Centralization Vs. Decentralization Of Inova Hospital
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Centralization vs. Decentralization in Inova Hospital
Human resource departments are dynamic entities within an organization’s internal structure, constantly evolving and developing strategic modifications based on an organization’s current business needs and the state of the economy at the time. An organization’s budget for HR services as well as core business principles and a corporation’s mission statement are all items that can affect the way an HR department runs and develops strategy. Gone are the days of the administrative or clerical HR department. (Coggburn, 2003) Today’s HR departments are businesses themselves within organizations and their function is to not only perform numerous HR related activities but to contribute to the overall performance of the organization they serve. It is often said that a company is only as strong as its weakest employee and since HR departments are responsible for hiring and terminating employees, it can be said that a company is only as strong as its HR department. Due to this change, organizations found it necessary to restructure their HR departments. In the 1990’s, one popular strategic discussion became the centralization vs. decentralization of the HR department and which strategy added more value to an organization while still allowing the HR entity to function at a high level.
In 1995, Inova Hospital, the largest hospital network in Northern Virginia, desired to centralize its numerous facilities’ HR departments into one base unit that could handle all the current functions of their various HR departments as well as allow for expansion and change. One focus of that decision was to establish a centralized employment center which would give current employees knowledge about...
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...ld, will look to Inova’s restructuring as a guide to steer their own organizations when considering centralization vs. decentralization of their HR departments.
In summary, Inova bucked the trend and went ahead with a plan to centralize their HR system and do a major overhaul despite a climate in organizational theory at the time that promoted decentralization over centralization. Despite the opinions of the naysayers, Inova was able to plan and produce a centralized HR system that was streamlined and efficient and made life easier for the corporation and its employees in many ways. The innovative strategy that Inova pursued also put the organization far ahead of others in the health care field. Today, the trend is toward centralization rather than decentralization. Inova has already completed that process and succeeded at it twenty years ago.