Formalisation and Organisational Effectiveness in Hospitals

Abstract

This study tests four propositions concerning the relationship between formalisation and organisational performance. The propositions are based on Hage's axiomatic theory, wherein formalisation is inversely associated with worker satisfaction and organisational adaptation, and positively associated with efficiency and production. Data were collected by questionnaire from 348 respondents from 92 units of eight hospitals, measuring formalisation, complexity, coördination, climate for change, quality of care and worker satisfaction. Propositions were tested on data aggregated to the unit level. Findings strongly indicate the need for careful respecification of the Hage model in terms of subconcepts of structural and performance measures. Confirmations are reported for four of the five propositions examined, and specified in terms of the subconcepts involved. Unexpected reversals are also found, however, suggesting that formalisation under some circumstances is beneficial for adaptation and morale, but conducive to inefficiencies under other circumstances.