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    HEST 5002

    Health Care Management

    Management Theories:Organisational Theory

    2 February 2011

    (Week 18)

    Learning Outcomes

    To provide a critical appreciation ofdifferent management theories

    To develop an understanding of thesedifferent theories and their application tohealth care

    Outline of this sessionConsider briefly different managementtheories and their application to healthcare:

    1. Scientific management

    2. Classical management

    3. Human relations school of management

    4. Systems Theory

    5. Contingency Theory

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    A timeline of management theory

    Theory

    Time1800s 1900s 1980s

    ScientificManagement

    ClassicalManagement

    Humanrelations

    school

    Contingency &

    Systems Theory

    1. Scientific Management

    The founding father is credited as FWTaylor

    Theories based on his own experience ofwork

    Studied people at work, e.g. pig-iron

    handlers in the late 1800s Theories geared towards efficiency of

    working methods and workers rewardedfor their own efficiency

    Scientific Management cont.

    4 scientific principles:

    Development of a true science for everyoneswork

    Scientific selection, training and developmentof workers

    Co-operation with workers to ensure it iscarried out in a prescribed way

    Division of work and responsibility

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    Scientific Management cont.

    Taylors ideas takenforward by others:

    Frank Gilbrethstudied bricklayers

    Henry Gantt deviseda chart to representwhen tasks wereplanned and bywhen they should beachieved (seeexamples)

    Scientific Management cont.

    Q: What potentialbenefits do you thinkarose out of Scientific

    Management?

    Q: What potentialcriticisms do you thinkcould be made

    against ScientificManagement?

    2. Classical ManagementThe founding father is seen as Henri Fayol

    To manage is to forecast and plan, to organise, to

    command, to coordinate and to control

    Fayol developed 14 principles of management,which have since been classified into areas suchas:

    bureaucracy,

    hierarchy,

    workers rights (fairness and job stability)

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    Classical Management cont.

    6 key activities:

    Technical

    Commercial

    Financial

    Security

    Accounting

    Managerial

    Classical & Scientific Management

    These theories do apply to managementeven today:

    plan ahead,

    count things and movements,

    allocate tasks and responsibilities,

    limit your span of control, review results.

    3. Human relations school of

    management

    Not to be mistaken with human resourcemanagement (main focus is on attitudes andbehaviour of employees) covered in HEST

    5006

    Origins in early 1900s as a response to scientificmanagement (Mary Parker Follett and EltonMayo and the Hawthorne experiments)

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    Main focus

    Emphasising the importance of socialprocesses at work

    Meeting peoples needs for belonging andfor group membership

    Management of people in teams andgroups and the effects they have on theorganisation

    Hawthorne experiments (1924-1932)

    A series of different experiments at theWestern Electric Company using:

    Lighting conditions

    Relay assembly room

    Bank wiring roomInterviewing

    4. Systems Theory a collection of parts unified to

    accomplish an overall goal. If one part ofthe system is removed, the nature of thesystem is changed as well.

    4/5 distinct parts: Inputs (Transformation)

    Outputs

    Outcomes

    Feedback

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    History of Systems Theory

    Hegel (1800s): historical development is adynamic process

    Marx & Darwin

    Von Bertalanffy (1968/9): biologicalbackground, but used it as the basis of hisstudy of general system theory

    Organisational Factors

    1. Inputs (Transformation)

    2. Outputs

    3. Outcomes

    4. Feedback

    Systems TheoryI T O Oc

    F

    I = inputs

    T = transformationO = outputs (Oc = outcomes)

    F = feedback

    E = environmentE

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    Assumptions

    1. Objects the parts, elements, or variables within thesystem. These may be physical or abstract or both,

    depending on the nature of the system.

    2. A system consists of attributes the qualities orproperties of the system and its objects.

    3. A system had internal relationships among itsobjects.

    4. Systems exist in an environment. A system, then, is aset of things that affect one another within an

    environment and form a larger pattern that is different

    from any of the parts.

    System Theory Characteristics

    Wholeness, interdependence and correlations

    Suprasystems and subsystems

    Self-regulation and control

    Interchange with the environment

    Balance/homeostasis

    Change and adaptability (morphogenesis)

    What has it added to

    management theory?

    Brought a new perspective for managers tointerpret patterns and events in the workplace.

    Recognises the various parts of the organisation,and, in particular, the interrelations of the parts,e.g. manufacturing, supervisors with workers, etc.

    In the past, managers typically took one part andfocused on that. Then they moved all attention toanother part, but the departments didnt synchronize at

    all.

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    5. Contingency Theory

    The study of any complex system

    Often applied to strategic andorganisational management

    The it depends approach: environment

    Contingency Theory

    Coined by Lawrence and Lorsch (1965)

    the amount of uncertainty and rate of changein an environment impacts the development ofinternal features in organisations

    Galbraith (1973)

    There is no one best way to organise

    Any way of organising is not equally effective

    Contingency Theorythe best way to organise depends onthe nature of the environment to which theorganisation relatesContingency theoryis guided by the general orientinghypothesis that organisations whoseinternal features best match the demandsof their environments will achieve the bestadaptation.

    Scott (2003)

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    Conflict in contingency theory

    Inter-departmental conflict caused by: mutual task dependence,

    task-related asymmetries,

    conflicting performance criteria,

    dependence on common resources,

    communication obstacles,

    ambiguity of goals, and

    organisational differentiation

    Contingency & Systems Theory

    Clear relationship between the two

    One describes the concepts that existwithin an environment

    The other describes the complexity thatexists by being part of an environment

    A system in health care

    Naylor (2004) p.35

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    A system in health care cont.

    Application to the NHS

    Consider the changing nature of illness, diseaseand technological innovation

    The NHS operates in an uncertain environment

    Many complex factors cause multiple effects onhealth service delivery

    Environment is key in both these theories andthe NHS

    Impact on the NHS Additional management schools of thought

    that fit better than traditional scientific orclassical theories.

    Helps managers and leaders to accept thecomplexity of their decisions but doesprovide a framework of sorts to helprationalise it.

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    Summary

    Considered a number of key historical managementtheories and their application to health care

    Classical and scientific management: the firstrecorded principles of management

    Human relations school: focus on workers aspeople and their interactions

    Systems and contingency theory add to existingmanagement and organisational theory by allowingfor the acceptance of disorder, uncertainty, chaos andcomplexity

    All have a role to play in real-life application to theNHS operating environment

    References & Further Reading

    1. Bertalanffy, von, L. (1968). General systems theory.New York: Braziller.

    2. Bertalanffy, von, L.(1969), General System Theory:Foundations, Development, Applications

    3. Boddy, D. (2002) Management: An IntroductionFTPrentice-Hall

    4. Cole G. A. (2004) Management Theory and Practice(6th Edition). London: Thompson.

    5. Dawson, S.J.N. (1999). Managing, Organising and

    Performing in Health Care: What do we Know and Howcan we Learn? in Mark, A. L., Dopson, S. (eds)Organisational Behaviour in Health Care. Basingstoke:Macmillan.

    6. Infante, D.A., Rancer, A.S. & Womack, D.F. (1997).Building communication theory. Prospect Heights,Illinois: Waveland Press.

    7. Laarmans, R. (1999). Communicatie zonder Mensen.

    Amsterdam: Uitgeverij Boom.8. Littlejohn, S.W. (2001). Theories of Human

    Communication. Belmont, CA: Wadsworth/ ThomsonLearning.

    9. Lorsch, J. W. & Lawrence, P. R. (1965) Organisation forproduct innovation, Harvard Business Review, 43: 109-120

    10. Luhmann, N. (1984). Soziale Systeme. Grund einerallgemeinen Theorie. Frankfurt am Main: Suhrkamp.

    11. McNamara, C. (1997-2008).Brief Overview ofContemporary Theories in Management. [online].Available from:http://www.managementhelp.org/mgmnt/cntmpory.htm

    12. Midgley, G. (Ed.) (2003). Systems thinking. London:Sage.

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    13. Morgan, G. (1986). Images of Organisation. London:Sage.

    14. Scott, W. R. (2003). Organizations: Rational,natural, and open systems(5th ed.). Upper Saddle

    River, NJ: Prentice Hall.

    15. Skyttner, L. (1996). General Systems Theory: An

    Introduction

    16. Thompson, D. (1987). Coalitions and Conflict in theNHS: Some Implications for General Management,

    Sociology of Health and Illness, 9(2) 127-53.

    APPENDIX 1:The 14 principles of Classical Management

    1. Division of work

    2. Authority

    3. Discipline

    4. Unity of command

    5. Unity of direction

    6. Subordination ofindividual intereststo the generalinterest

    7. Remuneration

    8. Centralisation

    9. Scalar chain

    10.Order

    11.Equity

    12.Stability of tenure ofpersonnel

    13.Initiative

    14.Esprit de corps

    Class Work (optional) Why is management important to you in your

    job?

    With reference to your workplace, consider howthe management theories weve examined today

    help you / your team function?

    How would you improve on those theories?


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