4 Organizational Behavior—MacroLearning ObjectivesAft.docx

4 Organizational Behavior—Macro
Learning Objectives
After reading this chapter, you should be able to:
• Identify and define the types of groups found in business
organizations.
• Summarize the principal theories of group dynamics.
• Analyze group performance and effectiveness.
• Discuss the role of physicians as stakeholders in health
organizations.
• Apply evidence-based management principles to health
organizations.
• Compare functional and dysfunctional organizations.
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Section 4.1Introduction to Organizational Behavior—Macro
Staff and Executive-Level Teams Are Fundamentally Different
A motivational poster frequently found in managers’ offices
displays a team of rowers to illustrate the
concept of people working together; a popular offering from the
Art of Rowing company is titled Team-
work: Together We Achieve More. When most people on a team
are doing similar jobs, the rowing
metaphor is very apt. However, executive-level teams are
different:
Executive teams are more like baseball teams. Sure, they are all
wearing one uni-
form and following one game plan, but sometimes they work
alone (as in the case
of a batter), sometimes they work in pairs (pitcher throws to
catcher, or shortstop
and first baseman collaborate in a double play) and only seldom
do they all get in
on the action.. . . Don’t expect a team at that level to feel the
same way your depart-
ment level team does. You’re not all in the same boat. So figure
out the game plan,
play your position, and keep your head up to spot your chances
to support your
teammates. (Davey, 2012, p. 1)
When one thinks of the ideal executive-

level team, a better metaphor might be
a company softball team—which can
include both men and women of varying
ages and ethnicities. However, company
softball teams are seldom good at playing
softball; many are formed to encourage
camaraderie among the players and sup-
porters, thereby strengthening working
relationships and organizational com-
mitment. Organizations need and value
talented individuals who can work col-
laboratively with others; being a “team
player” is an important attribute for
success in almost every type of job. Since
much of the clinical and administrative
work in health organizations is done in
groups or teams, it is important for health
care professionals to understand the work-
ings of, participate in, and lead teams.
Critical Thinking and Discussion Questions
1. What have you learned from participating in a department or
management team?
2. How important is team camaraderie among executives in
health care organizations?
4.1 Introduction to Organizational Behavior—Macro
Chapter 3 focused on the individual behavior in organizations.
This chapter focuses
on group behavior and discusses how organizations achieve
their goals by coalescing
the skills and efforts of individuals into groups and networks.
Organizational behavior
researchers and practitioners study behaviors within and
between groups, both formal

Randy Faris/CORBIS
An executive team is similar to a company softball
team.
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Section 4.2Group Dynamics
and informal. Formal groups are officially designated to fulfill
certain functions and
accomplish specific tasks. Within the category of formal groups
are command groups
and task groups. Command groups are the building blocks of the
organization’s struc-
ture. They are specified in the organization chart and include
the executives, managers,
supervisors, and the people who report to them. Task forces,
also called task groups,
are temporary groups charged with solving a problem or
responding to an opportunity.
Stakeholders are groups and organizations that have a vested
interest in the organiza-
tion. Informal groups are naturally formed groups of people who
work together or who
are drawn together on the basis of friendship or shared interests.
Although they are not
officially sanctioned or recognized by the organization, they
strongly influence its work-
ings (Ivancevich & Matteson, 2002). Successful health care
management requires skill in
managing individuals, groups, and stakeholders.

4.2 Group Dynamics
Cartwright and Zander (1968) define group dynamics as “a field
of inquiry dedicated to
achieving knowledge about the nature of groups, the laws of
their development, and their
interrelations with individuals, other groups, and larger
institutions” (p. 120). They note
that this subunit of organizational behavior became an
identifiable field in the United
States in the late 1930s and has four distinguishing
characteristics:
1. An emphasis on theoretically significant empirical research,
based on effective
experimental design, careful observation, reliable measurement
techniques,
and statistical analysis of data performed according to accepted
social science
research methods.
2. Interest in the dynamics of group life and observed
relationships, in order to
discover general principles concerning what conditions produce
what effects and
how certain properties and processes depend on others.
3. Interdisciplinary relevance, incorporating and contributing
ideas from and to
sociology, psychology, anthropology, political science, and
other social sciences.
4. Potential applicability of findings to professional and
business practice, in order
to provide a sounder scientific basis for practitioners in a
variety of group set-

tings and organizations.
While groups and teams are terms often used interchangeably in
the literature, there are
some important distinctions between them. Groups consist of
two or more individuals
who interact with each other and share a common purpose or
affiliation. A team is a
type of group; all teams are groups, but not all groups are
teams. In business a team is a
group whose members work together on a specific project or are
responsible for a specific
organizational function. While there may be a designated team
leader, teams collectively
assume responsibility, set goals, develop plans, and divide the
work. “In order to be a
team: (1) individuals’ actions must be interdependent and
coordinated, (2) each member
must have a specified role, and (3) members must share
common task goals or objectives”
(Ivanitskaya, Glazer, & Erofeev, 2009, p. 109).
Group dynamics, as the name implies, deals with changes that
occur when people interact.
The following section highlights three important theoretical
contributions to the study of
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group dynamics in the workplace. The first, roles, places the
individual in context among
peers, superiors, and subordinates and also defines his or her

function in the organization.
The sections on group process and intergroup behavior deal
with group development and
group behavior toward other organizational groups.
Roles
A key construct of psychology is the role an individual plays in
a given situation, which
serves a specific purpose and involves a set of shared
expectations. For example, nurses
are the primary caregivers of patients in a hospital. In business
others in the organization
and the profession establish expectations for a given role. For a
nursing supervisor, these
others would include direct reports, the boss, fellow
supervisors, patients and their fami-
lies, and the nursing educational, professional, and licensing
organizations.
Benne and Sheats (1948) developed functional role theory based
on behavioral patterns
they observed among individuals in many different small-group
interactions. Some indi-
viduals performed task roles, which involved completing a job
and accomplishing an
objective. Others performed maintenance roles, which were
social in nature, focusing
on process and relationships. Still others performed individual
roles to help the group
accomplish its goals. Whetten and Cameron (2011) noted that
two types of roles, task
facilitating and relationship building, were both important
contributors to group per-
formance. Most people, whether group members or leaders, tend
to emphasize one role

over the other. While at certain times one role may
predominate, effective groups need to
strike a balance between task-facilitating and relationship-
building roles. Tushman (1977)
described individuals whose roles primarily involve interactions
and communications
with external stakeholders as holding boundary-spanning roles,
such as compliance or
government-relations officers in a health organization. Another
type of role common in
large-scale or high-tech health organizations is that of horizon
scanning, which involves
identifying new and evolving interventions or technological
advances, as well as ana-
lyzing their potential impact on the health care industry
generally and the organization
specifically (Sun & Schoelles, 2013). Whetten and Cameron
(2011) categorized a number
of unproductive behaviors that inhibit group work as blocking
roles, and emphasized the
importance of managerial proficiency in developing,
participating in, and leading groups.
Theory in Action: Management Behavior and Group Roles
Here are common behaviors of each role type, with examples of
statements to illustrate
group leader behaviors or, in the case of blockers, to deal with
them effectively (Whetten &
Cameron, 2011).
Task-Facilitating Roles
• Giving directions: “Let’s start by brainstorming ideas.”
• Seeking information: “What do the licensing regulations
specify?”
• Giving information: “Here are the regulatory specifications.”

(continued)
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Theory in Action: Management Behavior and Group Roles
(continued)
• Elaborating: “To add to Joe’s comments. . .”
• Urging: “We need to win this bid to make our revenue target
next year.”
• Monitoring: “Who will be lead staff with accountability for
each task we’ve identified?”
• Analyzing process: “Some members seem to have checked out
on this project.”
• Reality checking: “Can we really meet this deadline?”
• Enforcing: “We’re getting off track; let’s focus on what we
have to decide today.”
• Summarizing: “Here is what I understand are our next steps,
and who is lead staff for
each.”
Relationship-Building Roles
• Supporting: “Your root-cause analysis was spot-on!”
• Harmonizing: “Let’s just agree to disagree about this; we
don’t need to agree on every
point to move ahead.”
• Relieving tension: “I haven’t had this much fun since my last
root canal!”
• Confronting: “Maria, this is your department’s domain, so you

need to assign staff to
complete this part of the job.”
• Energizing: “I can’t believe how much we’ve accomplished so
far!”
• Developing: “Jerry, I know this is a new area for your
department but Ruben will help
you; he’s done a lot of similar projects.”
• Building consensus: “Let’s list the things we have agreed to so
far.”
• Empathizing: “I know it’s stressful to have such a lot to do in
such a short time.”
Blocker Roles
• Dominating: “Remember, this is a group project; we need
everyone’s ideas.”
• Overanalyzing: (a) General: “We need to avoid analysis
paralysis”; (b) Specific:
“Hilary, will you please summarize your concerns in no more
than 1 page for the next
meeting?”
• Stalling: “Folks, we need to make a decision on this today.”
• Disengaging: “Charlie and Lisa, you haven’t said anything and
I know you have
opinions about this.”
• Overgeneralizing: “Is the issue that Oscar raised as much of a
problem for other
people?”
• Faultfinding: “Let’s keep an open mind as everyone presents
their ideas.”
• Premature decision making: “Are we jumping to a solution

here?”
• Presenting opinions as facts: “Do you have any data or facts to
support that
statement?”
• Rejecting: Include instructions prior to the meeting: “Please
type out on separate sheets
of paper your idea(s) for resolving issues 2 through 5 and bring
them to the meeting.”
• Pulling rank: “We need to hear more from the people who will
be doing the work.”
• Resisting: “Let’s concentrate on how we can move forward on
this project.”
• Deflecting: “We’re getting off track here, let’s focus on the
main points.”
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Group Process and Phases
Educational and research psycholo-
gist Bruce Tuckman became well
known following the publication of
a short article in 1965 in which he
proposed a four-stage linear process
of group development: Forming,
storming, norming, and perform-
ing. Hare, Borgatta, and Bales (1965)
argued that since group members
will seek a balance between accom-
plishing the task and building rela-

tionships with fellow group mem-
bers, it becomes a repetitive cyclical
process as the group moves from
storming, norming, and performing,
as illustrated in Figure 4.1 (Smith,
2005). Understanding dynamics of the
group developmental process is par-
ticularly important for health profes-
sionals participating in or leading the
multidisciplinary teams so common
in health organizations.
1. In the forming stage, groups organize themselves and test
each other to establish
boundaries for both task and relationship behaviors. It is also
during this stage
that leadership and dependency roles are established.
2. The storming stage involves some conflict or polarization as
members com-
pete for leadership or to control the group’s direction, which
disrupts task
requirements.
3. In the norming stage, members develop feelings of
identification and cohesive-
ness with the group as they put aside their personal agendas,
adopt new roles,
and commit to new behaviors as group members.
4. In the performing stage, the interpersonal structure becomes
the vehicle for
accomplishing the task activities as members recognize the
importance of group
goals, develop pride in identity, and direct their energies as a
group to accom-

plishing the task.
In 1977 Tuckman and Jensen added a fifth stage, adjourning,
since not all groups are
ongoing. This stage can be a stressful process because it
involves loss and the termina-
tion of roles (Smith, 2005). Coppola (2008) argues that an
additional preparation stage is
important, especially in hospitals and other large, complex
organizations. The informing
Figure 4.1: Group development phases
Early group dynamics researchers developed a four-phase
developmental model that included the phases of forming,
storming, norming, and performing.
Source: Smith, M. K. (2005). Bruce W. Tuckman—forming,
storming, norming
and performing in groups. The Encyclopaedia of Informal
Education.
Retrieved August 15, 2013, from infed website:
http://infed.org/mobi
/bruce-w-tuckman-forming-storming-norming-and-performing-
in-groups
Forming
Storming Norming Performing
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http://infed.org/mobi/bruce-w-tuckman-forming-storming-
norming-and-performing-in-groups
http://infed.org/mobi/bruce-w-tuckman-forming-storming-
norming-and-performing-in-groups

stage begins with an initial (written
or verbal) notification of or invita-
tion to membership when a new
team is officially designated or when
new team members join an existing
structural (command) team where
members rotate in and out. During
this stage the member(s) form opin-
ions about both the mission of the
team and its other members. Figure
4.2 displays the team development
phases as a six-stage process that
includes informing and adjourning.
Often, one of a new manager’s first
assignments is to lead a newly formed
or existing group. Understanding
the developmental group processes
will assist managers in maximizing
output; it will also prepare them to
lead more complex interdisciplinary
groups as their careers progress, such
as a hospital committee required by
the Joint Commission or staffing a
board of directors committee. Ledlow and Coppola (2014)
suggest strategies for health man-
agers to employ at each of the six stages of group development,
as summarized in Table 4.1.
Table 4.1: Group developmental stages and management
strategies

Stage Strategy Additional considerations
Informing • Officially notify each member
of appointment to the group
• Formally present group goals,
measurable objectives in a
bounded time frame
• Communicate in person with
group members
• Allow a reasonable time
period (15 to 30 days)
between notification and
first required meeting
• Known desire of members to
be or not be in the group
• Skill set, track record in prior
groups
• Personality dynamics
between group members
Forming • Hold a “kick-off meeting to:
1. Outline group roles
2. Clarify goals and
objectives
3. Establish time line
with milestones and

deliverables
• Challenge of allowing time
for group development pro-
cess within time constraints
for task completion
Figure 4.2: Tuckman, Jensen, and Coppola’s
group development phases
Groups develop over time in a series of stages that
include preparing to work together and bringing their
work to a close.
Norming
Storming
Adjourning
Forming
Performing
Informing
(continued)
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Stage Strategy Additional considerations

Storming • Encourage constructive pro-
fessional discourse
• Resist temptation to intervene
prematurely
• Push to develop a new
collective idea that reflects
input from all group
members
Norming • Recognize that group has
developed a unique per-
spective of the task to be
accomplished
• Work with nonnorming mem-
bers to encourage them to
support group norms
• Better to remove or replace
obstinately noncooperative
members
Performing • Thank group members
• Recognize individual
contributions
• Know contributions of each
member and use this knowl-
edge for staff development
to build on strengths
Adjourning • Document the process and

save the output
• Recap lessons learned
1. Best practices
2. Opportunities for
improvement
• Disseminate knowledge
gained to other segments of
the organization
• Acknowledge that people
will miss some aspects of the
group’s work and time with
each other
• Use learnings to build
knowledge-management
and organizational-learning
systems
Source: Ledlow, G. R., & Coppola, M. N. (2014). Leadership
for health care professionals: Theory, skills, and applications
(2nd ed.).
Burlington, MA: Jones & Bartlett.
Intergroup Behavior
Industrial psychologists Blake, Shepard, and Mouton (1964)
found in their studies of group
dynamics that members of a group who strongly identify with
the group will feel obli-
gated to conform to its norms and positions and to uphold their
group’s positions against

other groups. Acting in ways contrary to their own group
position would be regarded
as disloyal to the group, whereas holding fast to it would be
considered highly effective
behavior as a member or leader. Each group within an
organization has its own goals, yet
these groups are interdependent with each other. When
organizations encourage groups to
compete with each other and reward them on a relative basis
with group incentive plans,
the groups perceive defeat of the other groups as necessary to
achieve their objectives, and
a power struggle ensues. The researchers proposed three sets of
assumptions about inter-
group disagreement and identified mechanisms of intergroup
conflict resolution for each.
Table 4.1: Group developmental stages and management
strategies (continued)
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1. If intergroup disagreement is considered inevitable and
permanent, the operating
assumption is that it must be resolved in favor of one or the
other group, either
by a power struggle or by a third party arbiter—or left to
resolve itself.
2. If intergroup disagreement is not considered inevitable but
agreement is not possi-
ble, conflict can be resolved by reducing the interdependence

between groups and
allowing or encouraging the groups to act more independently
from each other.
3. If achieving agreement and maintaining interdependence are
both considered
possible and necessary to organizational functioning, conflict
may be resolved
by group actions to (a) maintain surface harmony, (b) bargain or
compromise, or
(c) make a genuine effort to address fundamental points of
difference between
groups (Blake et al., 1964).
Alderfer (1987) notes the importance of intergroup relationships
to explain group behav-
iors in larger organizations. He distinguished between identity
groups and organizational
groups, which are comparable to informal and formal groups.
Identity group members
share some common characteristic (e.g., age, ethnicity, gender)
and have shared experi-
ences (e.g., alumni, professional degree), and as a result they
have similar perspectives
on life and work. Members are assigned to organizational
groups based on the organiza-
tion’s division of labor and authority structure. Identity group
and organizational group
membership is frequently related. For example, a majority of
executives in health orga-
nizations are older white males who often share prior work or
educational experiences
and similar hobbies such as golf; clinicians who trained in the
same institution often work
together in other organizations during their careers. Intergroup
theory proposes that both

organization and identity groups affect members’ intergroup
relations and thus shape
beliefs and behaviors.
Teams
Teams are widespread in health organizations because the
clinical and administrative staff
need to work together closely to meet the needs of their
patients, customers, or members.
There are teams based on discipline (such as those composed
exclusively of physicians or
nurses) or hierarchical position (such as the governing
body/board of directors, executive
team/chief team, directors/unit leaders council, etc.).
Multidisciplinary teams are used
extensively for quality-improvement initiatives.
Permanent and Temporary Teams
Interdisciplinary teams are organized to perform a particular
function involving the
work of several operational units; if the functions are ongoing,
the teams are designated
as committees. Committees have permanent standing, elected or
appointed member-
ship, and provisions for alternate representatives. In some
committees members have
time-limited terms of office. In other committees membership is
automatically assigned
to the position; for example, the quality-improvement
committee of a hospital typically
includes the chief of the medical staff and the director of
nursing or their delegated
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physician or nurse representatives. Staffing committees is a key
health administration
role and helps support clinicians or senior executives.
Theory in Action: Typical Health Organization and
Hospital/Health-System Board Committees
Some typical health organization committees with ongoing
responsibilities and a brief
description of their function are:
• Utilization Review—patient-care management case reviews,
medical-management
process analysis
• Clinical Documentation Review—monitoring of
documentation adequacy
• Risk Management—liability exposure and overall safety
assessment
• Infection Control—physical facility and patient-care process
monitoring to prevent and
deal with infection
• Patient Safety—adverse event case analysis, care-process
improvement to prevent
adverse events
• Quality Improvement—proactive patient-care and business-
process improvement
• Professional Development—individual and group skill
enhancement and training
• Credentials—clinical credential assessment, verification and

monitoring
• Patient/Health Plan Member Grievance Review—complaint
assessment and
adjudication
At the governing body level, hospital and health-system boards
commonly do much of their work
through committees. A 2013 survey by the American Hospital
Association’s Center for Healthcare
Governance found that over half had committees for finance
(83%), quality (75%), executive (68%),
governance and nominating (61%), and audit and compliance
(51%) (Gamble, 2013).
Task forces are temporary teams organized as needed to solve a
particular problem or
complete a specific project. These teams are time limited, have
specific and strategic objec-
tives, and disband when the problem is resolved or the project is
finished. Often there
is a work product such as an accreditation self-study or a
revised policy and procedure
manual. Examples of health organization task force functions
and work products include:
• Accreditation or licensing application or renewal
• Policies and procedures—development or update
• Event planning: Holiday party, charitable activity,
organizational anniversary
celebration
• Space planning (for a move or facility renovation)
• Technology transitions—planning and implementation (e.g.,
electronic medical

records)
• Customer service initiatives involving significant business-
process changes
• Feasibility studies for new business ventures or programs
• Pursuing an award such as the Baldrige prize for quality,
magnet hospital designa-
tion, or five-star Medicare health plan rating
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Cross-Functional Teams
Many organizations create customer teams in response to
increased market competition
and customer demands for better service coordination. Managed
health care systems have
resulted in the creation of ever-larger economic bargaining units
among both payer and
care delivery organizations as evidenced by health plan mergers
and acquisitions and
hospital system affiliations. These large customers (mega health
plans and multihospital
systems) expect not only lower prices but also knowledge of
their business and rapid
responsiveness to their needs; they often demand a single point
of contact for inquiries
and service. In such an environment, a coordinated approach to
business development
and customer relations is essential and typically involves people
from marketing, finance,
information systems, and operations on the team. The cross-
functional team members

possess the competencies needed to achieve an optimal
outcome, such as winning a new
contract or improving customer satisfaction and regulatory or
accrediting agency ratings.
Theory in Action: Ten Tips for What Not to Do as a
Team Manager
Parker (1994) offers a David Letterman–style “Top 10 List” of
practices to avoid when managing
cross-functional teams.
10. Don’t listen to any new idea or recognition from a team. It’s
probably not a good idea
since it’s new and comes from a team.
9. Don’t give teams any additional resources to help solve
problems in their area. Teams
are supposed to save money and make do with less. Besides,
they will probably just
waste more time and money.
8. Treat all problems as signs of failure and all failures as a
reason to disband teams and
downgrade team members. Teams are supposed to make things
better, not cause you
more problems.
7. Create a system that requires lots of reviews and signatures
to get approvals for all
changes, purchases and new procedures. You cannot be too
careful these days.
6. Get the security department involved to make it difficult for
teams to get information
about the business. Don’t let those team members near any

computers. You don’t want
them finding out how the business is run.
5. Assign a manager to keep an eye on teams in your area. Tell
the teams that he or she is
there to help facilitate (teams like that word)—but what you
really want these managers
to do is control the direction of the teams and report back to
you on any deviations
from your plan.
4. When you reorganize or change policies and procedures, do
not involve team members
in the decision or give them any advance warning. This will just
slow things down and
make it difficult to implement the changes.
3. Cut out all training of team members. Problem solving is just
common sense
anyway, and besides, all that training really accomplishes is to
make a few
consultants really rich.
2. Express your criticisms freely and withhold your praise and
recognition. Teams need
to know where they have screwed up so that they can change. If
you give out praise,
people will expect a raise or reward, and you don’t want that.
1. Above all, remember you know best. That’s why they pay
you the big bucks. Never
forget that (pp. 210–211).
Source: From Parker, G.M., Cross-functional teams: Working
with allies, enemies & other strangers. © 1994 John Wiley
and Sons Inc. Reprinted by permission.

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Section 4.3Group Performance and Effectiveness
Virtual Teams
Advances in electronic communication technology have
encouraged the formation of vir-
tual teams in many organizations and some entirely virtual
organizations as well. As the
use of virtual work teams grew, both organizations and workers
realized that virtualiza-
tion had both benefits and drawbacks. At International Business
Machines (IBM), an early
adopter, more than 45% of its 400,000+ employees and
independent contractors work
remotely; however, employees joke that the company’s initials
stand for “I’m by myself”
(Johns & Gratton, 2013). Marissa Mayer made headlines when
she was named CEO of
Yahoo! in July 2012 at age 37, when she was 6 months pregnant
with her first child; she
sparked a firestorm of controversy 7 months later by eliminating
the company’s long-
standing telecommuting programs. Mayer argued that employees
needed to be physically
present to create a unified organization. Yahoo!’s share price
increased by more than 70%
in Mayer’s first year in office, although the company’s revenue
rose at a much slower rate
than its competitors in the digital advertising industry (Efrati &
Silverman, 2013).
As in other businesses, a growing

number of administrative profession-
als in health organizations are telecom-
muting. Managers in these organiza-
tions recognize that new work models
bring new challenges, and it is not
easy to achieve a balance between the
independence and freedom of vir-
tualization and the camaraderie and
opportunities for collaboration in a
traditional office setting. Finding or
creating new ways to provide a sense
of community can mitigate worker
isolation, avoid alienation, and foster
team collaboration (Johns & Gratton,
2013).
4.3 Group Performance and Effectiveness
Teams are an integral element of health organizations’
administrative infrastructure. Effec-
tive teams are like flocks of geese: Both have interdependent
members who care for and
support each other and are more efficient working together than
alone. Members rotate as
leaders and help each other when one falters or is distressed.
Benefits and Costs of Teams
Considerable research has demonstrated the benefits of teams
for both the organization
and the individual: Enhanced communication, higher
productivity and satisfaction, and
decreased turnover (Buchbinder & Thompson, 2012).
Blend Images/John Fedele/Getty Images
A virtual team meeting via video chat saves time

and money.
fra81455_04_c04_091-120.indd 102 4/24/14 2:03 PM
Teams maximize the organization’s human resources, for in
teams, each
member learns to be more effective through the coaching, help
and leader-
ship of all the other members. All members, not just the
individuals, feel
success and failures alike. Because failures are not blamed on
individual
members, they have the courage to take more risks in a team
setting and
more ideas are forthcoming. The greatest lesson learned by team
members
is: Teams consistently outperform individuals. And the second
greatest is:
Individuals may be considered for career advancement as a
result of broad-
ening their knowledge of the organization and acquiring
teamwork skills.
(Costa, 2009, p. 315)
Katzenbach and Smith (1993), in their best-selling business
book, The Wisdom of Teams,
present the following findings to support their fundamental
premise that teams and orga-
nizational performance are inextricably connected.
• “Real teams” are jointly responsible for specific results that
the company perfor-

mance ethic demands. They emerge and operate best when
management makes
clear and strong performance demands and holds them
accountable for results.
• High-performing teams are rare, mainly because few teams
elicit the high degree
of personal commitment that distinguishes members of high-
performing teams
from people on other teams.
• Teams integrate, rather than replace, formal hierarchical
structures and processes.
• Teams integrate performance and learning by defining
performance goals and
developing the skills needed to achieve them.
• Teams are increasingly the primary unit of performance for
organizations, essen-
tial for the speed and quality that customers in all types of
industries expect.
There are, however, significant costs of teamwork. The greatest
cost is the staff time spent
in meetings and the associated opportunity costs (how that time
might be better spent).
Other costs include time spent in arranging, scheduling, and
recording meetings; travel or
communication expenses for in-person or virtual meetings; and
expenses for food, travel,
and accommodations. There are also psychic costs associated
with having to work with
other people, such as delayed decisions, loss of autonomy, and
pressure to compromise
(Buchbinder & Thompson, 2012).

Health administrators therefore need to weigh the costs and
benefits of forming teams
under varying circumstances, since whether a team or individual
approach is most appro-
priate depends on the nature of the problem, the goal to be
achieved, and the skill of the
team leader (Maier, 1967). Generally, teams are most useful in
situations requiring mul-
tiple skills, a variety of perspectives, broad experience, and a
free flow of communication
(Whetten & Cameron, 2011).
fra81455_04_c04_091-120.indd 103 4/24/14 2:03 PM
Dysfunctional Teams
Not all teams function successfully. Patrick Lencioni (2002) has
identified five dysfunc-
tions of teams that prevent them from performing effectively.
Table 4.2 compares the prin-
cipal characteristics of dysfunctional and well-functioning
teams.
Table 4.2: Functional and dysfunctional teams
Attribute Dysfunctional teams Functional teams
Trust In the absence of trust, team
members are unable to be
genuinely open with each
other about their mistakes and

weaknesses.
Team members feel free to ask
for or offer help.
Conflict Failure to establish a founda-
tion of trust creates fear of
conflict, so that team members
cannot frankly and passionately
debate ideas, and fail to resolve
the issues about which they
disagree.
Productive conflict enables a
team to produce the best pos-
sible solution in the shortest
amount of time, then move on
to the next important issue.
Commitment Lack of healthy conflict results
in lack of commitment, since
team members have not openly
expressed their opinions. The
quest for certainty about the
correctness of a decision can
paralyze a team and undermine
members’ confidence in their
ability to make any decisions.
Seeking consensus is not
necessary; reasonable people
can support a decision they do
not agree with as long as they
perceive that their opinions
have been heard and seriously
considered.

Accountability Lacking commitment to a clear
plan of action, team mem-
bers avoid accountability and
hesitate to confront their peers
regarding counterproductive
actions and behaviors.
Members of great teams dem-
onstrate their respect for each
other by holding them account-
able for performing at a high
level.
Results Failure to hold each other
accountable leads to inattention
to results when team members
put their individual needs or
the needs of their work unit
above the collective goals of the
team.
Great teams want to achieve the
goals they set and the results to
which they commit.
Source: Lencioni, P. (2002). The five dysfunctions of a team: A
leadership fable. San Francisco: Jossey-Bass.
Teamwork in health organizations is often very challenging,
especially in large, complex
organizations with members from different professional groups.
Forming and leading a
great team is hard work, but the results are worth the effort.
fra81455_04_c04_091-120.indd 104 4/24/14 2:03 PM

Web Field Trip: Mind Tools Team Effectiveness Assessment
Go to
http://www.mindtools.com/pages/article/newTMM_84.htm.
Answer the 15-question
assessment for a team in which you are a leader or participant.
1. Analyze your responses and identify your areas of strength
and weakness.
2. How will you use what you learned from this assessment to
become a more effective
group leader?
Groupthink
Yale University research psycholo-
gist Irving Janis (1971) developed this
concept from research on the actions
of President John F. Kennedy’s cabi-
net toward Cuba. After concluding
that Cuban president Fidel Castro
was working on behalf of the Soviet
Union, in late 1961 Kennedy autho-
rized a clandestine brigade of Cuban
exiles to invade the island. The Bay of
Pigs fiasco, as it became known, failed
within days and was an embarrass-
ing defeat for the Kennedy adminis-
tration. A few months later, the same
team handled the Cuban missile cri-

sis brilliantly. After aerial reconnais-
sance photographs revealed Soviet
missiles under construction in Cuba, the administration boldly
confronted Soviet premier
Nikita Khrushchev while avoiding armed conflict (U.S.
Department of State, n.d.).
Janis (1971) reviewed hundreds of documents on the Bay of
Pigs invasion attempt and
other unsuccessful government and military leadership team
decisions and made a sur-
prising discovery: Each group of high-level leaders and officials
displayed the same
type of social conformity that psychologists had routinely
observed in studies of groups
composed of students and the general population. Janis called
this phenomenon
groupthink, defined as
remaining loyal to the group by sticking with the policies to
which the
group has already committed itself, even when these policies
are working
out badly and have unintended consequences that disturb the
conscience
of each member . . . when concurrence-seeking becomes so
dominant in a
cohesive ingroup that it tends to override realistic appraisal of
alternative
courses of action. (p. 157)
Henry Burroughs/AP
The Kennedy administration’s 1961 Bay of Pigs
fiasco is a prominent example of groupthink.

fra81455_04_c04_091-120.indd 105 4/24/14 2:03 PM
http://www.mindtools.com/pages/article/newTMM_84.htm
Groupthink Signs and Signals
Behavioral symptoms of groupthink typically arise during the
norming stage of the group
developmental process, but they can develop at any time. Signs
and signals of groupthink
include:
1. Illusion of invulnerability: Members feel their group or
organization is too smart,
powerful, or rich to be wrong or to experience defeat.
2. Rationalization: Members discount warnings and other
signals that their think-
ing is incorrect.
3. Morality: Members’ belief in the inherent morality of their
group and the right-
ness of their position leads them to ignore the ethical
consequences of their
decision.
4. Stereotypes: Members consider opponents too weak, stupid,
or corrupt to deal
effectively with whatever the in-group decides to do and
dismiss disconfirming
information by discrediting its source.
5. Pressure: Group leaders and members apply direct pressure to
any member

who expresses doubts about the proposed course of action or
who questions the
assumptions on which it is based.
6. Self-censorship: Members suppress misgivings and doubts,
deciding that they
are not relevant and should be set aside.
7. Illusion of unanimity: Members assume that not speaking in
opposition indicates
agreement with the group’s position.
8. Mind guarding: Members protect the group leader and fellow
members from
adverse information that would disrupt the consensus, such as
objections or
questions from “outsiders”— even highly respected experts.
The author’s experience during the 1980s in a nonprofit hospital
system executive team
meeting illustrates groupthink in health care organizations. The
corporate director of
marketing and planning presented her plan for an integrated
marketing approach by the
system’s member hospitals as a cost-effective way to promote
the hospitals in their respec-
tive communities and compete with the erosion of market share
and doctor defections to
for-profit hospitals chains in the region. The CEO of the
flagship hospital stated, “I refuse
to engage in any form of advertising; it’s not dignified, and it’s
unethical for a nonprofit
religious hospital to use its funds in this manner. Besides,
everyone knows we provide the
best quality care and have the best physicians. They lure
patients with false advertising

and doctors with kickbacks. If we adopt their tactics, we stoop
to their level.” The senior-
level leadership team ignored the marketing director’s rejoinder
that advertising was just
one small part of the overall plan and that the physician
relations program did not and
would never involve payment for admissions. After some
murmuring, discussion of the
plan was tabled; it did not appear on the executive council
agenda again until the flagship
hospital CEO was on vacation.
fra81455_04_c04_091-120.indd 106 4/24/14 2:03 PM
Section 4.4Stakeholder Dynamics
Groupthink Remedies
To counteract groupthink, Janis (1971) offers the following
suggestions based on the suc-
cessful actions taken by the Truman administration’s Marshall
Plan team for post–World
War II European economic recovery as well as the actions of the
Kennedy cabinet in peace-
fully resolving the Cuban missile crisis:
• Assign the role of critical evaluator to at least one team
member, who will encour-
age the group to consider both pros and cons of any proposed
course of action.
• Leaders should refrain from expressing their opinions or
expectations at the
beginning of a group discussion.

• Set up subgroups of team members or outsiders to develop and
debate indepen-
dent proposals.
• Require each team member to seek input from members of
their organizational
units and report back to the group.
• Invite one or more outside experts to each meeting to hear and
critique core
members’ views.
• Assign at least one team member to play devil’s advocate
whenever the agenda
calls for an evaluation of policy alternatives. In contrast to the
critical evaluator’s
neutral stance, this member’s role is to make opposing
arguments.
• Hold a “second-chance” meeting at least 1 day after the group
reaches a pre-
liminary consensus, where all members are encouraged to
express their second
thoughts about the decision.
Taking these actions will help ensure that team decisions in
health organizations are well
formed, carefully considered, vigorously debated, and
thoughtfully adopted.
An illustration of groupthink often used in management classes
is the Abilene Paradox
(http://www.crmlearning.com/abilene-paradox), which recounts
the story of a Texas family
that made a long, hot, and unpleasant drive to Abilene for
dinner. They all would have pre-

ferred to stay home, but each agreed because they felt the others
wanted to go (Harvey, 1988).
4.4 Stakeholder Dynamics
Health care organizational stakeholders and their relationships
are especially complex
and involve many players and forces. These individuals, groups,
and organizations are
linked together by cooperative economic exchanges as well as
legal and regulatory rela-
tionships. Table 4.3 lists the major types of health organization
stakeholders and briefly
describes their primary characteristics (White & Griffith, 2010).
fra81455_04_c04_091-120.indd 107 4/24/14 2:03 PM
http://www.crmlearning.com/abilene-paradox
Table 4.3: Principal attributes of health organization
stakeholders
Stakeholder Principal attributes
Owners Vary according to whether the organization
is a not-for-profit or for-profit corporation, or
a federal, state, or local government agency
Customers, buyers, and payers Patients and families,
differentiated by age,
gender, clinical need, and language prefer-
ence; employers, health insurance and other
types of payers differentiated by company
and type of coverage

Suppliers and workers Direct patient-care providers
differentiated
by professional credentials; many other
types of employees; contract providers; sup-
pliers of goods and services; and volunteers
who support and supplement the efforts of
workers in myriad ways
Regulators and advocates Government agencies (federal, state,
and
local); accrediting bodies; trade and profes-
sional associations; lobbying groups; unions;
consumer associations; community groups;
competitors; and other organizations influ-
encing health organization transactions and
operations
Source: White, K. R., & Griffith, J. R. (2010). The well-
managed healthcare organization (7th ed.). Chicago: Health
Administration Press.
Health organization stakeholders include individuals and groups
within and exter-
nal to the organization. Employees, including managers and
executives, are internal
stakeholders. There are also interface stakeholders, which
function both externally
and internally; for health care organizations these groups would
include the medi-
cal staff, the governing body, and stockholders in the case of
for-profit organizations.
External stakeholders for health care organizations include
patients, community orga-
nizations, insurers, vendors, competitors, employers, labor
unions, and regulatory and

accrediting bodies (Ledlow & Coppola, 2014). Sometimes
stakeholders are individu-
als; more often they are groups. Figure 4.3 illustrates a generic
model of stakeholder-
organizational relationships.
Stakeholder Management
Health organization leaders must thoroughly understand the
function and role of stake-
holders to determine which are relevant to their organizations
and then assess which are
potential partners or allies and which are potential threats.
Stakeholders have their own
fra81455_04_c04_091-120.indd 108 4/24/14 2:03 PM
interests and agendas, which may
align or conflict with that of the health
organization, and they all make
demands on the organization to some
degree. Balancing the demands of
multiple stakeholders pursuing dif-
ferent interests and seeking to influ-
ence the organization to act in ways
that further their agendas is a major
challenge for health organization
leaders—especially when conflicting
responsibilities to patients, governing
bodies, professional staff, employees,
and community pose ethical dilem-
mas (Levey & Hill, 1986). Achiev-

ing this balance is part of the larger
challenge of delivering high-quality
care while simultaneously increas-
ing access to health care services
and reducing costs; to achieve one
objective often involves a trade-off in
another area. Thus, health organiza-
tion leaders are hard-pressed to sat-
isfy their various stakeholder groups
in terms of what these stakeholders
most value in terms of access, cost,
and quality (Coppola, Erckenbrack,
& Ledlow, 2009).
Stakeholder analysis is a widely used method in health
organizations to understand how
different stakeholders influence the organizational decision-
making process. As part of
the strategic planning process, it is especially useful in
generating knowledge of relevant
individuals, groups, and organizations in order to understand
their interests, agendas,
interrelationships, resources, and vulnerabilities (Brugha &
Varvasovszky, 2000). When
stakeholder representatives are willing to forthrightly state the
positions of their organiza-
tions and share these with other relevant stakeholders,
organizational leaders can engage
in a more transparent and productive relationship with
stakeholders. Unfortunately, this
situation rarely occurs, so it is often necessary to conduct
interviews, focus groups, or sur-
veys to discern stakeholders’ true intentions or to accurately
predict their actions.
Interface stakeholders present the biggest challenge in

stakeholder management, since
they interact with the organization across boundaries. With the
increase in integrated
delivery systems and new organizational structures, the number
and types of these stake-
holders are increasing. Managers need to identify the key
stakeholders and understand
their interests and agendas in order to develop and sustain
successful relationships with
them (Dansky & Gamm, 2004).
Figure 4.3: Stakeholder-organizational
relationships
An understanding of stakeholder-organizational
relationships is essential to stakeholder management.
O
w
n
er
s/
G
ov
er
nin
g B
ody
R

e
g
u
lators/Advocates Custo
me
rs
/B
uy
er
s/
P
a
y
e
rs
Suppliers/W
orkers
Organization
fra81455_04_c04_091-120.indd 109 4/24/14 2:03 PM
Physician Relations

Physicians are key interface stakeholders who can interact
across organizational bound-
aries to manage a variety of internal and external stakeholders.
In addition to practic-
ing medicine, physicians may serve on hospital, medical group,
and health plan commit-
tees; on medical school faculties; on governmental planning or
advisory committees or
review boards; as consultants to pharmaceutical, medical
device, and other health care
organizations; and as expert witnesses in legal actions. In these
various roles they can
be valuable sources of organizational business intelligence.
Physicians also represent the
organization to the external environment and thereby contribute
positively or negatively
to the organization’s reputation and image, particularly with
respect to clinical outcomes
and quality-performance indicators reported to and reviewed by
insurers and regulatory
and accrediting agencies. Most importantly, physicians
represent their organizations to
patients; as patient care managers, they are the principal source
of both the medical care
and the information about the care that patients receive.
Since stakeholder relationships directly impact an
organization’s financial performance,
an important function for health organization executives is to
help physicians, as interface
stakeholders, develop and maintain strong positive connections
with their mutual key stake-
holders of patients, insurers, and regulatory and accrediting
agencies. To do this involves
assessing specific physician behaviors about patient
communications, adherence to insur-

ance clinical and administrative protocols, and compliance with
regulatory and accrediting
agency data collection and reporting requirements (Malvey,
Fottler & Slovensky, 2002).
Theory in Action: Training Physicians as Group Leaders
An example of how health organizations might help physicians
with patient communications
is to offer them training in group facilitation and education
skills. Group patient visits are an
emerging trend in a growing number of medical practices today
and have been proposed as one
way to deal with anticipated increases in demand for medical
care by newly insured patients
under the ACA.
The percentage of practices offering group visits grew from 6%
to 13% between 2005 and 2010
and includes some of the nation’s leading medical groups such
as the Cleveland Clinic and
Harvard Vanguard Medical Associates (Park, 2013). Cleveland
Clinic nurses note that shared
medical appointments have improved patient access, outcomes,
and patient satisfaction. For
chronic conditions, patient education is repetitive and time-
consuming yet necessary; group
visits are a much more efficient way to provide this education.
They allow providers to devote
more time to patients and encourage patients to learn from each
other how to manage their
conditions. Additionally, the group visit model allows nurse
practitioners to serve as primary
care providers by leading patients in group discussions and
evaluating their current health
status (Bartley & Haney, 2010). Physicians who move into

management positions will benefit by
acquiring skills in group leadership.
fra81455_04_c04_091-120.indd 110 4/24/14 2:03 PM
Strong positive relationships with physicians are essential to
health organizations in
almost every sector of the industry. Pressures to do more with
fewer resources make it
more difficult to maintain the trust and respect that are essential
building blocks of posi-
tive relationships. As a result, relationships with physicians are
becoming more adver-
sarial than collaborative. This situation often negatively impacts
workplace morale and
patient care and increases the risk of litigation and its
associated costs (Yamada, 2009).
Under conditions of steadily increasing economic pressures to
deliver high-quality care at
affordable costs, physicians and administrators today must (a)
document in increasingly
precise and standardized ways how they are meeting quality
standards and (b) break down
and justify their service charges to increasingly demanding and
sophisticated purchasers
of care. These pressures drive efforts for health organization
alignments with physician
groups. However, achieving successful alignment is difficult for
administrators and physi-
cians alike, since their training and professional orientation
predispose them to different

ways of working. Physicians and nurses operate from a clinical
framework, advocating
at the individual level for patients and families, while managers
are trained to look at
population-level health status and organization-wide issues.
Health administration edu-
cation emphasizes working collaboratively with employees and
colleagues, while clinical
care education focuses on development of individual skills and
competencies (Buchbinder
& Shanks, 2012). Research on hospital-medical staff
collaborations and the effectiveness of
interdisciplinary teams shows that conflicts between physicians
and hospital staff (includ-
ing nurses) are often due to physicians’ refusal to embrace
teamwork (Weber, 2004).
The ACA has strong financial incentives designed to encourage
closer physician-
organization alignment through formation of clinically and
administratively integrated
delivery systems called accountable care organizations (ACOs),
as discussed in Chapter 2.
Integration offers physicians opportunities to access greater
financial resources and focus
on practicing medicine while remaining independent members
of their medical group or
independent practice association. To succeed, integrated
arrangements require structures
and processes for administrators and physicians to jointly set
goals, develop strategies,
make decisions, and resolve conflicts. Studies of successful
physician-integration efforts
found that trust was considered the critical success factor in
establishing the cooperative
relationship necessary to make these processes work, and

identified these indicators of
trust-based relationships (Zuckerman et al., 1998):
• frequent, open, and candid communication, both formal and
informal;
• willingness to share and explain relevant clinical, financial,
and performance data;
• demonstrated management competence—responsiveness,
following through on
actions, and delivering on promises; and
• placement of physicians in management and governance
positions.
There are varying degrees of physician alignment, ranging from
loosely structured con-
tractual agreements to those in which the physicians become
salaried employees of either
the hospital/health system or a separate integrated services–
delivery organization. Hos-
pitals and health systems were eager to acquire and manage
physician practices during
the 1990s, but many of these acquisitions turned out to be
expensive mistakes: Hospitals
did not know how to manage medical practices, and many
physicians were less hardwork-
ing and productive as employees than they had been as
independent practitioners. Today
hospitals recognize the need to carefully evaluate physician
practices before acquiring
fra81455_04_c04_091-120.indd 111 4/24/14 2:03 PM
Section 4.5Organizational Misbehavior and Dysfunction

them and to employ experienced medical group administrators
to manage them (Aston,
2013). Professional services agreements in which the physician
remains employed by the
practice allow physicians to more closely align with a health
system without becoming an
employee. Various practice services agreement models enable
hospitals and health sys-
tems to realize financial benefits without incurring the legal
obligations and financial risks
of an employer (Reiboldt & Greeter, 2013).
4.5 Organizational Misbehavior and Dysfunction
Organizations, like individuals, can behave in ways that are
counterproductive, self-
defeating, and even pathological. Researchers have found that
organizational dysfunc-
tion reflects problems with the leadership of the organization
and, to a lesser extent, with
managers at lower levels. This chapter concludes by discussing
the diagnosis, prognosis,
and treatment of organizational dysfunction.
Theory in Action: Crime Does Not Pay
Some cases of organizational misbehavior are so flagrant that
they make front page headlines,
such as the saga of Richard Scrushy. Trained as a respiratory
therapist, Scrushy quickly rose
to top management and in his early 30s founded the HealthSouth
Corporation to deliver a
wide range of outpatient rehabilitation services. The company
soon went public and rapidly
expanded into sports medicine and workers’ compensation,
despite repeated lawsuits and

settlements with Medicare and private insurers claiming
fraudulent billing practices. Scrushy
enjoyed and flaunted the company’s success, earning millions of
dollars and traveling and
living in high style. He was widely admired as a brilliant
businessman—until he was indicted
for securities fraud.
Although all five of the HealthSouth chief financial officers
who worked for him were found
guilty and sentenced to prison terms, Scrushy was acquitted.
However, a few months later
Scrushy was convicted on unrelated charges and spent about 5
years in prison. Once revered as
a Wall Street wonder, today Scrushy is a poster boy for greed
who was profiled in a 2009 episode
of the CNBC series American Greed.
Diagnosing Organizational Misbehavior and Dysfunction
Seldom is organizational misbehavior by health organization
executives so clearly patholog-
ical. More often organizational dysfunction reflects egotism and
groupthink, when highly
intelligent people display poor judgment. It can also result when
leaders are unable to
• clearly articulate the organization’s vision, values, goals, and
culture;
• engage and motivate employees;
• develop meaningful reward systems; and
• effect needed changes (Graber, 2009).
fra81455_04_c04_091-120.indd 112 4/24/14 2:03 PM

Manfred Kets de Vries (2003) of the international INSEAD
business school faculty developed
a typology of five types of neurotic organizations based on the
typical and repetitive behav-
ior patterns of their leaders and managers and the effects of
these behaviors on the organiza-
tion’s employees. Each style has its strengths and weaknesses,
as displayed in Table 4.4.
Table 4.4: Neurotic organization leadership style summary
Style Description Illustrative
example
Strengths Weaknesses
Dramatic Driven by the
need to impress
and gain atten-
tion. Leaders are
highly charis-
matic, act boldly,
are undeterred
by risk, and take
controversial
stands.
Richard Branson,
Virgin Airlines
Strong entrepre-
neurial spirit

Decisions may
become too
centralized;
leader may
micromanage.
Suspicious General atmo-
sphere of distrust
and paranoia;
hyperalertness
for problems and
enemies.
J. Edgar Hoover,
Federal Bureau of
Investigation
Knowledge
and aware-
ness of external
threats and
opportunities
Punitive poli-
cies; encourages
subterfuge and
information
hoarding.
Compulsive Preoccupied with
rules; exhaustive
evaluation proce-
dures. Relation-
ships defined
by control and
acquiescence.

John Akers, IBM Efficient opera-
tions, strong ana-
lytics, thorough
problem-solving
approach
Risk of analysis
paralysis.
Detached Cold, unemo-
tional; lack of
involvement;
indifference to
praise or criti-
cism; intolerance
of dependency.
Howard
Hughes, Hughes
Corporation
Open to ideas
and influence
from people at
all levels and
outside the
organization
Leadership
vacuum induces
managers to
create individual
fiefdoms.
Depressive Inactivity, pas-

sivity, powerless-
ness, insularity;
lack of confi-
dence in ability
to effect changes.
Many government-
sector organizations
Consistent inter-
nal processes
Focus on mainte-
nance of internal
processes; can
become detached
from the
marketplace.
Source: Kets de Vries, M. (2003). Organizations on the couch:
A clinical perspective on organizational dynamics. Retrieved
August 19,
2013, from INSEAD Faculty & Research website:
http://www.insead.edu/facultyresearch/research/doc.cfm?did=13
21
fra81455_04_c04_091-120.indd 113 4/24/14 2:03 PM
http://www.insead.edu/facultyresearch/research/doc.cfm?did=13
21
Organizational Dysfunction Prognosis

Leaders in dysfunctional organizations often struggle to
understand why people in the orga-
nization continue to behave in counterproductive ways that
result in poor strategic deci-
sions, ineffective execution of strategy, factionalized
management teams and business units,
hiring mistakes, inadequate succession planning, and low
productivity. Too often, however,
they blame others for their own lack of communication and
problem-solving skills.
Organizations that are in a state of decline or experiencing rapid
and unsettling change
display a variety of similar dysfunctional characteristics when
they lose resources (rev-
enue or market share) and employees, which Cameron (1994)
identified as the “dirty
dozen” (p. 183):
1. Decision making is centralized, as employee empowerment is
constrained.
2. Long-range planning is neglected in favor of focusing on
short-term survival and
crisis management.
3. Tolerance for risk taking and learning from mistakes
decreases.
4. Employees become more resistant to change in order to
protect themselves from
loss of jobs, benefits, and perks.
5. Morale drops as employees become suspicious and angry.
6. Special interest groups become more visible and outspoken.
7. Across-the-board cutbacks are used to minimize
organizational resistance.
8. Organizational leaders lose credibility with subordinates.

9. Organizational competition for shrinking resources leads to
conflict and
infighting.
10. Information, especially bad news, is suppressed rather than
passed up the
hierarchy.
11. Teamwork declines as employees focus on individual
performance and rewards.
12. Leaders are blamed for organizational uncertainty and
decline.
Astute professionals will be aware of and alert to these warning
signs of organizational
dysfunction and take steps to address them promptly to prevent
further deterioration and
improve organizational functioning.
Organizational Dysfunction Treatment
The remedy for organizational dysfunction is evidence-based
management, which involves
using leadership practices supported by solid research. Walshe
and Rundall (2001) observed
that just as clinicians have been slow to adopt an evidence-
based approach to their own
practices, so have health care managers: They also tend to
overuse ineffective interventions
and underuse effective ones. Shortell (2006) named ineffective
health managerial decision
making as a significant contributor to the quality deficiencies,
excessive costs, and overall
underperformance of the U.S. health care system. A later study
by Kovner and Rundall
(2006) found that improving the quality of management decision

making received little
attention, even when a management mistake results in
significant harm to patients or
financial loss, such as the failed merger of Stanford University
and University of California
hospitals that cost $176 million over a 29-month period. Health-
system leaders believed
that their organizational cultures promoted the use of evidence-
based decision making—
but their definition of evidence consisted mostly of personal and
anecdotal experience,
fra81455_04_c04_091-120.indd 114 4/24/14 2:03 PM
information from Internet sites, and advice from consultants or
services such as the advi-
sory board. None reported any oversight or regular review of
the decision-making pro-
cesses in their organizations.
Health organization executives and managers have been
reluctant to acknowledge their
mistakes for the same basic reasons that prevent clinicians from
doing so: They are embar-
rassed and do not want to lose face with colleagues. They may
also lack financial or staff
resources or time to adequately research, analyze, or monitor
the effects of a decision, or
they may be under pressure from superiors, medical staff or
regulatory agencies. Some
executive decisions seem reasonable at the time they are made
but turn out badly. Further-

more, it often takes a long time before it is clear that a specific
decision is not working out
as planned. Hoffman (2002) urges health organizations to
encourage managers to disclose
and learn from their mistakes by taking the following actions:
• Establish and obtain governing board approval for a
managerial disclosure policy
based on criteria such as legal risk, regulatory agency
requirements, board man-
dates, and ethical considerations.
• Analyze the root causes of the problem, the decision-making
process, and its
consequences.
• Discuss the analysis with the management team to determine
how best to avoid
repetition of a similar error, such as:
1. articulating lessons learned,
2. developing new or modifying existing policy,
3. changing the decision-making process, and/or
4. developing new or modifying training activities.
• Learn more about how to handle management mistakes from
case studies of
other health organizations and national professional
development organizations’
educational programs.
• Incorporate questions or discussions of mistakes and lessons
learned into execu-
tive, managerial, and supervisory performance reviews.
Cohen (2011) makes a business case for use of evidence-based
human-capital manage-

ment practices in health care organizations where at least 60%
of budgets are allocated to
labor costs and notes the financial benefits of such practices for
staff recruitment, selec-
tion, development, and retention. For example, a poor executive
hire could cost the orga-
nization 6 to 10 times that individual’s annual earnings. Pfeffer
and Sutton (2006) recom-
mend that managers relentlessly seek new knowledge from both
inside and outside their
companies and industries so that they can keep updating their
skills and knowledge, just
as medical professionals must do.
Because clinicians and health administrators have different
professional cultures,
research orientations, and decision-making styles, evidence-
based practice concepts
need to be translated from the clinical to the management arena
(Walshe & Rundall,
2001). “Until both components are in place—identifying the
best content (i.e., EBM [or
evidence-based medicine]) and applying it within effective
organizational contexts
(i.e., EBMgt [or evidence-based management])—consistent,
sustainable improvement
in the quality of care received by US residents is unlikely to
occur” (Shortell, Rundall, &
Hsu, 2007, p. 673). The following case study describes the use
of evidence-based medi-
cine and management to improve patient safety.
fra81455_04_c04_091-120.indd 115 4/24/14 2:03 PM

Case Study: Improving Responses to Medical Errors With
Organizational Behavior Management
A 146-bed general acute care community hospital in southwest
Virginia conducted an assessment
of patient safety needs and the various organizational
behavioral management techniques
used by hospital managers in response to the nine most
frequently reported patient safety
events. The most frequently reported category of patient safety
events (errors) was procedure/
treatment variance, and the least effective management
responses were to witnessed falls. The
organizational behavioral management intervention therefore
selected managers’ follow-up
responses to procedure/treatment variance and witnessed falls as
targets.
Managers first received the results of the needs assessment,
then were instructed to (a) respond
to the two targeted event types with corrective-action
communication combined with individual
and group behavior-based feedback and (b) use positive
recognition to support behavior that
prevented harm, including reporting events. For the 3-month
intervention period, researchers
Cunningham and Geller (2011) reviewed 361 patient safety
event follow-up descriptions, with a
total of 527 interventions that achieved the following results:
1. Reports of targeted event types increased in the first month
of intervention, then
decreased in subsequent months, indicating that the intervention
increased employees’

sensitivity to the need to report close calls and learn from them.
2. The two targeted events displayed opposite trends in impact
scores associated with
managers’ follow-up actions during the intervention phase. The
impact scores for
follow-up behaviors for procedure/treatment variance increased
sharply in the first
month, then gradually declined in the next 2 months. In
contrast, impact scores for
follow-up behaviors for witnessed falls increased slightly in
month one, then sharply in
subsequent months.
3. Managers significantly increased use of individual and group
feedback during the
intervention phase and decreased use of no intervention, a
significant improvement in
the management of patient safety errors. Especially significant
was the increased use of
group feedback.
4. Participating managers and health care workers expressed
positive perceptions of the
intervention techniques used and related outcomes. Managers
received summaries of
the monthly events and intervention follow-up reports at
monthly managers’ meetings
and were encouraged to share them with their employees.
Intervention perception
survey results found that both managers and workers perceived
an increase in managers
delivering praise for behaviors to prevent harm than delivering
reprimands for errors.
This study demonstrates the benefits of applying an evidence-

based intervention strategy by
teaching health care managers to (a) communicate more
effectively in follow-up responses
to patient safety events, (b) more carefully document their
follow-up actions to learn what
intervention behaviors do most to promote patient safety, and
(c) provide group rather than
individual feedback when appropriate. This intervention
demonstrably improved patient safety
and offers a model for managers in other organizations to
follow.
Reflection Questions:
1. How does the trend in impact scores for managers’ follow-up
actions reflect the Haw-
thorne effect?
2. Why was the increase in managers’ use of group behavior-
based feedback important?
3. What would you recommend to sustain the use of the
intervention strategy?
fra81455_04_c04_091-120.indd 116 4/24/14 2:03 PM
Section 4.6Summary and Resources
4.6 Summary and Resources
Chapter Summary
Much of the work in organizations is done by teams of people
rather than individuals.
Organizations need talented individuals who can work
collaboratively with others. Being
a team player is an important attribute for success in most jobs,

and being able to lead a
team effectively is a critical success factor for managers and
leaders.
There are many different types of groups—formal and informal,
permanent and tempo-
rary, structural and functional. An understanding of group
dynamics and processes helps
managers effectively channel and coalesce the skills and efforts
of their subordinates for
maximum productivity and performance. Not all employees are
natural team players, so
managers also need to know how to deal with negative
individual and group behaviors.
High-performing teams are results oriented, with managers who
set clear performance
expectations and hold them accountable. Effective team
managers establish a climate of
trust, so that team members can be open with each other when
asking for or offering help.
They also encourage and manage constructive conflict, so that
members of the group can
frankly debate their ideas and consider a wide range of
solutions. Without a free exchange
of ideas, team members will lack commitment to the plan of
action or fall victim to group-
think, a condition that occurs when group loyalty prevents
members from expressing
their doubts about or opposition to an apparent consensus
decision.
Health organizations have many different stakeholder groups
with which they interact
and which have a vested interest in the organization.
Stakeholders’ interests may align or

conflict with those of the organization, so balancing their
demands is a major challenge
and responsibility for organizational leaders. Developing and
maintaining positive rela-
tionships with physician stakeholders is a critical success factor
for leaders of most health
organizations, as is attention to the experience of patient
stakeholders.
Just as physicians are increasingly expected to make deliberate
and thoughtful use of the
current best clinical evidence when making treatment decisions,
so should health admin-
istrators use management practices that are supported by solid
research. In addition,
health organizations should create conditions that encourage
leaders and managers to
acknowledge and learn from their own and others’ mistakes.
Critical Thinking and Discussion Questions
1. What are examples of task and maintenance roles for health
organization group
leaders, and why are both roles important?
2. Can a group leader streamline the group development
process?
3. How can managers help a task force end on a positive note?
4. How can managers hold teams accountable for results?
5. Why is lack of conflict a sign of a dysfunctional team?
6. Identify the key internal, interface, and external stakeholders
for a general acute
care hospital.
7. Give an example of evidence-based management.
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Key Terms
Abilene Paradox (Harvey) An agreement
to a group decision that none of the group
members desires, but each member thinks
the other members of the group prefer the
decision.
adjourning The final stage of group
development process, when the group
disbands after task completion.
blocking roles Behaviors that hinder a
group from accomplishing its goals.
command groups Groups specified in the
organization chart; members are respon-
sible for a specific function.
committees Formal groups that have per-
manent standing within the organization’s
administrative structure, regular meetings,
and elected or appointed members, often
with specific terms.
evidence-based management Manage-
ment practices based on effectiveness sup-
ported by research.
evidence-based medicine Clinical care
practices based on effectiveness supported

by research.
external stakeholders Members of groups
outside the organization, such as custom-
ers, suppliers, and regulators.
formal groups Groups officially desig-
nated by the organization to fulfill certain
functions and accomplish specific tasks.
forming The first stage in group devel-
opment process, when groups organize
themselves and establish boundaries for
task and relationship behaviors.
functional role theory (Benne and Sheats)
The observation that individuals in small
groups played task roles, maintenance
roles, or individual (blocking) roles.
groupthink (Janis) Remaining loyal to
a group position even when the policies
are not working out or the members have
misgivings about the position.
identity group A group in which mem-
bers share a common biological character-
istic or experiences.
independent practice association A
medical group formed as an economic
bargaining unit in a managed care delivery
system.
individual roles Behaviors that help a
group accomplish its goals.

informal groups Naturally formed groups
of people who work together or who are
drawn together on the basis of friendship
or shared interests.
informing A group process preparation
stage that involves an invitation to mem-
bership and prospective group members
forming opinions about the purpose of the
group and its members.
interface stakeholders Stakeholders that
function both internally and externally,
such as the medical staff, governing body,
and stockholders of for-profit corporations.
internal stakeholders Employees, includ-
ing executives and managers.
maintenance roles Roles that are social
in nature, focusing on process and
relationships.
fra81455_04_c04_091-120.indd 118 4/24/14 2:03 PM
neurotic organizations Organizations
that are characterized by counterproduc-
tive behaviors that impede achievement of
organizational goals.
norming The third stage of group devel-

opment process, when members develop
feelings of cohesion and adopt new roles
as group members.
organizational behavior management
Intervention techniques designed to
improve managerial effectiveness.
organizational groups Groups to which
members are assigned based on the organi-
zation’s division of labor and its authority
structure.
performing The fourth stage of group
development process, when members
focus their energies on accomplishing the
task for which they are responsible.
role A key construct of psychology; the
shared social expectations of how an indi-
vidual behaves in a given situation.
stakeholders Individuals, groups, and
organizations that have a vested interest in
the organization.
storming The second stage of group
development, when members compete
for leadership or to control the group’s
direction.
task force A temporary group charged
with solving a problem or responding to
an opportunity.
task roles Roles that are involved with

completing a job and accomplishing an
objective.
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