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Management Control Systems
Notes 3. Key success factors: A key success factor for many non-profit institutions is the number of
volunteers that it is able to attract and the number of volunteers; it is able to train at
various levels of quality.
Another crucial variable is fund development, since most rely heavily on the support of
the people, especially the volunteers, for contributions to support its paid staff and its
programme.
Another critical variable is the ability to attract the quantity and quality of board member
it needs.
4. Performance measures: Performance measures should be established for each critical success
factor for each goal. Reports on these performance measures should be prepared and
distributed to those responsible for their management.
We should attempt to quantify as many measurements as possible. Some are quite easy to
quantify.
Example: The number of patients attended to by the physician during a specified period
of time.
Others (example: the quality of care) are not so easy to measure but are nevertheless
critical. But even these critical variables that are not easily quantified may have quantitative
surrogates.
5. Infrastructure: Non-profits tend to have flatter organizational structures. Organisations
tend to be functional and the functions are headed by professionals (e.g. doctors, social
workers, ministers, professions). Typical responsibility centres in a child care agency are
social work, operations, administration and education. They tend to be cost centres unless
revenue is generated, in which case they are either revenue centres or contribution centres.
The modern hospital has a dual organisation structure, one for the medical side of the
institution and the other for administrative services. The medical side is dominated by
physicians and a broad range of technical and support staff. Administrative services include
housekeeping, food service, maintenance, billing and accounting. A good deal of autonomy
is usually granted to the hospital departments headed by professionals such as: nursing,
laboratory, pathology, radiology, surgery and so on. Most of these departments are cost
centres where quality of care and overall cost performance is the key performance measures.
Many hospitals have created SBUs for identifiable segments of the hospital such as
outpatient surgery, obstetrics, pharmacy, emergency room, physical medicine, etc. which
are profit centers and are established for strategic planning and implementation purposes.
6. Management style and culture: The small and mid-sized ones tend to take on the personality
traits of the executive director and if he is a professional, there is a tendency to place
primary attention upon his area of interest or training with little regard for management.
In case of hospital, dual structure results in an adversarial but co-dependent style.
!
Caution To manage the institution effectively, control must be maintained on the medical
side of the organisation.
A general theme that seems to be pervasive in all departments of hospitals is that they are
delivering health care of the highest quality possible.
248 LOVELY PROFESSIONAL UNIVERSITY