Diagnosing Organizational Effectiveness

A Roadmap toward Corporate Sustainability

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Contents
1. Comprehensive Model for Diagnosing Organizational Systems 2. Organization-Level Diagnosis : Strategy, Structure, Culture, People and Technology 3. Group-Level Diagnosis : Group Dynamics and Group Performance 4. Individual-Level Diagnosis : Employee Satisfaction and Performance 5. Designing Effective Organization Intervention

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Comprehensive Model for Diagnosing Organizational Systems

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What is Diagnosis?
• Diagnosis is the process of understanding how the organization is currently functioning, and it provides information necessary to design change interventions.

It is also a collaborative process between organization members and the OD (organization development) consultant to collect pertinent information, analyze it, and draw conclusions for action planning and intervention.

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High Politics Organization: Common Approach to Business Problems
YES DOES THE THING WORK? NO

DON’T MESS WITH IT

DID YOU MESS WITH IT? NO YES

NO

DOES ANYONE KNOW? YES YOU POOR $#@! ~*%$

YOU DUMB *#@>!! YES WILL YOU CATCH HELL?

HIDE IT

TRASH IT CAN YOU BLAME SOMEONE ELSE? NO YES NO PROBLEM

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Comprehensive Model for Diagnosing Organization
A. ORGANIZATIONAL LEVEL Inputs
- General Environment - Industry Structure

Design Components
Strategy Structure Human Resources Culture Technology

Outputs
Organization Effectiveness

B. GROUP LEVEL Inputs
- Organization Design

Design Components
Goal Clarity Task Structure Group Composition Group Functioning Group Norms

Outputs
Team Effectiveness e.g., quality of work life, performance

C. INDIVIDUAL LEVEL Inputs
- Organization Design - Group Design - Personal Characteristics

Design Components
Skill Variety Task Identity Task Significance Autonomy Feedback about Results

Outputs
Individual Effectiveness e.g., job satisfaction, personal development

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Organizational-Level Diagnosis

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Organizational-Level Diagnosis
Inputs Design Components
Strategy General Environment Industry Structure Human Resources Systems Technology

Outputs

Structure

Culture

Organization Effectiveness

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General Environment
General Environment

The general environment represent the external elements and forces that can affect the attainment of organization objectives. It can be described in terms of amount of uncertainty present in social, technological, economic, ecological, and political forces.

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Five Forces of Industry Structure
Buyer Power Supplier Power Threats of Substitutes

Industry Structure

Threats of Entry

Rivalry among Competitors

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Strategy
Strategy

A strategy represent the way an organization uses its resources to gain and sustain a competitive advantage. It can be described by the organization’s mission, goals and objectives, strategic intent, and functional policies.

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Strategy Formulation
Mission – Why We Exist Vision – What We Want to Be Values – What’s Important to Us
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Analysis of General Environment and Industry Structure

Strategy : Our Game Plan

Strategy Map : Translate the Strategy into Action

Analysis of Organization’s Core Competence

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Strategy Formulation
Strategic Outcomes Satisfied Shareholders Strategy : Our Game Plan Strategy Map : Translate the Strategy Delighted Customers Excellent Processes Motivated Workforce
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Structure
Structure

The structural system describes how attention and resources are focused on task accomplishment. It represents the basic organizing mode chosen to (1) divide the overall work of an organization into subunits that can assign task to individuals and groups and (2) coordinate these subunits for completion of the overall work.

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Culture
Culture

Organization culture represents the basic assumptions, values, and norms shared by organization members. It orients employees to company goals and suggests the kinds of behaviors necessary for success.

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Elements of Corporate Culture Formation
Organization System and Policy Top Management View Industry Characteristics

Profile of Employees

Organization Structure

Corporate Culture
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Human Resources Systems
Human Resources Systems

Human resources systems include mechanism for selecting, developing, appraising and rewarding organization members. HR systems influence the mix of skills, personalities and behaviors of organization members.

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Human Resources Systems
Recruitment & Selection

Business Strategy

Training & Development

Performance Management

Business Result

HR Systems Reward Management
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Career Management
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Technology
Technology

Technology is concerned with the way an organization converts inputs into products and services. It represents the core of the transformation function and includes production methods, work flow and equipment.

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Organizational-Level Diagnosis
• • What is the company’s general environment? What is the company’s industry structure?

• • •

What is the company’s strategy? What is the company’s culture? What are the company’s structure, human resources systems, and technology?

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Organizational-Level Diagnosis
Inputs
Does the organization strategic orientation fit with the inputs?

Design Components
Strategy

General Environment Industry Structure

Structure

Culture

Human Resources Systems

Technology

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Organizational-Level Diagnosis
Design Components
Strategy

Do the design components fit with each other?

Structure

Culture

Human Resources Systems

Technology

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Group-Level Diagnosis

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Group-Level Diagnosis
Inputs Design Components
Goal Clarity

Outputs

Organization Design

Task Structure

Group Functioning

Team Effectiveness

Group Composition

Group Norms

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Organization Design
Organization Design

• •

Organization design is the major input to group design. It consists of the design components characterizing the larger organization within which the group is embedded : technology, structure, human resources systems and organization culture.

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Group Components
Goal Clarity involves how well the group understand its objectives Task Structure is concerned with how the group’s work is designed Group Functioning is the underlying basis of group life

Group Composition concerns the membership of groups
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Group Norms are member beliefs about how the group should perform task
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Goal Clarity
Goal Clarity
• • Goal Clarity involves how well the group understands its objectives. In general, goals should be moderately challenging; there should be a method of measuring, monitoring and feeding back information about goal achievement. The goals should be clearly understood by all members.

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Task Structure
Task Structure
• Task Structure is concerned with how the group’s work is designed. Task structure can vary along two key dimensions : coordination of members’ effort and regulation of their task behavior.

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Group Functioning
Group Functioning
• Group Functioning is the underlying basis of group life. How members relate to each other is important in work groups because the quality of relationship can affect task performance.

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Group Composition
Group Composition
• 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, and job experience, can affect how people behave and relate to each other in groups.
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Group Norms
Group Norms
• Group Norms are member beliefs about how the group should perform task Norms derive from interaction among members and serve as guides to group behavior.

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Group-Level Diagnosis
• • • • • How clear are the group’s goals? What is the group’s task structure? What is the composition of the group? What are the group’s performance norm? What is the nature of team functioning in the group?

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Individual-Level Diagnosis

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Individual-Level Diagnosis
Inputs
Organization Design Group Design Personal Characteristics (skill, knowledge attitude) Task Identity

Design Components
Skill Variety

Outputs

Task Significance

Individual Effectiveness

Autonomy

Feedback

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Individual-Level Diagnosis
Organization Design

Organization design is concerned with the larger organization within which the individual job is the smallest unit.

Group Design

Group design concerns the larger group or department containing the individual job. Like organization design, group design is an essential part of the job context.
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Individual-Level Diagnosis
Personal Characteristics

Personal characteristics of individuals occupying jobs include their age, education, experience, and skills and abilities. Personal characteristics can affect job performance as well as how people react to job designs.

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Individual Jobs Dimensions
Skill Variety

Task Identity

Autonomy

Five Key Dimensions
Task Significance Feedback About Results

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Individual Jobs Dimensions
Skill Variety The degree to which the job requires a variety of different activities Task Identity The degree to which the job requires completion of a whole and identifiable piece of work Autonomy The degree to which a job provides freedom and discretion in scheduling the work and determining work methods.

Task Significance The degree to which a job has a significant impact on other people’s lives www.exploreHR.org

Feedback About Results The degree to which a job provides employee with direct and clear information about the effectiveness of task performance 39

Job Characteristics Model - Hackman/Oldham
Core Job Dimension Psychological States Personal and Work Outcomes

Skill Variety Task Identity Task Significance

Experienced meaningfulness of the wok Experienced responsibility for outcomes of the work Knowledge of the actual results of the work activities

• High internal work motivation • High-quality work performance • High satisfaction with the work • Low turnover

Autonomy

Feedback

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Individual-Level Diagnosis
• What is the design of the larger organization within which the individual jobs are embedded? What is the design of the group containing the individual job? What are the personal characteristics of jobholders?

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Individual-Level Diagnosis
• • • How much skill variety is included in the jobs? How much task identity do the jobs contain? How much task significance is involved in the jobs? How much autonomy is included in the jobs? How much feedback about results do the jobs contain?
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• •

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Designing Effective Intervention

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Intervention
• A set of sequenced planned actions or events intended to help an organization increase its effectiveness. Interventions purposely disrupt status quo; they are deliberate attempts to change an organization or subunit toward a different and more effective state.
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Intervention

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Effective Intervention
Two Major Criteria to Define an Effective Intervention
1. The extent to which it fits the needs of the organization 2. The extent to which it transfer change-management competence to organization members

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Intervention Success Factors

Key Factors that can affect intervention success

Readiness for Change

Capability of the Change Agent Cultural Context

Capability to Change

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Types of Intervention
Human Process Intervention Structural Intervention Human Resource Management Intervention Strategic Intervention
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Types of Intervention

Examples of Human Process Intervention Process Consultation
This intervention focuses on interpersonal relations and social dynamics occurring in work groups.

Team Building

This intervention helps work groups become more effective in accomplishing task

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Examples of Structural Intervention Structural Design
This change process concerns the organization’s division of labor – how to specialize task performances.

Downsizing

This intervention reduces costs and bureaucracy by decreasing size of the organization

Reengineering

This intervention radically redesign the organization’s core work process to create more responsive performance.
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Examples of Human Resources Management Intervention Performance Management
This intervention is a systematic process to link between corporate goal settings and reward systems.

Career Planning & Development

This intervention helps people choose career paths and attain career objectives.

Reward System

This intervention involves the design of organizational rewards to improve employee satisfaction and performance.
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Examples of Strategic Intervention Merger and Acquisition
This intervention is a systematic process to integrate two or more organizations.

Cultural Change

This intervention helps organizations develop cultures appropriate to their strategies and environment.

Organizational Learning
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This intervention seeks to enhance an organization’s capability to acquire and deploy new knowledge.
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Institutionalizing Interventions
Intervention Effective Institutionalization Process

Enhance Organization Performance

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Factors Affecting Institutionalization Process
Organization Characteristics: • Congruence • Stability • Unionization Intervention Characteristics: • Goal Specifity • Programmability • Level of Change Target • Internal Support • Sponsorship
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Institutionalization Process

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Organization Characteristics:

Congruence

This is the degree to which an intervention is perceived as being in harmony with the organization’s strategy, and structure; its current environment; and other changes taking place.

Stability of Environment and Technology

This involves the degree to which the organization’s environment and technology are changing.

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Organization Characteristics:

Unionization

Diffusion of interventions may be more difficult in unionized settings, especially if the changes affect unions contract issues, such as salary and fringe benefit, job design, and employee flexibility.

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Intervention Characteristics:

Goal Specifity

This involves the extent to which intervention goals are specific rather than broad.

Programmability

This involves the degree to which the changes can be programmed or the extent to which the different intervention characteristics can be specified early in advance to enable socialization, commitment, and reward allocation.
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Intervention Characteristics:

Level of Change Target

This concerns the extent to which the change target is the total organization, rather than a department or small work group.

Internal Support

This refers to the degree to which there is an internal support system to guide the change process.

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Intervention Characteristics:

Sponsorship

This concerns the presence of a powerful sponsor who can initiate, allocate, and legitimize resources for the intervention.

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References/Recommended Further Readings
Thomas Cummings and Christopher Worley, Organization Development and Change, South Western College Publishing.

You can obtain this excellent book at this link: http://www.amazon.com/Organization-Development-InfoTrac-College-Printed/dp/0324421389/ref=sr_1_1?ie=UTF8

Stephen Robbins, Organizational Behavior, Prentice Hall

You can obtain this excellent book at this link: http://www.amazon.com/Organizational-Behavior-12th-Book-CD-ROM/dp/0131890956/ref=pd_bbs_sr_1?ie=UTF8&

Marvin Ross Weisbor, Organizational Diagnosis : A Workbook of Theory and Practice, Perseus Books Group

You can obtain this excellent book at this link: http://www.amazon.com/Organizational-Diagnosis-Workbook-Theory-Practice/dp/0201083574/ref=sr_1_1?ie=UTF8

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