ORGANIZATIONS, ENVIRONMENTS, AND PERFORMANCE: A STUDY OF CONTRACT MANAGEMENT IN HOSPITALS (CORPORATE, INTERORGANIZATIONAL STRATEGY)

The analysis of interorganizational strategies and their performance implications has become a major research focus in the management literature dealing with organizational/environment interactions. This study develops an interdisciplinary conceptual framework for analyzing organization/environment interactions, such as interorganizational strategies, derived from major theoretical perspectives in the organization theory, business policy, and industrial organization literatures. Three underlying dimensions linking these perspectives are discussed, each offering differing views on the nature of the organization/environment interaction and its performance implications. These dimensions are termed dyadic strategies, competitive strategies, and institutional strategies. Dyadic strategies emphasize internal organization resource issues, competitive strategies stress market position, and institutional strategies emphasize external reputation and image. Hypotheses are generated regarding the covariation of variables representing these dimensions as well as predictions of performance. The study then applies this framework to the empirical analysis of interorganizational strategies and performance in the health care industry. More specifically, those hospitals opting for contract management (whereby an outside organization is contracted to provide comprehensive management services) are the focus of empirical investigation. The framework serves to link the antecedents and consequences of contract management. Results of the study suggest that the three dimensions emerging from the conceptual framework have distinct empirical counterparts, as suggested by a factor analysis of board of trustee responses to a survey questionnaire dealing with the antecedents of contract management. The key surrogate variables underlying these factors were then used in grouping a sample of hospitals under contract management into distinct clusters. The cluster profiles suggested that a single dominant view of the antecedents of contract management existed, corresponding to one of the three dimensions, and that this dominant view differed sharply from cluster to cluster. Finally, cluster membership proved useful in uncovering variation in the performance changes coincident with the interorganizational strategy of contract management, generally consistent with the hypothesized linkage between the antecedents and consequences of contract management. The research findings suggest that the determination of actual performance outcomes can benefit from an understanding of anticipated performance outcomes, as expressed by key organizational decision makers