Organizational Effectiveness and Financial Performance: A Healthcare Study

Abstract

Many studies have been conducted on approaches to organizational effectiveness and financial performance in the healthcare industry. The purpose of this article is to study the Relationship Between Measures of Perceived Organizational Effectiveness and Actual Financial Performance in the Medical Group Practice Environment. The population in this study came from an annual survey of U.S. medical practices conducted by the Medical Group Managers Association (MGMA). The evaluation instruments developed are a composite of documented and currently active instruments, including components of organizational effectiveness, general demographics, locus of control, and constituent/environmental influences. Statistical analysis of data includes regression analysis and descriptive statistics measures. The three tested hypotheses in the study are not supported. However, the study does support an understanding of industry relationships and reinforces the findings of former studies. Additionally, a new level of confirmation is established indicating that even under greater levels of environmental control, perceived organizational effectiveness and actual financial performance has no significant relationship. This article provides a concise summary and update of a larger and more detailed body of work.