Organizational Restructuring in Healthcare: Functional vs Divisional Organizational Structure

Running head: HEALTH SCIENCE
Health science
Nam of the Student
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Organizational restructuring
Organizational structure refers to the arrangement which determines the method of
organizing an allocating the roles. It also determines the direction of the flow of information
among the several levels of the management. Organizational structure plays a significant role in
enhancing the efficiency of the management so that the ultimate objectives of the organization
can be reached.
In order to create an ideal organizational structure through active participation as well as
shared objectives, several theories associated with organizational structure has been developed.
For instance, classical theories that include the bureaucratic approach ( Weber, 1947), the
scientific management approach (Taylor, 1947) and the administrative theory ( Fayol,1947) are
developed on the basis of task division as well as a delegation of responsibilities. Not only that,
these theories are based on the formation of hierarchical command line along with strategic and
decision making management. Later on, neoclassical theories that deal with loopholes of
classical theories are developed. Neoclassical theories are chiefly based on human relationship,
benefits of groups and participative management associated with the organizational structure.
The organizational structure of Hospitals chiefly involves the management levels which facilitate
the command chain in the department of the hospital. More is the size of the hospital more
complex will be its organizational structure. The basic requirements for effectiveness of the
structure include effective supervision and leadership of the managers and cooperation of the
employees. Considering the fact that the activities handled in healthcare sectors are highly
complex, effective coordination of the employees is highly crucial. In order to deal with the

2HEALTH SCIENCE
complexity, the organizational structure of the hospital prepares a blueprint to plan the activities
that will help the organization to achieve its mission, vision and goal.
The Sydney Community Hospital provides clinical as well as general medical services to
the local community. The organization is currently following the functional organizational
structure since it is helping it to perform well in the market. The functional structure is
represented by a pyramid. The pyramid represents the hierarchy, the individuals associated with
the positions and the function of each of them. The functional structure of larger healthcare
institute often tends to be vertical as it includes as it includes several levels of managerial control
over the organization. Massive range of managerial service is required to provide satisfactory
clinical facilities to the consumers. Apart from being simple and cost-effective, functional
organization structure enhances the efficiency reduces intricate management mechanism
requirements, support career development of the employees and helps the management to take
quick decisions. The functional organizational structure, along with firm line off reporting and
command ensures accountability, effective communication and control environment.
While above-discussed portion demonstrated the efficiency of the functional structure,
there are certain disadvantages associated with the functional organizational structure. If the
scope of service provided by the functional organizational structure is considered then it can be
stated that function structure is not adequate enough for the growth of the mentioned healthcare
organization. One of the major demerits of the organizational structure includes its approach to
considering the top accountable when the tasks are performed by the individuals who are at the
bottom of the pyramid. Besides that, since the employees who are positioned in the lower level
of the pyramid are not considered in the decision-making process of the employees, the
organization, the function structure does not provide enough cope of career development to the