Chapter 2. Management Functions

Dr. Zgarrick is professor and chair of the Department of Pharmacy Practice in the School of Pharmacy at Northeastern University's Bouvé College of Health Sciences. He received a B.S. degree in pharmacy from the University of Wisconsin and an M.S. and Ph.D. in pharmaceutical administration from The Ohio State University. He has practice experience in both independent and chain community pharmacy settings. He teaches courses in pharmacy management, business planning for professional services, and drug literature evaluation. His research interests are in pharmacist workforce issues, professional service development, and the use of evidence-based medicine by pharmacists.

After completing this chapter, readers should be able to

1. Define the terms management and manager. Describe how concepts in management figure into our everyday lives.

2. Compare and contrast management and leadership.

3. Compare and contrast classical views of management with modern views.

4. Describe the management process within the contexts of what managers do, resources they manage, and levels at which managers perform their roles.

5. Integrate modern views of management with the management process.

6. Apply the management process to all personal and professional activities.

Krista Connelly is a second-year pharmacy student. Like most second-year students, she describes her life as “incredibly stressed out.” A typical day consists of getting up at 6 a.m., getting dressed and running out the door by 7 a.m., and driving to school to get to her first class by 8 a.m. (making sure to avoid the accident on the expressway that she heard about on her way out the door). While at school, she finds time to squeeze in cups of coffee and snack bars between the lectures, labs, and workshops that usually last until at least 4 p.m. She also makes a point to go to the library to prepare upcoming assignments, as well as to meet with her professors to review how she did on her exams.

After class today, Krista has an Academy of Students of Pharmacy (ASP) meeting. Krista is the president of her chapter and works with committee chairs to accomplish the goals of the organization. In the past few weeks, she has helped the new professional service chairperson develop a brown bag seminar, talked her fund-raising chairperson out of quitting, and wrote a report on each committee's activities for the chapter Web site. While Krista enjoys her leadership role in ASP, she finds some of the people she works with to be frustrating and wonders how she can motivate them to do a better job.

After her meeting, Krista drives to a fast-food restaurant to grab a quick dinner on her way to her part-time pharmacy intern job. If she is not working, she will head to a friend's house to study for an upcoming exam. She usually gets back to her apartment by 10 p.m. and mentally prepares for what she needs to do in the next few days. She might catch a little bit of TV before heading to bed by midnight.

On weekends, Krista catches up on what one might call “activities of daily living.” She does her laundry, pays her bills, surfs the Internet, calls her parents and friends back home, and gets together with her friends on Saturday nights. When Krista and her friends (most of whom are also pharmacy students) go out, they often talk about their plans after they graduate from pharmacy school. They talk about how exciting it will be to counsel patients, work with other health care professionals, and finally start making those high salaries they have heard so much about. None of them says that they want to be pharmacy managers. “The pharmacy manager at my store is always on my case about coming in late or having to arrange my hours around my exam schedule,” said Krista. “I don't see how being a manager can help me do the things I want to as a pharmacist.”

1. Why is it that all pharmacists should be considered managers regardless of their titles or positions?

2. Why should pharmacy students study management?

3. What is the difference between management and leadership?

4. How does management affect every aspect of our daily lives?

5. Will the same approach to management be effective for all types of situations encountered by pharmacists?

For many people, a distinct set of images comes to mind when they hear the word management. First and foremost, they think of a person (or possibly a group of people) who is “the boss” to whom they report at work. While some people view their relationships with management as positive, many of us have had experiences where this has not been the case. This is why when you ask people what they think of management, they often provide negative views and experiences. Ask pharmacy students what they think about entering careers in pharmacy management, and you likely will get answers similar to those provided by Krista Connelly and her friends in the scenario.

Perhaps it may be better to start by looking a bit more closely at the term management. The stem of the word is manage, which according to Webster's Dictionary is a verb meaning “to control the movement or behavior of, to lead or direct, or to succeed in accomplishing” (Allee, 1990). Think about how this definition applies to your daily life. Have you ever controlled the movement or behavior of someone or something (even if it was just yourself)? Have you ever succeeded in accomplishing a task (even if it was just getting to an examination on time)?

According to Tootelian and Gaedeke (1993), management is “a process which brings together resources and unites them in such a way that, collectively, they achieve goals or objectives in the most efficient manner possible.” Contrary to what many people believe, management is a process, which is simply a method of doing something. Processes are used to perform simple everyday tasks (e.g., swinging a golf club or driving to school) as well as more complex activities (e.g., hiring a pharmacy technician or dosing an aminoglycoside drug). People perform processes because they want to achieve a goal or objective. Goals and objectives can be personal (e.g., a low golf score or getting to school on time) or professional (e.g., a smoothly operating pharmacy or high-quality patient care). Because processes require resources, and because resources are scarce (they are not present in unlimited supply), it is important that resources be used in such a way as to achieve goals and objectives in the most efficient manner possible. While one could achieve one's goal of getting to school on time by driving 90 miles an hour, one also could argue that this would not be the most efficient use of the driver's resources, especially if there is a sharp turn ahead or a police officer waiting around the corner.

Managers are simply people who perform management activities. While people whom we think of as “the boss” and those with administrative appointments within an organization certainly are managers, the fact is that anyone who has a task to accomplish or a goal to achieve is also a manager. Pharmacy students and pharmacists who say that they do not want to be managers may not desire the authority and responsibilities of having an administrative position, but there is no getting around their need to use resources efficiently to perform the tasks related to their jobs. Thus all pharmacists, regardless of their job responsibilities or position, should view themselves as managers.

Another term that is often used in concert with management is leadership. While some people use the terms interchangeably to describe characteristics that are expected of people who are “in charge” of organizations, leadership is a distinctly different skill from management. Leadership involves the ability to inspire or direct others. While it certainly is desirable that all managers also have leadership skills, they do not necessarily go hand in hand.

While management and managers have been with us since humans have had tasks to perform and goals to accomplish (e.g., gathering food or finding shelter), the study of management as a scientific and academic curriculum is relatively new. Before the industrial revolution of the eighteenth and nineteenth centuries, most people lived and worked alone or in small groups. While people at that time still had goals and objectives that needed to be accomplished efficiently, there was little formal study of the best ways to do so. The advent of the industrial revolution brought together groups of hundreds and thousands of people who shared a common objective. To get large groups of people to work together effectively, industrialists and academics established hierarchies and systems that allowed large industrial organizations to accomplish their goals (especially those related to growth and profitability).

Around the turn of the twentieth century, an American industrialist and a French engineer began to publish observations in what would become known as the classical, or administrative, school of management thought. F. W. Taylor, an executive with Bethlehem Steel, published The Principles of Scientific Management in 1911. He was among the first to espouse applying scientific principles to management of the workplace. Henri Fayol, a French mining engineer and corporate executive, published Administration Industrielle et Generale in 1916. Both Taylor and Fayol argued that all organizations, regardless of size or objective, had to perform a standard set of functions to operate efficiently. Fayol's five management functions (i.e., forecasting and planning, organizing, commanding, coordinating, and controlling) became widely accepted throughout the industrialized world. Both Fayol's five management functions and 14 principles for organizational design (Table 2-1) are still used by managers today. For example, while in the scenario Krista Connelly has the responsibility for working with her ASP chapter's committee chairs, she cannot be effective in her ability to carry out her responsibilities unless her position provides her with authority that is recognized by the committee chairs. Chapter 11 provides more information on Fayol's principles of organizational design.

Much of Taylor's and Fayol's work was developed based on the workplace conditions of the nineteenth and early twentieth centuries. The great industries of those times focused primarily on the mass production of tangible goods. Very few people were educated beyond grammar school. The few people with higher levels of education (almost always men) generally were given administrative positions. They were expected to supervise large numbers of less educated production-line employees. In this hierarchy, the role of administrators generally was to command and control their employees, and the role of workers was to carry out the tasks at hand without question.

On the other hand, the workforce and workplace of the late twentieth and early twenty-first centuries have evolved into something quite different. According to the US Bureau of Labor Statistics (2011), more than three times the number of people are involved in the provision of services than in the production of tangible goods. Today's workforce is better educated and more highly skilled than workers had been in the past. In many cases, today's administrators have less formal education and fewer technical skills than the people they are supervising.

These trends have led many to question the relevance of classical management theories in today's rapidly changing world. Walk down the “Business” aisle of practically any bookstore and you'll find literally hundreds of books written by management “gurus” such as Covey, Drucker, Peters, and many others espousing modern management techniques and offering “hands on” advice about how to deal with day-to-day workplace issues. Researchers apply scientific methods to the study of management and publish their results in scholarly journals, similar to what we see in pharmacy and medicine. These books and research studies make important contributions to management science, given the continued need to use scarce resources to achieve goals and objectives in an ever-changing business climate. However, classical management theory still has a place in today's pharmacies, as well as in our personal lives.

Figure 2-1 describes one way in which Fayol's management functions can be adapted to describe what managers do in today's world. There are three dimensions of management: (1) activities that managers perform, (2) resources that managers need, and (3) levels at which managers make decisions. Every action taken by a manager involves at least one aspect of each of the three dimensions.

Management Activities

Fayol's five management functions have been adapted to describe four activities that all managers perform. While managers who hold administrative positions in their organizations may have formal ways of performing these activities (and are evaluated on their ability to get them done), all managers (which means all of us!) perform each of these activities every day, whether we are thinking of them or not.

The first of these four activities is planning. Planning is predetermining a course of action based on one's goals and objectives. Managers must consider many factors when planning, including their internal and external environments. The chief pharmacist at a community pharmacy or the director of a hospital pharmacy will develop plans to predetermine which drug products she wishes to carry or what professional services she might offer. Some pharmacists will even go so far as to develop formal strategic and business plans for their pharmacies (see Chapters 4, 5, 25, and 26). On the other hand, planning can also be very informal. Anyone who goes to work or school in the morning develops a plan for how he will get there (i.e., What time do I need to arrive? What form of transportation should I take? What route should I follow?).

The next management activity is organizing. Organizing is the arrangement and relationship of activities and resources necessary for the effective accomplishment of a goal or objective. Once a pharmacist has decided which drug products or services she should offer, she needs to ask herself what resources she needs to provide them, how she will go about obtaining these resources, and then determine when she will need to obtain them. Once the person going to work or school has a plan, he needs to think about what else he may need to do to accomplish his goal (e.g., check the weather and traffic reports, get gas in his car, drop his kids off with a child care provider, etc.).

The next step is the leading or directing step. This step combines Fayol's command and coordinate steps to provide a better description of what managers actually do in today's world. Leading or directing involves bringing about purposeful action toward some desired outcome. It can take the form of actually doing something yourself (the person going to work or school just needs to get up and go) or working with others to lead them to where you want your organization to be. A pharmacist eventually may offer the goods and services described in her plans, but almost certainly will need to work with a number of other people within her organization to accomplish this task. In the scenario, Krista Connelly, in her role as president of her ASP chapter, is responsible for seeing that the chapter's committees work effectively to accomplish their objectives. Working with others often requires leadership skills, which will be discussed in Chapter 16.

The fourth step is the control or evaluation step. Control or evaluation involves reviewing the progress that has been made toward the objectives that were set out in the plan. This step involves not only determining what actually happened but also why it happened. Performing quality-control checks to help ensure that patients are receiving the desired medication in the appropriate manner is a very important function of a pharmacy practice. Pharmacists also can ask themselves if the goods and services they offered met their goals. These goals can be from the perspective of their patients (e.g., Did the goods and services result in high-quality patient care or improved clinical outcomes?), as well as from other perspectives (e.g., Did the service improve the pharmacist's job satisfaction? Did it improve the profitability of the pharmacy or organization?). The person going to work or school not only should ask himself if he arrived on time, but also should know why he did or did not (e.g., the traffic accident on the expressway, hitting the snooze button that third time before getting up, etc.). Chapters 8, 9, and 29 review methods that pharmacists use to evaluate the outcomes of their services, ensure the quality of their operations, and reduce the occurrence of medication errors.

Management activities should be performed in order, starting with the planning step. They are also meant to be cyclic, meaning that what a manager learns in the control and evaluation step should be incorporated back into the planning step the next time she needs to accomplish that objective (Fig. 2-2). For example, if a pharmacy student receives a score on an examination that did not meet his goal, he should use what he learned in the evaluation step (e.g., what questions he got wrong, time spent studying, etc.) to help him plan for the next examination.

Resources that Are Managed

Regardless of their level or position within an organization, managers must use resources to achieve their goals and objectives. Keep in mind that resources are scarce, meaning that they are not available in unlimited supply. Both organizations and individuals must use resources efficiently to achieve their goals and objectives.

The first resource that many managers think of is money. Customers generally provide money to pharmacies and pharmacists in exchange for goods and services. Employers generally pay their employees money in exchange for the services they provide to the organization. Managing money is important to any organization or individual, and several chapters of this book are dedicated to explaining how pharmacies and pharmacists manage money and use economic information to make decisions (see Chapters 17, 18, 19, and 20). Money in and of itself can be an important yardstick for measuring the success of an organization or an individual. However, most managers value money for its ability to allow them to obtain additional resources that are necessary to achieve other goals and objectives.

Another resource that is very important to managers is people. In pharmacy practice, there is very little that any one person can accomplish on his or her own, regardless of the practice setting. Pharmacists must work with other employees in their pharmacies, other health care professionals, and especially the patients and customers they serve. Given the importance of this topic, an entire section of this book (Chapters 11, 12, 13, 14, and 15) is dedicated to the management of people.

How many times have you heard someone say, “I'd have got that done if I'd have had more time”? Of all the resources managers have at their disposal, time can be the most limiting. After all, there are only 24 hours in a day! Time management is essential for today's busy pharmacist, as well as for most other people. In the scenario, Krista Connelly is a great example of a pharmacy student who could benefit from time and stress management. Chapter 10 is dedicated to time management, stress management, and organizational skills that can help you to get the most out of this precious resource.

When many people think of pharmacy, they still think of a pharmacist standing behind a counter compounding drug products and dispensing prescriptions. While pharmacy practice continues to evolve from a product to a patient orientation, managing material resources is still an important function in any pharmacy. Community pharmacies filled 3.6 billion prescriptions in 2009, an increase of over 30 percent over the past decade (NACDS, 2010). The costs of these drug products, as well as the costs of the equipment and supplies necessary to dispense them safely and efficiently to patients, continues to rise in all practice settings. Just as people need to assess their needs and supplies of material goods (e.g., food, clothing, household supplies, etc.) before going on a shopping trip, pharmacies need to make the same assessments before purchasing drug products, equipment, and supplies. Chapters 6, 23, and 24 are all designed to help readers learn more about managing material resources.

While the eighteenth and nineteenth centuries were known as the time of the industrial revolution, the twenty-first century certainly will be known as the information age. The advent of the computer and the Internet in the late twentieth century has resulted in an explosion of information that is literally at most people's fingertips. This already has had a tremendous impact on pharmacy practice, providing pharmacists with information about drugs and patients that they did not have only a few years ago. While it is not certain what implications this will have for pharmacy practice in the future, it is certain that information management is becoming an important job for pharmacists. Chapter 7 provides an overview of technologies that pharmacists use to manage information, as well as insights into what role information management may have in the future of pharmacy practice.

Levels of Management

When managers perform management activities, they can do so at a number of levels within an organization, and with a variety of different purposes in mind. While some people think of management activities occurring only in corporations and other complex organizations, management activities take place in all types of organizations, involving all levels of interactions among their members.

There is not a person reading this book who has not performed self-management activities. Just the fact that you are a pharmacy student or pharmacist attests to the fact that you have performed a number of activities on your own just to get to this point. Self-management is the most frequently occurring level of management, if for no other reason than that practically every decision we make every day (both professional and personal) requires self-management. For example, pharmacists must prioritize and manage their time efficiently so that they can accomplish the wide variety of tasks, from ensuring that every prescription is dispensed accurately to making sure that they have time to counsel their patients.

Next to self-management, the most frequent level on which managers find themselves performing is the interpersonal level. Interpersonal management occurs between the manager and one other person. In a pharmacy, this might involve a pharmacist counseling a patient about a medication or training a technician on how to submit a claim for a medication therapy management service with a third-party payer. Our personal lives are full of interpersonal relationships, including those with our parents, siblings, spouse, children, friends, and significant others.

The level of management that occurs the least often is organizational management. This involves actions that affect groups of people. We frequently think of this occurring at work, especially when a pharmacist needs to develop a policy or make a decision that may affect many people at the pharmacy. High-level administrators in large organizations (e.g., pharmacy chains, hospitals, etc.) often make decisions that affect everyone within the organization. Keep in mind that people who hold administrative positions are not the only ones who perform organizational management. Anyone who has ever had to make an “executive decision” among a group of classmates who are studying for an examination or deciding where to go for lunch can relate to the kinds of organizational-level decisions that business leaders make every day.

Much of what was first described by Taylor and Fayol at the beginning of the twentieth century is still applied today by managers at all levels of administration in all types of organizations. However, much has changed in both pharmacy practice and the workplace over that time, and management science has exploded to keep up with those changes.

In the past, the relationship between an administrator and a worker was often hierarchical. The authority of the administrator generally went unquestioned, and workers simply did what they were told. In today's workplace, there is often more of a partnership between administrators and workers. While administrators are still responsible for achieving organizational goals and objectives, workers generally expect to have input as to how goals and objectives will be developed, and expect to share in the rewards when those goals are accomplished.

Health care organizations such as hospitals and pharmacies present a number of managerial challenges to administrators. Unlike the workers of Taylor's and Fayol's day, most health care workers are highly educated and skilled professionals. Trends toward specialization among health care professionals often create situations where staff-level health care workers have more knowledge and expertise of their particular area than their administrators. As you can imagine, administrators of health care professionals who attempt to use their authority to command and control these employees may find this not to be an effective way to achieve organizational goals and objectives. According to Drucker, “knowledge workers” in today's information age need to ask “what should” they be doing in light of their own values, in accordance with the objectives and values of the organization (Drucker, 1999).

Modern views of management suggest that managers must adapt their management activities to their workers. These functions generally occur in addition to the classical management functions. According to Nelson and Economy (2003), today's manager also needs to

•     • Energize. Today's managers need to have a vision of what they want to create and the energy to make it happen. When you think of good managers with whom you have worked with, they are probably not the kind of people who just want to keep doing the same thing every day for the rest of their lives. They have ideas about what they would like to see their organizations become in the future, and the energy and enthusiasm to attract others to want to join them in achieving their goals. They are always trying to make the best stressful situations, especially when the level of resources available may be less than they desire. In pharmacy today, good managers are often pharmacists who want to see the profession move forward by developing new goods and services, especially those that improve patient care. Their energy and enthusiasm attract motivated pharmacists and other personnel who share their vision and want to work with them. These managers also seem to find the resources they need to carry out their vision or make the most of what they already have. Not only does the power of energy and enthusiasm work for pharmacists, but it also benefits pharmacy students. Do you think that Krista Connelly would be as an effective leader if she did not have a high level of energy and enthusiasm for ASP's goals and objectives?
•     • Empower. If you are a highly educated and skilled health professional, the last thing you want is to have an administrator questioning your decisions and telling you how you should do your job. In today's environment, managers should empower their employees to do what needs to be done. In many ways, today's manager is very much like the coach of a team. Coaches develop a game plan; select players; provide them with training, resources, and advice; and then step back and let the players execute the game plan. Good coaches empower their players to carry out the game plan. Managers who empower their employees provide them with training, resources, and advice and then let the employees get the job done. Krista Connelly can empower her ASP committee chairpersons by providing them with goals, resources, and advice and then letting them get to work.
•     This is not to say that managers do not need to supervise their employees. Managers are still responsible for seeing that organizational goals are met, which may mean having to intervene with workers. Just as coaches need to provide resources and advice to their players during a game, and occasionally replace a player who is not executing the game plan, managers need to provide resources, advice, and occasionally discipline to see that organizational goals are met.
•     • Support. After a manager has empowered her employees to do their jobs, she should not just leave them on their own, especially when things start to go wrong. Today, good managers need to be coaches, collaborators, and sometimes even cheerleaders for their employees. Providing support for employees does not mean that managers should be willing to do their employees' work or always agree with the decisions employees make on the job. It does mean that managers need to provide employees with the training, resources, and authority needed to do their jobs. Managers also need to be good coaches, letting employees know when they have done a good job, as well as helping them learn when things are not going so well. Even pharmacy students like Krista Connelly know that a few kind words to her committee chairpersons will help the ASP chapter in the long run.
•     In providing support, managers must also be mindful to balance the needs and resources of their organizations with what employees need. As much as a manager may wish to give a valued employee a big raise, the manager must also consider how much money is available for a raise amongst other potential uses of his organization's financial resources.
•     • Communicate. In today's information-laden environment, communication between managers and employees is more important than ever. While managers can energize, empower, and support their employees, if they cannot communicate their messages, they will not be effective and their organizations will suffer. The cornerstone of communications in any environment is trust. If employees feel that they can bring up any question or concern to a manager, they will likely be more receptive to what the manager has to say.
•     One major challenge for managers and employees today is the vast number of ways in which they can communicate. Communication that once took place between managers and employees in person now can take place over the telephone, via voice mail or e-mail, in a text message, or even through a social network such as Facebook or Twitter. While these additional methods can make it easier for managers and employees to communicate with each other, care must be taken in using these methods. As you can imagine, not every method of communication is appropriate for every type of message (e.g., disciplining or firing an employee in a text message is not a good idea).

After reading the first two chapters of this book, you still may be asking yourself, “Why should I study management?” You may think that being a good manager just involves using your common sense and applying the Golden Rule (act toward others as you would have others act toward you). After all, you probably have done a good job managing yourself up to this point without taking a management course or reading a management textbook. Can managing a pharmacy practice be that much different?

While there is certainly a role for applying self-management skills, most pharmacy managers agree that managing a pharmacy practice successfully requires a unique set of skills. Some of these skills can be quite technical [e.g., financial management (see Chapters 17, 18, and 19) and marketing (see Chapters 21, 22, 23, and 24)], requiring a knowledge base that goes beyond what many pharmacists bring to their practices. These skills should be learned just as one would learn medicinal chemistry, pharmacology, or therapeutics.

Something else to keep in mind is that in today's workplace, what might be common sense to you may not make sense at all to the other people you encounter. Pharmacists today work with employees, other health professionals, and especially patients who come from a wide variety of racial, ethnic, cultural, and educational backgrounds. People from diverse backgrounds bring with them an incredible amount of insight and experience. Pharmacists who do not take this diversity into account when working with people may find themselves frustrated and not able to achieve their goals and objectives effectively.

This book presents material that is relevant to both pharmacy students and pharmacists. Pharmacy students who use this book will find that many of the scenarios that start each chapter are directed toward experiences to which they can relate. There may be some of you right now who think that your life has a lot in common with Krista Connelly's. We anticipate that this is the case. The information provided in each chapter not only will help students to better deal with management issues they are currently experiencing but will also help to prepare them for what to expect in the future as pharmacists.

Pharmacists who use this book often have a good idea of why they need to have management skills. After all, they are living pharmacy practice management on a daily basis! The information provided in this book should help provide pharmacists with the skills they will need to better meet the challenges they face every day. In addition, the last six chapters of this book (Chapters 31, 32, 33, 34, 35, and 36) describe how pharmacists in a variety of practice settings apply management skills on a daily basis.

Listed below are three scenarios that represent how pharmacists use the management process on a daily basis. For each scenario, please describe (1) the level of management being performed, (2) the type of management activity being performed, and (3) the resources that the pharmacist needs to perform this activity.

• Scenario 1: Sabin Patel, R.Ph., is trying to decide what form of education (nontraditional Pharm.D., certificate program, continuing education) would best allow her to maintain her practice skills.
• Scenario 2: Doug Danforth, Pharm.D., is training a technician regarding information that needs to be collected during an initial patient interview.
• Scenario 3: Casey Kulpinski, Pharm.D., is reviewing her pharmacy's financial statements to determine if her diabetes care center met her chain's financial goals.