Undrerstanding & organisation - Essay Example

?The following is an analysis of the NHS case with regards to the changes brought about in the general structure of the organisation with the introduction of the concept of general management to exercise control and coordination of activities, as opposed to the consensus management style that existed prior to the changes. The changes were proposed by the then deputy chair and managing director of the supermarket chain Sainsbury’s, who famously claimed that the NHS was devoid of management that can make firm decisions and not always resort to consultation with doctors or senior clinical staff, as was prevalent due to the consensus management style. The existing structure gave a considerable amount of autonomy to the personnel at the operational level to make decisions, whilst each member of staff, depending on their area of expertise, had the power to veto any decisions made by the rest of the personnel. This was referred to as a ‘lowest common denominator’ style of decision making. Griffith, however, proposed a more management oriented structure, where line managers would be introduced for each unit or hospital, and these managers will carry the sole responsibility of making decisions, applying control measures especially where finances are concerned, and overall coordination of activities within the guidelines provided to achieve strategic objectives. Understanding the environmental circumstances which prompted the need for such changes in a nationalised organisation would provide more insight as to why such measures were necessary, and what these changes have implied for the organisation over the years. One method to study the environment is the PEST analysis, which stands for an understanding of the Political, Economical, Sociological and Technological aspects of the market environment (Johnson et al, 2008; Kotler et al, 2006). The political, economical, and sociological aspects in relation to the NHS case are quite intertwined, as this was a period when Britain was undergoing many changes as a result of the economic recession that started in the preceding years, and the young conservative government under the leadership of Margaret Thatcher was in the process of making many difficult decisions to turn the economy around and to reduce unemployment that hit the three million mark during this time. In addition to this, the Falkland war, albeit won the British public’s admiration of the Thatcher government, resulted in additional expenditure, along with added burden of sustaining existing nationalised businesses, which meant increase in taxes and the resultant inflation. This has caused the government to take stringent measures where financing was concerned specifically for nationalised organisations like the NHS. The government also fully or partly privatised many other initially nationalised organisations to extend some of the burdens to more profitable private entities. It could be that pure observation of how, many private firms have operated profitably during the economic recession, by employing measures of cutting costs, dissolving unwanted business operations, removing redundant personnel etc may have motivated the government to employ similar measures in the nationalised businesses. This seems fitting to the fact that the opinions of an executive from a supermarket chain were taken aboard, and then implemented as in the case of the NHS. The aim, however, was to include a certain degree of competitiveness within nationalised organisations in relation to other organisations in the market, which may result in profitability and expansion, and ultimately creation of new jobs (http://www.time.com/time/magazine/article/0,9171,920566-3,00.html). Another political factor playing an important role during this period was the influx of immigrants despite the government’s best efforts to curb it. Margaret Thatcher’s government was faced with problems related to incoming immigrants from Asian Commonwealth countries like India and Pakistan, and refugees from other regions, and measures had to be taken to reduce this number in order to reduce the burden on the nation in taking on more population. This also meant, changing demographics in Britain, as the society was increasingly becoming diverse with the influx, and new measures would have had to be introduced to be able to cope with the differences that this diversity may have brought. This may apply in both societal and organisational realms (http://www.telegraph.co.uk/news/politics/margaret-thatcher/6906503/Margaret-Thatcher-complained-about-Asian-immigration-to-Britain.html). One more significant development during this time was the advent of technology. The innovation of more sophisticated computers and their relatively easier availability to businesses as opposed to preceding decades had also been instrumental in job losses, as more and more jobs were becoming technology dependent for efficiency and reduction of overhead costs, and people without the necessary skills to operate the technology were made redundant. This is highly analogous to the period of the industrial revolution, where the advent of machines meant no jobs for many workers. This effectively covers the PEST analysis of Britain’s environment during the period of the introduction of changes to the NHS (http://www.politicsresources.net/area/uk/man/con83.htm). The structure of the organisation within the NHS will now be discussed with emphasis on the structure before the changes and after, with reference to literature. It is however vital to understand the concept of corporate or organisational structure. The term ‘organisational structure’ simply refers to the way in which job tasks are formally divided, grouped, and coordinated (Brooks, 2003). It involves the processes of work specialisation, where tasks in the organisation are subdivided into separate jobs; departmentalisation, where the subdivided jobs are grouped together; chain of command, which outlines the line of authority that extends from the top of the organisation to the lowest level, specifying who reports to whom. This is where authority is established; and span of control, where each manager is given a manageable number of subordinates (Robbins, 2001; Mullins, 2003). The degree to which decision making is concentrated at a single point in an organisation is referred to as centralisation (Brooks, 2003). Organisations where top managers make most of the decisions and pass them down to lower managers to merely be followed are more centralised in their structure. This is where management in the operational level has limited freedom to make key decisions even though they operate closer to the end users. Disadvantages of having a centralised structure would be slow flow of information from top levels to the bottom ones, especially in long structures; extenuating amounts of bureaucracy within the flow of information from either end, which may ultimately result in the information being tampered with or lost in the process; loss of motivation for lower level personnel as they do not feel involved in key decision making and consequently do not feel empowered with higher responsibilities. Advantages include a clear body of authority, where the chain of command is clearly defined; clear communication of the values and objectives of the organisation, which results in creating a unified direction for all employees; a strong culture that defines clearly how the organisation behaves and how things are done within (Schein, 2004; Mullins, 2003; Robbins, 2001). In contrast, organisations where lower level personnel are given more discretion and authority to make key strategic decisions are said to be decentralised. Top managers in such an organisation value the involvement of all levels of the structure in coming up with strategies as they realise the importance of the operational level as the key determinant for information on how the market behaves. The obvious advantages of a decentralised structure are a flexible culture that allows change with changing environments; more input from lower level management adding to the value of inputs already present; less feeling of alienation for lower level personnel due to empowerment through decision making, involvement in strategies etc, which improve overall motivational and performance levels. There are however some disadvantages like a weak culture and lack of clear authority that may cause confusion, and also not create a sense of unity amongst personnel in achieving organisational goals (Schein, 2004; Mullins, 2003; Brooks, 2003; Robbins, 2001). The existing organisational structure of NHS, before the changes were made, seems much decentralised with ground personnel at the operational level having significant autonomy to make important decisions. The interaction between staff and superiors, in this case, between doctors, administrators, clinical personnel and staff nurses, seems informal with a great degree of participation from all groups. This, however, seemed to have lacked a sense of direction and unified purpose that comes with effective leadership and management. Decisions were made on the basis of compromise between the different parties rather than by a process of control, especially where budget allocation was concerned. The changes brought about by the government have been aimed at tackling these issues, and also to give a sense of identity and uniformity to the staff in terms of corporate values and goals. Contrary to the above literature on structure, decentralisation has been more problematic in the case of the NHS, including the obvious disadvantages of lack of authority and uniformity. It can then be inferred that establishing clear levels of authority was long overdue. However, the intended outcomes of the changes, apart from the centralisation of authority, was to cut costs through control procedures, to improve staff performance by allowing them to carry out their tasks without having to be concerned with strategic decision making and budget allocation, to facilitate effective teamwork through standardised procedures and work environments, to reduce bureaucracy, and to achieve maximum efficiency with minimum costs. But the achieved outcomes seem entirely different, as implementation of the above measures has brought about a mechanistic form of organisation, with people in the lower level seen merely as machines that have to perform set tasks according to procedure, where the leadership has taken on an autocratic style of authority. Also evident is the fact that the bureaucracy has actually increased along with the distance between management and personnel, where most communication between these entities is being done through written drafts and figures rather than on a one-to-one basis. This again is analogous with early theories of management, like the scientific management theory introduced by Frederick Taylor during the industrial revolution, to increase productivity (Robbins, 2001). This somewhat goes against the human relations theories, which emphasise on workers as social beings with social needs (Robbins, 2001; Mullins, 2003). Another negative outcome is the fact that, instead of cutting costs, the introduction of so many managerial posts will have actually posed more costs to the government through recruitment of high level internal and external personnel to take these posts. This being done at the expense of patients’ time with doctors and staff, as the government sought to reduce the cost per patient. This, apart from seeming unethical, also seems infantile in terms of planning. The changes in organisational structure have also brought changes in the very behaviour of the organisation, by affectively changing its culture. The concept of an organisation as a culture is discussed best by Morgan (2006), where organisational culture has been effectively defined by Schein (2004) as, “A pattern of shared assumptions a group learned as it solved its problems of external adaptation and internal integration that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way you think, perceive, and feel in relation to those problems” In other words, the methods the organisation uses to bring about the internal changes to align with the environment are expressed in the form of culture. Schein (2004) puts the definition in simpler words by saying, “it’s the way we do things around here”. But since organisations are made up of groups and individuals, where each individual brings in their own personality and characteristics to a group, based on their own cultural mental programming (Hofstede, 1997) in the society, the organisational culture then becomes a culmination of different cultures and perspectives brought in by the external society. This brings us to the assumption that organisational culture is largely affected by societal and national cultures (hofstede, 1997; Morgan, 2006). This is evident in the case of the NHS, as the changes brought about reflect the mood of the country in general, where, as discussed above through PEST analysis, the country was in a state of reformation from years of economic recession, challenges posed by technological advance, and changing population demographics. The internal culture then, according to Morgan’s law of requisite variety (2006), must reflect at least all or more of the elements of the external culture for the organisation’s survival. The type of leadership and organisational structure in an organisation determine the kind of culture the company exuberates (Fritz, 1996). An authoritative leadership forms a centralised structure that in turn creates a strong and rigid organisational culture, whilst a democratic leadership forms a decentralised structure, which creates a weak but flexible culture. Clearly the changes brought about in the NHS were that of an authoritative leadership creating a strong culture that is not flexible enough to accommodate views of subordinates. This can be cross referenced with Hofstede’s cultural dimension of power-distance where different national cultures dictate the nature of the relationship between managers and subordinates. It can then be asserted that the changes have incorporated a high power-distance culture, which is normally common in Asian and Middle Eastern societies (Hofstede, 1997). Consequently, such a strong culture brings with it all the disadvantages of a centralised structure like information loss between levels in the structure, lack of a sense of belonging for subordinates and lack of input from the operational level to the top etc, which ultimately result in low motivational levels creating poor performances and high staff turnover. The motivation factor is crucial for the staff, particularly the nursing staff in the NHS case, because the new system of management has brought about more focus on completing paperwork over spending time with patients and catering for their needs. The lack of involvement in key discussions and decision making, and the standardisation of the work environment and uniforms, have had a reciprocal effect on the staff, as where they took pride in the appearance of their workplace before the changes took over, they no longer exhibited such a connection to the workplace or to the organisation after the changes (Johnson et al, 2008). The above clearly emphasises the need for the staff to be recognised as social beings in accordance with the human relations theories. Taking Maslow’s hierarchy of needs for example, requires taking into consideration people’s need to be able to communicate and associate with others both in society and at the workplace, to make the work more interesting and enjoyable through conversations and multiple inputs of ideas (Brooks, 2003). The new mechanistic approach at the NHS has obviously denied staff members of such needs and hence has caused an increase in absenteeism, poor performance levels and ultimately high staff turnovers due to decreased motivation. Hence an organisation’s culture is required to be flexible enough to adapt to change whilst strong enough to sustain its core values and objectives. This calls for a balance between centralisation and decentralisation of structure where the leadership has enough authority over major strategic implementations and can communicate key values and objectives clearly, and at the same time democratic enough to consider the views of lower level subordinates on changing circumstances hence creating a culture that is strong in its application of values and flexible in its approach to change and needs of personnel. The writer is inclined to believe that the changes brought about have introduced too many hierarchical levels with too many executive decision makers, which goes against the main idea of creating a centralised authority without too many divisions. In effect what has come out of the changes is a central authority with too many further central authorities. This has further damaged relationships between management and subordinates, and subordinates’ ability to identify themselves as part of the organisation. Hence the NHS, in the case of this particular unit, would have benefitted by studying the existing culture and activities of the unit, and probably of all the units, before imposing uniform changes upon them. Also no matter what the business objectives, the very existence of the NHS is to cater for patients, which has been given a back seat in the case of these changes where the government resorted to employ outside business executives to make important decisions based on financial figures rather than effectiveness of service to patients. Therefore, it would have been wiser to have employed personnel with more knowledge of medical procedures for key decision making posts, which would have benefitted he concerned departments as well as the patients, and would have kept operational personnel like nurses within the loop of decision making hence making association with the organisation more prominent. References Brooks, I. (2003). Organisational Behaviour: Groups, Individuals and Organisation. 3rd ed. Pearson: Harlow Fritz, R. (1996). Corporate Tides: The Inescapable Laws of Organisational Structure. Berrett-Koehler: San Francisco Hickson, D., McMillan, C., Azumi, K. And Horvath, D. (1979). ‘Grounds for Comparative Organisation Theory: Quicksands or Hardcore?’ in Lammers, C. And Hickson, D. (eds) Organisations Alike and Unlike, Routledge and Kegan Paul Hofstede, G. (1997). Cultures and Organisations: Software of the Mind. McGraw Hill, London Johnson, G. Scholes, K. Whittington, R. (2008). Exploring Corporate Strategy. 8th Edition. England: Pearson Education Ltd Kotler, P., Pfoertsch, W. (2006). B2B Brand Management. Springer-Berlin: Germany Larkey, L.J. (1996). “Toward a theory of communicative interactions in culturally diverse workgroups”, Academy of Management Review, 21:463-91 Morgan, G. (2006) Images of Organisations. Sage Publications, London Mullins, L.J. (2003). Management and Organisational Behaviour. Pitman Publishing, London Robbins. S.P. (2001) Organisational Behaviour. 13th Edition, Upper Saddle River, NJ: Pearson/Prentice Hall, Pearson Education International Rollinson, D. (2005). Organisational Behaviour and Analysis. 3rd edition. Pearson, England Schein, E.H. (2004). Organisational Culture and Leadership. 3rd edition. John-Wiley, San Francisco Online Resources http://www.time.com/time/magazine/article/0,9171,920566-3,00.html http://www.politicsresources.net/area/uk/man/con83.htm http://www.telegraph.co.uk/news/politics/margaret-thatcher/6906503/Margaret-Thatcher-complained-about-Asian-immigration-to-Britain.html Read More