Effective Leadership and
Management in Nursing
EIGHTH EDITION
CHAPTER
2
Designing
Organizations
Learning Outcomes
1. Discuss how organizational theories
differ.
2. Describe the different types of health
care organizations.
3. Explain how health care organizations
are structured.
4. Discuss various ways that health care
is provided.
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Learning Outcomes
5. Demonstrate how strategic planning
guides the organization's future.
6. Discuss how the organizational
environment and culture affect
workplace conditions.
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Organizational Theories
• Were unexplored until the Industrial
Revolution
• Include the following theories:
– Classical
– Contingency
– Humanistic
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Organizational Theories
• Include the following theories:
– Chaos
– Systems
– Complexity
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Classical Theory
• Built around four elements:
– Division and specialization of labor
– Chain of command; hierarchy, line
authority, staff authority
– Organizational structure describe the
arrangement of the work group
– Span of control
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Figure 2-1
Chain of authority.
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Humanistic Theory
• Focuses on social aspects of
organizational design
• Views social relationships, group
pressure, and search for personal
fulfillment as motivators
• Says formal authority only works with
willing participants
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Systems Theory
• A system is interrelated parts arranged
in a unified whole.
• Systems can be open or closed.
• Organization is a recurrent cycle of
input-throughput-output.
• The manager is the catalyst for the
process.
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Contingency Theory
• Performance is enhanced by matching
the organization's structure to its
environment.
• Environment includes people, objects,
and ideas outside the organization that
influence it.
• Optimal form of the organization
depends on the environment in which it
operates.
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Chaos Theory
• Organizations are living, self-organizing
systems that are complex and selfadaptive.
• Creativity and flexibility are necessary
to adapt to change.
• The leader's role is to build resilience,
maintain balance, and encourage
creativity.
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Complexity Theory
• Random events interfere with
expectations.
• No linear cause and effect to explain
outcomes.
• The system interacts and adapts to
change.
• Managers must encourage the flow of
information in all directions, not just
top to bottom.
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Hospitals
• Most are acute care facilities
• May be classified as general or specialcare facilities (e.g., pediatric)
• Many are teaching institutions
– Role of nurse may differ from teaching
to nonteaching hospital
• New groups in hospitals include
hospitalists and intensivists
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Long-Term Care Facilities
• Provide professional nursing care and
rehabilitative services
• May be freestanding or part of hospital
• Limit length of stay
• May be residential care facilities
(nursing homes) where care is
supervised by RNs and LPNs
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Home Health Agencies
• Provide intermittent, temporary health
care in the home by skilled or unskilled
providers
• May offer services other than nursing
such as physical therapy or medical
equipment
• May offer hospice care
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Temporary Service Agencies
• Provide nurses and other health care
workers to hospitals
• Provide private duty nurses to patients
in the hospital or at home
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Health Care Networks
• Deliver a continuum of care
• Provide geographic coverage for buyers
of health care services
• Accept risk in taking a fixed payment
for providing health care for all persons
in selected group
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Interorganizational Relationships
• Horizontal integration
– Organizations in a network provide the
same or similar services; e.g., all
hospitals provide comparable services
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Figure 2-6
Horizontal integration.
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Interorganizational Relationships
• Vertical integration
– Dissimilar but related organizations in a
network provide a continuum of services
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Figure 2-7
Vertical integration.
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Interorganizational Relationships
• Corporate health care network
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Figure 2-8
Corporate health care network.
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Diversification
• Organization expands into new arenas
• Two common types
– Concentric diversification and
conglomerate diversification
• Joint venture
– Partnership in which each partner
contributes different areas of expertise,
resources, or services to create a new
product or service
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Accountable Care Organizations
• Contract with Medicare to provide care
to a group of Medicare recipients
• More flexible than Health Maintenance
originations because consumers can
choose providers outside the network
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Traditional Organizational
Structures
• Functional
– Employees grouped in departments by
specialty
• Hybrid
– Contains both self-contained and
functional units
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Traditional Organizational
Structures
• Matrix
– Integrates product and functional
structures in one overlapping structure
– Different mangers, its appropriate in
highly uncertain environment.
• Parallel
– Unique to health care; involves two
lines of authority—the authority of the
organization and the authority of its
medical staff
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Figure 2-3
Service line structure.
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Different Types of Health Care
Organizations
•
•
•
•
Private or government
Voluntary (not for profit)
Investor owned (for profit)
Sectarian or nonsectarian
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Redesign
• Patient-centered care model
– E.g., medical home
• Focus on specific service lines
• Lean thinking
• Flat, decentralized organizational
structure
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Strategic Planning
•
•
•
•
Philosophy
Vision statement
Mission
Goals
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Organizational Environment
• System-wide conditions that contribute
to a positive or negative work setting
• Positive environment has a positive
effect on patient outcomes
• Nurse manager plays a key role in
maintaining a positive environment
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Healthy Work Environment
•
•
•
•
•
•
Skilled communication
True collaboration
Effective decision making
Appropriate staffing
Meaningful recognition
Authentic leadership
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Organizational Culture
• Encompasses basic assumptions and
values held by members of the
organization
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan
Organizational Culture
• Varies among institutions, subcultures,
and countercultures
– Consonance occurs when the
subculture's norms and traditions agree
with the organization's
– Dissonance occurs when they are not in
agreement
Effective Leadership and Management in Nursing, Eighth Edition
Eleanor J. Sullivan