Nadler Tushman Congruence Model Term Paper

Input Diagnosis

The Nadler-Tushman Congruence Model evolved out of open systems theory as a tool for organizational diagnosis (Falletta, 2005), and is arguably the most complete tool available, in that while complex it has the ability to capture the subtlety and nuance real world corporations. Performance in this model is dictated by strategy, culture, structure, work and people. The key is that these different variables should all be aligned towards a single, unified strategy. If that is the case, the organization will have a higher level of performance, because the different organizational inputs are complementing each other. Where there is misalignment, resources are not working in a synergistic way, and the result is a lot less effective. (MindTools, 2014).

The organizational diagnosis under the congruence model requires the user to have a high level of knowledge about the organization. A tool has been developed, known as the diagnostic funnel, that assists with this. The diagnostic funnel basically breaks down the information gathering function into constituent parts, based on scientific inquiry: data collection, data analysis, unique diagnostic paradigm and diagnostic feedback (Gregory et al., 2007). This technique will be applied to Whole Foods, in an attempt to understand the company's inputs, which will then be run through the framework of the Nadler Tushman Congruence Model.

Strategy

The point of the congruence model is that the inputs need to align with the strategy. Whole Foods operates in the grocery business. The company operates grocery stores, mainly in the U.S. But also Canada and the UK. Whole Foods has differentiated itself in the marketplace with premium positioning. The company has focused on organic and healthy foods, and indeed one of the company's most important target markets is among people who are specifically conscious about certain dietary restrictions, as Whole Foods stocks the niche foods that such people will eat.

Whole Foods has other target markets as well. Knowing that their niche foods were already going to be priced at a premium, as were the organics that the company was making a core part of its business, Whole Foods has added many high-end food products. They carry premium prices, but they also have premium quality. The company thus seeks out wealthier, educated clientele, and foodies, who are customers with the means to pay and with the desire to buy. This is what is known as a differentiated strategy (QuickMBA, 2010). The differentiate strategy not only requires the company to offer premium foods, but to deliver a premium shopping experience, including everything from service to store design to store offerings. Whole Foods has cultivated this premium positioning as a means of differentiating itself in a competitive grocery business, and has been able to grow by offering consumers a supermarket level of selection of niche goods, but with an aspirational shopping experience.

Environment

The first of the key inputs is the environment. The macroenvironment contains a number of different factors, and sometimes the PESTLE model is used to work through them. The economic environment can affect Whole Foods, because consumers have the ability to trade down when they are faced with financial hardship. Economic hard numbers are available, published by the Bureau of Economic Analysis and the Bureau of Labor Statistics. In general, they show a recent trend in the last couple of quarters towards strong GDP increases, and a five-year declining trend in unemployment. Other economic metrics like the stock market, and inflation rates, also point to a very healthy economy going forward -- not perfect -- but supportive of a premium grocery store. During the last recession, Whole Foods' customers were actually not affected as much as customers of some other retailers, so that Whole Foods was able to weather that economic storm.

The social environment has been a key driver of success for Whole Foods. The company has benefitted from increases knowledge of and demand for niche products. Whether it is organic foods, vegan foods, gluten-free, Whole Foods caters to all dietary needs and niches. As such, the rise of interest in these different diets and issues is a social trend that has been well-aligned with Whole Foods' strategy. The political environment has generally been favorable, but it is worth noting that the company has worked hard to maintain alignment with political forces, even striking a controversial deal with big agribusiness over GMO labeling (Benson, 2013).

Resources

Resources are a critical component of Whole Foods' success. The company has ensured that it has the normal prerequisite resources for a success large retail business -- a strong brand, ample access to capital for expansion, a solid real estate portfolio and a strong management team. Whole Foods has also specifically cultivated a staff that is capable of learning the job, and offering superior customer service to what most competitors are offering. Whole Foods has built a management team that has proven adept at implementing its strategy, as its financial and market success attests. In general, the company's resources are well-aligned with its strategy.

The organizational structure is also aligned closely with the strategy. The company uses a geographical structure that allows it to cater the product mix, the procurement, and the distribution functions at the regional level, rather than national. While there are many national products, Whole Foods does make a point to champion regional and local products as well, something facilitated by this structure. A regional structure also allows for better oversight of individual stores as well.

History

Whole Foods is a relatively young company, having been formed in 1980, and with most stores having been opened or acquired in the past fifteen years. Despite being a young company, Whole Foods has worked hard to create a lore around its history, and especially around its mission. There may be a sense that the history is now for the company, but that is deliberate and not just related to the fact that this is a young company. The company actively cultivates that view to ensure that employees are thinking about the present and how to build for a better future.

Strategic Fit

With a differentiated strategy, Whole Foods needs good real estate where its customers live, and it also needs to have a great staff. The geographical structure allows for a finer level of oversight, something that helps with the staffing function. The company has also been able to draw upon the history that it wants to create. By conveying to its employees that they are in the process of creating their own history, the company has been able to build a strong and positive employer brand in a short period of time to say nothing of the brand it has built with consumers. The high level of consistency of the Whole Foods experience has also helped with this -- Whole Foods means the same thing anywhere, and that helps create the sort of strong brand associations that otherwise would only come with a rich corporate history.

The company's strategy is highly congruent with external factors, in terms of the social values that have created a much higher interest in eating well, as well as interest in niche products and diets that have helped to attract new customers to the stores consistently. Whole Foods has also been the beneficiary of a strong economy for much of its existence, to the point where it was strong enough that the recession in 2009 did not harm it that much, and it rebounded quickly. Part of the reason for this is that Whole Foods caters to a target market less effected by economic circumstances.

There is high alignment with organizational resources as well. Whole Foods has had a consistent strategy for its existence, and that has allowed it to build its business around that strategy. The resources it has cultivated in its 35-year existence are geared to executing this particular strategy on a large scale.

The company's history has high alignment is with the history that the company is trying to create. This history is aligned with strategy, but the fact that this is a young company also plays into the strategy. There has never really been any attempt before Whole Foods at creating a nationwide chain of luxury supermarkets, so there is a transformative element to what Whole Foods is doing that aligns well with the premium nature of the store - they trade on being unique in part because what they're doing is unique.

References

Benson, J. (2013) Suspicious motives: is big food behind Whole Foods' GMO labeling decision? Natural News. Retrieved December 8, 2014 from http://www.naturalnews.com/039707_Whole_Foods_GMO_labeling_big_food.html

Falletta, S. (2005). Organizational diagnostic models: A review and synthesis. LeadershipSphere. Retrieved December 8, 2014 from https://brainmass.com/file/229019/Orgmodels.pdf

Gregory, B., Armenakis, A., Moates, K., Albritton, M. & Harris, S. (2007). Achieving scientific rigor in organizational diagnosis: An application of the diagnostic funnel. Consulting Psychology Journal: Practice and Research. Vol. 59 (2) 79-90.

MindTools. (2014). The congruence model. MindTools.com. Retrieved December 8, 2014 from http://www.mindtools.com/pages/article/newSTR_95.htm

QuickMBA.(2010). Porter's generic strategies. QuickMBA. Retrieved December 8, 2014 from http://www.quickmba.com/strategy/generic.shtml