Chapter 16. The Sustainability of Organizations

Dexter Dunphy

This book is dedicated to the memory of Richard (Dick) Beckhard—a creative contributor to a social movement that has had a significant impact on the nature of modern organizations. Practitioners such as Dick referred to the body of theory they were developing, and their practice, as organization development (OD). However, OD was but one phase in a wider social movement that, in the second half of the 20th century, aimed to change the fundamental character of traditional bureaucratic organizations. My colleague Andrew Griffiths and I have called this broader movement the organizational renewal movement (ORM).^[1]

In our book, The Sustainable Corporation,^[2] we trace the historical genesis and growing influence of ORM. The ORM began in the United States with the emergence of the human relations and OD movements. There was a parallel development in Europe of socio-technical systems (STS) theory and practice, which was closely related to the industrial democracy movement (ID). STS and ID emerged and had the greatest influence in the United Kingdom, Scandinavia, Germany, Holland, and Australia. Both the American and European streams of theory and intervention were a form of incremental humanism; that is, they were informed by liberal humanistic values and designed to make incremental, ameliorative changes in the nature of the prevailing rigid, hierarchical bureaucracies of the time.

However, the ORM underwent a controversial and major reorientation in the late 1970s. This was a time of major political, social, and economic change, and led into world recession. During this time the humanistic values of the movement were challenged. The Japanese, leading the first wave of Asian industrialization, developed very distinctive management strategies and techniques that focused on productivity, quality, and continuous improvement rather than on a humanized workplace. At the same time the globalization of business intensified market competition and dramatically sped up the pace of corporate change.

Some OD practitioners began to realize that the kind of incremental, participative strategies they had been advocating were inadequate to meet these challenges; these strategies were too slow and often did not address the fundamental issues standing in the way of creating flexible, proactive organizations that could deploy resources with speed and agility. There was consequently an increasing advocacy of transformative change strategies (organizational transformation—rather than OD),^[3] and of charismatic or even directive leadership. But the critical transformation of the ORM philosophy and methodology came from the increasing link made to corporate strategy. Organizational performance, rather than job security and work satisfaction, became the central thrust of corporate change agents. At the time this was a controversial move for OD practitioners to make and was seen by some as selling out on humanistic values. It had the consequence, however, of making people issues central to the agenda of strategic change and of creating a new profession of human resource managers increasingly represented on senior executive teams. Thanks to this link to strategy, by the end of the 20th century, the ORM and many of its practitioners had come from being heretics outside the corporate walls to occupying a central and influential place in the corporate boardroom and strategic change practice of a variety of organizations.

Partly as a result of this shift, in most leading organizations the old bureaucratic structures were stripped down—hierarchies shortened or turned to networks, decision-making processes sped up, flexible team working was set in place, enlightened human resource processes with high levels of employee involvement were introduced. While remnants of the old organizational order linger on, the world of work is substantially different from how it was around the middle of the past century. The value drivers, however, were more instrumental than humanistic.

This raises the question of whether the work of the OD movement and the wider organizational renewal movement is complete. Perhaps we can look back with satisfaction, praise those such as Richard Beckhard who achieved so much, and declare that the mission has been accomplished. If so, is it time to sit back and relax?

My own answer to this is “no.” The challenges organizations are facing in this new century are greater and the need for corporate transformation more critical. The future of humanity and other species on this planet depends on it. And the considerable knowledge and skill acquired by change practitioners will be even more essential to the transformation of our organizational world. The corporation is a relatively new phenomenon in historical terms; in its short history it has been significantly modified several times and is currently undergoing further change. Around the world active thought is going into considering the shape of tomorrow's organizations. Some key groups involved in the re-examination are The Center for Tomorrow's Company, The Prince of Wales Business Leaders Forum, and the New Academy of Business in the United Kingdom and Business for Social Responsibility and the Council on Economic Priorities in the United States.