Implications for the public sector
with examples from the UK National
Health Service
Institutions are not just economic
organisations because they cannot always be described solely in economic terms.
Furthermore, regulation and political
processes play a role. For example, hospitals
do not face the market discipline of failure
and closure, as a business would, because the
state acts as a regulator which guarantees
supply. What then is the mechanism by which resources are allocated within an
organisation such as those found within a
hospital environment, for example? If
hospitals, as organisations, are not merely
economic forms, then we must look to other
disciplines to offer a perspective on why
hospitals deliver the services in the way they
do. In a sense, organisational structure and the rules by which healthcare are delivered are set by institutional processes which are not generic. That is, we can offer no more of
an analysis than to observe organisational structure and comment on what we see.
What we observe with hospitals are social
institutional structures with elements of economic organisation (Lane, 1994). One
outcome of the social nature of organisations is that change is brought about largely in an
evolutionary manner because the degree of
connectedness between social and other
systems is complex which, of itself, would
make change a slow process. Moreover, there
are imposed restraints on evolution within the NHS because the principal mechanism
for policy development is from central
management at the National Health Service Executive. Hospitals cannot act in isolation,
but have quite strong regulatory
responsibilities (particularly with respect to
statutory responsibilities to provide health care services). In this context, Deakin and
Michie (1997) argue that, whilst the NHS has had imposed on it aspects of a market based organisation, it still has many features of a bureaucratically organised public service. Thus, recent proposed reforms to the NHS
with respect to the internal market have gone some way to recognise that the NHS is still an
integrated service and that it is difficult to
isolate components of it and treat them
separately for financial purposes. For
example, GP fundholding is likely to be
replaced by a commissioning process under
the ambit of a Primary Care Group which
would incorporate a wide spectrum of health
care providers (GP practices, community
nurses, dentists, pharmacists, and optometrists).
The bureaucracy referred to relates to
management activity which does not rely
solely on measurable activity and
encompasses actions which rely on decisions
which are informed by non-numerical
information. Thus bureaucracy often does
not have measurable purpose but that does not imply a lack of purpose in action.
Management styles in such a context will
involve much more than measurement and
monitoring of organisational activity and
have inevitably to function with an
understanding of organisational form as a
device which shapes organisational activity.
Thus, if managers seek to implement
effective working practices, bring about
organisational change and make assessments
of performance which have meaning and consequences for organisational activity,
then they must seek to influence the human
dimension in ways which reflect
organisational culture. Methods which are
deemed appropriate to influence human
activity are likely to be non-numerical in
essence. Persuasion, motivation, cajoling and trust building are likely to be as important as
target setting, budgeting, monitoring and
numerical goal achievement. In recognising
these important distinctions, successful
management styles are likely to value non-
financial achievement as a method of
achieving the purpose of the organisation. In this sense, understanding the culture of the organisation in terms of its rules and habits is likely to offer an important perspective in planning how change may be brought about.