Lecture 3 – Diagnosis: overview
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what is diagnosis?
why is it important?
the open systems approach to
diagnosis
characteristics common to Open
Systems diagnostic models
organisation level diagnosis
Module Learning Objectives Addressed
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Explain the importance of diagnosis in the
overall organisational change process
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Understand principles that facilitate effective
diagnosis
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Understand the 3 levels of diagnostic analysis
that can be performed (as per the Open
Systems Model)
What is diagnosis?
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An orderly or reliable way of gathering data to
identify how the organisation is functioning
currently
Diagnosis is typically used to identify problems
& opportunities
The collection of data informs the choice of
intervention. Put another way, diagnosis
precedes intervention
Note: there are various diagnostic instruments
(designed to highlight a particular part of the
change process e.g.. is the entity ready for
change?), or the organisation’s function (e.g.. its
structure), but our interest is in the whole of
organisation
Whole of organisation diagnosis implicates
diagnostic models
Importance of diagnostic models (Burke , in
Palmer, Dunford & Akin 2006)
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Managers carry around in their heads implicit models of
how things work. The problem with implicit models is
that they’re based on personal experience – therefore
not generalisable.
 In any organisation, literally thousands of things are
going on at any time. Models reduce this complexity to
a user-friendly, more manageable number of categories
 This categorising allows more effective identification of
organisation parts that warrant close attention
 It allows us to see how system parts are interconnected
 It provides us with a ‘common language’ with which to
discuss organisational characteristics
Diagnostic models: clarification
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There are scores of models available
Each model is a simplification of reality.
Each model emphasises different parts of organisation
life
Each reflects its creator’s views (& biases). Also
means in most cases the model has been exposed to
scrutiny by peers & attracted at least some support
Diagnostic models are not change strategies. They
provide pictures of how things are
Change strategies follow on from diagnosis
Open Systems Diagnostic model
Various assumptions inherent in systems thinking …
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Systems are comprised of numerous subsystems … all
interacting … but in combination working as a functioning
unit.
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Open systems interact with their environments.
Environmental factors influence org. behaviour (e.g.. via laws,
availability of labour etc.), but organisations also influence
environment (e.g.. medical labs. with development of new treatments
for illnesses)
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Various elements of open systems are common, regardless
of level of inquiry/application
Characteristics common to open
systems diagnostic models
Inputs; acquired from the organisation’s environment
Transformations; what happens in the organisation whereby the
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inputs are converted to outputs
Outputs; products or services that are transformed by the
organisation/system and sent to the environment
Boundaries; permeable & often indistinct borders of the
organisation
Feedback; information fed back into the organisation, whereby
this information influences or changes the functioning of the system
Equifinality; whereby similar outcomes or results may be possible
using different initial conditions and in many different ways
Alignment; or ‘fit’. Diagnosis is described as the search for misfit
among the various parts & subsystems of the organisation
Open Systems Model
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Source Waddell, Cumming and Worley (2011) Organisation Change -Development & transformation 4th edn. Cengage
Learning , South Melbourne Australia
Organisation-Level
Diagnostic Model
Inputs
General
Environment
Industry
Structure
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Design Components
Outputs
Organisation
performance
Strategy
Organisation
design
Productivity
Stakeholder
satisfaction
Source Waddell, Cumming and Worley (2007) Organisation Development & Change. Nelson, South
Melbourne Australia
Organisation level diagnosis
1. Inputs
Two key inputs viz. general environment & industry
structure. Both dynamic … change over time
1. 1 General environment
 Combination of various forces that individually or
collectively can influence whether or not
organisational objectives are achieved
 Environment includes social, techno., economic,
ecological, political events/influences
Organisation level diagnosis
1. Inputs…continued
1.2 Industry Structure (task environment)
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Five key forces/influences
 Suppliers,
 buyers/customers,
 threats of entry (new competitors),
 threats of substitutes,
 rivalry among competitors
Other writers include movement in the labour market, in
which skills shortages for example can hinder efforts to
expand or meet tight deadlines
Organisation level diagnosis
2. Design components or strategic orientation
phase (the transformation part of the Open Systems model)
There are 5 components to this part of the model
2.1 Strategy … includes
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The organisation’s mission (e.g.. long term purpose, range of
offerings, markets etc.)
Its goals & objectives (specific statements that identify priorities,
and the bases for organising work activities)
Strategic intent (the above specifies which goals … here the
focus is on how)
Functional policies (putting policies into action, including
procedures & rules)
Organisation level diagnosis
2. Design components or strategic
orientation phase (the transformation part of the
Open Systems model)
2.2 Technology … includes
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Ways by which inputs are converted to goods and
services
Includes focus on production methods, work flows,
equipment
Note how parts of the techno. system in the
organisation may require high interdependence (e.g.
when different depts. combine to develop or bring out
a new product). Your diagnosis would need to uncover
these interdependencies.
Organisation level diagnosis
2. Strategic Orientation (the transformation part of the Open
systems model) …continued
2.3 structural system
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How the work to be done is broken down into departments,
cost centres or sub-units, from which jobs and tasks can be
allocated
Two ways of identifying how this work is broken down
– Identify its formal structure (functional, divisional, network,
matrix?)
– Examine its level of differentiation & integration
Diagnosis involving investigation of differentiation (would
involve the degree of difference in design between different
departments or subunits) & integration (the way in which an
organisation co-ordinates work from its various
departments/subunits)
Organisation level diagnosis
2. Strategic Orientation (the transformation part of the
Open systems model) …continued
2.4 Measurement systems
 Methods of collecting and interpreting data and
disseminating info with reference to
performance of groups & individuals
 Used to uncover and control deviations from
specified goals
 Monitoring is implicit in this operation
 Accuracy in measurement and timely info.
help to legitimise findings
Organisation level diagnosis
2. Strategic Orientation (the transformation part of the Open
systems model) …continued
2.5 Human resource systems
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Strategy and technologies used inform the organisation about
which skills and knowledge types are needed
The locus for attending to the suite of functional HR activities
and developing required skills and knowledge (recruit. &
selection, training & development, performance appraisal,
remuneration)
Note that rewards must align with measurement systems
(assumes individual & group performances can be measured in
an objective way)
Organisation level diagnosis
2. Strategic Orientation (the transformation part of the
Open systems model) …continued
The below component is described by Waddell et al as an
‘intermediate output’ but for our purposes it fits ok with
other transformations … things that happen to inputs
2.6 Organisational/corporate culture
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Shared assumptions, beliefs, values, norms,
Powerful influences on thoughts and actions/behaviour
Is the prevailing culture strong? Does it endorse high
performance?
A non-supportive culture can undermine the best
otherwise-integrated system
Organisation level diagnosis
Outputs
 Represented by 3 categories
1. Organisational performance,
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Financial measures e.g. profits, ROI,
earnings per share
2. Productivity,
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Measures used to assess efficiencies
e.g. reject rates per 100 units made
3. Stakeholder satisfaction
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Various stakeholders … various
measures
Alignment between org.-level parts
Diagnosis of alignment usually means an
investigation of …
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Whether or not the strategic orientation (the transformations
part) fits with inputs
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Do all the elements of strategy fit with each other?
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e.g. do the rules and procedures support risk taking if innovation &
creativity are at the heart of the operation?
Do the elements of organisation design fit with each other?
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e.g. does structure accommodate uncertainties in the environment?
e.g. is the reward system sufficiently flexible to reinforce routine
desired behaviour in production, and creative and frame-breaking
activity in other parts?
Do the items in organisation design support the strategy?
Group-Level Diagnostic Model
Inputs
Design Components
Outputs
Goal Clarity
Organisation
Design
Task
Structure
Group
Composition
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Team
Functioning
Team
Effectiveness
Group
Norms
Source Waddell, Cumming and Worley (2007) Organisation Development & Change. Thomson, South
Melbourne Australia
Group level diagnosis
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The template for diagnosis at this 2nd level is the
same (inputs, transformations, outputs etc)
Note: many larger organisations have departments
that behave (and in some instances, have similar
numbers of staff) as organisations. It can be useful
to overlay the organisation-wide diagnostic template
over their operation.
Realise or appreciate how the elements take on
different forms (e.g. organisation design
shapes/influences how groups are set up … design
then becomes an input at this level)
Individual-Level Diagnostic Model
Inputs
Organisation
Design
Group
Design
Personal
Traits
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Design Components
Outputs
skill Variety
Task
Identity
Task
Significance
Autonomy
Individual
Effectiveness
Feedback
about Results
Source Waddell, Cumming and Worley (2007) Organisation Development & Change. Thomson, South
Melbourne Australia
Diagnosis at the individual level
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Note how the two levels of design
(organisation-level & group) both
have the capacity to influence
individual behaviour … they are
inputs at this individual level of
diagnosis
Consider … what are some of the
benefits of cross-functional work
teams?
How might this impact on individual
behaviour?
Summary – this section on diagnosis
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Diagnosis is the data collection phase that precedes
intervention
 Diagnosis attempts to portray how the organisation is
functioning
 Problems and opportunities can be identified through this
diagnosis activity
 The open systems model informs this module – we have
considered this at 3 levels of functioning, but others are
possible.
 Regardless of level, the various properties or elements of
the open systems model are applied during diagnosis
 There are numerous other models of diagnosis.
Testing understanding
Which of the below items best summarises and
describes the relationship between diagnosis and
intervention?
(a) there is no relationship because the two activities are carried
out by different interests
(b) diagnosis informs intervention
(c) intervention informs diagnosis
(d) diagnosis can only occur after the entry of a change
consultant
Testing understanding
In a large international magazine producer’s (e.g..
Cosmopolitan Mag.) organisational structure, the
production facility has to work to tight time deadlines, and
there are clear distinctions and roles between the various
levels of management. However, the journalists who write
for this magazine are typically given licence to organise
their time and energies, and few meetings are held with this
set. This example illustrates which of the below?
(a) permeable boundaries
(b) equifinality
(c) high differentiation
(d) Cosmo. is not a good place to work
Testing understanding
Many companies operate with limited human resource
management, preferring to outsource some of the HRM
functions. However, if this isn’t done effectively it can
hinder organisational functioning, especially if there’s little
consistency with performance appraisal and performance
management in different areas, or differences in the ways
that people are paid. Which of the below is most evident in
such a scenario?
(a) weak integration
(b) high differentiation
(c) culture is out of alignment with strategy
(d) myopic management