This paper surveys major organizational diagnostic models — including Lewin's Force Field model, Leavitt's model, the Likert Systems Analysis, open systems theory, Weisbord's Six-Box Model, the McKinsey 7S framework, and the Nadler-Tushman Congruence Model — evaluating the relative strengths and weaknesses of each. It then applies this analysis to Whole Foods Market, arguing that the Nadler-Tushman Congruence Model is the most appropriate diagnostic tool for the company given its comprehensive, open-systems foundation and its ability to account for complexity, ambiguity, and the possibility that an organization may already be well-positioned rather than in need of change.
Falletta (2005) outlines several different organizational diagnostic models. The first is the Force Field model, developed by Kurt Lewin in 1951. In this model, an organization remains in a state of equilibrium until it is shifted out of that state by a driving force that overcomes the restraining forces. The current state then becomes a problem (Falletta, 2005). This model can be used to explain what situation an organization is in, and even how that situation came about. The downside is that it provides little information about how the company can move to its new equilibrium point. Lewin's model does, however, explain how companies enter into an equilibrium state. Whole Foods' current equilibrium has still allowed for steady gains in revenue and profit based on growth, but with stability in profit margin (MSN Moneycentral, 2014).
Leavitt's model offers a somewhat different representation, with the firm being comprised of structure, technology, actors, and task (Falletta, 2005). This model is again quite simplistic and does not necessarily imply any causal relationship. Like the Force Field analysis, it has the weakness of not being able to prescribe anything. Unlike the Force Field model, this is because the Leavitt model does not describe a current state and does not fully explain the role of external forces — Leavitt's model is more of a step back.
The Likert Systems Analysis is another older model, developed in 1967. This model "describes four different types of management systems within organizations," these being the participative group, consultative, benevolent-authoritative, and exploitative-authoritative. Likert also wanted employees to evaluate what the management style within the organization was. As with the earlier models, Likert's framework is descriptive but limited in its ability to explain causal factors. Having a sense of how an organization is run is valuable, but does little to help managers understand how a current state came to be or what should be done about it.
This brings us to open systems theory. Open systems theory has led to a number of different approaches in managerial thought. The overriding flaw in the Leavitt and Likert models is that they assumed closed systems — Lewin had not — so open systems theory brought external influences to the fore. The basic open systems model has input, then transformation bounded and guided by environment, and finally output. This is how the organization is envisioned: as an open system subject to outside influence, where inputs are transformed into outputs (Falletta, 2005). The basic open systems model is simplistic and therefore of limited practical use, but it is accurate in its conception. An organization is fundamentally an entity that transforms, and this vision of the organization has been powerful, with open systems serving as a basic premise for many other diagnostic models.
In 1976, Weisbord's Six-Box Model conceptualized the organization, based on open systems theory, with boxes representing different elements: helpful mechanisms, relationships, purposes, leadership, structure, and rewards. This concept takes the feedback loop of open systems theory and breaks the organization down into its constituent parts so that each can be evaluated distinctly (Falletta, 2005).
The Nadler-Tushman Congruence Model incorporates ideas from the other models, giving it the advantage of being perhaps the most comprehensive of these diagnostic frameworks. The congruence model assumes open systems and treats organizations as dynamic entities. It is more sophisticated than the other models, assuming that organizational behavior occurs at the individual, group, and systems levels. The model also incorporates elements such as past organizational behavior and current strategies, thereby giving weight to some of the intangible influencing factors within an organization (Falletta, 2005). Nadler and Tushman therefore developed an open systems model that more accurately reflects the complexity and subtlety of organizations. This makes it easier to diagnose an organization with greater specificity than the other models allow, and the refined perspective of the Nadler-Tushman Congruence Model also enables some prescriptive thought.
"Critique of McKinsey's seven-element framework"
At present, Whole Foods is in a state of equilibrium. The company's operations are stable, its financials are stable, its growth is slow but steady, and it has few serious competitors. Major supermarkets had moved into the organic business, and a few years ago this seemed a significant threat, but Whole Foods demonstrated that it could withstand it. For any company, a profitable equilibrium is not a bad position to be in. One issue — though calling it a problem might be a stretch — is that Whole Foods has embarked on international expansion in Canada and the UK but has not moved very quickly in those markets. There is a great deal of uncharted territory in both countries. Combined with relatively slow growth in the U.S., it is reasonable to think that developing these international markets will be important for Whole Foods going forward as twin sources of growth once the U.S. market becomes completely saturated.
Another potential issue for Whole Foods involves expansion out of its traditional comfort zone. The company has also made healthy eating for Americans a central part of its mission, opening stores in areas that do not fit its typical demographic — specifically, areas with lower incomes. There are strategic elements to the chain's arrival in Detroit, but the reality is that the city is underserved by grocery stores (McMillan, 2014). The chain also has a store in New Orleans, another city where many residents have limited access to full-service grocery options. Through both strategies — moving into lower-income urban areas and expanding internationally — Whole Foods is trying to find new avenues for growth without straying too far from its traditional business model.
"Justification for Nadler-Tushman as best fit"
To analyze Whole Foods, the Nadler-Tushman Congruence Model is recommended. An open systems model is essential because organizations are open systems. The model can accommodate complexity and subtlety, because organizations possess those qualities as well. Therefore, the Nadler-Tushman model is the most appropriate framework for understanding the current situation of Whole Foods and how well equipped the company is to meet its objectives going forward.
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