Lecture 1 Organizations in health care, structure and design trade-offs Flashcards
What is an organization
- People working collectively for a common purpose
- An organized group of people with a particular purpose
Mechanic organizational structure
- Task-oriented
- Efficient and productive
- Formalized, central and complex
- Stable and simple environment
Organic organizational structure
- Task, authority & routines constantly redefined
- ‘Flat’ organization
- Informal, decentralized, simple
- Complex & dynamic environment
Bureaucracy definition
Bureaucracy is an organizational structure characterized by regulatory procedures, division of responsibility, hierarchy, and impersonal relationships.
Operating principles of bureaucracy
- Rationalisation (rules/procedures)
- Formality
- Specialization
- Hierarchy (top-down)
- Universal access, but no individual control
Critiques bureaucracy
- Dehumanizing effect
- Little room for ‘human beings’
- Inflexible/rigid
- Inefficient and viscous
- Differentiation & Disintegration
- Limited rationality
- Limited morality
Why is a hospital bureaucratic
- Standardization of processess
- Highly specialized
- Hierarchy
- Universal access, but no individual control
New Public Management
From supply-driven to demand-driven
- Strengthening position of healthcare consumers
- Achievements made ‘tangible’
- Accountability not solely horizontal anymore
- Improvement of performance
Creates a tension between the relation of professionalism and management
Professionalism
Protected professionals treat cases
- Skills
- Norms
- Expertise
- Service ethic
- Quality
- Humanity
Managerialism
Well-run organizations deliver products for customers
- Hierarchy
- Markets
- Results
- Accountability
- Efficiency
- Profitability
Dutch regulated market ‘competition’ by New Public Management
- Regulated health care market
- Transparency
- Accountability
- Demand & supply driven
- Tension between management & professionalism
Market failure in health care
- Health care is not a business
- Insufficient ‘competition’ to offer high quality care at best price
- No direct interaction between supply and demand, but mediated by third party
- Increased accountability –> bureaucracy revisited
Formalization
The extent to which rules, procedures, and other guides to action are written and enforced
Centralization
The extent to which authority to make decisions is retained in top management
Complexity
The number of different jobs and/or units within an organization
Design key trade offs mechanic vs organic
centralization vs decentralization
control vs autonomy
differentiation vs integration
narrow span of control vs wide span of control
tall hierarchy vs flat hierarchy
Centralization vs decentralization
Easier to implement vs more responsive to local circumstances
consistency with strategy vs opportunities for staff development
easier to achieve coordination and control vs sense of control good for staff motivation
‘faster’ decision-making vs -
Control vs autonomy
Top down vs bottom up
Differentiation vs integration
Differentiation:
- highly specialized vs collaboration
- patient has a disease vs holistic view of pt and care delivery
- health care silos
Organization structure
- service/product line structure (integration, projectized)
- functional structure (differentiation, functional)
- matrix structure (balanced matrix)
Functional structure
- Organized based on the necessary functions of an organization, incl production, marketing, finance, accounting, human resource
- Relatively small organizations with narrow range of products and services
Advantages functional structure
- Encourages specialization and efficiency
- Importance of general manager
- Standardisation = high efficiency
Disadvantages functional structure
- Inefficient use of managerial time
- Can create tunnel vision: employees may only see their problems, and not from whole organization
- Fragmentation of services for customers
Service/product line structure
- Products are preferred basis as a firm grows by increasing the numbers of products on the market
- Concentrating authority, responsibility and accountability in specific departments
- Product-based divisions are often freestanding departments
Advantages service/product line structure
- More autonomy can promote entrepreneurship
- more integration
- offer ‘unique’ product/service in market
Disadvantages service/product line structure
- Some duplication of activities unavoidable
- Coordination across business units difficult. Internal rivalry for customers and resources
- Less efficiency
Matrix structure
- Combines service/product and functional
- in midst of a continuum
- balanced compromise between 2
- dual authority system: a functional and a product manager
- in organizations that 1 require responses to rapid changes, 2 face uncertainties with high-information processing requirements and 3 have financial and human resources constraints
Advantages matrix structure
- flexibility in conditions and uncertainty
- constant interaction, channeled both horizontal and vertical
- efficient use of resources and skills
- opportunities for personal development
- more aware of total organization
- improving motivation and commitment
- cross-fertilization of ideas
Disadvantages matrix structure
- some duplication of activities unavoidable
- coordination across business units difficult. internal rivalry for customers and resources
- dual reporting relationships. workload not centrally known
Boundaryless organizations
chains of commands are eliminated, spans of control are unlimited, and empowered teams
virtual organizations
- alliance of separate individuals or organizations, all with different competencies, working together to bring a project to market faster
- often interorganizational networks with one parental organization
- flexible and efficient
