Organizational Design: Mayo Clinic - Case Study Example

Organizational design paper Introduction Managing an organization is a complex and tough task, the complexity of which increases with their size and structure. This is mainly because an organization is a dynamic system comprised of people, unlike a computer or piece of machinery. A proper organization will have a vision, a mission, and a strategy that will be geared towards achieving both. For this, the management will evolve and implement processes and day to activities that will help in achieving its strategy and eventually its goals and vision. This is true for any organization whether it is formed for doing service or for making profits. It also holds good for any field of activity or business, be it health, manufacturing, or service. For proper management and functioning an organization will have to have an organizational structure and design. The correct formation of the above two factors will be crucial in proper functioning and eventual growth and success of the organization. This paper is a review of organizational design with focus on the health sector, namely the world famous Mayo Clinic. In the process, the paper will also review the internal and external factors that influence the design. Accountability, especially in sectors like healthcare is very important and this area will also be looked into. Organizational design explained The term organizational design involves more factors than the organizational structure if definitions of the same are taken into account. According to Nadler, Tushman and Nadler (1997), the “organization design involves decisions of the formal organizational arrangements, including formal structures, processes, and systems that make up an organization” (49). It is to be noted that a large organization will be comprised of many sub-units and departments. In other words, an organization is a dynamic system comprised of many sub-systems. The proper coordination between these sub-systems working towards a common goal is essential. The factors that affect design can be internal as well as external. Political factors, environmental factors, socio/cultural factors, technical factors, competition etc. There are also many internal factors which are given here. Nadler and Tushman, credited with developing the Nadler Tushman model, include the following elements that are needed in designing an organization. So, one primary requirement of design includes composition of such units and the relationship between them. The technology used the quality and level of communication, strategies, the compensation and reward systems, HR, job description and design, and the physical working environment are some of the necessary factors to be considered in organizational design. Some more factors essential in a good organizational design is also provided below. They include the level of authority and control of different jobs, the responsibility of employees, the hierarchy or command chain, etc too have to be clearly spelt out (McNamara 2007). The political/legal factors or policies followed by a government will have an impact on the design of an organization and can also affect many of the internal factors as well. For example, a government usually will have labor laws prescribing many rules and responsibilities to be followed by the management. In the United States, labor laws states that a minimum wage has to be paid to casual as well as permanent employees. This will have an impact on compensation policies of an organization which is in effect an internal factor. Policies on how an organization should be structured, is also an example of an external factor impacting internal ones. Rules and regulations as to incorporation and registration of organizations are external factors that affect the structure of organizations. For example, an organization can be a sole-proprietorship, partnership, a limited liability company, or a not-for-profit organization. There are separate rules and regulations regarding formation and running of each of the above types activities. Other political/legal factors include policies on globalization and free trade and immigration policies. Liberal immigration policies will reflect on organizational culture due to diversity in the work force. Environmental factors also affect organizational design. Nowadays, concern for the environment is rising and many regulations are formulated for lower damage or reduction in harm to it. The design of organization, for example, managing waste, will be dependent on such regulations. Technology again plays an important role in design. With fast advances in areas like IT, most organizations are forced to change their design to catch up with it. The health sector is one area where rapid advancements in technology are seen. Organizations engaged in healthcare operations have to be ready to incorporate this into their operations in terms of personnel capability and resources. The visions, goals and strategies of organizations are internal factors affecting organizational design. For example, many companies link their compensation policies to performance of employees. Rewards are offered based on performance of their personnel with efficient employees earning more than others. Cultural diversity, ethics, organizational culture and politics, are some factors that directly impact design in organizations. In other words, almost all factors with regard to running an organization including human resource policies impact organizational design. Organizational design of the Mayo Clinic The Mayo Clinic success is based on its focus on service and care to its patients. Hence the organization’s design is based on these two premises. Dr Denise Cortese, the CEO and President observed in 2002 that employees (physicians, nurses, and other technical personnel) are engineers and artists. They are engineers primarily because they impart their technical knowledge, using the latest technology, research, and equipment in treating their patients. The grateful patients acknowledge this service done to them. This is the measurable part of service in a well respected clinic. With regard to staff being artists, Dr Cortese then writes that they know “when the patient needs a warm smile, reassuring words, or a gentle hug. It’s the artist that makes every patient welcome, comfortable, secure, hopeful” (Berry & Seltman 2008). It should be noted that the caring aspect (artist) extends to non-technical and administrative staff as well. The strategy that has brought the clinic so much success is this, incorporating the artist into the technician. The practice is followed in all its three divisions in Minnesota, Florida, and Arizona. This organization which started more than hundred years back has no marketing staff to speak of. At present its marketing department employees one on person. In other words, its reputation and word of mouth marketing works to bring in patients. In order to see that employees remain committed and motivated, the clinic has a full time communications team (referred to as comm team). This team reviews the performance of the nearly thirty thousand people employed by the clinic. Apart from this they regularly communicate with select employees to feel the working atmosphere within the organization. They also encourage employee participation and requests suggestions on improvements in the day to operations of the clinic. The comm team also relies on external surveys and studies on other organizations that have high employee morale and commitment. For example, team members review the Fortune 500 ‘Best Places to Work’ survey for incorporating improvements in working atmosphere. It should be noted that Mayo Clinic very often is a part of the list brought forth every year by Fortune Magazine. So, this is the way that Mayo Clinic ensures high quality of service to patients from all its employees. Great emphasis is put on team work. There are no contractual employees in the sense that everyone is directly paid salary and compensation by the clinic. Even though the organization has the reputation and resources to expand even more, it plans this strategy with great care, by ensuring that the quality of service is not diluted due to expansion. The Mayo is a leader in implementation of IT into its operations. In fact it was one of the first health organizations in the country to incorporate the concept of electronic medical records (EMR). Another design strategy is to keep records patient-wise rather than on physician activities, which is followed by many healthcare providers. This helps to track individual patient records more easily. The clinic has also incorporated Six Sigma into its operations. One main design success is that the management has fully realized that it is a labor intensive service oriented organization and hence designed every aspect with this in mind. Each department has two persons as its head, one a physician, and the other an administrative person. This helps both technical and administrative factors to be given equal consideration when taking decisions. The external factor of increasing health problems in the country definitely helps in getting more patients. The clinic is careful about environmental factors and has an efficient waste management system in place. Conclusion The Mayo Clinic is one of the most respected healthcare providers in the world and this is made possible by having an efficient organizational design in place. It has taken care to see that every aspect of management is considered in this regard. It also correctly sees and focuses on two areas namely service to patients and care for employees as most important. The Mayo Clinic can be cited as a excellent example of an organization having a very capable and practical organizational design. Works Cited Nadler, D, Tushman, M and Nadler, M.B. (1997). Competing by design: the power of organizational architecture. 2nd Illustrated Edition. Oxford University Press: US. McNamara, Carter. 1997-2007. Key Concepts in the Design of an Organization. Authenticity. Retrieved May 11, 2009, from Consulting, LLC: http://www.managementhelp.org/org_thry/concepts.htm Berry, L.L and Seltman, KD. (2008). Management Lessons from Mayo Clinic. The McGraw-Hill Companies: United States. Read More