Organizational Diagnosis

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Introduction

People go to doctors for many reasons, but no patient feels entirely satisfied coming away from a doctor’s visit without a diagnosis. Diagnoses categorize both disease and health, and they even sometimes describe an overall level of health rather than a particular disease. They are vital starting places for any entity looking to further understand itself better. That diagnosis must be obtained and the information contained in them explored is as necessary for organizations such as businesses as it is for individuals. Naturally, there is no such thing as a doctor for organizations—except in the form of consulting companies, who, like a doctor, approach the situation with scientifically trained, objective outsider’s eyes and take a look at the problem in the hopes of reaching a diagnosis that makes sense and will help the “patient” improve in health. Many models may be considered, but in the end, the decision rests on what the particular organizational issues are. In the case of Whole Foods Market and its particular struggles to provide quality food for market entry at a reasonable price point within the structure of its organizational frameworks, after assessing six different models from early models to open systems theory models to change-oriented models, it becomes clear that the McKinsey 7S framework is the appropriate organizational diagnostic model to use.

Overview, Strengths, and Weaknesses: Early Models

To begin, it is instructive to look at two very early models, comparatively speaking, of organizational diagnosis: the force-field analysis and the Leavitt model, both of which show a stereotypical midcentury thought process in their use of ideas oriented more toward mathematics and physics than the biological influences referenced by later models. For this and for other models of organizational diagnosis, Falletta (2005) provides a concise yet thorough summary, including visual diagrams for each model that give an intuitive, at-a-glance understanding. When not otherwise noted, objective information here on the nature of these models can safely be attributed to Falletta (2005). Given that caveat, it is now appropriate to venture into exploring the force-field model, which is perhaps the simplest of all six models here presented, though by no means is it simplistic for all that. This model proposes a kind of stasis in which organizations may find themselves, wherein forces for change are balanced by forces for the status quo, each pushing against one another. Ironically, though the model is couched in terms out of science fiction with the use of the language “force-field,” it could also be described as very similar to the organic system by which a cell membrane remains intact. Like a cell, or, if one prefers, like a spaceship, the organization can move forward only when the forces for change, depicted as an internal push in a chosen direction, overcome the forces for inaction, which are seen as external. The resulting disequilibrium persists until a new stable state is reached. The strength of this system is its looseness; it can be applied to almost any situation, organizational or even personal, allowing the user to input whatever variables that person sees fit as “forces” without dictating terms to the user ahead of time. Conversely, of course, the greatest weakness of this system is its greatest strength taken too far, so that the selfsame looseness fails to give enough guidance in some cases. Therefore, those seeking greater structure from an older model without sacrificing much simplicity might do well to look beyond the force-field analysis and investigate Leavitt’s model.

Leavitt’s model is another early model showing a good balance of simplicity and elegance with enough complexity to accomplish the organizational diagnostic task at hand, and yet it, too, carries its weaknesses. The model proposes four areas arranged such that each pulls and pushes on the other three, those areas being task, structure, technology, and people or actors. These four areas can be arranged on two axes with arrows also along the diagonals between the two edges, such that the result resembles a child’s kite, but upon a little reflection, it can be seen that the same conceptual principle could also be conveyed in three dimensions by putting each of the four areas at the vertex of a regular tetrahedron. The strength of this model is that whereas force-field analysis is extremely general, this model, Leavitt’s, at least specifies four different areas that can be approached individually during a business impact analysis. A few weaknesses, though, are present as well. For one thing, it can be difficult to visualize the result of “tugging” on any one of the four points in terms of real-world results. In addition, among the four topics listed, there is no room given for external players; everything is internal only, which, as shall soon be seen, is an approach that has since been rejected by open systems theory.

Overview, Strengths, and Weaknesses: Open Systems Models

In open systems theory, the model of organizations as living organisms, perhaps cells, gives rise to the understanding that only when the external situations—the cell’s environment—are understood can solid organizational diagnostics be made. This is where the true strength of open systems theory lies in that it requires all organizational diagnostic models falling under the umbrella of open systems to explicitly deal with external realities. For example, in the congruence model, the environment is explicitly taken to be part of the input into the system, along with the resources to which the organization has access and its history. The nature of congruence theory is such that every component within the organization must interact with the other components in a congruent manner, which is to say that, for example, tasks are appropriate for the people to whom they are assigned, or that informal and formal structures mesh well. The strength of this model is that it divides all aspects of an organization into inputs, outputs, and throughputs so that in making a diagnosis, it becomes clear which aspects the organization has control over and which it does not. Its weakness, on the other hand, is that with eight different pairs to evaluate for “fit” or congruence, the system can, at times, get a bit unwieldy. However, in this regard, it is still an improvement over the Burke-Litwin model.

The Burke-Litwin model focuses on causality, which is a rather revolutionary approach compared to what has previously been seen with other models and also provides twelve theoretical constructs to serve as variables with which to explore the various potential causal links. In addition, with this model, distinctions are made between the culture and climate of the organization, as well as between transactional dynamics (those in which a task is accomplished without either party changing) and transformational dynamics (those in which both parties come away from the interaction changed, as in transformational leadership). The strength of this model is that it brings causality into organizational diagnosis systems while at the same time being sure to include the external environment as a variable in compliance with open systems theory. Its weakness is that it is ever more unwieldy than the congruence model in the number of separate pairings that must be assessed. Twenty-eight separate pairings can be counted on the diagram provided by Falletta (2005). The Burke-Litwin model may work well for firms that specialize in organizational diagnosis, but for any company not looking to outsource the diagnosis, this approach would be too abstruse for most non-experts in the topic. To become stymied by an inability to comprehend the organizational diagnosis model is the last thing any organization wants when it is striving toward change.

Overview, Strengths, and Weaknesses: Models Oriented Toward Conscious Change

For lack of a better term, the remaining two models can be united under an umbrella of being oriented toward conscious change, for both the McKinsey 7S framework and high-performance programming focus on illuminating areas of strength and weakness in order to facilitate organizational growth explicitly, rather than simply suggesting that change happens in a passive way. The McKinsey 7S framework chooses as variables seven aspects of an organization that begin with the letter S—hence the name. These aspects are termed “levers,” with the idea being that each can act on either of its two adjacent neighbors in the ring diagram, and shared values acts on all other levers. The model’s strength is that it includes aspects sometimes ignored by American businesses, such as skills, style, staff, and shared values. The model’s weakness is that it fails to take into account the external environment, though as its creators state there may be other variables unnamed but still present in their system, perhaps there is a hair-splitting argument that the environment really is accounted for in this model. The McKinsey 7S also lacks an explicit exploration of causality, but again this may be compensated for by some of its implicit aspects. However, even better than causality is something shown in high-performance programming.

High-performance programming rates an organization on a Likert-type scale, so that at the end of applying this model to an organization, that organization will be left with a number to show how well they are doing, which, particularly in highly competitive fields where this could be a motivating factor to improve, could be invaluable. Organizations are ranked anywhere from a one to a four, with the lowest category being “reactive” organizations that spend their time still trying to clean up yesterday’s mistakes and the highest category being the “high-performing” organization that not only has a strong vision for the future but also makes its employees proud to work for the company. The advantage is that organizations come away with a clear idea of where they stand. The flip side of this, though, is that plans of action do not derive directly from the model itself; organizational diagnoses must look elsewhere for those. Regardless, though, with any organization, it is important to examine the issues at hand before beginning to select a model, and this is true too for the specific case of Whole Foods Market.

Issues Faced by Whole Foods Market

Though there are some concerns, overall, Whole Foods is in a good place for the time being, for it has already tapped into a growing market where people buy into the idea that ethics and food are intricately tied. As one researcher puts it, “Ethical consumer discourse is organized around the idea that shopping, and particularly food shopping, is a way to create progressive social change” (Johnston, 2008, p. 229). This shows that consumers are willing to spend the extra money to shop there—or at least, they have been in the past. However, Sahota (2009) cautions that “lower market growth rates are projected because of the international financial crisis” (p. 59), showing what a difference just a year can make in terms of how researchers evaluate the organic food market. Whole Foods’ challenge is to continue to thrive even in the harsher consumer environment where ethical food may begin to seem like too much of a luxury. However, there is also an internal challenge to be faced: “Whole Foods Market, Inc. is the largest natural-foods grocer in the United States. It is also one of the business world's most radical experiments in democratic capitalism” (Fishman, 1996). The experiment seems to be working so far, but can Whole Foods keep up its radical organizational structure in the face of greater strictures, financially speaking? Perhaps through the use of a consulting company to aid in selecting an organizational diagnostic model, they can.

Recommended Best Model for Whole Foods Market to Use

Clearly, the McKinsey 7S framework is best for Whole Foods because it takes the human element into such close consideration, just as Whole Foods itself does. It is said that “Research, experience, and common sense all increasingly point to a direct relationship between a company's financial success and its commitment to management practices that treat people as assets.” (Pfeffer, 1999, p. 37). Pfeffer then goes on to explain the ways in which Whole Foods already does this, indicating clearly that the organization knows people are its strength. That is why the McKinsey 7S framework is so appropriate for Whole Foods; with its emphasis on aspects normally seen as being outside the realm of business, such as style and staff, the framework will be right at home with Whole Foods’ upper-level management teams. It will strike them as an intuitively obvious way to set things up. From there forward, Whole Foods will know how best to proceed based on the framework to overcome the twin issues of their unorthodox internal organization and the struggling economy.

Conclusion

Whole Foods can continue to thrive in spite of harsh conditions if only it adheres to what consulting companies find. Those companies should use the McKinsey 7S Framework to evaluate Whole Foods and its people-first approach, because out of all the models, that one is best at ensuring the entire organization is taken into account, from staff to skills to style. Here, as in all of life, only by framing the situation in the appropriate way will the path forward become clear. If people will only take the time to learn the differences between various structures, wherever those structures arise in life, and to evaluate which one is best for the given situation, people and organizations will thrive the world over. 

References

Falletta, S. V. (2005). Organizational diagnostic models: A review and synthesis. White paper. Sunnyvale, CA.

Fishman, Charles. Whole Foods is all teams. Fast Company 2 (1996): 103.

Johnston, J. (2008). The citizen-consumer hybrid: Ideological tensions and the case of Whole Foods Market. Theory and Society, 37(3), 229-270.

Pfeffer, J., & Veiga, J. F. (1999). Putting people first for organizational success. The Academy of Management Executive, 13(2), 37-48.

Sahota, A. (2009). The global market for organic food & drink. The World of Organic Agriculture. Bonn, Frick and Geneva. ITC/FIBL/IFOAM.