This document provides an overview of classical and modern organization theory as applied to health care organizations. It discusses several theories of organization including scientific management, administrative management, behavioral, systems, and contingency theories. Scientific management theory focuses on standardization, time studies, and dividing work responsibilities. Administrative theory examines formal structure, rules, and principles of management. Behavioral theory emphasizes human factors like motivation, leadership, and group dynamics. Systems theory views organizations as goal-oriented systems, while contingency theory contends there is no single best way to manage and the approach must fit the situation. The theories provide frameworks for functions like management structures, performance evaluation, process standardization, and adapting to changing environments in health care.

1. ORGANIZATION THEORY
Prabesh Ghimire
Organization of Health Service
Public Health Administration and Management

2. Classical Organization Theory
Developed during industrial revolution
Developed from efforts to find the “best way” to perform
and manage tasks.
Three main theories
• Scientific management theory
• Administrative management theory
• Behavioural theory
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3. Scientific Management Theory
Aroused because of the need to increase productivity and
efficiency
• How to increase the output of the average worker
• How to improve the efficiency of management
 Major contributors: Frederick Taylor, Henry Gantt, and
Frank and Lillian Gilbreth
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4. Principles of Scientific Management
Theory
Work, equipment and processes should be standardized
Time and task study should be used to determine the
standards for workers
Selection, training and developing workers instead of
allowing them to choose their own tasks and train
themselves.
Cooperate fully with the workers to ensure they use the
proper method
Divide work and responsibility so management is
responsible for planning work methods using scientific
principles and workers are responsible for executing the
work accordingly.
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5. Administrative Management Theory
Focused on total organization
Emphasis was on the development of managerial
principles rather than work methods
Major Contributors: Henry Fayol, Max Weber, Mary
Parker Follet…
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6. Weber’s theory
 Disliked organizations managed on personal family like
basis
• Employees loyal to individual supervisors rather than organization
According to Weber
• management should be managed impersonally
• Formal organization structure, where specific rules are followed is
important
• Authority should be something that was part of a person’s job and
passed from individual to individual as one person left and another
took over
Non-personal objective organization- bureaucracy
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7. Weber’s theory of bureaucracy
A well-defined hierarchy
• Positions in bureaucracy should be structured in a way the permits
higher positions to supervise and control the lower positions
• Facilitates control and order in organization
Division of labor and job specialization
• Responsibilities should be specialized so that each employee has
the necessary expertise to do a particular task
• Fosters ability and merit as the primary characteristics of a
bureaucratic organization.
Former rules and regulations
• Standard operating procedures should govern all organization
activities to provider certainty and facilitate coordination
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8. Weber’s theory of bureaucracy
Impersonality
• Managers should maintain impersonal relationship with employees
so that favoritism and personal prejudice do not influence decisions
Competence
• Staffs are selected and appointed based on technical qualifications
and ability, rather than personal loyalty and relationships
Records
• Bureaucracy needs to maintain complete files regarding all its
activities
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9. Fayol’s Principles of Management
1. Division of work
2. Authority and
responsibility
3. Discipline
4. Unity of command
5. Unity of direction
6. Remuneration
7. Subordination of personal
interest to general interest
8. Centralization
9. Scalar chain
10. Order
11. Equity
12. Stability of tenure
13. Esprit de corps
14. Initiative
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10. Behavioural theories of Management
Successful organization depends largely on a manager’s
ability to understand and work with people.
Addresses human dimensions of work: motivation,
leadership, trust, teamwork and conflict management.
Major contributors: Mayo and Roethlsberger, Maslow, Mc
Gregor
Major contributions
• Hawthrone Experiement
• Maslow’s Need Hierarchy Theory
• Mc Gregor Theory of X & Y
• Herzberg’s Motivation Hygiene Theory
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11. Hawthrone Experiment
Organization is a social system not just techno-economic
system.
Employers can be motivate by psychological and social
wants because their behaviour is also influenced by
feelings, emotions and attitudes
Economic incentives are not the only method to motivate
people
Management must learn to develop co-operative attitudes
and not rely merely on command.
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12. Hawthrone Experiment
Productivity is linked with employee satisfaction.
Management must take greater interest in employee
satisfaction
Group psychology plays important role in organization.
We must therefore rely more on informal group effort
Key to higher productivity lies in employee morale. High
morale results in higher output
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13. Maslow’s need hierarchy theory
Theory of motivation
Considerations on five groups of human needs
Assumptions
Human needs are never completely satisfied
Human behaviour is purposeful and is motivated by the
need for satisfaction
Needs can be classified according to a hierarchical
structure of importance, from the lowest to highest
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14. Mc Gregor’s theory X and Y
Dichotomy about the assumptions managers make about
the workers and how these assumptions affect behaviour
Two basic kinds of manager exists
• Theory X manager
• Theory Y manager
Hard guy, soft guy approach of managing people in the
organization.
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15. Mc Gregor’s theory X and Y
Theory X
Negative assumptions about employee
Assumes that average person has an inherent dislike for
work and will avoid if they can
Employees are lazy, untrustworthy and incapable for
assuming responsibilities
They must be coerced, controlled, directed and
threatened with punishment to get them put forth
adequate efforts towards achievement of organization
objectives
Average employee prefer to be directed. They wish to
avoid responsibility and have little ambition. They are
interested only in security
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16. Mc Gregor’s theory X and Y
Theory Y
Work is as natural as play or rest if the conditions are
favorable
Employees are not only trustworthy and capable of
assuming responsibility, but also have high levels of
motivation.
People will exercise self-direction and self-control to
achieve organizational objectives to which they are
committed
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17. Applications of Classical Theory in
Health Care Organizations
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18. Scientific Management Theory
Hospitals using scientific management can design the
management structure, staffing and number of beds allocated
to particular units to care for a specific number of patients per
year.
Scientific management driven health care organizations can
evaluate health workers’ performance based on performance
indicators including productivity, number of patients seen
Process standardization are widely practiced to ensure health
care quality and efficiency: e.g. standards for Reproductive
Health services, standards for administration of vaccines
Work standardization are important in health organizations:
duty shifts, code of conduct, health ethics
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19. Applications of Bureaucratic Theory
 Job specialization should be very explicit in health care
organizations
• General practitioners, Specialist, Nursing, Radiology
Use of standard operating procedures are critical
components of health care procedures
• E.g. core competency steps to be followed for assisting birth
• SOPs for effective vaccine management
• SOPs for storage
Recently, Information management systems have been
an essential part of health care organizations
• HMIS, LMIS, FMIS, TIMS, IMIS
Impersonality and competence is must in health care-
specialized field (life vs death)
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20. Modern Organization Theory
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21. Modern Organization Theory
Considers an organization as an adaptive system which
has to adjust to changes in its environment.
Organization is viewed as a structured process in which
individuals interact for attaining objectives
Major theories
• Systems theory
• Contingency theory
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22. Systems management theory
System: Interconnected and interrelated set of elements
functioning as a whole
Every system is goal-oriented and it must have a purpose
or objective to be attained
In designing the system we must establish the necessary
arrangement of the components
Inputs of information, material and energy allocated for
processing as per plan so that outputs can achieve the
objective of the system
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23. Systems management theory
Organization as a system is composed of five
elements
• Inputs- human, finance, material, equipment,
information
• Transformational processes- technological and
managerial
• Outputs- products or services
• Feedback- reaction from the environment
• Environment
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24. Prabesh Ghimire 24
Systems management theory

25. Prabesh Ghimire 25

26. Contingency theory
Managerial practices depends on situation
(circumstances)
There is no one best way to manage organization
“If” and “then” approach to management
Considers multivariate nature of organizations
 Rather than having a specific solution to solve problems,
it provides a framework where every solution depends
upon the environmental conditions.
• Same problem can have different solutions at different points of
time
• Different problems can have same solution at the same point of
time.
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27. Contingency theory
Manager’s approach must be adjusted to the demands of
specific situations or circumstances.
Management is highly practice-oriented discipline. It is the
function of managers to analyze and understand the
environment in which they function before adopting their
techniques, processes and practices.
This theory is highly dependent on the experience and
judgment of the manager in a given organizational
environment
• Internal: Organization’s policy, culture, technology, structure and
size.
• External: organization’s operating environment
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28. Applications of Modern Theory in
Health Care Organizations
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29. Systems Theory
 Six building blocks have been emphasized for efficient
organization of any health system
• Service Delivery, Health workforce, information, medical products
vaccines and technologies, financing and governance
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Service Delivery
Health Workforce
Information
Medical products, vaccines and
technologies
Financing
Leadership/Governance
Improved health
Responsiveness
Social and financial risk protection
Improved efficiency
Access
Coverage
Quality
Safety
WHO Health System Framework

30. Systems Theory
 Almost all hospitals and health care projects operates in
a systems perspective
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Fig. Hayajneh Y. Systems & Systems Theory

31. Contingency theory
Health care organization operates in highly unpredictable
situation (outbreaks, PH emergencies, disaster)
Health managers during emergency must build an
organizational culture and structure that improvises and
acknowledges that each disaster is unique.
More dynamic organizational structure could be
structured based on the nature of the problem (hazard)
and who needs to be involved and the actions taken.
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32. 32
Queries & Discussion………
Prabesh Ghimire