The use of decision analysis for organizational design: reorganizing a community hospital

Organizational design is presented as a decision process, with specific structures seen as providing alternative choices. To illustrate this, the authors present the case of a major metropolitan hospital that used the process to coordinate service delivery (nursing care versus patient care) and service focus (product oriented versus function oriented). Through interviews with more than 40 hospital administrators and staff, the authors created a list of 20 attributes, and used simple multi-attribute utility analysis to generate six design alternatives. The decision makers unanimously chose one alternative, even though potential for significant conflict existed because of differing values and objectives. The authors find decision analytic techniques useful for both the problem formulation and for generating and evaluating structural alternatives, and conclude that in this case consensus was facilitated by the decision process used.