Health Management

(540163)

Lecture 2: Evolution of healthcare management

systems
Introduction
Management is
• “the process of getting things done through and
with people.”
(Harold Koontz and Cyril O'Donnell,
Principles of Management: An Analysis of Managerial Functions, 1955)

• Directing and planning of effort and organizing

and employing the resources to accomplish
some determined objectives.
• The practical execution of the plans is the
administrative pat.
Role of Manager
• Taking decisions at any and all moments.
monitoring the
Planning environment &
achieving
adaptations

Classical
Controlling Management Organizing
Functions

Actuating/Motivating
Qualities of a manager
• Knowledge of experiences of their predecessors
• Intuition
• Tactics of persuasions
• Controlling the human factor
• Constant monitoring the environment &
achieving timely adaptations

Management is Science and Art

The Evolution of Management Theory

[Link]-
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History of Modern Management
Today Problems can be solved using Quality Viewpoint
theories developed in the past and
tested and improved over time.
Contingency Viewpoint

Systems Viewpoint

Behavioral Viewpoint

Traditional Viewpoint

1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
Assumptions of Viewpoints
• Continuous viewpoints do not replace each other
but have differing perspectives
• All differ on how they view:
▫ behavior of individuals
▫ organizational goals
▫ issues that the organization faces
▫ how those issues should be resolved
 Scientific management
(F. Taylor 1911)

Scientific Management
The systematic study of the relationships
between people and tasks for the
purpose of redesigning the work process
for higher efficiency.
 1. Scientific management
(F. Taylor 1911)
• Father of Modern Management =the collaboration
of people and machines to create value.
• The direct observations of men at work led him to
develop the "motivation" theory = human labor is very
much analogous to machine work--- something to be
"engineered" to achieve efficiency === waste of human
efforts.
• His theories on management would be promoted
worldwide (took stronger root in Japan than in the U.S.
or Europe).
 If greater economic development through efficient and
productive work was Taylor's own view of his work, the
growing Labor Movement would see "Taylorism" as exploitive.
Inefficiency of workers from Taylor’s
point of view:
(1) Workers tended to ration their work load or work less
than they could, because working faster and harder
would mean that there would be less or no work to do
in the future.
(2) Management failed to structure work effectively and
to provide appropriate incentives.
(3) Rewarding for attendance, not performance (A day-
rate or hourly-rate system)
(4) the "piece-rate" system that paid workers on the basis
of output, also failed because standards were poorly
set, employers cut rates when workers earned "too
much", and workers would conceal their real capacity
for production to keep standards low.
What is the appropriate work standard?
The appropriate wages?
Management should establish specific work
targets, pay workers for the tasks and goals met,
and provide regular feedback.
The main elements of his theory were:
1. determining fair work standards and practices
= “ the one best way to work”
2. determining the kind of work for which an
employee was most suited, and to hire and
assign workers accordingly.
3. training the worker as to how the work is to be
performed and for updating practices as better ones
are developed.
4. Managers are not responsible for execution of work,
but they are responsible for how the work is done.
(Planning, scheduling, methods, and training are functions of the manager).

• The "scientific" approach towards work led Taylor

to investigate work through "task allocation" = a job
would be studied by sub-dividing it into discrete
tasks, each element of the job would be investigated
to discern the optimal efficiency by which it could
be accomplished.
• Problem: It omits the worker's own contribution to
the design of work .
 Taylor's Influence and Legacy
Carl Bart lecturer at Harvard and early consultant on Scientific Management
H.L. Gantt developed Gantt chart, a visual aid for graphing the scheduling of tasks and flow of work to be
completed
Harrington introduced scientific management to railroad industry and developed idea of "staff" function as
Emerson advisory role to "line" management.
Morris Cooke
adapted scientific management to educational and municipal organizations.
Hugo
created the discipline of industrial psychology
Munsterberg
Lillian Gilbreth introduced psychology to management studies.
Frank Gilbreth
introduced scientific management in construction industry and developed "motion" studies
using photography for what came to be called "time and motion" studies
S. Person as dean of 's Amos Tuck School of Administration and Finance, promoted the teaching of
scientific management
James O. professor at and senior partner in his accounting firm, propagated the budget as a means of
McKinsey accountability and measuring performance.
Outside the :
France Le Chater translated 's work and introduced scientific management thoughout state plants
during World War I. This will influence the French theorist Henri Fayol who publishes
Administration Industrielle et Générale in 1916, emphasizing organizational structure in
management.
Switzerland The American Edward Albert Filene established the International Management Institute to
spread information about management
Japan Yoichi Ueno - In 1912 introduced Taylorism to and was first management consultant to create
the "Japanese- management style". His son Ichiro Ueno pioneered Japanese quality
assurance.
The Gilberths
• Lilian & Frank Gilbreth refined Taylor’s theory
and made contributions to time and motion
study.
• They usually framed the task step by step into
their component movements.
• Target: to save time and effort, maximize
efficiency.
• Problem: repetitive tasks, monotonous,
dissatisfaction of Employee.
Administrative Management Theory
Administrative Management
▫ The study of how to create an organizational structure that
leads
to high efficiency
and effectiveness.
▫ organizational structure= the system of tasks and authority
relationships that control how employees use resources to
achieve organization’s goals.
▫ Mainly developed in Europe.
Administrative Management Theory
Max Weber (Germany)
▫ Developed the concept of bureaucracy as a formal
system of organization and administration designed to
ensure efficiency and effectiveness.

Henri Fayol (France)

▫ Developed a set of principals essential to increasing the
efficiency of the Management process.
Weber’s
Principles of
Bureaucracy

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Rules, SOPs and Norms
• Rules – formal written instructions that
specify actions to be taken under different
circumstances
• Standard Operating Procedures (SOPs)
– specific sets of written instructions about
how to perform a certain aspect of a task
• Norms – unwritten, informal codes of
conduct that prescribe how people should act
in particular situations

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Fayol’s Principles of Management

1. Division of Labor: allows for job specialization.

▫ jobs can have too much specialization leading to
poor quality and worker dissatisfaction.
2. Authority and Responsibility
▫ both formal and informal authority resulting from
special expertise.
3. Unity of Command
▫ Employees should have only one boss.

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 20

Fayol’s Principles of Management

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4. Line of Authority
▫ A clear chain of command from top to bottom of
the firm.
5. Centralization
▫ The degree to which authority rests at the top of
the organization.
6. Unity of Direction
▫ A single plan of action to guide the organization.
 Fayol’s Principles of Management
7. Equity - The provision of justice and the fair
and impartial treatment of all employees.
8. Order - The arrangement of employees where
they will be of the most value to the
organization and to provide career
opportunities.
9. Initiative - The fostering of creativity and
innovation by encouraging employees to act on
their own.

[Link]-
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Fayol’s Principles of [Link]-
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[Link]
▫ Obedient, applied, respectful employees are
necessary for the organization to function.
11. Remuneration of Personnel
▫ An equitable uniform payment system that
motivates contributes to organizational success.
Fayol’s Principles of Management
[Link] of Tenure of Personnel
▫ Long-term employment is important for the
development of skills that improve the organization’s
performance.
[Link] of Individual Interest to the
Common Interest
▫ The interest of the organization takes precedence
over that of the individual employee.

[Link]-
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Fayol’s Principles of Management
[Link] de corps
▫ Comradeship, shared enthusiasm foster
devotion to the common cause (organization).

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24
 The behaviorists & the Human
Relations approach (1930’s, 40’s, 50’s)
• The primary focus is on the worker, then the
work.
▫ How to make worker more productive using
behavioral theories?
• Looks at how managers do their job in order to
affect the behavior of subordinates.
• the “Hawthorne Experiments” were a series
of studies into worker productivity performed at
General Electric platform beginning in 1924 and
ceasing in 1932 by Eltom Mayo and F.J
Roethlisberg.
Behavioral Management Theory
▫ The study of how managers should behave to
motivate employees and encourage them to
perform at high levels and be committed to the
achievement of organizational goals.
▫ Focuses on the way a manager should personally
manage to motivate employees. [Link]-
Chap-05
 The behavioralists & the Human
Relations approach (1930’s, 40’s, 50’s)

• The primary focus is on the worker, then the work.

• How to make worker more productive using
behavioral theories?
• Looks at how managers do their job in order to
affect the behavior of subordinates
• the “Hawthorne Experiments” were a series of
studies into worker productivity performed at
General Electric platform beginning in 1924 and
ceasing in 1932 by Eltom Mayo and F.J
Roethlisberg.
Behavioral/Human Relations
• People and their behaviors matter within the
organization
• In light of that assumption this school looks at
how managers do their job in order to affect the
behavior of subordinates
A social sciences approach to management
Theorized that workers would be more productive if given
favorable working conditions and found that:

The attention given to workers was the variable that affected

performance (Hawthorne effect)

Worker productivity would be interpreted predominately in

terms of :
social group dynamics, motivation,
leadership, and
“human relations”.

The manager was an immediate part of the social system in

which work is performed, responsible for leading,
motivating, communicating, and designing the social milieu
in which work takes place.
Theory X and Theory Y
• Assumptions about employee’ attitudes and
behaviour affect manager’s behaviour.

Theory Y
Theory X
Employees, if given the opportunity,
Employees dislikes
will do what is good for the
work, are lazy...etc
organization, are not lazy...etc
The role of the
The role of the manager is to create a
manager is to
work setting that encourages
control their
commitment to organization goals
behaviour and
and provides space for imagination,
supervise tasks
initiative and self-direction.
The use of mathematics and inferential statistics in management
An approach to management that uses rigorous quantitative
techniques to maximize the use of organizational resources.
Systems Approach to Management
• Organizations are machines that operate within
an environment
▫ Inputs-human, financial, physical, and info
▫ Processes
▫ Outputs-products and services
• Focuses on the organization as a whole
• A change in one part of the system affects the
whole system
Systems
• An assemblage or combination of things or parts
forming a complex unit .
• Parts are interdependent
• 4 basic components:
1) Inputs
2) Processes
3) Outputs
4) Feedback
 2.7

Basic Systems View of Organization

Environment
INPUTS
Human, physical, TRANS- OUTPUTS
financial, and FORMATION Products
information and
PROCESS Services
resources

Feedback Loops

Adapted from Figure 2.4

In a healthcare system it could be
Inputs Process Outputs

• Characteristi • Structures • Provision of care

cs of clients • Processes & • Maintenance of
• Legal and procedures accreditation
accrediting • Organizational • Compliance with
agency patterns local legal
requirement programs
s • Quality of care
• Multiple
goals=
teaching,
patient care,
research…

Feed back = efficient communication channels

Classification of systems
Closed Open
• Isolated from • Constant state of flux.
environment influences, • Seeks balance constantly
only at input and output by continuous adaptation
portals and adjustment
• No new inputs, no • Suffers environmental
changes in its changes, all parts of the
components. organization interact with
• No need for adaptation the environment.
 Predominant Management Functions
Communicatin
g, resolving
conflict, Planning
evaluating, Feed
planning Inputs
back

System

Outputs Process Planning,

Planning
and staffing,
controlling controlling,
leadership
and
motivation
Contingency Approach

• “It Depends!” on the organization

• Must assess the environment and use aspects of
the three previous approaches in combination to
maximize performance
• No prescriptive “One best way”
Contingency Viewpoint
Behavioral Viewpoint
How managers influence others:
• Informal Group
• Cooperation among employees
• Employees’ social needs

Traditional Viewpoint
Systems Viewpoint
What managers do:
How the parts fit together:
 Plan
 Inputs
 Organize
 Transformations
 Lead
 Outputs
 Control

Contingency Viewpoint
Managers’ use of other
viewpoints
to solve problems involving:
 External environment
 Technology
 Individuals
Quality Systems
• Seeks excellence.
• affects everything from employee performance to
customer satisfaction.
Quality assurance is another important factor. If
the right plans are put into place and then
implemented in a timely manner, team leaders will be
able to ensure the quality that is expected is reached
and sustained.
Quality improvement is the process by which
necessary improvements are made that will positively
affect an organization. The idea is always to improve
and sometimes changes are needed in order to make
this happen.
Quality and Ed Demming
• Society has passed the point of concern with
quantity of production, because for the most
part quantity has been maxed-out
• Quality is now the issue when performance is
discussed
• Demming pioneered the quality movement, and
was ignored in the US
• Managers were required to have a system of
profound knowledge, comprised of appreciation
of a system, theory of knowledge, the psychology
of change and knowledge about variation.
Demming’s Principles
• Quality at the beginning will lead to lower costs
and greater productivity in the long-run
• use of statistical methods to assess quality
• all employees are responsible for quality checks
• leads to company image, lower costs, less
product liability, Higher Market Share
Quality Evolution