Health Organizations: Theory, Behavior, and Development

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SECOND EDITION

James A. Johnson

Caren C. Rossow

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Theory, Behavior, and Development

S E C O N D E D I T I O NHealth Organizations

James A. Johnson, PhD, MPA, MSc Professor, School of Health Sciences

Central Michigan University and

Visiting Professor, St. George’s University Grenada, West Indies

Caren C. Rossow, DHA, MSA, RN, FACHE Assistant Professor, College of Health Sciences

Indiana University

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Library of Congress Cataloging-in-Publication Data Names: Johnson, James A., 1954- editor. | Rossow, Caren C., editor. Title: Health organizations : theory, behavior, and development / edited by James A. Johnson, Ph.D., M.P.A., M.Sc., Caren C. Rossow, DHA, MSA, RN, FACHE. Description: Second edition. | Burlington, Massachusetts : Jones & Bartlett Learning, [2018] | Includes bibliographical references and index. Identifiers: LCCN 2017019273 | ISBN 9781284109825 (pbk : casebound) Subjects: LCSH: Health services administration. | Organizational behavior. | Organizational sociology. Classification: LCC RA971 .H398 2018 | DDC 362.1068--dc23 LC record available at https:// lccn.loc.gov/2017019273

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https://lccn.loc.gov/2017019273

DEDICATION

To James Allen Johnson IV, Joseph Mark Johnson, and Arianna Elizabeth Johnson

JAJ

To Emily Jillian Carr and Addison Olivia Carr

CCR

IN MEMORIAM

To those who have passed since the first edition:

M. Nicholas Coppola (chapter author)

Reuben R. McDaniel (chapter author)

and

Elizabeth R. Johnson (daughter and artist)

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PART 1 Organization Theory and Foundations 1 Chapter 1 Introduction to the Study of Health Organizations . . . . .3 Chapter 2 Anatomy and Physiology of Organization Theory . . . . . .9 Chapter 3 Classical Theories of Organization . . . . . . . . . . . . . . . . . .23 Chapter 4 Modern Theories of Organization . . . . . . . . . . . . . . . . . . .35 Chapter 5 Complexity and Postmodern Theories

of Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47

Chapter 6 Organizational Leadership Theory . . . . . . . . . . . . . . . . . .59

PART 2 Organization Behavior and Dynamics 83 Chapter 7 Human Behavior and Motivation

in Health Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . .85

Chapter 8 Group Dynamics and Teams in Health Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . .99

Chapter 9 Power and Politics in Health Organizations . . . . . . . . . 113 Chapter 10 Conflict Theory and Interpersonal

Dynamics in Health Organizations . . . . . . . . . . . . . . . . 122

Chapter 11 Models of Leadership Strategy and Influence for Health Organizations . . . . . . . . . . . . . . . . . . . . . . . . 133

Chapter 12 Decision Making, Analytics, and Communication in Health Organizations . . . . . . . . . . . . . . . . . . . . . . . . . 155

Brief Contents

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Brief Contents v

Chapter 13 Pathology and Dysfunction in Health Organizations . . . . . . . . . . . . . . . . . . . . . . . . . 175

Chapter 14 Diversity and Organizational Culture in Health Organizations . . . . . . . . . . . . . . . . . . . . . . . . . 185

PART 3 Organization Development and Change 207 Chapter 15 Ethics and Values in Health Organizations . . . . . . . . . 209 Chapter 16 Physician and Clinician Leadership

in Health Organizations . . . . . . . . . . . . . . . . . . . . . . . . . 221

Chapter 17 Governance and Board Development in Health Organizations . . . . . . . . . . . . . . . . . . . . . . . . . 232

Chapter 18 Organizational Change and Sustainability in Health Organizations . . . . . . . . . . . . . . . . . . . . . . . . . 251

Chapter 19 Organization Development and Crisis Management in Health Organizations . . . . . . . . . . . . . 268

Index 275

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Contents Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x

Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xii

Contributors and Collaborators . . . . . . . . . . . . . . . . xiv

About the Authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv

PART 1 Organization Theory and Foundations 1

Chapter 1 Introduction to the Study of Health Organizations . . . . . . . 3

Studying Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Beyond The Classroom . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Chapter 2 Anatomy and Physiology of Organization Theory . . . . . . . 9

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

What Is Theory? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

Anatomy of Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

Physiology of Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21

Learning Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21

Chapter 3 Classical Theories of Organization . . . . . . . . . . . . . 23

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24

Scientific Management . . . . . . . . . . . . . . . . . . . . . . . . . .24

Administrative Principles . . . . . . . . . . . . . . . . . . . . . . . . .26

Bureaucratic Principles . . . . . . . . . . . . . . . . . . . . . . . . . . .28

Human Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30

Administrative Behavior . . . . . . . . . . . . . . . . . . . . . . . . .32

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33

Chapter 4 Modern Theories of Organization . . . . . . . . . . . . . 35

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36

General Systems Theory . . . . . . . . . . . . . . . . . . . . . . . . .36

Contingency Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37

Transaction Cost Economics . . . . . . . . . . . . . . . . . . . . .38

Resource Dependence Theory . . . . . . . . . . . . . . . . . . .40

Institutional Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41

Population Ecology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44

Chapter 5 Complexity and Postmodern Theories of Organization . . . . . 47

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48

Systems Approach in Health . . . . . . . . . . . . . . . . . . . . .48

Complexity Theory in Health Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50

Emerging Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . .50

Complex Adaptive Systems . . . . . . . . . . . . . . . . . . . . . .52

Managing Health Organizations as Complex Adaptive Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57

Chapter 6 Organizational Leadership Theory . . . . . . . . . . . . . . . . . . . . 59

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60

Defining Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60

A Chronological Review of Leadership Theory . . . .61

Leadership Phase Evolution . . . . . . . . . . . . . . . . . . . . . .63

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73

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Contents vii

PART 2 Organization Behavior and Dynamics 83

Chapter 7 Human Behavior and Motivation in Health Organizations . . . . . 85

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86

Theories of Motivation . . . . . . . . . . . . . . . . . . . . . . . . . . .86

Motivation in the Work Environment . . . . . . . . . . . . .90

Changes in Motivation . . . . . . . . . . . . . . . . . . . . . . . . . . .95

Motivation and Learning . . . . . . . . . . . . . . . . . . . . . . . . .95

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .97

Chapter 8 Group Dynamics and Teams in Health Organizations . . . . . 99

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100

Groups and Teams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100

Group Formation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100

Groups and Teams in Health Organizations . . . . . . . . . . . . . . . . . . . . . . . . 101

Roles, Diversity, and Trust . . . . . . . . . . . . . . . . . . . . . . 104

Group Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

Performance and Group Effectiveness . . . . . . . . . 106

Group Phenomena . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110

Chapter 9 Power and Politics in Health Organizations . . . . . . . . . . . . . 113

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

Sources of Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

Politics in Health Organizations . . . . . . . . . . . . . . . . 117

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120

Chapter 10 Conflict Theory and Interpersonal Dynamics in Health Organizations . . . . 122

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123

Theories of Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123

Sources of Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124

Interpersonal Relationships . . . . . . . . . . . . . . . . . . . . 128

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131

Chapter 11 Models of Leadership Strategy and Influence for Health Organizations . . . . . . . . . . . . 133

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134

Strategic Prescription One: The Dynamic Culture Leadership Model . . . . . . . . . . . . . . . . . . . 134

Strategic Prescription Two: The Omnibus Leadership Model . . . . . . . . . . . . . . . . . . . . . . . . . . . 140

Tactical Prescription: The Inter-Professional Team Model: PAARP . . . . . . . . . . . . . . . . . . . . . . . . . 144

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152

Chapter 12 Decision Making, Analytics, and Communication in Health Organizations . . . . 155

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156

Decision Making . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156

Reality-Based Models: Garbage Can Model Overview . . . . . . . . . . . . . . . . . . . . . . . . 158

Tools of Decision Making . . . . . . . . . . . . . . . . . . . . . . 161

Communication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172

Chapter 13 Pathology and Dysfunction in Health Organizations . . . . . . . . . . . . 175

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176

Health Organization Groups and Professions . . . .176

Complexity and Work Intensity . . . . . . . . . . . . . . . . 177

Ambiguous and Conflicting Cultures . . . . . . . . . . . 178

Organizational Decline . . . . . . . . . . . . . . . . . . . . . . . . 179

Management and Organizational Dysfunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179

Organizational Well-Being . . . . . . . . . . . . . . . . . . . . . 181

Treatment and Prognosis . . . . . . . . . . . . . . . . . . . . . . 182

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183

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viii Contents

Chapter 14 Diversity and Organizational Culture in Health Organizations . . . . . . . . . . . . 185

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186

The Business Case for Diversity . . . . . . . . . . . . . . . . . 187

The True Meaning of Diversity and Inclusion . . . 191

The Impact of Prejudice . . . . . . . . . . . . . . . . . . . . . . . . 192

Diversity Management . . . . . . . . . . . . . . . . . . . . . . . . . 193

Managing Diversity, Inclusion, and Health Equity in the LGBT Community . . . . . . . . . . . . . . 194

Disability and the Workplace . . . . . . . . . . . . . . . . . . . 195

Aging in the Workplace . . . . . . . . . . . . . . . . . . . . . . . . 198

Diversity and Inclusion Impact on Care Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198

Components of an Effective Diversity Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200

Diversity in Healthcare Leadership: Two Major Studies . . . . . . . . . . . . . . . . . . . . . . . . . . 201

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203

PART 3 Organization Development and Change 207

Chapter 15 Ethics and Values in Health Organizations . . . . . . . . . . . . 209

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210

Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210

Ethical Theories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210

Ethical Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212

Organizational Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . 213

Institutional Ethics Committee . . . . . . . . . . . . . . . . 213

Decision-Making Tools . . . . . . . . . . . . . . . . . . . . . . . . 213

Code of Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215

Ethical Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215

Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216

Factors That Influence Culture . . . . . . . . . . . . . . . . . 216

Cultural Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218

The Purpose of Health Organizations . . . . . . . . . . 218

Cultural Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219

Ethics-Focused Culture . . . . . . . . . . . . . . . . . . . . . . . . 219

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219

Chapter 16 Physician and Clinician Leadership in Health Organizations . . . . . . . . . . . . 221

Introduction—The Case for Leadership . . . . . . . . 222

Separation of Power . . . . . . . . . . . . . . . . . . . . . . . . . . . 223

The 1990s—Integration Begins . . . . . . . . . . . . . . . . 224

Physician Values and Accountabilities . . . . . . . . . . 224

Effective Physician Leadership . . . . . . . . . . . . . . . . . 225

Physician Leadership—Early Pitfalls . . . . . . . . . . . . . 226

Cultivating Leadership Skills . . . . . . . . . . . . . . . . . . . 226

From Clinician to Leader—Essential Changes in Mindset . . . . . . . . . . . . . . . . . . . . . . . . . 227

Leadership Training Programs . . . . . . . . . . . . . . . . . . 227

Nursing Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227

Interdisciplinary Education and Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228

The Future: Physician and Clinician Leaders . . . . 229

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229

Chapter 17 Governance and Board Development in Health Organizations . . . . . . . . . . . . 232

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233

Board Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233

Board Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233

Board Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234

Board Meeting Format . . . . . . . . . . . . . . . . . . . . . . . . . 235

The Relationship Between Senior Management and the Board . . . . . . . . . . . . . . . . 237

Fiduciary Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237

Financial Oversight . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239

Operating Oversight . . . . . . . . . . . . . . . . . . . . . . . . . . . 239

Strategic Oversight . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239

Oversight of Patient Care and Resource Utilization . . . . . . . . . . . . . . . . . . . . . . . . . 241

Changing Board Models . . . . . . . . . . . . . . . . . . . . . . . 243

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Contents ix

Effective Governance: Cultures and Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244

Board Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244

Board Member Education . . . . . . . . . . . . . . . . . . . . . . 246

Board Development . . . . . . . . . . . . . . . . . . . . . . . . . . . 247

Current Issues and Controversies . . . . . . . . . . . . . . . 248

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249

Chapter 18 Organizational Change and Sustainability in Health Organizations . . . . 251

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252

Organizational Development: Framework for Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253

Creating the Capacity to Change . . . . . . . . . . . . . . 257

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264

Chapter 19 Organization Development and Crisis Management in Health Organizations . . . . 268

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269

Development Practice and Philosophy . . . . . . . . . 269

Development in a Changing World . . . . . . . . . . . . 269

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .275

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Acknowledgments A special thanks to Michael Brown, Danielle Bessette, and the always helpful team at Jones & Bartlett Learning. Furthermore, we would like to acknowledge the various contributors to the first and second editions of this book, along with the many students who have used the text and provided valuable feedback and input

leading to improvements in the second edition. Lastly, we acknowledge the many social scien- tists, organizational theorists, and health pro- fessionals who continue the advancement of our understanding of organizations in health- care, public health, and the myriad related enti- ties involved in health improvement.

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Foreword ▸ Excerpt from First

Edition Until now, there has been no integrated view on health organization theory. This book comes as a much-needed initiative of Dr. James Allen Johnson and a group of schol- ars and experts in an attempt to fill a void existent in health administration education. It provides an integrated view of organization theory, organization behavior, and organiza- tion development, making it one of the first books on the integration of these three critical interconnected domains. Integrated knowl- edge and understanding are needed in health care in order to prepare organizations for an uncertain future. This compendium of knowl- edge will attract significant attention from the healthcare administration and public health academic communities with its potential to enhance the professional development and education of our future leaders.

Lorenzo Gonzalez, MD, DHA Former Secretary of Health, Puerto Rico

▸ Second Edition Having known Dr. James Johnson for over 20 years, as a friend, colleague, and co-author, I am pleased to write this foreword for the second edi- tion of Health Organizations. Much has changed since the first edition appeared in 2009. The three-part focus of this book—theory, behavior, and development—brings students and scholars current on the dynamic changes and continuous improvements we see in health organizations. Today, perhaps more than ever, we are in need of this book to better prepare healthcare leaders and managers for the challenges facing our health- care system. This book is both comprehensive in its scope and rich in its diversity of topics. With the addition of Dr. Caren Rossow and a select group of guest authors to his team, Dr. Johnson has yet again produced a book that students will find an essential part of their health administra- tion education. Furthermore, they will come to know this book as a valuable resource they will turn to many times after graduation.

Leiyu Shi, DrPH, MBA, MPA Professor, Johns Hopkins University

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xii

Preface

The first edition of this book was written to address a significant need in health administration education. While at that time—about 10 years ago—there were many textbooks available for courses in organiza- tional behavior, there were few that addressed organization theory and even fewer that dis- cussed organization development in health care. Many university professors and instruc- tors, as they do now, preferred to have a text that addressed all three domains. Drawing upon the expertise and experience of col- leagues in various disciplines from univer- sities, government, and hospitals, I brought these three interconnected domains together. Both the first and the second editions address the domains in three sections: Part I, Organi- zation Theory; Part II, Organization Behavior; and Part III, Organization Development, each containing key chapters that discuss founda- tions, research, and new directions. Further- more, for the second edition, I enlisted the help of a friend and colleague, Dr. Caren Rossow. She brought extensive clinical and leadership experience to the project and was instrumental in the process of updating the book, while also bringing new material, studies, and perspec- tives into the second edition.

A summary of the three overarching themes in Parts I, II, and III are as follows:

Organization Theory and Foundations: Health organizations are complex human sys- tems that have evolved over time and continue to do so. There have been many theories draw- ing from the fields of psychology, sociology, economics, political science, anthropology, and, lately, physics in an attempt to explain

the phenomenon of organization. Each of the theories has changed as social science and behavioral research offered new findings and perspectives on human behavior in groups and larger aggregates. The classical theories of organization were primarily mechanistic and relied heavily on the knowledge advanced in the industrial age. Modern organization the- ory takes more of a systems approach that accounts for human dynamics and change. Today, emerging theories draw upon new insights from biology and physics, where orga- nizations are seen as complex adaptive systems interconnected with the larger environment. Postmodern theory and our increasing under- standing of complexity take us even further.

Organization Behavior and Dynamics: By virtue of the distinct care mission, health organizations have unique behavioral qual- ities. This book examines power, influence, conflict, motivation, group dynamics, values, communication, and leadership in the context of caring and the striving for the well-being of patients, families, employees, and the commu- nities being served.

Additionally, the realities of organization dysfunction and stakeholder dynamics are addressed.

Health organizations are composed of highly credentialed professionals who func- tion under considerable scrutiny within many prescribed guidelines. The challenge of managing in this environment can be daunt- ing. However, effectiveness can be improved by achieving a higher level of understand- ing of individual, group, and organization behavior.

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Preface xiii

Organization Change and Development: Lastly, health organizations are not static. The one constant, as with all systems, seems to be change. Leaders and managers are tasked to facilitate and manage the change that is inev- itable in modern organizations. This can best be done in a systematic, planned way, utiliz- ing approaches found in organization devel- opment and team building. This section of the book helps the student and practitioner use theories of organization and knowledge of organization behavior in ways that foster change in productive and sustainable ways, resulting in better outcomes. Team develop- ment, board development, physician/clinician development, and organization development and learning are all addressed. Challenges such as disaster preparedness, globalization, and sustainability are also discussed.

As you read the book and engage in the discussions recommended in each chapter, it is important to remember the significant

responsibility you have as a current or future healthcare manger and leader. You will have a responsibility to yourself, coworkers, the organization, and the individuals and com- munities you serve. Part of this responsibility can be met by committing to life-long learn- ing and continuously seeking to better under- stand physical and social phenomena. This includes an understanding of organizations as human-created systems. As our insightful col- league Margaret Wheatley once said, “Rather than thinking of organization as an imposed structure, plan, design, or role, it is clear that in life, organization arises from the interactions and needs of individuals who have decided to come together.” It is in this coming together that a meaningful purpose begins to manifest and then the great potential of health organi- zations making the world a better place for all fully emerges.

James A. Johnson, PhD, MPA, MSc

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xiv

Contributors and Collaborators Lee W . Bewley, MHA, PhD, FACHE University of Kentucky

Gwen Burbank, MBA, MEd, MA St. George’s University

Mark A . Cwiek, MHA, JD, FACHE Central Michigan University

Mark L . Diana, MBA, MSIS, PhD Tulane University

Rupert M . Evans, Sr ., MPA, DHA, FACHE Governors State University

James A . Johnson, MPA, MSc, PhD Central Michigan University

and St. George’s University

Gerald R . Ledlow, MHA, PhD, FACHE University of Texas, Health Sciences Branch

Peter C . Olden, MHA, PhD University of Scranton

Caren C . Rossow, RN, MSA, DHA, CIH, FACHE Indiana University

Leiyu Shi, MPA, MBA, DrPH Johns Hopkins University

James H . Stephens, DHA, FACHE Georgia Southern University

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About the Authors Dr. James A. Johnson is a Full Professor of health administration and policy at Central Michigan University, where he teaches courses in comparative health systems, organizational behavior, and health systems thinking. Dr. John- son is also a Visiting Professor at St. George’s University in Grenada, West Indies, and the former Chairman of the Department of Health Administration and Policy at the Medical Uni- versity of South Carolina, where he was also an Associate Professor of Family Medicine. He has been an active researcher and health sci- ence writer, with over 100 journal articles and 15 books published. One recent book with a worldwide audience is Comparative Health Systems: Global Perspectives, Second Edition, in which he and co-researchers analyzed the health systems of 20 different countries. He is also the co-author/editor with Leiyu Shi, Johns Hopkins University, of the third edition of Pub- lic Health Administration: Principles for Popu- lation-Based Management. Most recently he co-authored, with Doug Anderson, the book Systems Thinking for Health. Dr. Johnson is the past editor of the American College of Health- care Executives (ACHE) Journal of Healthcare Management and currently a Contributing Editor for the Journal of Health and Human Services Administration, and global health edi- tor for the Journal of Human Security and Resil- ience. He works closely with the World Health Organization (WHO) in Geneva, Switzerland, and Heart to Heart in Belize, Central Amer- ica on international projects, often involving students. He is a regular delegate to the World Public Health Congress, most recently in Cal- cutta, India. His work and travels have taken

him to over 45 countries so far. Dr. Johnson has been an invited lecturer at Oxford Uni- versity (England); Beijing University (China); University of Dublin (Ireland); University of Colima (Mexico); St. George’s University (Grenada); and University of Pretoria (South Africa), as well as universities, associations, and health organizations within the United States, including visiting or adjunct professorships at University of Michigan and Auburn University. Additionally, he has served on many boards, including the Scientific Advisory Board of the National Diabetes Trust Foundation, Board of the Association of University Programs in Health Administration (AUPHA), Advisory Board of the Alliance for the Blind and Visu- ally Impaired, Board President of Charleston Lowcountry AIDS Services, Advisory Board of the Joint Africa Working Group, Board of Directors of the Africa Research and Develop- ment Center Advisory, Board of the Center for Collaborative Health Leadership, and Board of Advisors for Health Systems of America. Dr. Johnson completed an MPA in healthcare administration from Auburn University and a PhD at Florida State University, where he specialized in health policy and organization development.

Dr. Caren C. Rossow is an Assistant Professor of healthcare administration at the Vera Z. Dwyer College of Health Sciences, Judd Leighton School of Business, and the College of Liberal Arts and Sciences at Indi- ana University of South Bend. Currently, Dr. Rossow teaches graduate and under- graduate courses in healthcare management,

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xvi About the Authors

health policy and advocacy, ethics, and healthcare human resource management. Prior to her academic appointment, she worked over 30 years in a number of divi- sions and director and management posi- tions in community hospitals and regional healthcare systems. She has a comprehen- sive background in various healthcare ser- vice lines and is experienced in planning, operations, logistics, finance, and human resource management. Since completing her doctorate she has presented internationally and authored peer-reviewed articles and book chapters. Her research interests include

international health, pandemics, health sys- tems in crisis, and organizational and bio- medical ethics. Dr. Rossow has participated in 12 study abroad and service learning trips to five countries, most recently co-leading trips to both Sweden and Belize. Dr. Rossow completed an MSA at the College of Business, University of Notre Dame, and a CIH (Cer- tificate in International Health) and DHA at the Dow College of Health Professions, Cen- tral Michigan University. Dr. Rossow is also a registered nurse (RN) and a Fellow in the American College of Healthcare Executives (FACHE).

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PART 1

Organization Theory and Foundations “It is with theories as with wells; you may see to the bottom of the deepest if there be any water there, while another shall pass for wondrous profound when it is merely shallow, dark, and empty.”

— Jonathan Swift

CHAPTER 1 Introduction to the Study of Health Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

CHAPTER 2 Anatomy and Physiology of Organization Theory . . . . . . . . . . . . . . . . . . . . . . . 9

CHAPTER 3 Classical Theories of Organization . . . . . . . . . . . 23

CHAPTER 4 Modern Theories of Organization . . . . . . . . . . . . 35

CHAPTER 5 Complexity and Postmodern Theories of Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

CHAPTER 6 Organizational Leadership Theory . . . . . . . . . . . 59

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CHAPTER 1

Introduction to the Study of Health Organizations

As long as there have been human endeavors, there have been people engaged in organiz-ing.1 Perhaps, even nature itself, as a system, is involved in the processes of organizing. As described by James Johnson, “organizations are complex, multifaceted, adaptive social sys- tems.”2 Health administrators, and managers, in order to be effective in helping their organizations accomplish their missions and in turn serve their communities, must have a solid understanding of human behavior and how it is manifested in the organizational setting. As Johnson further asserts, “at its most fundamental level, the study of organizational behavior is the study of human behavior.” There is extensive and long-standing research on human behavior and organizations provided by the fields of psychology, sociology, systems science, behavioral economics, political science, anthropology, and the various other social sciences.

Probably, the natural emergence of organization grew out of our instinct for survival. In the hostile world of early humankind, food, shelter, and safety needs usually required cooperative efforts, and cooperative efforts required some form of organization. Certainly, the patriarchal sys- tem vested leadership in the heads of early families. The oldest member of the family was the most experienced and presumed to be the wisest member of the family and thus was the natural leader.

Complex forms of organization were required and did evolve as families grew into tribes and tribes evolved into nations. The earliest written record, the clay tablets of the Sumerians, recorded division of labor and supervision practices. In Sumerian society, as in many others since then, the wisest and best leaders were thought to be the priests and other religious leaders.

Likewise, the ancient Babylonian cities developed very strict codes, such as the Code of Hammurabi. King Nebuchadnezzar used color codes to control production of the hanging gardens, and there were weekly and annual reports, norms for productivity, and rewards for piecework.

The Egyptians organized their people, including slaves, to build cities and pyramids. Con- struction of one pyramid built around 5000 bce required the labor of 100,000 people working for approximately 20 years. Planning, organizing, and controlling were essential elements.

China perfected military organization based on line-and-staff principles and used these same principles in the early Chinese dynasties. Confucius wrote parables that offered practical sugges- tions for public administration.

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performance and success as leaders in their future careers.

▸ Studying Organizations

Studying organization theory and learning about organization dynamics can be exciting, interesting, revealing, and rewarding. How- ever, it may involve a different kind of learn- ing than some students are used to. This text has many theories, principles, concepts, and abstract ideas—that is the nature of the mate- rial. Compared to some subjects and courses, the content is less exact and objective and has fewer absolutes. For example, answers to questions may be “contingent” on context or situations—just like what we experience with organizations in the real world. Students who come from “hard science” backgrounds or clinical professions might have to adjust to become comfortable with ambiguity and the “it all depends” concept. Students can learn about organizations and “bring to life” the conceptual content of this chapter by using methods presented in the rest of this chapter. By using these active learning methods and working with the content of this text, the stu- dents will increase understanding of organiza- tion theory, behavior, and development. These methods are interactive and may overlap.

Higher-Level Thinking In the 1950s, Bloom’s taxonomy of educational objectives identified the following six cogni- tive domains or levels of learning.3

1. Knowledge (e.g., identify, define, list, describe)

2. Comprehension (e.g., rewrite, explain, predict, summarize)

3. Application (e.g., compute, modify, prepare, use)

4. Analysis (e.g., simplify, outline, exam ine, diagram)

The city-states of ancient Greece were commonwealths, with councils, courts, admin- istrative officials, and boards of generals. Socrates talked about management as a skill separate from technical knowledge and expe- rience. Plato wrote about specialization and proposed notions of a healthy republic led by “philosopher kings.”

Many think the Roman Empire was so successful because of the Romans’ great abil- ity to organize the military and conquer new lands. Similarly, those sent to govern the far-flung parts of the empire were effective administrators and were able to maintain rela- tionships with the other provinces and the empire as a whole.

There are numerous other ancient exam- ples of organization development, such as Hannibal leading a massive army across the Alps, Alexander the Great building a vast interconnected empire, and the first emperor of China building the Great Wall. Many of the practices employed today in leading, manag- ing, and administering modern organizations have their origins in antiquity.

The Industrial Revolution of the 19th century created a need for new thinking and the refinement of old thinking. However, modern management theory, as discussed in this text and applied specifically to health organizations, is primarily a phenomenon of the 20th century, with even newer theoretical constructs and practices now emerging in the early 21st century.

Today organizations have become a con- stant part of people’s lives worldwide. Most people spend their professional lives working in an organization. Additionally, they spend their personal lives in and with organizations (e.g., churches, soccer leagues, clubs, and civic groups). The advance of health organizations can best be described as rapid and increas- ingly diverse and complex. Thus, students who intend to become healthcare managers will benefit by studying organization theory, behav- ior, and development. Understanding health organizations will undoubtedly improve their

4 Chapter 1 Introduction to the Study of Health Organizations

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4. Human dimension (learning about self, others; enabling them to func- tion and interact effectively)

5. Caring (new forms of feelings, interest, or values)

6. Learning how to learn (learning about the process of learning itself; special value which enables one to continue learning more effectively

Undergraduate education is likely to emphasize lower levels of learning, whereas graduate education should move toward higher levels of learning. The Commission on Accreditation of Healthcare Management Education (CAHME) defines lower level learning as Bloom’s Taxonomy level 1 knowl- edge ( learning/recall) while higher level learn- ing uses more complex skills; Bloom’s level 3 application (using learned material in new sit- uations) to level 6 Evaluation (assessing/judg- ing).6 Students can develop understanding of organizations by using all of these domains of thinking, especially the higher ones. That will help later in careers, because managing health organizations requires much analysis, synthe- sis, and evaluation.

Faculty instructors will likely create assign- ments and class activities that require higher- level thinking. Students will benefit from these and should work hard in completing them. For example, faculty instructors may require stu- dents to analyze a local health organization by applying concepts (e.g., mission, goals, struc- ture, and culture) from this text. Students might be asked to compare and contrast a primary care medical group with a safety net primary care clinic. These types of learning activities can be done alone or in small groups. The more a stu- dent does these assignments and discusses them with others, the more the student will develop the ability to think about organizations (health organizations, in particular).

Besides fulfilling assignments and activ- ities that come from courses and faculty, students may develop their own exercises. Students should get in the habit of examining,

5. Synthesis (e.g., combine, catego- rize, develop, plan)

6. Evaluation (e.g., compare, contrast, justify, assess)

Although this taxonomy has significant staying power, there are more recent adapta- tions. One example is in 2000 Anderson and Krathwohl suggested a newer, more action- oriented model:4

Remembering = Knowledge (lowest)

Understanding = Comprehension

Applying = Application

Analyzing = Analysis

Evaluating = Evaluation

Creating = Synthesis

Furthermore in 2013, Fink suggested a new paradigm, the Taxonomy of Significant Learning:5

1. Foundational knowledge (the need for students to know something; the ability to understand)

2. Application (the ability to engage in a new kind of action)

3. Integration (the ability to see and understand the connection between different things)

Studying Organizations 5

Evaluation

Synthesis

Analysis

Application

Understanding

Knowledge

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to apply the concepts and principles in this text to the urgent problem of medical errors and to “cross the quality chasm” in healthcare. Case studies also provide realistic problems for which students can try ideas and discuss them with others to consider various possible solu- tions. Finally, students might conduct an orga- nizational analysis, in which they analyze a health organization from an organization the- ory perspective.8 Students would select a health organization and then use concepts from this text to examine the organization’s mission, goals, structure, culture, groups, teams, coor- dination, learning, and so forth.

Students can develop their understanding through discussion in small groups (in which students may feel more comfortable) and then in the class as a whole. In their discussions, stu- dents can practice group skills, reflect on their group’s behavior and interaction, and expe- rience organizational behavior principles in their small groups. Students may also debate current issues related to topics in this text: Should health organizations change radically or incrementally? Should organizations empower employees more? After the debate, students can reflect on the process and dynamics of the group activity.

Students can also learn about and study organizations by interacting with managers and clinicians working in healthcare settings. Students can tour organizations and then ask healthcare executives specific questions based on chapters and theories in this text. Perhaps, students will also want to shadow a manager and observe the organizational behavior first hand. A more substantial approach to applied learning is fieldwork, such as an administra- tive internship or residency, typically done after coursework is completed.

Competency Development Health administration education at the graduate level is becoming more competen- cy-based, similar to graduate education in other professional fields. Health organizations’

analyzing, and evaluating organizations. By doing so, they will begin to develop a mental framework with which they can examine and understand organizations during their careers. Physicians develop a mental framework with which they examine and understand patients. Managers need to develop a mental framework with which they can examine and understand organizations. Students are also urged to reflect on what they learn and then try to link it to their own personal experiences. Students can reflect on organizations they have worked in or interacted with by using theory, principles, and concepts presented in this text: Which of these have they observed in organizations? Which approaches to organization seem most com- mon? Which of these would students prefer in a work situation?

Experiential Learning Students can strengthen their learning of this text’s theories, principles, concepts, terms, and methods by using experiential learning. Didactic classroom learning is important, but it is not sufficient to only learn about organiza- tion. Faculty can provide experiential learning opportunities and students should enthusias- tically pursue these to more fully learn what is offered in this text. This includes the following:

1. Problem-solving 2. Case studies 3. Organizational analysis 4. Small group discussions (practicing

organization behavior) 5. Debate 6. Interviewing healthcare executives 7. Film and video assignments

Educator and philosopher John Dewey reported almost a century ago that an effec- tive way to learn is through solving meaning- ful problems.7 Students, with guidance from faculty and others, should engage themselves in solving problems of organization theory, behavior, and development in health organiza- tions. For example, students can suggest how

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education, experiences, stage-of-career, and other factors, students should approach this text and its academic course with the goal of developing their competencies. This will serve all very well throughout their professional careers.

Integrative Learning As can be seen in the Table of Contents, orga- nization theory, behavior, and development include many topics and subtopics. Thus, stu- dents are urged to try to integrate these while

stakeholders expect healthcare managers to demonstrate competencies.9–10 Employers, professional associations (e.g., Association of University Programs in Health Admin- istration, American College of Healthcare Executives, and American Public Health Asso- ciation), and accreditors (e.g., Commission on Accreditation of Healthcare Management Education and Council on Education for Pub- lic Health) expect health administration stu- dents—especially at the graduate level—to become competent in organization theory, behavior, learning, administration, and man- agement. The Council on Education for Public Health (CEPH) places considerable impor- tance on management and administration by identifying “Management Competences” for public health education and practice. The Association of Schools and Programs of Public Health provides a list of core competencies in the managerial and leadership domains.11

Postgraduate education may lead to advancement to a Fellow status (board certi- fication in healthcare management) demon- strating leadership, expertise, competency, ethical conduct, and a lifelong commitment to education and professional development. The American College of Healthcare Executives (ACHE) measures the proficiency for success- ful performance in the healthcare executive job in the Board of Governors Examination in Healthcare Management in the 10 core knowledge areas listed in BOX 1-1.12

Students’ competencies should be deter- mined by multiple factors—including the stu- dents themselves. The old saying “you can lead a horse to water but you can’t make it drink” applies here. Students themselves must want— and take responsibility—to learn and become competent. Faculty can lead students to the skills, knowledge, and abilities presented in this text. Then students must invest the time, energy, and effort needed to learn, study, prac- tice, think, and eventually develop compe- tencies in organization theory, behavior, and development. While achievement of compe- tencies will vary based on each student’s prior

BOX 1.1 Ten Core Knowledge Areas for Healthcare Management

1. Business—marketing, business planning, and strategic planning

2. Finance—financial management process for capital, budget, and accounting

3. Governance and Organizational Structure—authority and accountability at all levels

4. Health Care—healthcare delivery, managed care, and future trends

5. Healthcare Technology and Information Management—information systems for clinical and decision management

6. Human Resources—strategic workforce planning

7. Laws and Regulations—impact of current and future government regulations, communication

8. Management—planning, organizing, directing, and controlling

9. Professionalism and Ethics—meeting needs of professional staff, modeling codes of conduct, and ethical decision making

10. Quality and Performance Improvement—quality improvement framework programs

Modified from ACHE Board of Governors http://ache.org/mbership/ credentialing/EXAM/ReferenceManual/BOGExamReferenceManual_ KnowledgeAreas.pdf Accessed 2/1/17

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http://ache.org/mbership/credentialing/EXAM/ReferenceManual/BOGExamReferenceManual_KnowledgeAreas.pdf

theories that can be tested out in the world of practice. This is indeed one way a profession grows and how individuals come to be integral in that growth. Hopefully, the study of organi- zations will be an empowering experience and an enjoyable endeavor.

References 1. Johnson JA, Breckon DJ. Managing Health Education

and Promotion Programs: Leadership Skills for the 21st Century. Sudbury: Jones and Bartlett; 2007.

2. Johnson JA. Introduction to Public Health Manage- ment, Organizations, and Policy. Clifton Park, NY: Delmar-Cengage; 2013.

3. Bloom BS, ed. Taxonomy of Educational Objectives, Handbook I: Cognitive Domains. New York: Longmans, Green; 1956.

4. Anderson LW, Krathwohl DR. A Taxonomy for Learning, Teaching and Assessment: A Revision of Bloom’s Taxonomy of Educational Objectives. White Plains, NY: Longman; 2001.

5. Fink LD. Creating Significant Learning Experiences: An Integrated Approach to Designing College Courses. 2nd ed. San Francisco, CA: Josey-Bass; 2013:34–37.

6. Commission on Accreditation of Healthcare Manage- ment Education. Candidacy Application Handbook. July 2014:ix.

7. Dewey J. Democracy and Education. New York: Macmillan; 1916.

8. Olden PC. Teaching organization theory for health care management: Three applied learning methods. J Health Adm Educ. 2006;23:39–52.

9. Bradley E. Use of evidence in implementing competency-based healthcare management teaching. J Health Adm Educ. 2003;20:287–304.

10. Campbell CR, Lomperis AMT, Gillespie KN, Arrington B. Competency-based health care manage- ment education. J Health Adm Educ. 2006;23:135–168.

11. Johnson JA, Shi L. Overview of public health adminis- tration. In: Shi L, Johnson JA, eds. Public Health Adminis- tration: A Population Based Approach to Management. 3rd ed. Burlington: Jones and Bartlett; 2014.

12. American College of Healthcare Executives. Board of Governors Examination Reference Manual: Knowledge Areas. 2017.

reading the text and studying organizations. Think about how organization structure is related to the mission, and how those are related to the external environment. Think about how group behavior is affected by organizational culture. Discuss relationships and interactions among the theories, concepts, principles, and ideas in this text. And of course, the topics in this text are only some of what must be learned in a health administration curriculum and its many courses. Students may strengthen their understanding of this text’s content by men- tally integrating it with the content of other texts and courses: How is organizational mis- sion related to financial management? How does human resources management affect organizational development? How does stra- tegic planning influence organizational out- comes? Are there reciprocal relationships? By thinking about these questions and discussing them with others, students can learn about health organizations in ways that are theoret- ically solid and practically useful.

▸ Beyond The Classroom Many often claim that there is nothing more useful than a good theory. Health organiza- tions and their leaders have at their core theo- ries of action that guide them and shape them as they change and develop. The successful manager is a leader who fully understands organization theory, who is a keen observer of organization behavior, and who facilitates change in ways that foster organization devel- opment. Each student who reads this text has the opportunity to take a significant step in becoming just such a leader. In fact some of the readers may go on to develop their own

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CHAPTER 2

Anatomy and Physiology of Organization Theory

LEARNING OBJECTIVES

■ Describe the anatomy and physiology of theory. ■ Distinguish between the analogy of anatomy vs. physiology as it pertains to social and

behavioral phenomena. ■ Explain what theoretical elements are and how they relate. ■ Explain the utility of theory in the study of organization behavior. ■ Describe a conceptual model. ■ Describe how conceptual models relate to theory. ■ Develop your own conceptual model and theory. ■ Describe the importance of theory in relation to other chapters in this text.

OVERVIEW

This chapter is foundational in that it goes to the heart of what theory is and why it is important to the study of organizations and other social phenomena. It provides a foundation for readers to appreciate the significance of theory. Furthermore, we emphasize the utility of theories, concepts, and models in our own self-improvement and in organizational development and sustainability.

With sincere appreciation for the many concepts developed by M. Nicholas Coppola as they appeared in the First Edition of Health Organizations

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roots therein, researchers, executives, and leaders are forced to make decisions based on opinions and individual heuristics rather than science and literature. Individuals who fail to understand the complexities of theory and how to adequately describe, model, and interpret theoretical models to their advan- tage will have a distinct disadvantage in the modern workforce. Lastly, an understand- ing of theory is a necessary precursor to building conceptual models for the practice community. Model building is a necessary precursor to performance-based management development, system examination, policy for- mulation, and conducting quantitative anal- ysis. However, understanding the process of building empirically measurable models may be one of the more underrepresented aspects in leadership development today.

As stated in Kilpatrick and Johnson’s Handbook of Health Administration and Policy, “Theories help us to appreciate the fact that not all behavior and phenomena are random; much behavior is in fact predictable…The- ories suggest patterns, and if we understand those patterns, we may be able to engage in better decision-making and more effective managerial practices.”2

This chapter describes what a theory “is,” what the individual parts of theory are (anatomy), and how these elements interre- late within a theoretical model (physiology). This chapter also describes how theories can be used to generate hypotheses, appropriate management research questions, metrics for benchmarking, and process improvement ini- tiatives. Finally, understanding how theories help in the development of conceptual mod- els assists in developing organization vision, mission, goal, and benchmarking objectives.

▸ What Is Theory? Theory is the primordial soup from which research questions, problem statements, and variables of interest are derived. Students

▸ Introduction

The word theory comes from the Greek word theoria, which means “to look at” or “to contemplate.” Plato spe- cifically applied this to the contemplation of the world of “forms.” In modern times, this certainly could be extended to include organizations. This chapter is adapted from Nicholas Coppola’s concepts and work that appeared in the first edition of this text, Johnson’s Health Organizations.1 It discusses the anatomy and physiology of theory while providing important tools and skills that will enable the reader to not only understand, model, and describe complex theories, but also have the ability to deconstruct theory into individual components. This is a very important skill for understanding many of the important concepts in the rest of this text. Failing to understand theory and theo- retical elements will make it very difficult to understand the meaning of other important concepts presented in this text.

Why Study Theories of Organization? Understanding the theoretical properties of complex issues is important to managers and leaders in health organizations. They are continually placed in positions where it is necessary to have a greater understanding of complex models that relate to organizational life cycles, sustainability, bureaucracy, insti- tutional dynamics, employee satisfaction, economic demands, and organizational effi- ciency, effectiveness, and value—to name only a few leader priorities that theory can help explain. As a result, understanding the value of theory is significant to the survival of any organization. Furthermore, understanding the complex parts and relationships within theory assists executives in framing problems, devel- oping alternatives, and researching solutions. Without an understanding of theory and the

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valuable to the profession or the advancement of knowledge.

As the organizational sciences have advanced over the last century, scholars have convergent thoughts in reference to theoretical elements and concepts. It is now possible to conceptually represent theory by suggesting biological metaphors and, even more recently, metaphors from physics. In this regard, elements of theory can be regarded as a “physical” unit where there is both anatomy and physiology.

Anatomy and Physiology of Theory The anatomy of theory can be broken down into specific units of analysis, just as one might do when looking at human anatomy. These units include the theory itself, followed by sub- ordinate constructs, variables, and operation- alized measures. An environment of discussion surrounds these elements. This enclosure is called bounded rationality. When discussing theoretical constructs, variables, and mea- sures, it is first necessary to frame these ele- ments within a plausible discussion group. By framing constructs, variables, and measures in a bounded rationality, an “out-of-bounds” area is presented that helps researchers stay within certain parameters of discussion.

Contained within this bounded ratio- nality is the physiology of theory. The phys- iology of theory describes the interaction among constructs, variables, and measures, as well as other elements. In this regard, the interaction of constructs within theory is helpful for developing propositional state- ments. This is important in the early stages of qualifying theoretical relationships before quantitative data are available for testing or disconfirmation. Forming a more concrete and testable relationship within theory are the relationships between variables known as hypotheses. Propositional and hypothetical relationships are discussed in detail later in the chapter.

should avoid “inventing” their own theory for solving management research. Numerous theories are available in the literature that will help them investigate issues relating to organi- zations, teams, and individuals. This text dis- cusses and describes many such theories.

It is important to know that there is no one accepted definition of theory within the orga- nization literature. In layman’s terms, a theory is an advanced form of an idea or an opinion that has some base in the empirical world. A leading theoretical scholar, Samuel Bacharach, has suggested, “a theory is a statement of rela- tions among concepts within a set of boundary assumptions and constraints.” Bacharach also suggests that a theory is a coherent narrative composed of assumptions, abstract reasoning, and speculation, which describes and explains an observed or experienced phenomenon’s constructs, their interrelationships, and their boundaries. Bacharach goes on to suggest that a theory should answer the question of how, when, and why, and that a theory should be logically consistent, able to be tested, and sub- ject to disconfirmation (or falsification).3

Other authors have suggested that a the- ory must explain why variables and constructs come about and why they connect, while others assert that the purpose of theory is to chal- lenge and extend existing knowledge, within the limits of the critical bounding assump- tions, through concise organization and clear communication of an idea. Additional authors identify the purpose of theory as bringing the components of a complex phenomenon together in one understandable whole. Finally, others suggest that the purpose of theory is to extend existing knowledge, within the limits of the critical bounding assumptions, through concise organization and clear communica- tion of an idea.4–6 Regardless of definition, a theory must be capable of support by quali- tative measures or quantitative data. If a the- ory is incapable of initial development based on qualitative or quantitative properties, the burgeoning theory may not have evolved past the opinion or idea phase and may not be

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description” of the key elements of a study. The conceptual model should be parsimonious (simple) and should offer graphic representa- tions of theoretical elements that help outsid- ers understand the issue(s) being investigated at a glance. A conceptual model may include the actual theory, as well as constructs, vari- ables, measures, confounders, and contextual factors; however, some conceptual models may only consider specific constructs as well as cer- tain elements specific to the unit of analysis under study. Many of the models presented in this text will include a discussion of the actual theory itself, while other models may only present constructs for discussion.

Also, contained within the bounded ratio- nality of theory are contextual factors and con- founders. Contextual factors are generally known elements that exist in the same environment as constructs, variables, and measures. The interac- tion of contextual factors on certain constructs and variables may be known in advance and can be controlled for through awareness and inter- vention. Confounders are properties in the envi- ronment that are generally not known in advance and may have interactive effects with theory that are not forecasted—or are difficult to predict.

FIGURE 2-1 depicts theory as a conceptual model for visual representation and under- standing. A conceptual model is a “conceptual

FIGURE 2-1 Conceptual Model of Theory

12 Chapter 2 Anatomy and Physiology of Organization Theory

Variable A Variable B Variable C Variable D

Bounded Rationality

Measures:

Construct Construct

Contextual Factors

Anatomy & Physiology of Theory

Physiology of Theory

Related by Propositions

Variable A relates to Variable B through a Hypothesis

Theory Confounder

Construct Construct

Variable A Variable B

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For example, an apple possesses empiricism insofar that it can be tasted, touched, seen, and smelled. It does not matter that the apple does not make noise. Because an apple possesses four of the five empirical senses, we can say that an apple is not a construct. This is because it can be rationalized through empirical prop- erties. Any physical element or property that can be described through at least one of the five senses does not qualify as a construct.

A classic example of a construct is qual- ity. Quality is a construct that cannot be dis- cussed without identifying it through other measurable properties or variables.9, 10 The classic statement “quality is in the eye of the beholder” generalizes the difficult problem we have describing quality. The discussions of other latent variables (such as efficiency, effectiveness, performance, satisfaction, orga- nizational survival, leadership, success, and motivation) are all examples of constructs. This text discusses many of these constructs that cannot be universally discussed without first assigning empirical properties to them. The empirical property used to describe con- structs is variables.

Variables Flowing from constructs are variables. Vari- ables are empirical units that are capable of identification through one of the five senses. Accordingly, a variable is an element that has precise meaning in the physical world. Generally, variables are universally under- stood and easily described. Weight is a good example of a variable. When discussing the concept of weight with peers or colleagues, universally understood concepts of pounds, ounces, or tons are immediately recognized as valid descriptors of weight. If a variable is incapable of a generalized descriptor, it may cause problems in describing theory. How- ever, if the builder of the theoretical concept makes a careful argument for the use of certain variables—and defines them appropriately— the variable may have utility in helping frame

The modeling of theory in Figure 2-1 is based on the early work on model building suggested by Bacharach, empirical measure- ment techniques in healthcare suggested by Wan, as well as simple, elegant, and consistent theoretical models suggested by other authors. This pictorial description and the relationship between theoretical parts will become clearer as the chapter progresses.7, 8

▸ Anatomy of Theory Constructs The building blocks of theory are constructs. Throughout this text, students will encounter dozen of constructs. As a result, it is critical to the study of organization behavior to have a clear understanding of what a construct is. Failing to have a clear understanding of con- structs will result in an inability to understand many of the concepts in subsequent chapters of this text.

Before defining a construct, it is first nec- essary to establish a rule for how constructs relate to theory. One constraint is that a valid theory must be capable of identification through at least two constructs. Failing to iden- tify a theory by at least two constructs (simi- lar to Figure 2-1) results in what scholars call tautology. Tautology implies a never- ending redundant cycle. The classic tautological state- ment is “The sky is blue because it reflects the ocean, while the ocean is blue because it reflects the sky.” This statement fails to clar- ify where the blue came from—the sky or the ocean. As a result, we are left in a revolving argument with no resolution. Accordingly, in order to adequately discuss theoretical proper- ties, it is necessary to have two or more con- structs in order to properly frame theoretical concepts and issues.

By definition, a construct is a latent variable that lacks empiricism (taste, touch, sight, smell, or sound). Elements that are empirical have tangible, physical properties.

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is possible to operationalize age in several dif- ferent ways: one, as a continuous variable; two, as a binary variable; and three, as a categorical variable (see TABLE 2-1).

In Table 2-1, we arbitrarily establish cut- off points for categorical and dichotomous variables that help support the issue under study. The categorical description of age could have also been classified using quarter century marks or separated by 5-year increments. The selection of a category is up to the executive analyzing the data. Finally, if the executive is interested in partitioning Medicare recipients from non-Medicare recipients, the age break at 65 provides the opportunity to analyze the two different groups.

Not all variables lend themselves to operationalized measures through all three metrics. For example, the variable racial cate- gory does not lend itself to a continuous mea- sure. The most appropriate nomenclature for race is a category where the researcher selects racial categories of interest in the study for analysis.

The process of operationalizing measures is critically important in medicine, business, education, and many other applied profes- sions. A requirement to gather, manage, and measure outcomes from data is a continu- ous process. However, before collecting and

the model. Similar to the tautological rule discussed previously, each construct within a theoretical model must be described using two or more variables.

Measures Operationalized measures derive from vari- ables. Measures are operationalized descrip- tions of variables that must be capable of numerical identification. Operationalizing is the process of quantifying a variable using appropriate, numerical-descriptive terms. Additionally, measures must be universally understood and are classically categorized as continuous (1 to n with n equal to infinity), dichotomous or binary (yes or no, on or off, etc.), or finally, categorical (such as Caucasian, African American, Latino, etc.). If measures are incapable of being operationalized through continuous, dichotomous, or categorical iden- tification, the measure may not have enough precise significance to be valid in describing or testing the theoretical model under study.

Variables should be capable of several different methods of operationalization. For example, the variable age can be operational- ized as a continuous, categorical, or a binary variable depending on how the researcher chooses to define and measure the age variable. The following section discusses this process.

Operationalizing Measures In order to operationalize the variable age, we first must associate the variable with a spe- cific unit of analysis (such as an organization, team, or individual). Next, we create a brief definition of the variable age that supports the unit of analysis under study. For example, we may say that age is defined as the number of years associated with a human individual’s life. This statement includes two important fea- tures. One, it qualifies age in terms of years. Second, it provides a reference group for age where a potential range for a life span is uni- versally understood. Given this information, it

TABLE 2-1 Operationalized Age Variable

Define age as the number of years associated with a human individual’s life.

Continuous: 1 to n.

Categorical: 0–10, 11–20, 21–30, 31–40, 41–50, 51–60, 61–70, 71–80, 81–90, 91–100, n > 101.

Binary: Medicare eligible? Yes or No (with Medicare eligibility being 65 years of age or older).

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keep in mind the assumptions of the test when building a code sheet. For example, paramet- ric and nonparametric tests require different assumptions, and these should be considered in the code sheet. While there are numerous examples for building a code sheet to demon- strate how data are operationalized in a study, TABLE 2-2 provides one proven example of suc- cess. The following code sheet is created for the variable “education.”

In this code sheet of a single variable, each column contains very specific and mutually exclusive information about the variable that assists in measuring the theory under study.

1. Label: The actual name of the variable used.

2. Description: Define the variable here.

3. Operationalization: How is it coded?

Contextual Factors Contextual factors are either variables or con- structs that exist in the bounded rationality of the theory under study. Contextual factors gen- erally have a known impact on the suggested relationships within the theoretical model. For example, in the proposed example of a con- ceptual model of nervousness in FIGURE 2-2, we can suggest that variables of physical appear- ance and an individual’s speech pattern may be good indicators of an individual’s level of

analyzing data, operationalize it in a consistent and logical manner. The Balanced Score Card developed by Kaplan and Norton is an exam- ple of a quality tool that requires executives to select and define not only constructs of interest to measure but also valid and reliable variables capable of identification through operational- ized measures that provide meaningful data for trend analysis.11

Similar to variables and constructs, at least two operationalized measures should be considered for each variable in order to avoid tautological issues. While oftentimes it may only be necessary to operationalize a variable one way and achieve finality in the measure- ment process, it is always a good idea to strat- egize alternative methods of measurement for each operationalized measure.

Code Sheets The last step in operationalizing variables is the construction of a code sheet. Whenever testing variables in a hypothetical relationship, it is not the variables being tested but rather the operationalized units of the variables. This is a necessary precursor to loading data into statistical software like SPSS, SAS, Minitab, or Excel. When we operationalize data for statis- tical software manipulation, we create code sheets.

A code sheet is a very simple explana- tion of how operationalized units of a variable will be used in the study. The researcher must

TABLE 2-2 Code Sheet Example for Variable Education

Label Description Operationalized

Education Highest education degree obtained by member

Categorical 1 = HS 2 = Community College 3 = 4 yr undergraduate (BA, BS) 4 = Masters (MHA, MBA, MPH) 5 = Doctorate (PhD, DHA, MD)

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unaware of in advance and cannot control for until after they are identified through alter- nate means. Confounders are spoilers or wild card factors that are usually identified after a conceptual model is built and testing begins. After confounders are identified through experimental testing or other means, they can be classified as contextual factors and controlled.

Confounding variables can have a significant effect on theoretical and concep- tual models. Unfortunately, it is impossi- ble to forecast the grave nature of the effect until after the confounder presents itself. The concept of controlling for confounders is a difficult subject and better addressed in a course on experimental design or quantita- tive analysis. However, an understanding of the likelihood that confounders are present in the environment and can affect assumptive outcomes of models is a necessary tenet of model building.

▸ Physiology of Theory Propositions The physiology of theory can be described in terms of the relationships. Two of these rela- tionships are expressed in terms of hypoth- eses and propositions. A proposition is a statement of opinion, based on some degree of preliminary study or heuristics, that is offered as a true or valid statement. While the statement may not always be true or valid, it is offered as such until evidence of disconfirmation is provided. The saying that “Time is Endless” is an example of a propo- sitional statement between constructs (see FIGURE 2-3). In this example, Time is one con- struct and is related to a second construct of Endless in order to form a propositional statement. The propositional statement can be helpful in the development of new oppor- tunities for research and the formulation of new knowledge. The statement also assists in

nervousness. We might also suggest that the variables of physical appearance can be opera- tionalized through measures of sweating (indi- vidual is or is not) and breathing heavy—a yes or no binary measure as well.

We may continue to suggest that speech is a good indicator of nervousness. If an individual is stuttering (yes or no), and if the individual is shout- ing (yes or no), the individual may be nervous. It may certainly be reasonable to suggest that if an individual is sweating, breathing heavy, shouting, and stuttering, the person may be nervous.

However, if we fail to take into account contextual factors, such as heat (perhaps it is a 100-degree day), the individual’s physical condi- tion (perhaps they are overweight and just walked up several flights of stairs), and the individual’s medical condition (perhaps they are hard of hearing and on medication that impairs speech), it is possible to come to a completely incorrect assessment based on physical characteristics. In essence, contextual factors are elements in the environment that affect the outcomes of the constructs or measures we are trying to study. Contextual factors are difficult to identify in advance, but necessary to consider when build- ing conceptual models of phenomenon.

Confounders Similar to contextual factors, confounders are variables that exist in the bounded rational- ity of the environment that the researcher is

FIGURE 2-2 Conceptual Model of Nervousness

16 Chapter 2 Anatomy and Physiology of Organization Theory

Nervous Contextual

factors

Physical appearance Speech

M1: Sweating Y/N M2: Breathing heavy Y/N

M1: Stuttering Y/N M2: Shouting Y/N

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statement using the modeling techniques dis- cussed earlier. After this exercise, students will be able to understand the complex nature and difficulty in not only drawing conceptual models, but also operationalizing and defining them.

Although difficult to model and often resulting in different interpretive outcomes, several research articles reviewing health- care delivery and leadership have utilized the proposition methodology to investigate con- struct relationships over the years.12 Recent studies in manager competencies, critical thinking, and quality outcome assessment have also successfully used the proposi- tion methodology to review phenomenon.13 Although sometimes referred to as concept mapping within the literature, the techniques and methodologies are similar. Regardless of name, the strength of utilizing the proposi- tional technique is that it assists in generat- ing propositional statements that can be used to guide the development of new variables to help define complex issues.14

Hypothesis A hypothesis is a testable relationship between two variables. Furthermore, the purpose of hypothesis testing is to discover causal rela- tionships between variables. Hypothesis statements are the foundation for all organi- zational research and form the basis for the advancement of knowledge. When writing a hypothesis, the researcher needs to follow very strict rules of design. From a reductionist point of view, in comparing two variables in a hypothetical relationship, there are generally five common methodologies for analysis.

1. One assumption is that there is no difference between variable 1 and variable 2 (null hypothesis).

2. The second assumption is that as one variable increases the other remains the same (positive relationship).

answering questions about the relationships between constructs.

Another classic example of a proposi- tional statement combining constructs is “the right to bear arms.” This propositional state- ment is offered as a statement of fact as if it was true; however, the interpretive nature of this proposition continues to be readdressed in America every year.

It is no small wonder why the brightest legal minds in our country have debated on the meaning of this propositional statement for over 200 years. This propositional state- ment has also been interpreted differently by nearly every state in the union. Addition- ally, there continues to be new interpretive legislation regarding the propositional state- ment “the right to bear arms” every year (see FIGURE 2-4).

The difficulty with interpreting this prop- ositional statement is the complex nature surrounding three culturally partisan latent variables of “rights,” “bear,” and “arms.” As an exercise, students are encouraged to try to come up with two variables for each con- struct in the propositional statement, define each variable with two operationalized mea- sures, and discuss contextual factors and confounders. Students are also encouraged to draw a conceptual model of this propositional

FIGURE 2-3 Propositional Statement

FIGURE 2-4 Propositional Statement of the Right to Bear Arms

Physiology of Theory 17

Time Endless Time is Endless

The Right to Bear Arms

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It is incorrect to suggest that the hypothet- ical relationship is “proved” due to the fact that all hypothetical relationships are supported or not supported. It is incorrect parlance to suggest that a hypothesis is proved.

Hypothesis testing is often the way that the overall theory is falsified. Falsification is achieved through empirical testing of the various oper- ationalized measures in theory. As a result, if a theory is not testable, the theory is not falsifiable in principle, and from an empirical viewpoint, is worthless to the field under study. For this reason, the falsifiability of theory is a necessary property of science. For a more detailed overview of designing and testing hypothetical relation- ships, encourage students to refer to their course text in research methods or quantitative analysis.

Research Questions Building conceptual models supports the ini- tial development of research questions. It is never a good idea to use opinions for guid- ing research questions; rather, sound research questions should flow elegantly and easily from a given conceptual model. Similar to theory itself, positing research questions requires the understanding of certain rules and constraints in advance. For example, a research question supporting a conceptual model may include one or more of the following elements:

1. It must include the primary unit of analysis in the statement (i.e., organization, team, or individual).

2. It may include a reference to the environment, a construct, variable, or a contextual factor within the bounded rationality.

3. It may include the methodological tools used for measurement.

3. The third assumption is that as one variable decreases the other remains the same (negative relationship),

4. The fourth and fifth assumptions suggest that both variables will increase or both variables will decrease.

There may be some exceptions to these guidelines based on experimental design; however, these five hypothetical relationships form the basis for all hypothesis testing.

As an example, a classic hypothetical relationship may seek to discover the rela- tionship between weight and blood pressure. One potential testable hypothesis may sug- gest that as weight increases, blood pressure increases. In this instance, weight may be classified as a continuous operationalized measure in pounds (1 to n), while blood pressure may be similarly classified as a continuous measure of systolic and diastolic indicators (again 1 to n). The same relation- ship can be tested with dichotomous units, a simple yes or no for weight increase, and a similar yes or no for outcome of blood pres- sure (see FIGURE 2-5).

In this example, it is first necessary to have a baseline for comparison and capture initial measures for both weight and blood pressure.

Baseline measures: Weight 185 pounds and blood pressure of 120/65

Measure after 6 months: Weight 205 pounds and blood pressure of 135/80

A simple visual inspection supports our initial hypothesis statement. If weight increased, but blood pressure remained the same, or decreased, we would fail to support our hypothesis.

FIGURE 2-5 Hypothesis Example

18 Chapter 2 Anatomy and Physiology of Organization Theory

As weight increases, blood pressure increases

Weight Blood pressure

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principles, we can conceptually model McClel- land’s theory of motivation.15 (This theory will be discussed in more detail in Chapter 6.)

In this instance, define motivation as the goal-directed behavior of individuals work- ing in an organization. McClelland’s theory of motivation suggests that if an employer wants to motivate his or her employees, there are three distinct foci for doing this. McClelland sug- gests that an employer should consider placing emphasis on three things: constructs of affilia- tion, power, and achievement. For the purpose of this conceptual model, we will use only the constructs of affiliation and achievement to demonstrate the utility of building the model. Remember that conceptual model building is as much an art as a science, and so it is not always necessary to model all the parts of the theory.

The first step in the process is to com- pletely define all the parts we are measuring and studying. Since we have already identified the theory, the second step is to identify our constructs. In our model (see FIGURE 2-6), we define affiliation as the types of opportunities

4. It must be a simple expression of one statement.

The following is an example of a good research question:

How do we measure the efficiency of hos- pitals with regression analysis?

Note this research question has a unit of analysis (hospital), a primary construct (effi- ciency), and the tool to measure efficiency (regression analysis). Other details reference the research question can be addressed in other parts of the study.

Theoretical Application Throughout this text, students will have the opportunity to learn about many different the- ories. Although not all the theories presented in this text lend themselves to easy conceptual modeling through the techniques discussed earlier in the chapter—all are capable of the- oretical and conceptual modeling if careful study and analysis of the theory is performed. As a demonstration of the theoretical modeling

FIGURE 2-6 McClelland’s Application of a Conceptual Model

Physiology of Theory 19

Affiliation Achievement

McClelland’s Theory of Motivation

Affiliating with professional organizations leads to

achievement

Professional organizations

M1 – Join Y/N M2 – Advance Y/N

OCB

M1 – # social events 1–n M2 – # of volunteers for extra work 1–n

Accomplishment

M1 – # of awards 1–n M2 – # of deadlines met on time 1–n

Advancement

M1 – Promotion rate Y/N M2 – # of promotions per unit 1–n

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As a test of one potential hypothesis, we could suggest the following:

Hypothesis 1: Individuals who join pro- fes sional organizations have higher pro- motion rates than individuals who do not join professional organizations.

Once data are collected on each mea- sure, and outcomes are known, this hypoth- esis can be tested. In this way, the theory can be supported or unsupported by hypothesis testing.

Not represented in this conceptual model are our bounded rationality, possible con- founders, and contextual factors. These ele- ments are important to consider when building theoretical or conceptual models, although it is not always necessary to include all parts of the anatomy and physiology of theory in each model. Only the parts necessary to convey the intent of the model are required.

As a teaching tip, students should notice in the aforementioned model that “advance- ment” is used as a measure of the professional organization variable and as the variable itself for the achievement construct. Similarly, “accomplishment” is used as a variable in this model; however, in a different model accom- plishment may be used as a construct. If a construct is defined based on empirical prop- erties, then it can be used as a variable—and sometimes as a measure. It is always incum- bent on the builder of the theory to remember that there is both an art and science to model building. The science captures the anatomy and physiology of theory and the rules and constraints therein. However, it is incumbent on the builder to recognize the opportunities and possibilities in applying those elements. As long as elements are carefully defined, and sound research methodologies are used based on literature, the building of conceptual mod- els becomes easy with practice.

employees have within the organization to join or participate in groups. In our suggested model, we define one group specifically as pro- fessional organizations. A professional organi- zation may be something like the American Medical Association (AMA), American College of Healthcare Executives (ACHE), a professional honor society, or some other professional organization. We operationalize professional organizations through two mea- sures of joining (operationalized as a dichoto- mous variable of yes or no), and advancing in that organization—perhaps to the standing of Fellow (yes or no).

We may also suggest that the affiliation construct can be measured through the num- ber of organization citizenship behaviors (OCB) within the organization. This might be measured by the number of social activities per month the employees in the organization engage in (measured by a continuous variable of 1 to n). We can also measure this construct by collecting data on how many people vol- unteer for extra work within the organization.

Apply the same methodology to the con- struct of achievement where this construct is measured by two variables of advancement and accomplishment. Define advancement as the promotion rate within the organization and the number of opportunities for advancement. Operationalize accomplishment by the number of awards an individual received and the total number of successful projects met on time.

A suggested propositional statement might be that affiliating with professional organizations leads to achievement. At face value, this propositional statement makes sense because it may be assumed that joining or advancing in a professional organization might make the employee more knowledge- able of job skills and, therefore, more likely to be promoted or become more efficient in his or her job. This may also be called face or construct validity.

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develop two variables and two measures for the latent variables. See FIGURE 2-7.

Exercise 2 1. Model the theory of motivation using

two constructs, four variables, and eight measures. See FIGURE 2-8.

2. Use your measures to write two hypoth- eses relating to your theory.

▸ Conclusion This chapter discussed what a theory is, the anat- omy and physiology of theory, and provided a short application of model building technique as it applies to McClelland’s theory of motiva- tion. The anatomy of theory includes constructs, variables, measures, confounders, and contex- tual factors within a bounded rationality. The physiology of theory includes the relationships between constructs called propositions, and the relationships between variables called hypoth- eses. When properly modeled and operational- ized, an aptly built model of theory is essential in falsifying, supporting, and testing the theory.

Review/Discussion Questions 1. How can conceptual model building be

used to explain the difficulty in under- standing propositional phrases like the right to bear arms or healthcare is a right?

2. Why is the understanding of confound- ers necessary in the development of conceptual models?

3. What is the difference between theory and a conceptual model?

4. What are the key differences between the anatomy of theory and the physiol- ogy of theory?

5. Why is it possible for a term to be used as a construct, variable, or measure? What must the builder consider before using the selected term?

▸ Learning Activities Exercise 1

1. Using the theoretical and conceptual modeling techniques you have learned, FIGURE 2-7 Chapter Exercise 1

Learning Activities 21

Individual intelligence

Individual health

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3. Posit a proposition between your two constructs. a. Hypothesis 1 b. Hypothesis 2 c. Proposition d. Question: Where might you get

data for these hypotheses?

References 1. Coppola MN. Anatomy and physiology of theory. In:

Johnson JA, ed. Health Organizations. 1st ed. Sudbury: Jones and Bartlett; 2008;9–26.

2. Fried BJ. The application of organizational theory and behavior. In: Kilpatrick AO, Johnson JA, eds. Handbook of Health Administration and Policy. New York: Marcel-Dekker;1999:705.

3. Bacharach SB. Organizational theories: Some criteria for evaluation. Acad Manage Rev. 1989;14:490–495.

4. Whetten DA. What constitutes a theoretical contribution? Acad Manage J. 1989;14:490–495.

5. DiMaggio PJ. Comments on “what theory is not.” Adm Sci Q. 1995;40:391–397.

6. Weick KE. What theory is not, theorizing is. Adm Sci Q. 1995;40:385–390.

7. Bacharach SB. Organizational theories: Some criteria for evaluation. Acad Manage Rev. 1989;14:490–495.

8. Wan TTH. Evidence-Based Health Care Management— Multivariate Modeling Approaches. Netherlands: Kluwer Publishers; 2002.

9. Donabedian A. Evaluating the quality of medical care. Milbank Meml Fund Q. 1966;44:166–206.

10. Lesneski CD, Honore PA, Clancy C. Public health and healthcare quality. In: Shi L, Johnson JA, eds. Public Health Administration. 3rd ed. Burlington: Jones & Bartlett; 2014;599–622.

11. Niven PR. Balanced Scorecard Evolution. Wiley; 2014.

12. Coppola MN. A propositional perspective of leadership: Is the wrong head on the model? Jrnl Intl Res Bus Disc: Bus Res Yearbook, International Academy of Business Disciplines. 2004;11:620–625.

13. Edmondson KM, Smith DF. Concept mapping to facilitate veterinary students’ understanding of fluid and electrolyte disorders. Teach Learn Med. 1998;10:21–33.

14. Simpson E, Courtney M. Critical thinking in nursing education: Literature review. Int J Nurs Pract. 2002;8:89–98.

15. Johnson JA. Introduction to Public Health Manage- ment, Organizations, and Policy. New York: Delmar- Cengage; 2013.

FIGURE 2-8 Chapter Exercise 2

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CHAPTER 3

Classical Theories of Organization

LEARNING OBJECTIVES

■ Trace the evolution of early major theories of organization. ■ Be able to distinguish key attributes of each theory from the others. ■ Understand and explain contributions of scientific management. ■ Understand and explain contributions of administrative theory. ■ Understand and explain contributions of bureaucratic principles. ■ Understand and explain contributions of human relations. ■ Understand and explain contributions of administrative behavior. ■ Gain insight into the value of understanding a wide range of theories.

OVERVIEW

This chapter provides the foundational and historical background for the study of organization theory. All of the major categories such as scientific management, administrative theory, and bureaucratic theory are presented here and will serve to inform the reader as he or she moves forward in the text. The elements and context of each of these theories are provided in a chronological and categorical way.

Contributing Authors: Peter C. Olden and Mark L. Diana

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▸ Scientific Management

Frederick W. Taylor, in his classic writings on management, stated “in the past the man has been first; in the future the system must be first,” to help the worker achieve maximum pro- ductivity and efficiency and then be properly rewarded.3 He believed that better management could help both the employer and the employee achieve greater prosperity while reducing what he perceived to be enormous waste, loss, and inefficiency throughout industries and the United States in general. Taylor argued that rather than management just searching for “better workers,” it should apply systematic sci- entific management. Taylor (1895, 1903, 1911) had come to believe that management was a true science based on defined laws, principles, methods, and techniques, and that this science could be applied to all kinds of activities for big increases in productivity and efficiency. Based on that approach, he led the development of scientific management in the late 1800s and early 1900s.3–5 His work was extended by Frank and Lillian Gilbreth6 and Henry Gantt.7, 8

Taylor argued and demonstrated that an individual worker’s tasks could be scientifically analyzed to determine how to achieve increased output with decreased energy and resource utilization. He conducted extensive studies of workers manufacturing steel that considered, for example, the design of a tool, availability of a tool for a worker, how a tool was held, how a tool was moved, and so forth. Taylor demonstrated his methods and proved their results, and so others came to see his ideas were not unproven theory but instead were proven to work. An early study and experiments at the Bethlehem Steel Plant with pig iron workers became legendary.3

When Taylor developed his ideas in the early 20th century, managers and workers were generally antagonistic toward each other. However, Taylor believed that both groups shared common interests and that each could not succeed without the other. Further, he

▸ Introduction

Organizing workers to achieve goals is perhaps as old as the human species, but the development of organization theory is much newer. Classical views of man- agement began in the late 19th and early 20th centuries with the Industrial Revolution. Facto- ries grouped together hundreds and thousands of workers into a much bigger scale of operations than before. Along with larger factories, there came larger universities, government agencies, hospitals, and other businesses and enterprises. This led to new problems of organizing and managing workers for maximum attainment of goals such as efficiency and productivity.

Theories of organization then evolved from different perspectives and schools of thought, and Perrow later grouped them into two broad categories: the mechanical school and the human relations school.1 The mechan- ical approach to organizations viewed orga- nizations as machines and emphasized, for example, centralized authority, division of labor, and rules. The human relations approach viewed organizations as groups of people and emphasized, for example, trust in employ- ees, interpersonal dynamics, and delegated authority. Alternatively, March and Simon divided classical organization theory into two contents—that which focused on physical pro- duction (e.g., Taylor’s time and motion stud- ies) and that which focused on larger problems of grouping workers and coordinating their work (e.g., Weber’s writings on bureaucracy).2

The purpose of this chapter is to briefly explain the main contributions of five import- ant approaches to organization theory: sci- entific management, administrative theory, bureaucratic principles, human relations, and administrative behavior. This is important for understanding the origin and intent of many management practices still in use today, either in part or in whole. The chapter next explains each of these five perspectives and then fin- ishes with a summary, review questions, learn- ing activities, and references.

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because rates were based on weak standards and tradition. Taylor based rates on scientific empir- ical analysis and measurement that workers felt were fair, and Taylor expected this approach to be embraced by workers and managers alike.3

Taylor identified several main principles of scientific management:

1. Managers develop a science to determine the best way to perform each element of work.

2. Managers scientifically select the best worker for each job.

3. Managers scientifically educate, train, and develop the worker for the job.

4. Managers cooperate with workers and assure work follows scientific methods.

5. Managers share almost equally with workers the responsibility for work results.3

Taylor’s work became known as scientific management, which was very different for man- agers and workers. It led to better understanding and cooperation between both groups, because they used empirical measurement, the scientific method, experimentation, and research man- agement to maximize output and minimize effort. This approach was applied to work con- ditions, equipment, procedures, and employee selection. It led to more worker specializa- tion, which created the need for coordination, departmentalization, and other administrative principles discussed later. It also led to manage- ment control, because once work standards were set and agreed upon, managers could measure actual work achieved by an employee and com- pare it to standards. In this way, Taylor’s focus on the specifics of the one best way to work also led to numerous changes in management and structure within the organization.3

Scientific management studied repetitive, simple, physical tasks in factory production or clerical work that could be clearly broken down and identified, and which had few mental or cog- nitive elements. The Gilbreths sought to further

believed both groups—not just the workers— were responsible for solving productivity and efficiency problems. Thus, he argued that management should assume more responsibil- ity for results than it previously had.

One way Taylor believed that managers could help workers was to help them work in “the one best way.” Too often, workers were left to figure out for themselves how to get their work done. Often, the same task might be done in dozens of ways, with some ways more efficient than others. Taylor believed there was “one best way” and one best tool or imple- ment to perform a task, and he applied scien- tific methods to find it. The “one best method and best implement can only be discovered or developed through a scientific study and anal- ysis of all of the methods and implements in use, together with accurate, minute, motion and time study . . . and the gradual substitution of science for rule of thumb.”3 This approach to management (sometimes called “Taylorism” or the Taylor System) required more planning and designing of work, and then training of workers to perform work in “the one best way.”

Although Taylor’s ideas began by focusing on individual workers, they expanded to man- agement and led to new management processes and methods. Every day, Taylor expected man- agers to plan and write out in detailed instruc- tions the next day’s work tasks, methods, tools, time allowances, and so forth to enable workers to be more productive with less effort and waste. Further, the managers were to establish meth- ods, rules, standards, actions, physical motions, tools, techniques, and systems—“the best way”—and then help workers understand all of this. In this way, managers and workers would be cooperative partners in achieving improved results. Managers were expected to pay higher wages to the laborers, so that everyone would gain from the higher productivity and output. Rue and Byars noted that piecework schemes (that pay workers based on the number of items produced regardless of the time taken to produce them) had previously been tried in production.9 Those payment plans were mostly unsuccessful,

Scientific Management 25

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part of scientific management was concerned with utilization of human beings in organiza- tions. They referred to scientific management as “physiological organization theory” because it included analysis of employees’ physiologi- cal constraints of production.2 Morgan argued that the scientific approach to management mechanized people and de-humanized the workplace.11 Further, it separated the “hand” of workers from the “brain” of managers. However, others (e.g., Rue and Byars) believed Taylor was concerned about helping both managers and employees improve production while improv- ing work conditions and pay for employees.9 Indeed, Taylor advocated higher rates of pay for workers who increased production.

Perrow identified several limitations of the scientific management school. First, labor and labor unions gained power, which led manage- ment to cooperate and share more with employ- ees and move away from rigid views of people as machines. Second, changing markets required businesses to adapt and change to meet new customer preferences. Frequent and sometimes rapid change did not work well with rigid scien- tific management. Third, social ideas and politi- cal viewpoints emerged that did not support the harsh authoritarian management that existed in some businesses imbued with scientific man- agement. Finally, the search for leaders of large growing organizations increased the realization that people, leaders, and organizations were not machines but social systems involving human relationships.1

▸ Administrative Principles

While the scientific management approach advanced the performance of individual tasks in an organization, not much theory had yet been developed for organizing different tasks into jobs, jobs into work units, and work units into departments. Minimizing the cost of production would require an organization to

deconstruct work into basic activities—grasp, reach, turn, etc.—and established time standards.6 However, this was confounded by the realization that the time to perform such actions depended on many other factors. They also analyzed mus- cle fatigue, speed, effort, skill, and other factors of human performance. Later disciples of Tay- lor (e.g., Henry Gantt and Carl Barth) expanded scientific management and applied it to other businesses and types of organizations, including those in municipal government and education.

The scientific management approach became widespread early in the 20th century, replacing traditional methods and “rule of thumb” standards. Many managers accepted it. However, some did not accept it because they felt it interfered with or reduced managers’ role, judg- ment, and ability. As Scott points out, these stud- ies and changes led to higher-level studies and changes in how work was organized, how tasks were sequenced and assigned, who was selected to perform particular tasks, and how production could be maximized.10 To do this, managers had to look at not only individual tasks and workers, but also at how those tasks and workers were connected to others, which meant rationalizing, coordinating, and sequencing communication, processes, and many aspects of production. The work of laborers was changed and so too was the work of managers. Managers’ decisions no lon- ger were personal or arbitrary; they were based on scientific analysis and experiments that led to more output and productivity.

Along with some managers, some workers resented this new approach because it standard- ized and proscribed much of their daily work. March and Simon stated that it studied men as accessories to machines for routine produc- tive tasks and tried to prescribe their work to increase production. This approach sought to improve productivity of an inefficient organ- ism (person) by carefully prescribing precise steps and methods of work. This converted a “general-purpose mechanism, such as a person, into a more efficient special-purpose mecha- nism,”2 and thus was a form of mechanization and automation. March and Simon believed that

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10. Order, with a place for everything and everyone

11. Equity, based on kindness and justice 12. Stability of personnel and person-

nel planning 13. Individual initiative, to plan and

then help implement the plan 14. Esprit de corps, harmony, unity in

the organization

Fayol believed management was a process based on these principles and that these princi- ples are applicable to all types of organizations. Thus, his ideas form a general theory of admin- istration that sought to form broad principles of administration to guide the management of organizations. These were “top-down” rather than the “bottom-up” approaches of Taylor. Two important concepts— specialization and coordination—were emphasized. As can be seen, these principles helped form organiza- tional design based on hierarchical levels and chain of command for control, with workers having a single boss, jobs being specialized by tasks and activities, and then jobs being grouped into departments. Line and staff work were distinguished from each other, in which line work contributed directly to achieving organizational goals, while staff work sup- ported the line work. These principles were to be flexible; Fayol expected managers to adapt them to particular situations.13

Gulick and Urwick (1937, p. 22) also developed administrative principles by describing administrative concepts including division of work, coordination of work, span of control, unity of command (one boss), top- down and bottom-up approaches to design- ing organizations, and executive functions. In doing so, they helped build on—and corrected problems of—Taylor’s work. For example, their unity of command principle was developed because multiple bosses caused inefficiency and conflict. They claimed that even “Taylor fell into this error in setting up separate fore- men to deal with machinery, with materials,

consider relationships, coordination, and pos- sible synergies among tasks, jobs, work units, and departments. Further, it would depend on the volume of work and whether there was enough need for a particular task to make it a full-time job or combine it with other tasks to make a full-time job. Principles for developing these kinds of structures emerged in the work of Fayol and Gulick and Urwick among others.

Based on his experience in management, Henri Fayol developed a more complete the- ory of administration and is often considered the first writer to do so.12 Unlike Taylor, who examined work from the level of the individ- ual employee, Fayol examined organizational management from the perspective and role of top managers. Thus, his work is more about managing an organization than just managing a worker. His classic book General and Indus- trial Management was published in 1916, and a revised translation of it by Gray explains Fayol’s 14 management principles that are considered universally applicable to managing organizations. Drawing from Fayol, Gray, and Rue and Byars, these principles are summa- rized below:9, 13, 14

1. Division and specialization of work 2. Authority, based on the formal

position rather than the person 3. Discipline, based on obedience and

respect 4. Unity of command, so an employee

takes orders from only one boss 5. Unity of direction, coming from

one boss and plan for activities that have the same objective

6. Placing group interests above indi- vidual interests

7. Pay, based on factors that are fair, uniform, and understood

8. Centralization, based on the situ- ation, authority, and communica- tion channels

9. Line of authority or scalar chain, to show formal communication channels

Administrative Principles 27

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much to group work based on process (special- ized jobs) versus purpose (self-containment). More self- containment means less coordination cost—but also less economy of specialization.

Gulick and Urwick also helped form the executive function by identifying and describ- ing the work of the chief executive. They asked “What work does a chief executive perform?” They then answered “POSDCORB.” That was their acronym for planning, organizing, staffing, directing, coordinating, reporting, and budget- ing. These seven functions may be subdivided so that the work is organized and performed by more than one person if necessary. When an organization is large, these functions should be divided among subparts of the organization.14

This approach continued to evolve with contributions from other writers. For example, Mooney further developed principles includ- ing coordination, scalar (hierarchical) levels of authority and responsibility, delegation, staff work, and function (duties).15

While these principles helped formulate a theory of management and organization, some of them were criticized as being too simplistic, contradictory, and based on dubious assump- tions.16, 17 At this point in the development of organization theory, “there is a tendency to view the employee as an inert instrument” without consideration of individual behavior, motivation, and variability.”2 Despite these shortcomings, these administrative principles helped develop organization theory, structure, and design. The criticisms led to the realization that broad prin- ciples may not apply to every situation or orga- nization (there are limits to the applicability of principles); they are contingent on other factors.

▸ Bureaucratic Principles Concurrent with development of scientific man- agement and administrative principles was the work of Max Weber in developing bureaucracy theory. Weber was a sociologist, economist, and political scientist who studied civilization and society. He wrote in the early 20th century

with speed, etc., each with the power of giving orders directly to the individual workman.”14

They did much work to develop depart- mentalization and grouping of work units both vertically and horizontally, realizing that both should be considered. Departmentalization of work units could be based on purpose and pro- cess, and the work itself could be grouped based on purpose, process, clients, or location. When grouping work by purpose—group all tasks, jobs, resources, etc. needed to completely accomplish a certain purpose—then the work is self-contained within a single department. Self-containment means everything (labor, resources, etc.) needed by a work unit to accomplish its work (pur- pose) is contained within that work unit, so it can achieve its purpose independently of what happens elsewhere in the organization. This approach has advantages. It helps ensure comple- tion of a particular purpose or project by putting it completely under the control of a single per- son (department director) who has control over all necessary staff, experts, services, and workers needed to accomplish the entire project and pur- pose. The department does not have to depend on or wait for others outside of the department director’s control. It does not have to deal with inter-departmental conflicts, which might have to be resolved by a higher- level manager, and in any event would cause delays and interference. It minimizes coordination time, cost, and energy. More self- containment means less coordination with other work units in the organization. How- ever, there is less specialization, which increases costs, as discussed next.

Grouping work based on process is basing work on skills and the types of work performed. When grouping all secretarial work in one department, economies are achieved by having a highly specialized focused department. How- ever, when grouping work based on specialized processes, increased coordination is required with other work units that need the specialized work to complete their purpose. These potential economies are lost when work of various skills is grouped together based on purpose (rather than process). So, an organization must decide how

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of knowledge. This is the feature of it, which makes it specifically rational.”12 This knowledge includes, of course, the technical knowledge that is the basis for selection into an office. But, there is also knowledge from knowing the history and experience in an organization and having access to knowledge in office files.

The purest form of exercised legal author- ity is found in a bureaucratic administrative staff. It is an ideal form, with these principles:19

1. Staff are free personally and subject to the organization’s authority only for their impersonal official work.

2. Staff are organized in a clear hier- archy of offices (bureaus) with a higher level one controlling those beneath it (rather than control based on personal loyalty of people).

3. Each office has clearly defined divi- sion of labor and duties and com- petencies, and it is managed based on written documents in files.

4. An office is filled by open free selection and appointment rather than election.

5. Staff are selected and appointed based on technical qualifications and ability, rather than personal loyalty and relationships.

6. Staff are paid by fixed salaries based largely on rank in the hierar- chy and responsibility.

7. An office is the sole or main occu- pation of a person in that office.

8. An office is part of a career in which someone can be promoted up the hierarchy based on achieve- ment and/or seniority.

9. Staff employment in an office is separate from ownership of rights, property, equipment, and other means of work production in that office; the office (not the hired worker) owns the means of pro- duction and rights of an office.

in German; his work was translated by Gerth and Mills (1946) and Henderson and Parsons (1947) and brought to the United States. Weber strongly believed in the bureaucratic form of organization that included hierarchical struc- ture, promotion based on merit rather than per- sonal relationships, impersonal rules, and other principles of organization. He believed this was superior to prior forms of organization such as feudalism or patrimony.18, 19

Weber began by identifying three types of legitimate authority based on three different views of what was legitimate.19 The different views were as follows:

1. Rational (legal authority)—based on the “legality” of normative rules and on the right of those in authority under those rules to give commands.

2. Traditional (traditional author- ity)—based on the sanctity of long-standing traditions and the legitimate status of those who use authority under those traditions.

3. Charismatic (charismatic author- ity)—based on devotion to exceptional heroism, sanctity, or character of a person and the nor- mative patterns of that person.

Weber thought the traditional and rational- legal forms were the most stable for administrative structures because charismatic leaders even- tually lose influence or pass away. The rational grounds for authority rest “on a belief in the ‘legality’ of patterns of normative rules and the right of those elevated to authority under such rules to issue commands (legal authority).”12

“In the case of legal authority, obedience is owed to the legally established impersonal order. It extends to the persons exercising the author- ity of office under it only by virtue of the for- mal legality of their commands and only within the scope of authority of their office.”12 This contrasted to authority based on feudalism’s tradition, religion’s charisma, or heredity’s cha- risma. “Bureaucratic administration means fun- damentally the exercise of control on the basis

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granted rather than being tested.20, 21 His work was further criticized for not distinguishing between two sources of authority—line authority based on position and staff authority based on special expertise.22, 23 Nonetheless, he contributed much to the development of organization theory.

▸ Human Relations A catalyst for the human relations movement was the Hawthorne Studies, which began in 1924 and studied how physical working con- ditions affected worker productivity. Inves- tigators conducted experiments by adjusting lighting, rest periods, and other factors at the Western Electric Hawthorne Plant near Chicago. As Western Electric executive C. G. Stoll stated in the classic book on the Haw- thorne Studies, the “work described in this volume grew out of our experience in other investigations, which revealed a considerable deficiency in our knowledge of the intangi- ble factors in the work situation that affect the morale and productive efficiency of shop workers. . . .24 The human reactions, of peo- ple engaged in productive work, have a much more important effect on their morale and efficiency than had previously been realized.”25

Like in scientific management, the unit of analysis for the human relations approach was often the individual worker, though work groups and cliques were later studied. During more than 10 years of study, the research used observations, experiments, and interviews. No clear relation- ship was found between working conditions and worker productivity. In some cases productivity improved even when work conditions worsened (e.g., less lighting), and sometimes productivity improved for both the test group and the control group. Psychologists, who then joined the study, concluded that other factors beyond the physi- cal working conditions—such as peer norms, recognition, teamwork, participation, and cooperation—affected workers and their pro- ductivity. Behavioral and social sciences offered insights and theories to better understand

10. Staff are subject to strict systematic rules, norms, discipline, and control of their work, decisions, actions, and performance in that office and must obey impersonal orders given by officials in their official positions; these systematic rules were known and fairly stable (rather than vague and subject to arbitrary change).

These principles were interrelated so that they combined to form a system of administra- tion. Weber believed that once a bureaucracy was established, it would likely remain perma- nent since it would be difficult to destroy such an organization. Bureaucratic principles com- prised a tool for leaders to have their legiti- macy supported by rules and law. Bureaucracy had rules, procedures, and preset routines in a defined administrative system. This approach was both rational and legal and carried the force of rational thought and the laws.

While Weber considered this the ideal orga- nization for efficiency, he realized it had short- comings. The bureaucratic form of organization has precision, unity, continuity, is unambigu- ous, and is thus technically superior to other organizational forms the way a well-designed machine is technically superior. However, to do this, the bureaucracy must eliminate human emotions such as love and hate from business. Bureaucracies thus become dehumanized. Rules are valued and followed closely to the point of minimizing creativity, individuality, and ini- tiative. In this way, Weber himself realized that the human aspects of work were reduced as administrative work became mechanized the way machines mechanized production. “The individual bureaucrat cannot squirm out of the apparatus in which he is harnessed. . . . He is only a single cog in an ever- moving mecha- nism, which prescribes to him an essentially fixed route of march” in an impersonal, methodically integrated organization of official functions.18 Also, like previous writers and theories, Weber and his work were criticized later for having too many unproven propositions that were taken for

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workers lost a feeling of security, camaraderie, informal membership, and group belonging.10 When mechanical processes, new technology, and engineered job design were implemented, workers’ social relationships at work changed and became unstable and insecure.

Barnard helped advance human relations by writing about his experiences as president of the NJ Bell Telephone Company. Unlike the Hawthorne Studies that viewed individual workers and work groups, Barnard viewed the entire organization and believed in hierarchy, authority, and clear formal communication. His views and theory emphasized the cooperative social relations among human beings in an orga- nization, and he conceptualized organizations as systems that integrate the cooperative purpose- ful efforts of its individual workers. Barnard articulated the need for individuals to cooper- ate with others in order to accomplish things they could not do alone. Creating cooperative relationships formed a system of parts (people) that, to survive, had to meet the purposes of the system and of the individuals in the system. Bar- nard believed this required that people accept the system’s purpose, be willing to cooperate, and communicate effectively with other parts (people) in the system. Those three conditions were the necessary and sufficient conditions to have an organization, and they become the basis of Barnard’s theory of formal organization.27

Barnard had been a student at Harvard and afterwards maintained his relationship with the Harvard faculty conducting the Haw- thorne experiments. They all came to see that a worker was not just an economic worker— there were also social, psychological, and behavioral dimensions of the worker. The nec- essary cooperation had to be developed and fostered by organizational leaders using social, behavioral, and moral motivators and rewards (not just material rewards). Barnard’s theory of administration also placed importance on the informal organization and extensive com- munication throughout the organization. He wrote in detail about conditions necessary for effective communication with authority and

workers and organizations, and management of them. Organizations now had further rea- son to think workers were not just economi- cally motivated— they were also socially and psychologically motivated. Workers were more complex than previously realized and were not always rational. Thus, the Hawthorne Studies helped launch the human relations approach to management, although their methods and con- clusions were later questioned by some.

Trained in listening, interviewing, and helping others express themselves, Hawthorne researchers, over a period of years, interviewed thousands of workers who spoke confiden- tially and eagerly. It was realized that workers as individuals want to confidentially express their thoughts and feelings about things in their lives—personal and work-related—to some- one (in this case, researchers) who would listen with care and interest.26 Human relations theory thus evolved to include the idea that managers should pay attention to workers’ complaints and to warnings that workers are upset about some- thing. In these studies, groups and their informal social control of work and work behavior were found to be important for both the internal work- ings of the group and how the group externally interacted with other parts of the organization. The industrial organization was a social organi- zation. Work cliques, through their norms, roles, and memberships, affected workers’ attitudes and productivity. Commenting on studies of wiremen at the Hawthorne plant, “their behavior at work could not be understood without con- sidering the informal organization of the group and the relation of this informal organization to the total social organization of the company.”25 Further, “the behavior of no one person in an industrial organization . . . can be regarded as motivated strictly by economic or logical consid- erations. . . . Non-economic motives, interests, and processes, as well as economic, are funda- mental to behavior in business, from the board of directors to the very last man in the organiza- tion.”25 Elton Mayo interpreted the results of the Hawthorne Studies and generally concluded that in the work setting of the Industrial Revolution,

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Earlier work (e.g., by Taylor) assumed that when facing a situation that required a decision, man- agers were rational people who could conceive of the possible alternatives, identify the conse- quences of each alternative, calculate the utility of alternative choices, and then choose an optimal decision. March and Simon thought otherwise. They believed man had limited ability to obtain all necessary information, identify all appropriate alternatives, objectively determine consequences, and rationally evaluate choices. Human beings instead had “bounded rationality” because they were only capable of mentally processing a lim- ited amount of information. Further, available information, perceived alternatives, and antic- ipated consequences were partly determined by the social and organizational environment, which therefore should be included in a theory of managerial decision making. Managers—and people in general—usually select a satisfactory alternative rather than going through the much more difficult process of searching for and deter- mining an optimal decision.

Another contribution of March and Simon was their distinction between routine and non-routine problem solving.2 When problems arise that have been repeatedly encountered before, the person or organization will quickly form a problem definition, possible responses, and a process for selecting a response. Organiza- tions may form written policies and procedures for how to handle routine situations and prob- lems in order to simplify and expedite how they are handled. These routine problems are han- dled easily with established processes, checklists, forms, procedures, and so forth. However, when a new or uncommon problem arises, the person or organization must develop a problem definition, search for alternatives, gather information for a decision, and form a decision- making process. All of that requires time, resources, and other costs, so the organization must also decide how much time, effort, and resources to expend to make a decision. This often leads to satisficing— accepting the first satisfactory solution that can be found rather than continue to spend resources searching for and evaluating other choices.

leadership. Together, these approaches created interpersonal relations, cohesion, and motiva- tion for workers to stay and work toward the organization’s overarching purpose. Humane leadership and fair treatment of employees was another aspect of Barnard’s work.27

Flowing from all this came organiza- tional research investigating culture, behavior, groups, leadership, workers’ personality traits, supervision, worker satisfaction, job design, and participation in decision making.25, 28–31 Research found that some elements of the mechanistic approach—specialization, routin- ization, and centralization—negatively affected employee morale and loyalty. Employee auton- omy, creativity, and freedom gained credence.

▸ Administrative Behavior

Herbert Simon was skeptical of earlier work by Fayol and Taylor, criticizing some of the writing as based on faulty, limited assumptions. He also disliked commonly used administrative princi- ples that to him were mere proverbs with terms (e.g., “purpose” and “centralization”) that lacked rigorous definition and conceptual meaning.2, 17 Consequently, they were not universally appli- cable. After dissecting four administrative principles and showing how they contradict themselves in some situations, Simon concluded “none of the four survived in very good shape, for in each case there was found, instead of a univocal principle, a set of two or more mutu- ally incompatible principles apparently equally applicable to the administrative situation.”17

Unlike Taylor, who considered “economic man” as fully informed and able to calculatedly make the best economic decision for his own self-interests, March and Simon assumed that man was limited in his ability to identify and evaluate alternatives and thus would settle for an acceptable solution rather than the best solu- tion or decision.2 They theorized administrative behavior by the “administrative man” rather than economic behavior by the “economic man.”

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of the Industrial Revolution. Taylor’s scien- tific management applied scientific methods, analysis, and measurement to work in order to improve productivity and efficiency. Addition- ally, scientific management expected managers to plan and organize tasks more efficiently so that individual workers could perform their work more efficiently. Fayol’s administrative principles created a theory of administration for grouping tasks into jobs, jobs into work units, and work units into departments; his approach emphasized specialization and coordination. Gulick and Urwick extended administrative theory by developing departmentalization based on purpose, process, clients, time, and location. Weber created bureaucratic principles based on rational legal authority of a position (office), which made organizations impersonal. These principles formed a stable system of organizational administration based on hierar- chy, division of labor, systematic rules, imper- sonal orders, and files (records) for each office.

The human relations movement (of the Hawthorne Studies and later Barnard) recog- nized that workers were human beings with feelings, personal needs, and variable perfor- mance that was influenced by psychosocial fac- tors in the work setting. Simon’s administrative behavior theory of decision making assumed that managers had limited cognitive ability to evaluate alternatives, thus they would “satisfice” (accept the first satisfactory solution available).

Taylor, Simon, and the human relations school focused largely on the individual worker, whereas Fayol and Weber addressed the organization. Focus on the individual assumed that improving the ability of the individual to work would lead to increases in performance and productivity. Similarly, an organizational focus assumed that the proper structure would improve performance and productivity. Scientific management, adminis- trative principles, bureaucratic principles, and administrative behavior assumed organizations could be made rational by applying impersonal structures, hierarchies, goals, principles, plans, positions, legal-rational authority, rules, and

A second aspect of this was Simon’s theory of hierarchical goals in which one level’s means were a lower level’s ends. The work performed at the lowest level of the organization was just a means to accomplish the end purpose of the second-most lowest level, whose work was just a means by which to achieve the end purpose of the next higher level of the organization. These hierarchical means-ends relationships among organizational levels guided the decisions made by each worker, work unit, department, division, etc., so that decisions made at one level (e.g., a worker or department) would help achieve the end purpose of the next higher level. In this way, each worker and work unit sufficiently focused toward the end purpose of the organization. These approaches to decision making were nec- essary because of people’s bounded rationality or limited cognitive ability.2 This view reflected that organizational life had too many alternatives that required too much information to fully process if a person were to consider all possible alter- natives for a decision. Thus, organizations set rules, premises, and boundaries in which deci- sions must be made. Like the nested means-ends sequences, they helped to rationalize decision making in organizations and integrate the many decisions that are made each day throughout an organization.

“Administrative theory is peculiarly the theory of intended and bounded rationality— of the behavior of human beings who satisfice because they have not the wits to maximize.”17 A person’s rationality is limited by a triangle of three factors: mental habits, abilities, skill, and speed; values and motives; and knowledge of the immediate problem and of how to make a decision. These factors will vary for a person over time and in different situations. Thus, all of these factors must be included in adminis- trative theory for decision making.

▸ Conclusion Theories of organization began to develop in response to the large businesses and factories

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11. Morgan G. Creative Organization Theory. Newbury Park, CA: Sage Publications, Inc.; 1989.

12. Boone LE, Bowen DD. The Great Writings in Management and Organization Behavior. New York: Random House; 1987.

13. Fayol H. General and Industrial Management. London: Pittman; 1916.

14. Gulick L, Urwick L. Papers on the Science of Administration. New York: Institute of Public Administration, Columbia University; 1937.

15. Mooney JD. The Principles of Organization. New York: Harper & Brothers Publishers; 1947.

16. Massie JL. Management theory. In: March JG, ed. Handbook of Organizations. Chicago: Rand McNally; 1965; 25–40.

17. Simon HA. Administrative Behavior. 2nd ed. New York: Macmillan; 1957.

18. Weber M. Essays in Sociology, translated and edited by Gerth H, Mills CW. New York: Oxford University Press; 1946.

19. Weber M. The Theory of Social and Economic Organization, translated by Henderson AM, Parsons T, eds. New York: Oxford University Press; 1947.

20. Blau PM, Scott WR. Formal Organizations. San Francisco: Chandler; 1962.

21. Udy SH. “Bureaucracy” and “rationality” in Weber’s organization theory. Am Sociol Rev. 1959;24:791–795.

22. Dalton M. Conflicts between staff and line managerial officers. Am Sociol Rev. 1950;15(June):342–351.

23. Thompson VA. Modern Organization. New York: Knopf; 1961.

24. Carey A. The Hawthorne studies: A radical criticism. Am Sociol Rev. 1967;32(June):403–416.

25. Roethlisberger FG, Dickson WJ. Management and the Worker. Cambridge, MA: Harvard University Press; 1939.

26. Mayo E. The Social Problems of an Industrial Civilization. Boston: Graduate School of Business Administration, Harvard University; 1945.

27. Barnard CI. The Functions of the Executive. Cambridge, MA: Harvard University Press; 1938.

28. Homans GC. The Human Group. Harcourt, Brace. New York; 1950.

29. Katz D, Kahn R. Some recent findings in human relations. In: Swanson E, Newcomb T, Hartley E, eds. Readings in Social Psychology. New York: Holt, Reinhart, and Winston; 1952; 12–32.

30. Lewin K. Resolving Social Conflicts. New York: Harper & Brothers; 1948.

31. Stogdill RM, Coons AE. Leader Behavior: Its Description and Measurement. Columbus, OH: Columbus Bureau of Business Research, Ohio State University; 1957.

controls. The human relations approach, while focused on the individual, was also concerned with other (not necessarily rational) aspects of an individual’s participation in organizational life. This included study of such things as lead- ership, job redefinition, participatory decision making, motivation, and morale.

Review/Discussion Questions 1. How are scientific management, admin-

istrative theory, bureaucratic principles, and human relations similar? How are they different?

2. Which principles and theories in this chapter assume “the economic man?” What other assumptions of human behavior influenced early organization management theory?

3. How did criticisms of some classi- cal management theories lead to new theories?

4. Which principles of classical manage- ment theory are still used today?

References 1. Perrow C. The short and glorious history of

organization theory. Organ Dyn. 1973;2:3–15. 2. March JG, Simon HA. Organizations. New York: John

Wiley & Sons, Inc.; 1958. 3. Taylor FW. The Principles of Scientific Management.

New York: Harper & Brothers Publishers; 1911. 4. Taylor FW. A Piece Rate System. NY: McGraw Hill; 1895. 5. Taylor FW. Shop Management. New York: Harper and

Row; 1903. 6. Gilbreth FB, Gilbreth L. Applied Motion Study. New

York: Sturgis & Walton Company; 1917. 7. Gantt H. Organizing for Work. New York: Harcourt,

Brace and Howe; 1919. 8. Gantt H. Industrial Leadership. New York: Association

Press; 1921. 9. Rue LW, Byars LL. Management Theory and Application.

4th ed. Homewood, IL: Richard D. Irwin, Inc.; 1986. 10. Scott WR. Organizations, Rational, Natural, and

Open Systems. 5th ed. Upper Saddle River, NJ: Prentice Hall; 2003.

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CHAPTER 4

Modern Theories of Organization

LEARNING OBJECTIVES

■ Distinguish between open and closed systems. ■ Distinguish between rational and natural systems. ■ Understand and explain contributions of general systems theory. ■ Understand and explain contributions of contingency theory. ■ Understand and explain contributions of transaction cost economics. ■ Understand and explain contributions of resource dependence theory. ■ Understand and explain contributions of institutional theory. ■ Understand and explain contributions of population ecology. ■ Gain insight into the potential utility of these theories in health organizations.

OVERVIEW

This chapter provides descriptions and context for a wide range of organization theories that have arisen in the modern era. Most of these are still very influential in the understanding of organizational phenomena and the human behaviors associated with health organizations. Two theories in particular provide overarching perspectives that can be seen influencing many others presented later in this book; they are general systems theory and contingency theory.

Contributing Authors: Mark L. Diana and Peter C. Olden

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economics, resource dependence theory, insti- tutional theory, and population ecology.

▸ General Systems Theory

General systems theory was founded in the late 1950s by Ludwig von Bertalanffy to develop an approach to systems that crossed disciplinary boundaries.4 Bertalanffy believed that the various scientific disciplines, in developing their own theoretical frameworks, became isolated from each other with communication between them increasingly difficult. Further, he believed there were common elements in many of these frameworks that crossed the boundaries between biology, physics, psy- chology, sociology, and so on. The common element these scientists studied was systems.

A system can be defined as a set of interde- pendent parts.5 Boulding developed a systems typology with nine levels of increasing complex- ity.6 In general terms, the simpler or less complex a system is, the more tightly connected the com- ponent parts are and the more specific and con- strained their behavior is. Alternatively, the more complex the system, the looser the connections between parts, which lends more flexibility to the system. In addition, the types of flows between the system’s parts, and between the system and its environment, change as the complexity of the system changes. In general, system-flows move from materials and energy in less complex sys- tems to information in more complex systems. Systems that are more complex are also capable of renewal, self- maintenance, growth, and change.

One more important concept that is a part of Boulding’s typology is that systems are hierarchical. That is, as systems become more complex, they incorporate the characteristics of the less complex systems below them in the typology. The following is a summary of Boul- ding’s typology:

1. Frameworks—the structural com- ponents of systems; the “geography

▸ Introduction

Most of the organization theorists discussed in Chapter 3 examined and thought about organizations as entities closed off from their environments. Suchman phrased it this way: “Resources mate- rialized at factory gates, production technologies ‘revealed’ themselves to engineers, and prod- ucts evaporated off loading docks. . . .”1 These early theorists generally viewed organizations as rational entities seeking improved efficiency and performance, which resulted in classifying their theories as rational systems models. There were two important exceptions to this pattern. The human relations school viewed organiza- tions as organic entities concerned with work- ers’ needs and wants more than with efficiency and performance; thus, it is classified as a nat- ural system model. Administrative behavior, which introduced the concept of bounded ratio- nality, was the first theoretical framework to suggest that organizations might be influenced by events outside of their boundaries.

Beginning in the 1960s and continuing to the present, organizational scientists began to develop models that explicitly incorporated the environment. Scott and others have clas- sified these theories as open-systems mod- els.2, 3 Scott’s classification scheme follows the development of organization theories through two phases that each have two subphases. The two phases are the closed-systems model and later the open-systems models. The two sub- phases took place twice—once during the closed-model phase and then again during the open-model phase. These subphases were the transition from rational models to natu- ral models. Thus, there were closed-rational systems models followed by closed-natural systems models. Then, after acknowledging the environment, there were the open-rational systems models followed by the open-natural systems models. This chapter next explains the theories that fall under these last two categories, specifically the general systems theory, contingency theory, transaction cost

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8. Social—“The unit of such systems is not perhaps the person—the individual human as such—but the ‘role’—that part of the person which is concerned with the organization or situation in question, and it is tempting to define social organiza- tions, or almost any social system, as a set of roles tied together with channels of communication.”6, p. 205 The person can also affect the role, so this level “. . . is human life and society in all its complexity and richness.”6, p. 205

9. Transcendental—“. . . the ultimates and absolutes and the inescapable unknowables, and they also exhibit systematic structure and relation- ship.”6, p. 205

Boulding thought most social science research focused on level two of his typology, with some work at level three, although the subject matter involved level eight. Because of the hierarchical nature of systems, how- ever, studying a system at a lower level is still useful to understanding the system. For example, many managerial control systems within organizations function as cybernetic systems. In addition, highly complex sys- tems can be broken down into component sub-systems to make the complexity more manageable.

General systems theory helped to propel organization theory into the open systems era, where the environment plays a prominent role. Katz and Kahn were instrumental in bringing general systems theory approaches to organi- zation theory by including it in the first edition of their textbook written in 1966.2, 7

▸ Contingency Theory Lawrence and Lorsch coined the term con- tingency theory in 1967, although the prior work of Burns and Stalker and Woodward helped to lay the foundation.8–10 Subsequent

and anatomy of the universe—the patterns of electrons around a nucleus, the pattern of atoms in a molecular formula” all the way up to “the mapping of the earth, the solar system, the astronomical uni- verse.”6, p. 202

2. Clockworks—simple dynamic sys- tems that function like a clock, such as the motion of the planets and moons in the solar system.

3. Thermostat or cybernetic systems that maintain an equilibrium, but the equilibrium point can be changed within the limits of the system.

4. Open systems—self-maintaining structures that utilize a throughput of resources from their environ- ment. “This is where life begins to differentiate itself from not-life . . . the existence of even the simplest living organism is inconceivable without ingestion, excretion and metabolic exchange.”6, p. 203

5. Genetic-societal (plants)—systems that have developed a division of labor with differentiated and mutu- ally dependent parts, and that have separated their appearance (phe- notype) from their genetic makeup (genotype); also called blueprint growth systems, as they reproduce using preprogrammed instructions (through seeds or eggs) rather than duplication.

6. Animal—have highly specialized information processing capabil- ities (eyes, ears, etc.) and a highly developed nervous system that organizes the information into an image or knowledge structure of the environment as a whole.

7. Human—possess self-consciousness; “. . . he not only knows but knows that he knows,”6, p. 204 and characterized by the capacity for speech.

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its environment. When a contingency variable changes, misfit occurs between the organiza- tion and its environment and the organization then adapts its structure to improve fit with the environment. Donaldson labeled this model the structural adaptation to regain fit (SARFIT) model.

The notion that there is no one best way to organize contrasts with ideas of early theorists, some of whom searched for that one best way. Though compelling, contingency theory is not without its problems. Chief among criticisms of contingency theory are:

1. a focus on the reaction of the orga- nization to its environment with a seeming lack of acknowledgment that the organization can alter its environment;

2. a proliferation of contingency vari- ables, many of which are not well defined;

3. a poor definition of the concept of fit; and

4. a poor definition of what con- stitutes improved organizational performance.14

▸ Transaction Cost Economics

Transaction cost economics (TCE) was first proposed by Coase and then developed more fully by Williamson.15–19 Transaction cost eco- nomics, as its name implies, has its origins in economics rather than sociology, and it focuses on individual transactions or exchanges of goods or services between buyer and seller. An organization has three choices when it comes to obtaining a good or service: purchase it on the market, produce it internally, or some combi- nation of the two, such as a joint venture. Man- agers must decide which of these approaches to use, but because of bounded rationality (the concept developed by March and Simon), there

work by Galbraith and Donaldson expanded the framework.11–13 The underlying theme of contingency theory is that there is no one best way to organize. Instead, features of the envi- ronment within which an organization exists determine the structure that will enable an organization to perform best. In other words, the best structure for an organization is con- tingent on aspects of its environment. These aspects are called contingencies, or contin- gency variables, and include, for example, size, technology, geography, and uncertainty. Aspects of the organizational structure that are contingent upon these environmental characteristics include the degree of formal- ization, differentiation, decentralization, and integration.

Lawrence and Lorsch proposed that the whole organization did not necessarily face the same contingencies, but instead various sub- units within the organization faced differing environments and contingencies.8 Thus, struc- tural features should also differ. The greater the variation of environments faced by indi- vidual sub-units within the organization, the greater the need for differentiation, and so the greater subsequent demand on coordination and control. Lawrence and Lorsch therefore saw contingency theory operating at both the sub-unit level and the organization level.

Galbraith focused more on the demand for information processing within the organi- zation as the complexity and uncertainty of the environment increased.11, 12 The more complex and uncertain the environment, the greater the demand on the organization for effective information processing that would lead to better decisions and increased performance. Structural features of the organization— including formalization, hierarchy, and decentralization—would need to be designed to maximize information processing.

Donaldson developed a variation of con- tingency theory that proposed an adaptive response of the organization to its structural fit with its environment.13 In this model, an initial state of fit exists between the organization and

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The more specific the asset, the higher the transaction cost. Frequency simply refers to the number of times a transaction takes place. The more frequent the transaction, the higher the cost. Uncertainty increases the cost of transactions because it worsens the effect of bounded rationality. Williamson devel- oped a framework that incorporates these elements that can be used to predict under what conditions organizations will conduct transactions externally and when they will internalize transactions. When asset specific- ity is low, always leave transactions to the mar- ket, regardless of the amount of uncertainty or other characteristics of the transaction. When all asset specificity, uncertainty, and frequency are high, do transactions internally. Interme- diate levels of these variables can lead to forms of organization other than markets or hierar- chies, such as joint ventures.

Transaction cost economics does not directly address issues of organization structure and performance. Williamson’s argument is that the need to reduce transaction costs explains why not all transactions take place in the mar- ket, and thus gives rise to hierarchies or orga- nizational structures that allow for monitoring and control of these transactions. Therefore, organizations arise from a rational approach to economizing on transactions, rather than through a conscious management decision to organize in a certain fashion. Further, Wil- liamson argues that reducing transaction costs results in a more efficient organization that can be more successful than otherwise.

There are many criticisms of TCE, per- haps most notably those of Perrow and those of Ghoshal and Moran.21, 22 Perrow’s critique con- sists of two main points. First, he argues that all of the factors that contribute to increased transaction costs in the market— opportunism, uncertainty, bounded rationality, and so on— also exist within the firm. In fact, Perrow points out that Williamson acknowledges this explicitly in markets and hierarchies.16 How- ever, once acknowledged, Williamson does not return to this problem, and essentially leaves

are conditions under which managers can- not account for all possibilities.20 Williamson argues that the costs of transactions are useful in helping managers make this decision.

Transaction costs arise from the need to monitor the other party in the transac- tion. This need to monitor stems from both bounded rationality and opportunism. This latter concept is the possibility that the other party may behave opportunistically, a behav- ior Williamson characterizes as “self-interest seeking with guile.” The potential for oppor- tunistic behavior depends on the nature of the transaction. In situations where the exchanged good or service is generic in nature and there are many sources of the good or ser- vice, there is little potential for such behavior, and the parties to the exchange do not need to know anything about each other’s needs. In such cases, the transaction costs are low and the good or service can be purchased in the market with little concern for monitor- ing. If, on the other hand, the good or service is highly specific to the buyer’s needs, there are likely to be fewer sources, and the buyer becomes susceptible to opportunistic behav- ior and higher transaction costs. In such cases, Williamson argues that the organization can reduce its susceptibility to opportunism and enforce monitoring of the transaction more economically by internalizing the exchange, or producing the good or service itself rather than purchasing it outside. Thus, an organiza- tion adds structures that define its boundaries in response to the need to reduce transaction costs, which helps to explain why vertical integration takes place. Williamson calls this internalization hierarchy.

Transaction costs were difficult to mea- sure, so Williamson added factors to the threat of opportunism that indicate the transaction cost: the type of transaction and the degree of uncertainty. The type of transaction is deter- mined by its asset specificity and frequency. Asset specificity refers to the degree of substi- tutability of the transaction, or how easily it can meet the needs of different organizations.

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book The External Control of Organizations: A Resource Dependence Perspective.25 The book’s title makes it clear that Pfeffer and Salancik viewed the external environment as capable of exerting control over the organization. This external control is exercised through the orga- nization’s need for resources that are controlled by external entities. All organizations require resources to function, because they are open sys- tems, and no organization can internally provide all its required resources. This need to acquire resources from external entities makes the orga- nization dependent on those outside entities. The degree of dependency varies with both the importance of the resource to the organization and the scarcity of the resource (how many sup- pliers there are).

Resource dependence theory offers a framework for understanding and predicting the actions of organizations to environmental pressures. More specifically, resource depen- dence theory suggests that organizations will take actions to secure the resources needed to function and survive. Resource dependence theory views organizations as existing in open systems within which they must contend with other organizations and entities for needed resources. Thus, control of the organization shifts from within the organization to outside the organization, reducing organizational con- trol to the extent that other entities control access to the needed resources.

Resource dependence predicts that orga- nizations will consciously scan the environ- ment and adopt strategic responses to better manage acquisition of resources. Usually the goal is to improve the performance of the organization, either as outcomes, products, or some form of change. The focus of the theory is on resources and the organization’s behavior in its attempts to acquire those resources. A fun- damental proposition of the theory is that an organization cannot supply all of the resources needed for its survival and so must enter into relationships with entities in its environment to obtain those resources. Pfeffer and Salancik term this interdependence.

the ability of an organization to reduce internal transaction costs as a given, primarily through fiat. Second, Perrow argues that the motiva- tion for vertical integration is market power and dominance, not efficiency gains through reduced transaction costs.

Ghoshal and Moran’s critique focuses on the concept of opportunism.22 They argue that Williamson’s formulation of opportunism does not adequately address its components, spe- cifically the differences between the tendency to behave opportunistically and opportunistic behavior itself. Further, they argue that the ability of organizations to control opportunistic behavior through fiat and other types of rational controls may actually lead to increased levels of opportunistic behavior within the organiza- tion. The result is a self- fulfilling prophecy and an endless feedback loop between the level of opportunistic behavior and the controls insti- tuted to prevent it. Ghoshal and Moran argue that this situation could well result in sapping the competitive ability of the organization.

More recently, Slater and Spencer have criticized TCE on the basis of the apparent contradiction between the notion of bounded rationality on the one hand, and the elaborate system for efficiently organizing transactions on the other.23 How is it that managers, so con- strained by bounded rationality, cannot deter- mine all of the potential pitfalls of conducting transactions but are able to analyze the char- acteristics of those transactions and determine the most efficient governance structure for organizing those transactions? Despite these criticisms, there is much empirical research to support transaction cost economics, partic- ularly in the case of the relationship between asset specificity and vertical integration.24

▸ Resource Dependence Theory

Pfeffer and Salancik developed the resource dependence theory primarily in their 1978

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with the other conditions listed above. Con- ceivably this control could reach the level of direct administrative control, where the exter- nal entity makes managerial decisions for the organization. The result is that organizations will develop strategies that minimize depen- dence on others or increase dependence of others on them. To be effective, organizations must satisfy the demands of those in its envi- ronment from which it requires support, in the form of needed resources.

There are two primary methods that orga- nizations will use to manage resource depen- dency. They can stockpile resource inventories and thereby reduce dependence on external entities, although this does not alter the under- lying insecurity. Or, they may seek to establish some type of inter-organizational relationship to increase resource stability and predictability. To ultimately obtain resources needed for con- tinued survival, resource dependence theory then predicts that organizations will undertake a variety of inter-organizational relationships to gain some control over their environ- ment and resources. These relationships can take the form of joint ventures, associations, diversification, vertical integration, mergers, and co-optation of those that control needed resources. This view of organizational action in response to the environment requires that managers be proactive in scanning the envi- ronment to detect resource risks and oppor- tunities, and that they take actions to reduce resource uncertainty and dependence.

▸ Institutional Theory Institutional theory developed out of the work of Meyer and Rowan, Meyer and Scott, and DiMaggio and Powell. It attempts to explain organizational behavior and structure from a cognitive and cultural viewpoint.26–28 This is in sharp contrast to contingency the- ory and resource dependence theory, both of which take a strategic view of organizational behavior and structure. All three theories

The theory predicts organizational behav- ior by analyzing the degree of control the organi- zation has over resources held by other entities, the degree of need for those resources, and the degree of access to alternatives. When needed resources are scarce or not under the control of the organization, the organization must act upon the environment to secure the resources or it will cease to exist. Another way to view this is that external entities will be able to exert control over the organization under these conditions:

1. The resource is critical to the oper- ation of the organization.

2. The external entity controls the resource and there are few or no alternative sources for the resource.

3. The organization does not control resources critical to the function- ing of the external entity.

4. The outputs of the organization are visible enough for the external entity to be able to judge compli- ance with its demands.

5. Satisfaction of the demands of the external entity does not face legal restrictions and does not con- flict with satisfaction from other components of the environment with which the organization is interdependent.

6. The organization does not control the formulation of the external entity’s demands.

7. The organization is capable of meeting the demands.

These conditions clearly demonstrate Pfeffer and Salancik’s view of organizations as interdependent.

Therefore, this dependence on the envi- ronment gives power and influence over the organization to those external entities pos- sessing control over needed resources. The degree of control relates to the degree to which the external entities are able to control the resources needed by the organization, along

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as acting inappropriately if it does not comply with these norms, and thus it will not be con- sidered legitimate. The cognitive pillar refers to the “. . . rules that constitute the nature of reality and the frames through which meaning is made.”30, p. 40 This refers to the idea that orga- nizations should look and behave like other similar types of organizations.

Scott nicely synthesizes these concepts, and this synthesis makes evident the power of institutions in shaping organizational behavior and structure in a variety of ways. Institutions give rise to a rationalized image of the legitimate structure and appearance of organizations in the same field. An organi- zational field is defined as “. . . those orga- nizations that, in the aggregate, constitute a recognized area of institutional life: key suppliers, resource and product consumers, regulatory agencies and other organizations that produce similar services or products.”31 These rationalized images are referred to as rationalized myths because they focus on external legitimacy rather than internal effi- ciency. In fact, adherence to these myths may adversely affect technical efficiency. How- ever, the institutional forces are so powerful that failure by the organization to adhere to the image of a legitimate organization may threaten its access to needed resources and support, both internal and external, and threaten its very survival. If organiza- tions act in generally unacceptable ways, as defined by the institutions in the environ- ment that the organization is subject to, their resources and support may be threatened or withdrawn. Because highly institutionalized organizations may have significant conflict between the need for both external legiti- macy and technical efficiency, organizations will attempt to decouple elements of their production structure from their legitimizing activities. This decoupling serves to insulate the technical core of the organization from the activities of the organization focused on gaining external legitimacy. The result is

are open- systems theories and as such, they acknowledge the role and influence of the environment on organizational behavior and structure. They also allow for adaptive responses to the environment by the organiza- tion. Contingency and resource dependence theories are rational systems models, how- ever, which pre-suppose the organization’s responses to the environment are based on objective environmental scanning and ratio- nal responses chosen to improve efficiency. In contrast, institutional theory is skeptical of this rational model, and proposes instead that organizational responses are often based on factors that have little or no relationship to organizational efficiency.

The concept of an institution is central to institutional theory. Scott and Meyer devel- oped the following definition of institutions: “Institutions are symbolic and behavioral sys- tems containing representational, constitutive, and normative rules together with regulatory mechanisms that define a common mean- ing system and give rise to distinctive actors and action routines.”29, p. 68 Scott gives a simi- lar definition: “Institutions consist of cogni- tive, normative, and regulative structures and activities that provide stability and meaning to social behavior. Institutions are transported by various carriers—cultures, structures, and routines—and they operate at multiple levels of jurisdiction.”30, p. 34

These regulative, normative, and cogni- tive elements are central to both definitions. Scott refers to these as the Three Pillars of Institutions. The regulative pillar refers to how institutions constrain and regulate behavior. Regulation is coercive through the applica- tion of rules, laws, and sanctions. An organi- zation that does not abide by these regulatory constraints will have its legitimacy challenged through legal sanction. The normative pillar refers to “. . . normative rules that place pre- scriptive, evaluative, and obligatory dimen- sions on social life.”30, p. 37 Normative pressures are applied through social obligation, or the belief by the organization that it will be viewed

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▸ Population Ecology Population ecology has been developed through the work of Hannan and Freeman and Aldrich.32–36 Based on natural biological selec- tion theories and the work of Charles Darwin, population ecology assumes that organizations have life cycles including birth, growth, mat- uration, decay, death, and distinction. This theory holds that some processes of change in organizational populations parallel processes of change in biologic populations. It focuses on the issue of organizational survival rather than efficiency and argues that organizations are powerless to control their destiny because the environment selects organizations best suited to survive. A striking difference between this and other organization theories is that popu- lation ecology focuses on populations of orga- nizations rather than single organizations or people inside organizations.

There are four key assumptions to this theory. First, it assumes that the environment differentially selects organizations for survival based on “fit” between organizational forms and environmental characteristics. Second, new organizations are always appearing, which leads to continuous changes within organiza- tional populations. Third, organizations are subject to inertial pressures, meaning it is dif- ficult for organizations to change. Finally, it assumes that organizations must struggle to remain competitive in the marketplace and survive.

Population ecology argues that popula- tions of organizations evolve through different life stages. First, a large number of variations (analogous to mutations in biology) appear in a population of organizations. These vari- ations expand the variety of organizational forms in the environment. Next, selection occurs in which some organizations find niches and survive while others do not and die. Market forces, competition, and/or inter- nal structural characteristics determine which specific organizations find niches. When insufficient demand for a firm’s product exists

there may be a difference between what an organization does and what it portrays itself as doing.

Institutional pressures cause organiza- tions in the same field to become similar over time in a phenomenon called isomorphism. DiMaggio and Powell cite this homogeneity in organizational forms and practices as one of the driving forces behind the development of institutional theory.31 They argue that in the early stages of the life cycle of an organizational field, there may be a considerable diversity of form and approach, but that as a field becomes well established, homogeneity develops. This inexorable move toward isomorphism is driven by three mechanisms discussed below: coercive forces, mimetic pressures, and nor- mative pressures.

First, coercive isomorphism is the result of formal and informal pressures exerted by other organizations. These organizations may be governmental and regulatory agen- cies that make and enforce laws and rules the organization must comply with or face some sort of penalty. Coercive forces may also arise from higher levels of the organization, as in the case of standardized policies and proce- dures enforced by the parent organization of a multi-level system. Second, mimetic iso- morphism occurs when organizations model themselves on other organizations that exter- nally are favorably viewed. This behavior is a response to uncertainty. When uncertainty is high, organizations will mimic the structures and behaviors of other organizations that appear successful, assuming these other orga- nizations face the same type of uncertainty. Mimetic behavior can also be an effort to gain legitimacy. Third, normative isomorphism arises primarily from professionalization in two ways. Formal education instills a com- mon cognitive reference that becomes viewed as legitimate, and, therefore, other approaches are considered illegitimate. And, the extensive professional network that develops with these professions serves to disseminate normative rules across the profession.

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organizations are at the mercy of their envi- ronments, since they either “fit” into a niche and survive, or are “selected out” and fail. This clearly relegates the managerial role to that of an observer on the sidelines at the mercy of the environment, unable to do anything much to enhance the organization’s chances of survival.

Although older organizations often do not adapt to survive in changing environments, population ecologists also propose that newer organizations will fail more frequently than older ones. This liability of newness results from the costs of learning new roles and tasks, capital constraints on new roles, a lack of infor- mation about normal procedures, and unsta- ble links to clients, supporters, and customers. Further, the growth of organizational popula- tions follows a distinct pattern that depends on population density. Early in the development of a population, new organizations are created slowly and fail at high rates. As the number of organizations in the population increases, competition eventually causes consolidation, slowing the growth and eventually leading to a gradual decline in the population. This den- sity dependence results in a curvilinear growth curve for new organizations.

▸ Conclusion Modern theories of organization are open- systems theories that made the same transition from rational models to natural models as the earlier closed-system theories made. General systems theory is a meta-theory that attempts to apply general characteristics of systems to theories in a wide variety of disciplines, including management. Contingency theory is a rational model that maintains there is no one best way to organize, but that the best struc- ture for an organization depends on its fit with its environment. Transaction cost economics is also a rational model that focuses on trans- actions between buyers and sellers. According to this approach, the nature of the transaction

in the market, and when insufficient resources are available to an organization, the environ- ment selects that organization out of the popu- lation; that organization dies. Third, retention occurs and a few organizations grow large and become institutionalized in the environment. Those that “fit” with the current environment survive, reproduce, and transmit their values. Certain technologies, products, and services become highly valued by the environment and others do not. The environment is always changing and if the dominant organizational forms fail to adapt to external changes, other organizations gradually replace them. Organi- zations that do not “fit” with the environment grow old, lose energy, and often cannot or won’t adapt quickly enough to survive.

Hannan and Freeman propose that orga- nizations operate under internal or external constraints that impede their adaptation to a changing environment.32, 33 These constraints result in structural inertia, a central concept in population ecology. Structural inertia occurs because organizations must produce services and products reliably and account rationally for their decisions and actions. These pres- sures result in highly standardized routines that inhibit organizational change. Prior investments, decisions, commitments, culture, and beliefs also create inertia that deters exist- ing firms from adapting to changing external environments.

Population ecology also assumes that environmental resources are structured niches, whose existence and characteristics the organizations cannot affect. Each pop- ulation of organizations must find a niche sufficient to support it, or else it will decline and eventually fail or give way to new organi- zational forms. When niches in the environ- ment fade away, existing firms may no longer have a niche to support them. Population ecologists maintain there are definite limits to the degree to which autonomous strategic choices are available for organizations. They view organizations as severely limited in their ability to adapt to different niches. As a result,

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3. Which modern organization theo- ries assume managers can strategically direct their organizations, and which assume managers essentially cannot?

4. Which principles of modern manage- ment theory do you see in use today the least? Which theories assume the ability of the organization to affect the envi- ronment and which do not?

References 1. Suchman MC. Managing legitimacy: Strategic

and institutional approaches. Acad Manage Rev. 1995;20:571–610.

2. Scott WR. Organizations: Rational, Natural, and Open Systems. 5th ed. Upper Saddle River, NJ: Prentice Hall; 2003.

3. Thompson JD. Organizations in Action: Social Science Bases of Administrative Theory. New York: McGraw Hill; 1967:192.

4. Bertalanffy LV, Rapoport A, eds. General systems: Yearbook of the society for the advancement of general systems theory. General Systems Theory. Vol. 1. Ann Arbor, MI: The Society; 1956.

5. Nicholson N, Schuler RS, Van de Ven AH, eds. The Blackwell Encyclopedic Dictionary of organizational behavior. In: Cooper CL, Argyris C, eds. The Blackwell Encyclopedia of Management. Oxford: Blackwell Publishers; 1998.

6. Boulding K. General systems theory: The skeleton of science. Manage Sci. 1956;2:197–208.

7. Katz DN, Kahn RL. The Social Psychology of Organizations. 2nd ed. New York: John Wiley; 1978.

8. Lawrence PR, Lorsch JW. Organization and Environ ment: Managing Differentiation and Integration. Boston: Graduate School of Business Administration, Harvard University; 1967.

9. Burns T, Stalker GM. The Management of Innovation. London: Tavistock; 1961.

10. Woodward J. Industrial Organization: Theory and Practice. London: Oxford University Press; 1965.

11. Galbraith J. Designing Complex Organizations. Reading, MA: Addison-Wesley; 1973.

12. Galbraith J. Organization Design. Reading, MA: Addison-Wesley; 1977.

13. Donaldson L. American AntiManagement Theories of Organization: A Critique of Paradigm Proliferation. Cambridge, New York: Cambridge University Press; 1995:263.

14. Hrebiniak LG. The organization and environment research program: Overview and critique. In: Van de Ven

determines whether it is best for the organiza- tion to conduct the transaction in the market- place, internally, or some combination such a joint venture.

Resource dependence theory is a rational model that focuses on the resources an organi- zation needs, and which entities control those resources. The more control external entities have over important resources, the more con- trol they have over the organization. The orga- nization responds to external control by trying to reduce its dependence on the resource, or by gaining control over the resource itself.

Institutional theory is a natural model that focuses on how institutions affect the way organizations structure themselves and behave. The institutional pressures come from normative, cognitive, and coercive sources, and these pressures tend to make organiza- tions in the same organizational field resemble each other over time.

Population ecology is a natural model that examines populations of organizations, rather than individual organizations. Popula- tion ecology is modeled after biological the- ories. It argues that organizations are subject to forces of adaptation based on variation, selection, and retention—like living organ- isms. Population ecologists argue that orga- nizations are difficult to adapt to changing environments, and that the environment is beyond the control of managers to under- stand, so managers have little effective ability to determine the survival of entire popula- tions of organizations.

Review/Discussion Questions 1. How are general systems theory, con-

tingency theory, transaction cost eco- nomics, resource dependence theory, institutional theory, and population ecology similar? How are they different?

2. Which theories in this chapter assume a “rational model,” and which assume a “natural model?”

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26. Meyer JW, Rowan B. Institutionalized organizations: Formal structure as myth and ceremony. AJS. 1977;83:340–363.

27. Meyer JW, Scott WR. Organizational Environments: Ritual and Rationality. Beverly Hills, CA: Sage; 1983.

28. DiMaggio PJ, Powell WW. The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. Am Sociol Rev. 1983;48:147–160.

29. Scott WR, Meyer JW. Institutional Environments and Organizations: Structural Complexity and Indi vidualism. 1st ed. Thousand Oaks: Sage Publications; 1994:328.

30. Scott WR. Institutions and Organizations. 1st ed. Thousand Oaks: Sage Publications, Inc.; 1995:178.

31. DiMaggio PJ, Powell WW. The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. In: Powell WW, DiMaggio PJ, eds. The New Institutionalism in Organizational Analysis. Chicago: The University of Chicago Press; 1991:63–82.

32. Hannan MT, Freeman J. The population ecology of organizations. AJS. 1977;82:929–964.

33. Hannan MT, Freeman J. Structural inertia and organizational change. Am Sociol Rev. 1984;49:149–164.

34. Hannan MT, Freeman J. Organizational Ecology. Cambridge: Harvard University Press; 1989.

35. Aldrich H. Organizations Evolving. Thousand Oaks, CA: Sage; 1999.

36. Aldrich HE. Organizations and Environments. Upper Saddle River, NJ: Prentice Hall; 1979.

AH, Joyce WF, eds. Perspectives on Organization Design and Behavior. New York: John Wiley & Sons; 1981.

15. Coase RH. The nature of the firm. Economica. 1937;4:386–405.

16. Williamson OE. Markets and Hierarchies: Analysis and Antitrust Implications. New York: The Free Press; 1975.

17. Williamson OE. Transaction cost economics: The governance of contractual relations. J Law Econ. 1979;22:233–261.

18. Williamson OE. The economics of organization: The transaction cost approach. AJS. 1981;87:548–577.

19. Williamson OE. The Economic Institutions of Capitalism. New York: Free Press; 1985.

20. March JG, Simon HA. Organizations. New York: John Wiley; 1958.

21. Perrow C. Markets, hierarchies, and hegemony. In: Van de Ven AH, Joyce W, eds. Perspectives on Organization Design and Behavior. New York: Wiley; 1981:371–386.

22. Ghoshal S, Moran P. Bad for practice: A critique of the transaction cost theory. Acad Manage Rev. 1996;21:13–47.

23. Slater G, Spencer DA. The uncertain foundations of transaction cost economics. J Econ Issues. 2000;34:61–87.

24. David RJ, Han S-K. A systematic assessment of the empirical support for transaction cost economics. Strategic Manage J. 2004;25:39–58.

25. Pfeffer J, Salancik G. The External Control of Organizations: A Resource Dependence Perspective. New York: Harper & Row; 1978:300.

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CHAPTER 5

Complexity and Postmodern Theories of Organization

LEARNING OBJECTIVES

■ Understand assumptions and ideas about health organizations shared by complexity science and systems theory.

■ Compare these assumptions with modern and classical models of organizations. ■ Understand the value of systems thinking in organizations. ■ Describe key characteristics of complex adaptive systems and develop a mental model of health

organizations as complex adaptive systems. ■ Develop implications of complexity science and systems thinking for those who manage health

organizations. ■ Gain an appreciation of the utility of the systems perspective for healthcare delivery, public

health, and health administration. ■ Determine one’s own capability to become more of a systems thinker in a leadership or clinical

role in the health organization. ■ Identify major changes a traditional manager or leader might have to make if they wished to

adopt a complexity science view of health organizations.

OVERVIEW

This chapter introduces the concepts and models of complexity science, systems thinking, and newly emerging ways of looking at organizations. The implications for leaders, managers, and clinicians are significant and potentially can help improve practice and engagement within the organization and with the communities being served. The global implications for systems thinking and complexity science are also discussed.

With sincere appreciation for the many concepts developed by Reuben McDaniel as they appeared in the First Edition of Health Organizations.

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a systems perspective.3 Furthermore, using the language of systems theory, health organizations can be viewed as complex adaptive systems. Healthcare is complex in that it is composed of multiple, diverse, interconnected elements, and it is adaptive in that the system is capable of changing and learning from experience and its environment. As shown in Johnson, Stoskopf, and Shi in a 20-country comparative study, this seems to be the case around the world in a vari- ety of cultural and political contexts.4

A systems approach to healthcare is more than the interorganizational relationships that support and facilitate the work of health deliv- ery but also the mindset of health professionals and social scientists who study organizations. This is often referred to as “systems thinking” and encompasses the viewpoint that health and health challenges have determinants and health behaviors have outcomes. In short, this is a paradigm of how everything is intercon- nected and interdependent.

More will be discussed about systems theory, systems thinking, and the systems approach to health organizations throughout this chapter and text. As you will see, we can better understand organizations—and perhaps our own selves—through the lens of systems thinking. Johnson further explains the systems approach in healthcare is not only the relation- ships that support and facilitate the organiza- tion and actions of healthcare, but also “the mindset of health professionals.”3 This is often referred to as systems thinking and is especially salient in health management, practice, and research. The National Cancer Institute (NCI) sums up their understanding and embrace of systems thinking, as presented in BOX 5-1. They were one of the first public health agen- cies to fully embrace systems thinking and have found it a most useful paradigm in their Tobacco Control Research Branch.5

Other systems thinking applications and efforts have been identified in the recent healthcare literature. These include the Syn- demics Prevention Network, supported by the CDC, which studies how recognition of

▸ Introduction

Typically, people viewed health organi-zations through the lenses of modernist philosophy and classical science, which has led to a perspective of organizations as some- thing akin to machines. Researchers have often adopted a reductionist approach to understand- ing organizations, analyzing pieces and fitting them together, predicting future outcomes of managerial behavior, and controlling the behav- ior of workers. Under these two traditional para- digms, organizational problems are dealt with by finding the “weak link” in the chain and fixing the part of the system that “broke.” These theo- retical perspectives have also driven the clinical side of healthcare as physicians train to provide the proper diagnosis and proper treatment, and nurses train to help patients in a prescribed manner.

Previous chapters in this text have articu- lated the modern and classical science views of organizations. This chapter presents alternative views to the modern and classical science views of organizations that are particularly useful in today’s highly volatile and ambiguous health- care environment. The past few decades have seen medicine and healthcare management influenced by the rise of new philosophical and scientific paradigms, most notably systems thinking and complexity science as postmodern organization theory.1, 2 These newer theoreti- cal lenses offer insights that enable innovative approaches to managing health organizations.

▸ Systems Approach in Health

Healthcare is highly interconnected and interdependent in its relationship to individ- uals, families, communities, and the larger society. As advocated by social scientist James Johnson, to best understand the complex scope of healthcare and health organizations along with the overlay of health policy, one must take

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mutually reinforcing health problems (sub- stance abuse, violence, HIV/AIDS) expands the conceptual, methodological, and moral dimensions of public health work and ways of thinking about health as a system. Other examples of a relevant effort include the Insti- tute of Medicine report, Crossing the Quality Chasm: A New Health System for the 21st Century, and Systems Thinking for Health Systems Strengthening, a report published in 2009 by the World Health Organization, in which they claim systems thinking is a “par- adigm shift.”6 As stated in the report, “Sys- tems thinking offers a more comprehensive way of anticipating synergies and mitigating negative emergent behaviors, with direct rel- evance for creating more system-ready poli- cies.” Based on systems thinking, the WHO now promulgates essential building blocks for health systems and health organizations. These “critical success factors” are shown in TABLE 5-1.

TABLE 5-1 Health Systems Building Blocks (Critical Success Factors) Service Delivery Medical Technology

Good health services are those that deliver effective, safe, quality personal and non-personal health interventions to those who need them, when and where they are needed, with minimum waste of resources.

A well-functioning health system ensures equitable access to essential medical products, drugs, vaccines, and technologies of assured quality, safety, efficacy, and cost-effectiveness, and their scientifically sound and cost-effective use.

Health Workforce Health Financing

A well-performing health workforce is one that works in ways that are responsive, fair, and efficient to achieve the best health outcomes possible, given available resources and circumstances (i.e., there are sufficient, fairly distributed staff; they are competent, responsive, and productive).

A good health financing system raises adequate funds for health, in ways that ensure people can use needed services and are protected from financial catastrophe or impoverishment associated with having to pay for them. It provides incentives for providers and users to be efficient.

Health Information Leadership and Governance

A well-functioning health information system is one that ensures the production, analysis, dissemination, and use of reliable and timely information on health determinants, health system performance, and health status.

Leadership and governance involves ensuring that strategic policy frameworks exist and are combined with effective oversight, coalition building, regulation, attention to system design, and accountability.

BOX 5-1 National Cancer Institute (NCI) Statement on Systems Thinking

Public health researchers and practitioners often work to solve complex population and health issues—such as obesity and chronic disease—which are deeply embedded within the fabric of society. As such, the solutions often require intervention and engagement with key stakeholders and organizations across many levels, ranging from local entities (schools, churches, and work environments) to regional systems (health departments and hospital networks) to entire countries (national agencies). This multilevel, multiparticipant view is at the heart of systems thinking, a process of understanding how parts influence one another within a whole.

Modified from the WHO Health Systems Framework. Systems Thinking for Health Systems Strengthening. http://www.wpro.who.int/health_services/ health_systems_framework/en/

Reproduced from National Cancer Institute, Washington, DC. Available at: https://researchtoreality.cancer.gove/cyber-seminars /using-systems-thinking-and-tools-solve-public-health-problems.

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organizational design, the evolution of organi- zations, and the dynamics and structure of spe- cific types of organizations. This work has been used to help us understand hospitals, nursing homes, clinical specialty systems, and family practices. Complexity science has brought to the forefront of organization theory a better understanding of the uncertain nature of real- ity and the implications of that uncertainty for manager and leader action. It also led us to understand that the nature of relationships was critical, and that by focusing on those relation- ships, new alternatives for management made themselves apparent. James Begun was one of the first organizational scholars to indicate our need to attend to these new sciences in our thinking about these issues.13, 14

In the remainder of this chapter, we first explore the intersections of systems the- ory and complexity science, applying their assumptions to health organizations and explicating ways in which these two theories help us understand health organizations dif- ferently than classical and modern theories of organization have. The interface of these two perspectives is within the domain of complex adaptive systems theory, which has provided unique insights for organization theory and organizational management.

Systems Thinking + Complexity Theory = Complex Adaptive Systems

▸ Emerging Perspectives Ruben McDaniel on complexity theory and James Johnson on systems thinking offer six insights or aspects of organizations that these two theoretical perspectives might call to the attention of health leaders and managers.15

Limits of Knowability Complexity science embraces the notion that at least some segments of the world are unknowable. It addresses the unintended consequences, unpredictable outcomes, and

Trochim and others assert that systems thinking is consonant with ecological models already familiar to health professionals, includ- ing the ideas of human ecology, population health, and social determinants of health.7 But, it goes beyond these models, incorporating advances in fields such as organizational behav- ior, system dynamics, emergence theory, and complexity theory, to be discussed later in this chapter. The system thinking approach empha- sizes how everything fits into the larger social, cultural, economic, and political system of the organization. As stated by Johnson and Breckon in response to a recent rise in the valuing of sys- tems thinking in healthcare, “the importance placed on interconnectedness cannot be under estimated in the world of the 21st century.”8

▸ Complexity Theory in Health Organizations

“Complexity science is the study of complex systems and the phenomena of complexity and emergence to which they give rise.”9, p. 166 Complexity science is an observational-based science that emerged in the early 1900s. It has proven itself useful in fields as disparate as physics, biology, cosmology, psychology, sociology, and anthropology for understand- ing a multitude of phenomena from immune systems and spread of diseases to ecosystems and social economic systems. It was probably in the late 1980s that complexity science was brought to the attention of the general public and researchers in domains outside of the phys- ical and biological sciences when books such as Gleik’s Chaos and Waldrop’s Complexity became available to the general public.10, 11 This was also a time when the Santa Fe Institute was initiated as a think tank for the emerging applications of complexity theory in various sciences, includ- ing the social sciences that so heavily influence our understanding of organizations.12

It was during this time that organizational theorists began using concepts from complex- ity science in their attempts to understand

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History Dependence Both systems theory and complexity theory lead us to a deeper understanding of how history con- strains and enables possible futures. Complexity science stresses how the state of a system at a given time is a nonlinear function of the state of the system at some previous time. Another way to put this is that the possible futures of a system are path dependent and irreversible.

For health organizations, choices made in the present are going to influence what the organization can do and what it can become in the future. You cannot get to every place from where you are. The difficulty that many hos- pitals have experienced in opening nursing homes is a manifestation of path dependence; the cultures of hospitals and nursing homes are so incongruent that although it appears that the same operational abilities are required, it turns out that this is not true. Furthermore, predicting the importance of any one decision may be very difficult, as something may appear to be unim- portant and turn out to be very important. For example, the casual assignment of diagnostic codes can run a hospital into economic decline.

Structure as Dynamic Complexity and systems sciences both recog- nize that structure is an ongoing, generative process rather than a stable entity. They see structure as emerging from decentralized, bottom-up processes of adaptation, learning, and evolution.3 Structure is not a priority or externally given, but arises in systems in which some degrees of freedom are constrained within boundaries. These boundaries connect the system with its environment and are them- selves emergent structures.

People in healthcare and public health organize themselves in an ongoing basis. This may seem very disruptive to the manager of a healthcare system and to patients, families, and workers. It is, however, an inevitable reflection of the nature of these organizations. Often the out- comes of these actions, such as quality of care in hospitals, and even the ability of surgical teams

emergent properties that can result from non- linearity and multiplication of effects even in fully deterministic systems.

As with systems thinking we can con- clude that no one is smart enough to figure out exactly where the health system is going at any level. There are limits to what people can know in health organizations or the entirety of a sys- tem, and these limits cannot always be over- come by getting more information or waiting longer. For example, estimating nurse avail- ability is often impossible, as is determining the impact of a new heart hospital on a family practice. Likewise, changes in reimbursement strategies will often affect the administrative processes in unexpected ways.

Importance of Relationships Both systems thinking and complexity science adopt principles consistent with the essentially interconnected nature of the world. They focus on the importance of connections and inter- dependencies for creating emergent order in networked systems.

The quality of relationships within a health organization may be more important than the quality of the people, because health organi- zations are essentially relational in their struc- tures, processes, and functions.16 It is not simply the sum of the individual behaviors and actions within health organizations that give them their identity, but the connections between them that are critical. For example, the interaction of value systems within a hospital influences the adoption of EMRs.17 Trust is an essential ingre- dient in the use of telemedicine.18 Conceptions of health organizations as collections of parts has led to silos of expertise, compartments, and departments, and may lead to things such as the scheduling of nurses in ways that may break up well-functioning teams. From a sys- tems thinking perspective, conceptualizing of health organizations as collectives rather than collections causes us to focus on such things as the interdependencies among all of the clinical areas and the way in which culture sets bounds on behavior.

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culture. The implementation of electronic medical records is reorganizing information asymmetries and thereby calling into question the monopolistic power of the white coat.

Both systems theory and complexity sci- ence are at the same time more optimistic and more pessimistic than classical or modern theories of organization. Neither accepts the world as it is; rather, both believe in the trans- formative power of events and ideas, “opening the space for” possible futures, because neither accepts the world as it is, as some sort of inev- itability. Interestingly, this is consistent with new developments in quantum physics and our understanding of the universe in general.

▸ Complex Adaptive Systems

The obvious overlap or integration of systems thinking and complexity science leads us to complex adaptive systems theory. When we view health organizations as complex adap- tive systems (CAS), new organizational char- acteristics are worth considering.23 These are described in BOX 5-2.

Complex adaptive systems theory tells us that successful understanding of health orga- nizations and the development of successful management strategies will involve the study of patterns and relationships rather than objects and substance, because it is the quality of the relationships among agents and between agents and their environment that most affect the quality of the system. CAS theory also tells us that successful management strategies will involve the study of wholes instead of parts because the effect of nonlinear interactions at all levels of the system means that the whole is greater than the sum of the parts. Lastly, CAS theory tells us that an astute manager will recognize that the trajectory of a health organization is unpredictable because CAS is a non-equilibrium-seeking system that con- tinuously evolves. The goal is not to always be

to incorporate new methods, are the result of dynamic characteristics of structure.19, 20

Inevitability of Change Complexity science sees change as the inevitable product of their dismissal of the notion of equi- librium. Both systems thinkers and complexity scientists believe that the search for equilib- rium, a balance, a stable state, is futile. Because systems are open to exchanges with the envi- ronment, they continuously adjust to moment- by-moment perturbations and other inputs from within the system and from without.

Both theoretical frameworks recognize that the definition of organizational success is an emerging property of any healthcare system.21 The roles people play in health organizations continuously change, so when you think of an organization as a set of roles, who plays them and what those roles are is continuously subject to change. Efforts to contain or constrain system evolution might waste a lot of energy. Because we tend to see what we expect to see, we may also fail to see a lot of the change and this failure limits our ability to respond accordingly.

Issues of Power Power differentials and power exploitation are big ideas in the organizational sciences; this is discussed in more detail in Chapter 9 of this text. The complexity science position is that power is created from one’s location in the chain of infor- mation exchanges and from the capacity to pro- vide unique information or points of view, thus the old adage, “information is power.”22

Traditional health systems locate power within the legitimacy of the roles people play, and power is often granted through exter- nalities and rules of conduct. Because health organizations are such information- dependent systems, the significant information asymme- try between clinicians, patients, and man- agers greatly shapes relationships. In most healthcare settings, the information power of the physician is symbolized by the white coat

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BOX 5-2 Attributes of Complex Adaptive Systems

Agents (i.e., people) CAS makes up a large number of diverse agents that are information processors. There must be adequate diversity within the group of agents to enable the group to develop new solutions to problems and to make decisions in unique circumstances. In CAS, agents have the capacity to exchange information among themselves and with their environment and to adjust their own behavior as a function of the information they process. In a health organization, everyone counts; not only does each person contribute their talents, but they must also help others contribute. The management of such a diverse and changing cast of agents is one of the more difficult tasks in healthcare management.

Interconnections The essence of a CAS is captured in the nonlinear relationships among agents. Inputs are not proportional to outputs; small changes can lead to big effects and big changes can lead to small effects. The way in which clinicians interact with each other, coupled with the way they interact with nonclinicians, is often a key determinant of a health organization’s ability to succeed. Everyone is busy and everyone has his or her job to do. But, CAS theory teaches us that the successful healthcare manager pays more attention to the relationship system than to the individual agents.

Self-Organization CAS theory teaches us that order in a system may well be a result of the properties of the system itself, rather than some intentionality on the part of some external controller. Rather than hierarchical control, CAS are characterized by a decentralized, bottom-up process of co-design. New structures and new forms of behavior spontaneously emerge as agents self-organize themselves into relatively stable patterns of relationships. No matter how hard a nursing home manager tries to control certified nursing attendants, the attendants will organize themselves to do their job in the way that they see fit. Efforts to help them see the job better and to develop better skills at organizational analysis are likely to pay higher dividends than efforts to get them to toe the line.

Emergence The behavior of a CAS cannot be obtained by summing the behaviors of the constituent parts, but emerges as the result of the pattern of connections among diverse agents. Emergence is a source of novelty and surprise in CAS. When we treat safety and clinical success as emergent properties of the system, we are more likely to be able to learn from the past behaviors of the system and develop alternative strategies for achieving our goals.

Co-Evolution CAS does not simply change; it changes the world around it. CAS and its environments co-evolve such that each fundamentally influences the development of the other. The organizations act and others react, often in unexpected and unpredictable ways. When a health organization even begins to investigate the purchase of some new information technology, the potential ramifications will almost immediately come to the fore in the decision-making process. And when a big payer decides that you should be paid by a system using diagnostic related groups (DRGS), then you will figure out a way to code the illness of your clients in a way that is profitable to you.

McDaniel RR and Jordan, ME Complexity and Postmodern Theory, in Johnson, JA. HEALTH ORGANIZATIONS. 2009, Jones and Bartlett Publishers

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today’s manager and their management team have a deeper knowledge of information sys- tems and data analytics, as well as how to effec- tively use these forms of communication. It is even more important that the effective man- ager look at things from a variety of positions, paying careful attention to tacit knowledge and being confident but not overconfident. Pay attention to both uncertainty reduction and uncertainty absorption. The adoption of new clinical technologies often leads to uncer- tainty about roles and responsibilities. To write flawless job descriptions, we can never know enough about new technology or about all of the circumstances that surround its use. But, we can provide an environment of psycholog- ical safety that will help workers develop an attitude toward innovation that enables them to act with a presumption of personal and professional confidence.24

Decision Making as Sensemaking Healthcare managers are traditionally taught to make good decisions, by which is often meant collecting information required to iden- tify relevant choices and to make the “correct” choice among them. It is almost as though the question before the manager is clear to all observers and the task is simply developing a strategy for choosing. Complexity science alerts us to the fact that situations are never clear and that the world may well not make sense when initially confronted. This means that sensemaking must take a prominent posi- tion in organizational action. A primary role of the manager is to help people make sense of the world as it unfolds.25, 26 Managers must be willing and able to share much more infor- mation about situations than they have tradi- tionally shared. They must also be prepared to invite people with very different perspectives of the world to look at any specific situation because diversity improves sensemaking. For example, both doctors and nurses need to be involved in the adoption of new surgery technologies.20 Effective healthcare managers

able to anticipate the future, but to always be organized in such a way as to respond appro- priately to the future as it unfolds.

▸ Managing Health Organizations as Complex Adaptive Systems

If we accept the assertions of systems theory and complexity science that the world is essen- tially unknowable in many of its aspects due to their emergent and fundamentally relational nature, then we may be able to offer several “prescriptions” for managing health systems. The following are some of these approaches that organizational leaders might consider:

Uncertainty Reduction and Uncertainty Absorption Modern health systems have focused on uncertainty reduction as a strategy for better management. Uncertainty reduction involves collecting information to understand clearly the risk that is involved in any situation. This helps us to understand, for example, the pres- ent push for EMR adoption. Newer manage- ment perspectives would suggest that the successful manager will also concentrate on uncertainty absorption, developing a posture and organizational structure that allows con- fident action even when risk might be poorly understood.24 Healthcare managers today must think about how they can organize their sys- tems to be more able to operate effectively in the presence of uncertainty. Time and oppor- tunity should be provided for reflection and careful consideration of alternatives. Trust will become a key component, as members of the team understand that nobody “knows” what to do, but as a team, they can discover an effective course of action. It is clearly important that

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resolution of dilemmas through the creation of new ways of viewing the world.

Knowing and Learning Whereas healthcare managers are often taught to think of learning as something we do in order to know, from the perspective of systems thinking and complexity science, knowing and learning switch places: Knowing is some- thing we do in order to learn. Because the future is uncertain, knowing based on prior experience must be “held loosely.” We learn, not so that we will “know,” but so that we can act more effectively in situations we have not seen before. Not only can healthcare man- agers learn to learn themselves, but they can also increase their skills at helping others learn to learn. There is a tendency to treat workers as if they do not learn. Once they have been taught their jobs and socialized into the dom- inant culture, it is assumed that that is the end of their learning. But, we know that people get wiser as they have more experience on the job and that they develop their own insights into the nature and meaning of their work. Manag- ers must develop strategies for taking advan- tage of this ongoing learning and for shaping that ongoing learning in order to avoid pitfalls and missed learning. The most important learning may not be learning for preparation for action, but learning while action is going on. As noted by Stacey, “The most important learning we do flows from the trial-and-error action we take in real time and especially from the way we reflect on these actions as we take them.”30, p. 17 This suggests that healthcare man- agers and health professionals need to attend to multiple interpretations of unfolding events and pay careful attention to various ways that others might perceive the world.

Planning and Improvisation Complexity science makes it clear that man- agement and operational strategies that

dedicate adequate time to those conversations that lead to good sensemaking. Because sense- making is a social act, such interaction helps people make better sense and improves their ability to take action.27

While decision making has a ring of finality and closure, sensemaking is an ongoing process and therefore more closely matches the dynamic world posited by postmodernism and complexity science. While decision making implies the ability to predict how decisions will be implemented and the effects of implementing those deci- sions, sensemaking recognizes that one con- tinually makes sense in order to act in the face of uncertainty: People make sense, take action based on the sense they made, observe as the world unfolds, and make further sense. It is not a question of either decision making or sensemaking. Rather, managers can improve their decision making by recognizing the need to improve the sensemaking capacity of their organizations.

Problem Solving and Dilemma Resolving Managers have traditionally been taught to be good problem solvers: find out what is wrong and fix it.28 Complexity science sug- gests that managers are faced with dilemmas much more often than they are faced with problems. A dilemma is a set of circumstances in the world that has no correct answer, but is rather a circumstance where differing points of view and issues of concern come to the table together. Health managers can reduce their tendency to ask, “What is the right thing to do?” and increase their tendency to ask, “What is the thing to do that will enable us to learn and to enhance our potential for goal achieve- ment?” Complexity science supports that we stop asking, “Is it this or that?” and rather start asking, “How do we achieve this and that?”29 In many ways, the development of the role of hospitalists and nurse practitioners was a

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Achieving the Expected and Creating and Releasing Potential Classical views of the world led to the assump- tion that the “correct performance” was the best performance that could be expected. The para- digms that we have explicated here acknowledge that the best that can be expected is, in fact, an unknown. While given our present understand- ing of a system, we may believe we can estimate what that system will achieve in some given timeframe, we are always surprised as rehab workers become the center of a patient’s clinical improvement, housekeeping staff attract a team of workers committed to organizational success, or physicians develop insights across specialties that lead to new clinical processes. In other words, we’re always surprised by the unantici- pated competencies of our organizations.36, 37

Healthcare managers often find them- selves in a trap of trying to accomplish what is expected of them. They concentrate atten- tion on keeping accreditation and meeting other standards and legal mandates and raising their average standing in comparison to sim- ilar organizations on issues, such as average expenditures for dietary services, infant mor- tality rates, and unnecessary readmissions. In an uncertain and changing world, the ability to respond creatively to unexpected events may be a very important skill; being curious combines with being critical as a managerial response to unanticipated events. Create an environment where the unexpected is not shunned, but is welcomed, where people feel free to discuss both the positive and negative outcomes of unintended events, and where the sharing of ideas is seen as a way to leverage new things in unexpected ways and to create new fabric. But, creating and responding to the unexpected may require that managers learn a different set of reactions than just following rules, procedures, and instructions and doing what is expected of them. Complexity science concentrates on “transforming the space of the possible.”

Rather than asking people in their orga- nizations, “Did you do this?” managers should

depend on forecasting are likely to be futile. Traditional healthcare theories have high- lighted planning as a managerial strategy for preparing for the future. However, planning focuses on the capacity to forecast with confi- dence. Because the future is still unfolding and is unknowable, this tool is of limited utility for deciding on action alternatives, particularly at the strategic level.31 While healthcare manag- ers can and should capitalize on the potential of planning as a strategy for legitimizing the organization in the eyes of stakeholders, they will find it much less useful as a strategy for figuring out what to do next. When you do not know what you are going to get, you need to be prepared to use what comes.32 Managing in the face of the unexpected requires skills at improvisation; the ability to make it up as you go and to respond with flexibility and cre- ativity to chance happenings within a loose structure. Effective managers are able to use whatever tools are at hand, pay attention to small wins,33 and learn from small failures34 in order to accomplish the goals of the organi- zation. They must treat mistakes as platforms for future action and ideas instead of as things to be fixed. Rather than seeking to eliminate uncertainty, managers must be willing to embrace its transformational possibilities.35 Healthcare managers who wish to capitalize on improvisation must create a culture that fosters willingness to experiment, a culture in which people are encouraged to play around with ideas, bounce ideas off others, and imag- ine scenarios of possible futures. Improvi- sation is often considered an act engaged in individually and is not recognized as a group activity. However, Johnson describes “orga- nized improvisation” where health organi- zations improvise collectively, and thus they must gain skills in continuously negotiating and assessing as they spontaneously make decisions and take action. Learning to respect that improvisation is enhanced by diversity; it is not unification of perspectives that is sought in group improvisation, but an integration of multiple perspectives.3

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Review/Discussion Questions 1. What are some assumptions about the

nature of the world that complexity sci- ence and systems thinking share? What are the implications of these assump- tions for understanding the nature of health organizations?

2. On what characteristics of their orga- nizations does this chapter suggest that healthcare managers focus their attention?

3. What managerial actions are suggested by complexity science and systems thinking that are different from those suggested by traditional management approaches?

4. What are the most critical elements of a health system from the standpoint of complexity science and systems theory?

5. What are some implications of com- plexity science and systems think- ing for those who manage health organizations?

6. What explanations would complexity science give for a lack of effectiveness of planning and control methods for man- aging health organizations?

7. What are some key attributes of lead- ership when one recognizes that health organizations are complex systems?

8. Why do you think someone, trained as an excellent problem solver, might run into difficulties when attempting to manage a complex adaptive system?

9. What are major changes a traditional manager might have to make if he/she adopted key views from postmodern- ism and complexity science?

References 1. West BJ. Where medicine went wrong: Rediscovering

the path to complexity. Studies of Nonlinear Phenomena in Life Science. Vol. 11. Hackensack, NJ: World Scientific Publishing Co.; 2006.

ask instead, “What did you do?” When peo- ple walk into the healthcare setting, we often assume that they leave their intelligence behind. We act as if people in authority must make all decisions, and then complain because patients “don’t take responsibility for their own health.” If you consider different questions than the ones given, expected, or assumed, you are likely to open up the organization to new ways of envisioning the past, present, and future.

▸ Conclusion Complexity science and systems theory have brought to the forefront of healthcare man- agement a better understanding of the uncer- tain nature of reality and the implications of that uncertainty for managerial action. These approaches have led us to understand that the nature of relationships is critical, and that by focusing on those relationships new alter- natives for management make themselves apparent. Complexity and systems thinking focus attention on similar aspects of the world and, therefore, viewing health organizations through this joint lens can illuminate crit- ical issues such as the history dependence, dynamic structures, inevitability of change, and issues of power. Also CAS theory calls our attention to the diversity of agents in the system and their capacity to learn, as well as the importance of the nonlinear interde- pendencies between these agents. Nonlinear interdependencies generate self-organization, emergence, and co- evolution leading to unpre- dictable future states and, at the same time, order and structure, thereby suggesting that managers focus on emergent patterns rather than focus on stable states.

In a recent book by James Johnson and Douglas Anderson, titled Systems Thinking for Health, the authors build a strong case for the use of systems thinking as a game changing paradigm for health organizations, leadership, and policy.38

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technology implementation in hospitals. Adm Sci Q. 2001;46(4):685–716.

20. Cilliers P. Boundaries, hierarchies and networks in complex systems. Int J Innovation Manage. 2001; 5(2):135–147.

21. Capra F. The Web of Life. New York: Anchor Books Doubleday; 1996.

22. Boisot M, Child J. Organizations as adaptive systems in complex environments: The case of China. Organ Sci. May/Jun 1999;10(3):237–252.

23. Rouse WB, Serban N. Understanding and Managing the Complexity of Healthcare. Cambridge MA: MIT Press; 2014.

24. Edmondson AC. Learning from mistakes is easier said than done: Group and organizational influences on the detection and correction of human error. J Appl Behav Sci. March 1996;32(1):5–28.

25. Weick KE. The collapse of sense making in organizations: The Mann Gulch disaster. Adm Sci Q. 1993;38(4):628–652.

26. Weick KE. Sense-Making in Organizations. Vol 3. Thousand Oaks, CA: Sage Publications; 1995.

27. March JG, Sproull LS, Tasmuz M. Learning from samples of one or fewer. Organ Sci. 1991;2(1):58–71.

28. Simon HA. Information, Technology and Computers in Management. Lecture at the Graduate School of Business. The University of Texas at Austin; 1991.

29. Kelso JAS, Engstrøm DA. The Complementary Nature. Cambridge, MA: The MIT Press; 2006.

30. Stacey RD. The science of complexity: An alternative perspective for strategic change processes. Strategic Manage J. 1995;16(6):477–495.

31. Crossan MM, Sorrenti M. Making sense of improvisation. Adv Strategic Manage. 1997;14:155–180.

32. Erickson F. Talk and Social Theory. Oxford: Polity Press; 2004.

33. Weick KE. Small wins: Redifining the scale of social problems. Am Psychol. 1984;39(1):40–49.

34. Sitkin SB. Learning through failure: The strategy of small losses. Res Organ Behav. 1992;14:231–266.

35. Merry U. Coping with Uncertainty: Insights from the New Sciences of Chaos, Self Organization, and Complexity. Westport: Praeger; 1995.

36. Goldstein JA, Hazy JK. Editorial introduction to the special issue: From complexity to leadership and back to complexity. Emergence: Complexity Organ. 2006;8(4):v–vii.

37. McDaniel RR, Jr., Jordan ME, Fleeman B. Surprise, surprise, surprise! A complexity science view of the unexpected. Health Care Manage Rev. 2003;28(3):266–278.

38. Johnson JA, Anderson DE. Systems Thinking for Health. Austin, TX: Sentia Publishing; 2017.

2. Zimmerman B, Lindberg C, Plsek P. Edgeware: Insights from Complexity Science for Health Care Leaders. Irving, TX: VHA Inc.; 1998.

3. Johnson JA. Introduction to Public Health Management, Organizations, Policy. Clifton Park, New York: Delmar-Cengage; 2013.

4. Johnson JA, Stoskopf C, Shi L. Comparative Health Systems. Sudbury: Jones & Bartlett; 2010.

5. Shi L, Johnson JA. Public Health Administration: Principles of Population-Based Management. Burlington: Jones & Bartlett; 2014.

6. World Health Organization. Systems Thinking for Health Systems Strengthening. Geneva, WHO Press; 2009.

7. Trochim WM. Am J Public Health. 2006; 96:538–546. 8. Johnson JA, Breckon DJ. Managing Health Education

and Promotion Programs: Leadership Skills for the 21st Century. Sudbury: Jones and Bartlett; 2007.

9. Maguire S, McKelvey B, Mirabeau L, Oztas N. Complexity science and organization studies. In: Clegg SR, Hardy C, Lawrence TB, Nord WR, eds. The Sage Handbook of Organization Studies. 2nd ed. London: Sage Publications; 2006:166.

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15. Stroebel CK, McDaniel RR, Crabtree BF, Miller WL, Nutting PA, Stange KC. How complexity science can inform a reflective process for improvement in primary care practices. Jt Comm J Qual Patient Saf. August 2005;31(8):438–446.

16. Seligman LS. Perceived Value Impact as an Antecedent of Perceived Usefulness, Perceived Ease of Use, and Attitude: A Perspective on the Influence of Values on Technology Acceptance. Ann Arbor, MI, The University of Texas at Austin; 2001.

17. Paul DL, McDaniel RR, Jr. A field study of the effect of interpersonal trust on virtual collaborative relationship performance. MIS Q. June 2004;28(2):183–227.

18. Weick KE, Sutcliffe KM. Hospitals as cultures of entrapment: A re-analysis of the Bristol Royal Infirmary. Calif Manage Rev. 2003;45(2):73–84.

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CHAPTER 6

Organizational Leadership Theory

LEARNING OBJECTIVES

■ Discuss and explain the foundations of leadership theory as theory and models are developed and evolve.

■ Discuss and compare different leadership perspectives and theories. ■ Develop a personal leadership definition. ■ Describe how individuals are motivated to perform effectively and develop motivational plans

with which to lead people. ■ List and define factors or components of leadership and how those factors contribute to

leadership. ■ Describe behaviors, actions, and processes that foster effective leadership of individuals and

groups. ■ Better understand the implications of various leadership theories in health organizations.

OVERVIEW

Theories of leadership are presented in a chronological and categorical order allowing the reader to better understand the broad sweep of leadership theory. The chapter also identifies factors and attributes associated with leader effectiveness. It further explores the appropriate role of the leader in health organizations, along with their capabilities to motivate, inspire, and ultimately lead with vision and purpose.

Collaborating Authors: Gerald R. Ledlow and James A. Johnson

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▸ Defining Leadership Traditional leadership scholars, who embrace the empiricists’ view, suggest that the under- standing of leadership is founded in tradi- tional research methods. In this view, concepts of leadership may be discerned through the development of testable hypotheses and the operationalization of demonstrable unit vari- ables derived from latent constructs. Other leadership enthusiasts advocate that leadership is an art and, like beauty itself, may lie in the eye of the beholder. Compounding this debate is the fact that framing leadership is not culture free. Techniques and activities developed in one society may need to be altered in order to be effective in another. For example, American society recognizes leadership regardless of age, ethnicity, or gender. However, Asian and Middle Eastern societies often place a heavier emphasis on gender and age as precursors to leader recognition.

Regardless of art or science, the discus- sion of leadership is ancient. Researchers can find numerous writings predating modern times that describe the exploits and qualities of leaders. Much of the early spiritual teachings of the East and West suggested great leaders should be beneficent and altruistic. Since these times, there have been as many methods to define leadership as there are ways to measure the phenomenon. Leadership is perhaps one of the most widely debated and broadly defined domains within the realm of organization the- ory. For example, when the famed American Indian and cavalry fighter Geronimo was asked what made him a good leader, he replied, “The ability to ride a strong horse.”1

The lack of a clear and accepted definition and model of leadership theory is a fundamen- tal challenge within the scholarly literature. Despite well-respected literature that distinctly separates leadership from other descriptive identifiers, leadership continues to be used to describe a plethora of activity in society, whether in pop culture, political culture, or in organizations.

▸ Introduction

This chapter provides an overview of the complex and exciting topic of leadership and its associated theories. Students of leadership should consider this discipline one of the more important aspects of personal and professional education.

History has recorded leaders’ exploits for thousands of years. Anthropology, sociology, psychology, political science, business, com- munication, health administration, and other disciplines have contributed to the founda- tions of leadership theory and practice.

All healthcare executives lead people and manage resources. This involves focusing the collective energy of both managing people and resources toward meeting the needs of the external environment by focusing on the mis- sion of the organization.

It is important for leaders to understand that the individuals who make up this human resource component are composed of people with vastly different education, training, and experience. These same individuals also have vastly different roles within the organization— and no leader can understand the complexity of all aspects of jobs within the system. As a result, a leader’s job is to successfully motivate individuals within the organization toward goal-directed behavior that supports the lead- er’s vision and the organization’s mission. Finally, the last important job of leaders is the management of non-human resources in the system. The role of a healthcare administrator is to merge the complexity of leading people and the complexity of managing resources into a culture that serves communities by maintain- ing and improving the health of individuals in those communities. This is done by influenc- ing the people and resources under their stew- ardship to serve those individuals who come to health organizations for assistance, to build strong and effective relationships with their communities, and, especially, to build working relationships with the public health infrastruc- ture in their communities.

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Machiavelli may have written one of the first widely recognized treatises on leadership in 1530; however, the first relevant scientific the- ories were not posited until the mid-1800s. From approximately 1840 to 1880, great person theorists Carlyle, Galton, and James studied great men from history who exhibited certain behavior characteristics and had documented successful outcomes, such as prosperity, politi- cal standing, or affluence. Based on the study of these characteristics, the authors suggested that in order to be a good leader, one would have to emulate the characteristics of these men. Such characteristics often also centered on an individual’s race and gender. Not surprisingly, many of the great men from the early chron- icles were Anglican, male, and Caucasian. Unfortunately, their studies did not include female leaders such as Queen Elizabeth I of England or Cleopatra of Egypt.

Some authors combine great man and trait theories into a common field of study, while oth- ers do not. In the early study of great man (i.e., great person) theories, an inordinate amount of weight was placed on certain immutable vari- ables such as gender, race, height, and oration. Mutable variables, such as social class, educa- tion, and religion, have also factored heavily into the early great man theories. As the study of historical figures evolved, scholars began to examine commonalities among great histori- cal figures and developed a finite list of traits. The primary focus on traits eventually evolved into a distinct discipline called “trait theory.” This niche concept suggested that leaders are defined by various characteristics, such as intelligence, extraversion, experience, educa- tion, confidence, and initiative. It was said that possession of these traits distinguished a leader from a follower in early trait-based theories.

1938 Trait Theory The re-emphasis on traits was solidified as an acceptable practice in 1938 and 1939 when authors Lewin, Lippitt, and White’s research

As stated earlier, within the referred litera- ture, leadership is said to be as much an art as a science.2 Furthermore, the study of leadership suggests that no one model guides the pro- cess of leadership study. As a result, the study of leadership has focused on distinct niches and amorphous constructs rather than any one general model. This different approach to leadership theory sets it apart from the study of other disciplines such as the study of devel- opmental biology or geology. Both these dis- ciplines have popularly accepted theories that help explain phenomena. The study of lead- ership is quite different and still vehemently debated among organization theorists. With so many available positions on leadership, it is easy to understand why there continues to be vehement debate on defining, testing, framing, and understanding the concept of leadership. As for an overarching definition, leader- ship is best described as the ability to assess, develop, maintain, and change the organiza- tional culture to optimally meet the needs and expectations of key stakeholders and external environment. Needless to say, there are many components, elements, behaviors, knowledge, skills, and abilities that a leader needs to mas- ter to meet the expectations of this definition. The following sections build on the founda- tion of leadership and influence in the hope that the definition of leadership written above becomes more salient.

▸ A Chronological Review of Leadership Theory

1800s Great Person Theories The urge to study leadership as a scientific property of human behavior is a relatively mod- ern discipline. In the ancient world, Plato in The Republic and later Marcus Aurelius wrote about leadership and so had Lao Tzu. However,

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approach (more system oriented/interrelated research today).5 The trait theory of leadership eventually evolved into the study of leadership behaviors.

Late 1950s Theory X and Theory Y5 Between the trait and the behavior phase of leadership research, the concept of Theory X and Theory Y emerged. In the late 1950s, McGregor hypothesized that leaders generally hold one of two contrasting sets of assump- tions about people. He additionally suggested that these two dichotomous sets of assumptions would influence leadership behavior. For exam- ple, if managers/leaders assumed that their followers were lazy, indifferent, and uncooper- ative, then they would be treated accordingly. Conversely, if they viewed their subordinates as energetic, bright, and friendly, they would treat them quite differently. These leadership attitudes toward followers would soon condi- tion the leader to behave in a certain manner. In essence, this theory exemplifies a self-fulfilling prophecy.

Those who hold Theory X assumptions would be autocratic and those who hold Theory Y assumptions would be democratic. A Theory X leader would view a subordinate who was late as irresponsible and would require stricter con- trol, while a Theory Y leader might speculate that this same subordinate may find his or her job boring and may need additional opportuni- ties to stimulate them and improve performance (and behavior). The real contribution of McGre- gor’s work was the suggestion that a manager/ leader influenced a leadership situation by these two dichotomous assumptions about people.6

■ Theory X: People are lazy, extrinsically motivated, incapable of self-discipline, and want security and no responsibility in their jobs.

■ Theory Y: People, who do not inherently dislike work, are intrinsically motivated, exert self-control, and seek responsibility.

became the benchmark studies of their time.3, 4 These scholars studied the leadership styles of two groups of 10- and 11-year-olds in mask- making clubs. During the experiment, they noted that the two groups demonstrated two distinct behavior types—authoritarian or democratic. The study led to the subsequent examination of the impacts on production, group tension, coop- eration, and feelings of “we’ness” versus “I’ness.” These early studies have become some of the more often cited and highly quoted leadership and social psychology studies of the modern era. Accordingly, much of the modern research in leadership theory today may trace its roots back to these earlier studies. Unfortunately, the failure of the theory to attribute any single trait, or set of traits, that could systematically explain leader- ship success across various situations promoted a paradigm shift in leadership study to analyze the effects of situations on leader behavior.

1950 Modern Trait Phase As the original study of trait-based theories developed, some have characterized the phe- nomenon as the trait-based phase. The mod- ern trait phase of leadership suggests that the study of leadership can be evaluated based on certain successful and admired personality and social traits. The underlying assumption is that some people have traits and skills that make them more likely to seek and attain leadership positions. In the first half of the 20th century, over 100 studies sought to find causal influence from traits such as intelligence, personal adjust- ment, originality, enthusiasm, and persistence (among others) to successful outcomes. How- ever, a major limitation is that traits associated with one leadership situation may not predict leadership ability or outcome in another sit- uation. Stogdill conducted several reviews of research in the trait arena and provided a listing of such traits and skills, as shown in TABLE 6-1. He concluded that recognition of the relevance of leader traits is not a return to the original trait

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leader has one leadership style, autocratic, and has a limited view of the world and does not consider internal and external modifiers.

▸ Leadership Phase Evolution

Behavior Phase All phases of leadership research build on each other and interweave into various models of

Theory Y leaders assess themselves (inter- nal modifiers) in areas such as preferred lead- ership style, motives and limitations, past experiences, and external modifiers such as characteristics of the task, time constraints, organizational norms, structure and climate, past history with group, economic and legal limits, and degree of stability of the organiza- tion. Once the assessment is complete, the The- ory Y leader chooses a leadership style (which does not mean they will not select an autocratic style depending on the situation). A Theory X

TABLE 6-1 Stogdill’s Successful Leader Traits and Skills

Traits Skills

Adaptable to situations Clever (intelligent)

Alert to social environment Conceptually skilled

Ambitious and achievement oriented Creative

Assertive Diplomatic & tactful

Cooperative Fluent in speaking

Decisive Knowledgeable about group tasks

Dependable Organized

Dominant Persuasive

Energetic Socially skilled

Persistent

Self-confident

Willing to assume responsibility

Tolerant of stress

Yukl G. (1994). Leadership in Organizations (3rd ed.)., Englewood Cliffs, NJ: Prentice Hall.

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closeness between the leader and followers while the initiating structure dealt with concern for actively directing subordinates toward job completion or goal attainment.

Surprisingly, those who were marked high on both consideration and initiating structure were not always the most effective leaders. Further research along these lines indicated that both of these dimensions were needed for effective leadership. It was more important for a leader to strike a balance between what is appropriate for the situation rather than con- sistently displaying high consideration and high structure at all times. The following com- ments delineate the summary of conclusions of how effective leader behavior relates to fol- lower satisfaction and performance.8

Consideration 1. Employee satisfaction with a leader

is dependent on the degree of con- sideration displayed by the leader.

2. Leader consideration affects em - ployee satisfaction more when jobs are unpleasant and stressful than when they are pleasant and have low stress.

3. A leader who is high on consid- eration can exercise more initiat- ing structure without a decline in employee satisfaction.

leadership as shown in TABLE 6-2. The great man theories and the study of traits eventu- ally evolved into a study of leadership behav- iors. Behavior theory gained acceptance in the 1940s and grew substantially into the 1950s. The behavior research phase focused on what styles or behaviors leaders utilized, and how those styles contributed to subordinate satisfaction, performance, and quality. The behavior research first acknowledged that leadership and leading could be a learned skill. Recently, since the 1960s and 1970s, situational leadership (also known as contingency leadership) has gained favor. This research phase suggests that successful leaders must assess the situation and then choose the appropriate leadership style to make the greatest positive impact on subordinate effort.

1947 The Ohio State Leadership Studies7 In 1947 under the direction of Stogdill, the Ohio State leadership studies were conducted. The goal of these studies was to determine if there was a relationship between effective leader behavior and subordinates’ satisfaction and per- formance. Two dimensions of leader behavior that emerged were consideration and initiating structure as presented in TABLE 6-3. The con- sideration structure focused on psycho logical

TABLE 6-2 Research Phase Time Line

Great Man Phase (ca. 450 bce–1900)

Trait Phase (450 bce–1940s)

Behavior Phase (1940s–1970s)

Situational or Contingency Phase (Present)

Attempts to suggest that modeling the characteristics of successful leaders made one successful

Attempts to determine what specific traits make a person an effective leader

Attempts to determine what particular behaviors leaders utilize to cause others to follow them

Attempts to explain effective leadership within the context of the larger work situation

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1950 University of Michigan Studies Conducted around the same time as the Ohio State leadership studies, the University of Mich- igan leadership studies sought answers to many of the same research questions as their Ohio State colleagues. Not surprisingly, the Mich- igan study results were similar to those con- ducted at Ohio State, thus supporting some convergent validity assumptions. As with the Ohio State studies, the Michigan studies sug- gested grouping leaders into one of two classi- fications: employee orientated or production orientated. The research suggested that highly productive supervisors spent more time plan- ning departmental work and in supervising their employees. The same supervisors spent less time working alongside and performing the same tasks as subordinates. They, the suc- cessful supervisors, accorded their subordinates more freedom in specific task performance and tended to be employee oriented. In contrast, the employee-focused leader focuses his or her time on forging relationships and in maintaining

4. Consideration given in response to good performance will increase the likelihood of future good performance.

Initiating Structure 1. Initiating structure by a leader that

adds to role clarity will increase employee satisfaction.

2. Initiating structure by a leader will decrease employee satisfaction when structure is already adequate.

3. Initiating structure by a leader will increase performance when a task is unclear.

4. Initiating structure by a leader will not affect performance when a task is clear.

The major drawback to the Ohio State leadership studies was the limited consideration given to situational differences that may influ- ence leader effectiveness. From this you can see the development of research (future studies) leaning toward situational leadership.

TABLE 6-3 Initiating Structure and Consideration

Manager ’s Initiating Structure

High Low

Manager’s Consideration

High High performance Low performance

Low grievance rate Low grievance rate

Low turnover Low turnover

Low High performance Low performance

High grievance rate High grievance rate

High turnover High turnover

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background of problems and projects, engaged in constructive conflict-resolution behavior, made decisions, and engaged in the evaluation of work. This helps to produce quality perfor- mance. Much of this research has been accepted by the greater organizational industry at large and has been adopted into many organizational training programs. This theory also supported the proposition that leaders were being devel- oped (behavior leadership phase theories), not just made (trait leadership phase theories). As a result of this early work, researchers began to recognize that the context or situation played a major role in successful leadership.

1964 Contingency Leadership Phase Also developed in 1964, Fiedler’s contingency model may be the first leadership theory to posit contingency relationships in the field of leader- ship. This model posits that the performance of groups is based on the interaction between the leader and situation favorableness. The funda- mental leadership style ultimately is based on the least preferred co-worker (LPC).9 The lead- er’s style of managing personnel can then be geared toward micromanagement (structured) or autonomous management (unstructured). Additionally, this model evaluates the interac- tion between leader traits and situations. The basic premise of the model is that effective- ness is contingent on having a match between leader and follower styles.9 Fiedler identified the degree of cooperation offered by followers (commitment), clarity of the group’s task (struc- ture), and the leader’s formal authority to direct and reward followers (power). He referred to those factors collectively as the degree of situ- ational control or favorableness on a preferred co-worker scale. The contingency model of leadership assumes that the style of a leader is fixed and that a leader cannot be sensitive to tasks and followers concurrently.

Fiedler argues that changing an individual’s leadership style is difficult. He proposes that,

harmony in the work environment. This type of leader is less interested in written policies and formalized delegation of responsibilities.

1955 Skills Perspective A less discussed and accepted model of lead- ership is Katz’s 1955 skills perspective of lead- ership. Katz posited that effective leadership is based upon possessing and developing three core skills of technical, conceptual, and human abilities. Technical proficiencies are associated with the work required to transform inputs into outputs. Conceptual proficiencies relate to abstract ideas in the environment that have an effect on ongoing projects. For example, some- one with high conceptual properties might be said to “get the big picture.” Human proficien- cies centered on the employees doing the work within the organization. Within this construct, high emphasis is placed on securing and main- taining relationships within the organization. Katz suggested that if a leader possessed all these skills, he or she would be a successful leader. The skills perspective of leadership is an evolutionary derivative of the early trait theories. While sim- ilar in many respects to trait theories, the skills perspective actually identified specific skills and suggested that leadership development and attainment were improbable outside the posses- sion of all three suggested skill constructs.

1964 The Managerial Grid In 1964, Blake and Mouton posited that leaders with high concern for people and a high concern for production are the best leaders.5 The “high- high” leader facilitates more “team manage- ment,” which is evident when the leader shares participation in goal setting, problem solving, and decision making. These “high-high” leaders modeled the behaviors by engaging fully in open confrontation and resolutions of differences, demonstrated initiative, explored fully into the

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(1) Leader-member relations, which is the quality of the relationship between the leader and followers. (According to Fiedler, this is the most important determinant because it directly contributes to the influ- ence the leader will have over his or her fol- lowers.) (2) Task structure is the degree to which a group’s assignment can be spelled out in a step-by-step fashion; the higher the degree of task structure, the more influence the leader will be given. (3) Position power is the authority to reward and punish fol- lowers, hire and promote them, and receive the backing in their decisions.

There are several important issues regard- ing Fiedler’s model of leadership: (1) Evidence suggests other situational variables, such as training and experience, contribute to leader effectiveness. (2) There is some doubt whether the LPC scale is a true measurement of leader- ship style; critics contend its interpretation is speculative and inadequately supported. Critics question the reliability of the measurement of leadership style and the range and appropriate- ness of the three situational components. The other significant element in situational leader- ship is organizational culture. Simply, culture is a group’s unique view of the world. Every orga- nization, from a family to a conglomerate, has an overriding organizational culture and vari- ous sets of sub-cultures. Leaders must attend to cultural issues to be successful.10 Some research- ers have suggested that leadership strategies in any setting have strong underlying similarities but must change as the setting changes over time. Even though the organization is essen- tially the same, change in the environment, such as continuous changes in health organizations (regulations, technology, socio-economic, and demographic), may require leaders to change their strategy/style to be effective.

Because of this groundbreaking devel- opment in leadership research, a training pro- gram was developed in order for leaders to learn how to adapt their circumstances to fit their set leadership styles, but it was found

instead, organizations should “engineer the job to fit the leader” or place individuals in situations that fit their style. A “backdoor” approach to sit- uational leadership is offered here. Fiedler spe- cifically identified three situational factors that are present in any situation where a task-oriented style, as opposed to relationship-oriented leadership, is more likely to be effective: (1) leader-member relations, (2) task structure, and (3) position power of the leader.5

■ Leader-member relations: the extent to which the group trusts and respects the leader and is willing to follow his or her directions

■ Task structure: the degree to which the task is clearly specified and defined or structured

■ Position power: the extent to which the leader has official power, that is, the potential or actual ability to influence others due to their position in the organi- zation (also known as legitimate power by French and Raven) This theory defines leadership effective-

ness in terms of work group performance. It postulates that work group performance is con- tingent upon the match between: (1) a person’s leadership style, and (2) the “favorableness” of the leadership situation. In essence: Work Group Performance = Leadership Style + Sit- uational Favorableness. According to Fiedler, the term leadership style is a leader’s manner of acting in a work situation, which depends upon his or her personality, and therefore is relatively fixed. Two key factors are important to under- stand in this theory or model of leadership:

■ Leadership style: To determine a person’s leadership style, Fiedler developed a mea- sure called the least preferred co-worker (LPC) scale. This instrument describes the one person with whom he or she worked least well with among all the workers they have ever supervised.

■ Situational favorableness: This refers to the degree a situation enables a person to exert influence over a work group. Three fac- tors are used to measure this component:

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performance will lead to rewards that are val- ued. If any one of these three variables (expec- tancy, instrumentality, and valence) drops in value, then motivation decreases. The path- goal theory describes how leader behavior affects these expectancies. The leader’s task contains two elements: (1) goal element— increase the number and kinds of rewards that the followers would receive for perfor- mance outcome (social exchange theory), and (2) path element—make the path easier by removing the obstacles that inhibit goal accomplishment.

The basic premise is that leader behavior and situational variables influence subordi- nate outcome. There are four types of leader behavior: (1) directive leadership (provides specific guidelines and “expectancies” to sub- ordinates), (2) supportive leadership (friendly and approachable, demonstrating concern for the well-being and personal needs of subor- dinates), (3) achievement-oriented leadership (leaders who set challenging goals, expect best performances, and show confidence in subor- dinates’ performance), and (4) participative leadership (leaders who consult with subordi- nates and elicit their suggestions before mak- ing a decision).

Situational variables play a major role in this theory such as: (1) subordinate characteristics (ability, need for self-esteem and self-actualization, and personality traits such as rigidity, authoritar- ianism, and closed-mindedness) and (2) task characteristics (ambiguous to nonambiguous, simple versus difficult, stressful versus non- stressful, dull versus interesting, and safe versus dangerous). These variables, coupled with leader style, assist in work outcomes.

Normative Decision Theory Vroom-Yetton-Jago’s normative decision-making model was originally developed in 1973 and sub- sequently modified in 1988.16 The model assumes that no one decision-making model is appropri- ate. However, the theory postulates that there are two types of decision-making styles adopted by

to have questionable success.11 However, the contingency model does not explain why leader-situation matches or mismatches occur.12 To help bridge the gap-filled reality constructed by Fiedler, other theories contend that the per- sonalities of leaders are not as pertinent as the awareness of their leadership styles, in addi- tion to how they use their self-awareness or self-knowledge to adapt to situations, instead of attempting to change the situation to reflect their style.12

1970s House’s Path-Goal Theory Developed in 1971, House’s path-goal model is based on expectancy motivation theory (that is, people are motivated by an expectation of a reward, in simple terms). In this theory, leaders make paths to goals as clear as possible based on the current situation, environment, and person- nel surrounding and competing with the goal. The premise of the theory is that the leader will have a positive impact on the follower’s moti- vation toward the goal. It is coined a path-goal approach because leader behavior is expressed in terms of a leader’s influence in clarifying the paths followers travel toward work and personal goal attainment.13 An important proposition of path-goal theory suggests that when task demands are unclear or ambiguous, decreased employee satisfaction and unlikely accomplish- ment of the goal happen.14 To be effective, the leader must adapt behavior to the task at hand, subordinate’s needs, and how his or her efforts will be perceived by subordinates.15 Leader- ship training could then focus on matching the appropriate behavior to the situation, and lead- ers would know when to choose between lead- ership structure and follower consideration.

As Yukl suggests, this theory attempts to combine basic elements of Vroom’s expec- tancy theory of motivation with a situational perspective.5 According to the expectancy the- ory, motivation depends on a person’s belief that effort will lead to performance, and that

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different member of the group, called a “dyadic.” Graen and Cashman later coined the term ver- tical dyad linkage (VDL), where leaders and members of each dyad form leader-group inter- actions, judgments, and opinions. The key with this theoretical model of leader behavior is that the emphasis is on the interaction of the leader with the supervised group. For example, the leader exchanges resources, such as increased job latitude, influence on decision making, and open communication, for members’ commit- ment to higher involvement in organizational functioning. This research embraces the social exchange theory that suggests that leaders must offer an exchange (bonus, increased status, etc.) for improved or additional performance by sub- ordinates. This approach has been criticized because it does not study the organizational out- comes associated with the exchange relationship and links exchanges in diverse and inconsistent ways. However, the obvious reality of many leaders treating employees differently based on personal relationships is a common reality in the workforce that merits additional attention.

Situational Leadership Theory From 1969 through 1977, Hersey and Blanchard developed the situational leader- ship theory.19 Situational leadership theory (SLT) is defined as a leadership style driven by the situation at hand. This model specified the readiness of followers, defined as the abil- ity and willingness to accomplish a specific task, as the major contingency that influences appropriate leadership style. Situational lead- ership theory is based on the relationship of three components: (1) directive behavior (task behavior) the leader provides followers; (2) the amount of supportive behavior (relational behavior) a leader provides; and (3) the devel- opment level (maturity) of the follower, which is derived from the amount of competence and commitment demonstrated while perform- ing a specific task. Competence is the degree of knowledge or skills gained from education, training, and/or experience needed to do the

leaders: group decisions and individual decisions. These decisions are then defined based on per- sonnel resources and the situation. Additionally, the normative decision theory proposed that the effectiveness of a leader’s decision-making style is contingent on situational factors.17 For example, the authors suggest that the effective- ness of a decision is a function of three classes of outcomes, each of which may be affected by the decision process used. These are the quality or rationality of the decision, the acceptance or com- mitment on the part of subordinates to execute the decision effectively, and the amount of time required to make the decision. The authors state that when the task is familiar and followers sup- portive, then it is appropriate for a leader to adopt an autocratic style. When the task is ambiguous, then the leader should use consultative strategies, and when follower support is in question, then the leader should use a participative strategy. The shortcoming of this theory is that it is mainly pre- scriptive and does not address what leaders actu- ally do when faced with a particular situation. The theory is also limited to decision making and neglects other important leadership elements such as motivation and the development of fol- lowers. The normative decision theory provided a foundation for subsequent leadership theories, such as the situational leadership theory.

Leader-Member Exchange Theory Graen and Cashman posited the leader member exchange theory (LMX) in 1975.18 This model suggests that leaders accomplish work through various personal relationships with different members of the group. Leaders give tasks that are more positive to members who they feel support them. LMX suggests behavior is not consistent across subordinates. As a result, lead- ers classify subordinates into two groups: an in-group and an out-group. Subsequently, the leader adapts to individual needs for direction, contact, and supervision on a follower basis. This creates a unique relationship with every

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Late 1970s Through 1980s Transformational Leadership Burns introduced the transformational leader- ship model into literature in 1978.21 Transfor- mational leadership is a process where leaders and followers raise one another to higher levels of motivation. This model borrows from earlier trait theories developed earlier in the decade. In the transformational model, the leader motivates followers through internal rewards. Leader moti- vation techniques include emphasis on personal charisma, individual attention to the follower and intellectual stimulation of the task. Trans- formational leaders motivate followers through appealing to strong emotions within the group.

Within the study of transformational leaders, Burns posited two types of leaders, transactional and transformational.21 Trans- actional leadership attempts to preserve and adhere to existing work constraints, while transformational leadership seeks to upset and alter norms. Transactional leaders exchange rewards and promises for their team members’ efforts. Transformational leaders are visionar- ies who seek to raise the level of consciousness in their followers and promote the goals of the organization, not individuals.

Burns has suggested that transactional lead- ership involves values, but they are values relevant to the exchange process. These values include honesty, fairness, responsibility, and reciprocity. Furthermore, the theory suggests that bureau- cratic organizations enforce the use of legitimate power and respect for rules and tradition rather than influence based on inspiration. For Burns, leadership is a process, not a set of discrete acts. Burns described leadership as “a stream of evolv- ing interrelationships in which leaders are con- tinuously evoking motivational responses from followers and modifying their behavior as they meet responsiveness or resistance, in a ceaseless process of flow and counter-flow. At the macro level of analysis, transformational leadership involves shaping, expressing, and mediating conflict among groups of people in addition to motivating individuals.”5

task, and commitment is defined as the combi- nation of confidence and motivation displayed by the follower to do the task. A follower can be competent but not committed to do a task, consequently needing support to regain the devotion to accomplish the task.

SLT also suggests that individual leader- ship style should be matched to the maturity of the subordinates.20 Situational leadership theory demonstrates that there is no one best style of leadership. People in leadership and management positions become more effec- tive when they use a leadership style that is appropriate to the development level of the individual or group they want to influence. Maturity is assessed in relation to a specific task, and the psychological maturity and job experience of the follower. The leader may then exercise various levels of delegating, participating, selling, and telling in com- pleting assigned tasks and goals. Application of the correct leadership style based on the developmental level of the follower or group is the key ingredient in this model; however, sometimes there are situational variables that may affect the leadership style. Some situa- tional variables are time constraints, super- visory demands, and job demands. Each style varies the leadership approach based on the aforementioned situational factors. Most recent leadership approaches include additional dimensions of leadership, whether or not the leader utilizes a transactional or transformational style.

While contingency and normative decision approaches are both types of situational theory, Hersey-Blanchard’s approach is more centric as it depends on the amount of tasks and people that the leader adopts in reference to the level of subordinates’ commitment and competence. The greater the subordinates’ level of com- mitment and competence, the less the leader has to provide task-based and relation-based leadership. The situational leadership theory holds that successful leadership is achieved by selecting the correct leadership style depending upon the readiness of the followers.

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■ Passive Management by Exception: use of contingent punishments and other corrective action in response to obvious deviations from acceptable performance standards

Servant Leadership As first described by Greenleaf in the 1970s the term “servant-leader” probably best describes the leadership approach health pro- fessionals should embrace. In 2004, Hackman and Johnson elaborate on servant leadership by identifying five foundational principles.22 The first principle is a concern for people. Servant-leaders believe that healthy orga- nizations care for their members. They use terms like civility and community to char- acterize working relationships. The second principle of servant leadership is steward- ship. Servant-leaders hold their organiza- tions, including their resources, in trust for others. The third principle is equity and the fourth principle of servant leadership is indebtedness—which bring with it account- ability and commitment. The fifth princi- ple for servant-leaders is self-understanding. These leaders analyze their motives, seek out opportunities for personal and professional growth, and regularly take time to examine their own attitudes and values. They create a positive climate for others by striving to be trusting, insightful, and open to new ideas and the perspectives of others.

Maccoby’s Psychoanalytic Model of Leadership Through his research, interviews, and inves- tigations in 1976 and beyond, psychoanalyst Michael Maccoby23 identified four distinct leader personalities or types:

The Craftsman. The Craftsman is the type of person who takes pride in their craft. They are subject matter experts on one thing, often

In 1985, Bass built on Burns’s work and proposed a theory of transformational lead- ership that is measured primarily in terms of the leader’s effect on followers.5 Followers of a transformational leader feel:

■ trust ■ admiration ■ loyalty ■ respect

And they are motivated by the leader to do more than the original expectation:

■ By making followers more aware of the importance of task outcomes

■ By inducing them to transcend their own self-interest for the sake of the team

■ By activating their higher-order needs

Bass’s original theory included three behaviors of transformational leaders; the fourth was added later to transformational behaviors:

■ Charisma: leader influences followers by arousing strong emotions and identifica- tion with the leader

■ Intellectual Stimulation: leaders increase follower awareness of problems and influ- ence followers’ view as problems from a new perspective

■ Individualized Consideration: provid- ing support, encouragement, and devel- opmental experiences for followers

■ Inspirational Motivation: extent that the leader communicates an appealing vision using symbols to focus subordinate effort and model (role modeling; Bandera’s social learning theory) appropriate behavior

Like Burns (1978), Bass viewed transac- tional leadership as an exchange of rewards for compliance; transactional behaviors are:21

■ Contingent Reward: clarification of work required to obtain rewards

■ Active Management by Exception: moni- toring subordinates and corrective action to ensure that the work is effectively accomplished

Leadership Phase Evolution 71

9781284109825_CH06_Print.indd 71 26/07/17 8:16 PM

The Gamesman. The Gamesman is the new- est type of organizational personality and was created by Maccoby. Gamesmen feel the orga- nizational environment is a game they have to “win.” Money isn’t the end result unless it is part of a goal. Gamesmen want to achieve, compete, and succeed in any given environ- ment. They are very success-driven, often, as Maccoby discovered, at the risk of alienating emotional attachments.

Unfortunately, Maccoby found that the drive that propels many gamesmen to the top of their fields often stands in the way of their emotional well-being. He proposes the idea that the corporate culture that promotes cor- porate “winning” and being “better” than oth- ers extinguishes the idea of true cooperation and compassion.

2000s Adaptive Leadership Theory As described in 2009 by Ronald Heifetz, Alexander Grashow, and Marty Linsky, at the Center for Public Leadership at Harvard University, adaptive leadership is the prac- tice of mobilizing people to tackle tough challenges and thrive.24 Heifetz, who trained as a physician, draws from evolutionary biology, to explain the concept of thriving in organizations as a type of successful adap- tation. This approach in natural systems, has three characteristics: (1) it preserves the DNA essential for continued survival; (2) it repels, reregulates, or rearranges the DNA that no longer serves current needs; and (3) it creates new DNA arrangements enhanc- ing the ability to flourish in new ways and in new challenging environments. Success- ful adaptations enable a living system to take the best of its past into the future. Of course, new challenges always await, whether the system be an organism or an organization. In their book, The Practice of Adaptive Lead- ership, the authors offer six analogies from

spending their entire lives working on one endeavor, skill, or field. They are career spe- cialists who value their “craft” or specialization over promotion or interaction; they get emo- tional satisfaction from being good at their niche.

The Jungle Fighter. Jungle Fighters are people who are highly competitive and play political games in an attempt to get to the top of an organization. They play peo- ple against each other, manipulate their co-workers, and use those below them for their own personal gain. They are largely political creatures who do whatever is nec- essary to get ahead.

The Company Man (Person). The Com- pany Person is the type of individual who throws themselves at the will of the organi- zation because they fear the repercussions of not doing so. Often they will do any job, take any position for the betterment of the organi- zation, and side with leaders on all decisions. They are submissive and do whatever it takes to not get fired.

BOX 6-1 Characteristics of Servant Leadership

1. Active Listening 2. Empathy 3. Healing Orientation 4. Awareness of Self and Others 5. Persuasion Skills 6. Conceptual Abilities 7. Foresight and Vision 8. Stewardship of Resources 9. Helping people grow

10. Building community within and outside the Organization

Data from Hackman, MZ and Johnson, CE. Leadership: A Communication Perspective. Long Grove: Waveland Press.25

72 Chapter 6 Organizational Leadership Theory

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familiar with the various theories and their implications for the organization, there is a greater likelihood that they can improve their own leadership effectiveness.

▸ Conclusion This chapter has presented a chronologi- cal overview of leadership theories in order to present information and ideas that have formed the foundation to modern leadership thought. The progression from great person, to trait, to behavior, to situational or contin- gency leadership along with servant leader and adaptive theories has been presented. Unfortunately, not all leadership theories can be listed in this chapter. However, the key and seminal leadership theories presented here have formed the lineage and foundation to modern leadership study. TABLE 6-4 below provides an overview of the range of theories presented and assists in understanding the niche-specific goals of each theoretical lead- ership theory.

In summary, the study of leadership is complex, interconnected with all aspects of organizational life, and is essential to the suc- cess of any organization. This chapter sets the foundation of leadership study over the past century and establishes the basis for a better understanding of subsequent topics on orga- nizational behavior and development, in this book.The importance of understanding the concept of “leading people and managing resources” is critical in that situational assess- ment, motivation, and communication are key skills of successful leaders. The following table serves as the chapter summary for the leadership models presented. Going beyond where we currently are and into the mid-21st century we are likely to see even newer models. Perhaps transcendental leadership, quantum leadership, or transhuman (AI) leadership will emerge as worthy of study by social scientists and organizational theorists.

the natural world that can inform organiza- tional leaders.24 These are summarized by Johnson in 2013 as follows:25

■ Adaptive leadership is specifically about change that enables the capacity to thrive.

■ Adaptive change builds on the past, being both conservative and progressive.

■ Organizational adaptation occurs best when there is experimentation.

■ Organizational adaptation relies on diver- sity; variation is central to system evolution.

■ Innovations and new adaptations displace, reregulate, and rearrange old patterns.

■ Organizational adaptation takes time and cultures change slowly.

A more recent 2017 study by Johnson and Chrisfort26 extends the work of Maccoby and others who look to personality theory to help explain different leadership styles and their effectiveness. Johnson et al., specifically identify four styles; many leaders’ behavior and ways of thinking are aligned with one or two of these styles. The four are: (1) Pio- neers; (2) Guardians; (3) Drivers; and (4) Inte- grators. Pioneers are leaders who most value possibilities, often believing that risks are worth taking. They inspire their teams with imagination and creative approaches to solv- ing big problems. As leaders, Guardians tend to value stability and they focus on bringing order and rigor to their organizations. They also value data and tend toward being prag- matists. Drivers also value data, but mostly focus on winning and getting results, often viewing issues in black-and-while terms. The fourth style is the Integrators. This style of leadership values connections and relationships. They are often viewed as nat- ural diplomats in the organization and with stakeholders.

As with many of the leadership theories presented in this chapter, it would be diffi- cult to state in a declarative way that there is a one best approach for health organizations. However, when a leader has chosen to become

Conclusion 73

9781284109825_CH06_Print.indd 73 26/07/17 8:16 PM

TA BL

E 6-

4 Su

m m

ar y o

f L ea

de rs

hi p T

he or

ie s a

nd M

od el

Th eo

ry Go

al An

te ce

de nt

am ew

or k

Co ns

tr uc

ts Va

ri ab

le s

Re la

ti on

sh ip

Ut ili

ty fo

r Gr

ea te

r Un

de rs

ta nd

in g

in P

ra ct

ic e

C ar

ly le

, G

al to

n , a

n d

m es

’s “g

re at

an ” t

h eo

(1 84

0– 18

80 )

Id en

tif y

im m

ut ab

le tr

ai ts

p as

t l ea

d er

s so

fu tu

re le

ad er

s ca

n b

e id

en tif

ie d

M os

t l ik

el y

M ac

h ia

ve lli

Ph ys

ic al

ar ac

te ris

tic s

Im m

ut ab

p hy

si ca

l ch

ar ac

te ris

tic s

Pr oc

es si

on o

f ch

ar ac

te ris

tic s

le ad

er sh

ip .

Ev ol

ve d

in to

tr ai

t th

eo ry

o ve

r t im

Le w

in , L

ip p

itt ,

an d

W h

ite ’s

tr ai

t t h

eo ry

93 8–

19 39

)

Id en

tif y

m ut

ab le

ai ts

o f p

as t

le ad

er s

so th

fu tu

re le

ad er

s ca

n b

e id

en tif

ie d

G re

at m

th eo

ry In

te lli

g en

ce ,

p hy

si ca

l s ta

tu re

, ex

tr av

er si

O ut

co m

es o

f in

te lli

g en

ce ,

ex tr

av er

si on

, p

hy si

ca l s

ta tu

Th os

e w

ith

“le ad

er sh

ip ”

tr ai

ts s

h ou

ld b

e g

oo d

le ad

er s.

In co

rp or

at ed

to b

ro ad

le ad

er sh

m od

el s

su ch

b eh

av io

ra l

an d

s itu

at io

n al

eo rie

M cG

re g

or ’s

Th eo

ry X

a n

Th eo

ry Y

(1 95

Id en

tif y

la zy

a n

se lf-

m ot

iv at

in g

er so

n n

Ea rly

tr ai

t th

eo rie

s La

zi n

es s

an d

ot iv

at io

n Va

rio us

La zi

n es

s eq

ua ls

ilu re

a n

m ot

iv at

io n

ua ls

s uc

ce ss

Su g

g es

m ot

iv at

le ad

er s

ca n

h ie

ve m

or e

th an

la zy

le ad

er s

St og

d ill

a n

C oo

n s’s

O h

Le ad

er sh

St ud

ie s

(1 95

Id en

tif y

in d

iv id

ua l

d im

en si

on s

b eh

av io

Ea rly

tr ai

t th

eo rie

s In

iti at

in g

ru ct

ur e

an d

n si

d er

at io

W or

k- re

la te

va ria

b le

s an

sa tis

fa ct

io n

Le ad

er s

w h

o se

t h

ig h

s ta

n d

ar d

s w

h ile

re sp

ec tin

em p

lo ye

ac h

ie ve

h ig

ou tc

om es

O rg

an iz

at io

n al

an ag

em en

t d

es ig

74 Chapter 6 Organizational Leadership Theory

9781284109825_CH06_Print.indd 74 26/07/17 8:16 PM

M ic

h ig

Le ad

er sh

St ud

ie s

(1 95

Id en

tif y

le ad

ob je

ct iv

as so

ci at

ed w

ith

p er

fo rm

an ce

fe ct

iv en

es s

Ea rly

tr ai

t th

eo rie

s Em

p lo

ye e

or ie

n te

d a

n d

ro d

uc tio

or ie

n te

Sa tis

fa ct

io n

a n

g oa

l a tt

ai n

m en

t Fo

cu s

is o

em p

lo ye

e ta

p er

fo rm

an ce

Ta sk

g an

iz at

io n

d e

m p

lo ye

e w

or kl

oa d

Ka tz

’s sk

ill s

th eo

(1 95

5) Id

en tif

y in

d iv

id ua

l d

im en

si on

s of

eh av

io r

Ea rly

tr ai

t th

eo rie

s Te

ch n

ic al

, co

n ce

p tu

al , a

n d

um an

a b

ili tie

Va rio

us tr

ai ts

a n

ou tc

om es

M us

t h av

e al

l th

re e

to b

e su

cc es

sf ul

Pr od

uc tio

ou tc

om es

A rg

yr is

’s p

er so

n al

ity a

n d

g an

iz at

io n

eo ry

(1 95

O rg

an iz

at io

n al

ar n

in g

Fl ed

g lin

h um

an is

tic

th eo

rie s

O rg

an iz

at io

n s,

ar n

in g,

a n

em p

lo ye

e m

en ta

l m

ap s

G ov

er n

in g,

tio n

, a n

co n

se q

ue n

ce s

In st

itu tio

n al

or m

s an

cu ltu

re s

M ea

su re

m en

t o f

or g

an iz

at io

na l

ou tc

om es

fe ct

ed b

y th

e le

ad er

Bl ak

e an

M ou

to n’

s m

an ag

er ia

l g

rid (1

96 4)

Fo cu

s on

tit ud

es Ea

rly tr

ai t

th eo

rie s,

ot iv

at io

n , a

n d

an ag

em en

t re

se ar

ch in

ra ct

ic e

C on

ce rn

fo r

re su

lts a

n d

n ce

rn s

fo r

p eo

p le

Sa tis

fa ct

io n

, ou

tc om

es , a

n d

ro d

uc tiv

ity

Th os

e w

ith h

ig h

tin g

s fo

r b ot

p eo

p le

a n

re su

lts a

re m

os t

ef fe

ct iv

Te am

b ui

ld in

an d

c on

se n

su s

m ak

in g

Er ik

so n’

s p

sy ch

oa n

al yt

th eo

ry (1

96 4)

Ps yc

h oa

n al

ys is

eo ry

Ea rly

s tu

d ie

s of

eu d

(1 91

3) a

n d

om m

(1 94

Fa th

er fi

g ur

e ro

le ,

m en

to rin

g, a

n d

Pl ea

si n

g a

n d

fe ar

ro p

os iti

on : M

y su

b or

d in

at es

a re

y ch

ild re

n ; t

h ey

us t r

es p

ec t m

In te

rs ub

je ct

iv e

ob je

ct , r

el at

io n

co n

te xt

Ea rly

b eh

av io

r st

ud ie

s on

ya lty

a n

en g

en d

er in

TA BL

E 6-

4 Su

m m

ar y o

f L ea

de rs

hi p T

he or

ie s a

nd M

od el

Conclusion 75

(c on

tin ue

9781284109825_CH06_Print.indd 75 26/07/17 8:16 PM

Th eo

ry Go

al An

te ce

de nt

am ew

or k

Co ns

tr uc

ts Va

ri ab

le s

Re la

ti on

sh ip

Ut ili

ty fo

r Gr

ea te

r Un

de rs

ta nd

in g

in P

ra ct

ic e

Fi ed

le r’s

n tin

g en

m od

el (1

96 4)

Id en

tif y

va ria

b le

s af

fe ct

in g

g ro

p er

fo rm

an ce

M ot

iv at

io n

a n

m an

ag em

en t

Si tu

at io

fa vo

ra b

le n

es s/

p re

fe rr

co w

or ke

r s ca

Ta sk

a n

re la

tio n

sh ip

ie n

ta tio

Th e

m or

e fa

vo ra

b le

th e

re la

tio n

sh ip

r p er

ce iv

re la

tio n

sh ip

) b

et w

ee n

th e

le ad

er a

n d

e fo

llo w

er ,

th e

h ig

h er

th e

d eg

re e

of ta

or ie

n ta

tio n

Ps yc

h ol

og y,

an ag

em en

t te

am s

H ou

se ’s

p at

h -

g oa

l m od

(1 97

Pr ed

ic t

le ad

er sh

ef fe

ct iv

en es

s b

as ed

o n

m m

un ic

at io

of le

ad er

in te

n t;

ex p

ec ta

n cy

ot iv

at io

th eo

Ea rli

er w

or ks

e xp

ec ta

n cy

, m

ot iv

at io

n ,

an d

le ad

in te

n t;

Vr oo

m ’s

ex p

ec ta

n cy

eo ry

Pe rc

ep tio

n of

or k,

s el

f- d

ev el

op m

en t,

an d

p at

h to

g oa

ls ;

co m

m un

ic at

io ns

: d

ire ct

iv e,

p p

or tiv

p ar

tic ip

at iv

e, a

ac hi

ev em

en t

or ie

nt ed

Re w

ar d

s, g

oa ls

, ac

co m

p lis

h m

en ts

, p

er so

n al

ar ac

te ris

tic s,

vi ro

n m

en t

Le ad

b eh

av io

r w ill

e m

ot iv

at io

n al

th e

ex te

n t

it as

si st

s su

b or

d in

at es

a cc

om p

lis h

si g

n ed

g oa

ls .

M an

ag em

en t

co m

m un

ic at

io n

TA BL

E 6-

4 Su

m m

ar y o

f L ea

de rs

hi p T

he or

ie s a

nd M

od el

76 Chapter 6 Organizational Leadership Theory

(c on

tin ue

9781284109825_CH06_Print.indd 76 26/07/17 8:16 PM

Vr oo

m –Y

et to

n –

Ja g

o’ s

n or

m at

iv e

d ec

is io

n -m

ak in

m od

el (1

97 3)

N o

on e

d ec

is io

n -

m ak

in g

m od

el is

p ro

p ria

te .

Ea rli

er w

or k

d ec

is io

n m

ak in

g Q

ua lit

y or

tio n

al ity

o f t

h e

d ec

is io

n , t

h e

ac ce

p ta

n ce

, o r

th e

co m

m itm

en t

on th

e p

ar t o

f su

b or

d in

at es

e xe

cu te

e d

ec is

io n

fe ct

iv el

y, a

n d

e am

ou n

t o f

tim e

re q

ui re

to m

ak e

th e

d ec

is io

Va rio

us Be

tt er

d ec

is io

m ak

in g

ac h

ie ve

th ro

ug h

al an

ci n

co n

st ru

d im

en si

on s.

D ec

is io

n m

ak in

G ra

en ’s

le ad

er -

m em

b er

ch an

g e

an d

rt ic

al d

ya d

lin

ka g

e (1

97 5)

Ta sk

s ar

e ac

co m

p lis

h ed

as ed

o n

er so

n al

la tio

n sh

ip s.

Ka tz

a n

d K

ah n’

s (1

96 6)

w or

k on

m ot

iv at

io n

, eq

ui ty

, a n

or g

an iz

at io

n al

tiz en

sh ip

eh av

io r

Ve rt

ic al

d ya

lin ka

g e

In -g

ro up

a n

ou t-

g ro

up Sa

tis fa

ct io

n w

ill

b e

h ig

h er

w ith

e in

-g ro

up ,

le ad

in g

th os

e in

d iv

id ua

to w

ar d

g oa

l at

ta in

m en

M ot

iv at

io n

, sa

tis fa

ct io

n ,

d el

eg at

io n

H er

se y

an d

an ch

ar d

’s si

tu at

io n

le ad

er sh

m od

el (1

97 7)

Fo ur

le ad

ch oi

ce s:

te ll,

s el

l, p

ar tic

ip at

e, o

r d

el eg

at e

G ra

en ’s

le ad

er -

m em

b er

ch an

g e

th eo

ry , v

er tic

d ya

d li

n ka

g e,

d o

th er

te ce

d en

t th

eo rie

D ire

ct iv

e b

eh av

io r,

su p

p or

tiv e

b eh

av io

r, d

ev el

op m

en t

le ve

St ru

ct ur

e va

ria b

le s

of ti

m e,

p er

vi so

d em

an d

s, a

n d

jo b

em an

d s

O p

tim iz

in g

e le

ad er

sh ip

as ed

o n

th e

en vi

ro n

m en

ta l

co n

st ra

in ts

ax im

iz es

tc om

es .

D el

eg at

io n

a n

d ec

is io

n m

ak in

TA BL

E 6-

4 Su

m m

ar y o

f L ea

de rs

hi p T

he or

ie s a

nd M

od el

Conclusion 77

(c on

tin ue

9781284109825_CH06_Print.indd 77 26/07/17 8:16 PM

TA BL

E 6-

4 Su

m m

ar y o

f L ea

de rs

hi p T

he or

ie s a

nd M

od el

Th eo

ry Go

al An

te ce

de nt

am ew

or k

Co ns

tr uc

ts Va

ri ab

le s

Re la

ti on

sh ip

Ut ili

ty fo

r Gr

ea te

r Un

de rs

ta nd

in g

in P

ra ct

ic e

H ou

se ’s

ch ar

is m

at ic

ad er

sh ip

m od

(1 97

In flu

en ce

a n

fo llo

w er

sh ip

M ax

W eb

er ,

ea rly

th eo

rie s

ch ar

is m

D om

in an

ce ,

in flu

en ce

, co

n fid

en ce

, a n

va lu

Su cc

es s,

c ul

tu re

, an

d c

h an

g e

Fo llo

w er

sh ip

a ch

ie ve

th ro

ug h

m e

d iv

in e

p er

so n

al ity

tr ai

t th

at c

an n

ot b

e m

ea su

re d.

Va rio

or g

an iz

at io

n al

d in

d iv

id ua

l tr

ai t o

ut co

m es

Bu rn

s’s

tr an

sf or

m at

io n

le ad

er sh

ip m

od el

97 8)

Le ad

er s

an d

llo w

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80 Chapter 6 Organizational Leadership Theory

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9781284109825_CH06_Print.indd 80 26/07/17 8:16 PM

Review/Discussion Questions 1. What traits, behaviors, personality,

and situational factors can you list of a leader you admire, and what makes you admire them?

2. How would you define leadership, and what would your leadership model look like?

3. What three critical success factors would make you a good leader and why?

4. What does it mean to “Lead People and Manage Resources” within the health organization context?

5. Why do you want to be a leader and what is your “vision” of leadership?

6. Explain the progression of leadership theories and models through time and how models are “built” upon each other?

7. Are the models presented descriptive or prescriptive? Explain.

8. To serve as the case study discussion question, without using names, what person in your experience was a great leader and who was a poor leader? What attributes of leadership were most profound in both cases and what con- text did you observe in those leaders?

References 1. Wintle J. The Dictionary of War Quotations. New York:

Free Press; 1989. 2. Hughes RL, Ginnett RC, Curphy GJ. Leadership—

Enhancing the Lessons of Experience. 3rd ed. New York: Irwin/McGraw Hill; 1999.

3. Lewin K, Lippitt R. An experimental approach to the study of autocracy and democracy: A preliminary note. Sociometry. 1938;1:292–300.

4. Lewin K, Lippitt R, White R. Patterns of aggressive behavior in experimentally created social climates. J Soc Psychol. 1939;10:271–301.

5. Yukl G. Leadership in Organizations. 3rd ed. Engle- wood Cliffs, NJ: Prentice Hall; 1994.

6. Bedeian AG. Management, Effective Leadership. New York: Dryden Press; 1986.

7. Gordon J. A Diagnostic Approach to Organizational Behavior. 3rd ed. Englewood Cliffs, NJ: Prentice Hall; 1991.

8. Filley AC. The Complete Manager. Champaign, IL: Research Press; 1978:57–60.

9. Fiedler FE. A Theory of Leadership Effectiveness. New York: McGraw-Hill; 1967.

10. Schein EH. The Corporate Culture Survival Guide: Sense and Nonsense About Culture Change. San Francisco, CA: Jossey-Bass; 1999.

11. Jago AG. Leadership: Perspectives in theory and research. Manage Sci. 1982;28:315–336.

12. Northouse PG. Leadership Theory and Practice. Thousand Oaks, CA: Sage Publications; 2001.

13. Mawhinney TC, Ford JD. The path goal theory of leader effectiveness: An operant Interpretation. Acad Manage Rev. 1977;2:398–411.

14. Greene CN. Questions of causation in the path-goal theory of leadership. Acad Manage J. 1979;22:22–41.

15. Schriesheim C, Glinow M. The path-goal theory of leadership: A theoretical and empirical analysis. Acad Manage J. 1977;20:398–405.

16. Vroom VP, Jago A. The New Leadership: Managing Participation in Organizations. Englewood Cliffs, NJ: Pretence Hall; 1988.

17. Vroom VH, Yetton PW. Leadership and Decision- Making. Pittsburgh, PA: University of Pittsburgh Press; 1973.

18. Graen GB, Cashman JF. A role making model in formal organizations: A developmental approach. In Hunt JG, Larson LL, eds. Leadership Frontiers. Kent, OH: Kent State University Press; 1975:143–165.

19. Hersey P, Blanchard K. Management of Organizational Behavior: Utilizing Human Resources. Englewood Cliffs, NJ: Prentice-Hall; 1969.

20. Hersey P, Blanchard K. Management of Organizational Behavior: Utilizing Human Resources. 2nd ed. Engle- wood Cliffs, NJ: Prentice-Hall; 1977.

21. Burns J. Leadership. New York: Harper Row; 1978. 22. Hackman MZ, Johnson CE. Leadership: A Communi-

cation Perspective. Long Grove: Waveland Press; 2009. 23. The Gamesman. The New Corporate Leaders Michael

Maccoby. New York: Simon and Schuster; 1976. 24. Heifetz R, Grashow A, Linsky M. The Practice of

Adaptive Leadership. Cambridge: Harvard Business Press; 2009.

25. Johnson JA. Management, Leadership, Strategy, and Systems Thinking, in Introduction to Public Health Management, Organizations, and Policy. Clifton Park: NJ: Cengage; 2013.

26. Johnson SM, Chrisfort K. Pioneers, drivers, integrators, and guardians. Harv Bus Rev. March– April 2017;95:50–57.

Conclusion 81

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PART 2

Organization Behavior and Dynamics “It is the theory that decides what is to be observed.”

— Albert Einstein

CHAPTER 7 Human Behavior and Motivation in Health Organizations . . . . . . . . . . . . . . . . . . . 85

CHAPTER 8 Group Dynamics and Teams in Health Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

CHAPTER 9 Power and Politics in Health Organizations . . . 113

CHAPTER 10 Conflict Theory and Interpersonal Dynamics in Health Organizations . . . . . . . . . . . . . . . . . . 122

CHAPTER 11 Models of Leadership Strategy and Influence for Health Organizations . . . . . . 133

CHAPTER 12 Decision Making, Analytics, and Communication in Health Organizations . . . . 155

CHAPTER 13 Pathology and Dysfunction in Health Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . 175

CHAPTER 14 Diversity and Organizational Culture in Health Organizations . . . . . . . . . . . . . . . . . . . 185

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CHAPTER 7

Human Behavior and Motivation in Health Organizations

LEARNING OBJECTIVES

■ Become familiar with theories of behavior. ■ Identify different types of motivation. ■ Describe theories of motivation at the workplace. ■ Describe three elements of intrinsic motivation. ■ Understand changes in motivation. ■ Understand the impact of age on motivation in the workplace. ■ Understand the impact of culture on motivation in the workplace. ■ List the top contributing factors to job satisfaction. ■ Describe ways to create a successful learning culture.

OVERVIEW

This chapter provides the student with an overview of individual behavior and motivation. A number of theories of individual behavior and motivation are examined in addition to theories of motivation in the workplace. Intrinsic motivators, impact of age and culture, and other influences on motivation are considered. Finally, United States job satisfaction data, contributing factors, and strategies to enhance job satisfaction are shared.

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some of the theories of motivation and the behaviors that result from the different types of motivation.

▸ Theories of Motivation Abraham H. Maslow’s Theory In 1943, A. H. Maslow published the article “A Theory of Human Motivation” in the journal Psychological Review.1 He began with an over- view of 13 propositions that he stated must be included in a definition of motivation and fol- lowed the overview by presenting his theory, which is composed of a hierarchy of five goals or basic needs, as shown in FIGURE 7-1.

▸ Introduction

Individual behavior and motivation have been and continue to be a conundrum for most people. Why does one student study four hours a day and another student never take home a book? Why does that team always seem to win while others always seem to lose? Some individuals dedicate their lives to a pro- fession or a sport, while others have the talent or intelligence but do not spend the time or energy to develop the skills necessary to suc- ceed. What is the difference between these individuals? Motivation is important to every- one involved in leading others and encour- aging them to act. This chapter will explore

FIGURE 7-1 Maslow’s Hierarchy of Needs

86 Chapter 7 Human Behavior and Motivation in Health Organizations

Self-actualization

Creativity, problem solving,

authenticity, spontaneity

Esteem

Self-esteem, con�dence, achievement

Social needs

Safety and security

Physiological needs (survival) air, shelter, water, food, sleep, sex

Adapted from Maslow 1954

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new or enhanced diagnostic tools, healthcare professionals must often learn new skills in order to provide the most up-to-date service. Training and continual education have become part of the healthcare professional’s career. Maintaining a position within a healthcare system requires learning new skills and ensures that the sec- ond level of the hierarchy, safety, which refers to job security, becomes satisfied. The camara- derie among employees fulfills the social need for belonging to a group. As employees become more skilled, they also add to the fourth level, self-esteem, because they become more valu- able to the organization. Thus, Maslow’s theory regarding different levels of motivation may be demonstrated by the behaviors of healthcare providers. When the lower levels are satisfied, healthcare professionals are motivated to pro- vide excellent care through self-actualization.1, 3

Frederick Herzberg’s Theory In 1959, Frederick Herzberg, along with Maus- ner and Snyderman, published The Motivation of Work, which classified Maslow’s hierarchy into two levels—the three lower levels are known as the hygienes, and the top two levels are the motivators.4 This theory became known as the Two-Factor Theory. The authors proposed that employees need to be satisfied with the hygiene factors, even if the higher- level factors are in place. If lower-level factors such as pay, incentives, and the work environment are improved, employees will quickly become satisfied. Employees will then want more because the motivating factors are not satisfied. The employer must emphasize intrinsic motivators—such as the need for more challenging work—that offer the opportunity for the employee to achieve a level of competence, which leads to self-actualization. Herzberg’s theory postulates that the employee derives satisfaction from the achievement, which is the motivation to do the job well.3

According to Herzberg’s theory, extrin- sic motivation is not as powerful as intrinsic motivation. Many psychologists have tested his assumptions and reported the results of their

At the bottom of the hierarchy, as seen in Figure 7-1, is the lowest level, which addresses physiological needs, such as food, water, and shelter. The second level represents safety needs, which are often fulfilled in a civilized society, but are more evident in war, natural disasters, and other emergencies. The third level represents social needs, which correspond to the human being’s need for love and affection. At the fourth level is esteem needs, the desire for respect from others and for independence and freedom. At the top of Figure 7-1 is self- actualization, which is the need to be fulfilled or maximizing one’s potential and fulfilling one’s passion.2 If needs at the lowest level are not satisfied, an individual will seek to have them satisfied before any others at the higher levels are satisfied. For example, if a person is hungry, especially if the person is starving, he or she will do almost anything to satisfy the need for food. The other needs will be unimportant. However, if the physiological needs are met, the next level of needs becomes prominent. As the needs at one level are met, the person will be motivated to reach satisfaction at the next higher level until reaching the top. At this level, people will have different types of self-actualization. Some will aspire to be an athlete, a lawyer, or even a teacher. In order for self-actualization to occur, the preceding levels must be satisfied. However, the lower-level needs, such as the physiological needs, may take prominence at various times until they are satisfied, at which time the indi- vidual will resume activities designed to satisfy needs at a higher level. Maslow determined that the three lower level needs were extrinsic, from outside the individual, while the top two levels were intrinsic, that is, within the individual.1, 3

Employees in health organizations rep- resent a variety of professionals and staff who are dedicated to providing health services to patients. Their motivation to attain the skills and knowledge necessary to achieve this level of proficiency is evident by their past dedication to academic study and acquisition of specific com- petencies. Because of the continual improve- ments in technology and the development of

Theories of Motivation 87

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The Need for Existence: Similar to Maslow’s psychological and safety needs, it is the most basic, demonstrated by the need for existence, to stay alive and be safe.9

The Need for Relatedness: Fulfilling a need for relationships and social interactions. Similar to Maslow’s belonging and esteem needs, the need for relatedness is manifested by acceptance into society, feeling good about oneself, and caring what others think.

The Need for Growth: The need for per- sonal growth and development, to be creative, and learn. Like Maslow’s self- actualization, the need for growth is fos- tered in a sense of completion, fulfillment, and personal achievement.9

Conceptualized in a linear fashion in FIGURE 7-2, Alderfer believed as Maslow that needs moti- vate individuals to take certain actions. Once lower-level needs are met, new needs are sought. Alderfer proposed an order for needs, however, not as fixed as in Maslow’s hierarchy. Though the need for existence is strong in all individuals, the need for relatedness and growth can change based on the individual’s situation.

Edward Deci’s Theory of Motivation Edward Deci proposed a theory of self- determination in The Psychology of Self- Determination in 1980.10 The Self- Determination Theory (SDT) espouses that intrinsic motivators “relate to the experience of being competent and self-determining.”11 People are motivated by their past experiences and the outcomes of those experiences. Both intrinsic and extrinsic moti- vators cause people to behave in different ways.

studies. Muchinsky5 reported two criticisms of the theory. The first involved the method of data collection, which could have been slanted in favor of the two factors. The second criticism was that other studies have not been able to rep- licate the results. However, Martin Wolf reported that the motivators or content components were more able to predict job satisfaction than were the hygiene or context components.6 Wolf also contended that Herzberg was incorrect “equating ‘satisfaction’ with ‘motivation.’”6

Expectancy Theory Expectancy Theory proposed by Vroom in 1964 suggests that individuals are motivated to expend more or less effort based on the benefits to be gained by devotion of time and energy to a project.7 Porter and Lawler suggest that individuals ask themselves three ques- tions: 1. (Expectancy) Will my effort lead to high performance? 2. (Instrumentality) Will performance lead to outcome? 3. (Valence) Do I find the outcomes desirable?7 As cited by Lunenburg, suggested motivation is related to expectancy, instrumentality, and valence by the following equation: Motivation = Expectancy × Instrumentality × Valence.8

In the first question, the individuals exam- ine the inputs or the levels of effort necessary to achieve the desired outcome or goal. Is there a direct link between the input of work and the desired performance or goal? The second ques- tion demonstrates the individual’s belief that the performance will actually lead to the outcome. Finally, in the third question, the individual examines whether the reward is actually worth the expended effort. It is the strength of an indi- vidual’s preference for a particular reward.8 Is it truly desirable? If there are no worthy rewards, then the individual would lose motivation.

Alderfer’s ERG Theory In 1969, Clayton Alderfer simplified Maslow’s hierarchy from five to three broader needs: existence, relatedness, and growth.

FIGURE 7-2 ERG Theory

88 Chapter 7 Human Behavior and Motivation in Health Organizations

Need for related-

ness

Need for existence

Need for growth

Modified From: Johnson, JA. Introduction to Public Health Organizations, Management, and Policy. Cengage. Kindle Edition. 2013: 212

9781284109825_CH07_Print.indd 88 26/07/17 9:53 PM

which is performing the activity for the pleasure of doing it. For example, extrinsically motivated employees may do their work because their job requires them to complete assignments in order to earn a salary. Intrinsically motivated employ- ees provide service because they enjoy personal fulfillment in the work. The two groups differ in that the first group is responding to a require- ment, whereas the latter group has chosen to perform the activity, which also indicates more autonomy among these employees.

Organismic Integration Theory (OIT) The OIT provides information about various “forms of extrinsic motivation”13 along with elements that influence integration and inter- nalization. FIGURE 7-3 illustrates a continuum that displays various types of motivation from non-self-determined to self-determined.

Moving from left to right, the continuum illustrates the changes from external regula- tion to integrated regulation as the motivation becomes less extrinsic and evolves into intrinsic motivation. Extrinsic motivation lies between intrinsic motivation and lack of motivation, or as Deci describes the concept, amotivation. At the far left of the extrinsic motivators are factors regulated by outside forces, such as supervisors, regulatory agencies, governments, etc. In these situations, the motivator is outside the control of the individual. Moving along the continuum to the right is introjected regulation, which refers to the ability to internalize the activity, but not fully invest in it as an intrinsic motivator. The

Deci indicated that those who are intrinsically motivated demonstrate improved effectiveness, inventiveness, and accomplishment as com- pared to those who are extrinsically motivated. The SDT identified different types of motivation, depending on the particular type of motivation that causes a person to act. The different types include cognitive evaluation theory, organismic integration theory, and basic needs theory.

Cognitive Evaluation Theory Within SDT are elements that address the dif- ferences in motivation due to social and envi- ronmental influences. The cognitive evaluation theory suggests that forms of communication, such as feedback, increase the individual’s level of competence, which also increases that per- son’s motivation for that event. Positive remarks encourage individual motivation in contrast to negative comments that weaken individual moti- vation. In addition, individuals need to feel that they are in control or caused the action in order to have intrinsic motivation enhanced. Relatedness, or connection with others, such as a mother with her infant, may also be significant in strengthen- ing intrinsic motivation. Of course, these con- cepts only apply to those that have the interest and the intrinsic motivation to reach a specific goal.12

Contrasted to intrinsic motivation is extrinsic motivation, which also is considered in the SDT. An individual’s behavior in response to extrinsic motivation depends upon previous experiences. Deci explains extrinsic motiva- tion as an activity that is executed in order to achieve an outcome in contrast to intrinsic,

FIGURE 7-3 Motivation and Regulation Flowchart.

Theories of Motivation 89

Non-self Extrinsic Intrinsic Determined

Motivation MotivationAmotivation

External Regulation

Introjected Regulation

Identified Regulation

Integrated Regulation

Intrinsic Regulation

Modified from “Self-Determination Theory and the Facilitation of Intrinsic Motivation, Social Development, and Well-Being” by Ryan, M.R. and Deci, E.L.

9781284109825_CH07_Print.indd 89 26/07/17 9:53 PM

personal motivation, negotiation, managerial effectiveness, management selection, training, and development.14

Steven Reiss’s Theory Dr. Steven Reiss stated that Maslow’s theory of motivation does explain much of people’s behavior.15 The desires that Dr. Reiss describes are consistent with the thoughts of William James and William McDonald “. . . that our basic needs are genetically determined.”12 In his text Who Am I? The 16 Basic Desires That Motivate Our Actions and Define Our Person- alities, Reiss lists the 16 desires, which are in included in TABLE 7-1.

Although almost everyone can relate to the 16 desires, the intensity is different within each person. This difference is due partially to the genetic diversity among individuals. For example, your mother may exhibit the desire “order,” but you do not exhibit that desire. In fact, you may have a very weak desire to maintain a clean room, but your mother may have a strong desire to see it clean. Individ- uals will also differ in the hierarchy of their desires. One person may consider honor as the most important desire while another per- son has status at the top of his list. Because people are born with these genetic predispo- sitions, these desires remain fairly constant throughout life.

▸ Motivation in the Work Environment

Supervisors often have the task of motivating their employees to increase production, improve a product or a service, deliver it more efficiently, or work more cooperatively with others. In order to accomplish these tasks, employees must have the required skills and the appropri- ate work environment as well as the motivation to perform well. Although an employee may be motivated to accomplish these tasks one time, the level of motivation may not be sufficient to

cause here remains external to the individual; however, the concept is moving toward being internalized. Between introjected and intrinsic motivation is integrated regulation, wherein an individual accepts the regulation and val- ues it as significant. The control has moved to more of an internal regulation. When the reg- ulation becomes intrinsic, individuals discover an increase in autonomy along with personal satisfaction.

Ryan and Deci report that basic needs include physiological and psychological needs, which are competence, autonomy and related- ness. These needs must be satisfied for an indi- vidual to enjoy well-being. Culture plays a role in determining the manner and extent to which an individual’s psychological needs are satisfied. However, the processes by which one acquires this satisfaction do appear comparable.

Basic Needs Theory McClelland’s Theory of Needs, as outlined in FIGURE 7-4, proposes human motivation is affected by three different types of needs: Achievement, Affiliation or Power.14 Needs are acquired and developed over time and through different life experiences.

The Need for Achievement is the need to prove something, to do something better than anyone else before.14 It may be a personal improvement or achievement as the primary motivation. Second, the Need for Power, (or Authority), is a need to dominate and to influ- ence others.14 And finally, the Need for Affiliation, to belong, is to be part of a something and the desire to develop relationships or friendship.14 Individuals possess all three, and depending on the circumstances, the predominant need will prevail. McClelland’s Theory of Need is used in

FIGURE 7-4 McClelland’s Theory of Need

90 Chapter 7 Human Behavior and Motivation in Health Organizations

• Betterment • To prove

• Dominate • Influence

• Be a part • Relationship

Achievement Power Affiliation

Data from McClelland DC, Burnhand DH. Power Is the Great Motivator. Harvard Business Review. https://hbr.org/2003/01/power-is-the-great-motivator. Published January, 2003.

9781284109825_CH07_Print.indd 90 26/07/17 9:53 PM

https://hbr.org/2003/01/power-is-the-great-motivator

involved in motivation; however, many theories do address some of the factors that are inherent in motivation. Author Paul Muchinsky describes theories of work motivation in his book Psy- chology Applied to Work.5 Muchinsky’s theories are need, intrinsic motivation, expectancy, goal setting, equity, and reinforcement. The need and intrinsic motivation theories postulate that people have internal motivation that causes indi- viduals to behave in ways that are enjoyable and ones that the people can control. The expectancy and goal-setting theories are based on the prem- ise that people are rational and choose behaviors that will result in the outcomes that are desired. The equity and reinforcement theories assert that external factors are the motivating factors.

improve performance consistently because of changes in the environment or other factors. The behavior is similar to that seen in Maslow’s hier- archy of needs, wherein a person may be at the self- actualization level until he becomes hungry. The individual will need to satisfy the lower-level need before he can resume activity at the higher level. This section of the chapter will explore motivation and behavior in the work place.

Workplace Theories Many psychologists have attempted to describe reasons for the motivators that explain the behaviors seen in the workplace. No one the- ory has emerged that explains all the factors

TABLE 7-1 Reiss’ s 16 Basic Desires That Motivate Our Actions and Define Our Personalities

Basic Desire Definition Behavior Power Desire to influence others Leadership, achievement

Independence Desire for self-reliance Self-reliance

Curiosity Desire for knowledge Truth-seeking, problem solving

Acceptance Desire for inclusion Assertive behavior

Order Desire for organization Makes many rules, clean, “perfect,” compulsive

Saving Desire to collect things Collecting, frugality

Honor Desire to be loyal to one’s parents and heritage

Character, morality, principled behavior

Idealism Desire for social justice Social causes, fair play

Social Contact Desire for companionship Party, join clubs/groups

Family Desire to raise one’s own children Parent, homemaker

Status Desire for social standing Concern with reputation, showing off

Vengeance Desire to get even Revenge

Romance Desire for sex and beauty Sex, courting

Eating Desire to consume food Eating, dining, cooking

Physical Activity Desire for exercise of muscles Physical exercise, participatory sports

Tranquility Desire for emotional calm Avoid stressful situations

Excerpt(s) from WHO AM I?: The 16 Basic Desires That Motivate Our Behavior and Define our Personality by Steven Reiss, copyright @2000 by Steven Reiss. Used by permission of Tarcher, an imprint of Penguin Publishing Group, a division of Penguin Random House LLC. All rights reserved.

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3. Motivation is not always con- scious. Unconscious motivation is the result of repressed memories, impulse, and desires that influence and drive human behaviors.

4. Motivation is not directly control- lable. It is within one’s mind and heart. It is not something done to others. A supervisor can attempt to motivate or influence others to work, but the supervisor cannot control the process.18

Motivation has a strong behavioral element. In an organization, motivation is related to indi- vidual differences, actual jobs, and the orga- nizations environment.17 The individual must be motivated or willing to perform. Personal beliefs and values influence this motivation. Those with strong work ethics are often more highly motivated. The job itself influences motivation. If the individual has the ability and finds the job interesting and challenging, then the individual is more likely to be moti- vated. Those who have jobs that are repeti- tive and boring in nature are less likely to be motivated. Finally, the individual must have the opportunity to perform the actual job. The organization needs to provide the right cul- ture (mission, vision, and values), climate, and opportunity for the individual to successfully perform the job.

Individuals who are motivated consistently, creatively, and energetically work toward the attainment of organizational goals that achieve organizational success. Therefore, management needs to understand individual and organiza- tional factors that influence motivation.

Daniel H. Pink describes three essential elements of motivation: autonomy, purpose, and mastery (see FIGURE 7-5).19

Autonomy is the ability and desire to direct our own lives. Counter to the traditional view of management, Pink suggests by allowing employ- ees autonomy or self-directed behavior they become more motivated and engaged in their work. The four essential components of auton- omy include: task, time, technique, and team.19

Equity theory involves motivation caused by per- ceptions of inequities. Reinforcement theory is predicated on rewarding individuals on a sched- uled basis. Therefore, motivation may be intrin- sic, that is, inside of us, a result of our desires, or “a result of things that are ‘done’ to us.”4

Another theory espoused by K. Sheldon, R. M. Ryan, E. L. Deci, and T. Kasser concerns the differences between extrinsic and intrinsic goals as they relate to well-being. Extrinsic goals are reported to be negatively correlated with well-being because those who focus on fame, wealth, and beauty report more symptoms of mental illness. The research does appear to be evidence that the goals individuals choose can be the underlying foundation that influences their future well-being.16

R. Denhardt, J. Denhardt and M. Aristigueta proposed that motivation causes people to behave the way they do. Having very deep roots, motivation is manifested in one’s state of mind, desire, energy or interests, that ultimately translates into action.17 R. Denhardt, J. Denhardt, and M. Aristigueta provide four things that are not motivation.18

1. Motivation is not a directly observ- able action, but an international state that causes people to act in a certain way to accomplish a purpose or goal. The actual outward man- ifestations (or physical steps used) may be observable, but not the motivation itself. An employee may work to receive money; however, the real motivation may be to buy food, pay the rent, or improve social status. The work is observable, but the motivation in itself is not.

2. Motivation is not the same as satisfaction. Satisfaction is past oriented; motivation is future ori- ented. One may be satisfied that they obtained a great job; how- ever, on a given day, it may not motivate them to continue what they are doing or to do an excep- tional job.

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want to join. Those working in self-organized teams are more satisfied and highly motivated than those working in inherited ones.19

Mastery is defined as the desire to get better and better at something that matters. Pink sug- gests that individuals enjoy the satisfaction of personal improvement. By allowing employees to enjoy a sense of progress at work, it enhances their personal motivation and professional development. Giving employees so-called “Goldilocks” tasks (neither overly difficult nor simple) pushes the employees out of their com- fort zone, allowing for greater mastery of skills.

Purpose is defined as a deeply motivated desire to work for a higher cause greater than oneself. Individuals try to create something that will better the world and outlive their lives, a purpose or legacy. These purposeful motives are exemplified in three realms of organiza- tional life—goals, words, and policies.19

Goals: Younger generations are redefining success from money as the important motiva- tor to non-monetary factors—giving back to society through work. Thus, the goal is to pur- sue purpose and use profit as a catalyst.19

Words: Words matter and by intensely listening one might hear a different, more purpose-oriented dialect. Pink states, “Human- ize what people say and you may well humanize what they do.”19 p. 137

Policies: Policies frequently represent the minimal accepted level of behavior which employees follow to avoid punishment. Rarely do policies inject purpose. Pink proposes a dif- ferent approach in which employees “enlist the power of autonomy in the service of purpose to maximization.”19, p. 140 A purpose- centered pol- icy prescription is one in which the employees “do it because it’s the right thing to do.”19, p. 139

Which theory is the best one to apply to the work environment? Which theory will the employees respond to in the most positive way? The answer is that there is no one theory that will be effective all the time. The need the- ory indicates that we are different in our moti- vators and that physiological needs must be satisfied before other needs are addressed. The equity theory recognizes that people are social

Task: Autonomy over task allows the employee to have the freedom to become inno- vative, creating their own projects. Pink cites several corporations who encourage employ- ees to spend time on self-directed work. The well-known Post-it note and Google Gmail are examples of autonomy and innovation.19

Time: Autonomy over time focuses on out- put, not the amount of time required for the input. Pink proposes eliminating antiquated management thinking by throwing away time clocks and tardy slips thus allowing employees to focus on their work, producing a good product, not the clock. Some corporations have embraced the ROWE approach which allows employees to comply with federal work regulations but auton- omy in choosing when they work.19

Technique: Autonomy over some mea- sure of individual freedom in jobs known for lack of it. Employees working at home are given greater autonomy on how they do their job. Customer service scores have been much higher than competitors with enhanced employee productivity and job satisfaction.19

Team: Autonomy to build a team on their own, the freedom of whom they work with. Some organizations allow anyone wanting to rise in rank to lead a team by assembling people willing to work with them. Others allow new professional staff to decide which team they

FIGURE 7-5 Three Elements of Intrinsic Motivation

Motivation in the Work Environment 93

Autonomy

MasteryPurpose

Motivation

Modified from: Pink DH. Drive: the surprising truth about what motivates us. New York, NY: Riverhead Books; 2009. 83–145

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they can grow their skills and abilities and a culture that fosters trust and values interper- sonal relationships.21

Leaders must value employees as indi- viduals, provide challenges in the work- place whenever possible, increase or vary job responsibilities, and allow employees to grow in such a way to benefit both parties.22 The American Hospital Association has proposed three components that correlate most highly with employee engagement, loyalty, and satis- faction: work processes designed in a manner to allow staff to work effectively, having staff input into decisions that affect their jobs, and the ability to have comfortable conversations with their supervisors with issues or con- cerns.22 Core management competencies must include these skills and attributes to foster employee engagement. Finally, a transparent culture with open communication regarding decision making can improve employee moti- vation, retention, satisfaction, and engagement in the organization.

L. Kimball and C. Nink examined the relationship between the employees and their supervisor and found it to be a critical factor in the length of time they remained employed with the organization and with their level of productivity.23 When workers are satisfied, or in this report, “engaged,” their productivity and commitment to the organization are increased. One suggestion for managers to improve employees’ engagement is to match the job with the strengths of the employee because those employees will demonstrate high per- formance, are innovative, and endeavor to become highly efficient.23 Managers who can- vassed employees about what they wanted and what was important to them were more effec- tive in improving employees’ productivity.23 By engaging the employees, managers were able to discover the employees’ motivations and to respond to those desires.

Further support of this approach in motivating employees was noted in a study by Baard, Deci, and Ryan that showed that intrinsic need satisfaction at work was highly

and that other people influence us in many ways. Expectancy theory describes motivation based on the benefits to be gained by devot- ing time and energy to a project. If there are no rewards, the individual will lose motiva- tion. Goal setting involves working toward a set goal by establishing specific objectives and working without distractions. Reinforcement theory suggests that motivation is increased when people are rewarded on specific defined performances rather than on time. People who have intrinsic motivation are said to behave in ways that give them feelings of personal control and their ability to perform a task or service.5

In response to the question “How does a supervisor motivate an employee?” one needs to consider the various theories of motiva- tion and discuss potential motivators with the employee. Because of the differences in people and in situations, one theory will not be effec- tive all the time and likely not effective with everyone. Consideration must be given to all the theories, and the most appropriate theory applied to the current situation.5

Job Satisfaction In 2016, the Society of Human Resource Man- agement reported an 88% overall satisfaction rate of U.S. employees with their current job.20 This marked the highest level of satisfaction over the last decade.20 The top contributing factor was respectful treatment of all employ- ees at all levels, rated as very important by 67% of employees.20 The survey suggests that employees consider culture and connection to be of utmost importance as well as feeling appreciated for their time and effort creates. Compensation and pay was the second most contributing factor at 63%; benefits third at 60%; and job security fourth at 58%.20 Finally, at 55%, the fifth leading contributing factor to job satisfaction was a tie between the abil- ity to use skills and abilities and trust between employees and the senior management team.20 Employees desire an environment in which

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reach the goal must be greater than the interest level itself. People may choose to quit working toward the goal or may choose behaviors that enhance the experience as they work toward accomplishing the goal. Thus, individuals are motivated by the outcomes and the process that occurs in reaching the outcome. Each area of motivation is self-regulated in order for individuals to cope with the daily trials of life. Understanding differences among individuals and the influences that these differences have on behaviors is important to predict future actions.25

▸ Motivation and Learning

Health organizations often provide opportu- nities for clinical and administrative staff to learn new methods and acquire new skills. In the fast-changing world of medical care, it is imperative that healthcare employees under- stand the necessity of continually improving the provision of care and assessing the impact of the improvements. One method is to utilize Maslow’s model and follow the path from phys- iological needs to self-actualization. Wages are considered to be at the lowest level, but if an employee is not satisfied with the pay, focus may be on locating a new job or the inequities in pay. The next highest level concerns safety, which can be satisfied by providing a safe work environment, such as having sharps containers in hospital examination rooms, as well as pro- viding sufficient benefits and training, which increase the employee’s skill and value to the organization. The third level is social belong- ingness, which can be enhanced by presenting training that involves employees from a variety of areas. Self-esteem is strengthened by attend- ing training which in turn may lead to rewards and positive recognition. At the very top of the hierarchy is self-actualization, which is rein- forced by the individual striving to acquire new skills and improve confidence.26

correlated with performance.24 As noted, the self- determination theory contends that individuals have three psychological needs: competence, autonomy, and relatedness. Com- petence refers to the capability of the individual to achieve the objectives they wanted. Auton- omy is related to being the generator of one’s behavior, while relatedness addresses forming a relationship with others that demonstrates mutual regard and dependence. After testing for the three needs, the authors investigated the relevance of a self- determination theory in terms of its applicability to workplace moti- vation. The study supported the theory that satisfaction of an individual’s intrinsic needs is reflected in job performance. Managers who support autonomy also influence employees’ perceptions of satisfaction.24

Job satisfaction was linked to job motiva- tion by Martin Wolf.6 He reported that con- text elements such as job security, technical supervision, and interpersonal relationships with peers are not related to motivation in the workplace because an employee is not able to change or improve them. However, con- tent elements (e.g., achievement, recognition, and advancement) closely relate to job moti- vation because an employee can increase the amount of his or her satisfaction by increas- ing the amount of work done. The strength of the motivation relates to the outcomes that are expected from the increase in work. This concept is also reflected in the expectancy the- ory as ascribed by Vroom and summarized by Muchinsky.5

▸ Changes in Motivation As stated by many researchers, motivation differs from individual to individual and indi- viduals display varying levels of motivation. Authors C. Sansone and D. Thoman suggest that a self-regulation process is helpful in comprehending the differences among peo- ple’s interest levels as they pursue goals.25 If a goal is not interesting, a person’s motivation to

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and improvements in health care enable the baby boomers to remain in the workforce. Millennials (1979–2000) are quickly filling the labor force and by 2020 will comprise nearly half (46%).28 Employees’ skills increase with age, debunking old myths and other stereo- types. North and Hershfield suggest offering flexible or half retirement, prioritizing older worker skills in hiring and promotion, creating new positions, and adapting old, and changing workplace ergonomics will maximize the aging workforce.30 Age diversity in organizations can improve organization performance, retention and productivity, organizational culture, and the bottom line.

Cultural Diversity and Motivation Cultural diversity is often defined in terms of not only ethnicity but also race, gender, age, and sexual orientation. Most organizations have adopted some form of a diversity plan to foster innovation and creativity. A study by Sta- zyk, Davis, and Liang demonstrated that diver- sity can produce overall organization success.31 Gender diversity increased overall job satis- faction in the workplace.31 However, different diversity characteristics did not always produce a positive outcome. Racial diversity negatively impacted several of the organizational attri- butes.31 A Singapore study by Darwin and Sel- varaj found that age, gender, and ethnicity did not have significant impact on workplace per- formance producing a neutral perception.32 In light of these findings, management must embrace a commitment to workforce diversity, ensuring employee compliance to diverse man- agement policies. Management must provide diversity training for employees with education on the value of cultural differences and con- tribution to the organization’s mission, vision, goals, and objectives to enhance motivation in a culturally diverse workforce.

In health care the diversity of cultures is important to note because the people who are, and will be, working in health care exemplify

Employee Involvement in Learning Creating a successful learning culture requires that employees and management commit to development that encourages and enhances skill development. Hiring employees that have demonstrated prior interest in development is important as is keeping current employees motivated to learn and apply new informa- tion. Employees who are motivated to advance in their careers often view learning as a means to acquire skills and knowledge that will lead to additional responsibilities and promotions. They may believe that participating in learn- ing activities will make work more engaging and inspiring, which is consistent with intrin- sic motivators being important in encouraging individuals to work toward a goal. The benefit to the organization is that employee retention is greater for those individuals who feel and expe- rience that learning contributes to retention by providing growth opportunities and work that is challenging. In contrast, extrinsic rewards, such as pay, were not nearly as important in retention as was the presence of learning opportunities.27

Impact of Age and Cultural Factors on Motivation From the Silent Generation (1925–1942) to Generation Z (1990s–present) five generations currently represent the workforce. The large number of baby boomers who are nearing retirement is projected to have an enormous impact on the economic climate of the United States. Many baby boomers indicate that they are not ready to retire but have the motivation and desire to continue working in some capac- ity.28 According to the U.S. Bureau of Labor Statistics, in 2022, 1 in 4 workers are expected to be age 55 and older.29 Many seniors lack retirement savings, while others experienced depletion of their savings during the Great Recession of 2008–2010. Increased longevity

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Review/Discussion Questions 1. Describe Maslow’s hierarchy. Which

need best describes your current moti- vational stage?

2. Describe Herzberg’s Theory of Motivation.

3. Describe Alderfer’s Theory of Motiva- tion. How does it differ from Maslow’s?

4. Describe Denhardt’s theory of motiva- tion. How does it differ from the other theories?

5. Describe Pink’s theory. How does it dif- fer from other theories?

6. Define intrinsic and extrinsic moti- vation. What is the major difference between them?

7. What is the impact of age in under- standing an individual’s motivation and behavior?

References 1. Maslow AH. A theory of human motivation. Psychol

Rev. 1943;50:370–396. 2. Johnson JA, Breckon DJ. Managing Health Education

and Promotion Programs: Leadership Skills for the 21st Century. Sudbury: Jones and Bartlett; 2007.

3. Dessler G. Human Resource Management. Upper Saddle River, NJ: Pearson Education; 2005.

4. Herzberg F, Mausner B, Snyderman BB. The Motiva- tion of Work. New York:Wiley; 1959.

5. Muchinsky PM. Psychology Applied to Work. An Introduction to Industrial and Organizational Psychology. Pacific Grove, CA: Brooks/Cole Publishing; 1990.

6. Wolf MG. Need gratification theory: A theoretical reformulation of job satisfaction/dissatisfaction and job motivation. J Appl Psychol. 1970;54:87–94.

7. Theories of Motivation. https://saylordotorg.github. io/text_organizational-behavior-v1.1/s09-theories-of -motivation.html. Published 2012. Accessed February 5, 2017.

8. Lunenburg FC. Expectancy theory of motivation: Moti- vating by altering expectations. Int J Manage Bus Adm. 2011;15(1):1–6. https://pdfs.semanticscholar.org/6ce0 /a17c0c51aadd099b9425a6e149f092befa95.pdf. Accessed February 5, 2017.

9. Johnson JA. Introduction to Public Health Organiza- tions, Management, and Policy. Cengage Textbook. Kindle Edition. 2013:212

the various cultures. They bring with them the variety of motivators and behaviors that are inherent in their backgrounds and experiences. Health organizations and administrators must acknowledge these differences, so that they provide environments that allow managers to respect and understand these employees’ motivations in order to meet the employees’ goals and the goals of the organization.

▸ Conclusion Maslow’s hierarchy described five levels of needs ranging from the basic physiological needs to self-actualization. Maslow’s needs were further classified into intrinsic and extrinsic motivators. Herzberg used Maslow’s theory of motivation as a foundation for the Two- Factor Theory. Alderfer simplified Maslow’s theory from five levels to three, pre- senting them in a linear fashion. McClelland suggested that individuals over time develop three main driving motivators: achievement, affiliation, or power. McClelland, Deci, and Ryan proposed the Self-Determination The- ory, which built on the foundation of intrinsic and extrinsic motivators. Intrinsic motivators appear to lead to an increase in competence and self-worth as opposed to extrinsic moti- vators. Reiss’s list of 16 desires provides a framework to analyze behaviors and define individual motivators underlying these behaviors. Denhardt et al. examined motiva- tion as having very deep roots, manifested in one’s state of mind, desire, energy, or inter- ests, that ultimately translates into action. Pink provided three essential elements of motivation: autonomy, purpose, and mastery. Finally, the chapter examines age and other cultural factors in relationship to motivation and learning. Ultimately, leaders must strive to understand their employees’ intrinsic and extrinsic motivators, cultural diverse needs, and goals to enhance employee motivation, satisfaction, and engagement.

Conclusion 97

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https://saylordotorg.github.io/text_organizational-behavior-v1.1/s09-theories-of-motivation.html

https://pdfs.semanticscholar.org/6ce0/a17c0c51aadd099b9425a6e149f092befa95.pdf

-r-workforce.pdf. Published July 08, 2016. Accessed January 3, 2017.

23. Kimball LS, Nink CE. How to improve employee motivation, commitment, productivity, well-being and safety. Correct Today. 2006;68:66–74.

24. Baard PP, Deci EL, Ryan RM. Intrinsic need satisfaction: A motivational basis of performance and well-being in two work settings. J Appl Soc Psychol. 2004;34:2045–2068.

25. Sansone C, Thoman DB. Maintaining activity engagement: Individual differences in the process of self-regulating motivation. J Pers. 2006;74:1697–1720.

26. Benson SG, Dundis SP. Understanding and motivating health care employees: Integrating Maslow’s hierarchy of needs, training and technology. J Nurs Manage. 2003;11:315–320.

27. Maurer TJ, Weiss EM, Bareite FA. A model of involve- ment in work-related learning and development activ- ity: The effects of individual, situational, motivational, and age variables. J Appl Psychol. 2003;88:707–724.

28. Workplace visions. Society of Human Resource Management. https://www.shrm.org/foundation/ our- work/initiatives/the-aging-workforce/Documents/Age -Diverse%20Workforce%20Executive%20Briefing.pdf. Published 2014. Accessed February 10, 2017. 1–6.

29. U.S. Bureau of Labor Statistics. Employment Projections: 2012–2022. https://www.bls.gov. Pub- lished 2013. Accessed February 10, 2017.

30. North M, Hershfield H. Four ways to adapt to an aging workforce. Harvard Business Review. https:// hbr.org/2014/04/four-ways-to-adapt-to-an-aging -workforce. Published November 1, 2014. Accessed February 10, 2017.

31. Stazyk EC, Davis RS, Liang J. Examining the link between workforce diversity, organizational goals, and job satis- faction. http://www.bc.edu/content/dam/files/centers /cwf/individuals/pdf/ DiversityClarityandSatisfaction .pdf. Published September 2, 2012. Accessed February 11, 2017.

32. Darwin JR, Selvaraj PC. The effects of work force diversity on employee performance in Singapore organisation. Int J Bus Adm. 2015;6(2):1–13. www .sciedupress.com/journal/index.php/ijba/article /download/6528/3879. Accessed February 11, 2017.

10. Deci EL. The Psychology of Self-Determination. Lexington, MA: Lexington Books, D.C. Heath and Company; 1980.

11. Deci EL, Ryan RM. Intrinsic Motivation and Self- Determination in Human Behavior. New York: Plenum Press; 1985.

12. Ryan MR, Deci EL. Self-determination theory and the facilitation of intrinsic motivation, social development and well-being. Am Psychol. 2000;55:68–78.

13. Deci EL, Ryan RM. The “what” and “why” of goal pursuits: Human needs and the self-determination of behavior. Psychol Inq. 2000;11:227–268.

14. McClelland DC, Burnhand DH. Power is the great motivator. Harvard Business Review. https://hbr .org/2003/01/power-is-the-great-motivator. Published January, 2003. Accessed February 5, 2017.

15. Reiss S. Who Am I?: The 16 Basic Desires that Motivate Our Actions and Define Our Personalities. New York, NY: Penguin Putnam, Inc.; 2000.

16. Sheldon KM, Ryan RM, Deci EL, Kasser T. The independent effects of goal contents and motives on well-being: It’s both what you pursue and why you pursue it. Pers Soc Psychol Bull. 2004;30:475–486.

17. Denhardt RB, Denhardt JV, Aristigueta MP. Managing Human Behavior in Public and Nonprofit Organizations. 4th ed. Los Angeles: SAGE Publications; 2015.

18. Denhardt RB, Denhardt JV, Aristigueta MP. Managing Human Behavior in Public and Nonprofit Organizations. 2nd ed. Los Angeles: SAGE Publications; 2008:147.

19. Pink DH. Drive: The Surprising Truth About What Motivates Us. New York, NY: Riverhead Books; 2009: 83–145.

20. Employee job satisfaction and engagement: Revitaliz- ing a changing workforce. https://www.shrm.org/hr-to day/trends-and-forecasting/research-and-surveys /pages/job-satisfaction-and-engagement-report -revitalizing-changing-workforce.aspx Published 2016. Accessed February 10, 2017. 1-68.

21. McConnell CR. The Effective Health Care Supervisor. 8th ed. Burlington: Jones & Bartlett; 2015:221–224.

22. Critical conversations on the changing health envi- ronment: Workforce development. The American Hospital Association. http://www.healthforum.com /connect/resources/pdf-files/ahasolutions-2016-0708

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https://www.bls.gov

https://hbr.org/2014/04/four-ways-to-adapt-to-an-aging-workforce

http://www.sciedupress.com/journal/index.php/ijba/article/download/6528/3879

https://hbr.org/2003/01/power-is-the-great-motivator

https://www.shrm.org/hr-today/trends-and-forecasting/research-and-surveys/pages/job-satisfaction-and-engagement-report-revitalizing-changing-workforce.aspx

http://www.healthforum.com/connect/resources/pdf-files/ahasolutions-2016-0708-r-workforce.pdf

https://www.shrm.org/foundation/ourwork/initiatives/the-aging-workforce/Documents/Age-Diverse%20Workforce%20Executive%20Briefing.pdf

https://www.shrm.org/hr-today/trends-and-forecasting/research-and-surveys/pages/job-satisfaction-and-engagement-report-revitalizing-changing-workforce.aspx

http://www.healthforum.com/connect/resources/pdf-files/ahasolutions-2016-0708-r-workforce.pdf

http://www.bc.edu/content/dam/files/centers/cwf/individuals/pdf/DiversityClarityandSatisfaction.pdf

CHAPTER 8

Group Dynamics and Teams in Health Organizations

LEARNING OBJECTIVES

■ Explain the difference between a group and a team. ■ Describe the three types of critical human capital competencies for effective teamwork. ■ Name the five stages of team development as identified in Tuckman’s model. ■ Identify the seven concepts for effective teams as identified by Johnson. ■ Describe the importance of roles and trust to team functioning. ■ Describe the six different types of teams currently found in health organizations. ■ Define the characteristics of high-performing healthcare teams. ■ Define teaming. ■ Describe the importance of roles, diversity, and trust to team functioning. ■ Explain socialization, role conflict, and group cohesion. ■ Describe the TeamSTEPP initiative and the impact on healthcare safety. ■ Describe groupthink and in group bias.

OVERVIEW

This chapter provides the student with an overview of group dynamics and teams. Definitions of groups, teams, and teaming are provided. Stages of team development, characteristics of highly effective teams, and teams currently found in health organizations are examined. The impact of diversity, roles, and conflict is discussed. New research on teams, strategies, and tools to enhance performance and patient safety is explored.

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to contribute and be a part of it. In contrast, nonteam group meetings are specific and effi- cient (e.g., breastfeeding support groups in the hospital often set specific agendas and end at a specific time). Members of groups do not nec- essarily desire to join, but go because they feel they must (e.g., mothers have found breast- feeding to be extremely challenging and want structured advice).

Three types of critical human capital com- petencies are required for effective teamwork: Teamwork-related knowledge: The skills and behaviors needed for an effective team as well as an understanding of how they manifest in a team setting.1

Teamwork-related skills: The learned abil- ity to interact with team members.1

Teamwork-related attitudes: Influences (internally) that can impact a team member’s decision to act in a given way.1

Shiver and Cantiello highlight the advan- tages of effective team performance, including greater total experience, synergy, higher morale, greater personal retention, and increased flexibility.1

▸ Group Formation The evolution of team development can best be described by a model developed by Bruce Tuckman in 1965, wherein he identified four stages of group development and later added a fifth in the 1970s.2 Tuckman’s model clearly captures the fundamentals of team progression.

Tuckman’s Team Development Model:

1. Forming: In this stage, the group is assembled; members get acquainted and understand the task at hand.

2. Storming: This represents a period where members become more com- fortable with one another and vie for leadership and status in the group, often engaging in arguments.

▸ Introduction

Healthcare reform, increased demands for quality, pay for outcomes, changes in payer mix and reimburse- ment, mergers, acquisitions, restructuring, and reorganizations have all increased the complexity of health care. No longer can healthcare providers expect that their facil- ity will survive just by its mere necessity; the business model of the healthcare system has ensured competition for survival of the health organization. Group efforts drive competi- tion. Thus, alone, a single individual cannot create a thriving organizational environment, but instead the organization will survive through group efforts. This chapter provides an overview of groups, teams, and the team processes.

▸ Groups and Teams Defining Groups and Teams A group consists of two or more people who interact with each other and share a common purpose. Groups will often identify them- selves as distinct from other groups. A team is a type of group. Therefore, all teams are groups, but not all groups are teams. Shiver and Cantiello define a team as a group of individuals committed to achieving a com- mon goal.1

Teams are often depicted as a group of people sharing leadership of and working together on a specific project, whereas a group (but not a team) consists of individuals who work independently and are led by a strong, focused individual. Team members take responsibility collectively, whereas groups that are not teams take individual responsibility. The goals of teams are developed collectively, whereas groups (that are not teams) are man- dated their goals. Team meetings tend to be open-ended, and members of the team desire

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▸ Groups and Teams in Health Organizations

Typology of Healthcare Teams Limieux-Charles and McGuire provide a typol- ogy of healthcare teams based on the team’s primary purpose or contribution to health organizations.4 Management teams are respon- sible for administrative functions. Quality improvement teams are dedicated to improv- ing health processes and outcomes. Teams that deliver care are defined based on the patient population (e.g., mental health), disease type (e.g., cardiac, stroke), and care delivery setting (e.g., acute, sub-acute, or chronic). Interprofes- sional care delivery teams (such as the transient team described earlier) have the advantage of drawing upon different, but complementary, areas of expertise of their members. This is particularly important for performing tasks that demand highly complex knowledge and skills that are difficult or time consuming to acquire. Compared to individual health profes- sionals, healthcare teams are often considered more capable of providing patient-centered care and responding to challenges of cost con- tainment or reorganization. It is not surprising then that the number of work teams in health organizations is on the rise.4

Types of Healthcare Teams Fried and Fottler cite six different types of teams currently found in health care: cross- functional, project, self-directed, task force, process improvement, and virtual.5

Cross-functional team: An interdisciplin- ary team formed to complete a specific goal or objective. Membership is usually voluntary and may consist of any members of the health- care team, including management, staff, physi- cians, nurses, etc.

Project team: A team formed to com- plete a specific project (new building project,

3. Norming: Here, they reach agree- ment on rules to achieve the goal and how the group will operate.

4. Performing: This stage is where the group becomes effective at reach- ing conclusions and implementing recommendations.

5. Adjourning: As the project con- cludes, the group begins the process of disbanding.2

The forming step is the initial encoun- ter in which there is some polite, social dis- course. In the storming step, members of the group begin to develop conflict, particularly over position status, power, and influence. By the third step (i.e., norming), members of the group develop and agree upon rules for behav- iors and engagement. In step four, members of the group accept their positions and the rules and begin to work together as a team. Evidence of team formation is the sense of cohesion and trust. Finally, in step five the team disbands.

Johnson emphasizes seven key concepts for effective teams.3

1. To be effective, teams need to be small in size and members care- fully selected.

2. To maximize a synergistic effect, all stakeholders should be repre sented.

3. Team members must be empow- ered to problem solve and accom- plish tasks.

4. Leadership must be comfort- able in empowering teams for effectiveness.

5. Once empowered, teams must accomplish goals for the organi zations.

6. Team selection should maximize the human resources potential by selection of team members with diverse skills and abilities.

7. Leadership must provide organiza- tional support to ensure success.

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In addition, Mitchell, Wynia, Golden, McNellis, Okun, Webb, Rohrbach, and Von Kohorn list five personnel values that char- acterize the most effective members of high-functioning teams in health care: honesty, discipline, creativity, humility, and curiosity.7

Honesty: Members put a high value on effective communication, including transpar- ency about goals, decisions, objectives, deci- sion, uncertainly, and mistakes.

Discipline: Team members carry out their roles and responsibilities with discipline, even when inconvenient. Team members are engaged in seeking out new information to enhance team performance.

Creativity: Team members are engaged and excited by opportunities to tackle new or emerging problems creatively. Setbacks and untoward errors are seen as opportunities to improve.

Humility: Team members recognize differ- ences in training of team members but recog- nize the contribution of each. Members are all on an equal playing field.

Curiosity: Team members are dedicated to lessons learned and a commitment to contin- uous quality improvement of their own work and that of the team.7

Effective healthcare teams are curious, creative, yet virtuous and disciplined.

Teaming Amy Edmondson suggests that healthcare teams need to shift focus from structure to activities of teamwork referred to as “team- ing.”8 “Teaming involves fluid, collaborative, interdependent work across shifting products and a shifting mix of partners, often across organizational boundaries.”8 Teaming is flex- ible teamwork, a method to get divisions and disciplines together to tackle unexpected problems or emerging opportunities.8 To team well, organizations must employee principles of project management: scoping, structur- ing, sorting, emphasizing purpose, building psychological safety, and embracing failure.9

renovation, or new service). Membership is often assigned by management based on abil- ities. The team normally disbands upon com- pletion of the assigned project.

Self-directed team: Highly skilled, these individuals are normally responsible for pro- duction of a service central to the organiza- tions success. Often accountable for the entire process, members seek consensus for major decisions, job responsibilities, problem solving, and interaction with stakeholders.

Task force team: A specific team for prob- lem solving. These are normally formed by management to strategize a long-term solution including an implementation plan evaluation method.

Process improvement team: An interde- partmental team consisting of knowledgeable employees normally appointed and empowered by management to improve quality, eliminate waste, or enhance productivity.

Virtual team: Any team that has an elec- tronic dependence on technology or tele- communications in order to meet. Normally teams meet online versus face-to-face as members are dispersed in various locations. Similar to project teams, membership is often limited until completion of the assigned task/ project.5

High-Performing Work Teams Today’s healthcare environment calls for the development of high-performing work teams to establish more patient-centered, coordinated, and effective healthcare deliv- ery systems. A high- performance work team is a group of goal-minded individuals with specialized expertise and skills who col- laborate, innovate, and produce superior results. TABLE 8-1 lists the characteristics and key attributes of high- performing teams: shared goals, leadership, collaboration, com- munication, clear roles and expectations, group operating rules, early conflict reso- lution, and a very strong sense of trust and accountability.6

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individual’s expertise fit into the larger picture of care?8

Make it safe: Addresses the lack of psy- chological safety in health care, the reluc- tance to question or to speak up. Leadership must play a critical role in developing a safe environment by encouraging thoughtful, probing questions. Speaking up, asking more

Teaming is critical in health care but requires substantial commitment. Leadership can facil- itate teaming by framing the work, making it safe, and by building facilitating structures.8

Reframing: Health care’s mindset is en trenched in an independent expertise mind- set. Though vital, it is no longer sufficient to produce optimal patient care. How does the

TABLE 8-1 Characteristics of High-Performing Teams6

Characteristic Key Attributes of High Performance

Purpose Achievement of a common short-and long-term goal Total commitment to team work and team members

Roles Roles are clear, team members understand contribution

Talent, skills, and work ethic Recruitment of top talent possessing complementary skills (technical, decision making, problem solving, interpersonal) Team commitment to performance excellence Accountability at individual and team level Low performers found other places to work

Incentives and motives Monetary and nonmonetary that encourage high performance Intrinsic motivators such as increased personal satisfaction working on interesting projects, respect of colleagues, self-actualization

Leadership Essential leadership qualities to keep the purpose and goals relevant, build commitment and confidence, provide opportunities for enhancement of skills, serve as a champion, remove obstacles hindering performance, and hands on work with teams (as needed to accomplish goals)

Conflict and communication

Conflict management skills, open communication with focus on coaching and addressing immediate concerns

Power Empowerment of work teams to increase ownership and commitment. Decision-making boundaries with latitude for empowerment choices

Norms and standards Open lines of communication, early resolution of conflict, regular evaluations of the team and individual’s performance, high respect among team members, cohesive team environment, strong work ethic that focuses on team success. Members discuss and agree on operating rules and procedures—standards upheld by all members

Data from: SHRM Developing and sustaining high-performance work teams – July 23, 2015

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people belong in the focal person’s role set. Thus, the role set includes people who have a stake in the focal person’s role ful- fillment. Members of one’s role set encode and send messages (i.e., role senders) to the focal person (i.e., role receiver), who then decodes and interprets the message. The intended message is a derivation of what is sent and received. Various filters influence the way we encode and send messages and the way in which we listen or decode and interpret messages. Our filters are shaped over time through personal, observed, or studied experiences. Both role senders and role receivers are responsible for the way an intended message is interpreted. A key component to healthy group dynamics is communication of role expectations. When roles are poorly or insufficiently communi- cated, the focal person may perceive that he or she is not fulfilling the role or has been given unclear or conflicting messages so that stressors (i.e., perceived demands) per- taining to the role begin to form.

Diversity In the healthcare industry, populations are diverse in numerous ways, including educa- tion, sex, affinity, orientation, ethnicity, and professional background. Inclusiveness of dif- ferent genders, races, nationalities, and skill sets enhances team performance. Research by McKinsey on 366 public organizations found that those in the top quartile for ethnic and racial diversity in management were 35% more likely to have greater financial success, well above their competitors, and compa- nies in the top quartile for gender diversity were 15% more likely to have yields above the industry mean.10 Diverse teams often capitalize on difference in strengths and per- spectives and have a tendency to re-examine facts and remain objective. By breaking up homogeneous teams, individuals become

questions, builds a more psychologically safe environment.8

Build facilitating structures: Leadership must create structures that foster teaming, enhance communication, and redesign facil- ities to foster cross-disciplinary collaboration for complex patient care.8

Edmonson suggests that framing can be started for little cost in any healthcare system and begins the process for improv- ing team process and ultimately patient outcomes.8

▸ Roles, Diversity, and Trust

Roles Each member of an organization holds a role, or set of shared expectations, in the organization. A role is the part one plays in a given context. In the organizational context, a person can hold numerous roles, including the roles of supervisor, co-worker, and advisor. The role one plays in any given context serves a specific function. The func- tion includes activities or behaviors that the role player believes are expected of him. For example, when one is the charge nurse of a shift, then the function served is that of supervisor for nurses in a given unit during a given timeframe. The person in this role (i.e., the focal person) is expected to per- form his or her duties that are formally and informally, implicitly and explicitly dictated. Expectations for role behaviors are set by others who are impacted by the focal person’s role. These other stake- holders include the focal person’s subor- dinates, supervisor(s), co-workers, other administrators, physicians, patients and patients’ families, and others with whom the focal person is in contact and who influence the focal person’s role fulfillment. All these

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Respect for the individual: Regarding others in a positive manner.

▸ Group Processes Socialization Role senders are key players in socializing us. Socialization is an important process that helps us internalize the organization’s cul- ture. An organization’s culture is composed of values, norms, language (i.e., acronyms), beliefs, symbols, and assumptions that develop over time and begin with the founder of the organization. In the case of hospitals, the cul- ture is established by both the administration and the board of the hospital, as well as the general culture of health care. It is through the process of communication among organiza- tional contributors that people begin to social- ize into the organization’s culture. Once people are socialized they develop shared mental models of how things will work in the orga- nization. When “things” do not work, conflict arises, because one is unable to fulfill his or her role properly. Thus, role conflict arises when a focal person’s ideas of his or her requirements are incongruent with expectations from role set members.

Role Conflict There are four types of role conflict.11–13 Intrarole conflict arises when the focal person is conflicted with two different activities to engage in or ways of doing things. The focal person, therefore, violates his or her values or standard ways of doing things. For example, all of a manager’s subordinates have been fabulous performers, yet Human Resources requires the manager to down-rate some sub- ordinates in order to (falsely) demonstrate that there are differences in subordinates’ per- formances. Intrasender conflict arises when the focal person perceives that a role sender has unrealistic expectations that the focal

more aware of their own bias, blinding them to information and potential errors in deci- sion making.10

Trust Trust is an emotional and logical act that is developed through experiencing seemingly predictable situations, exchanging informa- tion about oneself with others, reciprocation of different unspecified deeds when needed, and opening up oneself to vulnerability of being taken advantage of with the expectation that one’s vulnerabilities will not be exposed. Groups that forge a sense of trust among their members will be more cohesive and desir- able to others. In addition to trust is respect. Respect refers to the willingness to listen to the feelings and ideas of others. Trust and respect are essential for successful human relations and, therefore, group functioning. Trust is particularly important when team members do not meet face to face. In the hospital set- ting, healthcare providers who work daytime hours trust that the evening hour healthcare providers will provide clearly written notes and information so that there will be little confusion about the on-going care of patients. For example, a neonatal intensive care unit evening shift nurse trusts that the infant’s phy- sician, who visited early in the morning, has left explicitly clear instruction for the care of the infant and that if the physician did not, the attending nurse at the time did. If poor instruc- tions were written and something bad hap- pened to the infant, trust in the physician and day shift nurse would be completely destroyed. Therefore, in order to develop a sense of trust, group members must demonstrate:

Sensitivity: Demonstrating genuine care of others’ ideas, affects, and experiences.

Open communication: Informally or formally expressing negative and positive thoughts and feelings.

Vulnerability: Self-disclosing honestly without worry of impressing others.

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or identity with group goals is low, then mis- takes, such as wrong-sided or site surgery, leaving an instrument or surgical sponge in the body, might occur. This example typifies task cohesion, because members of the group are required to cooperate in order to achieve the goal. There is also social cohesion, which is the extent to which group members get along.

Five factors influence the extent to which groups are cohesive. These factors are repre- sented in terms of five S’s:

Stability: Refers to the duration of the group. Groups that have been around for many years are more attractive to potential new members; knowing that a group is stable perpetuates cohesion.

Similarity: Refers to the extent to which personal characteristics of members are the same. Group members that are similar in age, ethnic background, education level, attitudes, sex, nationality, etc. are likely to be more cohesive.

Size: Refers to the number of members in the group. Group coherence tends to nega- tively correlate with group size.15, 16

Support: Refers to the instrumental or emotional aid and encouragement supervi- sors give to subordinates and peers give to one another; the greater the support, the greater the cohesion.

Satisfaction: Refers to members’ content- ment with other group members, their per- formance, and socialization into the group’s normative practices.

▸ Performance and Group Effectiveness

State of Knowledge about Healthcare Team Effectiveness General models of team effectiveness are often based on team characteristics, processes, and outcomes that are not completely relevant to healthcare settings.4 For example, numer- ous studies of non-healthcare teams focus on

person believes he or she cannot fulfill. For example, a manager is asked to train his or her subordinates by the end of the month on a new technology that he or she is also unfa- miliar with. Interrole conflict has to do with the focal person having too many incompat- ible roles in the organization. For example, a manager sits on a committee to improve work processes, yet until the new process is approved must enforce the current poor pro- cess that is in place. Finally, intersender con- flict arises when the focal person is faced with at least two conflicting requests or incompat- ible processes. For example, the focal person (e.g., a nurse) may be asked to adminis- ter medication to a patient, but the patient adamantly opposes taking the medication, because the dosage is incorrect. The general distinction between these four types of con- flict is whether the focal person is perceiving the incongruence with his or her own stan- dards or values (intra-) or whether the focal person recognizes the conflict arising due to incompatibilities among others and/or poli- cies (inter-).

Group Cohesion Group cohesion refers to a shared vision, unity of goals and objectives, pride in group membership, and collective group identity. Carron also noted that a clear structure for communication is also evident in cohesive groups.14 Clear roles would also help groups develop cohesion. High-interaction teams, such as those found in tactical or surgical teams, are likely to require greater cohesion than low- interaction teams. Having a strong sense of purpose and identity in group mem- bership would likely yield greater surgical success than when sense of purpose or iden- tity is low. Thus, being a part of a surgical team in which the attending or lead surgeon is highly respected would likely yield greater cooperation among members of the team than when the surgeon is fairly new, just out of residency and not well known. When purpose

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broadly divided into two categories: objective and subjective. Objective outcomes incorpo- rate data from medical records, administrative databases, and standardized assessments. They are less dependent on respondents’ opin- ions and judgments than subjective outcomes. TABLE 8-2 shows how researchers who studied

“intellectual teams” that are different from “work teams” in health care.17

Research on healthcare teams suffers from lack of well-developed measures, such as team effectiveness; therefore, it is hard to evaluate the outcomes of teamwork in health orga- nizations. Team effectiveness measures are

TABLE 8-2 Common Outcome Measures Used in Studies of Team Effectiveness

Measures Objective Measures Subjective Measures

Patient-centered Satisfaction surveys Nosocomial infection rate Surgical infection rates Patient function status QALY—Quality-Adjusted Life Year D2B Door to Balloon time ER wait times ER admission to floor times Healthcare utilization rates ALOS—Average Length of Stay Hospital readmission rate Critical care readmission rate Hospital utilization rate, last 180 days of life Mortality rates

Patient/caregiver satisfaction Patient/caregiver morale Perceived post-discharge outcomes (follow-up phone calls) Perceived wait times to answer call lights

Staff-centered Staff retention rates Employee satisfaction surveys Team effectiveness—measured from outside evaluator

Patient-rated quality of nursing care Interdisciplinary teams’ satisfaction with coordination of care Staff ’s perception with work quality and environment

Organizational CAHPS—Consumer Assessment of Healthcare Providers and Systems HEDIS—Healthcare Effectiveness Data and Information Sets SCIP—Surgical Care Improvement Project Treatment costs/cost of care Technology adoption curve—time to adopt new procedures (robotics, minimal invasive procedures) Patient flow—wait times for hospital bed Patient volumes—occupancy rates Ability to accept new admission Surge capacity

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A meta-analysis of 129 studies on team training in health care found a significant association between team programs and participative learning and positive organi- zational outcomes that improve care.18 It is estimated that as of February 2017, 35% of all healthcare workers have been exposed to TeamSTEPPS.18

Multidisciplinary teams are used in health care in both clinical and manage- ment functions. A study by Landry and Erwin explored the experience of health- care executives working in multidisciplinary teams. A survey of 492 American College of Healthcare Executive members revealed that an overwhelming 94.3% had partici- pated in multidisciplinary teams.20 Advan- tages associated with the team process were collaboration and coordination. Increased knowledge of other disciplines had the highest response of 94%.20 Areas for improvement included communication, cooperation, and conflict resolution.20 Landry and Erwin suggest that training and development of communication skills, facilitating collabora- tion, and enhanced conflict resolution skills may improve team effectiveness in health organizations.20

Common Barriers and Negative Outcomes of Teamwork Strong indicators that a team is not function- ing effectively or needs management interven- tion include nonparticipating leaders, poor decision making, infrequent communication, and diversity not valued.6

Nonparticipating leaders: The team mem- bers fail to use a democratic leadership style that fosters engagement.

Poor decision making: The team members make decisions too quickly, failing to use deci- sion making tools.

Infrequent communication: The team members’ line of communication is minimal or closed.

healthcare teams defined team effectiveness. Healthcare researchers measure outcomes of teamwork in many different ways; therefore, it is challenging to compare and summarize results of different studies.

As can be seen in Table 8-2, some mea- sures used to assess team effectiveness—such as mortality, length of stay, or cost of care— might not have a strong direct link to the actual task that a healthcare team is performing.

If fluctuations in mortality, length of stay, or cost of care are caused by other fac- tors that are not related to teamwork, then these outcomes will serve as poor indicators of team effectiveness. When evaluating team performance, it is important to ask, “What tasks are team members expected to perform effectively?” and to select outcomes relevant to those tasks.

Team Training, Evaluation and Research The Agency for Healthcare Research and Quality (AHRQ) in collaboration with the Department of Defense utilizes Team Strat- egies and Tools to Enhance Performance and Patient Safety (TeamSTEPPS).18 This evidenced-based initiative was designed to serve as a national standard for team train- ing in health care. Since its inception, thou- sands of individuals worldwide have been trained using the TeamSTEPPS program.18 Now, 10 years later, the program has inspired research on the importance of delivering safe, quality care and the need for more team training. Insights gained over the last 10 years include the continued need for patient safety, eliminating barriers to care, highly effective teams that optimize resources and achieve best clinical outcomes, increased team awareness of roles and responsivities, and conflict resolution.18 FIGURE 8-1 high- lights the TeamSTEPPS 2.0 Team Perfor- mance Observation Tool for measuring team performance.19

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FIGURE 8-1 TeamSTEPPS 2.0 Team Performance Observation Tool

Reproduced from TeamSTEPPS® 2.0 Team Performance Observation Tool. Agency for Healthcare Research and Quality; Rockville, MD. https://www.ahrq.gov/ sites/default/files/wysiwyg/professionals/education/curriculum-tools/teamstepps/instructor/reference/tmpot.pdf. Accessed February 12, 2017.

Performance and Group Effectiveness 109

Team Performance Observation Tool Date: Unit/Department: Team: Shift:

Rating Scale Please comment if 1 or 2.

1 = Very Poor 2 = Poor 3 = Acceptable 4 = Good 5 = Excellent

1. Team Structure Rating a. Assembles a team

b. Assigns or identifies team members’ roles and responsibilities

c. Holds team members accountable

d. Includes patients and families as part of the team

Comments: Overall Rating – Team Structure

2. Communication Rating a. Provides brief, clear, specific,and timely information to team members

b. Seeks information from all available sources

c. Uses check-backs to verifyinformation that is communicated

d. Uses SBAR, call-outs, and handoff techniques to communicate effectively with team members

Comments: Overall Rating – Communication

3. Leadership Rating a. Identifies team goals and vision

b. Usesresources efficiently to maximize team performance

c. Balances workload within the team

d. Delegates tasks or assignments, as appropriate

e. Conducts briefs, huddles, and debriefs

f. Role models teamwork behaviors

Comments: Overall Rating – Leadership

4. Situation Monitoring Rating a. Monitors the status of the patient

b. Monitors fellow team members to ensure safety and prevent errors

c. Monitors the environment for safety and availability of resources (e.g., equipment)

d. Monitors progress toward the goal and identifies changes that could alter the plan of care

e. Fosters communication to ensure that team members have a shared mental model

Comments: Overall Rating – Situation Monitoring

5. Mutual Support Rating a. Provides task-related supportand assistance

b. Provides timely and constructive feedback to team members

c. Effectively advocates for patientsafety using the Assertive Statement, Two-Challenge Rule, or CUS

d. Uses the Two-Challenge RuleorDESC Script to resolve conflict

Comments: Overall Rating – Mutual Support

TEAM PERFORMANCE RATING

PATIENT CARE T EA

TeamSTEPPS ® 2.0 PERFORMANCE

Leadership

Situation Monitoring

Mutual Support

SKILLS ATTITUDESKNOWLEDGE

Communication

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https://www.ahrq.gov/sites/default/files/wysiwyg/professionals/education/curriculum-tools/teamstepps/instructor/reference/tmpot.pdf

decision with reasons that the decision is cor- rect or downplaying reasons that would negate the decision, without considering reasons why the decision may be incorrect. Another related concept is risky shift.23 This concept refers to a group’s tendencies to make riskier decisions than the average of individual’s deci- sions alone. People feel more comfortable tak- ing risks when all members are responsible for the risk together, as opposed to an individual bearing sole responsibility. Another phenom- enon of groups is social facilitation and social loafing.24, 25 Social facilitation occurs when the presence of others serves as a positive stimulus to motivate better performance, particularly on easy or well-rehearsed tasks. Members of a team, for example, may encourage or motivate others to perform beyond what they would normally do otherwise. When the task is dif- ficult or challenging, however, the presence of others can hinder performance. Groupthink, group polarization, risky shift, and social loaf- ing are examples of undesirable outcomes of group work.26

Ingroup bias may also occur when an individual has a tendency of favoring one group.26 This is not one group in par- ticular, but whatever group the individual associates with at a particular time.26 It can have a powerful effect on people, societies, and life in general. For example, when you play on a sports team or attend a group that meets once a week, you are part of the team’s ingroup. It may also be something on a much grander scale such as conflict between religious groups, ethnic cleansing in Bos- nia, or genocide in Rwanda which resulted in mass murder because each side perceived their own group as being right and the other group being bad and evil.26

▸ Conclusion Inter professional teams (rather than groups or individuals) are equipped to deliver the highest quality of care. In a team, individuals’

Diversity not valued: The team members do not value the diversity of team members, their backgrounds, or viewpoints.

Negatives outcomes associated with dys- functional teams lead to lack of mutual trust, inability to manage conflict, poorly delineated roles and responsibilities, relationship issues, and a negative environment.6

▸ Group Phenomena Highly cohesive groups are often subject to group phenomena, such as groupthink or group polarization. This is because in groups, people tend to be more extreme or less argu- mentative than when asked to make a decision alone. Groupthink is the phenomenon in which all members conform and accept the ideas of a strong other.21, 22 This happens when the unity of the group becomes of utmost importance. The desire for unanimity overrides efforts for appropriate decisions. The result of such decision making is usually very bad. The head surgeon may be viewed as the most knowledgeable group member. When faced with a dilemma in the operating room, the surgeon may seek others’ advice, but pose his or her own ideas before soliciting others. Members of the team may then offer ideas sim- ilar to those the surgeon had originally stated, because something different no longer seems like a plausible solution. Unfortunately, the surgeon was not made aware of some aspect of the patient’s bodily function and the decision everyone agreed upon was a bad one. Group- think typically occurs when members of the group do not question the decision, warnings are rationalized, the group feels invulnerable to error, there is pressure to conform, people self-censor, people desire unanimity, or the group is guarded from contrary viewpoints. Group polarization is the exaggeration of group members’ positions. Groups tend to polarize when members of the group already have a tendency toward a given position. Polarization of decisions occurs when members fuel the

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4. What are the six different types of teams currently found in health orga- nizations? How are they similar? How are they different?

5. What are the characteristics of a high- performing healthcare team?

6. What is teaming? How do you think teaming can be applied to health care?

7. What is the importance of roles, diver- sity, and trust to team functioning?

8. What impact has the TeamSTEPP ini- tiative had on healthcare delivery?

9. What are groupthink and ingroup bias? How can they be avoided?

References 1. Shiver J, Cantiello J. Managing Integrated Health

Systems. Burlington: Jones & Bartlett; 2016:144–146. 2. Tuckman B, Jensen M. Stages of small-group

development revisited. Group Facilitation: Res Appl J [serial online]. January 2010;10:43–48. Available from: Business Source Complete, Ipswich, MA. Accessed February 7, 2017.

3. Johnson JA. Introduction to Public Health Organi- zations, Management, and Policy. Cengage Textbook. Kindle Edition. 2013:276.

4. Lemieux-Charles L, McGuire WL. What do we know about health care team effectiveness? A review of the literature. Med Care Res Rev. 2006;63:263–300.

5. Fried BJ, Fottler MD. Human Resources in Healthcare: Managing for Success. 4th ed. Chicago, IL: Health Administration Press; 2015:163–165, 514–522.

6. Developing and sustaining high-performance work teams. Society of Human Resource Management. https://www.shrm.org/resourcesandtools/tools-and -samples/toolkits/pages/developingandsustaining high-performanceworkteams.aspx. Published July 23, 2015. Accessed February 10, 2017.

7. Mitchell P, Wynia M, Golden R, et al. Core principles and values of effective team-based health care: Dis- cussion paper. National Academy of Sciences. https:// www.nationalahec.org/pdfs/VSRT-Team-Based- Care-Principles-Values.pdf. Published October 2012. Accessed February 12, 2017. 1–32.

8. Edmondson AC. The kinds of teams health care needs. Harvard Business Review. December 2015. https://hbr .org/2015/12/the-kinds-of-teams-health-care-needs. Accessed February 10, 2017.

9. Edmondson AC. Teamwork on the fly. Harvard Business Review. April 2012. https://hbr.org/2012/04

actions are interdependent and coordinated, each member has a specified role, and mem- bers share common task goals or objectives. However, health organizations have several different types of teams—cross- functional, project, self-directed, task force, process improvement, and virtual teams.

A team member’s role is the part one plays in a given context. A key component to healthy group dynamics is communication of role expectations. Trust is developed when team members experience seemingly predict- able situations, exchange information about oneself with others, reciprocate, and open up. People begin to socialize into the organiza- tion’s culture through the process of commu- nication. Once team members are socialized, they develop shared mental models of how things will work in their team. Role conflict arises when a focal person’s ideas of his or her requirements are incongruent with expecta- tions from role set members. Groups trans- form into teams through forming, storming, norming, and performing. Cohesive groups may develop group phenomena—such as groupthink or intergroup bias—that limit their effectiveness.

Healthcare administrators must take steps to design better teams, train team members to work together, manage team performance, structure the work performed by the team, and provide support to team members. Healthcare teams can become more effective through training aimed to enhance their members’ autonomy, diversity, and interdependence.

Review/Discussion Questions 1. What are the major differences between

a team and a group? 2. What are the three types of critical

human capital competencies for effec- tive teamwork?

3. What are the five stages of team devel- opment as identified in Tuckman’s model?

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https://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/developingandsustaininghigh-performanceworkteams.aspx

https://www.nationalahec.org/pdfs/VSRT-Team-Based-Care-Principles-Values.pdf

https://hbr.org/2015/12/the-kinds-of-teams-health-care-needs

https://hbr.org/2012/04/teamwork-on-the-fly.html

https://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/developingandsustaininghigh-performanceworkteams.aspx

/teamwork-on-the-fly.html. Accessed February 10, 2017.

10. Rock D, Grant H. Why diverse teams are smart. Harvard Business Review. November 2016. https:// hbr.org/2016/11/why-diverse-teams-are-smarter. Accessed February 12, 2017.

11. Adapted from Manning G, Curtis K, McMillen S. Building Community: The Human Side of Work. Cincinnati, OH: Thomson Executive Press; 1996.

12. Kahn RL, Wolf DM, Quinn RR, Snoek DJ, Rosenthal RA. Organizational Stress: Studies in Role Conflict and Ambiguity. New York: Wiley; 1964.

13. Rizzo JR, House RJ, Lirtzman SI. Role conflict and ambiguity in complex organizations. Adm Sci Q. 1970;15:150–163.

14. Carron AV. Social Psychology of Sport. Ithaca, NY: Movement Publications; 1980.

15. Liden RC, Wayne SJ, Jaworski RA, Bennett N. Social loaf- ing: A field investigation. J Manage. 2004;30:285–304.

16. Shaw ME. Group Dynamics: The Psychology of Small Group Behavior. New York: McGraw-Hill; 1981.

17. Oandasan I, Baker GR, Barker K, et al. Teamwork in Healthcare: Promoting Effective Teamwork in Healthcare in Canada. Ottawa: Canadian Health Services Research Foundation; 2006.

18. Baker DP, Battles JB, King HB. New insights about team training from a decade of TeamSTEPPS. PS Net.

https://psnet.ahrq.gov/perspectives/perspective/218 /new-insights-about-team-training-from-a-decade-of -teamstepps. Published February 2017. Accessed February 12, 2017.

19. TeamSTEPPS 2.0 team performance observation tool. TeamSTEPPS. https://www.ahrq.gov/sites/default/files /wysiwyg/professionals/education/curriculum-tools /teamstepps/instructor/reference/tmpot.pdf. Accessed February 12, 2017.

20. Landry A, Erwin C. Perspectives on multidisciplinary team processes among healthcare executives: Pro- cesses that facilitate team effectiveness. J Health Hum Serv Adm. 2015;38(3):350–380.

21. Janis I. Victims of Groupthink. Boston: Houghton- Mifflin; 1972.

22. Janis I. Groupthink. 2nd ed. Boston: Houghton-Mifflin; 1982.

23. Stoner JAF. A comparison of individual and group decisions involving risk. Unpublished Master’s Thesis, Massachusetts Institute of Technology; 1961.

24. Bond CF, Titus LJ. Social facilitation: A meta-analysis of 241 studies. Psychol Bull. 1983;94:265–292.

25. Karau SJ, Williams KD. Social loafing: A meta-analytic review and theoretical integration. J Pers Soc Psychol. 1993;65:681–706.

26. Hewstone M, Rubin M, Willis H. Intergroup bias. Annu Rev Psychol. 2002;53:575–604.

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https://hbr.org/2016/11/why-diverse-teams-are-smarter

https://psnet.ahrq.gov/perspectives/perspective/218/new-insights-about-team-training-from-a-decade-of-teamstepps

https://www.ahrq.gov/sites/default/files/wysiwyg/professionals/education/curriculum-tools/teamstepps/instructor/reference/tmpot.pdf

https://hbr.org/2012/04/teamwork-on-the-fly.html

Power and Politics in Health Organizations

LEARNING OBJECTIVES

■ Describe the effect of power in a health organization. ■ Be able to discuss the role and importance of power in health delivery. ■ Identify the sources of power for individuals in a health organization. ■ Describe how health professionals can achieve power in the healthcare setting. ■ Gain an appreciation of the power dynamics we often see in health delivery. ■ Describe individual, structural, and resource bases of power. ■ Describe the elements of politics and the association of politics and power in a health

organization within Mintzberg’s political game playing framework.

OVERVIEW

This chapter describes the sources of power and how they interplay with organizational dynamics and politics. There is also a discussion about the necessity of power and the need to use it responsibly, especially among the various health professional groups. Power is addressed from the perspectives of structure, resources, and personal bases. There is a description of political games that get played out in organizations and examples of how they are germane to healthcare.

Contributing Author: Lee W. Bewley

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hand, an individual who regularly interacts with staff in an organization is clearly more likely to exert or experience influence and, therefore, has the potential to employ power in the course of work. The foundation for power is based on the nature of the interaction between a staff member who seeks to influence another staff member or group. Generally, the level of power and corre- sponding likelihood of a successful conveyance of influence are based on an evaluation of char- acteristics or context aligned with the executive, manager, or individual seeking to leverage power to achieve influence. For instance, the higher the level of power a hospital nursing staff perceives the vice president for nursing in a community hospital to possess as a consequence of certain characteristics inherent in the executive and the organization context of the position, the higher the level of influence that the executive is likely to be able to achieve in the hospital.

Another important consideration in the interaction of members in an organization rel- ative to power and influence is the practice of organizational politics. Politics in business is usually associated with attempts to influence or to achieve power contrary to or misaligned with the primary design or goals of the orga- nization. There are a number of mechanisms in which individuals or groups in health orga- nizations may seek to employ organizational politics to gain power and exert influence.

▸ Sources of Power What are the characteristics or organizational contexts that enable a member of a health orga- nization to achieve power in order to positively influence staff in the organization? The two broad domains of power generation include individual-based characteristics and organiza- tional structure. Fellow staff members will assess the level of power an individual possesses based on characteristics inherent in the individual and the position that the individual holds in the orga- nization. There are several components of both individual- and structural-based power sources.

▸ Introduction

The modern health organization is typi-cally staffed by hundreds of employees serving multiple departments, services, and clinics, and representing scores of human capital perspectives ranging from health exec- utive to administrative staff. Each of the staff members and the collective groups of staff in various service areas bring unique perspectives, experiences, expectations, and capabilities to the organization; however, the staff, individ- ually and collectively, shares a common, uni- versal element in organizational behavior: the ability to decide whether, and to what degree, to dedicate their efforts toward achieving goals and objectives established by management.

Autonomy of alignment with management direction among staff and work groups is not unique to hospitals among health organizations. Medical group practices, managed care organi- zations, health plans, and virtually all health organizations face the management problem of shaping and directing the behavior of staff in the workplace. Successful management practices in organizational behavior are positively associ- ated with operational outcomes, higher levels of employee commitment, and greater preva- lence of organizational citizenship behaviors. Conversely, management that fails to positively develop staff behaviors is more likely to achieve decremented operational outcomes, lower lev- els of employee commitment, and higher rates of employee detachment from the organization.

The essential component of management in achieving positive development of organiza- tional behavior among employees is the appro- priate utilization of power by an individual in an organizational setting, ranging from a single staff member to the entire enterprise. Power is the ability to stimulate productive action. The key element of this ability in an organization is inherent in the nature of the relationship between an individual and the staff who may be influenced by power. An individual in isolation has no one that he may influence; consequently, his power is effectively benign. On the other

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to bonuses or promotions. It is important to note that if a manager or executive is not per- ceived by staff to be either able or willing to generate rewards, then the ability of an indi- vidual to use reward power to influence staff to achieve organization goals will bear no fruit.

Coercive The contrary power perspective of reward power is coercive power or the perception of members of an organization that an individ- ual has the ability to mete out punishment or sanctions ranging from a mild annoyance to professionally or personally devastating. Sim- ilar to reward power, if the organizational staff judge that an individual either does not have the ability or the constitution to adjudicate coercive actions to individuals or groups in the organization, then the executive or manager that attempts to employ this form of power to achieve influence will likely fail in their efforts.

Expert The individual-based characteristic of expert power is particularly effective and clearly iden- tifiable by attributes specific to an individual. Practically any characteristic, credential, or ability that reflects relatively rare expertise and a unique ability to positively contribute may serve as the basis for expert power. However, the essential element of establishing power, like all forms of potential power, is that staff that may be subject to the attempted influence of an indi- vidual seeking to leverage expert power must recognize, understand, and accept the charac- teristics of the individual who may attempt to establish power. For instance, people unfamiliar with many health professions may equivalently judge the expert power of a physician assistant and an emergency medical technician.

Referent The final individual-based power source is ref- erent power. As people in an organization pos- itively associate specific personal or behavioral

Individual Based A seminal writing in organizational behavior by French and Raven outlines five primary sources of power based on individual characteristics eval- uated by staff subject to the potential influence of an individual. These individual characteris- tics are legitimate power, reward power, coer- cive power, expert power, and referent power.1, 2 Each of these bases of power is neither mutually inclusive nor independently exclusive as a rule of practice. Separate or combinations of each of the sources of individual-based power may be lev- eraged to achieve influence in an organization.

Legitimate Legitimate power derives primarily from authority. It is the reflection of an assignment or duty position allocated to an individual in an organization, which is recognized and understood by other staff, particularly by staff members who occupy subordinate positions. Subordination to another individual in an organization facilitates the opportunity to com- mand, direct, or change employee actions by the staff member with authority, provided that the subject subordinates fall within the rele- vant bounds of control available to the senior staff member. For instance, the chief executive officer (CEO) of a hospital possesses legitimate power, and practically all of the staff in the hos- pital exist within the CEO’s bounds of authority. However, the vice president for nursing services also holds similar, significant legitimate power in the organization, but staff working in areas other than nursing will likely moderate the level of power perception of the nursing executive.

Reward Reward power is based in the perception by staff that either an individual possesses some- thing that is desired by individuals or groups in an organization or the individual can reason- ably coordinate to deliver something of value to members of the staff. Examples of rewards that may be conveyed range from simple praise

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the firm. If appropriately utilized, the ability or opportunity to make decisions within an organizational context potentially affects each of the other prime sources of power and, thus, can be a potent source of power if staff influ- enced by the individual with decision-making authority recognize this power.

Information The common refrain that “information is power” is generally true. Information that is essential, valued, and/or sought by individuals within an organization serves as the basis for power for key individuals who possess or have access to information that could yield influence. Just as possession and control of resources may gen- erate influence opportunities in ascending or lateral organizational strata, information power may also achieve influence up, across, and down the organizational boundaries depending upon the level of value individuals in the organization place on the information.

Summary of the Sources of Power The prime use of power in an organization is to influence individuals and/or groups to gen- erate positive actions aligned with the goals and objectives of the firm. Each of the compo- nent sources of power with the individual and structural domains of power generation exist as potential levers to generate influence and corresponding action within an organizational context (see FIGURE 9-1).

Sources of Power for Health Professionals Health professionals have a number of mech- anisms for achieving power within the organi- zational context, particularly given the degree of specialization among professions that cre- ate varying and relative scarcity of human resources. Furthermore, the prevalence of

characteristics to an individual that causes them to be inclined to agree with or seek to please another individual that is judged to have charisma, then referent power is developed in an organization by an individual. The enduring essential element of this power generation process is that the mem- bers of the organization generate this power by associating favorable personal judgments with a focused individual based on the manner in which that individual interacts with people.

Structural Based In addition to individual-based sources of power in organizations, there are certain aspects of firms that have the potential to generate power based upon the structural characteristics of the enter- prise. These structures include resource power, decision-making power, and information power. Each of these sources of power may be employed individually or in combination to exert influ- ence in organizations to facilitate achievement of organizational goals and objectives.3, 4

Resources Perhaps no other aspect of an organization, par- ticularly in a capitalistic society, is emblematic of power than the possession and control of essential resources to achieve some individual or collective end. The breadth and depth of potential resources that may generate power are extensive, but the strength of the power generation is positively asso- ciated with the relative scarcity of the resources in the relevant market context and in the strength of being essential or desired. Individuals that have the capacity to direct, divert, withhold, and/ or provide resources clearly have the capacity to influence others, potentially in relationships that are lateral or ascendant rather than a traditional subordinate or downstream perspective.

Decision Making Individuals that hold a position within the structure of an organization that either make or facilitate decisions clearly have the capacity to be able to influence individuals or groups within

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executive positions in organizations, creden- tialing services, and the asymmetrical access to resources and information yield accessible means for achieving power to generate influ- ence.5 TABLE 9-1 outlines some mechanisms that health professionals may use to achieve power in health organizations.

▸ Politics in Health Organizations

The development and use of power in orga- nizations to generate influence are gener- ally associated with the primary mission of the organization, which is usually to enable principles and agents to provide an adequate FIGURE 9-1 The Effect of Power

TABLE 9-1 Sources of Power for Health Professionals

Physicians/ Dentists Nurses

Allied Health Providers

Health Administrators

Legitimate Owner, Partner, Chief

VP, Head Nurse Owner, Partner, Chief

CEO, Administrator

Reward Contingency Based

Contingency Based

Coercive Contingency Based

Contingency Based

Expert MD, DO, DMD MSN, Ph.D. , DNP M.S., D.PT., Ph.D. , AuD, PsyD

MHA, MBA, FACHE, Ph.D., DHA

Referent Past Actions, Interpersonal Interactions

Past Actions, Interpersonal Interactions

Resources Clinical Nursing Clinical Business Processes

Decision Making

Clinical Staff Nursing Staff Clinical Staff Business Processes

Information Patient Diagnosis

Case Management

Patient Diagnosis

Business Processes

Politics in Health Organizations 117

Individual: Legitimate, reward, coercive, expert, referent Structural: Resources, decision making, information

Power: Individual

and structural

Organizations and

individuals

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the players, conditions, and power/influence relationships in an organization context along with the primary reasons for playing each of the games. The following depictions illustrate how health professionals may play these games in health organizations.8, 9

Insurgency This game involves individuals or small groups that resist authority or some legitimate power. If the CEO of a community hospital was con- sidering an unpopular closure of the Neo-Natal Intensive Care Unit (NICU), then the staff may leak details of the plan to the local newspaper or to board members in an attempt to have the plans derailed.

Counter-Insurgency This game involves senior leaders, executives, and/or individuals with legitimate power countering the political insurgency efforts of subordinate staff. In the NICU scenario, the CEO could censure discussion of hospital plans outside of the hospital or take actions to punish staff that leaked information.

Sponsorship This game involves subordinate or junior staff that seek to improve their power position in the organization by seeking patronage and sponsorship from more senior and powerful staff members. An example of this might be represented by the actions of a junior actu- ary in a health insurance company that are directed to gaining valuable developmental time with the chief executive of the firm.

Alliance-Building This game involves line leaders with legitimate power coordinating across operational lines to solidify their power base. Each of the respec- tive head nurses in a hospital may develop relationships across wards to enhance their power base.

return on investment to the owners of the enterprise in for-profit health organizations or to achieve higher levels of societal benefit in the context of nonprofit health organizations. Organizational politics exists as another pro- cess of shaping power and influence; however, the basis and intent of these processes are not always aligned with organizational goals and objectives and, in fact, may be contrary to the benefit of the firm for the gain of individuals or interest groups. When individuals seek to develop and utilize power within an organi- zational context in a manner contrary to or not completely consistent with the organiza- tion’s mission, vision, and value, then profes- sional risk for employment standing, career progress, and/or personal reputation should be expected; consequently, individuals play- ing organizational politics should be expected to perpetually evaluate potential risks and rewards for their actions.

Elements of Playing Politics What are the characteristics of organizational politics? Generally, the elements of playing politics include actions taken outside the bounds of established organizational pro- cesses, actions taken to benefit individuals or groups often to the detriment of the organi- zation, and intentional, premeditated actions focused solely on the attainment and/or pres- ervation of power. Essentially, playing politics is an individually motivated event undertaken with the principal intent to improve one’s own personal benefit.6, 7

Mintzberg’s Political Games Mintzberg articulated a model of organiza- tional interaction focused on the development, maintenance, and employment of influence in firms among employees that often exists out- side the established bounds of the enterprise, but intermittently achieves outcomes that align with the interests of the organization. Mintzberg’s model of political games outlines

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Line vs. Staff This game is played between staff members with alternatively legitimate and expert pow- ers generally intended to diminish the power standing of one individual or group. Staff con- flicts between administrators and clinicians may often resort to these political games.

Rival Camps This game is played when multiple groups aggregate around polarizing issues and seek a “winner takes all” outcome to com- pletely establish power by dashing the power and standing of the other group. A division between the medical staff and nursing staff rel- ative to operational procedures could develop into this game.

Strategic Candidates This game is played by individuals or groups with legitimate power to change the funda- mental framework or direction of the orga- nization. Individuals seeking to become the CEO, who advocate different views of the future in terms of mergers or alliances versus remaining a stand-alone facility, may play this game.

Whistle-Blowing This game is played by levering informa- tion power to stop or inhibit action within the organization. An example of this game would involve staff coming forward to the press or the board of directors with informa- tion to prevent the firing of a popular staff member.

Young Turks This game is played with the most aggressive political goals intended, which result in a rev- olutionary change in the process or content of leadership and power in the organization. An example of this is employees or junior

Empire-Building This game involves line leaders with legitimate power angling to attain and accumulate key, essential resources within the organization to bolster their power base. A partner in a group practice management could play this game by seeking to concentrate the most productive providers in his clinic at the expense of the other partner clinics.

Budgeting This game is similar to the empire-building game; however, focus of line leaders is solely on attaining a greater portion of the opera- tional budget and effectively crowding out other aspects of the firm. The emergency services director that seeks to upgrade his facilities by advocating for the allocation of 90% of the annual capital budget would be playing this game.

Expertise This game is played by employing expert power in a manner that is oriented exclu- sively to improving the power base of the individual. A highly regarded physician who practices pediatric neurosurgery demands specific facilities, equipment, and support staff with the prime rationale being that no one else in the hospital understands what is required to generate value within his or her service line.

Lording This game is played by staff members with potentially excess legitimate power who overly leverage their power to firmly establish their own power base and diminish the power of other staff. The president of the medical staff, who perpetually reminds the administrator that he or she is the medically trained profes- sional in public and private forums, may be playing the lording game.

Politics in Health Organizations 119

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FIGURE 9-2 Mintzberg’s Organizational Political Game

leaders of a healthcare system seeking to buy the system.

FIGURE 9-2 depicts the various political games that members of a health organiza- tion may play in the development of personal power to achieve influence.

▸ Conclusion Power facilitates influence in health organi- zations and is derived from the bases of indi- viduals and organizational structure. Health professionals may develop power from several

120 Chapter 9 Power and Politics in Health Organizations

�

� �

�

Insurgency Sponsorship

Expertise LordingBudgeting

Rival Camps

Young Turks

Counter- Insurgency

Empire- Building

Line vs. Staff Strategic

Candidates Whistle- Blowing

Alliance- Building

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5. What are the various political games that health professionals may pursue in health organizations?

References 1. French J, Raven B. The basis of social power. Studies

in Social Power. Ann Arbor, MI: Institute for Social Research; 1959:150–167.

2. Ivancevich J, Matteson M. Organizational Behavior and Management. 4th ed. Chicago: Irwin; 1996:361–376.

3. Bass D, Burkhardt M. Potential power and power use: An investigation of structure and behavior. Acad Manage J. 1993;June:441–470.

4. Pfeffer J. Understanding Power in Organizations. Marshfield, MA: Pitman Publishing; 1981:104–122.

5. Shi L, Singh D. Health Services Professionals. Deliv- ering Health Care in America: A Systems Approach. Sudbury: Jones and Bartlett; 2004:117–148.

6. Velasquez M, Moberg D, Cavanagh G. Organizational statesmanship and dirty politics: Ethical guidelines for the organizational politician. Organ Dyn. 1983; Autumn:65–79.

7. Yoffie D, Bergenstein S. Creating political advantage: The rise of corporate entrepreneurs. Calif Manage Rev. 1985;Fall:124–129.

8. Mintzberg H. Power In and Around Organizations. Englewood Cliffs, NJ: Prentice Hall; 1983:171–271.

9. Mintzberg H. The organization as political arena. J Manage Stud. 1985;22:133–154.

perspectives and sources. The magnitude of potential power development is dependent on available resources and choices of individuals within organizations.

Power provides the basis for political games and competition. Organizational poli- tics are played to advance the power and influ- ence of individuals. Individuals and subgroups may play a number of political games in a health organization in a manner that considers professional risks and rewards toward achiev- ing advancement for their own interests that may or may not be consistent with organiza- tional strategies.

Review/Discussion Questions 1. What are the two prime sources of

power in health organizations? 2. What are specific determinants of power

for individuals in health organizations? 3. How does power vary among health

professionals? 4. What is the prime motive for play-

ing organizational politics in health organizations?

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CHAPTER 10

Conflict Theory and Interpersonal Dynamics in Health Organizations

LEARNING OBJECTIVES

■ Describe the financial impact of conflict to organizations. ■ Describe three theories of conflict. ■ Describe the sources of conflict in an organization. ■ List and describe the different conflict management styles. ■ Apply the conflict management style decision tree to real or hypothetical conflict situations. ■ Describe four factors in building professional and positive interpersonal relationships. ■ Explain how trust and disclosure work together in building relationships. ■ Explain how quality communication leads to better conflict management and conflict outcomes

as well as better interpersonal relationships.

OVERVIEW

This chapter provides the student with an overview of conflict theory and interpersonal dynamics in health organizations. Theories and sources of conflict are examined. Conflict management styles, decision trees and other techniques for conflict resolution are provided. Finally, factors that can improve or destroy interpersonal professional relationships are discussed.

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▸ Theories of Conflict In their book, Managing Human Behavior in Public and Nonprofit Organizations, Denhardt, Denhardt, and Aristigueta eloquently examine three theories of conflict: systems, attribution, and social exchange theory.4

Systems theory suggests that conflict should be viewed as one piece in the context of larger systems of interactions. Conflict may be assessed by examining the workings of the entire system, looking at recurring patterns, and recognizing individual contributions to the operations of the system as a whole. Therefore, conflict is exam- ined by possible patterns, intertwining sequences, roles, relationships, and the processing of infor- mation. Organizations may experience growth, development, downsizing, mergers, and acqui- sitions. Occurrences such as these impose great change, producing conflict. However, in health- care, change is dynamic and difficult, yet essential for systems to evolve. Without conflict, organiza- tions fail to thrive and eventually cease to exist.4

Attribution theory proposes that the way individuals act during conflict is largely due to their individuality, personalities, ways of discern- ment, and thinking. The individual attributes a behavior to a cause. In other words, the individ- ual involved in conflict interprets the other indi- vidual’s actions based on the assumption that something is wrong with the other person, the behavior would have occurred anyway, and that the behavior has been present throughout their lives and is not something they can change. 4, 5

Social exchange theory asserts that indi- viduals evaluate their interpersonal relation- ships based on their value. Relationships are measured in terms of costs (amount of effort) and rewards (what is received in return). When costs are high and rewards are low, conflict is more likely to occur. Therefore, conflict occurs more frequently in relationships that lack per- sonal rewards or have perceived inequity, while conflict is less likely in relationships that are perceived to be rewarding and equitable.4

▸ Introduction Conflict is a universal characteristic of the human condition. A recent study of 5000 employees from 9 countries in Europe and the United States found that 85% of employees have experienced workplace conflict.1 A total of 34% of employees in entry level or front line positions have experience workplace conflict, while 12% of those at a senior level experience conflict. Employees spent 2.8 hours per week dealing with conflict, totaling 385 million working days nationwide at a cost of $359 bil- lion in paid hours.1 Among employees in the United States, 81% have seen conflict lead to a positive resolution. However, 27% of employ- ees have seen conflict escalate into a personal attack and 25% avoid conflict, resulting in ill- ness or absenteeism.1

Furthermore, interpersonal relationships are required to successfully lead health organi- zation now and into the future. Disagreements transpire when interdependent people have different priorities: goals and objectives in the midst of an environment of scarce resources.2 Each department director in an organization has different goals; even if the goals are only slightly different, conflict can occur.3 In other words, there are conflict situations across the continuum of healthcare among a pleth- ora of interpersonal relationships. Inclusivity of all healthcare stakeholders’ opinions and creating a positive, transparent environment with mutually beneficial interpersonal rela- tionships by leadership and management are key to successful healthcare operations. This chapter will examine theories of conflict, sources of conflict, conflict styles, and inter- personal relationships. The goal of this chap- ter is to provide the reader with the necessary critical thinking skills to successfully navi- gate through conflict, capitalizing on positive change that can lead the health organizations to an optimal future.

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or separately. Indirect influence submits that a manager’s participation provides balance to the opposing sides and helps those individu- als involved in the conflict to seek clarification of the diverse positions. Distant refers to the impact by a manager’s mere presence: restrain- ing oneself from direct or indirect involvement.7

Communicative can be viewed as a con- straining influence in which management bars the inclusion of different views in conflict or enables influence that allows the inclusion of different views. Regardless of the view, manage- rial behavior impacts organizational conflict.7

▸ Sources of Conflict When individuals of varying ethnicity, back- grounds, beliefs, and values converge to achieve an administrative directive, goals, or objectives, conflict may occur. Personality dif- ferences, perceived irritating behaviors, unmet needs in the workplace, perceived inequali- ties, unclarified roles, competing job duties, systemic organizational issues (workforce slowdown), mergers, acquisitions, reduction in workforce, mismanagement of organiza- tional change, and poor communication are all sources of workplace conflict.10 Customs, social norms, morals, mores, and fairness, together with the employment of numerous distributive justice methods, add to conflict situations when one individual feels cheated or given a less equitable allocation of resources.

When interdependent individuals or groups have different goals or aspirations of achieve- ment within an environment of scarce resources, conflict occurs.2 With the increasing cost of healthcare, we are all asked to do more with less. Directors and managers compete for limited resources (capital and operational budgets, staff- ing, supplies), causing varying degrees of conflict. At one end of the continuum, conflict may be minor in nature, identified by two parties who recognize the problem and seek an amenable solu- tion (problem-solving style) or it may be a major confrontation, ending in assault and battery, and violence (competing style); on the opposite end of

As described in the earlier chapter on post- modern theories, health organizations are com- plex and usually large entities. Many theorists of organization science suggest that conflict between individuals and individuals and the organization would get worse as organizations become larger (hierarchical, bureaucratic, imper- sonal) and more complex (rules and span of control systems). Likewise, as societies become better educated and more affluent (creating more individuals whose higher-level needs are salient), more conflict occurs.6 Transparency, veracity, and situational updates are imperative for successful conflict management and form an essential foundation for building solid inter- personal relationships. Time-sensitive commu- nication that is accurate and truthful creates an environment of trust, fostering open communi- cation and collaboration, essential ingredients for positive conflict management and interper- sonal relationships.

The complexity perspective views con- flict as dynamic: escalating and deescalating, changing form, spreading into new groups, and having the ability to pass from generation to generation.7, 8 Conflict is endemic and can be beneficial for organizations, serving as a source of energy, adaption, and growth.7 The complex- ity theory view recognizes the importance of leadership—individuals who act in ways that influence conflict and ultimately shape out- comes.7 Management influences complex sys- tems by encouraging, constraining, and shaping interactions to bring about patterns, dynamics, and properties.9 Managerial conflict resolution is viewed as the impact one has on conflict interaction and the meaning-making process. Research by Siira suggests that managerial con- flict can be conceptualized according to two theoretical dimensions, directness and commu- nicative, with five subdimensions: direct, indi- rect, distant, constraining, and enabling.7

Directness is viewed as the extent that one (manager) intervenes with conflict and can be viewed as a direct, indirect, and distance influence. Direct suggests overt influence in the conflict, addressing participants together

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the continuum, it could even be war, which is an ultimate failure of conflict management.

Conflict Styles Various situations and contexts require different conflict intervention styles; training manage- ment and other stakeholders on the effective use of conflict styles is imperative. A conflict style is symbolized in an individual’s behavior toward conflict.11 As identified by Folger in 2005, Led- low in 2009, and again by Johnson in 2013, there are six basic conflict management styles:11, 12, 19

1. Accommodating 2. Avoiding 3. Collaborating 4. Competing 5. Compromising 6. Problem solving

In addition, assertiveness (concern for self ) and cooperativeness (concern for others)

BOX 10-1 Conflict Styles

Accommodating ■ When you find you are wrong, to allow a better position to be heard; to learn; and to show your

reasonableness. ■ When issues are more important to others than to you, to satisfy others and maintain cooperation. ■ To build social capital for later issues. ■ To minimize loss when you are outmatched and losing the conflict. ■ When harmony and stability are especially important. ■ To allow subordinates to develop by learning from their mistakes.

Avoiding ■ When an issue is trivial or more important issues are pressing. ■ When you perceive no chance of satisfying your needs. ■ When potential disruption outweighs the benefits of resolution. ■ To let people cool down and regain perspective. ■ When gathering information supersedes immediate decision making. ■ When others can resolve the conflict more effectively. ■ When issues seem a result of other issues.

Collaborating ■ To find an integrative solution when both sets of concerns are too important to be compromised. ■ When your objective is to learn. ■ To merge insights from people with different perspectives. ■ To gain commitment by incorporating concerns into a consensus. ■ To work through feelings that have harmed an interpersonal relationship.

are two independent dimensions, combining to form the first five basic management styles.2 Individuals have a primary style (dominant) and a secondary style that are fairly stable. All six styles can be taught, practiced, and mastered to improve an individual’s skill and ability to manage interpersonal and organiza- tional conflict. Practice makes perfect! The six styles presented are shown as a combination of numerous scholars’ work for purposes of expanding your knowledge.2, 13–19

Styles are chosen based on the situation. It is important to note that during conflict situa- tions, those individuals involved in the conflict can select styles intentionally or unintention- ally, and individual selection may be different. Only in problem solving do individuals mutu- ally choose the style and work together. In order to understand the situational context, and what style to select, each style is presented with its associated situational context in BOX 10-1.

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Competing ■ When quick, decisive action is vital (e.g., emergency situations such as a disaster, terrorism incident,

or accident). ■ On important issues where unpopular actions need implementing (e.g., cost cutting, enforcing

unpopular rules, discipline). ■ On issues vital to company welfare and survival when you know you are right. ■ Against people who take advantage of noncompetitive behavior.

Compromising ■ When goals are important, but not worth the effort or potential disruption of competing. ■ When opponents with equal power are committed to mutually exclusive goals. ■ To achieve temporary settlements to complex issues. ■ To arrive at expedient solutions under time pressure. ■ As a backup when collaboration or competition is unsuccessful.

Problem Solving ■ May not always work (it takes two to make this style work). ■ Requires the identification of a broader range of strategies. ■ Points for problem solving

• Both parties must have a vested interest in the outcome (the resolution). • Both parties feel a better solution can be achieved through problem-based collaboration. • Both parties recognize the problem is caused by the relationship, not the people involved. • Focus is on solving the problem, not on accommodating differing views. • Both parties are flexible. • Understanding that all solutions have positive and negative aspects. • Both parties understand each other’s issues. • Problem is looked at objectively, not personally. • Both parties are knowledgeable about conflict management. • Allow everyone to “save face.” • Celebrate successful outcomes openly.

Obviously, the six different conflict manage- ment styles vary in nature and should be used in the appropriate situation. It is critical that leaders and managers of health organizations receive the knowledge, skills, and abilities to become com- petent with each conflict style. The Michigan and the Ohio State Leadership studies identified two broad behavioral leadership styles. Similar in nature to the leadership styles, conflict manage- ment styles can be arrayed graphically as shown in FIGURE 10-1.20

Management behavior is another ele- ment of consideration in the management of conflict. Preparation is key and increases the likelihood of positive outcomes. BOX 10-2 demonstrates desired behavior during initial conflict and in the midst of conflict.

While it is better to address workforce conflict in a timely manner, occasionally guidance from an outside expert may be indicated for allegations of discrimination or harassment, a hostile workplace such as bul- lying or abusive behavior, patterns of negative reoccurring behavior, legal issues, or lack of in-house expertise by management and HR staff.10

Somewhat similar to conflict resolution is the process of negotiation. Fisher, Ury, and Pat- ton’s exceptional work, Getting to Yes: Negotiat- ing Agreement Without Giving In (2011, 3rd ed.), provide insights that are applicable to conflict management.21 These insights are highlighted in BOX 10-3 and provide methods to problem-solve, getting to yes and ultimately agreement.

BOX 10-1 Conflict Styles

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FIGURE 10-1 Conflict Styles Regarding Concern for Self and Others

Conflict Style Selection A number of factors influence the selection of a conflict style including the extent of the interpersonal relationships, the presenting

BOX 10-2 Desired Manager Behaviors during Conflict

In the early stages of conflict, it is important to keep these tenets in mind.

■ Stay calm and keep focused. ■ Use facts and prepare beforehand. ■ Understand the resource implications and

limitations that may be involved. ■ Listen to your own emotions and know

what you want. ■ Try to imagine what the other(s) feel, want,

and need. ■ Use a process such as the decision tree

method and then develop a strategy. ■ Rehearse the strategy you have developed,

perhaps with a neutral colleague. ■ Be prepared to modify your approach when

needed to better deal with the conflict.

When in the midst of conflict, it is important to keep these tenets in mind:

■ Keep the person separate from the problem as much as possible.

■ Focus on interests, not positions of right and wrong

■ Avoid always having a “bottom line” that is fixed and nonnegotiable.

■ Think about the worst and best solutions and know what is acceptable.

■ Generate several possibilities before deciding what to do.

■ Insist that the agreed upon resolution be based on some objective standard.

BOX 10-3 Getting to Yes and Agreement

■ Do not bargain over positions. ■ Separate the people from the problem. ■ Focus on interests, not positions. ■ Invent options for mutual gain. ■ Insist on using objective criteria to resolve

the issue. ■ Develop your BATNA (best alternative to a

negotiated agreement). ■ Use your BATNA (what is the worst-case

scenario if nothing is resolved?). ■ Get the other party to negotiate.

Adapted from Getting to Yes, 2e, by Roger Fisher, William Ury, and Bruce Patton. Copyright 1981, 1991 by Roger Fisher and William Ury. Used by permission of Houghton Mifflin Harcourt Publishing Company. All rights reserved.

Sources of Conflict 127

High Assertiveness

Low Assertiveness

Low Cooperation

High Cooperation

C o n ce

rn f o r

se lf

Concern for others

Competition Collaboration

Compromise

Avoiding Accommodation

Problem solving

Personal/contingency conflict Management styles

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important to embrace these conflict manage- ment skills using the appropriate conflict styles and decision support tools such as the decision tree. Interpersonal relationships can also be improved in an environment of transparency, veracity, and trust. Interpersonal relationships are discussed in the next section.

▸ Interpersonal Relationships

During one’s career, about one-third of life is spent at work. In that context, professional relationships are not only required, but nor- mally mutually satisfying and enriching. There are a number of important factors that can enhance professional relationships. In 1994, Yukl put forth a taxonomy of manage- rial behaviors. Building relationships is one of four major domains of managerial life. In this domain, managers and leaders were encour- aged to build and strengthen relationships by sharpening their skills and abilities, engaging in managing conflict, teambuilding, network- ing, and mentoring.22 In healthcare, leaders and managers interact with both internal and

conflict resources available, and other related influences. With this in mind, the decision tree model, as presented in FIGURE 10-2, can be used in the form of high/yes or low/no answers to the following questions:

1. Is/are the issue(s) important to you?

2. Is/are the issue(s) important to the other party?

3. Is the relationship with the other party important to you?

4. How much time is available and how much pressure/stress is there to come to a resolution? Of note, an answer of “High” means high pressure.

5. How much do you trust the other party?2

Begin with the key questions at the top of the diagram and the associated high/yes and low/no answers to each of the questions. Fol- low the algorithm until you come to the con- flict management style that is recommended for use for the given conflict situation.

All of the conflict management tools pre- sented here are important to leaders and man- agers of health organizations. It is critically

FIGURE 10-2 Conflict Management Style Decision Tree (Modified)

128 Chapter 10 Conflict Theory and Interpersonal Dynamics in Health Organizations

High Low

High Low Competing

High Low

Problem Solving High Low

Collaborating Accommodating Avoiding

Compromise Compromise

Problem Solving

Competing Collaborating

Accommodating Avoiding

Avoiding Avoiding

Accommodating Accommodating

High Low Competing

Importance of Issues to You

Importance of Issues to Others

Importance of Relationship to You

Time and Pressure

Degrees of Trust in Other

Style/Strategy

Folger JP, Poole MS, Stutman RK. Working Through Conflict: Strategies for Relationships, Groups, and Organizations, (3rd ed.). NY: Longman; 1997. Copyright © 2005 by Pearson Education. Reprinted by permission by the publisher.

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the information provided. Is it in a sufficient quantity to positively reinforce and validate the relationship? Disclosure refers to the type of information shared with another individual, that is, the depth and breadth of the informa- tion. The greater the depth of information dis- closed, the closer the bond of the relationship. The broader the scope of topics of information and experiences shared, the closer the bond for the relationship as well. Disclosure of informa- tion about family, friends, hobbies, and other personal information indicates a level of trust. Self-disclosure is reciprocal (shared) and a func- tion of ongoing relationships. It moves in small increments, timed and related to what is hap- pening and the individuals directly involved. BOX 10-4 illustrates Powell’s self-disclosure lev- els. Level 5 demonstrates a weak relationship bond, whereas level 1 shows a strong relation- ship bond.23 Disclosure or self-disclosure can be categorized and measured. A strong correlation exists, indicating that the more trust an individ- ual has, the more likely they are to disclose.

Trust is the third factor and an essential component of a quality, positive relationship. Trust can be built and earned over a period of time through honest communication and positive experiences. Veracity, inclusion, and sincerity directly link to building trust. Verac- ity is being honest, truthful, and transparent, giving accurate information or knowledge that you share. Inclusion is about being welcomed or embracing another person to become a member of a group in an organization and including them in activities and experiences

external stakeholders. Therefore, it is essential to build relationships with both. Relationships may be enhanced by making rounds or simply visiting various units in a health organization. Senior leaders need to be visible. It is important they leave their offices and visit departments, getting to know the department management team and individual employees, as well as what they do, their contribution to the organization, and any concerns they have. This can go a long way to enhance communication and build trust. The next section provides key factors to strengthen these relationships.

Factors to Strengthen Relationships Relationships are often referred to as the feel- ings, roles, norms, status, and trust that both affect and reflect the quality of communication between members of a group.23 Interpersonal relationship communication theorists propose that every message has both a content (spe- cific information that is conveyed) and a rela- tionship (messages that provides hints about whether the sender/receiver likes or dislikes the other person) dimension. Both content and a relationship are essential in confirming positive enhanced communication. The reader should review the chapters in this textbook on decision making, analytics, and communica- tion in health organizations.

Language, tone of delivery, and nonver- bal communication work together to provide meaning that comes from the sender and is interpreted by the receiver. Important infor- mation regarding nonverbal communication is conveyed through eye contact, facial expres- sions, body posture, and movement.24 Individ- uals believe what they see: 55% of meaning is derived from body language, 38% from tone of voice, and 7% from the actual words.25

Essential considerations for strengthening relationships include frequency of communi- cation, disclosure, trust, and cultural compe- tence. Frequency of communication examines the timeliness, accuracy, and usefulness of

BOX 10-4 Powell’s Self-Disclosure Levels

■ Level 5: Cliché communication ■ Level 4: Facts and biographical information ■ Level 3: Personal attitudes and ideas ■ Level 2: Personal feelings ■ Level 1: Peak communication (rare; usually

with family or close friends)

Source: Johnson JA, ed. Health Organizations. Sudbury: Jones and Bartlett, 200912

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emphasis on verbal expression. As you can see, information is delivered very differ- ently between Eastern and Western cultures. Individuals from a low-context culture may be more likely to make specific requests for information while a person from a high-context culture expects communication to be more indirect and relies on cues that are more implicit.24 Furthermore, high-context cultures may consider a low-context individ- ual overbearing, dominant, and talkative and may see them as less credible or trustworthy.24 High-contact and low-contact cultures differ as well in personal space and in time. Indi- viduals from some cultures are high contact or more comfortable being touched or being in close proximity, while others are uncom- fortable with being touched, wanting their own personal space.24 Difference in temporal orientation include mono-chronic (M-time) and poly-chronic (P-time).4, 26 Those individ- uals in P-time usually belong to high-context cultures, are normally not alone, and prefer to multi-task, doing more than one activity at a time. M-time individuals are found in low-content cultures and emphasize sched- ules, promptness, and precise time to be used and manipulated.4 Individuals of this cultural orientation tend to do one thing at a time, completing the current task before starting another. M-time individual will be prompt, showing up early for a meeting, while P-time individual may arrive very late. Understand- ing cultural differences can diffuse anger and potential conflict.

Several concepts have been presented in this chapter to give you a better understand- ing of disclosure, self-disclosure, trust, and cultural competence. This information, along with the decision-making and communica- tion chapters of this text, will help you build a firm foundation for relationships with all health organization stakeholders. However, learning does not stop here. Life-long learn- ing will continue to enhance your skills and abilities, making you a better manager and leader.

that are important to you, the individual, and the group. Sincerity is meaning what you say, meaning what you do, and not keeping a record of transgressions. If you build your relationships with a foundation of honesty, inclusion, and sincerity over time, your rela- tionships with others will bloom.

Cultural competence is the fourth factor and encompasses ethnical (a way of living) or national dimensions but also socio-economic factors as well. In health organizations, culture differences occur not only among patients but also among healthcare professions. Exam- ples of where these can occur are the tradi- tional hierarchical relationship of surgeon and nurse or a nurse and nursing assistant, to name a few. Members of each group are cul- turally unique. Seeking understanding and appreciating these unique factors are essential in building solid interpersonal relationships. Moving toward cultural competence is eas- ier said than done. It requires commitment, work, a shift of awareness, attitudes, and the development of new skills.4 It is well worth the time. Demonstrating an acceptance and respect for cultural differences will help you in supervisory management and leadership positions. Culture is “the pattern of shared values, beliefs, and norms—along with asso- ciated behaviors, symbols, and rituals—that are acquired over time by members of an organization”.19

Cultural differences occur in styles of communication, perception of time, and meaning of health, to name a few. Hall illus- trates high-context and low-context cultures based on the way in which information is perceived and transmitted by individuals from different cultures.4, 26 High-context cul- tures (often seen in Eastern societies) rely on nonverbal communication more than verbal or written. They have a very different com- munication style, not speaking openly or directly telling how they are feeling or what is bothering them. Yet, they expect to be understood.4, 26 Western cultures are largely low-context, just the opposite, placing more

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BOX 10-5 Guidelines for Supportive Leadership

■ Show acceptance and positive regard. ■ Be polite and diplomatic, not arrogant and

rude. ■ Bolster the person’s self-esteem. ■ Provide assistance with the work when

needed. ■ Be willing to help with personal problems. ■ Be a great listener.

Guidelines for Integrative Problem Solving: ■ Foster mutual trust. ■ Identify shared objectives and beliefs. ■ Identify specific reasons (not personalities)

for the conflict. ■ Consider a range of acceptable solutions. ■ Try to find an optimal solution.

Guidelines for Team Building: ■ Emphasize common interests. ■ Use ceremonies and rituals. ■ Use symbols to develop identification with

the work unit. ■ Encourage and facilitate satisfying social

interaction. ■ Hold team-building sessions. ■ Involve frank and open discussion of

interpersonal relationships. ■ Involve yourself in group processes in an

effort to improve them. ■ Use process consultants when and where

appropriate.

Managers should be consistent in disclosure when building new stakeholder relationships. BOX 10-5 shows Yukl’s recommendations for leader and manager behaviors and activities to promote relationship building.27

▸ Conclusion This chapter has described the positive and negative impact of conflict to an organization, three theories of conflict, the social complex- ity perspective, conflict styles, tools for conflict management, and an overview of interpersonal relationships. It is highly recommended that the reader pursues an attitude of life-long learning, with additional study of conflict management and interpersonal relationship building.

Conflict occurs in all organizations and in many human relations. It can be viewed as necessary for organizational growth, occur- ring when interdependent parties have differ- ent values, goals, or objectives amongst scarce resources. However, managers and leaders can learn to adapt conflict styles for a given situa- tion. Tools presented in this chapter, such as the decision tree, can aid in style selection. Health professionals must develop interper- sonal relationships to accomplish the mission, goals, and objectives of the organization. In closing, periodic training and development are beneficial for all organizational stakeholders, especially when the focus is on conflict man- agement, cultural competence, and interper- sonal relationship effectiveness.

Review/Discussion Questions 1. What is the cost of conflict to an

organization? 2. What is conflict and can it be avoided? 3. Describe the three theories of conflict. 4. Can conflict be managed throughout

the organization and how? 5. What are the styles of conflict manage-

ment and what is important about each style?

Leadership and Management Roles An essential management skill is to build relationships with all stakeholders. Though not easy, you can build professional relation- ships that are culturally appropriate, inclusive, transparent, honest, and sincere. Managers can “separate the business from the personal” by disclosure levels, consciously drawing the line for their personal level of disclosure while maintaining position, power, and authority.

Source: Adapted from Yukl27

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11. Folger JP, Poole MS, Stutman RK. Working Through Conflict: Strategies for Relationships, Groups, and Organizations. Boston: Pearson; 2005.

12. Ledlow J. Conflict and interpersonal relationships. In: Johnson JA, ed. Health Organizations. Sudbury: Jones and Bartlett; 2009:149–165.

13. Thomas KW. Conflict and negotiation processes in organizations. In Dunnette MD, ed. Handbook of Industrial and Organizational Psychology. Vol 3. Palo Alto, CA: Consulting Psychologists Press; 1992: 651–717.

14. Burton J. Conflict: Resolution and Prevention. New York: St. Martin’s Press; 1990.

15. Cahn D, ed. Intimates in Conflict: A Communication Perspective. Hillsdale NJ: Lawrence Erlbaum; 1990.

16. Canary DJ, Cupach WR, Messman SJ. Relationship Conflict. New York: Sage; 1995.

17. Cupach WR, Canary DJ. Competence in Interpersonal Conflict. New York: McGraw-Hill; 1997.

18. Hocker JL, Wilmot WW. Interpersonal Conflict. 4th ed. Madison, WI: WCB Brown & Benchmark; 1995.

19. Johnson JA. Introduction to Public Health Organiza- tions, Management, and Policy. Cengage Textbook. Kindle Edition. 2013:220–221

20. Note: This is an aggregation of multiple scholars’ work as referenced in endnotes 5–10 above and a modification of the leadership studies at Ohio State and Michigan University accredited to Stogdill and Likert; as for the leadership component, “Concern for Task” was substituted with “Concern for Others.”

21. Fisher R, Ury W, Patton B. Getting to Yes: Negotiating Agreement Without Giving In [e-book]. New York: Penguin; 2011. Available from: Harvard Library Bibliographic Dataset, Ipswich, MA. Accessed February 18, 2017.

22. Yukl G. Leadership in Organizations. 3rd ed. Englewood Cliffs, NJ: Prentice Hall; 1994.

23. Beebe SA, Masterson JT. Communicating in Small Groups: Principles and Practices. 5th ed. New York: Addison-Wesley Educational Publishers Inc.; 1997.

24. O’Hair D, Friedrich GW, Wiemann JM, Wiemann MO. Competent Communication. 2nd ed. New York: St. Martin’s Press; 1997.

25. Mehrabian A. Professor Albert Mehrabian’s communications model. “Silent Messages” -- A Wealth of Information About Nonverbal Communication (Body Language). http://www.kaaj.com/psych/smorder. html. Published 1981. Accessed February 18, 2017.

26. Hall ET. Beyond Culture. Garden City, NY: Achor Press/Doubleday; 1976.

27. Yukl G. Leadership in Organizations. 3rd ed. Englewood Cliffs, NJ: Prentice Hall, 191–218; 1994:191–218.

6. What factors impact interpersonal rela- tionships? What factors outside of those presented in this chapter are important to your relationships?

7. What things destroy relationships? What builds relationships?

8. What items in the lists of recommen- dations (guidelines) did you find most important to relationship building?

References 1. Workplace conflict and how businesses can harness

it to thrive. CPP Global Human Capital Report. July 2008:1–35. https://www.cpp.com/pdfs/CPP_Global_ Human_Capital_Report_Workplace_Conflict.pdf. Accessed February 18, 2017.

2. Folger JP, Poole MS, Stutman RK. Working Through Conflict: Strategies for Relationships, Groups, and Organizations. 3rd ed. NY: Longman; 1997.

3. March JG, Weisinger-Baylon R. Ambiguity and Command: Organizational Perspectives on Military Decision Making. Marshfield, MA: Pitman Publishing; 1986.

4. Denhardt RB, Denhardt JV, Aristigueta MP. Managing Human Behavior in Public and Nonprofit Organizations. 4th ed. Los Angeles: SAGE Publications; 2015.

5. Lolofs RS, Cahn DD. Conflict from Theory to Action. Boston: Allyn & Bacon; 2000.

6. Bolman LG, Deal TE. Reframing Organizations: Artistry, Choice, and Leadership. San Francisco, CA: Jossey-Bass Publishers; 1991:152–153.

7. Siira K. Conceptualizing managerial influence in organizational conflict-A qualitative examination. Negotiation Conflict Manage Res [serial online]. May 2012;5(2):182–209. Available from: SocINDEX with Full Text, Ipswich, MA. Accessed February 18, 2017.

8. Coleman PT. Conflict, complexity, and change: A meta- framework for addressing protracted, intractable conflicts--III. Peace Conflict: J Peace Psychol. 2006; 12(4):325–348. doi:10.1207/s15327949pac1204_3.

9. Goldstein J. A new model of emergence and its leadership implications. In: Hazy JK, Goldstein J, Lichtenstien BB, eds. Complex Systems Leadership Theory. Mansfield, MA: ISCE Pub.; 2007:61–92.

10. Managing workplace conflict. Society of Human Resource Management. https://www.shrm.org/ resourcesandtools/tools-and-samples/toolkits/pages /managingworkplaceconflict.aspx. Published November 4, 2015. Accessed February 12, 2017.

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http://www.kaaj.com/psych/smorder.html

https://www.cpp.com/pdfs/CPP_Global_Human_Capital_Report_Workplace_Conflict.pdf

https://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/managingworkplaceconflict.aspx

CHAPTER 11

Models of Leadership Strategy and Influence for Health Organizations

LEARNING OBJECTIVES

■ Discuss the process of leadership based on the models presented in this chapter. ■ Explain and list factors where leaders influence organizational culture. ■ Describe, compare, and contrast organizational culture from organizational leadership, based on

the definition of leadership. ■ Describe the strategies and discuss the applications of the Dynamic Culture Leadership Model. ■ Describe the strategies and discuss the applications of the Omnibus Leadership Model. ■ Describe tactical elements of applications of the Inter-Professional Team Model: PAARP.

OVERVIEW

This chapter describes several perspectives on leadership in health organizations while also extending beyond the previous chapter by providing three newer theories and approaches. These are the Dynamic Culture Leadership Model, the Omnibus Leadership Model, and the Inter-Professional Team Model. Each has its own utility and value to the health organization and can be useful to current and aspiring leaders.

Contributing Authors: Gerald Ledlow and Mark Cwiek

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should assist young leaders in honing their personal leadership practice. The expecta- tion is that these models will invoke thought, reflection, and discussion. These strategic models are the Dynamic Culture Leadership Model and the Omnibus Leadership Model. Both of these models are prescriptive in that they provide a strategy for success and a model for implementation. Finally, this chapter provides a prescriptive model for application geared toward tactically import- ant committee success, particularly related to teams composed of various kinds of health- care professionals. This operational model is known as the Inter-Professional Team Model: PAARP.

▸ Strategic Prescription One: The Dynamic Culture Leadership Model

Due to the increasingly dynamic nature of the healthcare environment, superb leadership is required at all levels of the health organiza- tion. This reality was the catalyst for the devel- opment of the Dynamic Culture Leadership (DCL) Model, a model that is still in devel- opment. This model recognizes leadership at three levels as the critical ingredient in the recipe for overall business success: at the per- sonal level, at the team level, and at the orga- nizational level. The challenge is to focus the knowledge and skills of organizational lead- ers and to empower the total organization to complete its mission, to reach its vision, and to compete successfully in an environment that constantly changes. The DCL Model is presented herein in overview form and is intended to fit within the transformational leadership paradigm.

The Dynamic Culture Leader Model1 provides both a descriptive and high-level prescriptive process model of leadership. The

▸ Introduction

Leadership is a complex field of study. Mature and experienced leaders acknowledge having to adjust their per- sonal leadership style based on the organiza- tion that they work in, the types of employees they are leading, and who is available for the tasks that need to be performed. Prac- ticed leaders will often conduct a 360-degree self-assessment of their personal leadership ability once every 2 or 3 years and make adjustments to their behaviors, foci, and training. Some leaders may find that they have slowly allowed themselves to take on a dictating rather than delegating mode of leadership, and be unaware that decisiveness on their part can be interpreted at times as an uncaring attitude. Other leaders may find that a desire to be consensus-driven and collabo- rative has crept into a pattern of protracted group discussions and decision-making avoidance. Change creates the necessity to master ambiguous situations and to provide structure and meaning to complex organi- zations. This requires continuous leadership growth and development for those that lead in dynamic organizations. Thus, the Dynamic Culture Leadership Model prescribes a sequence of leadership-based activities and processes essential to steer the organization as a matter of cyclical strategy, to be renewed in application every 3 to 4 years. Lastly, some leaders may have become so comfortable with their “inner circles” of senior level vice presidents and department heads that the collective wisdom of the group is no longer heard or encouraged. In this regard, the char- ismatic qualities that may have led the CEO to his or her position of eminence may not be relative to maintaining effectiveness in the long run.

This chapter presents several aids for both students and mature practitioners of leadership to learn from. In this chapter, we present two evolving strategic models and one tactical/operational model of leadership that

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Optimized leadership is certainly attain- able for any person and any organization, but it usually requires concentrated effort to overcome past habits, ideas, and tenden- cies. Ultimately, individual leaders comprise a leadership team. The team, therefore, must be diverse in style and competencies while being anchored to a set of values and operating principles of the organization. The assessment instrument for individuals and teams for this model is based on a leadership–management continuum and an art–science continuum.

The characteristics of “leadership” as com- pared to “management,” and “science” as com- pared to “art,” are described in the following table. It is important to note that organizations need leaders, managers, scientists, and artists working together to achieve success over the long term. FIGURE 11-1 illustrates the macro descriptive

model emphasizes a sense of balance that needs to be maintained in order to achieve a sustainable and continuing level of optimized leadership. It is strategic in the sense that it is meant to be applied and to evolve over time in a cyclical fashion, responding to the changes within the organization and the environment in a logical, continuous fashion. “Optimized leadership,” like the concept “high quality,” is not necessarily a norm to be achieved at all times. Rather, it is a worthy goal, an ideal state. No individual (and certainly no orga- nization) can in all situations and at all times enjoy a steady state of higher-level leadership. There are, however, many individuals—and organizations—who continuously optimize their ability to function at high leadership lev- els by consciously (and even unconsciously) cultivating the various elements of the model.

FIGURE 11-1 The Dynamic Culture Leadership (DCL) Model

Strategic Prescription One: The Dynamic Culture Leadership Model 135

Congruent vision, mission, goals and organizational values

Technical competence Relationship building

Emotional intelligence

Situational analysis

Trust & relationship building Art of

leadership

Science of

leadership

Interpersonal elements

Technical mechanics

Communication Strategic planning

Decision making

Employee enhancement

Learning & knowledge

management

External environment E xte

rna l e

nv iro

nm en

© 2004 New Visions Network. All rights reserved. Ledlow, Gerald & Cwiek, Mark (2005) “The Process of Leading: Assessment and Comparison of Leadership Team Style, Operating Climate and Expectation of the External Environment,” Global Business and Technology Association Proceedings Volume, Lisbon, Portugal, July.

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FIGURE 11-2 The Leadership Process (DCL) Model

model, while FIGURE 11-2 shows the prescription (or processes) associated with the model.

The differences in leadership versus man- agement are shown in TABLE 11-1. The differences

in science versus art are shown in TABLE 11-2. It is important to keep in mind that organizations need not only a leadership mentality and capa- bility, but also a management, art, and science mentality and capability, in order to survive and thrive in its external environment.

The Dynamic Culture Leader Model entails a strategic leadership process, as shown in Figure 11-2, that emphasizes leadership team assessment, communication improvement, strategic planning, decision making alignment, employee enhancement, and learning organi- zation improvement. Leaders who follow the sequence shown in Figure 11-2 on a regular strategic cycle have the best potential to deal with change in their environment while build- ing a culture that is effective even during times of change. FIGURE 11-3 illustrates the leadership team assessment (Step 1 in Figure 11.2) for 10 members of a hospital leadership team as it compares to the current operational environ- ment and the demands of the external envi- ronment. As shown, there is a tension between

136 Chapter 11 Models of Leadership Strategy and Influence for Health Organizations

Communication improvement

Strategic planning

Decision- making

alignment

Employee enhancement

Learning organization improvement

Evaluation

Reflection

Retraining and retooling 1. The science

and art of leading dynamic organizations:

Leadership team assessment and

alignment

TABLE 11-1 Explanation of the Leadership–Management Continuum (DCL)

Leadership Management

Longer Time Horizon Shorter Time Horizon

Vision Then Mission Oriented Mission Oriented

Organizational Validity (Are we doing the right things?)—Environmental Scanning and Intuition

Organizational Reliability (Are we doing things correctly and consistently?)—Compliance to Rules and Policies and Rule Development

Does the Organization Have the Correct Components (People, Resources, Expertise) to Meet Future as Well as Current Needs?

How Can Current Components Work Best Now?

Developing and Refining Organizational Culture to Meet External Environment Needs

Maintaining Organizational Climate to Ensure Performance

Timing and Tempo of Initiatives and Projects Scheduling of Initiatives and Projects

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what the leadership team tends to be (more Leadership oriented with a reasonable Science and Art balance) versus what the external envi- ronment demands (more Management and Science emphasis of leadership); the operating environment can be found within that tension. The external environment requirements, as perceived by the leadership team, are skewed toward Management and Science (the Analytical Manager quadrant). The perception of leader- ship would lead one to believe that the exter- nal environment requires greater cost control, accountability, and adherence to policies and rules, although relationships are still important, as is some leadership focus.

Assessing an organization’s leadership team is essential. Aligning the team to bring diversity of style, skills, experience, and abilities is essen- tial for organizations to maintain a robust and resilient, and even opportunistic, personality. In this model and assessment, cultural and individual diversity is valued so as to better respond to dynamic organizational and exter- nal environments. Diversity of focus and orga- nizational goals is not advantageous; a diverse leadership team brings robustness to solving organizational problems as long as focus on the vision, mission, and goals is similar across the

TABLE 11-2 Explanation of the Science–Art Continuum (DCL)

Science Art

Technical Skills Orientation—Forecasting, Budgeting, etc.

Relationship Oriented—Networking, Interpersonal Relationships

Decisions Based More on Analysis Decisions Based More on Perceptions of People

Developing Systems—Important to Organizations Developing Relationships and Networks— Important to Organizations

Expert Systems Experts as People

Cost Control and Evaluation of Value Important Image and Customer Relationships Important

FIGURE 11-3 Comparison of Leadership Team Style, Operating Style, and External Environment Requirements for a Hospital Leadership Team

Strategic Prescription One: The Dynamic Culture Leadership Model 137

0 10 20 30 40 50 60 70 80 90

100

Leadership

Art

Management

Science

Leadership and management team range of scores

Leadership and management team composite organization operation range of scores

Leadership and management team composite of organization’s operating environment

Ledlow, Gerald & Cwiek, Mark (2005) “The Process of Leading: Assessment and Comparison of Leadership Team Style, Operating Climate and Expectation of the External Environment,” Global Business and Technology Association Proceedings Volume, Lisbon, Portugal, July.

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today. This is not the easiest path to take, but it is the path that optimizes the likelihood of leadership effectiveness and success.

Organizations are more dynamic today than ever before. With the advent of the Information Age, the fluidity of professional and family life, and the competitive nature of the global marketplace, there exists today more of an entrepreneurial environment in organizations. “Entrepreneurial organizations reflect a different set of underly- ing assumptions principally because they shift the focus away from producing specific, prede- termined behavior by means of direction and formal controls. Instead, they encourage coor- dination through the shared understanding that will enable individuals to choose effective actions themselves. Organization structure and control systems can no longer be depicted as tools that mechanically determine members’ behaviors. We, too, must shift our thinking about organiza- tions away from the organization as an entity, to members’ choice and understanding.”3 Leaders in this environment cannot rest on the laurels of “cookie-cutter” methods, but must become effec- tive in developing teams of professionals within dynamic cultures. If one questions the reality of the dynamic nature of organizations today, one need simply consider the realities of human diversity, information overload, the evolution of technology, the sophistication of the consumer, and e-commerce.

Leaders need to have a firm grasp of how to develop an organizational culture that cre- ates a thriving environment for their orga- nization. In 1999, Schein defined culture as the basic assumptions and beliefs shared by members of a group or organization.4 “A major function of culture is to help us understand the environment and determine how to respond to it, thereby reducing anxiety, uncertainty, and confusion.”5 The key question becomes: How do leaders shape culture? Schein suggests that leaders have the greatest potential for embed- ding and reinforcing aspects of culture with the following five primary mechanisms4:

leadership team. An assessment that looks at leadership as a team, across organizational lev- els, operating environments, and external envi- ronment needs, is far better than simply relying on only individual leader assessments.2

Figure 11-3 shows the results of a lead- ership team style assessment, including operating style and external environment expectations. Note that there is a considerable disconnect between leadership style and exter- nal environment requirements. The organiza- tional operating style is Balanced whereas the leadership style composite is Analytical Leader (skewed toward Science and Leadership) and the external environment is Analytical Man- ager (skewed toward Science and Manage- ment). This is hypothesized to represent a leadership coping strategy. Aligning additional leadership team members to bring in more Management- and Science-oriented members may be an appropriate strategy. Alternatives to adding team members would be to “buy” or consult with those that add Management and Science abilities to the organization. However, this can cause a long-term problem since insti- tutional knowledge could easily be lost. When leadership style by organizational level is com- pared, as one looks down the organizational hierarchy, there is much more propensity for Leadership than Management than an orga- nization may be able to tolerate over the long term. In essence, it is important to understand and know the leadership team’s style and “per- sonality” as it compares to the operating style (how business gets done), as well as the expec- tations of the external environment.

Leaders are gifted in different ways, with different personalities and varying skill sets. All leaders can grow and become more bal- anced and achieve greater effectiveness. There are common factors found in those who suc- ceed in becoming Dynamic Culture Lead- ers, including the desire to learn more about themselves, the motivation to learn and prac- tice new skill sets, and the need to grow and to become more tomorrow than what they are

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Johnson discuss the importance of leadership in the integration of quality and strategy to achieve organizational success. In this book, leadership process was described as critical for success. The Dynamic Culture Leader Model is presented as an application of theory to advance existing contingency leadership theories, and coupling all of this with a strategic process. This is there- fore presented as a prescriptive model.

Today’s complex, ever-changing organiza- tions are experiencing a shortage in leadership effectiveness, not because of the lack of talent or good will, but because of the tremendous bal- ancing act needed for success. This balance of scientist attributes and artist attributes defined in the Dynamic Culture Leadership Model pro- vides the pathway for success. Experts (such as Friesen and Johnson, as well as the authors of this chapter) assert that leadership is the pivotal issue in success. The Dynamic Culture Leader- ship Model is intended to become central to the understanding of leadership in organizations and the people who lead them.

In its current state of development, the DCL Model is being tested in both theoreti- cal and practical ways. It currently provides a conceptual framework for the better under- standing of complex organizations and exists as a model for advancing leader effectiveness. Further, tools for leadership assessment and direct application are being refined to advance the practical utility of the model in all orga- nizational settings. In summary, the Dynamic Culture Leadership model recommends:

■ An assessment of the organization’s leader- ship team and ultimately the development of a team that is diverse in terms of the Lead- ership, Management, Art, and Science attri- butes, all while securing in itself the values, beliefs, and mission of the organization.

■ An organization’s leadership should focus on communication improvement, strate- gic planning, decision-making alignment, employee enhancement, and learning organization improvement, in a regular, cyclical sequence.

■ Attention: Leaders communicate their priorities, values, and concerns by their choice of things to ask about, measure, comment on, praise, and criticize.

■ Reaction to Crisis: Increases potential for learning about values and assumptions.

■ Role Modeling ■ Allocation of Resources ■ Criteria for Selection and Dismissal: Lead-

ers can influence culture by recruiting people who have particular values, skills, and traits and by promoting them…like- wise for firing.

Schein also described five secondary mechanisms:4

■ Design of Organizational Structure: Cen- tralized structure reflects that only the leader can determine what is important; decentralized structure reinforces indi- vidual initiative and sharing.

■ Design of Systems and Procedures: Where emphasis is placed shows concern and ambiguity reduction issues.

■ Design of Facilities ■ Stories, Legends, and Myths ■ Formal Statements

It is imperative that healthcare leaders understand the factors that influence culture. Culture is more stable and harder to change than “climate,” since climate usually is not sta- ble over time. Whether employees are “happy” today (a climate indicator) is only of temporal importance, while culture indicators (such as processes, incentive systems, communication environment, and understanding of goals and how they fit into the work to attain goals) are much more meaningful and important.

The Dynamic Culture Leader Model is a set of constructs with the goal of helping unify the various leadership theories that previously have received attention. Further, the DCL Model can be studied immediately and utilized by leaders and organizational scholars intent on develop- ing highly effective leadership. In their book The Success Paradigm,6 Mike Friesen and James

Strategic Prescription One: The Dynamic Culture Leadership Model 139

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original concept of creep was coined by Casper Weinberger, who suggested that creep is the absence of a uniform vision and that this condi- tion results in constant change.8 The end product of creep results in solving problems that have no relationship to the original project or process at all. In other words, the wrong fight is fought.

The study of leadership theory may have suffered from theoretical creep. A review of leadership theories in the 20th century sug- gests leadership studies have crept from the broad and wide ranging trait and Great Man theories to discriminate research efforts that reflect more of an application of unit mod- els of decision making or satisfaction, rather than theory. Supporting this premise, some authors have suggested the problem with orga- nizational theories is that the wrong unit of analysis is applied to inappropriate situations. Furthermore, many authors suggest previ- ous studies may not be looking at leadership issues, but rather evaluating supervisory and interpersonal characteristics.9–14

Constructs of the Omnibus Leadership Model Traditional models of leadership focus on out- comes and trace those outcomes back to specific leadership traits, characteristics, or behaviors, with little emphasis placed on the values asso- ciated with intrinsic goal-directed behavior. The “nature vs. nurture” debate has long existed within the study of leadership. Are leaders born, or can they be made? The environment certainly plays a role in fostering goal-directed behavior, as do family values, available resources, and education (including both didactic and spiritual education). However, these constructs are often viewed as confounding variables rather than leadership progenitors in traditional leadership models. This is a weakness within traditional leadership study.

Furthermore, traditional leader theories fail to fully integrate the various aspects of confounding variables into one multi-faceted

■ The sequence should be repeated based on the tempo of change in the environ- ment; rapid change creates a need to work through the sequence at a faster pace. It is estimated that in health care today, this strategic sequence should be planned for every 3 to 4 years.

▸ Strategic Prescription Two: The Omnibus Leadership Model

In 1905, the world famous Carnegie Museum of Natural History exhibited the bones of a prized Apatosaurus. The bones remained on display until 1992, when the fossil was re-examined by a different team of paleontologists who noticed that incorrect kinesiology had been displayed and the wrong head had been placed on the dinosaur almost 90 years earlier.7 However, during those years, hundreds, perhaps thou- sands of scholars and academics viewed the bones and admired the symmetry and perfec- tion of the fossil—never noticing the 90-year- old error the original paleontologists had made. Is it possible that the study of leadership is likewise suffering from an ancient error in construction? Has the study of leadership become a calculus formula that has become memorized, but never derived? It has been suggested that there are as many methods to define leadership as there are ways to measure it. From a research perspective, this is often very beneficial, as the purpose of research is to look at things in increasing levels of complex- ity, with the ultimate goal of discerning intri- cate parts of the puzzle. Is it possible that in the complex study of leadership theory, the level of complexities are so intricate that the larger pic- ture is no longer visible? A review of leadership theory suggests the possibility that the answer to this question is “yes.”

Furthermore, is it possible that the study of leadership has suffered from theory creep? The

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environment as signposts for other variables or constructs. Furthermore, from these spa- tial dimensions, the constructs of beneficence, character traits, and resources may be derived.

Higher Order Construct Higher Order principles guide the construct of beneficence, or the practice of “doing good” against the construct of malevolence, or the practice of “doing bad.” Higher Order principles are themselves derived from family values, spir- itual teachings, education, “herd mentalities” in the community, and individual interpretation of the aforementioned spatial dimensions— whether they be consistent or inconsistent with practices or norms of behavior. Certainly, Higher Order principles guide the development of many leaders. It is a construct that should not be overlooked in future leadership studies.

For example, when applying traditional leadership models, Adolf Hitler might be described as an effective leader, or at least as someone who demonstrated leadership skills, through the example of the successful rebuilding of Germany after WWI. A retrospective applica- tion of path-goal leadership theory may justify this proposition. Additionally, it is unquestion- able that Adolf Hitler initially inspired hundreds of thousands of followers toward his fascist movement in both Europe and the United States in the late 1930s. A retrospective application of transformational leadership theory may help explain Hitler’s retrospective success in this regard. However, to refer to Adolf Hitler as a leader is insulting to the profession of leader- ship. Adolf Hitler is not thought of as a highly regarded leader in the study of leadership theory today. He is considered, at best, to have been a despot and a dictator. Certainly, a model must be created that allows for the differentiation of leadership and dictatorship.

Individual Culture Construct From the individual cultural spatial dimen- sion, the construct of character traits may be

model that allows for a wider range and util- ity of leadership study. Specifically, constructs such as cultural distinctiveness, higher power influences, and environmental pressures are often disregarded as antecedent constructs for forecasting leader outcomes or explaining past leader behavior. However, these constructs are excellent theoretical examples for fore- casting leader outcomes under appropriate conditions.

For example, in the current environment of the War on Terror, some leaders feel they are driven to goal-directed behavior through a Higher Power mandate. Separate from that which is considered religion or spirituality in its common understanding, a Higher Power is often classified as a greater belief in a mantra, or distinctive icon, which guides and directs leader behavior and followership in a predict- able manner. Rarely however does the dis- cussion of how Higher Powers impact on the values and goal-directed behavior of leaders take place. In fact, many leadership scholars completely ignore altogether the construct of a Higher Power influence when examining lead- ership. Some suggest it is politically incorrect to consider this, while others posit that it is too hard to measure and evaluate. Regardless, the study of Higher Power influence on leadership is a burgeoning field of interest in the scholarly community.15–17

As previously discussed, the preponder- ance of traditional leadership models focus on outcomes, using indicators of satisfaction and productivity as indices of success. However, many established models also fail to incorpo- rate the aspects of environment and individual culture. Clearly, culture and the environment have a profound impact on the study of leader- ship theory. As a result, an integrated theoretical model developed by Coppola18 suggests a solu- tion to this problem. The Omnibus Leadership Model (OLM) borrows from previous literature in the field and provides a different aperture for evaluating leaders and leadership theory. The model offers strategic spatial dimensional con- structs of higher order, individual culture, and

Strategic Prescription Two: The Omnibus Leadership Model 141

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available. For example, in the modern study of leadership, vehicles for message delivery have exponentially been available to small groups of individuals who may have been hermetically sealed from the preponderance of the world culture in the past. The advent of the Internet has allowed small fringe groups of previously marginalized peoples to gain standing and respect in the greater world community. If an individual with a provocative website has a message that inspires followership, a lone mar- ginalized individual may find standing and prominence on the world stage. Clearly envi- ronmental resources have gained prominence as vehicles for leadership followership.

The Model The Omnibus Leadership Model meets the needs of future leadership researchers by including the spatial dimensions of Higher Order, Individual Culture, and Environment. TABLE 11-3 provides a template for this model. FIGURE 11-4 illustrates Table 11-3 as a concep- tual model of the Omnibus Leadership The- ory. The benefit of this theory is in capturing constructs that assist in explaining why certain leaders are driven to leadership decisions. For example, many leader decisions are based on values learned from childhood, relating to cul- tural and spiritual teachings that can be acted upon in favorable environments. In under- standing and applying this model it becomes clear on what some leaders base their decisions, and why some leaders have widespread follow- ership. In fact, followership based on cultural and Higher Order issues cannot be overlooked as a strategic imperative in this modern era of terrorism and increasing globalization.

Methods for measuring the Omnibus Leadership Model in the near term may rely on observational and nonexperimental stud- ies. Donabedian proposed a similar observa- tional methodology with the now renowned structure-process-outcome quality model in 1966. Donabedian’s original article contained few insights for empirical measurement other than

derived. Trait theory itself has dominated the bulk of traditional leadership methodology over the previous century and little additional discussion seemed to have been warranted. However, as mentioned in the previous chap- ter, cultural distinctiveness clearly acts as an immutable object in the study of leadership theory. Some Asian and Middle Eastern soci- eties clearly favor gender in the practice of leadership hierarchy, while other societies are more gender neutral. Age is likewise a factor in many Asian societies and is often used as a proxy that suggests experience equates with competence. As a result, it would be inappro- priate to apply a transformational leadership model to the evaluation of some societies due to the hierarchal gender- and age-based traits associated with those cultures. For example, in traditional Chinese and North Korean cul- tures, inquisitiveness and outspokenness may be perceived in a negative light, as opposed to the western sense of it showing a search for understanding and an extroverted approach.

Environment Construct Leaders cannot execute their vision, inspire followership, or demonstrate legitimate and charismatic attributes unless there are appro- priate resources in the environment to assist in the communication of the leader’s message. If the environment lacks appropriate resources to assist in the transfer and the communication of the leader’s intent, the leader may not affect significant followership to lead anything. For this reason, we posit that the Environmental Construct is a necessary precursor to resource availability. Furthermore, leader recognition is not possible without appropriate resources to deliver the leader’s message.

Resources19 have likewise attained a rea- sonable amount of focus in traditional lead- ership study; however, resources are generally used as variables unto themselves and not as constructs for measurement. In the OLM, resources may be assessed through both human followership and those logistically

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to be applicable with the Omnibus Leader- ship Model. Subjects and data may continue to be collected and analyzed utilizing tradi- tional practices and procedures. However, the Omnibus Leadership Model will help guide the researcher toward qualifying specific con- structs of leadership for discerning certain phenomena.

In closing, perhaps the Latin term res ipsa loquitur, or "the thing speaks for itself," may suggest additional structure to the Omni- bus Leadership Model. Leadership is action oriented—“one knows it when he sees it.” As a result, leadership theory may continue to confound research efforts. Perhaps leadership scholars must be satisfied with the apprecia- tion of leadership as an art more than a science after all.

Traditional Tools for Measuring Leadership Much of the leadership research has been descriptive and qualitative. There appears to be less quantitative data. As a result, qualitative research has centered on a “theory building”

to qualify review actions as having merit based on normative and accepted practices in the field. Donabedian suggested subject matter experts and panels are required to evaluate his new model.20 Similar methodologies are necessary for the eval- uation of the Omnibus Leadership Model.

Traditional leadership models have pre- viously employed true experimental and nonexperimental methods within traditional leadership frameworks. This would continue

TABLE 11-3 Omnibus Leadership Model

Spatial Dimension Construct Description Variables

Higher Order Beneficence or Malevolence

Altruism or Sadism

Actions Self-serving vs. Serving Teamwork: Glory Me vs. Glory We

Individual (Culture)

Character Extraversion or Introversion Type A or B Personality Archetypes

Traits, Ability, & Skills

Environment Resources Stability Turbidity Dynamic

Human followership and Logistical Availability

Outcomes Action vs. Reaction Flight vs. Fight

FIGURE 11-4 Conceptual Model of Omnibus Leadership

Strategic Prescription Two: The Omnibus Leadership Model 143

Omnibus Leadership

Higher order

Individual culture

Character traits

ResourcesEnvironment

Beneficence

Outcomes

Skills

Actions

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profiles these various test tools. All have been widely used in the literature with varying degrees of utility. While our list is certainly not an all-inclusive list of leadership tools on the market, it is felt that a balanced approach to the tools on the market is presented of those that are readily available and cost-efficient. The authors recommend that readers of this text acquire one or more of the measurement tools listed below and use them as companion guides to this text, in accord with course goals and objectives.

▸ Tactical Prescription: The Inter-Professional Team Model: PAARP

The awareness of forces and factors of inter-professional teams assembling, charter- ing, aligning, resourcing, and performing are critical. In order to best understand these forces and factors, we will first reexamine related theories and models from previous chap- ters, considering their constructs and tenets, which can enhance the inter- professional team and lead to greater, more focused and more efficient, effective, and efficacious per- formance. Considering Bloom’s Taxonomy of

methodology that uses such methods as biographies, observation activities, informal interviews, and the like. On the other hand, quantitative research is a “theory testing” methodology that tries to prove causality. That is, one thing causes another thing to happen. This is normally associated with statistical applications like the general linear model (t tests, ANOVA, ANCOVA, Regression) or rela- tionships (such as correlations). The theories highlighted in this chapter and the previous one are but a small reflection of the myriad of leadership models that have been researched throughout the history of leadership research. Truly, most leadership research has been con- ducted using surveys, observation, and factor analysis of experts. Rarely have leadership models that link leader styles, situational vari- ables, and outcomes (performance) been eval- uated. However, the models summarized in this chapter form the basis of much “cutting edge” leadership thinking today.

A review of the literature suggests that there are a plethora of descriptive tools on the market to measure or evaluate a leader’s style or success. Many of these tests use self-report scales. As a result, they introduce and maintain method bias. However, it is possible to control for bias by taking the test multiple times over a course of a period of time. In this manner a true response score might be found. TABLE 11-4

TABLE 11-4 Leadership Tests and Measures

Test Measures

Multifactor Leadership Questionnaire

MLQ is designed to measure different characteristics associated with transformational leadership. Three subscales pertaining to transformational leadership include charisma, individualized consideration, and intellectual stimulation.

Leadership Competency Inventory

Developed for individual use, the LCI measures and identifies four competencies essential to effective leadership: Information Seeking, Conceptual Thinking, Strategic Orientation, and Customer Service Orientation.

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Leadership Skills Inventory Developed for individual use, the LSI evaluates and measures competency in: Planning and Organizational Skills; Oral and Written Communication Skills; Decision Making Skills; Financial Management Skills; Problem Solving Skills; Ethics and Tolerance; Personal/Professional Balance Skills; Total Inventory Score.

Leadership Practices Inventory, Individual Contributor

Developed for individual use, the LPI assesses five leadership practices: challenging the process, inspiring a shared vision, enabling others to act, modeling the way, and encouraging the heart.

Leadership Practices Inventory

The third edition of this instrument package approaches leadership as a measurable, learnable, and teachable set of behaviors. This 360° leadership assessment tool helps individuals and organizations measure their leadership competencies, while guiding them through the process of applying Leadership to real-life organizational challenges.

Leader Behavior Questionnaire

Developed for individual use, it helps leaders to determine what changes or further skill development is required for them to make full use of their capabilities for visionary leadership. The Questionnaire is made up of 50 items measuring 10 key leadership scales: Focus, Respect for self and others, Communication, Bottom line orientation, Trust, Length of vision span, Risk, Organizational leadership, Empowerment, and Cultural leadership.

Leader Behavior Analysis II, Revised

Developed for individual use, this self-scored questionnaire measures team leadership style flexibility, primary and secondary style, effectiveness in matching leadership behaviors to the group situation, and tendencies to misuse or overuse various styles.

Leadership Team Alignment Assessment, Dynamic Culture Leadership

Developed to assess individual and group leadership versus management and science versus art personalities in comparison to organizational operating culture and external environment expectations. This assessment incorporates the Dynamic Culture Leadership process of: (1) Communication Improvement; (2) Strategic and Operational Planning; (3) Decision Making Alignment; (4) Employee Enhancement; (5) Knowledge Management; and (6) Repeat. A key premise is that a leadership team that is diverse (in leadership personalities) yet focused on organization goals is better situated for internal and external changes, thus, Dynamic Culture Leadership.

Leadership Skills Inventory Developed for individual use, the LSI is a condensed, streamlined version of the self-assessment section in Transforming Leadership. It provides the leader with a tool for assessing his or her effectiveness in self-management, communications, counseling, problem- management skills, consulting, and style shifting. It identifies areas for development of behavioral change to produce maximum results. The LSI is self-administered, self-scored, and self-interpreted.

Tactical Prescription: The Inter-Professional Team Model: PAARP 145

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identifying purpose and continual communi- cation are keys. The PAARP model proposed by Stephens, Ledlow, and Schott postulates that the actions of inter-professional teams occur in five distinct phases that repeat as necessary depending on the type of team.

Responsibilities of Leadership When Forming a Group Purpose According to PAARP, it is the actions of lead- ership which give purpose to a group. There are several theories that can assist the leader in providing this purpose: the great groups approach, goal setting theory, and the theory of planned behavior (see FIGURE 11-5).

the Cognitive Domain, the synthesis of mod- els and theories is most appropriate in this aspect of health leadership; that is, facilitating inter-professional teams to improve the health organization and remedy issues that arise in a dynamic environment using problem solv- ing capabilities of the inter-professional team. The authors want to illustrate the pieces of the model and the sequence that was most salient for the PAARP model. The PAARP model development, with associated models and the- ories previously discussed in the text, is first shown and later illustrated in a simple yet use- ful model.

When followed throughout the life cycle of a team, the PAARP model can result in improved morale of team members, improved outcomes, and greater value to the organization. Throughout the team life cycle,

FIGURE 11-5 Interprofessional Team Model: PAARP Source: Ledlow, G. and Stephens, J. Leadership for Health Professionals. Jones and Bartlett; 2017

146 Chapter 11 Models of Leadership Strategy and Influence for Health Organizations

PURPOSE

Leader/Leadership Team

Inter-Professional Team Members

Nurse IPT Publication

Model

Nurse IPT Publication

Model

Communication & Data Gathering

Planning

Standing Teams (Long Term)

Implementation/Execution of Plan

Coordinated Management of Meaning

Cultural Competence

Goal-Setting Theory

Goal-Setting Theory Leadership

Leadership Action

Inter- Professional Team Action

Celebration

Legend

Path–Goal &

Expectancy Theories

Path–Goal &

Expectancy Theories

Path–Goal &

Expectancy Theories

Shutz’s Theory of Affiliation

Tuckman’s Group

Dynamics Theory

Coordinated Management of Meaning

Schein’s Primary

Embedding Mechanisms

Schein’s Primary

Embedding Mechanisms

Theory of Planned Behavior

ASSEMBLE & CHARTER ALIGN RESOURCE PERFORM ADJOURN (Ad Hoc or Short-

Term Teams)

Deliver Results

Great Groups

Approach

Knowledge, Skills, and Abilities

Goal-Setting Theory

Goal-Setting Theory Followership

Shutz’s Theory of Affiliation

Celebration

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leader to gauge the progress their team is mak- ing toward the goals. Based on the feedback, leaders also have the opportunity to clarify the expectations of team members and adjust goals accordingly. When considering task complexity, care must be taken to ensure that work will not overwhelm the team, especially when assignments are complex. It is com- mon for individuals who work in complex or demanding roles to push too hard and lose their work/life balance, ultimately resulting in reduced performance and eventual burnout.22

The theory of planned behavior or TPB is also useful to the leader when thinking about the purpose of a group. TPB links the beliefs of an individual to their behavior and improves on the predictive ability of previous psycho- logical theories (see FIGURE 11-6).

Behavioral attitude encompasses the beliefs of the individual around the conse- quences of their behavior. Subjective norms are how the individual perceives the social pressures surrounding their behavior. Per- ceived behavioral control is an indication of the ease or difficulty of performing a particu- lar action. According to the TPB, these three elements form the intention of the individuals

Great groups are a common subject when it comes to planning teams but so many of the associated principles are quickly glanced over for the sake of expediency. It is important to remember that not only does a leader create a great group but it is the group that makes the leader great. For the group to succeed, the right people need to be in the right jobs. With the right people in place, the great group is focused on results and achieving their goal.21 A useful tool for determining goals which will motivate your inter-personal team is goal setting theory.

Goal setting theory plays a role through- out the PAARP process, beginning with the determination of purpose. When determining the purpose of your group, it is helpful to keep in mind Locke and Latham’s five principles of goal setting:

1. Clarity 2. Challenge 3. Commitment 4. Feedback 5. Task Complexity22

When setting goals, it is important that they are clear. A tool designed to aid the cre- ation of clear goals is the mnemonic SMART: specific, measurable, achievable, relevant, and timely. Goals should say who will accom- plish them and how you will measure success. Goals should also be achievable and be aligned with the mission and vision of the team. Finally, goals should have a time period for completion.22

Goals should also be challenging and should strike a balance between performance and pressure. It is important to ensure that achieving challenging goals results in rewards for your team members. Another approach is to allow team members to set their own goals that contribute to the overall mission of the group. Allowing team members to set their own goals will increase their sense of commit- ment and empowerment.22

In addition to selecting the correct goals, leaders need to listen to feedback from their team members. This feedback will allow the

FIGURE 11-6 The Theory of Planned Behavior23

Tactical Prescription: The Inter-Professional Team Model: PAARP 147

Behavioral attitude

Intention Behavior Subjective

norms

Perceived behavioral

control

Modified from Icek Ajzen “The theory of planned behavior”, in Organizational Behavior and Human Decision Processes, 1991, Elsevier

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Align The competing needs of the group members, as defined by Schultz, present in the Assem- ble phase, continue through the Align phase as group members find their place within the team. These needs are manifested through the forming, storming, norming, and performing phases as previously described in Chapter 8.

Forming occurs when the team first meets and learns their purpose. In the forming phase, group members tend to act somewhat inde- pendently of each other. Think back to your personal experiences joining groups for the first time. The generalized process is the same for teams as work, group projects at school, or recreational groups such as club sports.25

Storming begins shortly after the form- ing process and is when group members begin to form opinions about others in the group. These opinions are both positive and negative, ranging from admiration for a group member to distrust of the group leader. The storming phase lasts until any disagreements between the members are resolved. As you might imag- ine, sometimes groups never mature past the storming phase. Additionally, it is not a phase that can be “skipped.” Best practices by the leader in the Purpose and Assemble phases however, can dramatically reduce the length of the storming process.25

Norming occurs as team members accept the goals of the team as their own and take responsibility for their part in achieving them. When the team reaches the norming phase, the members accept each other and learn to work together.

Performing—the final phase of group alignment per Tuckman—occurs when indi- viduals are not only motivated (as in the norming phase) but also knowledgeable and able to perform tasks and make decisions within their bounded reality with little to no supervision. Groups in this phase have mech- anisms in place to handle conflict so that it can be resolved without reverting back to the storming phase.25

with regards to performing or not perform- ing a particular action. The intention of the individual, if strong enough, then results in the expression of the behavior. Leaders with a strong understanding of what influences the behaviors of their team members will be bet- ter able to assemble a team to achieve their goals.

Assemble and Charter Assembling and providing the group charter are activities primarily related to leadership action. The leader must take into account the knowledge, skills, and abilities of their proposed team members. In addition to selecting team members who have the abil- ity to perform the desired group activities, it is essential that the proposed group mem- bers have inter-personal skills and are able to work together. This need is compounded in health care due to the high stakes of health care and the zero tolerance for error in clinical areas. As described in TPB, a part of work- ing together is cultural competence, which is being aware that individuals have different backgrounds. This can change their perceived behavioral controls and cause them to act dif- ferently in accordance with their culture and how they perceive the subjective norms of the organization.

Let’s examine how this is related to the actions of inter-professional team members once the group is formed.

Assemble As the group is assembled and given its charter by leadership, the members of the group begin to learn about each other and their role within the newly created team. For group members, there are three types of basic needs: the need for inclusion, the need for control, and the need for affection. The competing needs to be included and to give or receive warmth are cyclical and groups will observably pass through each one of these phases.24

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3. Episodes: Episodes are the entire situation of a communication between individuals. Episodes are also unique to each team member. They include the feelings toward the interaction by that team member and deeper meanings to phrases.27

4. Relationships: Relationships between group members weigh heavily on the interactions between individu- als. This is perhaps the easiest level of the hierarchy to understand; con- sider how you would communicate differently with a parent, peer, child, or leader.

5. Life Scripts: Life scripts are the combined effect of all episodes between participants.26

6. Cultural Patterns: Cultural pat- terns are what is generally con- sidered normal for a society when communicating.26

Clinical Inter-Professional Skills Due to the additional complications of the healthcare environment, there are several other desirable competencies for inter-professional teams in health care:

■ Patient centered ■ Community oriented ■ Sensitive to systems context across prac-

tice settings ■ Applicable across health professions28

FIGURE 11-7 illustrates the competencies identified by the American Association of Col- leges of Nursing, in association with other medical education bodies, as the four general competences required to provide population- oriented and patient-centered care.28

Values for inter-professional practice and their related ethics are an important part of creating a professional identity that is inter- personal in nature. If the values and ethics are patient centered and population oriented, they will support the common good in health care

This conflict management is part of a larger system for how team members create and inter- pret meaning. These rules are an integral part of the makeup of the team and as such are constantly evolving with the team. This system of meaning is referred to as the coordinated communication of meaning or CCM.26 The coordinated manage- ment of meaning has three basic domains: man- agement, meaning, and coordination.

Management refers to the actual rules which govern the communication between individuals. Based on the rules, team members can coordi- nate and manage the meaning of what is com- municated between group members. As would be expected, this management of meaning takes on different context depending on the relational position of the group members communicating. For example, when two peers communicate, messages may have a different meaning than when a team member and team leader commu- nicate; this is because people organize meaning hierarchically.27 CCM proposes that there are six levels to this hierarchy and that the higher levels of meaning may contradict or even override a lower level of meaning.

1. Content: The content of a message is the information transmitted during the communication and may not be enough on its own to draw mean- ing from the message. This ties into Media Richness Theory, which ranks communication methods based on their “richness” or ability to transmit a message. The take- away from the CCM content level and MRT is that transmitting a message via text may make the mes- sage less clear for the recipient than a communication method such as face-to-face communication.26

2. Speech: The speech portion of the meaning domain of CCM is how the content is aggregated into phrases that convey additional meaning such as a promise, asser- tion, complement, or threat.27

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for the inter-professional team member to be a good team player. Some behaviors involved with teamwork include cooperating with the patient-centered delivery of care and coor- dinating with other health professionals to increase the safety and effectiveness of care. As health care continues to evolve, the increas- ing levels of interdependence between teams embedded in health organizations will con- tinue to increase.28

In Resourcing, the inter-professional team sets goals and expectations both for individual members and the team as a whole. The setting of goals was best described by Edwin Locke in his 1968 publication “Toward a Theory of Task Motivation and Incentives.”29 According to Locke this process can be summed up in seven steps:

1. Specifying objectives or tasks to be completed by the team

2. Determining how the performance will be measured

3. Specifying the standard to which the tasks or objectives must be completed

4. Specifying the time period in which the goal must be accomplished

5. Placing a priority on goals when more than one exists

6. Rating goals as to their difficulty and importance

7. Determining requirements for coordinating with team members30

It is worth noting that the difficulty of goals will also affect team performance. More difficult goals will be more satisfying to team members when they are attained because they provide team members with a greater sense of self-efficacy, achievement, and skill improve- ment when compared to easier goals.31

Additionally, you must be aware of the role that leaders play in removing obstacles from the path of the group and allowing them to complete tasks on schedule. In support of this, path goal theory describes four leadership

while reflecting a shared commitment to cre- ating a safer, more efficient, and more effective system of care.28

Roles and responsibilities as well as an understanding of how professional roles and responsibilities complement each other are essential for inter-professional relationships. Understanding these complementing roles is essential for an individual’s own competency as well as collaborative practice.28

Inter-professional communication is a common area for health professions educa- tion but typically health professions students have little knowledge about or experience with inter-professional communication. In the move toward patient-centered care, communication competencies help prepare professionals for collaborative practice. An important aspect of inter-professional communication is the use of a common set of terms or defining acronyms before their use. Using undefined professional jargon creates a barrier to effective inter-professional care.28

Teams and teamwork behaviors apply in any setting where health professionals inter- act on behalf of shared goals for care with patients or communities. As such, it is critical

FIGURE 11-7 Inter-Professional Collaborative Practice Domains28

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C om

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Values/ethics

for

inter-professional

practice

In te

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fe ss

io na

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bi lit

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Reproduced from: Core Competencies for Interprofessional Collaborative ... Retrieved November 22, 2015, from http://www.aacn.nche.edu/education-resources/ipecreport.pdf.

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2. Yes-people: These are team mem- bers who are committed to the goal of the team and do not question the actions of the leader. Team mem- bers who fall into this category will typically defend the leader against any criticism, even when that criti- cism proves to be valid.

3. Pragmatics: Pragmatics will tend to support the majority decision and tend to remain in the background of the group. They will never be the first to suggest a controversial or unique idea.

4. Alienated: Alienated individuals can usually be found question- ing the actions of the leader and attempting to stall or bring down the efforts of the group through questioning the motivations of the leader. In addition to being critical of the leader, an alienated group member will commonly assume they can lead the group more effec- tively and view themselves as the true leader of the group.

5. Star followers: Star followers are independent, positive, and active. They evaluate the actions and deci- sions of the leader and will provide input and commentary as they deem appropriate. Star followers are able to work independently and will generally succeed even when the group leader is not present.34

Primary embedding mechanisms come down to how a leader transmits culture. For example, whatever a leader holds up as import- ant, their team will do the same. What the leader controls on a regular basis through emphasis will eventually become the focus of the team. The most important factor to remember here is that consistency of action on the part of the leader is essential to prevent them team from second-guessing the actions of the leader. According to Schein, leaders communicate

styles which can be used depending on the sit- uation and team members involved: directive, supportive, participative, and achievement oriented.32

The directive approach requires the leader to inform team members what is expected of them. It is most effective when team members are unsure about a task or there is uncertainty within the environment. The supportive approach requires the leader to show concern for the team members while being approach- able and friendly. This approach is most effec- tive in situations where the assigned tasks are physically demanding. The participa- tive approach has the leader consulting with their followers before making decisions. This approach is effective when the team members are highly experienced. An achievement ori- ented approach requires a leader to set chal- lenging goals for their team members and hold them accountable for performance at the highest level while showing confidence in their abilities. This approach works best in professional or competitive environments.33

Perform The perform phase focuses on followership, leadership, and embedding mechanisms. Followership and leadership are reciprocal roles within the team. Robert Kelly described followership extensively and identified five general types of followers formed from a com- bination of two key underlying behavioral dimensions. The first dimension measures the extent to which an individual is an indepen- dent critical thinker and the second is a mea- sure of how active or passive an individual is with regard to group behavior.

1. Sheep: Sheep are team members who are very passive and require the leader to motivate them externally. Additionally, these team members lack commitment and require con- stant supervision from the leader.

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and outcomes. The ultimate leadership out- comes are organizational survival, longevity, and matching purpose with external needs. In health care, these outcomes can be translated into stronger, more productive, healthier, and symbiotic organizations poised to meet change successfully. The ability for health leaders to build, enable, and enrich inter-professional teams is of paramount importance. The PAARP model serves as a tactical structure for successful inter-professional team initiatives and ultimately creates a culture of inter-pro- fessional teamwork.

Another aspect of leadership that is neglected in the literature is related to scope and scale of success. For example, a hospital leader whose organization is very successful financially may be considered a “good leader,” yet if the community is not becoming health- ier and is not becoming more productive, can that person truly be considered a good leader? Leadership ought to be considered in the light of morality and good conscience, and one should understand what successful outcomes are in terms of the greater com- munity served. In addition to studying the models presented in this chapter, it is recom- mended that the reader review and consider

their true feelings both explicitly and implicitly. If the leader is conflicted, their message will not be consistent, resulting in uncertainty and conflict within the organization. Health leaders must predetermine where and how to guide the team and stay on task to meet goals.4

As seen in FIGURE 11-8, team members must align, resource, and perform tasks as laid out by leadership through the defined purpose and assembly of the group. Once tasks are complete, the standing group is repurposed for its next task or adjourned for single-purpose groups.

▸ Conclusion The topic of leadership is complex and ever changing. However, as organizations transi- tion, leaders must study and understand the strategic imperative to guide their organiza- tions and develop a culture that can thrive in the dynamic external environment. Leaders are needed because organizations, the external environment, technology, and people change. The descriptive and prescriptive models over- viewed in this chapter were discussed with the intention of facilitating thought, reflection, and discussion of quality leadership practices

FIGURE 11-8 PAARP

152 Chapter 11 Models of Leadership Strategy and Influence for Health Organizations

Adjourn or

Repurpose

PAARP Model

Inter-Professional Team Members

Align

Resource

Perform

Leadership

AS SE

M BL

E &

PU RP

OS E

CH AR

TE R

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References 1. Ledlow G, Cwiek M, Johnson J. Dynamic culture

leadership: Effective leader as both scientist and artist. Global Business and Technology Association (GBATA) international conference. In: Delener, Nejdet, Chao, Chiang-nan, eds. Beyond Boundaries: Challenges of Leadership, Innovation, Integration and Technology; New York: GBATA; 2002:694–740.

2. Conger J, Toegel G. A story of missed opportunities: Qualitative methods for leadership research and practice. In: Parry KW, Meindl JR, eds. Grounding Leadership Theory and Research: Issues, Perspectives, and Methods. Greenwich, CT: Information Age Publishing, Inc.; 2002:175–197

3. Jelinek M, Litterer JA. Toward entrepreneurial organizations: Meeting ambiguity with engagement. Entrepreneurship Theory Pract. 1995;3:137–169.

4. Schein EH. The Corporate Culture Survival Guide: Sense and Nonsense About Culture Change. San Francisco, CA: Jossey-Bass; 1999.

5. Yukl G. Leadership in Organizations. 3rd ed. p. 3. Englewood Cliffs, NJ: Prentice Hall; 1994:355.

6. Friesen M, Johnson J. The Success Paradigm. London: Quorum Books; 1995.

7. American Museum of Natural History: Apatosaurus. https://www.livescience.com/25093-apatosaurus .html. Accessed March 12 2017.

8. Crocker C. The lessons of Somalia. Foreign Aff. 1995;74:2–8.

9. Mowday RT, Sutton RI. Organizational behavior: Linking individuals and groups to organizational contexts. Annu Rev Psychol. 1993;44:195–229.

10. Antoinette SP, Bedeian A. Leader-follower exchange quality. The role of personnel and interpersonnel attributes. Acad Manage J. 1994;37:990–1001.

11. Norris WR, Vecchio RP. Situation leadership theory: A replication. Group Organ Manage. 1992;17: 331–343.

12. Weick KE. What theory is not, theorizing is. Admin Sci Q. 1995;40:385–390.

13. Roberts KH, Glick W. The job characteristics approach to task design: A critical review of the literature. J Appl Psychol. 1981;66:193–217.

14. Lowe KB, Gardner WL. Ten years of the leadership quarterly: Contributions and challenges for the future. Leadership Q. 2001;11:459–514.

15. Jordan S. The effects of religious preference and the frequency of spirituality on the retention and attrition rates among soldiers, Dissertation Project Submitted to the Faculty of the School of Human Services, Healthcare Administration Program, In Partial Fulfillment of the Requirements for the Degree of Doctoral of Philosophy. Capella University, Minnesota; 2006.

the selections found in the reference section of this chapter.

■ Two prescriptive strategic leadership models with associated processes were presented, the Dynamic Culture Leader- ship Model and the Omnibus Leadership Model, both of which focus on organiza- tional culture.

■ A prescriptive tactical leadership model was presented, the Inter-Professional Team Model: PAARP, which focuses on the optimization of critical team perfor- mance, especially when various profes- sional member skills and experiences are needed.

■ The understanding of organizational culture is of critical importance, and the development and maintenance of a thriving culture are essential to the long-term survival and success of the organization.

■ Primary embedding and secondary rein- forcement mechanisms were presented to guide development and refinement of organizational culture.

■ The healthcare industry needs and requires good leaders.

Chapter Discussion Questions 1. How would you apply the Dynamic

Culture Leadership Model in health organizations?

2. How would you apply the Omni- bus Leadership Model in health organizations?

3. Compare and contrast the Dynamic Culture Leadership Model with the Omnibus Leadership Model.

4. How do organizational culture and leadership work together?

5. What would you prescribe as a leadership model for health organizations?

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https://www.livescience.com/25093-apatosaurus.html

25. Coppola MN. Managing teams in organizations. Healthcare Exec. 2008;23(3):70–74.

26. Folger JP, Poole MS, Stutman RK. Working Through Conflict: Strategies for Relationships, Groups, and Organizations. 3rd ed. New York: Longman; 1997.

27. West R, Turner LH. Introducing Communication Theory Analysis and Application. 3rd ed. McGraw-Hill Higher Education; 2006:111.

28. Core Competencies for Interprofessional Collabora- tive. http://www.aacn.nche.edu/education-resources /ipecreport.pdf. Published 2012. Accessed November 22, 2015.

29. Locke EA. Toward a theory of task motivation and incentives. Organ Behav Hum Perform. 1968;5: 157–189.

30. Locke EA, Latham GP. Goal Setting, A Motivational Technique That Works! Englewood Cliffs, NJ: Prentice-Hall, Inc.; 1984.

31. Mento AJ, Locke EA, Klein HJ. Relationship of goal level to valence and instrumentality. J Appl Psychol. 1992;77(4):395–405.

32. Woolard D. Path-Goal Theory of Leadership. Campbell University; 2009.

33. Path-Goal Theory of Leadership. http://www.nwlink . c o m / ~ d o n c l a r k / l e a d e r / l e a d _ p at h _ g o a l . ht m l. Published 2013. Accessed November 22, 2015.

34. Kelley RE. In praise of followers. Harvard Business Review. 1988;66:142–148.

16. Fry LW. Toward a theory of spiritual leadership. Leadership Q. 2003;14:693–727.

17. Russell RF, Stone AG. A review of servant leadership attributes: Developing a practical model. Leadership Organ Develop J. 2002;23(3):145–157.

18. Coppola MN. A propositional perspective of leadership: Is the wrong head on the model? Jrnl Intl Res Bus Disc: Bus Res Yearbook, International Academy of Business Disciplines. 2004;11:620–625.

19. Goodman RM, Speers MA, McLeroy K, et al. Identifying and defining the dimensions of community capacity to provide a basis for measurement. Health Educ Behav. 1998;25(3):258–278.

20. Donabedian A. Evaluating the quality of medical care. Millbank Meml Fed Quality. 1996;44:166–203.

21. The 10 Rules of Great Groups - CBS News. http://www .cbsnews.com/news/the-10-rules-of-great-groups/. Published 2013. Accessed November 22, 2015.

22. Locke's Goal-Setting Theory - Mind Tools. https://www .mindtools.com/pages/article/newHTE_87.htm. Published 2007. Accessed November 22, 2015.

23. The Theory of Planned Behavior, Operationalized. http://publichealthnerds.blogspot.com/2011/06 /theory-of-planned-behavior.html. Published 2011. Accessed November 22, 2015.

24. Beebe SA, Masterson JT. Communicating in Small Groups: Principles and Practices. 5th ed. New York: Addison--Wesley Educational-Publishers; 1997.

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http://www.nwlink.com/~donclark/leader/lead_path_goal.html

http://www.cbsnews.com/news/the-10-rules-of-great-groups/

https://www.mindtools.com/pages/article/newHTE_87.htm

http://publichealthnerds.blogspot.com/2011/06/theory-of-planned-behavior.html

CHAPTER 12

Decision Making, Analytics, and Communication in Health Organizations

LEARNING OBJECTIVES

■ Describe and categorize the major domains of applied decision making theory. ■ List and apply the elements of the willful choice or rational decision making model. ■ List and describe the application of a reality-based decision making model. ■ Understand the most used tools of decision making within the methodologies of quantitative,

qualitative, and triangulated decision making for individuals, groups, and organizations. ■ Define communication and describe the factors of quality communication. ■ Describe and apply models for effective leadership and management regarding media richness

theory, listening, and cultural competent communication. ■ Describe how decision making and communication contribute to effective leadership and

management.

OVERVIEW

This chapter explores the critical areas of decision making and communications. Along with doing so, it discusses decision analytics and various decision tools that can be useful to healthcare managers. Furthermore, decision styles are explored as are various forms of communication seen in health organizations.

Contributing Authors: Gerald R. Ledlow and James Stephens

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alternative categorization, prioritizing alter- natives, and selecting an alternative based on group consensus) to triangulate (using both quantitative and qualitative methods) on an effective decision. In reality, decision making is not as sterile and ordered as most have been taught. Both willful choice—or rational deci- sion making models—and reality based—or garbage can models—are used in organiza- tions amid a myriad of tools and techniques. The major domains of decision making are:

■ willful choice or rational models, ■ reality-based or garbage can models, and ■ combinations of willful choice and

reality-based models.

Methods of decision making are:

■ quantitative methods that use tools such as multiple attribute value, probability-based decision trees, analytical mathematical models, linear programming, and similar tools;

■ qualitative methods that use tools such as focus groups, interviews (formal and informal), normative group techniques, and similar tools; and

■ triangulation methods that combine both quantitative and qualitative methods where, classically, qualitative methods are “theory building” and quantitative methods are “theory testing, validating or confirming.”

Next, a review of willful choice and reality-based decision making models is pre- sented; more time is spent on reality-based models since this method is the least rep- resented but may be the most applicable to health organizational leaders and managers.

Willful Choice Decision Making Models Decision making models and current under- standing imply that decisions are made by rational, intentional, and willful choice. Choice is guided by four basic principles:

▸ Introduction

Competent decision making and com-munication are essential for successful individuals, groups, and organizations. For decades, communication (consistently the most noted) and decision making have been listed as areas needing significant improve- ment across all industries and organizational types (for-profit, nonprofit, governmental, and others); this is especially true in pub- lic health and health-related organizations, including hospitals, clinics, community health departments, and group practices where broad diversity and deep complexity are inherent. A process or prescriptive model of leadership, as compared to descriptive models, suggests that communication improvement and decision making alignment are vital components to successfully guide organizations to best meet the needs of the external environment, and thus achieve longevity in the marketplace.1, 2

A large volume of text has been written on the topics of decision making and com- munication. The emphasis in this chapter is to provide a general overview of decision making and communication and to focus on applica- tions most applicable to entry and mid-level public health and health organization leaders and managers.

▸ Decision Making Decision making occurs in all organizations. The decision making process begins with identifying a question, problem, an area need- ing improvement, or an operational issue. Problems, issues, questions, and operational challenges come to leaders and managers from many different people both within and outside of the health organization. Leaders and man- agers are usually taught to utilize the rational decision making model using analytical (quan- titative) methods and, when necessary, couple this with group methods (qualitative) such as normative group technique (brainstorming,

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decision making process are assumed to have similar (if not the same) goals.3 These issues are the basis of willful choice model criticisms. The- ories of agency (for conflict management) and economics (scarce resources, namely time and information) have attempted to resolve contra- dictory issues associated with willful choice as an explanatory model. Both the theories of agency and economics depend on rational participants to validate the models.6 The reality of the health organization world suggests that individual and group preferences change as underlying variables associated with the decision vary, environmental factors evolve, and other organizational decisions are made.3, 7 Reality suggests that preferences of participants in the decision making process vary, often in illogical and emotionally dependent ways. Although considered in the willful choice models, time and information are not considered as valuable or scarce as reality actually suggests.

Neoclassical economic theory suggests that the greatest good occurs when individuals are free to pursue self-serving interests.6 This further confounds the willful choice decision making model’s underlying assumptions. It is unreasonable to assume that each partic- ipant in a decision making process will have similar self-serving goals and similar joint organizational goals most of the time. These contradictions add further credence that willful choice models should be used when participants’ goals are similar, time and infor- mation are available in sufficient quantity to use the willful choice model, and participants are well trained in the use of the model. What is provided here is not a suggestion that one should not use willful choice models but that the model should only be used in appropriate situations. This leaves the leader and manager in a tough situation; what model should be used when the willful choice model conditions cannot be met? A reality-based model—in the discussion that follows the garbage can model is highlighted—as an extension of rational decision making models adds to the available methods of decision making for the leader and manager in health organizations.

(1) unambiguous (you know what questions to ask) knowledge of alternatives, (2) probability and knowledge of consequences, (3) a rational and consistent priority system for alternative ordering, and (4) heuristics or decision rules to choose an alternative.3 These models assume that alternatives are selected based on greatest utility (cost-benefit analysis, for example) given the environmental situation (such as a strength, weaknesses, opportunities, and threats [SWOT] analysis) for the organization in line with orga- nizational objectives, goals, and mission. Deci- sion making in engineering, operations analysis and research, management science, and decision theory are variations on the rational and willful choice model.3 As ascribed in practical applica- tion of business practice, the six-step model of decision making4 puts into application the ana- lytic willful choice model prescribed today:

1. identify the problem, 2. collect data, 3. list all possible solutions, 4. test possible solutions, 5. select the best course of action, and 6. implement the solution based on

the decision made.

The practical model assumes time and information are abundant, energy is available, and goal congruence of participants (everyone is focused on the same set of goals) has been achieved.

Criticism of Willful Choice Models Well-known leadership management concepts consider pre-planning (short and long term) as the method to solve ambiguity in business, but as task complexity increases and time availabil- ity decreases, the ability to plan increasingly becomes more difficult.5 The rapid pace of oper- ations and change in health care today makes tra- ditionally based organizations less adaptive and flexible in complex environments.5 Information and time are assumed to be abundant and rela- tively free resources in rational and willful choice models, and organizational participants in the

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and when the can is full, a decision is made and removed from the scenario.9 “Numerous empirical observations of organizations have confirmed a relatively confusing picture of decision making. Many things seem to be hap- pening at once, technologies are changing and poorly understood; alliances, preferences, and perceptions are changing; solutions, opportu- nities, ideas, people, and outcomes are mixed together in ways that make interpretation uncertain and leave connections unclear.”3 In management arenas, specifically acquisi- tion decisions, decision making load, speed required in decision making, uncertainty, and equivocality are commonplace.10 Thus, the temporal nature of decision making processes, if taken as “snapshots” in time, would show sequential arrival of problems, solutions, and information in a complex mix of participants, environmental factors, and consequences of prior decisions as reality in the “organized chaos” of decision making in organizations. Since time is not static and multidimensional- ity is reality, the garbage can model depicts the chaotic nature of decision making.

Concepts are grounded in the ambiguous and uncertain states of nature for the garbage can model. Originally, three states of nature contributed to the model. All three states are immersed in ambiguity and, to a lesser degree, uncertainty; the greater the ambiguity of tech- nology, preferences of participants (the less preferences are known, the greater the level of uncertainty) and of the organization, and par- ticipation (in more specific terms, attention of participants), the greater the prevalence of gar- bage can processes in organizational decision making. Ambiguity is defined as ignorance. Not only does this imply lack of knowledge but a lack of understanding of what ques- tions to ask, what information is available, and what connectivity exists between problem and solution sets and the consequences of imple- menting solutions. Ambiguity of participation exists when participants in the decision mak- ing process have competing time demands that compete for attention necessary to solve

▸ Reality-Based Models: Garbage Can Model Overview

Reality-based models, such as the garbage can model, are intended to extend the under- standing of organizational decision making by emphasizing a temporal context and accept- ing chaos as reality. Rational decision making models are a subset of reality-based models. In ambiguous situations where time and infor- mation are limited and “perfect information” impossible to acquire, where organization struc- ture/hierarchy is loosely coupled, and organized anarchy (chaos) seems to embody the organi- zational persona, analytical decision making models do not fit reality. The garbage can model, originally designed to reflect decision making in universities, has been used to explain decision making processes in various organizations and situations. Also, garbage can models have been introduced as possible methods to understand processes such as how an organization learns.8 For the past two decades, researchers have observed that willful choice models of decision making underestimate the chaotic nature and complexity regarding actual decision making sit- uations; a large percentage of decisions are made by default where decision making processes are worked without actually solving anything.3

Garbage Can Model Concepts Organized anarchy, chaos, and bedlam are terms that describe organizational decision making. “Garbage can decisions can occur in any organization but are more likely to be found in ‘organized anarchies,’ where decisions are made under ambiguity and fluid involve- ment of participants.”3 Garbage can models are attempts at finding logic and order in the mist of decision making chaos. Garbage, defined as sets of problems, solutions, energy, and participants, are dumped into a can as they are produced (streams of “garbage” in time),

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Temporal order replaces sequential order. Time is spatial in that a multitude of issues, problems, information flows, and sensing mechanisms can bombard decision makers in short or long time blocks. How problems and information to resolve the problems arrive in time have relatively equal priority as the eval- uation of their importance. Arrival time and sequence in the current context influence deci- sion makers’ attention to the situation. “The process is thoroughly and generally sensitive to load. An increase in the number of problems, relative to the energy available to work on them, makes problems less likely to be solved, decision makers more likely to shift from one arena to another more frequently, and choices longer to make and less likely to resolve problems.”3 Indi- viduals in the decision making process, directly and indirectly, are interconnected and influence the context of the decision at hand.

Attention demands influence decision making. Time and energy must be allocated to understand, evaluate, and formulate a problem, then synthesize relevant information, evaluate options, and finally choose an alternative to counter or terminate the problem. Individuals focus on some things and do not attend to oth- ers in the same space of time. Corporate actions, outcomes, and responsiveness are the results of dynamic organizational processes, not heuristics of individual choice.7 Time and energy combine to form “attention.” Attention is a dynamic con- cept that is highly dependent on load (that is, the number of decisions that need to be made).

Lending support to the garbage can con- cept, rational choice in organizational decision making can be skewed by rituals and symbol- ism. Symbolic rituals of decision making can skew rational attempts to understand the pro- cess. Decision making is a process that reassures the organization that values, norms, and logic are upheld; in this light, decision making is a ritual. Lastly, decision making as a process is about showing control and logic in a world of complexity and rapid change. “We made a deci- sion” and “we own the process” imply control of human existence by logical choice. However the

a problem (make a decision). Since measure- ment of participation ambiguity depends on many extraneous variables in a sea of limitless situational factors, it is hard to quantify. Yet, attention and energy variations among par- ticipants are considered a “given” phenome- non in decision making processes. Extending original concepts, Takahashi (1997) proposed three additional states of nature ambiguities to the model: (1) fluid participation, (2) divorce of solutions from discussion, and (3) job per- formance rather than subjective assessments.9 Regarding individual preference, Pablo and Sitkin (1996) suggest that the more risk adverse a decision maker is, the less tolerant they are to ambiguity.10

Loose coupling in organizations fosters a garbage can decision making approach. Loose coupling in an organization is defined as more informal and differentiated, focused less on following the rules but still having structured connectivity of intra-organizational entities. Loose coupling tends to allow a more flex- ible organization.11 Organizations that are loosely coupled, in the traditional sense, are more adaptive to change and environmental factors.5, 3, 10 The strength of feedback loops determines organizational coupling; stronger feedback loops imply tighter coupling, whereas weaker loops suggest loose coupling.12 Four criteria5 for determining the coupling status in organizations are as follows: (1) formal rules where the closer the rules are followed, the tighter the coupling (in entrepreneurial orga- nizations, formal rules are not as important); (2) agreement on rules where the greater the employee congruence, the tighter the coupling (entrepreneurial firms agree on social norms rather than formal rules); (3) feedback where the closer the feedback, in time, the tighter the coupling; and (4) attention where empow- ered individuals allocate energy and time to prioritized areas in their “area” (participation, competence, and empowerment foster focused attention to areas of responsibility). In the gar- bage can model, the concept of loose coupling is required to understand decision making.

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the goals,13 comprehend technology, and logi- cally apply rational decision making processes? The answer is simple—organizations do not exist to make decisions but to serve the exter- nal environment. An organization structured to make decisions will not serve its customers well and eventually will be removed from the marketplace.

Imperfect decision making can be expected. In light of the ambiguous reality of information, preferences, differences, and incongruent goals and the problem of information bombardment of the temporally “exposed” decision maker, the garbage can model is a reasonable extension of willful choice theories. Humans strive for processes of willful choice, yet, as the garbage can model proposes, fail to achieve rationality in decision making due to time, energy, atten- tion, uncertainty, ambiguous information, and decision making load issues. Leaders who can grasp the dynamics of the garbage can are bet- ter enabled to promote and foster situations that can position their organizations to make good decisions amid organized chaos and compe- tition. Leaders and managers in health orga- nizations should develop an organizationally sensitive system of decision making by:

1. evaluating the situation and deci- sions that need to be made across the organization (or within your area of responsibility) and cat- egorizing decisions by quantity, urgency, information needed to make the decision, and variance in decision outcomes;

2. developing readily available infor- mation concerning core business functions;

3. standardizing, documenting, and training team members on deci- sions that need to be made rou- tinely where the same or similar decision outcome is required and by “pushing” those decisions to the lowest levels of the organization as possible but requiring feedback loops;

choice ritual makes one feel, decision making is not rational, but depictions of organized chaos rationalized by imperfect participants among a myriad of complex and synergized variables.

Decision possibilities in the garbage can form the spectrum from willful choice models to garbage-can-based models. Decisions by “flight,” “resolution,” and “oversight” are prominent cat- egories in the model. “Flight” is defined as a decision maker’s intentional movement (atten- tion shift) to another area of concern (prob- lem). “Resolution” is defined as a decision that uses classical decision making processes such as willful choice models.9 “Oversight” is defined as decision makers activating a process or proce- dure before a problem becomes apparent, such as a standing operating procedure or using an established and documented process. Much of the research shows that “flight” was a signifi- cant result of many decision making decisions; that means decisions were “overcome by events” or were not made but let to resolve or escalate themselves. So, what does a leader or manager do to deal with the reality of decision making?

Optimization of Decision Making If a health organization has decision making processes that resemble the garbage can environ- ment, understanding the issues and proactively creating an environment that improves deci- sion making can benefit the organization. Sim- ulation results of garbage can studies revealed that decision making by resolution was not the prominent result of decision making processes unless “flight” results are greatly constrained or decision load is light; the prominent results of decision making are “flight” and “oversight”;9 that means that either decisions were not made or pre-determined and established processes (like standing operating procedures) were used to a greater degree than willful choice models. So why not reengineer organizations to foster decision making based on goals of the organi- zation, where clearly defined yet challenging goals are set and managers direct subordinates to focus, persist, and provide effort in achieving

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the organization’s mission and vision statements and strategic planning-based goals and objectives. Next, a summary of decision making tools is presented.

▸ Tools of Decision Making

As a summary, tools of decision making vary but are important to be aware of for future study and practice. Studying, taking a course, and practic- ing both quantitative and qualitative decision making tools are highly recommended. Quan- titative methods and qualitative methods are highlighted while triangulation is a combina- tion of both quantitative and qualitative meth- ods. Considering the next four paragraphs, it is recommended that each tool mentioned (and those not mentioned) be researched and dis- cussed, practiced, and role played with others in the class, group, or organization. Facilitating the decision making process in a group or organiza- tion is an essential skill of leaders and managers and a working competence of decision making tools is a pre-requisite to such a skill.

Quantitative Methods Summary Quantitative methods include mathematical and computational analytical models to help us understand the decision making situation (data turned to information to knowledge) and produce mathematical outcomes of solutions. Some models are rather simple while others can be very complex. Quantitative models assist in putting a “number” on uncertainty. Models include multiple attribute value and multiple utility methods, linear programming, probability, and decision trees based on Bayes, theorem, and can be as complex as discrete and dynamic simulation. In general, simulation uses theoretical distributions and probabili- ties to “model” the real world situation on the computer. From the computer model, response variables produce “outcomes” that can be evaluated. Quantitative models take time and

4. determining decision making load (quantity in a set time frame) and information available to make decisions for the existing decisions (those not standardized);

5. determining the importance of a decision to the organization by creating a system of risk determi- nation, urgency, and technological requirements for non-standardized decisions; and

6. training team members on the deci- sion making system and processes.

When following these steps, it is import- ant to remember that decision making is not always orderly.

When a decision or decisions need to be made, a health organization leader and man- ager should:

1. evaluate the priority and risk of the decision to be made and determine whether it is a standardized deci- sion or a decision that needs to be worked through;

2. evaluate time and resources avail- able, participant attention, goals, and incentives; and

3. determine what decision making method to use: oversight based on established documented pro- cesses (such as standing operating procedures or resolution using a willful choice model) or pushing the decision to the appropriate level, individual, or group. It is also important to know when you do not need to make a decision, based on the importance and risk level of the decision at hand.

Understanding that in most cases deci- sion making is not a sterile and orderly pro- cess is essential knowledge required for a leader and manager to develop a reality-based decision making system. Importantly, orga- nizational decision making should be aligned (decisions should be in accordance with) with

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Analytics Summary Analytics methods include small data, predic- tive modeling expansion, and real-time ana- lytics as the different forms of data analytics. Health leaders must take advantage of data analytics by recognizing the uniqueness of each health organization’s situation. In addi- tion, we suggest that medical practices, hos- pitals, and healthcare systems examine small data and conduct real-time analytics. Large- scale organizations managing populations of patients should adopt predictive model- ing methods. All three methods can assist in collection, management, and analysis of raw data to improve the quality of patient care and cost-efficiency and be a key component of a health system’s Accountable Care Organiza- tion. Healthcare data will continue to accu- mulate rapidly, especially since the healthcare industry is moving toward value-based pay- ment. If this industry fails to actively respond to the significant increase of unstructured data, the various health organizations risk for- going the opportunity to use this data.14

Summary Decision making is an integrated process that is embedded in health organizations. Leaders and managers can consciously make decision making better, more efficient, effective, and efficacious while reducing organizational stress. Under- standing the nature of decision making and becoming competent as a decision maker, facili- tator, analyst, or decision making assistant (those that help with the decision to those making the decision) are critical for success as a leader and manager; they are also necessary for success as a team member who is not in a leadership or man- agement role. Developing a system of decision making within the organizational context and constraints, training others in that system, and becoming a competent user of the system are vital to becoming and maintaining excellence in health organizations. Another salient topic, com- munication, is presented next.

understanding of the important elements (also known as factors or variables) associated with the decision that needs to be made. In most health organizations, quantitative models are gaining momentum, but qualified (trained and well practiced) analysts that understand health processes and can perform a range of quantita- tive analyses are still difficult to find and hire. Even with quantitative analyses in hand, many times leaders and managers skew decisions toward the qualitative side of decision making.

Qualitative Methods Summary Qualitative methods include a variety of tools from personal intuition, discussions with team members, informal interviews, formal interviews, focus groups, nominal group tech- niques, and even voting. Qualitative methods are very useful since experience, intuition, and common sense are used to aid decision mak- ing by individuals as well as groups. Study and practice of qualitative methods are essential for leaders and managers to facilitate decision making for themselves, groups, and organiza- tions. When quantitative and qualitative meth- ods are combined, it is called triangulation.

Triangulation Summary Triangulation is a more thorough method to make decisions. Although triangulation takes time, it brings both quantitative and qualita- tive approaches into the decision making pro- cess. It is common for a group to use nominal group techniques to come to a small set of pos- sible solutions and then for each solution to be analyzed quantitatively. From there the leader or manager can make a decision. Training the group or organization to use triangulation is a good practice for resolving (resolution in reality based models) decisions. Triangulation can also be used to develop standing operat- ing procedures (known as oversight in real- ity based models). Lastly, triangulation can be used to make improvements to processes within the organization.

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paralanguage (such as tone of voice), body language (such as a shrug of the shoulders), and context (public versus private) to transfer meaning from one person to others. What is communicated from the sender of the mes- sage is taken in by the receiver of the message and filtered through their own experiences, knowledge, and assessment of the context of the communication environment. What this means is what gets communicated by the sender, with the sender’s intended mes- sage, must be received and processed by the receiver, given that the receiver will process the message through their own set of filters. In essence, the receiver may process and translate a message with a different meaning that what the sender intended. Given this reality, leaders and managers must carefully craft messages and be consistent in their actions (to match their words), paralanguage, and body language and select the proper context with which to communicate their intended message.

From a macro-perspective, communica- tion is determined to be “quality” when accu- racy, usefulness, timeliness, and quantity are in optimal ranges for the intended audience. Always assess your audience when communi- cating. Use messages consistent with actions, paralanguage, body language, and context your intended audience will receive so that your audience can process and translate the message to best understand your intended message. When assessing an audience, use the least common denominator approach; that is, craft your message for everyone to understand. If you are talking to a group of physicians, nurses, and non-healthcare com- munity members about a medical situation, use language that a non-healthcare person can understand; the physicians and nurses will also understand what you are discussing. In craft- ing messages, media richness, confirmatory language, and culturally competent commu- nication are important factors in quality com- munication. Lastly, listening is of paramount importance for leaders and managers in health organizations.

▸ Communication Communication is continuous. Communica- tion is necessary. Communication is learned. Communication needs to be improved consid- ering individuals, groups, and organizations. Communication—dyadic, group, and organi- zational—is one of the weakest links in health organizations; there is a plethora of evidence (patient safety, efficiency, morale, etc.) that suggests communication must be improved across the health industry. The rest of this chapter will discuss communication and pro- vide a few vital communication essentials for leaders and managers in health organizations. The essence of communication, media rich- ness, listening, confirmatory language, and basics of culturally competent communication will be the tenets of the rest of this chapter. Again, volumes of texts have been written on each of these topics so more intense study in each of these areas is recommended.

Communication Is Transfer of Meaning Simply put, communication is the use of sym- bols, gestures, body movements, and context to transfer meaning to other people, groups, or organizations. Everything you do communicates something to someone. What you do not say or do not do still communicates meaning. Several communication scholars and researchers have stated that “One cannot not communicate!” Being keenly aware of this reality, leaders and manag- ers need to be careful in what they say and do but also in what they do not say or do not do. For example, if a large medical center hospital chief executive officer is seen walking over a crumpled piece of paper lying on the floor of a heavily used hallway in the hospital (not picking the trash up and throwing it away), this sends a message that cleanliness is not important; a “dirty” hospital can be the result in a very short time.

Communication uses verbal (talking), nonverbal (writing, such as this sentence),

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Information richness is defined as the ability of information to change understanding within a time interval.17 The longer the time interval to exchange understanding, the less rich the infor- mation. Consequently, the less time required, the more rich the information is to the communica- tors (sender and receiver). The media (such as email, telephone, or face-to-face conversation) that carries information to intended audiences also has a richness associated with it. A con- tinuum of media richness has been established based on the medium’s capacity for immediate feedback, the number of cues and channels uti- lized, personalization, and language variety.17, 19 In decreasing media richness, the continuum of richness consists of “(1) face-to-face; (2) tele- phone; (3) personal documents such as letters, memos, and emails; (4) impersonal written documents, and (5) numeric documents.”17 The richer the media, the better equivocality can be reduced; media low in richness are best used when communicating messages that are understood well and possess standard information.17 Simply, face- to-face interaction is most effective and bulletin board flyers are least effective in transferring meaning. Leaders and managers must consider what media with which to communicate to ensure the highest probability to transfer mean- ing to their intended audience.

Confirmatory Language and Culturally Competent Communication Confirmatory language should be the goal of leaders’ and managers’ communication in health organizations. Simply, confirm- ing language causes people to value them- selves more, while disconfirming language causes people to value themselves less. Both positive (you are doing great) and negative (your work is not meeting standards) mes- sages can be conveyed using confirming lan- guage. The following items provide the basis for developing a confirming communication environment:

Media Richness Communication is critical for successful health outcomes; communication is the vital process that links consumers of care and pro- viders of care.15 The accurate gathering, doc- umenting, and passing of information that allows high-quality decisions to be made, or for instructions to be followed, are at the crux of what is required to communicate effectively within health organizations. The value of com- munication in an organization equates directly to how much communication assists the orga- nization in reaching its goals; goals must be clear, measurable, and set within a reasonable time frame.16 Media richness theory17, 18 offers research and application potential for success- ful leader and manager communication.

Daft and Lengel state that organizations process information to reduce uncertainty (the absence of information) and equivocality (ambiguity).17 Information is processed and communication occurs to accomplish internal tasks of the organization, to coordinate activ- ities, and to evaluate external environments.17 “Uncertainty is a measure of the organization’s ignorance of a value for a variable in the [infor- mation] space; equivocality is a measure of the organization’s ignorance of whether a vari- able exists in the [information] space.”17 More information reduces uncertainty.18 Basically, low uncertainty about an issue or problem means an organization has data or informa- tion in sufficient quantity to make decisions about the problem, whereas low equivocality means an organization has defined what ques- tions or data are needed to attempt to solve the problem. Equivocality means that multiple and contradictory interpretations exist about an organizational issue or problem.18 Leaders and managers differ in information processing response when confronted with uncertainty as opposed to equivocality. Uncertainty causes managers to acquire data, whereas equivocal- ity prompts the exchange of subjective views among leaders and managers to define prob- lems and resolve conflicts.

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■ Certainty vs. Provisionalism: flexible, open, and genuine thinking fosters a supportive climate; do not be a “know it all.”

Being culturally competent in communi- cation is important as well. The following are some considerations a leader and manager should attend to when crafting messages and communicating with others (these concepts were originally the work of Hofstede in his cultural studies as shown in TABLE 12-1).20

■ Individualism: Individualistic cultures value individual recognition, self-actualization, rights, and freedoms over collectivistic achievement (the United States, Great Brit- ain, and Australia are examples).

■ Collectivistic: cultures where the group or team achievement is valued more than individual achievement (Japan, China, Taiwan, Venezuela, Columbia, and Pakistan are examples of countries who score high on collective approaches to work methods).

■ Conversational Style: • Western cultures: control is exerted

through speaking.

■ Evaluation vs. Description: evaluation is “you” language; description is “I” language; descriptive language leads to more trust and group cohesiveness. Use description language. Whenever you talk to someone and say “you” or feel you need to point your finger at them, it is probably evalua- tion language.

■ Controlling vs. Problem Orientation: prob- lem orientation is more effective than controlling communication in reducing defensiveness. Focus on a problem and communicate together; do not control com- munication with your personal issues; find a problem to discuss together.

■ Strategy vs. Spontaneity: strategy (like controlling) suggests manipulation, so be spontaneous (or at least communicate as such) in communicating with someone; do not take out a list and say, “I have three things to talk with you about.”

■ Superiority vs. Equality: supportive cli- mates occur under participation and equality. Communicate as equals rather than as supervisor and subordinate; talk as if you are equals even though you may not be equal in organizational status.

TABLE 12-1 Individualistic versus Collectivistic Assumptions from Beebe and Masterson20

Individualistic Assumptions Collectivistic Assumptions

Most effective decisions made by individual Most effective decisions made by group

Planning is centralized Planning is done by all concerned

Individuals should be rewarded Group or team should be rewarded

Individuals primarily work for themselves Individuals primarily work for the team

Healthy competition is important Teamwork is important

Meetings are for sharing information Meetings are for team decision-making

Key objective: advance your own ideas Key objective: group consensus

Data from Beebe, Steven A. & Masterson, John T. (1997). Communicating in small groups: Principles and practices, 5th Ed., Addison-Wesley Educational Publishers Inc.: New York, New York.

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■ Hearing: receiving the message as sent ■ Analyzing: discerning the speaker’s purpose

and using critical and creative judgments ■ Empathizing: seeing and understanding

the speaker’s viewpoint

“People seen as good leaders are also seen as good listeners.”20

Listening Model or Guide to Effective Listening:

1. Stop 2. Look 3. Listen 4. Ask questions 5. Paraphrase content 6. Paraphrase feelings

One of the most significant differences in listening for those in health care is whom are we willing to listen to. Because of technology advances and changes in business practices, we have changed whom we listen to, what we are lis- tening for, when we listen to them, and how we listen to them.21 In addition to the complications of listening for knowledge, there are different challenges when listening to people from other cultures or age groups. Recent technological advances have also changed what we listen to, setting the stage for more changes in our listen- ing behaviors.

Active listening becomes extremely important when we interact with individuals from different cultures. Listening to someone requires individuals to be focused on more than what has been said; we must also observe behav- ior of the individual. People who are active lis- teners are more aware of nonverbal messages and communicate more effectively with peo- ple in their own and other cultures.22 There is an African custom when one person greets another person by saying, “I see you.” The other person then responses by saying, “I see you too.” Through this verbal communication—and their nonverbal behavior of eye contact—both individuals have demonstrated respect for each other’s presence. They are now more sensitive to each other’s communication needs.

• Eastern cultures: control is expressed through silence and an outward show of reticence.

■ Time: • Monochronic: time is linear and seg-

mented; precision is valued (North American, European)

• Polychronic: laissez-faire attitude of time; human existence does not pro- ceed by clockwork (African Americans)

■ Status and Power: • High status group members:

✦ talk more, ✦ communicate more often with

other higher status individuals, ✦ have more influence, ✦ are less likely to be ignored, ✦ are less likely to complain about

their responsibilities, ✦ talk to the entire group, and ✦ are likely to serve in leadership

roles. • Low status group members:

✦ direct conversation to high sta- tus individuals,

✦ communicate more positive messages to higher status people,

✦ are more likely to be ignored, and

✦ communicate more irrelevant information.

Understanding the cultural consider- ations of your audience will assist in crafting messages and consistent behaviors.

Listening Lastly, leaders and managers in health orga- nizations must be good listeners. Listening not only helps gather vital information but shows empathy and trust. Empathy and trust are essential to building relationships with others. The better your relationship with others, the better communication and deci- sion making will become. Below is a simple yet effective listening model from Beebe and Masterson.20

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deal with every day forces them to be selective about what and what not to believe.”24

Introduction to the 4Ps of Health Analytics The 4Ps of Health Analytics Adoption is another descriptive model of how data is used within a health system. Unlike the HIMSS Delta model, the 4Ps breaks data into four cat- egories which are depicted in FIGURE 12-1.

The 4P’s of Health Analytics describes the interconnections between the four major cat- egories of data found in health organizations: patients, populations, processes, and profitabil- ity. Traditionally, these four types of information have been separate, and use of data from multiple

How we listen can vary by age of the listener. Younger workers prefer to use more electronic tools, while older workers are more likely to seek face-to-face communication or telephone con- versations.23 Another influence of technology is how we listen. In some cases, we are no longer listening but are reading instead. A significant number of Americans now receive information through online sources, listening to other forms of media less frequently. On the other hand, the use of smartphones and digital devices enables individuals to select their listening experience. According to Hayakawa, “The advent of new forms of technology has been accompanied by the onslaught of more forms of communication. The information overload that people have to

OUTCOMES

STRATEGIC DECISION SYSTEM

P A T I E N T S

P O P U L A T I O N S

P R O C E S S E S

P R O F I T A B I L I T Y

ANALYTICS

Data patient care

Data communities

Data care

processes and

administration

Data revenue and

costs

Health status, delivery, policies, business

Operational decision system

HEALTH SYSTEM

ANALYTIC FRAMEWORK

4P’s of Health

Analytics

DATA WAREHOUSE/SOURCES

FIGURE 12-1 Health System Analytic Framework

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narrowing margins, and focus on reducing costs will require hospitals to look further into prof- itability. The Health Research & Educational Trust, in partnership with the AHA, published metrics for the high-priority strategies outlined to move to the second curve. As previously noted, one of the top four strategies is improv- ing efficiency through productivity and financial management, which is crucial to profitability.26

The first metric is expense-per-episode for each care setting, with a broad range of episodes provided. This data gives insight and under- standing to the true cost of care for specific epi- sodes, which is necessary for financial planning and improvement strategies. Metrics should also be in place to measure, manage, model, and pre- dict risk, using a broad set of historical data from different sources.26 For example, measuring risk is necessary when entering into partnerships with payers and can be assessed with possible financial gains and savings.26 Cost-reduction goals can be created for specific departments or services, aiming to both increase profitability and meet the needs of patients. In order to use these goals as metrics, organizations must make them specific and attainable.26 Similarly, results from quality-improvement initiatives and pro- cess re-engineering should also be measurable.26 In order to meet these goals and assess profit- ability, these changes must be demonstrated through metrics. Lastly, the impact of managing future Medicare payment levels must be consid- ered. Projecting the financial impact is necessary to cut costs in order to manage the organization at the payment level for all payments.26

Effective financial management and increas- ing profitability will require more comprehensive data sources and a reliance on analytics. Most hospitals do not have the information technol- ogy to support the changing environment, and investing in technology is a significant category in spending growth. Implementing technology can allow metrics to be utilized in cutting costs, increasing efficiency, and boosting revenues.27

The profitability of a health organization is critical to the continued operation of the organi- zation. A hospital may provide the best care in

categories would have been very difficult. When data are not easily accessed or used with other types of data it is referred to as being in an Infor- mation Silo. As computer systems evolved, it became possible to store data in an electronic database which, when properly implemented, allows for information that was previously in a silo to be used with other data sources. Another term for these electronic databases is data ware- house or enterprise data warehouse. A Data Warehouse is a system which creates a central repository of data and makes that data available for reporting and data analysis.

Due to the complexity of the model, we will break down what is included in each type of data in depth before explaining the inter- connectivity within the model.

Patient data are data pertaining directly to the treatment of the patient; it is con- tained in the Electronic Medical Records (EMR) system.

Population data refer to the communities where health organizations are located. The data in this category are related to the health and well-being of the community as a whole.

Process data include information on the way business is conducted within the organization.

Profitability data include details on the ability of a health organization to generate income such as cost of services, amount billed, and expected reimbursement.

Profitability Ensuring profitability requires organizations to properly measure and assess all the financial standings constantly. Financial ratios such as operating margins, days cash on hand, operating EBIDA margins, debt to capitalization, and capi- tal spending are some important metrics that can be pulled from a hospital’s financial statement to measure profitability, liquidity, and capital struc- ture.25 The transition to value-based payment,

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In order to sustain profitability, hospital rev- enue must be safeguarded. This can be achieved through internal audits.29 Internal audits can mitigate the potential for revenue loss through denied or recovered payments.29 Changes in coding and qualified bundle payments will only increase the amount of denied claims.29 Through an internal audit, mistakes can be caught before a loss of time and money ensues. This in turn can also allow hospitals to improve billing and cod- ing.29 As a result, the hospital can take in entitled revenue without the stresses of payer audits.29

One component alone cannot determine or measure the profitability for a hospital. “Revenue cycle management—from appointment sched- uling and patient registration at the front end of the revenue cycle to billing and cash collections at the back end—plays a crucial role in hospitals’ efforts to improve their financial performance.”30

Profitability is a key element in maintaining state of the art technology needed to attract and keep highly trained healthcare professionals.30 This is also a crucial component to providing high-quality care for patients. For-profit hospi- tals can raise equity by issuing shares. In order to maintain their not-for-profit status—necessary for tax purposes—a nonprofit hospital in this category cannot issue shares.30 They can, how- ever, build equity on internal operations sup- plemented with donations and gifts to manage financial investments.30

The current economy has caused the amount of donations hospitals receive to drop, requiring hospitals be creative in finding revenue elsewhere. This is where effective management of patient revenue can enhance profitability and help the hospital grow equity as a result. Singh’s study looks at the relationship between patient revenue in relation to its assets, and the time it takes on collection of patient revenue.30 Other important factors include financial performance indicators: operating and total profit margins, free cash flow, and equity capital of the hospital.

In the end, managing the patient revenue cycle successfully increases profitability. The author suggested that this revenue plays a criti- cal role. There was also an indication that higher

the country with the number one outcomes in patient recovery and satisfaction, but if the bills cannot be paid, the doors will close. Financial resources are allocated in many ways. Health organizations want the latest medical technology and the highest qualified physicians. This will attract patients, but this achievement is unreach- able without financial resources. Organizations may lose tax-exempt status if the culture becomes overly focused on reputation and profit.

An indicator of a financially healthy organi- zation is its ability to show a profit and return on their investments. The financial stability of health organizations is measured by the gross profit margin. The gross profit margin is defined as the percentage of money remaining after goods and services have been paid. Focusing on a healthy or high gross profit margin will reflect favorable potential earnings. This in turn mirrors the prof- itability. Earnings from revenue in the operating performance is determined by the net profit mar- gin. A net profit margin highlights pricing, cost structure, and efficiency of an organization. All three of these components dictate the success and the future directions of an organization. An organization must be efficient in order to justify particular costs. Inefficiency can make 100% of the cost a complete waste.

Making adequate use of the resources an entity has can be measured by looking at the return on assets. Every resource is valuable. Not using an available resource to its highest effi- cacy is a waste of investment and a drain on the potential for profits. Before taking on any new ventures or investments, a review of the orga- nization’s return on equity should be under- taken.28 This allows the health organization to see the returns, if any, gained on the investments that were made.28 The health organization must also track the return on investments to deter- mine whether or not resources should remain allocated.28 Positive returns on an investment may control decisions on future investments. A decrease in profitability will result in a decline in the return on assets and return on equity. Each of the previous measures is important to sustain a financially healthy status.28

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groups with important community organiza- tions, surveys, and the use of real data patients.32 These metrics can be utilized to acquire reliable, accurate, and useful information on the sur- rounding community.32 As previously stated, assessing the needs of the population can help to deliver a higher quality of care.

Electronic Health Records (EHRs) have been at the top of the list for considerable health information management. Electronic health records address ways to provide solutions to improving population health and breaking down the barriers associated with traditional health records. EHR’s can be used for research integration and patient care.33 Electronic health records could contribute to improving pop- ulation health in the United States. Realizing this potential will require understanding what EHRs can realistically offer in efforts to improve population health, the requirements for obtain- ing useful information from EHRs, and a plan for addressing these requirements.33 Potential contributions of EHRs to improving popula- tion health include better understanding of the level and distribution of disease, function, and well-being within populations.33 Being able to utilize EHRs allows for better understanding of the patient and how to access the patient needs, while providing the best services that proves to be efficacious and unharmed.33

Continuing with the advancement of EHRs, population health is a high priority for health information management and for health information management professionals. A shift in population health management (PHM) is expected to occur in the near future, as medicine becomes the spotlight for managing the long- term health effects of patient populations.33

“Population health management (PHM) lowers costs by refocusing healthcare on not just the sick but also the well…The goal of PHM is to keep a patient population as healthy as possible and reduce the need for expensive interventions like tests, emergency department visits, hos- pitalizations, and procedures. While

patient revenue amounts per total assets and quicker collection times were associated with improved operating and profit margins.30 The research noted faster collections reduced the balance in accounts receivable, and as a result, the hospital’s need for short-term financing and interest expenses were lessened.30 Effective rev- enue cycle management also allowed for higher “free cash flows.” This facilitated an increase in cash flow from operations.30 The research per- formed was able to provide firsthand evidence that significant improvements were achieved in each hospital’s revenue cycle performance.30

Patients The following data sources and metrics could be used to evaluate patients: readmissions, patient satisfaction surveys, awards, occupancy rates, and average length of stay.31 Readmissions are important because these numbers can help determine whether or not appropriate care was provided to the patient in a previous visit to the hospital within a 30 day period.31 This demon- strates if treatment methods were effective or not. Patient satisfaction surveys determine if the medical staff communicated appropriately with the patient when providing care. Awards are a way of determining the effectiveness of patient care in comparison to other medical facilities. It also provides feedback for hospi- tal performance.31 Another way of measuring patient care is through occupancy rates, which indicate the hospital’s census.31 Patient satisfac- tion can also be measured through occupancy rates; for example, if the census of the hospital remains high, it may be an indication of success throughout the organization.31 Finally, the aver- age length of stay (AVLOS) is the fifth metric used to measure patients; it determines the type of patients treated in the hospital.31 For exam- ple, if most AVLOS are high, it shows a greater number of patients with severe illnesses.31

Populations Population can be measured in various ways. Some of the metrics that can be used to measure the population include census, school data, focus

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Processes Previous studies show that medical errors due to lack of communication among the medical staff are estimated to be the chief cause of death for between 44,000 and 98,000 patients every year.35 Therefore, the productivity of hospitals and improvement of patient health rests upon the implementation of health information tech- nology in hospitals. Defining health information technology can be challenging because it can be composed of multiple administrative and clinical applications that may vary across different hospi- tals and medical settings. Health information tech- nology is not an application that can be applied to the health organization and be expected to run smoothly by itself; HIT needs the commitment of the leadership and staff of the organization for it to work effectively and efficiently.35

Healthcare leaders are the spearhead of this operation, and therefore, must advocate for the implementation of HIT into their orga- nizations.35 Of equal importance, leaders must understand that HIT implementation is a pro- cess and it may take from 1 to 2 years to have an optimal operational system in place.35 Thus, the loss of productivity in those two beginning years is expected and must be taken in consideration.35 Moreover, having a successful operating HIT not only helps productivity within the organization, but it also helps the organization’s profitability, patient’s quality care, and population health.35 Along with all the pros of HIT adoption, there are also many cons. Those cons include cost and loss of productivity in the first 2 years due to learning and adjustment processes.35

HIT will increase productivity after the initial 2 years of implementation by allowing smoother communication with supply chain management, accounting, and billing.35 It will also reduce transaction costs and improve resource allocations.35 The rising cost of health care and the presence of inefficiencies in hospi- tals can lead to the loss of profits. HIT can moni- tor physician’s behavior and resource allocation.35 A relatively simple clinical information monitor- ing system can be used to identify any overuse of laboratory and radiology resources.35 This

most healthcare providers see the critical importance of PHM, they do not have the information technology, the required understanding of PHIM, or the data management skills and resources that are required to success- fully utilize population health man- agement. Some of the first things that must be understood when launching a PHM program is what a population of healthy people looks like, how clinical risk is defined, how financial risk is measured, and what will be the met- rics used to analyze how sick patients with chronic disease do and do not get sicker…PHM programs also track and trend inpatient, ambulatory, and emergency department patients.”34

Friedman, D.J., Parrish, R., & Ross, D.A. (2013). Electronic Health Records and US Public Health: Current Realities and Future Promise. American Journal of Public Health: September 2013, Vol. 103, No. 9, pp. 1560-1567. doi: 10.2105/AJPH.2013.301220

Understanding the usage of PHM and all its functions is important in addressing all the risks related to a population of non-healthy peo- ple versus healthy people.34 PHM makes use of patient data registries and data banks to create a portrait of a certain population and analyze trends to find solutions to problematic behav- iors and connect care gaps that may leave cer- tain segments chronically underserved.34 Using population health data to its fullest extent and achieving complete data integration will “rede- sign the way providers approach and deliver care” while taking advantage of existing health IT initiatives, such as electronic health records and health information exchanges that represent huge investments for hospitals and physicians.34

Drawing from recent data and analytics, health information management professionals must be the trendsetters in quality data analytics by gathering proper information, maintaining the integrity of clinical documentation, informa- tion governance and EHRs, and analyzing data to be effective in the way patients of diverse pop- ulations are perceived and treated.34

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Hospitals will also have to implement processes to maintain their nonprofit sta- tus (as described in section 501(c)(3) of IRS code). This is important to keep the benefits for tax purposes. The organization will have to write and publish a fee assistance policy, a policy written for actions taken in emergency medical conditions, and perform a community needs assessment once every 3 years.37 These implementation strategies may take up time on the part of the administration, but after performing these steps continuously, the pro- cess should be administered seamlessly.37

▸ Conclusion Communication is a learned skill. The more you attend to communication factors, the bet- ter you will communicate, build relationships, and make decisions. Communication is an area that must be improved through good practice of skills, training and discussion about com- munication. Below is a list of key elements of this chapter that one might want to remember.

Decision Making:

■ Major domains of decision making include (1) willful choice or rational mod- els, (2) reality-based or garbage can mod- els, and (3) combination of willful choice and reality-based models.

■ Willful choice models in decision making may be most effective when participants’ goals are similar, time and information is available, and participants are well trained in the use of the model.

■ Reality-based or garbage can model in deci- sion making may be most effective when time and information are limited, where structure/organization hierarchy is loosely coupled, and organized chaos is present.

■ Garbage can model is a decision making process that attempts to find logic and order in the midst of decision making chaos.

■ Three states of nature contribute to the garbage can model, which are immersed in ambiguity to include technology,

reduction in transaction costs attributed to inef- ficiency of production and resources allocation will increase profitability by allowing the hospi- tals to keep more of its profits.35

HIT, such as electronic medical records (EMR), will also improve patient’s care quality by allowing communication between physicians and staff throughout the hospitals and its’ exter- nal support.35 Patient care requires coordination of many activities across multiple departments in which communication among the staff is critical, and human errors can be potentially costly to both the organization and patients.35 HIT implementation allows for a reduction of redundancy of treatment and communication errors among medical staff.35 This improves patient care by allowing the patients to manage their health alongside the physicians.35

The main deterring factor to the adoption of HIT is cost. Many inefficient hospitals are already struggling to survive; therefore, having to adapt to a brand new clinical and administra- tive system may seem daunting.36 Productivity increases as HIT—such as electronic medical records—are introduced, with the benefits likely outweighing the costs of adoption.36 Moreover, improving health through the process of health information technology takes more than just integrating the technology into the organiza- tion’s system.36 HIT is useless if leaders do not emphasize the benefits of integrating HIT into patient’s care. Training is an important part of HIT implementation; more importantly, mak- ing post-implementation maintenance training available to the staff is critical.36

Different metrics and data sources can be utilized to further research the effects of pro- ductivities of the HIT process in medical set- tings. Random surveys can be used to measure patient’s satisfaction with physician care. Centers for Medicare & Medicaid can be used as a tool to determine a hospital’s efficiency. HIT pro- cesses can also be used to survey supply chain, keep track of physician’s customary actions with patients, and catch billing errors. Those are just a few metrics that HIT can use to improve the quality of the hospital and patient care.

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6. What is the meaning of flight, resolu- tion, and oversight as decision making possibilities?

7. Which of the Tools for Decision Mak- ing (quantitative methods, qualitative methods, and triangulation methods) should be used in developing operating procedures?

8. What is the definition of communi- cation?

9. How would you explain the difference in verbal, nonverbal, paralanguage, body language, and context when transferring meaning from one person to others?

10. Is it true that the shorter the time inter- val to exchange understanding, the less rich the information? Explain.

11. Would communicating a message of individual achievement with a person from Japan have different meaning than with a person from the United States? Explain.

12. Why are good listening skills so import- ant to building relationships?

References 1. Ledlow G, Cwiek M. The process of leading:

Assessment and comparison of leadership team style, operating climate and expectation of the external environment. Global Business and Technology Association Proceedings Volume. Lisbon, Portugal; 2005.

2. Ledlow G, Cwiek M, Johnson J. Dynamic culture leadership: Effective leader as both scientist and artist. Global Business and Technology Associa- tion International Conference. In: Delener N, Chao C-N, eds. Beyond Boundaries: Challenges of Leader- ship, Innovation, Integration and Technology; Global Business and Technology Association Proceedings, 2002:694–740.

3. March JG, Weisinger-Baylon R. Ambiguity and Command: Organizational Perspectives on Military Decision Making. Marshfield, MA: Pitman Publishing; 1986.

4. Argenti PA. The Portable MBA Desk Reference: An Essential Business Companion. New York, NY: John Wiley & Sons, Inc.; 1994.

5. Jelinek M, Litterer JA. Toward entrepreneurial organizations: Meeting ambiguity with engagement. Entrepreneurship Theory Pract. 1995;19(3):137–169.

preferences of participants, and attention of participants.

■ Prominent categories in the garbage can model are flight (intentionally moved to another problem), resolution (uses classical decision making process to include the will- ful-choice model), and oversight (activating a process before problem becomes apparent).

■ Methods of decision making include quan- titative methods, qualitative methods, and triangulation (combination of both quan- titative and qualitative methods).

Communication:

■ Communication is a transfer of meaning by using symbols, gestures, body move- ments, and context to someone else.

■ Media richness can reduce equivocality (ambiguity) within the organization’s pro- cess of information.

■ Confirmatory language and culturally competent communication are necessary communication skills of healthcare lead- ers in diversified workforces.

■ Good listening skills build relationships with others because it shares empathy and trust.

Review/Discussion Questions 1. What organizational circumstances

would a healthcare leader use—the willful choice rational decision making model or the reality-based garbage can model?

2. Discuss what operational issues and changes in the external environment might cause healthcare leaders not to utilize the willful choice model.

3. Under what organizational conditions should the reality-based/garbage can model be considered by healthcare leaders?

4. What is the difference between ambigu- ity and uncertainty in a decision mak- ing model?

5. Discuss the four criteria for determin- ing the coupling status in organizations.

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25. Rodak S. 5 key financial ratios healthcare providers should track. Becker’s Hospital CFO. http://www .beckershospitalreview.com/finance/5-key-financial- ratios-healthcare-providers-should-track.html. Published May 20, 2012. Accessed December 5, 2016.

26. Health Research & Educational Trust. Reducing Health Care Disparities: Collection and Use of Race, Ethnicity and Language Data. Chicago, IL: Health Research & Educational Trust. www.hpoe.org. Pub- lished August 2013.

27. L.E.K. Consulting. Hospitals adopt new strategies to boost profitability, but still face deep challenges: A new imperative for medtech. Exec Insights. 2013;15(4).

28. Benton DC, Gonzalez-Jurado MA, Beneit-Montesinos JV, Fernandez FP. Use of open systems theory to describe regulatory trends. J Nurs Regul. 2013; 4(3):49–56.

29. Allen B. Internal audits can safeguard hospital revenue. Healthcare Financ Manage. 2013;67(9):106–112.

30. Rauscher SS, Wheeler J. Hospital financial management: What is the link between revenue cycle management, profitability, and not-for-profit hospitals’ ability to grow equity? J Healthcare Manage. 2012;57(5):325–339.

31. Sorra J, Famolaro T, Yount ND, et al. Hospital Survey on Patient Safety Culture 2014 User Comparative Database Report. (Prepared by Westat, Rockville, MD, under Contract No. HHSA 290201300003C). Rockville, MD: Agency for Healthcare Research and Quality; March 2014.

32. Health Research and Educational Trust. Improving Health Equity through Data Collection and Use: A Guide for Hospital Leaders. Chicago, IL: Health Research & Educational Trust; 2011. http://www.hret .org/health-equity/index.shtml.

33. Friedman DJ, Parrish R, Ross DA. Electronic health records and US public health: Current realities and future promise. Am J Publ Health. 2013;103(9):1560–1567.

34. Bresnick J. Population health is the new frontier for HIM, says AHIMA. EHR Intelligence. http:// ehrintelligence.com/2013/07/30/population-health-is- the-new-frontier-for-him-says-ahima/. Published July 30, 2013. Accessed April 22, 2014.

35. Zhang N, Seblega B, Wan T, Unruh L, Agiro A, Miao L. Health information technology adoption in US Acute Care Hospitals. J Med Syst. 2013;37(2):9907.

36. Zhivan N, Diana M. U.S. hospital efficiency and adoption of health information technology. Health Care Manage Sci. 2012;15(1):37–47.

37. Department of the treasury, internal revenue ser- vice. 2016 https://www.irs.gov/charities-non-profits /charitable-organizations/exemption-requirements- section-501-c-3-organizations

6. Swanson DL. Neoclassical economic theory, executive control, and organizational outcomes. Human Relat. 1996;49(6):735–757.

7. Swanson DL. Addressing a theoretical problem by reorienting the corporate social performance model. Acad Manage Rev. 1995;20(1):43–65.

8. Tsang EWK. Organizational learning and the learn- ing organization: A dichotomy between descrip- tive and prescriptive research. Human Relat. 1997;50(1):73–90.

9. Takahashi N. A single garbage can model and the degree of anarchy in Japanese firms. Human Relat. 1997;50(1):91–109.

10. Pablo AL, Sitkin SB. Acquisition decision-making processes: The central role of risk. J Manage. 1996; 22(5):723–747.

11. Bennis W, Parikh J, Lessem R. Beyond Leadership: Balancing Economics, Ethics, and Ecology. Rev ed. Cambridge, MA: Blackwell Publishers, Ltd.; 1996.

12. Van de Ven AH, Poole MS. Explaining development and change in organizations. Acad Manage Rev. 1995; 20(3):510–541.

13. Locke EA, Latham GP. Goal Setting, a Motivational Technique That Works! Englewood Cliffs, NJ: Prentice-Hall, Inc.; 1984.

14. Willis M. Decisions through data: Analytics in healthcare. ACHE Richard J. Stull Essay Competition in Healthcare Management. Chicago, IL; 2014.

15. Kreps GL, O’Hair D, Clowers M. The influences of human communication on health outcomes. Am Behav Sci. 1994;38(2):248–257.

16. Lindeborg RA. Excellent communication. Public Relat Q. 1994;39(1):5–12.

17. Daft RL, Lengel RH. Organizational information requirements, media richness, and structural design. Manage Sci. 1986;22(5):554–571.

18. Daft RL, Lengel RH, Trevino LK. Message equivocality, media selection, and manager performance: Impli cations for information systems. MIS Q. 1987;11(3):355–366.

19. Frey LR, Botan CH, Friedman PG, Kreps GL. Inves- tigating Communication: An Introduction to Research Methods. Englewood Cliffs, NJ: Prentice Hall; 1991.

20. Beebe SA, Masterson JT. Communicating in Small Groups: Principles and Practices. 5th ed. New York, NY: Addison-Wesley Educational Publishers Inc.; 1997.

21. Bentley SC. Listening in the 21st century. Int J Listen- ing. 2000;2(14):129–142.

22. Timm S, Schroeder B. Listening/nonverbal communi- cation training. Int J Listening. 2000:14(20):109–128.

23. Pitney Bowes Inc. Messaging Practices in the Knowledge Economy. Stamford, CT; 1999.

24. Hayakawa SI. The task of the listener. (Retro- spect) Analysis of skepticism. Rev Gen Semantics. 1999;56(2):110.

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http://www.beckershospitalreview.com/finance/5-key-financial-ratios-healthcare-providers-should-track.html

http://www.hpoe.org

http://www.hret.org/health-equity/index.shtml

http://ehrintelligence.com/2013/07/30/population-health-is-the-new-frontier-for-him-says-ahima/

https://www.irs.gov/charities-non-profits/charitable-organizations/exemption-requirements-section-501-c-3-organizations

CHAPTER 13

Pathology and Dysfunction in Health Organizations

LEARNING OBJECTIVES

■ Understand the numerous factors that can contribute to dysfunction in a health organization. ■ Identify key cultural and psychological aspects of professional groups that contribute to

separation and a lack of cohesiveness within the organization. ■ Understand leadership and management deficiencies that are common in health organizations. ■ Gain better appreciation for psychological and psychosocial dynamics. ■ Be able to translate psychopathology phenomena into management and leadership insights. ■ Develop successful strategies for effectively dealing with organizational dysfunction. ■ Better understand factors and attributes that contribute to organizational decline. ■ Identify conflicting cultures within healthcare delivery and health organizations. ■ Be aware of the tendency of some health organizations to have values and cultures that are not

in synchrony with their environments.

OVERVIEW

This chapter focuses on the psychodynamics within an organization that can contribute to dysfunction. The issue of psychopathology is discussed as is organizational decline, culture, and the role of health professionals. Furthermore, there are insights and research findings that can help inform leaders and serve to guide healthier organizational behavior.

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Partially competent leaders may lack clar- ity or be ambiguous about the organization’s goals, vision, and culture. Such leaders may value not only engagement, trust, and empow- erment but also control and predictability. They may use participative management on minor issues and switch to an authoritarian style on major issues. Employees then become uncertain or distrustful of the leaders’ inten- tions in the face of varying and changing orga- nizational goals and directives, and conflicting or inharmonious programs and policies.

In health organizations, leaders may be deficient in several primary domains, including values, vision, culture, motivational ability, devel- oping relevant reward systems, and competence and capacity to effect needed changes. When many of these domains are problematic or unde- veloped, then a pathological or dysfunctional organization exists. This chapter focuses on the relevance of these domains to effective organi- zational functioning and offers suggestions as to how these antecedents of organizational pathol- ogy can be addressed more effectively.

Health organizations possess unique struc- tural, cultural, and motivational features that pose a unique challenge to creating a unified culture that includes and motivates all organi- zational members. One of these features is the diversity and heterogeneity of employees or professional groups in many health organiza- tions. These professional groups, with their own values and reward systems, pose a challenge for managers who wish to create a unified culture.

▸ Health Organization Groups and Professions

A major challenge to creating and maintaining a healthy organization is management’s limited authority over professional, licensed person- nel such as physicians, nurses, and therapists. Physicians are not always employees of health organizations, yet have considerable power and influence. In hospitals, although physicians may have little or no formal organizational

▸ Introduction

Many lenses can be used to view dys-function or pathology in organi-zations. One lens focuses on the leaders and managers within the organization. While dysfunctions certainly exist and persist at lower levels of organizations, it is the domain and the responsibility of managers to take the needed actions to create a positive environ- ment that minimizes their negative impact. Consequently, the primary foci of attention of social science research have been on the lead- ership of the organization and, to a somewhat lesser extent, on the mid- and lower-level man- agers within the organization.

The organizational leader is responsible for not only establishing the policies and pro- grams of the organization but also creating, or at least upholding, the vision and the culture of an organization. Dysfunction can be a reflec- tion of the hubris, egotism, and subsequent groupthink1 of the CEO and upper manage- ment team who, by acts of commission, under- mine the organization. Leadership theorists have consistently noted the causal link or con- nection between deficiencies of leaders and subsequent organizational dysfunction. Kets de Vries and Miller stated, “Our experience with top executives and their organizations revealed that parallels could be drawn between individual pathology—excessive use of one neurotic style—and organizational pathol- ogy, the latter resulting in poorly functioning organizations.”2

On the other hand, the leaders of an orga- nization may not have a clear neurotic style, be well intentioned, and hope for positive organizational attributes, such as engagement, empowerment, trust, and creativity, yet not know how to infuse or instill these in the orga- nization.3 In such cases, their omissions and the lack of needed action result in the failure to restore the organizational health. Thus, it is known that organizations can become dys- functional due to pathological leaders or due to incompetent or partially competent leaders.

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possible with physicians. However, primarily due to professional education and socializa- tion, the worldview of both physicians and nurses differs from that of managers. Nurses have been noted to possess stronger values of altruism and compassion than healthcare administrators.8 As mentioned earlier, physi- cians often view patient care issues, organiza- tional resources, and community service in a different light than do healthcare managers.

These distinctions and differences in pro- fessional subcultures, which possess unique val- ues and desired behaviors, are greater in health care than most modern organizations. Health- care managers must confront this challenge that is intrinsic to and embedded in health organi- zations. In this sense, an innate pathology exists in health care that can only be remedied by insightful management, which understands the motivations and values of a number of different professional groups and creates reward systems that are valued by these groups. Failure to do so will inevitably result in conflict, demotivation, and lack of engagement within the organization.

▸ Complexity and Work Intensity

Complexity, intensity of work, and a multitude of diverse responsibilities is true of many jobs in health care. Healthcare workers, clinicians, and managers must be aware of and satisfy multi- ple influential authority figures and may have several supervisors. The rapid pace of change in health care has been a major challenge for healthcare managers and employees. Through- out the last 20 years, mergers and acquisitions were common in health care. Clinical practice guidelines and benchmarks were introduced, as well as new management models or oper- ational models (e.g., quality management, Studer Group interventions). Job redesign and major downsizing initiatives, as well as major changes in reimbursement and information technology, have been and will continue to be

authority, they often give directives or orders to individuals not under their jurisdiction.4

In many health organizations, physicians are a powerful subculture existing outside of the institutional culture; they expect deference and take action individually or jointly when their interests are threatened. When physician interests are not closely aligned with the orga- nization, organizational dysfunction is likely to occur on a continual basis.

Alexander and Morlock described several key cultural differences between physicians and healthcare executives.5 Physicians tend to have a stronger professional identity or ego than healthcare managers. Healthcare execu- tives are expected to position the organization for the future, with middle-to long-term frame of action. Physicians are primarily focused on meeting the immediate needs of patients and tend to have more of a short-term frame of action. There are exceptions, but physicians’ principal sense of professional duty is toward serving individual patients. Executives also con- sider service to patients within the organization important, but they must also be concerned about providing services and programs to the greater community.5 Managers were described as viewing resources as limited and being highly aware of the need to allocate scarce resources effectively. Conversely, physicians were noted to generally consider resources as critical for qual- ity of care and for serving their own patients.

Although physicians are undoubtedly key actors in health organizations, they are not the only element in the considerable heterogene- ity of these organizations. Subcultures exist in very disparate settings in health care, such as in the distinct motivational and working condi- tions of a hospital laundry department6 and the unique culture observed in the humor, team- work, and “bonding” of operating room staff.7

Nurses have less influence than physi- cians do in most health organizations and, in contrast to physicians, are generally orga- nizational employees. Hence, the capacity of healthcare managers to motivate and engage nurses would appear to be greater than is

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▸ Ambiguous and Conflicting Cultures

Health organizations typically include employ- ees or participants who belong to distinct professional groups, with their own identi- ties and areas of concern that may or may not align with those of the organization. Similarly, health organizational values may not reflect the values of the general public and key stake- holder groups. An organizational focus on efficiency and profitability is usually necessary for survival. However, if this focus becomes the raison d’être of the organization, then the organization will not be compatible with or embraced by the community.

Within the health organization, conflicts between professional groups are embed- ded and built into the system. This chapter has described value and cultural differences between different professional groups in hospitals, such as nurses, physicians, and administrators. Even within professional groups, cultural differences exist. Hojat et al. studied two groups of medical students and identified their specialty 25 years after gradu- ation.13 As reported in the first edition of this book, physicians were noted to belong to one of two groups: (1) people-oriented specialties, such as family medicine and general pediatric physicians; and (2) technology-oriented spe- cialties, such as surgical specialties, oncology, and cardiology physicians. Analyzing scales administered in medical school revealed that, physicians in the technology-oriented special- ties had shown a greater focus on economic rewards and a lesser focus toward interpersonal relationships and the community than phy- sicians in the people-oriented specialties had shown. The authors noted that personal val- ues at the inception of medical education were associated with the nature of later physician practice. Such distinctions in values among physicians and within or between professional groups are a key ingredient in the diverse sub- cultures that exist in health organizations.

more the norm than the exception in health care. Many of these major change initiatives have not come without detriment to employee motivation and performance. Healthcare workers must continue to carry out demanding jobs in the face of major changes that require compliance, cooperation, and often, substan- tial job modifications on their part.9

Continual change in health care has exac- erbated another major factor, one not unique to health care, but one that is endemic in health care—job overload and understaffing, and the significant morale and motivational costs that accompany this malady. Job over- load and work intensity have contributed to a high prevalence of burnout in the health pro- fessions. Burnout is considered pervasive in the health professions. Maslach and Freuden- berger coined the term burnout to denote a type of stress response in the helping or service professions, among professional groups such as nurses, educators, and social workers.10, 11 The three major negative features of burn- out are exhaustion, cynicism, and feelings of ineffectiveness. Maslach and Leiter noted that burnout is not so much due to personal weak- nesses or the inadequacies of an employee, but is built or embedded into an organization.12 In short, organizational features, presumably under the influence of managers, create the burnout environment.

Thus, an established feature of many health organizations is a burnout environment that may affect a high proportion of staff and clinicians in the organization. In the experience of the author, burnout is a widespread pathology in health care, often fueled by an organizational insensitivity to staff. In contrast to organizational dysfunctions that are sourced in the leaders of an organization, in burnout environments the leaders may create the conditions that foster burnout, yet personally remain unaffected by the burnout that is mani- fest elsewhere in the organization. Consequently, it is not surprising that many health organiza- tions have been unable to eradicate burnout or even effectively control it.

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▸ Organizational Decline As reported by organizational sociologist and anthropologist Yitzhak Samuel, organizations can go into a “decline spiral” and ultimately fail.15 Organizations, like living organisms, go through periods of expansion and contrac- tion or shrinkage during their life cycle. The shrinkage or contraction is often referred to as organizational decline. There are three major types of decline presented by Samuel and oth- ers: undiscovered decline, uncontrollable decline, and orchestrated decline. Each of these has some resemblance to a prolonged illness that a person might experience. If there is denial or negligence, the pathology is likely to worsen. Failure to pay attention to early symptoms may lead to physical deterioration, which could in turn lead to death or serious impairment. Some of the early warning signs (i.e., symptoms) might include all or any of the following:15

Low morale

High stress

High turnover

Low productivity

Increasing accidents

▸ Management and Organizational Dysfunction

Kets de Vries and Miller described various types of neurotic organizations.2 One is the dramatic organization, which may have a bold, charismatic leader, yet still be fundamentally unsound. The paranoid organization typically insists on con- trol mechanisms and both external and internal organizational intelligence for protection and sustainability. The compulsive organization is characterized by dogmatism, inflexibility, and submission to orders and initiatives. The depres- sive organization is pessimistic, with members

When a health organization does not succeed in establishing a strong, overarch- ing culture with members feeling a sense of belonging and loyalty to the overall good of the organization, then small and great dysfunctions will exist throughout the organization.

In a communication to David Graber14 at the Medical University of South Carolina from hospital CEO S. H. Fine the following passage captures some of theses challenges:

In the “non-system,” that of most for- malized hospital medical groups, there is constant infighting and maneuvering among constituencies (e.g., cardiologists, vascular surgeons and radiologists fighting over who will “own” peripheral endovascular procedures). The cardiologists care not how their push for expanding the definition of “cardiology” to include interventional work in areas of the body distal to the heart may impact upon the ability of the hospi- tal to maintain a viable vascular surgery or interventional radiology service, and the GI physicians care not how stripping away the better paying, lower risk endoscopy procedures may impact upon the hospital’s ability to maintain proficiency and capabil- ity to deal with the more complicated and emergent cases. In short, many parties don’t particularly care about how changing one element may impact upon the rest of the organization. However, there are certainly other groups and individuals who commit to the mission and values of the organization, and set aside or modify opportunities to maximize personal gain in favor of support- ing the broader community.

Consequently, physician groups may be competing with each other, as well as acting against the administration and the good of the hospital with little concern for the greater good or the need to maintain a financially viable workplace. Another casualty in the professional arrogation of influence or turf may be the quality of care received by the patient.

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Personality characteristics of leaders and others within the organizations can be prob- lematic at the individual level as well.

As described by psychiatrist Mark Unter- berg, personality traits can wreak havoc in the workplace in the form of destructive behaviors and the undermining of trust and morale. In the case of antisocial behavior— sometimes in the more extreme form of sociopathy— manipulations, cons, and improper conduct are hidden at first, then earnestly denied. The apparent lack of guilt about harm to others can be especially destructive. When the behavior and its impact become known, management must be quite firm and set clearly defined rules of conduct. As Unterberg explains, if the employee stays with the organization, close supervision and carefully structured work responsibilities are necessary. In partic- ular, the employee should not be allowed to make unsupervised decisions that could hurt other employees or the organization. Other- wise, morale can be seriously affected by the anger of coworkers and supervisors over past behaviors and their ongoing concern about the employee’s continuing lack of concern and betrayal of others.

According to the American Psychiat- ric Association, antisocial personality disor- der has the characteristics shown in BOX 13-1 below.

There are many other personality and social types in the health organization who can create or contribute to organizational dys- function. Some of these include people who gossip; those who blame others instead of tak- ing responsibility; individuals who are overly dramatic in their responses; those who are too controlling of others; people who adopt a victim mentality; individuals who are inor- dinately withdrawn; passive aggressive types; those who are overly suspicious, perhaps even paranoid; narcissistic individuals; and, as described earlier, sociopathic types. There is also likely to be combined types, where the person has traits of more than one of these characteristics.

feeling helpless, at the mercy of external events, and often inhibited or indecisive in action. In the schizoid organization, many members are cold, unemotional, and withdrawn. They may be indifferent to praise or criticism and largely uninvolved with their organization.

The reader with healthcare experience may recognize one or more of these types of neurotic organizations. Each of these types of organizations may manifest due to a leader possessing a particular neurotic quality. Much has been written about the “dark side” of cha- risma and how a charismatic personality can severely harm or even destroy an organiza- tion.16, 17 Certainly, many charismatic per- sonalities have greatly influenced healthcare delivery. Florence Nightingale’s charm, insight, organizational skills, and self-abnegation during the Crimean War essentially created the modern model of nursing.18 Others have been enormously destructive to their organizations. Due to external forces, negative publicity and lawsuits, and the need to comply with regula- tory and accreditation standards, some organi- zations may gravitate toward a paranoid model. Health organizations that fail to motivate or engage employees and who fail to develop a sense of membership among diverse profes- sional groups may also become dysfunctional.

In health care, there are powerful forces that can propel organizational leaders toward a neu- rotic style. In fact, these forces are so substantial that failure to respond to them may automati- cally begin to engender a negative environment. Health organizations are replete with dualistic or segregated areas of influence and responsibil- ity. These can be summarized as follows:

■ Management authority vs. clinical authority ■ Organizational allegiance vs. professional

allegiance ■ External forces dictating change vs. orga-

nizational-based change initiatives ■ Community values vs. efficiency or finan-

cial values ■ Lack of remorse, as indicated by being

indifferent to or rationalizing having hurt or mistreated another

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As described by James Johnson in his book Introduction to Public Health Manage- ment, Organizations, and Policy,20

The most widely accepted definition of health for the past sixty years is the one published by the World Health Orga- nization in its constitution in 1947. It declares, “Health is a state of com- plete physical, mental, and social well- being and not merely the absence of disease and infirmity” (WHO, 1947). Some scholars have chosen to expand upon this enduring definition in an attempt to be more holistic. Specifi- cally, Payne, Hahn, and Lucas describe health in terms of six interacting and dynamic dimensions— physical, emo- tional, social, intellectual, spiritual, and occupational.

Furthermore, David Graber and James Johnson in the Journal of Healthcare Manage- ment add spirituality as an essential dimension

▸ Organizational Well-Being

To begin this section of the chapter, it is important to realize that the Oxford Hand- book of Organizational Well-Being 19 focuses on organizational well-being in its wid- est sense, and it is concerned with the fac- tors which are associated with ill health and associated organizational pathology. In today’s changing healthcare environ- ment, the sustainability of any health orga- nization is increasingly dependent on the extent to which it and its members are able to transform and adapt to these changes. Health has been identified as a key driver of socio-economic success, emphasizing the link between the health of individual workers and the overall performance of an organization. Equally, decades of research have highlighted the major role that work plays in determining physical health and psychological well-being.

BOX 13-1 Antisocial Personality Disorder in the Workplace

Diagnostic Criteria 301.7 (F60.2) A. A pervasive pattern of disregard for and violation of the rights of others, occurring since age 15 years,

as indicated by three (or more) of the following:

1. Failure to conform to social norms with respect to lawful behaviors, as indicated by repeatedly performing acts that are grounds for arrest.

2. Deceitfulness, as indicated by repeated lying, use of aliases, or conning others for personal profit or pleasure.

3. lmpulsivity or failure to plan ahead. 4. Irritability and aggressiveness, as indicated by repeated physical fights or assaults. 5. Reckless disregard for safety of self or others. 6. Consistent irresponsibility, as indicated by repeated failure to sustain consistent work behavior or

honor financial obligations. 7. Lack of remorse, as indicated by being indifferent to or rationalizing having hurt, mistreated, or

stolen from another.

B. The individual is at least age 18 years.

C. There is evidence of conduct disorder with onset before age 15 years.

D. The occurrence of antisocial behavior is not exclusively during the course of schizophrenia or bipolar disorder.

Content removed due to copyright restrictions

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of health, and likely an influencer of organiza- tional dynamics and culture.21

As an important analog to organizational well-being there is a need for healthy leaders. By this we mean leaders who are grounded and have the emotional maturity for the role. In Chapter 6 of this text we discuss many theories of leader- ship and provide a range of attributes and char- acteristics that can be associated with healthy leadership. Additionally, it might be useful to look at an Eastern perspective on the subject. In about 500 bce in China, Sun Tzu wrote about leadership and provided many insights that are useful today, as shown in TABLE 13-1 below.

▸ Treatment and Prognosis

To avoid neurosis and dysfunction, health orga- nizations must begin to develop a comprehen- sive approach to management that addresses the entrenched, structural challenges to optimal functioning that have been described in this chapter. Health organizations should seek to hire and promote employees who care for both patients and other employees, and who have the capacity to provide patient-centered care. Many organizations extol this attribute, but few have an intense focus on achieving a humanis- tic, caring environment. Such a patient orienta- tion is a foundation for the quality care that the community expects. A patient-oriented culture will be aligned with American values and is ulti- mately likely to contribute to the prosperity of the health organization. Until health organiza- tions achieve a caring culture, they will not be fully recognized and valued by the community and will continue to suffer from the pathology manifested in an uncaring, sterile environment.

Health organizations should find mecha- nisms for integrating the diverse professional groups within a functional and recogniz- able organizational culture. One step toward achieving this is to formulate common overar- ching values that have meaning and relevance

to all organizational members. It is also import- ant to create distinct reward systems for differ- ent groups of healthcare professionals, such as physicians, nurses, and therapists. Due to the high preponderance of clinical or unit manag- ers within health organizations without man- agement training, many health organizations are deficient in managers who know how to run a meeting, deal with conflict, give perfor- mance appraisals, and competently carry out the essential functions of management. This can be remedied by instituting in-house train- ing in management. Programs to develop phy- sician leaders may also be adopted. Another approach successfully used in some hospitals is to employ leadership assessment tools that give as much weight to personal characteris- tics like honesty, humility, and caring as to technical skills and knowledge. Such programs may help an organization to develop servant leaders or the Level 5 leaders identified by Col- lins.22 Level 5 leaders are said to possess humil- ity and to be unassuming, yet have an intense professional will and focus to transform the organization from a good one to a great one.

These are some of the steps that will reduce the chances that an inherently unbalanced, neu- rotic, or self-absorbed personality will take over all or part of the health organization. A strong culture that values solid, caring management and that has institutionalized some of the pro- grams described here will be unlikely to tolerate individuals who seek to sidetrack the organiza- tion and promote themselves. This chapter has argued that neuroses are common and often entrenched in health organizations.

Countering these negative influences and patterns is not simple and does require an intense focus by organizational leaders and management at all levels. However, creative and consistent management programs and clear organizational values can be effective as treatments. To put it simply, this is the right thing to do and is what organizations should do to better serve sick and disabled indi- viduals who need quality care and a caring environment.

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TABLE 13-1 Healthy Leader Lessons

Qualities 1. Discipline: A leader must be disciplined. Having discipline includes knowing one’s limits and weaknesses and not acting in haste.

2. Presence of mind: Presence of mind is the ability to stay calm and act sensibly in a crisis. This is a leader’s most important asset.

3. Self-respect: If your actions cause you to lose self-respect, your team will not respect you and will undermine your authority.

4. Wisdom, sincerity, and good faith: When you make decisions that are thoughtful, and you act with integrity, your subordinates will trust you. If you are trusted, your subordinates will be free to speak their mind, which means problems can be solved collaboratively and quickly.

5. Prompt decision making: In a complex and competitive health care environment the leader must be prepared to make a quick decision with the information at hand.

Organizing 1. Make preparations: One must constantly plan, prepare, and train our employees. 2. Prioritize tasks: One must prioritize tasks to achieve goals. 3. Choose your battles: Lose the battle to win the war. 4. Work in short efforts but swiftly: Great results can thus be achieved with small forces. 5. Adapt to circumstances: Each situation is unique; do not replicate your past

successful tactics to new circumstances. Be innovative.

Strategies 1. Create a common philosophy: To be truly successful the organization culture should transcend the mission, values, and vision. The employees should know they are part of something larger and make a difference in the life of others.

2. Foster cooperation: To be successful in health care it is important to have employees working together in cooperation. Be a positive role model for cooperation.

3. Maintain good communication: Being well informed is the best way to make sound decisions. Maintain access to all levels of information in your organization.

4. Control your team with kindness and discipline: Provide rewards without regard to rule; issue orders without regard to previous arrangement.

5. Do not micromanage your subordinates: The art of giving orders is not to try to rectify minor blunders and not to be swayed by petty doubts. Vacillation and lack of clarity only sap the confidence of an organization.

6. Foster a spirit of innovation: Promote a culture of problem-solving and thinking outside the box.

Contributed by Saad Ehtisham based on writings by Sun Tzu

▸ Conclusion No one can deny the value of the study of pathology in medical practice and research, nor the utility of studying pathology in the field of

psychology. Likewise, pathology has a place in our understanding of organizations. As men- tioned earlier in this chapter, dysfunction in health organizations may stem from neurotic, harmful leaders or may arise from well-meaning

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5. Alexander J, Morlock LL. Multi-institutional arrange- ments: Relationships between governing boards and hospital chief executive officers. Health Serv Res. 1985;19(6Pt1):675–699.

6. Smith DB, Kaluzny AD. The White Labyrinth. Ann Arbor, MI: Health Administration Press; 1986.

7. Cushman (Producer). Hospital Corporate Cultures (Film). Los Angeles, CA: Hospital Satellite Network; 1984.

8. Thorpe K, Loo R. The values profile of nursing undergraduate students: Implications for education and professional development. J Nurs Educ. 2003; 42(2):83–90.

9. Filipczak B. Weathering change; enough already. Training. 1994;September:23–29.

10. Maslach C. Burned-out. Hum Behav. 1976;5:16–22. 11. Freudenberger HJ. Staff burnout. J Soc Issues. 1974;

30(1):159–165. 12. Maslach C, Leiter MP. The Truth about Burnout: How

Organizations Cause Personal Stress and What to Do about It. New York, NY: Jossey-Bass; 1997.

13. Hojat M, Brigham T, Gottheil E, Xu G, Glaser K, Veloski J. Medical students’ personal values and their career choices a quarter-century later. Psychol Rep. 1998;83:243–248.

14. Graber DR. Organization dysfunction and pathology. In: Johnson JA, eds. Health Organizations. Sudbury, MA: Jones and Bartlett Publishers; 2009; 284–285.

15. Samuel, Y. Organizational Pathology: Life and Death of Organizations. New Brunswick, NJ: Transaction Publishers; 2012.

16. Hogan R, Raskin R, Fazzini D. The dark side of charisma. In: Clark KE, Clark MB, eds. Measures of Leadership. West Orange, NJ: Leadership Library of America; 1990; 98–105.

17. House RJ, Howell JM. Personality and charismatic leadership. Leadership Q. 1992;3(2):81–108.

18. Gillian G. Nightingales: The Story of Florence Nightingale and her Remarkable Victorian Family. New York, NY: Ballantine Books; 2004.

19. Cartwright, S. Cooper, CL. Oxford Handbook of Organizational Well-Being. Oxford, UK: Oxford University Press; 2008.

20. Johnson JA. Introduction to Public Health Management, Organizations, and Policy. Clifton Park, NY: Delmar Cengage Learning; 2013.

21. Graber D, Johnson, JA. Spirituality in healthcare organizations. Jrnl of Healthcare Mgmt, 2001:46(1): 39–50.

22. Collins J. From Good to Great: Why Some Companies Make the Leap and Others Don’t. New York, NY: Harper Business; 2001.

but ineffective leaders. Healthcare professional groups may contribute to organizational dys- function due to leadership failure to address the dissimilarities in their work and their varying values and cultures. The demanding nature and stresses of work in health care experienced by a large proportion of an organizational workforce may contribute to a pathological healthcare environment. Health organizations with cul- tures that do not match community values will not be accepted by the community and will fail to achieve their potential. External forces such as governmental and political influences, as well as legal threats, may contribute to neuroses in health organizations. Health organizations may develop optimal functioning through employee and management training and engagement and working to develop a unified culture.

Review/Discussion Questions 1. What are the internal cultural forces

that can contribute to organizational pathology?

2. How do job overload and job inten- sity affect employees and the health organization?

3. How can leaders or managers who will exemplify and contribute to a healthy organization be developed?

4. What values should a health organiza- tion embrace and enact to be accepted by the community and by the individ- uals it serves?

References 1. Janis I. Groupthink. 2nd ed. Boston, MA: Houghton

Mifflin; 1982. 2. Kets de Vries M, Miller D. The Neurotic Organization:

Diagnosing and Changing Counterproductive Styles of Management. San Francisco, CA: Jossey-Bass; 1984.

3. Kerr S. On the folly of rewarding A, while hoping for B. Acad Manage Exec. 1995;9(1):7–14.

4. Scott R. Managing professional work: Models of control for health organizations. Health Serv Res. 1982;17(3):213–239.

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CHAPTER 14

Diversity and Organizational Culture in Health Organizations

LEARNING OBJECTIVES

■ Explain the differences between diversity, inclusion, and cultural competence; identify the business case for diversity and inclusion in health organizations.

■ Explain the service patterns of health professionals from ethnic and racially diverse health professionals.

■ Explain why healthcare institutions need to provide greater opportunity for patients to see a practitioner from their own racial or ethnic group.

■ Identify strategies to accommodate cultural diversity of patients. ■ Strategize the handling of conflicts in a culturally diverse workplace. ■ Identify how the proactive use of diversity principles can transform the organization’s culture. ■ Review strategies on how to create an inclusive organizational culture. ■ Explain the roles that healthcare providers, management, and governance play in building a

diverse and inclusive environment within the organization.

OVERVIEW

This chapter provides the student with a framework to enhance inclusion and diversity in health organizations. In addition, the chapter builds the business case for diversity as well as strategies for creating an inclusive culture. Finally, the chapter provides tools that health professionals can use to build a diverse and an inclusive environment within the health organization.

Contributing Authors: Rupert M. Evans and Gwen Burbank

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health professions candidates, and the admis- sions and retention of these candidates in the health professions pipeline and workforce. These programs are represented in both public and private initiatives. The result of this significant demographic shift is that as the United States becomes more ethnically and racially diverse, healthcare systems and providers that can reflect and respond to an increasingly heterogeneous patient base are needed. Knowing how to serve people with different values, health beliefs, and alternative perspectives about health and well- ness is a business imperative in the most diverse regions of the United States.

Data from the Health Resources and Ser- vice Administration (HRSA) support these significant changes in the healthcare make-up of the United States. In recent years, however, competing demands for resources, along with shifting public opinion about policies aimed to assist members of specific racial and ethnic groups, have threatened the base of support for “diversity programs.” Continued support for these programs will increasingly rely on evidence that they provide a measurable pub- lic benefit.

The most compelling argument for a more diverse health professions workforce is that it will lead to improvements in public health. HRSA examined the evidence addressing the contention that health professions diversity will lead to improved population health out- comes. They specifically examined, reviewed, and synthesized publicly available studies addressing four separate hypotheses:

1. The service patterns hypothesis: that health professionals from racial and ethnic minority and socioeconom- ically disadvantaged backgrounds are more likely than others to serve racial and ethnic minority and socioeconomically disadvantaged populations, thereby improving access to care for vulnerable pop- ulations and in turn, improving health outcomes;

▸ Introduction

This chapter provides a definition of diver-sity and a framework for understanding the different ways people view the term. In addition, it highlights several studies and legal issues pertaining to this topic and enumer- ates methods for building a case for and estab- lishing a diversity program. For over 20 years, healthcare leaders have struggled with the issue of representation in the leadership and gover- nance of the nation’s health organizations, yet achieving a healthcare workforce that reflects the diversity of the U.S. population remains an elusive goal. Diversity and inclusion are explicit goals supported by, among others, the Associa- tion of American Medical Colleges (AAMC),1 the American Medical Association (AMA), the Institute of Medicine, the American Hospital Association (AHA), the American College of Healthcare Executives, and others. Expanding the workforce of underrepresented minority (URM) physicians has warranted significant attention. URMs have traditionally included African Americans, Mexican Americans, Native Americans, and mainland Puerto Ricans. The AAMC defines “underrepresented” as those racial and ethnic populations that are under- represented in the medical profession relative to their numbers in the general population.2 Several racial and ethnic groups, most notably African Americans, Latinos, and Native Americans con- tinue to be significantly underrepresented in the health professions workforce when compared with their representation in the general U.S. pop- ulation. The demographic trends in the United States will result in an older and more racially and ethnically diverse population by 2065.2 Sev- eral racial and ethnic minority groups as well as people from socioeconomically disadvantaged backgrounds are significantly underrepresented among health professionals in the United States. Numerous public and private programs aim to remedy this underrepresentation by promot- ing the preparedness and resources available to minority and socioeconomically disadvantaged

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Association of Public Hospitals and Health Systems announced a call to action for the elimination of healthcare disparities. Their goals are to increase the collection of race, eth- nicity, and language preference data; increase cultural competency training for clinicians and support staff; and increase diversity in governance and management. The coalition stated, “Addressing disparities is no longer just about morality, ethics and social justice: It is essential for performance excellence and improved community health.”3

▸ The Business Case for Diversity

In 1900, one in eight Americans was nonwhite; in 2012, blacks represented one in five Ameri- cans and Hispanics represent one in six. By 2060 those ratios will be closer to one in four and one in three respectively.2 This trend means that the healthcare industry needs physicians, nurses, and other providers as well as caregivers who reflect the diversity of the population because every- one, at one point or another, becomes a patient. The same is true for healthcare managers and executives. Therefore, health organizations must ensure that their caregivers and leaders represent the backgrounds of the communities they serve. In addition, healthcare executives must look for new insights, examples, and best practices to help navigate their organizations through a diversity journey. A key challenge in this jour- ney is establishing a business case for having a diverse workforce. While making the business case for diversity, it is important to understand the key elements. They include the following:

■ Representation—reflecting employees, patients, and communities

■ Inclusiveness—in welcoming, listening, mentoring, training, and benefits

■ Cultural competency—being respectful and responsive to cultural backgrounds and their impact on health outcomes

2. The concordance hypothesis: that increasing the number of racial and ethnic minority health professionals—by providing greater opportunity for minority patients to see a practitioner from their own racial or ethnic group or, for patients with limited English proficiency, to see a practitioner who speaks their primary language—will improve the quality of communication, comfort level, trust, partnership, and decision making in patient– practitioner relationships, thereby increasing use of appropriate health care and adherence to effective programs, ultimately resulting in improved health outcomes;

3. The trust in healthcare hypothesis: that greater diversity in the health- care workforce will increase trust in the healthcare delivery system among minority and socioeco- nomically disadvantaged popu- lations, and will thereby increase their propensity to use health ser- vices that lead to improved health outcomes; and

4. The professional advocacy hypoth- esis: that health professionals from racial and ethnic minority and socioeconomically disadvantaged backgrounds will be more likely than others to provide leadership and advocacy for policies and pro- grams aimed at improving health care for vulnerable populations, thereby increasing healthcare access and quality, and ultimately health outcomes for those populations.”1

Diversity and inclusion continue to be issues on the mind of many healthcare lead- ers. In February 2013 the American College of Healthcare Executives, AHA, Association of American Medical Colleges, Catholic Health Association of the United States, and National

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and the Center for Healthcare Governance and assisted by many state hospital associations.5 Several hundred candidates have participated in this orientation focused on hospital boards and their practices. The program has demon- strated no dearth of highly qualified leaders from minority communities, and a national reg- istry of candidates is available. This initiative has continued through 2017, yet there still have not been significant gains made in the goal to move more URM executives on to hospital and health system boards of trustees. To help fill the void and push the field forward, a new not-for-profit organization emerged in 2015: The Leverage Network Inc. (TLN). This unique organization is solely dedicated to increasing the represen- tation of African Americans in executive, gov- ernance, and entrepreneurial roles in health organizations. Their mission is to “promote the advancement of African American leaders to key decision making roles in the healthcare industry.” Having the ability to serve people with different values, beliefs, and perspectives will not only be a pressing business imperative for the healthcare industry of the future but, will also have a direct impact on the health disparities we continue to experience in this country.6

Like the AHA initiative, TLN is commit- ted to changing the dynamic in three focus areas: (1) increasing the representation of African Americans in Executive Leadership positions (C-Suite and two levels below), (2) increasing the number of African Americans holding seats on the boards of major health organizations, and (3) increasing the number of major healthcare contracts held by African American entrepreneurs.

The challenge now is to improve place- ments on hospital and health organization boards to provide broader evidence of what many trustees have already experienced: can- didates drawn from minority communities can be the most effective trustees. In addition to the nation’s shifting demographics, the wider health insurance coverage initiated in 2014 under the Affordable Care Act likely will increase diversity in patient populations, given the

■ Broader definitions of diversity— encompassing thought, education, skills, and gender

The business case for diversity is unique for each organization. The circumstances, envi- ronment, and community demographics of one organization cannot be generalized to another institution. However, some elements that are common in all organizations can be the basis of a diversity program: the healthcare marketplace, employee skills and talent, and organizational effectiveness. These elements will drive the insti- tution’s investment in and commitment to diver- sity. An organization can achieve and sustain growth and profitability by doing the following:

■ Expand market share by adding or enhancing services that target diverse populations.

■ Link the marketplace with the work- place through recruiting, developing, and retaining employees with diverse racial and ethnic backgrounds.

■ Create and implement workplace policies and management practices that maximize the talent and productivity of employees with diverse backgrounds.

The facts are that members of all minority groups buy and consume healthcare services, many of them are educated and trained to either provide healthcare services or manage operations, and many of them currently work within the field and understand its complexi- ties. Hospitals and other health organizations cannot afford to miss such opportunities. They can seek, cultivate, and retain minority talent to help them compete in today’s diverse health- care environment. Failure to take advantage of these opportunities will mean the difference between being a provider and employer of choice and losing ground to competitors.4

The Role of Governance The AHA developed an initiative called the Hos- pital Trustee Professionalism Program, led by the Institute for Diversity in Health Management

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workstation. The employees alleged that the supervisors allowed the behavior to continue. The EEOC’s response required the company to enact a graffiti abatement policy and undergo annual reviews of its compliance for 2 years. Similarly, in a lawsuit against Banner Health resolved in 2012, the EEOC alleged that the nonprofit healthcare system failed to accom- modate an intellectually disabled individual who had worked for it as a kitchen worker and dietary aide since 1984. During the course of his employment, the individual’s requests for rea- sonable accommodation were ignored. In 2002, a settlement agreement in response to a charge of discrimination filed with the EEOC required the employer to notify the individual’s brother, who had power of attorney, prior to taking any negative employment actions. However, when the individual requested an accommodation in 2005, Banner refused and instead fired the indi- vidual without notifying his brother. The set- tlement required Banner to pay $255,000 into a trust for the individual and provide injunctive relief, including training and postings.8 Another reason that a health organization board should support diversity initiatives is to encourage and strengthen employee commitment to the orga- nization. Simply, a diverse workforce is an asset. It differentiates an organization in the market- place, giving it an edge against its competitors in terms of inclusiveness, cultural sensitivity and competency, and even progressive practice.8

Board commitment to the principles of diversity may lead to shifts in the corporate cul- ture as well, allowing all stakeholders to contrib- ute to the overall success of the organization and its mission. Trustees should hold organizational leaders and managers accountable for setting and following high diversity standards. This practice will lead to an improved organization and to healthy communities.

When you hear the term diversity, what comes to mind? To some, the word means the differences between human beings related to race or ethnicity. To others, it means the uniqueness of each individual. A few people still may argue that it is just a code word for affirmative action.

disproportionate share of minorities among the previously uninsured. For hospital and health organization trustees, reviewing the status of membership diversity on boards will be very important; resources such as the AHA’s Minority Trustee Candidate Registry can be used to begin recruitment efforts.7 Doing this work will lead to one of the most important improvements trustees can make in building the strength of U.S. hospitals and health systems in the future: establishing boards and leadership that truly reflect the cultures of our communities.

Members of boards of trustees are the ulti- mate links to the communities served by a health organization. They know the makeup of the population the organization serves and seeks to target, and they have insights into their commu- nities’ healthcare needs. Because board members are part of the community, they have an interest in making sure that the organization they rep- resent is not only providing inclusive services but is also being a fair and equitable employer and neighbor. With this perspective in mind, governance should support a business strategy that promotes community goodwill, encourages growth, considers current social and demo- graphic transformations that indicate future needs, and emphasizes culturally competent and sensitive health care. Most importantly, mem- bers of the board should also reflect the multi- cultural mix of the surrounding communities.

Considering all of the challenges faced by any health organization board, why should it be concerned with diversity? One of the many rea- sons is to protect the organization’s bottom line. The financial impact of problems stemming from racial discrimination and discriminatory practices can be substantial. Cases of large orga- nizations committing or turning their backs on such practices provide evidence of the extent of cost consequences. For example, in Decem- ber 2012, a mill in South Dallas, Texas, agreed to pay $500,000 to 14 black employees to settle an Equal Employment Opportunity Commis- sion (EEOC) race discrimination suit alleging violent, racist graffiti, racial slurs by cowork- ers, and the display of nooses at an employee

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The dimensions of diversity are repre- sented by the Diversity Wheel. The center of the wheel represents internal dimensions that are usually the most permanent or visible. The outside of the wheel represents dimensions that are acquired and change over the course of a lifetime. The combinations of all of these dimensions influence our values, beliefs, behav- iors, experiences, and expectations and make us all unique as individuals (FIGURE 14-1).9

Health organizations across the United States are beginning to move toward embrac- ing and fostering workforce diversity and inclusion. This cultural change means adopt- ing new values that are inclusive and appro- priately managing a diverse workforce. In the future, diversity will drive the business prac- tices of hospitals and other health organiza- tions, and this dynamic will require strong leadership.

FIGURE 14-1 Diversity Wheel Reproduced from the Johns Hopkins University Diversity Leadership Council

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Family

Religion

Appearance

Work experience

Education

Income Language and

communication skills

Organizational role

Political belief

Race / ethnicity Age

Gender identity or expression

Gender

National origin

Sexual orientation

Mental / physical ability

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norms vary from one culture to another and influence how individuals interact with their work environments. For example, some reli- gious groups are forbidden from working on the Sabbath, and this exemption has an impact on work scheduling and even hiring decisions.10 Finally, systems diversity includes teamwork, re-engineering, strategic alliances, military experience, empowerment, quality, education, corporate acquisitions, and innovation. Systems diversity relates to the differences among orga- nizations in work structure and pursuits. Sys- tems diversity deals with systems thinking and the ability to recognize how functions in the work environment are connected with diversity. In a multicultural, diverse, and inclusive work- place, organizational systems are integrated to enhance innovation, encourage teamwork, and improve productivity.

All of these dimensions are important and present in the health organization, and all lead- ers should recognize them. The challenge is in seeing not only our differences but also our similarities as individuals, as professionals, and as members of a group. Leaders must develop effective strategies to manage the differences (and highlight similarities), and the use of these strategies will lead to building effective teams and a higher-performing organization.11

Managing diversity is not an easy task, as a number of barriers often get in the way of achieving a harmonious working environment. Some of these barriers, which revolve around the diversity dimensions mentioned earlier, can be a great source of tension and conflict. For instance, a person’s culture can be a bar- rier to a work team when other members of the group are not respectful or understanding of the person’s values, beliefs, or even clothing, all of which may reflect that person’s cultural background. Examples of a cultural differ- ence may be the person’s hairstyle or affinity for wearing religious artifacts. The education, race/ethnicity, work style, empowerment, and relationship/task orientation of an individual can also become barriers if they are not prop- erly understood and managed.7

▸ The True Meaning of Diversity and Inclusion

R. Roosevelt Thomas, Jr. a nationally recog- nized scholar on diversity management coined a definition of diversity, stating “Diversity is the total collective mixture, made up of ‘main’ ones and ‘others,’ it is not a function of race or gender or any other us-versus-them dyad, but a complex and ever changing blend of attributes, behaviors, and talents”. Inclusion as defined by the Society for Human Resource Management is “the achievement of a work environment in which all individuals are treated fairly and respectfully, have equal access to opportunities and resources, and can contribute fully to the organization’s success.”10

This definition and the illustration of the wheel illustrate that diversity must be viewed across different dimensions, those being human, cultural, and systems diversity. The human dimension of diversity, includes factors such as race, sexual orientation, gender and gender identity, ethnicity, physical ability, age, and fam- ily status. Human diversity includes the attri- butes that make us human beings. These traits are what frequently come to mind first when individuals consider the differences in people. Human diversity is a core dimension because it defines who we are as individuals. This dimen- sion is with us throughout every stage of our lives, guiding how we define ourselves and how we are perceived by others. A workplace defi- nition of diversity includes human diversity as a minimum. The cultural dimension includes factors like language, classism, learning style, ethics, religion, lifestyles, work styles, and global cultures. Cultural diversity encompasses a person’s beliefs, values, family structure prac- tice (nuclear or extended family, independent living), and mind-set as a result of his or her cultural, community, and environmental expe- riences. Cultural diversity is a secondary dimen- sion, but it can have a powerful impact on how a person behaves in the workplace. Cultural

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wherein authority and prestige favors the cli- nician. When a healthcare provider commits a microaggression, the exchange may undermine attempted provision of care, trust may be broken, and the visit becomes a source of patient stress. Microaggressions are possible in any intercul- tural exchange and are liable to be enacted by all of us, including the most caring, sensitive pro- viders. Thus, there is great impetus for critical self-reflection and broadened understanding of microaggressions to achieve high-quality, cul- turally safe care. Although a growing literature explores the consequences of healthcare-related discrimination in multiple forms, investigation of microaggressive healthcare experiences spe- cifically has received almost no empirical atten- tion. In this chapter, we examine the prevalence of microaggressive experiences in healthcare settings and their association with health out- comes and behaviors.14

The concept of “comfort and risk” relates to a human being’s natural need to feel com- fortable and to avoid risk. People tend to pre- fer to work with others from similar racial or ethnic backgrounds because doing so provides them with a certain amount of comfort and shields them from a certain amount of risk. Although subordinate–superior relationships that involve people from different backgrounds work sufficiently to allow people to get the job done, they often fail to lead to the close bonds that form between a mentor and a protégé.

Given the systemic existence of prejudice and the way it influences people’s mind-set and behavior in the workplace, the fair and accurate assessment of minority employees (caregivers, support staff, and managers alike) remains an organizational dilemma rather than an established practice. For instance, the literature provides evidence that managers systematically give higher performance ratings to subordinates who belong to the same racial group as they do, while high performers from minority groups remain comparatively invis- ible in the managerial/leadership selection process.14

▸ The Impact of Prejudice

Prejudice is a set of views held by individuals about members of other groups. Prejudice is prejudgment; hence, it is not based on facts or experience. It affects the way people react toward and think about other people, and it can be as innocent as children choosing not to play with children they deem different from themselves or as harmful as adults not associ- ating with certain people because English is not their native language.7, 12

Formally, prejudice can be defined as a set of institutionalized assumptions, attitudes, and practices that have an invisible-hand effect in systematically advantaging members of more powerful groups over members of less domi- nant groups. This type of prejudice occurs in many health organizations. Some examples include culturally biased assessment and selec- tion criteria, cultural norms that condone or permit racial or sexual harassment, lower per- formance expectations for certain groups, and a collective misconception about a specific group that relegates the group’s members to unfair positions. Stereotyping is an example of the latter.13

Stereotypes are generalizations about indi- viduals based on their identity, group member- ship, or affiliations. A common stereotype in the healthcare management field is the assump- tion that black executives are not as qualified as their white counterparts. Thus, African Amer- ican executives are tested more often to prove their competence, while their white contem- poraries are assumed to be capable from the start. (This fact is substantiated in the race/ ethnic surveys discussed later in the chapter.) Microaggressions describe the frequent, subtle (often unconscious) indignities expressed in relation to one’s gender, race, sexual orientation, or otherwise-marginalized social position. The potential impact of microaggressions in clinical encounters is notable given the provider patient relationship and inherent power differential

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nursing, with men now 10% of the profession according to the Census Bureau. Leaders are confronted with an additional layer of com- plexity with the increased focus on transgen- der patient care issues.

Generational With four generations already in the workforce—Traditionalists, Baby Boomers, Generation X, and Millennials (now the largest cohort)—organizations must manage rather than attain diversity. B.E. Smith has written extensively about the varying generational characteristics and motivations on everything from work expectations to communication preferences to learning styles. Leaders must adapt management practices and construct programs in ways that demonstrate respect for the differences. Be aware also that the millennial view of diversity itself differs from the non-millennial, with the former focused on “the mix of unique experiences, identities, ideas, and opinions” while the latter usually “frames diversity in terms of demographics and equal opportunity.”

Experiential Diversity of background has assumed greater value as health care undergoes transforma- tional change and demands fresh solutions. Leaders who possess particular skills that are not always congruent with conventional experience and credentials are highly valued. Successful organizations proactively seek nontraditional candidates for key positions, increasingly looking outside the healthcare industry. B.E. Smith’s surveys reveal that the industries currently viewed most favorably as candidate sources are finance, hospitality, and information technology. Leadership develop- ment programs are also devoting greater effort to exposing emerging leaders to a wider range of internal and external experiences.15

According to Dotson and Nuru-Jeter (2012),11 finding strategies that lead to the

▸ Diversity Management In accordance with the Institute for Diversity in Health Management’s publication “Diver- sity and Disparities: A Benchmarking Study of U.S. Hospitals in 2015,” the healthcare industry has improved its racial and ethnic balance in recent years, generating such success stories as Robert Wood Johnson University Hospital’s growth in minority leadership to 32% over the past few years. More broadly, though, studies reveal that significant progress remains elusive:

■ Minorities constitute 32% of hospital patients, but only 11% of hospital execu- tives and 14% of board members—both numbers essentially flat since 2011. An uptick has been seen in first- and mid- level management, which has reached 19%, but this statistic still suggests that ensuring diverse senior leadership in the future will require greater bench strength.

■ On the clinical side, about 9% of physi- cians identify as African American, Native American, or Hispanic. Less than 20% of nurses identify as racial or ethnic minori- ties.5 Such low levels threaten progress toward more representative leadership as clinicians continue to be sought for important executive roles, including CEO.

■ Approximately one-third of hospitals have a “documented plan to increase the num- ber of ethnically, culturally, and racially diverse executives on the senior leader- ship team.”15

Gender Healthcare’s workforce is nearly 80% female. Women are frequently the primary decision-makers on family medical concerns. Yet women still occupy only about 28% of hos- pital board directorships and comprise one- third of the physician population—far less in many specialties. Female compensation trails that of male counterparts in both primary and specialty care.7 There are encouraging signs in

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cultivate core competencies in LBGT health as well as healthcare environments that welcome, include, and protect LGBT patients, students and staff. This issue has received increased attention from the AHA and the American College of Healthcare Executives, both spon- sors of the Institute for Diversity in Health Management’s health education programs that emphasize basic LGBT concepts and terminol- ogy, as well as openness towards and accep- tance of LGBT people. The Joint Commission also continually strives to better understand the needs of individual patients and popula- tions as they relate to healthcare disparities and to provide guidance for hospitals as they attempt to provide patient- and family-cen- tered care.16 Many initiatives and efforts have been made toward this end; the Joint Commis- sion’s Comprehensive Accreditation Manual for Hospitals published new and revised stan- dards designed to promote patient-centered communication. These communication stan- dards include revised elements of performance that prohibit discrimination based on sexual orientation, gender identity, or gender expres- sion, and ensure access to a support person of the patient’s choice, all of which are critical issues to the LGBT community. In addition to the revised standards, the Joint Commission published Advancing Effective Communica- tion, Cultural Competence, and Patient- and Family-Centered Care: A Roadmap for Hospi- tals in August 2010, which is a comprehensive document intended to inspire hospital staff to integrate concepts from the fields of commu- nication, cultural competence, and patient- and family-centered care into organizations. The Roadmap for Hospitals contains recom- mendations specific to the LGBT population, including an inclusive definition of family, and also provides resources related to the care of LGBT patients.17 Caring for the health needs of LGBT patients also involves the creation of healthcare settings that affirm LGBT commu- nities in a manner that is responsive to cultur- ally specific needs, sensitivities, and challenges that vary across the globe.

development of high-quality health care in increasingly diverse patient populations has become a major challenge. To address the challenges of health and healthcare dispari- ties, three effective strategies will lead orga- nizations to become culturally competent. The first is to provide empirical evidence of a connection between diversity and perfor- mance. Second, link the organization’s invest- ment in diversity to strategic goals, financial incentives, and organizational success metrics. Finally, ensure that the leadership of the orga- nization is responsible for cultural competence as a performance measure.11

A study of the banking industry demon- strated an empirical link between diversity and performance; data showed that racial diversity was positively associated with performance of firms pursuing growth strategies and neg- atively associated with performance in firms going through downsizing.11 The study illus- trated that racial diversity interacted with busi- ness strategies in determining productivity, return on equity, and market share. Through analysis of such studies, healthcare managers can develop their business cases using empiri- cal data from other industries.

▸ Managing Diversity, Inclusion, and Health Equity in the LGBT Community

Over the past 10 years’ lesbian, gay, bisexual, transgender, and queer (LGBTQQ) people face pervasive health disparities, barriers to high-quality care, and discrimination in the workplace. There is inadequate LGBT sexual health education for emerging health pro- fessionals. Clinical training programs and health organizations are well poised to start addressing these disparities and affirming LGBT patients through curricula designed to

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Beyond organizational change within health organization, achieving sustainable and comprehensive health equity for LGBT peo- ple will require substantial societal change to address a range of adverse LGBT health out- comes driven by social determinants outside the healthcare arena.18

A health organization’s ability to provide equitable, competent, and welcoming care to all patients is a factor of its ability to create a culturally competent workforce. Health orga- nizations are key in developing strategies to develop a workforce that is prepared to pro- vide the best possible care to LGBT patients. These strategies should be designed to achieve two key workforce goals: (1) ensure that LGBT employees are treated in an inclusive and equi- table manner; and (2) ensure that all employ- ees are able to provide equitable, competent, and welcoming care to LGBT patients and their families.

▸ Disability and the Workplace

Incorporating the disabled into the healthcare workforce increases diversity and adds value to organizations. Overcoming and living with difficult life challenges has often resulted in the disabled gaining creative and innovative skills that would translate well in the health- care business environment. Yet the disabled continue to represent an untapped resource in health employment. With increased knowl- edge about diversity, it is time that the health- care sector embraces the disabled as a rich resource for meeting increasingly demanding employment needs.

Disability is on the increase and is some- thing that almost everyone will face at some point in their lives. This increase is due to the aging population as well as disabilities result- ing from chronic disease such as cardiovas- cular diseases, diabetes, and mental illnesses. “More than a billion people are estimated to

Despite recent advances in the recog- nition of LGBT people, with data demon- strating a rapid increase in the acceptance of LGBT people1, 2 and attainment of equal- ity in many sectors,3 education on LGBT health needs for health professionals still lags greatly.16 As recently as a decade ago there were no standard texts that included information about care for LGBT people, and numerous studies and reviews of health issues have documented a continued gap in healthcare education.16

A curricular resource with suggested milestones has been developed by the Asso- ciation of American Medical Colleges that can serve as a guide for educational programs seeking to expand LGBT health training.18 In addition, there are now many more curricular resources for education and training on the health needs of LGBT people than there were just a decade ago.

Gender identity is distinct from gender expression, and both are clinically relevant.1 “Gender identity” refers to a person’s inter- nal sense that they are a man, a woman or, in some cases, both or neither. To the extent that someone’s gender identity is noncongru- ent with their sex assigned at birth, they may identify themselves as transgender or as gen- der nonbinary, if they do not identify strictly as either male or female.24 Gender expression describes a person’s outward manifestations of gender in relation to societal norms, such as their style of dress and mannerisms. Gen- der expression may or may not be related to a person’s gender identity. Clinical trainees can be taught to: (1) not make assumptions about a person’s gender identity or sexual orienta- tion based on their gender expression; (2) be familiar with commonly used terms, recog- nizing that preferred terminology varies by person, place, and time; and (3) have a basic understanding of what the gender affirma- tion process may entail for transgender peo- ple, as well as the medical interventions (i.e. gender-affirming hormones and surgeries) that patients may seek.16

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accommodations, employment, transporta- tion, state and local government services, and telecommunications.20

According to ADA, if a person has a disability, he or she must also be qualified to perform the essential functions or duties of a job, with or without reasonable accom- modation, in order to be protected from job discrimination by the ADA.21 Reasonable accommodation is defined by the ADA as any change or adjustment to a job or work envi- ronment that permits a qualified applicant or employee with a disability to participate in the job application process, to perform the essential functions of a job, or to enjoy benefits and privileges of employment equal to those enjoyed by employees without dis- abilities. An employer is required to provide a reasonable accommodation to a qualified applicant or employee with a disability unless the employer can show that the accommo- dation would be an undue hardship; that is, it would require significant difficulty or expense. Examples of reasonable accommo- dation include:

■ Providing or modifying equipment or devices

■ Job restructuring ■ Part-time or modified work schedules ■ Reassignment to a vacant position ■ Adjusting or modifying examinations,

training materials, or policies, ■ Providing readers and interpreters ■ Making the workplace readily accessible

to and usable by people with disabilities.21

As outlined in the 2011 World Report on Disability, The United Nations Conven- tion on the Rights of Persons with Disabili- ties (CRPD), aims to “promote, protect, and ensure the full and equal enjoyment of all human rights and fundamental freedoms by all persons with disabilities, and to pro- mote respect for their inherent dignity.”19 ADA, CRPD and other groups have certainly brought more awareness to the public about the disabled and the fact that discrimination

live with some form of disability or about 15% of the world’s population.”19

The American with Disabilities Act (ADA) defines a person with a disability as a physical or mental impairment that substantially limits one or more major life activities, a record of such an impairment, or being regarded as having such an impairment. It is important to remember that in the context of the ADA, “disability” is a legal term rather than a medical one.20 Another definition of disability is from the International Classification of Functioning, Disability and Health (ICF) and is used by the World Health Organization (WHO) in the 2011 World Report on Disability. The ICF defines disability as an umbrella term for impairments, activity lim- itations, and participation restrictions, in rela- tion to the negative aspects of the interaction between individuals with a health condition and personal and environmental factors.19

The World Report on Disability is an important report contributing to a greater understanding of the attitudinal, physical, and financial barriers faced by those with disabili- ties and offers strategies for incorporating the disabled into the workforce.19 The report states that across the world, people with disabilities have poorer health outcomes, lower education achievements, less economic participation and higher rates of poverty that people without disabilities.19

The Americans with Disabilities Act (ADA) became law in 1990 and was amended in 2009. The ADA is a civil rights law that prohibits discrimination against individu- als with disabilities in all areas of public life, including jobs, schools, transportation, and all public and private places that are open to the general public. The purpose of the law is to make sure that people with disabilities have the same rights and opportunities as everyone else. The ADA gives civil rights pro- tections to individuals with disabilities sim- ilar to those provided to individuals on the basis of race, color, sex, national origin, age, and religion. It guarantees equal opportu- nity for individuals with disabilities in public

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professionals, the private sector, disabled indi- viduals and their families, the general public, the private sector, and media.19

Recommendations from the World Report on Disability include:

1. Enable access to all mainstream systems and services

2. Invest in specific programs and services for people with disabilities

3. Adopt a national disability strategy and plan of action

4. Involve people with disabilities 5. Improve human resource capacity 6. Provide adequate funding and

improve affordability 7. Increase public awareness and

understanding 8. Improve disability data collection 9. Strengthen and support research

on disability1

Employers have an obligation by law to facilitate the implementation of CRPD. One of the first things that employers can do is to know and follow antidiscrimination laws. A second action would be to make reasonable accommodations for the disabled. This would include equality in recruitment and selection of employees as well as providing technolo- gies that would assist the disabled to do their job. Third, the government sector could help with tax incentives for organizations hiring the disabled. And finally, multiple sectors could assist with both skills development as well as training that deals with perceptions and attitudes.

In conclusion, we see that the time is ripe for incorporating the disabled into the health- care workforce. Not only will this increase diversity, but it will add value to organizations through the creative and out-of-the box think- ing that is characteristic of many disabled. Now more than ever the implementation of The United Nations Convention on the CRPD is possible if all sectors of society are willing to work together to incorporate the disabled into the healthcare workforce.

against individuals with disabilities is pro- hibited by law, yet the disabled are still under represented in the workforce.

According to the U.S. Department of Labor, Bureau of Labor Statistics (BLS), across all age groups, persons with a disability were much less likely to be employed than those with no disability. The employment–population ratio in 2015 for persons with a disability was at 17.5% compared to 65% for those with no disability.22

Following are factors contributing to this employment–population ratio:

■ Policies that do not take in to account the needs of the disabled

■ Policies and standards that are not enforced

■ Misconception by employers that the dis- abled are less productive

■ Deficiencies in services needed to support and assist the disabled

■ Inadequate funding and resources needed to implement disability policies and pro- vide needed services to the disabled.19

As the American healthcare systems con- tinue to experience economic competition and the increased demand for skilled workers, disabled individuals can provide innovative skills needed to meet the demand. In a 2013, Jay Ruderman reported that disabled individ- uals are confronted with life difficulties that require creative adaptation and ingenuity on a daily basis. As a result, the disabled know resil- ience, and they know how to think out-of-the- box and on their feet, or wheels. In fact, recent studies show employers who hire people with disabilities report a higher level of dedication and increased retention.23

We have addressed the barriers and inequalities faced by the disabled. Facilitating the implementation of recommendations will require the efforts of many different sectors— health, education, social protection, labor, transport, housing—and different actors— governments, civil society organizations (including disabled persons organizations),

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that expand roles for older nurses, promoting policies that respect a work/life balance, and using technology to assist with labor intensive work.26

▸ Diversity and Inclusion Impact on Care Delivery

The need for diversity and inclusion goes well beyond mere compliance or risk man- agement. Healthcare industry trends compel organizations to pay greater attention to lead- ership and organizational diversity. Health organizations are evolving toward consumer models that put patient choice and involve- ment at the center of care. Because providers now need to focus on the individual differ- ences of patients, CEOs are defining consum- erization as the need to achieve individual value for every single person. Health organi- zations need to engage the consumer as part- ner by being as inclusive as possible, making them feel valued and that their care matters to the organization. This focused individu- alized care means organizations need to be representative of their communities in ways that heighten sensitivity to localized patient needs. Diversity can thus promote customer satisfaction and create an advantage in a highly competitive market. Focusing on dis- parities in care, including the disproportion- ate recruitment and selection of a minority workforce and ensuring the cultural com- petence of caregivers are interconnected. To minimize care disparities, institutions and providers have to develop cultural compe- tence. To develop cultural competence, a diverse group of providers, support staff, and managers needs to be in place and diversity training and policies for all employees and caregivers have to be established. Simply, the lack of a culturally competent healthcare workforce is a possible contributor to the dis- parities in care.

▸ Aging in the Workplace The aging U.S. workforce has many impli- cations for the way health organizations will operate in the future. According to the U.S. Census Bureau, the population is projected to age over the coming decades, with a higher proportion of the nation’s total population in the older ages (65 and over). The per- centage of the population that is aged 65 and over is expected to grow from 15% to 24%, an increase of 9% points by 2060. Not only is the population aging, but more older peo- ple are participating in the workforce.24 The BLS states that those 65 to 74 years had a workforce participation rate that was 20.4% in 2002 and expanded to 26.8% in 2012. This age group of older workers had the largest increase relative to all the other age groups over the decade, and their rate is expected to continue to increase to 31.9% in 2022.25

Older people are choosing to stay in the workforce longer for several reasons. Peo- ple are healthier than previous generations. Older workers are living longer and desire to stay active. They enjoy being productive. Some require additional financial resources due to the default of pension plans, insuffi- cient retirement savings, or high healthcare costs.

As individuals age, they are more likely to develop a disability, are more prone to workplace accidents, and often desire more work-life balance. Organizations that hope to stay competitive and guard against disability related legal costs will need to implement a range of strategies to accommodate the needs of the aging workforce. During a symposium convened by The State University of New Jersey entitled The Aging Workforce Chal- lenges for the Health Care Industry Workforce, the following strategies for accommodating the needs of the aging workforce were iden- tified: ergonomic workstations, flexible work schedules, seasonal months-off without los- ing benefits, phased retirement, career paths

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impact of language barriers, religious taboos, unconventional views of illness and disease, or alternative remedies are unlikely not only to satisfy their patients but, more importantly, also to provide their patients with optimally effective care.4

Cultural competence is not a discrete fac- tor of health care, but it is a significant compo- nent of overall quality in healthcare delivery. Issues of healthcare quality and satisfaction are of particular concern for people with chronic conditions who frequently come into contact with the healthcare system. Efforts to improve cultural competence among health profession- als and provider organizations would contrib- ute to improving the quality of health care for all consumers.

An understanding of the factors that influ- ence the disparities in health care is essential in developing effective strategies to minimize the problem. FIGURE 14-2 presents two sets of factors: patient-related factors and health-system-related factors. Patient-related factors are cultural characteristics of patients that prevent them from getting fair and adequate treatment in an organization that is not culturally competent or sensitive. Health-system-related factors are organizational dynamics (e.g., employee attri- butes and biases) that influence the methods used to treat patients.17

An approach to social determinants of health is a “place-based” organizing frame- work, reflecting five (5) key areas of social determinants of health (SDOH) that was devel- oped by Healthy People 2020 (FIGURE 14-3). The following are the five key areas (determinants):

■ Economic Stability ■ Education ■ Social and Community Context ■ Health and Health Care ■ Neighborhood and Built Environment

Each of these five determinant areas reflects a number of critical components/key issues that make up the underlying factors in the arena of SDOH.

Another trend is population health man- agement, which requires care coordination among a range of providers along with the ability to identify and address broader com- munity health factors. Diverse leadership is often better equipped to engage the commu- nity and establish the network of partnerships necessary for optimal population care.

Cultural competence may be defined as a set of complementary behaviors, practices, attitudes, and policies that enables a system, an agency, or individuals to effectively work and serve pluralistic, multiethnic, and lin- guistically diverse communities. Different from cultural sensitivity, cultural competence is about action, doing something that creates and delivers culturally competent services.27 Cultural competence is the ability of providers and organizations to effectively deliver health- care services that meet the social, cultural, and linguistic needs of patients. A culturally com- petent health organization can help improve health outcomes and quality of care, and can contribute to the elimination of racial and ethnic health disparities. Examples of strate- gies to move the health organization towards these goals include providing relevant train- ing on cultural competence and cross-cultural issues to health professionals and creating policies that reduce administrative and lin- guistic barriers to patient care. The demo- graphic makeup of this country will continue to change, and culturally competent and sen- sitive care will be expected from current and future health professionals. To effectively provide such care, leaders, health profession- als, and all the employees in between must have a firm understanding of how and why belief systems, personal biases, ethnic ori- gins, family structures, and other culturally determined factors influence the manner in which patients experience illness, adhere to medical advice, and respond to treatment. Such factors ultimately affect the outcomes of care. Physicians and other health profes- sionals who are not mindful of the potential

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social determinants. It is anticipated that addi- tional objectives will continue to be developed throughout the decade.

▸ Components of an Effective Diversity Program

Healthcare leaders can establish a diversity program that will lead to a more diverse and

■ Economic Stability • Poverty • Employment • Food Security • Housing Stability

■ Education • High School Graduation • Enrollment in Higher Education • Language and Literacy • Early Childhood Education and

Development ■ Social and Community Context

• Social Cohesion • Civic Participation • Discrimination • Incarceration

■ Health and Health Care • Access to Health Care • Access to Primary Care • Health Literacy

■ Neighborhood and Built Environment • Access to Healthy Foods • Quality of Housing • Crime and Violence • Environmental Conditions This organizing framework has been used

to establish an initial set of objectives for the topic area as well as to identify existing Healthy People objectives (i.e., in other topic areas) that are complementary and highly relevant to

FIGURE 14-2 Causes of Racial and Ethnic Disparities in Health Care Modified from American Hospital Association, based on learning from “Unequal Treatment: Confronting Racial and Ethnic Disparities in Health Care” Institute of Medicine. 200217

FIGURE 14-3 Social Determinants of Health Reproduced from Healthy People 2020.gov

200 Chapter 14 Diversity and Organizational Culture in Health Organizations

Patient-related factors • Social economic status • Health education • Human behavior

Health system factors • Cultural competency of staff • Healthcare professional discrimination • Diversity of workforce • Communication – language barriers • Access to care • Reimbursement • Information – data on population

Causes Racial and ethic

disparities in health care+ =

Neighborhood and built

environment

Economic stability

Health and health care

Education Social and community

context

SDOH

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http://2020.gov

■ Recruitment and retention. Attracting and retaining a diverse workforce have a lot to do with the state of the workplace. Leaders should create an environment in which minorities feel included, professionally developed, and safe.

■ Bridging of generations. Generational differ- ences in expectations, education, and values exist between younger and older staff. Such gaps should be acknowledged, and attention should be paid to the physical, mental, and emotional well-being of all caregivers and staff at all ages regardless of backgrounds.

■ Cultural competence. This competence is an in-depth understanding of and sen- sitivity to the values and viewpoints of minority staff, patients, and other cus- tomers. Leaders should master the skills necessary to work with and serve these groups and should provide training in this matter to all employees to ensure pro- vision of culturally competent care.

■ Organization-wide respect. Leaders should create an environment in which the differ- ences in title, role, position, and department are valued and respected but not held too lofty above everything else. Each employee, regardless of his or her level within the organization, should be viewed as integral to the overall success of the team.

▸ Diversity in Healthcare Leadership: Two Major Studies

Despite the demographic changes in the U.S. population, and hence in the healthcare field, few minorities are present in the executive suite. Two major studies have been undertaken to understand the factors behind minorities’ difficult climb on the healthcare management ladder. As the findings of these studies indi- cate, although improvements are continually being made in terms of how workforce and

inclusive organization. Actions that leaders can take toward this goal include, but are not limited to, the following:

■ Ensure that senior management and the governing board are committed to the development and implementation of a diversity program.

■ Broaden the definition of diversity to include factors beyond race and ethnicity.

■ Recognize the business case for bringing in diversity at the leadership level.

■ Tie diversity goals to business objectives. ■ Hold recruiting events that target racial

and ethnic groups, women, people with disabilities, older but capable workers, and others who are considered minorities.

■ Encourage senior executives to mentor minorities. The business imperatives and organiza-

tional necessities for aggressively creating a diversity program include, but are not limited to, the following:

■ Reflection of the service population. The health organization’s professionals and support staff should mirror the diversity of the population that the institution serves. Toward this end, the organization should attract and take advantage of the talents, skills, and growth potential of minority professionals within the community.

■ Workforce utilization. Minority employees have a lot to contribute to the organiza- tion. Leaders should recognize this fact and should be open to, sensitive to, knowl- edgeable about, and understanding of the cultures, mind-set, and practices of the organization’s diverse workforce. Doing so will not only enhance staff productiv- ity and overall performance but also boost staff morale.

■ Work–life quality and balance. Leaders should recognize that work and personal activities are interrelated, not separate preoccupations. Both are performed on the basis of necessity, practicality, effi- ciency, and spontaneity.

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members, an average of 14% of executive lead- ership positions, and 15% of first- and mid- level management positions.

Study 2: Building the Business Case—Healthcare Diversity Leadership: A National Survey Report In 2015, the executive search firm Witt/Kief- fer completed a national survey that offered a progressive benchmark to build on its seminal survey conducted during 2006 and its original diversity survey conducted during 1998. Witt/ Kieffer partnered with the Institute for Diver- sity in Health Management, Asian Health Care Leaders Association, National Association of Health Services Executives, and National Forum for Latino Healthcare Executives to conduct the 2015 survey, which attracted a diverse respondent pool: 16% African Amer- ican, 10% Asian, 17% Hispanic, and 55% Caucasian. The 2015 sample was much more varied than the 2006 survey, in which 71% of the respondents were Caucasian. The 2011 survey also attracted more female respon- dents than the 2006 study (32% vs. 28%). More than half (54%) of the 464 respondents in 2015 were CEOs, C-suite executives, and vice presidents.28 The remaining 46% consisted of medical chiefs, administrators, directors, and other leaders. In the summer of 2015, an online survey consisting of 42 questions was distributed to a broad range of Witt/Kieffer healthcare executive contacts. The survey included 10 demographic questions, 25 longi- tudinal questions based on past surveys, and 7 questions on best practices and resources. In most questions, respondents were asked to rate their agreement with statements based on strongly agree, agree, disagree, and strongly disagree scales. “Agree” in this report always includes both “agree” and “strongly agree” responses. “Disagree” always includes both “disagree” and “strongly disagree” responses. Throughout the survey, diversity was defined

leadership diversity is viewed and valued in health organizations, much work remains to be done.

Study 1: Diversity & Disparities: A Benchmark Study of U.S. Hospitals In 2011, the Institute for Diversity in Health Management, an affiliate of the AHA, com- missioned the Health Research & Educational Trust of the AHA to conduct a national survey of hospitals to determine the actions that hos- pitals are taking to reduce healthcare dispar- ities and promote diversity in leadership and governance.15

The survey results offer a snapshot of some common strategies used to improve the qual- ity of care that hospitals provide to all patients, regardless of race or ethnicity. The survey results highlight that while more work needs to be done, advancements are being made in key areas that can promote equitable care, such as collecting demographic data, providing cultural competency training, and increasing diversity in leadership and governance.

The survey included data collected through a national survey of hospitals mailed to the CEOs of 5,756 institutions, which rep- resented all U.S. registered hospitals at the time of the survey. The response rate was 16% (924 hospitals), with the sample generally being representative of all hospitals. The com- plete study can be found at www.hpoe.org/ diversity-disparities.

Some core findings of this study indicate that cultural competency training is occur- ring: 81% of hospitals educate all clinical staff during orientation about how to address the unique cultural and linguistic factors affecting the care of diverse patients and communities, and 61% of hospitals require all employees to attend diversity training. In the area of leader- ship and governance, although minorities rep- resent a reported 29% of patients nationally, they account for only 14% of hospital board

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http://www.hpoe.org/diversity-disparities

advancement of minority executives: mentoring programs, programs to expose young people to healthcare careers, sensi- tizing management, developing cultural sensitivity initiatives, and communicating diversity initiatives to employees.

▸ Conclusion Health disparities that arise from a lack of access to care and contribute to poor health outcomes continue to disproportionately affect a growing segment of the population. While reports show some progress in reduc- ing disparities, much work remains to be done. Health organizations in the United States are beginning to make a commitment to embrac- ing and fostering workforce diversity. This cultural change means adopting new values in terms of being inclusive and attracting a diverse workforce. The business case for diver- sity is unique for each organization because the circumstances, environment, and community demographics of one organization vary from those of another. However, certain elements (such as the marketplace and organizational effectiveness) that are common in all organi- zations can be the basis of a diversity program.

One of the many reasons that senior man- agement and the governing board should pay attention to diversity issues is to protect the organization’s bottom line. The financial costs of problems that stem from racial discrimina- tion and discriminatory practices can be sub- stantial. Studies have found disparities in two areas:

1. Minority healthcare administrators ascend in rank more slowly within their organizations than do their white counterparts.

2. Patients who belong to minority groups receive different medical treatments than patients who are white. Such disparities may be bridged with the development of a diversity program.

as multidimensional with respect to race, eth- nicity, national origin, gender, religion, age, marital status, sexual orientation, gender iden- tity and disability.28

The survey report identified the following main findings of the 2015 study:

■ Respondents see diverse leadership as a valuable business builder, associating it with improved patient satisfaction, suc- cessful decision-making, reaching strate- gic goals, improved clinical outcomes, and a stronger bottom line.

■ Respondents perceive more positive diversity activities within their own orga- nizations when it comes to closing the minority leadership gap and giving equal consideration to minorities for leadership positions.

■ While the pool of diverse candidates for healthcare leadership has grown over the last 5 years, respondents do not per- ceive the same growth within their own organizations.

■ Minority representation is still weak, with only one-quarter reporting that minority executives are well-represented in their organizations’ management teams and about the same percentage agreeing that the diversity of their management teams reflects patient demographics.

■ The top five solutions for diversity success are being sensitive to cultural differences in the workplace, establishing strategic goals and standards that emphasize cul- tural diversity, seeking regular employee input about the organization’s diversity initiatives, promoting minorities from within, and mentoring people of color.

■ Perceived barriers vary based on race/eth- nicity. Minority respondents zero in on a lack of commitment from top manage- ment as the #1 barrier to success. Cauca- sian respondents focus on a lack of diverse candidates, access to them, and a lack of candidates to promote from within.

■ Respondents are in total agreement about best practices that will lead to the

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6. Governance CfH. Trustee candidate recruitment 2014. www.americangovernance.com/trustee/index .shtml. Published 2014. Accessed September 11, 2014.

7. Brooks-Williams D. Setting the stage for a business case for leadership diversity in healthcare: History, research, and leverage/practitioner application. J Healthcare Manage. 2012;57(1):35–44.

8. Carle SD. Angry Employees: Revisiting Insubordination in Title VII Cases. Forthcoming 10 Harvard L. & Pol. Rev.; 2016.

9. Johns Hopkins. Diversity Leadership Council. Diversity Wheel. http://web.jhu.edu/dlc/resources/ diversity_wheel/index.html. Accessed February 13, 2017.

10. Guillory W. The Business of Diversity: The Case for Action. Salt Lake City, UT: Innovations Publishing Division; 2001.

11. Dotson E, Nuru-Jeter A. Setting the stage for a business case for leadership diversity in healthcare: History, research, and leverage. J Healthcare Manage. 2012;57(1):35–46.

12. Nelson AR, Stith AY, Smedley BD. Unequal Treatment: Confronting Racial and Ethnic Disparities in Health Care (Full Printed Version). Washington, DC: The National Academies Press; 2002.

13. Sue DW. Microaggressions in Everyday Life: Race, Gender, and Sexual Orientation. Hoboken, NJ: John Wiley & Sons; 2010.

14. Walls ML, Gonzalez J, Gladney T, Onello E. Unconscious biases: Racial microaggressions in American Indian health care. J Am Board Fam Med. 2015;28(2):231–239.

15. Management IfDiH. Diversity and disparities: A benchmarking study of U.S. hospitals in 2015. http:// www.hpoe.org/Reports-HPOE/diversity_disparities_ chartbook.pdf. Accessed May 6, 2017.

16. Parameshwaran V, Cockbain BC, Hillyard M, Price JR. Is the lack of specific lesbian, gay, bisexual, trans- gender and queer/questioning (LGBTQ) health care education in medical school a cause for concern? Evidence from a survey of knowledge and prac- tice among UK medical students. J Homosexuality. 2017;16(3):367–381.

17. Miller A. Teaching lesbian, gay, bisexual and transgen- der health in a South African health sciences faculty: Addressing the gap. BMC Med Educ. 2013;13(1):174.

18. Commission J. Advancing Effective Communi- cation, Cultural Competence, and Patient-and Family-Centered Care for the Lesbian, Gay, Bisexual, and Transgender (LGBT) Community: A Field Guide. Oakbrook Terrace, IL: The Joint Commission; 2011.

19. World Health Organization. World report on disability. World Health Organization website. www .who.int. Published 2011. Accessed February 13, 2017.

Review/Discussion Questions 1. Describe in your own words how a

health organization can create the envi- ronment for diversity and inclusion. What are some of the steps you would take to make the organization ready for change?

2. Cultural competence is an in-depth understanding of and sensitivity to the values and viewpoints of minority staff, patients, and other customers. How should leaders insure that all employees practice culturally competent care?

3. Can hospitals that adhere to gender- or race-based patient demands face discrim- ination lawsuits from their employees?

4. Does workforce inclusion and diversity enhance organizational performance? Explain your answer.

5. There are five (5) key areas of social determinants of health (SDOH) that were developed by Healthy People 2020. Why are these important in insuring a healthy community and equity to all individuals in the community?

References 1. Betancourt JR, Green AR, Carrillo JE. Cultural

Competence in Health Care: Emerging Frameworks and Practical Approaches. New York, NY: Commonwealth Fund, Quality of Care for Underserved Populations; 2002.

2. Bernstein R. US Census Bureau projections show a slower growing, older, more diverse nation a half century from now. https://www.census.gov/news- room/releases/archives/population/cb12–243.html. Published December 12, 2012. Accessed February 2013:15.

3. Dolan TC. Increasing diversity in governance and management. J Healthcare Manage. 2013;58(2):84–86.

4. Dreachslin JL, Gilbert MJ, Malone B. Diversity and Cultural Competence in Health Care: A Systems Approach. Hoboken, NJ: John Wiley & Sons; 2012.

5. Abernathy J. Diversifying diversity. Trustee. 2016;69(4):1–2.

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http://www.americangovernance.com/trustee/index.shtml

http://web.jhu.edu/dlc/resources/diversity_wheel/index.html

http://www.hpoe.org/Reports-HPOE/diversity_disparities_chartbook.pdf

http://www.who.int

https://www.census.gov/news-room/releases/archives/population/cb12�243.html

25. Bureau of Labor Statistics. Labor force projections to 2022: The labor force participation rate continues to fall. US Department of Labor website. www.bls.gov. Published December 2013. Accessed February 15, 2016.

26. Harrington L, Heidkamp M. The aging workforce: Challenges for the health care industry workforce. The NTAR Leadership Center. https://www.dol.gov/ odep/pdf/NTAR-AgingWorkforceHealthCare.pdf. Published March 2013. Accessed February 15, 2017.

27. Weech-Maldonado R, Elliott MN, Pradhan R, Schiller C, Hall A, Hays RD. Can hospital cultural competency reduce disparities in patient experiences with care? Med Care. 2012;50:S48–S55.

28. Witt/Kieffer. Building the business case-healthcare diver- sity leadership: A national survey report. http://www .diversityconnection.org/diversityconnection/mem- bership/Resource%20Center%20Docs/Healthcare%20 Diversity%20Leadership-%20a%20National%20 Survey%20Report.pdf. Accessed May 6, 2017.

20. ADA National Network. Information, guidance and training on the Americans with disability act. www .adta.org. Accessed February 15, 2017.

21. The U.S. Equal Employment Opportunity Com- mission. The ADA: Your employment rights as an individual with a disability. Equal Opportunity Com- mission. https://www.eeoc.gov/facts/ada18.html. Pub- lished March 21, 2005. Accessed February 13, 2017.

22. Bureau of Labor Statistics. Persons with a disability: Labor force characteristics summary. US Department of Labor website. www.bls.gov. Published June 21, 2016. Accessed February 15, 2017.

23. Ruderman J. Disabled individuals bring innovation to the workforce. Huffington Post. April 12, 2013. www.huffingtonpost.com. Published June 12, 2013. Accessed February 13, 2017.

24. Colby SL, Ortman JM. Projections of the Size and Composition of the U.S. Population: 2014 to 2060, Current Population Reports. Washington, DC: U.S. Census Bureau; March 2015:25–114.

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http://www.bls.gov

https://www.dol.gov/odep/pdf/NTAR-AgingWorkforceHealthCare.pdf

http://www.diversityconnection.org/diversityconnection/mem-bership/Resource%20Center%20Docs/Healthcare%20Diversity%20Leadership-%20a%20National%20Survey%20Report.pdf

http://www.adta.org

https://www.eeoc.gov/facts/ada18.html

http://www.bls.gov

http://www.huffingtonpost.com

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PART 3

Organization Development and Change “He who loves practice without theory is like the sailor who boards ship without a rudder and compass and never knows where he may cast”

— Leonardo DaVinci

CHAPTER 15 Ethics and Values in Health Organizations . . . 209

CHAPTER 16 Physician and Clinician Leadership in Health Organizations . . . . . . . . . . . . . . . . . . . 221

CHAPTER 17 Governance and Board Development in Health Organizations . . . . . . . . . . . . . . . . . . . 232

CHAPTER 18 Organizational Change and Sustainability in Health Organizations . . . . . . . . . . . . . . . . . . . 251

CHAPTER 19 Organization Development and Crisis Management in Health Organizations . . . . . . 268

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CHAPTER 15

Ethics and Values in Health Organizations

LEARNING OBJECTIVES

■ List and define the four common branches of ethics. ■ Compare five ethical theories relevant to health organizations. ■ Summarize Confucianism and list the reasons why it is applicable to health organizations. ■ Define the four ethical principles and their application to health organizations. ■ Define organizational ethics. ■ Describe Rawl’s Reflective Equilibrium model and how it can be used for ethical decision

making. ■ List Nelson’s six steps for sound decision making and ethical reasoning. ■ Describe tools to use when encountering unethical behavior in the workplace. ■ Define organizational culture. ■ List 12 factors that influence culture. ■ Describe the difference between mission-based, clan-based, bureaucratic-based, and

learning-based subcultures in an organization. ■ Describe how a healthcare leader can set the ethical tone for an organization.

OVERVIEW

This chapter provides the student with an overview of organizational ethics and values in health care. The ethical principles and theories are defined, as well as their application to health care. Tools for ethical decision making are provided. Finally, factors that influence organizational culture are discussed, as well as guidance for healthcare leaders to set an ethical tone for the organization.

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Moral psychology: examines how people form moral reasoning as they develop intellectually. Moral reasoning begins at birth and advances with age through adulthood

Applied ethics: also known as practical ethics or professional ethics. It uses eth- ical theories, codes of ethics, and moral reasoning to problem solve. The Amer- ican College of Healthcare Executives (ACHE)5 is an example of applied ethics, serving as the code of ethics and describ- ing standards of behavior for healthcare executives. Bioethics, business ethics, and organizational ethics are all applied ethics.6

▸ Ethical Theories Ethical theories are essential for enhancing ethical practice. Presented here are six ethical theories: five are used in health care for ethical decision making, and one is counterintuitive to the health profession. Confucianism and Stakeholder Theory are presented as compel- ling business practice ethics.

Virtue ethics: dates back to Plato (427–347 BCE) and Aristotle (384–322 BCE).7 Virtue- based ethics defines qualities for appropriate behavior, the right action to take, to find the proper end for humans, and then to seek it. Virtue is emphasized in the internal charac- teristics of an individual. It’s doing the right thing, in the right place, at the right time, in the right way. Aristotle proposed the concept of Eudaimonia, translated as actions that lead to happiness or well-being. Happiness in Aris- totle’s wisdom was the ability to live one’s life as it was intended to be, by being virtuous.7–9 Administrators as part of the health profession should be moral agents, practicing Aristotle’s four cardinal virtues of prudence, fairness, courage, and temperance.6

Natural law: based on the teaching of St. Thomas Aquinas (1224–1274).8 God is per- fectly rational and created the world both

▸ Introduction

The challenges facing health orga-nizations today are unparalleled. Healthcare reform, customer and payer expectations, financial constraints, new models of healthcare delivery, consoli- dations, mergers, and changes in the polit- ical climate are perplexing to most health organizations. Requirements for improved safety and quality, patient satisfaction, and increased regulatory demands have placed healthcare delivery systems under great strain. These unprecedented demands open the door for shortcuts and unethical or ille- gal behaviors: healthcare fraud (billing for unnecessary or services not provided, upcod- ing, and kickbacks), unprincipled decision making, dishonesty, and corporate abuse.1, 2 When organizations part with principles and values, abandoning their ethical purpose, they become unsustainable.3 There is no guarantee that an organization will do the right thing and sustain itself against unsustainability. How- ever, good ethical leadership, accountability, and respectable treatment of stakeholders are desirable qualities for sustainability.3 This chapter examines organizational ethics, ethi- cal theories, principles, decision making, and culture in relation to health organizations.

▸ Ethics Ethics is a set of values and moral principles; it is the study about what is right and wrong.4 There are four common branches of ethics: descriptive, normative, moral psychology, and applied ethics.

Descriptive ethics: also called comparative ethics; describes how people behave when confronted with ethical choices.

Normative ethics: also called prescriptive ethics; specifies what people should do or not do when confronted with an ethical dilemma and choices

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used in strategic planning, budgeting, and cap- ital acquisition.

Deontological: or duty-based ethics, founded on the teachings of Immanuel Kant. Individuals should be treated as ends, not as a means to an end, but with respect for person, human dignity, and treatment of a patient.10, 11 Kant recognized that humans were rational beings and could decide what is good. His tool, the Categorical Imperative, tests actions, determining one’s duty, and allows for moral decision making.8 Kant’s expression of the categorical imperative was do unto others what you would do to yourself.8 This theory emphasizes the importance of protecting the dignity and self-worth of an individual based on their status as a person—the right to life, free speech, and religious affiliation. Kant suggested that what is right for one is right for all.9 Kant’s beliefs on moral duty are use- ful when developing policies and procedures. Should everyone have to comply? However, for a healthcare administrator, based on Kant’s teaching all decisions would be made based on goodwill, not on the reality of having to make a profit, comply with legal rules and regula- tions, and please stakeholders.8 Remember: no mission, no margin.

John Rawls believed that individuals have a claim to basic liberties in society. Those less fortunate, or in a lesser position (poverty), or those with a lesser quality of life (chronic med- ical conditions) should be protected.8, 9 Any- one at some point in their life can be in a lesser or vulnerable position. Therefore, society (or another individual) seeks to protect these indi- viduals in time of need. Failure to help those less fortunate will negatively impact society as a whole. Rawls proposed that each person has a right to the same basic liberties that are com- patible with liberties for all.9

Rawls’s influence has had enormous impact on political and healthcare leaders’ thinking about social justice and has influenced pro- grams such as Head Start, Medicare, Medic- aid, and the Patient Protection and Affordable Care Act.8, 9 Healthcare administrators should

rationally and providentially. Therefore, the right thing to do is in accordance with this providential order. God gave man the ability to reason, wonder about the cause of things, and make rational decisions; to choose good over evil. Aquinas proposed the Principle of Double Effect: to distinguish between good and evil. This principle is often used when discussing issues related to abortion, physician-assisted suicide, and euthanasia. It is not the intent of this chapter to draw conclusion on this theory. Students are encouraged to investigate this theory in more depth to seek a better under- standing.7, 8

Authority based: these are faith-based theories: Christian, Muslim, Hindu, Bud- dhist, and Jewish, to name a few. Determining the right thing to do is based on an authority figure—such as lessons our parents taught us. Most religions provide a basis or cause for dis- ease and suffering along with ways to cope and find comfort.7 It is important for the healthcare administrator to have a good understanding of the faith-based religions. The patient’s thought process on the cause of disease, suffering, and end of life may impact their decision making and selection of treatment options.

Consequentialism: based on the teach- ings of Jeremy Benthan (1748–1832) and John Stuart Mill (1806–1873), who was one of the most influential theorists in health care.8 Con- sequences determine the moral rightness or wrongness of an act with the goal of maximi- zation of good (utilitarianism). Both Benthan and Mill maintained that decisions should be based on the most benefits relative to their disadvantages, and the largest number of peo- ple. Utility is defined as what is best in a spe- cific case (act) or what is generally preferred (a rule). Utilitarianism is often associated with collective human welfare.7–9 Many healthcare administrators recognize Mill’s principles to be a practical way to address difficult healthcare issues. Decisions on scarce resource allocation can be made on universal benefit, determining merit, and making a decision that will benefit the needs of the many.8 This principle is often

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violations of organizational policy.14 To facilitate participation, many organizations have imple- mented a telephone “hotline” number to report anonymous concerns.14 For healthcare admin- istrators, incorporating stakeholder theory into an established organization’s ethics program is easier said than done, requiring additional members with knowledge of business and the ethical decision-making process. However, some organizations have successfully expanded membership on an ad hoc basis when consider- ing specific policies and procedures.6, 7

▸ Ethical Principles Ethical theories and their application to health care have been presented as an ethical foun- dation. The ethical theories, along with the principles of autonomy, non-maleficence, beneficence, and justice, are used in conjunc- tion for judgment and decision making.6

Autonomy is often defined as self- determination, making one’s own decisions. It is often used in reference to informed consent, decision making related to diagnosis, and treatment.11

Beneficence is rooted in the Hippocratic oath and includes acting in a positive manner for the benefit of the patient, including kindness and charity.10

Non-maleficence is the obligation to first do no harm or to avoid unnecessary harm.7, 8, 10 This principle is often cited when discussing physician-assisted sui- cide and euthanasia.

Justice is defined in many ways, often in terms of what is fair, what is equitable treatment, or in fairness of distribution, what is deserved.

All four ethical principles are used by intuitional ethics committees (IEC), health- care administrators, and managers when confronted with ethical dilemmas to aid in decision making.

minimize their own bias and maximize justice when weighing solutions and writing and fol- lowing policies.

Egoism: the greatest good for only one individual.11 Related to Ayn Rand and the the- ory of objectivism, in which a person seeks to advance their own self-interest and pleasure. This theory is counterintuitive to healthcare professionals, who have a fiduciary responsi- bility to those they serve, putting aside their own personal interest for those of the patient.7

Confucianism: Confucius (551–479 BCE) believed in a good or ideal society, based on a serious of harmonious, hierarchical relationships characterized by trust and mutual concerns.12 He believed that citizens should be of high char- acter, committed to lifelong learning, striving to enhance their ethical lifestyle.12 This was inclusive of all, from individuals in a family to high-ranking members of government.12 Leaders should govern by living a moral lifestyle (leading by example) and care for those around them, ensuring dignity and respect for all.12 Confucianism is applicable to the modern business world as well as organi- zational ethics because of its emphasis on hier- archy, relationships, policies, norms, procedures and rituals—business etiquette.13 In most health organizations, hierarchy is the basic organizational structure, and most behavior is structured around business principles, knowledge, and areas of responsibility. Morality is an essential component of relationships and recognizes hierarchy in the leadership role of the moral person in achievement of a moral society.13 Therefore, leaders of health organizations should strive to live a moral ethical lifestyle of high character, striving to improve their lives and the lives of those they serve.

Stakeholder theory: This theory extends business ethics, addressing the rights and inter- ests of other people (patients, families, provid- ers, community, organizations, and businesses) who interact or are affected by an organization’s decision. In other words, they have a stake in the organization and its success.6, 7 Stakeholders should be aware of the standards of the orga- nization, what to expect in business dealings, and an avenue to report alleged or potential

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The goals of traditional ethics commit- tees include promoting the rights of patients, shared decision making, fair policies, and pro- cedures that maximize good, patient-centered outcomes, as well as promoting an ethical environment for health professionals in orga- nizations.17 To be able to respond to ethics consultations, members should have the fol- lowing knowledge, skill, and ability18:

Assessment skills: the ability to identify and analyze the ethical uncertainty or conflict and to apply ethical theories, principles, organizational policies, profes- sional guidelines, and standards.18

Process skills: the ability to assist in a con- sult, communicate and document the consult, and collaborate with various professionals.18

Interpersonal skills: include the ability to empathetically listen, ask appropri- ate questions, foster understanding, and communicate among all parties partici- pating in the consult.18

In addition, ethics committee members should have fundamental ethics-related knowl- edge. Core competencies include moral reason- ing related to ethics consultation, basic ethics concepts, clinical context, and organizational context.18 In recent years, IECs have expanded their role, working with human resource departments to provide assistance with pol- icy and procedures that impact employees, capital acquisition, and allocation of scarce resources.

▸ Decision-Making Tools Rawl’s reflective equilibrium model can be used as a logical model for decision making. FIGURE 15-1 demonstrates the back-and-forth process. Central is the primary healthcare concern, surrounded by four morals or ideals: considered judgments, ethical principles, ethi- cal theories, and common morality.

▸ Organizational Ethics In 1995, the Joint Commission introduced a new chapter in the accreditation manual enti- tled Patient Rights and Organizational Ethics.7 This required hospitals to operate according to a code of ethical behavior. It also required that hospitals develop procedures to address ethi- cal questions and concerns not only in regards to clinical care, but business ethics: marketing, billing, admission, transfer, and relationships with external stakeholders, other health orga- nizations, schools, and providers.7 Now hos- pitals and other health organizations have a fiduciary responsibility not only in the care of patients, but in operations of the organization.

An organization is a group of individuals who come together to accomplish a shared goal or goals. Health organizations are highly inte- grated systems composed of inputs (resources of humans, equipment, and money) and pro- cesses to provide output (high-quality care to a population).15 Organizational ethics applies moral standards and principles, focusing on the ethical climate of an entire organization.8, 9 These new challenges require the healthcare system to have an integrative ethics approach, combining both organization and clinical ethics.7

▸ Institutional Ethics Committee

An IEC of a health organization serves in an advisory capacity. Membership consists of a multidisciplinary group of health professionals (medical staff, nursing staff, administrators, social services, board members, clergy, bioeth- icists) joined by culturally diverse community members to educate the public on biomedi- cal ethics, policy development, and case con- sultation.16 In addition, hospitals often add a patient representative or ombudsman who can provide information on the patient or family perspective.7

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respond? Nelson proposes a six-step sys- tematic response based on procedural jus- tice for sound decision making and ethical reasoning.20

1. Recognize the background. Identify the factor(s) that contributed to the ethical issue. Involve all stakehold- ers to voice their concerns, seeking an understanding of all perspec- tives. Identify any policy, proce- dural, economic, social, or legal implications.20

2. Identify the specific ethical ques- tions that need clarification. Once facts and perspectives are gathered, formulate, articulate, and seek consensus on the ethical question. Failure to do so may create obsta- cles to a successful resolution.20

3. Consider the related ethical prin- ciples and/or organizational val- ues. Examine the relevant ethical principles (autonomy, beneficence, non-maleficence, and justice). Are there any organizational values related to the conflict? Policies? Legal regulations?20

4. Determine options for response. List the potential options and review the ethical justifications for each. Examine the positives and nega- tives of each option.20

5. Recommend a response. After exam- ining each potential option, seek consensus selecting one proposed response. Share the decision and ethical justification with all the stakeholders.20

6. Anticipate the ethical conflict. Deter- mine how future controversies or conflicts can be prevented. Exam- ine why they initially happened and what can be done to prevent their reoccurrence. What policies and procedures need to be changed? Do leaders need a strategy to prevent reoccurrence?20

Considered judgments are moral judg- ments, a decision-making guide, decided after thought, deliberation, and reasoning. They may be moral or intuitive in nature.7

Ethical principles of autonomy, benef- icence, non-maleficence, and justice ensure we do no harm, respect individu- al’s rights, and seek to do good, while pro- tecting liberty and justice.7

Ethical theories are examined to explain intentions or motivations. Are the moti- vations due to ideology, authority, or duty?7

Common morality is general rules and principles that we accept and live by.7

This back-and-forth process of consider- ation and reconsideration allows individuals or groups to examine ethical principles, com- peting ethical theories, commonly accepted moral judgments, and considered judgments to reach a decision (hopefully consensus) based on sound ethical reasoning.7

Adopting an ethical framework and educating staff on its use speak to the ethical culture and commitment of the organization. Employees must be able to recognize an ethical issue, question the ethical behavior, and determine a decisive action.19 Once identified, how should one

FIGURE 15-1 Reflective Equilibrium at Work

214 Chapter 15 Ethics and Values in Health Organizations

Healthcare issue at

hand

Common morality

Ethical principles

Ethical theories

Considered judgments

Reflective Equilibrium at Work

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If the decision or course of action did not achieve the desired outcome, other options such as referral to an ethics committee or a second opinion should be explored.

▸ Code of Ethics Most professions have codes of ethics to direct members in behavior. Healthcare executives are guided by the ACHE Code of Ethics.21 First established in 1941, the code provides stan- dards of behavior or conduct for all its members in interaction with all stakeholders: patients, coworkers, community, other organizations, and society.21 The preamble is presented in BOX 15-1.

The ACHE website offers a plethora of resources to aid in ethical decision making, including self-assessments, journal articles, and position statements.5

▸ Ethical Leadership Ethical leadership in various health organiza- tions is defined differently. For the most part, many believe ethical leadership is modeled in the way senior leaders ought to behave in terms of trust, honesty, and treatment of employees.22 Ethical leadership is a demonstration of appro- priate conduct through personal actions and interpersonal relationships as well as promo- tion of conduct to followers through two-way communication, reinforcement, and decision making among employees.22 Furthermore, ethical leaders exhibit behaviors that denote fairness and use this in their decision-making process. The “moral person” aspect of a leader influences the ethical—as well as unethical— behavior of colleagues and employees.22 How does a healthcare administrator influence eth- ical behavior beyond modeling? How does one keep colleagues honest? By speaking up, man- aging oneself, and confronting the problem. Gentile provides eight insights or tools for use when encountering unethical behavior in the workplace.23

BOX 15-1 Code of Ethics

Preamble The purpose of the Code of Ethics of the American College of Healthcare Executives is to serve as a standard of conduct for affiliates. It contains standards of ethical behavior for healthcare executives in their professional relationships. These relationships include colleagues, patients, or others served, and members of the healthcare executive’s organization and other organizations, the community, and society as a whole.

The Code of Ethics also incorporates standards of ethical behavior governing personal behavior, particularly when that conduct directly relates to the role and identity of the healthcare executive.

The fundamental objectives of the healthcare management profession are to maintain or enhance the overall quality of life, dignity, and well-being of every individual needing healthcare service; and to create a more equitable, accessible, effective, and efficient healthcare system.

Healthcare executives have an obligation to act in ways that will merit the trust, confidence, and respect of healthcare professionals and the general public. Therefore, healthcare executives should lead lives that embody an exemplary system of values and ethics.

In fulfilling their commitments and obligations to patients or others served, healthcare executives function as moral advocates and models. Since every management decision affects the health and well-being of both individuals and communities, healthcare executives must carefully evaluate the possible outcomes of their decisions. In organizations that deliver healthcare services, they must work to safeguard and foster the rights, interests, and prerogatives of patients or others served.

The role of moral advocate requires that healthcare executives take actions necessary to promote such rights, interests, and prerogatives. Being a model means that decisions and actions will reflect personal integrity and ethical leadership that others will seek to emulate.

Source: American College of Healthcare Executives Code of Ethics: http://www.ache.org/ABT_ACHE/CodeofEthics.pdf

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http://www.ache.org/ABT_ACHE/CodeofEthics.pdf

▸ Culture Culture is the values, norms, guiding beliefs, and understanding shared by members of an organization.4 It is the way groups inter- act with internal and external stakeholders. Organizational culture is an organization’s standards, principle beliefs and values, atti- tudes, ideologies, practices and customs, and language.2 It’s a type of applied ethics that holds an organization accountable to its val- ues and moral position.6 Culture is learned and shared; it evolves and does not change quickly. It is mostly invisible, interpreted based on listening and what is sensed, and is powerful and guides behavior.24

▸ Factors That Influence Culture

Many factors shape culture. Internal and exter- nal forces influence cultural norms and beliefs in a health organization. Twelve forces than influence health organizational culture are presented in FIGURE 15-2.

1. External laws, standards, demands (e.g., accreditation and regulatory standards, nondiscrimination laws, demands for LEED, or eco-friendly green behavior)4, 24–26

2. Organizational mission (e.g., the mission of the organization to serve all people, regardless of race, eth- nicity, or sexual orientation)4, 24–26

3. Organizational structure (e.g., a highly centralized structure, where most decisions are made by the President and Chief Executive Officer)4, 24–26

4. Rewards and punishment (e.g., recognition for exceptional patient care, punishment for poor customer service or missed deadlines)4, 24–26

5. Training and education (e.g., in-house in ser vices, workshops,

Treat the conflict as a business matter. Speaking up and supporting it with appro- priate content and a carefully crafted argument.23

Recognize this is part of your job. Think- ing about ethics and doing something about them is a regular part of profes- sional life for anyone in positions of accountability.23

Be yourself. Have a characteristic way of expressing yourself with your colleagues and stick with that style when discussing ethical issues.23

Challenge the rationale. Poking holes in the common rationale for acting unethi- cally. When colleagues say “everyone does it,” or “it is standard practice,” simply ask why is there a policy against it?23

Turn newbie status into an asset. While it is common to think you cannot address an ethical concern because you are new or a junior associate, you can! Simply clarify the discussion, asking if you have misunderstood since you are new to the organization.23

Expose faulty either/or thinking. Ratio- nales are often based on false informa- tion or dichotomies. If either/or thinking is used to defend unethical behavior, counter it by pointing it out to the parties involved.23

Make long-term risks more concrete. Long- term costs and benefits seem less tangible than short-term ones. Make big-picture concerns more concrete and thus more urgent. It will pay in the long run.23

Present an alternative. People fear being labeled as self-righteous by speaking up. To avoid labeling, present smart alterna- tives to unethical action.23

Make ethics everyone’s business. Set the right tone in the organization by speaking up and using these insights to support an ethical environment.

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8. Beliefs, values, and norms of infor- mal leaders (e.g., a nonsupervisory laboratory technician giving advice to other technicians on how to get along with pathologists)4, 24–26

9. Beliefs, values, and norms of employ- ees (e.g., an older worker who values punctuality)4, 24–26

10. Ceremonies, symbols, rituals, and activities (e.g., diplomas and continu- ing education certificates proudly displayed in the clinic)4, 24–26

or webinars advancing educa- tion)4, 24–26

6. Physical work setting (e.g., a bland, cold, sterile work environment that does not inspire comfort or interpersonal warmth or creativ- ity)4, 24–26

7. Beliefs, values, and norms of formal leaders (e.g., senior vice-presidents learning the names of employees and sending individualized birth- day cards)4, 24–26

FIGURE 15-2 Model of the Forces and Factors That Influence Healthcare Culture4, 24–26

Factors That Influence Culture 217

Beliefs, values, norms of formal

leaders

Physical work setting

Training and education

Rewards and punishments

Organization structure

Organization mission

External laws, standards, demands

Language

Stories and legends

Ceremonies, symbols,

rituls, activities

Beliefs, values,

norms of employees

Healthcare organization

culture

Beliefs, values, norms of

informal leaders

Reproduced from Management of Healthcare Organization. An Introduction. (2011). Peter C. Olden. HAP/AUPHA, p. 173. Based on the work of (Olden 2011; Borkowski 2009; Daft 2010; and Evans 2009)

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▸ The Purpose of Health Organizations

The purpose of health organizations has not changed drastically over time. While conduct- ing the fund drives for the first community hospital in North America—the Pennsylvania Hospital founded in 1760—Benjamin Franklin outlined these five principles:

1. Samaritanism and support of the poor—a desire to aid the sick and needy because the aid itself has value or intrinsic merit. In advanced industrial nations, Samaritanism has two forms: tax-supported gov- ernment programs and voluntary charity.

2. Personal health—a desire to improve the health of oneself and one’s loved ones to deal more effectively with disease, disability, and death.

3. Public health—a desire for health as a collective or social benefit to pre- vent illness, ensure a healthy work- force and military force, and reduce the social burdens associated with disease, disability, and death.

4. Economic gain for the providers and the community—a desire to use the health organization as a source of income and employment and a desire to make the community as a whole economically successful and attractive as a place to live.

5. Control of costs and quality of healthcare—a desire to ensure cer- tain levels of quality and costs for health care, recognizing that poor quality and inefficiency impair the achievement of the other four goals.

These motivations are the permanent sup- port for community health organizations. The debates that occur from community to com- munity and from generation to generation are

11. Stories and legends (e.g., the story of how Jane made it to work in the winter of 1967 in spite of 12 feet of snow and stayed for 3 days in order to care for patients)4, 24–26

12. Language (e.g., straightforward, no-nonsense language used by a new manager)4, 24–26

▸ Cultural Change To provide a greater understanding of the mechanism necessary for culture change, Daft divided organization subgroups into mission-based, clan-based, bureaucratic-based, and learning-based.8, 27

Mission-based: In a mission-based cul- ture, the needs of the population are the focus. Change is slow and not the norm.8

Clan-based: In a clan-based culture, employees’ need is the focus. Change is fast and common.8

Bureaucratic-based: In a bureaucratic- based culture, order is present in the form of procedures; the environment remains steady and unchanging. Change pro- gresses slowly.8

Learning-based: A learning-based orga- nization stresses the importance of adapting to change, values, caring for one another, and seeing the big picture. It resists the urge to be culturally bound and refrains from negativity that focuses on the past (i.e., the way it has always been done).8, 27

All of these can be found today in health organizations. Healthcare administrators must deliberately shape cultures by aligning mission, vision, values, and beliefs. Remem- ber, culture is what you as a healthcare admin- istrator accept!

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alike.30 Being ethically attuned starts with establishing an ethical culture of shared values based on ethical guidelines, codes of ethics, ethics statements, and procedures.30 Begin to recognize ethical ramifications and build an infrastructure of ethical resources that deci- sion makers can use when uncertainty arises. Finally, realize you are not alone and draw on outside tools for help.30 As discussed earlier, ACHE and other organization offer online tools to assist with ethical decision making.

▸ Conclusion Professional and ethical standards must be at the forefront of every health organization, resounding from the board of trustees and impregnated throughout the organization. Health organizations should be managed with strong ethical integrity and a compelling vision, mission, and organizational values. Business ethics or organizational ethics is a broad con- cept that includes ethical theories, principles, culture, and trust. It describes a way of acting and living, the very heartbeat of an organiza- tion. Leaders at all levels must embrace and model ethical behavior, thus delivering a cul- ture that produces an exceptional patient expe- rience and high-quality value-based care.

Review/Discussion Questions 1. What are the four common branches of

ethics? Describe each. 2. List five ethical theories relevant to

health care. How are they similar? 3. How is Confucianism similar to the

other ethical principles listed in the text?

4. What are the four ethical principles? How do they apply to healthcare deci- sion making?

5. What is organizational ethics? How is it different than ethics?

about the relative importance of each rather than the introduction of new ones.28

▸ Cultural Levels Culture can be thought of as existing on dif- ferent levels. The first level, called an artifact, is the most easy to observe when walking into an organization. This is the things that you see, hear, and feel as you move throughout the orga- nization. As you enter most faith-based organi- zations you immediately see religious artifacts, such as crosses and statues of the Virgin Mary or Christ. The individual’s observations inspire an emotional reaction to the architecture, the décor, and the climate and are based on how people behave toward each other.29

The second level is the espoused values of the organization. In most health organizations, these are often written and posted with the mission and vision statements of the organiza- tion; expressing the beliefs of the organization, serving as a guide to behavior. They describe the organizations’ values, principles, ethics, and visions and may even reflect the value sys- tem of the organization’s founders. The third and final level is shared tacit assumptions. At this level, one has to know about the history of the organization. At this level, you find the values, beliefs, and assumptions of the found- ers and key leaders are taken into account, and evaluate how those factors made the organiza- tion successful.29

▸ Ethics-Focused Culture The culture of the organization plays a very significant role in how the health organization executes its mission. As a healthcare adminis- trator, you set the ethical tone for the organi- zation. An ethics-focused culture is woven in the organization’s policies, procedures, admin- istrative practices, performance measures, and modeled by management and associates

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14. McConnell CR. The Effective Health Care Supervisor. 8th ed. Burlington: Jones & Bartlett; August 27, 2014.

15. Pynes JE, Lombardi DN. Human Resources Management for Health Care Organizations: A Strategic Approach. San Francisco, CA: Jossey-Bass; February 9, 2012.

16. Garrett TM, Baillie HW, Garrett RM. Health Care Ethics: Principles and Problems. 5th ed. Upper Saddle River, NJ: Prentice-Hall; 2010.

17. Pearlman RA. Ethics committees and ethics consul- tation: Ethical topic in medicine. University of Wash- ington School of Medicine. https://depts.washington .edu/bioethx/topics/ethics.html. Published February 18, 2016. Accessed February 26, 2017.

18. Nelson WA. Necessary competencies for ethics committees. Healthcare Exec. 2013;28(4):46–47.

19. Perry F. The Tracks We Leave: Ethics & Management Dilemmas in Healthcare. 2nd ed. Chicago, IL: Health Administration Press; October 1, 2013.

20. Nelson WA. Making ethical decisions. Healthcare Exec. 2015;30(4):46–49.

21. ACHE code of ethics. American College of Healthcare Executives. https://www.ache.org/abt_ache/code.cfm. Published November 14, 2016. Accessed February 25, 2017.

22. Brown ME, Treviño LK. Ethical leadership: A review and future directions. Leadership Q. 2006;17(6):595–616.

23. Gentile M. Keeping your colleagues honest. Harvard Bus Rev. https://hbr.org/2010/03/managing-yourself -keeping-your-colleagues-honest. Published March 1, 2010. Accessed February 27, 2017.

24. Olden PC. Management of Healthcare Organizations: An Introduction. Chicago, IL: Foundation of the Amer College; July 1, 2011.

25. Borkowski N. Organizational Behavior, Theory, and Design in Health Care. Sudbury: Jones and Bartlett; 2009.

26. Evans RM. Culture and values in ethics. In: Johnson JA, ed. Health Organizations: Theory, Behavior and Devel- opment. Sudbury: Jones and Bartlett; 2009:233–252

27. Daft RL. Organization Theory and Design. 11th ed. Boston, MA: South-Western College Publishing; June 14, 2012.

28. Griffith JR, Alexander JA, Foster DA. Is anybody managing the store? National trends in hospital per- formance. J Healthcare Manage. 2006;51(6):392–405; discussion 405–406.

29. Schein EH. The Corporate Culture Survival Guide: Sense and Nonsense about Culture Change. San Francisco, CA: Jossey-Bass; 1999.

30. Nelson WA. Strengthening ethical decision making. American College of Healthcare Executives. https:// www.ache.org/abt_ache/YourCareer_CEO_Sp05.pdf. Published Spring 2005. Accessed February 25, 2017.

6. What is Rawl’s Reflective Equilibrium model and how it can be used for eth- ical decision making?

7. What are Nelson’s six steps for sound decision making and ethical reasoning?

8. What are the differences between mission-based, clan-based, bureaucratic- based, and learning-based subcultures in an organization?

9. How can a healthcare leader set the eth- ical tone for an organization?

References 1. Center for Medicare and Medicaid Services. Common

types of healthcare fraud. https://www.cms.gov /O ut re ach.../Me dicare.../f raud_and_abus e.p df. Published July 2016. Accessed February 26, 2017.

2. Butts JB, Rich KL. Nursing Ethics: Across the Curric- ulum and into Practice. 2nd ed. Sudbury: Jones and Bartlett; November 30, 2007.

3. Westover J. The Organizational and Business Ethics Imperative. Champaign, IL: Common Ground Pub- lishing; June 5, 2015.

4. Daft RL. Organization Theory and Design. 10th ed. Mason, OH: South-Western Cengage; 2010.

5. American College of Healthcare Executives. Standards of excellence. http://www.ache.org/ABT_ACHE/code .cfm#profession. Accessed February 25, 2017.

6. Forrestal EJ, Cellucci LW. Ethics and Professionalism for Healthcare Managers. Chicago, IL: Health Administration Press; 2016.

7. Morrison EE, Furlong B. Health Care Ethics: Critical Issues for the 21st Century. 3rd ed. Burlington: Jones & Bartlett; June 1, 2014.

8. Morrison EE. Ethics in Health Administration. 3rd ed. Burlington: Jones & Bartlett; March 13, 2015.

9. Johnson CE. Organizational Ethics: A Practical Approach. 2nd ed. Thousand Oaks, CA: Sage Publica- tions Inc.; 2012.

10. Shiver J, Cantiello J. Managing Integrated Health Sys- tems. Burlington: Jones & Bartlett; September 9, 2015.

11. Harris DM. Ethics in Health Services and Policy: A Global Approach (J-B public health/health services text). San Francisco, CA: Jossey-Bass; April 27, 2011.

12. Romar E. Virtue is good business: Confucianism as a practical business ethic. J Bus Ethics. 2002;38:119–131.

13. Romar EJ. Special issue: Business ethics in a global economy. Bus Ethics Q. 2004;14:663–678.

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https://depts.washington.edu/bioethx/topics/ethics.html

https://www.ache.org/abt_ache/code.cfm

https://hbr.org/2010/03/managing-yourself-keeping-your-colleagues-honest

https://www.ache.org/abt_ache/YourCareer_CEO_Sp05.pdf

https://www.cms.gov/Outreach.../Medicare.../fraud_and_abuse.pdf

http://www.ache.org/ABT_ACHE/code.cfm#profession

CHAPTER 16

Physician and Clinician Leadership in Health Organizations

LEARNING OBJECTIVES

■ Understand the need for physician and clinician leadership in terms of cost, access, and quality. ■ Discuss some of the comparative differences between managers and physicians. ■ Understand why physician independence started to change in the 1990s. ■ Explain why clinical leadership is the key to getting physicians on board for achieving hospital-/

health organization-wide improvements in clinical quality. ■ Describe the motivations and accountabilities that physicians have in trade-off for their clinical

decision making. ■ Describe five executive traits of successful leaders. ■ Discuss the role of the chief nurse executive as a valued member of the leadership team. ■ Understand interdisciplinary education and its importance for the future of health care.

OVERVIEW

This chapter provides the student with an overview of physician and clinician integration into health organization leadership. The historical development of physician and management roles and recent changes are described. Successful traits of physician and nurse leaders are discussed, as well as the recent movement toward interdisciplinary education.

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The healthcare industry is experiencing tre- mendous fiscal and market pressure to decrease cost and improve quality care. The Hospital Value-Based Purchasing (HVBP) is part of the ongoing work of the Center for Medicare and Medicaid Services (CMS) to structure Medi- care’s payment system to reward and incentivize providers.9 This program adjusts payments to hospitals under the Inpatient Prospective Pay- ment System (IPPS), based on the quality of care they deliver.9 The IPPS encompasses the largest portion of Medicare spending. HVBP provides incentives for acute care hospitals to provide quality of care to people, not just quantity of services. In 2017, CMS provided a HVBP Per- centage Payment Summary Report, which gives hospitals their Total Performance Score (TPS) and value-based incentive payment percentage for each Medicare fee-for-service patient dis- charge in FY 2017. This program is funded by reducing Medicare Severity-Diagnosis Related Group (MS-DRG) payments by 2%. Leftover funding will be distributed based on the TPS.9 Therefore, depending on the TPS, a hospital may receive an additional incentive less than, equal to, or greater than the 2% reduction.9

Quality domains for 2017 include clinical care outcomes (25%) and process (5%), patient- and caregiver-centered experience of care and care coordination (25%), safety (20%), and efficiency and cost reduction (25%), with over 20 reported measures.10 All of the domains require physician, clinician, and hospital col- laboration. Therefore, providers, particularly in hospitals with their capital-intensive facili- ties, have their survival at stake if they fail on the quality measures. In addition, the Medi- care Access and CHIP Reauthorization Act of 2015 (MACRA) became law in 2015.11 Under MACRA, physicians will be paid based on quality outcomes from compliance data and information from multiple delivery systems outside of their offices.11 A robust integrated Electronic Health Record (EHR) system to data mine statistical elements of performance may be needed to maximize reimbursement.

▸ Introduction—The Case for Leadership

In 2015, healthcare spending in the United States increased by 5.8%, reaching $3.2 tril-lion, or 17.4% of the gross domestic product.1 This equates to $9,990 per person.1 In spite of such spending, the number of uninsured non-elderly adults in 2015 stood at 28.5 million.2 Approxi- mately 46% of the uninsured state the high cost of insurance was the primary reason for the lack of coverage.2 One in five uninsured adults post- poned, went without medical treatment, or did not get a prescription filled due to the high cost of care.2 Of those uninsured who sought care, over half stated they, themselves, or a family member had difficulty in paying the medical bills.2

In spite of the high spending on health- care, the United States has very poor popula- tion health. Data from the Organization for Economic Cooperation Development (OECD) of 13 high-income countries revealed in 2013 the United States had the lowest life expec- tancy at birth at just 78.8 years, in comparison to the OECD mean of 82.2 years.3 In addition, the United States had the highest infant mor- tality rate of 6.1/1000 births in comparison to the OECD rate of 3.5/1000.3

The baby boomers are retiring at a rate of approximately 10,000 per day, which adds to the amount of people depending on Medicare.4 The Congressional Budget Office projects total Medicare outlays to increase from $632 billion in 2015 to 1.1 trillion in 2024.5 Continued spi- raling costs in healthcare will undermine other key initiatives of the U.S.: infrastructure, educa- tion, military, and our ability to be competitive. In spite of efforts, safety concerns still plague the healthcare system. A recent report by Pascal Met- rics suggests that 400,000 deaths annually may be attributed to hospital inpatient safety problems.6 Makary and Daniel cite medical errors as the third leading cause of death, following coronary heart disease and cancer.7 The Joint Commission predicts as many as 50 wrong-site surgical inci- dents occur each week in the United States8

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autonomy, which is obstructive to legitimate scientific change and patient-driven desires.

Physicians react more positively in a bureaucracy leadership style (the method used by most organized medical staffs) in which authority is based on education, training, and expertise of professional workers. Since most physicians are very highly educated, they expect autonomy with little management oversight. On the other hand, this is the exact opposite to the training of healthcare managers and hos- pital operations. TABLE 16-1 provides a number of comparative factors: authority, responsi- bility, time frames, uncertainty, feedback,

▸ Separation of Power Historically, there was a separation of power between hospital administration and the phy- sician realm. In some health organizations, relationships between doctors and adminis- trators have at times been very antagonistic.12 Physicians traditionally wanted autonomy and control over their private practice, avoid- ing hospital politics at all costs and leaving the leadership and management of the health facil- ities to hospital administration. Professional socialization and modeling during the medical school years hardwired this mindset of absolute

TABLE 16-1 Comparison of Managers and Physicians

Factor Managers Physicians

Authority Bureaucratic, individual, and shared Professional, individual

Responsibility Individual and group Individual

Work relationships Hierarchical, bureaucratic Peer, collegial

Allegiance, loyalty To the organization To patients, clients

Decisions Deliberative, use input from others, based on consensus

Quick, fact-based on own judgment

Resources Viewed as limited, must be used wisely

Assume resources will be available for patient care

Patient focus Groups and populations of patients

Usually one patient at a time

Time frame Ranges from now to years in the future

Now, today, this week; short term

Dealing with uncertainty Accepted as part of the job Expect more certainty

Feedback Sporadic, vague Specific, frequent

Responsiveness To patients, families, physicians, board members, employees, accreditors, other stakeholders

To patients, families, other physicians

Whom they help to survive Organization Patients

Compensation Salary Usually payments per patient or procedures

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designed to merge the hospital and physician worlds into integrated healthcare systems or networks.23 Based on the Kaiser Foundation Health Plan, these networks would employ physicians, own hospitals, and provide fixed pricing through state-wide purchasing coop- eratives to people based on income.23 Though the Clinton plan failed to gain incentive and become law, the frenzy ignited regional health organization mergers and physician practice acquisitions. In 1998, approximately 70,000 full-time equivalent physicians were employed by hospitals with an additional 108,000 interns and residents.23 In 2013, the number had increased a total of 122,000 physicians and by 2015 more than 140,000 physicians.23 Most healthcare decision making and, perhaps, the clinical team culture that impacts these out- comes still substantially rest with physician decisions and behaviors—All physicians are leaders! 95% of care is still directly supervised by physicians.24 Yet until recently, few health organizations have initiated measures to allo- cate responsibility and accountability for qual- ity clinical outcomes to their physicians. As for payers, their assumption thus far has been that behavior will follow the money.

▸ Physician Values and Accountabilities

Physician practice patterns are driven by a mix of values, interests, and accountabilities that often place conflicting demands on their clin- ical decisions, which ultimately impact patient outcomes.25 Understanding these complex accountabilities enables one to understand why financial incentives and disincentives alone cannot produce high-quality care, and why it will take a critical mass of physician leaders to reshape our healthcare system.

Physicians have a fiduciary responsibil- ity to provide the highest level of care to their patients. In this role, if the patient is unable to choose between diagnostic treatment options on their own, the physician is duty bound by

survival, and compensation, to name a few.13 It is extremely helpful to recognize the differ- ent mindset between managers and physicians when collaborating on initiatives that have potential to impact both stakeholders.

Regardless of their organizational title, a physician leader will continue to relate to his or her followers as a peer by nature of the med- ical professional code. These peers, from the organizational structure perspective, are subor- dinates, having a keen awareness of their pro- fessional autonomy and, in the past, have had scant respect for organizational hierarchy. In contrast, in business organizations, regardless of how democratic the organization is, it is an unspoken assumption that the boss–subordinate relationship is framed by the organization’s goal imperatives and hierarchical accountability.14–19 Unlike business managers who acquire a natu- ral legitimization of authority when they rise up the management hierarchy, physician managers often face criticism from former peers for having “sold out,” abandoning the values of their profes- sion, or being second-class physicians.14 During their early management years, physician exec- utives face being “ejected from the professional fraternity, with only partial membership in the managers’ club.”15, 20

It is important for healthcare managers to understand that most physician executives also have clinical responsibilities, which makes it doubly challenging for them to make the mindset transitions. Many complex reasons, including the financial value of their clinical role to the organization, identification with the clinical role, and concerns about losing the respect of peers, contribute to this mix of clini- cal and management responsibility shouldered by most physician leaders.21, 22

▸ The 1990s— Integration Begins

In the 1990s, physician independence began to change. During the Clinton administration proposals for sweeping healthcare reform were

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corporate profit motives may rule over the practice of medicine to the detriment of true professional as well as social interests.14, 28, 29 Since 2013, the HMO-style dominance over health care has decreased significantly as high-deductible health plans have become popular.30 The cost pressures continue to mount, and concerns over quality have become more audible. CMS and other HMOs’ pay-for-performance (P4P) initiatives demand accountability in the form of aggregate out- comes for a hospital’s total patient panel. His- torically, the hospital was unable to transfer accountability for the same numeric outcomes to individual physicians. This was because each physician’s patient panel outcomes were driven by physician autonomy in treatment method, tailored to meet individual patient’s needs based on clinical severity and biolog- ical variation in response. Now with robust integrated EHRs, data mining, and analytics, outcomes are more readily available. There- fore, outcomes of a group of physicians’ patient panels should conform to the evidence-based medicine—best practice guidelines (demon- strated by meta-analysis, clinical trials, and outcome studies). The call for aggregate clin- ical outcomes thus calls for physicians in lead- ership positions to assume responsibility for ensuring a collective accountability among their physicians for clinical outcomes and for delivering aggregate results.

Physicians in leadership positions, such as medical directors of service lines, departments, group practices, or hospital senior leadership positions, face many formidable challenges. Traditionally, physician leaders have assumed that providing the evidence for best prac- tices should be adequate for their “rational” colleagues to change their practice patterns. However, evidence shows that this leap from information to practice does not happen with- out interventions to facilitate the change.31–33 It requires a leader to engage physicians as peers, based on understanding physician values and interests and identifying with the total clinical practice setting.27

their professional oath to act in the best interest of the patient. On the other hand, in a managed care environment where payers are focused on cost controls, the physician becomes account- able to the managed care payer to produce the most cost-efficient results for the total patient panel, rather than to the individual patient. These two accountabilities could place con- flicting demands on clinical decisions.26 Phy- sicians also have legal accountability; not only must they act in the best interest of the patient but also demonstrate standards of care, which, if sued, would be needed in a court of law in the future. This concern predisposes the phy- sician to practice defensive medicine, ordering unnecessary tests and referrals. Finally, though not their primary interest, physicians also have the desire to maximize their income.27 All of these values, motives, and accountabil- ities influence the physicians’ clinical decision making, which, in turn, ultimately impacts patient outcomes.

The responsibility of health organiza- tions (hospital, group practice, independent practice association, etc.) is to improve their physicians’ care quality to ensure the aggre- gate benchmark levels desired by payers. This means encouraging physicians to practice evidence-based medicine while internally weighing their individual values, perceptions, and preferences regarding these multiple accountabilities. Clinical leadership by a peer, who understands where they are coming from, can mentor or guide the process toward a col- lective accountability.

▸ Effective Physician Leadership

Effective physician leadership development is critical to address the fundamental issues of healthcare cost, access, quality, and patient safety. Many excesses of managed care doc- umented in the mid-to-late nineties suggest that in the absence of effective physician engagement in the cost management process,

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organization? Robert Taylor, MD suggests 10 ways to cultivate leadership skills.

Define a vision: Good leaders have a pow- erful vision and are relentless until it is reality.

Share the vision: Leadership is an active role, not passive. Leaders need follow- ers, and must persuade others to join the adventure.

Recognize your leadership style: Autocratic, dictatorial, facilitative, bureaucratic, parental, or charismatic.

Differentiate between leadership and man- agement: Leaders have a vision; they do the right thing. Managers carry out the vision, they do things right. Both are important in health care but are totally different.

Learn the rules—but know when to break them: You don’t always have to play by the rules; they are the errors of the past. Learn from your mistakes and change the rules.

Earn the trust of those you lead: Make log- ical, rational, mission-based decisions. Reconcile your vision with your values and guard your credibility.

Recognize the power of leadership: Power is being in a position to control what hap- pens to others. Use power sparingly; share power appropriately and progressively.

Act like a leader: If you are selected to lead, act like a leader. Model the behavior and play the part. Fake it until you make it.

Turn followers into leaders: Empower your employees to make decisions. Acknowl- edge them for a job well done.

Main balance in your life: Turn work into play and play hard.38

It is imperative that health organizations help develop physician leaders by providing the essential knowledge, skills, and abilities necessary for successful physician integration and leadership.

▸ Physician Leadership— Early Pitfalls

Unfortunately, there have been several fre- quently observed behavioral pitfalls, when phy- sicians rising to management positions ignore the behavioral and mindset transitions needed to provide effective clinical leadership. These pitfalls include insensitivity or downright arro- gance and inability to choose staff, overman- aging and inability to adapt to organizational hierarchical roles,20, 34–35 fighting the wrong battles, being seen as untrustworthy, failing to develop and effectively communicate a stra- tegic vision,34 dysfunctional responses due to lack of awareness of the organizational imper- atives,20, 34 lack of commitment to leading,34, 36 lack of desire to be a manager, lack of manage- ment training, insufficient self-knowledge and self-awareness, lack of style flexibility, poor uti- lization of resources, inadequate interpersonal skills,36 lack of dynamism,36, 37 exclusively rely- ing on data sharing and feedback as the tool to realize outcomes and resolve conflicts, and assuming that if one has read every important management text, one is a great manager.20

Organizational factors can also hamper good physician leaders from being effective. These include poor leadership skills among orga- nizational leaders, poorly defined institutional goals and criteria for judging performance, and inadequacy or lack of control over resources.36

Regardless of the default process, unless there is a change in mindset achieved by a com- bination of appropriate leadership training and self-development, the result is often a physician leader without the business acumen or leader- ship skills to successfully perform the job.

▸ Cultivating Leadership Skills

So how do we help physician leaders develop the skills necessary to succeed in the health

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focusing on financial and strategic manage- ment, accounting, negotiation training, basic management, and finally leadership concepts. Many programs did not distinguish between the training needs of physicians seeking to acquire clinical leadership competencies and physicians who are looking to train for orga- nizational executive leadership roles, nor did the leadership training model for physicians bear in mind the one significant difference in boss–subordinate dynamics between busi- ness organizations and the medical profession. Such programs often lost the novice physician leader or their organization entirely because the original training objective of the physician leader and/or their sponsoring organization was to seek clinical leadership competencies to solely achieve organizational quality and cost benchmarks.

Now more than ever there are a number of physicians who are seeking dual degrees or who have significant management training, a master’s degree in health administration, public health, or business administration. The number of joint MD/MBA programs in Amer- ica has grown from 6 to 65 in the last 20 years. From 2012 to 2013 the number increased by 25%.41 Many medical students are seeking dual degrees to have more career option in indus- tries such as pharmaceuticals and hospital or large group medical practice administration, manage wellness centers, or lead medical organizations.42

▸ Nursing Leadership Nursing traditionally has played a critical role in healthcare leadership but not always at a senior level. Today, whether their title is vice-president, senior vice-president, chief nursing officer, or chief nursing executive (CNE), they are viewed as a valued member of the senior leadership team, the C-suite. In fact, in 2016 there were 33 registered nurses serv- ing as a chief executive officer (CEO) leading entire health organizations.43

▸ From Clinician to Leader—Essential Changes in Mindset

Physician leadership positions are not for the timid. Health organizations and clinical physi- cians need to realize the significant changes in mindset needed, and what they need to leave behind in order to prepare for and succeed at leadership roles. Judicious resource use and evidence-based medical practice by practic- ing physicians in the organization is essential in order to meet the Institute for Healthcare Improvement’s Triple Aim: urgent healthcare reform goals of improving the patient expe- rience of care (including quality and satisfac- tion); improving the health of populations; and reducing the per capita cost of health.39 This requires the physician leaders to have interper- sonal leadership competencies, not strategic leadership abilities. The question arises, what interpersonal leadership behaviors and attri- butes should physician leaders aim for in order to positively influence their physician subordi- nates and other clinical care providers? To be successful, a physician leader should embrace the following executive traits. The ability to:

■ adapt to a customer-first approach, ■ prevent burnout by making staff the sec-

ond priority, ■ foster a collaborative environment that

values business and physician alignment, ■ shift from autonomy to alignment, and ■ embrace disruptive innovators to adapt to

change.40

▸ Leadership Training Programs

Historically, physician executive development programs or physician “boot camps” offered generic management-training programs, often

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number of magnet hospitals throughout the United States, they have created cultures of transformational leadership.46 Organizations are embracing shared governance, effective councils, or committees fostering a cohesive- ness between leadership and clinicians.46

CNEs are the best ones to examine pro- cesses to improve quality and transform care. Working across multiple departments and patient care areas, they provide advice and apply critical thinking and analytical skills to improve models of patient care.45 They are reliable decision makers and problem solvers.45 High-performing organizations have a CNE partnering with other chief executives and physician leaders to achieve high-quality out- comes.47 In fact, not only do they have a CNE at the helm but also a number of unnamed nurse leaders who strive to contribute to advance- ment of the profession, improving the quality of care for patients by enhancing patient safety (reducing errors and falls), improving quality, and decreasing length of stay.48 As Drenkard eloquently shared, “Our job as a transforma- tional leader is to find ways to unleash that passion and create a place where continuous improvement and excellent patient care can flourish.”46 CNEs are dynamic, dedicated lead- ers who will help shape the future of health care.

▸ Interdisciplinary Education and Practice

There are a number of healthcare disciplines that participate in the care of the patient: med- icine, nursing, pharmacy, physical therapy, occupational therapy, speech therapy, labora- tory, and radiology to name a few. Often these disciplines—in both education and practice— work in parallel, yet very independently with different goals. All of them have a primary commitment to the patient. The complexity of health care mandates that all disciplines work collaboratively to provide safe, effective

Exceptional CNEs are highly intellectual, resilient, and have an inbuilt capacity to cope with challenging situations.44 In addition to their clinical background, they have a strong knowledge of business and management including finance, strategic planning, and human resources.45 In their rise to leadership, most have had mentors, coaches, or trusted colleagues who have served as an important source of support.44 Many have had formal management education but cite multidisci- plinary training as extremely valuable, offering understanding into the perspective of other disciplines and providing opportunities for networking.44

In their role as a CNE they exhibit the fol- lowing traits that drive solid performance:

Abstract reasoning ability: a problem solver, understanding logical relationships among concepts45

Aggressiveness: inclined to push forward, forceful45

Assertiveness: communicates in a direct manner45

Ego-drive: satisfaction in persuading others45

Urgency: quick to take action to obtain immediate success or results45

CNEs have strong leadership skills with a take-charge attitude. While multitasking, and juggling a plethora of priorities, they push for- ward to achieve results on time.45 They have robust interpersonal skills: trusting, empa- thetic, attentive listeners who are willing to consider other perspectives.45 Yet they inspire, communicating a powerful vision, motivat- ing others to be innovative and take risks to improve.46 However, they see their job as a facil- itator, bringing key individuals together, setting the task before them, supplying the tools, and allowing the clinical nurses to do the work.46

They are valued throughout the orga- nization. In their role, they have influence at the highest level (the Board of Trustees). In a

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▸ Conclusion This chapter presented a case for physician cli- nician leadership. The leading health indicators of cost, access, and quality demonstrate poor performance in U.S. health care in comparison to the 13 OECD countries. The historical per- ceptions of physicians in leadership were pre- sented to enable the student to understand the reluctance of physician involvement in man- agement and leadership. Comparative factors for authority, responsibility, time frames and other influences demonstrate vast differences between management and physicians. Phy- sician independence started to change in the 1990s with mergers and practice acquisitions, employing physicians and causing conflicting values and accountabilities. Early physician leadership highlighted the need for training programs. Finally, new models of education and leadership will be inclusive of physicians, nurses, and clinicians to reshape the health system, fostering team collaboration to deliver cost-effective quality care for all.

Review/Discussion Questions 1. Explain the case for leadership in terms

of cost, access, and quality. 2. Describe some of the comparative dif-

ferences between management and physicians.

3. Explain how and why physician inde- pendence began to change in the 1990s.

4. Explain why clinical leadership is the key to getting physicians on board for achieving hospital/health system- wide improvements in clinical quality performance.

5. What are the motivations and account- abilities that physicians have to trade-off in their clinical decision making?

6. How should physicians desirous of tak- ing leadership positions prepare them- selves to become successful in providing clinical leadership?

quality care at a decreased cost. Collabora- tion provides an understanding and appreci- ation for the roles and contributions of each discipline in the care of the patient. It fosters communication, sharing information about the patient, willingness to listen to another perspective, and the ability to work together to seek understanding.49

Interdisciplinary education is a fairly new movement in the education of health profes- sionals. It is defined as an education approach in which two or more disciplines collaborate in the learning process with the goal of enhancing interprofessional interactions, thus enhancing the practice of each discipline.50 The process begins at the foundation, the healthcare student’s academic infancy.51 The collaboration enhances communication and decision making, enabling a synergistic influence of grouped knowledge and skills. Hopefully, this collaborative care and leadership will bring forth change to prove safe, effective, and cost-effective care for all.

▸ The Future: Physician and Clinician Leaders

A more recent definition of leadership includes a focus on a shared goal, dependence on each other’s actions to reach that goal, and a lack of direct control of others.52 In July 2015, four medical schools launched leadership programs for clinicians.52 The new National Clinician Scholars Program is offered at the University of California, University of Michigan, Uni- versity of Pennsylvania, and Yale University. The program is open to nurses in an effort to embrace the value of team-based care.53 This dynamic program’s goal is to motivate, inspire, and promote change with the next genera- tion of health professionals. The initiative will develop leaders and change agents in order to reshape the health system. Now more than ever, it is the time for physicians and clinicians to take an active leadership role in the trans- formation of health care.

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41. Viswanathan V. The rise of the M.D./M.B.A. degree. The Atlantic. https://www.theatlantic.com/education /archive/2014/09/the-rise-of-the-mdmba-degree /380683/. Published September 29, 2014. Access February 20, 2017.

42. Smith-Barrow D. Become a business-savvy doc- tor with a joint M.D.-MBA program. US News and

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https://www.usnews.com/education/best-graduate-schools/top-medical-schools/articles/2013/10/01/become-a-business-savvy-doctor-with-a-joint-md-mba-program

http://www.becker-shospitalreview.com/hospital-management-adminis-tration/20-nurses-who-transitioned-to-hospital-ceos.html

http://www.calipermedia.calipercorp.com/whitepapers/us/Chief-Nursing-Executives-Leadership-Analysis-Report.pdf

https://www.questia.com/library/journal/1P3-3539340971/the-future-of-nurse-leadership

http://commons.pacificu.edu/cgi/viewcontent.cgi?article=1051&context=ipp

http://www.aacn.nche.edu/publications/position/interdisciplinary-education-and-practice

https://stti.confex.com/stti/congrs16/webprogram/Paper80138.html

https://www.advi-sory.com/daily-briefing/2015/03/18/prestigious-clinical-leadership-program

http://medicaleconomics.modernmedicine.com/medical-economics/news/modernmedicine/modern-medicine-feature-articles/10-ways-physi-cians-can-become?page=full

http://www.ihi.org/Engage/Initiatives/TripleAim/Pages/default.aspx

http://managedhealthcareexecutive.modernmedicine.com/managed-healthcare-executive/news/five-leadership-traits-necessary-physician-executives

https://www.theatlantic.com/education/archive/2014/09/the-rise-of-the-mdmba-degree/380683/

CHAPTER 17

Governance and Board Development in Health Organizations

LEARNING OBJECTIVES

■ Understand the principal roles and responsibilities that governing boards hold in the oversight of health organizations.

■ Understand the relationship between the board and the senior leadership of health organizations.

■ Identify common committee structures used by boards, and the typical functions of those committees.

■ Understand the importance of diversity representation on governing boards. ■ Identify strategies to enhance diversity representation on governing boards. ■ Identify recent trends in the changing nature of board responsibilities, and their implications for

governance in health organizations. ■ Evaluate the effectiveness of a governing board and its members’ contributions. ■ Become aware of the stages of board development and associated processes.

OVERVIEW

This chapter provides the student with an overview of governance and board development in the health organization. Common board structures, roles, committees, and responsibilities are discussed. The importance of diversity representation and strategies to promote diversity are shared. Finally, the importance of periodic board assessments of overall performance and opportunities for improvement are identified.

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members and officers, board member terms of office, the powers and duties of board mem- bers, the types of decisions requiring board approval, the frequency of board meetings, and even who will preside at board meetings.

Boards vary greatly in how they are orga- nized and how they operate. One survey of 616 hospital governing boards reflected this diver- sity of practices.1 Respondents to the survey indicated that:

■ Although the average membership of their boards was 15–16 members, smaller boards of less than 7 members and larger boards with more than 31 members were not uncommon.

■ A number of committees typically sup- port the work of the board. The most common board committees included finance, governance/nominating, quality, and strategic planning, as well as an exec- utive committee.

■ The average board met 10 times per year. Most boards met monthly but some met as infrequently as quarterly.

■ Typical board meeting agendas usually included addressing reports from man- agement and board committees, discuss- ing strategy, setting organization policy, and educating board members.

■ Most boards defined board member terms of 3 years, with limitations of three consecutive terms.

■ Although not directly related to gover- nance, fund-raising and solicitation of charitable gifts is an important activity of nonprofit governing boards. In fact, many nonprofit organizations expect contribu- tions from their board members as part of their services.

▸ Board Officers An organization’s bylaws will also identify and define the roles and responsibilities of the board members. The board will typically be led by a chairperson (or president), who presides

▸ Introduction

The English word governance derives from the Latin word meaning “to steer, guide, or direct.”1 In this chapter, we will discuss governing boards and their roles and responsi- bilities, how they are structured, and how they operate to fulfill their responsibilities. As you will see, there is wide variety in current practice, and while there are some generally accepted princi- ples of effective practice, these principles provide for considerable flexibility. Health organizations have many nuances in their governance activ- ities; accordingly, we have attempted to reflect examples of these throughout the chapter.

As background, most health organizations in the United States are organized as nonprofit corporations. The secretaries of state authorize the formation of nonprofit corporations and the attorneys general regulate their operations in each of the 50 states. Because nonprofit corpora- tions are formed to benefit the public for chari- table purposes, they are granted exemption from most federal, state, and local taxes. Responsibil- ity to oversee these nonprofit health organiza- tions is delegated to governing boards, which are also referred to as boards of trustees or boards of directors. The individual members of governing boards are known as trustees or directors.

Effective oversight, or governance, of health organizations involves ensuring that the organization fulfills its charitable mission and public responsibilities. Such responsibilities are fulfilled by providing appropriate leader- ship and strategic direction as well as ensuring financial integrity and the delivery of quality and safe patient care in ways that meet the healthcare needs of community members.

▸ Board Organization An organization’s articles of incorporation and bylaws serve as guidelines for the structure and operation of its governing board. These guide- lines will typically address the frequency of board elections, the election process for board

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priorities and key goals and objectives of the board. Members of this committee generally include the board officers and/or the chairs of the various committees, and as such represent a leadership group within the board. Often, members of the executive committee meet in “executive session.” The purpose of “executive session” is to handle sensitive issues, including the compensation and evaluation of the chief executive officer’s performance, or when it is impractical for the entire board to meet.

Finance Committee The finance committee supports the board in its responsibility to ensure the financial integrity and financial oversight of the orga- nization. As part of this activity, many boards also have an audit committee with responsibil- ity for oversight of the audit function and the independent auditors. This typically includes recommending and selecting the independent auditors and oversight of financial reporting and internal controls. Other functions of the finance committee include working with the chief financial officer to establish appropri- ate financial and operating information to be reported to the board and recommending financial policy to the board.

Governance/Nominating Committee The governance/nominating committee sup- ports the board in establishing and defining the duties and responsibilities of the board and its members, evaluating board structure, nominat- ing and recruiting members of the board, and facilitating the board’s continuing education. Often this committee also has responsibil- ity for overseeing a board assessment process, described in more depth later in this chapter.

Quality Committee The quality committee supports the board in ensuring that the organization is providing

over meetings of the governing board and the executive committee, serves as spokesperson for the board and the organization, appoints committee chairs, establishes the agenda for board meetings and board priorities, and works closely with the chief executive officer and leadership team of the organization.

Other than the chairperson, board offi- cers include a vice chairperson (or vice pres- ident), a treasurer, and a secretary. The vice chairperson assumes the responsibilities of the chairperson in the chairperson’s absence and serves on the executive committee. The trea- surer serves on the executive committee and chairs the finance/audit committee, and the secretary serves on the executive committee and is responsible for the maintenance and accuracy of board minutes. Board minutes are the official record of the activities of the board and document the approval of corporate pol- icy decisions at board meetings.

▸ Board Committees Although most governing boards have the committees mentioned earlier (executive, finance, governance/nominating, quality, and strategic planning), boards may have addi- tional committees specific to their organiza- tion. For example, nonprofit organizations typically have a charitable giving committee, or hospitals often have separate foundation boards to support charitable giving activities.

How a committee operates and its activ- ities vary greatly from organization to orga- nization. Accordingly, each board committee should have a written description of its role, responsibilities, and policies to provide guid- ance and clarity of expectations. The activities described next are typically associated with each of the major committees.

Executive Committee Members of the executive committee sup- port the board chairperson in establishing the

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made from charitable gifts received by the foundation boards.

▸ Board Meeting Format The formats of board meetings vary widely—a sample agenda follows. The orga- nization’s bylaws indicate the necessary notice that must be provided to the members in announcing a meeting, and the proper method of announcement. To have an official meeting, there must be a quorum, which is also defined in the corporate bylaws. To have a quorum, the bylaws generally indicate those who must attend (e.g., the chairperson or vice chairperson) and the minimum number of board members who must be present (e.g., a majority of members).

After calling the meeting to order and ascertaining there is a quorum, some boards request approval of the agenda to ensure all are in agreement with the priorities of the board meeting. Then, the minutes of the prior meeting are usually approved in order for the meeting to be official. The main agenda items are started next. Although meeting structure and content varies, it will often include pre- sentations from the chief executive officer, the chief financial officer, and members of management concerning operations, finance, strategy, and quality, and the chairs of each standing committee will typically pres- ent reports outlining key issues from their respective committee meetings. Additionally, outstanding issues from prior meetings may be addressed, while new proposals might be presented or discussed including elections, approval of budgets, capital expenditures, and strategic plans. Discussions are gener- ally involved with each agenda item, and, at any point, motions and/or votes on issues may be requested and discussed. Once all of the agenda items before the board have been addressed, a member moves for the meet- ing to be adjourned, and a vote is taken to approve adjournment of the meeting.2

high-quality patient care and meeting the healthcare needs of community members. The quality committee works with the lead- ership team and, in the case of hospitals, the medical staff to establish appropriate quality measurements reported to the board as well as to the community in meeting public reporting requirements. In hospitals, often the medical affairs committee reports to this quality com- mittee. The hospital’s medical affairs commit- tee is typically responsible for evaluating the professional competence and credentials of the medical staff and making recommendations to the board for appointing physicians to the medical staff and granting clinical privileges.

Strategic Planning Committee The strategic planning committee supports the board in meeting its responsibilities for overseeing the organization’s strategic man- agement activities. The strategic planning committee works with the organization’s executive team to ensure that the organiza- tion is monitoring and adapting to changing community needs within the constraints of the organization’s mission, capabilities, and resources.

Charitable Giving Committee and Foundation Board Charitable giving committees and foundation boards support nonprofit boards and their organizations in developing public awareness of the charitable benefits the organization pro- vides. A charitable giving committee’s activ- ities may include involvement in soliciting contributions and gifts as well as oversight of board/foundation investments. These activ- ities are coordinated with the organization’s director of development or chief executive officer. A foundation board typically operates as a separate board that reports to the govern- ing board. Often, governing boards elect to retain responsibility for managing investments

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Meeting of the Board of Directors

Thursday, January 2 Deer Creek Hospital

Sample Agenda Call to Order D. Sutherland, Chairperson

Invocation K. Johnson, President

Minutes (for review and acceptance)

Discussion of Old Business

New Business Items

Annual Corporate Compliance Report L. Soto, Director of Compliance

Annual Board Assessment Complete and return to Secretary

President’s Report K. Johnson, President

Operations Report S. Shah, Chief Operating Officer (COO)

Financial Report A. Vitulli, Chief Financial Officer (CFO)

Quality Report M. Kwasny

Community/Foundation Report M. Odwazny

Professional Affairs/Medical Staff J. Applegate, M.D.

Appointments Report

Marketing/Business Development T. Jones

Board Member Education: Health reform in the United States

Adjournment

Attachments:

Minutes from Prior Meeting

Compliance Report

Board Assessment

Financial Statements

Balanced Scorecard Report

Charitable Care Report

Credentialing Report

Quality Improvement Plan

Resource Management Plan

Marketing Plan

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This division of responsibility is outlined in TABLE 17-1.

▸ Fiduciary Duties The board of directors have a fiduciary responsibility to the community they serve. In meeting their responsibilities, members of a governing board are required, both indi- vidually and collectively, to carry out their duties using standards of care, obedience, and loyalty. The duty of care requires members to act in good faith, with at least the degree of diligence, care, and skill ordinarily exercised under similar circumstances. The duty of obe- dience requires members to ensure that the leadership of the organization complies with laws, acts within the guidelines established in the articles of incorporation and bylaws, and is faithful to the charitable mission and pur- poses of the organization. The duty of loyalty requires board members to prioritize the inter- ests of the organization and the public above their own self-interests.

In practical terms, these duties require board members to have a commitment to reg- ularly attend board meetings and to familiarize themselves with organizational strategic, oper- ating, quality, and financial matters. In addi- tion, to ensure adherence to activities within the constraints of the organization’s charitable and tax-exempt purposes, a periodic board committee review of articles of incorporation, bylaws, due diligence reports from licensing and accrediting authorities, and insurance companies may help to surface noncompliant activities.

To avoid potential conflicts of inter- est, board members should generally avoid transacting business with the organization they are serving. Any transaction between a board member and the organization they are serving requires full disclosure and evalu- ation to ensure that the transaction is in the best interests of the organization. Further, any opportunities related to the purposes of the

▸ The Relationship Between Senior Management and the Board

The governing board is ultimately respon- sible for hiring the chief executive officer, or president, as well as determining his/her ongoing fitness for the role. Based upon the board’s understanding of the chief executive’s strategies and operating plans, the board and chief executive agree on which deci- sions should be brought to the board, which the board should “advise and consent,” and which should be delegated to the chief exec- utive.2 Despite delegating certain responsi- bilities to the chief executive, the board’s role is to continually monitor and evaluate the organization’s performance in achieving its goals and objectives. In addition, determin- ing how the board will hold management accountable and intervene in the event per- formance goals and objectives are not met is fundamental to the board’s role.

Officially, the chief executive is the only member of management who reports to the board. However, based upon the information and analysis needed by board members and the board committees to make meaningful rec- ommendations and appropriate decisions and policy, board members will typically need to interact somewhat regularly with other mem- bers of the senior leadership team, including, at a minimum, the chief financial officer, the chief operating officer, the chief nursing exec- utive, and the chief medical officer.

In addition to organizational goals and objectives, the board is responsible for work- ing with the chief executive in establishing expected personal performance goals and objectives. Monitoring, evaluating, and pro- viding meaningful feedback about the chief executive’s performance is an important board responsibility.

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TABLE 17-1 Board and Administrator Roles

Board Administrator

Long-term goals Approves Recommends, provides guidance

Short-term goals Monitors Establishes, carries out

Day-to-day operations No role Makes all management decisions

Budget Approves Develops, recommends

Capital purchases Approves Prepares, requests

Decisions on building, renovation, leasing, etc.

Makes decisions, assumes responsibility

Recommends, signs contracts, if authorized

Supply purchases Approves budget Purchases according to policy, maintains audit trail

Major repairs Approves Recommends

Minor repairs Sets policy on amount that can be spent

Authorizes repairs to predetermined amount

Emergency repairs Works with administrator Notifies board and acts with board’s agreement

Cleaning and maintenance Oversight Sets up schedule

Fees Adopts policy Develops or sets fees

Billing, credit, collections Adopts policy Proposes policy, implements policy

Hiring of staff No role Hires or delegates hiring of all staff

Staff assignments No role Establishes

Firing of staff No role Makes final termination decision

Staff grievances No role Handles grievances

Personnel policies Adopts Recommends and administers

Staff salaries Approves budget Considers staff recommen- dations, approves salaries

Staff evaluation Evaluates administrator Evaluates all other staff

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hospital boards as “stewards of assets” has been promoted.3, 4 Such a perspective requires more than ensuring adequate financial integrity and internal controls; it also includes an evaluation of financial and operating performance.5 Mon- itoring financial and operating performance is no longer viewed as micromanagement on the part of the board, but increasingly as essential to the board’s legal responsibility for over- sight. As stewards, understanding the goals and objectives of the organization, ensuring their alignment with the strategies of the orga- nization, and monitoring that they are being achieved in an effective and efficient manner are becoming viewed as fundamental respon- sibilities. These activities include comparisons of actual outcomes to budgets and plans as well as analyses of trends and activities.

In reviewing the operations of the organi- zation, the board looks for trends and expla- nations for changes in operating performance. For hospitals, operating information often reviewed by boards includes patient admis- sions and average daily census, average reve- nue and expenses per patient day, and average patient length of stay. Other information of interest might include trends between outpa- tient and inpatient services provided, payer mix, and the case mix index (CMI), a measure of acuity or level of sickness of patients. Hos- pital board members might also monitor the performance of key departments and service lines (e.g., emergency department, surgery, outpatient imaging, heart and vascular, oncol- ogy, and obstetrics/gynecology) to be aware of changes in activity, revenue, expenses, and levels of profitability. Other issues with finan- cial implications that might be appropriate for board-level review include malpractice insur- ance premiums, write-offs of bad debt, and the costs and reporting of charity care.

▸ Strategic Oversight Another key role of health organization gov- erning boards is ensuring that the organization

organization that come to the attention of a board member must be presented to the orga- nization before being taken advantage of by a board member.

▸ Financial Oversight In connection with the fiduciary responsibil- ities described previously, governing boards are responsible for ensuring financial integ- rity, developing financial policy, and pro- viding oversight of financial and operating performance. Because virtually all irregulari- ties involve the finances of an organization, the roles of the finance and/or audit committees are fundamental to board governance.

As part of financial oversight, board members generally review an organization’s monthly and annual financial statements. Review of the financial statements includes obtaining and understanding the composition of and any changes in the organization’s reve- nue, expenses, and operating margins as well as its assets and liabilities. In addition, govern- ing boards are responsible for understanding and approving the organization’s annual oper- ating and capital budgets as well as any signif- icant financings, transactions, and contractual agreements.

The finance/audit committee is also responsible for selection of the organization’s independent audit firm and arranging peri- odic meetings with the auditors to review issues related to the financial statements and weaknesses in financial and accounting con- trols. Financial oversight might also include meetings with the organization’s attorneys to discuss significant legal issues that might have an impact on the organization.

▸ Operating Oversight It is becoming clear that this limited view of the fiduciary role of financial oversight by boards is not adequate. For instance, a view of

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and they are therefore affecting the way board members and management teams must think about their organizations.

For example, many hospital boards and their senior management teams have tended to be internal in their focus, primarily con- cerned with operations and not how their organizations may need to adapt and change

is responding and adapting to changing forces in its environment. Such environmental or external forces include changing econom- ics, community demographics, technological advancements, epidemiological changes, reg- ulatory and political changes, and competitor challenges. Each of these forces can substan- tially affect the viability of health organizations,

The Sarbanes-Oxley Act

In 2002, Congress responded to concerns about governance of publicly traded companies by passing the Sarbanes-Oxley Act, also known as the Public Company Accounting Reform and Investor Protection Act, and sometimes referred to as SOX. Several policy-makers and scholars (e.g., Orlikoff ) have suggested that nonprofits should consider adopting relevant elements of the Act, which could include:6

■ Required review of the appropriateness and effectiveness of internal controls ■ Required certification of the financial statements by both the chief executive and chief financial

officers ■ Assurance of auditor independence and approval of the auditors by an audit committee consisting

of board members independent of management ■ Bans on personal loans to officers or board members ■ Adoption of policies that protect whistleblowers

Hospitals as Community Assets

Influential reports include the Catholic Health Association’s “Guide for Planning and Reporting Community Benefit” and PricewaterhouseCoopers’ “ My Brother’s Keeper: Growing Expectations Confront Hospitals on Community Benefits and Charity Care.”7, 8 Best practices described in these reports include: ■ Establishing board-level community benefits committees with external community members to

ensure alignment of organizational missions and community benefits. ■ Developing stakeholder analyses to ensure community needs are met and not duplicated by other

hospitals. ■ Identifying community benefit programs and their positive impacts in their communities. ■ Developing and distributing community benefit reports throughout the community. ■ Reporting charity care (service for which the hospital does not expect to receive payment due to a

patient’s inability to pay) at cost. ■ Offering discounts to uninsured patients based on managed care rates and their ability to pay. ■ Providing patients with financial assistance information and assistance from qualified financial

counselors.

Taken together, these numerous public reporting requirements strongly support the perspective that hospitals are community assets, and their board members and leaders are publicly accountable for their mindful stewardship.

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current services the organization provides, the diversity of the organization’s existing work- force, the organization’s available resources, and the feasibility of the organization’s desired mission.

Another example of strategic challenges a hospital governing board might need to evaluate is the declining access to capital for improving the facility’s infrastructure and investing in information technology, medical technology, and electronic medical records in relation to the continuing demand by patients, physicians, and regulators for the most modern facilities and technologies. Finally, a governing board might need to address how the organi- zation will respond to growing competition from other service providers and changing demands for services (e.g., cardiac services, women’s services, cancer services, pediatrics, neurosciences, surgical services, diagnos- tic services, ambulatory surgery centers, and end-of-life care).

These strategic conversations provide a governing board and its senior manage- ment with the framework to identify the challenges and opportunities for providing improved value and services to its patients, customers, and other constituencies. The resultant development of meaningful strat- egies and the implementation of appropri- ate change are probably the most crucial for ensuring the long-term sustainability of organizations.

▸ Oversight of Patient Care and Resource Utilization

A key component of any health organization’s mission statement is for its staff to provide high-quality care to its patients in an effi- cient manner with the resources it has avail- able. Accordingly, monitoring and evaluating

in response to forces external to their orga- nizations. However, there is an increasing recognition by governing boards of the need to focus on strategic issues and ensure their organizations are responding appropriately to changes to the external environment. Often, to obtain market information about strategic changes and trends, management uses outside services, such as local health- care associations or consulting firms that monitor and provide some analysis of rele- vant data.

Strategic management involves several key components, including monitoring ele- ments of the environment external to the organization; evaluating how environmental changes impact the organization; determin- ing how these changes fit with the mission, resources, and capabilities of the organiza- tion; and developing action plans to imple- ment necessary and appropriate change and adaptation. All of these activities are cru- cial responsibilities for senior management. However, because the board is ultimately responsible for determining the mission of the organization as well as approving deci- sions and policy about the direction and allocation of resources, it typically makes sense for boards to be integrally involved in the strategic planning process. In other words, management has the responsibility to provide the board with relevant information and analysis that is meaningful and helpful to the board in ultimately making strategic and policy decisions.

Senior management and governing boards continue to wrestle with numerous strategic trends and the associated questions of how these trends will impact their organizations, and how their organization might respond in light of its mission, resources, and capabilities.

For instance, a governing board might need to address the implications of an aging and ethnically changing population along with a growing number of uninsured and finan- cially disadvantaged patients in relation to the

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the quality of patient care and efficiency of resource utilization are pivotal roles of gov- erning boards. Historically, in hospital orga- nizations, the medical staff was viewed as primarily responsible for the quality of patient care. More recently, however, responsibility for the quality of care of patients has become as important as ensuring financial integrity and operating performance.9

Working Relationship with Medical Staff Historically, hospitals governance has fol- lowed a tripartite structure as demonstrated in FIGURE 17-1 with three major sources of authority: the chief executive officer, the board of trustees, and the chief of the medical staff.10 In the past when physicians operated their own hospital facilities, the majority of board members were trustees, often influential community members who brought prestige and capital investments

Board of Trustees

CEO Chief of Staff

(Medical Director)

Tripartite Structure of Hospital

Governance

ADMINISTRATION

Senior Vice President Vice President

Department Heads Supervisors

MEDICAL STAFF

Service Chiefs Committee Chairs

Dual Operational Structure

FIGURE 17-1 Hospital Governance and Operational Structures

to the institutions.10 As voluntary hospi- tals increased in the United States, the bal- ance of power shifted to physicians (due to admissions and referral privileges) and then considerably to management (due to the complexity of healthcare).10 Today, the tri- partite structure demonstrates the separate medical staff structure that runs parallel to the administrative or management structure. Both the chief executive officer and medical staff have a dual reporting relationship, ulti- mately to the board of trustees.

Typically, in hospital organizations, the responsibility for patient care oversight is assigned to the quality committee, which works closely with the medical staff to pro- mote quality patient care. As described in the tripartite structure, the medical staff works independently from the hospital’s senior management, who may not have the appro- priate background to inform clinical decision making. To manage this relationship between hospital management and the medical staff, hospitals have medical staff bylaws, which identify the rules and regulations for physi- cians and other professionals who have been granted clinical privileges at hospitals. Those bylaws are prepared by the medical staff and submitted to the governing board for approval. The medical affairs committee, a committee of medical staff, is typically responsible for evaluating the professional competence and credentials of the medical staff and making recommendations to the board for appoint- ments to the medical staff and granting clinical privileges.

Quality Impro vement In addition to managing medical staff appointments and granting clinical priv- ileges, the governing board monitors and evaluates quality improvement and resource management plans. Numerous types of quality improvement programs exist. For instance, a clinically focused program might

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▸ Changing Board Models As indicated in the previous discussions of each of the areas of board responsibilities, many facets of the governance role and pro- cess are continually evolving. The traditional governance model of only meeting the most basic fiduciary responsibilities and serving as a “rubber stamp” of management recommen- dations is clearly obsolete. In most instances, that model has evolved to a level in which the board provides assurance that the chief execu- tive and the management team are meeting the board’s expectations and in which the board is remaining informed about significant strate- gic, operating, and patient care improvement plans and issues. Even this model of providing basic assurance and remaining informed, how- ever, is now being challenged.

The model of governance that seems to be emerging involves board members becom- ing more engaged in the leadership of orga- nizations. In a more engaged board model, the talents for which board members are recruited are utilized in providing value and supporting the management team in creating high-performing boards and organizations. In this model of governance, board members are expected to provide meaningful advice and insightful thinking to leadership, including contributing to the development of organiza- tional plans and making key decisions.13

establish priorities that concentrate on high- risk, high-volume, or problem-prone clinical practice areas that consider the incidence, prevalence, and severity of patient problems. Many organizations have adopted quality programs with customer-first orientations focused on allowing patients and customers to drive quality goals. Other programs focus on pursuing continuous improvement and best practices or the continuing education and training of staff.

Efficient Resource Utilization Promoting quality improvement also requires the board to ensure effective and efficient use of organizational resources. In delivering high-quality care, organizations must work within the constraints of balancing qual- ity against the costs of providing care. In a hospital, for example, resource management plans might include identifying patterns of resource utilization such as overutiliza- tion, underutilization, and the scheduling of resources. Elements of such a plan might include evaluating the medical necessity of admission, continued stay, and the costs of drugs and treatments; discharge practices and case management policies and proce- dures; the accuracy, timeliness, and comple- tion of medical records; and medical staff policies and rules.

Changing Board Models on Public Accountability and Reporting for Quality Patient Care and Safety

To enhance public disclosure of individual hospital performance and to encourage continuous quality improvement, the U.S. Department of Health and Human Services publicly discloses information reported by hospitals about the treatment of certain medical conditions. Performance by individual hospitals can be compared for 57 quality measurements reported to the Centers for Medicare and Medicaid Services. Those measurements are available at https://www.medicare.gov/hospitalcompare/search.html.11 The reporting includes measurements of treatments for heart attacks, pneumonia, and surgery patients.12

Although the implications of expanded reporting are difficult to predict, the greater transparency of hospital operations and performance most certainly demands greater accountability by governing boards and senior management to the communities and constituencies they serve.

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https://www.medicare.gov/hospitalcompare/search.html

opportunities for improvement. Such assess- ments may include questions such as: Are we addressing the right issues and giving them the appropriate time and attention? Are we evaluating the right information? Do we have the right membership? Are board members exhibiting appropriate behaviors and pro- viding value? By compiling open and honest responses to questions of these types, boards are in a better position to make appropriate changes and enhancements to improve perfor- mance. The following are some areas that are frequently helpful for boards to self-assess.

Establishing Board Priorities and Setting the Agenda Identifying and prioritizing the areas that are most important to the board and then deter- mining the amount of time and attention the board will allocate to those areas is an import- ant assessment exercise. It may be useful to identify the areas where board members are currently focusing their time and energies (e.g., financial oversight 20%, capital budgets 20%, administrative duties 30%, etc.) and where the board members feel they should be spending their time (e.g., strategy 40%, physi- cian relations 25%, operational improvement 25%, etc.). Comparing and contrasting the results can provide a basis for discussing how the board may wish to refocus its priorities and efforts. For example, a board meeting may be overloaded with management presentations with little discussion or serious questioning or input from board members. Negotiating or managing the board agenda such that the priorities of the board and the organization receive the appropriate time and attention can improve the board’s focus on issues of greater priority and areas in which the board contrib- utes the most value. Controlling the agenda in this way can also allow more time to educate board members concerning the nuances of complex issues, as well as to engage in produc- tive discussion.

▸ Effective Governance: Cultures and Activities

According to the World Health Organization, good governance for health and well-being is guided by a framework that defines health as a human right, a global public good, a component of well-being and a matter of social justice.14 Collaboration is the new imperative. Partner- ing with the public ensures that community values are upheld and there is transparency and accountability.14 Governance for health requires foresight as well as involvement and cooperation of citizens, consumers, and patients to build the successful healthcare system of the future.

The most effective boards have been described as “robust, effective social systems.”15 They are distinguished by cultures that allow them to candidly and openly discuss difficult information, challenge one another’s thinking and beliefs, and conduct meaningful reviews of board-level and individual board member performance.

A study of both effective and ineffective boards identified numerous activities associ- ated with effective board governance.16 These activities included board members ensuring that they understood the organization, its cul- tures, and values; the board’s responsibilities; the complexities of issues from multiple per- spectives; the board’s accepting their responsi- bilities for stakeholder relationships; and their ensuring a strategic approach.

Using these activities as a basis for evaluat- ing board performance, a study of 64 nonprofit hospitals found that boards conducting more of these activities were associated with better orga- nizational performance.5 Findings such as these make a strong case for ongoing board assessment and development to enhance board performance.

▸ Board Assessment Many boards engage in periodic assessments concerning their overall performance and

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Member Performance Assessment In addition to evaluating board member skills and experience, assessing board member per- formance provides an opportunity to support members in making more meaningful contri- butions to the board. Some boards have their members self-assess as frequently as every board meeting on the quality of their contri- butions (e.g., whether they read the packet and came to the meeting adequately prepared, contributed to the discussions, and spoke with appropriate candor). Boards may also ask members to complete a set of peer feedback surveys, which will then be aggregated and the results reported back to individual board members. Areas in which members might be evaluated include their knowledge of the orga- nization and the healthcare industry; their knowledge of areas such as strategy, finance, patient care, technology, or marketing; their ability to understand specific technical issues, provide quality input, and ask thoughtful ques- tions; and their ability to understand their roles as board members and to interact effectively with management and other board members.

Diversity Cultural disparities in health care, equity of care, and the focus on population health necessitate increased diversity in governance and leader- ship. As representatives of community assets serving the needs of multicultural communities, board members who can interface and speak on behalf of these communities can help ensure the organization is keeping their interests in mind. Research suggests that board and senior leader- ship roles have not been keeping pace with the diversification of the U.S. population.17 Little progress has been made. Even though minori- ties comprise 37% of the population, nearly 9 out of 10 board members are Caucasian.18 In fact, 47% of hospital boards report no racial or ethnic minority members with 53% reporting at least one non-Caucasian member.18

Additionally, having senior management conduct the same analysis of the board could provide useful information in helping the board and management negotiate their respec- tive roles and initiate a meaningful discussion of priorities.

Determining Information to Be Monitored and Evaluated Board members are often given a substantial amount of information to monitor and evalu- ate. The quality of the information the board receives, including when and in what format they receive it, is critically important to the board’s ability to conduct its work effectively.13 Too little information or missing informa- tion will create “blind spots” in the board’s judgment; conversely, too much information (e.g., lengthy presentations and reports with- out meaningful analysis) can overwhelm a board member’s capacity for processing this information.

Member Skills and Experience Assessment Boards that are clear about the issues that will be most important to them are also in the best position to identify the skills and experiences that will be most helpful for future board mem- bers to have. Assessing the skills and experience of existing board members and comparing those to the future needs of the organization can help boards make better decisions about changes in the composition of board member- ship. For example, if the board views chang- ing demographics in the community and the movement of a competitor into the organi- zation’s market as significant issues that may require the organization to adapt and respond, it may consider focusing on recruiting new members who have a deeper understanding of the healthcare industry, the changing needs of the community, and/or experience with strate- gic planning and change management.

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and approaches to healthcare delivery and ulti- mately organizational success.

Clinical representation of the board enhances the overall quality and patient safety in the health organization. Nearly 75% of all hospitals have physician trustees on their board, 37% have at least one nurse, and 22% have at least one pharmacist or other clinician.18 Despite their importance and contribution, in recent years, the number of non-physician clini- cians (nurses and other clinicians) has dropped. The nursing workforce is composed primar- ily of females and is critical to the delivery of exceptional patient care, yet underrepresented at the board level. One opportunity to enhance clinician board representation is the inclusion of a public health official, emergency prepared- ness coordinator, or medical director/director of the local emergency medical services.

Finally, five generations are represented in the workforce. Millennials comprise 50% of the workforce, yet in 2014, only 2 in 10 board mem- bers were under 50 years of age; nearly 75% are male.18 It is imperative that health organization boards represent the communities they serve, bringing a variety of perspectives, knowledge, skills, abilities, and experiences to enhance orga- nizational success. It is therefore important for hospital boards to also assess their ability to hear, respond to, and include those they serve in the workforce and in decision and policy-making.

▸ Board Member Education

Healthcare delivery is influenced by a highly complex set of factors; even if board members have considerable expertise in their own fields, they often need additional grounding in health care. Accordingly, board member education is important for ensuring board effectiveness and productivity. Many boards will sponsor initial and ongoing educational programs for board members, which can include orientations, annual retreats, and regular items on the board’s

Lack of diversity is an opportunity missed. Homogeneous boards end up with blind spots or group think, and may fail to see cues about market trends and internal problems.19 Diver- sity provides multiple views. Extremely suc- cessful boards are diverse with women and people of color of a variety of ethnic back- grounds.19 Research in the for-profit sector indicates diverse boards yield higher dividends to stockholders than those with homogenous boards.19 In order to achieve diversity, the board and chief executive officer must develop strategies to achieve greater diversity. Strate- gies include:

■ Defining diversity ■ Expressing the organization’s commit-

ment at the highest level ■ Adopting a board policy to represent the

community served ■ Establishing goals and objectives to

enhance diversity ■ Incorporating diversity into board poli-

cies and procedures ■ Making diversity a requirement for

recruitment and succession planning ■ Looking below the traditional C-suite for

minorities and women ■ Seeking out women and minorities at net-

working events or use search firms19, 20

Gender representation has received more attention but progress has been slow. Women are highly educated in the United States, earning 57% of the bachelor’s, 62% of the masters, and 53% of the PhD’s, medical and law degrees.21 They have long been the decision makers of healthcare, making 80% of family healthcare decisions.22 In addition, they comprise nearly 83% of the healthcare workforce, with 65% serving as directors and 43% as executives.21 Yet, in 2014, just under 28% of females served as healthcare board members.18 Having gen- der diversity helps you better understand your primary customers, purchasing and usage decisions.21 Women bring a wide range of expe- riences, skills, and abilities to the table. Examin- ing their viewpoints can bring new perspectives

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the organization, as well as familiarizing them with key leaders responsible for running it on a day-to-day basis.

▸ Board Development As asserted by James Johnson and Donald Breckon in their chapter on board governance and responsibility, it would be shortsighted to assume boards will be effective simply because they exist.23 The administrator/executive has a responsibility to engage in board development. This involves orientation for new board mem- bers; keeping board members well informed of major organizational changes and initiatives; and an annual board retreat for long-range planning. The board needs to be seen as a valu- able resource to the manager both in its exper- tise and its political clout. Additionally, board members need to be aware of the changing legal landscape of health care. Ultimately, a well-de- veloped board will be seen as legitimate and credible. According to Johnson and Breckon, this is achieved when stakeholders perceive the board to represent all significant interests and perspectives, whereas credibility occurs when the board appears knowledgeable and fair and the board process rational.23 While there are many approaches to board development, there do seem to be some overarching principles that are instructive:24

meeting agenda. Subjects that are particularly useful for board member orientation include:

■ A general overview of the healthcare industry, to provide board members with an understanding of the framework within which health organizations oper- ate (e.g., the healthcare delivery system, major payers, regulators, and accrediting agencies).

■ The mission, vision, philosophy, and values of the organization, as well as its history.

■ The structure of the organization, includ- ing bylaws; an organization chart; and a summary of departments and their func- tions, policies, and relationship with con- stituencies (e.g., the medical staff ).

■ The organization’s strategy, including mar- ket description; significant competitors; market share; community demographics; and current strengths, weaknesses, oppor- tunities, and threats.

■ An overview of financial, operating, and quality programs and reports.

■ A review of board minutes for the prior year to understand the activities and major issues recently addressed by the board.

Board education activities can also pro- vide a forum for exposing members of the organization’s management team to the board. This can serve the dual purpose of providing board members with multiple perspectives of

Board Member Education Consent Agendas

To provide more time during board meetings for board member education and the discussion of strategic and substantive issues, many boards have adopted consent agendas. Consent agendas include noncontroversial administrative and financial items requiring board approval but not requiring board discussion before the board votes. Such items might include approval of board minutes and routine minor expenditures or contracts needing board approval but already reviewed by committees. All information and supporting documentation along with motions or policy resolutions about such matters should be provided to board members in advance of the board meeting and then simply voted on as one item.

Important items that would not be appropriate for a consent agenda include adoption of the organization’s mission; strategic, operating, and quality plans; annual operating and capital budgets; executive compensation arrangements; or any matters that might be controversial.

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organization. Some authors (e.g., Orlikoff ) have argued that a majority of members of a board should be independent.6 This rec- ommendation comes from the concern that board members who are part of management may not have the appropriate objectivity to make decisions in the best interests of the communities they serve. On the other side of the discussion, independent board members, who serve part-time and on a volunteer basis, certainly do not have the ability to make the same time commitment, nor do they have the same knowledge of the organization as will the organization’s leaders; thus a critical mass of board members from senior man- agement may be essential to effective board operations.

Separation of the Board Chairperson and the Chief Executive Officer There is increasing convergence of opinion that the chairperson and the chief executive officer should not be the same person. In circum- stances in which an organization has a dom- inating chairman/chief executive, the chief executive lacks accountability. Division of the roles gives the board chairperson responsibil- ity for leading the board, controlling the board agenda, establishing appropriate committees, and managing the nomination and selection of board members.

Paid vs. Unpaid Board Members Although few board members of nonprofit organizations are currently compensated, some have argued that board members should be paid, given the increasing chal- lenges and responsibilities of boards, as well as the expectations for more active contribu- tions from board members. Doing so might entice board members to be more engaged in meeting preparation and attendance, and payment might enhance the ability to recruit the most competent and qualified

■ Develop a strategic plan that actively involves board members

■ Establish a board contribution policy that specifies expectations of board members

■ Form a board development committee that provides stewardship

■ Ensure that recruitment committee pro- vides comprehensive background on roles and responsibilities

■ Provide a board manual and a board men- tor to everyone

■ Share committee minutes and provide in advance of meetings

■ Ensure financial reporting is meaningful and well understood by all

There are some attributes of highly per- forming boards in health organizations. These can be seen as goals of board development and include the following:

Good boards insist on accountability

The board cannot be for the administrator’s use only

Board seats should be filled according to needs and diversity, not personality

The most effective board members know the organization and its community

Board members should challenge the orga- nization’s thinking

Board members value their own contribu- tion to the organization

▸ Current Issues and Controversies

Currently, there are a number of questions regarding optimal board structure and process being debated. Several of these are described below.

Board Member Independence Independent board members are not employ- ees and do not conduct business with the

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some important general themes you noticed in these trends? What do you think their implications may be for future board members?

4. How does the World Health Organiza- tion define good governance? What is the new imperative?

5. Why is diversity important in board membership?

6. What strategies can be used to achieve board diversity?

7. Given the increasing challenges and responsibilities of boards, as well as the expectations for more active contribu- tions from board members, some have suggested that board members should be paid for their time and trouble. Dis- cuss the pros and cons for paying board members.

8. What is board development and why is it important? What might it include?

References 1. Wyatt M. Governing for Accountability: Principles

in Practice. NGO Management. London: Earthscan; 2010.

2. Colley J, Doyle J, Logan G, Stettinius W. What is Governance? New York, NY: McGraw-Hill; 2006.

3. Chait R, Holland T, Taylor B. Improving the Perfor- mance of Governing Boards. Phoenix, AZ: Oryx Press; 1996.

4. Taylor B, Chait R, Holland T. The new work of the nonprofit board. Harvard Bus Rev. 1996;74(9):5, 36–46.

5. McDonagh K. Hospital governing boards: A study of their effectiveness in relation to organizational per- formance. J Healthcare Manage. 2006;51(November/ December):377–391.

6. Orlikoff J. Building better boards in the new era of accountability. Front Health Serv Manage. 2005;21 (3):3–12.

7. Catholic Health Care. Guide for planning and report- ing community benefit. https://www.chausa.org/ docs/default-source/community-benefit/147699a- 7fad04854af4b2214426509211-pdf.pdf ?sfvrsn=2. Published 2007. Accessed February 2, 2017.

8. PricewaterhouseCoopers. My brother’s keeper: Grow- ing expectations confront hospitals on community benefits and charity care. https://books.google.com/ books?isbn=1449662226. Published 2007. Accessed February 2, 2017.

board members. The counter-argument is that payment undermines the very essence of a nonprofit organization, and if a person is unwilling to serve in this role without pay, then they may not have the ideal personality “fit” for the role.

▸ Conclusion Governing boards assume responsibility for oversight of nonprofit organizations and refer to members as trustees or directors. There are wide varieties of ways in which boards are structured (e.g., number of members) and in which they function (e.g., frequency of meet- ings). Most boards have a number of subcom- mittees, including an executive committee as well as finance, governance/nominating, qual- ity, and strategic planning committees. Board diversity is essential to identify and meet the needs of the community the health organiza- tion serves. The World Health Organization defines good governance as one that includes the health and well-being as a human right, a global public good, a component of well-being, and a matter of social justice. The new imper- ative is collaboration. The role of the board has been changing in recent years. The general trend has been toward greater expectations for involvement and accountability; some are recommending that boards require larger pro- portions of independent members and even consider payment for service. There is an ongoing need for board development.

Review/Discussion Questions 1. What are the three “duties” the board

is responsible for upholding? What is an example of a circumstance in which each might serve as a guiding principle?

2. What is the tripartite structure of hospi- tal governance? How did it develop?

3. This chapter has described several important trends in the nature of board member responsibilities. What are

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https://www.chausa.org/docs/default-source/community-benefit/147699a-7fad04854af4b2214426509211-pdf.pdf?sfvrsn=2

https://books.google.com/books?isbn=1449662226

Healthcare Governance. www.htnys.org/include/ docs/14-Governance-Survey-Report.pdf. Published 2014. Accessed April 18, 2017.

19. Bajic E. Why Companies Need To Build More Diverse Boards. Forbes. https://www.forbes.com/ sites/elenabajic/2015/08/11/why-companies-need- to-build-more-diverse-boards/#4c62dfeb662c. Pub- lished August 11, 2015. Accessed April 17, 2017.

20. McNutt JM, Totten MK. How to Grow the Amount of Women on Hospital Boards. Trustee. http://www . t r u s t e e m a g . c o m / a r t i c l e s / 1 0 3 0 - h ow - t o - g row - the-amount-of-women-on-hospital-boards. Published November 2016. Accessed May 1, 2017.

21. Hersh E. Why Diversity Matters: Women on Boards of Directors. Executive and Continuing Professional Education. https://www.hsph.harvard.edu/ecpe/why- diversity-matters-women-on-boards-of-directors/. Published February 14, 2017. Accessed April 18, 2017.

22. Healthgrades. How Women Influence Health Care Decisions. https://www.hospitals.healthgrades.com /index.cf m/c ustomers/e-ne wsletters/june-2012 /women-influence-health-care-decisions/. Accessed April 18, 2017.

23. Johnson, JA and Breckon, DJ. Board Governance and Responsibility, in Managing Health Education and Promotion Programs: Leadership Skills for the 21st Century. Boston: Jones and Bartlett Publishers. 2007

24. Walty, J. Board Development Best Practices. New York: Mayor’s Office. 2016. Accessed February 27, 2017 from http://www.nyc.gov/html/nonprofit/ downloads/pdf/Board%20Development%20Best%20 Practices.pdf

9. Biggs E. The Governance Factor: 33 Keys to Success in Healthcare. Chicago, IL: Health Administration Press; 2003.

10. Shi L, Singh DA. Delivering Health Care in America: A Systems Approach. 6th ed. Burlington, MA: Jones & Bartlett Learning; 2015.

11. US Department of Health & Human Services. Hospital compare. https://www.medicare.gov/ hospitalcompare/search.html. Published 2007. Accessed February 2, 2017.

12. HCACPS: Hospital Consumer Assessment of Health Providers and Systems. http://www.hcahpsonline.org/ home.aspx. Published 2017. Accessed February 2, 2017.

13. Nadler DA. Building better boards. Harvard Bus Rev. 2004;82(5):102–111.

14. Kickbusch L, Gleicher D. Governance for health in the 21st century. WHO/Europe. http://www.euro.who .int/en/publications/abstracts/governance-for-health- in-the-21st-century. Published March 18, 2017. Accessed May 3, 2017.

15. Sonnenfeld JA. What makes boards great? Harvard Bus Rev. 2002;80(9):106-113, September. 109.

16. Jackson D, Holland T. Measuring the effectiveness of nonprofit boards. Nonprofit Voluntary Sect Q. 1998;27:159–182.

17. Health Research & Educational Trust. Hospital governance: Initial summary report of 2005 sur- vey of CEOs and board chairs. http://www.hret.org /resources/8031883284. Published 2007. Accessed February 2, 2017.

18. National Health Care Governance Survey Report. American Hospital Association’s Center for

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http://www.htnys.org/include/docs/14-Governance-Survey-Report.pdf

https://www.forbes.com/sites/elenabajic/2015/08/11/why-companies-need-to-build-more-diverse-boards/#4c62dfeb662c

http://www.trusteemag.com/articles/1030-how-to-grow-the-amount-of-women-on-hospital-boards

https://www.hsph.harvard.edu/ecpe/why-diversity-matters-women-on-boards-of-directors/

https://www.hospitals.healthgrades.com/index.cfm/customers/e-newsletters/june-2012/women-influence-health-care-decisions/

http://www.nyc.gov/html/nonprofit/downloads/pdf/Board%20Development%20Best%20Practices.pdf

https://www.medicare.gov/hospitalcompare/search.html

http://www.hcahpsonline.org/home.aspx

http://www.euro.who.int/en/publications/abstracts/governance-for-health-in-the-21st-century

http://www.hret.org/resources/8031883284

CHAPTER 18

Organizational Change and Sustainability in Health Organizations

LEARNING OBJECTIVES

■ Understand the relationship of organization development and change. ■ Differentiate between various approaches to change management. ■ Apply analytical approaches to assessing organizational change. ■ Better understand the role and responsibility of the leader in the change process. ■ Understand the significance of organizational culture to the effective implementation of change

initiatives. ■ Apply concepts of systems thinking to the implementation of change initiatives. ■ Understand the concepts and processes of organization sustainability.

OVERVIEW

This chapter explores change in health organizations from various perspectives. It underscores the inevitability of change and provides several processes and change philosophies that can be utilized in a developmental way. This also leads to the critical and timely discussion of sustainability in health care and health organizations. The role of the leader and manager is explored along with the always- important influence of culture.

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accountability mechanisms for all stakeholders.3 However, as health care began the transition to an industry, organization development (OD) practitioners such as Tannembaum, Argyris, McGregor, Shepard, Burkhard, and others were advocating for a “total organizational culture change program. . . .”4 The emphasis of this new approach was the worker/supervisor relation- ship. Peter Drucker’s prediction of an “employee society” and a resulting “knowledge worker” in 1950 is evidenced by the results of OD research in the 1960s and correlates with the current transformation trends of the healthcare indus- try. Research in OD provides a basis and a vari- ety of models from which effective change in health organizations can occur. Rothwell and Sullivan report findings from the research field that suggests the following:

■ Expertise is not just held by experts, but exists throughout the organization— especially by those who are closest to the problem.

■ “Resistance to change” does not have to be a given. When people are involved in the change process, not only does cooper- ation increase, but the quality of the out- come dramatically improves.

■ It is possible to solve not only the problem at hand; even contentious issues can sig- nificantly increase individual, team, and organizational ability to function more effectively. This is the “development” in organization development.5

▸ Introduction

Health care, unlike other sectors, is highly fragmented and subject to con-stant and unpredictable change.2 The response to change has been complicated by the unique relationships with its stakeholders and the control they exert on strategic ini- tiatives. These relationships can and do cre- ate barriers to change, while also serving as enhancements to organization development and sustainability.

The events of recent decades—specifically technological advances, the Medicare/Medicaid program, and the entrance of investor-owned companies into health care—have transformed the healthcare environment from a local social responsibility to a national economic industry. Because of the intermix of private and pub- lic actors, some have referred to this as the medical– industrial complex. Consequently, dif- fering viewpoints relative to the scope and speed of the necessary changes have created frus- tration and produced limited benefits. Steven Shortell at Berkley provides a model in FIGURE 18-1 that demonstrates the relationship between the scope and speed of change as the healthcare industry struggles to transform a highly frag- mented delivery system.3

Health policy analysts in the 1990s pre- dicted an evolutionary and incremental rate of change, focusing on benefit packages that would cover more Americans and include

FIGURE 18-1 Assessing Approaches to Change Modified from Shortell, Remaking Healthcare in America (San Francisco: Jossey-Bass 1996) 4

252 Chapter 18 Organizational Change and Sustainability in Health Organizations

Scope of change

Speed of change

Narrow Broad

Fast Radical changeTargeted experimentation

Slow Inertia Evolutionary change

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Organization Development and Change Management Organization development (OD) is a relatively new concept of organizational improvement strategies. Its evolution in the 1950s and 60s was inspired by researchers such as Kurt Lewin in 1946 (the grandfather of applied behavioral science), Wilfred Bion and his work with the Tavistock laboratories in 1948, and Douglas McGregor’s Theory X and Theory Y in 1954. Building on their research, practitioners Dick Beckhard and Herb Shepard are credited with coining the term “OD” in 1957.5 Although the concept is new, the healthcare industry has adopted it as a framework for developing strat- egies of sustained change initiatives.8

Rothwell, Prescott, and Taylor report six key trends of change that have the great- est impact on the workplace: (1) changing technology, (2) increasing globalization, (3) continuing cost containment, (4) increasing speed in market change, (5) growing impor- tance of knowledge capital, and (6) increasing rate and magnitude of change.9 The changing technology of health delivery systems requires rapid advances in human know-how and the growing importance of knowledge capital. The continuing decline of profit margins and esca- lating costs demand flexible cost containment strategies that can be implemented quickly and effectively. In an effort to respond to these demands, the healthcare industry is focusing its strategic management efforts around an emerging second-generation concept of OD. These strategies include organizational trans- formation, organizational culture, the learning organization, high-performance work teams, and total quality management (TQM).10

Defining Change The concept of change is far too broad to jus- tify any one definition. Extenuating circum- stances and unpredictable shifts within the healthcare industry require a strategic man- agement model that addresses both change

Change models reflect a simplified pro- cess in the initiation and implementation of change strategies. Most models are rational models, emphasizing planning and problem solving or sociological models that focus on changing unique situations, rather than change per se.5 We will consider both types in this review.

▸ Organizational Development: Framework for Change

Health Care’s Changing Environment Change within the healthcare industry is occurring at an exponential and often very unpredictable rate. Although change is not new to health care, the underlying reasons for change are diverse compared to other sectors. Consumer perception that health care is a right has inspired regulatory changes that affect both access and quality of care. The entry of investor-owned companies into the acute-care markets has created a challenging and chang- ing healthcare environment, which occasion- ally threatens the survival of those unable to adjust to the trends.

Other factors contributing to unpredict- able changes in health care include the exclu- sive expertise of the providers, the physician/ hospital relationship and related referral pat- terns, the absence of a traditional compet- itive market, and the fragmentation of the industry.6

Consistent with the whitewater changes occurring in the industry, health care is in a state of transformation and restructuring, inte- grating a vast network of diverse enterprises. These and other changes have forced health- care leaders to reconsider traditional systems for delivering care and the subsequent need to transform the industry.

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problem solving, and execution and a more subjective sociological orientation applicable to an organization-wide transformation.

Many different models have been designed to inspire effective change and assist leaders in its implementation. Kurt Lewin, an early behav- ioral science practitioner, designed a model for industry in the early 1940s that focused on the forces driving and resisting change ini- tiatives. His force field analysis model is still used by many organizations to demonstrate the unfreezing, moving, and refreezing of behavior consistent with early change philosophy.

The action research model represents a philosophy of change, which incorporates employee participation, engagement, and empowerment into the change process. A more contemporary model, the appreciative inquiry model, focuses the attention of the organization on the positives (things that are going right) as opposed to the traditional neg- atives (things that are going wrong).5

Although there is no best model to ensure sustained organizational change, there is con- sensus that change is best represented as a cyclical process with no beginning, middle, or end; the objective being to create a learning organization that continually reinvents itself, based on external and internal environmental forces. FIGURE 18-2 reflects the common phases associated with organizational change.

A simplified linear model in FIGURE 18-3, developed by W. W. Burke, suggests three phases of a change initiative: pre-launch, launch, and post-launch. Each phase incorporates essential activities that lead to the next phase and ter- minates as the organization incorporates the change into the system. In the pre-launch phase, the external and internal environments are assessed and the need for change is established. The launch phase incorporates data collection and collation to justify the change initiative. This phase focuses attention on communicating the vision to all stakeholders, both internally and externally. Ultimately, the change is incorporated into the organization (institutionalized) and becomes an element of the organization culture.

and changing. Visionary leaders must be alert to external change and have the organization prepared to respond by changing internally. Consequently, everyone in the organization plays a role in change management.

Among the many definitions of change reported in the literature, transitional and transformational changes provide the most practical distinction relative to the scope and depth of change. Transitional change, some- times referred to as developmental change, is associated with the incremental adjustment or “tweaking” of processes. These changes may or may not influence the variables and meth- ods of measurement within the system but are designed to improve the system outcomes. Transitional change initiatives are planned and typically occur at divisional levels of the orga- nization, representing a bottom-up process of change. Effective transitional changes integrate with other organizational changes to achieve the overall goals and objectives.

Transformational change is associated with organizational restructuring and rep- resents a broad and complex radical shift, as the organization “reinvents itself.” Although strategies associated with transformational change are controllable, the forces that drive the change are not. Consequently, healthcare providers unprepared to make the shift in a timely manner generally do not survive.

Change Models An effective change process, whether incre- mental (transactional) or organization-wide (transformational), generally follows a defin- able sequence of events. Depending on the scope and depth of the change initiatives, the process can be very complex and difficult to organize. A simplified representation of the phenomenon is best depicted by modeling the various change interventions, creating a pic- ture of the phases through which the changes travel. Two approaches typically applied to the development of a change model include the rational approach, which focuses on planning,

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a complex and busy representation that could be confusing and frustrating to management, especially since most change models are top- down directed and give little consideration to middle management.

In reviewing the numerous alternatives to change models, commonalities emerge. Most agree that an awareness of the need for change is an initial step in the process, resulting from internal and external analysis of the relative environments. Data collected from the envi- ronmental assessments lend credibility to the need for change and are used to communicate the vision to the stakeholders of the organiza- tion. Representing organizational divisions, change teams are empowered to act on behalf

Ironically, the early change models were not designed for the rapid, chaotic, white- water change that the healthcare industry is experiencing. Consequently, Roland Sullivan and William Rothwell expanded the Burke model to reflect the more appropriate cyclical nature of the contemporary learning organiza- tion by adding phases of scanning, acting, and reacting, in a cyclical format (FIGURE 18-4).5 Although the expanded model addresses the phases and steps through which effective change must proceed, it assumes leadership skills and establishes an organizational cul- ture prior to the launch phase of the initiative. However, incorporating the many different variables into a simple model would result in

FIGURE 18-2 Activities Contributing to Effective Change Management Modified from Organization Development and Change 5/e T.G. Cummings and C.G. Worley. Copyright 1993 West Publishing. Reprinted by permission of South Western College Publishing, a division of International Thomson Publishing, From W. French & C. Bell Organization Development 6ed. (Upper Saddle River: Prentice/Hall, 1999) 123

Organizational Development: Framework for Change 255

Effective Change Management

Motivating Change • Creating readiness for change • Overcoming resistance to change

Creating Vision • Mission • Valued outcomes • Valued conditions • Midpoint goals

Developing Political Support • Assessing change agent power • Identifying key stakeholders • Influencing stakeholders

Managing Transition • Activity planning • Commitment planning • Management structures

Sustained Momentum • Providing resources for change • Building a support system for change agents • Developing new competencies and skills • Reinforcing new behaviors

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advocated by Rothwell’s research, preparing those to be empowered to act on behalf of the organization is both critical and difficult. Empowering those who do not wish to be empowered is an assurance of failure. Con- sequently, establishing a clearly defined rep- resentation of the process—a unique model, customized for the organization—will not only support the initiative but also help to keep the process on track throughout the var- ious phases. FIGURE 18-5 represents one alter- native that incorporates the transformational philosophy of organization-wide change with the transactional philosophy of inte- grated operational change. The model also correlates the leadership and management competencies needed to efficiently move the organization through the respective phases of the change process.

of the organization in the development of inno- vative alternatives that complement the change initiatives. Ultimately, the selected alternatives are implemented and institutionalized. Moni- toring and benchmarking ensure the effective outcome of the initiative and provide a base from which the process recycles.

As significant as they are to the process, change models cannot ensure that behavioral change will occur or be sustained over time. There is agreement in the industry that fun- damentally changing the values and belief sys- tems of the employees is essential to survive in a competitive, yet compassionate market.11 Consequently, the effectiveness of organi- zational change lies with the leadership and senior management. The culture of the orga- nization is a reflection of the leadership and an expression of the values that drive the mission and vision.

Although involving people throughout the organization in the change process is

FIGURE 18-3 A New View of the Action Research Model

FIGURE 18-4 Sullivan/Rothwell Change Process Model

Modified from J. Rothwell & R. Sullivan Practicing Organizational Development, 2ed. (San Francisco: Pfeiffer, 2005) 56, from W.W.Burke (2002) Organizationa change: Theory and Practice Thousand Oaks, CA.: Sage

Modified from Practicing Organization Development 2nd ed. (San Francisco: John Wiley & Sons, Inc.) 58

256 Chapter 18 Organizational Change and Sustainability in Health Organizations

• Be persistent • Move people beyond comfort level • Manage avoidance mechanisms

• Initial activities • Deal with resistance

• Begin with self-examination • Examine personal disposition and decision making • Examine the external environment • Establish the need for change • Provide clarity of vision and direction

Post-Launch

Pre-Launch

Launch

Marketing

Transformative Launch

Pre-Launch

React Scan

Act Plan

Continual Implementation and Adoption of Diverse

Interventions

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problems. While recognizing that there are unique situations that do require immedi- ate attention, transforming the organization is not included among them. Stakeholders in the healthcare system are demanding val- ued-added services at all levels of the organiza- tion and are not willing to wait while providers decide how to effectively deliver them.

▸ Creating the Capacity to Change

Assessing the Need to Change Whitewater change inspires strategies that produce a “quick-fix” mentality for solving

FIGURE 18-5 Leadership Style and Competency Modified from J. Whitlock, Leaders as Coaches:Their Influence on the Sustained Success of Reengineering Initiatives (Medical University of South Carolina, 1999)

Creating the Capacity to Change 257

LEADERSHIP STYLE LEADERSHIP COMPETENCY

Transformational

Transactional

Phase 1

Phase 2

Phase 3

Phase 4

Phase 5

Innovation Visioning Championing Diffusing

Collaboration Facilitating Coaching Dialoguing

Integration Organizing Improvising Bridging

Production Targeting Improving Measuring

Awareness of

Need to Change

Culture

Values

Capacity to Change

Enthusiasm for Change

Change Team

CommunityVendors Integration

Teams

Institutionalization

Medical Staff Unit Staff

Benchmarking Measuring

Celebrating

Awareness of

Need to Change

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power creates a barrier to change, while those who stand to gain power will likely embrace the desired changes. Consequently, the aware- ness of the need to change must address the diverse interests of all stakeholders if consen- sus is to be achieved. Complete agreement among stakeholders is seldom achieved.

One alternative approach to reaching consensus is the application of the previously described appreciative inquiry philosophy. By focusing on creative outcomes and individual stakeholder benefits, organizational values can be clearly articulated.13 Successful health orga- nizations are continually monitoring the exter- nal environment in an effort to anticipate and predict forces of uncontrollable change. When the responsibility for identifying these forces is expanded to the primary stakeholders, the potential for effective and timely implementa- tion of organizational change is enhanced.

Change Leaders This chapter is not about defining leadership or identifying effective attributes of good lead- ers; it is about leading change. The term “lead- ership” is ambiguous, at best, and suggests positions of power, authority, and control. The phenomenon of leading change incorporates a diverse set of leadership skills that must be applied through each phase of the change ini- tiative if the process is to succeed. The change agents must exert appropriate influence on the system to ensure that anticipated behavioral changes are endorsed and supportive of the intended transformational effort.

Researchers debate the question as to whether change leadership is the property of an individual or the property of the associated social system.14 A suggested response to this debate is “it depends.” Figure 18-5 demonstrates the dis- continuous process of transformational change and the incremental phases through which the process proceeds, beginning with an awareness of the need to change and terminating with the institutionalization of the change initiative.

Each phase represents sociological interven tions that require the application

Operational frameworks, such as total quality management (TQM), continuous qual- ity improvement (CQI), and reengineering, have not proven effective in reducing costs or significantly improving the quality of care. The micromanagement of these initiatives by top management represents a barrier to sustained and discontinuous change programs, leaving a perception of the “flavor of the month” change process. The justification for failed change ini- tiatives is typically applied to the radical and somewhat unpredictable whitewater changes previously described, suggesting “it’s hard to remember that the objective is to drain the swamp, when there are alligators nipping at our heels.” However, healthcare leaders must not lose sight of the mission of social responsibility to those they serve, the patients and potential patients of the service area.

As the transformation of health delivery systems continues to evolve, the acute care hospital has shifted from a central focus in the delivery system to that of a primary stake- holder, alongside the physician community, the insurance and managed care companies, and the community at large. Healthcare pro- viders have also experienced a corresponding loss of influence associated with decision mak- ing and environmental change.

The awareness of the need to make radi- cal changes in the organization becomes most obvious in the evolution of new and diversified healthcare markets. Although the local hospi- tal continues to be the perceived focal point for healthcare needs, the breadth and depth of network providers have inspired significant changes in the external environment. A good example is the decision by the American Hospi- tal Association to change the name of the orga- nization to “Hospitals and Health Networks.”12

Identifying Change Initiatives The decision to change goes beyond the boardroom and the senior manager’s office suite. Change initiatives threaten the balance of power held by primary stakeholders in the organization. The perceived threat of losing

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effect, all members of the organization become change leaders in some respect.

Changing Organization Culture In their book Diagnosing and Changing Orga- nizational Culture, Kim Cameron and Robert Quinn recognize the high failure rates of planned organizational change. They attribute these failures to neglected organizational culture and conclude that the three major change initia- tives, TQM, reengineering, and downsizing, fell short or failed completely due to slow, laggard, wrong-headed change efforts that did not assess or attempt to alter the organizational culture.15

The response of healthcare systems to these conclusions is mixed. A study of nine healthcare systems attempting major trans- formational change initiatives under a grant from the Woods Johnson Foundation and Pew Charitable Trust (Strengthening Hospital Nursing [SHN]: A Program to Improve Patient Care) reported that only a few change leaders considered culture an important part of the initiative.11 A continued review of vertically integrated initiatives by Stephen Shortell rec- ognized that these efforts have given way to a vertical disintegration and supports the need for healthcare systems to assess and diagnose the current culture of the organization before attempting to implement radical changes.3

In the unique healthcare environment, cul- tural values may vary significantly within the organization. Clinical staff (nursing, technical, and physician) may feel that upper manage- ment does not understand the value of quality of care, while upper management feel that clin- ical staff do not appreciate the value of func- tional operations that produce needed revenue and sustain profitability. Cultural elements, regardless of the industry, have common rela- tionships; some are tangible and easily defined, while others are not as easily defined or intan- gible. FIGURE 18-6 categorizes the elements and provides a means of integrating the relationship between the two. The inputs directly affect the outcomes. The intangibles (culture related)

of different skill sets by the change leaders, whether individuals or groups. Few, if any, individuals in leadership positions possess all of the competencies required to influence behavior necessary to sustain transforma- tional change. Consequently, the responsibility is distributed throughout the organization, in the form of “change agents.” The application of desired leadership competencies depends on the respective phase of the change initia- tive. Leadership styles relative to Phase 1 are more transformational, while Phase 4 requires a more transactional approach. The ideal rela- tionship provides for the integration of both styles, depending on the situation.

Leadership for Change and Development Effective organizational change begins with a common vision, inspired by a leader capa- ble of championing and communicating their vision to all of the organization stakeholders. Attributes typically associated with successful transformational leaders include the following:

■ A self-perceived change agent ■ A prudent risk taker ■ One who is sensitive to the needs of others ■ One able to articulate core values ■ One who is flexible and open to learning ■ One with cognitive skills consistent with

analytical problem solving ■ Intuitive thinker with vision14

Phase 1 of Figure 18-5 identifies the lead- ership style and desirable competencies needed to influence system stakeholders in recogniz- ing the need to change. The transformational leader serves as a mentor through which the values of the change initiative are communi- cated and support groups are identified. From these groups arise the “champions of the cause” who, by expanding the capacity for learning to those around them, create the beginning of a learning organization. The learning orga- nization represents discontinuous (cyclical) and sustained transformational change. In

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Organizational change initiatives that are sustained over time are representative of “learning organizations.” Peter Senge describes five disciplines that compose the core of the learning organization:

■ Personal Mastery—learning to expand our personal capacity to create the results we most desire, and creating an organiza- tional environment, which encourages all its members to develop themselves toward the goals and purposes they choose.

■ Mental Models—reflecting upon, contin- ually clarifying, and improving our inter- nal pictures of the world, and seeing how they shape our actions and decisions.

■ Shared Vision—building a sense of com- mitment in a group by developing shared images of the future we seek to create and the principles and guiding practices by which we hope to get there.

■ Team Learning—transforming conver- sational and collective thinking skills so that groups of people can reliably develop intelligence and ability greater than the sum of the individual member’s talents.

■ Systems Thinking—a way of thinking about—and a language for describing and understanding—the forces and interrela- tionships that shape the behavior of sys- tems. This discipline helps us see how to change systems more effectively, and to act more in tune with the larger processes of the natural and economic world.16

Systems Thinking To appreciate the value of “systems thinking” one must first understand the interrelated- ness of elements that define a “system.” Obvi- ously, the elements will differ depending on the system. However, the behavior of all sys- tems follows specific common principles that guide the process. Systems thinking is not top-down or bottom-up but a participative relationship between management and oper- ations.16 The more effective organizations are in defining and articulating their systems,

influence the outcomes both directly and indi- rectly. Consequently, it is imperative that these elements work together if radical change is to be sustained.2 While it is not within the constraints of this chapter to define the various assessment tools for addressing specific cultural character- istics, the reader is directed to the reference list for further attention to the subject.

The Learning Organization The goal of organizational transformation is to create a culture that embraces the capacity to change, not incrementally but continuously. Consequently, individuals within the organi- zation must integrate their cultural values with those of the organization and vice versa; the ultimate objective being the “learning orga- nization” that prescribes to “lifelong” learn- ing for both the individual members and the organization.

FIGURE 18-6 Relationships Between Tangibles and Intangibles Used with permission, from T. Atchison & J. Bujak, Leading Organizational Change (Chicago: Health Administration Press.) 70.

260 Chapter 18 Organizational Change and Sustainability in Health Organizations

Inputs

Outputs

Tangible Intangible

Money People Policy/procedures Strategy Facilities Information systems

Profit Market share Products/Services Patient satisfaction Growth Productivity Quality

Culture Commitment Morale Job satisfaction Team spirit Pride/joy/trust Quality

Mission Values Vision Inspiration Leadership style Motivation

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and after the proposed change. John Kotter declares in his article Leading Change: Why Transformation Efforts Fail, “Transformation is impossible unless hundreds or thousands of people are willing to help, often to the point of making short-term sacrifices. Employees will not make sacrifices, even if they are unhappy with the status quo, unless they believe that use- ful change is possible. Without credible com- munication, and a lot of it, the hearts and minds of the troops are never captured.”17 Regardless of the scope and depth of anticipated change, leadership must assess the current internal communication practices of the organization and ensure that they are sufficiently strong to support the effort. For the purpose of this dis- cussion, communication strategy is directed to transformational change initiatives as opposed to incremental or business unit change. How- ever, the basic steps of getting started, doing the work, and producing results represent a relatively simple overview of the communi- cation plan. This plan is most effective when implemented by a communication change team (CCT).18

Members of the CCT should be rep- resentative of all primary stakeholders and not restricted to middle or senior managers. Front-line employees provide a definite benefit to ensure an organization-wide “buy-in” of the change. However, care in the selection of the CCT is necessary to represent the culture of the organization. Members should, at a min- imum, reflect open-mindedness, honesty, and interpersonal relations and facilitation skills. Although the CEO and other senior managers may not serve on the CCT, their responsibil- ity to supporting the initiative must be rec- ognized by everyone in the organization. The CEO must openly endorse and champion the process and ensure that senior management facilitates the implementation of the CCT rec- ommendations. This typically occurs in Phase 2 of the change-communication action plan.

Knowing both what you want to com- municate and how effective you are in the communication process is determined by

the more likely they are to sustain organiza- tional change.

The healthcare industry is part of a com- plex adaptive system composed of many dif- ferent agencies and related subsystems.2 Each of these agencies and related stakeholders respond independently to the external forces that drive change in their respective organi- zations. Subcultures within an organization follow a similar philosophy when external forces interfere with operations, causing dis- traction, confusion, and frustration and neg- atively influencing the organization’s capacity to change. The concept of a “tragedy of com- mons” described in Peter Senge’s 1990 book The Fifth Discipline and the more recent 2017 book by James Johnson and Douglas Ander- son, Systems Thinking for Health, emphasizes the disastrous results produced when individ- ual gain takes priority over the common good or well-being of the whole. Global warming, created by the desire of individuals to drive big- ger cars or manufacturing plants that increase production by expelling unfiltered poison- ous gases into the atmosphere, is an analogy more relevant to the health organization that is unable to effectively integrate the elements of the system to produce the best outcome for the patient. Subcultures within the organization battle for precious resources at the expense of other subcultures, without concern for the ultimate benefit to all. Creating the capacity to make radical change within the organization begins with a vision that benefits all stakehold- ers and, when effectively communicated and actively demonstrated, results in the “learning organization.” The “collaborative” competen- cies highlighted in Phases 2 and 3 of Figure 18-5 are prerequisite to building a strong and receptive culture that responds to external forces and inspires internal innovation.

Communicating Change Effective leadership communication that reaches all employees is a challenging respon- sibility that must be addressed prior to, during,

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incorporate the purpose of the change initiative with the fit to the overall organization, and the dynamic tensions associated with the change.2

Figure 18-5 addresses the leadership style and competencies associated with effective team building. Issues associated with build- ing change teams require both individual and organizational consideration. Initiatives that overlook or do not include members of the hierarchy, specifically middle management, face the potential for subconscious resistance by these individuals. James Champy declares middle management as the “Death Zone” of radical change if not incorporated into the change process.21 Consequently, the quality of the leadership becomes a factor in the poten- tial effectiveness of the change team.

Poorly designed teams with no clear objective and a limited knowledge of the team’s role in the change process become a liability rather than an asset. Before engaging teams in the change process, the organization should conclude that:

■ The team approach is the most appropri- ate strategy.

■ The team members have been adequately trained in the dynamics of problem solv- ing and process management.

■ Employees are accustomed to working in teams and understand the ground rules and methodology of conflict resolution.

■ The organization possesses essential tech- nology to support the team communica- tion needs.18

Criteria for selecting individual team mem- bers should be relative to the assigned tasks. While the overall change team is responsible for receiving and integrating the recommendations of the subordinate teams, the membership should also be diverse and represent the primary stake- holders. Teams should be functional in size and represent diverse skill sets. Large teams become more difficult to manage and are typically less effective than smaller ones. However, if the team is too small to represent the needed diversity of the group, effectiveness is compromised.

monitoring the front-line staff and listening to their feedback. Focus groups and surveys are effective tools to ensure that what was commu- nicated and what was interpreted are the same. Independent communication teams within the organization also provide an opportunity for front-line staff to express misunderstood com- munication or seek clarification.18

Although the formal action plan is a critical part of the effective change commu- nication process, the informal communica- tion links cannot and should not be ignored. Information from the top down is slow and typically communicated in writing through newsletters, bulletin boards, or policy releases, which are seldom read with any confidence of understanding the implications of the pro- posed changes for the individual employee. However, the “grapevine” flourishes when information is slow or organizational change is evident. Unfortunately, the information pro- cessed through the “grapevine” is seldom the message that management wants to convey. Consequently, it is important to monitor the informal channels and respond quickly when information is incorrect or misinterpreted.19

Simply communicating the facts is not sufficient to influence behavioral change. Transformational leaders communicate in a way that shifts the thinking and understand- ing of others. Bennis and Nanus refer to this as “meaning through communication.” An open dialogue between and among various ele- ments of the organization is essential to ensure commitment to the change. Communication should not just share facts and data but chal- lenge the way the members of the organization view things, incorporating the lives of individ- uals into the change initiatives.20

Building Change Teams One of the more effective strategies for com- municating and initiating radical change is the development of change teams. Team develop- ment is designed to produce an outcome, not provide input to the process. Effective teams

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many different tools available to monitor and adjust the change initiatives. However, Phase 5 of the process is critical if the change is to be sustained as a “way of life” in the informal organization. Hospitals function 24 hours a day, 7 days a week. Each shift within the sched- ule represents a separate and unique informal group which requires individual consideration when institutionalizing change. Consequently, feedback groups and surveys will be essential to test the effectiveness of the change process. Monitoring should not be restricted to inter- nal quantitative measures but include both external stakeholders and industry compet- itors. Externally, the transformation should link the organization to the community and not just to the patients they serve. Internally, the board and senior management of the orga- nization must learn to practice “CEO curios- ity.”16 That is, asking, “Are we doing what we should be doing, or are we doing what we want to be doing?” This and other questions establish a basis for the question, “Do we need to change?” If the answer to that question is “yes,” the next question must be, “Does our organization have the capacity to change?” If the process described by Figure 18-5 has been effectively applied, a natural process of con- sistent decision making will occur. In either event, the organization must never assume an accurate understanding of the external forces that influence radical changes.

Organizational Sustainability As described by James Johnson in the Handbook of Health Administration and Policy, there is no panacea for health organizations, but instead a systematic approach to analyze an organization’s situation and develop appropriate responses to improve is called for.22 This certainly is the case with organizational sustainability.

The health organization leader, as a systems thinker and critical thinker, will deploy creativity, intelligence, and wisdom to assure success and long term viability for the organization.23

Effective teams function best when the project goals are clearly defined and to some extent measurable within the time frames allotted. When team members understand their respective roles and responsibilities, and how they integrate with the overall change plan, they tend to be more productive, more innovative, and are more likely to champion the change initiatives. Although subordinate change teams representing the various depart- ments of the health system are not in a posi- tion to change the entire organization, their successful contribution to the process spurs others to accept and contribute to the overall process. Competencies from Phases 3 and 4 define the most effective skills leaders must employ in this process. Note that the applica- tion of these competencies begins to integrate the transformational style of leadership with the transactional style.

Institutionalizing Change In Phases 4 and 5 of the transformation process (Figure 18-5) the organization begins to incor- porate the recommended changes resulting from the assessment and diagnosis of external and internal forces driving the process. The objective is to move the change from “inno- vation” to “an accepted way” of doing things on a day-to-day basis. When consistency in decision making by all elements of the orga- nization is realized, the change is said to be institutionalized.

Medical centers, in particular, can be thought of as multiple organizations within an organization; each with its own set of rules, policies, and decision-making processes, ruled by an informal authority (medical staff ). Unlike other industries, the hierarchy of authority does not necessarily reflect the level of influence, depending on the nature of the decision. Consequently, effective transfor- mational change within a healthcare system becomes difficult to implement and more dif- ficult to measure. The constraints of this chap- ter do not provide for a detailed review of the

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Furthermore, the Word Health Organi- zation has articulated and advocated health systems building blocks for sustainable health organizations and systems. According to John- son, Stoskopf, and Shi in their book Compara- tive Health Systems, these elements, as described in TABLE 18-1, can be deemed as critical success factors (CSFs) necessary to both sustainability and effectiveness.25 If one scales up from the organizational to the larger system (or country) level, these CSFs serve an even larger purpose in informing leaders and policy-makers.

For further description of health sustain- ability, please read BOX 18-1.

▸ Conclusion The whitewater change occurring in health care, inspired by external environmental forces, challenges leaders in the industry to implement radical changes in their organiza- tions. These changes are transforming medical centers from local service industries to global networks of providers. Because of the expo- nential rate of change, organizations are revis- iting the mission vision and values that form their organizational culture and preparing to respond in the short term to competitive and regulatory forces.

Unlike transitional or developmental change, which tends to reposition or adjust systems of operation, transformational change is organization-wide and designed to redefine the organizational behavior of individuals and create a “learning organization.” Organization development practitioners have developed several general models that provide guidance to organizations initiating radical change, each of which utilize common phases of pro- cess development. Although these models do not ensure the success of the initiative, they incorporate competencies unique to each of the phases outlined in the process and provide change leaders a means of monitoring progress toward the objectives. Figure 18-5 represents one alternative to these models.

In their book, The Success Paradigm: Cre- ating Organizational Effectiveness through Quality and Strategy, Michael Friesen and James Johnson emphasize the importance of four cornerstones for success and sustainability. These are vision, focus, quality improvement, and organizational learning. Vision is essential in creating a mental model that can be artic- ulated and shared with others to engage their support and participation. Focus is critical to concentrate the thought, energy, and resources needed for accomplishment of the mission and goals. Quality improvement ensures the use of data in decision making, and organizational learning helps foster adaptation to a changing environment.24

The skills needed are based on systems thinking since the organization is, as explained in Chapter 5, a complex adaptive social system. The leader in their role as strategist and sys- tems thinker must think globally and consider the interdependence of managerial processes, leadership responsibilities, public health com- petencies, and the elements of strategy such as mission, vision, values, goals, and objectives.

Another consideration for the leader in fostering sustainability is the embrace of a “tri- ple bottom line.” Instead of focusing only on the classic bottom line of finances, the leader attends to three concurrent ones: financial viability, social responsibility, and the envi- ronment. By doing so, an organization is more sustainable over a longer period of time. See a diagram of the triple bottom line in FIGURE 18-7.

FIGURE 18-7 Triple Bottom Line

264 Chapter 18 Organizational Change and Sustainability in Health Organizations

Environmental

Social Economic

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integrated relationship of idea exchange that when selectively defined enhances the poten- tial for organization-wide buy-in of the cul- tural shift. These teams form the basis for the application of systems thinking and the evolu- tion of a learning organization. The learning organization represents the foundation upon which the organization can build a defense to external environmental forces and create inno- vative responses to accelerating change.

It is equally important for leaders to embrace the concept and practices of sustain- ability. Change that is episodic could be detri- mental and not in the long-term interest of the organization and its communities. However, when an approach is informed by systems

Critical to the success of organizational change and learning is the leadership style of the executive and senior managers responsible for change initiatives. Service industries, including health care, have begun to shift from a traditional transactional leadership style to a more transfor- mational style, which encourages participation of everyone in the organization. Attributes of both styles have relevance to radical change and effective leaders balance the application of these competencies throughout the process.

Equally important to effective change is the development of a communication strategy to ensure clear and articulate demonstration of the vision, mission, and goals of the organiza- tion. Communication change teams provide an

TABLE 18-1 Health Systems Building Blocks (Critical Success Factors for Organizational and Systems Sustainability)

Service delivery Medical technology

Good health services are those that deliver effective, safe, quality personal and nonpersonal health interventions to those who need them, when and where needed, with minimum waste of resources.

A well-functioning health system ensures equitable access to essential medical products, drugs, vaccines, and technologies of assured quality, safety, efficacy, and their scientifically sound and cost-effective use.

Health workforce Health financing

A well-performing health workforce is one that works in ways that are responsive, fair, and efficient to achieve the best health outcomes possible, given available resources and circumstances (i.e., there are sufficient staff, fairly distributed; they are competent, responsive, and productive).

A good health financing system raises adequate funds for health, in ways that ensure people can use needed services and are protected from financial catastrophe or impoverishment associated with having to pay for them; it provides incentives for providers and users to be efficient.

Health information Leadership and governance

A well-functioning health information system is one that ensures the production, analysis, dissemination, use of reliable and timely information on health determinants, health system performance, and health status improvements.

Data from World Health Organization. The WHO Health Systems Framework. http://www.wpro.who.int/health_services/health_systems_framework/en/. 2016.

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http://www.wpro.who.int/health_services/health_systems_framework/en/

Review/Discussion Questions 1. Organization development practitioners

have identified six key trends related to change. Using these trends, compare and contrast the healthcare and non-health- care service industries.

2. Define “change.” Distinguish between transitional (incremental) change and transformational change. Give examples of each.

3. Describe a “change model.” Why are change models important to the trans- formational change initiatives?

4. What role does leadership play in creat- ing a “capacity for change” throughout the organization?

5. What is meant by “institutionalizing” change? How do organizations assess the effectiveness of this process?

6. What is a “learning organization”? Why is this concept important to the trans- formational change process?

7. What challenges face the leader of a CCT? 8. Describe the phases of a discontinuous

(cyclical) change model. Why is the dis- continuous nature of these models rele- vant to transformational change?

9. Discuss sustainability and identify var- ious ways organizations can utilize the triple bottom line approach.

References 1. Drucker P. Post Capitalist Society. New York, NY:

Harper/Collins; 1993. 2. Atchison T, Bujak J. Leading Transformational Change:

The Physician-Executive Partnership. Chicago, IL: Health Administration Press; 2001.

3. Giles RR, Anderson DA, Erickson KM, Mitchell JB. Remaking Health Care in America: Building Organized Delivery Systems. San Francisco, CA: Jossey-Bass; 1996.

4. French W, Bell C. Organization Development: Behavioral Science Interventions for Organization Improvement. 6th ed. Upper Saddle River, NJ: Prentice Hall; 1999.

5. Rothwell W, Sullivan R. Practicing Organization Development: A Guide for Consultants. 2nd ed. San Francisco, CA: Pfeiffer; 2005.

thinking and sustainability, the organization and/or larger health system is more likely to shape its own future in ways beneficial to all involved and with the resilience to continue on in the important work of health.26

BOX 18-1 Sustainability in Health Systems

Dr. George Velez Sustainability uses the triple bottom line

of financial viability, social responsiveness, and environmental responsibility and applies systems thinking to the strategic development of sustainability efforts. This is a critical component for health systems to integrate holistic strategic processes to support sustainability efforts of initiatives, services, and the mission of the organization as a whole. A health organization is a microcommunity living within a larger community. Hence, the sense of culture and community, stewardship, and neighborliness are essential components of most healthcare system sustainability strategies. Healthcare systems in the near future will confront several critical issues on multiple levels. These issues are not unique to health care but certainly will drive urgencies and opportunities in the years to come. Some examples of these critical issues are significant changes in the aging of the population, in family structure, and in employment patterns that will influence reimbursement schemes and change traditional healthcare benefits. In view of these challenges, health systems cannot be sustained without addressing the trade-off between restricted resources (financial, people, environmental) and reaching overall health policy goals within the context of community and environmental stewardship. It will be crucial to generate new strategies for controlling the complex mechanisms that affect expenditure and performance of healthcare sustainability while striving for the achievement of core objectives of healthcare policies, such as universal access, high-quality standards, efficiency and effectiveness, adequate funding, and satisfaction of patients.

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16. Senge P. The Fifth Discipline Fieldbook. New York, NY: Doubleday Dell; 1994.

17. Kotter J. Leading Change: Why Transformation Efforts Fail. Boston, MA: Harvard Business Review; 1996.

18. Barrett D. Leadership Communication. Boston, MA: McGraw-Hill/Irwin; 2006.

19. McConnell C, Liebler J. The Effective Healthcare Supervisor. 4th ed. Sudbury: Jones and Bartlett; 2004.

20. Kent T. Leadership. In: Kilpatric A, Johnson J, eds. Health Administration and Policy. New York, NY: Marcell and Dekker; 1999.

21. Champy J. Reengineering Management. New York, NY: Harper-Collins; 1995.

22. Kilpatrick AO, Johnson JA. Handbook of Health Administration and Policy. New York, NY: Marcel- Dekker; 1999.

23. Johnson JA. Introduction to Public Health Organi- zations, Management, and Policy. New York, NY: Cengage; 2013.

24. Friesen M, Johnson, JA. The Success Paradigm: Creat- ing Organizational Effectiveness Through Quality and Strategy. Westport, CT: Quorum; 1995.

25. Johnson JA, Stoskopf C, Shi, L. Comparative Health Systems, 2nd ed. Burlington, MA: Jones & Bartlett Learning; 2018

26. Johnson JA, Anderson D. Systems Thinking for Health Leaders, Organizations, and Policy. Austin, TX: Sentia Publishing; 2018.

6. Zirkle T, Peters G. Healthcare Commentaries: Almanac of Essential Facts. Boulder, CO: Healthcare Commen- taries; 1993.

7. Swayne LM, Duncan WJ, Ginter PM. Strategic Management of Healthcare Organizations. Malden, MA: Blackwell; 2006.

8. Borkowski N. Organizational Behavior in Health Care. Sudbury: Jones and Bartlett; 2005.

9. Rothwell W, Prescott R, Taylor M. Strategic Human Resource Leader: How to Prepare Your Organization for the Six Key Trends Shaping the Future. Alexandria, VA: The American Society for Training and Development; 1998.

10. French W, Bell C. Organization Development: Behavioral Science Interventions for Organization Improvement. 5th ed. Upper Saddle River, NJ: Prentice-Hall; 1993.

11. Rundall T, Starkweather D, Norrish B. After Restruc- turing: Empowerment Strategies at Work in America’s Hospitals. San Francisco, CA: Jossey-Bass; 1998.

12. Aaronson W, Balotsky ER. Community Hospitals and Networks. New York, NY: Marcel Dekker; 1999.

13. Draveky E, Preston J. Managing Change. New York, NY: Marcell & Dekker; 1999.

14. Yukl G. Leadership in Organizations. Englewood Cliffs, NJ: Prentice Hall; 1994.

15. Cameron K, Quinn R. Diagnosing and Changing Orga- nizational Culture. Reading, MA: Addison-Wesley; 1999.

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CHAPTER 19

Organization Development and Crisis Management in Health Organizations

LEARNING OBJECTIVES

■ To better understand the practice of organization development. ■ To better value the philosophy of organization development in a changing world. ■ To identify critical success factors for health organizations in the future. ■ To gain knowledge of organizational crisis management. ■ To know what is involved in leading organizations to sustainability. ■ To learn the steps involved in organizational preparedness. ■ To be aware of trends and transitions in health care.

OVERVIEW

This chapter provides the reader with the opportunity to look at some drivers of the future. These include values, critical success factors for success, the need for sustainability, and organizational preparedness. Within the chapter are suggestions, guidelines, and rationales for the various endeavors and engagements that health organizations may be challenged with—and may also benefit from—as they move forward in an age of uncertainty.

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knowledge and fostering organizational learning are a necessity in the fast-paced information and bio-information world of health care.2

Organization development (OD) is a preferred approach in a growing number of organizations to dealing with change.1 The processes of OD are designed to improve the ability of an organization to deal with changes in its environment, as well as internal changes, in an effective way that also meets the needs of its members. Organization development, more than most approaches, has demonstrated con- siderable success in working through the natu- ral resistance to change we see in organizations. This is in part due to the way OD empowers participants in the change process with under- standing and a commitment to the desired change. It embraces a philosophy of participa- tion, mutuality, and the value of knowledge at all levels of the organization. At the core of any OD effort will be the involvement of employees in developing a commitment to change. This occurs for the following reasons:

■ They are intimately familiar with the cur- rent system and can make valuable contri- butions to the change effort, increasing its chances of success.

■ They become knowledgeable about what will happen as a result of the change, reducing fear of the unknown.

■ They are acting in a way that is support- ive of the change by being a part of the process and their beliefs about the change become more positive.

An excellent resource for further informa- tion on OD is the Organization Development Institute with its international network of practitioners and information dissemination.5

▸ Development in a Changing World

Change is inevitable, and development really is not an option but a necessity. Planned change

▸ Introduction

We are imbedded in an era of major social and cultural change with many challenges compelling us to manage health organizations with greater efficiency, effectiveness, and value.1, 2 Many believe we are engaged in the refinement of the best healthcare system in the world and others foresee that we are on the verge of a major reinvention that either leads to univer- sal care for all or returns us to a time of gross inequality. Regardless of which pathways we choose, what is needed will be knowledge, new tools, skills, technology, policies, and new perspectives. With exponential increases in information, interconnectivity, technological breakthroughs, and scientific discovery, there must be an unwavering commitment to life- long learning and a healthy embrace of change.

Health organizations are fundamentally dependent upon people and require an extensive range of roles to accomplish their tasks and goals.2 Considering the scope and scale of healthcare delivery, the process of leading and managing complex organizations can be daunting. In the leading and managing of health organizations, organizational development, closely tied to orga- nizational purpose, mission, vision, culture, and strategy, becomes a “critical success factor.”2, 3, 4

▸ Development Practice and Philosophy

Organizational development, as previously dis- cussed in Chapter 18, involves assessment of the culture, training and learning needs, and human dynamics across the organization. Thus, health organizations need to manage knowledge appro- priately and create a culture that enables the orga- nization to learn continuously. Organizational purpose, mission, vision, culture, and strategies inform organizational development plans, and those drive group and individual learning and change opportunities. Managing organizational

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their practices are quite dismal. There are few examples of “green hospitals” trying to reduce their environmental impact through energy conservation. This will have to change as soci- ety expects more and as we begin to see the value of operating from the triple bottom line.

Managing Workforce Complexity and Globalization With advances in transportation and inter- national commerce, we see an ever-shrinking world. In fact, the term “global village” is widely used, as we perceive the interconnectedness of today’s diverse societies and organizations. With globalization, new challenges emerge. Recent examples include infectious diseases like Ebola and Zika, along with re-emerging threats such as the Avian Flu and West Nile Virus. Also, there continues to be the threat of terrorism and the possibility of political upheaval.

Globalization also brings with it more immigration and thus a changing workforce. There is increasing workforce complexity. U.S. demographics have dramatically shifted with the increased number of Hispanics and Asians entering the labor pool. Many bring education and skills that can be useful in health organi- zations. Additionally, healthcare delivery must be culturally sensitive to be effective in reach- ing these various populations.

In addition to a more globalized work- force and patient population, there are increas- ing intergenerational demographics. For the first time in history, there are four generations in the workforce. Although this is an exciting time, it is not without challenges. Working with different generations requires patience and understanding. Each generation brings a new perspective, but we need to learn to value the new ideas and embrace the change that each new generation brings. Thus, the health- care manager must help the organization adapt to a more diverse workforce as well as more diversity in the populations being served.

and the managing of change are critical to organizational survival and success.

There are key foci, or what Johnson and others have called “critical success factors” that will gain increasing attention in the coming decades.3, 6

Values Renewal As futurist Ian Morrison asserts, “Health care is in need of renewal, reinvigoration, and lead- ership.”7 We desperately need creativity and innovation, on the one hand, and pragmatic long-overdue execution of well-established ideas, on the other. All healthcare systems are the products of the culture and thus an organi- zational embodiment of societal values. Morri- son identifies these core values in U.S. society as pluralism and choice, individual accountability, ambivalence toward government, innovation, volunteerism, antimonopoly, and competition. The manager is often faced with difficult deci- sions that are opposed to or consistent with these values. Some organizations even conduct a values audit to ascertain their own core val- ues. Others establish a “values statement” that is co-equal to their mission statement. There is also an emerging trend toward values align- ment for organizations to ensure they are doing what they say they are and that initiatives and programs are aligned with all stakeholders.

Creating Sustainable Organizations Health organizations have been slower than other organizations in the business sector to adopt principles and practices of sustainabil- ity. This approach embraces the “triple bottom line,” which means an equal focus on (1) finan- cial viability, (2) social responsiveness, and (3) environmental responsibility. Health orga- nizations have become increasingly adept at managing finances, and their missions tend to be socially responsible in their communities, yet when it comes to environmental practices,

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asserted by Johnson10 and later by Rossow and Johnson,11 these factors include training and education; mitigation of confusion, fear, and panic; time management; building response capacity; and economic empowerment.

Leaders of health organizations need to take responsibility for addressing concerns about the possibility of any of the disruptors described in this chapter. Awareness is the key. Leaders should inform all their key stakeholders, includ- ing their boards and staff, that preventive as well as response policies and programs are under way. This may take place in the form of brief- ings, in-service workshops, simulations and mock exercises, security enhancements, and coordination with local health facilities. Health systems will want to develop disaster plans and crisis management initiatives that help victims and their families remain in the information loop or in some cases to evacuate affected areas. Additionally, the private sector will need to have contingency plans and backup systems to deal with downtime. A robust communication plan for the public will also be essential. There are several “critical success factors” for a health organization to consider, and these should include the following.

Training and Coordination Training is essential for all health person- nel. This could be in the form of awareness enhancement or actual training in disease/

Disaster Preparedness and Crisis Management With the possibility of natural disaster always present and human-made disasters such as terrorism looming in our collective psyche, it is imperative for all organizations to focus on community and organizational prepared- ness. Additionally, organization development, education, and training are necessary, as are inter-organizational exercises and partnerships.

A successful, comprehensive emergency management program of preparedness, res- ponse, and recovery will help the organization through what could be its most difficult chal- lenge. The leader will be center stage during these trying times and can expect to be pulled in many directions by board members, clients, employees, and their own families. If ever there is a time for multi-tasking, this will be it. How- ever, those managers who have an organiza- tion-specific plan will do much better. As we all know, a plan is only as good as its implementa- tion. There will be a need to modify decisions on the ground and to adjust accordingly. This is a kind of organizational improvisation that will call upon all the skills and knowledge addressed in the previous chapters.9 Overall damage can be minimized with adequate preparedness and response. The phases that are likely to be seen are illustrated in FIGURE 19-1.

Several critical success factors for all com- munities should be considered. As described by James Johnson and Allen Johnson9 and further

FIGURE 19-1 The Four Phases of Disaster

BOX 19-1 Critical Success Factors for Crisis Management and Response

1. Health system workforce training 2. Mitigation of confusion 3. Time management (time is critical) 4. Building a response capacity 5. Economic constraints 6. Coordination with local agencies and

other organizations 7. Mitigation of fear and panic

Source: James A. Johnson, Health Organizations, First Edition, 200910

Development in a Changing World 271

Mitigation

PreparednessResponse

Recovery

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might even consider budgeting a “health crisis reserve” for contingency planning.

Mitigation of Fear and Panic There is no better way to decrease stress and anxiety in anticipation of a possible disruptive event, and likewise no better way to control for panic than putting in the requisite time and resources to properly train the workforce and larger community. This should include the design of a crisis-control command center where all communications originate. When there are but a few people directing the response, it tends to minimize panic and maximize effective dis- tribution of information.

Importance of Planning Every health organization, large and small, regardless of geographic location should have a disaster plan or crisis management plan for the population it serves. See EXHIBIT 19-1 for a generic overview with key elements for consid- eration in plan development and implementa- tion. There will be wide variation in the plans based on local culture, political structure, and economics.

▸ Conclusion The world is changing so fast that health orga- nizations and individuals who do not change quickly will become less and less effective. Managers and leaders of health organizations in the 21st century will have to anticipate and create change. They will need to be grounded in organization theory, must be keen observers of organization behavior, and must have the skills and values needed to engage effectively in organization development. They must also be prepared for disruption in the form of cri- sis or disaster, in order to ensure the viability of their organizations and the health of their communities.

agent detection and early intervention. Addi- tionally, the training of “disaster coordinators” could be useful. These individuals can serve as a resource person, advisor, counselor, or orga- nizer. They also could have the responsibility for staying informed and maintaining con- tact networks. Ideally, this coordinator would receive continuing education for periodic updates on skills and knowledge needed to be effective in this role.

Mitigation of Confusion Mitigation of confusion is a critical success factor in managing any crisis. The natural tendency of humans in a state of confusion is to panic. If this occurs, more harm is likely to result. Training, preparedness, and prior discussion of the range of possibilities and response scenarios all help to mitigate con- fusion. Fast, clear communications to all per- sonnel is essential along with the development of roles and responsibilities that are clearly understood and communicated widely.

Time Management Time is critical in all matters pertaining to infectious disease and other potentially life-threatening agents. Early signs, early diag- nosis, early warning to the noninfected, and early intervention all have positive implications for the decreased spread and eventual decreased impact of the disease or harmful substance.

Response Capacity Response capacity may be in the form of a trained workforce, along with needed equip- ment and supplies. It also includes working with local health agencies and other organi- zations to develop a quick response to a cri- sis. There are financial considerations such as cost of training, supplies, equipment, and down time that should be part of the capacity building within the health organization. Some

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Review/Discussion Questions 1. Identify the core reasons for involving

employees in any change process. What happens when you do not?

2. Is organization development a philoso- phy or a practice process? Is it both?

3. Discuss each of the four future foci (val- ues, sustainability, globalization, and pre- paredness). What current events in the world portend the necessity for address- ing these in health organizations?

4. Describe the critical success factors for effective disaster preparedness and response.

References 1. Kilpatrick AO, Johnson JA. Handbook of Health

Administration and Policy. New York, NY: Marcel-Dek- ker; 1999.

2. Johnson JA, Ledlow GR, Kerr BJ. Organizational development, training, and knowledge manage- ment. In: Fried B, Johnson JA, Fottler M, eds. Human Resources in Healthcare: Managing for Success. 2nd ed. Chicago, IL: Health Administration Press; 2005.

3. Friesen M, Johnson JA. The Success Paradigm. Westport, CT: Quorum; 1995.

4. McIlwain T, Johnson JA. Strategy: Planning, manage- ment, and critical success factors. In: Kilpatrick AO, Johnson JA, eds. Handbook of Health Administration and Policy, pp. 637–644. New York: Marcel-Dekker; 1999.

5. Cole D. Organization development institute. http://www .odinstitute.org. Published 2007. Accessed May 6, 2007.

EXHIBIT 19-1 A General Preparedness Plan for Health Systems

Address the following areas in the plan: ■ A collaboration plan including area health care; public health; veterinary, physician, and medical

group practices; and law enforcement with specific preparation action steps (stockpiling appropriate levels of material, training, etc.) and with the local hospital(s)

■ Reporting of incidents and possible incidents and how it will be done ■ Infection control practices and procedures and decontamination procedures ■ A post-exposure management plan for employees (prophylactics and vaccines and a plan to prevent

secondary infections) ■ An off-site contingency operation plan ■ An education plan (prospective and concurrent to an attack) and a public relations plan

Components of an effective response ■ Establish protocols ■ Establish a response command and control structure where critical decisions can be made (should be

community based) ■ Develop and implement a training and awareness program with local healthcare, public health, and

law enforcement officials ■ Ensure surveillance systems are in place

Cost considerations (consider when preparing a budget) ■ Cost of detection devices ■ Cost of personal protection devices such as masks and body covering ■ Cost of vaccines and prophylaxis (antibiotics, etc.) ■ Cost of training: training professionals, resources, and personnel hours ■ Cost of constructing evacuation avenues, decontamination sites, and “safe rooms” ■ Cost of temporary or permanent loss of business and government functionality ■ Cost of securing substitute personnel in case of temporary or permanent loss of regular personnel

Conclusion 273

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http://www.odinstitute.org

9. Johnson JA, Johnson A. Community preparedness and response: The Katrina experience. Soc Sci Perspect J. 2006;33 (1):20–27.

10. Johnson JA. Health Organizations: Theory, Behavior and Development. Sudbury: Jones and Bartlett; 2009.

11. Rossow C, Johnson JA. Health systems in crisis. In: Johnson JA, Stoskopf C, Shi L, eds. Comparative Health Systems, pp. 541–550. Burlington: Jones & Bartlett; 2017.

6. Johnson JA, Breckon DJ. Managing Health Education and Promotion Programs: Leadership Skills for the 21st Century. Sudbury: Jones and Bartlett; 2006.

7. Morrison I. Health Care in the New Millennium: Vision, Values, and Leadership. San Francisco, CA: Jossey-Bass; 2000.

8. Johnson JA, Kennedy M, Delener N. Community Preparedness and Response to Terrorism: The Role of Community Organizations and Business. Westport, CT: Praeger; 2005.

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A absorbing uncertainty, 54 acceptance

as basic desire, 91t of decisions, 69

“accommodating” conflict management style, 125b

accomplishment, 20 Accreditation Manual for Hospitals,

194 achievement

need for, 90 oriented leadership, 68

“achieving the expected,” 56–57 action, motivation for. See individual

motivation action research model, 254, 256f active learning methods, 4–7 active listening, 166 active management, by exception, 71 activities, 217 adaptation to environment, 44 adaptive leadership theory, 72–73 adjourning (in group formation),

101 administrative behavior, 24, 26,

32–33, 36 administrative principles, 26–28 admiration, 71 advancement, 20 affiliation, need for, 90 Affordable Care Act (2014), 188 age construct, 142 age factors, listening, 166–167 Agency for Healthcare Research and

Quality (AHRQ), 108 agents in complex adaptive systems,

52 aggressiveness, 228 aging, in workplace, 198 Alderfer, Clayton, 88

Alexander, 4 alienated individuals, 151 alliance-building (political game),

118 allocation of resources, 139 alternatives, to unethical actions, 216 altruism, 143t ambiguity. See uncertainty ambiguous cultures, 178–179 American Association of Colleges of

Nursing, 149 American College of Healthcare

Executives (ACHE), 7, 210 Code of Ethics, 215b

American Hospital Association (AHA), 258

initiative program, 188 Minority Trustee Candidate

Registry, 189 American Medical Colleges (AMC),

186 American with Disabilities Act

(ADA), 196 amotivation, 89 analysis, 4 analytical leader/manager, 138 analytics methods for making

decisions, 162 anatomy, of theory

code sheets, 15 confounders, 16 constructs, 13 contextual factors, 15–16 measures, 14 operationalizing measures, 14–15 variables, 13–14

Anderson, L.W., 5 animal systems, 37 antisocial behavior, 180 antisocial personality disorder, in

workplace, 180, 181b application, 4, 5

of theory, 19–20

applied ethics, 210 appreciative inquiry model, 254 approaches to organization theory.

See organization theories Aquinas, Thomas, 210–211 Aristigueta, M., 92, 123 Aristotle, 210 army leadership model, 80t art, leadership as, 60 articles of incorporation, 233, 237 artifacts, 219 assertiveness, 125, 228 assessment

approaches to change model, 252f

audience, 163 skills, 213

asset specificity, 39 assignments, film and video, 6 Association of Schools of Public

Health, 7 attention, 138 attitudes

corporate. See organizational culture

teamwork-related, 100 attribution theory, 123 audience assessment, 163 authority

based ethics, 211 legitimate power, 115, 118 political games and, 118–120 types of, 29–30

autocratic leadership, 69 automation, 26 autonomy, 89, 92–93, 212, 223

alignment with management directives, 114

as basic need, 90 ethical principles of, 214

average length of stay (AVLOS), 170 “avoiding” conflict management

style, 125b

Index Page numbers followed by f, t and b indicate figures, tables and boxes, respectively.

275

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case mix index (CMI), 239 case studies, 6 Cashman, J.F., 69 Casper, Weinberger, 140 Categorical Imperative tool, 211 categorical measures, 14 Center for Medicare and Medicaid

Services (CMS), 222 CEO (chief executive officer), 227,

234, 237, 246, 248 role and responsibility of, 176

ceremonies, 217 certainty, in language, 165 challenge, in goal setting, 147 Champy, James, 262 change

inevitability of, 52, 269 managing, 268–273 OD (organization development)

and, 268–273 organizational values and, 270 sustainable organizations and,

270 change management, 268–273. See

also change activities contributing to effective,

255f creating capacity to

assessing need to change, 257–258

building change teams, 262–263

change leaders, 258–259 changing organization culture,

259–260 communicating change,

261–262 identifying change initiatives,

258 institutionalizing change, 263 leadership for change and

development, 259 learning organization, 260 organizational sustainability,

263–264 systems thinking, 260–261

leadership style and competency model, 257f

organizational development, framework for, 253

change models, 254–257 defining change, 253–254 health care’s changing

environment, 253

boards assessments, 244–246 governing. See governing boards priorities, establishing, 244–245

boards of directors/trustees. See governing boards

body language. See nonverbal communication

boss–subordinate relationship, 224, 227

Boulding’s systems typology, 36–37 bounded rationality, 11–12, 32, 33

transaction cost economics (TCE) and, 38–40

Breckon, Donald, 247 bridging of generations, 201 budgeting (political game), 119 build facilitating structures, for

teaming, 104 building change teams, 262–263 Building the Business Case—

Healthcare Diversity Leadership (survey report), 202–203

Bureau of Labor Statistics (BLS), 197, 198

bureaucratic based organization culture, 218

bureaucratic principles, 28–30 Burke, W.W., 254 burnout, 178 Burns, J.

theory of transformational leadership, 70–71

business ethics, 210 etiquette, 212

bylaws, 233–234, 237, 247

C Cameron, Kim, 259 Cantiello, J., 100 care, 5

delivery teams, 101 duty of, 237

Carnegie Museum of Natural History, 140

CAS (complex adaptive systems) characteristics of, 52–54, 53b managing healthcare

organizations as, 54–57

avoiding error, 110 awards, 170 awareness, 271f

B baby boomers, 193, 222 Bacharach, Samuel, 11 Barnard, C.I. See also human

relations theory of formal organization, 31

baseline measures, 18 basic needs theory, 90 Bass’s theory of transformation

leadership, 71 BATNA (best alternative to

negotiated agreement), 127b

“be yourself,” 216 Beebe, S.A.

individualistic versus collectivistic assumptions from, 165t

Begun, James, 50 behavior, individual. See also

individual motivation mimetic, 43 opportunistic, 38–40 power and politics. See power in work environment, 90–95

Herzberg’s theory, 87 Maslow’s theory, 87

behavior phase, 63–64 behavior theories of leadership,

63–73 behavioral attitude, 147 beliefs/values/norms. See also

organizational culture of employees, 217 of formal leaders, 217 of informal leaders, 217

beneficence, 143t, 212 Bethlehem Steel Plant, 24 bias, ingroup, 110 binary (dichotomous) measures,

14, 16 bioethics, 210 biological selection. See population

ecology Blake’s managerial grid, 66 Blanchard, K., 69 Bloom’s taxonomy of educational

objectives, 4–5, 144, 146

276 Index

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comprehension, 4 “compromising” conflict

management style, 126b compulsive organizations, 179 conceptual model, McClelland’s

application of, 19 conceptual models, 12–13, 12f

of nervousness, 16f “concern for people” principle, 71 concordance hypothesis, 187 confidence. See competence and

competency development confirmation language, 164–166 conflict styles, 125–127, 125–126b

regarding concern for self and others, 127f

decision tree (modified), 128f selection of, 127–128

conflict theory, 123–124 in health organizations, 122–131 interpersonal relationships,

128–131 sources, 124–128

conflicts characteristic of human, 123 conflicts of interest, 237 cultural, 178–179 desired management behavior

during, 126, 127b treating as business matter, 216

confounders, 12, 16 controlling for, 16

Confucianism, 3, 212 confusion, mitigation of, 272 connection with others. See

relationships consent agendas, 247 consequentialism, 211 consideration, individualized, 71 consideration structure, 65t

Ohio State leadership studies, 64–65

considered judgments, 214 construct validity, 20 constructs, 13

contextual factors. See contextual factors

consumerization, 198 content, domain of CCM, 149 contextual factors, 12, 15–16

culture. See cultural factors; organizational culture

media richness theory, 164 power and status (cultural), 166

Commission on Accreditation of Healthcare Management Education (CAHME), 5

commitment, 66, 70 in goal setting, 147 lack of, 226 to organization, 94. See also

loyalty committees, governing, 233–235 communicating change, 261–262 communication, 163–172

change through, 262 confirmation language, 164–166 importance of, 31–32 listening, 166–167 patient-centered, 194 social contact, as basic desire, 91t within teams and groups, role

conflict, 105–106 communication change team (CCT),

261 communicative conflict, 124 community, 200 company man, 72 competence and competency

development, 6–7. See also learning; power

as basic need, 90 knowledge. See knowing leadership. See leadership Maslow’s theory of motivation

and, 87 motivation and learning, 95–97 partial competence in leadership,

176 self-actualization needs, 86, 95

competencies, 149, 263 “competing” conflict management

style, 126b competition

between organizations. See population ecology

revenge, desire for, 91t complex adaptive social system, 264 complexity of a system, 36, 47–57,

177–178 population ecology and, 44 postmodern complex adaptive

systems characteristics of, 52–54, 53b managing healthcare

organizations as, 54–57 complexity perspective views of

conflict, 124

organization development and change management, 253

and sustainability in health organizations, 251–266

chaotic nature, of decision making, 158

charisma, 71 charismatic authority, 29 charismatic power, 116

charitable giving committee, governing board, 235

chief executive officer (CEO), 176, 227, 234, 237, 246, 248

chief nursing executive (CNE), 227–228

China, 3 choice, 156–157 Chrisfort, K., 73 Christ, as religious artifacts, 219 clan–based organization culture,

218 clarity, in goal setting, 147 classical theories, of organization,

23–34 administrative behavior, 32–33,

36 administrative principles, 26–28 bureaucratic principles, 28–30 human relations, 30–32 postmodern complexity vs., 47 scientific management, 24–26

clockworks systems, 37 closed systems models, 36 CMI (case mix index), 239 co-evolution, 53b Coase, R.H., 38. See also transaction

cost economics (TCE) Code of Ethics (ACHE), 215b code sheets, 15

example for variable education, 15t

coercive isomorphism, 43 coercive power, 115, 117t cognitive element of institutions, 42 cognitive evaluation theory, 89 cohesion, group, 106 “collaborating” conflict management

style, 125b collaboration, 108, 228–229 “collaborative” competencies, 261 collecting. See saving, as basic desire collectivistic language, 165 “comfort and risk” concept, 192 command, unity of, 27

Index 277

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Deci’s theory of motivation, 88–89 decision making, 155–173

methods for, 156–157, 161–162 normative decision theory of

leadership, 70 optimization of, 160–161 postmodern complex adaptive

systems, 54–55 power from, 116, 117t reality-based models

garbage can model, 158–161 rituals of, 159 theory of hierarchical goals, 33 tools, 161–162, 213–215 willful choice models, 156–157

deficiencies, in services, 197 dehumanization of workplace, 26, 30 demographics of healthcare

workforce, 270 Denhardt, J., 92, 123 Denhardt, R., 92, 123 deontological/duty based ethics,

211–212 Department of Labor, US, 197 departmentalization of work units,

28 dependence on history, 51 dependence on others. See

independence, as basic desire dependency of resources. See

resource dependence theory depressive organizations, 179 descriptive ethics, 210 descriptive language, 165 design of facilities, 139 design of organizational structure,

139 design of systems and procedures,

139 desires

list of (Reiss), 91t reward power, 115, 117t

developmental change, 254, 264 Dewey, John, 6 Diagnosing and Changing

Organizational Culture (book), 259

dichotomous (binary) measures, 14, 16

didactic classroom learning, 6 dilemma resolution. See problem

solving directive behavior, 69 directive leadership, 68

training and coordination, 271–272

criticism. See feedback cross-function team, 101 Crossing the Quality Chasm: A

New Health System for the 21st Century, and Systems Thinking for Health Systems Strengthening (report), 49

CS (complexity science). See complexity of a system

cultural competence, 130, 187, 201 communication, 164–166 defined, 199 to minimize care disparities, 198

cultural construct, 141–142 cultural disparities, 245 cultural diversity, 191 cultural factors. See also

organizational culture ambiguous and conflicting

cultures, 178–179 groups and teams. See group

dynamics leadership and, 60 motivation and, 96

cultural patterns, domain of CCM, 149

culture, 90 change in, 218 defined, 130, 138 embedding/reinforcing

mechanisms of, 138–139 ethics focused, 219 factors that influence, 216–218 levels of, 219 purpose health organizations,

218–219 curiosity, 102

as basic desire, 91t cybernetic (thermostat) systems, 37 cynicism, 178

D Daft, R.L.

division of organization subgroups, 218

Daniel, M., 222 Data Warehouse system, 168 de Vries, Kets, 179 debate, 6

contingency leadership, 66–68, 76t contingency theory, 37–38, 66–68

institutional theory vs., 42 SARFIT model, 38

contingent reward, 71 continuous measures, 14 continuous quality improvement

(CQI), 258 controlling communication, 165 controlling, for confounders. See

confounders Convention on the Rights of Persons

with Disabilities (CRPD), 196

conversational style, cultural differences in, 165

cooperative relationships, 31 cooperativeness, 125 coordinated management of

meaning (CCM), 149 coordination, 108

of work, 27 coordinators, disaster, 272 Coppola, N., 10, 141 cost. See also transaction cost

economics (TCE) of care, 108 reduction goals, 168

Council on Education for Public Health (CEPH), 7

counter-insurgency (political game), 118

coupling in organizations, 159 craftsman, 71–72 creative actions, 56–57 creative thinking, 197 creativity, 102 creep, theoretical, 140 criteria for selection and dismissal,

139 critical success factors (CSFs), 264,

270, 271 coordination with other

organization, 271 for crisis management and

response, 271b economic constraints, 271 in health systems, 49t mitigation of confusion, fear and

panic, 272 for organizational and systems

sustainability, 265t response capacity, 272 time management, 272

278 Index

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emotions. See also nonverbal communication

transformational leadership, 70–71

trust, teams and groups, 105. See also conflicts

empire-building (political game), 119

empiricism, 13 employee orientated leadership, 65 entrepreneurial organizations, 138 environmental changes, impact of,

241 environmental construct, 142 environmental impact on

organization, 264. See also modern theories, of organization

adaptation to environment, 44 co-evolution of complex adaptive

systems, 53b interdependence with resources,

40–41 environmental responsibility, 270 episodes, domain of CCM, 149 Equal Employment Opportunity

Commission (EEOC), 189 equality in language, 165 equilibrium, impossibility of, 52 equity, 71 equity theory, 92, 93 ERG theory, 88, 88f error avoidance, 110 Erwin, C., 108 espoused values, of organization,

219 esteem needs, 87 ethical behavior, 215 ethical conflict, anticipating, 214 ethical principles, 214

and organizational values, 214 ethical questions, for clarification,

214 ethical theories, 214 ethics, 149

defined, 210 of management. See value

systems ethics and values, in health

organizations, 209–219 code of ethics, 215 decision making tools,

213–215 ethics defined, 210

true meaning of inclusion and, 191 in workforce, 270

Diversity & Disparities: a Benchmark Study of U.S. Hospitals, 202, 245–246

diversity not valued, in team, 108 Diversity Wheel, 190, 190f, 191 division of work. See administrative

principles Donabedian, A., 142 Donaldson, L., 38. See also SARFIT

(structural adaptation to regain fit) model

dramatic organizations, 179 Drenkard, K., 228 drivers style, of leadership, 73 Drucker, Peter, 252 duties of care, obedience, and

loyalty, 237 dyadic relation, 69 Dynamic Culture Leadership (DCL)

model, 134–140, 135f, 136f explanation of leadership–

management continuum, 136t

explanation of science–art continuum, 137t

dynamic structure, 51–52 dysfunction, in health organizations,

175–184 dysfunctional responses, 226

E eating, as basic desire, 91t economic gain, of health care

organization, 218 economic stability, 200 Edmondson, Amy, 102–104 education, 200 effectiveness, group

burnout and understaffing, 178 leadership and. See also leadership

contingency theory, 66–68 egoism, 212, 228. See also

self-esteem Egypt, 3 Electronic Health Records (EHRs),

168, 170, 172, 222 embedding mechanisms, 138–139,

151 emergence, 53b

directness, 124 directors, boards of. See governing

boards disability, and workplace, 195–197 disaster

coordinators training, 272 four phases of, 270, 271f preparedness and crisis

management, 271 discipline, 102 disclosure, 129 discrimination, 189 disparities, 203

in healthcare organizations, 199–201, 200f

dissatisfaction. See satisfaction diverse leadership, 199, 203 diversity

agents in complex adaptive systems, 53b

aging in workplace, 198 business case for, 187–190

role of governance, 188–190 components of effective program,

200–201 Building the Business Case—

Healthcare Diversity Leadership (survey report), 202–203

Diversity & Disparities: a Benchmark Study of U.S. Hospitals, 202

cultural, 96 definitions, 188, 191 disability and workplace,

195–197 gender, 96 in healthcare leadership, 201–203 impact of prejudice, 192 impact on care delivery, 198–201 management of

experiential, 193–194 gender, 193 generational, 193 in LGBTQ community,

194–195 of organization, drive away from,

43 and organizational culture

in health organizations, 185–203

and performance, 194 programs, 186, 200–201 in teams and groups, 104–105

Index 279

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garbage can model, 158–161 gender

diversity, 96, 193, 245–246 expression/identity, 195

General and Industrial Management (book), 27

general systems theory, 36–37 Generation X, 193 generational diversity, 193 genetic-societal systems, 37 Gentile, M.

insights/tools to encounter unethical behavior, 215–216

Geronimo (leader), 60 Getting to Yes: Negotiating Agreement

Without Giving In (book), 126

Ghoshal, S., 40 Gilbreth, L., 25–26 “global village,” 270 global warming, 261 globalization, 270 goal setting, 93

conflict. See conflicts five principles of, 147 motivation and, 94 pursuing self-serving interests,

157 teams and groups, 101

governance governance, 249 nominating committee, 234 role of, 188–190

governing boards administrator roles, 238t assessment, 244–246 bylaws, 233–234, 237 CEO and, 234, 237, 246, 248 changing models, 243 clinical representation, 246 committees, 234–235

charitable giving committee and foundation board, 235

executive committee, 234 finance committee, 234 governance/nominating

committee, 234 quality committee, 234–235 strategic planning committee,

235 development, 247–248 education for members, 246–247 effective governance by, 244 failure in governing, 246

garbage can decision-making model, 159

in goal setting, 147 reward and coercive power, 115,

117t female, in healthcare organization,

193 fiduciary duties of governing boards,

237–239 Fiedler, F.E., 66–68 Fifth Discipline, The (book), 261 film and video assignments, 6 filtering of group communications,

104 financial oversight, by governing

boards, 234, 239 financial ratios, 168 financial viability, 264, 270 Fink, L.D.

taxonomy of significant learning, 5–6

flight, decisions by, 160 focal person, in teams, 104, 105 focus groups, 262 focusing, 264 force field analysis model, 254 forecasting, strategies based on,

55–56 formal statements, 139 formation of groups and teams,

100–101 forming, in group formation, 100,

148 Fottler, M.D., 101 foundation boards, 235 foundational knowledge, 5 frameworks systems, 36–37 Franklin, Benjamin, 218 freedom. See independence, as basic

desire Freeman, J., 44 frequency of communication, 129 frequency of transactions, 39 Fried, B.J., 101 Friesen, M., 139, 264 funding, inadequate, 197

G Galbraith, J., 38 games, political, 118–120 gamesman, 72

focused culture, 219 institutional ethics committee

(IEC), 213 leadership, 215 organizational ethics, 213 principles, 212 theories, 210–212

ethnicity. See cultural factors Eudaimonia concept, 210 evaluation, 5 evaluative language, 165 exception, management by, 71 executive committee, governing

board, 234, 237 executive function, 28 exhaustion, 178 existence, need for, 88 expectancy theory, 68, 88, 94

House’s path-goal model, 68 expected results, achieving, 56–57.

See also stakeholders, in health organization

expense-per-episode metric, 168 experiential diversity, 193–194 experiential learning, 6 experimentation, 56 expert power, 115, 117t, 119 expertise, 252

political game, 119 exploitation of power, 52 External Control of Organizations:

A Resource Dependence Perspective, The (book), 40

external environmental changes, impact of, 241

external laws, 216 extrinsic motivation, 87, 89

cultural factors, 96 organismic integration theory

(OIT), 89–90 in work environment, 92

F face/construct validity, 20 faith-based theories, 211 falsification, 18 family, as basic desire, 91t Fayol, Henri, 27. See also

administrative principles fear and panic, mitigation of, 272 feedback. See also communication

280 Index

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processes, 171–172 profitability, 168–170

health information technology (HIT), 171–172

Health Organizations (book), 178 health organizations, 200

ambiguous and conflicting cultures, 178–179

building blocks, 265t complexity and work intensity,

177–178 conflict theory and interpersonal

dynamics in, 122–131 controlling costs and quality of,

218 critical success factors, 49t decision making, analytics and

communication in, 155–173 diversity and organizational

culture in, 185–203 diversity initiatives in, 187–189 ethics and values in, 209–219 forces that influence culture,

216–218, 217f governance and board

development, 232–249 groups and professions, 176–177 human behavior and motivation

in, 85–97 influence and responsibility of,

180 management and organizational

dysfunction, 179–181 model of forces and factors that

influence culture of, 217f models of leadership strategy and

influence for, 133–153 organization development and

crisis management in, 268–273

organizational change and sustainability in, 251–266

organizational decline, 179 organizational well-being,

181–182 pathology and dysfunction in,

175–184 personality and social types in,

180 physician/clinician leadership in,

221–229 politics in, 113–121

elements of playing politics, 118

teaming, 102–104 types of healthcare teams,

101–102 typology of healthcare teams,

101 in-groups and out-groups, 69 interpersonal relationships, 32 leadership theories. See leadership performance and group

effectiveness, 106–110 common barriers and negative

outcomes of, 108–110 states knowledge about,

106–108 team training, evaluation and

research, 108 power and politics. See power relationships. See interpersonal

relationships roles, diversity, and trust, 104–105 socialization, role conflict and

group cohesion, 104–106 and teams in health organizations,

99–111 group level of organizations, 101 grouping work based on process. See

administrative principles groupthink, 110 growth, need for, 88 guardians style, of leadership, 73 Gulick, L., 27–28

H Hackman, M.Z., 71 Hammurabi code, in Babylonian

cities, 3 Handbook of Health Administration

and Policy, 10, 263 Hannan, M.T., 44 Hannibal, 4 Hawthorne studies, 30–31. See also

human relations health

defined, 181 financing/information factor, 49t managing equity in LGBTQ

community, 194–195 Health Analytics Adoption, 4Ps of,

167f patients, 170 populations, 170–171

gender representation, 246 in health organizations, 232–249 independence, 248 meeting format, 235 member composition, 245 paid vs. unpaid, 248–249 performance self-assessments,

245 relationship with medical staff,

242 roles and responsibilities,

233–234, 245, 247 fiduciary, 237–239 financial oversight, 234, 239 operating oversight, 239 patient care and resource

utilization oversight, 241–243

strategic oversight, 239–241 senior management and, 237,

240–241, 241–243 separation of board chairperson

and CEO, 248 structure, 233–235, 247

Graber, David, 181 Graen, G.B., 69 Grashow, Alexander, 72 great groups, 147 “great man” theories, 61, 74t Great Wall of China, 4 Greece, 4 “green hospitals,” 270 Greenleaf ’s servant-leader, 71 gross profit margin, 169 group

decision-making in leadership, 69 phenomenon, 110 polarization, 110

group dynamics. See also individual motivation; relationships

ambiguous and conflicting cultures, 178–179. See also conflicts

defining groups and teams, 100 formation of groups, 100–101 group phenomenon, 110 group processes

group cohesion, 106 role conflict, 105–106 socialization, 105

groups and teams in health organizations

high-performing work teams, 102

Index 281

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individualized consideration, 71 individuals, conflict between. See

conflicts Industrial Revolution, 4 ineffectiveness, feeling of, 178 inertia, structural, 44 inevitability of change, 52, 269 influence. See power information

determining, 245 limits, 50–51

making decisions with, 32 sensemaking, 54–55 uncertainty reduction and

absorption, 54 power, 116, 117t processing, 38 richness, 164

Information Silo, 168 infrequent communication, in team,

108 ingroup bias, 110 initiating structure, 64, 65, 65t Inpatient Prospective Payment

System (IPPS), 222 inspirational motivation, 71 institution, defined, 42 institutional theory, 41–43 institutionalizing change, 263 instrumentality, 68, 88 insurgency (political game), 118 intangibles, 259–260, 260f integrated theoretical model, 141 integration, 5 integrative learning, 7–8 integrators style, of leadership, 73 intellectual stimulation, 71 intensity of work, 177–178 intentional decisions. See willful

choice models for decision making

inter-professional care delivery teams, 101

inter-professional collaborative practice domains, 150f

inter-professional communication, 150

inter-professional team model (PAARP), 134, 144–152, 146f, 152f

assemble and charter, 148 clinical inter-professional skills,

149–151 perform, 151–152

House’s path-goal theory (1971), 68, 76t

human behavior, and motivation in health organizations, 85–97

human dimension, 5 human diversity, 191 human relations, 24, 30–32. See also

relationships theory, 30

human systems, 37 humility, 102 hygiene factors (Herzberg’s theory),

87–88 hypothesis, 17–18, 18f

I idealism, as basic desire, 91t identity, group, 106 ignorance. See uncertainty imperfect decision making, 160–161 importance of decisions,

determining, 161 improvisation, 56, 271 in-group of subordinates, 69 in-house training, 182 inadequate funding/resources, 197 inclusion, 129, 187

and diversity impact on care delivery, 198–201

managing, in LGBTQ community, 194–195

true meaning of diversity and, 191 indebtedness, 71 independence, as basic desire, 91t individual-based power, 115–116 individual behavior. See behavior,

individual individual cultural construct,

141–142 individual decision-making in

leadership, 69 individual leaders, 135 individual level of organizations,

101 individual motivation. See also

group dynamics burnout and understaffing, 178 House’s path-goal model, 68 in leadership. See leadership

individual preference, 159 individualism in language, 165

Mintzberg’s political games, 118–120, 120f

preparedness plan for, 273b sources of power in, 117t

individual based, 115–116 resources, 116 structural based, 116

stakeholders in, 257, 258 sustainability in, 266b ten core knowledge areas for

managing, 7b treatment and prognosis, 182–183

health professionals, sources of power for, 117t

Health Resources and Service Administration (HRSA), 186

health workforce factor, 49t healthcare quality, 242–243 Healthy People 2020, 199 Heifetz, Ronald, 72 Hersey-Blanchard’s situational

leadership theory, 69–70 Hersey, P., 69 Herzberg’s theory of motivation,

87–88 hierarchical goals, theory of, 33 hierarchy of needs (Maslow), 86–87,

86f, 95 hierarchy of systems, 37, 39 “high-high” leaders, 66 high-performing work teams

characteristics of, 103t personnel values of, 102

“high quality” concept, 135 high-status context, 166 higher-level thinking, 4–6 Higher Order principles, 141 Higher Powers, 141 history dependence, 51 Hitler, Adolf, 141 Hofstede’s individualistic vs.

collectivistic assumptions, 165

homogeneity, in organizations, 43 honesty, 102, 129 honor, as basic desire, 91t Hospital Trustee Professionalism

Program, 188 Hospital Value-Based Purchasing

(HVBP), 222 hospitals

as community assets, 240 governance, and operational

structures, 242f

282 Index

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healthy lessons for, 183t Katz’s skills theory of, 66, 75t Kouzes and Posner’s leadership

framework, 79t leader-member exchange (LMX)

theory, 69 and management roles, 130–131 managerial and strategic

leadership model, 79t managerial grid, 66, 75t McGregor theory of, 62–63, 74t models/theories. See leadership

models modern trait phase, 62 normative decision theory, 68–69,

77t Ohio State leadership studies, 74t

consideration, 64–65 initiating structure, 65t

organizational theory, 59–80 path-goal theory, 68–70, 76t personality and organization

theory, 75t and pitfalls, effective physician,

225–226 power and politics. See power process, 139 psychoanalytic model of

leadership, 71–72, 75t responsible for cultural

competence, 194 results-based leadership, 80t situational leadership theory,

69–70 style, 67, 73, 151, 257f team assessment, 136, 137f tests and measures, 144–145t theories of, 61–73

contingency and situational theories, 66–68

great man and trait theories, 61 traditional tools for measuring,

143–144 training programs, 227 trait theory, 61–62, 74t transformational, 70–71, 78t University of Michigan Studies,

65–66, 75t vertical dyad linkage (VDL), 69,

77t Warren’s ministry L-model, 79t

leadership models, 74–80t Dynamic Culture Leadership

(DCL), 134–140

Johnson, S.M., 73 jungle fighter, 72 justice, 212

K Kaiser Foundation Health Plan, 224 Kant, Immanuel, 211 Katz’s skills theory of leadership,

66, 75t King Nebuchadnezzar, 3 knowing, 55. See also learning

desire for (curiosity), 91t information power, 116 knowability limits, 50–51

making decisions with, 32 sensemaking, 54–55 uncertainty reduction and

absorption, 54 knowledge, 4

teamwork-related, 100 Kotter, John, 261 Kouzes and Posner’s leadership

framework, 79t Krathwohl, D.R., 5

L Landry, A., 108 language, 218 Lawrence, P.R., 37–38. See also

contingency theory leader-member relations, 67

exchange theory (LMX), 69 leadership

adaptive leadership theory, 72–73 army leadership model, 80t assessment tools, 182 behavior phase, 63–64 for change and development, 259 change in, 258–259 characteristics of, 135 charismatic leadership model, 78t competency based leadership,

70, 78t contingency phase, 66–68, 76t defining, 60–61 developing skills, 226 dysfunction and pathology, 176 and governance factor, 49t “great man” theories, 61, 74t

responsibilities of leadership when forming group, 146–148

interaction, political. See politics, in health organizations

interconnections, in complex adaptive systems, 53b

interdependence, of resources and environment, 40–41

interdisciplinary education, 229 intergenerational demographics, 270 internalization hierarchy, 39 International Classification of

Functioning, Disability and Health (ICF), 196

interpersonal dynamics, in health organizations, 122–131

interpersonal relationships, 32, 128. See also relationships

factors to strengthen, 129–130 leadership and management roles,

130–131 interpersonal skills, 213 interrole conflict, 106 intersender conflict, 106 interviewing, healthcare executives,

6 intrarole conflict, 105 intrasender conflict, 105 intrinsic motivation, 87, 89

elements of, 92, 93f intrinsic needs and motivation

cultural factors, 96 in work environment, 92

Introduction to Public Health Management, Organizations, and Policy (book), 181

intuitional ethics committees (IEC), 212, 213

isomorphism, 43

J Jago, A.

normative decision theory, 68, 77t job overload, 178 job satisfaction, 94–95 Johnson, C.E., 71 Johnson, J., 3, 48, 139, 181, 247, 264

key concepts for effective teams, 101

on systems thinking, 50

Index 283

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governing boards and senior, 234–235, 237, 241–243

in postmodernist complex adaptive systems, 54–57

teams for, 101 managerial and strategic leadership

model, 79t managerial conflict, 124 managerial grid, 66, 75t managers, comparison of physicians

and, 223t Managing Human Behavior in Public

and Nonprofit Organizations (book), 123

March, J.G., 24, 26, 32. See also administrative behavior

marketplace, 203 Maslach, C., 178 Maslow’s theory of motivation,

86–87, 86f, 95 Masterson, J.T.

individualistic vs. collectivistic assumptions from, 165t

mastery, 93 maturity, of subordinates, 69 Mayo, Elton, 31 McClelland, D.C.

acquired needs model of motivation, 90f

application of conceptual model, 19f

McDaniel, Ruben, on complexity theory, 50

McGregor’s leadership theories, 62–63, 74t

meaning through communication, 163, 262

measurement tools, for leadership, 143–144, 144–145t

measures, 14 baseline, 18 code sheets, 15 operationalizing, 14–15 quality of care, 242

mechanical approach to organizations, 24

mechanization, of people, 26 media richness theory (MRT), 149,

164 medical affairs committee, hospital,

235, 242 medical errors, 222 medical staff bylaws, 242 medical technology factor, 49t

levels of learning, 4–5 The Leverage Network Inc. (TLN),

188 Lewin, Kurt, 254 LGBTQ (lesbian, gay, bisexual,

transgender, and queer community), 194–195

life scripts, domain of CCM, 149 life stages of organizations. See

population ecology limited information (knowability),

50–51 making decisions with, 32 sensemaking, 54–55 uncertainty reduction and

absorption, 54 line vs. staff (political game), 119 Linsky, Marty, 72 listening, 166–167 LMX (leader-member exchange)

theory, 69 Locke, Edwin, 150 long term risks, 216 loose coupling in organizations, 159 lording (political game), 119 Lorsch, J.W., 37–38. See also

contingency theory low-status context, 166 lower level learning, 5 loyalty, 71

duty of, 237 honor, as basic desire, 91t

LPC (least preferred co-worker), 66, 67

Lunenburg, F.C., 88

M Maccoby, Michael, psychoanalytic

model of leadership, 71–72, 75t

Makary, M., 222 “make it safe,” in teaming, 103 malevolence, 143t management

behavior during conflicts, 126, 127b Yukl taxonomy of, 128

competences, 7 differentiating leadership and,

226 by exception, 71

and health organization influences, 133–153

inter-professional team model (PAARP)

assemble/charter, 148 clinical inter-professional skills,

149–151 perform, 151–152 responsibilities of leadership

when forming group, 146–148

Omnibus Leadership Model (OLM)

constructs of, 140–141 environment construct, 142 higher order construct, 141 individual culture construct,

141–142 model, 142–143 traditional tools for measuring

leadership, 143–144 Leading Change: Why

Transformation Efforts Fail (article), 261

learning, 55. See also competence and competency development; knowing

employee involvement and motivation, 96

sensemaking, 54–55 uncertainty reduction and

absorption, 54 “learning how to learn,” 5 learning organizations, 260 learning–based organization culture,

218 least preferred co-worker (LPC),

66, 67 legal authority, 29–30 legitimate authority

political games and, 118–120 types of, 29–30

legitimate power, 115, 117t political games and, 118–120

Leiter, M.P., 178 Lemieux-Charles, L.

typology of healthcare teams, 101 length of stay, 108 lesbian, gay, bisexual, transgender,

and queer (LGBTQ) community, 195

managing diversity, inclusion and health equity in, 194

Level 5 leaders, by Collins, 182

284 Index

9781284109825_IDXx_Print.indd 284 27/07/17 1:08 PM

N National Cancer Institute (NCI), 48

statement on systems thinking, 49b

National Clinician Scholars Program, 229

natural biological selection. See population ecology

natural law, 210 “nature vs. nurture” debate, 140 needs, 88

hierarchy of (Maslow), 86–87, 86f negative feedback, motivation and,

89, 96 negative hypothesis, 18 negotiation, process of, 126 neighborhood, 200 Nelson, W.A.

proposal for decision making and ethical reasoning, 214–215

neoclassical economic theory, 157 nervousness, conceptual model

of, 16f neurotic organizations, 179–180 newbie status, in organization, 216 newness, as liability, 44 Nightingale, Florence, 180 nominating committee, governing

board, 234 non-routine problem solving, 32 nonlinear interdependencies, 57 non–maleficence, 212 nonparticipating leaders, in team, 108 nonprofit organizations, 248–249 nonverbal communication, 130, 163 normative decision theory, 68–69, 77t normative element of institutions, 42 normative ethics, 210 normative isomorphism, 43 norming (in group formation), 101,

148 null hypothesis, 17 nurses, subculture of, 177 nursing leadership, 227–228 nursing workforce, 246

O obedience, duty of, 237 objective outcomes, 107, 107t occupancy rates, 170

general systems theory, 36–37 institutional theory, 41–43 population ecology, 43–44 postmodern complexity vs., 50 resource dependence theory,

40–41 transaction cost economics

(TCE), 38–40 modern trait theory, 62 mono-chronic time (M-time), 130

cultures, 166 Mooney, J.D., 28 “moral person” aspect, 215 moral psychology, 210 moral reasoning, 213 morality, 212, 214 Moran, P., 40 Morgan, G., 26 Morrison, Ian, 270 mortality, 108 motivation, and human behavior,

85–97 basic needs theory, 90, 90f changes in, 95 cognitive evaluation theory, 89 cultural factors, 96 ERG theory, 88, 88f expectancy theory, 88 and learning, 95–97

cultural diversity and motivation, 96–97

employee involvement in, 96 impact of age and cultural

factors on motivation, 96 organismic integration theory

(OIT), 89–90 and regulation flowchart, 90f self-determination theory (SDT),

88 theories of, 86–90

Deci’s theory of motivation, 88–89

Herzberg’s theory, 87–88 Maslow’s theory, 86–87, 86f, 95 Reiss’s theory, 90

in work environment, 90–95 job satisfaction, 94–95 workplace theories, 91–94

Motivation of Work, The (book), 87 motivators (Herzberg’s theory),

87–88 Mouton’s managerial grid, 66 Muchinsky, Paul, 91 myths, rationalized, 42

Medicare Access and CHIP Reauthorization Act (MACRA), 222

Medicare Severity-Diagnosis Related Group (MS-DRG), 222

Medicare/Medicaid program, 252 meeting agenda, governing boards,

235 member skills, and experience

assessment, 245 mental models, 260 messages. See communication metrics, 168 Meyer, J.W., 42 Michigan leadership studies, 65–66,

75t microaggressions, 192 middle management, as death zone

of radical change, 262 Mill, John Stuart, 211 Millennials, 193, 246 Miller, D., 179 mimetic behavior, 43 minorities, 203 Minority Trustee Candidate Registry

(AHA), 189 Mintzberg’s political games, 120f

alliance-building, 118 budgeting, 119 counter-insurgency, 118 empire-building, 119 expertise, 119 insurgency, 118 line vs. staff, 119 lording, 119 rival camps, 119 sponsorship, 118 strategic candidates, 119 whistle-blowing, 119 young turks, 119–120

misconception, 197 mission–based organization culture,

218 mission/vision statements, of

organization, 219 mitigation

of confusion, 272 to disaster, 271, 271f of fear and panic, 272

model building, 10 models, changing board, 243 modern theories, of organization,

35–45 contingency theory, 37–38

Index 285

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ambiguity and conflict, 178–179. See also conflicts

groups and teams. See group dynamics

management and dysfunction of, 179–181

organizational decline, 179 pathology and dysfunction in,

175–184 physicians as subculture, 176–177 treatment and prognosis, 182–183 twelve forces influencing,

216–218 well-being, 181–182

organizational dysfunction, and management, 179–181

organizational effectiveness, 203 organizational ethics, 210, 213 organizational hierarchical roles, 226 organizational improvisation, 271 organizational mission, 216 organizational performance. See

performance, group organizational preparedness, 271 organizational structure, 216 organizational sustainability,

263–264 organizational theories, 9–21 organizational values, 270 Orlikoff, J., 248 out-group of subordinates, 69 out-of-the box thinking, 197 oversight, decisions by, 160 Oxford Handbook of Organizational

Well-Being, 181

P Pablo, A.L., 159 paranoid organizations, 179 partial competence in leadership,

176 participation in decision making,

158 participative leadership, 68, 69 Pascal Metrics, 222 passive management, by exception,

71 path-goal leadership theory, 68,

76t, 141 pathology, in health organizations,

175–184

sustainable organizations, 270 values renewal, 270

and crisis management in health organizations, 268–273

framework for change, 253–257 and change management, 253 change models, 254–257 defining change, 253–254 health care’s changing

environment, 253 practice and philosophy, 269

Organization for Economic Cooperation Development (OECD), 222

organization politics, 114, 118–120 organization theories

classical theories, 23–34 administrative behavior, 32–33 administrative principles,

26–28 bureaucratic principles, 28–30 human relations, 30–32 postmodern complexity vs., 47 scientific management, 24–26

classification of, 24 leadership, 59–80

chronological review of theory, 61–63

defining, 60–61 phase, 63–73

modern theories, 35–45 contingency theory, 37–38, 42 general systems theory, 36–37 institutional theory, 41–43 population ecology, 43–44 postmodern complexity vs., 50 resource dependence theory,

40–41 transaction cost economics

(TCE), 38–40 organization-wide respect, 201 organizational analysis, 6 organizational behavior. See power organizational change

failure rates of planned, 259 framework for change, 253–257 organizational development,

253–257 and sustainability in health

organizations, 251–266 organizational conflict. See conflicts organizational coupling, 159 organizational culture, 216. See also

cultural factors

OD (organization development), and crisis management in health organizations, 268–273

officers, governing board, 233 Ohio State leadership studies, 74t

consideration, 64–65, 65t OIT (organismic integration

theory), 89–90 OLM. See Omnibus Leadership

Model Omnibus Leadership Model (OLM),

134, 143f, 143t constructs of, 140–141 environment construct, 142 higher order construct, 141 individual culture construct,

141–142 model, 142–143

open communication, 105 open-systems theories of

organization, 36, 37, 44 operating oversight by governing

boards, 239 operational model, 134 operational performance, 239 operational structures, hospital

governance and, 242f operationalized age variable, 14t operationalizing measures, 14–15.

See also measures; variables opportunistic behavior, 38–40 optimization of decision making,

160–161 optimized leadership, 135 orchestrated organizational decline,

179 order, as basic desire, 91t organismic integration theory

(OIT), 89–90 organization citizenship behavior

(OCB), 20 changing, 259–260

organization, desire for. See order, as basic desire

organization development (OD), 252, 253–257

ancient examples of, 4 in changing world, 269–272

disaster preparedness and crisis management, 271

managing workforce complexity and globalization, 270

286 Index

9781284109825_IDXx_Print.indd 286 27/07/17 1:08 PM

managing healthcare organizations as, 54–57

similarities of, 50–52 potential, creating and releasing,

56–57 Powell, J.

self-disclosure levels, 129, 129b power, 52, 113–121

as basic desire, 91t cultural differences in, 166 of leadership position, 66 need for, 90 organizational politics, 114,

118–120 and politics in health

organizations, 113–121 sources of, 114–117, 117f, 117t

individual based, 115–116 structural based, 116

Practice of Adaptive Leadership, The (book), 72

pragmatics, 151 pre-planning, 157 prejudice, impact of, 192 preparedness

to disaster, 271, 271f organizational, 271 plan for health systems, 273b

prestige. See status, as basic desire Principle of Double Effect, 211 problem orientation

(communication), 165 problem solving, 6

conflict management style, 126b getting to yes and ultimate

agreement, 126, 127b in postmodernist complex

adaptive systems, 55 routine vs. non-routine, 32

processes, 171–172 improvement team, 102 skills, 213

production orientated leadership, 65 productivity, 30

motivation and. See individual motivation

satisfaction and, 94 professional advocacy hypothesis,

187 professional development. See

competence and competency development

professional life, recognition of, 216 professional organizations, 20

future leaders, 229 integration beginning from 1990,

224 interdisciplinary education and

practice, 228–229 interpersonal leadership

behaviors, 227 to leader, from, 227 leadership in health organizations,

221–229 leadership training programs,

227 nursing leadership, 227–228 separation of power, 223–224 as stakeholders, 176–177 values and accountabilities,

224–225 physiological needs, 87, 90 physiology, of theory

hypothesis, 17–18, 18f propositions, 16–17, 17f research questions, 18–19 theoretical application, 19–20

Pillars of Institutions, 42 Pink, Daniel H., 92 pioneers style, of leadership, 73 planning, importance of, 55–56,

272, 273b plant systems, 37 Plato, 10, 210 playing politics, elements of, 118 PM (postmodernism). See

postmodernism and complexity science

polarization, group, 110 policies, 93 politics, in health organizations

power and, 113–121 poly-chronic time (P-time), 130

cultures, 166 poor decision making, in team, 108 population ecology, 43–44 population health management

(PHM), 170–171 populations, 170–171 “POSDCORB” acronym, 28 position power, 67 positive feedback, motivation and,

89, 96 positive hypothesis, 17 postmodernism and complexity

science, 47–57 complex adaptive systems

characteristics of, 52–54, 53b

patient care quality, 241–243 patient-centered communication, 194 Patient Rights and Organizational

Ethics, 213 patients, 170

satisfaction surveys, 170 pay-for-performance (P4P), 225 people

-oriented physicians, 178 two dichotomous assumptions

about, 62–63 perceived behavioral control, 147 performance

assessment, 245 effective team, 101 of individual tasks. See scientific

management monitoring by governing boards,

239 phase of PAARP, 151–152

performance, group. See also teams burnout and understaffing, 178 group phenomenon and, 110 leadership and. See also leadership

contingency theory, 66–68 managerial grid, 66 Ohio State leadership studies,

64–65 situational theory, 69–70

performing (in group formation), 101, 148

Perrow, C., 24, 26, 39–40 personal beliefs, 92 personal health, 218 personal mastery, 260 personal satisfaction

job satisfaction, 94–95 motivation and. See individual

motivation within teams and groups, 106

personality, 138 and organization theory, 75t

perspectives, integration of multiple, 56

Pfeffer, J., 40–41. See also resource dependence theory

physical activity, as basic desire, 91t physical work setting, 217 physicians/clinicians

case for leadership, 222 comparison of managers and,

223t effective leadership and pitfalls,

225–226

Index 287

9781284109825_IDXx_Print.indd 287 27/07/17 1:08 PM

resolution, decisions by, 160 resolving conflict. See conflicts resolving dilemmas. See problem

solving resource availability

resource power, 116, 117t for willful decision making, 157

resource dependence theory, 40–41 institutional theory vs., 42

resources, 142 inadequate, 197 utilization, 243

respect, 71 desire for acceptance, 91t in teams and groups, 105

response capacity, 272 determining options for, 214 to disaster, 271, 271f recommending, 214

responsibility, risky shift, 110 results-based leadership, 80t revenge, desire for, 91t revenue cycle management, in

healthcare organizations, 169–170

rewards, 115, 117t expectancy theory, 94 House’s path-goal model, 68 and punishment, 216

“the right to bear arms” propositional statement, 17, 17f

risky shift, 110 rituals, 217

of decision making, 159 rival camps (political game), 119 Roadmap for Hospitals (document),

194 Robert, Kelly, 151 Robert Wood Johnson University

Hospital, 193 role modeling, 139 roles

receiver/sender, 104 and responsibilities, 150 in teams and groups, 104

cohesion and, 106 conflicts among, 105–106 leaders. See leadership relationships. See interpersonal

relationships Roman Empire, 4 romance, as basic desire, 91t

rationale challenging, 216 expose faulty either/or thinking,

216 rationalized myths, 42 Rawls, John, 211

reflective equilibrium, 213–214, 214f

reaction to crisis, 138 readiness, 69–70 readmissions, of patients, 170 reality, 157 reality-based models

garbage can model, 158–161 reasonable accommodation, 196 reasoning ability, 228 “recognize the background,” 214 recognizing style, of leadership, 226 recovery from disaster, 271, 271f recruitment, and retention, 201 reducing uncertainty, 54 referent power, 115–116, 117t reframing, in teaming, 103 regulation of motivation, 95 regulative element of institutions, 42 reinforcement theory, 92, 94 reinforcing mechanisms, 138–139 Reiss’s theory of motivation, 90 relatedness, need for, 88, 90 relational behavior, 69 relationships. See also human

relations cooperative and interpersonal,

31–32 domain of CCM, 149 factors to strengthen, 129–130 importance of, 51 in-groups and out-groups, 69 interconnections in complex

adaptive systems, 53b leader-member relations, 69

exchange theory (LMX), 69 motivation and relatedness, 89 power and politics. See power for resource control, 41 social contact, as basic desire, 91t between variables, testing. See

hypothesis releasing potential, 56–57 representation, 187 res ipsa loquitur (thing speaks for

itself ), 142 research questions, 18–19 “resistance to change,” 252

proficiencies. See competence and competency development

profitability, 168–170, 169 project team, 101–102 propositions, 16–17, 17f provisionalism, in language, 165 psychoanalytic model of leadership,

71–72, 75t psychological needs, 90 Psychological Review (Journal), 86 Psychology Applied to Work, 91 Psychology of Self-Determination,

The, 88 public accountability and reporting,

243 Public Company Accounting

Reform and Investor Protection Act. See Sarbanes- Oxley Act (SOX)

public health, 218 punishment. See feedback purpose, 93

in groups. See roles, in teams and groups

Q qualitative methods for making

decisions, 156, 162 quality

of care, 242 committee, governing board,

234–235, 242 of communication, 163 as construct, 13 of decisions, 69 improvement, 101, 242–243,

264 quantitative methods for making

decisions, 156, 161–162 quantum leadership, 73 questions. See research questions Quinn, Robert, 259

R race. See cultural factors racial discrimination, 189 racial diversity, 194 rational (legal) authority, 29 rational decision making, 69, 156

288 Index

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social justice. See idealism, as basic desire

social loafing, 110 social needs, 87 social responsibility, 258, 264, 270.

See also value systems ambiguous and conflicting

cultures, 178–179 social status, as basic desire, 91t social systems, 37 socialization, 105 societal values, 270 Society for Human Resource

Management, 191 sociopathy, 180 SOX (Sarbanes-Oxley Act), 240 specialization, in administrative

principles approach, 27 specificity of assets, 39 speech, domain of CCM, 149 sponsorship (political game), 119 spontaneity in language, 165 sports

physical activity, as basic desire, 91t

stability, of groups/teams, 106 stakeholders, in health organization,

257, 258 ambiguous and conflicting

cultures, 178–179 limited authority over, 176 teams and groups, 104 theory, 212

standardized decisions, 161 standards of care, obedience, and

loyalty, 237 star followers, 151 status

as basic desire, 91t cultural differences in, 166

stereotypes, 192 stewardship, 71 stockpiling resources, 41 Stogdill, R.M.

Ohio State leadership studies, 64–65, 74t

successful leader traits and skills, 62, 63t

Stoll, C.G., 30 stories and legends, 139, 218 storming (in group formation), 100,

148 strategic candidates (political game),

119

self-regulation of motivation, 95 self-reliance. See independence, as

basic desire self-serving goals, 157 self-understanding, 71 Senge, Peter, 261 senior management and governing

boards, 237, 241–243 sensemaking in postmodern

complex adaptive systems, 54–55

sensitivity, 105 servant leadership, 182

characteristics of, 72b principles of, 71

service delivery factor, 49t service patterns hypothesis, 186 service population, reflection of, 201 shared tacit assumptions, 219 shared vision, 226, 260 “sheep” people, 151 Shiver, J., 100 Shortell, S., 252, 259 significant learning, taxonomy of,

5–6 similarity, of groups/teams, 106 Simon, H., 24, 26, 32. See also

administrative behavior theory of hierarchical goals, 33

sincerity, 129 Sitkin, S.B., 159 situational favorableness, 67 situational leadership theory (SLT), 69 situational updates, 124 situational variables, 68 six-step model, of decision making,

157 size, of groups/teams, 106 skills

development. See competence and competency development

teamwork-related, 100 theory of leadership, 66

SLT (situational leadership theory), 69

small group discussions, 6 SMART mnemonic, 147 Smith, B.E., 193 social contact, as basic desire, 91t social control of work, 31 social determinants of health

(SDOH), 199, 200f social exchange theory, 123–124 social facilitation, 110

Rothwell, William, 255 change process model, 256f

routine problem solving, 32 Ruderman, Jay, 197 “rule of thumb” standards, 25, 26

S sadism, 143t safety needs, 87 Salancik, G., 40–41. See also resource

dependence theory Samaritanism, 218 Samuel, Yitzhak, 179 Santa Fe Institute, 50 Sarbanes-Oxley Act (SOX), 240 SARFIT (structural adaptation to

regain fit) model, 38 satisfaction

job, 94–95 leadership and. See leadership motivation and. See individual

motivation within teams and groups, 106

saving, as basic desire, 91t Schein, E.H., 138–139 schizoid organizations, 180 science, leadership as, 61 scientific management, 24–26

as physiological organization theory, 26

Taylor principles of, 25 Scott, W.R., 26

rational models to natural models, 36

Three Pillars of Institutions, 42 SDT (self-determination theory),

88, 95 self-actualization needs, 87, 95 self-confidence. See competence and

competency development; confidence

self-containment, 28 self-determination theory (SDT),

88, 95 self-directed team, 102 self-disclosure, 129

Powell’s levels of, 129b self-esteem, 87, 95 self-organization of complex

adaptive systems, 53b self-reflection, 192

Index 289

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in healthcare, 101–104 learning, 260 managerial grid, 66 performance and effectiveness,

group phenomenon, 110

roles in teams and groups, 104 cohesion and, 106 conflicts among, 105–106 leaders. See leadership relationships. See interpersonal

relationships socialization, role conflict and

group cohesion, 104–106 technology

listening and, 166–167 oriented physicians, 178

temporal orientation, 130 terrorism, 271 testing relationships between

variables. See hypothesis theoretical creep, 140 theories

anatomy of, 13–16 application of, 19–20 defined, 10–13 falsification of, 18 physiology of, 16–20 scope of, 10

theories, specific basic needs theory, 90 cognitive evaluation theory, 89 ERG theory, 88, 88f expectancy theory, 88 of leadership, 59–80

behavior theories, 63–73 chronological review of theory,

61–63 contingency and situational

theories, 66–70 defining, 60–61 great man and trait theories,

61–62 phases of, 63–73

of motivation, 86–90 Deci’s theory, 88–89 Herzberg’s theory, 87–88 Maslow’s theory, 86–87,

86f, 95 Reiss’s theory, 90

organismic integration theory (OIT), 89–90

of organization (classical), 23–34 administrative behavior, 32–33

characteristics of, 52–54, 53b managing healthcare

organizations as, 54–57 systems

defined, 36 diversity, 191 theory, 123 thinking, 48, 260–261

statement of National Cancer Institute (NCI), 49b

typology of Boulding, 36–37

T Takahashi, N., 159 tangibles, 259–260, 260f task characteristics, 68 task complexity, in goal setting, 147 task division and coordination. See

administrative principles task force team, 102 task performance. See scientific

management task structure, 67 tautology, 13 tax-supported government

programs, 218 Taylor, Frederick W., 24, 32. See also

scientific management Taylor, Robert, 226 Taylorism, 25 TCE. See transaction cost economics team effectiveness

common barriers and negative outcomes, 108–110

common outcome measures, 107t states knowledge about, 106–108 team training, evaluation and

research, 108 Team Strategies and Tools to

Enhance Performance and Patient Safety (TeamSTEPPS) program, 108, 109f

teams, 101–102. See also group dynamics

defining, 100 diversity and trust, 104–105 formation of, 100–101 and group dynamics in health

organizations, 99–111 group phenomenon, 110

strategic oversight, by governing boards, 235, 239–241

strategic planning, governing boards and, 235, 239–241

strategic vision, 226 strategy language, 165 stress

tranquility, as basic desire, 91t Structural Adaptation to Regain Fit

model. See SARFIT model structural-based power, 116 structural inertia, 44 structure as dynamic, 51–52 studying organizations

competency development, 6–7 experiential learning, 6 higher-level thinking, 4–6 integrative learning, 7–8

style of leadership, 67, 73 subcultures, in health organizations,

176–177 subjective norms, 147 subjective outcomes, 107, 107t subordinate characteristics, 68 Success Paradigm, The (book), 139,

264 Sullivan, Roland, 255

change process model, 256f Sun Tzu, 182 superiority in language, 165 support, to groups/teams, 106 supportive behavior, 69 supportive leadership, 68

guidelines for, 131, 131b surveys, 262 sustainability, 210

critical success factors (CSFs) for organizational and systems, 265t

in health systems, 266b organizational, 263–264 and organizational change in

health organizations, 251–266 sustainable organizations, 270 symbolic rituals of decision making,

159 symbols, 217 Syndemics Prevention Network, 48 synthesis, 5 system complexity, 36, 47–57,

177–178 population ecology and, 44 postmodern complex adaptive

systems

290 Index

9781284109825_IDXx_Print.indd 290 27/07/17 1:08 PM

Unterberg, Mark, 180 urgency, 228 Urwick, L., 27–28 utilitarianism, 211

V valence, 68, 88 value systems, 149, 270. See also

organizational culture ambiguous and conflicting

cultures, 178–179 subcultures in healthcare

organizations, 176–177 in transactional leadership, 70

variables, 13–14 confounders, 12, 16 contextual factors. See contextual

factors contingency. See contingency

theory operationalized descriptions of.

See measures testable relationship between. See

hypothesis VDL (vertical dyad linkage), 69, 77t vengeance, as basic desire, 91t veracity, 124, 129 vertical dyad linkage (VDL), 69, 77t Virgin Mary, as religious artifacts,

219 virtual teams, 102 virtue ethics, 210 vision, 226, 264 voluntary charity, 218 von Bertalanffy, Ludwig, 36. See also

general systems theory Vroom, V.P., 88

expectancy motivation theory, 68 normative decision theory, 68, 77t

vulnerability, 105

W Warren’s ministry L-model, 79t Weber, Max. See bureaucratic

principles whistle-blowing (political game),

119 whitewater changes, 253, 257, 258,

264

transaction cost economics (TCE), 38–40

transactional leadership, 70 transcendental leadership, 37, 73 transformational change, 254, 259,

263 transformational leadership, 70–71 transhuman (AI) leadership, 73 transient teams, 101 transitional change, 254, 264 transparency, 124 triangulation methods, for making

decisions, 156, 162 triple bottom line method, 264,

264f, 270 Trochim, W.M., 50 trust, 71, 129. See also conflicts

in healthcare hypothesis, 187 teams and groups, 105

trustees, 233. See also governing boards

Two-Factor Theory, 87–88

U uncertainty

communication and, 164 in decision making, 158 mimetic behavior and, 43 reduction and absorption of, 54

uncontrollable organizational decline, 179

underrepresented minority (URM), 186

undiscovered organizational decline, 179

unethical behavior, in workplace, 215

unexpected events, responding to, 56

uninsured adults, 222 United Nations (UN)

Convention on the Rights of Persons with Disabilities (CRPD), 196

United States (US) Department of Labor, 197 and workforce diversity, 186–190

unity of command principle, 27 University of Michigan studies

(1950), 65–66, 75t unpredictable changes, 253

administrative principles, 26–28

bureaucratic principles, 28–30 human relations, 30–32 postmodern complexity vs., 47 scientific management, 24–26

of organization (modern), 35–45 contingency theory, 37–38, 41 general systems theory, 36–37 institutional theory, 41–43 population ecology, 43–44 postmodern complexity vs., 50 resource dependence theory,

40–41 transaction cost economics

(TCE), 38–40 of organization (postmodern).

See postmodernism and complexity science

SARFIT model, 38 self-determination theory (SDT),

88 “theory building” methodology,

143–144 Theory of Human Motivation, A

(article), 86 theory of planned behavior (TPB),

147, 147f “theory testing” methodology, 144 thermostat (cybernetic) systems, 37 Thomas, R. Roosevelt, 191 Three Pillars of Institutions, 42 360-degree self-assessment, 134 tight coupling in organizations, 159 time

-sensitive communication, 124 decision-making and, 69 in different cultures, 166 management, 272

“time is endless” propositional statement, 16, 17f

Total Performance Score (TPS), 222 total quality management (TQM),

253, 258 Toward a Theory of Task Motivation

and Incentives (book), 150 traditional authority, 29 traditionalists, 193 training. See also competence and

competency development; learning

and education, 216–217 trait theory, 61–62, 74t tranquility, as basic desire, 91t

Index 291

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World Health Organization (WHO), 196, 249

about systems thinking, 49 World Report on Disability, 196

recommendations, 197

Y “yes-people,” 151 Yetton, P.W.

normative decision theory, 68, 77t young turks (political game),

119–120 Yukl, G., 68

taxonomy of managerial behaviors, 128, 131b

Herzberg’s theory, 87 job satisfaction, 94–95 Maslow’s theory, 87 workplace theories, 91–94

work intensity, 177–178 worker-supervisor relationship, 252 workforce

diversity, 186–190, 191 managing complexity and

globalization, 270 training, 271–272 utilization, 201

work–life balance, 201 workplace

aging in, 198 conflict, 123 disability and, 195–197 theories, 91–94

willful choice models for decision making, 156–157

criticism of, 157 Williamson, O.E., 38–39. See also

transaction cost economics (TCE)

Witt/Kieffer healthcare, 202 Wolf, Martin, 88 Woods Johnson Foundation and

Pew Charitable Trust, 259 Word Health Organization (WHO),

264 words, 93

cliques, 31 work environment, motivation in,

90–95. See also individual motivation

Deci’s theory, 88–89

292 Index

9781284109825_IDXx_Print.indd 292 27/07/17 1:08 PM

Cover
Title
Copyright
Dedication
Contents
Acknowledgments
Foreword
Preface
Contributors and Collaborators
About the Authors
PART 1 Organization Theory and Foundations

Chapter 1 Introduction to the Study of Health Organizations

Studying Organizations
Beyond The Classroom

Chapter 2 Anatomy and Physiology of Organization Theory

Introduction
What Is Theory?
Anatomy of Theory
Physiology of Theory
Conclusion
Learning Activities

Chapter 3 Classical Theories of Organization

Introduction
Scientific Management
Administrative Principles
Bureaucratic Principles
Human Relations
Administrative Behavior
Conclusion

Chapter 4 Modern Theories of Organization

Introduction
General Systems Theory
Contingency Theory
Transaction Cost Economics
Resource Dependence Theory
Institutional Theory
Population Ecology
Conclusion

Chapter 5 Complexity and Postmodern Theories of Organization

Introduction
Systems Approach in Health
Complexity Theory in Health Organizations
Emerging Perspectives
Complex Adaptive Systems
Managing Health Organizations as Complex Adaptive Systems
Conclusion

Chapter 6 Organizational Leadership Theory

Introduction
Defining Leadership
A Chronological Review of Leadership Theory
Leadership Phase Evolution
Conclusion

PART 2 Organization Behavior and Dynamics

Chapter 7 Human Behavior and Motivation in Health Organizations

Introduction
Theories of Motivation
Motivation in the Work Environment
Changes in Motivation
Motivation and Learning
Conclusion

Chapter 8 Group Dynamics and Teams in Health Organizations

Introduction
Groups and Teams
Group Formation
Groups and Teams in Health Organizations
Roles, Diversity, and Trust
Group Processes
Performance and Group Effectiveness
Group Phenomena
Conclusion

Chapter 9 Power and Politics in Health Organizations

Introduction
Sources of Power
Politics in Health Organizations
Conclusion

Chapter 10 Conflict Theory and Interpersonal Dynamics in Health Organizations

Introduction
Theories of Conflict
Sources of Conflict
Interpersonal Relationships
Conclusion

Chapter 11 Models of Leadership Strategy and Influence for Health Organizations

Introduction
Strategic Prescription One: The Dynamic Culture Leadership Model
Strategic Prescription Two: The Omnibus Leadership Model
Tactical Prescription: The Inter-Professional Team Model: PAARP
Conclusion

Chapter 12 Decision Making, Analytics, and Communication in Health Organizations

Introduction
Decision Making
Reality-Based Models: Garbage Can Model Overview
Tools of Decision Making
Communication
Conclusion

Chapter 13 Pathology and Dysfunction in Health Organizations

Introduction
Health Organization Groups and Professions
Complexity and Work Intensity
Ambiguous and Conflicting Cultures
Organizational Decline
Management and Organizational Dysfunction
Organizational Well-Being
Treatment and Prognosis
Conclusion

Chapter 14 Diversity and Organizational Culture in Health Organizations

Introduction
The Business Case for Diversity
The True Meaning of Diversity and Inclusion
The Impact of Prejudice
Diversity Management
Managing Diversity, Inclusion, and Health Equity in the LGBT Community
Disability and the Workplace
Aging in the Workplace
Diversity and Inclusion Impact on Care Delivery
Components of an Effective Diversity Program
Diversity in Healthcare Leadership: Two Major Studies
Conclusion

PART 3 Organization Development and Change

Chapter 15 Ethics and Values in Health Organizations

Introduction
Ethics
Ethical Theories
Ethical Principles
Organizational Ethics
Institutional Ethics Committee
Decision-Making Tools
Code of Ethics
Ethical Leadership
Culture
Factors That Influence Culture
Cultural Change
The Purpose of Health Organizations
Cultural Levels
Ethics-Focused Culture
Conclusion

Chapter 16 Physician and Clinician Leadership in Health Organizations

Introduction—The Case for Leadership
Separation of Power
The 1990s—Integration Begins
Physician Values and Accountabilities
Effective Physician Leadership
Physician Leadership—Early Pitfalls
Cultivating Leadership Skills
From Clinician to Leader—Essential Changes in Mindset
Leadership Training Programs
Nursing Leadership
Interdisciplinary Education and Practice
The Future: Physician and Clinician Leaders
Conclusion

Chapter 17 Governance and Board Development in Health Organizations

Introduction
Board Organization
Board Officers
Board Committees
Board Meeting Format
The Relationship Between Senior Management and the Board
Fiduciary Duties
Financial Oversight
Operating Oversight
Strategic Oversight
Oversight of Patient Care and Resource Utilization
Changing Board Models
Effective Governance: Cultures and Activities
Board Assessment
Board Member Education
Board Development
Current Issues and Controversies
Conclusion

Chapter 18 Organizational Change and Sustainability in Health Organizations

Introduction
Organizational Development: Framework for Change
Creating the Capacity to Change
Conclusion

Chapter 19 Organization Development and Crisis Management in Health Organizations

Introduction
Development Practice and Philosophy
Development in a Changing World
Conclusion

Index

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