Ownership, organizational form, and environment: A comparative study of strategic behavior in the hospital industry

This study was undertaken to investigate patterns of hospital strategy in relation to ownership type and organizational form across changing environmental conditions. Between 1980 and 1986, the hospital industry experienced significant changes in its external environment. This study was designed to test whether these changes have altered the relative importance of ownership type and organizational form as determinants of hospital strategic behavior.; The study's theoretical framework was based on a typology of organizational strategy that has been developed and tested through research in the field of strategic management. The typology posits four conceptual dimensions of organizational strategy: cost efficiency, differentiation, asset parsimony, and focus.; A multivariate taxonomic analysis was used to operationalize the study's theoretical framework. Variable selection was based on previous research, interviews with hospital administrators, and a priori theoretical considerations. Each variable was assigned to the conceptual dimension of strategy to which it most logically corresponded.; The study sample was drawn from the universe of short term, general hospitals in California. Hospital service and financial data were obtained from the California Office of Statewide Health Planning and Development.; Cluster analysis was the statistical technique used to identify hospitals with similar configurations of study variables. Hospitals that clustered together were assigned to the same "strategic group." Cluster analysis was performed twice, once on 1980 data (before the environmental changes) and once on 1986 data (after the environmental changes).; Contingency tables were used to examine the effect of ownership type and organizational form on strategic group membership. As expected, ownership type was a weaker determinant of strategic group membership type after the environmental changes than it was before the changes. Contrary to expectations, however, organizational form was not a stronger determinant of strategic group membership after the environmental changes than it was before the changes.; Policy implications concern the tax-exempt status of not-for-profit hospitals, and the relative merits of competition versus regulation as policy tools for promoting the efficiency, accessibility, and quality of hospital care.