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    Organizational Outputs at Nutrisystem Inc.

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    Outputs are not complicated to understand. At the Organization level, they are the products and services that are provided to customers. (It can also be the value provided to owners, but we are not going to consider this here.) The primary way that a company measures its performance is financially: Sales, Profit, Return on Sales (ROS), Return on Assets; and also via market share.

    The organization is made up of various groups. One way to look at groups is by functional area: marketing, operations, purchasing, etc. Another way, if the company is large, is by its various divisions or by its product groupings. Here it becomes a little more complicated to measure performance, but it is possible by defining the goals and objectives of each group.

    The bottom level of the organization is the individual. Each person has a job description and is responsible for specific outputs for that job. The main method of performance measurement here is individual productivity: Outputs / Inputs. e.g. widgets / hour, or reports / day. This is more difficult to quantify and for a specific company is difficult to obtain, since this data is not generally reported. Sometimes you can infer some individual measures, for example, by dividing Profit by the number of total employees, to get a measure of overall profitability per person.

    Research your company and find the relevant data for this assignment in terms of its outputs. One good source of information here is the Annual Report or the annual 10k report. But you may have to take some time to sift through these.


    Nadler, D.A. & Tushman, M.L. (1980) A model for diagnosing organizational behavior. Organizational Dynamics, 9(2), 35-51.

    For Case 3, you should focus on the Outputs aspect of this model. Read pages 43 to 51.


    Make a Case for one of the following possible statements about your organization: The interaction of the outputs at NUTRISYSTEM Inc from the three different levels of the organization, interact to generate [high, medium, or low] performance of the overall organization [choose one of the three possible performances.]

    Using the Nadler-Tushman Congruence Model, conduct an analysis of NUTRISYSTEM Inc outputs. Remember that outputs exist at the individual, group and organizational levels and that there are often differences between the output goals an organization specifies in its strategic plans and those that are actually achieved.


    Case Expectations: First you need to identify the outputs of the organization at each of three levels. Also identify the goals that it has set and its current performance. Include the following:

    Outputs at the organizational level are the products and/or services that it provides to its customers. What are these and how does the company categorize them? How does it measure its organizational performance (e.g., sales, net profit, return on sales, return on assets, market share, customer satisfaction, etc.) Provide some specific performance data.
    What are some ways the company identifies groups? For example, are there geographic groups (or divisions), functional groups, etc. What are the outputs of these groups? How does it (or how might it) measure performance of these groups?
    What are some of the key individual functions, and what are their outputs? How do these outputs contribute to the group outputs? How do they measure individual performance?
    Evaluate how the outputs at the different levels interact with each other. Determine if you think the overall performance of the company is high, medium, or low. Then choose your proposition and Make a Case.

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    Solution Preview

    Nutrisystem, Inc. is a weight loss organization that has helped many members lose
    weight successfully, for over three decades. It became a publicly traded company in 1999
    (Nutrisystem.com, 2011). The organization has shifted to an online only presence and
    contracts Exclusively with QVC network, to promote its weight loss products. The
    organization has been relatively successful in the past, with shares as high as $73 in 2006.
    However, for the past few years, the organization has been losing market share to Weight
    Watchers. Early this year, "NutriSystem Inc. disclosed, among other things, that its revenue
    fell from $105.5 million to $87.9 million or almost 17% in the fourth quarter, in 2010"
    (Shareholder Foundation, 2011). By March, 2011, shares had fallen to $13.81. In addition,
    executives have been under investigation recently, due to reports of excessive compensation
    with respect to the company's earnings. Though the company remains competitive, it is
    currently struggling to maintain market share. The interaction of the outputs at Nutrisystem
    Inc from the three different levels of the organization, interact to generate medium
    performance of the overall organization.
    Outputs for Nutrisystem Inc. are investigated at the organizational, group and
    individual levels, when the Nadler Tushman Congruence model is applied. Outputs at the
    organizational level include programs for consumers, profits and corporate image. Currently,
    the organization offers a product that includes more than simply weight loss food products.
    The total package includes personalized professional counseling and support. The
    Congruence model involves aligning inputs with outputs. Therefore, the culture of the
    organization is important to achieve strategic goals. The organization understands what
    today's weight loss consumers need, in terms of food programs that address health issues.
    The company uses health trends to determine the various food packages it offers. However,
    Weight Watchers has recently added new menu offerings and is increasing market share.
    Nutrisystem must consider more than current health issues, when developing new products.
    It must consider food preferences that consumers currently want. Understanding what
    consumers want and expect in weight loss menus will help the organization reach or exceed
    goals for ...

    Solution Summary

    The solution discusses organizational outputs at Nutrisystem Inc.