Assignment 2 Discussion QuestionBased upon the assigned reading f.docx

Assignment 2: Discussion Question
Based upon the assigned reading for
Module 1
, describe how the evolutions of healthcare delivery in the
United States positively or negatively affect the current health
care system. Provide examples with your response.
INTRODUCTION
Managers are found in every organization. They apply
principles of management to address basic organizational needs.
Systems thinking provides a useful paradigm and structure for
managerial activities. Quality initiatives and good customer
service enhance the operations and potential for success of any
organization. This chapter introduces all three subjects:
management, systems thinking, and quality improvement.
MANAGEMENT
Management evokes images of control, motivation, and
operations—internal activities that are essential in
organizations. Referring to the individuals who perform those
activities, one contemporary source defines management as
“those in charge of running a business” (Princeton University
2010
). Another offers the following definition: “the person or
persons that are in charge of running a business establishment,
organization or institution” (American Heritage
2006
). Traditionally, the primary activities (also referred to as
functions) of managers have been categorized as planning,
organizing, leading or motivating, and controlling
(Schermerhorn
2009
). In this book, we use the term
facilitating
to encompass the motivational and leadership activities
emphasized in health organizations. We also add the activity

improving
to each of the four functions to emphasize the foundational
importance of continuous quality improvement in all
management activities. The chapters of this book are grouped
around the four management functions of:
planning for improvement, organizing for improvement,
facilitating improvement
, and
control and improvement
. Managers and the four categories of management activities are
essential to ensure the smooth operation of an entity.
Management has many experts (both by reputation and by self-
proclamation) who have published books on the subject (see
references and resources at the end of the chapter). The common
thread is the need to guide an organization toward its goals. A
related common element of a manager’s job is providing
guidance and sufficient resources for employees to be
productive. Other important aspects of managing that have
emerged more recently include applying systems thinking,
continuously improving the quality of services and programs,
and providing excellent customer service. These are discussed
in greater detail later in this chapter.
Competencies are defined as effective applications of
knowledge, skills, attitudes, and values in complex situations
(Calhoun et al.
2002
). A diverse range of managerial competencies is needed in all
working milieus. Work that is related to health is undertaken in
a wide variety of settings, including private organizations that
are classified as for-profit or nonprofit and public (government-
funded) organizations. The governance and financial guidelines
that apply to for-profit, nonprofit, and public organizations are
different. The managerial competencies are, however, quite
similar. There are some differences depending on the size of the
organization. Managers of small organizations tend to be
generalists who must be able to meet a variety of demands that

emerge in their day-to-day activities. In comparison, managers
who work in large organizations may become specialists who
focus on a category of complex issues, such as finance, human
resources, strategic planning, or program evaluation.
All managers need to understand people. They must understand
leadership, evaluation, motivation, personalities, and
communication styles. Successful managers are able to apply
these basics to the people that they work with and supervise.
They must be able to adjust their expectations of individual
employees. They must also be adroit at helping their employees
develop their competencies and prepare them for advancement.
Management is challenging but is rarely boring. Achieving
success as a manager requires the ability to modify plans on
short notice. Managers must trust their employees and give them
opportunities to grow. Management also includes accepting the
knowledge that employees will occasionally fail and being able
to help them learn from failure. Successful managers have open
and prepared minds. Finally, managers must be committed to
their employees, their employer, and themselves. In addition to
commitment, they must respect all three. Despite the challenges
of management and the hard work that is required to complete
many tasks, the satisfaction that accompanies success is highly
rewarding.
Although full-time managers have the primary responsibility for
carrying out the management activities of an organization, in
fact, all employees contribute to their fulfillment and, by
extension, to organizational success. All employees of an
organization, whether they are managers or not, contribute to
planning, organizing, facilitating, and controlling their
organizations for improvement and performance. All employees
benefit from having some of the competencies of management
and from understanding the managerial functions. No matter
what their role in the organization, employees make choices
about how to manage their own work and often assist in
managing the work of several team or project members. In
effective organizations, employees both identify with and

contribute to the activities of management rather than viewing
managers as members of a different group or, worse, as
adversaries or enemies.
If employees understand and support (in addition to challenging
and trying to improve) the management activities of their
employer, then the organization is better able to move quickly
and efficiently to improve processes and outcomes. Employees
also feel more invested in their organization and more
empowered in their work. Employees become allies, rather than
victims, of management. For these reasons, it is important that
individuals understand and participate in fulfilling the
management functions of their employer’s organization. This
applies to all persons in a given organization and is independent
of their positions.
SYSTEMS THINKING
A key advance in modern management practice was the
realization that managerial decisions are rarely, if ever, made in
a vacuum. Each decision has implications for other parts of the
organization and often for suppliers and customers. For
example, the decision to reorganize a department is likely to
affect how employees interact with workers from other
departments and with external stakeholders. In addition, every
management decision has consequences (some of which are
unanticipated) that unfold over weeks, months, and even years.
A decision to reorganize has long-term consequences for
employee morale, retention, and performance, and for
community relations. Better decisions result when the
interdependent effects and long-term consequences of
managerial actions are considered in advance.
Generically, this approach to decision making can be referred to
as
systems thinking
. Systems thinking can be defined as “a general conceptual
orientation [that is] concerned with the interrelationships
between parts and their relationships to a functioning whole,
often understood within the context of an even greater whole”

(Trochim et al.
2006
, 538). Systems thinking has been characterized as
forest
thinking rather than
tree-by-tree
thinking. This highlights the importance of understanding the
context of relationships in addition to their details. Systems
thinking has also been described as
dynamic
thinking rather than
static
thinking because it pushes people to consider the consequences
of their actions over time (Richmond
2000
). Systems thinking has been advanced as a basic competency
for all public health practitioners (Association of Schools of
Public Health
2010
), and it has received widespread application in the study of
public health policy. Almost by definition, preventing health
problems and promoting population health through public policy
require systems thinking because the consequences of
promotion and prevention unfold over long periods of time and
involve complex interrelationships. Systems thinking also is
promoted as a basic competency for managers in hospitals and
other providers of clinical health services through the
competency models of major professional associations such as
the American College of Healthcare Executives, the American
Organization of Nurse Executives, and the Healthcare Financial
Management Association (Healthcare Leadership Alliance
2011
).
A classic review and application of systems thinking (Senge
1993
) in the early 1990s prompted interest in more widespread

applications of systems thinking in management decision
making. To encourage application of systems thinking, each
chapter following this one concludes with an example of applied
systems thinking in situations and organizations related to
management. Several terms and ideas that underlie systems
thinking for managers in organizations that provide programs
and services related to health will be introduced next.
Systems
are groups of interacting or interdependent elements that form
a unified whole. Organizations clearly are systems. They are
comprised of inputs (employees, managers, and financial
resources) and processes (policies, procedures, and production
activities) that interact to produce outputs (products, programs,
and services). An organizational system is open to influences
from its environment, particularly suppliers of inputs and
recipients or purchasers of outputs. To visualize changes in a
system over time, the concept of a
causal loop
is very useful. Causal loop diagrams portray cause-and-effect
linkages within a system. Causal loops are circular, rather than
straight lines. They encourage thinking about changes that occur
over time and about feedback effects.
Feedback
is information about change that leads to further modifications.
Performance reviews of employees are examples of a common
feedback mechanism that exists within organizational systems.
Causal loops can either be
reinforcing
, where change in one direction causes even more change in that
same direction, or
balancing
, where change in one direction creates resistance in the
opposite direction. The result of a
balancing loop
is a stable situation or equilibrium.
Organizational growth is an example of a

positive reinforcing loop
(also referred to as a virtuous cycle). Often, organizational
growth creates new revenues or other sources of support, which
spurs further growth. In contrast, a
negative reinforcing loop
(also referred to as a vicious cycle) leads to unwanted change.
Organizational downsizing is an example of a negative
reinforcing loop. Downsizing can reduce the quality of
organizational outputs, decrease demand for organizational
services, and stimulate further downsizing. Monitoring budgets
by using variance analysis (reviewing deviations from expected
expenditure allocations) is an illustration of a balancing causal
loop. A negative variance causes managers to reduce spending
or cut expenses, causing the budget to move back into
equilibrium.
Causal loops form the building blocks for visualizing systems as
they change over time. Management scholars have identified
several (approximately 10) common types or storylines of
system change.
System archetypes
are patterns that occur repeatedly in different settings (Pegasus
Communications
2010
). System archetypes are useful for training people to think
dynamically about complex interrelationships.
Fixes that fail
is an example of a system archetype. In the fixes that fail
storyline, a solution (fix) is applied to a problem and has
immediate positive results. However, the fix has unforeseen
long-term consequences that eventually make the problem
worse. A balancing loop in the short run is offset by the
outcomes of a negative reinforcing loop that appears after some
delay and eventually overwhelms the balancing loop. “Win
today, lose tomorrow” summarizes the fixes that fail scenario.
The tobacco industry in the United States “won today” for many
decades by denying that smoking caused serious health

problems. Those denials had the unintended long-term
consequence of stimulating development of convincing
scientific evidence that increased the liability of tobacco
companies for damages, harming the industry in the long run.
An example of a fix that fails in the realm of management is
rewarding a single employee who is vocal about needing a pay
raise, without considering the more subtle, long-term
demoralizing effects that such a single reward can have on the
rest of the workforce.
A second systems thinking archetype is
drifting goals
, wherein a gradual downward slide in performance goes
unnoticed, threatening the long-term future of a system.
Suppose, for example, that managers in an organization tolerate
rude behavior by an employee toward other employees and
customers. Over time, the organization’s acceptance of that
behavior frees other employees to behave in the same rude
manner. Levels of customer service and internal collaboration
drift downward. Customers or clients gradually turn to other
sources for services, threatening the organization’s existence.
In addition to system archetypes, more formal systems thinking
tools for management include simulation modeling, learning
laboratories, and diagrams that portray organizational
performance over time. Many quality improvement tools,
including those covered elsewhere in this book, draw on
systems thinking because they require that analysts uncover the
truth (often, the story behind the story) by tracing quality
problems back in time to discover their systemic root causes.
Systems thinking simplifies managerial life by helping
managers to see meaningful, underlying patterns. With mastery
of a few basic concepts and some practice, managers can make
better decisions by foreseeing the system-level consequences of
their actions.
QUALITY IMPROVEMENT
Quality improvement (QI) encompasses a set of methods and
techniques that can be used to improve programs, services,

products, or output of any organization. They can also be used
to decrease organizational costs. The approach and scope of
quality improvement programs can vary.
Two QI approaches are relatively common, top down and
bottom up. In
top down
, senior leaders in an organization support QI as a method for
improving performance, create a vision that provides one or
more goals, and supply needed resources. In
bottom up
, lower-level workers are trained in basic QI methods and
techniques and then encouraged to apply their training. The
scope of QI can vary from relatively modest to extreme.
Transformational change
is defined as a radical alteration that involves a complete
rethinking about the way an organization is structured or
managed.
One specific example of a QI approach is
process engineering
, a methodology that analyzes operational sequences (Bonem
2008
) and is used to improve operational efficiency. The ultimate
goal of process engineering is to eliminate or modify activities
that do not add value. Others examples will be introduced in
later chapters.
Manufacturing and service industries have been using QI
methods and techniques for over 90 years. Although QI has
been adopted extensively in many industries throughout the
world, health organizations have lagged. Health care delivery
organizations began adopting QI methods and techniques in the
1990s. Public health departments have only recently begun to
use QI methods and techniques (Riley et al.
2010
). The underlying premise behind improving the performance of
health organizations and public health departments is that doing
so will result in more affordable and higher quality health-

related services and, ultimately, healthier people.
Applying Quality Improvement
The American health system has sophisticated care delivery
capability, featuring complex technology and very committed
providers. However, serious questions exist regarding quality,
performance, and value. The health care system accounts for the
largest sector of the economy. Americans currently spend
almost $2.5 trillion per year on health care, comprising
approximately 17.6% of the total gross domestic product
(Centers for Medicare and Medicaid Services
2011
). This is the highest level of per capita spending in any country
of the world. Despite this level of spending, the United States
does not have the best health status measures or indices.
Moreover, individuals receive approximately one-half of the
services that should be delivered when they visit health care
organizations (McGlynn et al.
2003
). Approximately 25% to 35% of the services delivered have no
effect on the outcome. Evidence suggests that many treatments
and services are provided when less expensive care options
would yield comparable results (Orszag and Ellis
2007
).
The focus of the acute care sector is delivering individual care
services with the primary goal of restoring health and caring for
sick and dying persons. The public health sector focuses on
communities with the goals of protecting health, enhancing
health promotion, and improving the health of the general
population.
Critics assert that the health care industry is ineffective and
inefficient. Effectiveness means achieving high-quality results,
whereas efficiency is defined as maximizing outcomes while
minimizing costs. For example, from a financial perspective,
hospitals are better off being full rather than empty. Physicians
are paid when they interact with patients, independent of their

health status. The delivery system is biased toward delivering
services, independent of their value.
Questions regarding value and performance have been directed
at the public health system. Approximately 5% of health care
expenditures are made for public health services. The rest are
directed to hospitals, physicians, and prescription drugs.
Lifestyle issues such as poor nutrition and inadequate exercise
have resulted in an obesity epidemic involving approximately
40% of adults, and 20% of American adults routinely use
tobacco products. These two public health issues alone put
tremendous upward pressure on health care spending. It is now
estimated that three-quarters of all health care expenditures are
made for chronic diseases that are related to diet (US
Department of Agriculture
2011
).
QI programs might be used to address several problems that
have just been described. A review of treatment protocols could
identify opportunities for procedural changes. A review of
service delivery might reveal gaps in applications of existing
service standards. A review of outcomes could help to identify
unneeded treatments or services. Reviewing current programs
has the potential to identify less expensive options. An analysis
of treatment and service activities or needs might suggest
potential modifications to the existing goals of restoring health
and caring for sick and dying persons. Reviewing how the
salaries of physicians and other care providers are determined
might lead to changes in professional responsibilities and
compensation that are more closely linked to the health status of
their patients.
Analyzing the programmatic goals of public health might
identify programs that have limited utility or uncover
opportunities for new services. Such activities might lead to
savings that could be reallocated to yield better results or
improve productivity.
Although QI programs have great potential, they are not

universal panaceas. Research has highlighted several risk
factors for obesity in the American population. Inappropriate
nutrition and inadequate exercise are two important examples.
Modifying these behaviors will require more personal
commitment and effort rather than organizational activities. The
experience gained with addressing tobacco usage may provide
some guidance that can be generalized to other personal
activities that contribute to less than optimal health.
CONCLUSION
This chapter has introduced management, systems thinking, and
QI. These three concepts are synergistic. Organizations and
agencies that provide programs and services related to health
benefit when the three concepts are applied. With the concepts
of management, systems thinking, and quality explained,
readers will have a better understanding of the rest of this book.
C
ase
S
tudy
R
esolution
After thinking for a few moments, Dr. Lombard turned to
Elizabeth and said, “Have you ever considered a career in
management? The field needs people with inquisitive but open
minds. After learning some fundamentals, you should have
options. Before you make a commitment for additional training,
let me give you something to read. After you have finished the
material, come back, and we will continue this conversation.”
“Thanks,” Elizabeth said as Dr. Lombard handed her a copy of
this book.
REFERENCES
American Heritage. 2006.
American heritage dictionary of the English language
. 4th ed. Boston: Houghton Mifflin Harcourt.
Association of Schools of Public Health. 2010. Systems
thinking: Phase II competencies.

http://www.asph.org/document.cfm?page=898
(accessed November 10, 2010).
Bonem, J. M. 2008.
Process engineering problem solving
. Somerset, NJ: Wiley Interscience.
Calhoun, J. G., P. L. Davidson, M. E. Sinioris, E. T. Vincent,
and J. R. Griffith. 2002. Toward an understanding of
competency identification and assessment in health care
management.
Quality Management in Health Care
11 (1): 14–38.
Centers for Medicare and Medicaid Services. 2011. National
health expenditure data.
https://www.cms.gov/nationalhealthexpenddata
(accessed January 30, 2011).
Healthcare Leadership Alliance. 2011. Overview of the HLA
Competency Directory.
http://www.healthcareleadershipalliance.org/Overview%20of%2
0the%20HLA%20Competency%20Directory.pdf
(accessed June 23, 2011).
McGlynn, E. A., S. M. Asch, J. Adams, J. Keesey, J. Hicks, A.
DeCristofaro, and E. A. Kerr. 2003. The quality of health care
delivered to adults in the United States.
New England Journal of Medicine
348 (26): 2635–45.
Orszag, P. R., and P. Ellis. 2007. The challenges of rising
health care costs: A view from the Congressional Budget Office.
New England Journal of Medicine
357 (18): 1793–5.
Pegasus Communications. 2010. The systems thinker: Glossary
of terms.
http://www.thesystemsthinker.com/tstglossary.html
(accessed November 10, 2010).
Princeton University. 2010. WordNet.
http://wordnetweb.princeton.edu/perl/webwn?s=management
(accessed October 3, 2010).

Richmond, B. 2000.
The “thinking” in systems thinking: Seven essential skills.
Toolbox reprint series
. Waltham, MA: Pegasus Communications.
Riley, W. J., J. W. Moran, L. C. Corso, L. M. Beitsch, R.
Bialek, and A. Cofsky. 2010. Defining quality improvement in
public health.
Journal of Public Health Management and Practice
16 (1): 5–7.
Schermerhorn, J. R. 2009.
Management
. 10th ed. Somerset, NJ: Wiley.
Senge, P. 1993.
The fifth discipline
. New York: Random House Business.
Trochim, W. M., D. A. Cabrera, B. Milstein, R. S. Gallagher,
and S. J. Leischow. 2006. Practical challenges of systems
thinking and modeling in public health.
American Journal of Public Health
96 (3): 538–46.
US Department of Agriculture. 2011. Dietary guidelines for
Americans, 2010.
http://www.cnpp.usda.gov/dietaryguidelines.htm
(accessed February 2, 2011).
RESOURCES
Periodicals
Baker S. L., L. Beitsch, L. B. Landrum, and R. Head. 2010. The
role of performance management and quality improvement in
national voluntary public health accreditation system.
216 (1): 427–9.
Carriere, B. K., M. Muise, G. Cummings, and C. Newburn-
Cook. 2009. Healthcare succession planning: An integrative
review.
Journal of Nursing Administration
39 (12): 548–55.

DelliFraine, J. L., J. R. Langabeer, and I. M. Nembhard. 2010.
Assessing the evidence of six sigma and lean in the health care
industry.
Quality Management in Health Care
19 (3): 211–25.
Erwin, D. 2009. Changing organizational performance:
Examining the change process.
Hospital Topics
87 (3): 28–40.
Goldman, E., T. Cahill, and R. Filho. 2009. Experiences that
develop the ability to think strategically.
Journal of Healthcare Management
54 (6): 403–16.
Gorenflo, G. 2010. Achieving a culture of quality improvement.
16 (1): 83–4.
Green, L. W. 2006. Public health asks of systems science: To
advance our evidence-based practice, can you help us get more
practice-based evidence?
96 (3): 406–9.
Griffith, J. R. 2009. Finding the frontier of hospital
management.
54 (1): 57–72.
Leischow, S. J., A. Best, W. M. Trochim, P. I. Clark, R. S.
Gallagher, S. E. Marcus, and E. Matthews. 2008. Systems
thinking to improve the public’s health.
American Journal of Preventive Medicine
35 (2S): S196–S203.
Porter, M. E., and M. R. Kramer. 2011. Creating shared value.
Harvard Business Review
89 (1/2): 62–77.
Riley, W. J., H. M. Parsons, G. L. Duffy, J. W. Moran, and B.
Henry. 2010. Realizing transformational change through quality
improvement in public health.

16 (1): 72–8.
Scutchfield, D. G., M. L. Zuniga de Nuncio, R. A. Bush, S. H.
Fainstein, M. A. LaRocco, and N. Anvar. 1997. The presence of
total quality management and continuous quality improvement
processes in California public health clinics.
3 (3): 57–60.
Shea-Lewis A. 2009. Teamwork: Crew resource management in
a community hospital.
Journal of Healthcare Quality
31 (5): 14–8.
Sterman, J. D. 2006. Learning from evidence in a complex
world.
96 (3): 505–14.
Van Deusen, L. C., and S. K. Holmes. 2007. Transformational
change in health care systems: An organizational model.
Health Care Management Review
32 (4): 309–20.
William, J. C., J. Costich, W. D. Hacker, and J. S. Davis. 2010.
Lessons learned in systems thinking approach for evaluation
planning.
Journal of Public Health Management Practice
16 (2): 151–5.
Yuan, C. T., I. M. Nembhard, A. F. Stern, J. E. Brush, H. M.
Krumholz, and E. H. Bradley. 2010. Blueprint for the
dissemination of evidence-based practices in health care.
Issue Brief
(Commonwealth Fund) 86: 1–16.
Books
Ackoff, R., and H. J. Addison. 2010.
Systems thinking for curious managers
. Devon, UK: Triarchy Press.
Adams, J. S. 1965. Inequity in social exchange. In
Advances in experimental social psychology

, ed. L. Berkowitz. New York: Academic Press.
Baker, E. L., A. J. Menkens, and J. E. Porter. 2009.
Managing the public health enterprise
. Sudbury, MA: Jones and Bartlett.
Bialek, R., J. W. Moran, and G. L. Duffy. 2009.
The public health quality improvement handbook
. Milwaukee, WI: American Society for Quality Press.
Burke, R. 2010.
Fundamentals of public health management and leadership.
Sudbury, MA: Jones and Bartlett.
Chalice, R. 2007.
Improving healthcare using Toyota lean production methods: 46
steps for improvement
De Savigny, D., and T. Adam, eds. 2009.
Systems thinking for health systems strengthening.
Geneva, Switzerland: WHO Press.
Fallon, L. F., and E. Zgodzinski. 2012.
Essentials of public health management
. 3rd ed. Sudbury, MA: Jones and Bartlett.
Foster, S. T. 2009.
Managing quality
. 4th ed. Upper Saddle River, NJ: Prentice Hall.
George, M., J. Maxey, D. Rowlands, and M. Price. 2004.
The lean and six sigma pocket toolbook
. New York: McGraw-Hill.
Hoyle, D. 2007.
Quality management essentials
. Burlington, MA: Butterworth-Heinemann.
Institute of Medicine. 2009.
Leadership commitments to improve value in health care:
Finding common ground
. Washington, DC: National Academies Press.
Kim, D. H. 1999.
Introduction to systems thinking
. Waltham, MA: Pegasus Communications.

McGregor, D. 1967.
The professional manager
Meadows, D. H. 2008.
Thinking in systems: A primer
. White River Junction, VT: Sustainability Institute.
Moran, J. W., G. L. Duffy, and W. J. Riley. 2010.
Quality function deployment and lean-six sigma applications in
public health
National Cancer Institute. 2007.
Greater than the sum: Systems thinking in tobacco control
. Washington, DC: US Department of Health and Human
Services.
Pande, P. S., R. P. Neuman, and R. R. Cavanagh. 2000.
The six sigma way: How GE, Motorola, and other top
companies are honing their performance
Peters, T., and R. Waterman. 1982.
In search of excellence
. New York: HarperCollins.
Rowitz, L. 2008.
Public health leadership: Putting principles into practice
. 2nd ed. Sudbury, MA: Jones and Bartlett.
Senge, P. M., C. Roberts, R. B. Ross, B. J. Smith, and A.
Kleiner. 1994.
The fifth discipline fieldbook: Strategies and tools for building
a learning organization
. New York: Doubleday.
Sterman, J. D. 2000.
Business dynamics: Systems thinking and modeling for a
complex world
Taylor, F. W. 1998.
Principles of scientific management
. New York: Engineering & Management Press (reprint of 1911

edition).
Zimmerman, B., C. Lindberg, and P. Plsek. 1998.
Edgeware: Insights from complexity science for health care
leaders
. Irving, TX: VHA Inc.
Web Sites
•
Academy of Management
:
http://www.aomonline.org
•
American Health Information Management Association
:
http://www.ahima.org
•
American Society for Quality
:
http://www.asq.org/
•
Applied Systems Thinking: When Smallpox Becomes a Threat
Again
:
http://www.pegasuscom.com/aar/model3.html
•
Centers for Disease Control and Prevention Syndemics
Prevention Network
:
http://www.cdc.gov/syndemics/
•
Institute for Healthcare Improvement

:
http://www.ihi.org/
•
:
http://www.ache.org/PUBS/jhmsub.cfm
•
National Institute of Standards and Technology, Baldrige
National Quality Program
:
http://www.nist.gov/baldrige/
•
One Health Initiative
:
http://onehealthinitiative.com/
•
Robert Wood Johnson Foundation
:
http://www.rwjf.org/
•
Society for Human Resource Management
:
http://www.shrm.org
•
Systems Thinking
:
http://www.answers.com/topic/systems-thinking
•
Systems Thinking

:
http://thesystemsthinker.com/
INTRODUCTION
Management inside of organizations is undertaken within the
larger context of laws and regulations governing commerce in
the United States.
Laws
are rules developed and approved by legislative bodies and
enforceable in the courts.
Regulations
are rules developed by governmental agencies or by private
organizations that have been assigned authority by the
government, usually to enact the provisions of laws. Still more
rules are established by discretionary decisions of
administrative agencies of the government, because all
situations cannot be covered by laws and regulations. For
example, the federal government’s Centers for Medicare and
Medicaid Services (CMS) makes eligibility and reimbursement
decisions for the highly complex Medicare health insurance
program; those decisions essentially become rules.
Compliance with laws and regulations is a prominent task in
larger and complex organizations, and management is
responsible for ensuring that employees are aware of and follow
relevant laws and regulations. Larger health organizations retain
compliance managers and legal counsel to assist in compliance
management. For example, management of human resources is
subject to a host of laws and regulations. Financial laws and
regulations govern financial reporting. In this chapter, the focus
is on laws and regulations that are specific to the health sector.
The concept of health policy is broader than laws and
regulations.
Health policy
refers to the principles and activities guiding the allocation of
resources that affect the health of patients and populations.
Health policy is heavily influenced by the laws and regulations
formulated and implemented by governmental units. In addition

to governmental action, private organizations affect health
policy in the United States. For example, hospitals must be
accredited by The Joint Commission (a private organization) or
another similar accrediting body in order to receive federal
funds from Medicaid and Medicare. In addition, the decisions
made by large private insurance companies regarding
reimbursement of specific health services shape health policy.
Private nonprofit organizations, as well as private for-profit
organizations, are highly involved in formulation of US health
policy.
Managers can benefit from an understanding of how health
policy is formulated. The process of policy formulation is
outlined, with an emphasis on governmental action.
THE POLICY-MAKING PROCESS
Governmental policy making in the United States occurs at
three major levels: federal, state, and local. Two principles
undergird the policy-making process: federalism and the
separation of powers.
Federalism
refers to the sharing of power between states and the national
government. States are granted authority by the US Constitution
to establish laws that protect the public’s health and welfare.
States license health practitioners, health delivery
organizations, and health insurance plans, for example.
Federalism explains why managing in a health organization in
one state may differ from managing in a health organization in
another. As an example, for-profit hospitals are banned in the
state of Minnesota, but not in most other US states. Federalism
also means that states are free to delegate powers to local and
county governments, which they have done in most states for
many public health services. Despite such delegation, the
organization of public health services still varies substantially
across states.
The second principle,
separation of powers
, divides government into three branches: the judiciary (courts);

the executive, including the President at the national level and
governors and mayors at the state and local levels; and the
legislative, including the Senate and the House of
Representatives at the national level and similar entities at the
state level. Allocating power among the three branches in an
equitable manner is referred to as the system of checks and
balances. The legislative branch has authority to safeguard the
public health, which includes such areas as waste and water
management, vaccination requirements, and emergency
preparedness. The legislative branch also has authority to shape
the delivery of and payment for health services, although the
limits of that authority have been disputed, for example, by
challenges to the Patient Protection and Affordable Care Act of
2010 (discussed in more detail later in this chapter). The
judicial branch enforces laws made by the legislative branch,
with criminal and civil sanctions and adjudication of legal
disputes, for example, between providers and patients or
insurance companies and patients. The judicial branch decides
whether legislation is consistent with principles in the US
Constitution. The executive branch proposes and implements
legislation and regulations that flow from legislation.
The Legislative Branch
At the national level in the United States, laws originate in the
US House of Representatives or the Senate. Laws approved by
the House or Senate move to the other body. If identical bills
are approved, the law moves to the President for approval or
veto. If the bills are not identical, a conference committee
comprised of members from the House and Senate constructs a
compromise bill, which is then processed through the two
bodies. A two-thirds vote of the legislative branch (House and
Senate) can override a Presidential veto. Similar processes
guide most state legislatures.
Health organizations and their interest groups, such as
professional associations, can be directly involved in proposing
legislation and participating in hearings on health laws. Large
health organizations and associations frequently employ

communications or lobbying specialists to engage in this
activity. Key groups in the legislative process are the
committees of the US House and Senate that process health laws
under consideration. The Senate Finance Committee and the
House Committee on Ways and Means, which have jurisdiction
over Medicare and Medicaid legislation (described in more
detail later in this chapter), are two key committees. Legislative
committees often hold public hearings on controversial
proposals. The hearings give health organizations opportunity
for input. Similar processes at the community and state levels
provide opportunities for influence on state and local laws as
well.
Influencing the Policy Process
To further influence public policy in the health care arena,
managers can develop or participate in coalitions of like-minded
individuals and advocate for their viewpoints before, during,
and after the legislative process. Longest (
2010
) suggests five stages at which public policy can be influenced:
1.
Agenda setting stage
2.
Legislation development stage
3.
Rulemaking stage
4.
Policy operation stage
5.
Policy modification stage
To help establish agendas, managers can urge their
organizations to define and document problems, develop and

evaluate solutions, and lobby politicians. Members of health
organizations can participate in drafting legislation and
testifying at legislative hearings. At the rulemaking stage,
health organizations can provide formal comments on draft rules
and serve on rulemaking advisory bodies. At the policy
operation stage, health organizations can share their knowledge
and concerns with policy implementers. Finally, managers and
others, including consumers of health organization services, can
document the case for modifying laws and regulations through
communication to government of their experiences and
evaluations of laws and regulations.
DISTINCTIVE FEATURES OF US HEALTH POLICY
In the United States, the government is less involved in the
direct provision of health services than any other industrialized
country in the world (Greenwald
2010
; Jonas, Goldsteen, and Goldsteen
2007
). Health care workers are less likely to be employed by the
government. Managers in health organizations may work in a
variety of settings, including private nonprofit, private for-
profit, and public (including local, county, state, or federal
government; Veterans Administration; and armed forces). If
managers cross organizational settings in their careers, they
must be prepared to adapt their style and knowledge base to the
different settings.
In contrast to most national health systems, no central agency
governs the US health system. Further, there is no universal
access to health care. The existence of multiple sources of
payment for health services increases administrative costs to the
US system. Countervailing forces struggle to promote their own
interests in the political arena. The major forces are typically
identified as government, large private employers, labor,
insurance companies, physicians, and hospitals (Shi and Singh
2008
). Gaining consensus to change the system in fundamental ways

is very difficult. As a result, most changes in health policy are
incremental and fragmented.
Decentralization and fragmentation of health policies in the
United States do not mean that health organizations are
unregulated. In fact, many health organizations complain that
they are overregulated through micromanagement in the form of
laws and regulations that add to organizational costs and
sometimes conflict with each other. For example, government is
heavily involved in regulation due to the financing of health
services through the Medicare and Medicaid programs.
Medicare, established in 1965, finances medical care for
persons age 65 and older, certain permanently disabled workers
and their dependents, and persons with end-stage renal disease.
Medicare is a critical factor in the financial condition of many
health organizations, because it accounts for 20% of national
health expenditures (US Department of Health and Human
Services
2011
). Medicaid, also established in 1965, funds medical care for
some of the poor who qualify for eligibility, based on state
criteria. Medicaid funding is shared by the national and state
governments. Medicaid accounts for 15% of national health
expenditures (US Department of Health and Human Services
2011
). Both Medicare and Medicaid are in a precarious financial
condition. Managers in health organizations that depend on
those sources must be attuned to the need for increased
efficiency in services to recipients.
Government also funds a wide array of health research, training
of health workers, and a variety of direct delivery services, such
as the Veterans Health Administration. The Department of
Health and Human Services, which includes the Centers for
Disease Control and Prevention and the Agency for Healthcare
Research and Quality, is the largest of the governmental
departments administering health-related laws at the national
level. At the state level (in most states), a state board of health

oversees public health services, including vital statistics, public
health laboratories, communicable disease control,
environmental sanitation, maternal and child health, and public
health education. In most states, local health departments
implement many of these services.
KEY HEALTH POLICIES AFFECTING MANAGEMENT
As already noted, organizational activities are subject to many
laws that regulate financial reporting and human resources.
Legislation has been enacted to regulate organizations that
provide programs and services that are related to health. This
section reviews policies that are specific to the health sector,
focusing on those that impact the ability of health organizations
to improve the quality of their programs and services and
increase their value to consumers and clients.
Health Information Technology Support and Security
Health information technology has been targeted by recent
legislation designed to modify existing policies and practices.
These efforts have been driven by the slow adoption of
information technology by organizations in the health sector
and the fragmented delivery system in the United States. Health
care service providers have begun to implement a wide range of
different brands of information systems. Information systems
are often selected for their financial advantage to the purchasing
organization rather than considering their utility to customers,
clients, or patients. A consequence of this approach is that
individuals who use different provider organizations often do
not have integrated health records.
To address these issues, recent changes in health policies have
supported investment in information technology and
standardization of the diverse technologies so that they can be
interconnected. A National Coordinator for Health Information
Technology was mandated by the Health Information
Technology for Economic and Clinical Health Act (HITECH
Act). This legislation was included in the American Recovery
and Reinvestment Act (ARRA) of 2009. The Office of the
National Coordinator is responsible for promoting a nationwide

health information technology infrastructure that improves
health quality and reduces costs. The ARRA also authorized
nearly $20 billion over 5 years to assist physicians in adopting
electronic health record (EHR) technology. Beginning in 2015,
physicians not using EHRs will be penalized in their Medicare
payments.
Privacy and security of health data are of critical concern to US
health policy, again related to the many different sources of
health information already in existence. The Health Insurance
Portability and Accountability Act (HIPAA) of 1996 set
standards for the security of certain protected health
information. Health care providers and supportive personnel in
a variety of settings now receive training on enforcement of the
HIPAA guidelines. Privacy and security continue to be critical
national policy issues in implementation of a health information
technology infrastructure.
Access to Health Services
As noted earlier, the federal Medicare health insurance program
and the joint federal–state Medicaid health insurance program
have served elderly and disadvantaged populations for decades
in the United States. A major expansion in the federal role in
access to health services occurred in 2010, with the Patient
Protection and Affordable Care Act. The law unfolds over the
2010–2014 period. The constitutionality of the law is being
challenged in the courts as this book is written, with
undetermined outcome.
Immediate effects of the Patient Protection and Affordable Care
Act include a prohibition on denial of health insurance coverage
for children due to preexisting conditions and requirements for
full coverage of selected preventive services in health insurance
plans. Later effects include an individual mandate for health
insurance—individuals not covered by government insurance
programs must maintain health insurance or pay a penalty.
Access to affordable insurance will be increased through the use
of health insurance exchanges operating in each state. Minimum
standards for health insurance policies will be introduced. The

law also funds a major expansion of Community Health Centers,
which largely serve inner city poor populations, and increases
payment levels to rural health care providers. Providers
(primarily hospitals and clinicians) are given incentives to join
in community-based accountable care organizations (ACOs).
ACOs are integrated groups of providers responsible to care for
a population of Medicare enrollees who are rewarded for
reducing costs and improving quality.
Quality Improvement
US health policy is strongly behind efforts to improve the
quality of health services, with increased expectations that
health organizations will report and enhance the quality and
value of their services. This trend is demonstrated by several
provisions of the Patient Protection and Affordable Care Act.
This legislation requires increased linkages between Medicare
payments and quality outcomes. The Act establishes a Patient-
Centered Outcomes Research Institute that is independent from
the government. The Institute will examine the relative
effectiveness of different medical treatments. The HITECH Act
requires physicians to document clinical quality measures.
As of 2008, 26 states had enacted mandatory reporting laws
requiring provider organizations to report instances of serious
adverse events that occurred in hospitals on an annual basis (US
Department of Health and Human Services
2008
). In most states, root cause analysis is required to develop
action plans for preventing similar events.
A movement to accredit public health departments, formally
launched in 2011, is another example of the growing inclusion
of quality improvement in US health policy. The Public Health
Accreditation Board is dedicated to advancing the continuous
quality improvement of state, local, tribal, and territorial public
health departments.
Emergency Preparedness
Government is heavily involved in health policy for emergency
preparedness. At the national level, the US Department of

Homeland Security, established by the Homeland Security Act
of 2002, and one of its units, the Federal Emergency
Management Agency, develop and deploy national strategies for
prevention and response to emergencies, including terrorist
attacks and natural disasters. States and many localities have
similar emergency preparedness units, and health managers
should be familiar with their organization’s responsibilities to
the community, state, and federal governments during
emergencies.
Prevention and Health Promotion
US health policy has gradually increased recognition of the
importance of prevention and health promotion. Building on the
Healthy People initiatives, which set national health goals for
1990, 2000, 2010, and 2020, the Patient Protection and
Affordable Care Act of 2010 creates a $15 billion Prevention
and Public Health Fund and a council to develop and promote
stronger national prevention, health promotion, and public
health strategies. As already noted, the Act also creates
requirements for health insurance plans to cover selected
preventive services.
Another area of growing health policy concern is health
disparities.
Health disparities
are population-specific differences in health. Many different
populations are affected by disparities including racial and
ethnic minorities, residents of rural areas, women, children, the
elderly, and persons with disabilities. The Minority Health and
Health Disparities Research and Education Act of 2000
authorized several US Department of Health and Human
Services programs to address disparities. The Patient Protection
and Affordable Care Act of 2010 expands services to low-
income populations, broadens initiatives to increase racial and
ethnic diversity in the health care professions, and strengthens
cultural competency training for health care providers.
CONCLUSION
Informed and involved managers will not be surprised by most

changes in US health policy. Changes in health policy reflect
the fragmented, pluralistic structure of the health system in the
United States. Incremental shifts toward health information
technology support and security, increased access to services,
quality and value improvement, emergency preparedness, and
prevention and health promotion are long-term policy trends
that provide opportunities for many health organizations.
Managers familiar with the policy context of health management
can better position their units and organizations for coming
changes in health policies, take advantage of new service
markets, and comply with laws and regulations.
Systems Thinking about the Policy Context for Management
Most health organizations tackle complex challenges to improve
patient or population health. The health challenges inevitably
have a health policy component, creating long-term
interdependence between health organizations and health
policies. As health policies change, so do the roles of
organizations.
A good example of this connectedness over time is the health
challenge of tobacco control. For several decades in the United
States in the 1900s, tobacco control was not viewed as a salient
health policy issue. Individualistic values and the American free
enterprise economic system combined to limit the creation of
policy interventions to control the use of tobacco. Tobacco
users were free to make their own choices to use tobacco, and
tobacco manufacturers were free to pursue profit.
Eventually, accumulating research on the negative health effects
of tobacco on users and the harmful impact of secondhand
smoke on nonusers, along with the huge cost of tobacco-induced
illness to health insurance programs, altered health policy to
promote decreased use. Individual-level interventions such as
telephone quit lines and nicotine substitutes emerged.
Community-level and population-level interventions, including
bans on smoking in public places, higher taxes on tobacco
products, and warning labels on tobacco products, were
implemented. Successful suits against tobacco companies by

state governments reflected changing health policy and resulted
in large endowments for tobacco use prevention campaigns and
research. Over time, a multitude of stakeholder organizations
emerged, including government (e.g., the National Cancer
Institute, Centers for Disease Control and Prevention) and
private organizations (e.g., Robert Wood Johnson Foundation,
American Cancer Society, Campaign for Tobacco-Free Kids).
As a whole system, the changes in tobacco health policy reflect
the interdependence of private nonprofit organizations,
researchers, government, consumers, and product
manufacturers. Whole systems thinking about tobacco control
involves reducing duplication of effort among disparate
programs, encouraging multipartner efforts, developing better
evidence on the effectiveness of tobacco control efforts, and
integrating research and practice (National Cancer Institute
2007
). The whole systems approach to tobacco control is a
constructive attempt to address the pluralistic and fragmented
health system, the incremental nature of policy change, and the
complexity of most health challenges.
C
ase
S
tudy
R
esolution
Returning to the discussion about electronic health record
systems, Madeline began to speak. “Financial efficiency is
important, but, in my opinion, customers or clients should come
first. If we opt for efficiency, the organization and owners
benefit. If we install a system that can interact with other
electronic health systems in the region, our costs will be
marginally greater. However, the people that we serve will
benefit. The increase in customer satisfaction and goodwill
should more than offset the extra cost. The federal government
has recognized the value of integrated record systems, too. We

should check into that.”
“I agree,” replied Sandra.
REFERENCES
Greenwald, H. P. 2010.
Health care in the United States: Organization, management,
and policy
. San Francisco: Jossey-Bass.
Jonas, J., R. L. Goldsteen, and K. Goldsteen. 2007.
An introduction to the U.S. health care system
. 6th ed. New York: Springer.
Longest, B. B. 2010.
Health policymaking in the United States
. 5th ed. Chicago: Health Administration Press.
National Cancer Institute. 2007.
Greater than the sum: Systems thinking and tobacco control
. Bethesda, MD: Department of Health and Human Services.
Shi, L., and D. A. Singh. 2008.
Delivering health care in America: A systems approach
. 4th ed. Sudbury, MA: Jones and Bartlett.
US Department of Health and Human Services. 2008. Office of
the Inspector General.
Adverse events in hospitals: State reporting systems
.
http://oig.hhs.gov/oei/reports/oei-06-07-00471.pdf
(accessed July 28, 2011).
US Department of Health and Human Services. 2011. Centers
for Medicare and Medicaid Services.
National health expenditure fact sheet
.
https://www.cms.gov/NationalHealthExpendData/25_NHE_Fact
_Sheet.asp
(accessed July 28, 2011).
RESOURCES
Periodicals
Carter-Pokras, O., and C. Baquet. 2002. What is a “health
disparity?”

Public Health Reports
117: 426–34.
Freudenberg, N., and S. Galea. 2008. The impact of corporate
practices on health: Implications for health policy.
Journal of Public Health Policy
29: 86–104.
Keehan, S. P., A. M. Sisko, C. J. Truffer, J. A. Poisal, G. A.
Cuckler, A. J. Madison, J. M. Lizonitz, and S. D. Smith. 2011.
National health spending projections through 2020: Economic
recovery and reform drive faster spending growth.
Health Affairs
30: 1594–605.
Meyer, H. 2011. Accountable care organization prototypes:
Winners and losers?
Health Affairs
30: 1227–31.
Raphael, D., and T. Bryant. 2006. The state’s role in promoting
population health: Public health concerns in Canada, USA, UK,
and Sweden.
Health Policy
78 (1): 39–55.
Books
Bodenheimer, T. S., and K. Grumbach. 2009.
Understanding health policy: A clinical approach
. 5th ed. New York: McGraw-Hill.
Harrington, C., and C. L. Estes. 2011.
Health policy
. 6th ed. Sudbury, MA: Jones and Bartlett.
Jacobs, L. R., and T. Skocpol. 2010.
Health care reform and American politics: What everyone needs
to know
. New York: Oxford University Press.
McLaughlin, D. B. 2011.
Responding to healthcare reform: A strategy guide for
healthcare leaders
. Chicago: Health Administration Press.

Web Sites
•
Agency for Healthcare Research and Quality
:
www.ahrq.gov/
•
Health Disparities, Centers for Disease Control and Prevention
:
http://www.cdc.gov/omhd/Topic/healthdisparities.html
•
Health Information Privacy
:
http://www.hhs.gov/ocr/privacy/hipaa/understanding/consumers/
index.html
•
Health Information Technology for Economic and Clinical
Health (HITECH) Act of 2009
:
http://www.hhs.gov/recovery/reports/plans/onc_hit.pdf
•
Healthy People
:
http://www.healthypeople.gov/2020/default.aspx
•
Henry J. Kaiser Family Foundation
:
http://www.kaiseredu.org/
•
Homeland Security Act of 2002

:
http://www.dhs.gov/xabout/laws/law_regulation_rule_0011.shtm
•
National Academy for State Health Policy
:
www.nashp.org/
•
National Association for Public Health Policy
:
www.naphp.org/
•
National Healthcare Disparities Report, 2003
:
http://www.ahrq.gov/qual/nhdr03/nhdrsum03.htm
•
Patient Protection and Affordable Care Act of 2010
:
http://www.healthcare.gov/law/introduction
•
INTRODUCTION
Although managers oversee structures and processes, they must
manage people to achieve success. A successful manager must
understand people and the ways they interact. Formal
organizational structures influence interactions and friendships
among employees who work within them. Interpersonal and
intergroup factors affect organizations. Groups establish and
reward their own patterns of behavior. Group norms are often
highly fluid, and conflict and politics play a part in group and
individual behaviors. However, simply understanding will not
change people’s behavior. Successful managers must be familiar
with different methods for shaping the behavior of individuals
and the groups to which they belong.

INFORMAL GROUPS
Informal groups exist within most formal organizations. These
are often peer groups. In health organizations, informal peer
groups often form around professional identity, based on the
distinctive cultures of professions like nursing, pharmacy, and
medicine, or around work role, such as secretary. Each informal
group has its own norms for status and prestige that have
implications for managers. Peer groups provide four benefits for
members. They satisfy complex needs, offer emotional support,
help to shape personal identities, and assist in meeting personal
goals.
Research has shown that employees who work alone often find
their jobs to be unsatisfying (Festinger, Schacter, and Back
1950
; Mayo
1946
; Roy
1960
). The organizational cost of this lack of satisfaction can be
measured in terms of low productivity, excess rates of
absenteeism, and high turnover rates. Personal self-image is
derived, in large measure, from social feedback. A group
provides its members with norms (guidelines) for correct
behavior. The correctness is not necessarily aligned with
organizational policies and expectations, but rather in terms of
group norms.
Groups usually refer to aggregations of small numbers of
individuals. A classic definition is provided by Berelson and
Steiner (
1964
, 47):
A group is an aggregate of people, from two up to an
unspecified but not too large a number. These individuals
associate with each other in face-to-face relations over an
extended period of time. They differentiate themselves in some
regard from others around them. Finally, they are mutually

aware of their membership in the group.
Group membership is often related to both technology and the
pace of work. Some level of psychological or physical closeness
and an opportunity to communicate must exist before people can
form mutually satisfying groups. Sayles and Strauss (
1966
) described the progression of group development and how
informal patterns of behavior (group norms) evolve. Employee
groups often begin with friendships based on contacts at work,
equipment used, or common interests. These groups arise within
organizations. However, once these groups are established, they
develop lives of their own. At this point, groups are often
independent of the working situations from which they emerged.
This process is dynamic and self-generating. Increasing
opportunities for interaction tend to create favorable sentiments
toward fellow group members. In turn, these attitudes become
the foundation for an increased variety of activities that are not
related to job duties. Increased opportunities for interaction
reinforce group solidarity. The group becomes something more
than simply a collection of people. It develops norms or
customary behaviors. It evolves a set of stable characteristics
that become very difficult to change or modify. In other words,
groups become organizations.
Identification with a group is important. Most individuals have
difficulty in holding out against the weight of an otherwise
unanimous group judgment even when the group is clearly in
error (Maslow
1943
). In organizational settings, groups can assist individuals to
solve specific problems and to protect them from making
mistakes. Individuals prefer to receive guidance, advice, and
assistance from peers rather than supervisors or managers. As a
bonus, the ability to render assistance often becomes a source of
prestige for the giver. Nonconformity with group norms is
usually punished by withholding acceptance.
Members of many professional groups are able to differentiate

themselves on the basis of clothing or other signs of group
membership. Physicians frequently display stethoscopes
prominently around their necks or wear surgical scrubs outside
of a hospital. Nurses often wear their nursing school pins as
decoration on clothing other than uniforms. Most group
members use professional jargon as a means of establishing and
maintaining group identity.
Informal channels of communication also develop within groups
(Fallon, Covitch, and Rothenberg
1974
). Informal channels are independent of formal, organizational
channels. They tend to be both effective and long lived.
Individuals use them to discuss ideas, discoveries, and common
problems. Informal channels tend to be much more efficient
than formal channels of communication. Data travel more
rapidly over informal channels.
Managers assign duties and job responsibilities to individuals
and teams. In theory, managers should only be concerned that
assigned tasks are effectively and efficiently accomplished.
However, other forces and factors can and do emerge.
Individuals usually like or dislike the people with whom they
work; they are rarely neutral. These feelings often lead people
to establish communication links and perform activities with
others in a variety of informal and usually unplanned patterns.
Astute managers must understand and interact with these
patterns to be optimally effective.
The need for affiliation and group membership has been well
established. However, after groups have been established, many
individuals become competitive and want to be perceived as
having a higher status than their peers. Most people talk about
equality, but as George Orwell (
1946
) wrote, “Some want to be more equal than others.” Sets of
unwritten rules about expected conduct frequently define
prestige and status. Subtle differences in status begin to emerge
as informal groups become established.

Two classes of factors are relevant to status: external and
internal. External factors refer to attributes that are brought to
the workplace from the outside. These commonly include age,
gender, race, education, and seniority. Internal factors may be
created consciously when senior management establishes and
defines an organization. Internal factors often include titles, job
descriptions, perquisites, offices, work schedules, mobility, and
methods of evaluation. The title “Doctor” may sufficiently
differentiate physicians from other employees of a health care
organization. It does not perform this function in a university
setting. Within many organizations, traditional indications of
power and prestige are usually encountered: office size,
windows and their view, access to executive dining rooms, and
reserved parking.
Effective managers understand informal groups. If a group’s
basic attitude toward an organization is positive, informal
expectations can greatly assist management. This is particularly
important when managers strive to enroll employees in
improvement projects and in the pursuit of stretch goals.
Managers experience difficulties when the goals or structures of
the formal organization conflict with those of informal groups.
This can occur when management’s evaluation of positions or
jobs does not correspond with the opinions of group members.
When this occurs, managers must select between one of two
extreme positions. The first is to rearrange the formal
organization, including policies and procedures, to
accommodate the desires of an informal group. The second is to
change the norms or composition of the informal group.
Compromise is easier to accomplish. This type of conflict is
less common in professional settings than in blue-collar
environments. Nevertheless, managers must be alert for it and
seek methods of resolution that will have a minimal impact on
accomplishing organizational goals and objectives and on the
employees involved.
CONFLICT
When resources must be shared or collaboration is needed to

offer or deliver services (that is, when interdependence is high),
the parties involved must establish relationships with each
other, crossing boundaries that exist between individuals and
among groups. Stress and conflict frequently accompany such
interactions. Three distinct types of conflict are of interest to
professional managers: interpersonal, intergroup, and specialist
versus generalist.
Interpersonal Conflict
Interpersonal conflict is the least important but most
exaggerated type of friction. Managers often blame
organizational problems on individual personalities or general
worker incompetence. The traditional psychological explanation
for interpersonal conflict is frustration. Individuals who feel
ignored or undervalued seek alternative methods to overcome
their frustrations. In this process, they disrupt the normal
activities of an organization. Poorly structured formal channels
of communication frequently contribute to interpersonal
conflict.
Organizational structure defines the flow of communications. A
conscientious manager with employees who have interpersonal
problems will benefit from a review of the organization’s
structure and patterns of work flow. Individuals resent
communications that flow in only one direction. Similarly,
workers are slow in adjusting to unexpected changes in routine
that they cannot control.
Unpredictability can result from technological innovations as
well as from changes in organizational structure and policy.
Stress is increased and employees become aggravated if
organizational changes alter their informal status from what was
previously accepted. Stress is amplified when change is
unilaterally imposed without prior notice or consultation or if
individuals perceive no functional or technological reason for
changing. When changes are necessary, prudent managers
inform employees early in the process and, if feasible, allow
them to participate in decisions that affect their jobs or working
conditions.

Intergroup Conflict
Intergroup conflict develops when clusters of employees
belonging to different informal groups must interact with each
other. Groups can be categorized as apathetic, erratic, strategic,
or conservative.
Apathetic
groups are least likely to exert concentrated pressure on
management. Their members are usually not very cohesive, and
any group leadership is widely distributed.
Erratic
groups display inconsistent behavior toward management.
Strategic
groups tend to be shrewd and calculating when applying
pressure. They never tire of objecting to unfavorable
management decisions or seeking loopholes in contract clauses
or existing policies that will be beneficial to them. They
continually compare their benefits to those of other informal
groups within the organization.
Conservative
groups are composed of elite members who are secure and
powerful. They typically possess skills that are critical to their
organization.
The success of informal groups that bargain with management
reflects the internal strength or cohesion of the group. Cohesion
assists the members who are pursuing group goals. Cohesion has
six dimensions: homogeneity, communication, isolation, size,
outside pressure, and group status. Homogeneity reinforces a
basic reason for the existence of many groups. Individuals seek
out others who are like themselves. Group members with
different backgrounds and interests are frequently ineffective in
promoting their own particular agendas. Competition between
individuals usually reduces group cohesion; unified group
membership increases it.
Group members must be able to talk with each other. A lack of
privacy and opportunities for discussion hinders group
development. Both researchers and cartoonists have noted this

when they discuss cubicles. The widely used partitions of
contemporary offices are less expensive than permanent walls.
They also tend to reduce group development and solidarity.
Isolating all group members from other workers promotes group
solidarity, whereas isolating group members from each other
reduces group solidarity. Small departments tend to be more
closely knit than large ones, because larger groups tend to have
fewer opportunities for informal communication and are more
heterogeneous. This encourages fractionation of informal
groups into smaller cliques. This has the effect of creating new
small groups that offer more opportunities for membership and
interaction.
When organizations exert pressure on employees,
communication among peers (lateral communication) tends to
increase. Concurrently, communications between different
levels of management (vertical communication) tend to
decrease. Personal differences among group members are
minimized when presented with the threat of a common danger
such as a tough supervisor. Strong management policies toward
workers may encourage the formation of strong informal groups
to resist the pressure.
Specialist versus Generalist Conflict
The increasingly complex nature of contemporary health
organizations, the use of complex technological tools and
concepts, and the need to increase productivity have contributed
to the emergence and importance of specialists. By definition
and training, these individuals have advanced skills and specific
knowledge. When supervisors lack these technical skills, they
must carefully manage their subordinates. Managers must rely
heavily on specialists to be successful in their own supervisory
positions.
In contrast is the generalist. This is an individual who knows
something about many positions but frequently not enough to
displace a specialist. A generalist may not be a member of the
specialists’ group due to a lack of esoteric knowledge. A
generalist usually has less job security. A generalist may have

to use means other than technical knowledge to succeed. Often
this translates to relying on the output of subordinates or
politics. Subordinates are often unable to go to their supervisor
for assistance with technical problems. This can lead to
resentment and feelings that the boss is incompetent. This chain
of events was initially suggested almost a half century ago: The
most symptomatic characteristic of a modern bureaucracy is the
growing imbalance between ability and authority (Thompson
1963
).
It is interesting to note the role reversal of specialists and
generalists in contemporary health agencies or organizations. In
clinical care situations, generalists often have greater value to
managed care systems than do specialists because they are the
gatekeepers. Yet, they continue to be paid at lower rates than
specialists.
Disputes over jurisdiction or turf have historically been
common in service organizations as different specialty groups
tried to decide which one would assume the responsibility for
leading a particular initiative or program. The historical result
has been an informal arrangement known as a consultation. In
addition to providing specialized expertise, consultation serves
an organizational need, allowing individuals to tread on the turf
of others in a legitimate fashion. The contemporary reality is
that members of the same organization often provide
consultations to each other, thus reducing turf infringements.
Constructive Conflict
Conflict can be a constructive force in organizational life. In
fact, suppressing conflict can create a significant barrier to
improving internal processes and the quality and value of
goods, services, and programs. If employees (and managers)
fear retribution for delivering bad news or correcting their
superiors, opportunities for improvement will be missed.
Conflict among individuals and groups can be identified and
constructively addressed by encouraging honesty and frankness,
within the bounds of organizational values of respect and

integrity. Compromise and collaboration are two options for the
processing of constructive conflict (Thomas
1977
).
Compromise
requires that each side give up something for a solution that is
not ideal for either party but that both parties are willing to
accept in the interests of the organization.
Collaboration
requires more creativity, because it involves new ideas that are
appealing to both parties (win–win solutions). Managers should
encourage the identification of conflict around important issues
and the development of compromise or collaborative solutions.
Guidelines for improving collaboration among individuals and
organizations in a broader sense (beyond conflict management)
are covered elsewhere (
Chapters 12
and
13
) in this book.
Other common ways of processing conflict are
competition
(letting both sides battle to resolve an issue or disagreement,
with the most powerful usually winning),
accommodation
(one side surrenders), and
avoidance
(both sides allow the conflict to fester). Although none of these
three options sounds ideal on the surface, there are conditions
when each should be used (Thomas
1977
). For example, competition may be necessary when there is not
time to compromise or collaborate. Avoidance may be advisable
for trivial issues. Accommodation may be useful when harmony
and stability are especially important. Experienced managers
use all five options for managing conflict, depending on the

specific situation.
POWER AND POLITICS
Organizations, including those in the health care and public
health sectors, are infused with politics. Organizational politics
involves the use of power to get things done in the organization.
Managers are inevitably involved in organizational politics,
particularly if they pursue a change and improvement agenda.
Power derives from formal authority, control over resources
(which often comes with authority), expertise, and certain
personal characteristics and social networks of individuals.
Authority refers to legitimate power—power that is viewed as
appropriate by the individual who holds power and by those
subject to the power. In organizations, legitimacy is usually
conveyed by formal documents such as a position descriptions,
policies, and rules. In the absence of formal policies, those with
power often create ad hoc rules. A decision made using ad hoc
rules is either an interpretation of existing (standing) policies or
is made because no explicit guidelines exist. In organizations
built around authority, decisions are transmitted from managers
to subordinates, who then implement them. If subordinates
choose to disobey, then they will incur sanctions or pay a price
for this privilege. Subordinates may obey because an individual
holds a particular position or office, and power is perceived as
emanating from the position (authority). Most cultures teach
that individuals ought to obey both laws and persons of
legitimate authority.
Another source of power for managers is control over rewards
and punishments. Positive rewards make individuals feel good.
They can also provide desirable options or objects such as
money, status, prestige, position, special treatment, or
advancement. Negative rewards (sanctions) tend to be given
along a continuum of increasing degrees of coercion with
repeated applications. For example, if an individual does not
react to a verbal suggestion, at the next occurrence, the warning
typically is repeated and accompanied by a written document. A
fine or suspension may follow if suggestions or orders continue

to be ignored. Expulsion is the ultimate sanction. Managers can
use rewards and punishments, including the outplacement of
opponents, to advance the organization’s agenda (Pfeffer
2010
).
Expertise is a particularly common source of power in health
organizations, and sometimes it is more important than formal
position. Certain highly respected practicing clinicians or
scientists may have more influence over their peers than do
other clinicians or scientists appointed to formal positions. It is
important for managers to cultivate relationships with
respected, powerful individuals regardless of formal position.
Social networks are another basis of power outside the
hierarchy of authority. An individual’s connections with
powerful others, whether based on culture, training, religion, or
other factors, can give that individual power in organizational
decision making. Astute managers keep a wide range of
connections themselves and seek out employees who are widely
connected.
Finally, personal characteristics can add to one’s power base in
organizations, depending on the organizational and societal
culture. In some cultures, gender (usually male gender)
historically has been a source of power. Charisma, or the
projection of positive energy and enthusiasm, is another
personal characteristic that often yields power to the holder.
Constructive Politics
Constructive politics among individuals and groups can be used
in organizations to move controversial issues to decision points
and to advance the agenda of the organization. Constructive
politics means using power in ways that are moral, open, and
caring, where all participants follow the same rules or
guidelines (Bolman and Deal
2008
). In most workplaces in the United States, for example, it is not
ethical to use gender or religion as a source of power.
Constructive politics would not include giving more power to

individuals based on their gender or religion.
Constructive politics requires that power be exerted in the
interests of organizational goal achievement. Effective
managers use constructive politics to pursue the goals of their
unit and the organization. Four competencies of constructive
politics are useful for managers: setting agendas, anticipating
resistance, networking and building coalitions, and bargaining
and negotiating (Bolman and Deal
2008
).
Using the power to
set agendas
is critical for managers interested in improving organizations
and creating new value for consumers in products and services.
The default agenda for many organizations involves maintaining
the status quo. Managers can be proactive about seeking
improvement both in their departments and the larger
organization by making sure that organizational performance
issues and improvement opportunities get raised and addressed
at critical meetings.
Mapping the political terrain
enables managers to forward their agendas more successfully.
Anticipating and addressing resistance in advance of important
decision-making forums is particularly useful. Likely opponents
to action items can be co-opted, or enrolled in the process of
change, by seeking their help and developing informal
relationships with them. Proposals for change can be altered to
accommodate opponents’ suggestions, if the suggestions
improve the idea or only marginally damage it.
Networking
and building coalitions recognize that power derives in part
from mass and that individuals seldom succeed alone in
organizations. Ideas for improvement need sponsors in other
departments and at higher levels of the organization. Effective
managers develop coalitions of supporters for their ideas before
exposing the ideas to widespread testing.

Bargaining and negotiating
are final competencies of the constructive organizational
politician, because getting something is often preferable to
getting nothing or to imposing your will but losing the
commitment of those imposed upon. Bargaining and negotiating
skills are similar to those involved with collaboration and
compromise, including a willingness to truly listen to and
engage in dialogue with adversaries, to separate issues from
personalities, and to be creative about innovative, win–win
solutions when parties disagree (Fisher, Ury, and Patton
2011
).
The essence of politics is achieving compromise or
collaboration and getting results. Organizations constantly seek
positive results. Politically astute managers understand the
dynamics of groups and their rules of behavior. They use them
for the benefit of their entire organization. This may involve
establishing closer working relationships with informal leaders
to improve the output of a group. Alternatively, it may mean
promoting some group goals to generate support for a desired
organizational goal. This must be done within permitted
discretionary limits and guidelines. It may also involve working
behind the scenes to create environments and situations in
which their subordinates are allowed to shine. The possibilities
are limited only by organizational guidelines, personal ethical
standards, and individual imagination.
OTHER WAYS TO INFLUENCE ORGANIZATIONAL
DYNAMICS
Among other managerial options for increasing influence with
employees is development of personal participation and interest
in the careers of employees. Successful managers and
supervisors help to promote the careers of their employees. This
involves ongoing training that is delivered at formal and
informal venues. Managers should project clear career paths for
their employees. Within the limits of opportunity allowed by an
organization, formal career paths should exist. Successful

managers understand that helping subordinates and peers to
succeed will reflect positively on themselves.
Effective managers motivate their employees to think about
problems they may encounter before they occur. As workers
develop competence on their jobs, their self-esteem improves.
Employees also learn to expect and receive respect from
supervisors and peers. Successful managers promote good
attitudes about the organizations in which they lead. Further,
they continually review various aspects of their organization or
department so that they can identify and address problems
before they become insurmountable. Effective supervisors
discuss the details of a new program or project in advance
rather than allowing interns or inexperienced employees to look
foolish at meetings involving senior executives.
Successful managers stress the need for quality and reinforce
the importance of good customer service. They also regularly
reward examples of quality and good customer service. If
recognized and rewarded, employees will internalize the need
for quality and the values of excellent customer service.
A final class of options for influencing organizational dynamics
involves altering the existing formal structure of an
organization. Such modifications may involve changes in
authority, job duties, or responsibilities; modifying formal
communication channels; and remodeling and upgrading the
physical conditions of work.
Traditional management theory states that the goal of managers
is to achieve common objectives within their units, using
available resources within an allotted amount of time. However,
this view of management is changing. Experts are urging that
managers also have more input into the development of
organizational mission, strategy, and objectives and seek out
and use any and all available resources within an organization
(Rainey
2009
). Other experts (Foster
2009

; Gorenflo
2010
; Hoyle
2007
; Institute of Medicine
2001
) have noted the importance of quality and customer service in
the role of the manager.
Consistent with this expanded view of the management role,
contemporary managers must assume the task of absorbing and
preventing stress. An important goal is to balance change and
challenge with the need for some degree of organizational
equilibrium. It is a managerial responsibility to design and
adjust the working relationships of individuals so structural
problems do not interfere with the effective performance of an
organization. Frequently, simple changes of job responsibilities
can resolve minor problems.
Finding an appropriate placement for a problem employee can
be beneficial for both the sending and receiving groups. Simply
handing an unwanted employee to someone else will generate a
group or organizational reputation that is likely to outlive the
individual doing the dumping. Managerial success can be
improved by encouraging and maintaining open and appropriate
communications between associates (laterally) and supervisors
and subordinates (vertically). Observers have noted that poor
managers are characterized by either very high or very low
levels of interaction relative to the usual level for a given
position and organization (Richardson
1961
). Effective managers tend to spend a significant amount of time
responding to their subordinates and associates. As a result,
they are more readily available and receive more contact from
their subordinates (Rainey
2009
).
An important element of any manager’s duties is planning and

modifying the structure and flow of work to minimize any
stressful patterns or factors that may deter effective
performance by individual workers. This may involve placing
organizational or physical buffers or barriers. If there are
obvious external differences in the behavior or working
conditions of two groups, it is sensible to limit interactions to
the telephone, e-mail, or other electronic media. A manager
must maintain a comfortable rhythm in the flow of work among
subordinates. This may involve scheduling, sheltering, or
coaching subordinates. Workloads should be equitably designed
and distributed. In the current climate of task specialization and
electronic isolation, managers all too often react to the
pressures of senior organizational leaders by demanding
increased output from their employees. Successful managers are
careful not to routinely expect levels of production from their
employees that they would be unwilling or unable to produce
themselves.
CONCLUSION
The rhythm and cadence of work, as well as the administrative
processes by which they are controlled, are fundamentally
important for organizational success. Organizations have been
characterized as being a system of relationships (Chapple and
Sayles
1961
). Organizing tasks involves applying systems thinking and
using appropriate technologies. Every organization is a unique
collection of processes, procedures, policies, controls, formal
authority structures, and managerial techniques. Among related
units of organizations, it is unusual that changes in sentiment
precede changes in activities or organizational rearrangement.
Technology and organizational structures must be modified
before group norms and values are likely to be successfully
changed or altered.
This chapter has outlined various patterns in interpersonal and
intergroup relations in organizations. Many careers have been
devoted to understanding and describing group dynamics and

behavior. In addition to understanding their subordinates and
peers, effective managers understand the organizational forces
that exist in local working environments.
Table 7–1
summarizes several lessons for dealing with personal and group
dynamics in organizations. Being willing to listen to both
subordinates and superiors, communicating through multiple
methods, being open to innovation, and using constructive
conflict and politics should result in both effective and
rewarding experiences as a manager.
Public Health Accreditation Board
:
http://www.phaboard.org/index.php/about/

Assignment 2 Discussion QuestionBased upon the assigned reading f.docx

More Related Content

Similar to Assignment 2 Discussion QuestionBased upon the assigned reading f.docx (20)

More from karenahmanny4c (20)

Recently uploaded (20)

Assignment 2 Discussion QuestionBased upon the assigned reading f.docx