Asergieiev/iStock/Thinkstock Learning Objectives

10 OD and the Future
Asergieiev/iStock/Thinkstock
Learning Objectives
After reading this chapter, you should be able to:
• Examine the emergence of the knowledge society and its implications for organizations, leaders, and OD
consultants.
• Identify the challenges and opportunities presented by globalization and explain how OD can improve an
organization’s ability to manage these challenges.
• Identify the implications of ethical OD practices for leaders and OD consultants.
• Discuss the future of OD.
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Chapter 2 featured a vignette about several companies that failed to change. As a result, their
products became obsolete, and they lost their competitive edge. According to Newman (2010),
these companies became obsessed with competing in the present and lost sight of the future.
In the case of Blockbuster, not only did the company fail to anticipate the future, it turned
down the opportunity to buy Netflix, which now dominates the movie rental industry through
Internet video streaming. Why did Blockbuster decide not to buy Netflix? At the time, Netflix
was losing money (Graser, 2013), and Blockbuster’s management failed to predict customer
preference for Internet-based access to entertainment. Graser (2013) explains, “Blockbuster
chiefs lacked the vision to see how the industry was shifting under the video rental chain’s feet.”
When organizations fail to anticipate the future and change to accommodate it, they are at risk
of losing market share or even going completely extinct.
The average life expectancy of a multinational corporation is 40 to 50 years (de Geus, 1997).
Very few come close to the life expectancy of humans, which averages about 75 years. By 1983
one third of the companies listed in the 1970 Fortune 500 had vanished, either closing down
or succumbing to acquisitions or mergers. Given these statistics, information on preserving
organization longevity should be of interest to most companies that wish to survive.
In his book The Living Company, Arie de Geus (1997) examines the factors that keep companies
alive for centuries. The book is based on a previously unpublished study commissioned by the
Royal Dutch Shell Group, a multinational oil and gas company where de Geus worked. The
company was formed in 1907 from the merger of two competing companies, Royal Dutch
Petroleum and the Shell Trading Company of the United Kingdom. Incidentally, the word Shell
in the company name was derived from the fact that seashells were used for money at the time
in the Far East. The previously unpublished Royal Dutch Shell study examined companies older
than itself, i.e., those founded before the 1890s.
The Shell Group study defined a living company as characterized by four traits that bolster the
organization’s ability to be nimble, change ready, and healthy:
1. Sensitivity to the environment. This trait represents the organization’s capacity to
learn and adapt. As de Geus (1997) explains, “As wars, depressions, technologies, and
political changes surged and ebbed around them, they always seemed to excel at keeping their feelers out, tuned to whatever was going on around them” (p. 6). This trait is
also characterized by creating a sense of harmony between the company and its environment. It is also essential in helping the organization change effectively as necessary.
2. Cohesion and identity. This trait is the organization’s ability to create a sense of
belonging among its members that is essential for surviving amid change. Managers
are generally promoted from within, and their priority is the health of the institution
as a whole, other than during times of crisis.
3. Tolerance and decentralization. De Geus (1997) suggests that these traits are symptomatic of the company’s awareness of ecology: “its ability to build constructive relationships with other entities, within and outside itself” (p. 9). Tolerance was selected
as the most descriptive word, since decentralization is a modern organizing concept.
These companies were highly tolerant of activities on the margins of their business that
were experimental and eccentric and stretched their possibilities for innovation.
4. Conservative financing. This trait captures the ability to carefully govern the growth
and evolution of the organization and ensure there is cash on hand to have the flexibility and means to explore new ventures that are out of competitors’ reach.
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Emergence of the Knowledge Society Section 10.1
What is remarkable about de Geus’s (1997) findings is how they parallel conditions for
creating and sustaining change in organizations: learning and adapting, commitment to
people and the health of the organization as a whole, tolerance of exploration of new ideas,
and careful financing to support exploration. Where have you observed these traits in your
experience with organizations?
This book has explored how organization
development uses planned change to help
individuals, groups, and organizations
become more effective and productive.
It has examined the dynamics of change
and the major phases of planned change
according to the action research process:
planning, doing, and checking. It has
also looked at some of the interventions
that arise as a result of engaging the
OD process at the individual, group, and
organization level.
In the final chapter of this book, it is
worth reminding ourselves that remaining relevant and competitive for the
long haul requires ongoing learning,
reflection, and commitment to change.
OD can help organizations respond to
shifting conditions in ways that keep
them relevant, competitive, and healthy. Particularly, organizations need to be prepared to
compete in the knowledge society and respond to a globalizing and changing workforce. OD
consultants can help organizations prepare for and respond to changing contexts by delivering
quality consulting and observing OD ethics and values.
10.1 Emergence of the Knowledge Society
The social, political, economical, and cultural world is interconnected and global. The emergence of technology and dominance of the creation and sharing of learning is known as the
knowledge society. Also referred to as the knowledge economy, the knowledge society has
replaced the industrial society. “Knowledge societies are about capabilities to identify, produce, process, transform, disseminate and use information to build and apply knowledge for
human development” (Bindé, 2005, p. 27). Embracing the knowledge society helps organizations develop what de Geus (1997) termed “sensitivity to the environment” (p. 9) in the opening vignette. This sensitivity is an organization’s capacity to learn and adapt.
This shift has implications for organization strategy, challenges, and interventions. Today we
have almost instant access to vast quantities of global information. Yet information is not
knowledge. Converting information into knowledge requires critical thinking to distinguish
useful from useless information, as well as new technologies to connect existing forms of
knowledge with new forms.
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A key factor in promoting an organization’s longterm sustainability is its ability to build relationships with those inside and outside itself.
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Emergence of the Knowledge Society Section 10.1
In developed nations, communications technology and the Internet mediate the knowledge
society. Not everyone, however, has this access. The gap between those who have technology
and the resources to use it and those who lack this access is known as the digital divide.
“Although some may say the digital divide has been bridged, visiting impoverished inner-city,
small rural, and violence-torn areas around the globe reveals scores of people who do not
have access to electricity, technology, and the outside world” (King, 2010, p. 426).
Opportunities and Challenges of the Knowledge Society
The key challenges of the knowledge society include accelerated change, hypercompetition,
and creating new knowledge (Adams, 2012). People are stressed trying to keep up with the
impossible information explosion and continue learning.
Accelerated Change
Earlier in this book we drew on Heraclitus’s philosophy to underscore the adage that change
is the only constant. OD helps an organization plan change so it can respond to the unexpected and strategize for the future. Friedman noted in his 2007 book, The World Is Flat, that
technological advancement has resulted in a reality in which
engines can now talk to computers, people can talk to people, computers
can talk to computers, and people can talk to computers farther, faster, more
cheaply, and more easily than ever before. And as that has happened, more
people from more places have started asking one another the same two questions: “Can you hear me now? Can we work together now?” (pp. 198–199)
What pressures have you felt in dealing with the deluge of information that comes at you
daily?
Hypercompetition
In a global context, information overload puts increasing pressure on organizations to change
quickly. Hypercompetition is typical when new markets or industries emerge, such as what
occurred with smart devices and apps. Competition may be created through pricing, invading
markets with better or newer products, or creating new alliances, such as when AT&T purchased DirecTV. New, innovative technology shifts the rules and creates competitive advantage and profits. These advantages are often short lived, however, because the competition
works to keep up and ultimately innovates beyond the new product or service. Hypercompetition puts extreme pressure on organizations and accelerates the change process. Following
a quality, ethical OD process is imperative in these situations.
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Emergence of the Knowledge Society Section 10.1
Challenge to Create New Knowledge
Needed and valued knowledge society competencies include the ability to deeply understand
and synthesize information, effectively function interpersonally through soft skills such as
team work, and engage in high-quality learning (Dumont & Istance, 2010). Chapter 9 discussed organization learning and learning organizations as responses organizations make to
an increasing knowledge society. When CEOs talk about increasing human capital, what they
are really discussing is the capacity to generate and share knowledge through people. In what
ways have you seen or experienced new knowledge creation?
Corporations are not the only organizations that have embraced the knowledge society and learning as a strategy. Schools aspire to become learning
organizations (Senge, Cambron-McCabe,
Lucas, Smith, & Dutton, 2012), and
governments, nonprofit organizations,
and corporations are coming together
to solve social problems using learning strategically (Senge, Smith, Kruschwitz, Laur, & Schley, 2008).
Keeping Up
With technological innovations and knowledge explosion comes the stress of trying to keep
up with impossible volumes of information and the need to continue to learn. Information is
at our fingertips most anytime and anywhere, making it impossible to keep pace. According
to Schilling (2013), information doubles every 12 months, soon to be every 12 hours. Even
basic, routine transactions require new knowledge, such as paying automated parking meters,
self-scanning groceries, checking in for a flight on a smartphone, or searching online for health
information.
Becoming Lifelong Learners
Lifelong learning is a self-directed process of seeking knowledge for personal, professional,
or civic enhancement. It heightens social, emotional, mental, intellectual, community, spiritual, professional, and economic health. Lifelong learning is also the best defense against the
overwhelming deluge of information that is available—and growing—on a daily basis. Since
knowledge becomes increasingly obsolete as new information becomes available every second, how people learn and teach will likely have to change. It will be advantageous to develop
more flexible approaches to learning new knowledge and to question existing knowledge.
Lifelong learning will enable people to keep up, remain relevant, and contribute to relationships and the workplace.
Darrin Klimek/Photodisc/Thinkstock
Technological advances have promoted the emergence
of the knowledge society, or knowledge economy.
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Emergence of the Knowledge Society Section 10.1
The Role of the OD Consultant in the Knowledge Society
OD consultants can play a range of roles when helping organizations address knowledge
society challenges. Refer back to the characteristics of the living company presented in the
opening vignette. You could apply those steps as OD interventions with clients to cope with
the knowledge society: being sensitive to the environment and learning and adapting to it,
promoting organization cohesion and unity in the face of change, building tolerance and constructive relationships with multiple entities, and adopting conservative financing that helps
govern and fund careful growth.
There are many other ways OD consultants help organizations cope with the knowledge society. One is to work with them to design ways to capture and share learning related to their
processes and products. Another is to anticipate group and team dynamics issues that might
arise, given the challenges of a knowledge society. Consultants can also help organizations
plan ways to respond to technological and web evolutions, such as creating a social networking strategy or using collaborative virtual tools for meetings and training. Technology may also
be able to assist change efforts through new communication, training, and meeting modes.
Who Invented That? MOOCs
A good example of the challenges and opportunities of a knowledge society is the
development of MOOCs (massive open online courses). MOOCs provide learners
worldwide with an opportunity to build knowledge on a scale never before seen. An
MOOC provides open access—it is available to anyone with an Internet connection who
wishes to participate.
MOOCs combine traditional learning pedagogy such as streamed video, readings, and
problem solving with virtual pedagogy such as interactive user forums and web-based
activities to facilitate learning and community among the participants. It remains to
be seen if this free, open-access innovation will grow to become recognized as a valid
educational option.
To learn more about MOOCs in which you can participate, check out this top ten list:
http://www.bdpa-detroit.org/portal/index.php/comittees/high-school-computer
-competition-hscc/29-education/57-moocs-top-10-sites-for-free-education-with-elite
-universities.html.
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Globalization and the Changing Workforce Section 10.2
10.2 Globalization and the Changing Workforce
Boundaries are more permeable than ever before. Goods and services cross borders and cultures easily. Your morning coffee may come from Colombia; your clothing may come from
China; and the person processing your order may work at a call center in India. This exchange
of goods and services across countries and cultures is called globalization.
International commerce has existed for centuries.
What distinguishes today’s global market, however,
is its speed and intensity, or its shift from “connected to hyper connected” (Friedman, 2011). To
survive, organizations must develop work teams
able to collaborate virtually across borders and time
zones. Globalization also challenges organizations
to be accountable to workers and communities in
distant regions, as well as to the global environment. Although global markets bring a wide variety
of products and services to a large audience, their
drawbacks include environmental destruction, pollution, and the exploitation of workers, including
child labor. Such drawbacks have intensified pressure to hold corporations accountable for their
impact on communities and the environment. Given
the pace and scope of globalization across national,
social, political, economic, and cultural borders, it
is becoming more incumbent on organizations to
advocate social responsibility and sustainability
(Scherer, Palazzo, & Matten, 2010).
Luciano Lozano/Moment/Getty Images
Globalization is creating new opportunities to connect and collaborate
around the world.
Take Away 10.1: Emergence of the Knowledge Society
• The knowledge society, or interconnectivity of the social, political, economical,
cultural, and global world, has created information overload and technological
innovation.
• The knowledge society presents both opportunities and challenges, including
accelerated change, hypercompetition, new knowledge creation, pressure to keep
up, and the need to become lifelong learners.
• Consultants can support organizations in the knowledge society by helping them
find ways to capture and share learning and respond to new challenges using the
action research process to solve problems.
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Globalization and the Changing Workforce Section 10.2
Growth of Outsourcing
The notion of globalization may call to mind the outsourcing of manufacturing to low-income,
low-wage countries, or mega multinational corporations that operate worldwide with little
accountability or regulation. Outsourcing is the transferring of portions of production to outside suppliers as a means of cost reduction.
Outsourcing challenges how we define organization boundaries and our assumptions about
work and organizations. Temporary, contract, and other contingent workers now carry out
work that was once done only by full-time, permanent employees. Teams are quickly and
easily assembled across global boundaries and just as easily disbanded when the work is
finished. Work colleagues and customers are more diverse than ever before, which creates
more opportunities for innovation and creativity but also miscommunication and misunderstanding. Expectations for productivity and results are high. These dynamics put pressure on
employees and organizations. Consultants bring an understanding of the human dynamics of
change and are attuned to the social costs and benefits of the organizational challenges that
accompany globalization and outsourcing.
Growth in Cultural Diversity
As the world seems to get smaller through globalization and the increased communication
capacity afforded by technology, people are more aware than ever of the diversity of the
world’s 7 billion people. The population is aging and growing, and many nations are challenged with increased cultural and ethnic diversity, including the United States. According
to the latest U.S. Census (Humes, Jones, & Ramirez, 2011), from 2000 to 2010 the Hispanic
population accounted for 43% of the total population growth, Asians 43.3%, and African
Americans 12.3% (Humes et al., 2011). Such demographic changes create both tensions and
opportunities. Tensions arise as cultural and ethnic groups are faced with preserving their
culture and language versus adopting the norms of the dominant culture. Opportunities to
collaborate, innovate, and learn abound with these shifts.
Although it is impossible to categorize all of the nuances of culture, some authors have
attempted to highlight the range of cultural differences, such as Hofstede’s dimensions of
culture (Hofstede, Hofstede, & Minkov, 1991). This work began in the 1960s with survey research on attitudes and values of people in 40 different countries, with more recent
research including 76 countries. Hofstede and colleagues (1991) distinguished six cultural
dimensions known as power distance, uncertainty avoidance, individualism versus collectivism, masculinity versus femininity, long-term versus short-term orientation, and indulgence
versus restraint. The dimensions are summarized in Table 10.1.
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Globalization and the Changing Workforce Section 10.2
Table 10.1: Hofstede’s dimensions of culture
1. Power distance
Power distance is the extent to which the less powerful members of organizations and institutions (such
as the family) accept and expect that power will be distributed unequally. This represents inequality (more
versus less), but defined from below, rather than from above.
Low power distance
Power distance scores are smaller for Anglo and
Germanic countries.
High power distance
Power distance scores are higher for Latin, Asian,
and African countries.
2. Uncertainty avoidance
This dimension deals with a society’s tolerance for uncertainty and ambiguity and level of comfort with
unstructured situations that are novel, unknown, surprising, or different from the norm.
Uncertainty avoidance
Uncertainty-avoiding cultures attempt to minimize
the possibility of novel and unexpected situations
by adopting strict laws, rules, safety, and security
measures.
Uncertainty avoidance scores are higher in Latin
countries, in Japan, and in German-speaking
countries.
Uncertainty acceptance
Uncertainty-accepting cultures tolerate opinions
different from what they are used to. They adopt
as few rules as possible. Religious and philosophical views tend to be relativist and open to multiple
interpretations. These cultures are emotionally
reserved and contemplative.
Uncertainty acceptance is observable in China and
in Anglo and Nordic countries.
3. Individualism versus collectivism
This is the degree to which individuals integrate into and identify with certain social groups.
Individualism
Individualistic societies experience loose ties
among individuals. People look after themselves
and their immediate family members and expect
others to do the same. Decisions are made with the
good of the individual in mind.
Individualism prevails in developed and Western
countries.
Collectivism
Collectivist societies are made up of people who
form strong, cohesive in-groups from birth that often
include extended families (with uncles, aunts, and
grandparents). These groups provide protection and
unquestioning loyalty to each other. Decisions are
made with the good of the collective in mind.
Collectivism prevails in countries such as Japan,
China, and Russia.
4. Masculinity versus femininity
Masculinity versus femininity refers to the distribution of socialized and emotional roles between the
genders. Traditional masculine qualities include being more assertive and competitive. Traditional feminine
qualities include being more caring and modest.
Masculinity
Tendency toward more assertive, competitive qualities that can be exhibited by both women and men.
Masculinity is high in Japan; in some European
countries like Germany, Austria and Switzerland;
and moderately high in Anglo countries.
Femininity
Tendency toward more caring, modest values that
can be exhibited by both women and men.
Femininity is high in Nordic countries and Netherlands and moderately high in some Latin and Asian
countries like France, Spain, and Thailand.
(continued)
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Globalization and the Changing Workforce Section 10.2
5. Long-term versus short-term orientation
Long-term orientations are geared toward the future and creating conditions supportive of future
generations.
Long-term orientation
These cultures embrace pragmatic, future-oriented
virtues such as saving, persistence, and adapting to
changing circumstances.
Long-term orientation scores are highest in East
Asia and moderate in eastern and western Europe.
Short-term orientation
Short-term oriented societies embrace virtues
related to the past and present, such as national
pride, respect for tradition, preservation of “face,”
and fulfilling social obligations.
Short-term orientation scores are high in the Anglo
world, the Muslim world, Latin America, and Africa.
6. Indulgence versus restraint
The degree to which a culture is oriented toward immediate gratification of needs.
Indulgence
A culture permissive of relatively free gratification
of basic and natural human needs related to enjoying life and having fun.
Indulgence scores are highest in Latin America,
parts of Africa, the Anglo world, and Nordic Europe.
Restraint
A culture that shows restraint by suppressing
gratification of needs. Strict social norms regulate
behaviors around gratification.
Restraint is mostly found in East Asia, eastern
Europe, and the Muslim world.
Source: Adapted from http://www.mindtools.com/pages/article/seven-dimensions.htm.
What dimensions have you noticed in cultures to which you belong and with which you
interact?
Growth in Age-Related Diversity
Around the globe, the population is dramatically aging. Fertility has declined in industrialized
nations as longevity has increased, creating an effect such that “in less than 10 years, older
people will outnumber children for the first time in history” (Withnall, 2012, p. 650). Eleven
percent of the world’s population was made up of older adults in 2010, but that number is
expected to grow to 22% by 2050 (World Economic Forum, 2012).
Multiple Generations
Today’s U.S. workforce represents four distinct generation groups that have different values
and mindsets (Gesell, 2010; Hahn, 2011). When these multiple generations work together,
conditions are ripe for misunderstanding each other (Ulrich, 2001). The four generational
groups are (dates are ranges that vary according to source):
1. traditionalists, born in or before 1945;
2. baby boomers, born 1946 to 1964;
3. generation X, born 1965 to 1976; and
4. the millennials, also called generation Y, born 1977 to 1997.
Multigenerational issues intersect with the knowledge society, globalization, technology,
and cultural diversity. These dynamics affect the people who work in organizations and may
create innovation, conflict, challenge, learning, and of course change due to different work
Table 10.1: Hofstede’s dimensions of culture (continued)
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Globalization and the Changing Workforce Section 10.2
styles values, beliefs, attitudes, and culture. Table 10.2 compares certain characteristics of
each group. Bear in mind that these are generalizations; that is, they are not descriptive of
every person within the population. Each generation’s individuals have unique personalities,
values, and life experiences.
Table 10.2: Generational differences
Generation Characteristics
Information
consumption and
influences Work expectations
Traditionalists
(also called the silent
generation, the greatest
generation, veterans, or
seniors)
• Diminishing in the
workforce due to
retirements
• Solid and reliable
• Value consistency
• Change is challenging
• Loyal
• Newspaper
• Radio
• Movie theaters
• Authority figures are
to be obeyed
• Achievement
depends on hard
work, obeying rules
• Rewards for their
commitment and
loyalty
• Comfortable with
delayed recognition
and reward
Baby boomers • Largest group in
workforce
• Loyal with a strong
sense of duty
• Optimistic
• Known as
workaholics
• Grew up in nuclear
families
• Tend to be managing or are managed
by people young
enough to be their
children
• Natural change
agents
• Strong work ethic
• Television
• Visual news stories
about civil rights,
Vietnam War, and
Apollo 11 moon
landing
• Team oriented
• Empowerment
• Seek personal gratification and growth
• Dynamic work
environment
• Equate work with
self-worth
• Arrive early, engage
in overtime as a
moral obligation
Generation X
(also called the “sandwich generation” due
to its position between
two large generational
groups)
• Smallest generation
• Independent
• Global thinkers
• Self-directed
• Techno-savvy
• Latchkey generation
• Self-sufficient
• Adaptable to change
• Self-reliant
• Resourceful
• Balanced
• Media
• Expanding
technology
• MTV and video
game era
• Videocassette
recorder
• Advent of home
computers during
lifetime
• Appreciate and seek
quality of life
• Prefer action over
talk
• Value balance, fun,
informality
• Require individual
positive feedback
and recognition
• Thrive on challenge
• Want to lead and
follow
• Embrace
self-governance
• Prefer to work alone
rather than on a team
(continued)
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Globalization and the Changing Workforce Section 10.2
Generation Characteristics
Information
consumption and
influences Work expectations
Millennials,
generation Y
• Will become largest
generation
• Less than half of
today’s workforce
• Confident
• Optimistic
• Sociable
• Accept
multiculturalism
• Value change
• Open minded
• Strive to be part of
greater good
• High sense of civic
duty and morality
• Technology
• Instant
communication
• Cell phones
• Social networking
• Flexible work
schedules
• Life balance
• Inclusivity
• Can-do attitude
• Multitasking
• Goal oriented
• Embrace teamwork
• Have solid trust in
authority
• Want to understand
“why?”
• Need ongoing
feedback
• Less adept at reading nonverbal cues
and understanding
social context cues
for appropriateness
Source: Adapted from Gesell, 2010, and Hahn, 2011.
What is your generation? Do you agree with the descriptions?
Tips and Wisdom
Gesell (2010) offered some OD interventions that help avoid or minimize intergenerational
conflict:
• Facilitate open dialogue among the generations. OD consultants are usually skilled
dialogue facilitators and can help organizations learn how to have multigenerational
conversations. When leaders understand generational differences, they can lead the
different groups according to their needs and expectations.
• Help organization members explore generational differences through formal OD
interventions in which each generational group shares information about its history.
Types of information might include:
1. historical events of the generation;
2. trends, people, and popular culture of the time;
3. key values of the generation;
4. key challenges of the generation;
5. perceptions of other generations;
6. benefits and challenges of working with other generational groups; and
7. things they wish other generations knew about them.
• Several of the team-building and conflict-management interventions discussed in
Chapter 8 would also be effective for working with multigenerational groups.
Table 10.2: Generational differences (continued)
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Globalization and the Changing Workforce Section 10.2
An Aging and Shrinking Workforce
An aging population has implications for the U.S. workforce. It means that multiple generations work side by side, which can create conflicts in work values and expectations. It also
increases the need for talent management to ensure that people working later in life continue
to be challenged.
Moreover, although a higher percentage of older workers are now staying in the workforce,
when the baby boomer generation begins to retire in large numbers, a significant labor shortage will occur. According to employment predictions published by the U.S. Department of
Labor (2013), the country is facing a workforce shortage that will potentially slow economic
growth in the next decade. Although annual economic growth is predicted to be 0.7%, the
workforce is predicted to grow at only 0.5% per year. Workers age 55 and older will make up
more than 25% of the workforce in 2022. The overall decline in the labor force participation
rate will be from 63.7% in 2012 to 61.6% in 2022, with declines predicted for both women
and men. Job openings are predicted to be 50.6 million in total, with 67.2% of those jobs coming from replacement needs. A shrinking workforce will require talent management, especially in the areas of attracting and retaining workers. Competition may drive wages higher
and force organizations to offer more benefits and incentives in order to retain employees.
Opportunities and Challenges of Globalization
Globalization has created several positive opportunities for organizations, countries, and citizens. First, it has accelerated economic growth, particularly in poor countries. It has helped
bolster wages and redistribute wealth, while also improving product quality. Globalization
has also helped reduce poverty; for example, between 1993 and 1996, the number of people
living on less than $1 per day (absolute poverty as defined by the World Bank) declined from
432 million to 267 million (Griswold, 2000). Globalization has raised the standard of living
and brought better medical care and education to remote and impoverished places. Global
adoption of technological innovations has improved global commerce, communications, and
cultural exchanges.
Globalization has also created challenges. It has been blamed for increasing child and unfair
labor practices, environmental destruction, and the gap between the world’s richest and
poorest citizens. Within organizations, it has intensified expectations for workplace flexibility
and virtual office arrangements, requiring different measures of communication and performance in these environments. Globalization is also creating new challenges for communicating across languages, geographical borders, and cultures. This is also met by increasing need
to develop leaders who can be effective in multiple environments.
The Role of the OD Consultant in Globalization
OD helps organizations respond to the challenges of globalization by using the action research
process to identify problems and opportunities and to improve functionality, particularly
in virtual communications and work practices. Group and team interventions, discussed in
Chapter 8, can particularly help organizations manage the conflicts and differences that arise
with a globalizing workforce.
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OD Ethics and Values Section 10.3
OD interventions can also bolster capacity to facilitate multilingual written and verbal communication, including by recruiting and retaining a multilingual workforce. Organizations will also
be challenged to embrace cultural differences and find ways to create synergies on increasingly
diverse work teams. OD consultants need to understand multiple cultural norms so they can
help organization members work together effectively.
Take Away 10.2: Globalization and the Changing Workforce
• Globalization, the exchange of goods and services across boundaries and cultures,
has prompted the growth of outsourcing.
• Globalization has heralded increases in cultural diversity, including shifts in agerelated demographics, multiple generations working side by side, and a shrinking
workforce.
• Challenges of globalization include increasing child and unfair labor practices,
environmental destruction, and inequality. Opportunities presented by
globalization include increasing technological innovation, communicating
instantaneously, accelerating economic growth, bolstering wages, redistributing
wealth, and improving product and service quality.
• OD consultants support globalizing organizations by helping them identify and
capitalize on globalization’s opportunities while meeting its challenges.
10.3 OD Ethics and Values
Discussions of OD values, practices, and purposes have been ongoing since the field’s inception (Minahan & Norlin, 2013). OD is founded on a humanistic ethic that seeks to develop
individuals and the organization in positive, productive ways. This section examines ethics in
the workplace, ethical guidelines for consultants, corporate social responsibility, and the role
of OD consultants in upholding ethical practice.
Tips and Wisdom
Globalization complicates leadership across national, geographical, and cultural boundaries
and therefore requires organization leaders—and OD consultants—to think systemically
about organization challenges and strategies. Consult the research journal International
Journal of Complexity in Leadership and Management to learn more about issues related to
leading in global context: http://www.inderscience.com/jhome.php?jcode=ijclm.
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OD Ethics and Values Section 10.3
Ethics in the Changing Workplace
In a 2013 survey, only 21% of Gallup Poll respondents rated business executives as having
high ethical standards (Pastin, 2013). This indicates that both leaders and consultants need
to work to ensure that ethical OD is in practice and perceived as such by employees. Serving
as ethical role models is not easy in a workplace riddled with ethical dilemmas. Ethics challenges arise daily in organizations and become even more pronounced when change is in
progress and employees are on edge. Typical ethical dilemmas during change might include
interpersonal conflicts, misunderstandings, differences in values or goals, or disagreements
over the best courses of action when solving problems. You might observe behaviors such as
withholding information, unfair treatment of employees, others taking credit for work that
is not theirs, harassment, bullying, gossiping, or lying. What types of unethical behavior have
you witnessed or experienced?
Pastin (2013) identified different ways people handle ethical issues at work. These include:
1. Conformity. Conformists follow rules and do not question authority figures. They
do not want to rock the boat. Although conformists might be perceived as always
doing the right thing, they might also look the other way in the presence of unethical behavior by individuals higher up in the organization hierarchy. Conformists may
experience ethical conflicts in organizations that lack strict rules and clear consequences for not following them.
2. Negotiation. Negotiators make up rules as they go about organization change. When
confronted with a questionable situation, such as a colleague handling personal
matters on company time, negotiators will take a wait-and-see approach to see if the
consequences of the colleague’s behavior worsen or affect them negatively. Negotiators experience ethical conflicts when they are required to make decisions without
guidelines, because they change the rules according to what seems easiest at the
time.
3. Navigation. Navigators follow an internal compass to guide their actions when
confronted with unethical behavior. They usually have an innate sense of right and
wrong and rely on it. They are willing to make unpopular choices by following this
moral compass. Navigators can be natural leaders and earn their colleagues’ respect
and confidence. Navigators tend to succeed in most organizations and will leave
those they believe to be unethical.
4. Wiggling. Wigglers do not follow a moral compass. They take the route that gives
them the most advantage. Motivated by self-interest, wigglers will engage in what
most would perceive as unethical behavior, such as lying, if it will help them gain
favor with a supervisor or avoid conflict with a colleague. Wigglers get into trouble
when others regard them as dodging ethical issues to protect themselves.
Assessment: Which Ethical Type Are You?
Take this assessment to understand what your ethical tendency is. Your ethical style is not
permanent, so you can use this information to help you make more ethical decisions.
http://www.healthethicstrust.com/otjet
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OD Ethics and Values Section 10.3
The Role of the OD Consultant in Upholding Ethical Guidelines
Conducting OD inevitably raises ethical issues, and one of the consultant’s roles is to ensure
that the process upholds OD ethics and standards. The OD code of ethics was presented
in Chapter 1. Throughout this code, you can see OD’s humanistic orientation in the way it
emphasizes quality of life, health, justice, dignity, win–win outcomes, holistic perspectives,
and participative decision making: http://www.isodc.org.
Nekoranec (2009) views the OD consultant’s role as holding leaders acco-untable for ethical
behavior so that interventions are ethical and legally acceptable. He notes it is important for
OD consultants to ask leaders, “Will this course of action generate the right outcome?” De
Geus (1997) notes that leaders should preserve the health of the whole organization during
change, which is also an ethical imperative.
Nekoranec (2009) identified three themes for leaders’ ethical actions when making decisions.
OD consultants can ask leaders questions around each of these themes as they help clients
navigate the ethics of change. Leaders can use some or all of these when making decisions.
These themes include:
1. Personifying espoused values
a. Taking on a role as ethical vanguard
b. Acting with integrity to do the right thing
c. Reflecting on courses of action
d. Speaking honestly and frankly about issues
e. Learning from the past
f. Leading inclusively
g. Serving as a role model of values
h. Showing and explaining emotions: OD consultants might ask clients, “How will
employees perceive your values as we go about this change?”
2. Building relationships for harmony and purpose
a. Supporting people and helping them bring out their best
b. Respecting others
c. Sharing information
d. Earning trust in leadership
e. Maintaining a visible profile and being approachable: OD consultants might ask
clients, “How will your employees achieve greater harmony and purpose as we
go about this change?”
3. Working for mutually beneficial solutions
a. Getting the facts honestly and openly
b. Seeking counsel to clarify thinking
c. Knowing the legal parameters
d. Listening to employees’ feelings and thoughts
e. Negotiating the information-gathering process
f. Challenging the organization to find a more effective solution: OD consultants
might ask clients, “How will you help employees achieve mutually beneficial
outcomes as we go about this change?”
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OD Ethics and Values Section 10.3
Nekoranec (2009) also identified two types of leadership styles that make achieving ethical
outcomes more problematic for OD consultants. The first is bad leadership that will result in
ineffectual outcomes or unethical leadership. Bad leadership is usually incompetent, rigid,
and intemperate. In such cases Nekoranec advises OD consultants to move on to other clients.
The other type of problematic leadership style is ethically neutral. Although these leaders
may support ethical OD interventions, they are generally not accustomed to ethical practice.
They need to be reminded of ethical issues and the importance of ethical outcomes through
coaching and direct nudging from the consultant.
Holding Ourselves Ethically Accountable as OD Consultants
Before we can be both worker and organization advocates, we need to think about our own
ethics and responsibilities. Cheung-Judge (2012) recommends that OD consultants own,
refine, and integrate self-knowledge to remain sharp; they should do this by developing
lifelong learning habits, working through issues of power, building emotional and intuitive
self-awareness, and committing to self-care.
Gellerman, Frankel, and Landenson (1990) present ethical guidelines for OD consultants that
are worth reflection and consideration. They note that ethical OD practice is represented by:
1. Upholding responsibility to ourselves. This occurs when consultants carry out OD
with integrity and authenticity, continually pursue self-development, and uphold
individual interests in a fair and equitable way. It is difficult to advocate change for
others if we are not actively engaged in changing and developing ourselves.
2. Being responsible for professional development and competence. Taking this responsibility means we are accountable for our actions, committed to our own continuous
learning and development, and dedicated to maintaining our professional competencies. In essence, as OD consultants, we have to practice what we teach!
3. Being responsible to stakeholders. This responsibility involves seeking the
long-term well-being of OD stakeholders (such as employees, customers, community, and the environment) and conducting ourselves with honesty, responsibility,
and integrity. This means asking tough questions and upholding the consulting
role of authenticity with the client.
4. Being responsible to the profession. This responsibility entails contributing to the OD
knowledge base, promoting sharing of knowledge and learning, and respecting other
OD professionals.
5. Considering the consequences of our actions. This social responsibility is concerned
with both the client and the larger social system; it involves carrying out OD with
cultural sensitivity and social justice.
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OD Ethics and Values Section 10.3
Practicing the OD code of ethics and following Gellerman, Frankel, and Landenson’s (1990)
guidelines will position consultants to advance OD well into the future.
Corporate Social Responsibility: Promoting OD Values in a
Changing Workplace
OD plays a unique role in organizations: It is in a position to champion workers’ needs while
also addressing organization needs that might range from recruitment to termination of the
employment relationship. OD can also help the organization improve its processes, services,
and products in a way that benefits all stakeholders and ensures organization health.
Tips and Wisdom
Shepard (2006) offered the following advice for OD consultants:
1. Stay alive.
2. Start where the system is.
3. Never work uphill.
4. Do not build hills as you go.
5. Work in the most promising arena.
6. Do not use one when two could do it.
7. Do not overorganize.
8. Do not argue if you cannot win.
9. Play God a little.
10. Innovation requires a good idea, initiative, and a few friends.
11. Load experiments for success.
12. Light many fires.
13. Keep an optimistic bias.
14. Capture the moment.
Tips and Wisdom
A key way to think about OD is as a process of improving human systems, as noted in the
Organization Development Network’s (n.d.) Strategic Plan: “Organization Development is a
field central to creating effective and healthy human systems in an inclusive world” (p. 3).
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OD Ethics and Values Section 10.3
Holding organizations accountable for the footprint they leave on people, communities, and
the environment is known as corporate social responsibility (CSR). CSR movements often
tout sustainability, the idea that the business uses renewable energy, has a minimal impact
on the environment, and adopts humane workforce practices. CSR and sustainability are
directly linked to globalization and concerns about how it exploits people and places (Bierema & D’Abundo, 2004).
Fenwick and Bierema (2008) interviewed human resource development (HRD) executives
from high-profile Canadian and U.S. corporations to understand how they perceived their
roles and challenges in implementing CSR. They found that participants’ engagement centered on employee learning and promotion, employee ownership of development, and
employee safety and respect. Overall, however, HRD appeared to be only marginally involved
or interested in the firms’ CSR activities. Because OD falls under the HRD function in many
organizations, these results should be cause to examine how OD interprets an organization’s
commitment to CSR. Given the inherent risks of global commerce, individuals and organizations are under more pressure to behave responsibly. OD’s humanistic philosophical orientation, discussed at length in Chapter 1, positions the process to take a humane approach to
organization change, making OD more relevant today than ever before.
Case Study: Corporate Social Responsibility at CarCO
Lauren has enjoyed working at CarCO as the plant manager. She is currently being
groomed for a promotion to oversee manufacturing operations at multiple plants. Lauren
is looking forward to the challenge of having more responsibility and has several ideas
she wants to implement, especially after attending a leadership development program
over the past year. She has become involved with a local environmental nonprofit in her
free time and has become increasingly concerned with environmental conservation and
pollution control. As plant manager, she has implemented several conservation programs
that lessened the plant’s carbon footprint.
As Lauren transitions into her new role, she is invited to a corporate strategic planning
meeting to assess manufacturing capacity and future growth. During the meeting, some of
the executives begin to discuss the logistics of expanding production at one of the plants
that will fall under Lauren’s responsibility. One of the issues is wastewater treatment
and whether the plant can comply with industry standards and still be productive.
Although the company can easily comply with federal standards, the new industry
standards are environmentally stricter and more costly to implement. The community
and environmental groups are pressuring the company to adopt the higher industry
standards; moreover, the executives acknowledge that, in the long run, this is probably the
direction federal regulation would go.
(continued)
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OD Ethics and Values Section 10.3
The discussion is quite lively, and it becomes clear that the majority are in favor of the
lesser, cheaper wastewater treatment options that merely meet federal compliance. The
issue is never resolved, and Lauren is left wondering what her options are and whether
she should raise the issue or do what she thinks is right when the time comes for her to
take over operations.
Critical Thinking Questions
1. What are the ethical issues in this case?
2. What would be the socially responsible response?
3. How might this ethical issue be handled from each of the four perspectives
offered by Pastin (2013): conformity, negotiation, navigation, and wiggling?
4. If you were brought in to work with Lauren and the executives around this issue,
what OD approaches would you recommend?
Case Study: Corporate Social Responsibility at CarCO
(continued)
OD in the Future
What is the future of OD? Cummings & Worley (2009) predict it will be more widely adapted
across a range of organizations and be more involved in supporting technological and managerial innovation. OD will also take on more diversity and inclusion issues and focus more
on ecological sustainability. OD has helped organizations adapt and change for more than
50 years. If OD is to replicate the success of the companies profiled by de Geus (1997),
the field will need to find ways to continually learn and adapt, commit to sustaining the
health of the organization and its workers, explore new ideas, and invest in new theories
and practices that work. Given its humanistic value system, it is fitting for OD to find ways
to help organizations meet mounting expectations for corporate social responsibility and
sustainability.
OD’s key contribution is to help human systems learn and change (Minahan & Norlin, 2013).
Is there a place for OD in the future? Absolutely. As Hamel and Breen (2007) assert, for organizations to be healthy for the future, they need to be healthy for human beings. Creating
healthy organizations for healthy human beings is how OD makes a difference.
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Summary and Resources
Take Away 10.3: OD Ethics and Values
• OD ethics and values help uphold OD’s humanistic stance. OD consultants can
remind leaders to prioritize ethics during change.
• OD consultants should uphold the OD code of ethics and hold clients accountable
for ethical leadership.
• Corporate social responsibility is the process of holding organizations
accountable for their effects on people, communities, and the environment.
• In the future, OD will continue to create healthy organizations for healthy
human beings.
Summary and Resources
Chapter Summary
• The knowledge society, or interconnectivity of the social, political, economical,
cultural and global world, has created information overload and technological
innovation.
• The knowledge society presents both opportunities and challenges, including accelerated change, hypercompetition, new knowledge creation, pressure to keep up, and
the need to become lifelong learners.
• Consultants can support organizations in the knowledge society by helping them
find ways to capture and share learning and respond to new challenges using the
action research process to solve problems.
• Globalization, the exchange of goods and services across boundaries and cultures,
has prompted the growth of outsourcing.
• Globalization has heralded increased cultural diversity, including shifts in age-related
demographics, multiple generations working side by side, and a shrinking workforce.
• Challenges of globalization include increasing child and unfair labor practices,
environmental destruction, and inequality. Opportunities presented by globalization
include increasing technological innovation, communicating instantaneously, accelerating economic growth, bolstering wages and redistributing wealth, and improving product and service quality.
• OD consultants support globalizing organizations by helping them identify and capitalize on globalization’s opportunities while meeting its challenges.
• OD ethics and values help uphold its humanistic stance. OD consultants can remind
leaders to prioritize ethics during change.
• OD consultants should uphold the OD code of ethics and hold clients accountable for
ethical leadership.
• Corporate social responsibility is the process of holding organizations accountable
for their effects on people, communities, and the environment.
• In the future, OD will continue to create healthy organizations for healthy human beings.
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Summary and Resources
Think About It! Reflective Exercises to Enhance Your Learning
1. Minahan and Norlin (2013) suggest that the current workplace context raises questions for OD practitioners, such as: How do we negotiate the needs of the individual
versus the needs of the organization? What should OD’s value orientation be? What
are the consequences of OD’s humanistic values? How can we be honest with clients
about our concerns and anxieties about working in current workplace context? Who
gets to define what makes effective OD? Reflect on these questions and formulate
your own answers.
2. Think of a time when a failure to change impacted your life. The failure can be yours
or another person’s and can relate to a product, process, relationship, expectation,
or outcome. What was the outcome? What did you learn?
3. Review this article on General Motors’ disastrous ignition switch recall and identify
the key ethical issues: http://www.nytimes.com/2014/03/25/business/carmaker
-misled-grieving-families-on-a-lethal-flaw.html?_r=0.
Apply Your Learning: Activities and Experiences to Bring OD to Life
1. Go to the Miniature Earth site (http://www.miniature-earth.com) and write a
one-page summary of issues you identify and their implications for workplaces
and OD.
2. Check out an OD professional and her reflections on her path and work: Profile in
OD: Chief Learning Officer Magazine features Tonya Cornelius, VP of Learning and OD
for ESPN: http://clomedia.com/articles/view/espn-s-top-play-learning.
3. Go to the U.S. Department of Labor website (http://www.dol.gov) and search topics
that interest you. What did you search? What did you learn?
4. Review the Organization Development Network: The Essential Elements of OD Curricula: http://www.odnetwork.org/?page=EssentialElements.
5. Consider the case of the Sriracha hot sauce plant discussed in this article (http://
america.aljazeera.com/articles/2013/10/29/sriracha-lawsuitmaymakeprices
jumpreport.html) and identify the key ethical and corporate social responsibility
issues.
Additional Resources
Web Links
Business Ethics Case Studies, resources on business ethics.
http://www.web-miner.com/busethics.htm
Corporate Responsibility Magazine, a publication that focuses on sustainable, responsible
business practices.
http://www.thecro.com
Hofstede Centre, for more about Geert Hofstede’s work on culture.
http://geert-hofstede.com
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Summary and Resources
Monthly Labor Review, U.S. Department of Labor, for reports on labor trends.
http://www.bls.gov/opub/mlr/2013/article/overview-of-projections-to-2022-1.htm
MOOCS: Top 10 Sites for Free Education with Elite Universities.
http://www.bdpa-detroit.org/portal/index.php/comittees/high-school-computer
-competition-hscc/29-education/57-moocs-top-10-sites-for-free-education-with-elite
-universities.html
Organization Development Network: The Essential Elements of OD Curricula.
http://www.odnetwork.org/?page=EssentialElements
Trompenars Seven Dimensions of Culture, another model for understanding culture.
http://www.mindtools.com/pages/article/seven-dimensions.htm
Vanderbilt Center for Ethics, a good collection of case studies.
http://www.vanderbilt.edu/CenterforEthics/cases.html#business
Media
Summit on the Future of the Corporation (Arie de Geus is one of the speakers)

The Power and Promise of Diversity: SAP
https://www.youtube.com/watch?v=0P9M-1eEQFM
Boomers, Gen X and Gen Y: Multigenerational Workforce

Key Terms
corporate social responsibility (CSR) The
movement toward holding organizations
accountable for the footprint they leave on
people, communities, and the environment.
digital divide The gap between people,
communities, or countries with ready access
to technology and the resources to use it
versus those without technological access
and knowledge.
globalization The exchange of goods and
services across boundaries and cultures.
outsourcing Transferring portions of production to outside suppliers as a means of
cost reduction.
sustainability The idea that business can
be maintained by using renewable energy,
having a minimal impact on the environment, and employing humane workforce
practices.
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