THEORY OF BUREAUCRACY OR ORGANIZATIONAL THEORY

Max Weber, a political theorist and sociologist in prewar Germany, was

attempting to address social and political concerns when he developed his definition of
bureaucracy (Levi, 1990). Weber considered a bureaucracy to be an ideal form for an
organization in which there is a clearly defined hierarchy and division of labor operating
in a system of detailed rules and regulations. Webers theory emphasized the concepts of
authority, command, power, domination, and discipline. For example, in a bureaucracy,
the authority for decision-making depends on the individuals position in the
organization (ie, the higher the individual is ranked in the organization, the greater the
level of authority of that individual) (Weber, 1970). Many of Webers principles are still
used in large health organizations today.

I.

STRATEGIES AND STRUCTURES

STRATEGIES - are plans for achieving the organizations mission and goals
primarily involve positioning the organization to succeed in its environment relative to
its competitors.

Two types of external environment

Predictable Environment
Turbulent Environment
Sources of Competitive Advantage
a. EXTERNAL SOURCES - Opportunities and Threats
b. INTERNAL SOURCES - Strengths and Weaknesses

5 Ps OF STRATEGY
1. Position- advantage gained by achieving strategies distinctive value in the minds of
consciousness.
Distinctive value can be achieved by one or more of the following 3 positions:
1.1. Low-cost- producing goods and services that consumer perceive to have.

1.2. High- differentiation- achieved by modifying the characteristics of goods an

services for the purpose of projecting distinctive value to consumers.
1.3. Distinctive Niche- achieving by selling distinctive segments in the manner.
2. Power strategies- advantage gained through the accumulation and effective
consolidation of mass.
2.1. Horizontal Expansion- expansion in the scale of existing business activities
2.2. Horizontal integration- the pursuit of synergies among different types of
business that are not vertically related.
2.3. Vertical integration- the pursuit of synergies among different types of
business that share input- output relationship.
2.4. Portfolio strategy- the pursuit of financial synergies among different types
of businesses.
3. Pace- advantage gained through managing the timing and intensity of strategic
actions.
Four Organizational Types by Miles and Snow (1978):
3.1. Prospectors- organization that frequently search for new market
opportunities and regularly engage in experimentation and innovations.
3.2. Analyzers- organization that maintain standard operations in some areas but
also search for new opportunities.
3.3. Defenders- organizations that search for additional opportunities for growth,
and seldom make adjustments to existing well established strategies.
3.4. Reactors- organizations that have top managers who perceive change in their
environments, but are unable to respond effectively.
4. Potential - Advantage derived from the accumulation of critical resources
Essential Characteristics needed for a resource or capability to become important
strategically:
4.1. Transferability- it can be transformed into a resource or service that is valued
by costumers.
4.2. Competitive Superiority- it is truly better than the resources or capabilities of
competitors.

4.3. Inimitability- it cannot be copied easily by competitors

4.4. Substitutability- it cannot be replaced through substitution by competitors
4.5. Durability- its value does not depreciate quickly
4.6. Performance- advantage gained through the efficient conduct of operations
and the effective implementation of strategy

ORGANIZATIONAL STRUCTURE
Society, community, family are all conserving institutions. They try to maintain
stability, and to prevent, or at least to slow down, change. But the organization of the
post-capitalist society of organizations is a destabilizer. Because its function is to put
knowledge to work-on tools, processes, and products; on work; on knowledge itself-it
must be organized for constant change.

-Peter Drucket
in a changing world, organizations must change as surely as individuals must change.
Recent years have seen an increase in organizational flattening, the tendency to shrink
the organizational structure through the removal of layers of hierarchy.

-Charles R. McConnell
Leadership Roles and Management Functions
Associated With Organizational Structure

Leadership Roles
1. Evaluates the organizational structure frequently to determine if management
positions can be eliminated to reduce the chain of command.
2. Encourages and guides employees to follow the chain of command and
counsels employees who do not follow chain of command.
3. Supports personnel in advisory (staff) positions.
4. Models responsibility and accountability for subordinates.

5. Assists staff to see how their roles are congruent with and complement
organizations mission, vision, and goals.

the

6. Facilitates constructive informal group structure

7. Encourages upward communication
8. Fosters a positive organizational culture between
subcultures that facilitates shared values and goals

work

groups

and

9. Promotes participatory decision making and shared governance to empower

subordinates
10. Uses committees to facilitate group goals, not to delay decisions
11. Teaches group members how to avoid groupthink

Management Functions
1. Continually identifies and analyzes stakeholder Interests in
organization

the

2. Is knowledgeable about the organizations internal

structure, including
personal and department authority and responsibilities within that structure
3. Provides the staff with an accurate until organization chart and assists with
Interpretation
4. When possible, maintains unity of command
5. Clarifies unity of command when there is confusion
6. Follows appropriate subordinate complaints upward
command.

through

chain

of

7. Establishes an appropriate span of control.

8. Is knowledgeable about the organization to meet organizational goals.
9.Uses committee structure to increase the quality and quantity of work
accomplished.
10. Works, as appropriate, to achieve a level of operational excellence appropriate
to magnet status.

CENTRALITY
Centrality, or where a position falls on the organizational chart, is determined by
organizational distance.
Employees with relatively small organizational distance can receive more information
than those who are more peripherally located.
This is why the middle manager often has a broader view of the organization than other
levels of management.
A middle manager has a large degree of centrality because this manager receives
information upward, downward, and horizontally.

TYPES OF ORGANIZATIONAL STRUCTURES

LINE STRUCTURES
Bureaucratic organizational designs are commonly called line structures or line
organizations. Those with staff authority may be referred to as staff organizations. Both
of these types of organizational structures are found frequently in large health care
facilities and usually resemble Webers original design for effective organizations.
Because of most peoples familiarity with these structures, there is little stress associated
with orienting people to these organizations. In these structures, authority and
responsibility are clearly defined, which leads to efficiency and simplicity of
relationships.
Ad Hoc Design
The ad hoc design is a modification of the bureaucratic structure and is
sometimes used on a temporary basis to facilitate completion of a project within a
formal line organization. The ad hoc structure is a means of overcoming the inflexibility
of line structure and serves as a way of professionals to handle the increasingly large
amounts of available information. Ad hoc structures use a project team or task approach
and are usually disbanded after a project is completed. This structures disadvantages
are decreased strength in the formal chain of command and decreased employee loyalty
to the parent organization.

MATRIX STRUCTURE
A matrix organization structure is designed to focus on both product and
function. Function is described as all the tasks required to produce the product, and the
product is the end result of the function.
(For example, good patient outcomes are the product, and staff education and
adequate staffing may be the functions necessary to produce the outcome.)
The matrix organization structure has a formal vertical and horizontal chain of
command.

Service Line Organization

Similar to the matrix design is service line organization, which can be used in
some large institutions to address the shortcomings that the endemic to traditional large
bureaucratic organizations. Service lines, sometimes called care-centered organizations,
are smaller in scale than a large bureaucratic system.
For example, in this organizational design, the overall goals would be determined
by the larger organization, but the service line would decide on the processes to be used
to achieve the goals.
Flat Designs
Flat organizational designs are an effort to remove hierarchical layers by
flattening the chain of command and decentralizing the organization. In good times,
when organizations are financially well off, it is easy to add layers to the organization in
order to get the work done, but when the organization begins to feel a financial pinch,
they often look at their hierarchy to see where they can cut positions. While there are
advantages to a flattened organization, many managers resist such change as it means
their work load is greatly increased.
In flattened organizations, there continues to be line authority, but because the
organizational structure is flattened, more authority and decision making can occur
where the work is being carried out.

STAKEHOLDERS
Stakeholders are those entities in an organizations environment that play a role
in the organizations health and performance or that are affected by the organization.

Stakeholders may be both internal and external, they may include individuals and large
groups, and they may have shared goals or diverse goals.
Internal stakeholders, for example, may include the nurse in a hospital or the dietitian
in a nursing home.
Every organization should be viewed as being part of a greater community of
stakeholders.

LIMITATIONS OF ORGANIZATION CHARTS

The informal structure also has its own leaders. In addition, it also has its own
communication channels, often referred to as the grapevine.

ADVANTAGES AND LIMITATIONS OF THE ORGANIZATION CHART

Advantages
Maps lines of decision-making authority
Helps people understand their assignments and those of their coworkers
Reveals to managers and new personnel how they fit into the organization
Contributes to sound organizational structure
Shows formal lines of communication
Limitations
Shows only formal relationships
Does not indicate degree of authority
May show things are they are supposed to be or used to be rather than as they are
Possibility exists of confusing authority with status

 Authority - is defined as the official power to act. It is power given by the

organization to direct the work of others. A manager may have the authority
to hire, fire, or discipline others. Because the use of authority, power
building, and political awareness are so important to functioning effectively
in any structure.

Responsibility is a duty or an assignment. It is the implementation of a job.

For example, a responsibility common to many charge nurses is establishing
the units daily patient care assignment. Managers should always be
assigned responsibilities with concomitant authority. If authority is not
commensurate to the responsibility, role confusion occurs for everyone
involved.
For example, supervisors may have the responsibility of
maintaining high professional care standards among the staff. If the
manager is not given the authority to discipline employees as needed,
however, this responsibility is virtually impossible to implement.
Accountability is similar to responsibility, but it is internalized. Thus, to be
accountable means that individuals agree to be morally responsible for the
consequences of their actions. Therefore, one individual cannot be
accountable for another. Society holds us accountable for our assigned
responsibilities, and people are expected to accept the consequences of their
actions. A nurse who reports a medication error is being accountable for the
responsibilities inherent in the position.
SHARED GOVERNANCE: ORGANIZATIONAL
Shared governance, one of the most innovative an idealistic of organization
structures, was developed in the mid-1980s as an alternative to the traditional
bureaucratic organizational structure.

II. ORGANIZATIONAL DESIGN

Organizational Design refers to the way in which the building blocks of
organization ----- authority, responsibility, accountability, information, and rewards
------ are arranged or rearranged to improve effectiveness and adaptive capacity.
Organization design and redesign are dynamic, being simultaneously both outcome and
process. As outcome, organization design can be represented by the boxes and lines on
organization chart. These represent how the building blocks are arranged. As many
organizations face increasingly uncertain and rapidly changing environments, new ways
of representing organization are emerging, replacing boxes and lines. Intersecting
circles, inverted triangles, and lattices are alternative ways of describing the outcomes of
design and redesign.
Managements Roles in Organization Design
Managements primary task is to maintain and improve performance.
Often organization design has been thought of as a once and for all event
parallel to an architect or engineer designing and constructing a new building.
The design process is not carried out in isolation from other management
activities. In fact, ideas about the type of design that might be appropriate
should be derived from the organizations mission and strategic planning
process (Pearce, 1982). For example if the Department of Public Health
decides to close down its immunization program, it may be necessary to
regroup ongoing services within the organization.
LEVELS OF ORGANIZATIONAL DESIGN
LEVELS
Individual Positions

Work Groups

Cluster of Work Groups

Total Organizations

ILLUSTRATIONS

Managers
Staff position
Health professionals
Other workers
Task forces and committees
Teams
Units and departments

Division of two or more units

Medical staff organization
Hospitals
Primary Care Centers

Network of Organizations

Systems

Public health units

Long-term care facilities
Health maintenance organizations
(HMOs)
Multispecialty group practices
Strategic alliances between
physicians and health systems
Organizations providing services for
oncology patients
Preferred provider organizations
(PPOs)
Affiliated groups of hospitals
A groups of hospitals under single
ownership
All home health services in a state
A national system of health services
An integrated health system

TYPES OF ORGANIZATIONAL DESIGN

FUNCTIONAL DESIGN- exists when labor is divided into departments specialized by

functional area. This kind of design is typical of a NURSING HOME, CHRONIC-CARE
FACILITY, OR SMALL (LESS THAN 100 BEDS) COMMUNITY GENERAL HOSPITAL.
DIVISIONAL DESIGN - is often found in large academic health science centers (AHSCs)
that operate under conditions of high environmental uncertainty exacerbated by
relationships with the medical school and high technological complexity because of
intensive research activities. (PHARMACEUTICAL COMPANIE AND HEALTH
SUPPLIER ORGANIZATIONS where a large variety of products and markets are
involved.
MATRIX DESIGN - to overcome some of the functional and divisional designs, MATRIX
or MIXED DESIGNS have evolved to improve mechanisms of lateral coordination and
information flow across the organization. (PSYCHIATRIC CENTER)

PARALLEL DESIGN- was originally developed as a mechanism for promoting quality of

working life in organizations (Stein & Kanter, 1980). It is responsible for complex
problem solving requiring participatory mechanisms. (ACUTE GENERAL HOSPITAL)

HEALTH CARE ORGANIZATIONS AND CHANGE

RESISTANCE TO CHANGE - Consist of any employee behaviours designed to discredit,

delay or prevent the implementation of a work change.
Nature and effects
The perceived threat stemming from a change may be real or imagined, intended or
unintended, direct or indirect, large or small. Regardless of the nature of the change,
some employee will try to protect themselves from its effects. Their actions may range
from complaints, foot-dragging, and passive resistance to passionate arguments,
absenteeism, sabotage, and work slowdowns.
Reasons for Resistance
1. Employees may feel uncomfortable with the nature of the change itself.
2. Resistance stems from the method by which change is introduced.
3.Inequity experienced when people perceive themselves being changed while someone
else appears to gain the benefits of the change.

From Resistance to acceptance:

5 stages: denial, anger, depression, search for alternatives, and eventual acceptance of
the prognosis

Seven types of individuals representing different levels of commitment to change:

Covert Resisters- people who resist the change behind the scenes.
Overt Resisters- those who openly resist the change.
Skeptics- people who need to be convinced of the need for the change.

 Observers- those who watch and withhold judgment about the need for or merit
of the change.
Participants- people who accept the change and go through the necessary actions.
Committed- those who embrace the change.
Champions- those who are the initiators of the change.
CHAIN - REACTION EFFECT is a situation in which a change, or other condition, that
directly affects only one person or a few persons may lead to direct or indirect reaction
from many people, even hundreds or thousands, because of their mutual interest in it.

Types of Resistance:
Logical: based on disagreement with the facts, rational reasoning, logic, and science.
Psychological: based on emotions, sentiments, and attitudes.
Sociological: also is logical when it is seen as a product of a challenge to group interests,
norms, and values.

Resistance is not all Bad.

Possible Benefits of Resistance:
Resistance may encourage management to re-examine its change proposals, thus
making sure they are appropriate. Employees operate as part of a system of checks and
balances that ensure that management properly plans and implements change.
Management may be encouraged to do a better job of communicating the change, an
approach that in long run should lead to better acceptance.

LEWINS FORCE FIELD ANALYSIS MODEL

Social psychologist Kurt Lewin developed the force field analysis model to help us
understand how the change process works.
One side of the force field model represents the driving forces that push
organizations toward a new state of affairs. Driving forces in the external environment,
including globalization, virtual work, and a changing workforce. Along with these
external forces, corporate leaders create driving forces within the organization so the
organization anticipates the external forces. These internally originated forces are

difficult to apply because they lack external justifications, so effective transformational

leadership as well as structural change mechanisms are necessary to legitimate and
support internal driving forces.
The other side of Lewins model represents the restraining forces that maintain
the status quo. These restraining forces are commonly called resistance to change
because they appear as employee behaviors that block the change process. Stability
occurs when the driving and restraining forces are roughly in equilibrium-that is when
they are of approximately equal strength in opposite directions.
Lewins force field model emphasizes that effective change occurs by unfreezing
the current situation, moving to a desired condition, and then refreezing the system so
that it remains in this desired state. Unfreezing involves producing disequilibrium
between the driving and restraining forces. As we describe, this may occur by increasing
the driving forces, reducing the restraining forces, or having a combination of both.
Refreezing occurs when the organizations systems and structure are aligned with the
desire behaviors. They must support and reinforce the new role patterns and prevent the
organization from slipping back into the old ways of doing things.
Change is a permanent part of life. No matter who we are, where we live, how
old or young, we all make changes in our lives. Most of us struggle with change
The ways we change inside, the ways we grow and learn, and become
transformed are because of the changes in our lives.
Organizational change is about making alterations to the organization's purpose,
culture, structure, and processes in response to seen or anticipated changes in the
environment. Strategic management of change is all about identifying and embedding in
the organization those changes that will ensure the long-term survival of the
organization. How do we think about change?
Change
CONDITION AND PROCESS
Change can be thought of as a condition and a process. Change as a condition
describes what is happening in the environment; it is part of the reality we must accept.
Change as a condition may profoundly influence our organization, but it takes place
externally and we have little control over it.
Change as a process is what we foster internally in response to changes in the
environment. It is the leadership and management actions we take to change the
organization. Therefore, unlike changes in the environment, change as a process is ours
to influence.

PLANNED OR UNPLANNED?
Change can be planned or unplanned. Both can be good, both can be bad.
Unplanned change just happens in reaction to unseen or unanticipated influences.
Often, it is difficult to tell where the change came from and how it was initiated.
Paradoxically, planned change is all about maintaining the organization's relevancy in
the face of environmental pressures.
2 Types of Change
Unplanned Change
Managers dont expect it
Can lead to chaotic, uncontrolled periods of change
Planned Change
Systematic efforts by managers to move organizations to a new state
Design, technology, tasks, people, information systems, etc.
TACTICAL OR STRATEGIC?
Tactical change occurs in the short-term and, more often than not, is short-lived.
"Fad-surfing" is a sure symptom of tactical change. In the face of changes in the
environment, many leaders often reach out and grasp the "fad du jour" [e.g., one-minute
manager, management by objective (MBO), TQM, TQL]. Then the next day, they grasp
at the next "fad du jour," whip-sawing the organization with inconsistent messages and
inconsequential behavior. This attempt to manage change is a sure sign that the leaders
do not understand the environment, the organization, or both.
Strategic Change
is about leveraging vision to get at fundamental aspects of the organization,
including the organization's direction and its culture. Strategic change is about forging
organizational robustness in the face of environmental pressures. Hence, an accurate
and insightful view of the current reality is as important as a clear vision. Robustness is
the timely capacity to anticipate and adapt to environmental change in order to
maintain competitive advantage. Improving and maintaining robustness takes three
interdependent forms. First, it is a function of comprehensive environmental scanning,
accurate articulation of values, beliefs, and assumptions, the freedom to question values,
beliefs and assumptions, creativity to formulate new options, and tolerance of risk in the
pursuit of a new course. Second, robustness is about resource self-sufficiency. Often, the
capital investment/reinvestment required to implement change is huge. Third,

robustness is about maintaining contact and managing credibility with strategic

constituencies.
ROBUSTNESS
THE CAPACITY TO ADAPT AND MAINTAIN COMPETITIVE ADVANTAGE
OPENNESS: THE FREEDOM TO QUESTION ONE'S OWN BELIEFS AND
ASSUMPTIONS
RESOURCE SELF-SUFFICIENCY: THE MEANS NEEDED TO PUT PLANS
INTO ACTION
CONSTITUENCY SUPPORT: MAINTAINING CONTACT, CREDIBILITY, AND
COMMITMENT
EVOLUTIONARY OR REVOLUTIONARY?
Evolutionary Change
Incremental adaptation to the external environment
Series of phases
-Need for change
-Unfreeze
-Change (or move)
-Refreeze
Revolutionary Change
Unfolds over long periods of time.
Equilibrium periods: organization moves steadily toward its mission and
goals.
Revolutionary periods: Feverish change that affects the overall strategy of the
firm.
Deep structures are affected like culture, design, processes, and relationships
with the environment
Both evolutionary and revolutionary change can be legitimate strategic choices
under the right environmental conditions. Environmental conditions can be defined by
velocity, mass, and complexity. The velocity of change is the rate change takes place. The
mass of the change is how widespread it is. And, the complexity of change means that
change never occurs in isolation. Each change affects other changes in often unseen,

unanticipated, or misunderstood ways that lead to unintended second- and third-order

effects.

References