Organisational Development

This report focuses on an organisation called Tulip House1 (TH). It evaluates why this organisation is deemed a success and a process it failed at. The examples are located in Organisational Development (OD) theory. It concludes that TH’s development is closely correlated to structural factors particular to voluntary sector organisations (VSO’s). Key characteristics TH is currently the leading provider of voluntary sector mental health services – within its constitutional boundaries of a London Borough. Affiliated to a national organisation it abides by their standards and guidelines but is itself an independently managed organisation.

Being neither public nor private TH is a ‘third sector’ organisation. Other related terms include: not-for-profits, nonprofits or, more typically in the UK, the voluntary sector. Definitions are problematic as organisations within this sector vary considerably2 (Anheier, 2000; Cunningham, 1999; Febbraro et al, 1999; and Parry et al. 2005). Managerial practice and human resource management (HRM) in VSO’s have special characteristics, too, according to Parry at al. (2005). Four are of interest here. Firstly, the work is “strongly value-led” and “these values may influence the way in which people are managed”.

Secondly, staff may be committed to the cause and have formed a “moral attachment” may have an impact on organisational culture – “it may mean that employees are more concerned with how the organisation goes about its work”. Thirdly, professional managers may be accountable to a number of interest groups (trustees, providers of funds, voluntary workers and users of the service), and this may make it difficult to develop a coherent strategy. Fourthly, VSO’s may be subject to complex decision-making processes and are often run by groups or committees, making decision-making a long and complex process (Parry et al.2005: n. p. 3).

However this model has been criticised not least for positing a linear process controlled by management. This positivist view is now complemented by a more constructionist, post-modern understanding of change. Newer OD models are now concerned with, “appreciative enquiry, large group interventions to seek common ground, changing mindsets and consciousness to achieve transformational change, addressing diversity and multicultural realities, and models of change such as complex adaptive systems theory”. (Marshak and Grant, 2008: S9)

In VSO’s change is a “more dynamic and complex process” (Hay et al. , 2001: n. p. ) and newer OD models address this. According to Chapman there are three core requirements of OD practice: firstly, understanding the nature and scope of organisations and what constitutes an improvement to them; secondly, using appropriate strategies for levering change; and thirdly having a change agent (Chapman, 2002: n. p. ). These three points will be significant when evaluating TH’s development. This report also focuses on TH’s “culture” from an OD standpoint.

It,”refers to the deep structure of organisations, which is rooted in values, beliefs, and assumptions held by organizational members” (Denison, 1996: 624). It considers the mutable nature of TH’s “success”. Examples are contextualised, gleaned by qualitative field observations. Example of a success and aids to development A Service Manager proudly noted that at national Local Associations (LA’s) gatherings she always receives appreciative remarks about her organisation. TH is one of the largest LA’s in the network. However in VSO’s, especially in an organisation comprised of two thirds volunteers, success cannot simply be defined by size.

Anheier states that VSO’s have “multiple bottom lines” through which success may be adjudged: the dual management structure, motivational structure of staff, organisational environment, interest and needs of clients and the importance of values (Anheier, 2000: 6-7). Success must include all these groups for, as with other VSO’s, TH is, “characterised by participatory and autonomous organizational structures and methods of working, driven by a desire to generate consensus and take account of the diversity of stakeholders.

” (Cunningham, 1999: 21) Creating a participatory culture is a function of senior management. Rowald and Rohmann (2008) argue that transformational leadership is a critical factor in VSO’s success. Although it may be found in other arenas people come to VSO’s for positive emotion and motivation, not just financial remuneration. They contend that, “… leaders inspire followers by communicating a strong sense of purpose… leaders satisfy followers by inspiring them in their respective field of expertise…

inspirational leaders emphasize ideological values and engage in morally responsible action… To sum up, the present study characterizes voluntary leadership as people-oriented, emotional, and inspirational. ” (Rowold and Rohmann, 2008: 13) Organisations in the LA network are independent. Growth and development is CEO driven; some LA’s are only single-person operations. TH’s CEO’s transformational leadership style maintains a positive, strong culture that not only contributes to effective performance and productivity but also creates staff who feel valued.

The author argues that staff participation is the key to this VSO’s development and its CEO makes it an organisation to be proud of4. Example of a failure and hindrance to development The main office became a multi-site operation to expand services and gain greater accessibility5. The CEO expressed concern that the counselling staff would feel “abandoned” by the move as the senior management team (SMT) and all the other staff moved away. Relocation impacts the quality of work life, services, inter-group relationships and managerial practice.

It required careful planning to minimise resistance, resentment and ensure a smooth transition. The CEO recognised the need for planned change but a professional “change agent” was not appointed. That the CEO had sole responsibility for building selection is consistent with the practices found in the private sector. Cunningham argues that private sector HRM evidences “top-down management-led initiative where employee involvement is limited to day-to-day working practices, through such techniques as empowerment, quality circles and team-working”6.

Staff are not involved with strategic planning unlike VSO’s where “participatory culture predominates” (Cunningham, 1999: 21). The CEO’s perceived lack of consultation generated disquiet. The Relocation Committee was ineffective and uncommunicative to other members of staff. Resistance grew and was made manifest on the day. Staff felt they ought to have more of a say in the characteristics of the building and be kept informed about the process. The process was hindered by improper consultation, planning and communication.

The problem was partly the CEO and partly structural issues affecting VSO’s; this will be discussed next. To what extent is the organisation developing? Despite the difficulties experienced during the relocation TH is developing well and continues to expand its services. This section will argue that some of the issues restraining TH’s development are structural and peculiar to VSO’s. Aneier’s “law of non-profit complexity” TH’s relocation process was first order change7. TH was not, as Anheier predicted, able to simply replicate organisational development (OD) practices from the public or private sector.

Anheier’s “law” posits that managing VSO’s is very “complex” as there are so many variables, more so than the equivalent private sector organisation. Accountability is dispersed over many arenas, “In terms of its environment (managing diverse constituencies, stakeholders and multiple revenue sources including donations, fees and charges, and public sector payments like subsidies, grants and contracts), and its internal components (board, staff, volunteers, clients and users). “