Organizational Development (OD) is an outgrowth of industrial psychology and management theory. In OD an organization is treated as an organism, subject to the characteristics and life cycle of its type. Both economic and personal factors are considered, giving a balanced viewpoint that allows the real causes of organizational behavior to be uncovered. Such an understanding of organizational dynamics often allows informed and effective changes to be made in an organization that make it better able to meet its objectives.

Organizational strengths can be focused and improved in a systematic way. Dysfunctional and counterproductive strategies and attitudes can be identified and changed, allowing an organization to continue to grow in a healthy manner and to make those transitions necessary to absorb the consequences of success.