MMHA 6000 Week 2 Organizational Chart Analysis Example

Eleven Direct Reports and a Pump That Needs Three Signatures: Reading the Organizational Chart of Calder Ridge Community Hospital Layer by Layer

Student Name

Walden University

MMHA 6000: Foundations of Healthcare Administration

Instructor Name

Month Day, Year

Eleven Direct Reports and a Pump That Needs Three Signatures: Reading the Organizational Chart of Calder Ridge Community Hospital Layer by Layer

The Chart and Its Type

Calder Ridge Community Hospital is a composite 118-bed independent nonprofit hospital with an employed medical group of eight clinics; the organization and its chart are invented for this analysis. Figure 1, summarized below, shows the chart as the hospital publishes it. A volunteer board of trustees sits at the top. The president and chief executive officer reports to the board. Six executives report to the chief executive: the chief operating officer, chief financial officer, chief nursing officer, vice president of medical affairs, vice president of ambulatory services and vice president of human resources. Department directors report to these executives, and managers and front-line staff report to the directors.

Table 1

Figure 1 Summary: Executive Reporting Lines and Direct Reports

Figure 1 is described as a table; the published chart shows the same lines as boxes.

Most of the chart is functional: units are grouped by the kind of work they do, such as nursing, finance or facilities. Ambulatory services is the exception, grouped as a service line that holds everything needed to run outpatient care, from clinic staff to referral coordination. The hospital is therefore a hybrid, mainly functional with one service line. Functional designs build depth of expertise within each discipline, while service line designs make it easier to coordinate everything a patient group needs, and most hospitals mix the two (Burns et al., 2020).

Reporting Lines

Authority runs from the board to the chief executive, who is the only employee the board hires and evaluates. Below the chief executive, lines are mostly clean: each director has one executive. Two exceptions show up on close reading. The emergency department director reports to the chief nursing officer, but the emergency physicians are contracted through the vice president of medical affairs, so the department's two main groups of staff answer to different executives. And outpatient infusion sits under nursing, although the patients it serves are almost all referred from the medical group's oncology clinic, which sits under ambulatory services.

Spans of Control

Span of control means how many people answer directly to a single manager. No single number is correct; the right span depends on how similar the units are, how experienced their leaders are and how much coordination they need (Daft, 2021). Two spans on the chart look out of balance. The chief nursing officer has eleven direct reports, more than any other executive, and they are not similar units: inpatient nursing, emergency care, surgery and infusion each face different problems. Directors report that getting time with the chief nursing officer takes weeks. At the other end, the vice president of human resources has two direct reports, which suggests the role is more advisory than operational and could take on more.

Line and Staff Functions

Line functions deliver the hospital's core services: nursing, the emergency department, surgery, imaging, laboratory, pharmacy and the clinics. Staff functions support them: finance, human resources, information technology, purchasing and quality. The chart mixes the two under some executives. The chief operating officer manages both line units, such as imaging and laboratory, and support units, such as facilities and security. That arrangement is common in a hospital this size and keeps the number of executives down, but it means one person divides attention between patient-facing units and building maintenance. Staff functions also hold a quiet form of power over line units: purchasing, information technology and finance can delay a clinical request without ever saying no, simply by placing it in a queue. The pump purchase described next is an example.

Where Decisions Stall

One recent approval shows the cost of the current design. The outpatient infusion clinic asked for a second infusion pump model, at about $40,000 for a set, to reduce wait times for longer treatments. The request started with the infusion nurse manager, went to the chief nursing officer, who controls nursing equipment, then to the vice president of ambulatory services, because the oncology clinic depends on the infusion schedule, and finally to the chief financial officer's capital committee. It needed three executive signatures across two reporting lines and took four months. No one opposed it. It stalled because no single executive owned the outcome, and each waited for the others.

One Structural Adjustment and Its Cost

The adjustment proposed is to move outpatient infusion from nursing to the ambulatory service line, with a dotted line back to the chief nursing officer for nursing practice standards. The infusion clinic would then share a vice president with the oncology clinic it serves, and requests like the pump purchase would need one operational signature rather than two. The chief nursing officer's span would also drop from eleven to ten.

Two other options were considered and set aside. Raising the infusion manager's purchasing limit would have sped up this one request but left the clinic's daily scheduling split between two executives. Creating a full cancer service line, with its own vice president, would solve the problem more completely, but the hospital sees too few oncology patients to support another executive salary.

The change has costs. Infusion nurses would report operationally to a vice president who is not a nurse, and the dotted line to nursing creates a small matrix, which can confuse staff about whose direction comes first. Galbraith (2002) notes that every structure solves some coordination problems by creating others, and that the choice is which problems the organization would rather manage. Here the trade is worth making, because coordination with oncology happens daily, while coordination with inpatient nursing on practice standards happens monthly. The dotted line will need a written agreement on who decides staffing, competencies and policy, or the clinic will have two managers instead of one.

References

Burns, L. R., Bradley, E. H., & Weiner, B. J. (2020). Shortell and Kaluzny's health care management: Organization design and behavior (7th ed.). Cengage.

Daft, R. L. (2021). Organization theory and design (13th ed.). Cengage.

Galbraith, J. R. (2002). Designing organizations: An executive guide to strategy, structure, and process (New and rev. ed.). Jossey-Bass.