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Organizational Structure

Fortis Hospital Noida

We would like to express our gratitude to all those who gave us their valuable
time and support to complete this project.
We want to thank Prof. Neeraj Kumar for giving us the opportunity and challenge
to explore our knowledge in organizational structure and design skills through this
topic which has ultimately enhanced our understanding on the subject besides
giving us a practical implication of the real time structure and design of an
organization. It gave us a chance to visualize and analyze the strategy and
design, which would help us in a long run in our streams of corporate lives. Mr.
Neerajs stimulating suggestions during the course of project were a great help.
We would also like to thank Dr A.V.Chordiya, Director Fortis Noida who supported
us on necessary research work which laid the foundation for our project.
Besides, the team work within the group has been indispensable at different
stages of work and for the successful completion of the project. Each ones
contribution and constant suggestions for improvement have gone a long way in
bringing the project to the final shape.

About Fortis Healthcare

Fortis Healthcare Limited, a leading healthcare organization in India has a vision of

"creating a world-class integrated healthcare delivery system in India, entailing the
finest medical skills combined with compassionate patient care". Fortis Healthcare
Limited is one of the leading chains of Hospitals and a leader in healthcare
consultancy in India which is benchmarked to International standards - achieving
quality through the relentless adherence to the protocols observed in some of the
world's leading hospitals.
In line with its growth strategy and with the recent acquisition of the Escorts Heart
Institute & Research Centre, Fortis Healthcare has taken its total operational
hospital strength to 28 hospitals (including 12 satellite/heart command centers).
The Fortis Healthcare group has progressive plans to change the healthcare delivery
landscape in India by being the premier healthcare provider in the region driven by
quality and most importantly "patient-centricity".
Leading healthcare group in India matching international standard
First hospital opened in 1999 at Mohali
Hallmark is patient-centricity approach
At present it has 22 hospitals and 2,500 beds.
"To create a world-class integrated healthcare delivery system in India, entailing the
finest medical skills combined with compassionate patient care"
Virtuous Values
Vision: Imbibe and share the vision.
Integrity: Lead through honesty and integrity.
Respect: Earn respect.
Trust: Gain patient trust.
Understanding: Commit to compassion, care and understanding.
Own: Own quality excellence.
Uphold: Uphold innovation and continuous improvement.
Share: Develop and share success.

Fortis Healthcare has assembled the finest talents in medicine, be they doctors,
nurses or technicians, and even management professionals across a wide spectrum.
Enabling them to deliver the highest quality of healthcare are state-of-the art facilities
and support infrastructure at each of our hospitals.
Fortis Healthcare India hospitals are benchmarked to International standards achieving quality through the relentless adherence to the protocols observed in some
of the world's leading hospitals.
The Fortis Healthcare circle of caring is fast expanding, spreading the name of Fortis
Healthcare, India reaching out to distant communities, welcoming patients from
beyond India's shores.

Goals: Market Dominance and Quality Excellence

Fortis has two goalsto be world class in quality and to dominate the market. The
pharmaceutical and pathology lab businesses of its promoters were the largest in
To assure quality, Fortis medical staffing and nursing staffing ratios were based on
Harvard recommendations. Fortis maintained 1:1 nurse-patient ration in the ICUs and
ICCUs. Every unit identified a quality champion, ideally a senior clinician, who was
supported by a full-time quality team leader and two executive assistants. All
employees were trained on quality protocols and compliance.
Code of conduct
This talk about the guiding principles which are expected to underpin all operations of
Fortis group companies and actions of its people. Adherence to this code of conduct
is expected to be modeled and reinforced at all time by directors, management,
employees and other full time associates of the Fortis Healthcare group.
The Fortis Healthcare group of Companies is committed to uphold its value in all
endeavors and shall partner with business associated who believe in and promote
similar values.



The Fortis Healthcare group believes in creating, sustaining and growing successful
businesses based on quality products and services; value to customers and
shareholders; partnership with employees and other stakeholders; ethical practices
and good corporate citizenship.
Universal Causes
The Fortis Healthcare group is committed to fostering the universal causes of
Environmental Protection, Human Rights and Health for all. A Fortis Healthcare group
Company shall strive to contribute actively to these causes where possible and,
minimally, shall ensure that no sphere of its activity impacts detrimentally upon any of
these causes.
National Interests
A Fortis Healthcare group Company is committed to contribute to the economic and
social development of India and other countries in which it operates. It shall strive to
align its activities to the economic development and foreign policies, objectives and
priorities of the nations government and conduct its business affairs within the legal
and statutory framework. The company will respect the socio-cultural and religious
mores of the country in which it operates.
Political Non-Alignment
The Fortis Healthcare group is committed to and shall support a functioning
democratic system in India. A Fortis Healthcare group Company shall not, directly or
indirectly, support any specific political party or candidate for political office.
Community Service
A Fortis Healthcare group Company shall actively engage in, and contribute to,
improving the quality of life of people in the communities in which it operates, through
specifically identifies initiatives. It shall also encourage and support volunteer
activities for community service by its employees.
Industries Development
The Fortis Healthcare group shall actively engage with policy makers and industry
associations towards developing the regulatory framework of the industry,
establishing quality benchmarks for products and services and promoting ethical
business and trade practices.
A Fortis Healthcare group Company is committed to enhance shareholder value. The
company shall comply with all regulations and laws that govern shareholders rights.
The board of directors of the company shall duly and fairly inform its shareholders
about all relevant aspects of the companys business.

A Fortis Healthcare group Company shall position the customer as the central focus

of all its business activities and providing value to customers as its central premise. It
shall provide high quality products and services towards meeting identified needs
and requirements of its customers and strive to continually upgrade the benchmarks
of customer value and experience. A Fortis Healthcare group Company shall adhere
to the highest standards of legal and ethical behavior in creating and developing its
relationships with customers.
The Fortis Healthcare group recognizes its people as the key source and drivers of
its endeavors. It is committed to upholding its core HR values in all dealings with
employees and other significant associates human dignity, respect, trust and
A Fortis Healthcare group Company shall be an equal opportunity employer, with
merit being the prime consideration in both recruitment and advancement, and will
not discriminate on the basis of race, caste, religion or sex. It will be an affirmative
action employer and will actively foster diversity in employment.
A Fortis Healthcare Group Company shall demand, demonstrate and promote
professional behavior and respectful treatment of all employees. A Fortis Healthcare
group Company shall provide a safe, healthy, gender-unbiased and supportive work
environment to its employees, free from any type of harassment, sexual or otherwise,
physical or verbal abuse or intimidation.
A Fortis Healthcare group Company shall base its HR management systems and
processes on the value of meritocracy, equity, objectivity, teamwork, collaboration
and empowerment. The Fortis Healthcare group shall provide opportunities for, and
support employees in exploring, developing and utilizing their potential and acquiring
new knowledge and skills.
The Fortis Healthcare group encourages and supports its employees in following the
code of conduct laid down by their professional associations and accrediting
The Fortis Healthcare group recognizes that suppliers are important contributors to
its business activities and is committed to partnering suppliers in mutually beneficial
and respectful relationships. A Fortis Healthcare group Company shall comply with
agreements and conditions of engagement with suppliers, in letter and spirit.
Government Agencies
A Fortis Healthcare group Company and its employees shall not offer or give any
company funds or properly as donation to any government agencies or their
representatives, directly or through intermediaries, in order to obtain a favorable
decision in any matter.

The Fortis Healthcare group believes in sustainable development and is committed to

best practices in environmental matters; A Fortis Healthcare Group Company shall

comply with all applicable environmental laws and regulations in conducting its
business affairs. It shall prevent wasteful use of natural resources and minimize any
hazardous impact of development, production, use and disposal of its products and
services on the environment.
Health and Safety
The Fortis Healthcare group attaches great importance to a healthy and safe work
environment. A Fortis Healthcare group Company shall provide good physical
working conditions and encourage high standards of hygiene and housekeeping. The
company shall ensure training of employees to increase safety awareness and
adoption of safe working practices to prevent workplace accidents and minimize
occupational health hazards.
Related Company Transactions & Cooperation within the Group
A Fortis Healthcare group Company shall cooperate with other companies within the
group by sharing physical assets, human resources and knowledge, where possible,
without adversely affecting its own business interests. A Fortis Healthcare group
Company shall five preferences to another Fortis Healthcare company in the
procurement of products and services on market competitive terms.
Aligning Work Systems & Processes
It is the responsibility of the Chief Executive of each business to ensure that the
Code of Conduct is appropriately communicated and propagated in their businesses,
and that policy, systems and processes in all areas of their operations reflect and
reinforce the guiding principles.


The directors, management and employees of the company, though their personal
conduct, shape and convey the culture and tone of the company and its professional

pursuits. It is expected that each member of the Fortis Healthcare group shall
constantly reinforce the stated values of the organization in their behavior and
actions, in both internal and external interactions.
Business with Integrity
Employees are expected to carry out companys business with professionalism,
honesty and integrity, displaying high moral standards and ethical business practices,
and without in any manner, compromising the interests of the company or group.
Conflict Of Interest
A Fortis Healthcare employee shall not engage in any business, relationship or
activity, which may potentially conflict with the interest of his company or the Group,
without prior permission from the management. This would include but not be limited
to concurrent employment; business relationships with suppliers/customers;
employing relatives or introducing them for employment; engaging in business with
relatives or introducing relatives for business relationships; financial investment with
an actual or potential competitor, supplier, customer or other business associate.
Employees shall always keep the interests of the customers in the forefront of their
activities and give them top priority. They are expected to interact with customers
with a high degree of respect and in the spirit of services. Employees shall not
accept/give any gifts, monetary or non-monetary, from/to customers.
Employees are expected to ensure that the interests of the company are maintained
in terms of quality of products, services and competitiveness of prices and terms
offered by suppliers.
Employees shall ensure that the companys interests are never compromised in
dealing with suppliers and will not accept gifts, other than those of a commemorative
nature, or any gratuity, payments, commissions or benefits in kind from suppliers.
Protection of Confidential Information
Employees shall not disclose or use any confidential information gained in the course
of association with the company, for personal gain or for the advantage of any other
person. No information shall be provided to the press, other publicity media or any
other external agency, formally or informally, expect within approved policies.
Public Representation
No employee, expect specifically authorized directors and employees, shall interface
with the media and other public constituencies, such as the financial community and
shareholders, or disclose any information pertaining to the business affairs of the
company, to any external agency.
Team Working
Employees are expected to cooperate with their colleagues and work together

cohesively and supportively, towards delivering required performance and achieving

organizational goals.
Workplace Behavior
Employees shall ensure that their behavior at work is aligned with the Fortis
Healthcare values and they conduct themselves with discipline and decorum; exhibit
respect for others in their dealings; and do not subject any employee, associate,
customer, supplier or visitor to any harassment, sexual or otherwise, verbal or
physical abuse or intimidation.
Relationships with Colleagues
It is expected that employees shall not allow any personal relationships with
colleagues to impact their work related decisions, manifest in unacceptable conduct
in the workplace and/or during working hours, or result in misuse of company
facilities or benefits.
Adherence to Code of Conduct
It is expected that all employees will adhere to and promote the Fortis Healthcare
code of Conduct, in letter and spirit, and will be committed to building up the image,
reputation and business of the company and the group.
Any instance of non-adherence to, or potential violation of, the Code should be
brought to the attention of the immediate reporting superior or nominated authority
and shall be addressed appropriately.

Fortis Operational Management and Structure

The Fortis hospital network was based on a hub and spoke model with multispecialty spoke hospitals providing comprehensive health care services and hub
hospitals with sub specialty services in one or more areas. This model helped Fortis
provide comprehensive health care services from within its own network to a large
geographical area. To make optimal use of the intra-network referral model, the
number of patients referred for surgeries from within the network versus those who
came from outside were constantly monitored.
Fortis hospital services prices were among the highest in India. Fortis justified the
higher prices by noting its large investments in infrastructure, equipment, nursing
facilities, and prominent doctors with high salaries. The price of procedures at subspecialty hospitals was higher than the spoke hospitals. Fortis bundled services at
hospitals as Packages, a single charge for a range of services associated with a
diagnosis, including examinations, common tests, room charges and procedure
Fortis refined many hospital protocols imported from the west for the Indian market.
For example, a typical Indian patient checked in accompanied by three to four
attendants and this number sometimes grew to 10 to 20 for patients from rural
backgrounds. Fortis ensured that the higher number of patient attendants was
factored in hospital design and workflows. It also accommodated cultural practices
which varied dramatically across the country. The hospitals provisioned for prayer
rooms for different communities at different sites.
Fortis Human Resource Policies
Fortis considered the recruitment and retention of highly skilled doctors, nurses and
other personnel its top priority. The staff at hospitals operated and managed by Fortis
was compensated by the respective hospital owners. At its owned hospitals, Fortis
hired reputed physicians at above-market salaries to access the patient roster and
increase the companys standing in the industry. Cultural fit was also used as
selection criterion in the interview process.
All specialists and most general practitioners were compensated on a salary plus
incentive basis. They worked across the network hospitals, depending on demand.
The physicians who practiced exclusively within the Fortis network earned a
guaranteed income and had predictable working hours. They could also provide
better continuum of care to patients, and had more time for resource development
and research. Although Fortis paid more in salary costs during the initial years, it
hoped to lower personnel costs in the future as physicians practices expanded.
Fortis outsourced housekeeping, security, grounds maintenance and various other
medical support services.
In most cases, Fortis replaced the physician-led management of acquired hospitals
with professional managers. This practice sometimes disturbed the power structure
within the hospitals, creating friction between physicians and managers. A senior
cardiologist at the recently acquired Escorts heart hospital remarked, Fortis
management is generating ill-will amongst the physicians, some of whom are the
best in the country. They overrule the decisions of senior surgeons and introduce
policies without consulting the physicians. To address such concerns, the Human
Resources departments of Fortis group hospitals focused on balancing business
requirements with the motivational concerns of the physicians.
Compensation of physicians varied significantly, depending on seniority, specialty,
reputation and demand for their services. Fortis had developed a formula to calculate

the variable component of salary, which factored success rate of various procedures,
patient referrals, and rapport with patients, administrative responsibilities and
publications. Though Fortis encouraged physicians to conduct research, it had not
developed a clear model to compensate for the time. The physicians in non-core
specialty areas, such as dentistry and ophthalmology, and in multi-specialty
practices, were permitted to maintain their own separate private practices and to
consult at other hospitals. They were compensated on a fee-for-service or revenuesharing basis.
Fortis salaries were considerably higher than the national average. The salaries of
the most senior consultants ranged from US$100,000 to US$600,000. In comparison
the salaries for a physician trained in internal medicine in an average Indian hospital
were in the range of US$10,000US$15,000 post residency and for specialists with
fellowship training in medical sub-specialties in the range of US$12,000US$20,000.
The hospitals expected the high-paying physicians to generate revenues to justify
their pay packages.
Marketing and Branding
Under the guiding hand of Ranbaxy, Fortis understood the importance of creating a
specific and strong brand identity. Fortis hoped that its message of quality would
help overcome the controversy between private primary care practices in the
community and hospitals around kickbacks for referrals.
The patient referral system in India was similar to other countries and relied on
referrals from the family doctor to specialists or directly to a hospital if the patients
needed a procedure. Patients frequently conferred with friends, family members and
other doctors before they chose a hospital. Those who were Internet savvy read
about their condition and identified the best physicians and hospitals. To aid in
physician retention, Fortis conducted Continuing Medical Education (CME) programs.
It reimbursed the physicians for any participation fees but did not compensate them
for the time spent on non-clinical activities. In 2006, Fortis physicians participated in
over 400 CMEs.
The major competitors of Fortis were the for-profit hospitals in North India, including
the nationwide chain of Apollo hospitals, and regional operators like Max Healthcare.
Fortis also competed with hospitals owned by government agencies or nonprofit
trusts, such as the Post Graduate Institute, All Indian Institute of Medical Sciences,
and hospitals affiliated with medical schools. As Fortis expanded into the rest of
India, it expected to face competition from established local players. A large number
of private hospital groups from Singapore, United States and Australia were also
planning hospitals in India.
With a growing demand for health care services by local Indian population, most
market participants felt that there was enough room for growth by addressing the
domestic market. To build a national brand, the hospitals jointly created the Indian
Health Care Federation whose agenda was to establish national benchmarks by
sharing clinical outcomes information among all the member hospitals.

Organization Effectiveness

Productivity and profit

Net Profit for the year ended 31st March 2008 was Rs 77.56 Lac
Profitability ratio is a healthy 26 percent
Occupancy rate 70-80 %
Wealth of medical expertise with the finest talent amongst doctors,
nurses, technicians and management professionals
Utilization of environment
Located in best of residential locations

Evaluation by external entities

Financial audits are conducted every year by external auditors

ISO 9001:2000 certified by International Certification Services Limited
Emphasis on Training and Development
New joiners go through an initial training program
Fortis training centers are also used
Community outreach programs for senior citizens named Arokya, Kids
& Teens

Organization Life Cycle

Management Organization Structure at Fortis

Chief Executive

Chief Financial

President Medical
Strategy and Quality

Specific Environment

Applying strategic Constituencies approach

President Strategy
and Organizational

Shareholders: Profit margins of 26 percent

Doctors and Administrative Staff:

Competitive remuneration, Learning


Patients: Multi-specialty, Quality Service

Community: Various community outreach programs
Government: Transparent in operations
About Fortis Noida
The Fortis Hospital at Noida, near Delhi, is a centre of excellence in Orthopedics and
Neuroscience with additional focus on Cardiac Sciences, Minimally Access Surgery
and Oncology.
The second mega hub hospital, in the Fortis Healthcare group, it caters to the special
needs of patients and their families. The hospital has been designed and developed
to deliver patient care with maximum ease warmth and effectiveness.
Medium-sized organization

No apparent change in size, after Fortis deal

17 departments

300-bed facility

256 full-time staff

Workforce divided into department heads and teams

Organization Structure at Fortis - Noida

* HK- House Keeping

* F&B Food and Beverages

Structure can be analyzed on following dimensions

Level of complexity
Horizontal Differentiation

37 Medical departments covering the entire breadth of medical

6 other departments (HR, Finance, Marketing and Sales, Materials,
Engineering and Nursing)
Social Specialization Doctors
Functional Specialization Nurses, Technicians

Vertical differentiation
3 levels of Hierarchy
Zonal Director
Head of Departments of all 43 departments
Teams under each department
Wide span of control

All departments are controlled by Head of Departments
Heads report to Zonal Director
Autonomy for each individual in the organization is limited
Financially Highly Centralized

Functionally Moderately Decentralized

Standard operating procedures
High level of standardization for administrative tasks
Low level formalization for Doctors
Subcontracts are highly formalized
Recruitment process is highly formalized
Impact on Structure
Medium-sized but multi-specialty hospital
Low Vertical but High Horizontal complexity
Moderately formalized
No direct impact on centralization

Porters Competitive Strategy

Differentiation focus strategy

Focused on upper middle class citizens of Noida

Differentiated itself by emphasizing on high technology, patient-centric
centers, high end health care service
Impact on structure
Moderately flexible structure
Moderate complexity in terms of hierarchy
Moderate formalization at higher level
Highly formalized, moderately decentralized decision making at
operational level




\Fortis Healthcare signs pact with US hospitals,

3.htm, accessed July 5, 2007

Interview with the P Virk, March 16, 2007- Business Today

U. Kher, Outsourcing your heart, Time Magazine, May 29, 2006

According to estimates, about 500,000 Americans get medical care outside the
U.S. Krysten Crawford, Medical Tourism Agencies Take Operations
Overseas, Business 2.0, August 3, 2006; and medical tourism industry could
grow to $40 billion by 2010 [David Hancock, The Complete Medical Tourist
(John Blake Publishing Limited, April 1, 2006)]