System characteristics that contribute to dynamic complexity.
Describe how the following example illustrates one or more of the system characteristics that contribute to dynamic complexity.
Describe the influence of dynamic complexity and system relationships on managerial decision-making.
Example:
Medical Associates is a for-profit medical group of 40 physicians that operates two facilities and offers services in several medical specialties, including cardiology; ear, nose and throat; family medicine; gastroenterology; general surgery; pediatrics; and obstetrics and gynecology. Medical Associates is open six days a week in each location from 8:00am until 6:00pm. Plans are being developed to extend its hours to 9:00pm two days a week. For several years Medical Associates discounted its listed fees by 3 percent to 5 percent for its managed care contracts, but a few years ago, it had to accept larger discounts to remain in the networks of health plans.
Lower reimbursement led Medical Associates to change its staffing from relying solely on registered nurses (RNs) to hiring medical assistants (MAs) as well. Currently, all physicians assigned to primary care services are assigned one RN or MA to assist with patient care. Physicians assigned to surgery are assigned one RN for every two physicians. As RNs retire or reassign, they have been replaced with MAs. On five recent occasions, when an RN assigned to a senior physician resigned, the senior physician demanded that the RN assigned to a junior physician be reassigned to him and that a new MA be hired to fill the vacancy with the junior physician. This ad hoc system of job switching has subsequent resignation of two RNs who did not want to be reassigned....Confusion exists around staff reporting relationships and who has the authority to change job assignments. (Seidel and Lewis 2014, 215)
Sample Solution
The Medical Associates example illustrates several characteristics of dynamic complexity:
- Non-linearity: The relationship between the changes in reimbursement rates and the staffing decisions is not linear. A decrease in reimbursement rates led to a shift from RNs to MAs, but the specific staffing adjustments were not simply proportional to the decrease.
- Feedback loops: The changes in staffing (from RNs to MAs) created a feedback loop. The decreased morale and potential for job dissatisfaction among RNs due to reassignments could lead to higher turnover rates, further impacting staffing levels and potentially affecting patient care quality.
Full Answer Section
- Emergent properties: The system-wide behavior, such as the confusion around staff reporting relationships and job assignments, emerged from the interactions between individual components (physicians, RNs, and MAs) and their responses to changes in the environment (lower reimbursement rates).
- Complexity: The system involves multiple interconnected components (physicians, RNs, MAs, patients, health plans) with complex relationships and interactions. Understanding the system's behavior requires considering the interactions between these components rather than analyzing them in isolation.
- Uncertainty: The non-linearity and emergent properties of complex systems make it difficult to predict the exact consequences of decisions. Managers must be prepared to adapt their strategies based on the evolving circumstances.
- Interdependence: Decisions in one area of the organization can have unintended consequences in other areas. Managers must consider the broader system to avoid unintended negative outcomes.
- Time delays: The effects of decisions may not be immediately apparent, and there may be time delays between actions and their consequences. Managers must be patient and willing to wait for results to materialize.
- Adaptability: Given the dynamic nature of complex systems, managers must be adaptable and willing to change their plans as needed. This requires flexibility, creativity, and a willingness to experiment.