Lecture 1 – Introduction
Exam: 3 open ended questions + 38 multiple choice
Recently, many hospitals are in financial trouble, closure of hospitals,
nobody seems to be responsible, management within hospital is not
functioning well
- These problems are caused by problems, which will be discussed in
this course!
Challenges in health care
- There is a need for an increase in quality and access, but at the
same reduce costs
- Changes in demographics, chronic diseases, technological
advancements all influence and play a role in the quality of health
care
- Who is involved in all these decisions?
o Internal stakeholders
o External stakeholders
- Deliver value not delivering enough value competitors take
over
- Rising costs due to innovation, aging population, imperfect
market, people want cheap insurance, providers focus on acute
diseases, not on prevention.
Management challenges
- Customized care and differentiation, personalized care (genomics)
o It’s difficult and more expensive to make care personalized
- Continuous pressure on quality of care
- Ageing population/older people become major market segment
- Increase of chronically ill people
- Lifestyle and health, prevention of disease
o Should the hospital deal with this? Or not their job?
- Globalization and commercialization of health market
- ICT changes information exchange and relation patient-doctor
Also, nasty management issues
- Failing projects
- Legal issues
- Problems with key stakeholders
- Conflicts at management level
1
,Lecture 2 – Schools of Management
Learning goals:
After this lecture, students should be able to
Explain the historical foundations of management
Name and explain the different schools of management theory
Compare and contrast different schools of management theory
Name and explain the key elements and relationships that
characterize organizations as dynamic open systems
Explain and exemplify a manager's interpersonal, informational and
decisional roles.
Explain the importance of mission and vision in strategy.
Formulate a SMART goal, recommendation and/or plan of action.
Analyze an organization’s internal and external environment.
The Main Schools of Management Theory/Historical foundations of
management
- Classical early 20th century
- Human Relations 1940’s, importance of social interactions
- Systems 1950’s, understanding of organization as part of broader
system and also understanding organization itself as a system
- Contingency 1950’s
Management used to be trial and error. Understanding management is a
growing issue. Management should therefore have its own body of theory
Classical approach – Weber and Bureaucracy
- Bureaucracy as a form of organization that is capable of the
highest level of efficiency
- Management and bureaucracy are all about control
- Four main features
o Hierarchy of authority
o Specialization and division of labor
o System of rules (standardization)
o Impersonality decisions are made based on rationality
- Contribution of Frederik Taylor (Scientific Management)
o Explicit emphasis on the control element of bureaucracy
- Three major assumptions:
o Management must plan and control the labor process
o Management must supervise - people don’t want to work
o Management must determine the best methods - there is one
best way to perform the work
- Contribution of Fayol and Administrative Management
o General principles of management: based on his observations
and on concepts developed by both Weber and Taylor
2
, o These principles shaped managerial practice during the last
century
Managers have authority and responsibility over
employees
Hierarchy between levels of managers
Thus: the organization functions like a machine to accomplish the
organizations goals in a highly effective manner
- No human aspect (only a piece in the machine and humans are not
intrinsically motivated)
- Assumption that the organization can be effective/maximized
Human relations approach: The Hawthorne studies
- Paying attention to what a worker needs as a way to improve
productivity
o Contradictory to classical school of management
- Phase 1 of the hawthorne studies: Illumination experiments
scientific management style effect of lightning on productivity
o Remember scientific management style: one best way to do
the work, can be as detailed as lightning
o Results of this study were inconclusive
o The level of production was influenced by other factors than
physical conditions of work
- Phase 2: Relay assembly test room two women as test
subjects, and they ask 4 other co-workers to join
o Measuring hours of work, duration of pauses, etc. affect the
group and individual activity
o Again, it was not really the change that affected productivity
o Researchers concluded that the fact that they were being
observed explained the effect on outcome = famous
hawthrone effect
- Phase 3: Interviewing program attempt to find out more about
the workers. More than 20.000 employees were interviewed
o Not just information on supervision and work conditions, but
also about attitudes, interpersonal relationship, and group
process
o Conclusion: satisfying for some could be dissatisfying to
other, so there is no one best way
o Some work less hard if they thought the rest of the team
would be upset by the fact, they would be highly productive,
even if they are offered extra money
- So, social relations really matter!
o Primacy of the group in structuring individual behavior
o Managers must go beyond monetary incentives and top-down
control of work
o Elton Mayo: organization development and the informal
organization
3
, o Role of peer acceptance and solidarity is an important factor to
consider by managers. Employees are not only driven by
money
The system approach
- Classical approach: emphasis on technical requirements
- Human relations approach: emphasis on the psychological and social
aspects
- Both approaches study organizations solely in terms of their internal
environment
- The systems approach reconcile these two
- Organizations are analyzed as a system, with a number of inter-
related subsystems
- Any part of the organization is affected by any other part
- Inputs come from outside, outputs go outside, with feedback loop.
So even the external environment influences organization
o So, the organization is part of a larger system
Contingency approach
- There is no one optimum state for forms of organization structures
and systems of management
o Depends on situational and contextual factors
- Aspects of classical school (structure), but also combining with
human components of human relations schools
- Can be seen as an extension of the system approach
4
Exam: 3 open ended questions + 38 multiple choice
Recently, many hospitals are in financial trouble, closure of hospitals,
nobody seems to be responsible, management within hospital is not
functioning well
- These problems are caused by problems, which will be discussed in
this course!
Challenges in health care
- There is a need for an increase in quality and access, but at the
same reduce costs
- Changes in demographics, chronic diseases, technological
advancements all influence and play a role in the quality of health
care
- Who is involved in all these decisions?
o Internal stakeholders
o External stakeholders
- Deliver value not delivering enough value competitors take
over
- Rising costs due to innovation, aging population, imperfect
market, people want cheap insurance, providers focus on acute
diseases, not on prevention.
Management challenges
- Customized care and differentiation, personalized care (genomics)
o It’s difficult and more expensive to make care personalized
- Continuous pressure on quality of care
- Ageing population/older people become major market segment
- Increase of chronically ill people
- Lifestyle and health, prevention of disease
o Should the hospital deal with this? Or not their job?
- Globalization and commercialization of health market
- ICT changes information exchange and relation patient-doctor
Also, nasty management issues
- Failing projects
- Legal issues
- Problems with key stakeholders
- Conflicts at management level
1
,Lecture 2 – Schools of Management
Learning goals:
After this lecture, students should be able to
Explain the historical foundations of management
Name and explain the different schools of management theory
Compare and contrast different schools of management theory
Name and explain the key elements and relationships that
characterize organizations as dynamic open systems
Explain and exemplify a manager's interpersonal, informational and
decisional roles.
Explain the importance of mission and vision in strategy.
Formulate a SMART goal, recommendation and/or plan of action.
Analyze an organization’s internal and external environment.
The Main Schools of Management Theory/Historical foundations of
management
- Classical early 20th century
- Human Relations 1940’s, importance of social interactions
- Systems 1950’s, understanding of organization as part of broader
system and also understanding organization itself as a system
- Contingency 1950’s
Management used to be trial and error. Understanding management is a
growing issue. Management should therefore have its own body of theory
Classical approach – Weber and Bureaucracy
- Bureaucracy as a form of organization that is capable of the
highest level of efficiency
- Management and bureaucracy are all about control
- Four main features
o Hierarchy of authority
o Specialization and division of labor
o System of rules (standardization)
o Impersonality decisions are made based on rationality
- Contribution of Frederik Taylor (Scientific Management)
o Explicit emphasis on the control element of bureaucracy
- Three major assumptions:
o Management must plan and control the labor process
o Management must supervise - people don’t want to work
o Management must determine the best methods - there is one
best way to perform the work
- Contribution of Fayol and Administrative Management
o General principles of management: based on his observations
and on concepts developed by both Weber and Taylor
2
, o These principles shaped managerial practice during the last
century
Managers have authority and responsibility over
employees
Hierarchy between levels of managers
Thus: the organization functions like a machine to accomplish the
organizations goals in a highly effective manner
- No human aspect (only a piece in the machine and humans are not
intrinsically motivated)
- Assumption that the organization can be effective/maximized
Human relations approach: The Hawthorne studies
- Paying attention to what a worker needs as a way to improve
productivity
o Contradictory to classical school of management
- Phase 1 of the hawthorne studies: Illumination experiments
scientific management style effect of lightning on productivity
o Remember scientific management style: one best way to do
the work, can be as detailed as lightning
o Results of this study were inconclusive
o The level of production was influenced by other factors than
physical conditions of work
- Phase 2: Relay assembly test room two women as test
subjects, and they ask 4 other co-workers to join
o Measuring hours of work, duration of pauses, etc. affect the
group and individual activity
o Again, it was not really the change that affected productivity
o Researchers concluded that the fact that they were being
observed explained the effect on outcome = famous
hawthrone effect
- Phase 3: Interviewing program attempt to find out more about
the workers. More than 20.000 employees were interviewed
o Not just information on supervision and work conditions, but
also about attitudes, interpersonal relationship, and group
process
o Conclusion: satisfying for some could be dissatisfying to
other, so there is no one best way
o Some work less hard if they thought the rest of the team
would be upset by the fact, they would be highly productive,
even if they are offered extra money
- So, social relations really matter!
o Primacy of the group in structuring individual behavior
o Managers must go beyond monetary incentives and top-down
control of work
o Elton Mayo: organization development and the informal
organization
3
, o Role of peer acceptance and solidarity is an important factor to
consider by managers. Employees are not only driven by
money
The system approach
- Classical approach: emphasis on technical requirements
- Human relations approach: emphasis on the psychological and social
aspects
- Both approaches study organizations solely in terms of their internal
environment
- The systems approach reconcile these two
- Organizations are analyzed as a system, with a number of inter-
related subsystems
- Any part of the organization is affected by any other part
- Inputs come from outside, outputs go outside, with feedback loop.
So even the external environment influences organization
o So, the organization is part of a larger system
Contingency approach
- There is no one optimum state for forms of organization structures
and systems of management
o Depends on situational and contextual factors
- Aspects of classical school (structure), but also combining with
human components of human relations schools
- Can be seen as an extension of the system approach
4
