STAKEHOLDERS

23McEwan

Organizational Development: Begin with a Healthy Infrastructure

Bruce McEwan, PhD

Bruce McEwan, PhD is a retired Vice President-Administration & Risk Manager for Young Brothers, Limited, a marine freight transportation company.

Among his duties were responsibility for communications, organizational development, and conflict resolution. He is also the principal of ProManCon and specializes management, risk management, and insurance consulting. For the University of Phoenix, he teaches courses in management, leadership, workplace communication & critical thinking, and small business & entrepreneurial planning.

Contact Information:

Bruce McEwan, PhD

Principal-ProManCon Adjunct Faculty-University of Phoenix P.O. Box 61513 Honolulu, HI 96839-1315

Email: [email protected]

Abstract

Organizations are made of many pieces, sometimes

referred to as departments, divisions, units, etc.;

however, sometimes we forget that they are

all subsystems of the large system called the

organization, company, agency, or other appropriate

label. Whatever the structure or name, they are

subject to change.

Organizational Development projects to bring

about change can be expedited and reach an

optimum degree of success (by the organization’s

standards), if the organization has assessed its

infrastructure and taken steps to make sure it

functions properly. The infrastructure of an

organization, as postulated in this paper, consists

of four interrelated and interdependent systems: (a)

communication system, (b) conflict management

system, (c) education system, and (d) reward

system. These systems are also under the control

of the organization’s leadership, who are charged

with keeping them healthy and intact. This paper

sets out a logical argument for leadership tending

24 Organization Development Journal l Fall 2015

a resource to make change effective. The systems

approach to understanding the infrastructure of

an organization was validated by Constantino and

Merchant (1996) in their research: “A systems

approach to working with organizations encourages

the identification of those subsystems that make up

the whole and the examination of how well they

collectively interact in order to discover how to

improve them” (p. 21).

Organizational Development (OD) has been

a staple in guiding organizational change for many

decades. The success of OD projects will vary for

any number of reasons. The purpose of this paper

is to make a logical argument for the concept that

a healthy organizational infrastructure should be

considered a prerequisite for embarking on such a

project. The infrastructure that this paper supports

consists of four key organizational systems: (a)

communication system, (b) conflict management

system, (c) education system, and (d) reward

system. Each of these systems is interrelated,

interdependent, and critical to the efficient and

effective functioning of an organization in carrying

out its mission, regardless of the organization’s

industry the or the product or service provided.

Figure 1 is a visual depiction of the systems.

If this concept is accepted by organizational

leaders, the extent of the infrastructure could

be broadened to incorporate other systems in a

to their organization’s infrastructure and how a

healthy infrastructure can positively influence

organizational development.

Keywords: communication, conflict

management, education, infrastructure, reward,

system

_______________

We continually read and hear about how

important the U.S. infrastructure is and how

neglected it has been at all levels—federal, state,

local. Of course, this infrastructure refers to the

road and highway systems, water systems, sewer

systems, and other physical resources that make our

lives tolerable. We must not forget about the legal

system, education system, defense system, health

system, and all of the various organizational parts

of the infrastructure. It is the compilation of all of

these systems as part of governmental infrastructure

responsibilities that led the author to think in

terms of infrastructure as it relates to business

organizations—both profit and non-profit. Once the

focus is on organizations, it is inevitable that there is

a link to change that is ever-present in organizations

and the possibility that change can be better managed

if change managers, for example executives, look

to their organizations’ infrastructure elements as

25McEwan

particular organization. In their work, Louisot and

Ketcham (2009) identified infrastructure as part of

the core aspects of an organization’s business model.

Spitzer and Tobia (1994) addressed infrastructure

as important to the people in an organization.

They made the clear statement to build the right

infrastructure: “People-wise organizations know that

people will naturally adapt structure, systems, and

processes to match the needs of their jobs and their

organizations. And because those needs continually

change with business condition, the infrastructure

in a people-wise organization is always evolving”

(p. 47). Spitzer and Tobia also make the connection

between two of the systems identified in this paper

when they discuss the employee focus on “clarity of

pay standards” (reward system) and “training and

feedback” (education system) (p. 45).

Alexander, Weiner, Shortell, Baker, and

Becker (2006) in their research on organizational

infrastructure uncovered several critical findings.

Quality improvement achieves its full potential

based on culture and infrastructure that is required

for sustainable success and infrastructure is

required for sustainable success across conditions,

organizational units, and time. Further, they found

that support systems are also critical:

Our findings generally support the

proposition that appropriate organizational

infrastructure and financial support are

significantly associated with greater scope

Figure 1: Organizational systems

26 Organization Development Journal l Fall 2015

and intensity of…Quality Improvement

[(QI)]. This should send a strong signal that

organizations intent upon developing QI

activities that are appropriately implemented

must attend to the context in which such

efforts are practiced, and that such efforts

are unlikely to be thoroughly taken up

unless support systems (emphasis added)

are in place (p. 17).

The idea of support systems or interdependent

systems within an organization as identified in this

paper as infrastructure elements is found in a variety

of research. Hultman and Hultman (2008) in their

study of teamwork found three key components

that are identified here: communication, conflict

resolution (conflict management), and learning

(education) (p. 15). Research by the Society

for Human Resource Management (“Effective

organizational communication,” 2008) found

that communication as a foundational system is

instrumental for the conflict management, education,

and reward systems. Hartley (2004) found that

organizational development is defined by the needs

of the organization and that those needs fall into

areas that are encompassed by communications,

conflict management, education, and rewards.

For the OD professional called in to help

effect organizational change, knowing the health

of the organization’s infrastructure can help to

understand the organization better and plan for the

most appropriate change method to be used. If the

OD professional can start by gauging the strength

and health of the four infrastructure systems

discussed in this paper, perhaps some insight can

be derived to help with the change process. Also,

finding that the organization’s leaders do not

understand or have a focus on their organization’s

infrastructure will signal to the OD professional that

there are problems ahead in trying to guide change.

All of the infrastructure systems will be utilized

in some manner during an organizational change

process.

Communication System

The communication system should be viewed

as the basis for all of the systems and the basic link

to all organizational systems. As stated very simply

by Wilmot and Hocker (2007), “Communication

is key and essential in any organization” (p. 338).

Nickels, McHugh, and McHugh (2008) posited that

“communication impacts all basic management

functions” (p. 182). This makes it an important

skill to develop among all executives and managers

in an organization, regardless of which areas they

oversee. The importance of communication to an

organization has been recognized in various areas

of research (Callahan, 2008; Krell, 2006; Prosen,

2006). Bingham and Jeary (2007) as a weakness that

is found in many organizations: “The irony is that

27McEwan

often communication isn’t something people think

about much at all. Relatively few people understand

how truly important effective communication

is for an organization’s health, and fewer tied

communication skills as a strategic asset” (p. 83).

Hughes and Terrell (2007) identified

communication as a “team’s lifeblood. It is what

people do to connect with others. When a team

cannot communicate effectively, it lacks the

ability to perform at higher levels” (p. 1). This

view was supported by other research on teams

and communication (Bowditch, 2008; Robbins &

Judge, 2007).

Research by the Society of Human Resource

Management (SHRM) (“Effective organizational

communication,” 2008) found: “In today’s global

business environment, effective organizational

communication—internal and external—has

significant impact on an organization’s success” (p.

1).

Taylor (2006) provided a workable definition

of what an effective communication system should

look like in an organization when he defined

communication as “giving, receiving or exchanging

information, opinions, or ideas by writing, speech

or visual means, so that the message communicated

is completely understood by the recipient(s)” (p.

12). Of course, we know that the various levels

of technology that an organization has adopted

will be a major factor in how the communication

system functions. One of the premises of this paper

is that an organization, in fact, does recognize

that a communication system of some formal

structure is vital to its success and is, therefore, an

essential infrastructure system. Carr (2004) found

that “communication is hardly a revelation; its

importance is a prevalent theme in leadership and

organizational change” (p. 39).

With regard to the strategic function of

a communication system, research found that

communication plays a critical role to ensure

companies, their employees, and customers have the

mechanisms in place to ensure business continuity

(Strategic Communication Management Editorial

Board, 2006; Thatcher, 2006). The major functions

of a communication system in an organization as

identified by Robbins and Judge (2007) are linked to

the other infrastructure systems the author believes

are essential in organizational development: control

(conflict management), motivation (reward),

emotional expression (conflict management,

reward), and information (education), which puts

the system in a very strategic position.

Goodman and Truss (2004) gave some

perspective on communication in relation to

organizational development when they stated:

“It has long been recognized that effective and

appropriate communication is a vital ingredient

28 Organization Development Journal l Fall 2015

in the success of change programs (Lewin, 1951;

Goodsler & Warner-Burke, 1991; Kotter, 1996)” (p.

217). Since the infrastructure health is the underlying

principle of this paper in supporting organizational

development projects in an organization, this

recognition is important. SHRM (“Effective

organizational communication,” 2008) research

supported this when they found “successful change

is highly dependent on effective organization

communication…In fact, communication largely

determines how well change initiatives are received

and supported” (p. 6). As Carr (2004) observed,

successful change comes when communication is

clear about the objectives so that the entire resources

of the organization are aligned. The importance

of the communication system was articulated by

Costantino and Merchant (1996): “OD relies heavily

on the collection and feedback of valid information

to drive the change intervention process” (p. 30).

In summary, the communication system

permeates any organization and touches many

functional areas as well as the relationships

and interactions of people in the organization.

Organizational development success is directly

dependent upon the structure and effectiveness

of an organization’s communication system. The

OD professional can use this information to show

potential clients why having a strong communication

system is vital to their success.

Conflict Management System

The idea of conflict in an organization being

inherent in the nature of the entity is recognized

by researchers in conflict management (Bowditch,

2008; Constantino & Merchant, 1996; Dana, 2001;

Liberman, Levy, & Segal, 2009; Wilmot & Hocker,

2007). Liberman, Levy, and Segal (2009) put

organizational conflict in a very realistic context:

“Today, the inevitability of conflict is accepted,

and regarded as an opportunity and catalyst for

organizational growth” (p. 64); however, as

Haraway and Haraway (2005) validated in their

research, “Conflict can be unpleasant and stressful.

It distracts people from pursuing more productive

endeavors and is personally and professionally

expensive” (p.11). As stated by Marcus and Roover

(2003), “conflict can be constructive if people

recognize and acknowledge it, deal with it, resolve

it, and most importantly, learn from it so that is less

likely to recur” (p. 17). Hughes and Terrell (2007)

supported this idea when they recognized that the

purpose of conflict resolution in an organization is

to help the employees work together for the benefit

of their teams and the organization as a whole.

Haraway and Haraway (2005) found other benefits

to using conflict in a more constructive manner:

“Not all conflicts are destructive. Some lead to a

sharpening of critical issues and the creation of new

systems and institutions that can be beneficial to

29McEwan

and business impact. Runde and Flanagan (2007)

found that “organizations that manage conflict

poorly may incur a wide range of costs such as

wasted management time, turnover, absenteeism,

grievances, lawsuits, sabotage, and even violence”

(p. 20).

Bowditch (2008) provided a positive outlook

open to organizational leaders:

Conflict can also lead to new ideas about novel

approaches to organizational processes, the

surfacing of longstanding problems that can

be resolved, the opportunity for people to test

their capabilities, and heightened interest

and creativity in dealing with organizational

problems. (pp. 182-183)

Liberman, Levy, and Segal (2009) supported this

position when they found that “it is believed that

proper handling of conflicts in an organization can

improve management, employee performance, and

morale” (p. 64). The CMS needs to be designed in

such a way that it steers conflicts onto a constructive

path and avoids a destructive result.

The design experts provide excellent advice

with regard to the construction of an effective CMS.

Here is advice from Liberman, Levy, and Segal

(2009):

• “An internal conflict management system

(CMS) for workplace disputes, must

be designed to promote a positive work

the organization. In some instances conflict leads to

much needed change” (p.11).

When executives and managers of

organizations think about sources of conflict,

they have an opportunity to uncover core issues

that can trigger expressions of dissatisfaction or

disagreement that can interfere with the operation

of the organization. The list of causes of conflict in

an organization can be lengthy, but here are some

common ones:

• Disputes over roles

• Scarcity of resources

• Misunderstandings in communication

• Differences in priorities

• Disagreement over goals

• Labor unrest

• Workplace violence

• Retaliatory lawsuits (Bowditch, 2008;

Dana, 2001; Hughes & Terrell, 2007;

Liberman, Levy, & Segal, 2009; Wilmot

& Hocker, 2007)

Liberman, Levy, and Segal (2009) opined that it

is important to identify these types of causes in

an organization, because “identifying the causes

of conflict can help an organization recognize

and neutralize key problems and failures in

management” (p. 64). From a practical management

perspective, the negative results of conflict not

properly managed can have a critical organizational

30 Organization Development Journal l Fall 2015

competition through innovation and reinvention”

(“Strategic training and development,” 2008, p. 1).

The strength of the education system will determine

how successful the organization can be in gaining the

competitive edge, which is what SHRM studies have

found (“Effective organizational communication,”

2008; “Strategic training and development,” 2008).

Through their employees, “knowledge is often

the most valuable resource that organizations can

possess” (Anand, Glick, & Manz, 2002).

Hunsaker and Alessandra (2008) tied the

following elements of effective management to

education and training needs: (a) learning how to

learn and (b) managing conflict. Brandon (2003)

espoused support for the importance of this and other

types of learning when he stated that “developing

skills, competence, knowledge, abilities, and

experience leads to increased confidence. A

person’s self-image improves as he or she masters

certain subjects and tasks and learns new ways to

solve problems” (p. 97). He further justified the

need for education when he opined that “in this

age of rapid change and information, companies

should encourage their employees to continually

attend to their education” (p. 97). Research found

that organizations are recognizing the importance

of developing knowledge and skills in employees

for creating operational effectiveness to compete in

today’s business environment and give organizations

environment” (p. 63).

• “The goal of the CMS is to provide the

organization with an all-encompassing set

of practices to apply when potential and

actual conflicts arise” (p. 65).

• “Designing a conflict management system

involves: identifying the types and sources

of conflicts, taking into consideration the

parties’ interests, and studying possible

conflict resolution measures that can satisfy

these interests” (p. 65).

These are some guidelines that the OD professional

can use when discussing the CMS with a client.

In summary, the OD professional can benefit

if the organization has a CMS that will be able to

manage any disruptions that may occur during the

change process.

Education System

The term education is purposely used for

this system because it expresses a broad view of

the learning process, which is meant to include

both formal education and training within the

organization. Training teaches an employee how to

do something that the employee knows about and

expects, whereas, education helps an employee to

do something when he or she encounters something

unexpected. Research by SHRM found that the

“business environment has changed, with intense

pressure on organizations to stay ahead of the

31McEwan

a competitive edge (Anand, Glick, & Manz, 2002;

Clarke, 2005; Nickels, McHugh, & McHugh, 2008;

O’Driscoll, Sugrue, & Vona, 2005).

Experts in organizational learning identified

a number of common ways and strategies that

can be used by employees to gain the knowledge

and competencies to improve their value to the

organization (Allen & Hartman, 2008; King, 2001;

Wellins & Weaver, 2003;). The methods start

with the basic job rotation to more sophisticated

simulations to use of technology in e-learning to

action-based learning to personal development plans

and coaching. Developing employees through these

various sources creates a collective wisdom which is

the accumulated judgment, perceptions, experience,

intuition, and intelligence of all employees (Spitzer

& Tobia, 1994) that will determine the strength and

health of the organization’s education system.

An important way to build a strong

education system is to create a learning

organization. Championed by Peter Senge, the

learning organization is one based on continuous

improvement and heuristic learning as recognized

in supportive research (Chalofsky, 2005; Frattali,

2007; King, 2001; Senge, 1990; Spitzer & Tobia,

1994).

In addressing the training aspect of the

education system, Clarke (2005) stated it well

from observations in his research: “A training

policy articulates the organization’s commitment to

employee development, while the strategy identifies

how learning needs are to be met” (p. 190). Nickels,

McHugh, and McHugh (2008) found that strategy

in the education system had a practical element

because “employers find that spending money on

training is usually money well spent” (p. 297).

McEwan (2000) found that training can be made

more effective by using adult learning principles

in the employee training process. As Munoz

and Munoz (1999) discovered in their research:

“Training is a tool for learning; learning—and

ultimately—performance are the desired outcomes

of training…Training plays an important role in

developing a productive workforce and in getting

operations finely tuned so they can contribute more

directly to profits” (p. 2).

In summary, the education system is the part

of the infrastructure that provides the employees

with the knowledge and skills that leadership decides

will give the organization the best competitive

edge possible. The OD professional will want to

assess the skill level of employees and the ability to

comprehend the change process.

Reward System

The reward system needs to be broadly

defined because it must be able to motivate employees

from the front line to the executive suite. The

reward system must attract top caliber employees,

32 Organization Development Journal l Fall 2015

also a strategic decision. Semler (1997) found that

“reward systems are designed to provide incentives

toward some behaviors” which is reflected in the

“patterns of behavior that people choose to display

in order to be promoted, gain privileges, or simply

stay out of trouble” (p. 34).

Miller (2009) cited a Gallup Poll that found

82% of employees identified praise and recognition

as motivators of performance. They further stated

that “Overwhelming research demonstrates

that companies that engage in recognition and

rewards programs, including the use of specific

incentives programs, significantly outperform their

competition” (p. 76). Hastings (2009) found that

“Companies that fail to keep their award programs

fresh and interesting might be missing out on an

opportunity to reinforce desired behaviors” (p. 47).

Other research found “programs that offer an array

of recognition and rewards mechanisms as diverse

as the workforce are especially effective” (Miller,

2009). This shows a need to monitor the reward

system continually and make changes as needed to

maintain the system’s purpose to motivate desired

behavior.

In summary, the reward system encompasses

a number of different tools that organizations use to

motivate behavior and show appreciation for work

well done. The OD professional needs to be aware

of how effective the reward system is in order to

keep them committed to the organization during a

productive career, and recognize their value when

they retire.

The term reward and reward system can

be found in the research literature (Allen, 2008;

Bernstein, 2003; Collis, 2008; Lawler, 2003;

Sahraoui, 2002). Sahraoui (2002) even identified

the factors of a reward system: (a) equity in

compensation, (b) competency of performance,

(c) group and individual rewards, and (d) an open

pay policy where the pay system is understood.

Lawler (2003) made the clear statement about why

organizations need reward systems: “Virtually every

organization has a performance reward system that

is expected to attract, retain, and motivate employees

to achieve the organization’s goals” (p. 396).

A study by SHRM (2007) on “Benefit Trends

and Employee Satisfaction” indicated that employee

satisfaction factors that ranked highest fell into the

reward system: (a) benefits and (b) compensation

pay. This shows that the basics are still uppermost

in the minds of the average employee. Blair

(2010) opined that rewards, in which he included

recognition, must be made a standard protocol

within an organization. In establishing guidelines

for rewards, Blair recommended making rewards

commensurate with accomplishments and ensuring

that the incentives are personal and sentimental.

Including incentives as part of the reward system is

33McEwan

(Hartley, 2004); education and conflict management

(Haraway & Haraway, 2005; Wilmot & Hocker,

2007).

Appendix A provides the OD professional

with some suggested questions to ask when assessing

the health of the infrastructure of an organization.

As OD professionals work on helping

organizations improve, it would benefit the field if

some research can be done to determine how the

strength and health of the four key organizational

systems influence and impact the results of the OD

projects.

~~~~~~~~~~~~~~~

judge the level of employee commitment to the

organization and the change process.

Conclusion

The model in this paper gives the OD

professional a framework to use to perform a pre-

project assessment of the organization in order to

increase the likelihood of success for the OD change

process.

Every organization must have the four

systems identified in this paper. Many organizations,

especially smaller ones, may not have formalized

the structure of the system or even labeled it as

such, but it exists and should be assessed by the OD

professional. Research by SHRM (2007) supports

the premise of this paper as identified in their work

“Organization Development: A Strategic HR Tool.”

“OD helps improve organizational effectiveness,

with its major focus on both the total system and

the interdependent parts of the company” (p. 1).

This interdependence has been identified is much

of the research cited in this paper: Communication

and conflict management (Argenti & Forman,

2004; Constantino & Merchant, 1996; Dana,

2001, “Effective organizational communication: A

competitive edge,” 2008; Hartley, 2004; Wellins

& Weaver, 2003); Wilmot & Hocker, 2007);

communication and education (Hartley, 2004;

“Strategic training and development, 2008; Wellins

& Weaver, 2003); communication and reward

34 Organization Development Journal l Fall 2015

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Callahan, J. L. (2008). The four c’s of emotion:

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T&D, 58(8), 32-41.

Chalofsky, N. (2005). Reshaping the way we view

the world. T&D, 59(11), 54-58.

Clarke, N. (2005). Workplace learning environment

and its relationship with learning outcomes in

healthcare organizations. Human Resources

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Collis, A. (2008). Total rewards. HR Magazine.

53(8), 34.

Costantino, C. A., & Merchant, C. S. (1996).

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37

employee-related conflicts?

5. What is the organization’s position on

use of the five major forms of conflict

management?

6. Do employees believe that conflict is

positively managed?

Education System

1. Does the organization have a formal

education and/or training program for

employees? If so, what are the details?

2. How important does the organization’s

leadership consider employee training and

development?

3. Does the organization have an evaluation

process for its education program?

4. Does the organization understand the needs

related to adult education?

5. What benefits do the employees believe

they are receiving from their education and

training?

Reward System

1. How does the organization reward its

employees beyond normal wages?

2. Does the organization use individual

rewards, team rewards, or both?

3. What rewards does the organization use

besides money?

4. Do employees believe they are being

APPENDIX A

Infrastructure Assessment Worksheet

Use: This worksheet will help evaluate the health of

the organization’s infrastructure by getting answers

to key questions. This generic set of questions

can be amended for specific requirements in client

organizations.

Communication System

1. How do the organizational leaders describe

their communication system?

2. Is the system based on a specific

communication theory? If so, which one?

3. Is there clear upward and downward

communication?

4. What examples are there of types of

organizational communication?

5. Do employees believe the communication

system is effective?

Conflict Management System

1. What is the organization’s perception of the

role of conflict in an organization?

2. Does the organization have a formal conflict

management system? What are the details?

3. What examples can the organization leaders

give of managing conflict?

4. What are the major conflicts in which the

organization has been engaged, including

McEwan

38 Organization Development Journal l Fall 2015

rewarded beyond their wages for the work

they do?

5. Does the organization have a budget for

their reward system?

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