Implementing Self-organization in
Healthcare Firms -
The Role of the Board, Top Management and Staff Functions on I mplementation
Author: Jolien Kwant
Student number: 11146656
Date of submission and version: 30th of March 2018, final version
First supervisor: Hans Strikwerda
Executive Programme in Management Studies – Strategy track University of Amsterdam / Amsterdam Business School
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Statement of Originality
This document is written by Student Jolien Kwant who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document are original and that no sources other than those mentioned in the text and its references have been used in creating it.
The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
3 Table of contents Statement of Originality ... 2 Table of contents ... 3 Abstract ... 5 Introduction ... 6 Reading guide ... 9 1. Literature review ... 10 What is self-organization? ... 10
Conditions for self-organization ... 12
Reasons for self-organization ... 13
Self-organization in practice ... 15
Evolution of organizational form ... 17
New organizational forms ... 19
Role of leadership in self- organizing forms ... 21
Rules and regulations affecting an organization... 22
Culture in the Netherlands ... 23
CEO, top management and staff functions ... 24
1.1 Research question, propositions and theoretical framework ... 26
Theoretical framework ... 28
2. Data and Method ... 29
2.1 Research design ... 29
2.2 Data collection ... 30
2.2.1 The three organizations ... 34
2.3 Quality paradigms ... 34
2.4 Data analysis... 38
3. Results ... 40
3.1 Causal Conditions: Cause for self-organization to arise ... 41
3.1.1 Conviction or belief ... 41
3.1.2 Influences outside world ... 43
3.1.3 Financial motive ... 44
3.2 Phenomena: Self-organization... 45
3.2.1 A people oriented movement or philosophy... 45
3.2.2 A new way to organise work ... 47
3.2.3 Quest ... 48
3.3 Context: Where and when does self-organization arise? ... 48
4 3.4.1 Commitment ... 51 3.4.2 Culture ... 52 3.4.3 Facilities professionals ... 55 3.4.4 Stability ... 58 3.4.5 Systems ... 58
3.5 Strategies: How to deal with self-organization... 58
3.5.1 Choice ... 59
3.5.2 Co-creation ... 59
3.5.3 Culture program ... 60
3.5.4 Structure of the organization ... 60
3.5.5 Framework ... 61
3.5.6 Facilities professionals ... 62
3.5.7 Utilization of knowledge ... 62
3.6 Consequences ... 63
3.6.1 Client satisfaction (expectation) ... 63
3.6.2 Employee satisfaction (expectation) ... 64
3.6.3 Work independently (expectation) ... 64
3.6.4 Response to changes (expectation) ... 64
3.6.5 Workload (expectation) ... 64
3.6.6 Client satisfaction and employee satisfaction ... 65
3.6.7 Insecurity ... 65
3.6.8 No implementation ... 65
4. Discussion ... 67
4.1 Summary of findings ... 67
4.2 Results related to literature ... 70
4.3 Implications ... 77 4.4 Limitations... 78 4.5 Future research ... 79 5. Conclusions ... 81 Reference list ... 83 Appendices ... 87 Appendice 1; Survey ... 87 Appendice 2; Interview ... 89 Appendice 3; Codebook ... 92
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Abstract
In recent years the topic of self-organization has become a reoccurring theme in
organizational practice. This study gives an in-depth view on this topic, is it a hype or is something more fundamental going on? In practice a lot of terms are given to this phenomena, but in essence what is studied is the delegation of responsibilities to the frontline professional, who has the specific knowledge to resolve issues. The research process started off with a review of existing literature. Based on this review it became clear that top management in an organization has an essential role to play in successfully guiding the change towards self-organization. Therefore the central research question in this study is focused on this group of functions in an organization. Further data was collected through a survey and twenty semi- structured interviews from case studies in three different organizations. These results are integrated into the self-organization model, which sheds light onto the reason why organizations try to implement self-organization as a new way of working. This model consists of different stages that describe self-organization; what kind of conditions affect the quality of the change process, which strategies support a successful change towards self-organization and what kind of parameters can be used to measure its success. This research contributes to existing literature because the phenomenon of self-organization is explored further and it will support new attempts by organizations to implement self-organization successfully.
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Introduction
Since Adam Smith’s Wealth of Nations (1778) traditional economic theory has its effect on how we organize ourselves in firms. Based on the assumptions of economic theory, for instance bounded rationality, ownership of the firm, and self-interested actors, we have designed our organizations in hierarchical ways and shaped roles of managers accordingly. One organizational design was and still is very popular. Chandler (1962) described this way of organizing in detail, which was called the M-form1. In 1984, Ouchi stated that the only way to successfully organize a large organization was by means of this M-form. In the last 20 years we seem to be moving away from this (more) traditional view (Strikwerda and
Stoelhorst, 2009; Bartlett and Ghoshal, 1993). Self-organization or self-coordination seems to be the newest trend. Every organization needs to have self-organized teams in order to be successful. The question arises whether this is a hype or that something more fundamental is going on.
What we know is that many organizations in the Netherlands, and also abroad, are trying new ways of working. Semco style, agile and lean methods are all ways of involving and engaging the professional worker in a different way.
Much has been written about self-organizing ways, but not a lot of scientific research has been done on the matter of self-organization and its impact on organizations.
Self-organization does not have a clear definition or set of requirements yet (Banzhaf, 2009). Balkema and Molleman (1999) described that self-organization had something to do with
1The classic M-form is based upon a design that exists of different interdependent units or divisions, which are supported by centralized (f.i. technological) systems and coordinated by a ‘general office’.
7 autonomous decision making within certain teams, which considered the output and organized the change process by themselves.
Researching the term ‘self-organization’ makes it clear that it isn’t a new phenomenon after all, something fundamental is going on. Self- organizing is a term that has its roots in
cybernetics, physics and natural sciences (Banzhaf, 2009) and seems to be originated in Greek and Buddhist philosophy. Ideas on power and how decision making should be organized are already discussed in the beginning of the 1900’s by Follett (1913) and later by Hayek (1945). Nowadays self-organization is being researched in a variety of sciences for instance biology, ecology and also in software development. Around the 1980’s self-organization has been linked to organizational theory. Manz et al. (1980) describe the role of managerial control in an organizational design of self-organization. But they state that the managerial role needs to change to facilitate self-organizational processes. Balkema and Molleman (1999) also
describe this role change and state that there are a number of barriers for implementing self-organization. Several scholars have researched the reasons why organizations should pursue a self-organizational design (Kurki and Wilenius, 2016). One reason seems to be to increase the ability of an organization to act on the changing environment, which is changing faster with technological developments. This also relates to complexity theory (Stevenson, 2012). Another reason, which also links to the adaptability of an organization, is being able to utilize the growing body of tacit knowledge in the knowledge economy of today (Hayek, 1945; Foss, 2007).
When we take a look at organizations that are trying to implement self-organization some are successful and some return to their previous form of organizational design. The reasons why implementation attempts fail are mentioned by people in the field.They say that the process
8 of implementing self-organization was too rigorous and management layers are cut too
quickly. Bruijn et al. (2014) have described how 23 different organisations in practice react to changes in the environment. Their ‘Loslaten’ organizational design seems to be highly related to self-organization. This ‘loslaten’ as a condition for self-organization to be successful is mentioned by several authors, the most important seems to be that the focus should be on the needs of the professional. Coleman (1999) states that self-organization is about motivating people based on empowerment. Using a new design to only cut costs might be a reason why implementation attempts fail.
According to Strikwerda (2017) and Coleman (1999) a new concept of organizing is needed, which does not imply that the structure of the organization needs to change. It means that organizations need to reconsider their way of working. A change should be focused on using the organizational form as an infrastructure for professionals to share knowledge and to work on specific projects to effectively serve the needs of customers (Strikwerda, 2017). A new way of working based on trust and respect of the professional, which facilitates knowledge flows seems to be the answer. Of course, organizations are also affected by certain rules and regulations, or a culture in a specific country (Hofstede, 1994). This might also affect successful implementation of self-organization.
The role of the top layers (CEO, top management and staff functions) is mentioned several times in literature (Balkema and Molleman, 1999; Strikwerda, 2017; Manz et al, 1980; Pearce et al, 2008). These are the roles that need to change, or even the pitfalls in successful
implementation of self-organizing ways. A few directions on what is demanded of these roles have been given in recent research, but it is unclear how they should handle this shift in governing an organization and how they perceive their own role in this process. Which
9 specific administrative measures are needed are described by Strikwerda (2012, 2017),
whether these are used in practice by the top layers in an organization is not clear. That is why in this particular research the CEO, top management and staff functions of an organization are the level of analysis.
Therefore this research will be focused on the following question: What administrative measures do the CEO, top management and staff functions in healthcare have to take to effectively implement self-organization?
The answer to this question will support new attempts by organizations to implement self-organization successfully.
Reading guide
This research is structured as follows: in the first chapter the literature concerning the subject of self-organization is reviewed. The research question, corresponding propositions and theoretical framework, resulting from the literature, are described. In the second chapter the data and method of this research are formulated, which addresses the way further data will be collected and triangulated to answer the research question. A survey and a case study are part of this research design. In this chapter there will also be attention for the quality paradigms to ensure a rigorous approach. In the third chapter results will be presented and these results will be discussed in chapter 4. This research is concluded with a conclusions chapter, which is the fifth and final chapter.
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1. Literature review
In this literature review the topic of organization is studied, starting with what self-organization really is and what conditions are needed for self-self-organization. Than reasons in general why organizations want to work with self-organizing principles are addressed. How the literature describes the effect of self-organization on organizational design is discussed next. Then a further view on the role of rules, regulations and culture on organizations in the Netherlands and on a process like self-organization is reviewed. Following the literature and the propositions, the theoretical framework is created.
What is self-organization?
Self-organization, also known as self-coordination, from a managerial perspective seems to be a new phenomenon that firms are trying to implement in order to cut costs, to work more efficiently or because the perspective fits with ideas of future requirements. Additionally, self-organization viewed from an economic perspective can create better use of tacit knowledge, and a higher adaptability, which is described by Banzhaf (2009). He states that
self-organization does not have a clear definition or set of requirements yet, but it ‘refers to the ability of a class of systems (self-organizing systems (SOS)) to change their internal structure and/ or their function in response to external circumstances.’ Balkema and Molleman (1999) describe that self-organization has something to do with autonomous decision making within certain teams, these teams considered the output and organized the change process itself. Self-organization, however, does not seem to be a new phenomenon after all. Self- organizing is a term that has its roots in cybernetics, physics and natural sciences (Banzhaf, 2009) and seems to be originated in Greek and Buddhist philosophy. In the history of ideas on
management, Follett already describes in 1913 that a centre manager should create an environment that encourages professionals to be responsible for their own work (Damart, 2013). Follett also mentions ideas on power and that ‘power- with’, or in other words working together in a creative relationship gains better results, than in ‘power-over’ relationships. By
11 underlining the creative power of the individual, or as she calls it ‘self- creation’, she already describes the ideas on self-organization of today (Kaag, 2008). Hayek (1945) states that the problem of incomplete information from economic theory is the utilization of knowledge (particularly utilization of tacit knowledge), this is the real problem of society. In order to utilize this knowledge, decision making should be decentralized to the ‘man on the spot’. He also touches upon the needs of the ‘man on the spot’ when decision making is decentralized, which implicates a certain link with self- coordination or even self- organization.
Nowadays self-organization is being researched in a variety of sciences for instance biology, ecology and also in software development (Moe et al., 2008). Kauffman (1994) has
researched self-organization as an addition to the natural selection theory by Darwin. He states that there should be more to creating our ‘biosphere’ than just natural selection, self-organizing principles is what he believes have supported the complex changes in our biological systems.
When self-organizing behaviour is combined with organizational theory, behaviour is
described as self-organizing ‘when people (agents) are free to network with others and pursue their objectives, even if this involves crossing organizational boundaries created by formal structures’ (Coleman, 1999). Moe et al (2008) describe three levels of freedom or autonomy to self-organize, ‘external, internal and individual autonomy.’ External being the influence that all external parties around a team can exercise on the team, internal relates to the
influence of all the team members inside the team and individual is the amount of freedom an individual employee has on his or her own work. All these levels can exhibit self-organizing behaviour.
Semco style, agile and lean methods are all ways of involving and engaging the professional worker in a different way. These methods can be linked to the idea of self-organization, where professionals gain greater influence based on their knowledge.
12 Conditions for self-organization
What seems to be the thread running through the literature is that self-organization is a way of working that focuses on the needs of the professional. This requires certain conditions, or administrative measures. In the case studies by Kurki and Wilenius (2016) the significant difference, between other organizations and the organizations that were studied, was the emphasis on trust and respect. At both organizations (Buurtzorg and Reaktor) personnel got all the trust and were facilitated to take care of their professional work, without being
questioned or controlled by superiors. These organizations also rely on the relational networks and the positive motivation and ambition of the individual employee.
Ricardo Semler (1989; 1994) has written articles on Semco style in the Harvard Business Review, in which he states that his company treats people like responsible adults. He describes three fundamental values, which can be related to what is needed to facilitate self-organization; democracy or participation (which is also a very clear account on the fact that the role of managers needs to change), profit sharing and transparency or information sharing. The company is thriving despite the ever changing and harsh environment in Brazil.
Coleman (1999) states that self-organization is about motivating people, based on
empowerment. Hierarchical control systems do not facilitate trusting relationships. Miles et al. (1997) have interviewed several leaders of organizations who have changed their
organizational form, and they concluded that it is not easy to implement a new way of working. It requires a unique vision on managing an organization, a new philosophy. They also mention that the investment in human capability which can address future needs is an economic must. The biggest challenge seems to be the ability of management to trust
employees to be able to self-organize and the ultimate way of showing a commitment towards this new philosophy is sharing returns with employees.
13 Similarities can be found in the article by Strikwerda (2012) about empowerment. He
describes empowerment as a way of organizing which ensures that the employees get as much room as needed to self-organize. What is needed is facilitation of experimentation and
innovation. Strikwerda (2012) also mentions that frontline employees need to be able to review the consequences of their own actions.
Balkema and Molleman (1999) describe a few barriers to successful self-organization. They state that the change in the role of the leader is essential, the leader becomes more of a ‘facilitator or coach’ and loses control and power. Not every leader will find this acceptable. Furthermore, the employees’ willingness to engage in self-organization might also be a barrier for implementing self-organization. Also the availability of certain skills and learning abilities is an important condition for self-organization, as is the actual need to self-organize. Another aspect is sharing information and the ability to access information.
So, there is no clear definition of self-organization yet. However, based on the preceding theory and the following reasons for self-organization there are certain aspects that are involved when it comes to self-organization. These aspects relate to the role and position of the frontline professional and the utilization of knowledge. Therefore the following
proposition is formulated:
- Proposition 1: The most important aspects of self-organization are the focus on stimulating interaction of knowledge and empowering the professional (frontline employee).
Reasons for self-organization
A reason for implementing self-organization that links to the adaptability of an organization, is being able to utilize the growing body of tacit knowledge in the knowledge economy of today (Hayek, 1945; Foss, 2007). There are a lot of similarities between theory on knowledge
14 management and self-organization, the main difference seems to be the difference in vantage point. Both theories, especially the theory of Foss (2007) on the ‘knowledge governance approach’, see the interaction processes between professionals and the transfer of tacit knowledge as a way to coordinate knowledge work more efficiently. However, in knowledge management the approach is more focused on the processes and the knowledge that resides in the professional, whereas in self-organization the focus seems to be on rearranging
responsibilities to the frontline professional.
Another reason why organisations try new forms like self-organization is to deal with the changes that are brought by developments in technology. These changes result in an
increasing complexity, and this is seen as the main reason why self-organizing systems appear and why they work effectively to address the complexity in the environment (Kurki and Wilenius, 2016; Coleman 1999). In earlier work of Simon (1962) complexity is described from a different perspective. Not from an outside environmental view, but as a factor within the organization. Because of all the small parts in the organization that have to cooperate to make up an integral whole, the organization itself is seen as complex. Every player in the organization has a key-role to play in solving decision- making problems, which ensures an organization to adapt to changes. This also hints towards the aforementioned elements of self-organization where professionals are part of the formal self-organization.
So, self-organization has also been researched from a complexity view (Stevenson, 2012). In order to deal with complexity self-organization supports adaptational processes to deal with change.
In this research self-organization is not being researched specifically from a complexity view, but from a view that people today need space or room to utilize their expertise. This relates to
15 the knowledge governance approach by Foss (2007), as is also mentioned above and why this theory is being looked at further. Foss (2007) describes knowledge as a rage, which has become more serious over the years. He is pointing out a gap in the research of knowledge management, namely the focus on micro-level or in other words the individual. How governance mechanisms can influence the individual in the interaction or sharing of
knowledge needs to be researched further. Foss also refers to an article by Osterloh and Frey (2000) in which an example is mentioned about management continuously changing the delegated decision rights, which was cause for less motivated employees. This approach links to what other authors nowadays describe as self-organization, but the difference being that knowledge management specifically has a focus on knowledge, and self-organization on the professional as an individual actor. Self-organization is being viewed by Stevenson (2012) as a force within us. It exists in every one of us, but it is not always utilized consciously or even efficiently.
In this light it is interesting to research what kind of reason an organization has to implement self-organization, when do organizations consider self-organization to be successful? In general organizations are trying new ways of working to ensure their livelihood. When they are able to adapt to a changing environment and utilize their knowledge they will achieve a greater sustainable competitive advantage, this might be translated into higher economic profits. This leads to the following proposition;
- Proposition 2: Implementation of self-organization is successful when it leads to higher economic profits.
Self-organization in practice
Many organizations in healthcare are trying to self-organize (self-coordinating teams)2.
2 In Dutch organizations the term ‘zelfsturende teams’, ‘zelforganiserende teams’ or ‘resultaatverantwoordelijke teams’ is used. In international literature terms as ‘coordinating teams, organizing teams or
self-16 The ‘TBS kliniek De Woenselse Poort’ had tried to reorganize to achieve more
self-organization, two hierarchical layers of managers were cut. In October 2016 they stated that they reorganized too harshly, and that they will reverse some of the measures that were taken (Arensbergen and Dohmen, 2016).
Zorggroep Noordwest-Veluwe is proud to self-organize their care teams that provide care at home (Huis aan Huis, 2015).
Care at home is a specific group in healthcare that faces problems with funding, the biggest corporation of homecare ‘TSN Thuiszorg’ threatens to go bankrupt. ‘Buurtzorg’ who states to have found a way of self-organizing that is extremely successful has developed a plan to save TSN from bankruptcy (Wester, 2016).
In an article of NRC handelsblad (Dekker, 2016) the Dutch IGZ (inspection for healthcare organizations) visited a healthcare centre for elderly people in Harmelen. They stated that many organizations are trying to self-organize. However, many attempts fail, according to de Winter this is because implementation is too rigorous and management disappears too
quickly. As Robert Prins states in his blog on LinkedIn (Prins, 2017) the first step in the process of self-organization needs to be the design of the organization and the second step is making sure that all people in the organization are involved and are positive about the change.
In the book ‘Nieuwerwets organiseren’ by Bruijn et al. (2014) 23 different organisations have been reviewed, to see how these organizations react to changes in the environment. They have combined their findings in six new organizational designs, with each a different focus. For
managing teams’ are used. This should not be confused with Coase’s (1937) theory on a firm’s coordination task, where firms need to coordinate their activities more efficient than the market. In this sense ‘zelfsturend’ could imply that teams set their own objectives without a central or common coordination. This is not the case, self-coordination or self-organization is the coordination of activities by a team in order to achieve a set objective or task, as stated in the mission and strategy of an organization.
17 instance, ‘Loslaten’; where all management is relieved of their duties and the professional is in charge. ‘Cultiveren’: to cultivate an informal style, with specific core values, related to a family. These organizations are all trying to cope and try to change their organizational design. Self-organization seems to be mostly related to ‘Loslaten’.
Based on the literature there seems to be no particular reason why organizations are trying to implement organization. In practice many organizations who try to implement self-organization fail. Why do self-organizations even try to implement this way of working and what is needed to be successful in this process? Which leads us to the following proposition;
- Proposition 3: The reason why organizations (try to) implement self-organization is critical for success of the implementation process. Cost reductions as a motive will not lead to successful implementation.
Evolution of organizational form
A lot of theories are written about why firms exist and what characteristics enable firms to solve the problems that can’t be solved in markets. Traditional economic theories are based on assumptions that explain why markets work effectively and in turn explain why some
transactions are better done inside a firm. Theories like the resource based view, transaction cost theory and agency theory have enabled us to take a closer look in the workings of a firm itself. However, there is still no solid explanation on why firms exist and how they should be designed.
Miles et al. (1997) have described the evolutional change in organizational forms from the perspective that organizations are constantly recombining their know-how in accordance with the resources available to the organization at a specific time. They describe the evolution of
18 specific organizational forms from the emergence of the divisional form to the emergence of the network organization.
Traditional organization designs seem to be increasingly insufficient to bring intangible assets to productivity. One reason for this friction is that knowledge appears to be the foundation for innovation and growth. This (tacit) knowledge resides in people and this makes organization designs that are based upon command and control and centralized planning conflict with what people need to grow and share their knowledge. This sharing of knowledge is only possible through interactions between knowledge workers (Strikwerda, 2017). Designs that are based on a hierarchical structure appear to have several pitfalls, for instance that it is only possible to transfer knowledge and information through the different layers in the organization, and this causes problems in the translation and in the end the accuracy of information transfer (Kurki and Wilenius, 2016). Coleman (1999) also mentions this development, the ever
growing connectedness of people creates opportunities for organizations to respond to specific customer needs. For self-organization to exist there has to be some form of organization to support interaction of knowledge, people need to be able to try new things and to take risks (Coleman, 1999).
Technological developments also affect the need for organizations to be flexible and adjust to these changes. But it is also a big driver of ‘unmet spiritual needs of people’ (Kurki and Wilenius, 2016). People today need space to fulfil needs on a more spiritual level. This links to symbolic interactionism, described by Blumer (1969), who theorizes that social phenomena should be investigated in their natural setting. He states that human beings react to situations after an individual process of ‘self-indication’, and not based on the position or social role that someone has in society. Culture or roles, for instance, are not as important as the
19 individuals, do not acknowledge the individual, or the needs of an individual. This also relates to the so-called fundamental attribution error (Ross, 1977), which is described as the
‘tendency to overestimate the impact of personal disposition and underestimate the impact of the situations in analysing the behaviours of others’. This implies that organizations need to change the systemic context first, before changes in behaviour of individuals can be
addressed.
New organizational forms
These developments ask for a new concept of organizing. This does not imply that the structure of an organization needs to change (Strikwerda, 2017). In fact, all forms of organizing in organizational history have built on the preceding organizing forms (Miles et al., 1997). Changing towards a new form of organization means that organizations, in the broadest sense, need to reconsider their way of working. The organizational form may remain, but it may serve as an infrastructure for professionals to share knowledge and to work on specific projects to effectively serve the needs of customers (Strikwerda, 2017). An M-form might still be suitable in a knowledge economy, it is the way the different internal and external systems work together that will be the foundation for success. Coleman (1999) writes that there is a need for a tight sharing of values, which ensures control but also intrinsic motivation of employees. Managers need to believe in abilities of employees and let go of hierarchical control systems. A focus on output enables self-control in employees
(empowered) and the success of an organization. ‘What effects rapid change is what people do with the tools they have.’ (Coleman, 1999) It is the role of the manager to build ‘trust, responsibility, and initiative.’
Miles et al. (1997) see a new form emerging, that relies (among other things) on self-organization. They call this form the ‘cellular form’, which is based on the idea of a living,
20 adaptive organization. A combination of cells makes it possible for an organization to acquire and distribute the know-how across the organization, which enables continuous innovation. The foundation of this form is based upon ‘combining entrepreneurship, self-organization, and member ownership in mutually reinforcing ways.’ This cellular form will create a higher level of utilization of know-how than any organizational form has done before.
Strikwerda (2012) mentions the emergence of a so-called ‘edge-organization’. Employees who are in direct contact with the customers or clients are in control of the decision making process (at the edge of the organization). To facilitate such an organization employees should have the clearance to be able to decide, this means a hierarchical way of working based on control and power does not match with the concept of an edge-organization. Access to information is an essential condition to enable employees to make the right decisions. A few steps are already mentioned to create an empowered workforce, among these requirements the role of managers is mentioned again.
So, in existing theory it is not really clear if the form or structure of an organization needs to change to facilitate self-organization. This leads us to proposition 4.
- Proposition 4: For self-organization to occur a fundamental change is needed in the structure of the organization.
When the theory speaks of utilizing the knowledge of professionals and motivating
employees, the role of the HR department in this change process might be a prominent one. Therefore the following proposition is formulated, to study if the HR department has a specific role to play.
- Proposition 5: Implementation of self-organization is successful when the HR department is responsible for the implementation process.
21 Role of leadership in self- organizing forms
In the process of self-organizing it can also be questioned how efficiently teams in an
organization can organize themselves. This might also affect the level of self-organization that can be achieved. Manz et al (1980) suggest that managerial control remains important in an organizational design of self-organization. This role might change to a more facilitating and coaching role in order to support an individual and a team to fulfil all the necessary
responsibilities.
Another perspective is described by Pearce et al. (2008), who look at leadership when it functions terribly, resulting in fraud, major scandals and corruption. They propose a form of ‘shared leadership’ to prevent these negatives. ‘Shared leadership’ basically means moving away from the traditional, centralized and vertical way of leadership that we know today. What is interesting is that they describe that to achieve shared leadership, it should be developed through top-down, empowering leaders and that the total workforce should be trained in certain leadership skills, instead of only training the management layers in the organization.
Strikwerda specifically (2017) mentions, in his article on how to implement end-to-end- processes effectively, the role of the CEO. The CEO is responsible for making a number of decisions with respect to the internal governance and systems needed. An example of what these decisions consist of is the design of every end-to-end-process, this process is explicitly funded and there should be only one person responsible for the performance of the end-to-end-process. The CEO is also responsible for the creation of the right conditions for employees to be successful. This asks for a role change of CEO’s, and this might lead to hesitation in this group to self-organize.
22 Uhl-Bien and Marion (2009) have a very interesting perspective on the role of leadership, which relates to the shared leadership style described by Pearce at al. (2008). Uhl-Bien and Marion (2009) propose a Complexity Leadership Theory (CLT), which recognizes the formal side and the informal side of organizational designs. Because most organizations are
organized bureaucratically, there is a formal (administrative) side and an informal (adaptive) side to an organization and to leadership. They state that the majority of management theory is based on the formal side and that critics say that this conflicts with the informal side. Uhl-Bien and Marion (2009) propose that by learning and using CLT the formal and the informal side should become entangled in the organization, and not only the appointed managers show types of informal leadership, but individuals or frontline professionals as well.
Based on these theories about leadership, the role of CEO and management needs to change. Furthermore, it seems to be an important condition for self-organization to succeed. This leads us to the following proposition;
- Proposition 6: In order for self-organization to be successful a role-change is being expected from CEO’s, top managers and staff members.
Rules and regulations affecting an organization
In this study research will be conducted in healthcare organizations in the Netherlands. The Dutch healthcare system is highly regulated and consists of tight control and quality systems. There seems to be an increasing need from different healthcare organizations to organize differently to answer to the needs of the clients and the rapidly changing environment. This environment is also an important factor, because it is affected by all the changes in
technology. More rules and regulations might have an opposite effect, and might paralyze organisations. A change in approach or concept of organizing might be the answer to this ever more pressing problem.
23 In society the role of the government is changing, this also applies to the Dutch government. One effect of this changing role is that citizens are organizing themselves to address social welfare issues (Nederhand, Bekkers & Voorberg, 2016). In this respect self-organization has a broader impact, not only will it change the way an organization organises itself, it might also change the way people think about how they can contribute individually. When care takers like nurses get their space to operate instead of strict rules and procedures opportunities will arise that were not foreseen yet (Houten, 2015).
Culture in the Netherlands
One can also question whether, from a cultural point of view, implementation attempts fail because of the existing culture in the Netherlands. Hofstede (1994) has researched the national culture of several countries, among which the Netherlands. He describes national cultures along five dimensions. For the Netherlands this means people favour a small ‘power distance’, and this tells us that hierarchy might be accepted, but only because it is needed for an organization to function. Employees want to be regarded as a professional and treated that way, the leader should be willing to listen to all opinions and be creative in finding the optimal solution. The second value that plays a role in culture is ‘collectivism versus individualism’, in the Netherlands people seem to be highly focused on the individual. The result is more important than the relationship and individuals have to look after themselves. ‘Masculinity’ in the national culture of the Netherlands is low, this means that the men and women in this culture are quite the same in expressing values and men don’t have to act assertively or competitive to proof themselves. The most important thing that is valued is the quality of life. ‘Uncertainty avoidance’ refers to the need for people to know the future. ‘Long term versus short term orientation’ needs no explanation. These last two values do score, in the Netherlands, somewhat in the middle. So, there is no outspoken long term or short term
24 orientation and there is no real issue with uncertainty avoidance. Hofstede (1994) states that the culture of a nation in the end affects the culture in organizations, and management styles should be adjusted to the needs of a particular culture. According to Hofstede (1994) for change in an organizational culture, which is also changing towards self-organization, it is necessary to have good leadership and support from the key players in the organization. Then you can change the structure and the controls of the organization. He therefore also mentions the role of leaders in change processes.
Summarizing, looking at the five dimensions of the national culture in the Netherlands one might suspect that there is enough flexibility to support a change towards self-organization. In fact organizations are already trying to implement this new form of organizing. The only value that might be a problem is ‘individualism’, in order to switch to self-organizing systems it is needed to not only look at your own wants and needs, but also to the wants and needs in a team and to keep the end goal of the organization in sight. On the other hand it might also be a good starting point to address people’s needs of professional space.
CEO, top management and staff functions
To address what is meant by the different functions in the research question, the following description per function is suitable. The CEO can be the chairman of the board, the general director or the head of an organization. Regardless of this job title, the main focus is on the person who is responsible for the organization as a whole.
Top management is the layer in the organization that has a direct link with the CEO and who is responsible for translating decisions from the CEO towards the other layers in the
organization.
Staff functions can be functions in for instance HR, finance, marketing. The most important distinction of this group is that they support the primary functions in the organization. They are not directly working on the product or with customers, but they support these functions.
25 In the articles by Strikwerda (2012, 2017) he mentions several possible administrative
measures that the CEO, management and staff can take to create so-called end-to-end
processes. These are for instance; creating a new organizational structure based on processes to facilitate an increase in value for the customer, clearly defined goals, positioning
‘resultaatverantwoordelijke’ teams in the internal governance of the organization, budget accountability linked to a specific end-to-end process, reporting and accountability based on the end-to-end processes, available and transparent management information, etcetera.
26 1.1 Research question, propositions and theoretical framework
Summarizing, self-organization does not seem to be a hype. It seems that self-organization is (a part of) a new organizational form that is emerging to address the complexity or the
developments in the environment of the organization. In the literature, so far, there is no clear definition of organization, and no clear path to reach an optimal form of
self-organization. What seems to be worthwhile to research is the role that the top layers in an organization play; CEO, top management and staff functions. These roles are mentioned several times in literature as being the roles that need to change, or even the pitfalls in successful implementation of self-organization. A few directions have been given in recent research what is asked of these roles, but it is unclear how they should handle this shift in governing an organization and how they perceive their own role in this process. That is why in this particular research the CEO, top management and staff functions of an organization are the level of analysis.
Research question
This research will be focused on the following question: What administrative measures do the CEO, top management and staff functions in healthcare have to take to effectively implement self-organization?
Sub questions:
What is self-organization?
Why do organizations want to implement self-organization?
What is needed for self-organization to be implemented effectively? What kind of administrative measures are there?
When is self-organization successfully implemented?
What is the role of the CEO, top management and staff members in implementation of self-organization?
27 Propositions
Based on the literature on self-organization, the research question and its’ sub questions the following propositions are formulated:
- Proposition 1: The most important aspects of self-organization are the focus on stimulating interaction of knowledge and empowering the professional (frontline employee).
- Proposition 2: Implementation of self-organization is successful when it leads to higher economic profits.
- Proposition 3: The reason why organizations (try to) implement self-organization is critical for success of the implementation process. Cost reductions as a motive will not lead to successful implementation.
- Proposition 4: For self-organization to occur a fundamental change is needed in the structure of the organization.
- Proposition 5: Implementation of self-organization is successful when the HR department is responsible for the implementation process.
- Proposition 6: In order for self-organization to be successful a role-change is being expected from CEO’s, top managers and staff members.
Research objectives
The objective of this research is to explore the reasons why organisations want to implement self-organization and to develop an explanatory theory on which aspects influence the change towards self-organization. This research’ main focus is to contribute to establish criteria when implementation of self-organization will be successful, and in particular which role the CEO, managers and staff have to play in this implementation process. The perspectives of the different groups that will be interviewed will enable to create a sufficient set of criteria.
28 IV: CEO
decision for self-organization DV: Level of self-organization Mediating variables: - Administrative measures - Motive for implementation of self-organization
- Role of CEO/ top
management/ staff (trust) - Organizational design (structure) - Empowerment frontline professional - Knowledge Moderating variables: - Rules and regulations - Culture
By answering the research question some light might be shed on what the phenomenon of self-organization contributes to the organization’s sustainable competitive advantage, and will support new attempts by organizations to implement self-organization successfully.
Theoretical framework
29
2. Data and Method
2.1 Research design
Research philosophy and methods
The researcher views the nature of reality not as a static and exact science, but as socially constructed, it depends on the situation and the actors involved how reality is created. It is therefore also likely to change. Knowledge of actors might increase and this will affect the role actors’ play in creating reality. This stance is relevant to the research topic that is proposed, because it means the researcher will perform in depth research in motivations and attitudes towards implementation of self-organization.
To answer the research question What administrative measures do the CEO, top management and staff functions in healthcare have to take to effectively implement self-organization? the research design will therefore consist mainly on qualitative research. To answer this question and research the phenomenon of self-organization it is necessary to study the effect of the different functions in organizational settings where self-organization is being implemented or where it already is implemented. In order to create a real understanding of the interplay between the actors involved in self-organization research data needs to be studied
interpretively (Saunders et al., 2012). Being aware of values and judgements on these values is important during interpretation of results.
This research explores the effect of the top layers in the organization on the implementation process of organization. A lot has been written about organizational designs and on self-organization, but what influences a successful implementation of self-organization is still unclear. However, in several previous studies it is mentioned that the role of managers or leadership in itself needs to be researched further and that it even might be a reason that
30 implementation fails. That is the reason why this research will focus on this particular group in organizations.
For this research academic literature will be consulted to explore the topic further and to lay a foundation of existing theory. This will also ensure that the answer to the research question will be relevant and usable for practice. After the literature search, data will be collected primarily through case studies in three different healthcare organizations. The researcher also has access to survey data regarding views of employees on implementation of
self-organization in a healthcare self-organization. So, this data and the data gathered in case studies will be used to answer the research question. This mixed form of data gathering or
‘triangulation’ is suitable, because to answer the research question a deep understanding is needed to explore what the top layer of an organization specifically has to do in the
implementation process. The survey and the interviews will also be pilot tested.
2.2 Data collection Literature study
A first exploratory search in academic literature provides a better understanding of the topic of self-organization and it provides the researcher with specific actual knowledge on the topic. This ensures that the research is addressing a gap in the literature and that the outcomes of this research will be usable for practice. After researching academic literature on the topic, self-organization does not seem to be a hype (a posteriori). What seems to be worthwhile to
research is the role that the top layers in an organization play; CEO, top management and staff functions. These roles are mentioned several times in literature as being the roles that need to change, or even the pitfalls in successful implementation of self-organization. A few
directions have been given in recent research what is asked of these roles, but it is unclear how they should handle this shift in governing an organization and how they perceive their
31 own role in this process. That is why in this particular research the CEO, top management and staff functions of an organization are the level of analysis. The interviews will therefore be held with CEO, top management and staff functions.
Surveys
To prevent that this research will be biased by only researching the views of the functions in the top layers of the organization, surveys will be distributed in one healthcare organization in the Netherlands. This organization has already been in contact with the phenomenon of organization and is discussing with specific groups of employees how to implement self-organization. The surveys will be designed to answer questions from the perspective of these employees, because these employees are able to answer the research question. They have been thinking about self-organization and what they need to make self-organization succesful prior to this research. These groups represent different teams, with employees who perform
different jobs with different skill levels.
The surveys will for instance involve questions about the needs of an employee in the implementation process and what the role of the CEO, top managers and staff functions contributes to the implementation process (or maybe that it doesn’t contribute at all). The reason for involving the perspective of employees is that this research mainly focuses on the top layers of the organization. What these functions actually do in the process of
implementation has an effect on employees who are working in the primary process. So, to be able to structure a case study with critical interview questions for the functions in the top layer of organizations it is important to have a sense of the needs of employees.
To ensure the quality of the surveys the questions asked will be pilot tested by a psychologist, quality controller and an employee. This will improve the construct validity of the survey.
32 The surveys will be distributed through web-based questionnaire software familiar to the employees, www.mijnverbetermeter.nl.
The results of the survey will be uploaded in the specific software program for analysing qualitative data, Nvivo. The data that was gathered will be coded and analysed through thematic analysis. This means that the results of the surveys will be analysed individually and sentence by sentence, in order for answers of participants to be summarised in main themes or codes. These codes will be comprised in several main themes or ‘nodes’, that consist of multiple subthemes. This initial codebook will be used to sharpen the questions in the semi structured interviews and for further analysis of the data from the interviews. In this way a hierarchy of themes will be used to compare the results of the survey with the results of the interviews.
Case study
When the results of the surveys are gathered an initial understanding of the main themes concerning the role of the top functions in the organization in relation to self organization is established, further research will be conducted through case studies. Based on the outcomes of the survey semi-structured interviews will be held, which are focused because of the input of the surveys. The choice for a case study design is partly based on the researchers’ philosophy as described above, because a case study takes contextual aspects into account. And it is the belief of the researcher that all kinds of situational factors can influence the phenomenon of self- organization and it is not possible to separate real life context from this phenomenon (Yin, 2013). This makes a case study design most suitable for further research.
Further in depth research will be conducted through case studies of three different healthcare organizations in the Netherlands. The researcher will be able to compare outcomes of the
33 interviews in the different organisations, and it is expected that the researcher will be able to find differences and similarities in implementation of self-organization.
The top layer of the organizations will be interviewed, this indicates a holistic approach. Reason for this approach is that the phenomenon of self- organization is not well defined and it is complex, a lot of things can affect self-organization and its implementation process. The choice for these organizations will be based on their experience with implementation of self-organization. The reason for chosing three different organizations is because to answer the research question ‘What administrative measures do the CEO, top management and staff functions in healthcare have to take to effectively implement self-organization?’ researching one organization will be too narrow. By choosing three different organizations in different branches of healthcare and who vary in levels of self-organization the researcher will be able to answer the research question more accurately.
Due to time constraints the main focus will be on semi structured interviews in these
healthcare organizations. Semi- structured interviews make it possible to compare the results amongst the different interviews, but also enables further creation of understanding of the topic. This is necesarry to interpret the results based on nuanced answers. The three healthcare organizations will be asked to participate in this research process based on their ability to help answer the research question (based on purposive sampling).
The results of the interviews will be analysed the same way as the results of the survey are analysed. This will ensure that the data of the survey and the data of the interviews is
comparable. The main themes that were discovered in the survey and translated in a codebook will also be used in the analysis of the interviews. When new themes are discerned these new themes will be included in the codebook. This ensures that the rich data provided by the
34 interviewees can be used in this research. The thematic analysis is therefore based on an inductive and deductive approach.
By comparing the outcomes of the different interviews with the outcomes of the survey, the research question will be answered and it will provide insight into the circumstances in which self-organization is a good choice to implement.
2.2.1 The three organizations
All of the organizations in the case study are care facilities, who provide care in the Netherlands. The client groups being for instance senior, chronically ill and physical or mentally limited people. They provide care at home, or in their own facilities. They range from small to large organizations related to their numbers of personnel. Two of the organizations who were enthusiastic about participating in this research are Frion and
IJsselheem, located in Zwolle. The third organization was also enthusiastic to participate, but wishes to remain anonymous. All the organizations vary in their experience with
self-organization, but they are all working on the change towards self-organization. Interviewees were working as CEO, manager or in a staff function.
2.3 Quality paradigms Confidence
The outcomes of this research are not yet known, this simple fact also confirms that the researcher is building this research on a legitimate research process. Every person has his or her own preferences in how we work together professionally, but whether self-organization is the way to effectively work together is not answered yet.
The research process is built upon several theories on how to create a coherent framework in researching business and social dilemmas (Saunders and Lewis, 2012; Yin 2013). Objectivity
35 plays a major role in stating the level of confidence that the research is legitimate. In the next paragraphs the relevance, validity, generalizability and reliability are addressed.
Relevance
A lot of organizations in healthcare are trying to self-organize, and a lot of newspapers, articles and blogs are reporting this fact (Arensbergen and Dohmen, 2016; Huis aan Huis, 2015; Wester, 2016; Dekker, 2016; Prins, 2017).
What is described above at the section ‘literature study’ describes the societal and the scientific relevance further.
Validity
Construct validity
Validity can be addressed in different aspects, in which construct validity is one aspect. Construct validity is about the certainty with which the researcher can state that the construct or research design actually measures what it is supposed to measure.
The data is collected through a mixed form of data gathering. This ‘triangulation’ is suitable to create a deep understanding on the topic, as was stated in the research philosophy. This also ensures that the construct that the researcher wants to measure is actually measured.
To ensure the quality of the survey and the interviews the questions asked will be pilot tested by a psychologist, quality controller and an employee. The survey and the structure of the interview is adapted after this pilot test. This will improve the construct validity of the survey.
36 Internal validity
Another aspect of validity is internal validity, this addresses the quality of the research framework in the cause and effect relationships found during the research process, and by considering how to prevent false interpretation of answers by respondents.
The survey and the interviews are prepared by describing main themes that will address the research question. These were translated in sub questions and propositions, which were the foundation for the questions in the survey and the semi- structured interviews. The questions used are impartial, this makes it possible for the researcher to interview proponents and opponents of self-organization and it makes sure that no bias by the researcher is transferred to the interviewee. Semi- structured interviews make it possible to compare the results amongst the different interviews, but also enables further creation of understanding of the topic. By using follow-up questions during the interviews the true meaning and interpretation of the interviewee is checked. This is necesarry to interpret the results based on nuanced answers.
The interviews are held in this cross-sectional study by the researcher, and are conducted in a face-to-face setting. Before starting the interview the researcher explains the purpose of this research and emphasises the interviewee to express their own opinion. The researcher also defines the concept of self-organization, different concepts are used in practice. The different concepts are however not the focus of this research, it is the implementation process.
Anonymity will be guaranteed, only the results of the interviews combined will be used in the conclusions of this research. Pilot testing also ensures internal validity.
37 All the interviews are recorded and transcribed afterwards. This ensures that the actual
reactions of respondents are used, and by using all the data gathered in the interviews a nuanced and real understanding of the interplay between the actors involved in
self-organization can be studied interpretively (Saunders et al., 2012). By triangulating this data with existing literature and the views of employees in the surveys, values and judgements of the researcher can be minimized during interpretation of results.
Generalizability
To ensure that this research will be as generalizable as possible three different organizations in healthcare were asked to participate. The organizations differ in size, clients and
organizational design or hierarchy. They also differ in level of implementation of self-organization, they vary from starting with implementation of self-self-organization, having reached a high level of organization and one department of an organization were self-organization was being viewed as unsuccesfull at that time. By choosing self-organizations who are all familiar with the subject self-organization, but who are in different phases of
implementation, an objective approach is ensured. This also ensures that the research question can be answered, views of what is needed for succesfull implementation might differ in the various stages of implementation. Because of the differences in the population it is expected that data saturation will be reached by the time the third organization will be interviewed.
The choice for healthcare organizations in the Netherlands is made because in the recent years the phenomenon of self-organization is being implemented by a lot of these organizations. Another reason is more practical, and involves the ability of the researcher to get these organizations to cooperate. A research constraint is that the outcomes might not be generalizable beyond healthcare organizations.
38 Reliability
Reliability in multiple case studies is realized when repeated measurements provide the same results. Because the research methods, data collection and analysis are described in detail this research can be repeated, and will most likely produce the same results.
2.4 Data analysis
Like already described in the previous text concerning the survey and the case study, the results of the survey and the interviews were analysed using the analytic stages of grounded theory. Theoretical sampling combined with a constant comparative method was used to analyze the data (Boeije, 2002).
The data of the survey, was translated in an initial codebook (based on open coding). This codebook has served as a basis to compare the data from the survey with the data from the interviews. So, the data from the interviews was compared and added in the codebook during the process of interviewing. No new information or themes came up in the last interviews, and therefore data saturation was reached.
In the process of creating the codebook it became clear that by adjusting the questions for the interviews according to results of the survey additional information was gathered. It made that some questions were addressed in the interview, but not in the surveys, and new insights could be translated into codes. This ensured a richer data set, with views from employees and interviewees who’ve worked in organizations with self-organization.
The researcher also expected differences between the three organizations. So, the next step was to compare the results from the different organizations. Apparently, there was no significant difference to be found between the organizations. It appeared that every
39 interviewee contributed bits to complete the image of the puzzle, but views were not that different from each other. The only thing that was found was that interviewees have different ways of describing topics.
The researcher combined all the data of the survey and the data of the interviews in the codebook. This data was analysed further in the next step of grounded theory, axial coding. The open codes or themes were related to subcategories; causal conditions, phenomenon, context, intervening conditions, strategies, and consequences, based on the model by Corbin and Strauss (1990). This model was chosen, because it fits well with the initial theoretical model, the collected data and the research question and propositions that need to be answered.
The last coding stage, selective coding, was used to filter the combined data from the survey and the interviews even further. A hierarchy was made, themes that for instance were
mentioned several times by interviewees or participants of the survey were identified. Also themes that seemed to be of importance to answer the research question were taken into account. These subcategories were summarized and visualized in the self-organization model, see figure 2. (Corbin & Strauss, 1990)
These subcategories in the model were then related to the literature in the discussion chapter. This triangulation of data will ensure that the research question will be answered and it will provide insight into the circumstances in which self-organization is a good choice to
40
3. Results
This research focused on the question What administrative measures do the CEO, top management and staff functions in healthcare have to take to effectively implement self-organization? The results of the survey and the interviews3 in three different organizations will be brought together in this chapter. As described in the data and method chapter the analysis of the results is based on the analytic stages of grounded theory and on a constant comparing method.
Firstly the researcher will describe the conditions for self-organization to arise, then a further explanation of what self-organization really is will be addressed. Further attention will be given to what kind of aspects influence the phenomenon of self-organization and the quality of the implementation process. The next step is to zoom in on the way that this
implementation process is constructed and finally the results of the survey and the interviews will shed light on the consequences of implementing self-organization. Following these stages the following model (Corbin & Strauss, 1990) was constructed:
3 Participants of the survey will be addressed as participants or employees and the CEO, management and staff interviewees will be addressed simply as interviewees, unless in the context mention of which function is being quoted is needed or useful.
41 Figure 2 Self-organization model
3.1 Causal Conditions: Cause for self-organization to arise
Why do a lot of organizations start with organization, whether they call it self-organization, result responsible teams, or small-scaled teams? Why do they do it?
3.1.1 Conviction or belief
What seems to be the first aspect according to interviewees is a sort of conviction or belief in the topic. To start a change towards the phenomena of self- organization a strong conviction or belief in this concept is needed. Interviewees say that self-organization is what makes working in organizations attractive and meaningful. “You are no longer a herd animal, where the leader tells you what to do and how to do it, and afterwards you have to justify why you did it like that.” It is a conviction or belief of how people want to work that fits best with their human image. One interviewee even described that self-organization relates to human nature:
42 “When we look at how human nature is constructed, or how trees, plants or our bodies are constructed, there are a lot of self-organizing principles to be found, with limitations of course. So basically it is quite illogical to work in a different fashion, when human nature is built this way.”
Interviewees state that when organizations start with self-organization it is important to be convinced that this will be the dominant way of working in the future. “Self-organizing principles are principles of this century and the old ones were from the 1800- 1900 hundred’s and subsequently expanded on that idea.” You have to believe in the concept in order to start, so in other words you have to be intrinsically motivated. “Only do it when you truly believe in self-organization and find your own way to do it. So follow your own path. Of course you can learn from others, but it should fit your own organization.” This shows that the interviewees in general all feel that you should belief in the concept before starting with self-organization, the majority even says that if you don’t truly believe in the concept all attempts will fail: “If you only do it, because others in your environment are doing it, or if you think it should be something like that, it isn’t successful.”
What is important in this conviction or belief is that the ultimate goal is to support the customer. “The old way of working did not result in better quality of care, better decisions, truly focusing on the needs of the customer, etc. We are slowly figuring out that when you appeal to the consciousness of the employee, expect that he or she is aware of their own professionalism and ask to act on it, that’s what makes the difference.” This is an important part of believing in the concept of self-organization, because all interviewees and employees have mentioned that by changing the way of working not only their own role will change, but they expect that even the customer or client satisfaction will go up. One of the employees
