, by functional areas, andso forth. Users, such as managers and ODspecialists, would then receive results that cor-respond to their scope of responsibility.Organizational science M ost OD decisions pre-sently emp loy a very limited base of co nfirmedtheory and techniques to guide the diagnosisor organizational problems and the prescriptionof appropriate forms of remedial intervention.This isma inly a refiection of the poorly developedstate of the behavioral sciences. Trends seem tobe moving in the direction of greater sophisti-cation, as evidenced by the increase in organiza-tional research, systematic use of attitude sur-

veys, and some newer revolutionary concepsuch as hu ma n asset accou nting. ^ Unfotunately, most of the more important aspectof organizational behavior (leadership, trainingperformance evaluation, and so on) are stiin cmde states of development.However, the installation of comprehensive ODsystems using EDP infonnation may drasticallchange this state of affairs. With the continueaccumulation of data from these formalizesystems, organizational science should movforward rapidly. The simplest benefits woulresult from the capability to make normativcomparisons. That is, norms may be establishefor various m easures t o serve as stan dard s focomparison with specific organizational unitsDeviations from these standards may then be useto signal the attention of responsible managerand OD specialists.More thorough and effective use of the datcould result from statistical analysis of organizational relationships to establish scientific causeeffect relationships between organizational variables. This knowledge would be valuable foobtaining a better understanding of the factorgenerally leading to organizational performancethus allowing more effective direction of ODefforts.The development of comprehensive OD systemwith MIS capabilities, therefore, will provide thdata base required to allow the science oorganizational behav ior to develop t o a po int osufficient m atu rity so that it will be of greatebenefit in guiding the practice of OD. Thesbenefits sho uld accm e especially rapidly as ODsystems of this type become more widespreadand if they are able to effectively pool theidata for common analysis by organizationascientists and analysts.The three characteristics of fonnal OD programdescribed above, therefore, should constitute scienfific basis for OD that will provide managemen t with the organizational techn olog y required to accommodate the behavioral problems that are expected to become increasinglyurgent.Implications for Future OrganizationsThis forecast of the nature of future ODprograms raises urgent questions concemin

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the effects such programs will have on organiza-tional life. How will OD programs of this mag-nitude be managed? Will they result in a centrali-zation of power at the top of the organization?Most importantly, will they foster an inhumancontrol and manipulation of people?Management ofOD programsAlthough past ODprograms were intended to improve organiza-tional performance ultimately, they often werepreoccupied with social aspects of the organiza-tion and with hum ane values such as creatinga more benign working environment. Conse-que ntly, most OD programs were rarely justif ied,or even evaluated, on an economic basis.However, future OD programs will probablyfocus on economic goals because of the severefinancial im pac t th at is likely to resul t frombehavioral problems within organizations, andbecause the development of more sophisticatedOD systems will provide the capability toevaluate this impact economically. Correctingthese problems will probably result in increas-ingly important financial benefits through re-duced costs of manpower, turnover, absentee-ism, and so on and through gains in perfor-mance. These advantages of alleviating the be-havioral problems of organizations are likely tobecome so beneficial that the OrganizationalDevelopment function may equal or exceed theimportance of traditional line operations such asfinance and manufacturing.In order to realize these benefits, OD programsare also lihely to ado pt a mo re innovative orien-tatio n tha t will improve organizational effective-ness. Research findings may be used to suggestnew pay systems, organizational stmctures, andso forth that will be experimented with to pro-duce more satisfactory organizational fomis.Since the cost, difficulty, and risk associatedwith the implementation of such changes wouldbe great, it is likely that organizations willgradually imple me nt th em over a period ofyears with constant revisions of tentative plans.For the same reason, changes may be restrictedto Hmited parts of the organization, fewer ODvariables, and so on until they have been ade-quately developed. As a result, we may leam totest prototype forms of organization on alimited scale before implementation, in a similarmanner to the way new mechanical devices areSPRIN G / 1974 / VO L. XV I / N O . 3

laboratory tested or new products are niarkettested. IThe planning, design, development, and imple-mentation of these OD programs will reqjiire avariety of specialists working in a number of sub-programs. Persons sophisticated in measurt mentmethodology will be required to translate con-ceptual variables into operational measures, con-duct validation studies, and establish meisure-ment parameters such as sampling rates. EDPsystems and so ftware specialists will be r spon-sible for designing and m ainta inin g th e Mil;in the OD program. Behavioral scientist usedandsystems analysts are likely to be required foranalysis of data to guide corrective action. ODspecialists will interpret these analyseswith managers and will conduct programs tomodify the existing organization. Managing thiscomplex collection of activities and people willbe a formidable challenge that will prcbablyrequire an executive w ith training in th e beh avior-al sciences and with Vice President status.organizations now include such an execut ve ontheir management team.Centralization or decentralization What effectwill these OD systems of the future have on thelocus of power within an organization? Tiat is ,will providing such complete informatio]i andinfiuence to top executives result in a continua-tion of present trends toward decentralization,or will it permit a recentralization of pDwer?One could offer convincing arguments for bothpossibilities. The sheer availability of infom iationprovides the means by which greater control ispossible, thereby facilitating centralization. Onthe other hand, if the information v/hich isavailable includes adeq uate measures of perfor-mance, there is no need to exert control ss longas performance is acceptable; management byexception is then advantageous, encouragingdecentralization.This question reflects the more general issue ofthe effects of all forms of management EDPsystems on centralizatio n or decentrali: ktionof power. The many studies that have beencond ucted to establish these effects of the com -puter seem to produce ambiguous f indingsThere are instances in which the installat on ofEDP systems has moved the locus of powei up inthe organization, and other instances in wl[iich it

along

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has moved it down. These findings are inter-preted by some as indicating tha t the c om puteris neutral in its effects on the power stmcture.Th at is, the inform ation provided by EDP sys-tems may be used either to centralize or decen-tralize power; other factors such as the natureof the organization's technology or the personal-ities of executives detennine in which directionpower will move.If this argument is valid, future OD systems willresultin either centralization or decentralization,depending upon other factors. In some cases,such as a far-fiung multinational firm composedof autonomous profit centers, an OD system willpermit further decentralized control, while inoth er cases, such as a govem me nt agency engagedin a routine mission, it may allow for moreeffective recentralization. Inbrief these systemswill be management tools, modifying organiza-tions in the fashion they are used.The balance between science and ar/^.Duringthe early stages of the OD movement, numerousexecutives involved in OD programs shunned thequantitative and r igorous approaches to under-standing organizational Jbehavior because theyhad discovered the rich meaningfulness of sub-jective, intuitive ways of viewing the world. Itwas not unusual to f ind managers who un-abashedly admitted that they made li t t le attemptto evaluate the effects of OD programs using ha rd measures and were con tent with softglobal judgm ents of the benefits obtained. Late-ly, however, most organizafions are becomingkeenly aware of the need to more rigorouslyevaluate organizational effectiveness, for thereasons already indicated. As a result, there ap-pears to be developing a de-emphasis of theearlier intuitive philosophy in favor of the moreformalized approach described in this article.This swing toward formal OD programs raisesthe cmcial issue of their impact on the freedom,dignity, and privacy of the individual. The nofionof elaborate behavioral control systems ajndmo del simulation s evokes t he spectre of anOrwellian 1984 , Hu xley 's Brave New World, andSkinner 's Operant Conditioning.9 Are thesetechniques and systems likely to fosterperhapsin highly subtle waysregimented control ofemployee behavior and atti tudes?

It would be extremely unlikely for organizationto rely exclusively, or even primarily, upon thesformalized OD systems. For many reasons, ainordinate reliance on quantitatively measureobjectives of performance has been clearly recognized as ineffective: it provides too limited perspective of performance, allows for misintepretation, and encourages suboptimization. Instead, formal OD systems are best used taugment qualitative judgm ents. Both app roachhave differing strengths which complement eacother. Formalized systems are strong on precsion and objectivity but limited in scope anflexibility. Intuitive approaches provide widbrea dth and fiexibility of jud gm ent s, bu t allowfor serious inaccuracies and subjective biaThus, either approach alone has serious limitations, but these are compensated for when botapproaches are used jointly to provide a moruseful combination.The joint use of formal and informal approacheto OD should avoid the dangers of regimentation which would result if quantifiable measurealone were employed in an absolute manneInstead, data from the fonnal system should bprimarily used to reality te st subjectively derived hypotheses about the organization in ordeto c on ect personal biases by confrontation wit ha rd data . This usage is similar to the mann ein which a physician would confirm or rejeca diagnosis using data from laboratory tests.OD, therefore, should be recognized as employboth Science and Art. The scientific aspects arrepresented by the formal, rational, objectiveand quantitative nature of the science of organizational behavior; the artistic aspects being thinformal, intuitive, subjective, qualitative naturof the activities of the OD practitioner. Togreat a focus on either aspect results in an imbalance which is likely to curtail personal rightsEmphasis on the scientific facets results in sterile, rigid dictatorship of facts which blindlignores the complexity of human emotions anthoug hts. Too artistic an approach to OD iequally likely to result in oppressive domination by arrogantly ignoring the facts of realitwhile zealously pursuing highly personal values.This tension between Science and Art representa fundamental conflict in human nature whichas been refiected in the brief history of the OD

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movement. In the past, we have allowed infor-mahty, intuition, and subjectivity to dominate,thus allowing the disillusionment with OD thathas been recently experienced. If OD is to over-come this setbackand I believe it willit willhave to restore an equilibrium by developing theformalized OD programs which have been des-cribed. Both approaches will be required forOD in the future.

REFERENCES1. A review of results of the major OD technique,laboratory training,iscontained in Marvin D.Dunnetteand John P.Campbell, Laboratory Education: Impacton People and Organizations, Industrial RelationsVol. 8 (October, 1968) pp. 1-45.2 . This information concerning future trendsisadaptedfrom Daniel Bell, Toward the Year 2000: Work inProgress (Boston: Houghton Mifflin, 1968)andHermanKahnandAnthony J.Wiener,The Year 2000:AFrame-workforSpeculation (New York: MacMillan, 1967).3 . Keith Davis,Human Behaviorat Work (New York:McGraw-Hill, 1972), pp. 228-230.4 . D. Ronald Daniel, Management Information Crisis,

Harvard Business Review Vol. 39, No. 5 (September-October, 1961),pp. 111-121.

5. Forinstance,seeHerbert A.Simon, TheAutoma-tion of Management in Melvin AnshenandGeorgeL.Bach (eds.)M anagementandCorporations1985 (NewYork: McGraw-Hill, 1960).6. Stanley Seashore, Criteria of Organizations Effec-tiveness, Michigan usinessReview(July, 1965); Charles

E. Rice, A Model for the Empirical Study of aLargeScale Organization, General Systems YearbooJ: Year-book of the Society for General Systems Rjgearch,Vol.6, pp.101-106; ThomasA.Mahoney, ManagerialPerceptions of Organizational Effectiveness,ment Science Vol. 14,No.2 (October,1967)B91.7. Floyd C. Marm, Studyin g and Creating (Changein W. G. Bennis, K. D. Benne, and R. Chn,ThePlanningof Change(NewYork: Holt, Rinehart, andWinston, 1961) pp. 605- 13 .8. Rensis LikertandDavid G. Bowers, Organizational

Theory and Human Resources Accounting, ApiericanPsychologist 1969.9. See George Orwell, Nineteen Eighty-Fotr (NewYork: Harcourt, Brace, 1949); Aldous L. fluxley.BraveNew World(NewYork: Harper & Row. 1946);and B. F. Skinner, Beyond Freedom and Dignity(New York: Knopf, 1971).

. B76-

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