At the risk of some simplification, the purpose of this article is to show that HR split into two sig- nificantly different functions

Abstract

At the risk of some simplification, the purpose of this article is to show that HR split into two sig- nificantly different functions (administration and development) and that pressure for bottom line results has effectively strangled the ability of either human resources departments (HR) and organization development departments (OD) to focus on humanizing the workplace or attending to conditions amenable to employee self-actual- ization. At the same time, the article highlights the irony that many of the tools of OD have become integrated into the managerial repertoire, but not for their original purposes. I hope to stim- ulate some reflection among practitioners and academics regarding where we are heading in the hope that we may recommit ourselves to human betterment as well as organizational profitability.

I shall be telling this with a sigh Somewhere ages and ages hence:

Two roads diverged in a wood, and I– I took the one less traveled by,

And that has made all the difference.

– Frost, R. (1920, p. 9).

Human resources (HR) and organization devel- opment (OD), both enable people to contribute fully to the purpose of the organization. They could be, in effect, two roads to the same destina- tion – employee self-actualization – while fully contributing to the organization’s advancement. I suggest that both did serve that function at differ- ent times in their evolution, but today are

9Volume 30 � Number 1 � Spring 2012

Two Roads to the Bottom Line: HR and OD

John Nirenberg

Dr. John Nirenberg is a professor of Leadership and Organizational Change at Walden University. John’s books include The Living Organization: Transforming Teams Into Workplace Communities; Power Tools: A Leader’s Guide to the Latest Management Thinking, and Global Leadership. He

consults to organizations about leadership, workplace community, organizational culture, motivation and inno- vation.

Contact Information John Nirenberg, Ph.D. Walden University john.nirenberg@gmail.com

focused solely on the bottom line.

Today’s HR department evolved from the efforts of Robert Owen, the managing partner of a very successful Scottish cotton mill in the 19th century. He remedied the Dickensian conditions of factory life and is considered the “father of modern per- sonnel administration” (George 1972, p. 63). Attention to working conditions eventually beat a path through Henry Ford’s “sociological depart- ment” (Bratton & Gold, 1999, p. 6) that was the employment office and paymaster doling out the then superlative wage of $5 per day. Over the years, HR has been the advocate of better treat- ment for employees and, since the Hawthorn experiments, the center for research and develop- ment in search of the most effective combination of employer conditions that would lead to the highest productivity without turnover. Eventually, HR became more concerned with the mechanics of employment, formal labor relations, and super- vision; while OD focused on the development of the interface between the system and the employ- ees.

At the risk of some simplification, the purpose of this article is to show that HR split into two sig- nificantly different functions (administration and development) and that pressure for bottom line results has effectively strangled the ability of either HR or OD to focus on humanizing the workplace or attending to conditions amenable to employee self-actualization. At the same time, the article highlights the irony that many of the tools of OD have become integrated into the manageri- al repertoire, but not for their original purposes. I hope to stimulate some reflection among practi- tioners and academics regarding where we are heading.

HR and OD: Two Roads to Well Being?

After reviewing over 80 research documents, Wirtenberg, Abrams, and Ott (2004) surveyed 6,000 members of the OD Network, the OD Institute, and the International OD Association in a study of the OD profession. They found that “Respondents to this survey indicated that the field of OD (a) lacks a clear, distinct definition; (b) needs greater quality control/effectiveness and business acumen among OD practitioners; and (c) lacks clarity around its return on investment and perceived value of the work performed” (p. 1).

Some of the most telling respondent comments in their study were:

People who do OD are not business focused, they cannot speak the same language as their clients…. Many business executives see OD as ancillary to the core business strategy—OD practitioners need to be steeped in the business and be able to speak in business terms. If not, executives will see OD as soft and academic… The OD community is typically very weak in understanding business and not good when the business issues are complex…We need to understand the needs of CEOs and provide immediate solutions. (p. 473)

The HR community has also faced such criticisms periodically after which, self-doubts lead to a renewed focus on business results measured in ROI (Paauwe, 2009). In turn, this leaves the harder to measure process-related functions such as mediation, conflict resolution, and personal growth in the background. There has been a per- sistent effort to justify HR through ROI measures. For example, at a symposium at Simon Fraser

10 Organization Development Journal

University it was claimed that “HR executives, frustrated with the lack of respect for the HR function and concerned with communicating the significant strategic contributions of HR, are adopting the ROI methodology as a proactive approach to demonstrating organizational align- ment, contribution, and results from HR prac- tices” (Phillips and Phillips as cited in Simon Fraser University, 2009).

Pressure From the Bottom Line

Human resources departments evolved from per- sonnel departments, which evolved from admin- istration departments, which evolved from the coat pockets of founding entrepreneurs. The func- tion of HR is straightforward, if laden with myri- ad compliance responsibilities and assorted for- malities including monitoring the employee- organization relationship. According to the Society for Human Resource Management (SHRM) in a document entitled The future of the HR profession (http://www.Shrm.org), HR is still evolving; currently, into the talent management department.

“Broadly defined, talent management is a compa- ny’s ability to attract, retain and motivate employ- ees. While talent management has always been part of HR’s mission, a combination of demo- graphic and market forces will bring new urgency to cultivating a workforce that offers true compet- itive advantage” (SHRM, 2002, p. ii).

Whether it is personnel management, HRM, or talent management, clearly the purpose of HR is to improve organizational effectiveness through cultivating a workforce that offers “true” competi- tive advantage. The larger point, however, is that HR, at its core, is about maximizing the return on

its human capital. It always has been. HR then, is working hard to demonstrate that it is not “weak on bottom line thinking.” Does that leave OD still on the road less traveled? Does recognizing the human impulse to self-actualize remain a legiti- mate function within workplace organizations?

OD on the Road to Fulfillment

OD developed from a social systems perspective and unashamedly espoused humanistic values. Though it made contributions to interpersonal and team success, it did so because of a funda- mental belief in the worth of people expressed in their entitlement to a decent workplace experi- ence. Virtually all of the tools of OD were designed to enhance interpersonal communica- tions, conflict resolution, and personal expression in a trusting environment (Anderson, 2010). If workers were simply cogs in a machine or hired hands as in the pre-OD days, OD need not exist. But if organizations were to truly tap the potential of people in the workplace they would need the ability to communicate fearlessly, a goal that still remains illusive in most workplaces today.

Organization development started out rather con- ventionally. According to the OD Network (http://www.odnetwork.org), quoting Richard Beckhard, (1969) OD “is an effort (1) planned, (2) organization-wide, and (3) managed from the top, to (4) increase organization effectiveness and health through (5) planned interventions in the organization’s ‘processes,’ using behavioral-sci- ence knowledge.”

There is nothing particularly humanistic about it. Beckhard’s definition is clearly bottom line orient- ed.

11Volume 30 � Number 1 � Spring 2012

The rise of the New OD (in contrast to Beckhard’s view that leaves out individual development as part of the purpose of OD) was built atop the quality of life movement from the mid-1960s to the mid 1980s. OD developed a growing concern for personal self-actualization and people’s desire to find meaning in the pursuit of a worthy organi- zational vision (Argyris, 1957; Maslow, 1965, 1975). To make that possible, OD embraced many humanistic values and participative practices that suggested a democratization of the decision-mak- ing processes and concerns for stakeholder as well as stockholder interests. Indeed, with the coincident rise of the environmental sustainability movement and the cries for corporate social responsibility (CSR), it would be easy to claim that conventional OD has been much too amenable to corporate interests. The underlying humanistic values of New OD should be more in demand now than ever – at least among employ- ees in this country – especially since the demise of unions, the increase in average hours spent work- ing (Williams & Boushey, 2010) and the reduction of benefits including vacation time (http://www.cbsnews.com/stories, Our no vaca- tion nation).

New OD is recognized with the inclusion of a sec- ond definition, just below Beckhard’s on the same ODN web page (http://www.odnetwork.org) that claims OD “…is a field directed at interventions in the processes of human systems (formal and informal groups, organizations, communities, and societies) in order to increase their effectiveness and health using a variety of disciplines, princi- pally applied behavioral sciences. OD requires practitioners to be conscious about the values guiding their practice and focuses on achieving its results through people.” (Minors, n.d.)

It is this second definition that suggests OD isn’t simply one of the 13 domains of HR, but has a distinct purpose in addition to organizational effectiveness that makes all the difference: to increase effectiveness and health of the organiza- tion while being conscious of the values guiding personal growth and professional practice. To take that road less traveled is to truly strive for a connection between the humanistic and demo- cratic aspirations of the larger society with the internal functions of organizations. And in so doing, it would be easy to think that OD profes- sionals have lost their way, that they don’t really understand the nature of business.

I argue that it is quite to the contrary; they know all too well that if left alone, corporations would merely follow the organizational imperative as identified by Scott and Hart (1979), “wherein two value propositions and four rules comprise the dominant paradigm of organizational behavior. The two values are: ‘…whatever is good for the individual can only come from the modern organ- ization’ and, ‘…all behavior must enhance the health of such organizations.’ The rules that but- tress these two main propositions require employ- ees ‘…1) to be obedient to the decisions of superi- or managers, 2) to be technically rational, 3) to be good stewards of other people’s property, and 4) to be pragmatic (pp. 31-32).

As the organizational imperative has matured, it has come to mean much more. It assumes the willingness of the individual to sacrifice for the good of an organization in which he or she is not a stakeholder beyond wages received.

Traditionally, it also assumed that property rights as exercised by owners of organizations over their material wealth extends to the ownership of the

12 Organization Development Journal

employees who work for them. This reduces indi- viduals to a state of virtual wage slavery stripping them of many of the qualities that make them unique human beings and their lives worth liv- ing” (Nirenberg, 1993, p. 41).

If you are practicing in organization development, facing this institutional reality comes with the ter- ritory. Walking this road has led OD practitioners to both meaningful work, especially when we contribute to the improvement of human well being in social systems, and to their being consid- ered irrelevant and unrealistic because they appear to be ignoring the very same bottom line that pays their salaries.

Unfortunately, both the HR and OD roads seem to be merging once again into their classical origins of organizational effectiveness with minimum attention to human well-being.

Maybe it’s a variation on the means-end ethical challenge. Are employees solely instruments of an organization or are they ends in themselves and entitled to be treated as such? Can all personal benefit unrelated to the bottom line be stripped from the treatment of people in the workplace? Are organizations justified in returning to sweat- shop-like conditions because it would improve the bottom line? For HR people made to justify their roles, employees may simply become a means to an end or they jeopardize their own jobs. Then, as all slack (financial resources as well as time) is removed from the workplace, HR devotes less time to the process (non ROI) matters and more time on efficiency and carefully moni- toring the means of employee recruitment, selec- tion, assignment, compensation, training, promo- tion, evaluation, and dismissal.

New OD, on the other hand, if it remains viable at all, focuses on the ineffable aspects of forming a productive and satisfying organizational culture, helping to build a “great place to work,” helping teams work smoothly, building productive rela- tionships, and possibly even promoting self-actu- alization. Unfortunately, for many OD practition- ers personal growth is again only a coincidence (Slim, 2009). Curiously, this has developed because the techniques of OD, as originally con- ceived under Beckhard’s definition, have been co- opted by mainstream management practitioners and educators. For both normative HR and OD, increasingly the bottom line must be their sole justification. For them the roads have again con- verged.

An Ironic Pit Stop

HR is indispensable, especially for large organiza- tions if for no other reason than the need to administer the individual-institution relationship and government regulations. OD on the other hand, especially if it is promoted as a way of building community or self-actualization, is all too frequently seen as a luxury affordable only in good times or crisis, but not as a standard func- tion designed to build healthy workplaces. In a sense the value orientation of OD as a means to collective effectiveness requires much time to learn, practice and process in an environment typ- ified by goal-oriented impersonal action where results are not always immediately visible.

While HR is satisfying a basic functional need, values based OD, where it survives, is primarily a set of communication techniques that break down barriers and stimulates the spontaneous sharing of one’s best ideas and most compassionate behavior in the service of interpersonal creativity,

13Volume 30 � Number 1 � Spring 2012

innovation, achievement, and well-being. And that is increasingly being challenged by the inten- sifying bottom line thinking resulting from the organizational imperative designed to contain and strategically direct human energy for only one thing: profitability.

Values-oriented OD takes time, and diverts atten- tion from simply getting the job done. This is costly and anxiety-provoking in an age when all slack is being removed from human systems and our addiction to email, texting, relentless net- working, and typing on one keyboard or another fill all time with lip service to reflect, to build rela- tionships, and self-actualize on the job.

In its heyday from approximately 1975 to 1985, OD introduced many techniques to improve the effectiveness of both individual and organization. Reflection, action research, brainstorming, feed- back, dialogue, and future search – almost all of them have now become routine. Frequently man- agers with or without OD advice now utilize these (and many more) techniques to achieve their purposes regardless of their impact on the individual – though there is sometimes a coinci- dent positive feeling just being involved. The irony is striking. While OD practitioners are accused of not paying attention to the bottom line, otherwise hardnosed managers are using techniques that were invented in the OD commu- nity to help improve the bottom line.

Techniques that were once used to help build trust, communicate deeply and help disparate groups work together as teams for personal and organizational betterment are today part of the fabric of organizational life but, less frequently in the service of personal satisfaction. We now find them an everyday part of our lives at work, in the

community, in school. In many areas of our lives where we need to get to the point in a hurry, or just need to exploit the participants for their ideas, we turn to these techniques to keep them focused and productive. Thus, OD, as it is popu- larly understood, is becoming just another well- traveled road to additional organizational control.

The Best Places to Work

The Great Place to Work Institute that creates the “100 Best Companies to Work For” list for Fortune (http://money.cnn.com/magazines/fortune/), involves measures of qualities that rarely occur naturally in organizations – such as a climate of trust. For a climate of trust to be created where it may not already exist, OD still serves a useful purpose. But the climate piece is often overlooked when a great place to work is described.

For example, SAS, is a private software company ranked number 1 this year on Fortune’s list. What makes it so great? According to the 2010 list (Moskowitz, Levering, & Tkaczyk, 2010) “One of the Best Companies for all 13 years [of the list], SAS boasts a laundry list of benefits — high-quali- ty child care at $410 a month, 90% coverage of the health insurance premium, unlimited sick days, a medical center staffed by four physicians and 10 nurse practitioners (at no cost to employees), a free 66,000-square-foot fitness center and natatori- um, a lending library, and a summer camp for children. The architect of this culture — based on ‘trust between our employees and the company’ — is Jim Goodnight, its co-founder, and the only CEO that SAS has had in its 34-year history. Some might think that with all those perks, Goodnight was giving away the store. Not so. SAS is highly profitable…[and] turnover is the industry’s lowest at 2%” (p. 75). This description is obviously

14 Organization Development Journal

appealing and the strengths of the founder’s val- ues have indeed created the trust that is essential to successful OD as well as to being a “great place to work.”

Even at number 100 on the list, Colgate-Palmolive is still “great” according to Fortune. “What makes it so great? [The] king of [the] toothpaste market recruits with this come-on: ‘No matter where in the world you may want to work, Colgate can take you there.’ Appropriate since roughly 80% of sales come from outside the U.S. Top manage- ment ranks are studded with people who have international experience, including CEO Ian Cook, who joined the company in 1976 in Britain.”

Though it might be a great opportunity to work in places from Argentina to Zimbabwe, it says lit- tle about the individual-organizational relation- ship. Neither of these companies could survive without effective HR to manage these benefits and both have OD functions, presumably to keep the trust alive.

So, if the cultures that result in employee satisfac- tion and great work environments have sensible HR and OD practices to thank, why do HR and OD professionals feel so defensive and some downright vulnerable to claims they are not being properly bottom line focused (Paauwe, 2009)?

In addition to the Trust Index response that accounts for two-thirds of a company’s score on the great place to work survey, management’s credibility, employee job satisfaction and cama- raderie are also accounted for by the Institute’s Culture Audit, which includes detailed questions about hiring, communication, and diversity among other things.

The Great Place to Work Institute (http://www.greatplacetowork.com) reports that, “Trust is the essential ingredient for the primary workplace relationship between the employee and the employer. According to our model, trust is composed of three dimensions: Credibility, Respect, and Fairness” http://www.greatplace- towork.com/our-approach/what-is-a-great-work- place, para. 5). These are followed by pride and camaraderie.

OD is an integrative field as well as a set of skills (Friedlander & Brown, 1974; Mendenhall & Oddou,1983; French, Bell, & Zawacki, 2000). Psychology, anthropology, sociology, education, and interpersonal communications (and more) all contribute to the body of knowledge and the repertoire of exercises, instruments and tech- niques to get us to talk with, and understand one another in a mutually productive manner. Not surprisingly though, this knowledge, without a commitment to values, is often put to question- able use – the manipulation by marketers, the psychological operations (psyops) in the U.S. mili- tary that justify “enhanced interrogation” tech- niques (Zimbardo, 2007), and even the current use of social scientists to serve the war effort in Afghanistan, are highly visible examples (Price, 2011).

As Hugh Gusterson, board member of the American Anthropological Association recently said, “It’s impossible to be embedded in American military units in Afghanistan, collecting informa- tion about local villages, and not be complicit with actions that result in the death or imprison- ment of some of the people you talk to” (http://www.npr.org/templates/story/story.php?sto ryId=125502485).

15Volume 30 � Number 1 � Spring 2012

Thus, it isn’t a surprise that innovations once cre- ated for a mutually positive good (individual and organizational) often squeeze out the individual as the lack of time, money, or motivation presses upon the organization to achieve some form of “sustainable competitive advantage.”

When OD consultants’ efforts result in an organi- zation landing on the “100 Best Companies to Work For” list, OD as decoration may in fact prove to be an effective substitute for higher com- pensation, psychological well-being, creating shared meaning, and building real community. Individual aspiration and serving a larger societal purpose are not part of the criteria to be on the list, though some companies have a more natural connection to these ideas than others. Many mem- bers of the OD community would undoubtedly rather see such criteria used. Instead, the great places to work are often reduced to exotic benefits and employment stability, and their place on a chart to attract job applicants.

As OD terms and technologies become wide- spread, if not universal, and the language is pre- empted for strictly organizational purposes, con- cepts such as dialogue, open communication, trust, feedback, brainstorming, conflict resolution, mediation, team building, collaboration, and the learning organization become tools for process improvement, but only coincidentally for human betterment. While not exactly Orwell’s (1949) newspeak, the human betterment suggested in using these terms occupies a smaller and smaller part of the purpose in employing them. In the midst of being co-opted by adherence to the orga- nizational imperative and, without a strong val- ues orientation, when OD is applied as just a means to an economic end, it risks becoming just another reason to be even more cynical about work life.

End of the Road

The evidence-based empiricism of industrial- organizational psychology is contributing metrics for every aspect of HR from recruitment, selec- tion, placement, testing, and performance assess- ment per job specifications (blue collar) or per goal attainment (white collar), skill assessment and even temperament training (emotional intelli- gence), compensation, and dismissal. In short, the drive to the bottom line demands that all HR’s key performance indicators be measurable and shown to be connected to the bottom line, like everyone else’s.

From this perspective, human resources (people) are indeed a cost to be contained, an element in the economic formula that needs to be shaped and controlled as any other element in the supply chain. Personal self-actualization and collective well-being simply have no place. Today, it isn’t about values; it is about economic reality and the way of the business world, according to Wirtenberg, Abrams, and Ott (2004). Those that make it an issue are clearly just not professional; they’re just not team players.

The Conference Board reported last year that job satisfaction reached the lowest level in 20 years (Conference Board, 2010). Based on a survey of 5,000 households, it found that only 45% say they are satisfied with their jobs. In 1987 that figure was 61.1%.

According to a spokesperson for the Conference Board, “The drop in job satisfaction between 1987 and 2009 covers all categories in the survey, from interest in work (down 18.9 percentage points) to job security (down 17.5 percentage points) and crosses all four of the key drivers of employee

16 Organization Development Journal

engagement: job design, organizational health, managerial quality, and extrinsic rewards.” This doesn’t speak well for either the HR or the OD communities. Rather, I believe it emphasizes the increasingly bottom line focus on all workplace endeavors.

Plainly, our hyper-competitive, globalized, 24/7 business environment requires the full utilization of human as well as material resources. Any slack or surplus in their acquisition and application is considered waste. Why spend money on organi- zation development when we just need to get the work out? Why indulge a workforce with OD interventions when it is simpler just to expect everyone to handle their own issues?

Given this rather bleak scene, should we just fol- low HR down the return on investment justifica- tion path and simply abandon our values? Have OD professionals already done so in light of our inability to sell our wares as good for community building?

It seems that much of our technology from action research to brainstorming to team building to dia- logue and coaching, if not t-groups, are now mainstream. The interpersonal techniques once pioneered by NTL (http://www.ntl.org/) in the 1950s and 1960s, and Pfeiffer and Jones in the 1970s (Pfeiffer & Jones,1972 – 2004) are now embedded in the culture of business. Workshops and participation are expected. Flip charts and whiteboards are everyone’s tools and the colored pen-marks on one’s hands and clothes are the sign of an intensive session that has become routine daily practice, but not evidence of work toward self-actualization.

References

Anderson, D.L. (2010). Organization development: The process of leading organizational change. Los Angeles, CA: Sage.

Argyris, C. (1957). Personality and organization. New York: Harper & Row.

Beckhard, R. (1969). Organization development: Strategies and models. Reading, MA: Addison-Wesley.

Bratton, J., & Gold, J. (1999). Human resource management: Theory and practice. Mahwah, NJ: Lawrence Erlbaum and Associates.

CBS News (2010, May 30). Our no vacation nation. http://www.cbsnews.com/stories, our no vacation nation

Conference Board (2010, January 5th). U.S. job satisfaction at lowest level in two decades. Press Release.

Cox, J.W., & Minahan, S. (2006). Organizational decoration: A new metaphor for organization development. The Journal of Applied Behavioral Science, 42 (2), 227-243.

Fortune (2010, February 8th). The best companies to work for. 161(2) 56-64. Retrieved from http://money.cnn.com/magazines/ fortune/bestcompanies/2010/

French, W.L., Bell, C.H., & Zawacki, R.A. (2000). Organization development and transformation: Managing effective change. Boston, MA: Irwin-McGraw-Hill.

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Frost, R. (1920). Mountain interval. New York: Henry Holt.

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17Volume 30 � Number 1 � Spring 2012

George, C.S. Jr. (1972). The history of management thought. Englewood Cliffs, NJ: Prentice Hall.

Maslow, A. H. (1965). Eupsychian management: A journal. Homewood, IL: Irwin.

Maslow, A .H. (1975). The farther reaches of human nature. New York, NY: Viking.

Mendenhall, M., & Oddou, G.(1983). The integrative approach to OD: McGregor revisited. Group & Organization Studies, 8(3) 291-301.

Minors, A. (n.d.). http://www.odnetwork.org, para. 2.

Moskowitz, M., Levering, R., & Tkaczyk, C. (2010 February 8th). The list. Fortune 161(2), pp. 75-88.

Nirenberg, J. (1993). The living organization: Transforming teams into workplace communities. Homewood, IL: Business One Irwin.

NPR. Flintoff, C. (2010, April 5). Marines tap social sciences in Afghan war effort. http://www.npr.org/templates/story/ story.php?storyId=125502485

Organization Development Network (ODN). http://www.odnetwork.org/

Orwell, G. (1949). Nineteen eighty-four. London: Secker and Warburg.

Paauwe, J. (2009). HRM and performance: Achievements, methodological issues and prospects. Journal of Management Studies 46(1), 129-142.

Pfeiffer, W.J., & Jones, J.E. (1972 – 2004). Annual handbook for group facilitators. San Francisco: Jossey-Bass Pfeiffer.

Price, D.H. (2011). Weaponizing anthropology: Social science in service of the militarized state. Oakland, CA: AK Press.

Scott, W., & Hart, D., (1990). Organizational values in America. New Brunswick, NJ: Transaction Publishers, pp. 30-31.

SHRM. (2002). The future of the HR profession. Alexandria, VA: Society for Human Resource Management. Retrieved from: http://www.shrm.org/Pages/default.aspx

Simon Fraser University (2009, September). Measuring return on investment in HR: A global initiative for HR strategy. Vancouver, B.C.: Simon Fraser University seminar.

Slim, P. (2009). Escape from cubicle nation: From corporate prisoner to thriving entrepreneur. New York: Broadway Books.

Williams, J.C., & Boushey, H. (2010). The three faces of work-family conflict: The poor, the professionals, and the missing middle. San Francisco, CA: Institute for Work Life Law at Hastings Law School.

Wirtenberg, J., Abrams, L., & Ott, C. (2004). Assessing the field of organization development. The Journal of Applied Behavior Science, 40 (4), pp. 465-479.

Zimbardo, P. (2007). The Lucifer effect: Understanding how good people turn evil. New York, NY: Random House.

18 Organization Development Journal

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