04Jones Leadership(F)-ch 04 48 1/14/07 3:34 PM Page 48 Understanding Organizations President Vice President Nursing Vice President Operations Vice President Business and Finance Cardiac Facilities Accounting Medical Information Technology Human Resources Surgical Food Services Development Maternity Environmental Services FIGURE 4-1 Organizational components Line Positions Line positions are depicted by the solid vertical lines within the organization chart These lines demonstrate who is responsible to whom within the organization The positions with the most decisionmaking power are near the top of the organization chart An example of a line position would be the Nurse Manager of the Pediatric unit, who has power and authority over the staff nurses on the unit Another example would be the vice president of the organization who reports directly to the president Staff Positions Staff positions are broken horizontal lines or dashes within the organization chart, showing the relationship between two people who work together to support objectives within the organization These positions are primarily advisory in nature, with no direct authority over the people they are working with The staff positions support each other within the organization by consultation, education, role modeling, and development An example would be the vice presidents of the organization with respect to one another These members advise and consult with each other but report to a person in a higher position, through the vertical line connection Organizations would be hard-pressed to function without staff positions Managers usually work closely with people in staff positions to support a specific cause or opportunity for the unit For example, the manager works closely with the nursing educator to support the educational needs of the nursing unit The manager would find it difficult to this task without the educator’s assistance and expertise The educator does not necessarily report to the manager, nor the staff nurses directly report to the educator This is an example of the advisory nature of the staff position Unity of Command The concept of unity of command is central to the hierarchy of the organization The overall thought is that each person on the organization chart has one manager or one boss This is observed on the chart by the vertical solid lines that connect positions on the chart As health-care organizations continue to grow and increase in complexity, there may be more than one person to whom an employee must report Span of Control Span of control is denoted on the chart as the number of people reporting to each manager The span of control determines how the organizational structure 04Jones Leadership(F)-ch 04 1/14/07 3:34 PM Page 49 Understanding Organizational Structures will appear on paper (Altaffer, 1998) A wide span of control indicates that many people are reporting to a manager, and a narrow span of control indicates that only a few people are reporting to the manager In the 1990s, many managers were let go, and their positions were combined to cover many different units in an effort to reduce management costs Due to the hierarchical nature of the chart, the higher a leader resides within the organizational structure, the fewer the people who report, but the greater the overall responsibility that leader has within the organization As health-care organizations change and consolidate, upper-level managers are taking on a greater span of control (Altaffer, 1998) DECISION MAKING Organization charts also depict how decisions are made within an organization Centralized decision making occurs when a few people at the top levels of the organizational structure make decisions Such a chart will appear tall and hierarchical on 49 paper Decentralized decision making occurs when decisions are made throughout the organization, at the lowest level possible within the organization Such an organization chart takes on a flattened appearance In decentralized decision making, authority, responsibility, and accountability are given to the person closest to the problem to resolve the issue This method increases employee morale and job satisfaction Employees given such authority tend to be more motivated and feel valued as members of the organization (Huber, 2000; Marquis & Huston, 2003) The management and the leadership of the organization have to be comfortable with the type of decision making that will evolve with the organization The method used to make decisions is influenced by the mission, the vision, the values, and the philosophy The size of the organization may also influence what method is used Type of Organizational Structures Practice to Strive For 4-1 Today’s organizations face many challenges with changes in health-care technology, reimbursement, and practice The organizational leader’s jobs are to formulate an organizational culture and climate that is supportive of the vision, mission, and values of the organization One main point to strive for is autonomy for the nursing staff The culture should provide the members opportunities to grow and develop within their profession, such as with shared governance practice models and magnet status Both affect nurses and how they will function within the organizational structure The culture surrounding magnet status is one of care centers, with leaders who work with the staff to plan and evaluate the organization’s services to meet the needs of the community Magnet status allows the nursing staff to participate and share in the development of policies and procedures through committees detailing research, practice, and education Quality care and indicators are a part of all performance appraisal processes and patient satisfaction surveys The overall nursing structure includes autonomy, collaboration, and delegation as key processes within the nursing philosophy Nurses participate in all levels of decision making within the shared governance model Organizations strive for excellence and ensure this within all of the services and activities offered This philosophy is threaded throughout within the vision, mission, and values Health-care providers should be familiar with the type of structure used within their organization The structure affects communication patterns, relationships, and authority within the health-care setting (Marquis & Huston, 2006) The structure provides stability for the mission, the vision, the values, and the goals of the organization The structure aligns itself with the goals of the organization and provides efficiency for the organization The structure provides stability for decision making within the organization The structure determines how the decision will be made The organization chart depicts the lines of authority and chain of command and identifies communication patterns and relationships for the employees of the organization TALL/CENTRALIZED/BUREAUCRACY The centralized structure, a tall structure, also known as the bureaucracy, is a hierarchical structure (Fig 4-2) Decision making and power are held by a few people within the top level Each person who has some power and authority is responsible for only a few people There are many layers of 04Jones Leadership(F)-ch 04 50 1/14/07 3:34 PM Page 50 Understanding Organizations Chief Administrator Vice PresidentPatient Services Vice PresidentNursing Services Vice PresidentBusiness Inpatient Outpatient Inpatient Outpatient Inpatient Outpatient One One One One One One Two Three Two Three Two Three Two Three Two Three Two Three FIGURE 4-2 Bureaucracy departments, and communication tends to be slow as it travels through this type of a system This type of structure is noted for its subdivision and specialization of labor Advantages to this type of structure are that managers have a narrow span of control and can maintain close supervision of their employees A disadvantage is that there may be a delay in decision making due to the many layers of people that the decision must pass through to get to the top administrative level It predisposes leaders to an autocratic style of leadership because many decisions must go to the top of the organization or the higher-level supervisor for an answer of control Communication patterns are simplified, and problems tend to be addressed with ease and efficiency at the level at which they occur Employees have autonomy and increased job satisfaction within this type of structure A disadvantage is the broad span of control, which may make it hard for management to process information quickly and efficiently for the employees This is especially true for decisions that need to span the whole structure Management at all levels takes on a greater sense of responsibility within this structure, so education across teams is important Managers may be supervising areas with which they are not familiar or have limited working experience FLAT/DECENTRALIZED STRUCTURE AD HOC/ADHOCRACY STRUCTURE The decentralized structure is flat in nature, and organizational power is spread out throughout the structure (Fig 4-3) There are few layers in the reporting structure, and managers have a broad span The organic or adhocracy structure of organization is an open, free-form system This system has resulted from behavioral research based on job Nursing Administrator Maternity Supervisor Nurse Nurse Pediatric Supervisor Nurse Nurse Nurse Surgery Supervisor Nurse FIGURE 4-3 Decentralized structure Nurse Nurse Nurse 04Jones Leadership(F)-ch 04 1/14/07 3:34 PM Page 51 Understanding Organizational Structures satisfaction and efficiency This type of structure is used with specialized teams to complete a specific task From an organizational perspective, the entire organization consists of specialized teams, each assigned to complete a specific task The major disadvantage of this type of structure is the lack of a formal chain of command The teams work together, but when problems are encountered there is no assigned person within the structure on whom they can rely for resolution MATRIX STRUCTURE The matrix structure is a combination of two structures, consisting of the product (output) and the function, linked into one structure The function consists of all of the activities and duties needed to produce an end product, and the product is the result of the function The structure works to balance the function and service of the organization into one operational outcome The functions are the tasks required to complete the product The manager of the product division works with the manager of the function division, creating two lines of authority, accountability, and communication The team approach is incorporated, and there is a decrease in the number of formal rules for this type of structure Issues with the matrix structure include the vague chain of command and goal variation between the two structures This type of structure implements the use of resources efficiently STRUCTURES SPECIFIC TO HEALTH CARE As health-care organizations continue to change and reorganize services to meet the needs of the customer, so will the look of the structure Many services are changing and becoming more accessible for the patient entering the complex health-care arena Integrated Health-Care System Integrated health-care systems can be defined as innovative, patient-centered hospital delivery systems that continuously improve quality and use resources cost-effectively (Effken & Stetler, 1997) This type of system evolved as a result of changes in reimbursement and managed care An integrated health-care system is a network of structures combined into one to provide better continuity of care 51 for patients in the most applicable setting The networks share the risks associated with the cost to provide care to the patients (McCarthy, 1997) By providing services in the most appropriate setting, the costs can be contained, which allows for a better patient outcome The push for an integrated system stems from the need to improve the quality of care within organizations, to reduce costs associated with health care, and to ensure patient/customer satisfaction (Wolf, Hayden, & Bradle, 2004) The single hospital of yesterday is now a component of a much larger system, offering a wide range of services for the consumer Integrated health-care systems attempt to keep costs down and keep dollars for care within their own systems This type of consolidation also assists and prepares for managed competition One example of a cost control measure includes redesigning practice to serve the organizational and patient needs better Management systems look collaboratively at patient care and outcomes of care It is important for nurses to know and understand how these systems work and what can be done to enhance them The services offered can include a combination of any of the following: hospital, clinics, home health, community health, school nursing, longterm care, and rehabilitation services When services vary like this, it is known as vertical integration, which provides a range of health-care services across the life span (Newhouse & Mills, 1999) When the integrated system consists of a chain of similar services, such as all hospitals or clinics, this is known as horizontal integration TYPES OF HEALTH-CARE SERVICES There are three types of health-care services on the health-care continuum Integrated systems often provide all three types The shift to managed care has also changed the focus from secondary and tertiary care to primary health care Primary health care prioritizes the importance of health promotion and illness prevention This is the first line of defense for health care Examples of health-care services provided in primary care include physician visits, immunization clinics, mammography, and teaching and education for clients Primary health care covers services that prevent illness Secondary health-care services focus on treating disease 04Jones Leadership(F)-ch 04 52 1/14/07 3:34 PM Page 52 Understanding Organizations through intervention The patient has a health alteration and seeks treatment to improve the current state of health Secondary health-care settings include the acute care setting, such as inpatient hospitals, surgical centers, and birthing centers Tertiary health-care services focus on the restoration and rehabilitation services for patients with chronic health-care needs The goal is to maintain the current state at the best possible level of health Health-care settings include long-term care facilities, hospice, and rehabilitation centers Managed care is the umbrella term that is used to address the financing and risk management for services provided in integrated health-care systems Managed care unites the financing groups with the providers of care The goal of managed care is to establish programs that benefit all key participants, including the insurance companies and the physicians The push for managed care was evident as the health-care industry continued to become more complex and difficult for patients to maneuver and understand Intensifying these concerns was the increase in cultural diversity served by the private sector (Valanis, 2000) The managed care model is the only health-care delivery model formulated from market and customer response, as compared with government and legislative initiatives (KellyHeidenthal, 2003; Liberman & Rotarius, 2001) Managed care involves a prepaid mechanism, which means that a predetermined dollar amount is established to cover the cost of the health-care service Care that is rendered is selective and requires prior authorization There are many types of managed care products in use currently The most common is the health maintenance organization (HMO) The HMO plan offers health care for its members for a fixed prepaid amount An enrolled group of patients participates in the plan, and the provider is considered an employee The provider receives a fixed payment for the services from the subscriber and assumes the financial risk The advantage of a managed care program is cost reduction There is a gatekeeper for the patient, usually the primary care physician The gatekeeper’s role is to oversee and coordinate services for the patient in the mix of the system A disadvantage to managed care includes limitations to specialized care needs; some organizations are profit-driven and limit their services Patients in health care today are discharged quicker and sicker, with only limited services available outside of the acute care setting Professional Practice Models In organizations where nurses are employed and valued, management has developed and implemented opportunities for professional, autonomous nursing practice Shared governance is defined as “structures… based on a set of principles about the relationship between the worker and the workplace” (Porter-O’Grady, 2003, p 251) The push was for decentralized nursing leadership and decision making for professional nurses Such a structure is based on the values of interdependence and accountability for nursing practice The objective is to empower the nursing staff through involvement in decisions that affect their specific work areas (Erickson, Hamilton, Jones, & Ditomassi, 2003) The outcome from implementation of a professional practice model is that nurses have control of their nursing practice Nursing staff participates in nursing committees that cover topics such as education, community involvement, research, quality control, and staffing, scheduling, and hiring practices The uniqueness of this structure is that nurses gain control and autonomy over their professional nursing practice Governance models are designed to link values and nursing practice beliefs to achieve quality care (Anthony, 2004) There are more opportunities to be involved in decision making and have a voice within the organizational structure As the nursing staff members serve on the various committees, they plan and organize the care of the patients and establish standards for nursing care based on research and evidenced-based practice MAGNET STATUS The American Academy of Nursing (AAN) began to review and identify as magnet hospitals those hospitals that had solid organizational structures and a decentralized, open management style This concept became popular in the 1980s in relation to professional practice model concepts The goal of the magnet organization was to demonstrate autonomous nursing practice through selfgovernance, appropriate staffing, clinical expertise, and clinical ladder career opportunities (Upenieks, 2003) To obtain magnet status, hospitals demonstrate that the structure in place is exemplified through a professional practice model that promotes excel- ... organizational and patient needs better Management systems look collaboratively at patient care and outcomes of care It is important for nurses to know and understand how these systems work and what... status allows the nursing staff to participate and share in the development of policies and procedures through committees detailing research, practice, and education Quality care and indicators... their nursing practice Nursing staff participates in nursing committees that cover topics such as education, community involvement, research, quality control, and staffing, scheduling, and hiring