CEO perceptions of organizational consensus and its impact on hospital restructuring outcomes

Abstract

Increased competition and resource scarcity have caused hospitals to seek internal efficiencies by restructuring their structures and processes. The purpose of this paper is to examine the effects of an organization's orientation toward control and learning and the use of process facilitators on perceived organizational consensus on outcomes related to cost, quality, and the ability to sustain implemented changes following a major hospital restructuring. Data from 263 hospitals from across the USA were collected. Factor analysis was employed to develop scales measuring the organization's emphasis on learning, controls, and processes. Regression analysis then examined their relationship to the consensus on restructured outcomes. The findings suggest a positive relationship between a learning orientation and processes with improved perceived agreement on restructuring outcomes. Hospitals with control orientations have a negative relationship with perceived organizational consensus. The research has some limitations. The primary data for both the CEOs' and employees' perspectives comes from hospital CEOs. Also, the study is a cross-sectional study and lacks longitudinal information. It also includes mostly not-for-profit hospitals, with 100 or more beds, in urban areas. Practical implications - Hospitals will continue to feel pressures for the need to restructure and change. The findings suggest that hospitals achieve better results if they foster a learning orientation and put in place processes to facilitate the challenges of change. Although control systems are important, executives should realize that they might impede organizational efforts during organizational change. Hospitals may succeed in their change efforts by balancing adequate control and learning that are supported by processes to facilitate restructuring efforts. The work provides an original study on the effects of an organization's orientation of learning and controls and change processes on the perceived consensus of restructuring outcomes. The dichotomy of learning and controls has not been applied to hospital consensus on outcomes. The research suggests that hospitals can improve their change efforts by implementing appropriate processes and greater learning mechanisms. During times of stress and change hospitals often become more control oriented, which may create greater misalignments and ineffective change. Managers should learn from the research that appropriate processes and learning will provide better consensus and more effective change.