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Theory And History Of Hospital Management
Dr N Krishna Reddy
What makes a hospital better?
Count hospital management among new technology, drugs, and medical
procedures as the most important elements of a good hospital. Hospital
management has a direct impact on the quality of patient care and
safety, which translates into life-and-death numbers. It is reported
that in USA up to 98,000 patients die each year from medical mistakes,
more than the number of people who die from car accidents or breast
cancer.
There are two management styles -– control-based and commitment-based.
Both management philosophies seek to achieve higher organizational
performance by managing resources including employees more effectively.
However, the way they attempt to accomplish this goal is inherently
different and contradictory.
The control-based culture and management system currently in place in
most US hospitals, and also in India, doesn’t work and contributes to
medical mistakes.
The control-based style emphasizes lower-level needs (e.g., basic pay)
and does not allow for the fulfilment of higher level needs (e.g., need
for independence, achievement, self-confidence, and recognition).
Consequently, it makes workers sick –- not physically but intellectually
because it does not offer opportunities for employees to satisfy their
higher level needs. Employee turnover is high and morale low in such
organizations.
This kind of environment translates into medical errors by affecting the
detection and reporting of errors and by hampering employee motivation,
satisfaction, morale, and the kind of effort people put into their jobs.
It does not allow any learning to take place in health care delivery
process as it sets in motion a vicious cycle in which greater incidence
of medical errors leads to greater control and regulation of employee
behaviours, further strengthening the blame culture and finger pointing.
In the absence of any corrective action, the same medical errors keep
reoccurring.
Instead, a commitment-based approach, where management assumes that
people are capable of self-discipline and can work autonomously, works
better for both hospital employees and patients because employees are
committed to their organization and doing the best jobs that they can.
Employees take initiative and are actively engaged in their work in a
commitment-based organization. They take pride in the organization and
its mission. They cooperate and trust each other, thus overcoming
communication barriers and enhancing coordination and teamwork. This
management style results in low employee turnover and high morale. High
employee morale generates a positive emotional energy. Employees are
empowered and energized. The utilization of human capacity is 100
percent or more.
Implementing commitment-based management for healthcare organizations
would be a difficult transition. Unfortunately, the large majority of
hospitals have managers that are used to the control-based style. It
would be an uphill task to be able to change such organizations from
control-based to commitment-based. The existing clinical culture and the
difficulty of changing the belief that new technology solves all woes
are two major hurdles in implementing commitment-based management.
We at Care Hospitals are focusing on developing decision aids for
managers in the service and manufacturing industries. He also has
incorporated location analysis and general management theory into new
models for delivering world-class health care to local people within
their affordability.
Why theory and history of management?
Theory provides a simple conceptual framework for organizing knowledge
and for providing a blueprint for action to help guide organizations
toward their goals.
Contributions from past industrialists have moulded the organizational
culture and managers can benefit from an awareness of these
contributions.
The historical context of management
Social forces are the norms and values that characterize a culture.
Early social forces allowed workers to be treated poorly; however, more
recent social forces have provided for more acceptable working
conditions for workers. Social forces have influenced management theory
in areas such as motivation and leadership.
Economic forces are the ideas behind the concept of a market economy
such as private ownership of property, economic freedom, competitive
markets, and a limited role for government.
Political forces such as governmental regulations play a significant
role in how organizations choose to manage themselves. Political forces
have influenced management theory in the areas of environmental
analysis, planning, control, organization design, and employee rights.
Precursors to management theory
British social worker Robert Owen (1771–1858) was one of the first
managers to show respect and dignity to workers in his cotton factory.
He implemented better working conditions, raised the minimum age for
child labour, reduced hours, and supplied meals.
British mathematician and inventor Charles Babbage (1791-1871) applied
mathematic principles to find ways to make the most efficient use of
facilities and materials. He also advocated profit-sharing plans.
Scientific management
Scientific management focuses on ways to improve the performance of
individual workers. Some of the major contributors are:
American Engineer Frederick W. Taylor (1856-1915) saw workers soldiering
or deliberately working beneath their potential and designed a 4-step
method to overcome this problem:
- It begins with breaking the job into its smallest pieces.
- The second step is to select the most qualified employees to perform
the job and train them to do it.
- Next, supervisors are used to monitor the employees to be sure they
are following the methods prescribed.
- Finally, continue in this fashion, but only use employees who are
getting the work done.
Frank B. Gilbreth (1868- 1924) and his wife Lillian M. Gilbreth, worked
to find more efficient ways for workers to produce output. They sought
to understand the work habits of industrial employees and to find ways
to increase their output. They minutely observed and refined the hand
motions into 17 basic motions, such as grasp, transport loaded, and
hold.
Henry Gantt (1861-1919) introduced the Gantt chart, which is a way
to
schedule work. This type of chart is still used today.
Harrington Emerson (1864–1945) was an advocate of
specialized management
roles in organizations.
Administrative Management
Administrative management focuses on managing the total organization.
French management theorist Henri Fayol (1841-1925) was the first to
identify the four management functions-
- planning,
- organizing
- leading, and
- controlling,
British thinker Lyndall Urwick is best known for integrating scientific
management with administrative management. He wrote a book called The
Elements of Business Administration, published in 1943.
German political economist and sociologist Max Weber (1864-1920)
outlined the concept of bureaucracy based on a rational set of
guidelines for structuring organizations in the most efficient manner.
His work is the foundation of contemporary organization theory.
Chester Bamard (1886–1961) wrote about the acceptance of authority and
how managers get employees to do what they ask in a book called The
Functions of the Executive. He outlined some essential communication
rules in an organization:
- Everyone should know of the channels of communication
- Everyone should have access to the formal channels of communication
- Lines of communication should be as short and as direct as possible
The Behavioural Perspective
The emergence of organizational behaviour occurred out of the works of
Abraham Maslow (1908-1970) and Douglas McGregor (1906 - 1964).
Organizational behaviour takes a holistic view of behaviour by
addressing individual, group, and organization processes. Maslow
described hierarchy of human needs. McGregor developed Theory X and
Theory Y of human motivation.
The Quantitative Perspective
MANAGEMENT SCIENCE: Management science focuses specifically on the
development of mathematical models. These models help organizations to
try out various activities with the use of a computer. Modelling can
help managers locate the best way to do things and save money and time.
OPERATIONS MANAGEMENT: Operations management is an applied form of
management science that helps organizations develop techniques to
produce their products and services more efficiently.
Integrating Perspectives
THE SYSTEMS PERSPECTIVE: A system is an interrelated set of elements
functioning as a whole. An organization as a system is composed of four
elements:
- inputs (material or human resources),
- transformation processes (technological and managerial processes),
- outputs (products or services), and
- feedback (reactions from the environment).
Systems Theory
Systems theory has had a significant effect on management science and
understanding organizations.
First, let’s look at “what is a system?” A system is a collection of
part unified to accomplish an overall goal. If one part of the system is
removed, the nature of the system is changed as well. For example, a
pile of sand is not a system. If one removes a sand particle, you’ve
still got a pile of sand. However, a functioning car is a system. Remove
the carburettor and you’ve no longer got a working car. A system can be
looked at as having inputs, processes, outputs and outcomes. Systems
share feedback among each of these four aspects of the systems.
Let’s look at an organization. Inputs would include resources such as
raw materials, money, technologies and people. These inputs go through a
process where they’re planned, organized, motivated and controlled,
ultimately to meet the organization’s goals. Outputs would be products
or services to a market. Outcomes would be, e.g., enhanced quality of
life or productivity for customers/clients, productivity. Feedback would
be information from human resources carrying out the process,
customers/clients using the products, etc. Feedback also comes from the
larger environment of the organization, e.g., influences from
government, society, economics, and technologies. This overall system
framework applies to any system, including subsystems (departments,
programs, etc.) in the overall organization.
Systems theory may seem quite basic. Yet, decades of management training
and practices in the workplace have not followed this theory. Only
recently, with tremendous changes facing organizations and how they
operate, have educators and managers come to face this new way of
looking at things. This interpretation has brought about a significant
change (or paradigm shift) in the way management studies and approaches
organizations.
The effect of systems theory in management is that writers, educators,
consultants, etc. are helping managers to look at the organization from
a broader perspective. Systems theory has brought a new perspective for
managers to interpret patterns and events in the workplace. They
recognize the various parts of the organization, and, in particular, the
interrelations of the parts, e.g., the coordination of central
administration with its programs, engineering with manufacturing,
supervisors with workers, etc. This is a major development. In the past,
managers typically took one part and focused on that. Then they moved
all attention to another part. The problem was that an organization
could, e.g., have a wonderful central administration and wonderful set
of teachers, but the departments didn’t synchronize at all.
Business management theory
A business philosophy or popular management theory is any of a range of
approaches to accounting, marketing, public relations, operations,
training, labor relations, executive time management, investment, and/or
corporate governance claimed to improve business performance in some
measurable or otherwise provable way.
The Business Model concept
Alexander Osterwalder (2004) described a business model as consisting of
nine related business model building blocks. Thus, a business model
describes a company's:
1. Value propositions: The Company’s offers which bundle products and
services into value for the customer. A value proposition creates
utility for the customer.
2. Target customer segments: The customer segments a company wants to
offer value to. This describes the groups of people with common
characteristics for which the company creates value. The process of
defining customer segments is referred to as market segmentation.
3. Distribution channels: The various means of the company to get in
touch with its customers. This describes how a company goes to market.
It refers to the company's marketing and distribution strategy.
4. Customer relationships: The links a company establishes between
itself and its different customer segments. The process of managing
customer relationships is referred to as customer relationship
management.
5. Value configurations: The configuration of activities and resources.
6. Core capabilities: The capabilities and competencies necessary to
execute the company's business model.
7. Partner network: The network of cooperative agreements with other
companies necessary to efficiently offer and commercialize value. This
describes the company's range of business alliances.
8. Cost structure: The monetary consequences of the means employed in
the business model.
9. Revenue model: The way a company makes money through a variety of
revenue flows.
The biological Perspective
The human body is a miraculous arrangement of systems and structures,
each diligently performing its own task, and at the same time, working
harmoniously to keep us—the whole system—functioning in a most effective
and viable manner.
Take a moment and consider these components and their complexity:
- Organs—heart, lungs, brain, kidneys, pancreas, etc.
- Systems—circulatory, digestive, nervous, respiratory; reproductive;
etc.
- Structures—bones, muscles, cartilage, tissue, etc.
With all of these complexities, and so many opportunities for things to
go wrong, one would expect it to be a miracle that anything right
happens. And yet, over and over again, this common miracle
unfolds—perfectly. These systems work as they are designed to; we call
that "normal" and we're "healthy;" When they don't work, neither do we.
Because this "viable" living system works so well, this is a model to
emulate for organizational effectiveness.
Using the living systems model for organizations
With the human body as a model, we can look at our
business/organization. On the simplest level, can't we imagine the
various departments as reflections of the systems and structures of the
human body?
- Isn't the "org. chart" a "skeletal" representation of how the pieces
fit together?
- Aren't the "computer networks" and "phone/digital system" very much
like the circulatory or respiratory systems that allow nutrients—"blood"
and "air"—the "information" of business—to flow throughout?
As we envision these incredible systems doing their "own" thing, we must
not forget that as important as each function is individually, they are
only "viable" as a whole. Paraphrasing the great poet John Donne: No
[function] is an island, entire unto itself; each is part of the main…
Imagine if the body did conduct itself this way! It wouldn't take long
for the entire system to suffer the consequences—disease at the very
least, if not a quick and certain death.
Prescription for effectiveness
Even as each and every "function" is cherished and acknowledged for its
own uniqueness, its success or "viability" is rewarded in terms of the
alignment and contribution to the whole and not at its expense.
In the body, each function "naturally" shares a commitment to the larger
mission of the enterprise—sustaining life! Your business "viability" is
no different. Call it success, but do be careful and define success as
an interdependent whole, taking into account all the
stakeholders/components of the integrated "process chain" of
life—employees, customers, vendors, shareholders, communities, etc. etc.
etc. When all are recognized and rewarded as an integrated system the
organization stands the test of time.
Mission Statement of an Organization
A mission statement defines the core purpose of the organization - why
it exists. The mission examines the "raison d'etre" for the organization
beyond simply increasing shareholder wealth, and reflects employees'
motivations for engaging in the company's work. Effective missions are
inspiring, long-term in nature, and easily understood and communicated.
Mission statement of Care Hospitals is:
To provide quality medical care at an affordable price, delivered with
compassion, concern and care, through team spirit, training and
technology.
This involves:
- To develop a comprehensive healthcare delivery model that suits one
and all.
- To develop Centers of Excellence in various medical specialties
- To evolve a holistic approach to healthcare by incorporating the best
from various forms of medicine.
Vision Statement of an Organization
A Vision statement is a statement giving a broad, aspirational image of
the future that an organization is aiming to achieve. Rather than
describing the organisation as it currently exists, the statement
presents a picture of the desirable future. A vision statement is
essentially future oriented indicating the growth and renewal a group
wishes to experience in a brief statement.
Care Vision Statement is:
- To evolve as a unique university-based healthcare-centre where the
quest for new knowledge would continuously yield more effective and more
compassionate care for all.
- To nurture a new generation of professionals of life-long commitment,
dedication, knowledge, skills, wisdom and values.
- To strive for public trust and maintain medicine’s humane and noble
place amongst professions.
- To be globally competitive in healthcare and related businesses
integrating local culture and ethos.
Organizational Goals
Organizational Goals are good faith, quantitative objectives which
organization voluntarily set as the minimum progress they can make
within a certain time period (usually one year) to correct under
utilization of resources including their work force. Goals are specific
objectives of specific systems and may be otherwise referred to as
operating or program objectives or goals, operating standards,
performance levels, targets, or expected results. Goals are stated in
terms of facts and are usually thought more Long Term. Short term goals
are called objectives.
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