Study Set Content:
refers to the concentration of decision-making power at a single point in the organization.
Centralization
- This type of differentiation describes the differences among workers or units in an organization. This may include their education, type of training, and the tasks assigned to them. Since pharmacies concentrate not only on providing pharmacy services but also on merchandising non pharmacy-related items, all employees must be oriented on offering such services and items to the consumers. If all personnel had the same training, managing the organization would be easier because everyone would have a similar orientation. This is not the case in a pharmacy since the coordination of work among employees and personnel in the different units can be more difficult. may also refer to the multi-ownership of different firms from a variety of related industries. For example, a health system can own several firms with different functions such as hospitals, health care and nursing facilities, and managed-care businesses.
Horizontal differentiation
- focuses on the differences in hierarchical positions. This involves "the chain of command" in an organization which is the number of levels between the top management or owner of the organization and the rest of the staff. is typically represented by what is known as an organizational chart. An organizational chart is used to depict the relationships and the hierarchy of authority in an organization. It shows how tasks are delegated among employees and who reports to whom in the Organization. The degree of authority and the number of staff vary depending on the size of the organization. The smaller the organization, the less positions of authority are present in the hierarchical structure. Many independent community pharmacies started out this way. As pharmacies grew and expanded, owners hired individuals to supervise different areas or functions of the store. As owners branched out into running additional stores in various locations, more personnel were needed to run the day-to-day operations of the establishments.
Vertical differentiation
- Involves location, specifically the sites of an organization's units, whether they are in one place or spread across several areas. An independent community pharmacy may have only one location with its operations centralized in a particular area. A large health system or chain pharmacy operation may have multiple units in different locations around a city, state, or the entire region of the country. This can also occur when an organization has different departments located in different areas. A pharmaceutical manufacturer may have its research and development departments in one city or state and the sales and marketing divisions in another area of the country or the world. Coordination is key among these units especially as an organization grows and differentiates. Spatial differentiation is also related to the degree of horizontal and vertical differentiation and the complexity of an organization.
Spatial differentiation
- This organization emphasizes the maintenance of the structure. Maintenance involves the rules (degree of organizational control of employee behavior), procedural specifications (defined techniques that organizational members must follow when dealing with specific situations), technical competence (the "universal" standards as defined by the organization, and the extent of its use in selecting personnel and advancing processes), and impersonality (treatment of both members of the organization and individuals outside the organization regardless of their individual qualities).
Formalization
- refers to the concentration of decision-making power at a single point in the organization. The highest levels of management usually make most of the policy decisions in a centralized organization. The recent trend however, has been to decentralize decision-making and move it to lower levels of management and/or even to staff- level employees. A hospital pharmacy that has several satellite pharmacies located throughout the hospital is often referred to as being "decentralized." However, it is decentralized in a single location if the decisions being made concerning the satellites still rest at one centralized point in the organization.
Centralization
- This can be observed in pharmacies where pharmacists are assigned with specific functions such as dispensing or caring for patients. Even within clinical functions, pharmacists can specialize in a particular field (e.g., geriatrics, pediatrics, or disease states). Division of labor in the pharmacy is expected to result in heightened efficiency in the utilization of specialized skills of individual employees. However, the disadvantage of dividing labor is that employees assigned with singular tasks will not develop comprehensive skill sets in the field and they may eventually find their jobs monotonous. Some suggest that enlarging instead of narrowing the scope of some jobs leads to greater productivity by using employees with interchangeable skills (Robbins, 2005). This can be observed in the health system setting, where pharmacists are able to shift from providing traditional staffing functions to clinical functions.
Division of Labor
- Responsibility for decisions cannot be passed on while the authority to make them can be shared and/or given to others. Delegation of authority, however, is often not accomplished within smaller pharmacies. Owners who have gone into business to become bosses after developing and nurturing their pharmacies tend to be unwilling to share control with several other people. Even in companies where delegation is present, owners tend to centralize authority during difficult situations or when they feel that their employees are not performing well.
Parity of Authority and Responsibility.
- This refers to the idea that an individual employee must report to only one supervisor or manager. Decentralization often leads to employees having more than one superior to report to. A structure that makes use of this concept is called a matrix organization. A matrix organization integrates the activities of different specialists while maintaining specialized organizational departments (Tosi, Rizzo, and Carroll, 1994).
Unity of Command
- This refers to the number of employees a manager can effectively control. In pharmacies, a pharmacist supervises a variety of individuals. One pharmacist can supervise only one or two technicians in the pharmacy, or the pharmacist can manage the entire store, including non-pharmacy personnel.
Span of Control
- his refers to the categorization of individuals according to the specific tasks they must perform. For example, persons responsible for purchasing, distributing, and managing drug products could constitute a department. One of the advantages of having departments is that the individuals in one department share common vocabulary, training, and expertise.
Departmentalization.
diagram or chart that shows the important aspects of the organization.
Purposes:
Organizational Chart
Organizational chart purposes
a. to assist in viewing the firm's whole structure
b. to help management in dividing the different duties or functions in the business
c. to show the grouping of departments in order to easily direct and control activities
d. to sort the responsibilities of the positions so there will be no wasted time or effort.
Whether in a community or hospital setting, developing a pharmacy's ideal organizational structure involves a two-step process:
a. The management must identify a relatively standard organizational design that best fits the pharmacy's needs.
b. The design must be constructed to coincide with the preferences of the owner, the hospital's administrator, or board of trustees.
This refers to the straight and direct line of responsibility and control from the top management. In this structure, all personnel are involved in some facet of the preparation and sale of the pharmacy's prescription and non-prescription merchandise, and managers have the right to demand compliance from their subordinates.
Line organization
Straight and direct line of responsibility and control is established from the general manager to the department or section head who shares the same level of authority and is independent of the other. The head of each division is subject and responsible only to the individual directly above him or her. For instance, other supervisors may not interfere directly in his or her work or decision or with the personnel in his or her unit. Coordination among the various departments is established and maintained by a supervisory executive at the next higher level.
Line organization
Under Pharmacy manager
Manager prescription department, Manager over the counter-drugs and cosmetics, Manager Durable Medical Equipment
Advantages of the line organization:
• The centralization of authority regarding concerns is small, and the chief executive and his principal assistants are capable of handling these concerns. Problems are solved promptly, with a minimum of red tape. This is important in achieving business flexibility.
• The direct lines of authority make it easy to define responsibility, maintain single accountability, and achieve better control.
• Overhead expenses are likely to decrease or remain low because of the simple functionalization.
Disadvantages of line organization:
• The growth of an organization can increase the workload and responsibilities of each department head. The growing pressure on the department head may compromise the effectiveness of the work done in the pharmacy unless he or she is highly talented and capable of adapting to different situations.
• Instructions have to follow the flow of the chain of command because they are not directly given to the assigned worker. As the business grows, the chain of command also grows which can complicate the instructions given.
• Line executives are less likely to find themselves in a position to acquire expert knowledge in a particular field and gain relevant experiences
therein.
organizations employs the assistance of specialists. This structure is the most common for larger pharmacies that are already deemed successful in the industry. This structure still makes use of the features of the line organizational structure but is assisted by technical specialists who have expertise in some of the finer points of the business.
Line-and-Staff Organization.
