Pharmacy management

Professor Tariq Alasdai

Wasit university ,IRAQ

introduction

The world of pharmacy management is changing

rapidly. The myriad changes in the health care system,

including managed care, long-term care, and assisted

living facilities, require students of pharmacy to have a

broad understanding of how the profession fits in the

current and future health care delivery systems. Along

with health care system changes, the traditional

concepts of leadership, mentoring, organizational

design, and behavior have also changed in pharmacy.

The conventional notion of a pharmacist working in a

retail or hospital pharmacy is no longer applicable:

pharmacists are assuming a greater responsibility for

the outcomes of patients by using newer technologies,

such as electronic prescribing, robotics, and

automation, coupled with more direct patient care

activity. In addition, today’s consumers are more

interested in self-management, fueled by the Internet

and 24/ 7 information availability. This age of

consumerism clearly poses new challenges to

.pharmacists of the future

 Managing Pharmacy Practice

The practice of management is key to the successful

performance of professional responsibilities. Managing

people, information, and systems allows the creation

of an environment suitable to carry out the mission of

providing pharmaceutical care. Often considered a

second-rate subject by pharmacists, management is

considered by students to be less important than

traditional topics such as pharmacology or

pharmacotherapeutics. However, without the

organizational structures and wherewithal of

management, it would not be possible to carry out

professional duties. Given that, this text is organized to

help students understand how and where

management fits in their daily lives as practicing

pharmacists. Management theories The theory of

management takes a variety of forms. Classical

management deals with the traditional five

responsibilities of a manager: planning, organizing,

directing, coordinating, and controlling. This is coupled

with the science of management, which deals with

studying the impact of people and systems on

productivity, or output. In pharmacy, this typically

involves studying how to minimize waiting times for

customers or to increase the number of prescriptions

processed without increasing staff. Behavioral

management, in contrast, deals with organizational

and individual responses to situations. Instead of

considering workers as machines and attempting to

improve productivity through improving processes,

behavioral management looks at environmental,

interpersonal, and group interactions and their impacts

on productivity. Systems management involves taking

a holistic approach to all aspects involved in the

process of producing a product or a service. This theory

not only looks at processes and human or

environmental influences but also focuses on

interactions and how they affect the organization. The

different management theories are discussed in this

chapter, and the concept of systems theory is further

.addressed in

Management skills Managers

must possess specific skills in order to effectively

manage people, systems, and processes. These skills

are technical, interpersonal, and conceptual. Technical

skills relate to a manager’s knowledge of the day-to-

day operations of the organization. For example, a

pharmacist has the technical skills necessary to process

a prescription or make an intravenous solution.

However, in the course of the day, the pharmacist also

 needs interpersonal skills to communicate with

patients regarding how the medication should be used,

with technicians on how best to prepare the

medication, or with physicians and nurses regarding

drug therapy. Lastly, pharmacists must be able to

conceptualize their roles within the entire health care

system. Pharmacy is but one part of how patient care is

delivered. For example, a director of pharmacy within a

hospital must understand, conceptually, how the 0:

Introduction to management

pharmacy department integrates with other 3

departments in the complex operation of a hospital. As

a pharmacist’s career progresses, the percentage of

time spent on technical, interpersonal, and conceptual

skills changes. There is a need for growth in the

interpersonal and conceptual skills, while the time

needed for technical skills decreases (Figure 1.1).

Classical theory of management The process of

management Henri Fayol believed that management

was a process consisting of five different functions. He

saw a manager’s job to include the processes of

planning, organizing, directing, coordinating, and

controlling. These five functions are part of classical

management theory and are at present important

components in the daily functions of a manager.

Planning The planning process is designed to help the

organization minimize uncertainty in the future.

Planning helps determine future success as well as

anticipate potential pitfalls. Planning also helps to

maximize efficiency. When an organization

understands where resources, people, and money are

to be deployed, it can make the best use of them to

accomplish its goals. Planning includes considering

monthly as well as annual budgets and anticipated

profits. This involves recognizing the potential revenue

an organization expects at that point of time and in the

future, as well as expenses associated with current and

future operations. Along with the budgeting process,

planning also entails identifying and preparing for the

appropriate mix of staff (pharmacists, technicians,

ancillary personnel) and the hours of operation of the

current and future pharmacy. Figure 1.1 Manager skill

changes during career. Time Technical Conceptual

Percent of Daily Activities Interpersonal

B&IP3DJH7XHVGD\)HEUXDU\Managing Pharmacy

Practice A manager engages in several types of

planning on a daily basis. First, strategic planning is the

process of charting the course for the organization.

This type of planning considers the strengths and

weaknesses of the organization in light of the

opportunities and threats that the organization may

face in the future. Typically, strategic planning

attempts to plan three, five, or ten years into the

future. Once the overall direction of the organization is

planned through this process, tactical planning — plans

that carry out the strategic plan — occurs. Typically,

these plans come in the form of long-term objectives,

which are measurable achievements by which the

organization and all its members can benchmark

progress. For example, a retail pharmacy’s strategic

plan may include an initiative to become a leader in

diabetes care within the next three years. To

accomplish this plan, long-term objectives are needed

to support the initiative. These objectives could include

having all pharmacist-certified diabetes disease

managers, constructing a patient counseling area

supporting patient education, and redesigning the

work flow to allow pharmacists to perform this

function. Short-term planning involves planning for

activities within the upcoming year or sooner. Typical

short-term objectives include determining hours of

operation, marketing plans, and monthly and annual

budgets. The process of planning, in particular strategic

planning, incorporates the steps listed in Table 1.1.

Organizing Organizing is the second function of a

manager. It encompasses assigning responsibilities to

employees and determining how and when things are

to be accomplished. One of the primary organizing

functions is to determine the organizational chart. This

chapter reviews briefly some basic organizational

theories; the ins and outs of organizational charts are

discussed in greater detail in Chapter 3. Most

organizations today are based on the scientific

management theory, yielding the bureaucratic model.

The bureaucracy is the typical organizational structure,

which is founded on the principles of logic, order, and

legitimate authority. The characteristics of a

bureaucratic organization include a clear division of

labor, job specialization, a hierarchy of authority

implemented Table 1.1 Steps in the Process of Planning

• Assess the situation. • Determine the organization’s

strengths. weaknesses. threats. opportunities. •

Review (or develop) the organization’s mission. •

Determine the vision for the organization. • Develop

objectives in concert with the mission and vision. •

Develop implementation plans through measurable

objectives, budgets, schedules, and marketing.

B&IP3DJH7XHVGD\)HEUXDU\$0 Chapter one:

Introduction to management 5 through a system of

formal policies and procedures, fairness in applying

rules, and a career ladder by which individuals have

the opportunity for promotion based on merit and

accomplishments within the organization. Bureaucratic

organizations are typically considered mechanistic in

nature. Modern theories of organizations suggest that

one organizational design is insufficient and that

flexibility in organizational design is important. There

should be little hierarchy, or, if it does exist, it should

be fluid. There should also be fewer policies and

procedures and more overlap in job responsibilities.

This flexibility is characteristic of organic structures and

considers the size of the organization, its purpose and

function within society, and important external

variables (e.g., market forces) that may influence the

organization. Both bureaucratic and organic

organizations, with examples, are further discussed in

Chapter 3. Directing One of the most important

functions of a manager is directing — leading,

delegating, and motivating employees to accomplish

their jobs. This function relies primarily on the

interpersonal skills of a manager because directing

involves dealing with people. Further, this function

includes recruiting and retaining employees. How a

manager interacts with employees, or prospective

employees, sets the tone for the culture of an

organization. Related to this is the concept of power

within an organization. Various organizational

structures lend themselves to granting more orless

authority to an individual manager, but how the

manager uses that power is key in directing employees

to carry out job responsibilities. Chapter 4 discusses in

more detail power and its relationship to

organizational design and authority. One of the

primary tasks in the directing function is issuing orders

or directives to employees. What is to be ordered

stems from the scientific aspect of management and

how it is to be ordered is the art of management. One

can directly give orders, or one can delegate the

authority to accomplish a task to a subordinate as a

means of directing. The risk of delegating is that the

job may not be accomplished exactly as the manager

expected — sometimes the result is worse than

expected and sometimes it is better than expected. For

delegation to operate effectively, the manager must

consider how to motivate and lead the employee.

These concepts are further deliberated in Chapter 5.

Coordinating Synchronizing activities is the hallmark of

coordination. Within a department, many functions

take place simultaneously or in sequence to accomplish

an objective. The function of the manager in this

respect is to bring these activities together in an

efficient and effective manner to produce the desired

output. Coordinating activities include corrective

actions, in which adjustments to a process need to be

made to bring about the outcome; preventative

actions, which prevent problems from occurring; and

B&IP3DJH7XHVGD\)HEUXDU\$0 6 Managing Pharmacy

Practice promotive actions, in which relationships are

developed within and among departments and

personnel. A key aspect of the coordinating function is

managing conflict. Conflict arises on a daily basis in

organizations. Not all conflict is bad. At times, conflict

is a means of identifying problems and presents an

opportunity to improve. However, poorly managed

conflict can have serious consequences for employee

morale and customer satisfaction. One way to manage

conflict is using teams or committees to identify and

resolve problems between an organization’s units.

Chapter 10 discusses further means of managing

conflict. Controlling The controlling function of a

manager is regulatory in nature, by which the manager

assures that the functions of the department are

progressing in accordance with predefined plans. The

manager reviews the plans developed, determines the

performance measures needed to assure progress

toward the goal, compares the results of these

measures with the standards set in the plans, and

attempts to make adjustments, through one of the

other functions, to ensure congruency with the desired

outcome. The idea of management control can be

considered in a variety of settings. For example, the

manager compares the actual performance of a system

to the planned performance, and if there is a mismatch

takes corrective action so that the actual performance

meets the planned performance. Depending on what

the manager wants to control, a variety of control

devices can be used, such as budget reports,

performance appraisals, or opinion polls. These varied

devices provide a measure of performance — profits or

expenses through budget reports; productivity of

workers through performance appraisals; and

consumer satisfaction through opinion polls. Several of

these control devices are discussed in later chapters.

The science of management (aka Taylorism) Until the

early 1900s, managers used intuition and past

experiences to manage people and processes.

However, F.W. Taylor revolutionized the process of

management through his publication of “Scientific

Management” in 1911. In his proposal, Taylor suggests

that workers underperform primarily because of how

work is organized and how it is supervised and directed

by management. Taylor taught that there is only one

method of work that maximizes efficiency, “and this

one best method and best implementation can only be

discovered or developed through scientific study and

analysis.” The main thrust of his treatise focuses on

breaking tasks down into smaller, repetitive activities

that can be accomplished by well-trained workers.

These tasks should be standardized and placed in the

most efficient order that would take the least amount

of time to produce the desired output. Lastly, workers

should be motivated to produce more through a

system of rewards based on productivity and output.

This theory led to the development of the assembly

line process used within many organizations today.

B&IP3DJH7XHVGD\)HEUXDU\$0 Chapter one:

Introduction to management 7 Behavioral theory of

management Also known as human relations theory,

behavioral theory developed as a consequence of the

application of the scientific theory. In the late 1920s,

Elton Mayo conducted individual productivity

experiments at the Hawthorne Works plant of the

Western Electric Company (Reshef, Elton Mayo & the

Human Relations Movement). By varying

environmental conditions such as lighting, rest breaks,

and lengths of workdays, Mayo attempted to

determine which conditions were conducive to the

most efficient productivity. The experiments failed to

determine which conditions were best because

productivity improved in all conditions. Later studies

showed that group dynamics influenced the output;

that is, when coworkers put pressure on others to

decrease or increase output, the group norm took

precedence. Further, when supervisors were watching

workers or when individuals were singled out to

perform tasks at a higher level, productivity improved.

This “Hawthorne effect” demonstrated that

productivity is influenced by the situation and not

necessarily by the rewards or conditions of the job.

These findings led to the development of Douglas

McGregor’s Theory X and Theory Y management.

Theory X, a basic assumption of bureaucratic

organizations, assumes that people inherently dislike

work, must be coerced and threatened to do the job,

avoid responsibility, and have few career ambitions.

Theory Y, in contrast, looks at workers as individuals

willing to work and accept responsibility and as

capable of self-direction and control. It also considers

that the expenditure of mental and physical energy at

work is the same as at play. When managers subscribe

to either of McGregor’s theories, the Hawthorne effect

comes into play, thus creating a self-fulfiling prophecy.

If a manager believes that workers must be directed

and coerced into performing duties, then the workers

will conform to those expectations. On the other hand,

if a manager assumes a Theory Y stance, then the

workers will also respond accordingly. Further

investigations stemming from the psychological

literature surround the motivational aspects of

management. Abraham Maslow (1943) developed the

theory of human needs and helped spur an abundance

of thoughts around motivation and work productivity.

His theory focuses on two basic principles: a satisfied

need is not a motivator and the complexity of needs

increases as prior ones are satisfied, i.e., needs change.

Maslow identified five basic needs of all humans:

physiologic, safety, social, esteem, and self-

actualization. His theory suggests that as physiologic

needs are satisfied (e.g., food and water), safety needs

become the primary motivators for individuals. As

these needs are satisfied, social needs take

precedence. It makes sense that managers should help

employees satisfy needs and remove barriers to

employee self-fulfillment. All this must be considered

within the context of the organization and an

understanding of other motivational factors. Chapter 5

discusses how to use this theory and others derived

from the human relations management movement.

B&IP3DJH7XHVGD\)HEUXDU\$0 8 Managing Pharmacy

Practice Systems theory of management Systems

theory provides a model in which a manager can

understand the interactions among various

components of an organization. In contrast to scientific

management which analyzes processes by breaking

them into smaller parts, systems theory contends that

the product of a system is due to the interactions of its

parts — if the parts are separated, the system no

longer produces the desired output. Systems theory

takes a holistic approach instead of an analytical

approach to better understand the factors affecting the

desired output. If one of the components of the system

falters, then the desired output is not achieved. A good

manager understands both the task-oriented processes

as well as the behavioral aspects that affect

production. Systems in pharmacy management involve

people, drug products, information, and money. All

these factors are related to one another in some way;

and the care delivered by pharmacists is in some way

affected by the behaviors or actions of each system

and each system affects the behaviors and actions of

others. Further, the classical theory of management, in

terms of the functions, can be depicted as an

interrelated system (Figure 1.2). The concept of

systems theory is further discussed in Chapter 2.

Conclusion The theories of management form the

foundation for our workforce today. Pharmacy is a

complex series of technical, interpersonal, and

conceptually integrated processes in which drugs are

produced and distributed, and information regarding

proper use and monitoring is key to the success. As a

basis for understanding how managers should

function, one can look at the classical theory of

management, in which the day-to-day and long-term

operations of a pharmacy can be planned, organized,

directed, coordinated, and controlled. The subsystem

of drug dispensing can be viewed in terms of the

scientific theory of management, in which processes

are broken down into discrete functional tasks that

could be performed by robots or automated dispensing

devices and overseen by pharmacists and technicians.

The art of leading and motivating pharmacists and

technicians is embodied within the b