Diagnostic analysis methods and applications

Diagnostic Analysis

Organizational analysis is the process of evaluating the development, personnel, operations, and work environment of an organization (Perow, 2005). Carrying out a consistent and detailed analysis of an organization is useful in identifying the problems and inefficiencies within an organization. It identifies the unknown challenges, as well as strategies for dealing with them. Any organization is a social entity comprising three dimensions namely Corporate image, Purpose, and Future. The corporate notion identifies that the organization comprises of groups of individuals with a common goal. The Purpose of the organization steers it toward attaining a particular goal. The purpose of majority of organization stretches from making profits to offering medical cover. The future paradigm defines the intention of the owners beyond the achievement of an action.

Case study

Upon the entry of a new president, the board of the MBUSA embarked on a journey toward accessing the organizational capacity of the company and applying a 3-stage strategic plan. The board had sacked the former CEO in the wake of a failed merger with Chrysler and hard economic times. The 2006 recession forced the company to undertake a series of measures aimed at maintaining the company's share in the market. Building on past success, the board sought to contract a transformational leader who would steer the company through an evaluation process and apply effective diagnostic measures (Lance, 2006). Upon assuming office, the new president carried out an organizational analysis process that also reflected the employee's contributions. The diagnostic analysis involved managing the problem a hand using a three-step action plan for implementation by the different players in the organization. The strategic plan design reflected measures aimed at restoring the motivation of the associates in the midst of difficult times.

Mercedes Benz-USA

MBUSA is the sales and marketing wing of the German car maker. It is responsible for 20% of the overall worldwide sales. In late 2006, the company moved from a stumpy associate satisfaction to position 15 out of 100 in the list of the best companies to work with. The survey featured in Forbes Magazine. Analysts marveled at the performance of the company in the face of a crippling recession. The answer lies in the approach the company's executives adopted.

In 2006, the company encountered a series of obstacles. The impact of the unsuccessful merger with Chrysler was still fresh. The event greatly weakened the customer and dealership working relationship. The economic recession further slowed down sales, forced various cost cutting measures, and weakened the engagement of many associates. One of the intervention strategies the board undertook was to change the top management of the company. The company contracted a new CEO who would also be the company's president. The new executive adopted strategies aimed at evaluating and improving the culture of the company. The incoming president termed his strategy as "the common sense approach."

Ironically, the president described his common sense approach as an approach that is not very common. At the 2011 dealership conference, the new president unveiled the "common sense" plan that comprised of three stages of implementation.

The strategic plan

The first phase involved the establishment of a baseline throughout an all-associate survey. The survey included an organizational health and fitness diagnosis. It involved determining the current position of the organization through the SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis. The implementation of the framework was stretched up to the second stage. The president maintained that such knowledge would aid in defining possible solutions and open new trading grounds for the company. The board made substantial efforts in communicating the company's values and vision. This was crucial as investors and associates felt lost in the wake of the internal and external factors affecting them (Mulliro & Heitor, 2004).

The second stage involved finding common themes and developing an action plan. This stage involved the identification of areas of focus (Plunkett, 2006). This included leadership, associate satisfaction, effectiveness, and engagement of associates with the company's identity. In part, the company designed several feedback programs and specialized development plans. Compensation, recognition, and communication efforts emerged through a series of techniques. Some of the methods employed stretched from clarifying the compensation mechanism to sharing a consistent scorecard of the organization's performance. Several campaigns and initiatives took place to boost associates' connection to the company's brand. This also comprised of several internal communication campaigns and video contests.

The third step majorly dealt with accessing the implementation of the first two steps. It involved a diagnostic analysis designed to keep the strategy going. The stage also entailed winning the loyalty of both the staff and the executives. Commitment was essential, and it helped shift focus from short-term goals to long-term ones. Great emphasis was placed in the sales and marketing department. The tone at this stage maintained that early gains should not be given much importance. Maintaining the momentum was important as it would guarantee long-term success that would stretch for a long time.

The approach the company adopted accomplished satisfying results. Associate engagement was impressive in the midst of an industry that has suffered over the past years because of economic constraints. The diagnostic program increased the profitability of the company by 20% since it undertaken. The company rose up to position 45 before attaining position 15 in Forbes list of best companies.

SWOT Evaluation

The approach assumed by MBUSA reflects general principles that most companies faced with internal and external problems. Most of the ideas in their approach imitate the system of ideas applied by large multinational companies faced with recession problems. Applying the SWOT framework enabled the board to come up with customized solutions for the company. The framework was useful in understanding the weaknesses and strengths of the companies, as well as the opportunities and possible risk factors facing the company. This helped to carve a considerable niche in the market. The framework was effective in determining the position of the company in terms of its financial muscle and market share. The financial statements came in handy as they reflected the company's financial performance in the face of the recession. The publication of the financial statements facilitated the communication between the executives, the associates, and the members of staff. All areas of financial performance of the company came to the fore, and suitable recommendations forwarded.

The framework helped in identifying the constructive forces that operate within the company's environment. The framework also helped to classify the problems of the organization into internal and external categories. Realization of the problems would inform the process of addressing each of them. SWOT analysis also filled the communication gap between the board and staff. It also opened room for employee participation and consultation.

Organizational theories

An organization is a social entity designed and managed to accomplish a specific need or to track collective goals. Organizations comprise of a management function that determines associations between the various activities and the members. The management function in organizations rests in assigning roles, authority, and responsibility to undertake various tasks. Organizations are open systems influenced by their environment. For any business, the environment comprises of a set of exterior situations and forces that are capable of affecting the organization. The environment consists of the customers, business competitors, social trends and various additional forces and conditions. Every action undertaken by an organization causes some degree of change in its environment. The influence of most organizations limits to causing change in the respective industry only. Understanding the type of environment around a business is important to its executives. This is because the environment acts as a source of raw materials for the organization. No organization is self-sufficient. The organizational environment is also crucial because it contains the possible threats and opportunities that face the organization. The organization is thus a product of its environment. To fall in line with the demands of the environment, an organization develops a series of behaviors known as organizational behaviors. The organizational behavior forms the organizational culture in the course of time.

Evaluation using organizational theory

The approach adopted in the case study imitates aspects of the organizational theory. In the modern economic landscape, the prosperity of a business relies on the success of management strategies (Perow, 2005). Organizational theory offers a clear introduction to tested and effective methods of organizational management. The theory studies formal organization, the bureaucracies and systems, as well as the environment in which the organization operates. Organizational theory looks into aspects of organizational behavior and human resource.

Organizational theory encompasses the analysis of organizations from various perspectives, levels, and methods. "Micro" organizational theory specializes in groups and individual dynamics in organizations. "Macro" organizational theory centers it analysis on whole industries and organizations and looks into how organizations adapt, the structures, strategies, and contingencies that guide them (Mueller, 2000). In line with the two levels, analysts have suggested the expansion of the theory to include aspects of power and the networks of personalities in organizations. This includes an analysis of how populations within an organization relate.

The organization in the case study has widely applied the principles in organizational theory. The sharing of information between the associates reflects some of the principles. The case study also brings out an important variable in organizational theory, which is Transformational Leadership. The study presents an organization faced with the risk of organizational failure brought about by low motivation of the associates. The president presents a strategic plan that would also act as a motivational framework for the employees. The tool would also assist the new president familiarize with the organizational behavior of the company. The first stage involves knowing the position of the organization (Chia, 2006). This comprises relating the performance of the organization to its environment. This is the stage where the new president interacts with the employees and discerns the culture of the organization. The strategic plan also reflects teamwork. The new president proposes a scorecard for every employee. The card contains updated information touching on the current position of the company. The three-step action plan forwarded by the new president also emphasized on quality management. Quality takes center stage for it guarantees the satisfaction of clients thus long-term success.

Organizational behavior and the strategic plan

Organizational behavior forms a crucial perspective in organizational theory. The theory focuses on how the structures in an organization affect behaviors within an organization, and how the behaviors establish the organizational culture. The study looks into the influence individuals, structures, and groups have on human behavior within business organizations. It is interdisciplinary and includes the sociological, communication, psychological, and management aspect of organizations. Organizational behavior theory is a branch of organizational theory as it focuses its discussion on everyday studies.

The strategy developed by the president in the case study could be also be studied through the network theory. The analysis focuses on the relationship between relationships and behaviors in an organization. The ideas of sociometry, sociograms, and social networks appeared more than 50 years ago. The theory focuses on the social nature of relationships around an organization (Chia, 2006). Causal factors are inherent in the framework. The analysis is a set of techniques for detecting and measuring the magnitude of the causal factors. The framework provides a way to handle reality. This is through its conception and investigation. Establishment of the notion of the characteristics within and between units rather than the characteristics of the units themselves should follow. It analyses the nature of the relationship between individuals in the organization, and that of the organization and its environment. It views communication networks as comprising of interconnected individuals linked by patterned communication flows. Network analysis determines the interpersonal connections created by the sharing of information within the social networks in an organization.

The theory of network analysis centers on the communication structure of an organization, and its operation into different aspects. It analyzes and distinguishes structural features using respective methods. Some of the areas of operation include the communication pattern within the organization and the identification of groups (Lance, 2006). The communication analysis investigates the communication related roles of employees like communication channels, feedback, the communication apparatus used by employees, the relationship between the type of information and communication networks, and the communication load as determined by the employees. The analysis also measures the effectiveness of the communication channels.

Application of Network Analysis

Drawing back to the case study, various aspects of the network analysis greatly feature. The action plan adopted by the company reflects some of the values forwarded by network analysis. For instance, the framework focuses its initial proposals in championing for the identification of the current position of the organization. The analysis provides for the determination of the communication composition of organizations (Reed, 2003). The communication network is crucial for passing information down the hierarchical ladder. The action plan in the case study purposes to access the motivational capacity of the associates. The incoming president noted that the performance of the company greatly lies in the low motivation of the immediate stakeholders. This included the employees, shareholders, and members of the board. The low motivation resulted from the turbulent economic times and the failed merger with Chrysler. To restore potential performance and explore available opportunities, the president designed an action plan that focused on unearthing the source of low motivation among the respective players. The president's action plan reflected inclusiveness as it gave the players space to contribute their input. This occurred in the second stage, in the process of identifying general themes.