Diagnosing

Organizations
Module - 04
  Introduction to Diagnosing Organizations
 Need for Diagnostic Models
Content  Organization, Group and Individual Level Diagnosis
 Collecting and analysing the Diagnostic Information
  Diagnosis is the second major phase in the planned change.
 If done well, diagnosis clearly points the organization and the OD
Introduction practitioner toward a set of appropriate intervention activities
that will improve organization effectiveness
  Diagnosis is the process of understating how the
organization is currently functioning.

 It is a collaborative process between organization members and

consultants
 To collect pertinent information
What is  Analyse it
Diagnosis?  Draw conclusions for action planning and intervention

 Ex: Manager may seek an OD practitioner’s help to reduce

absenteeism in his department.
  What is Diagnostic Model?
 Organization members and OD consultants need to have an
Need for idea about what information to collect and analyse depend on
how organizations are perceived.
Diagnostic  Perceptions can vary from feelings to scientific explanations of
Models how organization function
 Conceptual frameworks that people use to understand
organizations are referred to as ‘Diagnostic Model’
 Focusing attention on those features, often to the exclusion of
others, can result in a biased diagnosis
 Provide information about how and why certain organizational
systems, processes or functions are effective.
 Helps in identifying variables that are associated with an
organizations effectiveness
Open Systems  Organizations as open systems
Model
https://
www.youtube.
com/watch?v=
1L1c-EKOY-w
• Organizations and
its subsystems
share a common
features that
explain how they
are organized and
function
• Hierarchical
ordering
• Society
• Organizations
• Departments
(groups)
• Individuals
 Environmen
ts

Alignment Inputs

Open
Open system Equifinality
System Transforma
Propert tions
properties ies

Feedback Outputs

Boundaries
  Everything beyond the boundaries of the system
 The functioning of the organization is affected by its environment
 Ex: availability of labour, raw material, customer demands,
Environments competition, Govt. Regulations

 Understanding these factors can help in explaining some of its

internal behaviour
  Inputs are acquired from the organizations external environment

 Transformation – processes of converting inputs into outputs

 Social and technological components carries out transformations
Inputs,
 The social component – people and their work relationships
Transformation
 Technological component- tools, techniques and methods of
and Outputs production

 Outputs are the results of what is transformed by the system and

sent to the environment
  Helps to distinguish between systems and environments

 Defining boundaries is more difficult

Boundaries  Boundary for one department may not be the same as that for a
different department

 Boundaries vary from fixed to diffuse

  Information used to control the future functioning of system is
Feedback considered feedback
  Organizations designed differently and still achieve the same
Equifinality results
 Ex:
  Systems overall effectiveness is partly determined by the extent
to which the different subsystems are aligned with each other

 Ex: alignment or fit between organization and its environment,

Inputs and transformation or between transformations and
outputs
Alignment
 Diagnosis is the search for misfits among the various
subsystems of an organization

 Diagnosticians who view the relationship among the various part

of a system as a whole are referred as to as a “System
Perspective”
Diagnosing
Organizational Systems
 organizations can be diagnosed at three levels
 Diagnosis can occur at all three organizational levels, or it may be
limited to issues occurring at a particular level
 The key to effective diagnosis is to know what to look for at each
level as well as how the levels affect each other

 (1) the inputs that the system has to work with

 (2) the key design components of the transformation subsystem,
and
 (3) the system's outputs.
 The relationships shown in Figure 5.2 illustrate how each
organization level affects the lower levels. The larger environment
is an input to organization design. Organization design is an input
to group design, which in turn serves as an input to job design.
These cross-level relationships emphasize that organizational
levels must fit with each other if the organization is to operate
effectively. For example, organization structure must fit with and
support group task design, which in turn must fit with individual
job design.
Organization-
Level
Diagnosis
• Similar to other popular organization-level diagnostic models. These
include Weisbord's six-box model, Nadler and Tushman's congruency
model, Galbraith's star model, and Kotter's organization dynamics
model.
• organization's transformation processes, or design components,
represent the way the organization positions and organizes itself within
an environment (inputs) to achieve specific outputs.
• The combination of design component elements is called a strategic
orientation.
  To understand how a total organization functions, it is necessary
to examine particular inputs, design components, and the
Inputs alignment of the two sets of dimensions.
 two key inputs affect the way an organization designs its strategic
orientation: the general environment and industry structure
 The general environment represents the external elements and
forces that can affect the attainment of organization objectives.
 It can be described in terms of the amount of uncertainty present
in social, technological, economic, ecological, and political forces.
 For example, the technological environment in the watch industry
has been highly uncertain over time. The Swiss, who build
precision watches with highly skilled craftspeople, were caught off
guard by the mass production and distribution technology of
Timex in the 1960s. Similarly, many watch manufacturers were
surprised by and failed to take advantage of digital technology.
 An organization's industry structure or task environment
 As defined by Michael Porter, an organization's task environment
consists of five forces:
 Supplier power, buyer power, threats of substitutes, threats of
entry, and rivalry among competitors.
 Strategic orientations must be sensitive to powerful suppliers
who can increase prices (and therefore lower profits) or force the
organization to pay more attention to the supplier's needs than to
the organization's needs. For example, unions represent powerful
suppliers of labor that can affect the costs of any organization within
an industry.
 Second, strategic orientations must be sensitive to powerful
buyers. Airplane purchasers, such as American Airlines or country
governments, can force Airbus or Boeing to lower prices or appoint
the planes in particular ways.
 Third, strategic orientations must be sensitive to the threat of
new firms entering into competition. Profits in the restaurant
business tend to be low because of the ease of starting a new
restaurant.
 Fourth, strategic orientations must be sensitive to the threat of
new products or services that can replace existing offerings. Ice
cream producers must carefully monitor their costs and prices
because it is easy for a consumer to purchase frozen yogurt or
other types of desserts instead.
 Finally, strategic orientations must be sensitive to rivalry
among existing competitors. If many organizations are
competing for the same customers, for example, then the
strategic orientation must monitor product offerings, costs, and
structures carefully if the organization is to survive and prosper.
 The complexity of the environment refers to the number of
important elements in the general environment and industry
structure.
 For example, software development organizations face dynamic
and complex environments. Not only do technologies,
regulations, customers, and suppliers change rapidly, but all of
them are important to the firm's survival. On the other hand,
manufacturers of glass jars face more stable and less complex
environments.
  strategic orientation is composed of five major design
Design components—strategy, technology, structure, measurement
systems, and human resources systems—and an intermediate
Components output—culture. Effective organizations align their design
components to each other and to the environment.
 A strategy represents the way an organization uses its resources
(human, economic, or technical) to gain and sustain a competitive
advantage.
 Technology is concerned with the way an organization converts
inputs into products and services. It represents the core of the
transformation function and includes production methods, work
flow, and equipment.
 Structure - It represents the basic organizing mode chosen to (1)
divide the overall work of an organization into subunits that can
assign tasks to individuals or groups and (2) coordinate these
subunits for completion of the overall work.
 Structure, therefore, needs to be closely aligned with the
organization's technology.
 Measurement systems are methods of gathering, assessing, and
disseminating information on the activities of groups and
individuals in organizations.
 Human resources systems include mechanisms for selecting,
developing, appraising, and rewarding organization members.
organization is to be successful.
 Organization culture represents the basic assumptions, values,
and norms shared by organization members.
 guide members' perceptions, thoughts, and actions.
 For example, McDonald's culture emphasizes efficiency, speed,
and consistency. It orients employees to company goals and
suggests the kinds of behaviours necessary for success.
 culture is shown as an intermediate output from the five other
design components because it represents both an outcome and a
constraint.
  The outputs of a strategic orientation can be classified into three
components.
 First, organization performance refers to financial outputs such as
profits, return on investment, and earnings per share. For non-
profit and government agencies, performance often refers to the
extent to which costs were lowered or budgets met.
 Second, productivity concerns internal measurements of
Outputs efficiency such as sales per employee, waste, error rates, quality,
or units produced per hour.
 Third, stakeholder satisfaction reflects how well the organization
has met the expectations of different groups. Customer
satisfaction can be measured in terms of market share or focus-
group data; employee satisfaction can be measured in terms of an
opinion survey; investor satisfaction can be measured in terms of
stock price
  The effectiveness of an organization's current strategic
orientation requires knowledge of the above information to
determine the alignment among the different elements.
Alignment  1. Does the organization's strategic orientation fit with the inputs?
 2. Do the design components fit with each other?
Analysis  Nike page no 93
  Organization design is the major input to group design.
Diagnosing  Technology – group task

Groups  Structure – specifies coordination required among groups

 Human Resources and measurement systems -
Group Level
Diagnosis
 Goal Clarity – how well the group understands its objectives
 Task structure – is concerned with how the groups work is
designed.
 Group composition – membership of groups. Members can differ
on a number of dimensions having relevance to group behaviour.
Ex: age, education, skills and abilities etc.
 Team functioning – how members relate to each other.
 Performance norms – beliefs about how the group should
perform
  Performance – reduce costs, increase productivity etc
Outputs  Quality of work life – work satisfaction, team cohesion and
organizational commitment.
  group design components must fit inputs if groups are to be
Fit effective in terms of performance and the quality of work life.
Analysis  Ortiv Glass Corporations
Individual
Level
Diagnosis
 Job design – organization design, group design and the personal
characteristics of job holders
 Organization design - is concerned with the larger organization
within which the individual job is the smallest job
 Group design – group task structure can determine how individual
jobs are grouped together
 Personal characteristics - age, education, experience, and skills
and abilities
  Skill variety – job requires a range of activities and abilities to
perform the work
 Task identity – able to see a job through from beginning to end.
Ex: carpenters – have jobs with high levels of task identity
 Task significance – degree to which a job has a significant impact
Design on other people’s lives
components  Autonomy – degree to which a job provides freedom and
discretion in determining work methods
 Feedback – job provides employees with direct and clear
information about the effectiveness of task performance. Ex:
assembly line jobs often provide high levels of feedback about
results.
  Those five job dimensions can be combined into an overall
measure of job enrichment.
 Enriched jobs have high levels of skill variety, task identity, task
Outputs significance, autonomy, and feedback about results.
 Many people find enriched jobs internally motivating and
satisfying.
  Job design – should be matching with the larger organization and
group designs within which the job is embedded.
Fits  Job design – should fit the personal characteristics of the job
holders
Analysis  Job Design – at Pepperdine University
Collecting and
Analysing Diagnostic
Information
Data
Collection and
Feedback
cycle
Methods of
Collecting
Data
 Qualitative Quantitative
Tools Tools

Means, SD and
Content
Frequency
Analysis
Distributions
Techniques for
Analysing Data Force-field
Scatter grams
and correlation
analysis
coefficients

Difference
Tests
 Qualitative techniques generally are easier to use because they
do not rely on numerical data.
 That fact also makes them easier to understand and interpret.
 Quantitative techniques, on the other hand, can provide more
accurate readings of the organizational problem.
  A popular technique for assessing qualitative data, especially
interview data

 attempts to summarize comments into meaningful categories.

Content
Analysis  Ex: What do you like most about your job?" different respondents
might list their co-workers, their supervisors, the new machinery,
and a good supply of tools. The first two answers concern the
social aspects of work, and the second two address the resources
available for doing the work.
  organizes information pertaining to organizational change into
two major categories: forces for change and forces for
maintaining the status quo or resisting change

 Using data collected through interviews, observation, or

unobtrusive measures, the first step in conducting a force-field
Force-Field analysis is to develop a list of all the forces promoting change and
all those resisting it.
Analysis  Then, based either on the OD practitioner's personal belief or
perhaps on input from several members of the client organization,
a determination is made of which of the positive and which of the
negative forces are most powerful.
 One can either rank the order or rate the strength of the different
forces.
Means  mean and standard deviation - represent the respondents'
average score and the spread or variability of the responses,
respectively.

Standard  Ex: Based on the five-point scale ranging from one (very low value)
to five (very high value), the data suggest that challenging work
Deviations and and respect from peers are the two most highly valued rewards.
Monetary rewards, such as pay and fringe benefits, are not as
highly valued

Frequency  both pay and praise from the supervisor are equally valued with a
mean of 4.0. However, the standard deviations for these two
Distributions measures are very different at 0.71 and 1.55, respectivel
 The frequency distribution is a graphical method for displaying
data that shows the number of times a particular response was
given
 Employees' responses to the value of pay are distributed toward
the higher end of the scale, with no one rating it of low or very low
value. In contrast, responses about the value of praise from the
supervisor fall into two distinct groupings: twenty-five employees
felt that supervisor praise has a low or very low value, whereas
seventy-five people rated it high or very high.
  Scattergrams and correlation coefficients are measures of the
Scattergrams strength of a relationship between two variables.
and  Ex: For example, suppose the problem being faced by an
organization is increased conflict between the manufacturing
Correlation department and the engineering design department. During the
data-collection phase, information about the number of conflicts
Coefficients and change orders per month over the past year is collected.
 The correlation coefficient is simply a number that summarizes
data in a scattergram. Its value ranges between +1.0 and -1.0. A
correlation coefficient of +1.0 means that there is a perfect,
positive relationship between two variables, whereas a correlation
of -1.0 signifies a perfectly negative relationship. A correlation of 0
implies a "shotgun" scattergram where there is no relationship
between two variables.
  It can be used to compare a sample group against some standard
Different Tests or norm to determine whether the group is above or below that
standard.
  important step in the diagnostic process is feeding back
diagnostic information to the client organization
 the success of data feedback depends largely on its ability to
arouse organizational action and to direct energy toward
Feeding Back organizational problem solving.
 Whether feedback helps to energize the organization depends on
Diagnostic the content of the feedback data and on the process by which
Information they are fed back to organization members.

 flexible and potentially powerful technique for data feedback that

has arisen out of the wide use of questionnaires in OD work is
known as survey feedback.
  If too many data are fed back, the client may decide that
Determining changing is impossible.
the content of  Therefore, OD practitioners need to summarize the data in ways
that enable clients to understand the information and draw
the feedback action implications from it.
 Relevant

Understandable

Descriptive

Verifiable

Nine Timely
properties
Limited

Significant

Comparative

Unfinalized
  data are provided to organization members in a meeting or series
of meetings

 Feedback meetings provide a forum for discussing the data,

drawing relevant conclusions, and devising preliminary action
Characteristics plans
of the
feedback  people are likely to come to feedback meetings with anxiety,
fear, and hope, OD practitioners need to manage the feedback
process process so that constructive discussion and problem solving
occur

 objective of the feedback process is to ensure that organization

members own the data
 Motivation to work with the data. People need to feel that
working with the feedback data will have beneficial outcomes.
 Structure for the meeting. Feedback meetings need some
structure or they may degenerate into chaos or aimless discussion
 Appropriate attendance. Generally, people who have common
problems and can benefit from working together should be
included in the feedback meeting.
 Appropriate power - It is important to clarify the power possessed
by the group.
 Process help. People in feedback meetings require assistance in
working together as a group
SURVEY  Survey feedback is a process of collecting and feeding back data
from an organization or department through the use of a
FEEDBACK questionnaire or survey
 1. Members of the organization, including those at the top, are
involved in preliminary planning of the survey
2. The survey instrument is administered to all members of the
organization or department
Survey 3. The OD consultant usually analyses the survey data, tabulates
the results, suggests approaches to diagnosis, and trains client
Feedback members to lead the feedback process
process 4. Data feedback usually begins at the top of the organization and
cascades downward to groups reporting to managers at
successively lower levels
5. Feedback meetings provide an opportunity to work with the
data.
  Ambiguity of purpose
Limitations of  Distrust
Survey  Unacceptable topics
Feedback  Organizational disturbance
Designing Interventions
What is OD  Sequence of activities, actions, and events intended to help an
organization improve its performance and effectiveness
Intervention?
  Intervention design, or action planning, derives from careful
diagnosis and is meant to resolve specific problems and to
improve particular areas of organizational functioning
identified in the diagnosis
Intervention
Design?  OD interventions vary from standardized programs that have
been developed and used in many organizations to relatively
unique programs tailored to a specific organization or
department.
What are  Interventions purposely disrupt the status quo; they are
effective deliberate attempts to change an organization or sub-unit toward
a different and more effective state
interventions?
 In OD, three major criteria define an effective intervention:
1. The extent to which it fits the needs of the organization;
2. The degree to which it is based on causal (Fundamental)
knowledge of intended outcomes; and
3. The extent to which it transfers change-management
competence to organization members.
  Contingencies Related to the Change Situation

HOW TO DESIGN  Readiness for Change

EFFECTIVE  Capability to Change
INTERVENTIONS?  Cultural Context
 Capabilities of the Change Agent
  Contingencies Related to the Change Situation - number of
contingencies present in the change situation that can affect
intervention success.
 These include individual differences among organization
Contingencies members (for example, needs for autonomy)
 organizational factors (for example, management style and
Related to the technical uncertainty) and
Change  dimensions of the change process itself (for example, degree of
top-management support).
Situation  Unless these factors are taken into account in designing an
intervention, it will have little impact on organizational
functioning or, worse, it may produce negative results.
  Intervention success depends heavily on the organization being
ready for planned change.
Readiness for  Indicators of readiness for change include
 sensitivity to pressures for change
Change  dissatisfaction with the status quo
 availability of resources to support change
 commitment of significant management time.
  ability to motivate change, to lead change, to develop political
support, to manage the transition, and to sustain momentum.
Capability to  If organization members do not have these capabilities, then a
Change preliminary training intervention may be needed before members
can engage meaningfully in intervention design.
  Interventions may have to be modified to fit the local culture,
particularly when OD practices developed in one culture are
Cultural applied to organizations in another culture.

Context  For example, a team-building intervention designed for top

managers at an American firm may need to be modified when
applied to the company's foreign subsidiaries.
Capabilities of
 Many failures in OD result when change agents apply
the Change interventions beyond their competence.
Agent
Overview of
OD
Interventions