Long Island University Brooklyn Campus HEDIS Measures Gaps in Care Prevention Essay

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Type a two page paper regarding what you thought was the most important concept(s), method(s), term(s), and/or any other thing that you felt was worthy of your understanding. Define and describe what you thought was worthy of your understanding in half a page, and then explain why you felt it was important, how you will use it, and/or how important it is in healthcare management and administration.

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Chapter 7 Power, Politics, and Conflict Management Timothy Hoff and Kevin W. Rockmann CHAPTER OUTLINE t The Uses of Power in Organizations t What Is Power and Where Does It Come From? t Key Power Relationships in Health Care Organizations t The Political Nature of Power t The Abuse of Power in Health Care Organizations t Power as a Key Source of Conflict t Types of Conflict t Negotiation as a Conflict Management Tool t Common Mistakes in Managing Conflict via Negotiation t Negotiation Strategies and Tactics t Conclusion LEARNING OBJECTIVES After completing this chapter, the reader should be able to:   Identify what power is and how it is used within health care organizations   Describe and compare the major sources of power within health care organizations   Identify the differences between individual and subunit sources of power within organizations   Identify the differences between managerial and professional sources of power within health care organizations   Summarize the interrelationship between power and politics within organizational settings   Describe the demographic and contextual factors that affect how power is distributed within health care organizations   Classify the various conditions that give rise to power abuses in health care organizations   Identify the different roles played by trust, fairness, and transparency in preventing power abuse in health care organizations   Describe the different types of conflict and how they might be present in various health care organizations   Describe how emotions affect individuals attempting to manage conflict   Describe the various mistakes relating to how individuals think about negotiation and how they think about relationships   Identify the difference between interests and positions and describe why understanding that difference is critical in negotiation   Compare the benefits of compromise, competition, and collaboration as three distinct strategies for negotiation   Describe the tactics to find a better solution, the tactics to acquire information, and the tactics to influence others CHAPTER 7 r Power, Politics, and Conflict Management 157 KEY TERMS "ODIPSJOH#JBT /FUXPSL$FOUSBMJUZ #"5/" /POTQFDJGJD$PNQFOTBUJPO $PBMJUJPOT 0SHBOJ[BUJPOBM1PMJUJDT Coercion 1PXFS $PMMBCPSBUJOH 1PXFS"CVTF $PNQFUJOH 1PXFS4USBUJGJDBUJPO $PNQSPNJTJOH 3FDJQSPDJUZ $POGJSNJOH&WJEFODF#JBT 3FMBUJPOTIJQ$POGMJDU $POUJOHFOU 4FMG'VMGJMMJOH1SPQIFDZ $VMUVSBMMZ%FSJWFE1PXFS 4USVDUVSBM4PVSDFTPG1PXFS &NPUJPOBM$POUBHJPO 4USVDUVSBMMZ%FSJWFE1PXFS 'JYFE1JF#JBT 4UVEZPG$POGMJDU.BOBHFNFOU 'SBDUJPOJOH 5BTL$POGMJDU 'VODUJPOBM'JYFEOFTT 5ISFBU3JHJEJUZ&GGFDU *OEJWJEVBM4PVSDFTPG1PXFS 7BMVFJO/FHPUJBUJPO ,OPXMFEHF#BTFE4PVSDFTPG1PXFS 8JOOFST$VSTF -PHSPMMJOH rrr*/13"$5*$& 1BZGPS1FSGPSNBODFBOE1PXFS*OGMVFODJOHBOE /FHPUJBUJOHUIF.VSLZ.FBTVSFNFOU8BUFSTPG7BMVF#BTFE1VSDIBTJOH The concept of “value-based purchasing” (VBP) has gained traction as a potential means to better link health care outcomes to payment. Numerous national demonstration projects are underway, and the concept’s flagship philosophy, “pay-for-performance” (P4P), has been integrated into the majority of physician practices and many hospitals across the United States. VBP rests on a fundamental principle—that practitioners and institutions that produce the best outcomes, from both an efficiency perspective and a quality-of-care perspective, should be rewarded financially, while those who underperform should be subject to earning less. This approach is innovative because traditionally everyone in health care got paid the same, regardless of their performance excellence, for the services they provide. However, the VBP approach unleashes the potential for many power dynamics within the health care setting and for conflict among different stakeholders. For example, the issues of how to measure cost-effectiveness and quality become front and center to making VBP work. Because there can be substantial disagreement as to the “right” ways to measure these outcomes, the use of power can become an integral component of making decisions in this regard. When one stakeholder such as the Centers for Medicare and Medicaid Services (CMS) uses its power to try to influence the kinds of measures used, conflict may erupt. This conflict can undermine the success of pay-for-performance programs by promoting an adversarial relationship among the parties involved. Insurance companies, employers, and government—all of whom pay for health care services—may seek to exhibit greater influence over the measurement debate because of the dependence by providers such as physicians and hospitals on that payment for their economic survival. This may cause consternation and resistance among providers such as physicians and hospitals, especially if they have differing opinions on the measurement issue. On the other hand, physicians may use their own advantages of control over clinical knowledge and the public’s trust in them to counteract the influence of payers in deciding which measurements will form the basis for paying on the basis of quality and value. Hospitals, because they possess the infrastructure that everyone in the system relies upon to deliver complex care, can exert their own influence to shape measures in a way favorable to their interests and constituencies. Moreover, patients may have little ability to influence the measurement debate, simply because they do not have a source of power upon which to draw in getting the other stakeholders to comply with their preferences. In fact, these overall power dynamics have been seen in the current value-based purchasing movement, where many major decisions around how to measure become drawn-out exercises in power use and influence tactics (Centers for Medicare and Medicaid Services, 2017). 158 PART 2 r MICRO PERSPECTIVE rrr*/13"$5*$& 1BZGPS1FSGPSNBODFBOE1PXFS*OGMVFODJOHBOE /FHPUJBUJOHUIF.VSLZ.FBTVSFNFOU8BUFSTPG7BMVF#BTFE1VSDIBTJOH (Continued) The conflict that arises around identifying the best way to measure outcomes in a pay-for-performance incentive program is often managed through a political process in which different stakeholders attempt to use their power in shaping how the debate is conducted. For example, health care payers may push for the establishment of public reporting of clinical outcomes through devices like “report cards,” in part as a means to get consumers on their side and to put physicians and hospitals on the defensive. They may want measurements reported that they feel more in control over, i.e., care processes that can be more easily standardized across different providers. The use of tactics like report cards and care standardization may be promoted overtly as a rational means to achieve performance transparency. However, these tactics may also be used covertly to exert and enhance the payers’ control over how “value” and “quality” should be defined and measured in the eyes of the general public. Alternatively, health care providers may put forth a message of “we know best because we deliver the care” to patients and advocacy groups to try to convince them that they should be allowed to exert greater influence over which measures are used. This is where conflict management and, more specifically, the process of negotiation can play a role in moving the use of power and politics to a productive end. By treating the discussion around measurement within a VBP approach as one in which multiple stakeholders can simultaneously “win,” there is a higher probability that the outcome will have something favorable in it for everyone (including patients) and, as a result, will be more easily accepted by all the relevant parties in the negotiation. In this way, negotiations around how to measure “cost-effectiveness” or “quality” that consider multiple viewpoints, provide voice to a diverse group of stakeholders for input, and seek to achieve a level of acceptance and satisfaction among all constituencies are likely to create a more favorable climate for implementing pay-for-performance programs and to enhance the chances for their long-term success. The use of power and politics goes hand in hand with the use of negotiation, simply because power and politics create the potential for conflict among stakeholders, and this conflict is best managed through a more rational approach that seeks to find the most optimum outcome that can be accepted by all. CHAPTER PURPOSE As the first In Practice example illustrates, perhaps nothing is as potent a force in organizational life as QPXFS. Power is the ability to exert influence or control over others. It dictates a significant degree of what goes on in organizations, from decision making to performance outcomes. In health care, where there is greater uncertainty around how to best deliver and pay for care, power looms large as a key variable enabling various stakeholders to control decision making. Power involves two key dynamics—influence and dependence—and when these dynamics are present in large quantities, power may be wielded by individuals, groups, and organizations in ways that allow them to achieve their preferred vision and goals. Those at the sharp end of its use may find themselves unable to pursue their own agenda. The purpose of this chapter is to provide students with a clearer understanding of what power is, how and where to look for it, where it comes from, and how it plays out in health care organizations. In addition, emphasis is placed on how power relates to the political aspects of organizational action in settings such as hospitals, insurance plans, and physician practices, and the conditions and circumstances that give rise to power abuse are featured as important factors for managers to keep in mind at all times. The ethics of wielding power effectively should not be understated. A key focus in the second half of the chapter is on the role of conflict management in managing the role of both power and politics. A practical guide is offered for how to use the process of negotiation to achieve mutually satisfactory outcomes among organizational stakeholders. Power and politics can be implemented in dysfunctional, self-interested ways by a variety of organizational stakeholders. This chapter touches upon this issue. But it also stresses the important and necessary functions played by power and politics in getting organizations and workers to perform effectively. In the case of health care, power and politics are necessary dynamics for getting things done. The use of power and politics heightens the level of conflict that may occur in organizations, and such conflict is best managed, this chapter argues, through a more strategic perspective that focuses on an ethical, rational, and results-oriented process of conflict management and negotiation. In other words, power and politics are the forces that move change and enhance effectiveness in health care, but these forces are managed best through proven tactics associated with skilled conflict management and negotiation. CHAPTER 7 r Power, Politics, and Conflict Management THE USES OF POWER IN ORGANIZATIONS Power can be used for different purposes within organizational settings. Perhaps the most ubiquitous use of power in organizations involves determining the key choices made at an organizational level to guide overall company strategy (Finkelstein, 1992). The types of choices in this regard most amenable to the use of power include those that involve higher levels of uncertainty and innovativeness (Mintzberg, Raisinghani, and Theoret, 1976). The use of power by chief executive officers, boards of directors, and other top leadership to guide the direction in which the organization moves, how it chooses to compete, which products or services to offer, and the type of business model employed for pursuing profit has existed as long as the concept of the corporation. Leaders can and do use power effectively to make strategic decisions in efficient ways. Power may also be used to influence the actions of others, be they workers, professionals, other organizations, or the customers that use the organization’s products. In this way, power is thought of as a highly coercive mechanism alongside other influence-wielding tactics such as 159 trust, co-optation, and conformity (Hart and Saunders, 1997). Power in this regard is simply another in a toolbox of tactics individuals in organizations employ to get other people to behave in desired ways. It requires a certain degree of effort and resource use like any other influence approach. While it is worth noting that the use of power in this regard may be no more effective than other “softer” tactics such as gaining people’s trust to believe that what is being asked of them is the correct thing to do (McEvily, Perrone, and Zaheer, 2003), nonetheless, it is often viewed as a quick, reliable form of control that can be employed across a diverse array of organizational situations (Pfeffer, 1981). Power can control, allocate, and redistribute resources of all types within organizations (Pfeffer and Salancik, 1978). These resources include human capital such as clinical staff, financial resources such as budget allocations to hospital departments, and knowledge resources like innovations or awareness of external markets that enable a production process to be done better or a competitive advantage to be gained. For example, power can be used to decide which part of a health care system should have a fully integrated electronic medical record to use first in its everyday work. By being the first to use rrr*/13"$5*$& 5IF2VBMJUZ*NQSPWFNFOU%FQBSUNFOU "DDSFEJUBUJPO  BOE1PXFS Organizations in the health care industry gain a great deal of their legitimacy from accreditation. Many different types of accrediting processes exist, from the Joint Commission for hospitals and other health providers, to the National Committee for Quality Assurance (NCQA) for insurance plans, and to more specialized accreditation for niche providers like laboratories and radiology facilities. Nothing shifts the power structure more in a health care organization, at least temporarily, than the process of gearing up for one of these many accreditations. Much of the time, the power shift moves favorably in the direction of quality improvement (QI) staff and units within the organization. These staff and units are often the nerve centers of data collection, analysis, and reporting for the kinds of things accrediting organizations request and verify when they visit. Thus, accreditation offers them an opportunity to gain greater control over scarce resources, influence strategic decision making, shape organizational culture, and change the manner in which the organization’s workforce does its jobs. For example, there may be a particular area or work output of the organization where quality measures lag and a problem regarding quality is thought to exist. While a QI department may be involved over time in addressing the issue, if the issue impacts accreditation, greater resources may be made available to QI staff, and greater freedom provided to them by top management, to try to correct the issue in a timely manner. The resources given to QI may be taken away from some other part of the organization, lessening the influence of other stakeholders in the process. The QI function may be emboldened by the organization to reshape how work is performed in the particular area, how workers do and think about their jobs, what performance data should be collected, and how that data must be evaluated. In this way, QI staff come to be relied upon by top management and the organization as a whole to help ensure that not only are quality problems identified and fixed but also the all-important external accreditation is not jeopardized in any substantive way. This may also represent an opportunity for the QI function to solidify its influence within the organization, acquire greater resources for itself, and gain greater control over others competing for the same resources. Thus, even a short-term shift in power and influence within an organization can have long-term consequences. 160 PART 2 r MICRO PERSPECTIVE such a system, favorable benefits may accrue to that part of the system earlier and in greater quantity than later adopters. Resource control and allocation is perhaps the most widely used application of power within organizations. As the sociologist Charles Perrow asserts, this use of power deals with “the size of the pie” within organizations and how it is sliced—i.e., who wins and who loses in getting more of something that they want, while at the same time preventing others from doing the same thing (Perrow, 1989). of subtle influence dynamics to achieve desired goals. This means that all power brings with it the potential for heightened tension and conflict within the organizational setting. This is one of the reasons why the use of power is often filtered through a political process within organizations (described later in the chapter). It is also a key reason why negotiation and conflict management, a primary focus of this chapter, are at the center of a more pragmatic view of how to think about, use, and regulate power within organizations. Power may also be wielded for purposes of shaping or transforming organizational or work cultures in ways top management desires or to move the organization toward being more competitive and effective in the marketplace. For example, leaders of both General Electric and IBM used their positions and authority, along with that of their top managers, to help transform these companies during the 1980s and 1990s into global, innovative firms (Gerstner, 2002; Slater, 1999). They did this in large part through a focus on shifting the meaning systems among employees within each of the organizations toward beliefs and values that could support a new way of doing business, one that would enable the companies to meet the challenges of a changing marketplace. If influence is at the core of defining power, then this implies that all power is also relational in the sense that its existence, magnitude, and use rely upon an ongoing social exchange between two parties (Dahl, 1957). For example, power can be attributable to a given individual based on another individual’s perception of that person’s relative influence. However, that perception is likely strengthened or weakened over time as the two individuals interact. The perception of power gets validated through the social experience within organizations. In this way, power requires two or more parties interacting with each other on an ongoing basis to be fully realized. While it may be understood that one group or unit has power over another, for example in a hospital or insurance company, by this definition power would exist in its fullest form only when the powerful group or unit behaves with others in a way specifically designed to control or alter their behavior. In this way, a group of self-employed surgeons working collectively in the same practice may be presumed to have the ability to influence Hospital A’s behavior toward them, such as better reimbursement rates or preferred operating room times, because there is an equivalent Hospital B in the same geographic area where these surgeons can take their business. But as a relational dynamic, power would be evident most during moments when the surgical group, through direct communication or posturing during contract negotiations with Hospital A, actually convinces Hospital A to give them higher reimbursement or better operating room times, and Hospital A complies in this regard (see the “In Practice” case study “Pay- forPerformance and Power”). Other companies, particularly in the new gig economy, have strong leaders who use power to push their companies in directions they believe are necessary for success, even at the expense of both public and worker approval (Isaac, 2017; Kantor and Streitfeld, 2015). Using power to change organizational culture carries risks, because culture is difficult to change (Martin, 1992). In addition, the overuse of power by a single leader may stifle a diversity of ideas that may be needed to help the company grow, change its culture, enhance its workforce, or align better with the competitive marketplace. Companies such as Uber and Amazon, while successful because of strong leaders using their power, nonetheless put themselves at risk if that power crowds out other important voices in the organization. WHAT IS POWER AND WHERE DOES IT COME FROM? Power has been defined in a variety of ways. However, common to all definitions is the notion of one stakeholder’s ability to exert influence over others in ways that, among other things, influence them to do things they normally would not do (Pfeffer, 1981). In short, power is defined by the level of control one group has over another’s behavior (Hickson et al., 1971). Central to this definition of power is the idea of influence—i.e., that an individual, group, subunit, or organization has both the ability and opportunity to control how another acts either directly or indirectly (Dahl, 1957). In this way, power by definition involves coercion.Coercion is the use Power comes from several different sources. Three major sources of power within an organization are structural-, cultural-, and individual characteristics. 4USVDUVSBMTPVSDFTPGQPXFS are sources that derive from the formal or bureaucratic aspects of an organization (Wilson, 1989). Examples of these aspects include the organizational chart, written policies and procedures, job titles and descriptions, and budgets. Structural sources of power can be used by individuals, groups, or entire organizations. The potential for power is built into every organization through the existence of a formal structure that orders social relations and provides a guide for behaving to organizational actors. In examining how CHAPTER 7 r Power, Politics, and Conflict Management 161 structure gives rise to power, one need only examine how one or more of these bureaucratic components instill in specific people and groups the ability to exert influence over others. power deriving from existing norms or beliefs may become more influential than structural power, in part because it seeks to influence organizational behavior in ways that are less visible to public view. For example, a simple job title and job description provides insight into the power and influence associated with that position. A job title that includes the word “manager” or “supervisor” means that the person filling the position will have formal authority over one or more persons in the organization. Alternatively, this authority may be implied in the job title (e.g., medical director, chief executive officer, vice president in charge of compliance) and articulated in more detail in the description itself (e.g., “hires, supervises, and evaluates all physicians working in the medical group”). From the title and job description, an individual gains the legitimacy to direct others’ actions, evaluate their performance, and serve as the conduit for information between higher levels of the organization and the workers under their direct supervision. Cultural sources of power cannot easily be identified through formal artifacts such as organizational charts or budgets. Instead, they are discerned from an implicit understanding and appreciation for “how things work” in the organization. An example of culturally derived power might be seen in a group of surgeons, where one surgeon in particular who is widely understood to be “the best cutter” or “have the best hands” is deferred to by other surgical colleagues across a variety of work situations, in large part due to the collective belief that such a surgeon must know and be good at a variety of things if he or she is perceived as the best in this core skill all surgeons value. In this instance, this surgeon gains power and influence due to a shared meaning system within the group that may or may not mirror reality. Similarly, physicians who believe a particular nurse working with them has great sway with other nurses may defer more to that nurse across different work situations, giving the nurse more power to influence not only those physicians but also her fellow nursing colleagues. 4USVDUVSBMMZEFSJWFEQPXFS gains its stability and legitimacy by creating resource dependencies that place some individuals or groups in positions to influence others (Pfeffer and Salancik, 1978). This is seen clearly in the situation in which one department or unit in an organization is relied upon to help produce the work of other departments. In health care, such situations abound. For example, all hospital work from emergency medicine to surgery relies heavily upon departments like radiology and laboratory services for its effective completion of work. The need to test and monitor patient blood levels, screen for infection and disease, and examine bones and organs in detail for proper assessment gives both the radiology and laboratory departments the ability to influence how other work in the hospital is performed and how other actors request and get services from these departments. Without the timely, high-quality assistance of these latter units, both surgical and emergency services can take longer to do, be of lower quality, and cost more. This creates a dependency situation in which radiology and laboratory services, because they are vital to all other work in the hospital, gain additional ability to determine their own work patterns and resource needs. In this instance, the “resource” depended upon is the knowledge and technology associated with radiology and lab work. In other situations, the resources may be financial. Power also is derived culturally within organizations. Culture is defined as the shared meaning systems that arise out of ongoing interaction between two or more entities (Schein, 1992). Whereas structure represents the formal aspects of organization, culture is associated with the informal aspects, i.e., norms, values, beliefs, and assumptions. $VMUVSBMMZEFSJWFEQPXFS is power that derives from these informal aspects and is less visible but no less potent than structurally derived power. In some situations, Finally, there are several different JOEJWJEVBMTPVSDFTPG QPXFS (French and Raven, 1959). These include power rooted in an individual’s legitimate authority, ability to reward another, knowledge or expertise, charisma, coercive ability, and informational centrality. According to French and Raven (1959), both expert and reference bases of power involve personal qualities of the individual. In health care particularly, these two sources of power are commonly leveraged by professionals. ,OPXMFEHFCBTFE TPVSDFT PGQPXFS are particularly ubiquitous. Knowledge-based power derives from an individual’s control over the expertise needed to make key decisions and organize production. This power source is common in health care because much of the work contains higher degrees of uncertainty in terms of both processes and outcomes. Some health care work can be standardized and routinized, but much of it cannot, providing ample opportunity for those with a knowledge advantage to assert control. Knowledge-based power in the health care industry currently plays out in two major ways. Traditionally, the medical profession has been the primary source of knowledge power-based. Physicians have been able to define how clinical work should be performed, how patients should be treated, and what success and failure mean in different types of delivery situations (Freidson, 1970). Physicians still remain the most powerful group of health care workers in large part because they retain heavy control over the most important forms of clinical and scientific knowledge available, and others defer to them in setting the terms under which that knowledge is applied on an everyday basis. 162 PART 2 r MICRO PERSPECTIVE More recently, however, knowledge-based power through structural rather than individual sources has proliferated. This diffusion is an example of the commodification of knowledge-based power and the transferring of power from professionals like doctors to the organization by standardizing and making it transparent throughout the organization. In one sense, this modern-day quality movement represents an attempt to garner knowledge-based power for the organization and its administrators, either by taking it away from or sharing it with physicians. For example, a clinical care guideline that is developed to treat a diabetic or hypertensive patient, where specifics of the diagnostic process, preferred means of treatment, and identification of risk factors are all included in it, can transfer knowledge previously within the exclusive domain of the physician to the organization, reducing the physician’s power in the process. Finally, it is important to note that none of these three power sources acts alone to generate power in an organization. Sources of power can and do interact with each other, as in the case above where knowledge-based power may be wielded by individuals even as some of that power is embedded formally in the organizational structure through guidelines, policies, and “best practices.” The concept of OFUXPSL DFOUSBMJUZ is another illustration of interaction occurring between knowledge-based and structural sources of power. Network centrality refers to a situation within an organization in which one work group or unit lays at the intersection of many other work groups or units, as a result becoming a repository of knowledge and understanding about how the entire organization works (Ibarra and Andrews, 1993). This makes them indispensable sources of information for other parts of the organization and provides them with a greater ability to influence the actions of others. rrr*/13"$5*$& 5IF1VSTVJUPG1PXFSBNPOH.BOBHFSTBOE1IZTJDJBOT Managers and physicians working in the same health care organization might draw upon different sources for establishing and maintaining their power. Managers work in positions typically associated with the formal organization—i.e., the bureaucratic chain of command that exists to help coordinate work in standard and routine ways. If one examines an organizational chart for a department or the entire organization, it may be clear that persons occupying management or supervisory positions possess specific degrees of influence over different organizational functions, budgets, or staff. Physicians, especially those not occupying formal administrative positions, derive their power mainly from knowledge-based and cultural sources. These sources are not specific to any single organization, as might be the case for management power, which relies upon formal policies or organizational charts. Rather, physician power derives similarly across all organizations from the wider societal belief that doctors “should be in charge,” possess the most valuable knowledge for effective health care delivery, and are more likely to represent the views of the customer, i.e., patients and their families. Within the hospital setting, for example, a “dual hierarchy” still exists that recognizes the power of both managers and physicians to direct staff, control work, and make decisions for the organization. One part of the hierarchy recognizes the role played by management personnel in these areas, while the other bestows that same recognition on physicians. Thus, we have “medical directors” who retain control over clinical staff and delivery and department or unit managers whose formal domain is overseeing budgets, nonclinical staff, and often quality improvement reporting. It is this dual hierarchy and its everyday implementation that gives rise to ongoing tension between the two groups within settings such as a hospital. With each having power and influence, and each seen as legitimate by key stakeholders within the organization, the imperative becomes one of advancing the positive contributions of each group to organizational functioning while minimizing the conflict and confusion potentially arising from both groups asserting their power in the same situations. And assert power they do. Managers may use formal devices to both assert and pursue power, such as the creation of new organizational policies; reorganization; the collection, analysis, and reporting of data around clinical work; and establishment of new domains of authority such as quality assurance or accreditation. They may not be viewed as “knowing what physicians know,” but they can seek to offset some of this knowledge advantage by gaining access to the knowledge, standardizing it, and making it transparent throughout the organization. Physicians may counter in their pursuit and assertion of power by making more overt their knowledge advantage in specific work situations, moving to make portions of their work more complex, or look more complex, so it is less subject to management cooptation, and getting others like patients and nurses to believe that they are the most legitimate group to direct care and make decisions. In each case, different sources are drawn upon to promote the group’s power and influence. This reality makes health care settings particularly fluid in terms of how such a dual hierarchy works, how power is distributed between the two groups, and which group accomplishes its preferred goals for the organization and itself at a given period in time. CHAPTER 7 r Power, Politics, and Conflict Management The quality improvement (QI) department of a hospital, insurance plan, or medical group is the clearest example of this in health care. By collecting and analyzing information on each work process in the organization—e.g., what works in one area of the hospital or practice and could be transferred for use to another part—of the QI department gains legitimacy and power. Departments and personnel that require knowledge or understanding held by other parts of the organization will come to depend on such a “network-central” entity like the QI department to help improve their own production processes. KEY POWER RELATIONSHIPS IN HEALTH CARE ORGANIZATIONS Health care is a service industry. This means that the key production inputs are the individuals who provide the services—physicians, nurses, and a variety of clinical and nonclinical support staff. Since all power is relational, understanding power within a service industry like health care requires examination of the major stakeholders and their interactions with each other. There are three key power relationships in health care organizations: physician–patient, physician–nurse, and physician–administrator. The most important relationship in health care involves that of physician and patient. All health care service delivery is built around this relationship, because patients are the ultimate consumers of all health care services. Traditionally, physicians have held great authority over patients, and the main reason for this has been the significant asymmetries in knowledge, information, and access. Physicians possess the clinical knowledge and skills patients seek when accessing care and historically, such knowledge and skills were not available for access in any manner other than seeing the physician (Starr, 1982). Society has also granted to physicians exclusive or near-exclusive rights to prescribe medications, order medical services such as MRIs and physical therapy, bill insurance for services rendered to patients, and to serve as the final arbiter for which types of services are appropriate and reimbursable. These rights bestow on physicians control over medical decision making, giving them a significant power advantage over the patients they serve. For a long time, physician power over patients manifested itself in a paternalistic approach that emphasized the caring doctor to whom the patient must listen and comply. This approach limited conflict and tension in the relationship, as patients were expected to obey the physician’s orders and question less. However, this type of relationship and the one-sided nature of the power and influence implied in it have been increasingly criticized 163 as unnecessary and a source of lower health care quality and patient satisfaction (Wachter and Shojana, 2004). Although the physician continues to maintain a clear and significant knowledge advantage over patients, some believe that information and knowledge asymmetries between doctor and patient are lessening with the advent of new information technologies, such as the Internet, which give patients the ability to access and absorb quick, easy-to-understand medical information (Pew Internet and American Life Project, 2002). Another reason for a shift in the balance of power between doctor and patient may stem from increasing patient distrust of health care institutions, reflected in lower confidence in our health care system, a growing health care consumer movement, and sustained emphasis on consumer-driven issues such as patient safety (Armstrong et al., 2006; Hoff, 2017). The physician–nurse relationship is also fraught with the use of power and influence. Physicians depend greatly on the skills of nursing staff in order to perform their work effectively. However, this dependence does not translate into equal power for nurses vis-à-vis physicians since the medical profession retains control over key cultural and knowledge-based power sources. This control allows them to maintain legal privileges and exert direct influence over nursing work, pay, and employment status. For example, registered nurses (RNs) and licensed practical nurses (LPNs) are neither allowed to prescribe their own medications for patients nor diagnose and treat patients. Training for these occupational groups is limited largely to preparing them for work roles where they assist physicians in their clinical work. The pay and prestige of nursing as a field also lags behind physicians’ salaries and prestige. As a result of this relationship, which is based on mutual dependence but asymmetrical power, the physician–nurse relationship has been characterized historically by high degrees of tension. More recently, however, because of workforce shortages in medical fields such as primary care, the nursing profession has advanced a new occupational subgroup, nurse practitioners (NPs), which puts them more on a par with certain groups of physicians such as family doctors and pediatricians. In some states, NPs have independent prescribing power and can diagnose and treat patients without physician oversight (National Association of Nurse Practitioners, 2017). Recent studies show that NPs may provide care on a similar quality level as their physician counterparts (Stanik-Hutt et al., 2013). Over time, if a subgroup such as NPs can demonstrate equality in work performance in areas traditionally the purview of physicians, they will provide nursing with an opportunity to acquire new sources of power for themselves that allow them greater self-determination as an occupational group. 164 PART 2 r MICRO PERSPECTIVE rrr*/13"$5*$& "SUJGJDJBM*OUFMMJHFODFBOE1IZTJDJBO1PXFS There is no potentially more profound development that may shift the balance of power and influence from physician to organization than the introduction of sophisticated artificial intelligence (AI) algorithms that can perform population health management, more accurately predict the onset of disease, and develop a deeper set of treatment options for certain patient conditions. IBM’s Watson supercomputer is one example of the AI application in health care. As this supercomputer continues to absorb medical knowledge, and as it gains experience giving predictions or analyses, it begins to acquire a certain legitimacy that enables those using AI to wield greater influence within the system. Organizations and even managers then begin to be seen as sources for knowledge-based power that is relevant for helping the system run better. Patients may also see AI as more accurate than the individual physician, which can shift the power dynamic as well. Population health management, particularly in the area of chronic disease, may become an example of this power shift in action. If the use of AI can identify deeper patterns of morbidity and service use embedded in a group of diabetic patients, for example, and use that information to create treatment recommendations for those patients who are more robust, targeted, and likely to work, third-party payers will start to rely on machine learning assessments of care delivery more so than the individual primary care doctor. They may shift more of their payment systems toward rewarding the assessments made by AI algorithms. This will weaken doctor influence and increase the influence of the larger systems within which these doctors are embedded. rrr*/13"$5*$& 1BUJFOU&NQPXFSNFOUJOUIF*OUFSOFU"HF Some argue that the advent of the Internet and advanced forms of health information technology such as the electronic medical record (EMR) affords patients an opportunity to rebalance the power inequities in their relationship with physicians. There is no doubt that patients have become more consumer-oriented in their health care interactions. Anecdotes abound about the manner in which patients may now come to a physician’s office armed with knowledge gained from their smartphone about symptoms and conditions they may think they have, and the ensuing confusion that can result from the physician trying to explain to the patient why the patient’s self-diagnosis is inaccurate or incomplete. In a key sense, though, these anecdotes miss the main point: that the ability of patients to investigate and consume medical information prior to their interactions with the health care system inevitably creates a more proactive, inquisitive, engaged, and thus powerful health care consumer—a consumer that has to be more respected and addressed in a different, less paternalistic manner. There are a variety of report cards, rating systems, and performance measures now available online for specific physicians, hospitals, insurance companies, and others doing the business of health care. If one requires cardiac surgery in New York State, for example, there is an easily accessed comparison of morbidity and mortality for all the cardiac surgery programs operating in New York State that helps in deciding which programs are of the highest quality. In turn, these report cards mean that cardiac surgery programs must openly compete on the basis of providing the highest quality outcome to patients, giving patients more power to help determine the direction such programs take in the way of clinical process improvements, resource investment, marketing, and customer relations. Whether the types of patient empowerment created by the Internet and health information technology generally give patients more power in their interactions with health professionals or merely create the perception of additional power, the fact remains that much health care performance is now more transparent and available for consumers to use in comparison shopping. This “information marketplace” levels the playing field, if only in a small way, between health care consumers and producers, aiding in the transformation of an entire industry long built on “knowing what is best for the patient.” However, as medical science grows increasingly complex, it may be far-fetched to presume that the availability of more information for consumers empowers as opposed to confuses them. This confusion, along with the information overload that accompanies a fully transparent health care delivery endeavor, may provide physicians and hospitals additional future opportunities to gain back any power loss from the consumer-oriented movement occurring in health care over the past decade. CHAPTER 7 r Power, Politics, and Conflict Management 165 The physician–administrator relationship is also one characterized by the acquisition and use of power. As noted in the “In Practice: The Pursuit of Power among Managers and Physicians” discussion, physicians and management tend to derive their power and influence from different sources, setting up an ongoing competition for power acquisition that may fester and go unnoticed for some time within the organization. In addition, the continued presence of dual hierarchies in places like hospitals creates tension between these groups because it legitimizes the claim to power for both groups simultaneously, while being less specific about where and when one group should have more authority than the other. Finally, physicians and administrators often have performance-related interests that differ, giving rise to sustained attempts by each to use power across a variety of situations to gain a specific preferred outcome. specific conditions that require things done in the same manner all the time, and payment made on the basis of showing “value” in care delivery as defined by a complex mix of efficiency and quality metrics (Centers for Medicare and Medicaid Services, 2017). The shift from performance “as defined by the individual physician” to performance based on global, transparent standards has been profound. It may threaten physicians’ source of power because it involves transferring knowledge traditionally controlled and disseminated by the medical profession to the health care organization as a whole, and also to patients. In addition, as payment systems are controlled more by health care insurers and government programs like Medicare, it is more these payers and less the providers who may acquire more legitimate sources of power within the health care sphere. For example, physicians may remain largely concerned with their individual patients, how they as clinicians or their immediate departments deliver care, and thus they maintain less concern about the overall performance of their peers or that of the organization as a whole. On the other hand, administrators (even physicians who become administrators) are hired directly by the organization to help ensure effective performance at a macro level, whether that is defined by work unit, department, function, or the entire organization. It is a manager’s job not to overemphasize individual performance assessment but instead examine performance from an aggregate or group level. It should be noted that these different perspectives do not represent bad and good perspectives. Rather, the important point is that difference in responsibility itself sets up differences in how appropriate performance should be viewed, and this may lead to conflict and the use of power and negotiation in attempts to reconcile. THE POLITICAL NATURE OF POWER The modern-day quality movement in health care, payment reform, and the increased emphasis on high-cost, high-tech specialty care are recent examples of trends that have exacerbated power battles between physicians and administrators. For example, differing from a decade ago, these two groups now come into contact frequently in a health care system that seeks greater and more formalized performance variety, transparency, and measurement. This has led health plans, hospitals, and practices to build formal administrative systems, using managers to run them, that provide the resources and authority not only to evaluate how clinicians perform but also to make that information available for patients and the rest of the organization to view. Related to changes in how health care quality is defined and measured is the shift in how health care services are reimbursed. Examples of this shift include elaborate pay-for-performance programs that provide financial incentives for clinicians to perform higher-quality care, standardized “bundles” of care delivery for Power in organizations is often created, maintained, and transferred through a political process. 0SHBOJ[BUJPOBM Q PMJUJDT has been defined as an ongoing process of “managing influence” (Mayes and Allen, 1977), in which different coalitions of interests or influence vie for the opportunity to achieve their desired goals. This process of managing influence often involves the use of nonlegitimate strategies and tactics, one of which is the exertion of power (Mayes and Allen, 1977). This definition is consistent with others that see politics as a process of using dynamics like power to gain desired ends (Eisenhart and Bourgeois, 1988). These definitions point to organizational politics as a key crucible in which power use is amplified and gains greater momentum. For example, the presence of a highly politicized work atmosphere both denotes and encourages the use of power, because it gives stakeholders greater freedom to assert their rights to control work, each other, and decisions. The use of politics is characterized by its hidden nature; i.e., it involves strategies and tactics that are not transparent to everyone (Eisenhart and Bourgeois, 1988). This hidden nature also facilitates power use, especially in situations that are high stakes, are high risk, or involve activities not immediately sanctioned by the organization and its workers. An example of one of these situations is when a company in financial crisis decides it must lay off workers to help reverse its fortunes. While the layoff decision may be known at all levels of the organization, different departments and units will likely engage in a political process designed to minimize the layoff impact on their own workers. This process may include a department or unit making veiled or overt threats to management about the negative outcomes for the organization of the department or unit being included too heavily in the layoff decision, moving to get key decision makers 166 PART 2 r MICRO PERSPECTIVE to support their specific department or unit cause, and undermining the cases made by other departments or units to top management. This process can be hidden from view and often involves only the most senior managers within each department and unit and top management. The process itself will likely involve a wide range of power demonstrations and attempts to control decision making. For instance, the nursing department in a hospital may threaten to walk off the job, especially if they are unionized, if too many layoffs are aimed at them, or they have concerns about proper staffing. Physicians may side with them and work on their behalf with administrators to address the issues, in part because a shortage of nurses might impact physician performance and potentially undermine their own sources of power with patients. Nurses may attempt to use their own power through a political process of trying to convince administration to impose fewer layoffs. Physician may also appeal directly to “one of their own,” such as the hospital medical director or physician members on the board, and craft arguments geared to what they feel would resonate most with another physician. To shift the example to another hospital unit, the QI department may allude to the breakdown in hospital functioning that would occur should too many of their workers be fired. That department may attempt to use its influence to demonstrate using quality data how the hospital would be impacted by too many layoffs or specific staffing ratios. Or, alternatively, the QI department might view reduction in nursing staff as an opportunity to gain greater influence throughout the hospital, by having access to the types of data needed to assess the relative care delivery impact of different staffing ratios. In this way, the QI department may end up helping or hurting the nurses’ attempts to use their own influence to stop layoffs. The notion of organizations as negotiated orders or coalitions of different interests provides a rationale for why politics becomes a dominant mode of interaction for members. Seen in this way, conflict and struggles for influence are endemic, almost natural, in every organizational setting, in large part because it is acknowledged by everyone that melding different and often competing stakeholder interests into a single cohesive set of outcomes remains daunting. Through this lens, much organizational activity becomes preoccupied with two things: (1) determining whose interests and perspectives should rule in a given situation and (2) determining which specific organizational outcomes are preferred and how they should be attained. Health care organizations are particularly political organizations. This is due mainly to the presence of several different, powerful stakeholder groups working alongside each other. For example, physicians, nurses, and administrators each have the ability to exert influence over their work settings, make key decisions, and gain control over resources. Much of the management imperative within health care settings revolves around trying to limit political activity that aims to exert power in dysfunctional ways—i.e., ways that benefit the group exerting power without clearly adding value for the organization as a whole. The use of politics can be inefficient for the organization in these situations, because it requires individuals and groups to expend valuable time and resources for self-interested ends, which often reduces the overall time and resources available to pursue collective ends related to productivity and quality (Pfeffer, 1981). On the positive side, politics plays a critical role in organizations by encouraging groups and individuals to share power and to ally with each other, if only temporarily, to achieve common goals or outcomes. This reality can be used by the organization to mount collective efforts aimed at mutually agreed-upon goals. For example, while physicians and nurses may spend a certain portion of their collective time in conflict with one another around different issues in the workplace, or become preoccupied with exerting influence in part to gain resources at the expense of the other group, they may come together and use their political power to help the organization fulfill its accreditation requirements or to address a quality deficiency that threatens the reputation of the organization and its workers. They may also, as noted above, unite to stop the organization from doing things not in their collective interests. In pursuing these imperatives, physicians and nurses in the same setting use similar informal tactics, share information and best practices, and advocate behind the scenes for similar changes. The political activity generated by two such powerful groups working in tandem may be quite influential. Generally, the political process creates a fluid power structure within organizations, making it more difficult to predict at a given moment which parts of the organization may exert their influence and whether or not they will be successful. The fluid nature of power within an especially political environment makes it somewhat risky for organizational leaders to attempt to manage the use and acquisition of power. Add to this the dependence of both power and politics on the type of work environment in which they are embedded, and the ability to harness political activity and the power it encapsulates remains one of the foremost management challenges in modern organization. )PX1PXFS4USBUJGJFT1FSTPOBMBOE $POUFYUVBM*OGMVFODFT Power is never equally distributed within or across organizations. 1PXFSTUSBUJGJDBUJPO means that different stakeholders may have unique opportunities to access power based upon their particular characteristics or circumstances. One key source of power stratification, particularly with respect to structural sources of power, derives from the demographic qualities of stakeholder groups. CHAPTER 7 r Power, Politics, and Conflict Management For example, historically, males have been afforded greater chances to assume top management roles in a variety of organizations compared to their female colleagues (Ragins, 1993). In U.S. medicine, the most powerful, highest-paying specialties such as surgery have long been dominated by male physicians, despite an increasing number of female physicians over the past two decades. Much academic medicine in the United States also remains populated disproportionately with male physicians, giving this demographic group inordinate power to control the educational and socialization agenda for medical students and young physicians (Hoff and Scott, 2017). Age is another key demographic source of power stratification in health care. For example, professions such as medicine and nursing are built upon the apprenticeship model of training, where experience is the basis for seniority. In this way, individuals who have the most work experience, almost always older practitioners, retain greater influence and authority among their peers. They set the rules for professional behavior as well as impose their preferred cultural meaning systems onto the group as a whole, with sanctions applied for those choosing to deviate from their norms. Residency and fellowship programs that form the basis of professional training in health care implicitly favor age as a determining factor for which professionals deserve the access to greater power and control within their profession. Employment status also serves as a source of power stratification in health care. For instance, salaried physicians, who work directly for their medical practices or for a health maintenance organization, generally have less individual and collective power than physicians who own their own practices. In the former situation, the physicians rely on the organization to pay them a salary, structure their workloads, and set policies that they must follow. In the latter case, the physicians may negotiate preferred rates of reimbursement with insurers and hospitals, can better self-manage their work and hours, and choose the types of patients and services they offer. Depending on the size and type of organization in which an individual works in health care, different power opportunities may also be afforded. Being an executive in a large insurance plan that controls a majority of the market share in a geographic area provides numerous opportunities to acquire and exert power with physician practices, hospitals, and employer groups—all of whom may depend on the insurance plan heavily for the success of their business. In the same way, physicians in a particular specialty may come together within a geographic area to form a single practice organization that dominates care in that market. They may do this in part to get better payment terms for their services or to control how they deliver care. This trend has been seen increasingly in the United States, with specialists such as orthopedists, cardiologists, and urologists, among 167 others, splitting their practices off from academic medical centers to form “super-practices” that contain significant numbers of the available specialty physicians in that geographical area. Finally, controlling financial resources stratifies organizational power. Within any organization, the “power of the purse” means that those individuals maintaining control over the distribution of resources have additional power opportunities than individuals who do not have this control. This is being seen now in the move to “value-based” reimbursement systems that allow health insurers to tie payment more to outcomes, leaving doctors often in a reactive state (Hoff, 2017). These insurers can force providers to have to report more quality information, control costs better, and adhere to standard care guidelines—in large part because they control disbursement of the financial resources physicians need to run their businesses. Traditionally, and within the organization, departmental units such as finance and accounting retain a great deal of power within the organization because they are sanctioned to review or approve the decisions made by other units in areas such as purchasing, capital acquisition, and hiring. Very often, struggles for power within the organizational setting revolve at least in part around one group’s desire for greater fiscal independence or authority over others. THE ABUSE OF POWER IN HEALTH CARE ORGANIZATIONS Rather than viewing power as inherently negative, it is important for managers to view the use of power as at times necessary for their organization in helping to achieve its goals in an efficient manner. Managers should, however, balance this functional view of power with a more critical perspective that views the use of power as potentially abusive to the organization’s employees and external stakeholders (Hardy and Clegg, 1996). Unfortunately, there are an increasing number of examples of power abuse evident in American business and health care. 1PXFSBCVTF refers to situations where one or more organizational stakeholders use power in ways that are not generally acceptable, often involve selfinterest rather than the organization’s best interests, and can inflict negative outcomes on workers, customers, and supporters of the organization. Power abuses occur within organizations for two main reasons. One reason is the advancement of personal ends at the expense of the customer, shareholder, or employee. Examples of power abuses used to pursue personal ends could involve chief executives creating boards of directors consisting solely of friends or business partners, executives directing staff to misrepresent 168 PART 2 r MICRO PERSPECTIVE financial and performance data to outside stakeholders, and executives using unauthorized company funds or resources to enhance personal wealth. All these examples have recently been seen in both health care and other industries. Power can also be abused to advance organizational ends. This form of power abuse is not easy to discern, nor do all groups within the organization necessarily agree that abusing power to achieve organizational ends in a given situation has negative consequences. In fact, such abuse may be sanctioned by numerous stakeholders both within and external to the organization. Examples of power abuses by managers that are used to pursue organizational ends could include laying off employees to send positive signals to board members or shareholders, without attending to the fundamental organizational problems or bad management decisions causing poor performance, and manipulating performance measurements for the sole purpose of misrepresenting the organization vis-à-vis other competitors in the marketplace. In this vein, potential power abuses can also be tied to company founder attempts to push a certain image of their organization in the marketplace or motivate the workforce in particular ways thought to be necessary for ensuring company success. Recent news stories on companies such as Amazon and Uber demonstrate this dynamic (Isaac, 2017; Kantor and Streitfeld, 2015). Regardless of the ends pursued, the abuse of power by managers or leaders elevates the potential for negative fallout to occur in the organization. Perhaps most important is the crisis of trust that can occur when managers or executives abuse power. This trust crisis is expressed in two primary ways: (1) loss of faith by customers and external stakeholders (e.g., regulators, shareholders, funders) in the organization (see the case of Uber for an example of this) and (2) loss of faith by employees in management. Both crises continue to be prevalent in light of corporate scandals in health care and other industries, as well as in the U.S. financial industry crisis that helped to produce a severe economic recession a decade ago. Loss of faith by customers and other external stakeholders can meaningfully affect organizational performance and survival, in the form of lost business for the organization, reduced financial capital, stricter regulatory scrutiny, and the development of a negative reputation that allows other competitors to gain a long-term edge over the organization (Fukuyama, 1995; Sitkin and Stickel, 1996). Loss of trust by employees toward managers when power is abused reduces the potential for positive dynamics within the organization to enhance performance. Examples of positive dynamics negatively affected by power abuse include teamwork, cooperative behavior, communication quality, citizenship behavior, and job satisfaction (Axelrod, 1984; Blau, 1964; Hoff, 2003; Whitener et al., 1998). Other negative fallout that may occur includes increased organizational complacency, decreased work effort or “shirking” on the part of employees, slower organizational adaptation to change, high turnover, and decreased quality of services or products (Burawoy, 1979; Kantor and Streitfeld, 2015). While not a certainty, the abuse of power can seriously impact organizational performance, lead to lost business, and, in some cases, facilitate collapse in the form of bankruptcy or dissolution. Examples of these outcomes are found in recent American corporate history, including Enron, Bear Stearns, Countrywide, and Tyco. Several conditions facilitate the abuse of power within organizations. These include high uncertainty regarding how to achieve goals or desired output; an overly centralized decision-making structure; the scarcity of rival coalitions both internal and external to the organization, a lack of reliance by key organizational stakeholders on each other; an existing culture of organizational complacency; and existing pressure to make quick decisions within the organization (Brass, Burkhardt, and Marlene, 1993; Crozier, 1964; Mintzberg, 1983; Perrow, 1989; Weber, 1978). Ironically, many of the conditions that create the potential for power abuse derive in large part from the same general conditions that give rise to power use. This highlights the paradoxical nature of power within organizations, in that the factors that allow power to grow and be used effectively are also those that, when manipulated in certain ways or taken to extremes, provide fertile conditions for power abuse. Given this reality, a key managerial task is to institutionalize a structural framework and culture within the organization that limits the probability that power use conditions are manipulated. For example, the ability to create dependencies in relationships on the basis of resources like knowledge or funding is a potential source of organizational power within organizations. However, too much of an imbalance in terms of the extent to which a dependency relationship favors one group over another creates the potential for power abuse (Brass, Burkhardt, and Marlene, 1993). This situation is exacerbated when the resources in question are scarce, essential, and nonsubstitutable. Control over information through structural advantages such as network centrality is another legitimate source of organizational power that, when taken to extremes, often results in power abuse. As discussed, individuals or groups who position themselves at the center of communication and information networks within the organization are in a position to exercise power. Information is a resource that allows individuals to set decision-making premises within the organization and control uncertainty (Crozier, 1964; Perrow, 1989). However, to the extent that managers or others within the organization gain CHAPTER 7 r Power, Politics, and Conflict Management 169 exclusive control over information—i.e., to the extent that specific individuals or groups can create gaps or ambiguities in understanding within the organization that only they can fill—a foundation for power abuse is created. deviation from the preferred status quo (Salancik and Pfeffer, 1977). This may hurt the organization in terms of performance and ability to adapt to changing demands in the environment. The building of coalitions and alliances is a source of organizational power. However, an organizational environment in which there is a single dominant coalition or alliance provides a foundation for power abuse. Any leader-centered coalition that does not adhere to a diversity of viewpoints and perspectives can create an autocratic situation in which the leader’s will and preferences become those of the larger group (Mintzberg, 1983). This leads to negative outcomes such as groupthink. The absence of rival coalitions within the organization creates a situation for power abuse, mainly by lessening the capacity for creative tension and ideas to compete with each other on the basis of their informational, logical, and strategic merits. This decreased capacity encourages the dominant coalition to introduce mechanisms by which to minimize 5IF3PMFPG5SVTU 'BJSOFTT BOE 5SBOTQBSFODZJO1SFWFOUJOH1PXFS "CVTF Managers can take several steps to guard against the abuse of power within their organizations. These steps include structuring communication networks to create greater transparency in terms of organizational decision making, implementation, and evaluation; using boards of directors and advisory groups as counterbalances to managerial authority; creating a strong code of ethics within the organization; designing appropriate appraisal systems; and emphasizing personal integrity in the hiring function (Alford, 2001; Hoff, 2003; Thibodeaux and Powell, 1985; Westheafer, 2000). rrr*/13"$5*$& "CVTJOH1PXFSBUUIF5PQ-FWFMTPGUIF0SHBOJ[BUJPO There have been instances in business and health care over the years in which top managers, a chief executive officer (CEO), a company founder, or a board of directors have abused their power through the creation and maintenance of a single dominant coalition within the organization that controls decisions and discourages dissenting viewpoints. For example, if a CEO desires to have more influence over the organization, she or he may create a board of directors that consists of close friends, business partners, or individuals who share a similar strategic viewpoint. In the extreme, these types of boards become “rubber stamps” that may fail to carry out their fiduciary responsibility as counterbalances to executive control within the organization. They also reduce the quality of strategic decision making because they abdicate their role of critiquing management decisions. In the final analysis, this allows executives to make decisions that potentially benefit their own ends at the expense of customer, employee, or shareholder interests. Imagine a CEO of a hospital who helps place on its board of directors a banker with whom the CEO used to work, a lawyer who frequents the same country club to which the CEO belongs, the head of a local construction company that has helped perform work on the hospital, and an old college friend who still goes on fishing trips with the CEO and is one of the top cardiologists in the community. The prior and existing relationships between the CEO and these individuals, forged through other work and personal circumstances, may taint the ability of the group as a whole to generate the creative tension and independent thought needed for developing hospital strategy and evaluating the CEO’s decision making. For instance, one or more of the board members, because they trust the CEO from other walks of life, may come to rely on the CEO’s “version of the world” and align their thinking with the CEO’s, leading to unquestioning support for the CEO’s actions and take on the world. By owing the CEO for their seats on the board, some directors may be remiss to challenge or disagree with the CEO. Other directors may perceive that if they help the CEO “get his way,” there is the possibility of additional rewards for themselves. Still others may simply like the CEO, be friends with him, and so be less likely to contradict his desires or decisions. Having directors who know the CEO from prior walks of life, or who feel indebted to a CEO for their position, increases the chances that the CEO may abuse his own power, especially if he wishes to make certain decisions or impose a particular strategic decision on the organization. Friendship is important in life, but in the case of a CEO and his board, it may foster a singular alliance of interests at the very top of an organization that crowds out alternative viewpoints and critical debate, producing a leadership group that becomes insular, self-interested, and disconnected from true organizational realities. It is these attributes that can then facilitate power abuse within the group. 170 PART 2 r MICRO PERSPECTIVE Creating transparency involves making the sharing of information a “public good” within organizations. This means, for example, allowing access to performance data at all levels of the organization so that everyone from line employees to the chief executive appreciates the logic by which specific decisions are made. In establishing greater internal transparency, managers end up becoming more accessible to employees. This enhances trust within the organization, and while it does not preclude the use of power as a necessary dynamic, it is likely to identify instances of abuse in a timely manner. External transparency also limits power abuse. Providing key constituents such as shareholders, regulators, and customers with complete, accurate, and timely performance data prevents executives and boards of directors from making decisions that are not rooted in strategic logic but instead derive more from the manipulation of circumstances on the part of individuals or groups in the organization. Many recent corporate scandals that involved managerial abuse of power could have been prevented through the use of independent oversight mechanisms in the form of boards of directors and external auditors. Many boards are laden with members who are connected to the organization in some manner that makes them reluctant to enact their oversight role (see the “In Practice: Abusing Power at the Top Levels of the Organization” example). Such characteristics make boards less useful for controlling power abuse in organizations. Organizations that staff boards of directors with individuals who have the time to fulfill the oversight role, and who have no personal stake involved in the results of that oversight, place themselves in the best position to allow the use, but not abuse, of power by managers. Creating a strong code of ethics and institutionalizing it into the organization’s culture also limits power abuse (Hatcher, 2002). Recent examples of power abuses within organizations have been found to result in part from the presence of work environments that tolerated and even promoted unethical (not necessarily illegal) behavior in relation to the use of power. Establishing a code of ethics gives managers and employees formal guidance as to how to act across different situations where power may be exercised. This limits individual discretion in using power. It also conveys a sense that there are risks or potential sanctions to using power in an abusive way (Thibodeaux and Powell, 1985). Key to the success of a code of ethics is the overt dedication of top management to it. Designing performance appraisal and hiring systems that emphasize and reward ethical behavior also limit the potential for power abuse within organizations. For example, power abuse by managers toward employees through the use of formal position in the hierarchy is minimized when appraisal systems exist that judge employee performance across a range of objective performance dimensions. Considering personal values and ethical behavior as important factors in the hiring and evaluation of managers and employees heightens the probability that the organizational workforce consists of individuals who are less likely to take advantage of any power at their disposal. Over time, it creates an organizational culture in which a negative view toward power abuse becomes a shared norm. POWER AS A KEY SOURCE OF CONFLICT The use of power within organizational settings, along with the political activity that helps manifest it, can give rise to conflict. Conflict associated with power and politics derives from two primary organizational circumstances. First, conflict can occur when two or more parties have different perspectives, ideas, or agendas; they intend to move them forward in the organization; and each party is willing to behave in ways that require some form of resolution to avert a suboptimal or dysfunctional organizational outcome. Conflict in organizations can also arise when two or more interdependent parties draw upon different sources for their power or have unequal access to power opportunities in the organization. This second circumstance is most endemic to health care settings, where different groups have their work highly coordinated and must rely meaningfully upon each other to deliver services to patients. In these instances—high mutual dependence among two or more parties that have different power sources—the key conflict-generating dynamic involves parties trying to figure out who (and therefore also which power source) is more influential or controlling in a given situation. One such instance of this second source of conflict occurs when there is a specific organizational goal that the interdependent parties are expected to pursue jointly. For example, physicians and nurses working in a hospital may be asked to help reduce the incidence of medical errors occurring to patients during their hospital stays. To accomplish this goal, each group may want the same resource— more staff positions, technology, or decision-making autonomy—and the conflict becomes centered on each group attempting to claim that resource for themselves. This is the type of conflict we generally think about. However, conflict often occurs at a second, deeper level in this circumstance. This conflict involves disagreements about which power source to rely upon in order to solve the first-level conflict of who should claim the desired resources. When multiple sources of power exist in an organization, ideas for how to resolve conflict are not necessarily shared by all parties. For instance, those who possess a knowledge advantage might think knowledge-based power is most relevant, while those who are in supervisory or high-level positions and who have structurally derived power might think relying on administrative mechanisms like formal policies is most appropriate (Ashforth and Johnson, 2001). CHAPTER 7 r Power, Politics, and Conflict Management A related issue is the choice of which conflict management technique to use in a given situation. For example, in the physician–nurse relationship or the physician–patient relationship, the physician has culturally derived power from his or her advanced standing in the medical profession. That power gives the physician authority over the nurse or the patient. When conflict arises between the physician and nurse or the physician and patient, that physician has to decide whether or not 171 to employ the use of power. The physician may draw on that culturally derived power to say “I’m the physician, you are the nurse or patient, and I know better” as an influence attempt, or the physician can take a different approach that relies less on formal power use and more on less coercive means of influence. Effective conflict management is based on appreciating the sources of power for each party involved and knowing how and when a particular power source could be used. %&#"5&5*.& For those who possess some level of professional or organizational power, it can be difficult to know when and how to use that power in situations that might benefit the organization’s customers. As the chapter notes, not all power use is bad. In fact, the use of power is necessary and productive in situations where the customer stands to benefit in the form of a higher-quality or more efficient service provided to them. Often, the carefully planned use of power can help overcome organizational inertia regarding the best decision to implement, move needed change forward, resolve infighting between internal stakeholders that may hold up appropriate decision making, and produce key decisions quickly in situations where time is of the essence. However, knowing the precise moment and manner in which to begin using one’s power, regardless of the reason for it, is a challenging task for any health care manager or professional. When would you use power within an organization? Several considerations should likely guide your decision making. First, consider the type of outcome toward which your use of power would contribute. Is it ethical? Does it benefit the organization as a whole? Would it help produce an outcome that improves the efficiency or quality of services provided, or directly benefit the customer in some meaningful way? Can it be done in a manner that does not undermine other important organizational goals or objectives? The answers to these types of questions are critical for establishing the prerequisite rationale for using power, a rationale that, at some point, others in the organization or external stakeholders may need to hear. Once these questions have been answered, the second consideration is to assess the type of actions required for using power and how disruptive or potentially detrimental such actions might be for the rest of the organization. For example, using power in a strictly covert, highly political manner that masks its true nature as a control or influence mechanism may not be appropriate, regardless of the type of outcome such a use of power is aiming to achieve. In short, this step requires understanding the right ways to exercise one’s power. What should be the level of transparency in using power? Should everyone know that the use of power is guiding organizational action in the given situation? Are certain actions “out of bounds” with respect to how power will be used? A third consideration involves assessing the potential unintended negative consequences the use of power might cause within an organization. Such consequences may result even if power use is determined to be necessary and the actions taken to use power are appropriate. These types of unintended consequences are important. They may include workforce effects like decreased job satisfaction, productivity, morale, and turnover; organizational outcomes like decreased profitability or client dissatisfaction; increased short-term conflict between different organizational stakeholders or constituencies; and cultural shifts within the organization that might undermine worker or management cohesiveness. Predicting which types of negative consequences might occur is not easy. However, it is imperative to at least discuss openly the probability that some of these could happen and what could be done to limit the damage done to the organization. Finally, the use of power, even in an appropriate, required circumstance should be short-lived. Clear consideration must be given to the time frame within which power use will occur, when it is no longer appropriate to use power in a given situation, and agreement on the boundaries within which power will be used and when it will no longer be used, regardless of whether or not all the desired outcomes are achieved. This consideration is important precisely because the use of power takes a toll on the organization, and on the individuals within it, especially the longer its use occurs. Therefore, this dynamic must be used sparingly, strategically, and with careful attention paid to whether or not it is working effectively. With these things in mind, power may be exercised by individuals and groups within organizations as well as by organizations themselves. This notion moves us beyond the idea that all power is bad, that its use is immoral, and that the organization never benefits from its employment as a tactical device to achieve particular outcomes. That said, it remains a higher-risk, more unpredictable approach to managing and must always be assessed within that regard. 172 PART 2 r MICRO PERSPECTIVE The TUVEZPGDPOGMJDUNBOBHFNFOU concerns how parties approach, deal with, and resolve conflict and which personal, social, and environmental factors affect that process. The focus here is on one conflict management tool—negotiation—which is presented as a direct way to resolve conflict. Other strategies to resolve conflict could include avoidance, whereby one or more parties refuse to deal with the conflict, or accommodation, where one party simply concedes to the other(s). While avoidance may work in a situation where emotions are high and time is needed to prepare for negotiation, and accommodation may work in a situation where the outcome is not of great importance, negotiation is a viable process when there is a vested interest in the outcome and when each party wishes to manage the situation as effectively as possible for themselves and their interests. TYPES OF CONFLICT There are generally thought to be two types of conflict that occur in groups: conflict related to ideas concerning the task at hand and conflict related to social factors in the team (Jehn, 1997). The first type of conflict, known as UBTLDPOGMJDU, reflects differences between parties in understanding and carrying out tasks. This type of conflict, while detrimental to overall performance or decision making in the team or group, is seen to be the “better” type of conflict in that it is less personal and somewhat easier to accommodate. Task conflict on its own can result in better decision making in a health care situation. For example, a doctor and a nurse may have differing opinions on a course of treatment due to their different interactions with the patient—in an attempt to resolve this conflict, they may discover that each has unique expertise that should come to bear in making the treatment decision. Interdependent parties struggle in terms of both performance and satisfaction when SFMBUJPOTIJQDPOGMJDU, or conflict regarding some inherent characteristic of the other party, is present. The causes of relationship conflict can be related to interpersonal styles, personality, political preference, or other difference beyond the task at hand (De Dreu and Weingart, 2003). Relationship conflict is particularly difficult to deal with because judgments are being made about the characteristics of someone else—e.g., “I don’t like them” or “I can’t work with them.” Even when there is a shared understanding regarding how to solve the task, those groups experiencing conflict rooted in the relationship itself possess heightened negative emotions and perceive a dislike of the other party. If the conflict is primarily task-based, the challenge is in understanding the viewpoints and perspectives of all of those at the table. If the conflict is more relationship-based, the challenge is how to navigate around the heightened emotions and perceptions in the group, which can interfere with the mutual pursuit of a negotiated outcome. Task conflict can also lead to relationship conflict. For example, if we acknowledge that two different parties can have two different sources of power, such as with a physician and an administrator, the knowledge-based power possessed by the physician might create task conflict with the administrator, who has control over resources. In this case, each thinks they know the best way to solve the conflict, which represents conflict over the task at hand. However, if they fail to see the conflict from the other side’s point of view, that task conflict can escalate into relationship conflict. Once this happens, not only do they hold different views regarding how to solve the task, but they now also may be judging each other’s values and character, which can lessen mutual trust and respect. This lack of trust means they do not have a solid relational base from which to work, which makes the resolution of conflict more difficult. 5IF/FHBUJWF4JEFPG&NPUJPOT The threat rigidity effect states that when individuals feel threatened, their thinking becomes rigid or inflexible (Staw, Sandelands, and Dutton, 1981). When conflict results in an individual feeling like his or her resources are threatened, or that his or her ego is threatened, threat rigidity results. These heightened emotions produce a decreased ability to cognitively process information, ideas, and possible solutions. The brain goes into “protection” mode instead of “exploration” mode, and consequently the negotiators become preoccupied with protecting their own viewpoint rather than trying to come to a creative solution with others. Threat also need not be actually experienced, as even the expectation of threat can impact individuals. Carnevale and Probst (1998) found that when participants expected a hostile situation with high conflict, they showed less cognitive flexibility and creative thinking than if expecting a collaborative situation. Not only do heightened emotions shut down cognitive processing, but emotions can be socially contagious (Barsade, 2002). The process of FNPUJPOBMDPOUBHJPO occurs when emotions are transmitted from one party to another. If one individual becomes angry, others can “catch” that anger, and a negative spiral ensues where they then transfer that anger to others. Individuals experiencing conflict who travel through this negative emotional spiral may find themselves with very few options that would result in a positive negotiated resolution to the conflict at hand. This is why individuals experiencing conflict in general, and relationship conflict in particular, need to be acutely aware of the emotional state of the group. CHAPTER 7 r Power, Politics, and Conflict Management 173 rrr*/13"$5*$& "/FHBUJWF&NPUJPOBM4QJSBMJO)PTQJUBM)VNBO3FTPVSDFT In the following example of Mary and her boss Ryan, we can see emotional contagion in action. Mary, an HR benefits administrator in the hospital, has been experiencing a bit of frustration with her career progress. While she started out in patient advocacy and later moved into advocacy training, her current job has taken her away from patient contact completely. She feels that her boss, Ryan, has taken advantage of her willingness to work “any task” and forced her away from her passion. Ryan, as her boss, has been quite pleased with Mary’s performance and counts her among his top performers. She is conscientious with all assigned tasks and seems willing to do whatever he asks. This is precisely why he approached her about moving into a benefits position. Mary has just had lunch with a colleague who was asking about her career, a conversation in which Mary “realizes” that she is not happy about her position. Without thinking through the conflict, she is placing the blame largely on Ryan and has decided to approach Ryan about this conflict: .BSZ (already upset): “Ryan, I’d like to talk with you right now about my position.” 3ZBO “Sure, Mary, what’s the problem?” .BSZ “Why have you put me into this dead-end job?” 3ZBO “What are you talking about? You are one of my best performers!” .BSZ “You know exactly what I’m talking about—no one else wanted to do benefits and you knew that I wouldn’t say no to you.” 3ZBO “If you think accusing me of something is going to get you what you want, you are sorely mistaken. I’ve done nothing but try to help you.” .BSZ “I want out of this job and a move back to patient advocacy. If I don’t get that, I’m moving to another hospital.” 3ZBO “If that’s your attitude, then my answer is no.” In this case, the negative emotions that Mary harbors when resolving this conflict has not only clouded her ability to negotiate effectively, but they have transferred to Ryan. Her anger has become contagious in this discussion. The effect of this is that Ryan, who may have been happy to calmly discuss Mary’s issues, is now unwilling to work with Mary. We can detect this here by noticing that they do not talk about Mary’s passion—having direct patient contact. If this were discussed, it is possible that Ryan would agree to try to get her back to what she loves, especially considering she is a high performer. Good negotiators realize that the actions and emotions they portray will be mimicked or reciprocated by the other party. NEGOTIATION AS A CONFLICT MANAGEMENT TOOL Individuals are faced with conflict on a day-to-day basis, and they need a language for how to resolve those conflicts with the people with which they are interdependent. This is where negotiation comes in. Negotiation is not a skill to be reserved for special occasions like major purchases or career transitions, although it is helpful in those situations. Negotiation knowledge represents understanding that can help us in any aspect of managing conflict with coworkers, supervisors, clients, patients, kids, spouses, parents, you name it. Think about all the current or potential conflict in your life— each of those situations can be resolved from the perspective of negotiation. One can think of negotiation potential as the degree to which a conflict might be resolved effectively through negotiation. Negotiation is effective when one gets more or loses less than they would have if they did not negotiate - and getting more of what one wants is always the objective when negotiating. The formal definition of negotiation is “a process of potentially opportunistic interaction by which two or more parties, with some apparent conflict, seek to do better through jointly decided action than they could otherwise” (Lax and Sebenius, 1986). If we simplify this definition, we can say that the basic conditions where negotiation might be possible are the following: t There is more than one person (two or more parties). t The people or parties want, or seem to want, different things (apparent conflict). t The people or parties have to deal with each other in order to get what they want (joint action). As seen in the negotiation between Mary and Ryan (“In Practice: A Negative Emotional Spiral in Hospital Human Resources”), there are actually a wide variety of situations that fit these criteria, many that 174 PART 2 r MICRO PERSPECTIVE we typically don’t see as “negotiation.” Mary is not “buying from” or “selling to” Ryan. These are just two individuals who have conflict and, more importantly, have a vested interest in resolving that conflict while also maintaining their relationship. Thus, when we think about situations that have negotiation potential we need to include any situation that involves multiple parties, apparent conflict, and joint action or interdependence. COMMON MISTAKES IN MANAGING CONFLICT VIA NEGOTIATION Perhaps the most significant error negotiators make when approaching conflict, and one easily seen with Mary in the “In Practice: A Negative Emotional Spiral in Hospital Human Resources” example, is failing to plan or think through the conflict before attempting to deal with it. Failing to plan is more likely to result in a haphazard approach to negotiation marked by an overreliance on techniques most familiar to the negotiator, while planning beforehand is more likely to result in a methodical and well-thought-out approach marked by negotiation tactics more effective in resolving the conflict. An effective plan for each party to a negotiation will include a description of one’s own interests or underlying needs, possible positions or offers that can satisfy those interests, goals regarding specific positions for the negotiation, and possible tactics to use in reaching the goals. If there is uncertainty regarding the interests and positions of the other party, a plan should also include a listing of questions to ask, as questions will help gain understanding about the interests and positions of the other side. Interests, rather than positions, help a negotiator focus on what is most important, opening up possibilities for creative problem solving through the consideration of multiple positions (see Thompson, 2005). Goals are critical as they increase motivation on the part of the negotiator (Locke and Latham, 1990). When negotiators have clear goals, they are influenced to keep working toward reaching those goals, which can increase persistence and effort toward conflict resolution. Finally, planning before dealing with the conflict will give each party multiple options for how to resolve the conflict. This will help the negotiators avoid coming to an impasse or failure to reach agreement. A negotiation plan includes a description of the logistics of the negotiation. Where will the negotiation take place? For how long? Who will be at the table? Who are the influential stakeholders not present at the table? What are the issues to be discussed? The logistics are important for various reasons. First, there must be enough time to resolve the conflict without a sense of urgency, as a sense of urgency usually results in parties using compromise—or splitting the difference—as a strategy, which is not ideal. Second, the environment can facilitate information sharing if all parties are comfortable and relaxed. Even the ambient level of noise is important, as a quiet environment will decrease the likelihood of miscommunication. Third, as much information as possible about the parties and issues should be known beforehand so that each negotiator knows what to expect. Finally, meeting in one’s own office instead of another’s conveys power and comfort. Meeting at a location and time convenient to another may be seen as a gesture of good faith. When negotiators fail to plan, they can fall victim to GVODUJPOBMGJYFEOFTT, which occurs when a negotiator bases his or her strategy on familiar, rather than the most effective, methods (Adamson and Taylor, 1954). For example, imagine that a particular physician has had a long, contentious relationship with one hospital administrator. Every time they have to negotiate or solve a problem, the interaction becomes emotional, and each party behaves aggressively toward the other side. Needless to say, this creates tension for them and for those around them, and it results in less-than-effective negotiated agreements—neither side is ever happy. Now imagine that the administrator is replaced by someone new. Given his or her past experiences, that physician immediately begins to rely on those same contentious behaviors with the new administrator—he or she is fixated on those types of behaviors as being the way to negotiate with all administrators. Thus, even though the new administrator may be willing to negotiate in a different way, the physician never uncovers that possibility because he or she reverts to those familiar tactics. A negotiation plan, in this case, could help the physician realize that he or she knows very little about the new administrator and should rely on asking probing questions and bu...
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Running head: LEARNING AND INNOVATION

Learning and Innovation in Organizations
Student’s Name
Institutional Affiliation
Date

1

LEARNING AND INNOVATION

2

Learning and Innovation in Organizations
Introduction
In the modern competitive business environment, organizations are required to indulge in
intensive learning and innovative activities. Organizations that are highly innovative are better
positioned to learn new market trends, and can therefore, be in a position to achieve a
competitive advantage in the market. According to Hui et al. (2013), investment in
organizational learning is crucial in innovating new ways of doing business activities. For this
reason, the main emphasis that Hui et al. emphasizes on is the significance of innovation and
learning in enhancing the performance of the organization. Ideally, Hoff and Rockmann (2011)
state that the impact of learning is seen in the input it brings into innovation. Notably, Hoff and
Rockmann (2011) argue that learning and innovation are p...


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