Going into their final Premiership game on Saturday, Sale cannot finish higher than their current 10th place after finishing sixth last season.
The Sharks also won just once in the Champions Cup and had a 10-game losing streak during the campaign.
"I'm disappointed with my running of the place over the last seven or eight months," said Diamond.
Speaking to BBC Radio Manchester's Rugby Union Extra, he continued: "I've sat back a little bit and let players talk and that is not the way we do things and we've worked that one out.
"Players that came in didn't gel as soon as we would have expected them to and I'm to blame for a lot of that, not doing as much homework as I should have done.
"If the skill set is letting you down through poor selection from me, then I have to take quite a lot responsibility as a whole."
Sale's co-owners Simon Orange and Ged Mason wrote to season ticket holders recently explaining their intention to try to purchase their AJ Bell Stadium home.
There have been problems with access in and out of the ground in Barton, which Sale share with top-flight rugby league outfit Salford Red Devils, since it opened in 2012.
"We're in negotiations with the stadium management company and we're waiting for answers to our offers," added Diamond.
"Hopefully they're positive talks at the moment and if they don't continue to be positive then I don't think we have any other option but to look at our other options.
"For confidentiality, those options we can't really discuss at the minute, but there are three different sites on the table."
The start of the season saw number eight Josh Beaumont take over the captaincy of the club after Dan Braid's retirement.
Beaumont, who has spent time in Eddie Jones' wider England squad, suffered a shoulder injury midway through the season and vice-captain Will Addison remained skipper when he returned.
"I think there will be a change," said Diamond.
"I think Josh has had a good year and played pretty well under duress with a couple of niggling injuries.
"We forget that he's a young lad with a big name and expectations are high but he is capable of fulfilling those expectations.
"Maybe we could have helped him more in certain areas and we're all guilty of expectation. I think he'll come through it as a far better player, decision maker and tougher mentally."
Steve Diamond was speaking to the final Rugby Union Extra on BBC Radio Manchester on Thursday, 4 May at 19:00 BST.
Sale director of rugby Steve Diamond says he takes some responsibility for their performances this season.