A Behavioral Model of Innovative Search: Evidence from Public Hospital Services

Abstract

This article examines the generative mechanisms and underlying contingencies of innovative search. Extending behavioral arguments to the public sector context, it proposes that changes in innovative activity reflect either of two organizational search processes. The first process, commonly known as problemistic search, is triggered by negative performance feedback and initiated to identify appropriate solutions for the performance problem at hand. The second process is known as slack search. It is driven by the availability of excess resources, which decision makers seek to employ most fruitfully. In addition to these fundamental driving forces of innovative search, the proposed behavioral model attributes important moderating roles to organizational slack and regulatory endorsement. In particular, it suggests that public service organizations with high levels of available slack are most likely to engage in problemistic search following perceived performance shortfalls. Similarly, it is assumed that problemistic search is most salient among organizations with full regulatory endorsement. Conversely, when endorsement is low, slack search gains in importance. These behavioral propositions are tested based on novel panel data from the entire population of public nonspecialist hospital organizations in the English National Health Service. Findings from fixed-effects panel regression analyses offer broad support for the proposed behavioral model of innovative search, which has important implications for public administration research and practice. ‘‘The concepts needed for a theory of decision making by political organizations are not strikingly different from those needed in dealing with the firm’’ (Cyert and March 1963, 198).