Understanding Organizational Structure: Formal vs Informal Approach

1. Chapter 12 Organizational Structure

2. Formal versus Informal Organizational Structure • Formal: the emphasis is on organizational positions and formal power • Provides a framework for defining managerial authority, responsibility, and accountability • Informal: the focus is on the employees, their relationships, and the informal power that is inherent within those relationships • Has its own leaders and communication channel (grapevine)

3. Question Tell whether the following statement is true or false: Assigning tasks is part of the informal structure: • True • False

4. Answer Answer: Rationale:

5. Bureaucracy as an Organizational Design • There must be a clear division of labor • A well-defined hierarchy of authority must exist • There must be impersonal rules • There must be a system for dealing with work situations • There must be a system of rules for covering the rights and duties of each position • Selection for employment must be based on technical competence

6. Organization Structure Terminology • Span of control • Line authority • Staff authority • One man, one boss • Unity of command • Scalar chain • Authority • Responsibility • Accountability

7. Unity of Command It is indicated by the vertical solid line between positions on the organizational chart This concept is best described as one person/one boss in which employees have one manager to whom they report and to whom they are responsible It is difficult to maintain in some large health-care organizations, because the nature of health care requires a multidisciplinary approach

8. Question Why can unity of command be difficult to maintain? • It can be difficult to keep track of who one reports to • The organizational chart can be confusing • The multidisciplinary nature of health care makes it difficult to maintain

9. Answer Answer: Rationale:

10. Refers to the number of people directly reporting to any one manager and determines the number of interactions expected of him or her Too many people reporting to a single manager delays decision making, whereas too few results in an inefficient, top-heavy organization Span of Control

11. Centrality • Where a position falls on an organization chart • Degree of communication of a particular management position • The middle manager often has a broader view of the organization • Decisions are made by a few managers at the top of the hierarchy

12. Levels of Management Top-Level Managers • Board of Directors • Chief Executive Officer • Administrators Middle-Level Managers • Nursing supervisors • Department heads First-Level Managers • Team leaders • Charge nurses • Primary care nurses • Case managers

13. Advantages of the Organization Chart • 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

14. Disadvantages of the Organization Chart • Does not show the informal structure of the organization • Does not indicate the degree of authority held by each line position • May show things as they are supposed to be or used to be rather than as they are • Possibility exists of confusing authority with status

15. Types of Organizational Structures • Line structures • Ad hoc design • Matrix structures • Service line organization • Flat designs

16. Flattened Organization Structure

17. Ad Hoc Design • Modification of the bureaucratic structure • Sometimes used temporarily to facilitate project completion within a formal line organization • Overcomes the inflexibility of line structure • Serves as a way for professionals to handle increasingly large amounts of information • Uses a project team or task approach and is usually disbanded after a project is completed • May result in decreased employee loyalty to the parent organization

18. Question Tell whether the following statement is True or False: Ad hoc design is incompatible with a formal line structure. • True • False

19. Answer Answer: Rationale:

20. Matrix Organizations • Designed to focus on both the product and the function • Have a formal vertical and horizontal chain of command • Have fewer formal rules and fewer levels of the hierarchy • Can cause slow decision making due to information sharing • Can produce confusion and frustration for workers because of dual-authority hierarchical design

21. Service Line Organizations • Used in some large institutions to address the shortcomings that are endemic to traditional large bureaucratic organizations • Sometimes called care-centered organizations • Smaller in scale than large bureaucratic systems

22. Flat Organizational Designs • Remove hierarchical layers by flattening the scalar chain and decentralizing the organization • Continue to have line authority, but because the organizational structure is flattened, more authority and decision making can occur where the work is being carried out • Despite being very flat, often retain many characteristics of a bureaucracy

23. The decision-making hierarchy, or pyramid, is often referred to as a scalar chain Scalar Chain

24. In organizations with centralized decision making, a few managers at the top of the hierarchy make most of the decisions In decentralized decision making, decision making is diffused throughout the organization, and problems are solved by the lowest practical managerial level. Usually, this means that problems can be solved at the level at which they occur Centralized versus Decentralized Decision Making

25. Question A company that always directs problems to managers at the top of the hierarchy is using: • Centralized decision making • Decentralized decision making

26. Answer Answer: Rationale:

27. Stakeholders • Those entities in an organization’s environment that play a role in the organization’s health and performance, or that are affected by the organization • May be both internal and external • Every organization should be viewed as being part of a greater community of stakeholders

28. Definitions—Accountability, Responsibility, and Authority • Accountability is the moral responsibility that accompanies a position • Responsibility is related to job assignment and must be accompanied by enough authority to accomplish the assigned task • Authority is the official power to act and direct the work of others

29. Organizational Culture • The values and behaviors that contribute to the unique social and psychological environment of an organization • A sum total of values, language, past history of “sacred cows,” formal and informal communication networks, and the rituals of an organization • Differs from organizational climate (how individuals perceive the organization)

30. Organizational culture is often confused with organizational climate—how employees perceive an organization. The perception may be accurate or inaccurate, and people in the same organization may have different perceptions about the same organization Organizational Climate

31. Question How employees perceive an organization is the: Organizational climate Organizational culture Organizational chart Organizational structure

32. Answer Answer: Rationale:

33. Success in building a new culture often requires new leadership and/or outside analysis Building a New Culture

34. Shared Governance • Introduced in the 1980s • Nurses at every level play a role in the decisions that affect nursing activity throughout the system • Nurse-managers move out of traditional industrial model roles into collegial models, becoming moderators of the service process • Usually defined by a structure of rules or bylaws

35. Although participatory management lays the foundation for shared governance, they are not the same. Participatory management implies that others are allowed to participate in decision making over which someone has control. Thus, the act of “allowing” participation identifies for the participant the real and final authority Participatory Management

36. Characteristics of Magnet Hospitals • Well-qualified nurse executives in a decentralized environment, with organizational structures that emphasize open, participatory management • Autonomous, self-managing, self-governing climates that allow nurses to fully practice their clinical expertise, flexible staffing, adequate staffing ratios, and clinical career opportunities • A professional practice culture in all aspects of nursing care • Compliance with standards in the ANA's Scope and Standards for Nurse Administrators

37. The 14 Forces of Magnetism for Magnet Hospital Status • 1. Quality of nursing leadership • 2. Organizational structure • 3. Management style • 4. Personnel policies and programs • 5. Professional models of care • 6. Quality of care • 7. Quality improvement • 8. Consultation and resources • 9. Autonomy

38. The 14 Forces of Magnetism for Magnet Hospital Status—(cont.) • 10. Community and the hospital • 11. Nurses as teachers • 12. Image of nursing • 13. Interdisciplinary relationships • 14. Professional development

39. Pathway to Excellence • Recognizes health-care organizations with foundational quality initiatives in creating a positive work environment, as defined by nurses and supported by research

40. Committees • Too many committees in an organization is a sign of a poorly designed organizational structure • To be productive committees should have: • An appropriate number of members • Prepared agendas • Clearly outlined tasks • Effective leadership

41. Groupthink occurs when there is too much conformity to group norms, often resulting in opinions and ideas that may lack merit Groupthink