Organizational Development - Larsen and Toubro Case Study

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Organizational Development (OD) is a planned long term effort led and supported through the top management to improve an organization’s ability and to solve its own problems by continuously working together and on managing the culture using behavioural skills. Thus, there are some certain aspects worth discussing about which are- OD is a planned effort. It requires a lot of effort, patience, and faith and is time consuming. Secondly, OD usually uses outsiders. These ‘facilitators’ as they are called are process specialists and are involved in depth in this process. The pioneers of OD in India were Larsen and Toubro India (L&T). OD at L&T started by calling in 2 eminent professors- Dr Udai Pareek and Dr TV Rao to study the appraisal process at the company. The existing appraisal system had many faults and needed to be corrected. The difficult task started by the professors interviewing some bosses and subordinates from different departments (using Diagnosis or Action Research) and they got a very interesting feedback. Some of the aspects of the feedback were – juniors wanted to know how well they were doing on the job, but weren’t told; people wanted to know what the growth opportunities in the company were; the appraisal form was too lengthy; some bosses had too many subordinates to appraise, etc. After getting the feedback from the employees the professors gave a report to the top management about the actual problem. The appraisal system had to serve not just one but many purposes namely it should help people understand their strengths and weaknesses, their own progress on the job, how they can perform better, and how they could grow in the company. So the appraisal process had to address the issues of appraisal, potential, counselling, career development and training all in one! The top management after reviewing the report gave the go ahead and they did two main things which were the most important which were bifurcating the Personnel department into personnel...
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