Lecture notes: Management in Health Organization
LECTURE 1: introduction to the course
Deliver value = quality / costs
Organizations in health care are asked to deliver value.
Not delivering enough value: > competitors take over.
- Care providers (hospitals, pharmacies, general practitioners): Accountable Care
Organizations and pay-for-performance.
- Suppliers (pharmaceutical companies, suppliers of medical devices): comparative
effectiveness.
- Insurers and providers: value-based purchasing.
Rising costs due to:
- Innovation
o Financial incentives that reward superior performance
o “Technology war”: sophisticated biotechnical and clinical services
- Aging of the population
- Imperfect market: customers/patients lack information
- People want cheap insurance – patients the best possible treatment
- Providers focus on acute diseases, not on prevention
LECTURE 2: Schools of management
Name, explain, compare and contrast the different schools of management theory
Explain the historical foundations of management
The classical approach: Weber and Bureaucracy
- Max Weber:
o Bureaucracy as a form of organization that is capable of the highest level of
efficiency
o Management and bureaucracy are all about control
o Four main features
▪ Hierarchy of authority
▪ Specialization and division of labour
▪ System of rules (standardisation)
▪ Impersonality, so formal, no emotions, not making friends, not
socializing.
Taylor and Scientific Management.
- Frederik Taylor:
o Explicit emphasis on the “control” element of bureaucracy
o Three major assumptions
▪ 1. Management must plan and control the labour process, so precisely
how it’s done.
▪ 2. Management must supervise: People don’t want to work
▪ 3. Management must determine the best methods: there is one best way
to perform the work
- Henry Fayol
o Administrative management. General principles of management: based on his
observations and on concepts developed by both Weber and Taylor.
, o These principles shaped managerial practice during the last century.
o Management is the study of managerial experiences. If the experiences are
studied and certain generalizations are deducted there from, these will help the
practicing managers.
Summing up the classical approach:
Organizations function in a machine-like manner to accomplish the organization’s goals in a
highly effective manner. Humans are there for only contributing, are only a part.
Human relations approach, Mayo: behavioral; the Hawthorne studies
- 3 faces:
o Illumination experiments: lighting, supposed that the level of production was
affected by other factors than physical conditions of work. But, there was a
lack of a consistent correlation between lighting levels and product output, so
there must been a variety of other factors than just the lightning effect.
o Relay assembly test room: The effect that rest periods and hours of work
would have on efficiency. Factors such as lightning, hours of work, rest
periods, bonus incentives, and supervision affected workers, but the attitudes
of the employees experiencing the factors were of greater significance.
(production increased when they felt like a group).
o Interviewing program: the researchers hoped to gain insights (home life,
relationships) that might play a role in employees’ attitude towards work and
interactions with supervisors. that what employees found most deeply
rewarding were close associations with one another, “informal relationships of
interconnectedness,” as he called them. “Whenever and where it was possible,”
he wrote, generated them like crazy.
Summing up human relationship approach
- Not only driven by financial incentives, but also by human sentiments.
- Primacy of the group in structuring individual behavior.
- Managers must go beyond monetary incentives and topdown control of work
- Elton Mayo: Organization Development and the informal organization
The Systems approach
- Classical approaches: emphasis on technical requirements. Basically understanding
organizations without people.
- Human relations approach: emphasis on the psychological and social aspects and
human needs
- Both approaches study organizations solely in terms of their internal environment
- The systems approach reconcile these two: the organization is part of a larger system
with inputs (environment, recourses, history) and outputs (organization, group,
individual).
The Contingency approach 'Contingent' when used in a leadership sense means
that leaders must adjust their approach appropriately. No one best design.
There is no one optimum state for forms of organization structures and systems of
management > Depends on situational and contextual factors, like the vision of organization,
the size, the technology and overall environment.
Could be seen as an extension of the system approach.
No one best design of organization.
,Part 3 Identify the key elements and relationships that characterize organizations as
dynamic open systems.
The Systems approach.
The organization as an open dynamic system (which means they take input from the
environment, so organizations are not self-sufficient) Influenced by external forces→ adapts
overtime. Outputs are services, which can be again used for another input. So, it connects
directly with environment. So, a system that responds to influences from external
environment. Example: The organization as an open dynamic system
- Influenced by external forces (covid19) → adapts overtime
- Who knows this organization?
Distinction between 2 parts of the external environment
- Transacting environment
o The broader ecosystem - other organizations that have strong or weak direct
relations, such as competitors, suppliers, customers.
o Which all Influences (and it is influenced by) the organization directly
- Macro-environment
o The broadest system containing general societal components, such as politics,
science and technology, behavioral and economy.
o Influence is indirect (by altering the transacting forces). The organization self
has very little influence on macro environment.
Explain and exemplify an organization's transacting and macro environments.
Stakeholders
- System approach – systems inside and outside the organization
o Stakeholders > Can affect and are affected by the organization > Have an
interest (a “stake”) in the organization.
- Stakeholder engagement: is the process in which an organization involves its
stakeholders. Key stakeholders deserve close attention
Define stakeholders, provide examples and explain the importance of stakeholder
engagement for organisational performance.
, LECTURE 3: Managers and strategy
Schools of management thoughts:
- Old, mostly classical aspects
- New, mostly human and relationship aspects
Example on motivation.
Douglas McGregor’s Theory X and Y: The classic approach sees employees as people who
don’t want to work, so an external reward is necessary to motivate them (Theory X).
On the other hand, people cheering up the opportunity to work as long as their (social) needs
are present, Theory Y.
What do managers do? The classical approach by Fayol: name, explain and exemplify
Fayol’s management functions
- He defined Five classic functions of managers
o Forecasting and planning: managers should examine the future, decide what
needs to be achieved and actually achieve those goals.
o Organizing: the managers should provide the materials and human resources,
and build in those structures, deciding who does what and when.
o Commanding: maintaining activity among personnel, telling people what to
do and force it.
o Coordinating: different people in different positions are responsible for a part
of the department, managers have to coordinate in order to harmonize all those
activities.
o Controlling: making sure everything goes as planned and establish principles.
These five functions are technical skills to acquire efficiency.
In response to Fayol, Mintzberg: said that Managers do not carry out only these classical
functions, but several roles. Henry Mintzberg’s 10 managerial roles in 3 categories:
informational, interpersonal and decisional. name, explain and exemplify Mintzberg’s
management roles.
What is the most contrasting difference between Fayol’s and Mintzberg’s views on the role of
a manager? → Mintzberg pays Explicit attention to human skills: ability to work with,
understand and motivate other people.
- Fayol: managers authority
- Mintzberg: relationships
“The best corporate managers have become, in a sense, enemies of the corporation. The
reasons for this are clear enough. Corporations are bureaucracies and managers are
bureaucrats. Their fundamental tendency is toward self-perpetuation. They are, almost by
definition, resistant to change” End of management 8 Alan Murray calls for a new
management theory / model wherein change, innovation, adaptability are at the core. Is this
necessarily true?
→ No, because there is no one way to define a manager.
LECTURE 1: introduction to the course
Deliver value = quality / costs
Organizations in health care are asked to deliver value.
Not delivering enough value: > competitors take over.
- Care providers (hospitals, pharmacies, general practitioners): Accountable Care
Organizations and pay-for-performance.
- Suppliers (pharmaceutical companies, suppliers of medical devices): comparative
effectiveness.
- Insurers and providers: value-based purchasing.
Rising costs due to:
- Innovation
o Financial incentives that reward superior performance
o “Technology war”: sophisticated biotechnical and clinical services
- Aging of the population
- Imperfect market: customers/patients lack information
- People want cheap insurance – patients the best possible treatment
- Providers focus on acute diseases, not on prevention
LECTURE 2: Schools of management
Name, explain, compare and contrast the different schools of management theory
Explain the historical foundations of management
The classical approach: Weber and Bureaucracy
- Max Weber:
o Bureaucracy as a form of organization that is capable of the highest level of
efficiency
o Management and bureaucracy are all about control
o Four main features
▪ Hierarchy of authority
▪ Specialization and division of labour
▪ System of rules (standardisation)
▪ Impersonality, so formal, no emotions, not making friends, not
socializing.
Taylor and Scientific Management.
- Frederik Taylor:
o Explicit emphasis on the “control” element of bureaucracy
o Three major assumptions
▪ 1. Management must plan and control the labour process, so precisely
how it’s done.
▪ 2. Management must supervise: People don’t want to work
▪ 3. Management must determine the best methods: there is one best way
to perform the work
- Henry Fayol
o Administrative management. General principles of management: based on his
observations and on concepts developed by both Weber and Taylor.
, o These principles shaped managerial practice during the last century.
o Management is the study of managerial experiences. If the experiences are
studied and certain generalizations are deducted there from, these will help the
practicing managers.
Summing up the classical approach:
Organizations function in a machine-like manner to accomplish the organization’s goals in a
highly effective manner. Humans are there for only contributing, are only a part.
Human relations approach, Mayo: behavioral; the Hawthorne studies
- 3 faces:
o Illumination experiments: lighting, supposed that the level of production was
affected by other factors than physical conditions of work. But, there was a
lack of a consistent correlation between lighting levels and product output, so
there must been a variety of other factors than just the lightning effect.
o Relay assembly test room: The effect that rest periods and hours of work
would have on efficiency. Factors such as lightning, hours of work, rest
periods, bonus incentives, and supervision affected workers, but the attitudes
of the employees experiencing the factors were of greater significance.
(production increased when they felt like a group).
o Interviewing program: the researchers hoped to gain insights (home life,
relationships) that might play a role in employees’ attitude towards work and
interactions with supervisors. that what employees found most deeply
rewarding were close associations with one another, “informal relationships of
interconnectedness,” as he called them. “Whenever and where it was possible,”
he wrote, generated them like crazy.
Summing up human relationship approach
- Not only driven by financial incentives, but also by human sentiments.
- Primacy of the group in structuring individual behavior.
- Managers must go beyond monetary incentives and topdown control of work
- Elton Mayo: Organization Development and the informal organization
The Systems approach
- Classical approaches: emphasis on technical requirements. Basically understanding
organizations without people.
- Human relations approach: emphasis on the psychological and social aspects and
human needs
- Both approaches study organizations solely in terms of their internal environment
- The systems approach reconcile these two: the organization is part of a larger system
with inputs (environment, recourses, history) and outputs (organization, group,
individual).
The Contingency approach 'Contingent' when used in a leadership sense means
that leaders must adjust their approach appropriately. No one best design.
There is no one optimum state for forms of organization structures and systems of
management > Depends on situational and contextual factors, like the vision of organization,
the size, the technology and overall environment.
Could be seen as an extension of the system approach.
No one best design of organization.
,Part 3 Identify the key elements and relationships that characterize organizations as
dynamic open systems.
The Systems approach.
The organization as an open dynamic system (which means they take input from the
environment, so organizations are not self-sufficient) Influenced by external forces→ adapts
overtime. Outputs are services, which can be again used for another input. So, it connects
directly with environment. So, a system that responds to influences from external
environment. Example: The organization as an open dynamic system
- Influenced by external forces (covid19) → adapts overtime
- Who knows this organization?
Distinction between 2 parts of the external environment
- Transacting environment
o The broader ecosystem - other organizations that have strong or weak direct
relations, such as competitors, suppliers, customers.
o Which all Influences (and it is influenced by) the organization directly
- Macro-environment
o The broadest system containing general societal components, such as politics,
science and technology, behavioral and economy.
o Influence is indirect (by altering the transacting forces). The organization self
has very little influence on macro environment.
Explain and exemplify an organization's transacting and macro environments.
Stakeholders
- System approach – systems inside and outside the organization
o Stakeholders > Can affect and are affected by the organization > Have an
interest (a “stake”) in the organization.
- Stakeholder engagement: is the process in which an organization involves its
stakeholders. Key stakeholders deserve close attention
Define stakeholders, provide examples and explain the importance of stakeholder
engagement for organisational performance.
, LECTURE 3: Managers and strategy
Schools of management thoughts:
- Old, mostly classical aspects
- New, mostly human and relationship aspects
Example on motivation.
Douglas McGregor’s Theory X and Y: The classic approach sees employees as people who
don’t want to work, so an external reward is necessary to motivate them (Theory X).
On the other hand, people cheering up the opportunity to work as long as their (social) needs
are present, Theory Y.
What do managers do? The classical approach by Fayol: name, explain and exemplify
Fayol’s management functions
- He defined Five classic functions of managers
o Forecasting and planning: managers should examine the future, decide what
needs to be achieved and actually achieve those goals.
o Organizing: the managers should provide the materials and human resources,
and build in those structures, deciding who does what and when.
o Commanding: maintaining activity among personnel, telling people what to
do and force it.
o Coordinating: different people in different positions are responsible for a part
of the department, managers have to coordinate in order to harmonize all those
activities.
o Controlling: making sure everything goes as planned and establish principles.
These five functions are technical skills to acquire efficiency.
In response to Fayol, Mintzberg: said that Managers do not carry out only these classical
functions, but several roles. Henry Mintzberg’s 10 managerial roles in 3 categories:
informational, interpersonal and decisional. name, explain and exemplify Mintzberg’s
management roles.
What is the most contrasting difference between Fayol’s and Mintzberg’s views on the role of
a manager? → Mintzberg pays Explicit attention to human skills: ability to work with,
understand and motivate other people.
- Fayol: managers authority
- Mintzberg: relationships
“The best corporate managers have become, in a sense, enemies of the corporation. The
reasons for this are clear enough. Corporations are bureaucracies and managers are
bureaucrats. Their fundamental tendency is toward self-perpetuation. They are, almost by
definition, resistant to change” End of management 8 Alan Murray calls for a new
management theory / model wherein change, innovation, adaptability are at the core. Is this
necessarily true?
→ No, because there is no one way to define a manager.
