Organizational Analysis

Unit 8 Organizational Diagnosis: Tools and Techniques

Unit 8: Organizational DiagnosisTools and Techniques

Structure: What is organizational diagnosis? Organizational analysis as first step in diagnosis Illustrative list of organizational subsystems Illustrative list of organizational processes Purpose of organizational analysis Organizational analysis perspectives Methods of organizational analysis Practical perspectives on organizational analysis

8.1 What is organizational diagnosis? Human body many parts; organization- many departments Organization- many minds- more complex- different perceptions about the same context, problems Requirement: Periodic check up or diagnostic exercises to assess its growth, dynamism, strengths, weaknesses etc

8.1 What is organizational diagnosis?

Organizational diagnosis: An exercise to make an analysis of the organization, its structure, subsystems and processes in order to identify the strength and weaknesses of its structural components and processes and use. Base for developing plans for developing plans to improve and/or maximize the dynamism and effectiveness of the organization

8.2 Orgn. Analysis as a first step in diagnosis

Analyzing the organization in terms of its components and their functioning- step I

Analysis of subsystems (eg natural teams, top management, middle management, workforce etc) Analysis of organizational processes (eg, decision-making process, communication pattern/styles, relationships between interfacing groups, conflict management, planning, goal-setting methods)

8.3 Illustrative list of orgn subsystems Various levels in the organization Geographic units Functional background based on subsystems Experience and education based subsystems Division-based subsystems Personnel and HRD policies Research and development Stakeholders and their contribution Financial management Marketing management

8.4 Illustrative list of orgn processes Communication

One-way/ both way; upward/downward Info. Sharing Info. Source Info purpose Info distortion Channels Timeliness Formal/informal Type of info availability

8.4 Illustrative list of orgn processes Goal setting

How are goals set? Task/objective clarity Who provides clarity? How frequently? What is the process of goal setting? Is it participative or autocratic? Does the process of goal setting ensure commitment to tasks?

8.4 Illustrative list of orgn processes Role clarity

Do employees know well what they are expected to do? Is there a discipline to plan their work? To what extent is there ambiguity of roles resulting in tensions, adhocism etc? Is there periodic dialogues between supervisors and their subordinates to increase role clarity? What is the extent of flexibility/rigidity in defining roles for employees? Is it functional or dysfunctional?

8.4 Illustrative list of orgn processes Culture

What are the norms and values in the organization that are widely shared? To what extent openness is valued? Do people trust each other generally? Is there general collaborative attitude among staff? Do people value experimentation, risk-taking and initiative? Is punctuality valued?

8.4 Illustrative list of orgn processes Management Styles

Is the management bureaucratic or entrepreneurial or professional or conservative? What is the style of decisionmaking in relation to new investments, people, technology, structure and the like?

8.4 Illustrative list of orgn processes Conflicts and their management

How frequently do conflicts occur? How are they dealt with?

8.4 Illustrative list of orgn processes Management of mistakes

When people make mistakes how are they handled?

8.4 Illustrative list of orgn processes Organizational learning mechanism Teams and team-work
How much is team work Are there committee systems? How do they function? What are the attitudes of employees to them?

8.4 Illustrative list of orgn processes work motivation

Are people generally satisfied with work and their job? What is the level of their involvement? Do they take pride in what they do? What is the level of loyalty to the organization?

8.5 Purpose of Org. Analysis

1. Enhancing the general understanding of the functioning of organizations (i.e., educational or research purposes)
Direct beneficiary- researcher, analyst Indirect beneficiary- organization Aimenhancing the understanding of human behavior through a study Enhance the understanding of the society as reflected in organizational life

8.5 Purpose of Org. Analysis

2. Planning for growth and diversification to reveal the strengths that could be used for growth and diversification To reveal weak spots that need to be removed in the new plans, The precautions to be taken To plan structure, people, systems, styles, technology that have implications for growth.

8.5 Purpose of Org. Analysis

3. Improving organizational effectiveness or planning improvements For improving the general efficiency For formulating action plan in terms of toning up administration, time saving, resource utilization, change of personnel planning, motivation, restructuring, training

8.5 Purpose of Org. Analysis

4. Organizational problem solving To identify source of problems To take corrective actions (e.g., a sick unit, communication block, poor performing dept, repeated failures of mgmt system or orgn process, frequent violation of orgn rules, fall in discipline, reduction in output, absenteeism, increase in conflicts etc)

8.6 Org. Analysis Perspectives

1. Economics perspectives 2. Political science perspective 3. Sociology and social psychology perspective 4. Management perspective 5. Applied behavioral science or OD perspective

8.6 Org. Analysis Perspectives

Economic analysis of orgn: Focus- use of money, allocation of resources, distribution and consumption patterns, pricing decisions General questions: How are the resources allocated? What is the market structure (is it competitive, monopolistic, oligopolistic? Etc) What is the organizations market and its

8.6 Org. Analysis Perspectives

Economic analysis of orgn: General questions (cntd..): Are the products and services in the industry homogeneous or differentiated? What is the nature of demand for organizations services? What is the cost of making the product or services? How are the various elements in the process of making it related? Are there

8.6 Org. Analysis Perspectives

Political analysis of orgn: Focus- deals with tactics and strategies employed by the individuals and groups in the orgn as well as the orgn itself in the quest for power Helps understanding many softer and strategic dimensions of orgn- output, cost reduction, profits etc)
Sample questions: Who is most influential in the orgn (individuals, groups, departments, etc)

8.6 Org. Analysis Perspectives

Political analysis of orgn: Sample questions (cntd..): What is the power base of each of the categories of people in the organization (Is it position based, competency based, collectivity based like in unions, is it because of closeness to top executive or ruling party, is it due to the ability of the person to reward, hire and fire)? How is the power distributed among individuals, groups and departments?

8.6 Org. Analysis Perspectives

Political analysis of orgn: Sample questions (cntd..): What strategies do people use in influencing or controlling each other? How is the power used? How much for organizational purposes? How much for expanding ones power base? Etc. What are ideologies of different groups? What implications do these have for organizational functioning? Is there congruence with organizational goals?

8.6 Org. Analysis Perspectives

Political analysis of orgn: Sample questions (cntd..): How much is there a commitment for organizational goals? Is decentralization functional or centralization useful? What kinds of control are needed to regulate the behavior of people? Limitations: The information acquired from this analysis needs to be enriched with other

8.6 Org. Analysis Perspectives

Sociological and social psychology based analysis: Focussocial behavior of individuals and groups formation of groups, habits, norms, values, process of socialization, conflicts, strikes, protest behavior etc Influence of society on the organization Useful for planning, growth and expansion (especially location decisions, recruitment, structural decisions, departmentation), Useful for problem solving

8.6 Org. Analysis Perspectives

Professional management perspective in organizational analysis: Focus- various management dimensions of organizational life Each branch of management can analyze significant roles of organizational functioning (business policy, strategy management, production and operations management, personnel management, marketing, finance, accounting, organizational structures and dynamics, managerial economics etc)

8.6 Org. Analysis Perspectives

Professional management perspective in organizational analysis: Sample questions: What are the strengths, weaknesses, opportunities and threats facing the organizations with respect to its business and its functioning? What are the business goals? Is there a long term plan? What are the strategic considerations the organization has in planning its business activities? Is the structure best suited for its goals? What is the technology being used? Are better technologies available? What are the problems in changing technology?

8.6 Org. Analysis Perspectives

Professional management perspective in organizational analysis: Sample questions (cntd..):
How is the production planned? What is the capacity utilization? How could it be improved? How frequent are the break-downs? What is the level of inventory? Are materials available on time? What is the rate of rejection of products? What is the wastage? How could it be reduced? How are people recruited? How are they trained? What attracts people for this organization? What retains them? What reward and punishment system exist? Are there unions? How many? What are their attitudes? How satisfied are the people with work? What are personnel policies? What is unique to the organization? How do they suit the technology and business of this organization?

8.6 Org. Analysis Perspectives

Professional management perspective in organizational analysis: Sample questions (cntd..):
What is the financial position of the organization? What are the sources of finance? How are the surplus used? What are the investments made by the organization? What control system exists? How are the products priced? What are the marketing strategies being used? How much of competition exists for the organizations products and services? What new products are planned to be introduced? What is the experience with the existing product? Has the organization established its name in the market?

8.6 Org. Analysis Perspectives

Professional management perspective in organizational analysis: Sample questions (cntd..):
Is the structure functional, divisional or martix? Does it suit the organization requirements? What are the characteristics of employees? How are the interpersonal relations? What is the source of conflict? Do people take initiative and show leadership qualities? How is team work and collaboration?

8.6 Org. Analysis Perspectives

OD or Applied Behavioral Science Perspective: OD perspectiveFocus: human process dimensions of org functioning (individuals in terms of expected role, team work, inter-team collaboration, orgn culture, health) Attitudes, norms, values, systems, processes in the orgn Questions:
Are they facilitating the utilization and development of human competence available individually or collectively in the organization? Is the organization culture facilitating people to contribute their best to the orgn? What is the extent openness, collaboration, trust, autonomy, proaction, authenticity, confrontation characteristics characterising the organizations culture?

8.6 Org. Analysis Perspectives

OD or Applied Behavioral Science Perspective: OD perspectiveQuestions (cntd..):
What is the profile of people who join the organizations? What values do they have? What is their of the human being? What is the value of organizational health as reflected in communications, conflicts, role clarity, job satisfaction, work motivation, team-work, participative decision-making, goal-setting, discipline, management of mistakes etc? What is valued by most people in the orgn? Is it excellence, power, relationships, status, helping each other control or what? In what order are they valued? How much of creativity is there and is encouraged? Do people take initiative and risks? What processes encourage/prevent creativity and initiative?

8.6 Org. Analysis Perspectives

OD or Applied Behavioral Science Perspective: OD perspectiveQuestions (cntd..): Are jobs defined clearly? What mechanisms are there to communicate expectations and difficulties? What mechanisms exist to solve problems? Do people experience a sense of growth? What processes seem to generate organizational identity and we feeling? What processes create problems for team work? What characteristics various groups and their functioning?

8.7 Methods of Organizational Analysis

Frequently used methods: Questionnaire Interview Observation Analysis of records, circulars, appraisal reports and other org literature Analysis of hard data of orgn and various units Task forces and task groups Problem identification/ problem solving workshops Seminars, symposium and training programme Recording and examining critical incidents, events

Study of entire orgn in terms of its objectives, its resources, allocation, utilization for achievement of objectives as well as dynamic interactions trends with external environment The philosophy for the entire orgn can be developed in terms of the following steps: 1. Analysis of objectives:
Provides clear understanding of both short-long-term objectives as well as the priorities Specific goals and strategies for each division/department/ section 2. Resource utilization analysis: Evaluating the process of allocation of various human and physical resources in the orgn Deriving various efficiency indices (input, process, output contribution of human resource in these areas)

8.8 Practical Perspectives on Organizational Analysis

3. Environmental scanning: Analysis of the enterprise as a subsystem operating in a socio-cultural, economic, legal, political, and competitive environment 4. Organization climate analysis: Employees attitudes towards various aspects of work , supervision, company procedures, goals and objectives and productivity in the organization 5. Work practices: For execution of various activities in different functional areas (like norms, followed by employees to maintain uniformity) 6. Technology: For driving various organizational processes, conversion of raw materials into final products and services 7. Other resources: Financial resources, business practices, administrative practices, management expertise, information resources, R & D etc 8. Systems: Interacting elements to convert input into output and provide to env.

8.8 Practical Perspectives on Organizational Analysis

Approach:
1. 2. 3. 4. 5.

8.8 Practical Perspectives on Organizational Analysis

Mission and vision Organizational structure Processes Culture Work ethos
Openness Confrontation Trust Authenticity Pro-action Autonomy Collaboration Experimenting

6. 7. 8. 9. 10. 11.

Work practices People Technology Other resources Systems People

Culture and climate: External environment Organization culture Organization climate Business analysis - SWOT Organization analysisFinancial analysis Statistical analysis Org structure analysis Org design criteria Job analysis Process analysis- business process reengineering, activity profiling, benchmarking, zero-based budgeting, work measurement, effective communication processes, people analysis, psychometric tests, assessment centers, right sizing, attitude surveys

8.8 Practical Perspectives on Organizational Analysis

8.8 Practical Perspectives on Organizational Analysis

Organization culture: Deeply held beliefs about the way the organization should operate Value system- influences employees behavior Organization climate: Prevalent atmosphere encompassing the feelings and emotions of the people within it Perception about work Business analysis: Structure Processes People Public sector SWOT analysis: Strength, weakness, opportunity, threat

Organization analysis- Factors: Overall org objectives and business adopted including the monitoring and review process The PMS, performance measures and standards The budgetary and financial control procedures in use OD and structure Staffing levels Activity levels Overhead costs Review of procedures and activities

8.8 Practical Perspectives on Organizational Analysis

Financial analysis: For stability (long term financial strength) Calculated on ROIs and other mechanisms Statistical analysis:
For productivity Rate of employee turnover Grievances and disputes Employee attitudes

8.8 Practical Perspectives on Organizational Analysis

8.8 Practical Perspectives on Organizational Analysis

OD Exercises/ Interventions Role analysis TQM Quality circles Assessment/development centers Re-engineering Large scales systems change MBO Team building T groups (also known as encounter groups and sensitivity training) Work redesign and job enrichment Survey research and feedback Third party interventions Quality of work-life projects Grid training Action research

8.8 Practical Perspectives on Organizational Analysis

Action research (Kurt Levin): Systematically collecting research data relating to a specific goal, objective or need of the organization, feeding the results back to the sources of the original data and planning further action based on discussion of the results obtained. Interactive process of data collection, joint planning Continuous approach of test-retest until the desired result is obtained. Org Structure analysis: AimTo determine the existing structure is appropriate to the needs of org To determine the existing structure supports the mission and strategy To determine that it provides the most logical and cost-effective grouping of functions To determine that the structure maximizes the people strengths in the org

8.8 Practical Perspectives on Organizational Analysis

Org Structure analysis: ApproachTo determine which criteria are of central importance, eg, local customer, cost control- centralized structure? To measure their impact on the previously identified critical success factors To weigh these criteria both in terms of their current importance to the org and also in terms of the impact they would be likely to have on org strategy To rank these criteria and test them against different org types StepsList the criteria on which analysis is to be conducted Rate criteria as currently perceived Estimate the impact on strategy Rate the impact on previously identified critical success factors Calculate current rating plus strategic impact plus number of times it relates to a critical success factor Rank the criteria based on the total scores

8.8 Practical Perspectives on Organizational Analysis

Process analysis: To support corporate objectives and provide the required quality and types of products and services Approaches:
Business process reengineering

Examines the processes that are critical to the success of the orgn Determines those processes which are priorities in terms of giving the company competitive advantage Determines the types of change or new investment required to ensure the maximum efficiency and effectiveness of these processes Determines what changes to aspects of the companys strategy and structure may be necessary Reviews managerial accountabilities and redefines jobs as required ensuring that the processes can be optimized where possible

8.8 Practical Perspectives on Organizational Analysis

Process analysis: To support corporate objectives and provide the required quality and types of products and services Approaches:
Activity profiling (Price Waterhouse Urwich) To analyse the relative contribution made by different activities to the achievement of org objectives Essential activities, manpower cost, resource usage, opportunity costs etc compared and ratios produced (cost of the activity with the contribution compared) Decisions can be made about how resources could be allocated in the future

8.8 Practical Perspectives on Organizational Analysis

Process analysis: To support corporate objectives and provide the required quality and types of products and services Approaches:
Benchmarking: Identify the core performance issues to be addressed and the key performance indicators to be used for comparison purpose. These may be mixture of unmet customer needs, obvious performance gaps, the need to gain a competitive advantage, problem areas etc Collect internal data, which may also reveal the need for improvements to internal processes Identify external organizations to form the basis for comparison Obtain relevant data from comparative organizations, major improvement opportunities Compare and contrast this with own organization data to identify major improvement opportunities Review the processes and procedures used by comparative organizations to determine what improvements can be translated to own organization Implement the new processes
Getting the data from competitors being sensitive Translate the data, gathered to ones own org Possibility of dispute with the competitor

8.8 Practical Perspectives on Organizational Analysis

Process analysis: To support corporate objectives and provide the required quality and types of products and services Approaches:
Zero based budgeting Not compared to previous years budget with added inflation but rather, every activity to be budgeted separately with justification, and then level of expenses determined Top level decisions may be made about priorities and service provision

8.8 Practical Perspectives on Organizational Analysis

Process analysis: To support corporate objectives and provide the required quality and types of products and services Approaches:
Work measurement

Mostly for manual and craft job, routine clerical jobs Measure relatively accurately the time taken to produce certain level of output For managerial jobs, quality measured in terms of customer satisfaction and competencies

8.8 Practical Perspectives on Organizational Analysis

Process analysis: To support corporate objectives and provide the required quality and types of products and services Approaches:
Effective communication processes

Formal lines of communication Informal links Sources of information Measuring communication- sociograms- map the number of interactions occuring between different members of a particular work group- central and peripheral links established

8.8 Practical Perspectives on Organizational Analysis

People analysis
Psychometric tests and assessment centers

Psychometric tests- Structured questionnaires- aimed at measuring ability Assessment centers- objective way to produce fairly hard numerical outputs based on observation of performance

8.8 Practical Perspectives on Organizational Analysis

People analysis
Right sizing

To establish the optimum number of employees

8.8 Practical Perspectives on Organizational Analysis

People analysis
Attitude surveys- to determine how the informal structure of the orgn works, to ascertain the climate and culture , to gain views about prevalent management style Power culture Role culture Task culture Person culture

8.8 Practical Perspectives on Organizational Analysis

The 7s Framework:
Strategy Skills Shared values Staff Systems Style structure