WEEK 7 DISC

3 1 9

L e a r n i n g O b j e c t i v e s

C H A P T E R 1 3

M A K I N G D E C I S I O N S A N D S O LV I N G P R O B L E M S

A problem well stated is a problem half solved.

John Dewey, philosopher and pioneer of

educational reform

Studying this chapter will help you to

➤ define and describe decision making;

➤ explain who makes decisions;

➤ describe the rational decision-making approach and its limits;

➤ explain the satisficing, intuition, incremental, evidence-based, and garbage can

approaches to decision making;

➤ identify barriers to decision making;

➤ describe sources and uses of data for decision making; and

➤ know how to resolve conflict with decisions.

C o p y r i g h t 2 0 1 9 . H e a l t h A d m i n i s t r a t i o n P r e s s .

A l l r i g h t s r e s e r v e d . M a y n o t b e r e p r o d u c e d i n a n y f o r m w i t h o u t p e r m i s s i o n f r o m t h e p u b l i s h e r , e x c e p t f a i r u s e s p e r m i t t e d u n d e r U . S . o r a p p l i c a b l e c o p y r i g h t l a w .

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M a n a g e m e n t o f H e a l t h c a r e O r g a n i z a t i o n s3 2 0

Here’s WHat HaPPeneD Partners HealthCare faced serious problems in the areas of quality of care and financial risk. At all levels of the organization, managers had to make decisions to solve these problems and resolve conflicts. They had to diagnose problems, consider alternative ways to solve them, and decide which solutions to try. Yet, before they performed these steps, managers first had to decide who should make the decisions and which decision-making approaches to use. Should they use a rational approach, a politi- cal approach, an evidence-based approach, an intuitive approach, or some other approach? After making one decision, managers often had to make other decisions. For example, managers decided to use telehealth to solve the readmission problem— and that led managers to decide when, where, and how to implement the telehealth technology. They had to decide on new positions, responsibility and authority for positions, whom to hire, work schedules, patient care policies, and other matters. Conflict was inevitable, and when some nurses and primary care physicians resisted, the Connected Cardiac Care program managers resolved those conflicts. To do so, they first had to decide which approach to use—accommodating, compromising, collaborating, or something else.

M anagers at Partners HealthCare continually made decisions, solved problems, and resolved conflicts to achieve the organization’s goals and mission. These activities are a big part of what managers do at every level of a healthcare

organization (HCO). Although decisions at higher levels have bigger consequences than decisions at lower levels, managers at all levels make decisions to solve problems and resolve conflicts. Imagine the decisions HCOs are making now in response to the exciting trends and developments described in chapter 1!

Managers make decisions to perform all five main management functions—plan- ning, organizing, staffing, leading, and controlling. Several of Mintzberg’s management roles (discussed in chapter 2) involve making decisions and solving problems: monitor, disturbance handler, resource allocator, and negotiator. Decision making affects manage- ment activities described in other chapters. Conversely, management activities discussed in other chapters affect how decisions are made. For instance, recall that organizing work (chapters 4 through 6) includes centralization and decentralization of authority to make decisions, which affects how decisions are made throughout an organization. Think about how different approaches for leading and influencing (chapters 9 through 11) affect how managers make decisions, solve problems, and resolve conflict.

How do managers make decisions? Well, how do you make decisions? Flip a coin? Throw a dart? Compare pros and cons of several options? Just do what worked before? Follow instincts? Go with the first idea that comes to mind? All of the above? None of the above?

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This chapter explains how managers at all levels of an HCO can make decisions to solve problems and resolve conflicts. First, it describes decision making and identifies the types of decisions managers make. Then it explains several approaches that managers use to make decisions. The main approach, which is based on rational thinking and analy- sis, is not always feasible or realistic. Thus, managers may use other methods, which are explained. Barriers to effective decision making and uses of data and big data in decision making are also discussed. The final section of the chapter explores how to resolve conflict, which involves making decisions.

De c I s I o n ma k I n g a n D De c I s I o n s Some authors say decision making is “choosing from among alternatives to determine a course of action” (Liebler and McConnell 2004, 141). These writers do not directly include implementation in their definition, yet their decision-making process does include evalu- ating implemented decisions. Another writer defines organizational decision making as “the process of identifying and solving problems” (Daft 2016, 468), which seems to imply that a solution is implemented. Other writers agree that decision making is choosing from among alternatives, and the steps in their decision-making approach include implementa- tion (Griffin, Phillips, and Gully 2017). Based on these perspectives, in this book decision making is defined as the process of choosing from among alternatives to determine and implement a course of action. Drawing attention to implementation forces managers to make decisions that are realistic and can be implemented.

Managers have to make two types of decisions and solve two types of problems (Daft 2016). Programmed decisions are well defined, routine, easily diagnosed, and eas- ily solved with existing decision rules, formulas, algorithms, and procedures. Programmed decisions can be made with high confidence that the chosen alternative will succeed and solve the problem. For example, when should I see a dentist? How many boxes of gloves should we have available each day at each clinic? How many custodians will be needed to clean the clinics next month?

Alternatively, nonprogrammed decisions are new, unusual, and hard to define, diagnose, and understand. They present fuzzy alternatives with uncertain cause and effect relationships. Creative thinking and difficult judgments are likely to be needed. For example, when the United States enacted the Affordable Care Act, HCO managers throughout the country wondered, How will this healthcare reform law affect us? What should we do? They struggled to define the decisions to be made, to describe alternative courses of action, and to anticipate how alternatives might play out and with which consequences. The new healthcare law was extremely comprehensive, with many new reforms, and it was not clear how those reforms would affect HCOs and their stake- holders. Recall from chapter 3 that nonprogrammed problems and decisions often arise during strategic planning.

decision making

The process of

choosing from

among alternatives

to determine and

implement a course of

action.

programmed decisions

Decisions that are

well defined, routine,

easily diagnosed, and

easily solved with

existing decision rules,

formulas, algorithms,

and procedures.

nonprogrammed

decisions

Decisions that are

new, unusual, hard

to define, and hard to

diagnose; they present

fuzzy alternatives with

uncertain cause and

effect relationships

and without existing

decision rules to follow.

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Do you suppose managers use the same decision-making methods for programmed and nonprogrammed decisions? Think about this question as you study the decision meth- ods in this chapter.

W H o m a k e s D e c I s I o n s ?

Individuals throughout an organization make decisions, and so do groups, committees, teams, and HCOs. Experienced senior managers make decisions, and so do inexperienced managers in their first week on the job.

We can categorize decisions as individual and organizational. Individual decisions are made by a single person—such as you, a webpage designer, a grant writer, or a diversity coordinator. Organizational decisions are made by groups of people in an organization—such as a website design task force, the department of clinical research, or a group of managers that is developing more diversity and inclusion. Group decisions have become more com- mon as a way to bring many kinds of expertise and viewpoints into the decision process. Another benefit is that more stakeholders are involved in the decision, which creates more support for it. However, as we saw in chapter 6, involving more people in decision making means more time and cost.

Who actually makes the decision is not always the same as who provides input for the decision. Some people provide advice, consultation, helpful analysis, brainstorming, or other assistance but do not then make the decision. A manager who is dealing with a problem must determine who will make the decision to solve the problem. Recall from chapter 6 that groups use different methods to make decisions. At one extreme, a manager might use an autocratic approach and make the decision alone. At the other extreme, a manager might use a delegated approach and let a subordinate or group decide without

TRY IT, APPLY IT

As a manager, your involvement in making a specific decision can range on a continuum

from complete to almost none—that is, from autocratic to delegated. Try to think of situ-

ations in which you made an autocratic decision, delegated a decision, and used an

approach that was somewhere in between autocratic and delegated. Discuss your exam-

ples with classmates. This practice will help you understand that managers must deter-

mine how much to involve other employees and stakeholders in organizational decisions.

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the manager. In between the autocratic and delegated approaches, a manager might share decision making with subordinates to get their participation. For example, the manager might obtain input from group members and then make the decision alone. Group mem- bers might vote democratically to decide what to do. A manager might build consensus among a group of people for an idea that everyone generally agrees with. A manager who is dealing with a problem that requires a decision must first decide

◆ who will provide input, analysis, brainstorming, and consultation; and

◆ who will make the decision and how (e.g., majority vote, consensus).

me t H o D s f o r ma k I n g no n P r o g r a m m e D De c I s I o n s Managers make decisions in different ways. Programmed decisions are the easy ones and can be made by following an appropriate decision rule. For example, in deciding when to schedule a dental appointment, many of us follow a common decision rule: See a dentist every six months. However, two cautions apply to this type of decision (Griffin, Phillips, and Gully 2017). First, managers must ensure that the problem or situation really is routine and that a programmed decision would be appropriate. Second, managers must apply an appropriate decision rule.

The rest of this section will explain methods for making nonprogrammed decisions. These are the harder ones, such as deciding where to live after graduation. We begin with the rational approach, which will probably seem familiar to many people. It is common yet idealistic. We will learn why this approach is hard to follow completely, and then we will consider other approaches.

r at I o n a L a P P r o a c H

As the name suggests, rational decision making is based on logical reasoning and deliberate analysis to arrive at the best decision. You have probably used this method (at least partially) to make a decision, such as which college to attend or which car to buy. Individuals, groups, committees, and teams use this method in organizations.

The rational approach is shown below in eight steps (Daft 2016, 471–73). Some variations of the approach combine steps (e.g., Dunn 2016; Griffin, Phillips, and Gully 2017). The first four steps identify the problem and the decision that must be made. Iden- tifying the problem is important, as the quote at the beginning of this chapter indicates. The last four steps solve the problem by making and implementing a decision. Each of the eight steps builds on what was done in the previous steps. Decision makers are supposed to follow the steps in sequence, from 1 to 8. However, they sometimes back up to redo

rational decision

making

The process of making

a decision based on

logical reasoning and

deliberate analysis.

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earlier steps. See exhibit 13.1 for applications of the rational approach to a student’s deci- sion and an HCO’s decision.

1. Monitor the decision environment. Review external and internal information, check results, and detect performance problems.

2. Define the decision problem. Describe a detected performance problem by gathering more information about it, such as who, what, where, and when.

3. Specify the decision objectives. State what is to be accomplished by the decision, and identify the desired outcomes. Talk with people who are involved. Seek varied perspectives.

4. Diagnose the problem. Analyze the information gathered to determine why the problem happened, and explore causes of the problem. Dig deeply below the problem’s superficial symptoms.

5. Develop alternative solutions. State what could be done to solve the problem. What are the options? Think creatively and brainstorm possibilities. Consult relevant online sources, such as professional associations and other HCOs.

6. Evaluate the alternatives. Judge how well each alternative solution would achieve the decision objectives and outcomes. Consider pros and cons, likely consequences, and stakeholders’ views.

7. Choose the best alternative. Select the best alternative to achieve the decision objectives.

8. Implement the chosen alternative. Put the chosen alternative into effect—make it happen.

Chapter 11 discussed ethics and suggested that HCOs should have a process for deciding how to resolve ethical problems. Managers and ethics committees often follow a process similar to this rational model. They define the problem, diagnose it, develop alternative solutions, consider the pros and cons of those solutions, pick the solution they think is right, and implement it. Participants in this process give extra attention to ethics by considering the following (Nelson 2015):

◆ The values and preferences of all stakeholders who would be affected by the decision

◆ The ethical consequences of alternatives

◆ Which ethical principles (e.g., beneficence) support each possible solution

◆ Whether any solution violates an ethical principle (e.g., justice)

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Rational Decision- Making Steps

Student Example: Renting an Apartment HCO Example: Lab Productivity

1. Monitor the decision environment

Apartment listings show rents are starting to rise.

Internal reports show the number of lab tests performed per lab tech declined 4 percent this year and is now 7 percent below industry standards.

2. Define the decision problem

On September 1, rent for my current one-bedroom apart- ment will rise to $1,000 per month, which is more than I can afford.

Tests per tech are 3 percent above standards on the first shift and 8 percent below standards on the second shift; automated tests per tech equal standards; manual tests per tech are 11 percent below standards.

3. Specify the decision objectives

I want to spend no more than $900 per month on rent in the next academic year and live somewhere that offers the same safety, comfort, and con- venient location as my current apartment.

Lab tests per tech should equal the industry standards for our kind of lab tests and equipment.

4. Diagnose the problem Landlords have to cover their rising costs; my current apart- ment will be upgraded with new appliances and my rent will rise.

The second-shift chief tech job is vacant; the second-shift workload declined 9 percent since last May 1.

5. Develop alternative solutions

Negotiate a $900 rate with my landlord; move to a cheaper one-bedroom apartment; join a friend in a two-bedroom apart- ment for $700 per month per person.

Promote a second-shift tech into the chief tech job to super- vise staff; create a productivity incentive system for the second shift; advertise the lab to bring more work to the second shift.

6. Evaluate the alternatives Consider cost, location, safety, and comfort.

Consider costs, feasibility, effects on the entire lab, and the likelihood of increasing the second shift’s tests per tech.

7. Choose the best alternative

Move in with my friend for $700 per month.

Promote a second-shift tech into the chief tech job to super- vise staff.

8. Implement the chosen alternative

Let my current lease expire, sign a new lease, move my stuff, and notify my family and friends.

Promote the tech, provide supervisory training and men- toring, and monitor results.

Note: Based on the eight-step process of Daft (2016, 471–73).

exHIbIt 13.1 Examples of the Rational Decision- Making Process

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Rational decision making generally makes sense, and managers often use it. Yet sometimes managers do not rely on it. Why? Human ability to be rational is limited (Daft 2016; Griffin, Phillips, and Gully 2017). The human brain can process a limited amount of information, consider a limited number of factors, and evaluate a limited set of alterna- tives. Even the brains of world-champion chess grand masters eventually become “full” and cannot consider one more alternative move. Further, human brains are not robotic; they are affected by personality, emotions, biases, personal values, experiences, situations, and pressures. These may cause decision makers to be (or at least seem to be) irrational instead of rational. Also, some problems are just too complex to accurately describe and diagnose. Finally, in today’s world, there just may not be enough time for decision makers to gather all the information, much less analyze it. The result is bounded rationality. There are boundaries (limits) to how rational a person can be and how rational decision making can be. Then what happens? Because of bounded rationality, managers often make decisions using other approaches. These are explained next.

s at I s f I c I n g a P P r o a c H

Herbert Simon developed the satisficing approach to decisions (Daft 2016; Walston 2017). This method assumes that people are not capable of making the best decision among all possible alternatives. Because of bounded rationality, people cannot (and do not) make the choice that will maximize outcomes and results. Instead, they conduct a limited search for alternatives and choose an early solution that will achieve their mini- mum acceptable results. They satisfice—that is, they decide on a satisfactory alternative that will suffice. A manager might “kind of ” follow the rational model but hurries along, takes shortcuts, and settles on a solution that is good enough. This approach is easier and faster, requires fewer resources, and involves less conflict than the ideal pursuit of the best solution. Managers realize that better alternatives probably exist, yet they also real- ize that not all problems need the best solution—they just need an acceptable solution. Perhaps you have used this approach to decide which shirt to buy or to choose which apartment to rent. Individuals and organizations often satisfice when making decisions (Daft 2016; Walston 2017).

Some organizational decisions are made by groups and coalitions rather than by just one person. Groups are also likely to satisfice. There are even more barriers to the ratio- nal approach for an organizational decision than for an individual decision. With more people involved, there are more personal biases, hopes, fears, favors to repay, and so forth. It becomes challenging for all group members to analyze all possible solutions and agree on a best solution. Some groups cannot even agree on what best means! Group members typically want to finish the decision-making meeting to get back to their other work that is piling up. So they agree on the first simple solution that everyone can live with. It probably is not the best solution, but it meets their minimum requirements. To enable the process,

bounded rationality

Limits to human

rational decision

making.

satisfice

To decide on a

satisfactory (rather

than the best) solution

that will suffice.

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a group member might informally confer with a few other members before a meeting and compromise toward a satisficing solution.

I n t u I t I o n a P P r o a c H

Instead of using rational analysis, individuals sometimes make a decision by using intu- ition. With this approach, a manager bases the decision on experience, hunches, feel- ings, or unconscious processes rather than on conscious logical thinking and reasoning (Daft 2016; Griffin, Phillips, and Gully 2017). Good intuition is the result of years of experience and enormous amounts of information stored in the subconscious, so it is not arbitrary. Managers find this approach useful when time is short, problems are complex, precedents do not exist, and facts are scarce. Even when rational decision making can be used, managers may supplement it with intuition. For example, an HCO manager in Billings might use the rational approach and tentatively decide to hire Allen as the new community outreach specialist. However, before she tells the human resources director her decision, she wants to “sleep on it” and let her unconscious intuition determine if Allen is a good choice. In the morning, her intuition will let her know if she is comfort- able with that decision.

The origins of intuition are not fully understood, although experience seems to help it develop. People may not be able to fully explain their intuition or justify intuitive decisions. Yet, they can sometimes use intuition with good results for decision making. Intuition can be developed, and managers can practice intuitive thinking by paying more attention to their inner mind and feelings about choices. Managers can learn to use the intuitive approach to complement the rational approach and help overcome bounded rationality. This process takes years of experience, and new managers should be cautious about relying solely on intuition.

I n c r e m e n ta L a P P r o a c H

Sometimes an HCO might begin a rational decision-making process but then proceed through the steps with pauses, backups, interruptions, redos, and only gradual progress. Decision making can be incremental, with a series of small decisions that eventually create a big decision. Carlos might say, “If we try to figure out the whole solution and decide everything at once, by the time we do, the situation will have changed, and we’ll have to

intuition

The process of

knowing, believing,

or deciding based on

experience, hunches,

or unconscious

processes rather than

on logical conscious

thinking and reasoning.

CHECK IT OUT ONLINE

Intuition for decision making can be improved—for example,

by paying more attention to one’s inner mind, inner voice, and

feelings about choices. A clear, quiet mind helps intuition, so

turn off the technology, stop texting, and meditate for a while

to become more aware of your inner thoughts and feelings.

Jot down notes while letting your mind wander. Visit an online

bookseller and read customers’ reviews of books or DVDs on

intuition. Find one that fits your style. Check it out online and

see what you discover.

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M a n a g e m e n t o f H e a l t h c a r e O r g a n i z a t i o n s3 2 8

figure it out again.” Instead, he and his team take two steps forward and one back (and maybe a step sideways) to further diagnose the problem or revise an earlier small deci- sion. Incremental decision making does not follow an orderly, linear sequence of steps.

In 2010, the Affordable Care Act was enacted with a five-year implementation plan. Many HCOs began incrementally deciding how to adapt to the new law. Managers knew they would have to gradually figure out what to do as parts of the law were implemented, courts ruled on legal challenges to the law, and the government’s implementation plans were modified. Deciding what to do required incremental decision making. Managers do the same with other complex decisions; these may take a year or longer. They think, “Let’s get started, and we’ll keep figuring it out as we go.” This approach is common for nonpro- grammed decisions that must be newly created. It works best in HCOs that value learning, experimentation, change, and innovation (which are discussed in chapter 14). Some HCOs encourage this trial-and-error approach as a way to learn, especially for complex problems that are too big to solve all at once.

e v I D e n c e -b a s e D a P P r o a c H

Managers sometimes use evidence-based management for decision making to overcome people’s struggles to be fully rational. This approach is similar to rational decision making and more intensely applies that method. Managers use it to avoid bounded rationality, blinders, biases, groupthink, flawed assumptions, and closed-mindedness (Hellriegel and Slocum 2011).

“Evidence-based practice is about making decisions through the conscientious, explicit and judicious use of the best available evidence from multiple sources by

1. Asking: translating a practical issue or problem into an answerable question

2. Acquiring: systematically searching for and retrieving the evidence

3. Appraising: critically judging the trustworthiness and relevance of the evidence

4. Aggregating: weighing and pulling together the evidence

5. Applying: incorporating the evidence in the decision-making process

6. Assessing: evaluating the outcome of the decision taken

to increase the likelihood of a favorable outcome” (Barends and Briner 2014). The evidence-based approach begins with a careful statement of the problem to be

solved. As new evidence is examined and logically applied to the problem, managers might

incremental decision

making

The process by which a

big, complex decision

is gradually made

from a series of small

decisions during a

lengthy time period

that may involve

backing up to further

diagnose problems,

rethink ideas, and

revise prior choices.

evidence-based

management

An approach to making

decisions through the

conscientious, explicit,

and judicious use of

the best available

evidence from multiple

sources.

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further refine the problem. This intelligent approach searches for relevant information from multiple sources (Barends and Briner 2014; Briner, Denyer, and Rousseau 2009):

◆ External scientific research evidence

◆ Internal evidence from the local setting, context, or organization

◆ Experiences, expertise, and professional judgments of practicing managers

◆ Preferences, values, and views of relevant stakeholders

In this approach, managers systematically acquire and use the best evidence available. They pay careful attention to which evidence and information is relevant and how accurate, valid, and reliable it is. They give greater weight to some evidence than to other evidence. This approach moves the rational process closer to the idealized version. Managers apply discipline and ask each other tough questions to avoid quick fixes, faddish answers, and educated guesses (Hellriegel and Slocum 2011). However, because of its systematic thorough- ness, the evidence-based approach requires more resources, time, and staff. Evidence-based management decision making has been used for healthy transitions programs, integrated chronic disease management, perioperative services, nursing productivity, and a hospital evacuation because of a hurricane (Kovner and D’Aunno 2016).

g a r b a g e c a n a P P r o a c H

Garbage can decision making is even less sequential and step-by-step than the incremental approach. It was conceived by Michael Cohen, James March, and Johan Olsen to understand decision making in very organic, messy organizations characterized by uncertainty, change, and disorder (Daft 2016). Garbage can decision making occurs in freewheeling, chaotic organizations in which streams of people, problems, solutions, and decision opportunities are coming, going, and changing (Daft 2016, 490). Rather than explain how a particular deci- sion is made, this approach explains how a pattern of decisions is made in an organization.

Imagine an organization’s monthly meeting in a conference room, which presents an opportunity for making decisions. Some people who are present were not at the prior meeting. Some arrive late or leave early and are therefore not present for all discussions and decisions. Others take calls on their cell phones during the meeting and are not paying attention. Ideas are thrown into the discussion, perhaps as solutions in search of a problem. Information is limited and obscure. Decision makers do not understand the causes of problems or know if they will be solved by proposed solutions. If they do x, it might cause y, but then again it might cause z, or it might not cause anything. Managers decide to try something; if it doesn’t work, they can try something else later.

garbage can

decision making

Seemingly random

organizational decision

making resulting from

evolving streams of

problems, solutions,

participants, and

decision-making

opportunities.

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The garbage can approach to decision making might seem surprising. When used in an organization, it may leave some people wondering, “What were they thinking?” Yet some freewheeling, nonbureaucratic organizations do use this method as an alternative to the rational process (Daft 2016). Managers should realize that this type of decision making might occur in their HCO if its meetings are too loose, unstructured, and chaotic. Some suggest that HCO medical staffs and universities use this approach (Walston 2017):

ba r r I e r s t o ef f e c t I v e De c I s I o n ma k I n g Managers should strive to avoid or overcome the following common barriers to decision making (Daft 2016; Dye 2017; McConnell 2018; Walston 2017):

◆ Unwillingness to confront problems (or the real problems); avoidance, delay, procrastination

◆ Inability to admit a previous decision was wrong and is not working

◆ Defining a problem in such a way that it is solved too easily and quickly

◆ Not diagnosing a problem well enough to really solve it

◆ Hurrying and not devoting enough time to decision making

◆ Having a closed organization culture or closed leadership style

◆ Being risk averse or afraid to try a new idea; exercising too much caution; being stuck in a rut

◆ Wishful thinking, unrealistic optimism, hubris, and overestimating the ability to handle problems

◆ Accepting only favorable information, avoiding unfavorable information, and rejecting useful information because of its source

◆ Biases, personal agendas, and conflicts of interest

◆ Organization politics and political behavior

◆ Not involving the right people in the decision

◆ Using an inappropriate approach to decision making

◆ Groupthink, conformity, playing it safe, copycat thinking, and copycat decisions

To avoid the all-too-common last barrier, consider this classic advice from longtime man- agement consultant and writer Peter Drucker (1967, 148): “The first rule in decision-making is

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C h a p t e r 1 3 : M a k i n g D e c i s i o n s a n d S o l v i n g P r o b l e m s 3 3 1

that one does not make a decision unless there is disagreement.” Deborah J. Bowen, FACHE, CAE, the president and CEO of the American College of Healthcare Executives, adds that “leaders should cultivate the art of productive disagreement” (Bowen 2016, 8).

Data f o r De c I s I o n ma k I n g For effective decision making, managers need data—sometimes lots of data—with which to analyze problems and evaluate alternative solutions. Where do the data come from? How do managers use it? Organizations often use both quantitative and qualitative sources of data and methods rather than rely on only one approach (Daft 2016; McLaughlin and Olson 2017):

Quantitative Data and Methods

◆ Written and digital files, reports, and records; databases; scorecards; and other sources inside an HCO have useful quantitative data, as do external reports, websites, and databases.

◆ Computer programs and apps with probability models, operations management methods, linear programming models, decision trees, mathematical formulas, scheduling systems, statistical programs, and comparison matrices use quantitative data to make decisions to solve problems. These and other management science techniques can easily process dozens and even hundreds of quantitative variables to reach decisions—far more than humans can process. However, such techniques are less useful for capturing people’s qualitative feelings, judgments, and experiences.

Qualitative Data and Methods

◆ Discussions, interviews, focus groups, and conversations with people inside and outside the HCO provide useful qualitative data and information.

◆ Delphi technique, nominal group technique, brainstorming, intuition, devil’s advocate approach, expert opinion, and pro/con discussions use qualitative data to make decisions to solve problems.

In larger HCOs, specialized internal staff conduct data gathering and analysis to help the actual decision makers. Larger HCOs have been hiring many data analysts, decision scientists, and researchers to do this work. Smaller HCOs with less need and fewer funds may contract with external consultants for help with data. Computer software and apps have become more user friendly, enabling managers to more easily analyze data.

Data analytics is done to obtain insights that enable smarter decisions and better outcomes (McLaughlin and Olson 2017, 205). HCOs use three types of analytics:

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1. Descriptive analytics condenses large amounts of data into a few meaningful pieces of information. Examples include performance statistics for quality, finances, utilization, compliance, labor use, and other key performance indicators.

2. Predictive analytics forecasts probabilities of future events and outcomes. Examples include predicting which prior patients might unnecessarily use the (costly) emergency department and how much a 5 percent increase in salary would affect employee retention.

3. Prescriptive analytics recommends solutions to problems and questions. Examples include optimal staffing of a rehabilitation facility, minimizing risk of patient injury, and maximizing use of expensive medical equipment.

The growth of analytics and big data has resulted from massive—sometimes unimag- inably massive—amounts of available data and the development of technology to use it. Every two years, the volume of healthcare data doubles (Ebadollahi 2017). Google scientists were able to analyze and predict in the United States, almost in real time, the spread of winter flu by studying the frequency of certain flu-related search terms in its billions of daily searches (Daft 2016). Analysts run computer models with hundreds of variables to better understand how social determinants of health (e.g., food and housing) affect use of costly emergency departments. In the future, decision support systems will be more commonly used with expanded data sets to better solve problems and improve performance. Artificial intelligence will also be used for clinical and managerial decisions as a way to overcome the bias that humans have in their decision making (Radick 2017). The Using Chapter 13 in the Real World sidebar describes how a real HCO uses analytics for population health.

An organization must strive to have its information available at the right time in the right place in the right form for the right people. Doing this requires effective knowledge management—a system for finding, organizing, and making available an organization’s knowledge, including its experience, understanding, expertise, methods, judgment, lessons learned, and know-how (Daft 2016; Hellriegel and Slocum 2011). It includes both codified knowledge in written documents and tacit knowledge in people’s heads. Tacit knowledge is insight, know-how, intuition, experience, judgment, and expertise. Compared to codified knowledge, it is harder to find, gather, organize, store, and make available to others in the organization. Yet, tacit knowledge comprises much of an organization’s unique, valuable knowledge. Managers use information technology (IT) to manage codified knowledge relatively easily. Managing tacit knowledge is more challenging, and it depends on person- to-person interactions, professional networks, and face-to-face connections.

Suppose managers of an HCO in New Brunswick want to enable staff to share tacit knowledge. They can facilitate these relationships so that employees can easily find

knowledge

management

A system for finding,

organizing, and

making available

an organization’s

knowledge, including

its experience,

understanding,

expertise, methods,

judgment, lessons

learned, and

know-how.

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C h a p t e r 1 3 : M a k i n g D e c i s i o n s a n d S o l v i n g P r o b l e m s 3 3 3

and interact with people who have the right tacit knowledge. Face-to-face meetings, team huddles, and discussions are useful. Work spaces can be designed to encourage and enable conversations. Managers can also invest in telecommunication systems, Skype, FaceTime, social media, and other technology to enable conversations for sharing tacit knowledge. To more widely share knowledge, tacit knowledge can be codifi ed in documents, captured in Instagram videos, blogged, tweeted, and posted online and in social media. Th e knowledge can be e-codifi ed to share within the company or beyond.

tr e n D s I n De c I s I o n ma k I n g Th e external environment of most HCOs has become more complex and less certain. As a result, HCOs’ decisions have also become more complex and less certain. HCOs face more nonprogrammed decisions that do not fi t their playbooks. Compared to decisions made in the past, today’s decisions usually involve more factors, more alternatives, more information, and more stakeholders’ interests. Th us, some HCOs and decision makers use deliberate evidence-based decision making, involve more people, and make more group (rather than individual) decisions.

On the other hand, the environment is changing rapidly, so HCOs feel they must make decisions rapidly. Pressure to make complex decisions quickly has led some managers to use more satisfi cing, intuition, and incremental decision making. HCOs are now more willing to allow trial and error, followed by learning. Th ey make an incremental decision, try it, learn from it, adjust, and try again. (Does this method remind you of the defi ne,

USING CHAPTER 13 IN THE REAL WORLD

To improve population health in the Seattle area, Providence St. Joseph Health uses big

data and analytics to identify and solve problems. This health system has a population

health data coordinating council, a senior director of population health informatics, and

other groups and positions that help gather and use data to identify and solve health

problems in local communities. They are expanding the collection and use of data for

social determinants of health (not ordinarily included in medical records) and integrat-

ing it with clinical data. This enables the health system to make better decisions about

where and how to invest its resources to best improve population health. For example,

big data and predictive analytics enable proactive decisions and problem solving to

reduce the population’s costly visits to the emergency department (Buell 2018).

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measure, analyze, improve, and control cycle in chapter 12?) Some HCOs have begun actively encouraging a trial-and-error approach.

Finally, the workforce and decision makers in most HCOs have become more culturally diverse. Decision makers should take the time to understand relevant views, concerns, and ideas of different cultures that are involved in a decision or that will be affected by the decision. Doing so takes more time and patience amid pressure to make fast decisions.

These trends are general and do not apply to every situation and organization.

re s o Lv I n g co n f L I c t Conflict and decision making have a reciprocal relationship—they affect each other. A moderate amount of conflict can improve decision making by opening up closed think- ing, expanding understanding, developing creative ideas, and avoiding groupthink. Good decision making depends on first examining all conflicting ideas, views, and alternatives. The flip side is that conflict can be resolved by good decision making.

Some conflict (but not too much) is both normal and useful in HCOs. When there is too little conflict, managers might stimulate it to gain the benefits of conflict (Walston 2017). But if there is too much conflict that is not managed well, it can be harmful and ruin an organization. The Joint Commission, which accredits HCOs, states that conflict is common and can produce positive change. However, if leaders do not manage conflict, healthcare quality and safety may be threatened. Thus, a conflict management process is required for accreditation (Joint Commission 2015, 106).

c a u s e s o f c o n f L I c t

Conflict is normal in HCOs because of causes that are normal in HCOs. It occurs among individuals and groups. The following causes of conflict occur naturally, so managers should expect them in their HCOs (Daft 2016; Dye 2017; McConnell 2018; Walston 2017). Some of the examples provided here are healthcare related:

◆ Goal incompatibility. Goals include decreasing costs but increasing weekend staff; goals include innovation along with consistency.

◆ Differences in perceptions, values, beliefs, cognition, emotions, cultures, and views. Physicians and managers think differently; staff members are diverse in terms of gender, age, culture, and other characteristics, so they have different views.

◆ Task interdependence and required cooperation. A nurse hands the surgeon a scalpel; the restaurant server waits for the cook to finish a pizza.

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◆ Competition for scarce resources. There is not enough time, information, power, money, space, prestige, staff, equipment, or other resources to meet everyone’s needs and wants; three employees requested a laptop, but only one is available.

◆ Unclear or overlapping expectations. People are unsure what to do or when to do it (often because of unclear communication); the policy says to “perform equipment maintenance daily,” but the first shift staff leaves the maintenance for the second shift and vice versa.

These causes of conflict might be worsened by other factors, including time pressure, poor communication, past history, unreasonable rules, personalities, or someone just having a bad day. Take a few minutes to think of examples you have heard about or experienced.

c o n f L I c t r e s o L u t I o n m o D e L

Kenneth W. Thomas and Ralph H. Kilmann (1974, 2018) developed a model to resolve conflict that has been used for more than 40 years. Managers, human resource professionals, negotiators, mediators, executive coaches, and others use it in many organizations today, including in HCOs (Dye 2017; McConnell 2018).

The model consists of five styles for resolving conflict—collaborating, competing, compromising, accommodating, and avoiding (see exhibit 13.2). Which approach should a manager use to resolve conflict? The answer depends on how assertive and how coopera- tive she chooses to be, which depends on her temperament and the situation (Thomas and Kilmann 2018). In other words, the approach depends on concern for oneself and concern for others. Depending on whether assertiveness is high, medium, or low and cooperative- ness is high, medium, or low, a person uses one of these five styles to resolve conflict (also shown in exhibit 13.2). Each approach is sometimes appropriate and sometimes not so appropriate, as shown in exhibit 13.3. (The styles might remind you of the leadership styles discussed in chapter 9.)

A manager decides which style to use after evaluating the situation. In other words, the best approach is contingent. (Sound familiar?) When you are a manager or supervisor, you can use the guidelines in exhibit 13.3 to evaluate conflict and then choose the style that seems right for the situation. Studies have found that in general (but not always), managers who collaborate are more successful, are more often found in high-performing organizations, and are viewed more positively by others than managers who do not collaborate (Hellriegel and Slocum 2011). In contrast, managers who use the competing or avoiding styles are more likely to be viewed negatively. The compromising style is generally viewed positively by others. Views of the accommodating style are mixed and do not permit clear conclusions.

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a D D I t I o n a L s u g g e s t I o n s f o r m a n a g I n g c o n f L I c t

New managers should learn to use the conflict resolution model developed by Thomas and Kilmann. It is an excellent tool for managers, supervisors, and others in HCOs. What else can managers do to successfully manage conflict?

Earlier we learned that The Joint Commission requires that HCOs have a conflict resolution process for accreditation. Managers can follow such a process. Dye (2017, 255) offers the following steps:

1. Declare that a conflict exists, so that everyone formally realizes it and uses proper processes to resolve it.

2. Give reasons why the conflict exists and ensure the conflict is not based on personal hostility or malice.

3. Enlist a neutral person to clarify issues in the conflict and seek input from all concerned participants.

4. Consider only one conflict at a time; do not let participants bring up others until the first conflict has been resolved.

5. Require everyone involved in the conflict to participate and not hide.

6. Maintain a fair discussion, with opportunities for participants to assert and defend themselves.

7. Clearly state the outcome of the conflict and the agreement that ends it; declare the conflict has ended.

Collaborating Competing Compromising Accommodating Avoiding

Exchanging information, examining dif- ferences, and being creative to reach a win– win solution to fully satisfy everyone (high asser- tive and high cooperative)

Using your power to force acceptance of your position while ignoring the concerns of the other person (high asser- tive and low cooperative)

Everyone giving and taking to reach a mutually acceptable, partly satisfy- ing, and conve- nient solution (medium assertive and medium cooperative)

Neglecting your own concerns to satisfy the concerns of the other person; yielding to someone else; self-sacrificing (low asser- tive and high cooperative)

Not trying to satisfy anyone’s concerns; withdraw- ing from the conflict by postponing or ignoring it (low asser- tive and low cooperative)

Source: Data from Thomas and Kilmann (2018).

exHIbIt 13.2 Five Styles for

Resolving Conflict

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C h a p t e r 1 3 : M a k i n g D e c i s i o n s a n d S o l v i n g P r o b l e m s 3 3 7

Managers can of course use many other tools, methods, theories, and concepts from this book. Think back to what you learned in previous chapters about management, leading, motivating, using power, and so forth. The next two chapters explain additional useful concepts, including emotional intelligence and effective communication—both of which are essential for managing conflict.

Collaborating Competing Compromising Accommodating Avoiding

The outcome matters to everyone.

The outcome is extremely important to you.

There is no time now for collaboration.

The outcome does not mat- ter to you, but it matters to someone else.

The outcome does not mat- ter to you.

You want a win–win situation.

The outcome is needed for compliance with essential rules or laws.

The conflict involves incompatible goals.

You realize your position is wrong.

The conflict is beyond your control or cannot be solved.

There is time to carefully consider every- one’s views.

The conflict must be quickly settled, such as in an emergency.

A quick but temporary resolution of a complex con- flict is needed.

You are unlikely to get your way, so you pick your battles.

The conflict is not your responsibility.

You want everyone com- mitted to the solution.

The conflict is with someone who takes advantage of cooperation.

A democratic approach is required.

It’s important to get along with others; peace matters.

The conflict may resolve itself.

Problem-solv- ing expertise is available.

The conflict involves an unpopular yet necessary matter.

Yielding now can help you get something else you want later.

You want oth- ers to try their ideas.

Sources: Data from Hellriegel and Slocum (2011); Ledlow (2009); Polzer, Neale, and Illes (2006); Thomas and

Kilmann (2018).

exHIbIt 13.3 When to Use Each Conflict Resolution Style

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M a n a g e m e n t o f H e a l t h c a r e O r g a n i z a t i o n s3 3 8

A final suggestion is to seek expert help when necessary to resolve difficult con- flicts that are harming your HCO. The expert could be someone in the HCO, such as a professional counselor who has experience in conflict resolution. Or, it could be an outside consultant, mediator, or arbitrator. An arbitrator allows disputants to present their views and input and then makes a decision (similar to a court judge) to resolve the conflict. A mediator leads conflicting parties through discussions, question-and-answer sessions, negotiations, and processes that guide the parties to decide themselves how to work out the problem. Sometimes a neutral, objective outsider can be effective in resolv- ing difficult conflicts.

Managers in an HCO make decisions to solve problems and resolve conflicts to achieve the HCO’s goals and mission. Making decisions is a big part of what managers do at every level of an HCO to perform all five main management functions—planning, organizing, staffing, leading, and controlling. Decision making is the process of choosing from among alterna- tives to determine and implement a course of action. Some decisions are programmed (i.e., routine, common) and can be decided with common decision rules, formulas, and procedures based on past experience.

Other decisions are nonprogrammed (i.e., nonroutine, uncommon) and are therefore harder to make. The external environment has become more complex and uncertain, so HCOs’ decisions have also become more complex, uncertain, and nonprogrammed. Managers sometimes make these decisions alone but more often involve other people. They may take the rational approach, which uses deliberate analysis, explicit reason- ing, and choosing from among alternatives to make the best decision. This approach makes sense, yet managers may find it hard to follow completely because of bounded rationality. Thus, they might partly follow the rational method and then use satisficing, intuitive, incremental, evidence-based, or garbage can approaches. Quantitative and qualitative data, big data, analytics, and knowledge management are essential for ef- fective decision making.

Conflict is natural in HCOs because of conflicting goals, scarce resources, interdepen- dent work, unclear expectations, and differences among people, groups, and departments. To resolve conflict, a manager may collaborate with, compete with, compromise with, ac- commodate, or avoid the other person(s). The proper approach depends on how assertive and how cooperative someone chooses to be, or how much concern for oneself and concern for others a person has. Although the collaborative style seems to work best in many situa- tions, a manager should develop the ability to use each of the five conflict resolution styles when appropriate.

o n e m o r e t I m e

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C h a p t e r 1 3 : M a k i n g D e c i s i o n s a n d S o l v i n g P r o b l e m s 3 3 9

1. Is satisficing really appropriate for managers, or is it just being lazy?

2. How do you feel about using intuition rather than rational thinking to make decisions?

3. Which barriers to effective decision making have you observed or experienced in a club, team, or group? What could have been done to overcome those barriers?

4. Several students talked about where they want to work after graduation. One student wants to work in an HCO that does not have conflict because working there will be less stressful. What do you think of that idea?

5. Discuss the pros and cons of the five conflict resolution styles. Which style(s) do you favor? How could you become better prepared to use all the styles?

These questions refer to the Integrative Case Studies at the back of this book.

1. Disparities in Care at Southern Regional Health System case: What are some of the decisions that Mr. Hank and his HCO must make? Using terms, concepts, and decision-making approaches discussed in this chapter, explain how he and his HCO could make each of these decisions.

2. Hospice Goes Hollywood case: Referring to exhibits 13.2 and 13.3, which of the five conflict resolution styles do you think Ms. Thurmond should use to resolve the conflict? Justify your answer.

FOR YOUR TOOLBOX

• Programmed and nonprogrammed

decisions

• Rational decision making

• Satisficing decision making

• Intuition decision making

• Incremental decision making

• Evidence-based decision making

• Garbage can decision making

• Conflict resolution model

f o r D I s c u s s I o n

c a s e s t u D y Q u e s t I o n s

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M a n a g e m e n t o f H e a l t h c a r e O r g a n i z a t i o n s3 4 0

3. How Can an ACO Improve the Health of Its Population? case: What decisions does Ms. Dillow have to make? Using terms, concepts, and decision-making approaches discussed in this chapter, explain how she could make the decisions.

4. The Rocky Road to Patient Satisfaction at Leonard-Griggs case: Referring to exhibits 13.2 and 13.3, which of the fi ve confl ict resolution styles do you think Ms. Ratcliff should use to resolve the confl ict? Justify your answer.

RIVERBEND ORTHOPEDICS MINI CASE STUDY

Riverbend Orthopedics is a busy group practice with expanded services for orthopedic

care. It has seven physicians and a podiatrist, plus about 70 other employees. At its big,

new clinic building, Riverbend provides extensive orthopedic care. Several technicians

provide diagnostic medical imaging, from basic X-rays to magnetic resonance images.

The physicians perform surgery in their own outpatient surgery center with Riverbend’s

own operating nurses and technicians. Therapy is provided by three physical thera-

pists and one part-time contracted occupational therapist. In addition to staff provid-

ing actual patient care, the clinic has staff for fi nancial management, medical records,

human resources, information systems/technology, building maintenance, and other

administrative matters. Occasional marketing work is done by an advertising company.

Legal work is outsourced to a law fi rm. Riverbend is managed by a new president, Ms.

Garcia. She and Riverbend have set a goal of achieving “Excellent” ratings for patient

experience from at least 90 percent of Riverbend’s patients this year.

Ms. Garcia has often tried to use a rational and somewhat individual decision-mak-

ing approach at Riverbend. This has caused some problems, and she wants to try other

approaches. Assume that Riverbend currently has Excellent ratings from only 65 percent

of its patients.

mInI case stuDy QuestIons

1. Discuss how Ms. Garcia and her management team could use tools from this chapter

to make decisions and solve problems to reach the 90 percent goal.

2. Although the physicians all approved the 90 percent goal, Ms. Garcia feels that con-

fl ict might arise between her and Dr. Barr regarding how to achieve the goal. Which

causes of confl ict (described in this chapter) might create that confl ict? Which confl ict

resolution style should Ms. Garcia use?

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