Best Buy - Organizational Analysis Project - Current state

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Chapter 5

The Diagnostic Process

Learning Objectives (part 1 of 2)

  • Identify system parameters.
  • Recognize symptoms, problems, and causes of ineffectiveness.
  • Recognize techniques for gathering information.

Learning Objectives (part 2 of 2)

  • Describe major diagnostic models and techniques used in OD programs.
  • Apply systematic diagnosis to organizational situations.

Figure 5.1
Stage 3 of OD’s 5 Stages

Diagnosing Problem Areas
(part 1 of 2)

  • Identification of areas for improvement.
  • Assess current performance and desired level of quality.
  • Provides information that allows for faster-reacting organization.

Diagnosing Problem Areas
(part 2 of 2)

Analyzes data on organization’s:

  • Structure.
  • Administration.
  • Interaction.
  • Procedures.
  • Interfaces.
  • Other elements.

What is Diagnosis?

  • Systematic approach to understand present state of organization.
  • Specifies nature of problem and causes.
  • Provides basis for selecting strategies.
  • Involves systematic analysis of data.

Critical Issues in Diagnosis

  • Simplicity.
  • Visibility.
  • Involvement.
  • Primary factors.
  • Measure what’s important.
  • Sense of urgency.

The Process

Diagnosis is cyclical process involving:

  • Data gathering.
  • Identification of problem areas.
  • Interpretation.
  • Potential action programs.

Steps in Diagnosis (part 1 of 2)

Step 1: Tentative problem identified.

Step 2: Collect data.

Step 3: Analyze data.

Step 4: Feedback data.

Step 5: More data needed?

Steps in Diagnosis (part 2 of 2)

Step 6: Problem areas identified.

Step 7: Is client motivated?

Step 8: Diagnosis and work on problem.

Step 9: Monitor and assess results.

Figure 5.2
The Diagnostic Process

Performance Gap

  • Difference between what organization could do and what organization is doing.

Figure 5.3
The Performance Gap

Self-Assessment Gap Analysis
of Four Key Areas

Organization’s strengths.

What can be done to take advantage of strengths.

Organization’s weaknesses.

What can be done to alleviate weaknesses.

Data-Collection Process

  • Data is an aggregation of:
  • Statistics.
  • Opinions.
  • Assumptions.
  • Signs.
  • Signals.
  • Clues.
  • Facts.
  • Information is data that have form and structure.

Data Collection Stages (part 1 of 4)

Definition of objectives.

Selection of factors.

Selection of data-gathering method.

Data Collection Stages (part 2 of 4)

Stage 1: Definition of Objectives

  • Define objectives of change program.
  • Identify preliminary diagnosis and further information required.

Data Collection Stages (part 3 of 4)

Stage 2: Selection of Key Factors

  • Identify central variables.
  • May be necessary to increase range and depth of data.

Data Collection Stages (part 4 of 4)

Stage 3: Selection of Data-Gathering Method

  • Selection of one or more methods.
  • Nature of the problem helps determine method.
  • Variety of methods may be used.

Types of Data-Gathering Methods (part 1 of 3)

Secondary sources.

Organization and industry data.

Employee surveys or questionnaires.

  • Useful with a large number of people.
  • Data may lack “richness.”

Types of Data-Gathering Methods (part 2 of 3)

Sociogram.

  • Visual method of recording and analyzing preferences in a group.
  • Each member represented by circle.
  • Communication represented by arrows indicating direction of choice.

Figure 5.5
Example of Sociogram

Types of Data-Gathering Methods (part 3 of 3)

Direct observation.

  • Observing how people go about tasks.

Interviews.

  • Direct, personal, and flexible.
  • One of most widely used methods.
  • Directed interview.
  • Nondirected interview.

Implementation of
Data Collection

  • Decide from whom data will be obtained.
  • Select appropriate technique.
  • Implement data-collection program.

Analysis of Data

  • Techniques used to analyze data.
  • Dictated by method used to gather data.
  • Type of analysis decided prior to data collection.

Guidelines for Evaluating Effectiveness of Data Collection

  • Validity of data.
  • Time to collect data.
  • Cost of data collection.
  • Organization culture and norms.
  • Hawthorne effect in data collecting.

Diagnostic Models

  • Models may be used to:
  • Analyze structure, culture, and behavior of organization.
  • Models play a critical role.
  • Provide conceptual framework to understand organization.

Types of Diagnostic Models

  • Differentiation-integration model.
  • Sociotechnical systems.
  • Force-field analysis.

Differentiation-Integration Model (part 1 of 3)

  • Stresses sound analytical diagnosis.
  • Used for interdepartmental issues.
  • Collects data on activities, interactions, and norms.
  • Objective is to help departments achieve integration.

Differentiation-Integration Model (part 2 of 3)

  • Steps in implementation of model:
  • Begins with study of degree of differentiation between units.
  • Then analyzes integration and cooperation required between units.
  • Provides a basis for structural and cultural changes in departments.

Differentiation-Integration Model (part 3 of 3)

  • Examines work units using 4 characteristics of environment:
  • Degree of departmental structure.
  • Time orientation of members.
  • Interpersonal orientation of members toward others.
  • Members’ orientation toward goals.

Table 5.1
Example of Survey Results Using the Differentiation-and-Integration Model

Sociotechnical Systems Model

  • Two interrelated systems in organization:
  • Social system.
  • Technical system.
  • The 2 systems are interrelated.
  • Diagnosis determines:
  • Interrelationships.
  • Type of feedback required between subsystems.

Force-Field Analysis Model
(part 1 of 2)

  • Behavior balance between opposing forces.
  • Restraining forces.
  • Act to keep organization stable.
  • Driving forces.
  • Act to change organization.

Force-Field Analysis Model
(part 2 of 2)

  • When forces equal, organization in quasi-stationary state of equilibrium.
  • Analysis determines forces to increase or decrease.

Figure 5.6
Force-Field Analysis Model

Figure 5.7
Example of the Use of Force-Field Analysis

Warning Signs in Diagnosis

  • Confidentiality of data.
  • Over-diagnosis.
  • Crisis diagnosis.
  • Threatening and overwhelming diagnosis.
  • Practitioner’s favorite diagnosis.
  • Diagnosis of symptoms, not problems.

OD Application
Performance Gap at eBAY

  • eBay’s business model was:
  • Auction of merchandise on Internet.
  • Has no warehouses, does not take possession of merchandise.
  • Revenue comes from listing fees, advertising, and PayPal.
  • Revenue and profit down substantially.

  • eBay now gathers data to learn about customers.
  • Data showed strategy of on-line auctions obsolete.
  • Now focuses on fixed price sales of:
  • Collectables, overstocked items, and last years models.
  • But business continues to fall short of expectations.

OD Application
Data Collection and Diagnosis at McDonald’s

  • In ‘02 McDonald’s identified a problem based on earnings and profitability.
  • Lack of data on customers prevented identifying problem.
  • In ‘03 adopted system to gather data over long term.

  • Data obtained from:
  • Mystery diners who graded stores.
  • In-depth interviews with customers.
  • Data analysis showed solution:
  • Deliver better experience for customers.
  • Solution included better food and more choices.
  • Coffee station part of solution:
  • Increase traffic at existing stores.
  • Bring in customers at non-dinner hours.

Key Words and Concepts

  • Clique.
  • In a sociogram, when 3 or more persons select one another.
  • Closed questions.
  • Specific questions normally answered yes or no.
  • Data.
  • Unstructured, unformed facts.

  • Diagnosis.
  • Analysis of problem(s).
  • Diagnostic models.
  • Provide conceptual framework to understand organization.
  • How well they function as a system.
  • Differentiation and integration model.
  • Diagnostic model that stresses analytical diagnosis as basis for planned change.

  • Directed interview.
  • Interview in which specific information is sought.
  • Driving forces.
  • Put pressure on organization to change.
  • Equilibrium.
  • Restraining and driving forces for change being equal or in balance.

  • Force-field analysis model.
  • Weighs forces for and against change.
  • Hawthorne effect.
  • Act of observing may influence behavior of those being investigated.
  • Information.
  • Data that has structure and form.
  • Isolates.
  • In a sociogram, individuals within group who are chosen rarely by others.

  • Mutual choice.
  • In a sociogram, when individuals within group choose one another.
  • Nondirected interview.
  • Interview direction is chosen by respondent.
  • One-way choice.
  • In a sociogram, when individual in group chooses another but not chosen in return.

  • Open-ended questions.
  • Allows respondent to be unrestrained and to direct interview.
  • Performance gap.
  • Difference between desired and actual performance.
  • Questionnaires.
  • Method of gathering data.
  • Normally used for large number of responses.

  • Restraining forces.
  • Forces that act to keep organization stable.
  • Sociogram.
  • Diagram of relationships and interactions within group.
  • Sociometric approach.
  • Technique for collecting quantitative data on work groups.
  • Result of approach is sociogram.

  • Sociotechnical systems model.
  • Determines how social and technological systems interrelate.
  • Describes feedback between subsystems.
  • Stars.
  • Those highly chosen individuals in a sociogram.
  • Surveys.
  • Method of gathering data normally used for large number of responses.

OD Skills Simulation 5.1
The Acquisition Decision

  • Purpose.
  • To experience and observe how information affects team decision making.
  • Will allow you to experience and observe:
  • How team members share task information.
  • How various problem-solving strategies influence results.
  • How collaboration and competition affect team problem solving.

Preparations for Next Chapter

  • Read Chapter 6.
  • Prepare for OD Skills Simulation 6.1.
  • Complete Step 1.
  • Read the Company Situation.
  • Read and analyze Case: The Hexadecimal Company.