Designing Organizations

Prepared by Humaira iftikhar

OBJECTIVES

 At the end of this session students will be able to

 Describe the nature of organization in health care setting
 Describe the management theories
 Describe the organization structure and its types
 Describe the organization culture.
ORGANIZATIONS

 An organization is a collection of people working together under a defined structure to

achieve predetermined outcomes using financial, human,and material resources.

 Two or more people working together to achieve something.

 Shared
-vision
-misson
-values
 Traditional Organizational Theories

 Classical Theory
 Humanistic Theory
 System Theory
 Contingency Theory
 Choas Theory
 Complexity Theory
1.Classical Theory

 The classical approach to Organizations focuses almost on the structure of the formal
organization.
 The main premise is efficiency through design.

 One designs an organization by subdividing work, specifying tasks to be done,and only

then fitting people into the plan.
Elements of classical Theory

 Classical Theory is built around four elements:

1. Division and specialization of labor
2. Organizational structure
3. Chain of commands
4. Span of control
Division and specialization of labor

 Dividing the work reduces the number of tasks, increase efficiency & improve the Organization’s
product.
 Economically beneficial.

Organizational structure
Organizational structure describe the arrangement of the work group.
 It can be formal or informal
 May be centralized or decentralized
 Varies from simple to complex
Chain of command

The chain of command is the hierarchy of authority and responsibility within the
Organization.
 Athourity:
 The right or power of supervisor to direct activity.

 Responsibility:
 The obligation to attain objectives or perform certain objectives.
Cont……..

 Types of authority are:

 Line Authority
super-ordinate
L
Subordinate
The relationship among the chief nurse executive,nurse manager,and staff nurse.
 Staff authority
Advisory or support
The relationship between acute care nurse practitioner and nurse manager.
Span of control

 Reffers to number of staff under one manager.

 Tall Organizational structure:

Authority is centralized with many small groups.(complex organization)

 Flat Organizational structure:

Authority is decentralized,with several managers supervising large work groups.(Less complex
Organization)
2.Humanistic Theory

An approach identified with human relations movement.

Amajor assumption of this theory is that
 People desire social relationships
 Respond to group pressures
 Search for personal fulfillment
This theory was developed as a result of a series of studies conducted by the Western Electric
Company as its Hawthorne Plant in Chicago.
Hawthorne Effect: The tendency for people to perform as expected because of special
attention.
 3.System Theory

This Theory view productivity as a function of the interaction among;

 Structre
 People
 Technology
 Environment
System can be closed or open.

 Closed systems are self-contained

 An open system interacts both internally and
with its environment
4.Contingency Theory

 This Theory suggest that Organizational performance can be enhanced by matching an

organization’s structure to its environment.

 The environment of healthcare Organization include patients,third party payers and

suppliers of physical facilities, personnel, equipment and pharmaceuticals.
5.Chaos Theory

 Chaos theory suggest that drive to create permanent Organizational structure doomed to fail.

 The Organizational structure should be based on creative and flexible format that can be quickly
adjusted and changed as the Organization’s realities shift.
 BECAUSE
Organizations are living, self-organizing systems that are complex and self-adaptive

 AND
 The life cycle of an organization is fully dependent on its adaptability and response to changes in its
environment.
6.Complexity Theory

 Complexity theory originated when scientist noted that random events interfered with
expectations

 Patient’s condition change in instant; necessary staff are not available; equipment fails,all
without warning.

 Managing in such circumstances requires considering every aspect of the system as it

interacts and adapts to change.
TRADITIONAL ORGANIZATIONAL STRUCTURE

Various Organizational structure have been utilized over time;

 Functional structure
 Hybrid structure
 Matrix structure
 Parallel structure
1.Functional Structure

In functional Structure employees are grouped in departments by speciality,

 Similar task being performed by the same group
 Similar groups operating out of the same department,
 Similar departments reporting to the same manager.
Cont…….

 Weaknesses;
Functional Structure have several weaknesses;
 Coordination across functions is poor

 Decision making in centralized so overloaded senior manager

 Respond to external environment are slow.

Functional units are uncommon in today’s rapidly changing healthcare environment.

2.Hybrid Structure

When an organization grows ,it topically organizes both self-contained units and functional
units; the result is a hybrid Organization.
It provide simultaneous:
 Coordination within product divisions,
 Can improve association between Corporate and service or product goals,
 Foster adaptation to the environment while still maintaining efficiency.

Weaknesses:
Conflict between top administration and managers.
3.Matrix Structure

 Matrix Structure is unique and complex; it integrates both product and functional
Structures into one overlapping Structure.
 Different manager are responsible for function and product.
 Matrix is appropriate in a highly uncertain environment that changes frequently.
Weaknesses:
 Dual authority is frustrating and confusing .
 Excellent interpersonal skills are required from the managers .
 A matrix Organization is time consuming due to frequent meetings.
 4.Parallel Structure

 It is the result of complex relationship that exist between the formal authority of the
health care Organization and the authorityof its medical staff.

GOVERNING BODY

CHIEF EXECUTIVE OFFICER MEDICAL STAFF

MANAGERIAL STRUCTURE NURSING

Service_line Structure

 Also called product line or service_integrated Structure.

 More common today .
 Clinical services are organized around patients with specific conditions.
 Respond repidly to the unit’s imidiate needs.
Cont…..

Strengths:
 Potential for repid change in a changing environment.
 Client setisfection is high .
 Coordination across function occurs easily (nursing, dietary,formacy)
 Service goals receive priority.
Weaknesses:
 DupLication of resources (such ads for new positions)
 Coordination across service categories is difficult (oncology, cardiology and the burn unit)
 Shared gvernance

 Is a process for empowering nurses in the practice setting.

 Nursing practice is best determined by nurses.
 Participative decision making is the Hallmark f shared governance.
 Ownership of health care Organizations

Healthcare organization differ in ownership,it can be

 Private or government,
 Voluntary (not for profit) or investor owned (for profit)
 Sectarian or non sectarian.
Healthcare settings

Organizations are further divided by settings in which they deliver care.These include;
 Primary care
 Acute care
 Home health care
 Long term care
Complex healthcare arrangements

 Health care Networks

 Interorganizational Relationship
 Diversification
 Managed Healthcare Organizations
 Accountable care organizations
1.Integrated health care Networks

Emerged as organizations struggled to find ways to survive in today’s cost-conscious

environment.Integrated system encompasses a variety of model Organizational Structures,but
certain characteristics are common.Network systems
 Deliver a continuum of care;
 Provide geographic coverage for the Byers of health care services
 Fixed payment for providing health care to all employees of one company.
2.Interorganizational Relationship

 Horizontal integration;
Arrangements between or among organizations that provide the same or similar services.

 Vertical integration;
An arrangement between or among dissimilar but related organizations.
3.Diversification

Diversification is the expansion of an organization into new areas.Two types of diversification

are common;
Concentric diversification;
Broadening the types of services currently has available.e.g.achildren’s hospital might open a
day care center.
Conglomerate diversification;
Expansion into new areas that differ from the original product or service.e.g.long term care
facility might purchase a company of medical equipments.
4.Managed Healthcare Organizations

Managed Healthcare system is a system in which a group of providers is responsible for

delivering services through an organized arrangement whith a group of individuals (for
example,all employees of one company)
Diffrent types of managed care organizations exist:
 Health maintenance organization (HMOs)
 Preferred provider Organizations (PPOs)
 Point of service (POS)
Health maintenance Organizations

 HMO provides an agreed-on pakage of health maintenance and treatment services

provided to enrollees at a fixed monthly fee per enrollee,called capitation.patients are
required to choose providers within the network

Preferred provider Organizations

 Managed care Organizations contracts with independent practitioners to provide
enrollees with established discount rates.significant co-payments are required for
obtaining services from a non participating provider.
(A co-payments or copay is a fixed payment for a coverd service)
Point of service (POS)

 POS consider to be an HMO_PPO hybrid.Enrollees may use the network of managed care
providers to go out side the network as they wish.(additional cost in co-payments)
5.Accountable care organization

 Consists of a group of health care provider that provide care to a specified group of
patients.
 More flexible than a HMO because consumers are free to choose providers from outside
the network.
Organizational Environment and Culture

 Organizational environment and Organizational culture both describe internal conditions

in the work settings
Characteristics of a healthy work environment that the organization continue to promote are;
 Skilled communication
 True collaboration
 Effective decision making
 Appropriate staffing
 Meaningful recognition
 Authentic leadership..