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Chapter 2: Designing Organizations

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LEARNING OUTCOME 1

Describe how organizational theories differ.

Concepts for Lecture

  1. Organizational theories remained largely unexplored until the Industrial Revolution in the late 1800s and early 1900s. Early philosophies are called classical theory and humanistic theory. Later approaches include systems theory, contingency theory, chaos theory, and complexity theory.
  2. Classical theory focuses on efficiency through design. It is built around four elements: division and specialization of labor, chain of command, organizational structure, and span of control. Division of work and specialization are seen as economically beneficial. The chain of command is top down, with higher levels of management delegating work to those below them.
  3. Humanistic theory focuses on the social aspects of work and organizational design. A major assumption of this theory is that people desire social relationships, respond to group pressures, and search for personal fulfillment. Formal authority does not work without willing participants.
  4. Systems theorists define a system as a set of interrelated parts arranged in a unified whole. An organization is a recurrent cycle of input, throughput, and output, with the manager being the catalyst for the input-throughput-output process.
  5. Contingency theorists believe organizational performance can be enhanced by matching an organization’s structure to its environment. The environment includes patients, third-party payers, regulators, competitors, and suppliers of facilities, personnel, equipment, and pharmaceuticals. Because organizations exist in different environments, the optimal form of organization is contingent on the circumstances faced by that organization.
  6. Chaos theory looks at organizations as living, self-organizing systems that are complex and self-adaptive. Organizations need to be creative and flexible to adapt to change. The role of leaders in these organizations is to build resilience in the midst of change and to maintain balance between tension and order, which promotes creativity and prevents instability.
  7. Complexity theory notes that random events interfere with expectations. In health care, random events such as a change in a patient’s condition or necessary staff being unavailable often happen without warning. Hierarchy is less important and managers must encourage the flow of information in all directions between and among team members.

PowerPoint Lecture Slides

1.Organizational Theories

  • Were unexplored until the Industrial Revolution.
  • Include the following theories:
  • Classical
  • Humanistic
  • Systems
  • Contingency
  • Chaos
  • Complexity

2a.Classical Theory

  • Is built around four elements:
  • Division and specialization of labor
  • Chain of command
  • Organizational structure
  • Span of control

2b.Chain of Authority

  • Figure 2-1

3.Humanistic Theory

  • Focuses on social aspects of organizational design.
  • Views social relationships, group pressure, and search for personal fulfillment as motivators.
  • Says formal authority only works with willing participants.

4a.Systems Theory

  • System is interrelated parts arranged in a unified whole.
  • Systems can be open or closed.
  • Organization is a recurrent cycle of input-throughput-output.
  • Manager is the catalyst for the process.

4b.The Health Care Organization as an Open System

  • Figure 2-3

5.Contingency Theory

  • Performance is enhanced by matching the organization’s structure to its environment.
  • Environment includes people, objects, and ideas outside the organization that influence it.
  • Optimal form of the organization depends on the environment in which it operates.

6.Chaos Theory

  • Organizations are living, self-organizing systems that are complex and self-adaptive.
  • Creativity and flexibility are necessary to adapt to change.
  • Leader’s role is to build resilience, maintain balance, and encourage creativity.

7.Complexity Theory

  • Random events interfere with expectations.
  • No linear cause and effect to explain outcomes.
  • The system interacts and adapts to change.
  • Managers must encourage the flow of information in all directions, not just top to bottom.

Suggestions for Classroom Activities

1. Have students select one of the six theories described (or assign to groups of students) and discuss how a nurse would fit into each type of organization. How might the nurse feel in such an organization?

2. Have students who have part-time jobs identify the theory behind their organizations and how the theory plays out in their daily work lives.

LEARNING OUTCOME 2

Describe the different types of health care organizations.

Concepts for Lecture

1.Health care organizations differ in ownership, role, activity, and size. Hospitals, long-term care facilities, ambulatory care centers, home health care agencies, freestanding clinics, temporary service agencies, and managed health care organizations are different types of health care organizations.

2.Competition for resources and pressures for better efficiency and effectiveness have forced health care organizations to establish relationships with each other. Examples include horizontal and vertical integration.

3.Diversification and joint ventures are creating other types of organizations in response to the demands of today’s economy.

PowerPoint Lecture Slides

1a.Different Types of Health Care Organizations

  • Private or government
  • Voluntary (not for profit)
  • Investor owned (for profit)
  • Sectarian or nonsectarian

1b.Hospitals

  • Most are acute care facilities.
  • May be classified as general or special-care facilities (e.g., pediatric).
  • Many are teaching institutions.

-Role of nurse may differ from teaching to nonteaching hospital.

  • New groups in hospitals include hospitalists and intensivists.

1c.Long-Term Care Facilities

  • Provide professional nursing care and rehabilitative services.
  • May be freestanding or part of hospital.
  • Limit length of stay.
  • May be residential care facilities (nursing homes) where care is supervised by RNs and LPNs.

1d.Ambulatory Care Centers

  • Are increasingly being used to deliver health care.
  • Include physician’s offices, emergency rooms, surgical centers, clinics in pharmacies, and family planning centers.

1e.Home Health Agencies

  • Provide intermittent, temporary health care in the home by skilled or unskilled providers.
  • May offer services other than nursing such as physical therapy or medical equipment.
  • May offer hospice care.

1f.Freestanding Clinics

  • Provide ambulatory care in shopping centers, pharmacies, and discount stores.
  • Are staffed by nurse practitioners.

1g.Temporary Service Agencies

  • Provide nurses and other health care workers to hospitals.
  • Provide private duty nurses to patients in hospital or at home.

1h.Managed Health Care Organizations

  • Deliver services through a formal arrangement with a group of individuals.
  • Include HMOs, PPOs, and POS plans.
  • Have declined because of dissatisfaction with limitations and inflexibility.

2a.Interorganizational Relationships

  • Horizontal integration: Organizations in a network provide the same or similar services; e.g., all hospitals provide comparable services.
  • Figure 2-10

2b.Interorganizational Relationships (continued)

  • Vertical integration: Dissimilar but related organizations in a network provide a continuum of services
  • Figure 2-11

2c.Interorganizational Relationships (continued)

  • Figure 2-12

3.Diversification

  • Organization expands into new arenas.
  • Two common types: Concentric diversification and conglomerate diversification
  • Joint venture: Partnership in which each partner contributes different areas of expertise, resources, or services to create a new product or service

Suggestions for Classroom Activities

1. Have students select each type of health care organization and represent these in a discussion on which types exist in their community. Give examples of each.

2. Have students visit the various types of health care organizations and report in class what they experienced. What was the role of the nurse? Did the nurses have an active part in the leadership of the organization?

LEARNING OUTCOME 3

Explain how health care organizations are structured.

Concepts for Lecture

1.Organizational structure integrates organizational goals, size, technology, and environment. Managers can use organizational structure as a tool to increase organizational efficiency. Traditional organizational structures include functional structure, service-line structure, hybrid structure, matrix structure, and parallel structure.

2.Relationship-oriented structures are suggested by systems, contingency, chaos, and complexity theories. Principles of shared governance reflect partnership, equity, accountability, and ownership. New relationship-oriented structures include heterarchy structures and self-organizing structures.

PowerPoint Lecture Slides

1a.Traditional Organizational Structures

  • Functional: Employees grouped in departments by specialty.
  • Service-line: All functions needed to produce a product or service grouped together in self-contained unit.
  • Hybrid: Contains both self-contained and functional units.
  • Matrix: Integrates product and functional structures in one overlapping structure.
  • Parallel: Unique to health care; involves two lines of authority—the authority of the organization and the authority of its medical staff.

1b.Service-Line Structure

  • Figure 2-4

1c.Hybrid Structure

  • Figure 2-5

1d.Matrix Structure

  • Figure 2-6

1e.Parallel Structure

  • Figure 2-7

2.Relationship-Oriented Structure

  • Shared governance supports decision making, quality imperatives, and collaboration among disciplines.
  • Heterarchy structure is based on the concept of connections.
  • Self-organizing structures are flexible and able to respond to change.

Suggestions for Classroom Activities

1. Find the organizational chart for your school and identify the theory and structure of this organization’s governance.

2. Have students take a hospital’s philosophy and mission statements and organizational structure and discuss whether or not nurses are part of governance.

LEARNING OUTCOME 4

Demonstrate how strategic planning guides the organizational decision making.

Concepts for Lecture

1.A strategic plan projects the organization’s goals and activities into the future and guides the direction the organization is to take. Decision making is guided by the philosophy, vision statement, mission, and goals stated in the strategic plan.

PowerPoint Lecture Slides

  1. Strategic Planning
  2. Philosophy
  3. Values
  4. Vision statement
  5. Mission
  6. Goals
  7. Objectives

Suggestions for Classroom Activity

1. Have students discuss strategic planning for the school of nursing they attend. What goals would they agree upon for the future and why?

2. Have students observe a part of strategic planning in the community, where possible, and report to the class what they observed.

LEARNING OUTCOME 5

Discuss how organizational environment affects success.

Concepts for Lecture

  1. Organizational environment contributes to a positive or negative work setting. A positive environment directly affects patient outcomes.
  2. Organizational culture encompasses the basic assumptions and values held by members of the organization. Organizational culture varies among institutions, subcultures, and even countercultures. Consonance occurs when the subculture’s norms and traditions agree with the organization’s; dissonance occurs when they are not in agreement.

PowerPoint Lecture Slides

1.Organizational Environment

  • Systemwide conditions that contribute to a positive or negative work setting.
  • A positive environment directly affects better patient outcomes.
  • The nurse manager plays a key role in maintaining a positive environment.

2.Organizational Culture

  • Encompasses basic assumptions and values held by members of the organization.
  • Varies among institutions, subcultures, and countercultures.
  • Consonance occurs when the subculture’s norms and traditions agree with the organization’s.
  • Dissonance occurs when they are not in agreement.

Suggestions for Classroom Activities

1. Have students describe and discuss two different classroom environments and identify what makes them different.

2. Have students discuss the work environment for the nurses they have observed in the past.

LEARNING OUTCOME 6

Explain how to become a magnet hospital.

Concepts for Lecture

  1. The American Nurses Credentialing Center (ANCC) in 1994 developed the magnet recognition program to designate organizations that recognize excellence in providing nursing care. Magnet hospitals have successfully recruited and retained nurses despite the nursing shortage.
  2. To qualify as a magnet hospital, the organization must demonstrate that it meets specific criteria, including promoting quality, identifying excellence in delivery of nursing services, and disseminating best practices in nursing services.

PowerPoint Lecture Slides

  1. Magnet Recognition Program
  • ANCC designates organizations that provide nursing excellence.
  • Magnet hospitals successfully recruit and retain nurses despite the nursing shortage.
  1. Magnet Hospitals
  • Promote quality in a setting that supports professional practice.
  • Identify excellence in the delivery of nursing services.
  • Disseminate best practices in nursing services.

Suggestions for Classroom Activities

1. Have students discuss how excellence in nursing care can be achieved and why it is important.

2. Have students interview nurses and patients from hospitals with magnet status and compare and contrast these in the classroom or in written reports.