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Penn State Health (PSH) seeks to be a low-cost leader for healthcare in the central Pennsylvania region as they face strong competition from other healthcare
Penn State Health (PSH) seeks to be a low-cost leader for healthcare in the central Pennsylvania region as they face strong competition from other healthcare systems in Pennsylvania and beyond. (text) PSH could improve in the areas of corporate staff and reporting lines in their current organizational structure to align with the low-cost leader strategy they seek. (text) While PSH does a good job of having a narrow and defined set of functions, which is in line with their low-cost leader strategy, their corporate staff levels could be improved. There are often too many staff at the corporate level with few direct reports, and this results in inefficient and convoluted reporting structures. (text) Additionally, this inhibits effective strategy decisions as there are often competing interests at the corporate level which can make implementation of strategic decisions difficult. This article from HBR describes this type of managerial struggle in organizations that adapt a mechanistic approach to corporate strategy but do not support it with proper modest corporate staffing levels. (Davis 1978) (text) The struggles with corporate staff is only exacerbated by the fact that PSH as a system has recently grown through mergers and recent new construction, creating additional reporting layers
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