ORG 727 Week 1 Introduction to Organizational Diagnosis Example

Before Prescribing, Diagnose: Framing an Organizational Diagnosis at a Southwestern Credit Union

[Student Name]

University of Phoenix

ORG/727: Organizational Diagnosis and Intervention

Week 1 Assignment

[Instructor Name]

[Date]

Saguaro Federal Credit Union, its branches, people and figures are composites written for a model paper.

Saguaro Federal Credit Union, a composite organization, serves about 210,000 members across southern Arizona from 38 branches, with $3.1 billion in assets and 820 employees. For two decades it grew about 6 percent a year. Over the past three years, membership growth has slowed to under 1 percent, while two large banks and an online lender have gained share in its markets. The board has asked the chief executive to explain why and to propose a response. Her three senior leaders offer three different answers. Leaders want an answer within six months. This paper introduces organizational diagnosis and frames a diagnostic study of the credit union that the rest of the course will carry out.

Three Explanations, Three Fixes

The marketing vice president argues that younger members choose institutions with better mobile apps and that Saguaro's app is rated 3.2 stars. She proposes a $6 million digital program. The retail vice president argues that branches are understaffed after a hiring freeze, so waits are long and new-member accounts take an hour to open. He proposes hiring 45 tellers and member service representatives. The chief lending officer argues that auto and mortgage decisions take three days against competitors' same-day approvals, so members take their loans elsewhere and then their accounts. He proposes a new loan origination system. Each explanation is plausible; each reflects its author's function and budget. None has been tested, and each would cost several million dollars if adopted.

What Diagnosis Is

Harrison and Shirom (1999) define organizational diagnosis as the use of conceptual models and applied research methods to assess an organization's current state and to discover ways to solve problems, meet challenges or enhance performance. Diagnosis differs from troubleshooting, which responds to visible symptoms with fixes, in that it examines the organization as a system, seeks underlying causes and uses models to guide what is studied. It differs from academic research in that its purpose is to help a client act, so it must be timely, relevant and acceptable to the people who will use it.

Why Systems Thinking Underlies Diagnosis

Most diagnostic models rest on an open systems view. Organizations take in inputs from their environments, such as members, deposits, staff and technology, transform them through work processes, structures and culture and produce outputs, such as services, loans and member experiences, whose results feed back into future inputs. Parts are interdependent, so a problem in one part often originates elsewhere. Nadler and Tushman (1980) built a widely used model on this view, arguing that results depend on how well four components fit one another: the tasks to be done, the people doing them, the official structures and systems and the unwritten norms and relationships, all judged against strategy and environment. From this view, stalled growth at Saguaro could arise from misfit among several components, not from one function's failure.

Each executive sees the part of the system nearest to them, which is exactly why the whole system needs to be examined.

Phases of a Diagnostic Engagement

Diagnosis typically moves through several phases. In scouting, the consultant and client explore whether a diagnosis is warranted and feasible. In entry and contracting, they agree on purpose, scope, access, roles, confidentiality and how findings will be reported. In data gathering, the consultant collects information through interviews, surveys, observation and records. In analysis, the consultant uses models to interpret the data and identify gaps between current and desired states. In feedback, findings are presented to the client in a way that invites discussion and ownership. Finally, the client decides on action, often with the consultant's help in planning interventions.

For Saguaro, the contract will be with the chief executive and board, with a steering group of the three vice presidents and two branch managers. The scope covers member acquisition and retention across branch, digital and lending channels.

The Consultant's Role

Consultants can work as experts who diagnose and prescribe, as process consultants who help clients diagnose themselves or in collaborative roles between. Harrison and Shirom describe a sharp-image approach that focuses on the issues of most concern to the client, rather than an exhaustive audit, while keeping a systems view. As an internal consultant from the credit union's strategy office, I bring knowledge and access but also relationships with each vice president that could compromise neutrality. A collaborative role, with the steering group helping to interpret data, suits an internal consultant and builds ownership of findings.

Ethics and Politics

Diagnosis raises ethical issues. Interviewees must know how their information will be used and that individual responses will be confidential. Findings may implicate particular leaders; the contract must specify who sees what. Each vice president has a stake in the outcome, since each has proposed a fix within their budget. Diagnosis is therefore political as well as analytical, and the consultant must guard against being used to justify a decision already made.

Framing the Presenting Problem

The presenting problem is stalled membership growth. The diagnosis will treat it as a symptom to explain. Initial questions include: Where in the member life cycle are losses occurring: attraction, account opening, first year or long-term relationships? Which member groups have changed behavior? How do the credit union's work processes, structures, people and culture fit its strategy of being the community's primary financial institution? How has the environment changed? These questions will guide the choice of a diagnostic model in Week 2 and data gathering in Week 3.

Levels of Analysis

Diagnosis can focus on individuals, groups or the whole organization, and the choice shapes what is found. Saguaro's leaders frame stalled growth as an organizational problem, but its causes may lie at the group level, in how branch, lending and digital teams work together, or in individual skills and motivation. Burke and Litwin (1992) distinguished factors at the organizational level, such as mission, leadership and culture, from those closer to daily work, such as climate, task requirements and motivation, and argued that both matter for performance. The diagnosis will collect data at all three levels and look for links between them.

Initial Evidence

Early records offer clues. New-member accounts fell 18 percent over three years, but members leaving rose only slightly, suggesting attraction more than retention. Applications for auto loans from non-members fell sharply. Branch traffic fell 22 percent while mobile logins rose 40 percent. These data neither confirm nor rule out any of the three explanations, which is why they are a starting point for inquiry rather than an answer.

Conclusion

Saguaro's leaders each see a different cause of stalled growth and a different fix. Organizational diagnosis offers a disciplined alternative: examine the credit union as an open system, gather evidence across its parts and interpret it with models before choosing interventions. Contracting, a collaborative consultant role and attention to ethics and politics will shape a diagnosis that the organization can trust and act on.

References

Burke, W. W., & Litwin, G. H. (1992). A causal model of organizational performance and change. Journal of Management, 18(3), 523-545. https://doi.org/10.1177/014920639201800306

Harrison, M. I., & Shirom, A. (1999). Organizational diagnosis and assessment: Bridging theory and practice. Sage.

Nadler, D. A., & Tushman, M. L. (1980). A model for diagnosing organizational behavior. Organizational Dynamics, 9(2), 35-51. https://doi.org/10.1016/0090-2616(80)90039-X