Organizing and Staffing, Case Study Example

Kaiser Permanente – Organization Design

Kaiser Permanente, one of the most well-known healthcare organizations in the United States, possesses a successful organizational design strategy that has enabled the business to remain profitable and effective for many years. The organization’s design is based upon the managed care model, which enables large numbers of patients to utilize various healthcare providers in an effort to provide successful care and treatment to this population on a regular basis.

Flat Versus Tall Organization

The organization, with over 130,000 employees, is a tall organization with many levels of leadership, which are represented by a variety of divisions and smaller subgroups that manage each division accordingly (Kaiser Papers Hawaii, 2004). In this context, managers possess control over smaller departments within their assigned divisions (Kaiser Papers Hawaii, 2004).

Narrow Versus Wide Span of Control

Similar to the tall organizational structure, the business utilizes a model that is dependent upon a narrow span of control, which is determined by the division to which an employee is assigned (Kaiser Permanente, 2010). Since there are a number of divisions to choose from, it is important for the organization to take the steps that are necessary to provide the appropriate level of control over the assigned division, but to refrain from making decisions that might directly impact other divisions, as this is not the desired model (Kaiser Permanente, 2010).

Chain of Command

Kaiser Permanente is led by a national team of experts, who oversee each division and region accordingly (Kaiser Permanente, 2010). This team serves as the driving force in supporting widespread changes throughout this healthcare system, and also support sub-departments within each division, such as communications and finance, amongst others (Kaiser Permanente, 2010).

Division of Labor

The organization, divided into smaller divisions and regions, possesses a strong managerial team and focus at each level, but also supports functionality and operations within each smaller group (Rauber, 2004). The organization has taken steps in recent years to explore different divisions of labor, such as those established in Northern California (Rauber, 2004). Therefore, the company has made some necessary improvements to its organizational and workforce design in order to accommodate the needs of its growing patient population (Rauber, 2004). This opportunity serves a viable purpose in ensuring the success of the organization over the long term (Rauber, 2004).

Centralized Versus Decentralized

Finally, the organization is both centralized with respect to its national office presence, but is decentralized to some degree at the divisional and regional levels, due to the challenges and trends that are taking place in different areas throughout the United States. Since the same model is not necessarily conducive to success in all regions, it is necessary for the organization to take the steps that are necessary to remain decentralized to some degree, and to capitalize upon existing strengths to maintain leadership and effective strategic growth at all levels.

References

Kaiser Papers Hawaii (2004). History of Kaiser Permanente. Retrieved August 19, 2010, from http://www.kaiserpapershawaii.org/kaiserpermanentehistory.htm

Kaiser Permanente (2010). Our business structure. Retrieved August 19, 2010, from http://www.kaiserpapershawaii.org/kaiserpermanentehistory.htm

Rauber, C. (2004). Kaiser’s re-org to divide and conquer in Northern California. Retrieved August 19, 2010, from http://www.bizjournals.com/sanfrancisco/stories/2004/03/29/newscolumn7.htmls