Abstract
This paper examines how executives in multi-business healthcare firms strategically use scope and the extent of centralisation to compete in the dynamic and complex healthcare environment. Scope is defined as the breadth and type of businesses comprising the corporate firm. Results suggest executives tend to take a decentralised approach attributed to the dynamic nature of healthcare and strong institutional stakeholders. Also, two distinct strategic groups based on different scope of businesses are observed. One group provides health plans and emphasises its ambulatory care services, while the other group does not provide health plans and focuses on its acute hospital and sub-acute long-term care businesses. Finally, executives are engaging in new ways of competing by increasingly purchasing different types of related non-patient care for-profit businesses and engaging in multiple collaborations in order to increase profitability.
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