chapter 10 organization design. copyright © 2006 by thomson delmar learning. all rights reserved. 2...
TRANSCRIPT
Chapter 10 Organization Design
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Purpose and Overview
• Purpose– To explore how decisions are made about
designing organizational structures
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Purpose and Overview
• Overview– The Meaning of Organizational Design – Levels of Organization Design – Systematic Assessment Before Design – Designs for a Variety of Health Services
Organizations – Influences on Future Organization Designs – Organization in Transition
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The Meaning of Organizational Design
• Building blocks of organization are arranged to improve effectiveness and adaptive capacity
– Authority
– Responsibility
– Accountability
– Information
– Rewards
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The Meaning of Organizational Design
• Organization Design– A dynamic process controlling outcomes and
process
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The Meaning of Organizational Design
• Management’s Role – Redesign: needs change as organization's
needs change
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The Meaning of Organizational Design
• Management’s Role
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The Meaning of Organizational Design
• When a design should be reconsidered – Severe performance problems– Change in environment that affects internal
policies– New programs or product lines – Leadership change
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Levels of Organization Design
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Levels of Organization Design
• Designing a Position– Identify:
• Major responsibilities and roles• Skills and training necessary• To whom the person and work are
accountable• The relationship of other peer positions
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Levels of Organization Design
• Designing a Work Group– Clarify
• Specific purpose of group• Time frame for completing problem solving• Boundaries of group's authority
– Appoint a leader
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Levels of Organization Design
• Designing Work Groups– Group units to maximize use of:
• Knowledge and skill• Work process• Time• Commonality of clients or patients• Geographic location
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Levels of Organization Design
• Designing a Total Organization– Enormous challenge– Extensive investment– Behavioral flexibility
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Levels of Organization Design
• Designing a Network– Coordination of services and client flow– Analyze interorganizational relationships
• Decide which organizations should have most power
• Identify resource transactions • Diffusing innovations
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Levels of Organization Design
• Designing a Health System– Centralization vs. decentralization
• Setting policy• Initiating activities• Granting final approval
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Systematic Assessment Before Design
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Designs for a Variety of Health Services Organizations
• Differentiation
• Integration
• All organizations must do both
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Designs for a Variety of Health Services Organizations
• The Continuum of Organizational Design
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Designs for a Variety of Health Services Organizations
• Functional Design– Specialized labor divided into departments – Most useful when organization has few
products or goals
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Designs for a Variety of Health Services Organizations
• Functional Design– Enables decision making on a centralized,
hierarchical basis– Unsuitable when:
• Organization grows• Organization diversifies • Poor departmental coordination allows top
heavy decision making
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Designs for a Variety of Health Services Organizations
• Functional Design
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Designs for a Variety of Health Services Organizations
• Divisional Design– Organizational divisions and semiautonomous
units – Decentralizes decisions to lowest level– Difficulties arise when priorities are
determined at higher organizational levels
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Designs for a Variety of Health Services Organizations
• Divisional Design
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Designs for a Variety of Health Services Organizations
• Matrix Design– Improves coordination and communication
across organization– Characterized by dual authority system– Reporting to managers– Disadvantages due to dual authority system
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Designs for a Variety of Health Services Organizations
• Matrix Design
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Designs for a Variety of Health Services Organizations
• Parallel Design– Bureaucratic or functional organization
• Responsible for routine activities– Parallel side
• Responsible for complex problem solving requiring participatory mechanisms
– Commonly seen with CQI/TQM
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Designs for a Variety of Health Services Organizations
• Parallel Design– Advantages
• Increased performance and quality– Disadvantages
• Time in meetings• Increased cost of operations• Conflicts between two structures
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Designs for a Variety of Health Services Organizations
• Parallel Design
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Designs for a Variety of Health Services Organizations
• Product/Service Line or Program Design– One person in charge of product or group– Advantages:
• Increased operational efficiencies• Enhanced market share
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Designs for a Variety of Health Services Organizations
• Product/Service Line or Program Design Key Factors for Success– Management system linking clinical, financial,
and volume data by product– Financial system that disaggregates costs
and revenues to assign accountability
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Designs for a Variety of Health Services Organizations
• Product/Service Line or Program Design Key Factors for Success– Innovation and risk taking rewards– Health care provider involvement in:
• Technology• Diagnosis and treatment • Quality improvement• Patient-centered issues
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Designs for a Variety of Health Services Organizations
• Product/Service Line or Program Design Key Factors for Success– Strong support staff– Align authority and responsibility – Integrative mechanisms across product lines
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Designs for a Variety of Health Services Organizations
• Product/Service Line or Program Design Key Factors for Success– Comprehensive management development– Ability to work with more than one manager– Communication skills– Conflict management skills– Computer literacy– Creativity
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Designs for a Variety of Health Services Organizations
• Product/Service Line
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Influences on Future Organization Designs
• The Mission– Specificity is important to determine design
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Influences on Future Organization Designs
• The Future Environment– Changing demographic characteristics– Public and consumer sophistication– Range of services provided outside
traditional hospitals
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Influences on Future Organization Designs
• The Future Environment– Involvement in community to address
underlying health issues– Increasing competition– Increasing regulatory pressures
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Influences on Future Organization Designs
• The Future Environment– Changing reimbursement systems – Expanding private sector involvement– Involvement of trustees, physicians, and other
health professionals in strategic planning– External standards for professional conduct
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Influences on Future Organization Designs
• The Future Environment– Demand for accountability and value– Focus on patient safety and quality of care– Rapidly developing medical technologies– Information demands– Development of information systems– Artificial intelligence
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Influences on Future Organization Designs
• The Organization– Greater emphasis on teamwork– Social contract accountability for governance– Corporatization of health services
organizations– Demands to improve the quality of care
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Influences on Future Organization Designs
• The Organization– Demands to control costs, efficiency,
productivity, and value– Comprehensive and integrated clinical and
financial information systems– Constrained financial resources
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Influences on Future Organization Designs
• The Organization– Changing working relationships – Increasing use of information technology– Increasing need to coordinate activities
internally
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Influences on Future Organization Designs
• The Organization– Managing conflict creatively– Collaboration among public and private
organizations to address preventable diseases
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Influences on Future Organization Designs
• Culture– Focus on "customer" and patient-centered care– Patient satisfaction surveys to modify care – Broad sets of performance indicators– Community-based care
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Influences on Future Organization Designs
• Culture– Use of evidence and health outcome measures– Challenges to traditional ways of operations – Value of employees committed to organization– Value of employees who are adaptable
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Influences on Future Organization Designs
• Culture– Value of nonhierarchical leaders who can lead
change processes– Emphasis on teamwork and collaboration with
nontraditional partners
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Influences on Future Organization Designs
• Culture– Integrating functions and clinical processes– Trust development– Creating a culture of patient safety– Promoting ethical work practices
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Influences on Future Organization Designs
• Human Resources– Acute shortage of nursing personnel– Emphasis on cross-training vs. traditional
professional training
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Influences on Future Organization Designs
• Human Resources– Emphasis on horizontal teams and
collaborative practices – Pressure to substitute "cheaper" health care
workers for more expensive health professionals
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Influences on Future Organization Designs
• Human Resources – More women in management require flexibility
• Accessibility of day care and job sharing– Greater ethnic and cultural diversity of
workforce– Need to experiment with new work
arrangements
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Influences on Future Organization Designs
• Human Resources – Physicians becoming employees– Shortages of key health services
professionals– Increasing need for managers with
professional training
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Influences on Future Organization Designs
• Human Resources– Increasing unionization of workers – Closer scrutiny by unions as some organizations
retrench– Need to educate all employees in strategic
management – Adopting a marketing orientation
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Influences on Future Organization Designs
• Human Resources– Succession planning, career planning, and
management development – Pressure to provide continuing education,
especially for clinical managers
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Influences on Future Organization Designs
• The Political Process– Informal leaders may be helpful – Better management to identify key players in
redesign process
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Organization in Transition
• Life Cycles– Four phases (Starkweather and Kisch):
• Search • Success • Bureaucratic • Succession
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Organization in Transition
• Designs for Quality Improvement– Quality of care – Quality is an organizational problem– Emphasize:
• Organizing work around patient • Reframing role of hospital in health
services system