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4

Entering and Contracting

learning
objectives

Describe the issues associated with entering into an OD process.

Describe the issues associated with contracting for an OD process.

T
he planned change process described in
Chapter 2 generally starts when one or
more managers or administrators sense an

opportunity for their organization, department, or
group, believe that new capabilities need to be
developed, or decide that performance could be
improved through organization development
(OD). The organization might be successful yet
have room for improvement. It might be facing
impending environmental conditions that necessi-
tate a change in how it operates. The organization
could be experiencing particular problems, such as
poor product quality, high rates of absenteeism, or
dysfunctional conflicts among departments. Con-
versely, the problems might appear more diffuse
and consist simply of feelings that the organization
should be “more innovative,” “more competi-
tive,” or “more effective.”

Entering and contracting are the initial steps in
the OD process. They involve defining in a
preliminary manner the organization’s problems
or opportunities for development and establishing
a collaborative relationship between the OD
practitioner and members of the client system
about how to work on those issues. Entering and
contracting set the initial parameters for carrying
out the subsequent phases of OD: diagnosing,
planning and implementing changes, and evaluating
and institutionalizing them. They help to define

what issues will be addressed by those activities,
who will carry them out, and how they will be
accomplished.

Entering and contracting can vary in complexity
and formality depending on the situation. In
those cases where the manager of a work
group or department serves as his or her own OD
practitioner, entering and contracting typically involve
the manager and group members meeting to
discuss what issues to work on and how they will
jointly meet the goals they set. Here, entering and
contracting are relatively simple and informal. They
involve all relevant members directly in the
process—with a minimum of formal procedures. In
situations where managers and administrators
are considering the use of professional OD
practitioners, either from inside or from outside the
organization, entering and contracting tend to be
more complex and formal.1 OD practitioners may
need to collect preliminary information to help
define the problematic or development issues.
They may need to meet with representatives of
the client organization rather than with the total
membership; they may need to formalize their
respective roles and how the change process will
unfold. In cases where the anticipated changes are
strategic and large in scale, formal proposals from
multiple consulting firms may be requested and
legal contracts drawn up.

75

This chapter first discusses the activities and
content-oriented issues involved in entering into
and contracting for an OD initiative. We will focus
our attention on complex processes involving OD
professionals and client organizations. Similar
entering and contracting issues, however, need to
be addressed in even the simplest OD efforts,
where managers serve as OD practitioners for their

own work units. Unless there is clarity and
agreement about what issues to work on, who will
address them, how that will be accomplished, and
what timetable will be followed, subsequent stages
of the OD process are likely to be confusing and
ineffective. The chapter concludes with a
discussion of the interpersonal process issues
involved in entering and contracting for OD work.

4-1 Entering into an OD Relationship
An OD process generally starts when a member of an organization or unit contacts an
OD practitioner about potential help in addressing an organizational issue.2 The organi-
zation member may be a manager, staff specialist, or some other key participant; the
practitioner may be an OD professional from inside or outside of the organization.
Determining whether the two parties should enter into an OD relationship typically
involves clarifying the nature of the organization’s current functioning and the issue(s)
to be addressed, the relevant client system for that issue, and the appropriateness of the
particular OD practitioner.3 In helping assess these issues, the OD practitioner may need
to collect preliminary data about the organization. Similarly, the organization may need
to gather information about the practitioner’s competence and experience.4 This knowl-
edge will help both parties determine whether they should proceed to develop a contract
for working together.

This section describes the activities involved in entering an OD relationship: clarifying
the organizational issue, determining the relevant client, and selecting the appropriate OD
practitioner.

4-1a Clarifying the Organizational Issue
When seeking help from OD practitioners, organizations typically start with a presenting
problem—the issue that has caused them to consider an OD process. It may be specific
(decreased market share, increased absenteeism) or general (“we’re growing too fast,”
“we need to prepare for rapid changes”). The presenting problem often has an implied
or stated solution. For example, managers may believe that because costs are high, laying
off members of their department is the obvious answer. They may even state the present-
ing problem in the form of a solution: “We need to downsize our organization.”

In many cases, however, the presenting problem is only a symptom of an underlying
problem. For example, high costs may result from several deeper causes, including inef-
fective new-product development or manufacturing processes, inappropriate customer-
service policies and procedures, or conflict between two interdependent groups. The
issue facing the organization or department must be clarified early in the OD process
so that subsequent diagnostic and intervention activities are focused correctly.5

Gaining a clearer perspective on the organizational issue may require collecting pre-
liminary data.6 OD practitioners often examine company records and interview a few
key members to gain an introductory understanding of the organization, its context,
and the nature of the presenting problem. Those data are gathered in a relatively short
period of time—typically over a few hours to one or two days. They are intended to pro-
vide enough rudimentary knowledge of the organizational issue to enable the two parties
to make informed choices about proceeding with the contracting process.

76 PART 2 THE PROCESS OF ORGANIZATION DEVELOPMENT

The diagnostic phase of OD involves a far more extensive assessment of the prob-
lematic or development issue than occurs during the entering and contracting stage. The
diagnosis also might discover other issues that need to be addressed, or it might lead to
redefining the initial issue that was identified during the entering and contracting stage.
This is a prime example of the emergent nature of the OD process: Things may change
as new information is gathered and new events occur.

4-1b Determining the Relevant Client
A second activity in entering an OD relationship is defining the relevant client for
addressing the organizational issue.7 Generally, the relevant client includes those organi-
zation members who can directly impact the change issue, whether it is solving a partic-
ular problem or improving an already successful organization or department. Unless
these members are identified and included in the entering and contracting process, they
may withhold their support for and commitment to the OD process. In trying to
improve the productivity of a unionized manufacturing plant, for example, the relevant
client may need to include union officials as well as managers and staff personnel. It is
not unusual for an OD project to fail because the relevant client was inappropriately
defined.

Determining the relevant client can vary in complexity depending on the situation.
In those cases where the organizational issue can be addressed in a specific organization
unit, client definition is relatively straightforward. Members of that unit constitute
the relevant client. They or their representatives must be included in the entering and
contracting process. For example, if a manager asked for help in improving the
decision-making process of his or her team, the manager and team members would be
the relevant client. Unless they are actively involved in choosing an OD practitioner and
defining the subsequent change process, there is little likelihood that OD will improve
team decision making.

Determining the relevant client is more complex when the organizational issue can-
not readily be addressed in a single unit. Here, it may be necessary to expand the defini-
tion of the client to include members from multiple units, from different hierarchical
levels, and even from outside of the organization. For example, the manager of a produc-
tion department may seek help in resolving conflicts between his or her unit and other
departments in the organization. The relevant client would extend beyond the bound-
aries of the production department because that department alone cannot resolve the
issue. The client might include members from all departments involved in the conflict
as well as the executive to whom all of the departments report. If that interdepartmental
conflict also involved key suppliers and customers from outside of the firm, the relevant
client might include members of those groups.

In such complex situations, OD practitioners need to gather additional information
about the organization to determine the relevant client, generally as part of the prelimi-
nary data collection that typically occurs when clarifying the issue to be addressed. When
examining company records or interviewing personnel, practitioners can seek to identify
the key members and organizational units that need to be involved. For example, they
can ask organization members questions such as these: Who can directly influence the
organizational issue? Who has a vested interest in it? Who has the power to approve or
reject the OD effort? Answers to those questions can help determine who is the relevant
client for the entering and contracting stage. However, the client may change during the
later stages of the OD process as new data are gathered and changes occur. If so, parti-
cipants may have to return to and modify this initial stage of the OD effort.

CHAPTER 4 ENTERING AND CONTRACTING 77

4-1c Selecting an OD Practitioner
The last activity involved in entering an OD relationship is selecting an OD practitioner
who has the expertise and experience to work with members on the organizational issue.
Unfortunately, little systematic advice is available on how to choose a competent OD
professional, whether from inside or outside of the organization.8 To help lower the
uncertainty of choosing from among external OD practitioners, organizations may
request that formal proposals be submitted. In these cases, the OD practitioner must
take all of the information gathered in the prior steps and create an outline of how the
process might unfold. Table 4.1 provides one view of the key elements of such a pro-
posal. It suggests that a written proposal include project objectives, outlines of proposed
processes, a list of roles and responsibilities, recommended interventions, and proposed
fees and expenses.

For less formal and structured selection processes, the late Gordon Lippitt, a pio-
neering practitioner in the field, suggested several criteria for selecting, evaluating, and
developing OD practitioners.9 Lippitt listed areas that managers should consider before
selecting a practitioner—including their ability to form sound interpersonal relationships,
the degree of focus on the problem, the skills of the practitioner relative to the problem,
the extent that the consultant clearly informs the client as to his or her role and contri-
bution, and whether the practitioner belongs to a professional association. References
from other clients are highly important. A client may not like the consultant’s work,
but it is critical to know the reasons for both pleasure and displeasure. One important
consideration is whether the consultant approaches the organization with openness and
an insistence on diagnosis or whether the practitioner appears to have a fixed program
that is applicable to almost any problem or organization.

TABLE 4.1

Essentials of an Effective OD Proposal

Elements Description

Objectives of proposed
project

A statement of the goals in clear and concise terms,
including measurable results, if any.

Proposed process or
action plan

Provide an overview of the process to be used. Usually
includes a diagnosis (including how the data will be
collected), feedback process, and action-planning or
implementation process.

Roles and
responsibilities

A list of key stakeholders in the process, including the
OD practitioner, and the specific responsibilities for
which they will be held accountable.

Recommended
interventions

A description of the proposed change strategies,
including training, off-site meetings, systems or pro-
cesses to be redesigned, and other activities.

Fees, terms, and
conditions

Provide an outline of the fees and expenses associated
with project.

SOURCE: Adapted from A. Freedman and R. Zackrison, Finding Your Way in the Consulting Jungle,
141–47. San Francisco: Jossey-Bass/Pfeiffer. © 2001.

78 PART 2 THE PROCESS OF ORGANIZATION DEVELOPMENT

Certainly, OD consulting is as much a person specialization as it is a task specializa-
tion. The OD professional needs not only a repertoire of technical skills but also the per-
sonality and interpersonal competence to use himself or herself as an instrument of
change. Regardless of technical training, the consultant must be able to maintain a
boundary position, coordinating among various units and departments and mixing dis-
ciplines, theories, technology, and research findings in an organic rather than in a
mechanical way. The practitioner is potentially the most important OD technology
available.

Thus, in selecting an OD practitioner perhaps the most important issue is the fun-
damental question, “How effective has the person been in the past, with what kinds of
organizations, using what kinds of techniques?” In other words, references must be
checked. Interpersonal relationships are tremendously important, but even con artists
have excellent interpersonal relationships and skills.

The burden of choosing an effective OD practitioner should not rest entirely with
the client organization.10 As described in the Ethical Dilemmas section of Chapter 3,
consultants also bear a heavy responsibility in finding whether there is a match between
their skills and knowledge and what the organization or department needs. Few man-
agers are sophisticated enough to detect or to understand subtle differences in expertise
among OD professionals, and they often do not understand the difference between inter-
vention specialties. Thus, practitioners should help educate potential clients, being
explicit about their strengths and weaknesses and their range of competence. If OD pro-
fessionals realize that a good match does not exist, they should inform the client and
help them find more suitable help.

Application 4.1 describes the entering process at Alegent Health, a large health care
system in Nebraska and western Iowa. The entry process was largely “virtual” in that the
researchers worked through two consultants who were conducting OD interventions on
a regular basis. The case highlights how OD work can come in different forms and
through different channels. It also reflects how quickly the “entry” process can occur.
This is the first in a series of applications based on the Alegent project that will be used
throughout the text.

4-2 Developing a Contract
The activities of entering an OD relationship are a necessary prelude to developing an
OD contract. They define the major focus for contracting, including the relevant parties.
Contracting is a natural extension of the entering process and clarifies how the OD pro-
cess will proceed. It typically establishes the expectations of the parties, the time and
resources that will be expended, and the ground rules under which the parties will
operate.

The goal of contracting is to make a good decision about how to carry out the OD
process.11 It can be relatively informal and involve only a verbal agreement between the
client and the OD practitioner. A team leader with OD skills, for example, may voice his
or her concerns to members about how the team is functioning. After some discussion,
they might agree to devote one hour of future meeting time to diagnosing the team with
the help of the leader. Here, entering and contracting are done together, informally. In
other cases, contracting can be more protracted and result in a formal document. That
typically occurs when organizations employ outside OD practitioners. Government agen-
cies, for example, generally have procurement regulations that apply to contracting with
outside consultants.12

CHAPTER 4 ENTERING AND CONTRACTING 79

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1

ENTERING ALEGENT HEALTH

A
legent Health (AH) is a five-hospital sys-
tem that serves the greater Omaha,
Nebraska, and western Iowa region.
Alegent was formed when two religious-

sponsored health care systems merged to
leverage health care industry changes and to
bargain more powerfully with physicians and
insurance providers. The system had its own
managed care insurance program, was imple-
menting a consumer-directed health care pro-
gram for its employees, and had about 100
employed physicians in addition to the physi-
cians with privileges at its hospitals.

Two well-known OD consultants had been
working with AH for about two years, doing a
variety of OD work. By far, the largest project
was the design and delivery of large group
interventions known as decision accelerators
(DAs) to create strategies for the major clinical
service areas, such as orthopedics, cardiology,
and women’s and children’s services. [Note:
Large group interventions are multistakeholder
meetings of over 50 people—see Chapter 11
for more information.]

At an organization design conference in
April, one of the consultants was talking with
researchers from the Center for Effective Orga-
nizations at USC. The conversation turned to a
discussion of the work at AH and the possibil-
ity of evaluating the change effort. The
researchers were excited about the organiza-
tion development and large group intervention
work in the health care context. The consultant
agreed to pitch the idea to AH’s Chief Innova-
tion Officer (CIO).

Following some additional background
conversations with the researchers and the
CIO, the consultant sent the following email in
June:

Dear CIO,
I would like to introduce you to the Center
for Effective Organization researchers. As
we discussed, the researchers are very
interested in the work being done at AH
and will be calling you early next week to
discuss the possibility of doing a research
project on the Decision Accelerator effort.

The form of research is typically action
research, meaning the data will be valuable
for Alegent in not only assessing the impact
and effectiveness of the DA intervention but
learning how to position this capability for
improved Alegent organizational effective-
ness. This can be quite valuable as Alegent
moves into the next round of change and
transformation.

Thanks all.

The researchers spent the next few days
talking to the two consultants about AH, its
history, strategy, structure, and culture, as
well as the motivation for the large-group, deci-
sion accelerator process. They also collected
data on AH through the Internet. Alegent was
indeed a unique organization. It was highly
successful from a financial point of view, had
a new CEO who had been brought in from
Florida, and had a strong faith-based mission.

In the first phone call with the CIO, the
researchers introduced themselves, described
the mission of the research center, and their
interest in doing a case study of change at
Alegent. The CIO talked about the history of
change at AH and asked questions about the
value the project would have for them. He saw
several benefits, including the opportunity to
generate a history of the change, to learn
about the impacts of the change process on
the organization’s culture and members, and
to build a database that could be used to
advance AH’s objective of “changing the face
of health care.” The call ended with the agree-
ment that the CIO would talk with others in the
organization, including the CEO, and that the
researchers should begin to put together a
project purpose, cost estimate, and schedule.

In the second call, the researchers presented
their understanding of the project as a case study
assessment of how innovation was created and
implemented at Alegent. They described a way
of working with organizations—the establish-
ment of a “study team” composed of several
key stakeholders in the organization. The study
team would meet, before the project officially
began, to review the objectives of the study

80 PART 2 THE PROCESS OF ORGANIZATION DEVELOPMENT

Regardless of the level of formality, all OD processes require some form of explicit
contracting that results in either a verbal or a written agreement. Such contracting clari-
fies the client’s and the practitioner’s expectations about how the OD process will take
place. Unless there is mutual understanding and agreement about the process, there is
considerable risk that someone’s expectations will be unfulfilled.13 That can lead to
reduced commitment and support, to misplaced action, or to premature termination of
the process.

The contracting step in OD generally addresses three key areas:14 setting mutual
expectations or what each party expects to gain from the OD process; the time and
resources that will be devoted to it; and the ground rules for working together.

4-2a Mutual Expectations
This part of the contracting process focuses on the expectations of the client and the OD
practitioner. The client states the services and outcomes to be provided by the OD prac-
titioner and describes what the organization expects from the process and the consultant.
Clients usually can describe the desired outcomes, such as lower costs or higher job sat-
isfaction. Encouraging them to state their wants in the form of outcomes, working rela-
tionships, and personal accomplishments can facilitate the development of a good
contract.15

The OD practitioner also should state what he or she expects to gain from the OD
process. This can include opportunities to try new interventions, report the results to
other potential clients, and receive appropriate compensation or recognition.

4-2b Time and Resources
To accomplish change, the organization and the OD practitioner must commit time
and resources to the effort. Each must be clear about how much energy and how many
resources will be dedicated to the change process. Failure to make explicit the necessary
requirements of a change process can quickly ruin an OD effort. For example, a client
may clearly state that the assignment involves diagnosing the causes of poor productivity
in a work group. However, the client may expect the practitioner to complete the assign-
ment without talking to the workers. Typically, clients want to know how much time will
be necessary to complete the assignment, who needs to be involved, how much it will
cost, and so on.

Peter Block has suggested that resources can be divided into two parts.16 Essential
requirements are things that are absolutely necessary if the change process is to be suc-
cessful. From the practitioner’s perspective, they can include access to key people or

and ensure that the work was relevant to the organi-
zation. There was some conversation about who
might be on that team, including the CEO, CFO, the
hospital presidents, and the VPs of the clinical service
areas.

Subsequent email exchanges among the con-
sultants, the CIO, and the researchers led to a

verbal agreement that the project should begin in
October. The CIO believed there was much to gain
from the project, and asked the Director of the
Right Track office (this was the internal name AH
had given to the decision accelerator) to lead the
contracting process and to help the researchers
schedule meetings and interviews.

CHAPTER 4 ENTERING AND CONTRACTING 81

information, enough time to do the job, and commitment from certain stakeholder
groups. The organization’s essential requirements might include a speedy diagnosis or
assurances that the project will be conducted at the lowest price. Being clear about the
constraints on carrying out the assignment will facilitate the contracting process and
improve the chances for success. Desirable requirements are those things that would be
nice to have but are not absolutely necessary, such as access to special resources or writ-
ten rather than verbal reports.

4-2c Ground Rules
The final part of the contracting process involves specifying how the client and the OD
practitioner will work together. The parameters established may include such issues as
confidentiality, if and how the OD practitioner will become involved in personal or
interpersonal issues, how to terminate the relationship, and whether the practitioner is
supposed to make expert recommendations or help the manager make decisions. For
internal consultants, organizational politics make it especially important to clarify issues
of how to handle sensitive information and how to deliver “bad news.”17 Such process
issues are as important as the needed substantive changes. Failure to address the con-
cerns may mean that the client or the practitioner has inappropriate assumptions about
how the process will unfold.

Application 4.2 describes the contracting process for the evaluation project at Alegent
Health. In this case, the contracting process was much more complicated than the entry
process. What would you list as the strengths and weaknesses of this example?

4-3 Interpersonal Process Issues in Entering
and Contracting
The previous sections on entering and contracting addressed the activities and content-
oriented issues associated with beginning an OD project. In this final section, we discuss
the interpersonal issues an OD practitioner must be aware of to produce a successful
agreement. In most cases, the client’s expectations, resources, and working relationship
requirements will not fit perfectly with the OD practitioner’s essential and desirable
requirements. Negotiating the differences to improve the likelihood of success can be
personally and interpersonally challenging.18

Entering and contracting are the first exchanges between a client and an OD practi-
tioner. Establishing a healthy relationship at the outset makes it more likely that the cli-
ent’s desired outcomes will be achieved and that the OD practitioner will be able to
improve the organization’s capacity to manage change in the future. As shown in
Figure 4.1, this initial stage is full of uncertainty and ambiguity. On the one hand, the
client is likely to feel exposed, inadequate, or vulnerable. The organization’s current
effectiveness and the request for help may seem to the client like an admission that the
organization is incapable of solving the problem or providing the leadership necessary to
achieve a set of results. Moreover, clients are entering into a relationship where they may
feel unable to control the activities of the OD practitioner. As a result, they feel vulnera-
ble because of their dependency on the practitioner to provide assistance. Consciously or
unconsciously, feelings of exposure, inadequacy, or vulnerability may lead clients to resist
coming to closure on the contract. The OD practitioner must be alert to the signs of
resistance, such as asking for extraordinary amounts of detail, and be able to address
them skillfully.

82 PART 2 THE PROCESS OF ORGANIZATION DEVELOPMENT

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2 CONTRACTING WITH ALEGENT HEALTH

F
ollowing the verbal approval of the CIO to
begin the work, the researchers began
working with the Right Track director and
the consultants to formulate an agreement

on how to proceed with the case study and
assessment. The contracting process pro-
ceeded on two parallel paths. One path was
the specification of the formal contract—who,
what, how much, and why—and the second

path was the project scheduling—who, when,
and where.

FORMAL CONTRACTING PROCESS

The formal contracting process required the
researchers to propose a purpose, cost esti-
mate, and schedule for the case study. The
researchers’ initial proposal looked like this:

Work Stream September October November December January

DA archives • Collect DA
materials

• Create
coding
scheme

• Coding • Write up
archival
data

Interviews • Finalize
interview
questions

• Arrange
interview
schedule

• First
round of
interviews

• Develop
coding
scheme

• Second
round of
interviews

• Coding
• Begin

analysis of
interviews

Governance • Meet with
“study
team”

• Feedback
meeting

• Transfer
learning to
organization

• …

©
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Diagnosing

learning
objectives

Discuss the philosophy and purpose of diagnosis in organization
development (OD).

Explain the role of diagnostic models in OD, especially the open-systems
model.

Describe and apply organization-level diagnostic processes.

Describe and apply group-level diagnostic processes.

Describe and apply individual-level diagnostic processes.

D
iagnosing is the second major phase in the
general model of planned change described
in Chapter 2 (Figure 2.2). It follows the enter-

ing and contracting stage (Chapter 4) and precedes
the planning and implementation phase. When
done well, diagnosis clearly points the organization
and the organization development (OD) practitioner
toward a set of appropriate intervention activities
that will improve organization effectiveness.

Diagnosis is the process of understanding a
system’s current functioning. It involves collecting
pertinent information about existing operations as
well as analyzing those data and drawing con-
clusions about the reasons for current performance
and the potential for change and improvement.
Effective diagnosis provides the systematic know-
ledge of the organization needed to design app-
ropriate interventions. Thus, OD interventions
derive from diagnosis and include specific actions

intended to improve organizational functioning.
(Chapters 10–20 present the major interventions
used in OD today.)

This and the next chapter describe different
aspects of the diagnostic process. This chapter
presents a general definition of diagnosis and
discusses the need for diagnostic models in guiding
the process. Diagnostic models derive from
conceptions about how organizations function,
and they tell OD practitioners what to look for
in diagnosing organizations, groups, or jobs. They
serve as a road map for discovering current
functioning. A general, comprehensive diagnostic
model is presented based on open-systems
theory. We then describe and apply the model to
diagnostic situations at the organization, group,
and job levels. Chapter 6 completes the diagnostic
phase by discussing processes of data collection,
analysis, and feedback.

89

5-1 What Is Diagnosis?
Diagnosis is the process of understanding how the organization is currently functioning,
and it provides the information necessary to design change interventions.1 It generally
follows from successful entry and contracting, which set the stage for successful diagno-
sis. Those processes help OD practitioners and client members jointly determine which
organizational issues to focus on, how to collect and analyze data to understand them,
and how to work together to develop action steps from the diagnosis. In another sense,
diagnosis is happening all the time. Managers, organization members, and OD practi-
tioners are always trying to understand the drivers of organization effectiveness as well
as how and why changes are proceeding in a particular way.

Unfortunately, the term diagnosis can be misleading when applied to organizations.
It suggests a model of organization change analogous to the medical model of diagnosis:
An organization (patient) experiencing problems seeks help from an OD practitioner
(doctor); the practitioner examines the organization, finds the causes of the problems,
and prescribes a solution. Diagnosis in organization development, however, is much
more collaborative than such a medical perspective implies and does not accept the
implicit assumption that something is wrong with the organization.

First, the values and ethical beliefs that underlie OD suggest that both organization
members and OD practitioners should be involved in discovering the determinants of
current organization effectiveness. Similarly, both should be involved actively in develop-
ing appropriate interventions and implementing them. For example, a manager might
seek an OD practitioner’s help to reduce absenteeism in his or her department. The
manager and an OD consultant jointly might decide to diagnose the cause of the prob-
lem by examining company absenteeism records and by interviewing selected employees
about possible reasons for absenteeism. Alternatively, they might examine employee loy-
alty and discover the organizational elements that encourage people to stay. Analysis of
those data could uncover determinants of absenteeism or loyalty in the department, thus
helping the manager and the OD practitioner jointly to develop an appropriate interven-
tion to address the issue.

Second, the medical model of diagnosis also implies that something is wrong with
the patient and that one needs to uncover the cause of the illness. In those cases where
organizations do have specific problems, diagnosis can be problem oriented, seeking rea-
sons for the problems. On the other hand, as suggested by the absenteeism example
above, the OD practitioner and the client may choose one of the newer views of organi-
zation change and frame the issue positively. Additionally, the client and the OD practi-
tioner may be looking for ways to enhance the organization’s existing functioning. Many
managers involved with OD are not experiencing specific organizational problems. Here,
diagnosis is development oriented. It assesses the current functioning of the organization
to discover areas for future development. For example, a manager might be interested in
using OD to improve a department that already seems to be functioning well. Diagnosis
might include an overall assessment of both the task performance capabilities of the
department and the impact of the department on its individual members. This process
seeks to uncover specific areas for future development of the department’s effectiveness.

In organization development, diagnosis is used more broadly than a medical defini-
tion would suggest. It is a collaborative process between organization members and the
OD practitioner to collect pertinent information, analyze it, and draw conclusions for
action planning and intervention. Diagnosis may be aimed at uncovering the causes of
specific problems, focused on understanding effective processes, or directed at assessing
the overall functioning of the organization or department to discover areas for future

90 PART 2 THE PROCESS OF ORGANIZATION DEVELOPMENT

development. Diagnosis provides a systematic understanding of organizations so that
appropriate interventions may be developed for solving problems and enhancing
effectiveness.

5-2 The Need for Diagnostic Models
Entry and contracting processes can result in a need to understand either a whole system
or some part, process, or feature of the organization. To diagnose an organization,
OD practitioners and organization members need to have an idea about what informa-
tion to collect and analyze. Choices about what to look for invariably depend on how
organizations are conceived. Such conceptions can vary from intuitive hunches to scien-
tific explanations of how organizations function. Conceptual frameworks that OD practi-
tioners use to understand organizations are referred to as “diagnostic models.” They
describe the relationships among different features of the organization, as well as its
environment and its effectiveness. As a result, diagnostic models point out what areas
to examine and what questions to ask in assessing how an organization is functioning.

However, all models represent simplifications of reality and therefore emphasize cer-
tain organizational features as critical while ignoring other features. Focusing attention
on particular features, often to the exclusion of others, can result in a biased diagnosis.
For example, a diagnostic model that relates team effectiveness to the handling of inter-
personal conflict would lead an OD practitioner to ask questions about relationships
among members, decision-making processes, and conflict resolution methods. Although
relevant, those questions ignore other group issues such as member skills and knowledge,
the complexity of the tasks performed by the group, and task interdependencies. Thus,
OD practitioners must choose diagnostic models and processes carefully to address the
organization’s presenting problems as well as to ensure comprehensiveness.

Potential diagnostic models are everywhere. Any collection of concepts and relation-
ships that attempts to represent a system or explain its effectiveness can potentially qual-
ify as a diagnostic model. Major sources of diagnostic models in OD are the thousands of
articles and books that discuss, describe, and analyze how organizations function. They
provide information about how and why certain organizational systems, processes, or
functions are effective. The studies often concern a specific facet of organizational behav-
ior, such as employee stress, leadership, motivation, problem solving, group dynamics,
job design, and career development. They also can involve the larger organization and
its context, including the environment, strategy, structure, and culture. Diagnostic mod-
els can be derived from that information by noting the dimensions or variables that are
associated with an organization’s effectiveness.

Another source of diagnostic models is OD practitioners’ experience in organiza-
tions. So-called “field knowledge” offers a wealth of practical information about how
organizations operate. Unfortunately, only a small part of that vast experience has been
translated into diagnostic models that represent the professional judgments of people
with years of experience in organizational diagnosis. The models generally link diagnosis
with specific organizational processes, such as group problem solving, employee motiva-
tion, or communication between managers and employees. The models list specific ques-
tions for diagnosing such processes.

This chapter presents a general framework for diagnosing organizations rather than
trying to cover the range of OD diagnostic models. The framework describes the systems
perspective prevalent in OD today and integrates several of the more popular diagnostic
models. The systems model provides a useful starting point for diagnosing organizations,

CHAPTER 5 DIAGNOSING 91

groups, and individual jobs. (Chapters 10–20 present additional diagnostic models that
are linked to specific OD interventions.)

5-3 Open-Systems Model
This section introduces systems theory, a set of concepts and relationships describing the
properties and behaviors of things called systems—organizations, groups, and jobs, for
example. Systems are viewed as unitary wholes composed of parts or subsystems; the sys-
tem serves to integrate the parts into a functioning unit. For example, organization
systems are composed of groups or departments, such as sales, operations, and finance.
The organization serves to coordinate behaviors of its departments so that they function
together in service of an organization goal or strategy. The general framework that
underlies most of the diagnosing in OD is called the “open-systems model.”

5-3a Organizations as Open Systems
As shown in Figure 5.1, the open-systems model recognizes that organizations exist
in the context of a larger environment that affects how the organization performs, and,
in turn, is affected by how the organization interacts with it. The model suggests that
organizations acquire specific inputs from the environment and transform them using
social and technical processes. The outputs of the transformation process are returned
to the environment and information about the consequences of those outputs serve as
feedback to the organization’s functioning.

The open-systems model also suggests that organizations and their subsystems—
groups and individual jobs—share a number of common features that explain how they
are organized and how they function. For example, open systems display a hierarchical
ordering. Each higher level of system is composed of lower-level systems: Systems at the
level of society are comprised of organizations; organizations are comprised of groups;
and groups are comprised of individual jobs. Although systems at different levels vary
in many ways—in size and complexity, for example—they have a number of common
characteristics by virtue of being open systems. The following open-systems properties
are described below: environments; inputs, transformations, and outputs; boundaries;
feedback; and alignment.

FIGURE 5.1

The Open-Systems Model

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92 PART 2 THE PROCESS OF ORGANIZATION DEVELOPMENT

Environments Environments are everything outside of the system that can directly or
indirectly affect its outputs. Open systems, such as organizations and groups, exchange
information and resources with their environments. Because these external forces influ-
ence the system, organizations cannot completely control their own behavior. Organiza-
tions, for example, are affected by such environmental conditions as the availability of
labor and human capital, raw material, customer demands, competition, and government
regulations. Understanding how these external forces affect the organization can help to
explain some of its internal behavior.

Inputs, Transformations, and Outputs Organizational systems are composed of
three related properties: inputs, transformations, and outputs. Inputs consist of human
capital or other resources, such as information, energy, and materials, coming into the
system from the environment. For example, a manufacturing organization acquires raw
materials from an outside supplier. Similarly, a hospital nursing unit acquires informa-
tion concerning a patient’s condition from the attending physician. In each case, the
system (organization or nursing unit) obtains resources (raw materials or information)
from its environment.

Transformations are the processes of converting inputs into outputs. In organiza-
tions, a production or operations function composed of both social and technological
components generally carries out transformations. The social component consists of peo-
ple and their work relationships, whereas the technological component involves tools,
techniques, and methods of production or service delivery. Organizations have developed
elaborate mechanisms for transforming incoming resources into goods and services.
Banks, for example, transform deposits into mortgage loans and interest income. Schools
attempt to transform students into more educated people. Transformation processes also
can take place at the group and individual levels. For example, research and development
departments can transform the latest scientific advances into new product ideas, and
bank tellers can transform customer requests into valued services.

Outputs are the results of what is transformed by the system and sent to the environ-
ment. Thus, inputs that have been transformed represent outputs that leave the system.
Group health insurance companies receive premiums and medical bills, transform them
through record keeping, and export payments to hospitals and physicians.

Boundaries The idea of boundaries helps to distinguish between organizational sys-
tems and their environments. Boundaries—the borders or limits of the system—help to
protect or buffer the organization’s transformation process from external disruptions;
they also assure that the right inputs enter the organization and the relevant outputs
leave it. An organizational system’s boundaries can vary in permeability, with some sys-
tems, such as a highly cohesive work team on the shop floor, being relatively closed to
the environment and other systems, such as a field sales force, being open to external
forces. Organizational boundaries are determined not only by physical location, but also
can be defined for managerial, technical, or social purposes. For example, to facilitate
managerial control, a department’s boundaries could encompass all members reporting
to a common administrator; to promote a smooth workflow, the department’s bound-
aries might include suppliers, employees, and customers located along a common supply
chain; or to foster cohesion among members, the department’s boundaries could
embrace those members sharing particular social connections and attitudes. Because
organizational boundaries can serve different purposes, OD practitioners may need to
determine early in the OD process if the client system’s boundaries are appropriate for
the intended purpose of the change effort. This may result in redefining or changing the

CHAPTER 5 DIAGNOSING 93

client’s boundaries before diagnosing begins. For example, the boundaries that identify a
particular client system on an organization chart might be well suited for addressing
leadership issues in that unit. However, the client system’s boundaries might have to be
enlarged to include other related departments if the intent of OD is to improve coordi-
nation among interdependent work groups.

Feedback As shown in Figure 5.1, feedback is information regarding the actual per-
formance or the outputs of the system. Not all such information is feedback, however.
Only information used to control the future functioning of the system is considered
feedback. Feedback can be used to maintain the system in a steady state (for example,
keeping an assembly line running at a certain speed) or to help the organization adapt
to changing circumstances. McDonald’s, for example, has strict feedback processes to
ensure that a meal in one outlet is as similar as possible to a meal in any other outlet.
On the other hand, a salesperson in the field may report that sales are not going well
and may insist on some organizational change to improve sales. A market-research
study may lead the marketing department to recommend a change to the organiza-
tion’s advertising campaign.

Alignment How well a system’s different parts and elements align with each other
partly determines its overall effectiveness. This alignment or fit concerns the relation-
ships between the organization and its environment as well as among the components
that comprise the design of the organization. Alignment represents the extent to which
the features and operations of one component support the effectiveness of another com-
ponent. Just as the teeth in the wheels of a watch must mesh perfectly for the watch to
keep time, so do the parts of an organizational system need to mesh for it to be effective.
Diagnosing environmental relationships and the interactions among the various compo-
nents of an organizational system requires taking “a systemic perspective.” This view
suggests that diagnosing often involves the search for misalignments among the various
parts of an organizational system.

5-3b Diagnosing Organizational Systems
When viewed as open systems, organizations can be diagnosed at three levels. The high-
est level is the overall organization and includes the company’s strategy, structure, and
processes. Large organization units, such as divisions, subsidiaries, or strategic business
units, also can be diagnosed at that level. The next lowest level is the group or depart-
ment, which includes group design and methods for structuring interactions among
members, such as norms and work schedules. The lowest level is the individual position
or job. This includes ways in which jobs are designed to elicit required task behaviors.

Diagnosis can occur at all three organizational levels, or it may be limited to issues
occurring at a particular level. The key to effective diagnosis is knowing what to look
for at each level as well as how the levels affect each other.2 For example, diagnosing a
work group requires knowledge of the variables important for group functioning and
how the larger organization design affects the group. In fact, a basic understanding of
organization-level issues is important in almost any diagnosis because they serve as criti-
cal inputs to understanding groups and jobs.

Figure 5.2 presents a comprehensive model for diagnosing these different organizational
systems. For each level, it shows (1) the inputs that the system has to work with, (2) the key
components for designing the system to create, and (3) the system’s outputs. The relation-
ships shown in Figure 5.2 illustrate how each organization level affects the lower levels.

94 PART 2 THE PROCESS OF ORGANIZATION DEVELOPMENT

The environment is the key input to organization design decisions. Organization design is
an input to group design, which in turn serves as an input to job design. These cross-level
relationships emphasize that organizational levels must fit with each other if the organization
is to operate effectively. For example, organization structure must fit with and support group
task design, which in turn must fit with individual-job design.

FIGURE 5.2

Comprehensive Model for Diagnosing Organizational Systems

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CHAPTER 5 DIAGNOSING 95

The following sections of this chapter address diagnosing at each of the three
levels—organization, group, and individual job. General overviews of the dimensions
(and their relationships) that need to be understood at each level are presented. It is
beyond the scope of this chapter to describe in detail the many variables and relation-
ships reported in the extensive literature on organizations. However, specific diagnostic
questions are identified and concrete examples are included as an introduction to this
phase of the planned change process.

5-4 Organization-Level Diagnosis
The organization level of analysis is the broadest systems perspective typically taken in
diagnostic activities. (In some cases, OD is applied to a multiorganization system; those
change processes are discussed in Chapter 20 on Transorganizational Change.) The
model shown in Figure 5.2 is similar to other popular organization-level diagnostic
models. These include Weisbord’s six-box model,3 Nadler and Tushman’s congruency
model,4 Galbraith’s star model,5 and Kotter’s organization dynamics model.6 Figure 5.2
shows that an organization’s design components represent the way the organization
organizes itself within an environment (inputs) to achieve specific results (outputs).7 To
understand how a total organization functions, it is necessary to examine particular
inputs, design components, and the alignment of the two sets of dimensions.

5-4a Inputs
Figure 5.2 shows that three key inputs or environmental types affect the way an organi-
zation is designed. We first describe these environments and then identify environmental
dimensions that influence how organizations respond to external forces.

Environmental Types Three classes of environments influence how organizations
function and achieve results: the general environment, the task environment, and the
enacted environment.8

The general environment consists of all external forces that can directly or indirectly
affect an organization.9 The general environment can include a variety of social, techno-
logical, economic, ecological, and political/regulatory forces. These forces may interact in
unique and unpredictable ways, presenting the organization with challenging threats and
opportunities. Each of the forces also can affect the organization in both direct and indi-
rect ways. For example, an organization may have trouble obtaining raw materials from
a supplier because a national union is grieving the supplier’s employment practices, a
government regulator is bringing a lawsuit against the supplier, or a consumer group is
boycotting the supplier’s products. Thus, parts of the general environment can affect the
organization without having any direct connection to it.

The task environment is another important organization input. Michael Porter
defined an organization’s task environment in terms of industry structure represented
by five forces: supplier power, buyer power, threats of substitutes, threats of entry, and
rivalry among competitors.10 First, an organization must be sensitive to powerful suppli-
ers who can increase prices (and therefore lower profits) or force the organization to
pay more attention to the supplier’s needs than to its own needs. For example, unions
represent powerful suppliers of labor that can affect the costs of any organization within
an industry. Second, a firm must respond to powerful buyers. Powerful retailers, such as
Walmart and Costco, can force Procter & Gamble, Johnson & Johnson, or other

96 PART 2 THE PROCESS OF ORGANIZATION DEVELOPMENT

suppliers to lower prices or deliver their products in particular ways. Third, an organiza-
tion must be sensitive to the threat of new firms entering into competition. Profits in the
restaurant business tend to be low because of the ease of starting a new restaurant.
Fourth, a company must respond to the threat of new products or services that can
replace existing offerings. Ice cream producers must carefully monitor their costs and
prices because it is easy for a consumer to purchase frozen yogurt or other types of
desserts instead. Finally, an organization must be sensitive to rivalry among existing
competitors. If many organizations are competing for the same customers, then the orga-
nization must be responsive to product offerings, costs, and structures if it is to survive
and prosper. Together, these five forces play an important role in determining an orga-
nization’s success, whether it is a manufacturing or service firm, a nonprofit organiza-
tion, or a government agency.

While the general environment and the task environment describe the objective
pressures an organization faces, the organization must first recognize those forces. The
enacted environment consists of organization members’ perception and representation
of the general and task environments. Environments must be perceived before they can
influence decisions about how to respond to them.11 Organization members must
actively observe, register, and make sense of the environment before it can affect their
decisions about what actions to take. Thus, only the enacted environment can affect
which organizational responses are chosen. The general and task environments, however,
influence whether those responses are successful or ineffective. For example, members
may perceive customers as relatively satisfied with their products and may decide to
make only token efforts at developing new products. If those perceptions are wrong
and customers are dissatisfied with existing products, the meager product development
efforts can have disastrous organizational consequences. As a result, an organization’s
enacted environment should accurately reflect its general and task environments if mem-
bers’ decisions and actions are to be effective.12

Environmental Dimensions In addition to understanding what inputs are at work,
the environment can be understood in terms of its rate of change and complexity.13

The rate of change in an organization’s general environment or task environment can
be characterized along a dynamic–static continuum. Dynamic environments change rap-
idly and unpredictably while static environments change more slowly and expectedly.
The complexity of the environment refers to the number of different elements in the gen-
eral and task environments that can significantly affect the organization. Some organiza-
tions, such as software development firms, face dynamic and complex environments. Not
only do technologies, regulations, customers, and suppliers change rapidly, but also all of
them are important to the firm’s survival. On the other hand, other organizations, such
as manufacturers of glass containers, face more stable and less complex environments.

A useful way to understand how the rate of change and complexity of environments
influence organizations is to view environments as information flows that organizations
need to process to discover how to relate to their environments.14 The key dimension of
the environment affecting information processing is information uncertainty, or the
degree to which environmental information is ambiguous. Organizations seek to remove
uncertainty from the environment so that they know how to transact with it. For exam-
ple, organizations may try to discern customer needs through focus groups and surveys
and attempt to understand competitor strategies through press releases, sales force beha-
viors, and knowledge of key personnel. The greater an organization environment’s rate of
change and complexity, the more information uncertainty the organization faces, and
consequently, the more information the organization must process to learn about the

CHAPTER 5 DIAGNOSING 97

environment.15 Thus, dynamic and complex environments pose difficult information-
processing problems for organizations. For example, global competition, technological
change, and financial markets have created highly uncertain environments for many
multinational firms and have severely strained their information-processing capacity.

5-4b Design Components
Figure 5.2 shows that an organization’s design is composed of four components—technology,
structure, management processes, and human resources systems. It is surrounded by an inter-
mediate input—strategy—and an intermediate output—culture—that need to be considered
along with the organization’s design. Effective organizations align their strategy to environ-
mental inputs and then fit the design components to each other to …

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Collecting, Analyzing, and Feeding
Back Diagnostic Information

learning
objectives

Understand the importance of the diagnostic relationship in the
organization development (OD) process.

Describe the methods for collecting diagnostic data.

Understand the primary techniques used to analyze diagnostic data.

Outline the process issues associated with data feedback.

Describe and evaluate the survey feedback intervention.

Organization development is vitally depen-dent on collecting diagnostic informationthat will be shared with the client in jointly
assessing how the organization is functioning and
determining the best change intervention. The qual-
ity of the information gathered and the effective-
ness of the feedback process, therefore, are
critical parts of the OD process. In this chapter,
we discuss several key issues associated with col-
lecting, analyzing, and feeding back diagnostic data
on how an organization or department functions.

Data collection involves gathering information on
specific organizational features, such as the inputs,
design components, and outputs presented in
Chapter 5. The process begins by establishing an
effective relationship between the organization
development (OD) practitioner and those from

whom data will be collected and then choosing data
collection techniques. Four methods can be used to
collect data: questionnaires, interviews, observations,
and unobtrusive measures. Data analysis organizes
and examines the information to make clear the
underlying causes of an organizational problem or
to identify areas for future development. Data
feedback presents diagnostic information to
organizational members so they can understand it
and draw action implications from it. Effective
feedback involves attention to both the content
and the process of data feedback. A popular
technique for feeding back questionnaire data is
called survey feedback. Its central role in many
large-scale OD efforts warrants a special look. The
overall process of data collection, analysis, and
feedback is shown in Figure 6.1.

6-1 The Diagnostic Relationship
In most cases of planned change, OD practitioners play an active role in gathering data
from organization members for diagnostic purposes. For example, they might interview
members of a work team about causes of conflict among members; they might survey

123

employees at a large industrial plant about factors contributing to poor product quality.
Before collecting diagnostic information, practitioners need to establish a relationship
with those who will provide and subsequently use it. Because the nature of that relation-
ship affects the quality and usefulness of the data collected, it is vital that OD practitioners
clarify for organization members who they are, why the data are being collected, what the
data gathering will involve, and how the data will be used.1 That information can help
allay people’s natural fears that the data might be used against them and gain members’
participation and support, which are essential to developing successful interventions.

Establishing the diagnostic relationship between the OD practitioner and relevant
organization members is similar to forming a contract. It is meant to clarify expectations
and to specify the conditions of the relationship. In those cases where members have
been directly involved in the entering and contracting process described in Chapter 4,
the diagnostic contract will typically be part of the initial contracting step. In situations
where data will be collected from members who have not been directly involved in enter-
ing and contracting, however, OD practitioners will need to establish a diagnostic con-
tract as a prelude to diagnosis. The answers to the following questions provide the
substance of the diagnostic contract:2

1. Who am I? The answer to this question introduces the OD practitioner to the orga-
nization, particularly to those members who do not know the consultant and yet will
be asked to provide diagnostic data.

2. Why am I here, and what am I doing? These answers are aimed at defining the
goals of the diagnosis and data-gathering activities. The consultant needs to present
the objectives of the action research process and to describe how the diagnostic
activities fit into the overall developmental strategy.

3. Who do I work for? This answer clarifies who has hired the OD practitioner,
whether it be a manager, a group of managers, or a group of employees and man-
agers. One way to build trust and support for the diagnosis is to have those people
directly involved in establishing the diagnostic contract. Thus, for example, if the

FIGURE 6.1

The Cycle of Data Collection and Feedback

SOURCE: Figure adapted from D. Nadler, Feedback and Organization Development, 1977, Pearson Education, Upper Saddle
River, NJ.

124 PART 2 THE PROCESS OF ORGANIZATION DEVELOPMENT

consultant works for a joint labor–management committee, representatives from
both sides of that group could help the consultant build the proper relationship
with those from whom data will be gathered.

4. What do I want from you, and why? Here, the OD practitioner needs to specify
how much time and effort people will need to give to provide valid data and subse-
quently to work with these data in solving problems. Because some people may not
want to participate in the diagnosis, it is important to specify that such involvement
is voluntary.

5. How will I protect your confidentiality? This answer addresses member concerns
about who will see their responses and in what form. This is especially critical when
employees are asked to provide information about their attitudes or perceptions. Either
OD practitioners can ensure confidentiality or state that full participation in the change
process requires open information sharing. In the first case, employees are frequently
concerned about privacy and the possibility of being punished for their responses. To
alleviate concern and to increase the likelihood of obtaining honest responses, the con-
sultant may need to assure employees of the confidentiality of their information, perhaps
through explicit guarantees of response anonymity. In the second case, full involvement
of the participants in their own diagnosis may be a vital ingredient of the change pro-
cess. If sensitive issues arise, assurances of confidentiality can coopt the OD practitioner
and thwart meaningful diagnosis. The consultant is bound to keep confidential the
issues that are most critical for the group or organization to understand.3 OD practi-
tioners must think carefully about how they want to handle confidentiality issues.

6. Who will have access to the data? Respondents typically want to know whether
they will have access to their data and who else in the organization will have similar
access. The OD practitioner needs to clarify access issues and, in most cases, should
agree to provide respondents with their own results. Indeed, the collaborative nature
of diagnosis means that organization members will work with their own data to dis-
cover causes of problems and to devise relevant interventions.

7. What is in it for you? This answer is aimed at providing organization members
with a clear delineation of the benefits they can expect from the diagnosis. This usu-
ally entails describing the feedback process and how they can use the data to
improve the organization.

8. Can I be trusted? The diagnostic relationship ultimately rests on the trust estab-
lished between the OD practitioner and those providing the data. An open and hon-
est exchange of information depends on such trust, and the practitioner should
provide ample time and face-to-face contact during the contracting process to
build this trust. This requires the consultant to listen actively and discuss openly all
questions raised by participants.

Careful attention to establishing the diagnostic relationship helps to promote the
three goals of data collection.4 The first and most immediate objective is to obtain valid
information about organizational functioning. Building a data collection contract can
ensure that organization members provide honest, reliable, and complete information.

Data collection also can rally energy for constructive organizational change. A good
diagnostic relationship helps organization members start thinking about issues that con-
cern them, and it creates expectations that change is possible. When members trust the
OD practitioner, they are likely to participate in the diagnostic process and to generate
energy and commitment for organizational change.

Finally, data collection helps to develop the collaborative relationship necessary for
effecting organizational change. The diagnostic stage of action research is probably the

CHAPTER 6 COLLECTING, ANALYZING, AND FEEDING BACK DIAGNOSTIC INFORMATION 125

first time that most organization members meet the OD practitioner, and it can be the
basis for building a longer-term relationship. The data collection contract and subsequent
data-gathering and feedback activities provide members with opportunities for seeing the
consultant in action and for knowing him or her personally. If the consultant can show
employees that he or she is trustworthy, is willing to work with them, and is able to help
improve the organization, then the data collection process will contribute to the longer-
term collaborative relationship so necessary for carrying out organizational changes.

6-2 Collecting Data
The four major techniques for gathering diagnostic data are questionnaires, interviews,
observations, and unobtrusive measures. Table 6.1 briefly compares the methods and
lists their major advantages and problems. No single method can fully measure the
kinds of diagnostic variables important to OD because each has certain strengths and
weaknesses.5 For example, perceptual measures, such as questionnaires and surveys, are
open to self-report biases, such as respondents’ tendency to give socially desirable
answers rather than honest opinions. Observations, on the other hand, are susceptible
to observer biases, such as seeing what one wants to see rather than what is really
there. Because of the biases inherent in any data collection method, more than one
method should be used when collecting diagnostic data. If data from the different meth-
ods are compared and found to be consistent, it is likely that the variables are being

TABLE 6.1

Strengths and Weaknesses of Different Data Collection Methods

Data Collection
Method Primary Strengths Primary Weaknesses

Surveys and
questionnaires

Member beliefs and attitudes can be
quantified easily

Can gather large amount of data from
many people

Inexpensive on a per-person basis

Relatively impersonal
Mechanistic and rigid—assumes all

the right questions are asked
Easy to “over interpret” the data
Response bias

Interviews Very flexible—can adapt to interviewee
and data collection subject

Data is “rich”
Interview process builds rapport and

empathy

Relatively expensive
Interviewer responses can be biased
Difficult to code and interpret
Self-report bias

Observations Collects data on actual behavior, rather
than reports of behavior

Real time, not retrospective
Adaptive and objective

Difficult to code and interpret
Sampling may be inconsistent
Observer bias and reliability can be

questioned
Can be expensive

Unobtrusive
measures

No response bias
High face validity
Easily quantified

Privacy, access, and retrieval difficulties
Validity concerns
Difficult to code and interpret

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126 PART 2 THE PROCESS OF ORGANIZATION DEVELOPMENT

measured validly. For example, questionnaire measures of job discretion could be supple-
mented with observations of the number and kinds of decisions employees are making. If
the two kinds of data support each other, job discretion is probably being assessed accu-
rately. If the two kinds of data conflict, the validity of the measures should be examined
further—perhaps by using a third method, such as interviews.

6-2a Questionnaires
One of the most efficient ways to collect data is through questionnaires. Because they typi-
cally contain fixed-response queries about various features of an organization, these mea-
sures can be administered to large numbers of people simultaneously. Also, they can be
analyzed quickly, especially with the use of computers, thus permitting quantitative com-
parison and evaluation. As a result, data can easily be fed back to employees. Numerous
basic resource books on survey methodology and questionnaire development are available.6

Questionnaires can vary in scope, some measuring selected aspects of organizations
and others assessing more comprehensive organizational characteristics. They also can
vary in the extent to which they are either standardized or tailored to a specific organi-
zation. Standardized instruments generally are based on an explicit model of organiza-
tion, group, or individual effectiveness and contain a predetermined set of questions
that have been developed and refined over time. For example, Table 6.2 presents a stan-
dardized questionnaire for measuring the job-design dimensions identified in Chapter 5:
skill variety, task identity, task significance, autonomy, and feedback about results. The
questionnaire includes three items or questions for each dimension, and a total score
for each job dimension is computed simply by adding the responses for the three rele-
vant items and arriving at a total score from 3 (low) to 21 (high). The questionnaire has
wide applicability. It has been used in a variety of organizations with employees in both
blue-collar and white-collar jobs.

Several research organizations have been highly instrumental in developing and
refining surveys. The Institute for Social Research at the University of Michigan (http://
home.isr.umich.edu) and the Center for Effective Organizations at the University of
Southern California (http://ceo.usc.edu) are two prominent examples. Two of the Insti-
tute’s most popular measures of organizational dimensions are the Survey of Organiza-
tions and the Michigan Organizational Assessment Questionnaire. Few other
instruments are supported by such substantial reliability and validity data.7 Other exam-
ples of packaged instruments include Weisbord’s Organizational Diagnostic Question-
naire, Dyer’s Team Development Survey, Cameron and Quinn’s Organizational Culture
Assessment Instrument, and Hackman and Oldham’s Job Diagnostic Survey.8 In fact, so
many questionnaires are available that rarely would an organization have to create a
totally new one. However, because every organization has unique problems and special
jargon for referring to them, almost any standardized instrument will need to have
organization-specific additions, modifications, or omissions.

On the other hand, customized questionnaires are tailored to the needs of a particu-
lar organization. Typically, they include questions composed by OD practitioners or
organization members, receive limited use, and do not undergo longer-term develop-
ment. They can be combined with standardized instruments to provide valid and reliable
data focused toward the particular issues facing an organization.

Questionnaires, however, have a number of drawbacks that need to be taken into account
in choosing whether to employ them for data collection. First, responses are limited to the
questions asked in the instrument. They provide little opportunity to probe for additional
data or to ask for points of clarification. Second, questionnaires tend to be impersonal, and

CHAPTER 6 COLLECTING, ANALYZING, AND FEEDING BACK DIAGNOSTIC INFORMATION 127

TABLE 6.2

Job-Design Questionnaire

Here are some statements about your job. How much do you agree or disagree with each?

My Job:
Strongly
Disagree Disagree

Slightly
Disagree Undecided

Slightly
Agree Agree

Strongly
Agree

1. provides much variety … [1] [2] [3] [4] [5] [6] [7]
2. permits me to be left on my

own to do my own work …
[1] [2] [3] [4] [5] [6] [7]

3. is arranged so that I often have
the opportunity to see jobs or
projects through to completion …

[1] [2] [3] [4] [5] [6] [7]

4. provides feedback on how well I
am doing as I am working …

[1] [2] [3] [4] [5] [6] [7]

5. is relatively significant in our
organization …

[1] [2] [3] [4] [5] [6] [7]

6. gives me considerable opportunity
for independence and freedom in
how I do my work …

[1] [2] [3] [4] [5] [6] [7]

7. gives me the opportunity to do a
number of different things …

[1] [2] [3] [4] [5] [6] [7]

8. provides me an opportunity to find
out how well I am doing …

[1] [2] [3] [4] [5] [6] [7]

9. is very significant or important in
the broader scheme of things …

[1] [2] [3] [4] [5] [6] [7]

10. provides an opportunity for
independent thought and action …

[1] [2] [3] [4] [5] [6] [7]

11. provides me with a great deal of
variety at work …

[1] [2] [3] [4] [5] [6] [7]

12. is arranged so that I have the
opportunity to complete the work
I start …

[1] [2] [3] [4] [5] [6] [7]

13. provides me with the feeling that I
know whether I am performing
well or poorly …

[1] [2] [3] [4] [5] [6] [7]

14. is arranged so that I have
the chance to do a job from the
beginning to the end (i.e., a
chance to do the whole job) …

[1] [2] [3] [4] [5] [6] [7]

15. is one where a lot of other people
can be affected by how well the
work gets done …

[1] [2] [3] [4] [5] [6] [7]

Scoring:
Skill variety …………………………………………………………………………………………………………. questions 1, 7, 11
Task identity ……………………………………………………………………………………………………….. questions 3, 12, 14
Task significance ………………………………………………………………………………………………… questions 5, 9, 15
Autonomy ………………………………………………………………………………………………………….. questions 2, 6, 10
Feedback about results ……………………………………………………………………………………….. questions 4, 8, 13

SOURCE: Reproduced by permission of E. Lawler, S. Mohrman, and T. Cummings, Center for Effective Organizations, University
of Southern California.

128 PART 2 THE PROCESS OF ORGANIZATION DEVELOPMENT

employees may not be willing to provide honest answers. Third, questionnaires often elicit
response biases, such as the tendency to answer questions in a socially acceptable manner.
This makes it difficult to draw valid conclusions from employees’ self-reports.

6-2b Interviews
A second important measurement technique is the individual or group interview. Inter-
views are probably the most widely used technique for collecting data in OD. They permit
the interviewer to ask the respondent direct questions. Further probing and clarification is,
therefore, possible as the interview proceeds. This flexibility is invaluable for gaining pri-
vate views and feelings about the organization and for exploring new issues that emerge
during the interview.

Interviews may be highly structured—resembling questionnaires—or highly
unstructured—starting with general questions that allow the respondent to lead the way.
Structured interviews typically derive from a conceptual model of organization function-
ing; the model guides the types of questions that are asked. For example, a structured
interview based on the organization-level design components identified in Chapter 5
would ask managers specific questions about strategy, technology, organization structure,
management processes, human resources systems, and organization culture.

Unstructured interviews are more general and include the following broad questions
about organizational functioning:

• What are the major goals or objectives of the organization or department?
• How does the organization currently perform with respect to these purposes?
• What are the strengths and weaknesses of the organization or department?
• What barriers stand in the way of good performance?

Although interviewing typically involves one-to-one interaction between an OD
practitioner and an employee, it can be carried out in a group context. Group interviews
save time and allow people to build on others’ responses. A major drawback, however, is
that group settings may inhibit some people from responding freely.

A popular type of group interview is the focus group or sensing meeting.9 These
are unstructured meetings conducted by a manager or a consultant. A small group
of 10 to 15 employees is selected to represent a cross section of functional areas
and hierarchical levels or a homogeneous grouping, such as minorities or engi-
neers. Group discussion is frequently started by asking general questions about
organizational features and functioning, an OD intervention’s progress, or current
performance. Group members are then encouraged to discuss their answers more
fully. Consequently, focus groups and sensing meetings are an economical way to
obtain interview data and are especially effective in understanding particular issues
in greater depth. The richness and validity of the information gathered will depend
on the extent to which the manager or the OD practitioner develops a trusting
relationship with the group and listens to member opinions.

Another popular unstructured group interview involves assessing the current
state of an intact work group. The manager or the consultant generally directs a
question to the group, calling its attention to some part of group functioning. For
example, group members may be asked how they feel the group is progressing on
its stated task. The group might respond and then come up with its own series of
questions about barriers to task performance. This unstructured interview is a fast,
simple way to collect data about group behavior. It enables members to discuss
issues of immediate concern and to engage actively in the questioning and

CHAPTER 6 COLLECTING, ANALYZING, AND FEEDING BACK DIAGNOSTIC INFORMATION 129

answering process. This technique is limited, however, to relatively small groups
and to settings where there is trust among employees and managers and a commit-
ment to assessing group processes.

Interviews are an effective method for collecting data in OD. They are adaptive,
allowing the interviewer to modify questions and to probe emergent issues during
the interview process. They also permit the interviewer to develop an empathetic
relationship with employees, frequently resulting in frank disclosure of pertinent
information.

A major drawback of interviews is the amount of time required to conduct and ana-
lyze them. Interviews can consume a great deal of time, especially if interviewers take full
advantage of the opportunity to hear respondents out and change their questions accord-
ingly. Personal biases also can distort the data. Like questionnaires, interviews are subject
to the self-report biases of respondents and, perhaps more important, to the biases of the
interviewer. For example, the nature of the questions and the interactions between the
interviewer and the respondent may discourage or encourage certain kinds of responses.
These problems suggest that interviewing takes considerable skill to gather valid data.
Interviewers must be able to understand their own biases, to listen and establish empathy
with respondents, and to change questions to pursue issues that develop during the
course of the interview.

6-2c Observations
One of the more direct ways of collecting data is simply to observe organizational beha-
viors in their functional settings. The OD practitioner may do this by walking casually
through a work area and looking around or by simply counting the occurrences of
specific kinds of behaviors (e.g., the number of times a phone call is answered after
three rings in a service department). Observation can range from complete participant
observation, in which the OD practitioner becomes a member of the group under
study, to more detached observation, in which the observer is clearly not part of the
group or situation itself and may use film, videotape, and other methods to record
behaviors.

Observations have a number of advantages. They are free of the biases inher-
ent in self-report data. They put the OD practitioner directly in touch with the
behaviors in question, without having to rely on others’ perceptions. Observations
also involve real-time data, describing behavior occurring in the present rather
than the past. This avoids the distortions that invariably arise when people are
asked to recollect their behaviors. Finally, observations are adaptive in that the
consultant can modify what he or she chooses to observe, depending on the
circumstances.

Among the problems with observations are difficulties interpreting the meaning
underlying the observations. OD practitioners may need to devise a coding scheme to
make sense out of observations, and this can be expensive, take time, and introduce
biases into the data. When the observer is the data collection instrument, the data can
be biased and subjective unless the observer is trained and skilled in knowing what to
look for; how, where, and when to observe; and how to record data systematically.
Another problem concerns sampling: Observers not only must decide which people to
observe, but they also must choose the time periods, territory, and events in which to

130 PART 2 THE PROCESS OF ORGANIZATION DEVELOPMENT

make those observations. Failure to attend to these sampling issues can result in highly
biased samples of observational data.

When used correctly, observations provide insightful data about organization and
group functioning, intervention success, and performance. For example, observations
are particularly helpful in diagnosing the interpersonal relations of members of work
groups. As discussed in Chapter 5, interpersonal relationships are a key component of
work groups; observing member interactions in a group setting can provide direct infor-
mation about the nature of those relationships.

6-2d Unobtrusive Measures
Unobtrusive data are not collected directly from respondents but from secondary
sources, such as company records and archives. These data are generally available
in organizations and include records of absenteeism or tardiness; grievances; quan-
tity and quality of production or service; financial performance; meeting minutes;
and correspondence with key customers, suppliers, or governmental agencies.

Unobtrusive measures are especially helpful in diagnosing the organization,
group, and individual outputs presented in Chapter 5. At the organization level,
for example, market share and return on investment usually can be obtained from
company reports. Similarly, organizations typically measure the quantity and qual-
ity of the outputs of work groups and individual employees. Unobtrusive measures
also can help to diagnose organization-level design components—structure, man-
agement processes, and human resources systems. A company’s organization
chart, for example, can provide useful information about organization structure.
Information about management processes usually can be obtained by examining
the firm’s management information system, operating procedures, and accounting
practices. Data about human resources systems often are included in a company’s
employee manual.

Unobtrusive measures provide a relatively objective view of organizational function-
ing. They are free from respondent and consultant biases and are perceived as being
“real” by many organization members. Moreover, unobtrusive measures tend to be quan-
tified and reported at periodic intervals, permitting statistical analysis of behaviors occur-
ring over time. Examining monthly absenteeism rates, for example, might reveal trends
in employee withdrawal behavior.

The major problems with unobtrusive measures occur in collecting such infor-
mation and drawing valid conclusions from it. Company records may not include
data in a form that is usable by the OD practitioner. If, for example, individual
performance data are needed, the consultant may find that many firms only record
production information at the group or department level. Unobtrusive data also
may have their own built-in biases. Changes in accounting procedures and in
methods of recording data are common in organizations, and such changes can
affect company records independently of what is actually happening in the organi-
zation. For example, observed changes in productivity over time might be caused
by modifications in methods of recording production rather than by actual
changes in organizational functioning.

Despite these drawbacks, unobtrusive data serve as a valuable adjunct to other
diagnostic measures, such as interviews and questionnaires. Archival data can be

CHAPTER 6 COLLECTING, ANALYZING, AND FEEDING BACK DIAGNOSTIC INFORMATION 131

used in preliminary diagnosis, identifying those organizational units with absentee-
ism, grievance, or production problems. Then, interviews might be conducted or
observations made in those units to discover the underlying causes of the
problems. Conversely, unobtrusive data can be used to cross-check other forms of
information. For example, if questionnaires reveal that employees in a department
are dissatisfied with their jobs, company records might show whether …