Principles of Management

255: Introduction to Health Care

Management
Definition of Management
⚫ The process of working with and through

others to achieve organizational objectives

in a changing environment
Management
⚫ It is a social process in which managers

are responsible for getting things done

by working with and through others
⚫ In each organization there are some

objectives to be achieved and there are

some individuals who are to work
towards the achievement of those goals
Management
⚫ In healthcare organizations, manager work

on many levels, from supervisors of small

functional teams to chief executive officers
of multi-facility networks
⚫ For many supervisors, the managerial role
is only one aspect of their job
⚫ In contrast, the work of executive-level
administrators is entirely managerial
Management
⚫ Just as every experienced specialty

physician started out as a lowly medical

student, supervisors in healthcare
organizations must begin their
management careers by practicing the
basics (progressive administration)
Management
⚫ A manager, working closely with his/her

subordinates, plans to achieve the

objectives of the organization is an
effective and successful manager.
⚫ While a manager who does not interact

well with his/her subordinates is not an

effective one
Organization
⚫ Is a cooperative social system involving the

coordinated efforts of two or more people for

the achievement of a common purpose or goal
⚫ It develops when people gather and formally

agree to combine their efforts for a common

purpose
⚫ It is a social entity that enables people to

achieve objectives they normally could not

achieve working alone
Formal vs. Informal Organization
⚫ The pattern of relationship developed by

the management is called the formal

organization
⚫ In any organization, people tend to have

informal patterns of relationships that

develop because the workers interact
with each other (informal organization)
Formal vs. Informal Organization
Every organization has 2 basic parts:
1. Formal structure: which is developed by
the management
And
⚫

2.

Informal structure that reflects the actual

interactions, wishes, and preferences of
people who make up the organization
Effectiveness and Efficiency
⚫ Organizations are supposed to be

effective and efficient

⚫ An organization structure is effective if it

facilitates the contribution of individuals

towards the achievement of objectives
Effectiveness and Efficiency
⚫ An organization is considered efficient if

it facilitates accomplishment of
objectives with the minimum possible
use of resources
⚫ Are all organizations effective and

efficient?
Effectiveness and Efficiency
⚫ An organization can be effective but may not

be efficient
⚫ An organization may be efficient but may not

be effective
⚫ There is a need to have an organization which

is effective and efficient at the same time

Characteristics of Organizations
1. Coordination of effort
2. Common goal or purpose
3. Division of labor
4. Hierarchy of authority
Characteristics of Organizations
Coordination of effort
results in things could not be achieved by
one person. Multiple individuals'
contributions usually lead to a better and
bigger product
1.
Characteristics of Organizations
2.

Common Goal or Purpose:

coordination of effort cannot take place
unless those who have joined together
agree to strive for something of mutual
interest

A common goal or purpose gives the

organization focus and its members a
reaching point
Characteristics of Organizations
3.

Division of Labor: by systematically

dividing complex tasks into specialized
jobs, an organization can use its human
resources efficiently

Division of labor permits each

organization's members to become more
proficient by repeatedly doing the same
specialized task
Characteristics of Organizations
4.

Hierarchy of Authority: every member of the

organization is assigned a specific rank

Each rank, in turn, carries a specific level of

decision-making authority as well as specific
responsibilities within the institution, giving
people the authority to see that the intended
goals are carried out effectively and efficiently
through formal collective effort to accomplish
goals
Managerial Functions
⚫ Henry Fayol, a French engineer and director of

mining, published a book summarizing his

executive experience.
⚫ Fayol’s major contribution included both a

description of five functions of management

and fourteen principle for organization design
and administration
Managerial Functions
⚫ Fayol’s five management functions have

persisted with some variation into

modern organizations and identify key
functions that define the manager’s role
Managerial Functions
⚫ These managerial functions are: planning,

organizing, leading, and controlling

⚫

Fayol’s fifth function, coordination or

unifying and harmonizing activity and effort,
has been absorbed by the other functions
(primarily controlling) in modern versions
Managerial Functions
⚫ Fayol’s management functions continued

to be useful categories for examining the

work of the manager.
⚫ After the enterprise is begun, these four

stages become a cycle for continuous

improvement in which the last function of
control is fed back into planning for plan
revision
Managerial Functions

Planning
It is the first step in management.
Planning can be defined as the process of
coping with uncertainty by formulating future
courses of action to achieve specific results.

OR

Determining what should be accomplished and

how to be accomplished ( the method).

1.

⚫
Managerial Functions
⚫ It is called the primary management function

because it affects all downstream

management functions
⚫ Plans and the objectives on which they are

based give purpose and direction to the

organization
⚫ In other words, the resources are used to

achieve the plans

Managerial Functions
⚫ Although planning occurs at all levels,

top-level or strategic planning is most

critical in formulating the mission and
providing direction for changes
⚫ When these strategies are defined, they

can be implemented at the lower levels

of the organizational pyramid
Managerial Functions
⚫ It is the top management's job to state

the organization's mission, establish

strategic priorities, and draw up major
policies
Types of planning
1.

Strategic planning: the process of

determining how to pursue the
organization's long-term goals with the
resources expected to be available

It lasts from 1-10 years and is

established by the top management
(CEO, president, GM, and division
heads)
Types of planning
2.

Intermediate planning: the process of

determining the contributions subunits
can make with allocated resources

Its duration is from 6 months to 2 years

and is carried out by the middle
management (functional managers,
product-line managers, and department
heads)
Types of planning
3.

Operational planning: the process of

determining how specific tasks can
best be accomplished on time with the
available resources

⚫ It takes between 1 week to 1 year and is

carried out by the lower management

(unit managers, and first-line
supervisors)
Types of planning
⚫ The manager role fall within this stage

where he/she makes sure that the

needed number of employees are
available to carry out everyday task
⚫ In addition, to the availability to any

other resources needed to carry out all

functions of the health information
department such as files, forms etc.
Planning Effectively
⚫ In order to carry out the planning

effectively an organization has to consider

the following factors:
1. Evaluation of the present conditions or
circumstances
2. The time factor
3. Collection and analysis of data
4. Hierarchy of plans within the organization
Planning Effectively
1.
⚫
⚫

Evaluation of the Present Conditions

The central element in planning deals
with recognizing the present conditions
In this respect, any inadequacy that
requires a change needs to be noted and
accounted for
Once an undesirable condition or set of
undesirable conditions have been
identified, the manager has to decide
what to do about them
Planning Effectively
⚫ A well trained planner looks into the

situation, considers different alternatives,

and comes over the problems through
using the right strategy
Planning Effectively
2. The Time Factor
⚫ The issue of timing of events is extremely

important in planning
⚫ Perhaps the importance of timing is the most

important in health care delivery systems

Planning Effectively
⚫ If a needed procedure is not done at the

right time, one may end up loosing a

patient
⚫ A well trained planner makes decision

sufficiently in advance of the time so that

there is lead time
Planning Effectively
⚫ Various activities can and should be well

coordinated so that the ultimate key

procedure or decision is made within time
⚫ It is important to remember that most
activities in an organization are
dependent or rely on other activities,
many of which may be carried out by
other departments
⚫ Therefore it is crucially important that the
time factor should be considered carefully
Planning Effectively
3.
⚫

a)

Collection and Analysis of Data

Proper planning depends on the quality
and quantity of data available to the
managers
In this regard the following are important
about information:
Must be available in reliable and valid
form
Planning Effectively
b) Must come from the right source
c) Must come at the right time
d) Must be at the right form
e) Must be processed at the right time
f) Must be communicated to the right
person at the proper time
Planning Effectively
⚫ In order to plan effectively, one not only

looks at the present data, but also can

and should look at the past data
⚫ At times the past information is very

important to determine what is to be

done at present and in future
Planning Effectively
⚫

⚫
1.

In order to make proper decision, one has

to make forecasts for the future based on
valid information
Some of the common examples for future
planning in health care are:
How many patients will be admitted
during the next one year?
Planning Effectively
2.

3.

4.
5.

6.

How many surgeries in specific specialties

will be carried out during the next, say one
month?
How many specific tests will be performed
during the next X weeks?
How many person-hours will be required for
various activities?
What kind of equipment will be needed in
department?
What equipment will need to be changed or
upgraded in the hospital?
Planning Effectively
⚫ Such information can not be provided with

absolutely certainty
⚫ But based on valid information, proper
assumptions can be made and therefore reliable
forecasts can be made
⚫ The above mentioned questions provide what is
generally called the premises for planning
⚫ Since the premises cannot be made with
absolute certainty, therefore it is important that
the plan must be flexible
Planning Effectively
⚫
1.

2.
3.

Planning premises include three type of

information:
Estimates of actual data
Policies of the organization
Future plans of the organization
Planning Effectively
⚫ E.g. in most hospitals it can be decided how

many specific tests will be made (example of

actual data)
⚫ An example for the policies of the

organization can be the policy for requiring

minimum level of experience for certain jobs
Planning Effectively
⚫ Another example can be the number of

people that are expected to be promoted

⚫ An example for future plans can be the

number of beds to be added or the

number of wards to be added during the
next year
Planning Effectively
4. Hierarchy of Plans within the

Organization
⚫ Plans always exist in a hierarchy and

they cover all levels of organization

⚫ Therefore to some extent they are

related to each other and to what is

going on within the organization
Planning Effectively
⚫ Plans are supposed to be objective, structured

and flexible
⚫ At this stage it is important to recognize that one
has to set priorities and that will establish the
hierarchy of planning
⚫ In other words, what is to be done immediately,
what will be done in the future?
⚫ Regarding the future, what shall be done within
near future; and what shall be done in the
distant future?
Strategy
⚫ Is the set of decisions that determine the

character (size, scope, and mix of

services) of health services and provide
the direction for what the organization is
going to be in the future
⚫ It may be appreciated that a number of
decisions put together to make up a
strategy for a particular program
Strategy
⚫ The strategy of an organization does not

simply emerge by chance. It has to be

formulated and created
⚫ The strategy, it may be appreciated, is

always in relation to the external

environment upon which the organization
is dependent
External Environment
⚫

1.
2.
3.
4.
5.
6.
7.

The following elements are important in

appreciating the dependence on the external
environment:
Competition among various organizations
Labor markets
Regulations
Opportunities
Threats
Defending organizations goals and domain
Having influence on the environment
Managerial Functions
2.
⚫

Organizing
management function that converts
organizational goals into actions;
consists of defining the activities
necessary to achieve goals, logically
grouping the goals, and assigning
responsibility to someone for
accomplishment
Managerial Functions
⚫ Traditionally, division of labor has been

used to divide work into separate jobs

⚫ This specialization allows for

development of greater expertise and

standardization of tasks and for clear
selection and training criteria
Managerial Functions
⚫ The emerging economy with downsized and

flatter organizations may require workers to take

on multiple roles and therefore have a number of
skills rather than one
⚫ Jobs are most often organized by positions, and
the positions are arranged hierarchically in the
business by an organizational chart
⚫ A proper organizing helps to ensure the efficient
use of human resources
Managerial Functions
3.
⚫

Leading
To accomplish the goals by influencing
behavior and by motivating and inspiring
people to high level of performance
At the turn of the century an autocratic
view of leadership was considered to be
appropriate, but as humanistic view have
prevailed over the decades, leadership
has become decentralized and
distributed throughout the organization
Managerial Functions
⚫ Leading is most often accomplished by

communicating, directing and motivating,

all intended to influence behavior to
perform well
⚫ Power, the ability to influence, is central
to leadership
⚫ Managers are supposed to be inspiring
leaders so that they set role models and
people can follow them
Managerial Functions
4. Controlling
⚫ The final managerial function refers to
comparing actual performance with prior plans
and taking necessary corrective action
⚫ Based on the comparison they can find out
whether they achieved what was supposed to
have been achieved
⚫ If not, they are supposed to take corrective
actions in keeping with the rules and
regulations of the organization
Managerial Functions
⚫ Recent trends indicate that employees

are empowered to monitor themselves

by each other, rather than being
monitored from the top
Managerial Functions
⚫ This obviously requires selecting

employees who have the maturity and

integrity to accept this responsibility, but
it corrects for the distortion and delay
that can occur in a very hierarchical
organization.