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Effect of Organizational Structure, Leadership and Communication on Efficiency and Productivity

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Effect of Organizational Structure, Leadership and Communication on Efficiency and Productivity Effect of organizational structure, leadership and communication on efficiency and productivity - A qualitative study of a public health-care organization Authors: Johanna Andersson Alena Zbirenko Supervisor: Alicia Medina Student Umeå School of Business and Economics Spring semester2014 Bachelor thesis, 15 hp Acknowledgements We would like to express our gratitude to those people who helped us during our work on this thesis. We want to thank Jens Boman for inviting us to work on this project. We also want to thank personnel of Laboratoriemedicin for their time and effort. Special thanks to Jegor Zavarin, for his help and support. We also want to thank our supervisor, Alicia Medina, for her help, guidance, and advice in times when we needed it most. Johanna Andersson&AlenaZbirenko Abstract This thesis has been written on commission by Laboratoriemedicin VLL, which is a part of region‟s hospital. The organization did not work as efficiently as it could, and senior managers have encountered various problems. We have been asked to estimate the situation, analyze it, and come up with solutions which could increase efficiency and productivity; in other words, increase organizational performance. After preliminary interview with the senior manager, we have identified our areas of the interest: organizational structure, leadership, and communication. This preliminary interview made us very interested at the situation at Laboratoriemedicin, and helped us to formulate our research question: “How do organizational structure, leadership, and communication affect productivity and efficiency of the public health-care organization?” Moreover, it made our research have two purposes, one of academic character, and one of practical character. The academic purpose is in investigating relationship between organizational structure, leadership, and communication and organizational performance, i.e. efficiency and productivity. The practical purpose is in giving analysis-based recommendations about possible ways to increase productivity and efficiency to Laboratoriemedicin VLL. In order to find out the answer to the research question and to fulfill both purposes of the research, we have conducted a qualitative research. This has been done by interviewing ten people working at Laboratoriemedicin. We have tried to talk to representatives of different layers of the organization to make our research more diversificated and complete. These semi-structured interviews resulted in qualitative data, which had been processed and analyzed using coding technique. The findings of our research revealed that structure, leadership, and communication affect efficiency and productivity. Structure defines how productive the operational processes are; leadership affects the whole personnel and the way they strive for achieving their goal; communication affects how fast things are getting done and how happy and willing personnel are. Additionally, we have spotted two areas affecting the relationship between structure, communication, leadership, and organizational performance: development issues and personal issues. Moreover, we have found that leadership and organization are the most problematic spots in Laboratoriemedicin. After careful analysis of the situation we have come up with the list of suggestions that can help the organization to achieve increased efficiency and productivity. Contents 1. Introduction ........................................................................................................... 1 1.1 Choice of topic ................................................................................................ 1 1.2 Laboratoriemedicin VLL .................................................................................. 1 1.2.1 Cooperation with University ............................................................ 2 1.3 Choice of domains .......................................................................................... 3 1.3.1. Summary of the preliminary interview ........................................... 3 1.3.2 Domains chosen ............................................................................... 3 1.4 Problem background ...................................................................................... 4 1.5 Research question .......................................................................................... 5 1.6 Research purpose ........................................................................................... 5 1.7 Limitations ...................................................................................................... 5 1.8 Definitions ....................................................................................................... 5 2. Literature Review ................................................................................................... 7 2.1 Organizational Structure ................................................................................. 7 2.1.1 Definition of Organizational Structure ............................................. 7 2.1.2 Weber’s Bureaucracy ....................................................................... 7 2.1.3 Mintzberg’s five structures .............................................................. 7 2.1.4 Dimensions of structure ................................................................... 8 2.1.5 Flatter Structures and Span of Control ............................................ 9 2.1.6 Decentralization or Centralization ................................................. 10 2.2. Leadership .................................................................................................... 10 2.2.1 Definition of leadership ................................................................. 10 2.2.2 Leadership versus Management .................................................... 10 2.2.3 Leadership skills ............................................................................. 11 2.2.4 Levels of management and appropriate skills ............................... 11 2.2.5 Vision .............................................................................................. 11 2.2.6 Leader – Member Exchange theory (LMX) .................................... 12 2.2.7 Dual leadership .............................................................................. 12 2.2.8 Leading by leveraging culture ........................................................ 12 2.3 Communication ............................................................................................. 13 2.3.1 Definition of communication ......................................................... 13 2.3.2 Importance of two-way communication ....................................... 13 2.3.3 Importance of horizontal communication ..................................... 13 2.3.4 Barriers to communication ............................................................ 14 2.3.5 Ways of communication ................................................................ 14 2.4 Theoretical framework ................................................................................. 14 2.5 Choice and criticism of literature ................................................................. 15 2.5.1 Structure ........................................................................................ 16 2.5.2 Leadership ...................................................................................... 16 2.5.3 Communication .............................................................................. 16 3. Methodology ........................................................................................................ 17 Theoretical methodology ................................................................................... 17 3.1 Preunderstanding ......................................................................................... 17 3.2 Research philosophies .................................................................................. 17 3.2.1 Ontology ......................................................................................... 17 3.2.2 Epistemology .................................................................................. 18 3.2.3 Approaching organizational change .............................................. 18 3.3 Research approach ....................................................................................... 18 3.4 Research strategy ......................................................................................... 19 3.5 Research design ............................................................................................ 19 Practical methodology ........................................................................................ 19 3.6 Method of collecting empirical data ............................................................ 20 3.7 Sampling........................................................................................................ 20 3.7.1 Sample size ..................................................................................... 20 3.7.2 Sampling technique ....................................................................... 21 3.8 Interview questions ...................................................................................... 21 3.9 Interviews’ outline ........................................................................................ 22 3.10 Ethical considerations ................................................................................. 22 3.11 Analyzing data ............................................................................................
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