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Diagnosing
learning objectives
Discuss the philosophy and purpose of diagnosis in organization development (OD).
Explain the role of diagnostic models in OD, especially the open-systems model.
Describe and apply organization-level diagnostic processes.
Describe and apply group-level diagnostic processes.
Describe and apply individual-level diagnostic processes.
D iagnosing is the second major phase in the general model of planned change described in Chapter 2 (Figure 2.2). It follows the enter-
ing and contracting stage (Chapter 4) and precedes the planning and implementation phase. When done well, diagnosis clearly points the organization and the organization development (OD) practitioner toward a set of appropriate intervention activities that will improve organization effectiveness.
Diagnosis is the process of understanding a system’s current functioning. It involves collecting pertinent information about existing operations as well as analyzing those data and drawing con- clusions about the reasons for current performance and the potential for change and improvement. Effective diagnosis provides the systematic know- ledge of the organization needed to design app- ropriate interventions. Thus, OD interventions derive from diagnosis and include specific actions
intended to improve organizational functioning. (Chapters 10–20 present the major interventions used in OD today.)
This and the next chapter describe different aspects of the diagnostic process. This chapter presents a general definition of diagnosis and discusses the need for diagnostic models in guiding the process. Diagnostic models derive from conceptions about how organizations function, and they tell OD practitioners what to look for in diagnosing organizations, groups, or jobs. They serve as a road map for discovering current functioning. A general, comprehensive diagnostic model is presented based on open-systems theory. We then describe and apply the model to diagnostic situations at the organization, group, and job levels. Chapter 6 completes the diagnostic phase by discussing processes of data collection, analysis, and feedback.
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5-1 What Is Diagnosis? Diagnosis is the process of understanding how the organization is currently functioning, and it provides the information necessary to design change interventions.1 It generally follows from successful entry and contracting, which set the stage for successful diagno- sis. Those processes help OD practitioners and client members jointly determine which organizational issues to focus on, how to collect and analyze data to understand them, and how to work together to develop action steps from the diagnosis. In another sense, diagnosis is happening all the time. Managers, organization members, and OD practi- tioners are always trying to understand the drivers of organization effectiveness as well as how and why changes are proceeding in a particular way.
Unfortunately, the term diagnosis can be misleading when applied to organizations. It suggests a model of organization change analogous to the medical model of diagnosis: An organization (patient) experiencing problems seeks help from an OD practitioner (doctor); the practitioner examines the organization, finds the causes of the problems, and prescribes a solution. Diagnosis in organization development, however, is much more collaborative than such a medical perspective implies and does not accept the implicit assumption that something is wrong with the organization.
First, the values and ethical beliefs that underlie OD suggest that both organization members and OD practitioners should be involved in discovering the determinants of current organization effectiveness. Similarly, both should be involved actively in develop- ing appropriate interventions and implementing them. For example, a manager might seek an OD practitioner’s help to reduce absenteeism in his or her department. The manager and an OD consultant jointly might decide to diagnose the cause of the prob- lem by examining company absenteeism records and by interviewing selected employees about possible reasons for absenteeism. Alternatively, they might examine employee loy- alty and discover the organizational elements that encourage people to stay. Analysis of those data could uncover determinants of absenteeism or loyalty in the department, thus helping the manager and the OD practitioner jointly to develop an appropriate interven- tion to address the issue.
Second, the medical model of diagnosis also implies that something is wrong with the patient and that one needs to uncover the cause of the illness. In those cases where organizations do have specific problems, diagnosis can be problem oriented, seeking rea- sons for the problems. On the other hand, as suggested by the absenteeism example above, the OD practitioner and the client may choose one of the newer views of organi- zation change and frame the issue positively. Additionally, the client and the OD practi- tioner may be looking for ways to enhance the organization’s existing functioning. Many managers involved with OD are not experiencing specific organizational problems. Here, diagnosis is development oriented. It assesses the current functioning of the organization to discover areas for future development. For example, a manager might be interested in using OD to improve a department that already seems to be functioning well. Diagnosis might include an overall assessment of both the task performance capabilities of the department and the impact of the department on its individual members. This process seeks to uncover specific areas for future development of the department’s effectiveness.
In organization development, diagnosis is used more broadly than a medical defini- tion would suggest. It is a collaborative process between organization members and the OD practitioner to collect pertinent information, analyze it, and draw conclusions for action planning and intervention. Diagnosis may be aimed at uncovering the causes of specific problems, focused on understanding effective processes, or directed at assessing the overall functioning of the organization or department to discover areas for future
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development. Diagnosis provides a systematic understanding of organizations so that appropriate interventions may be developed for solving problems and enhancing effectiveness.
5-2 The Need for Diagnostic Models Entry and contracting processes can result in a need to understand either a whole system or some part, process, or feature of the organization. To diagnose an organization, OD practitioners and organization members need to have an idea about what informa- tion to collect and analyze. Choices about what to look for invariably depend on how organizations are conceived. Such conceptions can vary from intuitive hunches to scien- tific explanations of how organizations function. Conceptual frameworks that OD practi- tioners use to understand organizations are referred to as “diagnostic models.” They describe the relationships among different features of the organization, as well as its environment and its effectiveness. As a result, diagnostic models point out what areas to examine and what questions to ask in assessing how an organization is functioning.
However, all models represent simplifications of reality and therefore emphasize cer- tain organizational features as critical while ignoring other features. Focusing attention on particular features, often to the exclusion of others, can result in a biased diagnosis. For example, a diagnostic model that relates team effectiveness to the handling of inter- personal conflict would lead an OD practitioner to ask questions about relationships among members, decision-making processes, and conflict resolution methods. Although relevant, those questions ignore other group issues such as member skills and knowledge, the complexity of the tasks performed by the group, and task interdependencies. Thus, OD practitioners must choose diagnostic models and processes carefully to address the organization’s presenting problems as well as to ensure comprehensiveness.
Potential diagnostic models are everywhere. Any collection of concepts and relation- ships that attempts to represent a system or explain its effectiveness can potentially qual- ify as a diagnostic model. Major sources of diagnostic models in OD are the thousands of articles and books that discuss, describe, and analyze how organizations function. They provide information about how and why certain organizational systems, processes, or functions are effective. The studies often concern a specific facet of organizational behav- ior, such as employee stress, leadership, motivation, problem solving, group dynamics, job design, and career development. They also can involve the larger organization and its context, including the environment, strategy, structure, and culture. Diagnostic mod- els can be derived from that information by noting the dimensions or variables that are associated with an organization’s effectiveness.
Another source of diagnostic models is OD practitioners’ experience in organiza- tions. So-called “field knowledge” offers a wealth of practical information about how organizations operate. Unfortunately, only a small part of that vast experience has been translated into diagnostic models that represent the professional judgments of people with years of experience in organizational diagnosis. The models generally link diagnosis with specific organizational processes, such as group problem solving, employee motiva- tion, or communication between managers and employees. The models list specific ques- tions for diagnosing such processes.
This chapter presents a general framework for diagnosing organizations rather than trying to cover the range of OD diagnostic models. The framework describes the systems perspective prevalent in OD today and integrates several of the more popular diagnostic models. The systems model provides a useful starting point for diagnosing organizations,
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groups, and individual jobs. (Chapters 10–20 present additional diagnostic models that are linked to specific OD interventions.)
5-3 Open-Systems Model This section introduces systems theory, a set of concepts and relationships describing the properties and behaviors of things called systems—organizations, groups, and jobs, for example. Systems are viewed as unitary wholes composed of parts or subsystems; the sys- tem serves to integrate the parts into a functioning unit. For example, organization systems are composed of groups or departments, such as sales, operations, and finance. The organization serves to coordinate behaviors of its departments so that they function together in service of an organization goal or strategy. The general framework that underlies most of the diagnosing in OD is called the “open-systems model.”
5-3a Organizations as Open Systems As shown in Figure 5.1, the open-systems model recognizes that organizations exist in the context of a larger environment that affects how the organization performs, and, in turn, is affected by how the organization interacts with it. The model suggests that organizations acquire specific inputs from the environment and transform them using social and technical processes. The outputs of the transformation process are returned to the environment and information about the consequences of those outputs serve as feedback to the organization’s functioning.
The open-systems model also suggests that organizations and their subsystems— groups and individual jobs—share a number of common features that explain how they are organized and how they function. For example, open systems display a hierarchical ordering. Each higher level of system is composed of lower-level systems: Systems at the level of society are comprised of organizations; organizations are comprised of groups; and groups are comprised of individual jobs. Although systems at different levels vary in many ways—in size and complexity, for example—they have a number of common characteristics by virtue of being open systems. The following open-systems properties are described below: environments; inputs, transformations, and outputs; boundaries; feedback; and alignment.
FIGURE 5.1
The Open-Systems Model
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Environments Environments are everything outside of the system that can directly or indirectly affect its outputs. Open systems, such as organizations and groups, exchange information and resources with their environments. Because these external forces influ- ence the system, organizations cannot completely control their own behavior. Organiza- tions, for example, are affected by such environmental conditions as the availability of labor and human capital, raw material, customer demands, competition, and government regulations. Understanding how these external forces affect the organization can help to explain some of its internal behavior.
Inputs, Transformations, and Outputs Organizational systems are composed of three related properties: inputs, transformations, and outputs. Inputs consist of human capital or other resources, such as information, energy, and materials, coming into the system from the environment. For example, a manufacturing organization acquires raw materials from an outside supplier. Similarly, a hospital nursing unit acquires informa- tion concerning a patient’s condition from the attending physician. In each case, the system (organization or nursing unit) obtains resources (raw materials or information) from its environment.
Transformations are the processes of converting inputs into outputs. In organiza- tions, a production or operations function composed of both social and technological components generally carries out transformations. The social component consists of peo- ple and their work relationships, whereas the technological component involves tools, techniques, and methods of production or service delivery. Organizations have developed elaborate mechanisms for transforming incoming resources into goods and services. Banks, for example, transform deposits into mortgage loans and interest income. Schools attempt to transform students into more educated people. Transformation processes also can take place at the group and individual levels. For example, research and development departments can transform the latest scientific advances into new product ideas, and bank tellers can transform customer requests into valued services.
Outputs are the results of what is transformed by the system and sent to the environ- ment. Thus, inputs that have been transformed represent outputs that leave the system. Group health insurance companies receive premiums and medical bills, transform them through record keeping, and export payments to hospitals and physicians.
Boundaries The idea of boundaries helps to distinguish between organizational sys- tems and their environments. Boundaries—the borders or limits of the system—help to protect or buffer the organization’s transformation process from external disruptions; they also assure that the right inputs enter the organization and the relevant outputs leave it. An organizational system’s boundaries can vary in permeability, with some sys- tems, such as a highly cohesive work team on the shop floor, being relatively closed to the environment and other systems, such as a field sales force, being open to external forces. Organizational boundaries are determined not only by physical location, but also can be defined for managerial, technical, or social purposes. For example, to facilitate managerial control, a department’s boundaries could encompass all members reporting to a common administrator; to promote a smooth workflow, the department’s bound- aries might include suppliers, employees, and customers located along a common supply chain; or to foster cohesion among members, the department’s boundaries could embrace those members sharing particular social connections and attitudes. Because organizational boundaries can serve different purposes, OD practitioners may need to determine early in the OD process if the client system’s boundaries are appropriate for the intended purpose of the change effort. This may result in redefining or changing the
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client’s boundaries before diagnosing begins. For example, the boundaries that identify a particular client system on an organization chart might be well suited for addressing leadership issues in that unit. However, the client system’s boundaries might have to be enlarged to include other related departments if the intent of OD is to improve coordi- nation among interdependent work groups.
Feedback As shown in Figure 5.1, feedback is information regarding the actual per- formance or the outputs of the system. Not all such information is feedback, however. Only information used to control the future functioning of the system is considered feedback. Feedback can be used to maintain the system in a steady state (for example, keeping an assembly line running at a certain speed) or to help the organization adapt to changing circumstances. McDonald’s, for example, has strict feedback processes to ensure that a meal in one outlet is as similar as possible to a meal in any other outlet. On the other hand, a salesperson in the field may report that sales are not going well and may insist on some organizational change to improve sales. A market-research study may lead the marketing department to recommend a change to the organiza- tion’s advertising campaign.
Alignment How well a system’s different parts and elements align with each other partly determines its overall effectiveness. This alignment or fit concerns the relation- ships between the organization and its environment as well as among the components that comprise the design of the organization. Alignment represents the extent to which the features and operations of one component support the effectiveness of another com- ponent. Just as the teeth in the wheels of a watch must mesh perfectly for the watch to keep time, so do the parts of an organizational system need to mesh for it to be effective. Diagnosing environmental relationships and the interactions among the various compo- nents of an organizational system requires taking “a systemic perspective.” This view suggests that diagnosing often involves the search for misalignments among the various parts of an organizational system.
5-3b Diagnosing Organizational Systems When viewed as open systems, organizations can be diagnosed at three levels. The high- est level is the overall organization and includes the company’s strategy, structure, and processes. Large organization units, such as divisions, subsidiaries, or strategic business units, also can be diagnosed at that level. The next lowest level is the group or depart- ment, which includes group design and methods for structuring interactions among members, such as norms and work schedules. The lowest level is the individual position or job. This includes ways in which jobs are designed to elicit required task behaviors.
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 knowing what to look for at each level as well as how the levels affect each other.2 For example, diagnosing a work group requires knowledge of the variables important for group functioning and how the larger organization design affects the group. In fact, a basic understanding of organization-level issues is important in almost any diagnosis because they serve as criti- cal inputs to understanding groups and jobs.
Figure 5.2 presents a comprehensive model for diagnosing these different organizational systems. For each level, it shows (1) the inputs that the system has to work with, (2) the key components for designing the system to create, and (3) the system’s outputs. The relation- ships shown in Figure 5.2 illustrate how each organization level affects the lower levels.
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The environment is the key input to organization design decisions. 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.
FIGURE 5.2
Comprehensive Model for Diagnosing Organizational Systems
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The following sections of this chapter address diagnosing at each of the three levels—organization, group, and individual job. General overviews of the dimensions (and their relationships) that need to be understood at each level are presented. It is beyond the scope of this chapter to describe in detail the many variables and relation- ships reported in the extensive literature on organizations. However, specific diagnostic questions are identified and concrete examples are included as an introduction to this phase of the planned change process.
5-4 Organization-Level Diagnosis The organization level of analysis is the broadest systems perspective typically taken in diagnostic activities. (In some cases, OD is applied to a multiorganization system; those change processes are discussed in Chapter 20 on Transorganizational Change.) The model shown in Figure 5.2 is similar to other popular organization-level diagnostic models. These include Weisbord’s six-box model,3 Nadler and Tushman’s congruency model,4 Galbraith’s star model,5 and Kotter’s organization dynamics model.6 Figure 5.2 shows that an organization’s design components represent the way the organization organizes itself within an environment (inputs) to achieve specific results (outputs).7 To understand how a total organization functions, it is necessary to examine particular inputs, design components, and the alignment of the two sets of dimensions.
5-4a Inputs Figure 5.2 shows that three key inputs or environmental types affect the way an organi- zation is designed. We first describe these environments and then identify environmental dimensions that influence how organizations respond to external forces.
Environmental Types Three classes of environments influence how organizations function and achieve results: the general environment, the task environment, and the enacted environment.8
The general environment consists of all external forces that can directly or indirectly affect an organization.9 The general environment can include a variety of social, techno- logical, economic, ecological, and political/regulatory forces. These forces may interact in unique and unpredictable ways, presenting the organization with challenging threats and opportunities. Each of the forces also can affect the organization in both direct and indi- rect ways. For example, an organization may have trouble obtaining raw materials from a supplier because a national union is grieving the supplier’s employment practices, a government regulator is bringing a lawsuit against the supplier, or a consumer group is boycotting the supplier’s products. Thus, parts of the general environment can affect the organization without having any direct connection to it.
The task environment is another important organization input. Michael Porter defined an organization’s task environment in terms of industry structure represented by five forces: supplier power, buyer power, threats of substitutes, threats of entry, and rivalry among competitors.10 First, an organization must be sensitive to powerful suppli- ers who can increase prices (and therefore lower profits) or force the organization to pay more attention to the supplier’s needs than to its own needs. For example, unions represent powerful suppliers of labor that can affect the costs of any organization within an industry. Second, a firm must respond to powerful buyers. Powerful retailers, such as Walmart and Costco, can force Procter & Gamble, Johnson & Johnson, or other
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suppliers to lower prices or deliver their products in particular ways. Third, an organiza- tion 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, a company must respond 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, an organization must be sensitive to rivalry among existing competitors. If many organizations are competing for the same customers, then the orga- nization must be responsive to product offerings, costs, and structures if it is to survive and prosper. Together, these five forces play an important role in determining an orga- nization’s success, whether it is a manufacturing or service firm, a nonprofit organiza- tion, or a government agency.
While the general environment and the task environment describe the objective pressures an organization faces, the organization must first recognize those forces. The enacted environment consists of organization members’ perception and representation of the general and task environments. Environments must be perceived before they can influence decisions about how to respond to them.11 Organization members must actively observe, register, and make sense of the environment before it can affect their decisions about what actions to take. Thus, only the enacted environment can affect which organizational responses are chosen. The general and task environments, however, influence whether those responses are successful or ineffective. For example, members may perceive customers as relatively satisfied with their products and may decide to make only token efforts at developing new products. If those perceptions are wrong and customers are dissatisfied with existing products, the meager product development efforts can have disastrous organizational consequences. As a result, an organization’s enacted environment should accurately reflect its general and task environments if mem- bers’ decisions and actions are to be effective.12
Environmental Dimensions In addition to understanding what inputs are at work, the environment can be understood in terms of its rate of change and complexity.13
The rate of change in an organization’s general environment or task environment can be characterized along a dynamic–static continuum. Dynamic environments change rap- idly and unpredictably while static environments change more slowly and expectedly. The complexity of the environment refers to the number of different elements in the gen- eral and task environments that can significantly affect the organization. Some organiza- tions, such as software development firms, face dynamic and complex environments. Not only do technologies, regulations, customers, and suppliers change rapidly, but also all of them are important to the firm’s survival. On the other hand, other organizations, such as manufacturers of glass containers, face more stable and less complex environments.
A useful way to understand how the rate of change and complexity of environments influence organizations is to view environments as information flows that organizations need to process to discover how to relate to their environments.14 The key dimension of the environment affecting information processing is information uncertainty, or the degree to which environmental information is ambiguous. Organizations seek to remove uncertainty from the environment so that they know how to transact with it. For exam- ple, organizations may try to discern customer needs through focus groups and surveys and attempt to understand competitor strategies through press releases, sales force beha- viors, and knowledge of key personnel. The greater an organization environment’s rate of change and complexity, the more information uncertainty the organization faces, and consequently, the more information the organization must process to learn about the
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environment.15 Thus, dynamic and complex environments pose difficult information- processing problems for organizations. For example, global competition, technological change, and financial markets have created highly uncertain environments for many multinational firms and have severely strained their information-processing capacity.
5-4b Design Components Figure 5.2 shows that an organization’s design is composed of four components—technology, structure, management processes, and human resources systems. It is surrounded by an inter- mediate input—strategy—and an intermediate output—culture—that need to be considered along with the organization’s design. Effective organizations align their strategy to environ- mental inputs and then fit the design components to each other to support the strategy and to jointly promote strategic behaviors. (Chapter 18 describes strategy and organization design interventions.)
A strategy represents the way an organization uses its resources (human, economic, or technical) to achieve its goals and to gain a competitive advantage in a particular environ- ment.16 Because strategy defines how an organization positions itself to compete in an environment, it is shown in Figure 5.2 as an intermediate input between the environment and the four design components. A complete statement of strategy includes the organiza- tion’s mission, goals and objectives, strategic intent, and functional policies.17 An organiza- tion’s mission defines the long-term purpose of the organization, the range of products or services offered, the markets served, and the societal needs addressed. Goals and objectives include specific targets for achieving strategic success. They provide explicit direction, set organization priorities, provide guidelines for management decisions, and serve as the cor- nerstone for organizing activities and setting standards of achievement. “Strategic intent” is a succinct label or metaphor that describes how the organization intends to leverage three resource dimensions—breadth, aggressiveness, and differentiation—to achieve its goals and objectives. For example, in 2013, a turnaround strategic intent drove Nokia’s goals of restoring financial confidence. That turnaround can be characterized by a narrower (as opposed to broader) focus on specific markets and products, increased aggressiveness dem- onstrated by its marketing expenditures and internal cost reductions, and improved differ- entiation through its alliance with Microsoft and its Windows 8 operating system. Finally, functional policies are the methods, procedures, rules, or administrative practices that guide decision making and convert strategic plans into actions. In the semiconductor busi- ness, for example, Intel had a policy of allocating about 30% of revenues to research and development to maintain its lead in microprocessors production.18 (Chapters 18 and 19 describe strategy interventions.)
Technology is concerned with the way an organization converts inputs into products and services. It represents the core transformation process and includes production methods, workflow, and equipment. Two features of the technological core have been shown to influence other design components: technical interdependence and technical uncertainty.19 Technical interdependence involves the extent to which the different parts of a technological system are related. High interdependence requires considerable coordination among tasks, such as might occur when departments must work together to bring out a new product. Technical uncertainty refers to the amount of information processing and decision making required during task performance. Generally, when tasks require high amounts of information processing and decision making, they are difficult to plan and routinize. The technology of car manufacturing is relatively certain and moderately interdependent. As a result, automobile manufacturers can specify in advance the behaviors workers should exhibit and how their work should be coordinated.
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Structure is the basic organizing mode for (1) dividing the overall work of an orga- nization into subunits that can assign tasks to groups or individuals and (2) coordinating these subunits for completion of the overall work.20 Structure, therefore, needs to be closely aligned with the organization’s technology. Organization structure can divide work by function (e.g., accounting, sales, or production), by product or service (e.g., Chevrolet, GMC, or Cadillac), by customer (e.g., large, medium, or small enter- prise), or by some combination of both (e.g., a matrix composed of functional depart- ments and product groupings). Structures can coordinate work across subunits through the managerial hierarchy or a variety of lateral mechanisms, such as plans and schedules, budgets, project managers, liaison positions, integrators, cross-departmental task forces, and matrix relationships. The amount of coordination required in a structure is a func- tion of (1) the amount of uncertainty in the environment, (2) the degree to which sub- units differ from each other, and (3) the amount of interdependence among subunits.21
As uncertainty, subunit difference, and interdependence increase, more sophisticated coordinating devices are required.22 (Chapter 12 discusses structural interventions.) Management processes are methods for processing information, making decisions, and controlling the operation of the organization. They help the organization to understand how well it is performing, to detect and control deviations from goals, to make relevant decisions, and to communicate the results. Closely related to structural coordination, management processes monitor organizational operations and feed data about work activities to managers and members so that they can better understand current perfor- mance, make relevant decisions, and coordinate work. Effective information, decision making, and control systems are linked closely to strategic objectives; provide accurate, understandable, and timely information; are accepted as legitimate by organization mem- bers; and produce benefits in excess of their cost.
Human resources systems include mechanisms for selecting, developing, appraising, and rewarding organization members. These influence the mix of skills, personal characteristics, and behaviors of organization members. An organization’s strategy and technology provide important information about the skills and knowledge required if the organization is to be successful. Appraisal processes identify whether those skills and knowledge are being applied to the work, and reward systems complete the cycle by recognizing performance that contributes to goal achievement. Reward systems may be tied to measurement systems so that rewards are allocated based on measured results. (Chapters 15, 16, and 17 discuss specific human resources systems, such as rewards and career development.)
Organization culture represents the basic assumptions, values, and norms shared by organization members.23 Those cultural elements are generally taken for granted and serve to 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 behaviors necessary for success. In Figure 5.2, culture is shown as an intermediate output from the four design components because it represents both an outcome and a constraint. Culture initially derives from an organization foun- der’s values and is reinforced and sustained through organization selection and socializa- tion processes. It is also an outcome of the organization’s history and environment as well as of prior choices made about the strategy, technology, structure, management pro- cesses, and human resources systems. Because organization culture is personally internal- ized, it can be difficult to change and can restrict an organization’s ability to change its strategy and organization design components.24 In that sense, culture can either hinder or facilitate organization change. In diagnosing organizations, the culture needs to be understood well enough to determine its alignment with the organization’s strategy and the four design components. (Chapter 18 discusses culture change in more detail.)
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5-4c Outputs The outputs of organization design are measures of how well the design contributes to organization effectiveness. This can include three kinds of outcomes. First, organization performance refers to financial outcomes, such as sales, profits, return on investment (ROI), or earnings per share (EPS). For nonprofit and government agencies, perfor- mance often refers to the extent to which costs were lowered or budgets met. Second, productivity concerns internal measurements of 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 having an interest in the organization. For example, customer loyalty can be measured in terms of market share or focus-group data; employee engagement can be measured in terms of an opinion survey; investor satisfaction can be measured in terms of stock price or analyst opinions; and environmental sustainability can be measured by the orga- nization’s carbon footprint.
5-4d Alignment Diagnosing the effectiveness of an organization requires knowledge of the above ele- ments to determine the alignment or fit among them.
1. Does the organization’s strategy fit with the inputs? To be effective, an organi- zation’s strategy needs to be responsive to the general and task environments. They include external forces, threats, and opportunities that need to be consid- ered in making strategic choices about mission, goals and objectives, strategic intent, and functional policies. The organization makes those choices based on members’ perceptions of the environment (the enacted environment). Thus, the organization’s information-processing and strategy-making capabilities must match the information uncertainty of the general and task environments if the organization’s perceptions and strategic choices are to accurately reflect external realities. Environments that change rapidly and are complex are highly uncertain. In these situations, organizations need to constantly process information and monitor wide segments of their environments; their strategy-making process needs to be flexible resulting in strategic choices that can quickly be adapted to changing external conditions. (Chapter 19 describes dynamic strategy-making interventions.) Conversely, organizations can periodically assess selected parts of the environment and make strategic choices that are stable over moderate to long periods of time when the information uncertainty of their general and task envir- onments is relatively low.
2. Do the organization design components fit with each other to jointly support the strategy? For example, if the organization’s strategy is highly flexible and responsive to environmental change, then the design components must mutually support and reinforce agile and adaptable organizational behaviors. Successful firms in Silicon Valley, such as Apple and Oracle, tend to have flexible strategies that promote inno- vation and change. Their organization design components include leading-edge technologies that are complex and uncertain; flexible structures that emphasize agil- ity and fast responses; management processes that provide rapid information and feedback and promote employee decision making; human resource policies that select, develop, and reward talented employees. These flexible and agile firms have organization cultures that value technical sophistication, member commitment, invention, and customer loyalty.
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5-4e Analysis Application 5.1 describes the Steinway organization and provides an opportunity to per- form an organization-level analysis.25 A useful starting point is to examine outputs and to ask about the organization’s current effectiveness. Steinway has excellent market share in the high-quality segment of the grand piano market, a string of improving financial measures, and strong customer loyalty. However, the data on employee satisfaction are mixed; there are both long-tenured people and an indication that some workers are leav- ing for other jobs. Financial improvements appear modest when contrasted with industry averages. Understanding the underlying causes of these effectiveness issues begins with an assessment of the inputs and organization design and then proceeds to an evaluation of the alignments among the different parts.
In diagnosing the inputs, two questions are important.
1. What is the company’s general environment? Steinway’s external environment is only moderately uncertain and not very complex. Socially, Steinway is an important part of a country’s artistic culture and the fine arts. It must be aware of fickle trends in music and display an appropriate sensitivity to them. Politically, the organization operates on a global basis and its distribution and sales networks must be attuned to different governmental and country requirements. The manufacturing plant in Hamburg, Germany, suggests an important political dependency that must be mon- itored. Technologically, Steinway appears reasonably concerned about the latest breakthroughs in piano design, materials, and construction. They are aware of alter- native technologies, such as the assembly-line process at Yamaha, but prefer the classic methods they have always used. Ecologically, Steinway must be mindful. Their product requires lumber and they are very selective (some would say wasteful) about the choices, rejecting many pieces. It is likely that environmentalists would express concern over how Steinway uses this natural resource. Together, these envi- ronmental forces paint a relatively moderate level of uncertainty. Most of these issues are knowable and can be forecast with some confidence. In addition, while there are several environmental elements that need to be addressed, not all of them are vitally important. The environment is not very complex.
2. What is the company’s task environment? Steinway’s industry is moderately com- petitive and profit pressures can be mapped by looking at five key forces. First, the threat of entry is fairly low. There are some important barriers to cross if an organi- zation wanted to get into the piano business. For example, Steinway, Yamaha, and Baldwin have very strong brands and dealer networks. Any new entrant would need to overcome these strong images to get people to buy their product. Second, the threat of substitute products is moderate. On the one hand, electronic keyboards have made important advances and represent an inexpensive alternative to grand and upright pianos. On the other hand, the sophisticated nature of many of the artists and audiences suggests that there are not many substitutes for a concert grand piano. Third, the bargaining power of suppliers, such as providers of labor and raw materials, is high. The labor union has effective control over the much- sought-after craft workers who manufacture and assemble grand pianos. Given the relatively difficult time that most high-end piano manufacturers have in holding onto these highly trained employees, the organization must expend considerable resources to retain them. Similarly, given the critical nature of wood to the final product, lumber suppliers can probably exert significant influence. Fourth, the bar- gaining power of buyers varies by segment. In the high-end segment, the number of buyers is relatively small and sophisticated, and the small number of high-quality
CHAPTER 5 DIAGNOSING 101
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STEINWAY & SONS
S teinway & Sons, which turned 160 years old in April 2013, is generally regarded as the fin- est piano maker in the world. Founded in 1853 by the Steinway family, the firm was
sold to CBS in 1972, taken private in 1985 by John and Robert Birmingham, and sold again in 1995 to Dana Messina and Kyle Kirkland, who took it public in 1996. Steinway & Sons is the piano division of the Steinway Musical Instruments Com- pany that also owns Selmer Instruments and other manufacturers of band instruments (www. steinwaymusical.com). Piano sales in 2002 were $169 million, down 7.6% from the prior year and mirroring the general economic downturn. Since going public, Steinway’s corporate revenues have grown a compounded 6–7% a year, while earnings per share have advanced, on average, a com- pounded 11%. The financial performance for the overall company in 2002 was slightly below indus- try averages.
The Steinway brand remains one of the company’s most valuable assets. The com- pany’s president notes that despite only 2% of all keyboard unit sales in the United States, they have 25% of the sales dollars and 35% of the profits. Their market share in the high-end grand piano segment is consistently over 80%. For example, 98% of the piano soloists at 30 of the world’s major symphony orchestras chose a Steinway grand during the 2000/2001 con- cert season. Over 1,300 of the world’s top pia- nists, all of whom own Steinways and perform solely on Steinways, endorse the brand with- out financial compensation.
Workers at Steinway & Sons manufacturing plants in New York and Germany have been with the company for an average of 15 years, often over 20 or 30 years. Many of Steinway’s employees are descendants of parents and grandparents who worked for the company.
THE ENVIRONMENT
The piano market is typically segmented into grand pianos and upright pianos, with the former being a smaller but higher-priced segment. In 1995, about 550,000 upright pianos and 50,000
grand pianos were sold. Piano customers can also be segmented into professional artists, amateur pianists, and institutions such as con- cert halls, universities, and music schools. The private (home) market accounts for about 90% of the upright piano sales and 80% of the grand piano sales, with the balance being sold to insti- tutional customers. New markets in Asia repre- sent important new growth opportunities.
The piano industry has experienced sev- eral important and dramatic changes for such a traditional product. Industry sales, for exam- ple, dropped 40% between 1980 and 1995. Whether the decline was the result of increased electronic keyboard sales, a real decline in the total market, or some temporary decline was a matter of debate in the industry. Since then, sales growth has tended to reflect the ups and downs of the global economy.
Competition in the piano industry has also changed. In the United States, several hundred piano makers at the turn of the century had consolidated to eight by 1992. The Baldwin Piano and Organ Company is Steinway’s pri- mary U.S. competitor. It offers a full line of pia- nos under the Baldwin and Wurlitzer brand names through a network of over 700 dealers. In addition to relatively inexpensive upright pia- nos produced in high-volume plants, Baldwin also makes handcrafted grand pianos that are well-respected and endorsed by such artists as Dave Brubeck and Stephen Sondheim, and by the Boston, Chicago, and Philadelphia orches- tras. Annual sales are in the $100 million range; Baldwin was recently sold to the Gibson Guitar Company. The European story is similar. Only Bösendorfer of Austria and Fazioli of Italy remain as legitimate Steinway competitors.
Several Asian companies have emerged as important competitors. Yamaha, Kawai, Young Chang, and Samick collectively held about 35% of the vertical piano market and 80% of the grand piano market in terms of units and 75% of global sales in 1995. Yamaha is the world’s largest piano manufacturer with sales of over $1 billion and a global market share of about 35%. Yamaha’s strategy has been to
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produce consistent piano quality through continuous improvement. A separate handcrafted concert grand piano operation has also tried to use continuous improvement methods to create consistently high- quality instruments. More than any other high- quality piano manufacturer, Yamaha has been able to emulate and compete with Steinway.
THE STEINWAY ORGANIZATION
Steinway & Sons offers several different pianos, including two brands (Steinway and the less expensive Boston brand) and both upright and grand piano models. The company handcrafts its grand pianos in New York and Germany, and sells them through more than 200 independent dealers. About half of the dealers are in North and South America and approximately 85% of all Steinway pianos are sold through this network. The company also owns retail outlets in New York, New Jersey, London, Munich, Hamburg, and Berlin.
The dealer network is an important part of Stein- way’s strategy because of its role in the “concert bank” program. Once artists achieve a certain sta- tus, they are invited to become part of this elite group. The performer can go to any local dealer, try out different pianos, and pick the one they want to use at a performance for only the cost of bringing the piano to the concert hall. The concert bank con- tains over 300 pianos in more than 160 cities. In return for the service, Steinway is given exclusive use of the performer’s name for publicity purposes.
Creating a Steinway concert grand piano is an art, an intricate and timeless operation (although alternate methods have been created and improved, the basic process hasn’t changed much). It requires more than 12,000 mostly handcrafted parts and more than a little magic. The tone, touch, and sound of each instrument is unique, and 120 technical patents and innovations contribute to the Steinway sound. Two years are required to make a Steinway grand as opposed to a mass-produced piano that takes only about 20 days. There are three major steps in the production process: wood- drying (which takes about a year), parts-making, and piano-making.
Wood-drying operations convert moisture-rich lumber into usable raw material through air-drying and computer-controlled kilns. Time is a critical ele- ment in this process because slow and natural
drying is necessary to ensure the best sound- producing qualities of the wood. Even after all the care of the drying process, the workers reject approximately 50% of the lumber.
After drying, the parts-making operations begin. The first of these operations involves bending of the piano rim (the curved side giving a grand piano its familiar shape). These rims are formed of multiple layers of specially selected maple that are manually forced into a unified shape, held in presses for sev- eral hours, and then seasoned for 10 weeks before being joined to other wooden parts. During this time, the sounding board (a specially tapered Alaska Sitka spruce panel placed inside the rim to amplify the sound) and many other case parts are made. The final critical operation with parts-making involves the fabrication of the 88 individual piano action sets that exist inside a piano. Piano “actions” are the intricate mechanical assemblies—made almost completely of wood and some felt, metal, and leather—that transmit finger pressure on the piano keys into the force that propels the hammers that strike the strings. The action is a particularly important part of a piano because this mechanical linkage gives Steinways their distinctive feel. In the action department, each operator is responsible for inspecting his or her own work, with all assembled actions further subject to 100% inspection.
Piano-making operations include “bellying,” finishing, and tone regulating. The bellying process involves the precise and careful fitting of the soundboard, iron piano plate, and rim to each other. It requires workers to lean their stomachs against the rim of the piano to complete this task. Because of individual variations in material and the high degree of precision required, bellying takes considerable skill and requires several hours per piano. After the bellying operations, pianos are strung and moved to the finishing department. Dur- ing finishing, actions and keyboards are individually fit to each instrument to accommodate differences in materials and tolerances to produce a working instrument. The final piano-making step involves tone regulating. Here, the pianos are “voiced” for Steinway sound. Unlike tuning, which involves the loosening and tightening of strings, voicing requires careful adjustments to the felt surround- ing the hammers that strike the strings. This oper- ation is extremely delicate and is performed by only a small handful of tone regulators. The tone
CHAPTER 5 DIAGNOSING 103
pianos means that customers can put pressure on prices, although they are clearly willing and able to pay more for quality. In the middle and lower segments, the number of buyers is much larger and fragmented. It is unlikely that they could collectively exert influence over price. Finally, the rivalry among firms is severe. A number of well-known and well-funded domestic and international competitors exist. Almost all of them have adopted marketing and manufacturing tactics similar to Steinway’s in the high-end segment, and they are competing for the same custo- mers. The extensive resources available to Yamaha as a member of their keiretsu, for example, suggest that it is a strong and long-term competitor that will work hard to unseat Steinway from its position. Thus, powerful buyers and suppliers as well as keen competition make the piano industry only moderately attractive and represent the key sources of uncertainty that Steinway faces. Overall, Steinway executives’ perceptions of the general and task environments seem to be accurate.
The following questions are important in assessing Steinway’s strategy and organiza- tion design:
1. What is the company’s strategy? Steinway’s primary strategy is a sophisticated niche and differentiation strategy. It attempts to meet its financial and other objec- tives by offering a unique and high-quality product to sophisticated artists. However, its product line does blur the strategy’s focus. With both Boston and Steinway brands and both upright and grand models, a question about Steinway’s commit- ment to the niche strategy could be raised. No formal mission or goals are men- tioned in the case, and this makes it somewhat difficult to judge the effectiveness of the strategy. Nevertheless, it seems reasonable to assume a clear intent to main- tain its dominance in the high-end segment. However, with new owners in 1995, it is also reasonable to question whether goals of profitability or revenue growth, implying very different tactics, have been sorted out.
2. What are the company’s technology, structure, management processes, human resources systems, and culture? First, Steinway’s core technology is highly uncer- tain and moderately interdependent. The manufacturing process is craft-based and
regulators at Steinway are widely considered to be among the most skilled artisans in the factory. Their voicing of a concert grand can take as much as 20 to 30 hours. All tone regulators at Steinway have worked for the company in various other posi- tions before reaching their present posts, and sev- eral have more than 20 years with the firm. Finally, after tone regulation, all pianos are polished, cleaned, and inspected one last time before pack- ing and shipment.
Steinway produced more than 3,500 pianos in 2002 at its New York and Hamburg, Germany, plants. Almost 430 people work in the New York plant and all but about 100 of them work in
production. They are represented by the United Furniture Worker’s union. Seventy-five percent of the workers are paid on a straight-time basis; the others, primarily artisans, are paid on piece rates. Retaining workers has proved increasingly difficult as well-trained Steinway craftspeople are coveted by other manufacturers, and many of the workers could easily set up their own shop to repair or rebuild older Steinway pianos. Excess inventories due to weak sales both pre and post September 11 forced Steinway to adjust its production schedule; rather than lay off highly skilled workers needed to build its pianos, workers in the New York plant reported to work every other week.
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dependent on the nature of the materials. Each piano is built and adjusted with the specific characteristics of the wood in mind. So much so that each piano has a dif- ferent sound that is produced as a result of the manufacturing process. The technol- ogy is moderately interdependent because the major steps in the process are not closely linked in time. Making the “action sets” is independent of the “bellying” pro- cess, for example. Similarly, the key marketing program, the concert bank, is inde- pendent of manufacturing. Second, the corporate structure is divisional (pianos and band instruments), while the piano subsidiary appears to have a functional structure. The key functions are manufacturing, distribution, and sales. A procurement, finance, and human resources group is also reasonable to assume. Third, manage- ment processes are focused on the production system. There are specific mentions of inspections by both the worker and the organization. For example, 100% inspec- tion (as opposed to statistical sampling) costs time and manpower and no doubt is seen as critical to quality. In addition, there must be some system of keeping track of work-in-progress, finished goods, and concert bank inventories. Fourth, the human resources system is highly developed. It includes a reward system that is both hourly and piece rate; a unionized employee relationship; worker retention programs; and global hiring, compensation, benefits, and training programs. Fifth, while there is lit- tle specific information, Steinway’s culture can be inferred. The dominant focus on the high-end segment, the craft nature of the production process, the importance of the concert bank program, and the long history of family influence all point to a culture of quality, craftsmanship, and responsiveness. These values are manifest in the way the organization chooses its raw materials, the way it caters to its prized customers, the care in the production process, and the image it works to retain.
Now that the organization inputs, design components, and outputs have been assessed, it is time to ask the crucial question about how well they fit together. The first concern is the fit between the environmental inputs and the strategy. The moderate com- plexity and uncertainty in the general and task environments argue for a strategy that is flexible enough to address the few critical dependencies but formal enough to control a sophisticated production process. Steinway’s focus on the high-end segment of the industry and the moderate breadth in its product line support this flexibility. It clearly intends to differentiate its product by serving the high-end segment with unique high-quality pianos. However, the market for higher-priced and more specialized concert grands is much smal- ler than the market for lower-priced uprights and limits the growth potential of sales unless Steinway wants to compete vigorously in the emerging Asian markets where the Asian companies have a proximity advantage. Steinway’s lack of clear strategic goals in general and policies that support neither growth nor profitability also would make entry into new markets difficult. Steinway’s flexible and responsive manufacturing process sup- ports and defends its preeminence as the top grand piano maker in the world. It also miti- gates the powerful buyer forces in this segment. Steinway’s moderate product line breadth gives it some flexibility and efficiency as well. It can achieve some production efficiencies in the upright and medium-market grand piano segments, and its brand image helps in marketing these products. Steinway must be careful not to broaden its product line too much, however, as this could dilute its strategic focus on the high-end market. Overall, the alignment between Steinway’s environment and its strategy appears sound.
The second concern is the alignment of the design components to support the strat- egy. There appears to be a good fit between Steinway’s strategy and the organization design components. The differentiated strategic intent requires technologies, structures, and systems that focus on creating sophisticated and unique products, specialized
CHAPTER 5 DIAGNOSING 105
marketing and distribution, and the concert bank program. The flexible structure, formal inspection systems, and responsive culture seem well suited for that purpose. Steinway’s technology appears aligned with its structure. The production process is craft-based and deliberately not standardized. The functional structure promotes specialization and professionalization of skills and knowledge. Specific tasks that require flexibility and adapt- ability from the organization are given a wide berth. Although a divisional structure over- lays Steinway’s corporate activities, the piano division’s structure is functional but not rigid and appears to be responsive to the craft and the artists it serves. In addition, the concert bank program is important for two reasons. First, it builds customer loyalty and ensures future demand. Second, it is a natural source of feedback on the instruments themselves, keeping the organization close to the artist’s demands and emerging trends in sound preferences. The well-developed human resources system supports the responsive production and marketing functions as well as the global nature of the enterprise. Finally, Steinway’s culture of quality and responsiveness promotes coordination among the produc- tion tasks, serves to socialize and develop people, and establishes methods for moving infor- mation throughout the organization. Clearly, any change effort at Steinway will have to acknowledge its long-established culture and design an intervention accordingly. The strong culture will either sabotage or facilitate change depending on how the change process aligns with the culture’s values and norms.
Based on this diagnosis of the Steinway organization, at least two OD interventions seem relevant. First, in collaboration with the client, the OD practitioner could suggest increasing the clarity of Steinway’s strategy. In this intervention, the practitioner would want to talk about formalizing—rather than changing—Steinway’s strategy because the culture would likely resist strategy change. However, there are obvious advantages to be gained from a clearer sense of Steinway’s future goals, its businesses, and the relation- ships among them. Second, Steinway could focus on better coordinating its structure, measurement systems, and human resources systems. The difficulty of retaining key pro- duction personnel warrants continuously improved retention systems as well as efforts to codify and retain key production knowledge in case workers do leave. This would apply to the marketing and distribution functions as well, since they control an important interface with the customer.
5-5 Group-Level Diagnosis Work groups are prevalent in all types and sizes of organizations. They generally consist of a relatively small number of people working together on a shared task either face- to-face or virtually via electronic communication. Work groups can be relatively perma- nent and perform an ongoing function, or they can be temporary and exist only to per- form a certain task or to make a specific decision. Figure 5.2 shows the inputs, design components, outputs, and relational fits for group-level diagnosis. The model is similar to other popular group-level diagnostic models such as Hackman and Morris’s task group design model,26 McCaskey’s framework for analyzing groups,27 and Ledford, Lawler, and Mohrman’s participation group design model.28
5-5a Inputs Organization design and culture are the major inputs to group design. They consist of the design components characterizing the larger organization within which the group is embedded—technology, structure, management processes, and human resources
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systems—and organization culture. Technology can determine the characteristics of the group’s task; structural systems can specify the level of coordination required among groups. Management processes can determine how much information the group receives and how much decision making and self-control it can exercise. The human resources and measurement systems, such as performance appraisal and reward systems, play an important role in determining team functioning.29 For example, individual-based, forced-ranking performance appraisal and reward systems tend to interfere with team functioning because members may be concerned with maximizing their individual per- formance to the detriment of team performance. Organization culture can influence the norms that groups develop to control member behavior. Collecting information about the group’s organization design context can greatly improve the accuracy of diagnosis.
5-5b Design Components Figure 5.2 shows that group designs have five major components: goal clarity, task struc- ture, group composition, team functioning, and performance norms.
Goal clarity involves how well the group understands its objectives. In general, goals should be moderately challenging; there should be a method for measuring, monitoring, and feeding back information about goal achievement; and the goals should be clearly understood by all members.
Task structure is concerned with how the group’s work is designed. Task structures can vary along two key dimensions: coordination of members’ efforts and regulation of their task behaviors.30 The coordination dimension involves the degree to which group tasks are structured to promote effective interaction among group members. Coordina- tion is important in groups performing interdependent tasks, such as surgical teams and problem-solving groups. It is relatively unimportant, however, in groups composed of members who perform independent tasks, such as a group of call center specialists or salespeople. The regulation dimension involves the degree to which members can control their own task behaviors and be relatively free from external controls such as supervi- sion, plans, and programs. Self-regulation generally occurs when members can decide on such issues as task assignments, work methods, production goals, and membership. (Chapter 14 discusses OD interventions for designing group task structure.)
Group composition concerns the membership of groups. Members can differ on a number of dimensions having relevance to group behavior. Demographic variables, such as age, education, experience, and skills and abilities can affect how people behave and relate to each other in groups. Demographics can determine whether the group is composed of people having task-relevant skills and knowledge, including interpersonal skills. People’s internal needs and personal traits also can influence group behaviors. Individual differences in social needs can determine whether group membership is likely to be satisfying or stressful.31
Team functioning is the underlying basis of group life. It involves group processes hav- ing to do with how members relate to each other, which is important in work groups because the quality of relationships can affect task performance. In some groups, for exam- ple, interpersonal competition and conflict among members result in their providing little support and help for each other. Conversely, groups may become too concerned about sharing good feelings and spend too little time on task performance. In OD, considerable effort has been invested in helping work-group members develop healthy interpersonal rela- tions, including an ability and a willingness to share feelings and perceptions about mem- bers’ behaviors so that interpersonal problems and task difficulties can be worked through
CHAPTER 5 DIAGNOSING 107
and resolved.32 Group functioning, therefore, involves task-related activities, such as advo- cacy and inquiry; coordinating and evaluating activities; and the group-maintenance func- tion, which is directed toward holding the group together as a cohesive team and includes encouraging, harmonizing, compromising, setting standards, and observing.33 (Chapter 10 presents interpersonal and group process interventions.)
Performance norms are member beliefs about how the group should perform its task and what levels of performance are acceptable.34 Norms derive from interactions among members and serve as guides to group behavior. Once members agree on performance norms, either implicitly or explicitly, then members routinely perform tasks according to those norms. For example, members of problem-solving groups often decide early in the life of the group that decisions will be made through voting; voting then becomes a routine part of group task behavior. (Chapter 10 discusses interventions aimed at helping groups to develop appropriate performance norms.)
5-5c Outputs Team effectiveness has two dimensions: performance and quality of work life. Perfor- mance is measured in terms of the group’s ability to control or reduce costs, increase productivity, or improve quality. It is a “hard” measure of effectiveness. In addition, effectiveness is indicated by group members’ quality of work life. It concerns work satis- faction, team cohesion, and organizational commitment.
5-5d Alignment Diagnosing team effectiveness requires assessment of how well the group elements described above fit with each other.
1. Does the group design fit with the inputs? As shown in Figure 5.2, the key inputs into group design are the larger organization’s design and culture. Organization designs and cultures that are highly flexible and promote agile and adaptive orga- nizational behaviors generally fit with work groups composed of highly skilled and experienced members performing highly interdependent tasks. Conversely, organi- zation designs and cultures that are bureaucratic and support standardized beha- viors generally align with work groups that have clear, quantitative goals and norms and structures that support routine task behaviors and interactions. Although there is little direct research on these fits, the underlying rationale is that congruence between organization design and culture and group design sup- ports overall integration of task behaviors within the organization. When group designs are not compatible with organization designs and cultures, groups often conflict with the organization.35 They may develop norms that run counter to organizational effectiveness, such as occurs in groups supportive of horseplay, goldbricking, and other counterproductive behaviors.
2. Do the group design components fit with each other? The nature of a group’s task determines how the design components should align with each other. When the task is highly interdependent and requires coordination among group mem- bers, goal clarity, task structure, group composition, performance norms, and team functioning all need to promote effective task interaction among members. For example, task structure might physically locate related tasks together; group composition might include members with similar interpersonal skills and social needs; performance norms would support task-relevant interactions; and healthy interpersonal relationships would be developed. Conversely, when a group’s task
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is independent, the design components should promote individual task perfor- mance.36 The other relevant task dimension concerns task uncertainty, which has to do with the amount of information processing and decision making that need to occur during task performance. When a work group has an uncertain task, then task structure, group composition, performance norms, and team functioning should promote self-regulation. Members should have the nec- essary freedom, information, and skills to assign members to appropriate tasks, to decide on production methods, and to set performance goals.37 For example, when self-regulation is needed, task structure might be relatively flexible and allow the interchange of members across group tasks; composition might include members with multiple skills, interpersonal competencies, and social needs; per- formance norms would support complex problem solving; and efforts would be made to develop healthy interpersonal relations. On the other hand, when tech- nology is relatively certain, group designs should promote standardization of behavior and groups should be externally controlled by supervisors, schedules, and plans.38
5-5e Analysis Application 5.2 presents an example of applying group-level diagnosis to a top- management team engaged in problem solving.
Examination of the group’s outputs shows that it is ineffective at problem solving. Members report a backlog of unresolved issues, poor use of meeting time, lack of follow-through and decision implementation, and a general dissatisfaction with the team meetings. Examining group inputs and design components and assessing the fit among them can uncover the causes of those group problems.
The key inputs into a work group are the design and culture of the larger organi- zation. The Ortiv Glass Corporation’s decentralized philosophy allows each plant to set up its own organization design. Freedom to innovate in the manufacturing plants is probably an outgrowth of the firm’s OD activities and culture, which promote par- ticipation and innovation. Although little specific data are given about the new plant’s organization design, tasks are structured into functional departments that must work together to produce plate glass. The team’s problem-solving activities reflect this inter- dependence among the departments as coordination among team members is needed to resolve plantwide issues. The team meetings also seem to involve many issues that are complex and not easily solved, so there is probably uncertainty in the technology or work process. This ambiguity is typical in a new plant and makes it difficult for a problem-solving team to determine the causes of problems or to find acceptable solu- tions. Consequently, members of the top-management team must process considerable information during problem solving.
Diagnosis of the team’s design components answers the following questions:
1. How clear are the group’s goals? The team’s goals seem relatively clear: they are to solve problems. There appears to be no clear agreement, however, on the specific problems to be addressed. As a result, members come late because they have “more pressing” problems needing attention.
2. What is the group’s task structure? The team’s task structure includes face-to-face interaction during the weekly meetings. This structure allows members from differ- ent functional departments to come together physically to share information and to solve problems mutually affecting them. It facilitates coordination of problem
CHAPTER 5 DIAGNOSING 109
solving among the departments in the plant. The structure also seems to provide team members with the freedom necessary to regulate their task behaviors in the meetings. They can adjust their behaviors and interactions to suit the flow of the discussion and problem-solving process.
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TOP-MANAGEMENT TEAM AT ORTIV GLASS CORPORATION
T he Ortiv Glass Corporation produces and markets plate glass for use primarily in the construction and automotive industries. The multiplant company has been involved
in OD for several years and actively supports par- ticipative management practices and employee involvement programs. Ortiv’s organization design is relatively flexible, and the manufacturing plants are given freedom and encouragement to develop their own organization designs and approaches to participative management. It recently put together a problem-solving group made up of the top-management team at its newest plant.
The team consisted of the plant manager and the managers of the five functional departments reporting to him: engineering (maintenance), administration, human resources, production, and quality control. In recruiting managers for the new plant, the company selected people with good technical skills and experience in their respective functions. It also chose people with some managerial experience and a desire to solve problems collaboratively, a hallmark of par- ticipative management. The team was relatively new, and members had been working together for only about five months.
The team met formally for two hours each week to share pertinent information and to deal with plantwide issues affecting all of the departments, such as safety procedures, inter- departmental relations, and personnel prac- tices. Members described these meetings as informative but often chaotic in terms of deci- sion making. The meetings typically started late as members straggled in at different times. The latecomers generally offered excuses about more pressing problems occur- ring elsewhere in the plant. Once started, the
meetings were often interrupted by “urgent” phone messages for various members, includ- ing the plant manager, and in most cases, the recipient would leave the meeting hurriedly to respond to the call.
The group had problems arriving at clear decisions on particular issues. Discussions often rambled from topic to topic, and mem- bers tended to postpone the resolution of pro- blems to future meetings. This led to a backlog of unresolved issues, and meetings often lasted far beyond the two-hour limit. When group decisions were made, members often reported problems in their implementation. Members typically failed to follow through on agreements, and there was often confusion about what had actually been agreed upon. Everyone expressed dissatisfaction with the team meetings and their results.
Relationships among team members were cordial yet somewhat strained, especially when the team was dealing with complex issues in which members had varying opinions and interests. Although the plant manager pub- licly stated that he wanted to hear all sides of the issues, he often interrupted the discussion or attempted to change the topic when mem- bers openly disagreed in their views of the problem. This interruption was typically fol- lowed by an awkward silence in the group. In many instances, when a solution to a pressing problem did not appear forthcoming, members either moved on to another issue or they infor- mally voted on proposed options, letting major- ity rule decide the outcome. Members rarely discussed the need to move on or vote; rather, these behaviors emerged informally over time and became acceptable ways of dealing with difficult issues.
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3. What is the composition of the group? The team is composed of the plant man- ager and the heads of the five functional departments. All members appear to have task-relevant skills and experience, both in their respective functions and in their managerial roles. They also seem to be interested in solving problems collabora- tively. That shared interest suggests that members have job-related social needs and should feel relatively comfortable participating in group problem-solving situations.
4. What are the group’s performance norms? Group norms cannot be observed directly but must be inferred from group behaviors. The norms involve member beliefs about how the group should perform its task, including acceptable levels of performance. A useful way to describe norms is to list specific behaviors that complete the sentences “A good group member should …” and “It’s okay to … .” Examination of the team’s problem-solving behaviors suggests the following performance norms:
• It’s okay to come late to team meetings. • It’s okay to interrupt meetings with phone messages. • It’s okay to leave meetings to respond to phone messages. • It’s okay to hold meetings longer than two hours. • A good group member should not openly disagree with others’ views. • It’s okay to vote on decisions. • A good group member should be cordial to other members. • It’s okay to postpone solutions to immediate problems. • It’s okay not to follow through on previous agreements.
5. What is the nature of team functioning in the group? The case strongly suggests that interpersonal relations are not healthy on the management team. Members do not seem to confront differences openly. Indeed, the plant manager purposely deflects issues when conflicts emerge. Members feel dissatisfied with the meetings but spend little time talking about those feelings. Relationships are strained, but members fail to examine the underlying causes.
The problems facing the team can now be explained by assessing how well the group design fits the inputs. The plant’s organization design requires coordinated problem solv- ing among functional departments. The newness of the plant and the uncertainty of the technology result in complex, plantwide issues that require considerable information processing to resolve. The weekly team meetings are an attempt to address and resolve these interdependent and complex problems. The plant’s culture promotes participation in problem solving and the team meetings are a reflection of that involvement. Although it is too early to tell whether the team will succeed, there does not appear to be signifi- cant incongruity between the plant’s organization design and culture and what the team is trying to do.
Next, alignment among the group design components is assessed to determine how well they fit together to promote interdependent and complex problem solving. The team’s task structure and composition appear to fit the type of issues that the team is sup- posed to address. The face-to-face meetings help to coordinate problem solving among the department managers, and except for interpersonal and group problem-solving skills, members seem to have the necessary task-relevant expertise to address the plantwide pro- blems. There appears, however, to be a conflict in the priority between the problems to be solved by the team and the problems faced by individual managers. Moreover, there seems to be a mismatch between the demands of the problem-solving task and the team’s perfor- mance norms and interpersonal relations. Complex, interdependent problems require per- formance norms that support sharing of diverse and often conflicting kinds of information. The norms must encourage members to generate novel solutions and to assess the relevance of problem-solving strategies in light of new issues. Members need to
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address explicitly how they are using their knowledge and skills and how they are weighing and combining members’ individual contributions. The team’s performance norms fail to support complex problem solving; rather, they promote a problem-solving method that is often superficial, haphazard, and subject to external disruptions. Members’ interpersonal relationships reinforce adherence to the ineffective norms. Members do not confront per- sonal differences or dissatisfactions with the group process. They fail to examine the very norms contributing to their problems. In this case, diagnosis suggests the need for group interventions aimed at improving performance norms and developing healthy interper- sonal relationships. (Chapter 10 describes interpersonal and group process interventions.)
5-6 Individual-Level Diagnosis The final level of organizational diagnosis is the individual job or position. An organiza- tion consists of numerous groups; a group, in turn, is composed of several individual jobs. This section discusses the inputs, design components, and relational fits needed for diagnosing jobs. The model shown in Figure 5.2 is similar to other popular job diagnostic frameworks, such as Hackman and Oldham’s job diagnostic survey and Herzberg’s job enrichment model.39
5-6a Inputs Four major inputs affect job design: organization design, culture, group design, and the personal characteristics of jobholders.
Organization design is concerned with the larger organization within which the indi- vidual job is the smallest unit. Organization design is a key part of the larger context surrounding jobs. An organization’s technology, structure, management processes, and human resources systems can have a powerful impact on the way jobs are designed and on people’s experiences in them. For example, company reward systems can orient employees to particular job behaviors and influence whether people see job performance as fairly rewarded. In general, technology characterized by relatively uncertain tasks is likely to support job designs allowing employees flexibility and discretion in performing tasks. Conversely, low-uncertainty tasks are likely to promote standardized job designs requiring routinized task behaviors.40
Culture represents the values and norms shared by organization members. Because they are generally taken for granted, they guide members’ perceptions, thoughts, and actions. Culture can influence the kinds of work designs that organizations consider and that members perceive as legitimate. The more an organization culture promotes member participation and innovation, the more likely job designs will be highly flexible and involve member decision making.
Group design concerns the work group containing the individual job. Like organiza- tion design, group design is an essential part of the job context. Task structure, goal clar- ity, group composition, performance norms, and team functioning serve as inputs to job design. They typically have a more immediate impact on jobs than do the larger, organi- zation design components. For example, group task structure can determine how indi- vidual jobs are grouped together—as in groups requiring coordination among jobs or in ones comprising collections of independent jobs. Group composition can influence the kinds of people who are available to fill jobs. Group performance norms can affect the kinds of job designs that are considered acceptable, including the level of jobholders’ per- formances. Goal clarity helps members to prioritize work, and group functioning can
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affect how powerfully the group influences individual-job behaviors. When members maintain close relationships and the group is cohesive, group norms are more likely to be enforced and followed.41
Personal characteristics of individuals occupying jobs include age, education, experi- ence, skills, and abilities. All of these can affect how people react to job designs and per- form. Individual needs and expectations also can affect employee job responses. For example, individual differences in growth needs—the need for self-direction, learning, and personal accomplishment—can determine how much people are satisfied by jobs with high levels of skill variety, autonomy, and feedback about results.42 Similarly, work motivation can be influenced by people’s expectations that they can perform a job well and that good job performance will result in valued outcomes.43
5-6b Design Components Figure 5.2 shows that individual jobs have five key dimensions: skill variety, task identity, task significance, autonomy, and feedback about results.44
Skill variety is the degree to which a job requires a range of activities and abilities to perform the work. Assembly-line jobs, for example, generally have limited skill variety because employees perform a small number of repetitive activities. On the other hand, most professional jobs include a great deal of skill variety because people engage in diverse activities and employ several different skills in performing their work.
Task identity measures the degree to which a job requires the completion of a rela- tively whole, identifiable piece of work. Skilled craftspeople, such as tool-and-die makers and carpenters, generally have jobs with high levels of task identity. They are able to see a job through from beginning to end. Assembly-line jobs involve only a limited piece of work and score low on task identity.
Task significance identifies the degree to which a job has a significant impact on other people’s lives. Custodial jobs in a hospital are likely to have more task significance than similar jobs in a toy factory because hospital custodians are likely to see their jobs as affecting someone else’s health and welfare.
Autonomy indicates the degree to which a job provides freedom and discretion in scheduling the work and determining work methods. Assembly-line jobs generally have little autonomy; the work pace is scheduled and people perform preprogrammed tasks. College teaching positions have more autonomy. Professors usually can determine how a course is taught, even though they may have limited say over class scheduling.
Feedback about results involves the degree to which a job provides employees with direct and clear information about the effectiveness of task performance. Assembly-line jobs often provide high levels of feedback about results, whereas college professors must often contend with indirect and ambiguous feedback about how they are performing in the classroom.
Those five job dimensions can be combined into an overall measure of job enrich- ment. Enriched jobs have high levels of skill variety, task identity, task significance, autonomy, and feedback about results. They provide opportunities for self-direction, learning, and personal accomplishment at work. Many people find enriched jobs inter- nally motivating and satisfying. (Chapter 14 discusses job enrichment more fully.)
5-6c Outputs Individual-job effectiveness includes two kinds of outputs, those related to how well the job is performed and those having to do with how people experience their job. Perfor- mance is measured in terms of the quantity, quality, time, and cost of producing a
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particular job outcome such as a product or service. Indicators of an individual’s experi- ence of the job include job satisfaction, absenteeism, and personal development.
5-6d Alignment The diagnostic model in Figure 5.2 suggests that the job-design elements just described must align with each other to produce effective job outputs, such as high quality and quantity of individual performance, low absenteeism, and high job satisfaction.
1. Does the job design fit with the inputs? Job design should be congruent with the larger organization design, culture, and group design within which the job is embed- ded.45 Both the organization and the group serve as powerful contexts for individual jobs or positions. They support and reinforce particular job designs. Highly flexible organization designs, participative cultures, and work groups that permit members to self-regulate their behavior align with enriched jobs. These organization and group inputs promote autonomy, flexibility, and innovation at the individual-job level. Conversely, bureaucratic organizations and cultures and groups relying on external controls are congruent with job designs scoring low on the five design com- ponents. These organization and group inputs reinforce standardized, routine jobs. As suggested earlier, congruence across different levels of organizational design pro- motes integration of the organization, group, and job levels. Whenever the levels do not fit each other, conflict is likely to emerge.
Job design also should fit jobholders’ personal characteristics if they are to perform effectively and derive satisfaction from work. Generally, enriched jobs fit people with strong growth needs.46 These people derive satisfaction and accomplish- ment from performing jobs involving skill variety, autonomy, and feedback about results. Enriched jobs also fit people possessing moderate-to-high levels of task- relevant skills, abilities, and knowledge. Enriched jobs generally require complex information processing and decision making; people must have comparable skills and abilities to perform effectively. Jobs scoring low on the five job-design compo- nents generally fit people with rudimentary skills and abilities and with low growth needs. Simpler, more routinized jobs requiring limited skills and experience fit better with people who place a low value on opportunities for self-direction and learning. However, because people can develop growth needs and expertise through educa- tion, training, and experience, job design must be monitored and adjusted from time to time to fit jobholders’ changing needs and enhanced knowledge and skills.
2. Do the job-design components fit with each other? The five job-design compo- nents must align with each other to provide a clear and consistent direction to how the job should be performed. Enriched job designs that score high on skill variety, task identity, task significance, autonomy, and feedback of results signal the need for flexibility, active engagement, and decision making to perform the job. Conversely, traditional job designs that score low on the design components indicate the need for routine and standardized job performances.
5-6e Analysis Application 5.3 presents an example of individual-level diagnosing. As part of a larger cost-cutting initiative, the university is considering a change in the job design of a program administrator. The application provides information about the administrator’s current job. Diagnosing the individual-level elements and the alignment among them can help to address whether or not the proposed change makes sense.
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5 3 JOB DESIGN AT PEPPERDINE UNIVERSITY
T he Graziadio School of Business and Man- agement (GSBM) at Pepperdine University is one of the largest business schools in the country and has the third largest part-
time MBA program. The school also provides graduate education aimed at different markets including an executive MBA (EMBA), a presidential/key executive MBA (PKE), and a specialized master’s degree in organization development (MSOD). The MSOD program’s curriculum consists of 10 four-unit classes over 22 months. Eight of the classes are con- ducted off-site during eight-day sessions at both domestic and international locations. The MSOD program office consists of a faculty director, a program administrator, and an administrative assistant. In response to cost- cutting initiatives at the university level, a pro- posal was being considered to alter the job designs of the MSOD program staff.
The MSOD Program Administrator, the focus of this application, was responsible for marketing and recruiting new students, man- aging the delivery logistics of the off-site pro- gram, managing the students’ registration and financial relationships with the university, and maintaining relationships with the MSOD alumni. The marketing and recruiting duties involved working with the Program Director and the Director of Marketing for GSBM to develop marketing tactics including advertise- ments, brochures, conference marketing and support, and other market development activi- ties. The recruiting process involved explaining the curriculum to prospective applicants, over- seeing the application process for each appli- cant, working with the faculty to have qualified applicants interviewed, and managing the admissions process. This too had to be coordi- nated with the director and the administrative assistant. Once a class was admitted, the Pro- gram Administrator worked with various off- site facilities to establish room and board rates and catering services; managed the faculty’s travel and teaching requirements; managed various intersession activities includ- ing the final exam; managed the students’
enrollment and graduation processes including their interface with the university’s registrar and finance office and the school’s financial aid office; and coached students through the program. After graduation, the Program Admin- istrator served as an unofficial placement ser- vice, hooking up eligible graduates with prospective employers who called looking for MSOD talent, provided career guidance, and worked with the program’s alumni organization to sponsor conferences and other alumni activities.
Each of the above activities was some- what programmable; they occurred at specific times of the year and could be scheduled. However, because each applicant, student, class, or graduate was somewhat unique, the specific tasks or actions could not always be specified in advance and there were a number of exceptions and unique situations that arose during each day, month, or year.
The MSOD Program Administrator has worked with the MSOD program for over 15 years and was a fixture in both the MSOD and the general OD communities. Year over year, the Program Administrator delivered qual- ified applicants in excess of available space although that task had become increasingly dif- ficult in the face of tuition increases, increas- ingly restrictive corporate policies on tuition reimbursement, and the ups and downs of the economy. He handled both routine and nonroutine administrative details profes- sionally, displays and reports a high level of job satisfaction and commitment to the pro- gram, and has been complimented formally and informally by the students in the program. In fact, each cohort develops its own relation- ship with the administrator and he becomes a de facto member of almost every class. The alumni considered the Program Administrator a key and integral part of the MSOD program. The set of duties described above has evolved considerably over the Program Administrator’s tenure. In particular, he has become more involved and responsible for marketing and recruiting activities, and the alumni relations
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Diagnosis of individual-level inputs answers the following questions:
1. What are the design and culture of the organization within which the individual job is embedded? Although the example says little about the organization’s design and culture, a number of inferences are possible. The business school’s administra- tion was attempting to reward the Program Administrator with a more enriched job. This suggests that the culture of the organization was supportive of employee involvement. However, the proposed change also was being considered as part of an efficiency drive. The school is large, hosting the third largest part-time MBA pro- gram in the United States. This helps to explain why a specialized master’s degree in OD has been paired with two EMBA programs and differentiated from the large, part-time MBA program. To the extent that the MSOD program has different stu- dents or different marketing, delivery, and alumni relations processes than the EMBA programs, there may be difficult points of integration between the two types of programs.
2. What is the design of the group containing the individual job? Three individual jobs were grouped together according to the type of program. In this case, a faculty director, program administrator, and administrative assistant comprise the program office. The office is clearly dependent on other university and school functions, such as the registrar’s office, financial aid, and the teaching faculty. Each of the three jobs has specific duties, but there is a clear sense that all three jobs are highly interdepen- dent. The Program Administrator must coordinate with the faculty director on mar- keting, admissions, and curriculum decisions and with the administrative assistant on recruiting, program delivery, and routine administrative processes. Interaction during task performance is thus intense, and although partly scheduled, the work involves a high number of exceptions.
3. What are the personal characteristics of the jobholder? The application provides some clues about the Program Administrator’s personal characteristics. First, he has stayed in the position for more than 15 years; this speaks to a loyalty or com- mitment to the OD program. Second, his job has evolved considerably and suggests at least a moderate amount of growth needs strength.
duties have been added in response to alumni requests that cannot be filled by traditional univer- sity departments.
In an effort to improve efficiencies, and in recognition of the MSOD Program Administrator’s outstanding productivity, a proposal was being con- sidered by GSBM administration to change the design of his job. The proposal suggested that the MSOD Program Administrator continue to perform all of the current duties of the position and, in addi- tion, provide administrative support to two PKE clas- ses from their initial class to graduation. The duties of administrating the PKE program would be similar in nature to the delivery aspects of the MSOD
program, including working with faculty to support their teaching efforts, managing textbook ordering processes, and providing different facilities logistics activities. It would not include marketing, recruiting, and alumni development activities. The Program Administrator would receive additional compensa- tion for the increased responsibilities and a title change. The new position would include joint super- vision, with the EMBA program administrator, of an assistant program administrator, who would in turn manage a pool of administrative assistants. In addi- tion, the new program administrator job would report to both the MSOD program director and the director of EMBA/PKE programs.
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Diagnosing individual jobs involves the following design components:
1. How much skill variety is included in the job? The program administrator job involves a wide variety of tasks, including recruiting students; advising prospective and current students on career opportunities; making input into marketing strategies and tactics; handling routine and nonroutine administrative matters such as registra- tion, grade changes, and graduation processes; supervision of an administrative assistant; coordination with other functions and departments within the school and university; traveling to several class sessions and handling logistics details; negotiat- ing with a variety of resort properties on rooming costs, menus, meal costs, and room setup; working with alumni; and a variety of ancillary tasks.
2. How much task identity does the job contain? The program administrator job is “all of a piece.” It involves following individuals through an entire process, as appli- cants, students, and alumni. It engages them as individuals, as professionals, and as members of a family or other community.
3. How much task significance is involved in the job? The program administrator job scores high on task significance. It includes bringing potential students into a well- respected program, working with them during their matriculation, advising them on their experiences in the program, and taking an important hand in their personal and professional development. The job is an integral part of a transformational edu- cational process, which also contributes to its task significance.
4. How much autonomy is included in the job? There is a moderate-to-high amount of autonomy included in the program administrator job. It involves considerable discretionary decision making without much supervision or external controls.
5. How much feedback about results does the job contain? The program administra- tor job receives a lot of feedback. It comes from the faculty director on job perfor- mance; from program evaluations about service quality; and from students on the amount of support and guidance received.
Assessing individual-level outputs involves measures of job satisfaction, performance, absenteeism, and personal development. The Program Administrator performs his job well and seems to be very satisfied with it and the personal development opportunities it affords. Although there is no information on his level of absenteeism, it seems safe to assume that it is negligible.
These positive outcomes suggest that currently there is a good fit between the job design and the inputs and among the job-design components. When the job components are examined together, the program administrator job contains high levels of enrich- ment. Task variety, task identity, task significance, autonomy, and feedback about results are all high and mutually contribute to an enriched job experience. Over time, the level of enrichment appears to have increased because skill variety and autonomy have increased. The fit between the job design and the organization design is mixed, however. The business school’s technology of recruiting and educating students and managing alumni is at least moderately, if not highly, uncertain. Tasks that are uncertain require considerable information processing and decision making. Enriched jobs fit such tasks, and the program administrator job has gradually evolved to fit the high levels of task uncertainty. Structurally, as a specialized master’s degree that is different from an EMBA program, the MSOD program office, and the administrator job in particular, have evolved to be somewhat independent of the business school’s other programs. There does not appear to be much sharing or coordination of tasks across these different MBA programs, despite obvious opportunities such as student registration, graduation, book ordering, and others. Either the MSOD program is sufficiently different from the
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EMBA programs that it warrants such independence, or there are some important opportunities for improved efficiencies from the proposed change. There also seems to be only a partial fit between Graziadio School of Business and Management’s culture and the administrator’s job design. The culture includes values that promote both employee involvement and efficiency, with the former supporting an enriched job and the latter potentially impeding enrichment. The program administrator job and the other jobs in the program office closely interact with each other to form a team that is cohesive and mostly self-managed. This suggests a good fit between the enriched program administrator job and the design of the office team. Finally, the design of the program administrator job aligns well with the personal characteristics of the Program Administrator.
In the current context, the proposed change to the program administrator job needs to be considered very carefully. Will the change likely improve productivity, enhance quality, or increase job satisfaction? In general, the answer appears to be “no.” For exam- ple, the proposed change argues that adding new responsibilities will increase task vari- ety, task identity, and task significance. However, the additional administrative tasks of the EMBA classes do not increase the skill variety of the existing program administrator job. There are, in fact, no new skills required to administer those classes, and adding these responsibilities may actually unbalance the existing skill mix. That is, under the proposed new job, the program delivery component of the job will increase dramatically with respect to the other job components and more or less dominate the mix. This could actually result in decreased task variety.
The proposed change also contends that task significance will increase because the program administrator job will be able to affect the lives of both the MSOD program participants and the EMBA students. There is some merit to this idea, but it must be tempered with the chance that task identity might decrease. The task identity of the pro- gram administrator job, as described in the application, is high while the task identity for the EMBA program is relatively low. In the EMBA program, the program administrator job would interact with the students only during the program; it would have little involvement with them in the recruiting process and later as alumni. Thus, any increase in the number of people the proposed new job affects (task significance) is likely to be offset by the reduced involvement it would have with about half of these people (task identity).
Finally, the proposed change claims that the Program Administrator is being given more responsibility, which is true, but he will have less autonomy. The new program administrator job will report to two bosses: the MSOD program director and the EMBA/PKE director. Thus, the Program Administrator will probably have more, not less, supervision as the MSOD program director ensures that the MSOD program objec- tives are addressed, and the EMBA/PKE program director ensures that his or her program objectives are being addressed.
Examining the proposed changes in relation to the design components of the program administrator job suggests an intervention dilemma in this case. Should the business school’s administration continue with the proposed change? The hoped-for effi- ciencies may or may not materialize. The Program Administrator’s extensive skills and knowledge may in fact be applied to improve productivity. However, will it do so at a cost to his work satisfaction? Over time, such a solution may not be sustainable. If the change is implemented, OD interventions probably should be aimed at mitigating the negative effects on task identity, task significance, and autonomy. The MSOD director and the EMBA/PKE director need to work with the Program Administrator to set out clear expectations for his new job. They need to figure out methods to allow the Program
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Administrator to perform certain tasks that he finds most rewarding. (Chapter 14 describes interventions for matching people, technology, and job design.) If the proposed changes are not implemented, alternative structural arrangements within the EMBA programs organization may need to be examined.
SUMMARY
This chapter presented information for diagnosing organizations, groups, and individual jobs. Diagnosis is a collaborative process, involving both organization members and OD practitioners in collecting pertinent data, analyzing them, and drawing conclusions for action planning and intervention. Diagnosis may be aimed at discovering the causes of specific problems, or it may be directed at assessing the organization or department to find areas for future development. Diag- nosis provides the necessary practical understanding to devise interventions for solving problems and improv- ing organization effectiveness.
Diagnosis is based on conceptual frameworks about how organizations function. Such diagnostic models serve as road maps by identifying areas to examine and questions to ask in determining how an organization or department is operating.
The model presented here views organizations as open systems. The organization serves to coordinate
the behaviors of its departments. It is open to exchanges with the larger environment and is influenced by exter- nal forces. As open systems, organizations are hierar- chically ordered; that is, they are composed of groups, which in turn are composed of individual jobs. Organi- zations also display five key open-systems properties: environments; inputs, transformations, and outputs; boundaries; feedback; and alignment.
A comprehensive model for diagnosing organiza- tional systems was described and applied to three orga- nizational levels—organization, group, and individual job. It consists of inputs; a set of design components; and a variety of outputs, such as performance, produc- tivity, and stakeholder satisfaction. For each organiza- tional level, diagnosing involves understanding each of the parts in the model and then assessing how the design components align with each other and with the inputs. Effective outputs are likely to result from good alignment.
NOTES
1. C. Lundberg, “Organization Development Diagnosis,” in Handbook of Organization Development, ed. T. Cummings (Los Angeles: Sage Publications, 2008), 137–50; D. Nadler, “Role of Models in Organizational Assessment,” in Organi- zational Assessment, ed. E. Lawler III, D. Nadler, and C. Cammann (New York: John Wiley & Sons, 1980), 119–31; R. Burton, B. Obel, H. Starling, M. Sondergaard, and D. Dojbak, Strategic Organizational Diagnosis and Design: Developing Theory for Application, 2nd ed. (Dordrecht, The Netherlands: Kluwer Academic Publishers, 2001).
2. M. Poole and A. Van de Ven, eds., Handbook of Organi- zational Change and Innovation (New York: Cambridge University Press, 2004); D. Coghlan, “Organization Development through Interlevel Dynamics,” International Journal of Organizational Analysis 2 (1994): 264–79.
3. M. Weisbord, “Organizational Diagnosis: Six Places to Look for Trouble with or without a Theory,” Group and Organizational Studies 1 (1976): 430–37.
4. D. Nadler and M. Tushman, Competing by Design: The Power of Organizational Architecture (New York: Oxford University Press, 1997).
5. J. Galbraith, Designing Organizations (San Francisco: Jossey-Bass, 2002).
6. J. Kotter, Organizational Dynamics: Diagnosis and Inter- vention (Reading, MA: Addison-Wesley, 1978).
7. M. Tushman and E. Romanelli, “Organization Evolution: A Metamorphosis Model of Convergence and Reorienta- tion,” in Research in Organizational Behavior, vol. 7, ed. L. Cummings and B. Staw (Greenwich, CT: JAI Press, 1985); C. Worley, D. Hitchin, and W. Ross, Integrated
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