Organizational Capacity Analysis: Whitlam Memorial Hospital Report

This report analyzes the organizational capacity of Whitlam Memorial Hospital (WMH), a healthcare organization, focusing on its bureaucratic structure, organizational strategy, and potential restructuring. It begins by defining organizational capacity and capacity building, categorizing organizational theories into classical, neoclassical, and modern perspectives. The report then delves into WMH's bureaucratic structure, detailing its principles like division of labor, hierarchy of authority, and impersonality of relationships, while also acknowledging its limitations in terms of collaboration and adaptability. The analysis extends to WMH's organizational strategy, including its vision, mission, values, and goals, and how these elements are impacted by internal and external factors. Finally, the report proposes a matrix organizational design as a restructuring solution for WMH, highlighting its advantages in terms of collaboration and communication, while also addressing its potential drawbacks. The conclusion emphasizes the need for WMH to transition to a matrix structure to improve its capacity for collaboration, communication, adaptability, and accountability.

Running head: BUILDING ORGANIZATIONAL CAPACITY IN HEALTH CARE
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Building organizational capacity in health care
Author:
Course Name:
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Building organizational capacity in health care
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Contents
Introduction......................................................................................................................................3
Bureaucratic structure......................................................................................................................4
Organizational strategy....................................................................................................................6
Restructuring of WMH....................................................................................................................7
Conclusion.......................................................................................................................................9
References........................................................................................................................................9

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Introduction
Organizational capacity is defined as “the ability of an organization to fulfill its mission through
a blend of sound management, strong governance and a persistent rededication to assessing and
achieving results” (Grantmakers for Effective Organizations, 2003). Abilities analyzed include
human, material, financial, information and intellectual resources (Business Dictionary, n.d).
Capacity building is defined as a ‘process of developing and strengthening the skills, instincts,
abilities, processes and resources that organizations and communities need to survive, adapt and
thrive in the fast-changing world’ (Academic Impact, n.d).
The organization capacity relies on the theory they are founded on. There are a number of
theories and they are categorized based on the time of development. The categories are classical
theories, neoclassical theories and modern theories (Western Sydney University, 2018). The
classical theories include scientific management, bureaucratic management and administrative
management (Walonick, 2008) (Ferdous, 2016). The neoclassical theorists include Follet, Mayo,
McGregor, Argyris and Barnard. They developed the hawthorne effect and theory X and theory
Y (Western Sydney University, 2018) (Walonick, 2008). The modern theories include the
General systems theory, contingency theory, transaction cost economics, resources dependency
theory, institutional theory, population ecology theory and complex adaptive theory (Western
Sydney University, 2018).

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Bureaucratic structure
Bureaucratic structure, also known as functional organizational design, line structures or line
organization, is followed by many organizations (Marquis & Huston, 2009). Whitlam Memorial
Hospital (WMH) is one of these organizations. This was developed by Max Weber with the aim
of achieving the aims and goals of an organization (Ferdous, 2016). Weber discussed three points
that explained the obedience accorded to authority by the subordinates. These are legal-rational
authority, traditional authority and charismatic authority. The bureaucratic structure is founded
on the legal-rational authority which is grounded on the chain of command and procedures for
the job (Marquis & Huston, 2009). Hospital settings like WMH are known for their detailed and
structured chain of command.
The bureaucratic structure is composed of six main principles (iEduNote, n.d). There is a clear
division of labor (Market Business News, n.d) (Maddern & Courtney, Traditional and emerging
organisational designs, 2006). In WMH, tasks cane be divide into medical like general acute
medical, surgical, obstetric and emergency services; accounting; procurement etc. This
categorization is based on the staff’s knowledge base and skills. Secondly, there is `a hierarchy
of authority. There is a chain of command at the hospital. An intern may report to the medical
officer in charge. The medical officer will report to the registrar and to the consultant. Decision
making and communication is highly dependent on this chain of command. The other
characteristic is the impersonality of relationships. Interaction among the staff while at work is
mainly concerned with the care provided for the patients. There is a system which stipulates how
work situations are dealt with. Work cannot be carried out as one pleases, there is a system that
guides and stipulates how every activity at the hospital will be carried out. For example, ward

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rotations, giving out medications, theatre preparation. Another principle is the presence of rules
that outline the rights and responsibilities of everyone at the workplace. For example, the roles of
a nurse, medical doctor, psychologist etc are clearly stipulated. This is important as it avoids role
confusion at the hospital. Lastly, recruitment and promotion are offered on basis of technical
competency. Employment is based on level of one’s knowledge and skills (Marquis & Huston,
2009) (Maddern & Courtney, Traditional and emerging organisational designs, 2006). At the
hospital, being a technical area, one cannot be appointed or employed without consideration of
the skills. Figure 1.0 demonstrates a functional design.
Figure 1.0 Functional Organizational Structure. Derived from (Market Business News, n.d).
The functionality grouping brings about economies of scale which describes the advantages
experienced in costs by an organization when it increases the level of output (Maddern &
Courtney, Traditional and emerging organisational designs, 2006) (CFI, n.d). For example,

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WMH offers an array of services. This allows them to buy materials in bulk hence saving on
costs of procurement. Other advantages include; facilitation of performance management,
increased efficiency through the refinement of tasks and brings about a clear career path in the
organization (Maddern & Courtney, Traditional and emerging organisational designs, 2006).
WMH is able to refine tasks as decisions are not made by one person. Tasks and interventions
are reviewed at every stage of the chain. This ensures that the best care is provided. This design
also has some disadvantages. Due to the division to obstetrics, surgical, emergency etc, this
hinders collaboration and communication. Each of these groups offers their care separately to
achieve the group’s objectives rather than the organization’s objectives. The chain of command
and upward chain of communication hinders rapid adaptability to a changing environment. There
is also a big concern when it comes to incentives and cost containment in that they are managed
by the central hierarchy (Maddern & Courtney, Traditional and emerging organisational designs,
2006) (Marquis & Huston, 2009).
Organizational strategy
Organizational strategy has been defined by Maddern, Courtney, Montgomery, & Nash, (2006)
as “what an organization seeks to do and how it plans to do it’. This organizational strategy is
affected by a number of factors. These factors are categorized into external environment and
internal environment (Maddern, Courtney, Montgomery, & Nash, 2006). WMH strategy is
undergoing changes due to factors in the hospital and outside the hospital. The needs of the
community have grown and there is need of new services like cancer, pediatric, cardiovascular,
renal, trauma, aged care and community services. There is also a need to increase the bed space

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from 130 to 250. This together with the increase of knowledge base and skills of the healthcare
providers has provided a revision of the strategy.
The organizational strategy is composed of the following elements; vision, mission, values,
strategy and goals/ objectives (Heathfield, 2017). The vision is a statement that expresses the
future of an organization (Heathfield, 2017). In our case study, the vision of WMH is “Provide
health experiences that are able to respond to the changing needs of the community”. This
reflects the want of the organization to identify the needs of the community and respond to them
resulting to a healthy community. The mission of an organization answers the white hot why
(Heathfield, 2017). The mission statement of WMH is “to provide highest quality, specialist
health care in partnership with patients, carers, the community at large and other health care
providers”. This reflects the purpose of the organization. It aims to provide the best care as it
partners with all needed persons and organizations. This sets the values that need to be upheld in
order to provide the best care. According to the vision and mission of WMH, its values can be
teamwork, quality, patient-centered etc. The goals/ objectives provide the specific direction of
what needs to be accomplished (Heathfield, 2017). The goals/objectives for WMH are “to
develop high performing, multidisciplinary teams within the specialist services in order to
provide high quality, patient-centered care that is effective, efficient and able to respond to the
changing health needs of the population”
In order for WMH to provide the highest quality care that enables them to meet the needs of the
community, there is a need for the provision of multidisciplinary health care and invest in
partnerships with the community. The vision provides the where we want to as an organization

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and the mission answers the why the need of this organization. The strategy defines the how and
the goals define what needs to be done. The interconnection of these elements enables the
efficient running of an organization.
Restructuring of WMH
The matrix organizational design will be ideal for this hospital. This is due to its focus on both
functionality and the end result. This will enable WMH to not only look at the services provided
but also the outcome of these services. Unlike the bureaucratic structure, it is characterized by
the presence of both vertical and horizontal chain of command (Marquis & Huston, 2009). This
is described as the dual authority system. This will enable WMH to still offer specialist care
while keeping in mind the needs of the community (Maddern & Courtney, 2006). Other
characteristics are that it has fewer rules and less hierarchy levels. This will enable collaboration
among the different functionalities for example obstetrician offering his input in cancer care or
psychological care in medical care. Figure 1.1 shows a matrix organization structure

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Figure 1.1 Matrix Organization Structure. Derived from (Distelzweig, n.d)
The advantages cited for this structure include; increased level of collaboration bring about
multidisciplinary care, better communication among healthcare providers due to better flow of
information and increased accountability in the utilization of resources. It is easier to identify the
needs and respond rapidly to changing needs due to closer proximity of decision making. These
are all the results that WMH aims to achieve. Despite this, there are also some limitations. These
include; costly maintenance, dual reporting brings about confusion, conflict and power struggles
and there is need for good technical information system.
Conclusion
For WMH to achieve the desired changes there is need to change its structure from bureaucratic
structure to a matrix structure that brings about collaboration, better communication, adaptability
and accountability.

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