Diagnosing Organizational Effectiveness

Diagnosing Organizational Effectiveness A Roadmap toward Corporate Sustainability

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

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Comprehensive Model for Diagnosing Organizational Systems

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.

High Politics Organization: Common Approach to Business Problems DOES THE THING WORK? DON’T MESS WITH IT DID YOU MESS WITH IT? YOU DUMB *#@>!! DOES ANYONE KNOW? WILL YOU CATCH HELL? HIDE IT TRASH IT YOU POOR $#@! ~*%$ CAN YOU BLAME SOMEONE ELSE? NO PROBLEM YES NO YES NO NO YES YES YES NO

A. ORGANIZATIONAL LEVEL B. GROUP LEVEL C. INDIVIDUAL LEVEL - General Environment - Industry Structure Inputs Design Components Organization Effectiveness Outputs Strategy Structure Culture Human Resources Technology - Organization Design Inputs Design Components Team Effectiveness e.g., quality of work life, performance Outputs Goal Clarity Task Structure Group Functioning Group Composition Group Norms - Organization Design - Group Design - Personal Characteristics Inputs Design Components Individual Effectiveness e.g., job satisfaction, personal development Outputs Skill Variety Task Identity Autonomy Task Significance Feedback about Results Comprehensive Model for Diagnosing Organization

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

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.

Five Forces of Industry Structure Supplier Power Threats of Entry Buyer Power Threats of Substitutes Rivalry among Competitors Industry Structure

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.

Mission – Why We Exist Vision – What We Want to Be Values – What’s Important to Us Strategy : Our Game Plan Strategy Map : Translate the Strategy into Action Strategy Formulation Analysis of General Environment and Industry Structure Analysis of Organization’s Core Competence

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

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.

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.

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

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.

Recruitment & Selection Training & Development Performance Management Reward Management Career Management HR Systems Business Strategy Business Result Human Resources Systems

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.

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?

Organizational-Level Diagnosis Culture Technology Human Resources Systems Structure Strategy General Environment Industry Structure Inputs Design Components Does the organization strategic orientation fit with the inputs?

Organizational-Level Diagnosis Culture Technology Human Resources Systems Structure Strategy Design Components Do the design components fit with each other?

Group Functioning Group-Level Diagnosis Group Norms Group Composition Task Structure Goal Clarity Organization Design Team Effectiveness Inputs Design Components Outputs

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.

Group Functioning is the underlying basis of group life Group Norms are member beliefs about how the group should perform task Group Composition concerns the membership of groups Task Structure is concerned with how the group’s work is designed Goal Clarity involves how well the group understand its objectives Group Components

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. Goal Clarity Goal Clarity

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. Task Structure Task Structure

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. Group Functioning Group Functioning

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. Group Composition Group Composition

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. Group Norms Group Norms

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?

Task Significance Feedback Autonomy Task Identity Skill Variety Organization Design Group Design Personal Characteristics (skill, knowledge attitude) Individual Effectiveness Individual-Level Diagnosis Inputs Design Components Outputs

Organization Design Organization design is concerned with the larger organization within which the individual job is the smallest unit. 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. Group Design 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. Individual-Level Diagnosis

Individual Jobs Dimensions Five Key Dimensions Autonomy Feedback About Results Task Significance Task Identity Skill Variety

Individual Jobs Dimensions Autonomy The degree to which a job provides freedom and discretion in scheduling the work and determining work methods. Feedback About Results The degree to which a job provides employee with direct and clear information about the effectiveness of task performance Task Significance The degree to which a job has a significant impact on other people’s lives Task Identity The degree to which the job requires completion of a whole and identifiable piece of work Skill Variety The degree to which the job requires a variety of different activities

Job Characteristics Model - Hackman/Oldham Core Job Dimension Skill Variety Task Identity Task Significance Autonomy Feedback Psychological States Personal and Work Outcomes 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

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?

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?

Designing Effective Intervention

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

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

Intervention Success Factors Key Factors that can affect intervention success Readiness for Change Capability to Change Capability of the Change Agent Cultural Context

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

Process Consultation Examples of Human Process Intervention Team Building This intervention focuses on interpersonal relations and social dynamics occurring in work groups. This intervention helps work groups become more effective in accomplishing task

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

Performance Management Examples of Human Resources Management Intervention Career Planning & Development This intervention is a systematic process to link between corporate goal settings and reward systems. 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.

Merger and Acquisition Examples of Strategic Intervention Cultural Change This intervention is a systematic process to integrate two or more organizations. This intervention helps organizations develop cultures appropriate to their strategies and environment. Organizational Learning This intervention seeks to enhance an organization’s capability to acquire and deploy new knowledge.

Institutionalizing Interventions Effective Institutionalization Process Intervention Enhance Organization Performance

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

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.

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.

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.

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.

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

Recommended Further Readings Thomas Cummings and Christopher Worler, Organization Development and Change , South Western College Publishing Stephen Robbins, Organizational Behavior , Prentice Hall Marvin Ross Weisbor, Organizational Diagnosis : A Workbook of Theory and Practice , Perseus Books Group

Diagnosing Organizational Effectiveness

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