Modern Management

Techniques

Ravi Rohilla
Community Medicine
PGIMS Rohtak
 Contents

Introduction
Classification
Various Management techniques
References
 Definition
Management is the art, or science, of
achieving goals through people.
More broadly, management is the process of
designing and maintaining an environment in
which individuals, working together in groups,
efficiently accomplish selected aims.
 Objectives
There are basically three management
objectives.
Ensuring organizational goals and targets are met
with least cost and minimum waste.
The second objective is looking after health and
welfare, and safety of staff.
The third objective is protecting the machinery
and resources of the organization, including the
human resources.
 Classification
Management techniques are divided in
following categories:
1. Statistical techniques
2. Activity analysis
3. Mathematical techniques
4. Financial techniques
5. Others(Miscellaneous)
 Statistical techniques
1. Time trends and forecasting
2. Decision theory and tree
 Time trends and forecasting
Time trend Analysis is the practice of
collecting information and attempting to spot
a pattern, or trend, in the information.
Based on past experiences, prediction can be
made about the expected occurrence, by
using mathematical methods.
 Time trends and forecasting
For ex., Epidemiologist can construct endemic
curves based on incidence of disease and also
establish the likely limits of variations.
If the incidence of a disease exceeds the
expectation by certain limits, the occurrence
of an increased incidence or epidemic can be
anticipated.
 Decision theory
Decision theory is the body of analytical tools,
including logic and mathematical models,
using probability theory and diagrammatic
presentation for use in decision making.
Future events, which may affect decision
making, are shown diagrammatically.
 Decision tree
Decision tree is a diagram that depicts key
interactions among decisions and associated
chance events, as the decision maker
understands them.
The base of the decision tree, drawn
horizontally is the starting point denoting an
event which occurs by chance.
Branching of tree into two or more branches
begins at the first chance event.
 Decision tree
A set of relative values for the predicted
outcome of each possible decision can be
made.
The highest value indicates the course most
likely to produce the greatest benefit.
 BPb 10-14
Recurrence BPb 15-24

BPb 25

Enforcement
No
No Recurrence Good Outcome

Poisoned
Child
Identified BPb 10-14

Recurrence BPb 15-24

Environmental
Enforcement

BPb 25

BPb = blood No Recurrence Good Outcome

lead levels g/dl
Source :Decision tree for blood lead level enforcement. (Brown MJ: Costs
and benefits of enforcing housing policies to prevent childhood lead
poisoning.
 BPb 10-14
EC= $ 139,724
P=0.46 $74,166
EC= $ 101,988 Recurrence BPb 15-24

P=0.73 P=0.43 $ 156,151

No Enforcement BPb 25

P=0.11 $ 349,660
No Recurrence
Good Outcome
P=0.27 $0
BPb 10-14
Poisoned EC= $ 119,009
P=0.50 $ 79,093
Child
Recurrence BPb 15-24
Identified
$ 146,172
Environmental

P=0.38 P=0.46
Enforcement

BPb 25

P=0.04 $ 305,579
No Recurrence
Good Outcome
P=0.62 $ 18,412
EC= $ 56,639

Source : Decision tree for blood lead level enforcement. Brown MJ: Costs and benefits of
enforcing housing policies to prevent childhood lead poisoning.
Med Decis Making 2002; 22: 48292.
 Contd

Expected cost of with no enforcement is

$101,988 per child, compared with $56,639 for
strict enforcement.
$101,988 per child

Enforcement reduces the cost from $101,998 to $56,639 or

$45,349 per child who develops lead blood poisoning, on the
average.

$56,639 per child

 Activity analysis
1. Time motion studies
2. Work sampling and activity analysis
3. Queuing theory
4. Gantt chart and work schedule
 Time motion studies
This technique consists of observing and
timing by using stopwatches the physical work
and movements carried out by a worker.
The movements thus carried out are broken
into segments, analyzed and redesigned so
that task can be accomplished more
efficiently.
In a hospital, all samples for lab investigations were taken from each ward to central lab
every morning by ward class-4. In this process, many servants used to take extra ordinary
time to return to ward once out of the ward. A modification of the system was adopted in
which class 4 from central lab used to collect samples from each ward at specified time in
the morning, thus saving precious time. Also now each class 4 was available for duties in his
respective ward.
 Work sampling and activity
analysis
Work sampling is a technique for determining
the proportion of time spent by workers in
various defined categories of activity.
In a work sampling study,
A large number of observations are made of the
workers over an extended period of time.
The observations must be taken at random times
during the period of study, and
The period must be representative of the types of
activities performed by the subjects.
 For example: In a study done on PHCs nurses
in Punjab revealed that
15% of time was spent on the direct services
including actual treatment,
34% of time was spent on supportive services like
administration, record keeping, maintenance,
supervision, etc.;
21% of time was spent on travel and
30% time was spent on personal non productive
activities
Such analysis unrelated
thus enables to work
not only a scrutiny responsibilities.
of activites undertaken but also
suggests possible modifications.
 Queuing theory
Queuing theory is the mathematical study of
waiting lines, or queues.
The theory enables mathematical analysis of
several related processes, including arriving at
the queue, waiting in the queue, and being
served at the front of the queue.
 Queuing theory
Queuing theory has applications in
telecommunications, traffic engineering,
computing and the design of factories, shops,
offices and hospitals.

For example: In a OPD patients have to go to registration clerk for registration and
go to doctor for examination and then go to dispensary for drugs. If a patient
spends three time the time with a Doctor for examination as he does with a
registration clerk, there will be queue of patients waiting for examination by the
doctor. If the number of registration clerks is only one third the number of Doctors
then there will be smooth flow of patients.
 Gantt chart and work schedule
Developed by Frenchman Henry L. Gantt.
Gantt chart is a graphical representation of
the duration of tasks against the progression
of time. Gantt chart is a type of bar chart that
illustrates a project schedule.
It is a useful tool for planning and scheduling
projects.
Gantt chart for a Hospital construction project
GANTT CHART
 Mathematical techniques
1. Simulation study/models
2. Systems analysis
3. Linear programming
4. Inventory control
5. Precedence and arrow diagramming
6. Network analysis
7. PERT
8. CPM
 Model/simulation study
Basic concept of management science in
which there is symbolic representation of
idealized situation.
This is an aid to understand how the factors in
a situation affect one another.

This method has been used for planning and evaluation of immunization and
sanitation programmes for control of typhoid fever.(Bull World Health Organ. 1971;
45(1): 5375.)
 Model/simulation study
An epidemiological model of typhoid fever
was made to study transmission of infection at
different levels.
Numerical values based on known evidence
were assigned to parameters.
Changes were introduced in some parameters
to study the effect of mass vaccination and
improvement in general health and sanitation
on incidence of typhoid.
 System analysis
System is defined as an arrangement and set
of relationships among multiple parts
functioning as a whole.
System analysis is the study of inter-
relationships operating in the various
components within a system and also
between a system and other system.
 System analysis
This is used in decision making in public
administration.
The technique is used to study different
factors in totality and also to study changes
necessary for improvement.
 Inventory control
Inventory Control is the supervision of supply,
storage and accessibility of items in order to
ensure an adequate supply without excessive
oversupply.
Various types of items are required in
manufacturing industry and the right item
must be available in required quantity when
needed.
 Inventory control
The solution to avoid such out of stock
position will be to keep a large stock of all
items available all the time which is associated
with high cost of carrying the inventory.
Inventory control
Helps in maintaining an optimum level of the all
resource at least possible cost.
Determine appropriate levels of holding
inventories, ordering sequence & the quantities,
so that the total costs incurred are minimized.
 Inventory control methods
ABC analysis
VED analysis
Ordering cost
Inventory carrying cost
Economic order quantity
Lead time
Safety stock
Reorder level
Stock turnover.
 Precedence and arrow diagram
The precedence diagram method is a tool for
scheduling activities in a project plan.
It is a method of constructing a project
schedule network diagram that uses boxes,
referred to as nodes to represent activities
and connects them with arrows that show the
dependencies.
 Precedence diagram

Activity-on-node (AON)
Nodes represent activities, and arrows show
precedence relationships

AON Project Network for House

Lay foundations Build house
2 4 Finish work
4 8
7
Start 1 1
3
Design house 3 6
and obtain 1 5 1
financing Order and receive 1 Select carpet
Select paint
materials
 Arrow diagram
Arrow diagram method consists of
constructing a project network diagram using
arrows to represent the activities and
connecting them at nodes to show the
dependencies. Known as activity on arrow.
AOA Project Network for House
3
Lay Dummy
foundation Finish
4 0 Build
3 1 house work
1 2 4 6 7
8 1
Design house Order and
1 1
and obtain receive Select Select
financing materials paint carpet
5
 Network analysis
It is a general name given to certain specific
techniques which can be used for the
planning, management and control of
projects.
The basic principle of network analysis is to
show diagrammatically the logical sequence in
which different events necessary between the
start and end of the project need to take
place.
 Network analysis
Involves 3 main stages
1. Breaking down the project into a set of
individual jobs and arranging them into a
logical sequence or network
2. Estimating the duration and resource
requirement of each job deducing a
schedule, finding which job control the
completion of the project
3. Re-allocating money or other resources to
improve the schedule
 Network analysis - PERT
Programme Evaluation and Review Technique
Developed by US navy in year 1958
This is for more detailed planning and more
comprehensive supervision
 PERT
Shown by an arrow diagram representing logical
sequence in which events must take place.
USES
Time by which each activity must be completed, can
be calculated.
Critical activity can be identified
It aids in planning, scheduling and monitoring of the
project.
Any problem which could disrupt time bound
attainment of goal can be identified and corrective
 PERT
In PERT, activities are shown as a network of
precedence relationships using activity-on-
arrow network construction
Used in Project management - for non-
repetitive jobs (research and development
work), where the time and cost estimates
tend to be quite uncertain.
 CPM(critical path method)
Longest path of the network is called critical
path.
If any activity along critical path is delayed,
entire project will be delayed.
CPM network represent activities rather than
events as done in PERT network.
 CPM(critical path method)
Activities are shown as a network of
precedence relationships using activity-on-
node network construction
Used in Production Management - for the
jobs of repetitive nature where the activity
time estimates can be predicted with
considerable certainty due to the existence of
past experience
 Financial techniques
1. Monitoring expenditure
2. Cost accounting and analysis
3. DALY
4. Cost benefit analysis
5. Cost effectiveness analysis
6. Performance budget
7. PPBS
8. Zero based budgeting
9. Input output analysis
10. Outcome budget
 Cost accounting and analysis
Provides basic data on cost structure of any
programme.
It has three important purposes in health
services:
Cost control
Planning and allocation of people and financial
resources.
Pricing of cost reimbursement.
 Cost accounting
Cost accounting is valuable management tool
to
identify inefficient services,
locate wasteful use of resources,
bring efficiency into health care system.

The insurance companies have to reimburse the

expenditure incurred by insured persons in the medical
treatment obtained from private medical practitioners and
hospitals. The reasonableness of charges levied can be
examined by carrying out the costing of the services.
 DALY
The disability-adjusted life year (DALY) is a
measure of overall disease burden, expressed
as the number of years lost due to ill-health,
disability or early death.
Key measure employed by the World Health
Organization in publications as its Global
Burden of Disease.
 DALY
Benefits
DALYs calculated help in the prioritization of
health needs by quantifying the economic value of
disease.
Calculation of DALYs help the planner to compare
the economic burden caused by two or more
diseases, thus paving the way for decision on
which should
In 1990, WHO report be taken
indicated that 5up
of theon an priority
10 leading basis.
causes of disability
were psychiatric conditions. Psychiatric and neurologic conditions
account for 28% of all years lived with disability, but only 1.4% of all
deaths and 1.1% of years of life lost. Thus, psychiatric disorders, while
traditionally not regarded as a major epidemiological problem, are shown
by consideration of disability years to have a huge impact on populations.
 Cost benefit analysis
It is an analysis of the expected balance of
benefits and costs, helping predict whether
the benefits of a policy outweigh its costs, and
by how much.
Benefits are expressed in monetary terms to
determine whether a given programme is
economically sound and to select best out of
several programmes.
 Cost benefit analysis
Cost of sickness calculated from direct cost of
treatment and investigations of the patient
and he being the non productive member of
the society.
Once the cost of disease is known, the cost of
preventive measures can be compared with
it.
Cost benefit analysis of intensified programme
against smallpox in India during period July 1973
to December 1975 has shown net benefit of Rs
1058 million.
 Cost benefit analysis
Drawback:
Benefits cannot always be expressed in
monetary terms as in health field benefits are
generally in terms of reduction in mortality,
morbidity and control or eradication of a
disease.
 Cost effective analysis
Benefit is expressed in terms of result
achieved rather than to express in monetary
terms. eg. Number of lives saved.
This is a better tool than cost benefit analysis.
 Cost effective analysis
Two ways in which analysis can be done :
1. A system which gives more units of
effectiveness for a given rupee is more
efficient.
2. A system which enables the attainment of
effectiveness at minimum cost in terms of
rupees is more effective.
DDT was the cost effective method accepted for
the vector control in malaria eradication
programme
Planning programming budgeting
system(PPBS)
This is to allocate resources so that the
available resources of an organization are
used in most effective way in achieving
objective.
It helps in:
Defining objectives
Selection from alterative programmes
Allocating resources to achieve the objectives
Planning programming budgeting
system(PPBS)
In this method , budgeting is link between
planning and programming covering it into
annual budget format.
 Zero base budgeting
Developed by Peter Phyrr
Defined as an operating, planning and
budgeting process which requires each officer
to justify his budget from zero level upwards
Starting from a Zero base of no funds for the
programme, the sanctioning of every rupee
needs justification even for ongoing
programmes.
 Zero base budgeting
Benefits
Efficient allocation of resources, as it is based on
needs and benefits rather than history.
Drives managers to find cost effective ways to
improve operations.
Detects inflated budgets.
Increases staff motivation by providing greater
initiative and responsibility in decision-making.
Identifies and eliminates wasteful and obsolete
operations.
 Zero base budgeting
Drawbacks
More time-consuming than incremental
budgeting.
Justifying every line item can be problematic for
departments with intangible outputs.
Requires specific training, due to increased
complexity.
In a large organization, the amount of information
backing up the budgeting process may be
overwhelming.
 Input output analysis
Input-output analysis seeks to explain how
one industry sector affects others in the same
nation or region. The analysis illustrates that
the output of one sector can in turn become
an input for another sector, which results in an
interlinked economic system.
An input output table shows how much of
each input is needed to produce unit amount
Healthcare services consumes resources(inputs) in forms of
of each output.
staff, equipment etc. and produces output like treatments
given, deliveries conducted.
 Miscellaneous
1. Management by Objectives
2. Management by exception
3. Situational analysis
4. Current State Assessment
5. SWOT analysis
6. Log Frame analysis
Management by objectives (MBO)
Management by objectives (MBO) is a
process of defining objectives within an
organization so that management and
employees agree to the objectives and
understand what they need to do in the
organization in order to achieve them.
The essence of MBO is
participative goal setting,
choosing course of actions and
decision making.
Management by objectives (MBO)
Benefits
Employees tend to have a clear understanding of
the roles and responsibilities expected of them
Subordinates tend to have a higher commitment
to objectives
Better communication and Coordination between
superiors and subordinates
Drawbacks
For example, distribution of family welfare targets to
different districts in a State considering past performance,
Setting up of targets is in reality not participatory
special conditions like drought, unrest. The targets were
but
thentop management
distributed among severalhand
sub down targets
district units on similar
lines. The same cycle repeated in subsequent year.
Everything else is secondary except targets
 Management by exceptions
Management by Exception is a "policy by
which management devotes its time to
investigate only those situations in which
actual results differ significantly from planned
results.
The idea is that management should spend its
valuable time concentrating on more
important items (such as shaping the project's
For example, the company controller may be required to
future strategic
notify managementcourse).
of those expenses that are greater
than $10,000 or 20% higher than expected.
 Management by exceptions
Benefits
It reduces the amount of financial and operational
results that management must review, which is a
more efficient use of their time.
This type of management can be powerful when it
is necessary to process lots of data in order to
make managerial decisions.
Drawbacks
This policy of management result in myopic
behavior.
 Situational analysis
This method described as where are we
now, is the means by which a company can
identify its own strengths and weaknesses as
they relate to external opportunities and
threats.
It is an integral component of the
management process to find out what the
existingFor example,
situation studies regarding
is, analyze drugthe
prescription
same, and
consumption in different types of health facilities. The
identify,
resultwhich aspects
of these studies revealneeds changing,
the prescribing habits of and
Doctors and the need and ways for improving drug
then plan accordingly.
management to make them safer and economical.
 SWOT analysis
SWOT analysis is a strategic planning method
used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats involved in a
project or in a business venture.
It involves identifying the internal and external
factors that are favorable and unfavorable to
achieve a objective.
 SWOT analysis
Benefits
Source of information for strategic planning.
Helps in setting of objectives for strategic planning
Helps in identifying core competencies of firm
Drawbacks
Categorizing aspects might be very subjective
It may cause organizations to view circumstances
as very simple which organizations might overlook
 Logical Framework
The Logical framework(Logframe) is a method
found useful for bringing about clarity in the
process of planning, monitoring and
evaluation.
It compresses the entire programme being
proposed in a summary format.
Devised by U.S DoD, used by various agencies
like UNDP, UNFPA.
 References
WHO. Modern management methods and the
organization of health services, public health
papers
Epidemiology and Management for
Healthcare for All By PV Sathe
Wikipedia.en/org
Questions/Queries?