Organizational Diagnosis is the use of conceptual models and applied research methods to assess an organization's current state and discover ways to solve problems, meet challenges, or enhance performance.
“Organizational Diagnosis is an effective way of bridging the gap between the current performance and desired performance of an organization.”
Organizational diagnosis is a creative method for getting to know an organization at all levels- from the surface levels to the deepest hidden parts that aren’t visible to the eye. Performing organizational diagnosis is not so far off from a doctor trying to diagnose their patients. Some doctors diagnose differently by focusing on nutrition, food, and natural remedies, whereas others diagnose by using chemical medications, or even by trying a remedy, seeing whether it has positive effects, and then trying something new. This is very similar to what we have learned to do in the business sense to organizations. Typically, organizational diagnoses can be done when leadership has identified issues that they would like to fix, or when things are going well within an organization but they want to continue to further improve their performance. In either situation there exist two “major sets of problems that all groups, no matter what their size, must deal with:
(1) Survival, growth, and adaptation in their environment; and
(2) Internal integration that permits daily functioning and the ability to adapt and learn” (Schein, p. 18, 2010). 
Organizational Analysis as the First Step to Diagnosis
Analyzing the organization, in terms of its components and their functioning is the first step in a comprehensive diagnosis. Every organization can be conceived as consisting of various subsystems or parts. Effective functioning of each of these parts is essential for effective functioning of the organization. In addition the coordinated functioning of these subsystems also contributes to organizational effectiveness. For making organizational diagnosis the strengths, weaknesses and potential of each of the subsystems need to be examined. In addition the various processes that contribute to the effective functioning of the organization as a whole need to be examined. As emphasized by Bechard “The development of a strategy for systematic improvement of an organization demands an examination of the present state of things. Such an analysis usually looks at two broad areas. One is a diagnosis of the various subsystems that make up the total organization. These subsystems may be natural “teams” such as top management, the production department, or a research group; or they may be levels such as top management, middle management or the work force. “The second area of diagnosis is the organization processes that are occurring. These include decision-making processes, communication pattern and styles, relationships between interfacing groups, the management of conflict, the setting of goals and planning methods”. Thus organizational analysis may either focus on the structural aspects (subsystems, various components etc.) or on processes.
Organizational Diagnosis - The Diagnostic Cycle
In recent years organizational diagnosis has evolved from a technique used as part of the organizational development process to a major technique in its own right. Effective diagnosis should be an organic process in that as you start to look at an organization and its structures and what it does and does not do, change starts, as change progresses so does the ‘now’ performance and as such the diagnosis process also needs to re-start. The purpose of a diagnosis is to identify problems facing the organization and to determine their causes so that management can plan solutions. An organizational diagnosis process is a powerful consciousness-raising activity in its own right, its main usefulness lies in the action that it induces. The major steps of a diagnostic cycle include:
- Goal setting
- Data gathering
- Analysis/ Interpretation
- Action Planning
- Monitoring/ Measure
Keys to Successful Diagnosis
Diagnosis can succeed only if it provides its clients with data, analyses, and recommendations that are useful and valid. To meet these dual standards, the diagnostic practitioner must fill the requirements of three key facets of diagnosis— process, modeling, and methods—and needs to ensure good alignments among all three.