Understanding
Organizational
Structures
Introduction
• In health care today, organizational structures are affected by
the economic, political, social, and technological pressures in
society.
• The structure identifies the authority, the responsibility, and the
decision-making processes.
• Today’s structures are no longer simple and hierarchical; they
are complex systems with cross-functional teams and
communications and interactions occurring at many levels.
• The structure of the organization is representative of its
mission, vision, and values and how it functions.
Theory of Organizational strctures
• [Link] organization can be defined as “a group of persons with
specific responsibilities who are acting together for the
achievement of a specific purpose determined by the
organization.
• 2. The Classical Theory focus of this theory was on the
structure of the formal organization: it examined the efficiency
of the organization as a by-product of the design of the system
• 3. The Neoclassical Theory links with a democratic style of
leadership because the employees are encouraged and allowed
to participate in the functions of the organization and the
decision-making proces.
4. The Chaos Theory stresses the importance of change within
organizations. Change is the stimulation of the organization, and it
is constant in health care today.
Organizational Components
and Planning
• Organizations with a strong value set, mission, vision, and
philosophy will be more prepared to successfully meet these
ever-changing events.
• Goals and objectives, policies and procedures, and strategic
planning are also key components of facile organizational
operation.
ORGANIZATIONAL VALUES
• The stated values of an organization give meaning to its existence
and help its members act in concert with its motives.
• The values clarify what is important to the organization in regard to
its customers, products, and/or services.
• Values set the standards for behavior within the organization and
support the mission and the strategic plan.
• For example, if a hospital as an organization values service, the
members will work hard on methods to improve their patient
satisfaction surveys.
MISSION STATEMENTS
• The purpose or the mission statement encapsulates the intent and
goal of the organization.
• It explains, in a short statement, the core reasons behind the
organization’s existence and a primary focus on a single strategic
thrust for the organization.
• The purpose of each area of the organization is to pursue the stated
mission of the organization.
• Example: Provide a personal approach to the services offered by
demonstrating a commitment to quality health care and offering
services that promote well-being of the community through
education and advanced technology.
VISION STATEMENTS
• The vision statement incorporates an organization’s mission
and values.
• It serves as the future-oriented plan for the organization, the
wish list of future development ideas, and the plan to set this
wish list into motion.
• The vision statement serves as the dream of the organization
and provides guidance on where an organization wants to be
10–15 years into the future.
• Example: To be the premier leader in quality health-care
education and service.
ORGANIZATIONAL
PHILOSOPHY
• The philosophy of an organization is derived from its mission
and incorporates the organizational values that direct the
behavior of the organization.
• The information provided in the philosophy the values and
principles of the organization provides the framework for the
decision-making process of the organization and shapes the
social and professional development of the organization.
ORGANIZATIONAL GOALS
AND OBJECTIVES
• The specific goals and objectives of the organization provide
more concrete information on what and how the organization
plans to provide/act, under the guiding hands of its established
mission and philosophy.
• The organizational goals are the broad statements of intent,
and the objectives are the specific ways to accomplish the
goals.
ORGANIZATIONAL POLICIES
AND PROCEDURES
• A policy is a written plan stating how the organization will
function and work together. Policies help the organization to
accomplish the established goals and directives and provide
cohesive guidance for the members of the organization.
• The procedures are the methods and direction on how the
policy will be implemented. It offer step-by-step guidance as to
how to implement and carry out the policy.
ORGANIZATIONAL
STRATEGIC PLANNING
• Many organizations do strategic planning 3–5 years out for the
purpose of preparing to reach future goals.
• Strategic planning begins with analysis of where the
organization stands currently and where it wants to be in the
future.
• The strategic plan may include new services for patients,
building opportunities, and other growth for the organization.
It serves as the blueprint for the future.
The Organization Chart
• The organization chart outlines the formal working
relationships and the way people interact within the given
structure.
• The organization chart establishes the following:
■ Formal lines of authority—the official power to act
■ Responsibility—the duty or assignment
■ Accountability—the moral responsibility
The Organization Chart
• The chart displays the decision-making authority within the
organization, illustrating who has the power to make and enforce
decisions for the organization.
• The formal channels of communication are identified as well as how
members fit within the given structure.
• The chart demonstrates the formal relationships within the
organization but does not demonstrate the informal communication
and relationships that often develop as a result of working within the
organization.
• The chart shows how the organization is supposed to run and how
departments support one another in this process.
The Organization Chart
CHAIN OF COMMAND
• Chain of command demonstrates who formally reports to
whom within the organization.
• Line positions are depicted by the solid vertical lines within
the organization chart. These lines demonstrate who is
responsible to whom within the organization.
• 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.
CHAIN OF COMMAND
• 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.
• 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
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.
• 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.
Type of Organizational
Structures
• 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.
• 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.
TALL/CENTRALIZED/BUREAUCRACY
• The centralized structure, a tall structure, also known as the
bureaucracy, is a hierarchical structure
• 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 departments, and communication
tends to be slow as it travels through this type of a system.
• 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.
FLAT/DECENTRALIZED
STRUCTURE
• The decentralized structure is flat in nature, and organizational
power is spread out throughout the structure.
• There are few layers in the reporting structure, and managers
have a broad span of control. Communication patterns are
simplified, and problems tend to be addressed with ease and
efficiency at the level at which they occur.
AD HOC/ADHOCRACY STRUCTURE
• The organic or adhocracy structure of organization is an open,
free-form system. This system has resulted from behavioral
research based on job 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.
AD HOC/ADHOCRACY
STRUCTURE
• 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.