Organizational Structure Matters

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This week’s Tip continues last week’s theme of organizational structure. Organizational structure precedes organizational behavior in that its logistical framework will pave the way, along with the actions of leaders and others in the organization, to shape culture. Organizational structure encompasses seven major aspects: differentiation (the degree to which units are dissimilar); formalization (the degree to which jobs are standardized); centralization (degree of concentration in decision-making); division of labor (the degree to which activities are divided into separate jobs); unity of command (an unbroken line of authority); departmentalization (the way in which jobs must be grouped for task coordination); and span of control (the number of levels and managers the organization creates.

Killingsworth and Eschenbacher review optimal designs for organizational structures in a hospital pharmacy.1 They contend that there are many potential designs, and those will depend on the size of the organization, the number of states in which it operates, and the geographic spread and complexity of the pharmacy business lines. The structure needs to support incorporation of the pharmacy leadership into all strategic planning discussions at the hospital and health-system levels so that they can directly represent the pharmacy enterprise instead of relying on others to develop strategy on their behalf. It is important that leaders of all aspects of the pharmacy enterprise report through the system’s top pharmacy executive, who should be a pharmacist and have a title consistent with those of other leaders reporting at the same organizational level (eg, chief pharmacy officer and chief nursing officer). They describe a chain of command using top-down and bottom-up approaches to evaluate quality and services as well as the advantages and limitations of the types and degree of hierarchy in the pharmacy department itself, including the ability to adapt, change, and align the pharmacy department’s goals with those of the larger hospital system. They also discuss how the structure of the organization will affect succession planning, talent development, and other human resources decisions. They conclude by stating that pharmacy leaders need to be well positioned within an organization to advocate for the pharmacy enterprise and that leadership of the pharmacy enterprise is unified under a single executive team.

Pharmacy managers must understand that how they design the structure of an organization (or unit within a larger organization) will greatly impact its culture and all the decisions made, thereafter.

Additional information about Organizational Structure and Behavior in Pharmacy Management: Essentials for All Practice Settings, 5e. If you or your institution subscribes to AccessPharmacy, use or create your MyAccess Profile to sign-in to Pharmacy Management: Essentials for All Practice Settings, 5e. If your institution does not provide access, ask your medical librarian about subscribing.

1Killingworth P , Eschenbacher L. Designing organizational structures: Key thoughts for development. Am J Health Syst Pharm. 2018;75:482-492. 

Shane Desselle

Professor of Social and Behavioral Pharmacy, Touro University California

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Shane Desselle about 1 month ago

Have you worked in hospitals or any other organizations with different structures? What was the result?