‘We Do Much More Than Norms Require’: Making Sense of Family-Owned Healthcare Firms’ Profitability and Ethics

Esa Hiltunen,Riikka Holopainen,Kang Li

doi:10.1177/22779779211040163

Esa Hiltunen, Riikka Holopainen + Show 1 more

Open Access

https://doi.org/10.1177/22779779211040163

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Abstract

To address the literature gap regarding the business ethics of family firms in the healthcare sector, this case study investigates profitability and business ethics from the perspective of a very successful Finnish private healthcare company. The study combines business ethics and sensemaking theories to provide a broad view of the company’s performance and stimulate new thinking about the relationship between ethics and profitability in private healthcare. Company’s profitability requirements seem to elicit disapproval from the public. This study examines how a private, family-owned healthcare company combines business ethics and profitability successfully in its operations and how this family-owned company has successfully constructed a plausible, trusted and ethical identity. The theoretical framework of this study is based on business ethics, profitability, trust and sensemaking theory. The study shows that the case company has worked tirelessly to maintain high ethical practices and standards in providing excellent care and enjoying high profitability. By achieving high standards of business ethics and maintaining good social relations with stakeholders, the company has developed a plausible and trustworthy identity, while continuously improving its operations. The case shows that the surrounding environment, in particular, places significant pressure on the case company’s daily activities and management. Even when customers (municipalities and residents) are very satisfied with the quality of care, this does not automatically lead to performance and profitability in the short term. Profitability as a value creation can also depend on personal relations and trust fostered between the company and its stakeholders. Thus, applying sensemaking theory, profitability means company’s ongoing sensemaking about the plausibility of its actions and reading cues within the environment now and for the future.

Highlights

In Finland, healthcare companies are somewhere between a private and a public service provider—very often, the clients of private service providers are public entities like municipalities or cities
We noted that ethics and trust were important elements of success and profitability in the case company
The sensemaking framework allows for examining the power and identity struggle from the perspective of this private healthcare company

Summary

Introduction

In Finland, healthcare companies are somewhere between a private and a public service provider—very often, the clients of private service providers are public entities like municipalities or cities. In the Finnish business context, where public sector actors (municipalities) are the main customers of private firms, profitability is constantly questioned due to the use of tax money. This dilemma has prompted research studies to understand more about the ethics of private healthcare firms. A decline of confidence to business has been caused due to corporate scandals and crisis (Adams, 2012; Pirson et al, 2017). This has lowered trust to business and companies as an ethical actor. There has been a concern that business and profit maximization may displace high quality care conducted with high ethical standards

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