The key difference between organizational development and organizational transformation is that organizational development is a systematic approach for the betterment of the organization by analyzing past experience, current situation and future objectives, whereas organizational transformation is a rigid and rapid approach to stabilize or improve the organization by analyzing the current business situation.
Change is always evident in any organization. Organizational development and transformation can be introduced as two ways of organizational change. We must apply one of these ways for the growth of the company, depending on the situation.
1. Overview and Key Difference
2. What is Organizational Development
3. What is Organizational Transformation
4. Relationship Between Organizational Development and Organizational Transformation
5. Side by Side Comparison –Organizational Development vs Organizational Transformation in Tabular Form
What is Organizational Development?
Organizational development is a systematic approach to enhance organizational performance. In general, this is a planned strategic approach to drive long term objectives of the company. Organizational development is action-oriented.
In the current context, organizational development is planned with a broad, careful analysis of organization situation, macro-environment, behaviour, skills and competencies of employees and future objectives of the organization. Sometimes past experiences will also matter for organizational development.
The main purpose of organizational development is to improve organizational performance in many ways. For instance, some of them are adapting to a rapidly changing external environment of new markets, customer requirements and technology. Operation management, training, development, and knowledge management are the key concepts of organizational development.
What is Organizational Transformation?
Organizational transformation is the restructuring or redesigning of the business model. It may be a collective approach of reengineering, redesigning or redefining business systems.
An organization may need to change rapidly with the changing environment, especially in macroenvironment, since the organization is not able to foresee the change. As a result, to safeguard the organization, the management decides different transformational methodologies. For instance, to survive in a financial crisis, the organization might need to downsize the company, merge business operations, etc.
The measure of success of the transformation is based on the difference of organizational performance from the current state to future state. There won’t be any concern regarding the past state. Normally organizational transformation is created from top management due to targets of the organization, magnitude of change, timing, and budget limitations.
What is the Relationship Between Organizational Development and Organizational Transformation?
In general, the concepts of change management, organizational development and organizational transformation are equally important. In certain instances, transformation occurs through organizational development. Moreover, an organization’s change happens throughout a period of time. In some cases, the basis behind organizational development is to withstand and follow rapid changes in the external environment. This is also the same basis behind the organizational transformation.
What is the Difference Between Organizational Development and Organizational Transformation?
Although both organizational development and organizational transformation are concepts of change management, there is a significant difference between organizational development and organizational transformation in theory and practise. Moreover, methods of application are entirely different from business to business and highly dependent on the current business situation.
The basis of organizational development is the careful analysis of past experience, current state and future trends. On the contrary, the basis of organizational transformation is solely the assessment of the current business situation. Throughout the transformation process, businesses analyse the data and information comparatively to the present and future goals in a regular manner. So, this is also a major difference between organizational development and organizational transformation. Organizational transformation is originated by top management as per business requirement, whereas for organizational development, there is no need for top management involvement. Department heads may take part in organization development.
Moreover, a further difference between organizational development and organizational transformation is their requirements. For sustainable organizational development, it is necessary to have an organizational strategy, adequate processes and relevant training. However, this is not required for sustainable organizational transformation. In certain instances, organizational development may support the transformation process, but organizational transformation does not support the development process. Moreover, we can introduce Organizational development as a systematic and flexible approach, whereas organizational transformation is not always systematic and maybe a rigid approach.
Summary – Organizational Development vs Organizational Transformation
The key difference between organizational development and organizational transformation is that organizational development is a systematic approach for the improvement of an organization by analyzing past experience, current business situation and future objectives, whereas organizational transformational is a rigid and fast approach to stabilize or improve the organization by analyzing the current business condition.
1. “What Is Organizational Development (OD)? Definition and Meaning.” BusinessDictionary.com, Available here.
2. Fannin, Kris. “Organizational Change & Transformation – 6 Critical Differences.” Intelivate, 13 Feb. 2018, Available here.
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