MANAGEMENT AND ORGANISATION THEORY

1.TYPE 1 THEORIST 2.TYPE 2 THEORIST 3.TYPE 3 THEORIST 4.TYPE 4 THEORIST 5. SPECIAL FEATURE OF MANAGEMENT IN HOSPITAL

SUBMITTED BY
ANU BHASKAR LOHITA NITASHA PULKITA

ORGANIZATION An organization is a consciously coordinated social entity,

with a relatively identifiable boundary, that functions on a continuous basis to achieve a common goal or a set of goals.

ORGANIZATION THEORY is the discipline that studies the structure and

design of organizations. It describes how organizations are actually structured and offers suggestions on how they can be constructed to improve their effectiveness

TYPE 1 THEORISTS
The type 1 theorists, also known as the classical school, developed universal principals or models that would apply in all situations.

FREDERICK TAYLOR AND SCIENTIFIC MANAGEMENT

In 1911, Frederick Winslow Taylor published Principles of Scientific Management. His desire was to find the One Best Way in which each job should be done. He proposed 4 principles of scientific management The replacement of rule of thumb methods for determining each element of a job by scientific determination Scientific selection and training of workers Cooperation of management and labour to accomplish work objectives

Equal division of responsibility between managers and workers, with former involved in planning and supervising and latter involved in execution

HENRI FAYOL AND PRINCIPLES OF ORGANIZATION

1. 2. 3. Division of work makes employees more efficient Authority Managers need to be able to give orders Discipline Employees need to obey the rules of the organization

4. Unity of command Each employee receives orders from only one superior

5. Unity of direction Each group of activities that have same objective should be directed by one manager with one plan
6.

Subordination of individual interests to the general interests Remuneration Fair wages for service Centralization With reference to decision making

7. 8.

9. Scalar chain communications should follow the line of authority from top management to lowest ranks 10. Order - people and materials should be in the right place at the right time 11. 12. 13. Equity Managers should be kind and fair to the subordinates Stability of tenure to keep employee turnover low Initiative Allow employees to originate and come out with plans

14. Espirit de corps promoting team spirit builds unity within the organization

MAX WEBER AND BUREAUROCRACY

Weber developed a structural model that, he argued, was the most efficient means by which organizations can achieve their ends. He called this ideal structure bureaucracy. It was characterized by Division of Labour A clear authority hierarchy Formal selection procedures Detailed rules and regulations Impersonal relationships

RALPH DAVIS AND RATIONAL PLANNING Davis stated that the primary objective of a business firm is economic service. This economic value is generated by the activities members engage in to create the organizations products or services. These activities then link the organizations objectives to its results. It is the managements job to group these activities together in such a way as to form the structure of the organization.

Davis concluded, therefore, that the structure of the organization is contingent upon the organizations objectives.

Managements formal planning Determines Organizations objectives Determines Development of structure Flow of authority Other relationships

TYPE 2 THEORISTS (Human Relations School)

The common theme among Type 2 theorists is recognition of the social nature of organizations. These theorists believed that organizations are made up of both tasks and people.

ELTON MAYO AND THE HAWTHORNE STUDIES Prof .Elton Mayo conducted experiments between 1927 to 1932 at Western Electric Companies Hawthorne Works in Illinois. These experiments which are known as Hawthorne Experiments, were a series of studies on the productivity of workers, wherein various conditions were manipulated (pay, light levels, humidity, rest breaks, etc.) Following were the highlights of Hawthorne studiesAn illumination test was conducted , varying the intensity of illumination at work place was carried out. Both the increase and drop in light level lead to an increase in productivity. This lead to consideration of job designs, length of work day and work week , introduction of rest periods and Individual vs. Group wage plans.

Four general conclusions were drawn from the Hawthorne studies:

The aptitudes of individuals are imperfect predictors of job performance. Although they give some indication of the physical and mental potential of the individual, the amount produced is strongly influenced by social factors.

Informal organization affects productivity. The Hawthorne researchers discovered a group life among the workers. The studies also showed that the relations that supervisors develop with workers tend to influence the manner in which the workers carry out directives. Work-group norms affect productivity. The Hawthorne researchers were not the first to recognize that work groups tend to arrive at norms of what is a fair days work, however, they provided the best systematic description and interpretation of this phenomenon. The workplace is a social system. The Hawthorne researchers came to view the workplace as a social system made up of interdependent parts. Social Norms were thus concluded to be the key determinants of individual work behaviour.

CHESTER BARNARD Chester Barnard said organisations are cooperative systems. They are composed of tasks and people that have to be maintained at an equilibrium state. Attention only to technical jobs or the needs of the people sub optimizes the system. He introduced the role of informal organisation and also proposed that the managers major role was to facilitate communication and to stimulate subordinates to high levels of effort.

Key concepts of Chester Barnard's Studies

Importance of an Individual's behaviour Felt other theorists had underestimated the variability of individual behaviour and impact of this on organizational effectiveness. Compliance Concept of "zone of indifference" - orders must be perceived in neutral terms to be carried out without conscious questioning of authority. Incentives, can be used to expand zone, but material incentives alone limited in their ability to effect compliance - need also use status, prestige, personal power. Communication

Central concept - decision-making processes depend on communications, he described characteristics and focussed on importance of communication in informal organisation Other points Organisations made up of individual humans with individual motivations. Every large organization includes smaller, less formal groupings whose goals need to be harnessed to those of the whole - this is managements responsibility. Management efficiency vs. effectiveness Authority only exists in so far as the people are willing to accept it 3 basic principles for ensuring effectiveness of communication. *everyone should know what the channels of communication are *everyone should have access to a formal channel of communications *lines of communication should be as short and direct as possible Managers key tasks are to set up systems to motivate employees towards the organisation's goals - individuals working to a common purpose rather than by authority - real role of Chief Exec is to manage the values of the organisation.

DOUGLAS McGregor AND THEORY X AND THEORY Y

Douglas McGregor, an American social psychologist, proposed his famous X-Y theory in his 1960 book 'The Human Side Of Enterprise'. Theory x and theory y are still referred to commonly in the field of management and motivation, and whilst more recent studies have questioned the rigidity of the model, McGregors X-Y Theory remains a valid basic principle from which to develop positive management style and techniques. McGregor's XY Theory remains central to organizational development, and to improving organizational culture.

WARREN BENNIS AND DEATH OF BUREAUOCRACY

The strong humanistic theme of the type 2 theorists culminated with the death of bureaucracy. Warren Bennis claimed that bureaucracys centralized decision making, impersonal submission to authority, and narrow division of labour was being replaced by decentralized and democratic structures organized around flexible groups. Influence based on authority was giving way to influence derived from expertise.

HERBERT SIMON
He argued that organization theory needed to go beyond superficial and oversimplified.

Simon distinguished between two principal sets of mechanisms which Influence organization: 1. External 2. Internal External mechanisms are "the stimuli with which the organization seeks to influence the individual" , "those that initiate behavior in a particular direction." Internal mechanisms are mainly concerned with individual psychological factors Internal mechanisms are those "which determines his response to the stimuli" , "those that cause behavior to persist in a particular direction once it has been turned in that direction." External mechanisms can be invoked by someone other than the person they are intended to influence, and consequently, they play a central role in administrative organization. Simon views organizations as systems in equilibrium. The equilibrium balances incoming contributions (money, time, and effort) with inducements in terms of the organizational goal itself, the conversation and growth of the organization, and contributions like salaries. The equilibrium is maintained by the "control group i.e. Management.

KATZ AND KAHNS THEORY

They promoted advantages of open systems for examining the important relations of an organization with its environment and hence the need for organizations to adapt to changes in environment organizations, if they want to survive. Various types of environment identified: Placid randomized: which means it is unchanging and homogenous. Placid clustered: unchanging and clustered Disturbed reactive: competition between organizations Turbulent fields: dynamic and rapidly changing

FRAMEWORK FOR OPEN-SYSTEMS THEORY ENCOMPASSES:

(1) Energic inputs into the organizations: resources like employees, raw materials, and capital (2) The transformation of those inputs within the system: using energies, or inputs,to create products or services. (3) Energic outputs: simply the products or services that are distributed to consumers. (4) Recycling: Refers to the fact that outputs are indirectly recycled back into the organization. For instance, when a company sells a toaster the revenue becomes an input into the organization that is used, for example, to pay workers or buy materials.

Other organizational characteristics that support the open systems theory 1) They recognized the universal law of entropy, which holds that all organizations move toward disorganization or death. However, an open system can continue to thrive by importing more energy from the environment that it expends, thus achieving. For example, a failing company might be able to revitalize itself by bringing in a new chief executive who improves the way the company transforms energic inputs.

2) Another characteristic of organizations is dynamic homeostasis, which means that all successful organizations must be able to achieve balance between subsystems. For example, a sales department might grow very quickly if it is very successful or demand for its products jumps. But if the manufacturing arm of the company is unable to keep pace with sales activity, the entire organization could break down. 3) also characterize open systems by equifiniality. This concept suggests that organizations can reach the same final state by a

number of different paths. In fact, the course is not fixed and may develop organically as both internal and external influences intervene.

ASTONS GROUP AND SIZE OF ORGANIZATION

Advocates organize size as an important factor influencing structure Increased size is associated with greater specialization and formalization An increased scale of operation increases the frequency of recurrent events and the repetition of decisions, which makes standardization preferable. Large organizations tend to have 2000 or more employees When an organization has 2000 employees, additions in size have minimal impact on structure A change in size will have its greatest impact on structure when the organization is small

Smaller Organizations Require

Less job specialization Less standardization More centralization

Larger Organization Require:

More job specialization More standardization Less centralization

JOAN WOODWARD AND CHARLES PERROW

Technology can be defined as the activities, equipment, and knowledge necessary to turn organizational inputs into desired outputs. The concepts of technology and environment are closely related. Organizations choose their technologies. In general, this choice will be predicated on a desired strategy. Also, different parts of an organization rely on different technologies, just as they respond to different aspects of the environment as a whole. Woodward demonstrated that organization structures adapt to their technology., she identified that production run sizes were linked to increasing levels of complexity and technological sophistication.

Conclusions: 1. Departments do differ from one another and can be categorized by their workflow technology. 2. Structural and management processes differ based upon workflow technology. 3. Managers should design departments so that requirements based on technology can be met.

TYPE 4 THEORISTS
The most recent approach to organization theory focuses on the political nature of organizations. The early formation of this position was made by James March and Herbert Simon, but it has been extensively refined by Jeffery Pfeffer.

March and Simons cognitive limit to Rationality

March and Simon challenged the classical notion of rational or optimum decision. They argued that most decision makers selected satisfactory alternatives- alternatives that were good enough. Only in exceptional cases would they be concerned with the discovery and selection of optimal alternatives. March and Simon called for a revised model of organization theory one very different from the rational cooperativessystem view. This revised model would recognise the limits of a decision makers rationality and acknowledge the presence of conflicting goals.

Pfeffers Organization as political Arenas

Jeffrey Pfeffer has built on March and Simonss work to create a model of organization theory that encompasses power coalition, inherent conflict over goal, and organization- design decisions that favour the self- interest of those in power. Pfeffer propose that control in organizations becomes and end rather than merely a means to rational goal such as efficient production of output. Organizations are coalitions composed of varying groups and individuals with different demands. An organizations design represents the result of the power struggles by these diverse coalitions. Pfeffer argue that if we want to understand how and why organization are

designed the way they are, we need to assess the preferences and interests of those in the organization who have influence over the design decisions. This view is currently very much in vogue.

NEED FOR MANAGEMENT

All organizations depend upon group efforts. Management creates teamwork and Management is indispensable in all kinds of organizations. Management is a creative force which helps in the optimum utilization of resources. In the absence of management, an organization is merely a collection of men, money, and coordination among specialized efforts, materials and machinery. Management is required to plan, organize, direct and control group efforts. Management provides leadership and motivation to individuals. As an innovative force, management performs the same role in an organization which brain does in the human body. It is the fundamental coordinating mechanism that underlies organized endeavour.

 Sound management helps in maximizing output and minimizing costs. It maintains a dynamic equilibrium between an organization and its ever changing environment. Management is responsible for the creation, survival and growth of organizations.

WHY HAS SIGNIFICANCE OF MANAGEMENT INCREASED IN RECENT YEARS?

(i) Growing size and complexity of business. (ii) Increasing specialization of work, (iii) Cut throat competition in the market, (iv) Growing unionization of labour. (v) Sophisticated and capital intensive technology, (vi)Increasing complexity of business decisions, (vii) Growing regulation of business by the Government, (viii) Need for research and development, (ix) Turbulent environment of business. (x) Need for reconciling the interests of various groups, e.g., owners, workers, customers and the public, (xi) Need for optimum utilization of scarce resources. President Roosevelt of U.S.A. once said: "a government without good management is a house built on sand." Management makes a significant social contribution by supplying goods and services, employment, tax revenue, etc.

Characteristics of Hospital Organization

Every organization has a head. In every organization there should be a clear line of authority for every individual. In a hospital, there are dual

lines of authority. The Administrators are responsible for solving management problems while Doctors are involved in patient care. Hospitals are characterized by having wide diversity of objectives and goals for different personnel, professional groups and subsystems. For example: The house keeping department works towards maintaining cleanliness and sanitation, the clinical team focus on patient care, the Administration team works on problem solving and hospital betterment, the marketing team works towards brand building and better marketing of services. The hospital is in continuous operation which requires high operating costs and substantial personnel and scheduling problems. The diversity of personnel ranges from highly skilled and educated administrators and doctors to unskilled and uneducated employees like the staff involved in sanitary functions. The hospital organization is characterized by interdependence. Every person involved in patient care is dependent on other departments or individuals in order to accomplish their tasks or fulfill their responsibilities. For example: An orthopedic surgeon cannot perform an orthopedic surgery without the findings from the radiology department and the assistance of the nurses and technicians. Hospitals deal with problems of life and death. This has psychological and physical stress on personnel at all levels in the hierarchy. Measuring the quality of product (healthy and satisfied patient) is a problem because patient care delivered has no precise measurement. Hospitals provide services. Unlike the production industry where productivity and quality may be easily defined, hospitals productivity and quality cannot be quantified easily. Hospitals should always comply by the medical ethics. (eg: patient confidentiality).

Special Features of Management In a hospital

The Nature of work in Hospitals is quite different from other Organizations. Hospitals are expected to deliver Quality service 24 hours a day at a minimal cost.

The urgent Nature of its work and the level of efficiency that is expected have increased the need for a well co-ordinated management in hospitals. The following activities are common to the management of all hospitals: 1. Determination of goals and Objectives 2. Facility and Program Planning: This refers primarily to the activities involved in remodeling existing services, organizing new facilities, services and programs. 3. Financial Management: This relates to financial affairs of the hospital. It includes budgeting and costing. 4. Personnel Management: This category relates to the selection motivation and guidance of employees. It includes wage and salary administration. 5. Co-coordinating departmental operations: This category includes inter-dependent activities dealing with the internal functioning of all hospital departments. Frequent meeting with the departmental heads would be one example. 6. Program review and Evaluation: The review and evaluation relates to the functioning of the clinical services and programs, and is a continuous process. 7. Public and community activities: This concerns activities related to the development and maintenance of interaction with other health service institutions including shared service arrangements with other hospitals. 8. Health Industry activities: This classification refers to activities that are external to the hospital. It includes participation in hospital associations, third party payers (insurance companies, employers etc.) 9. Government related activities: This activity is concerned with legal problems of the hospital and dealing with local, state and central government agencies.

What is hospital administration?

Hospital administration is the management of the hospital business. Hospital administration is made up of many healthcare managers and executives who take care of individual departments. They are in charge of all the administrative or management functions of their respective departments. These various managers or assistant administrators will report to the Hospital Administrator.

Functions of the Hospital Administrator:

1. Acts as a legal representative of the Hospital. The Hospital Administrator is responsible to ensure whether the hospital is complying with the government rules and whether all the statutory requirements are met. 2. Is a part of the Governing Board. He / she has the responsibility of supervising all the activities in the hospital 3. Should ensure that all staff is aware of the hospitals mission, vision and objectives. He /she is instrumental in getting information on mission, vision and objectives down to all the staff. 4. Implements all the management decisions in the hospital 5. Formulates major rules, regulations and procedures and ensures their implementation 6. Ensures that the rules formulated are in line with the hospitals policies 7. Coordinates and participates in devising short term and long term plans for the hospital 8. Submits annual reports to the Governing Body 9. Ensures financial viability of the hospital 10. Acts as a link in between the management and the employees. Therefore participates in deciding the salary structure, benefits, etc. 11. Is responsible for a good employer employee relations 12. Works closely with other important executives in the hospital such as the Medical Superintendent, nursing Superintendent, etc. 13. Ensures that all the departments function smoothly and efficiently. 14. Is responsible for outsourcing services, contracts, hiring, etc. 15. Acts as an official representative of the hospital 16. Maintains contacts with the government, community and media.