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Drivers Of Hospital Entrepreneurship Health And Social Care Essay

Background: As many governments deregulate their healthcare sectors, interest in entrepreneurship among hospital managers and physicians is growing. Still, little is known about the intra-hospital dynamics leading to entrepreneurial behavior.

Purposes: The purpose of this article is to review the existing literature concerning the influence of intra-organizational dynamics on entrepreneurship among hospital managers and physicians.

Approach: We conducted a systematic review on how intra-organizational dynamics among hospital managers and physicians influence entrepreneurship.

Implications for Practice: With the implementation of healthcare reforms, physicians’ dependence on hospital management has increased. Among physicians this evoked two type of responses. As part of a defensive response or value commitment, physicians are pushed to adopt entrepreneurship in order to defend their traditionally dominant position and professional autonomy. In contrast, physicians holding a reformative posture or value commitment towards traditional medical professionalism, are pulled to adopt entrepreneurial elements of business-like healthcare by the prospect of increased autonomy and income.

In this context, interest dissatisfaction and type of response or value commitments can both stimulate and determine the nature of physicians’ entrepreneurship. As a result, hospital management can influence the tendency to- and nature of physician’ entrepreneurship depending on their attention given to physicians’ interests. For example, hospital managers, can pay explicit attention to the professional autonomy and development of physicians showing a defensive response towards business-like healthcare logic in order to commit them to hospital-wide entrepreneurial initiatives. Likewise, physicians driven by a reformative response can be facilitated by an organizational environment where proactiveness, innovativeness and constructive risk-taking are both encouraged and rewarded by hospital management.

KEY WORDS

institutional practice; organizational change; hospital-physician relations; entrepreneurship; hospital administrators; physicians; literature review

INTRODUCTION

Entrepreneurship among hospital managers and physicians is gaining increased attention. The aging society, the progress of innovation, and the growth of chronic illnesses are pushing healthcare beyond its limits both in terms of costs and capacity. In response, many governments of European countries started to reform their healthcare systems during the 1990s (Saltman, Busse, & Mossialos, 2002). By adopting principles of the new logic of business-like healthcare, more weight was given to cost containment, efficiency and patient satisfaction.

Logics provide the organizing principles for a field (Friedland & Alford, 1991). As they refer to belief systems and practices that are dominant in an organizational field (Scott, Ruef, Mendel, & Caronna, 2001), they provide both unity and direction. As a consequence, the introduction of a new strongly influences actors at different levels within a field by leading them in new directions (Kitchener, 2002). The introduction of the business-like healthcare logic meant a direct threat to the previously dominant logic of medical professionalism (Reay & Hinings, 2009). As part of the traditional logic, physicians [1] were dominant both in relation to their patients and to other medical professionals as well as in relation to hospital management. Under the new logic, this dominance started to erode, and tensions arose between physicians embedded in the logic of medical professionalism and hospital management embedded in the business-like healthcare logic (Reay & Hinings, 2009).

These tensions are intensified by governance structures that include physicians in the formal decision-making structure of their hospital. As a result, hospital managers are left with limited formal power while each of the two groups (i.e. physicians and hospital managers) is dependent on the co-operation of the other (Scholten & Grinten, 2002). The mutual interdependence of actors embedded in competing logics leads to unique intra-organizational dynamics.

Next to intensified intra-organizational dynamics, the introduction of the business-like healthcare logic, has resulted in competition, innovation and entrepreneurship among healthcare providers and has led to pervasive reconfiguration of healthcare fields (Saltman, et al., 2002). Entrepreneurship involves the intersection of two phenomena that have received wide attention: the presence of opportunities, and the presence of enterprising individuals (Shane & Venkataraman, 2000). In contrast, the processes involving the interaction of hospital managers and physicians that drive hospital-related entrepreneurship seem to remain largely neglected in literature. We aim to contribute to literature by answering our central review question: How do intra-organizational dynamics among hospital managers and physicians influence entrepreneurship?

In answering this question, we will focus our review on the influence of intra-organizational dynamics in explaining entrepreneurship of hospital managers and physicians. We will structure our search by applying neo-institutional theory. This theory provides a model linking organizational context and intra-organizational dynamics to change (Greenwood & Hinings, 1996).

CONCEPTUAL FRAMEWORK

Neo-institutionalism defines radical change as the adoption of a new template that breaks with the prevailing institutional template in its field (Dacin, Goodstein, & Scott, 2002). In mainstream literature, institutional templates are often referred to as institutional logics (Battilana, Leca, & Boxenbaum, 2009); for the sake of clarity, we will consistently use the term logics instead of template.

Because entrepreneurship of hospital managers and physicians implies a transition from the traditional logic of medical professionalism emphasizing strict isolation from commercial interests towards a business-like healthcare logic, including a stronger and more explicit emphasis on entrepreneurial values, it is an example of radical change.

In their effort to explain radical change, Greenwood and Hinings (1996) introduced a model linking contextual influences like the introduction of business-like healthcare, to intra-organizational dynamics between groups. These dynamics consist of an interplay between ‘interest dissatisfaction’, ‘value commitments’, and ‘power dependencies’ as depicted in figure 1.

As the model fits well with both the contextual changes faced by hospital organizations and the intra-organizational dynamics between the two groups of managers and physicians, we apply its concepts in answering our central review question. Consequently, we formulate the review questions to capture the intra-organizational dynamics driving hospital entrepreneurship.

Figure 1: Review framework

Power dependencies – interest dissatisfaction

“Organizations are arenas in which coalitions with differing interests and capacities compete for dominance” (Greenwood & Hinings, 1996, p. 1035). Resulting power imbalances constrain those actors more dependent on others in terms of their ability to act in ways that satisfy their interests (Molm, 1997). Interest dissatisfaction is defined as an outcome of a competition for power (Ehrenhard, 2009). The extent to which certain groups are satisfied or dissatisfied with how their interests are accommodated by the organization may be a pressure for either stability or change.

In addition, interest dissatisfaction may not only result from power differences, it may also result from a lack of autonomy, whether real or perceived, experienced by medical professionals in dealing with patients and the lack of control or influence experienced by hospital managers (Reay & Hinings, 2009). Especially in professional bureaucracies, managerial interventions to improve coordination between the domains of physicians, nursing, and the hospital organization may conflict with the professionals’ sense of autonomy as it counters widespread pigeon-holing behavior by professionals (Mintzberg, 1983). This raises the first subsidiary review question: In what ways do power interdependencies between physicians and managers lead to interest dissatisfaction in hospitals?

Power dependencies – value commitments

Although a high level of interest dissatisfaction may provide a stimulus for change, the direction for change is provided by value commitments. Central to value commitments is the notion that dissatisfied groups or individuals may develop a competitive commitment once they recognize that the prevailing logic is disadvantageous to their interests (Greenwood & Hinings, 1996).

We will focus our review to the two commitments that are relevant in explaining change: a defensive commitment aimed at maintaining the status quo, and a reformative commitment (including a competitive commitment) in favor of an alternative logic (Kellogg , 2009).

As the business-like healthcare logic emphasizes entrepreneurial values, practices and processes, we include entrepreneurial orientation as defined by Lumpkin and Dess (1996) in our review. Based on their work, we reason that the level of entrepreneurial orientation of organizational members or groups will be critical in explaining entrepreneurial initiatives.

The concept of entrepreneurial orientation itself refers to the processes, practices, and decision-making activities that lead to new entry. It comprises the following constructs (Lumpkin & Dess, 1996; Miller & Friesen, 1983):

Autonomy refers to the independent action of an individual or team in proposing an ideal or a vision, and carrying it through to completion.

Innovativeness refers to the tendency to engage in and support new ideas, novelty, experimentation, and creative processes that may result in new products, services or technological processes.

Risk taking refers to the proclivity of respondents to initiate risky projects and their preference for bold versus cautious acts.

Proactiveness refers to the capability to find and exploit new products and/or market opportunities.

Competitive aggressiveness refers to the propensity to directly and intensely challenge competitors so as to achieve entry or improve position, in a way that outperforms rivals.

Although we consider entrepreneurial orientation to be closely related to a reformative commitment, we will review both concepts separately. Consequently, we formulate our second subsidiary review question as follows: How are power dependencies related to a defensive or reformative commitment and/or an entrepreneurial orientation in hospitals?

Interest dissatisfaction - value commitments

According to Greenwood and Hinings (1996), functionally differentiated groups like physicians and managers in hospitals are not neutral towards each other. In fact, rivalry for dominance is ever present. Dissatisfaction with how interests are accommodated by the organization can potentially be a pressure for change (Covaleski & Dirsmith, 1988). This is dependent on both the degree of dissatisfaction and the presence of a sufficiently strong reformative commitment.

Furthermore, we expect the key dimensions of entrepreneurial orientation - like a propensity to act autonomously, a willingness to innovate and take risks, and a certain level of awareness or aggressiveness towards competitors - to be present among entrepreneurial hospital managers and physicians (Lumpkin & Dess, 1996; Miller & Friesen, 1983). However, it is unclear how interest dissatisfaction is related to reformative commitment and entrepreneurial orientation. Consequently, we formulate our third subsidiary review question: How do interest dissatisfaction, defensive or reformative commitment, and entrepreneurial orientation interact in hospitals?

METHOD

Data sources and searches

The databases of Scopus, ISI and Pubmed were searched for relevant studies. The searches were conducted in October-November (weeks 43-45) 2009. The retrieved articles were manually searched for other relevant references. The following search terms were used:

Search 1: Terms related to power dependency and interest dissatisfaction:

((physician OR doctor) AND (manager OR administrator) AND dissatisfaction)

((physician OR doctor) AND (manager OR administrator) AND power NOT nurse)

((physician OR doctor) AND (manager OR administrator) AND (power OR interest) AND (hospital OR clinic) NOT nurse)

Search 2: Terms related to power dependency, defensive or reformative commitments, and entrepreneurial orientation:

((physician OR doctor) AND (manager OR administrator) AND (power OR values) AND ("entrepreneurial orientation" OR autonomy OR innovativeness OR "risk taking" OR pro-activeness))

Search 3: Terms related to interest dissatisfaction, defensive or reformative commitment, and entrepreneurial orientation:

interests AND values AND ‘“entrepreneurial orientation” OR autonomy OR innovativeness OR "risk taking" OR pro-activeness OR "competitive aggressiveness"’

Study Selection

Studies were included if they complied with all of the following criteria:

Written in English

Published between 2000 and 2009

Commentaries were excluded

Dealing with the influence of competing logics on intra-organizational dynamics and/or the influence of intra-organizational dynamics on entrepreneurial initiatives and/or explanations for entrepreneurial behavior by physicians and hospital managers.

Data extraction

Study inclusion was determined in a two-step procedure. First, the abstracts of retrieved studies were evaluated for concordance with the formal inclusion rules by one reviewer. The remaining studies were selected for full text appraisal. In this second step, all full texts were checked against the criteria, and excluded if violating any one of them. The resulting set of articles are presented and discussed in detail.

FINDINGS

The literature search initially identified 970 candidate articles, of which 111 were selected for full text retrieval (Figure 2). In all, 31 publications satisfied all criteria and are included in this review. These were 21 quantitative and qualitative studies, and 10 theoretical papers.

Figure 2: Diagram for search and selection processes

We present the main findings and finish with a summary per review question.

POWER DEPENDENCIES AND INTEREST DISSATISFACTION IN HOSPITALS

We found twenty-one papers dealing with the influence of power dependencies on interest dissatisfaction in hospitals: twelve surveys, four single case studies and one multiple case study, and four essays. Every article was weighted based on methodological rigor, richness of empirical data, and relevance for the research question. An overview of the review results in order of quality of design and resulting material, can be found in table 1.

Many reports were found on the increased interdependence between physicians and managers resulting from the introduction of the business-like healthcare logic. (Castellani & Wear, 2000; Degeling, et al., 2006; Kaissi, 2005; Lega & Depietro, 2005; Som, 2005; Sutherland & Dawson, 1998; Warwicker, 1998). Although, medical dominance in key areas of technical and clinical autonomy is reported to remain strong (Abernethy, 2004; Currie, Humpreys, Waring, & Rowley, 2009; Fitzgerald & Ferlie, 2000; Klopper-Kes, Meerdink, van Harten, & Wilderom, 2009; McDonald, Waring, & Harrison, 2006; Succi, Lee, & Alexander, 1998), it is a source of strain and interest dissatisfaction among physicians (Thorne, 2002).

Moreover, physicians have not uniformly lost power outside these key clinical areas, and some have gained considerably. Many who have assumed hybrid roles and gained in political power and autonomy are themselves exercising a degree of quality control or technical control over other professional colleagues (Fitzgerald & Ferlie, 2000).

Despite these reports of physicians being successful in retaining power, physicians are more pessimistic than managers about their relationship (Rundall, Kaiser, Davies, & Hodges, 2004). This may be explained by the pervasive nature of the change brought by the introduction of the business-like healthcare logic. Another explanation may be the observation made in numerous studies indicating that both physicians and managers believe the other group has more power than they attribute to their own group (Braithwaite & Westbrook, 2004; Salvadores, Schneider, & Zubero, 2001). This observation is of particular importance as willingness of groups to participate in decision making and the implementation of policies may be tied to their perception of their influence and level of power (Daake & Anthony, 2000; Paul Leigh, Kravitz, Schembri, Samuels, & Mobley, 2002). Next, their perceived powerlessness may influence the level of interest dissatisfaction as physicians may not support new policies when they perceive them as management-led without adequate consultations (Som, 2005).

The influence of power dependency on interest dissatisfaction might be mitigated by the use of common goals and objectives to stimulate collaboration. By defining superordinate goals related to a patient perspective, conflict and interest dissatisfaction between managers and physicians could be diminished (Klopper-Kes, et al., 2009).

Summarizing, there is still limited empirical material answering this research question. Although no studies were found dealing with interest dissatisfaction among hospital managers, convincing data on the influence of power dependency and interest dissatisfaction among physicians was found in the surveys of Paul Leigh (2002) and Degeling (2006), and the case studies described by Cohn (2005) and Som (2005). These studies conclude that the introduction of business-like healthcare logic has severely altered the relationship between managers and physicians in hospitals. Power dependencies between the two groups both shifted and intensified in favor of hospital managers. The diminished economic autonomy of physicians and continuous efforts to bring clinical care within a management framework lead to interest dissatisfaction among physicians. The level of their dissatisfaction is dependent on the extent of their subordination to management and the use of structural power to control their clinical practice. Superordinate goals to stimulate collaboration between physicians and managers possibly mitigate the influence of power dependency on interest dissatisfaction.

Table 1 (Results presented in order of sample size and methodological rigor)

Review Question 1: In what ways do power dependencies between physicians and managers lead to interest dissatisfaction in hospitals?

Reference

Focus

Methodology

Main Finding

Paul Leigh, et al., 2002, Archives of Internal Medicine

Physicians

Survey, n=12.474 physicians

A relative high proportion of dissatisfied physicians practices “procedural” specialties (eg, ophthalmology and orthopaedic surgery), whereas physicians practicing some “cognitive” specialties (eg, infectious diseases and paediatrics) are unlikely to be dissatisfied. The change in these levels that has occurred in recent years can explain this difference. Reported dissatisfaction for procedural specialities can be explained by the considerable loss of income, autonomy and job openings with the advancement of managed care.

Degeling, et al., 2006, Social Science and Medicine

Hospitals

Survey n=2.637

The interests of physicians and managers across Commonwealth countries are united in a commitment to the viability of a health service but opposed on how dilemmas about scarce resources, clinical autonomy and accountability might be addressed.

Succi, et al., 1998, Journal of Healthcare Management

Physicians and managers

Phone survey n=2.609 physicians

For cost-quality management, managers and physicians have different professional interests. Both groups associate increased power in this area for their own group with greater trust. Physicians nor managers did not experience less trust when the counterpart group held more power in areas they traditionally dominated. Both groups may have come to recognize the importance of the counterpart group's contribution to hospital decisions, even in areas outside their expertise.

Salvadores, et al., 2001, BMC health services research

Hospitals

Survey. N=1.027 workers from four different public hospitals (two university-based and two district hospitals)

.

Every professional division in hospitals attributes the least power to itself. Nurses and administrative staff regard the medical staff as the holder of the highest real power inside the hospital, whereas the medical staff attributes the highest power to the administrative staff. Not even the highest strategic levels (managers, heads of departments) attribute real decision-making authority to themselves. Every division feels that the power is in different hands than their own.

Daake & Anthony, 2000, Health Care Management Review

Physicians and managers

Survey, n=500

The more influential a group perceives itself to be, the more likely it is to support the current direction or mission of the organization. One explanation is that if a group believes it has influence over and input into the direction of the organization, the members are more likely to agree with that direction. Willingness of groups to participate in decision making and implementation of policy may be tied to their perception of their influence and level of power.

Klopper-Kes, et al., 2009, Organization and Management

Physicians and managers

Survey, n=162

Hospital managers perceive physicians as superior in professional status and power with different goals. Physicians perceive hospital managers having more power, different goals and lower status. Both groups highly value a more effective co-operation among each other and share a focus on patient related problems. By defining super ordinate goals with a patient perspective, conflict between managers and physicians could be diminished.

Rundall, et al., 2004, Journal of Healthcare Management

Physicians and managers

Survey: n=107

The relative power of doctors and managers is a source of strain on their relationship. Physicians are more pessimistic than managers about the state of doctor-manager relationships and to be more likely to disagree with any positive statement about that relationship.

Abernethy (2004), Accounting, Organizations and Society

Physician managers

Survey: 56 physician managers

Physician power is manifested in their control over significant resources without any formal accountability for the use of those resources (Abernethy & Lillis, 2001). Unlike formal authority structures, physicians have been able to use their power to influence decision making at all levels within hospitals. They use this informal authority to bypass the authority systems implemented by senior management. Furthermore, their power has enabled them to avoid accountability for the resource management of clinical units. Physicians have been able to retain their power to a much greater extent than other professionals associated with providing social services.

Braithwaite & Westbrook, 2004, Health Services Management Research

Managers and staff in hospitals

Survey: 49 managers, 5 non-CD hospital executives, 9 senior CD managers, 1 business manager, 34 manager of ward or department, 46 doctors, 24 nurses, 10 administrators in one hospital

Both the managerial and non-managerial groups believe the other group has more power than the group attributes to itself. Managers are more positive about CD's (clinical directorates) than non-managerial group. Managers believe CDs have improved working relations and brought better organization and benefits. Non-managers' cluster tends to be a dispersion of weaker and uncertain attitudes. Respondents deny CDs have led to improvements in working relations or are related to better organization or benefits.

Currie, et al., 2009, Health, Risk and Society

Physicians and managers

Survey: 44 physicians, 6 managers

Despite attempts at their regulation and control, doctors are still located at the apex of the professional hierarchy.

Fitzgerald & Ferlie, 2000, Human Relations

Physicians

Two longitudinal studies between 1990-1994. Mixed methodology: interviews, questionnaires and telephone follow-ups. N-31 clinicians

It is evident that while attention has focused on the power shifts between professionals and managers, a substantial shift of power within the medical professions may be observed. Professionals have not uniformly lost power, some have gained considerably: Many of those professionals who have assumed hybrid roles and gained in political power and autonomy are themselves exercising a degree of quality or technical control over other professional colleagues. Although economic autonomy of doctors may be diminished, medical dominance in key areas of technical and clinical autonomy remains strong.

Castellani & Wear, 2000, Qualitative Health Research

Physicians

Survey: n=50 interviews

Struggles of physicians include (a) the struggle to negotiate the cultural clash between medicine and managed care, (b) the struggle to find counterbalance to professional decentralization and its attack on medicine’s power and ethics, and (c) the struggle to create new concepts of profession sufficient to overcome medicine’s current narrative dysfunction. However, physicians are resilient and are meeting the professional demands of corporate healthcare by becoming sophisticated about its bureaucratic organization and the ways in which their professional and personal commitments fit in the system.

McDonald, et al., 2006, Sociology of Health and Illness

Physicians and managers

Case study of single large teaching hospital (39 interviews) in the UK

The tendency of doctors to blaming ‘of the system’ for creating a chaotic environment, which required them to exercise great flexibility and judgement, may be the product of a working environment in which doctors see themselves as central. Guidelines provide non-medical managers with a legitimate reason for attempting to challenge medical practice. Yet doctors resist all attempts at control and challenge their legitimacy with great success, since they continue to exercise control and resist rules.

Ong & Schepers, 1998, Journal of management in medicine

Hospitals

Interviews. UK: single hospital, NL: 9 hospitals

In both The Netherlands and the UK, medical power is being re-defined within a broader domain of managerial power. Doctors can invoke the idea of professional autonomy and clinical freedom to protect their own power and by so doing define the boundaries for change.

Cohn, et al., 2005, Surgery

Hospitals and physicians

Case study

Physicians and hospital managers display different perspectives and behaviours stemming from their training and professional interests. Rapid changes in the clinical and financial health care environment and the need to consider the interests of many diverse constituents make conflict inevitable.

Som, 2005, International Journal of Public Sector Management

Physicians and hospitals

Case Study

Tensions exist between management wishing to bring clinical care within a management framework and doctors who are resisting managerial efforts to replace the old framework of bureau professionalism.

Thorne, 2002, Health Services Management Research

Physicians and managers

Case Study

The medical profession is being ‘embattled’, facing challenges to its expertise and organizational power. Doctors’ fear reforms due to 1. The use of structural power to control the medical ‘experts; 2. subordination of doctors to managers; 3. the motives and competence of managers.

Kaissi, 2005, The health care manager

Physicians and managers

Theoretical paper

Many contextual factors have caused the separation between managers and physicians to disappear, thus managers and physicians are more interdependent. Conflict of interest are ultimately resolved through the medium of power. Managers’ and physicians’ power over each other can have different sources. Managers may provide resources; physicians can develop new skills for specific procedures. The balance of power will be determined by whether each party is the sole or major provider of resources and by the dependence of the other party on these resources.

Lega & Depietro, 2005, Health Policy

Hospital

Theoretical paper

The analysis of several recent re-organizations in hospital on an international scale shows some common trends, such as the re-organization based on intensity of care and cure, the empowerment of the nursing staff, the implementation of tools to govern and support managerial and clinical skills and competencies required to play new emerging roles.

Sutherland & Dawson, 1998, Quality in Health Care

Physicians, managers and hospitals

Theoretical paper

Despite recent erosions into the legitimacy of professional autonomy of physicians, it remains a powerful force and is one of the defining issues in the relationship between managers and professionals. For doctors, quality has traditionally been linked inextricably with professional autonomy, the profession secures the trust of lay people (and politicians) in their capability and willingness to monitor and regulate quality.

Warwicker, 1998, International Journal of Public Sector Management

Physicians

Theoretical paper

The model of "managerialism" attempts to subordinate and control professional practice - professionals themselves could be turned into managers or into budget holders and it was to put PG's into a bureaucratic chain of command.

POWER DEPENDENCIES, VALUE COMMITMENTS AND ENTREPRNEURIAL ORIENTATION IN HOSPITALS

Seven papers were found dealing with the relation between power dependencies and reformative commitment in hospitals. We encountered no material on the relation between power dependencies and entrepreneurial orientation. Three of the papers are based on surveys, one paper is based on a single case study, and three papers are essays. Every article was weighted based on the extent to which it dealt with the research question and its empirical rigor.

Structural and ideological changes brought by the business-like healthcare logic threaten medical dominance as it increases dependence on hospital management. In response to the rising tensions resulting from increased dependence on hospital management, physicians show a range of possible behaviors depending on the nature of their value commitment.

Physicians driven by a defensive value commitment are reported to be more willing to leave their profession than to change the way they practice (Floyd, Kramer, & Born, 2005). In response, they may choose to leverage their position as sole supplier of essential knowledge and skills to protect their interests (Ong & Schepers, 1998). A more explicit strategy driven by a defensive value commitment is to invoke the help of the board of trustees or to start lawsuits against hospital management adopting principles of the business-like healthcare logic (Feinstein, 2003).

As part of a defensive value commitment towards the business-like healthcare logic to maintain their professional autonomy, physicians may be pushed to explicitly adopt elements of this logic. As a result, these physicians may attend business schools to acquaint themselves with the concepts of business-like healthcare (Thorne, 2002) or establish their own clinics or healthcare system based to some extent on the logic of medical professionalism (Feinstein, 2003). As a consequence, their dependence on managerial power of others decreases as physicians integrate managerial functions in their own set of responsibilities.

Finally, physicians may develop a reformative commitment towards their traditional logic of medical professionalism and chose to be medical entrepreneurs. Their growing interest in gaining additional sources of income, rising consumer expectations like access to one-stop shopping, and desired autonomy over working conditions, pulled physicians to become medical entrepreneurs. As medical entrepreneurs, physicians may invest in enterprises delivering ancillary medical services, in specialty clinics or outpatient centers. (Berenson, Bodenheimer, & Pham, 2006; Fletcher, 2005).

In general, entrepreneurial responses to the business-like healthcare logic can be well explained from a historical point of view as commercial considerations among physicians have always been implicitly present although often explicitly denied (Stone, 1997). Bhuian (2005) reports that too strong and explicit entrepreneurial values however are detrimental for hospitals’ performance. Both hospital managers and physicians should therefore consider the internal implications of strong entrepreneurial values.

In addition to the defensive and reformative value commitments of physicians driving entrepreneurship, we did not find studies on joint entrepreneurial activities by both physicians and managers (Berenson, et al., 2006), neither did we encounter studies concerning the drivers and entrepreneurial orientation causing hospital managers to engage in entrepreneurship.

Although our review uncovered only limited empirical material concerning the influence of power dependencies on the reformative commitment of physicians, the most convincing studies we found were in the survey of Berenson (2006), and the case study of Thorne (2002). Summarizing the results: increased power dependence on hospital managers has heightened both defensive and reformative value commitments among physicians. As part of a defensive value commitment, physicians defend their position and autonomy and are pushed to embrace certain elements of the business-like healthcare logic in order protect their professional autonomy in an effective way. Physicians are pulled towards entrepreneurship by the prospect of increased autonomy and income and develop a reformative value commitment towards their traditional logic of medical professionalism.

Table 2 (Results presented in order of sample size and methodological rigor)

Review Question 2: How are power dependencies related to reformative commitment and entrepreneurial orientation in hospitals?

Reference

Focus

Methodology

Main Finding

Floyd, et al., 2005, Health Care Management Review

Physicians and managers

Survey: n=1.221 physicians.

Findings indicate that physicians have not accepted, and have not likely internalized, managed care practices. During a period of unprecedented change in physician practice, many physicians appeared more willing to leave the field, than change the way they practice. Greater harmony between the goals of health care organizations and medicine’s professional ideals can strengthen physicians’ organizational commitment, as well as their acceptance of managed care.

Berenson, et al., 2006, Health Affairs

Physicians and hospitals

Survey n= 1,008 semi-structured interviews

Hospitals and physicians are developing and marketing specialty-service lines. Respondents identified a number of factors at work that encourage movement of service lines to community-based sites: (1) Growing physician entrepreneurship and interest in gaining additional sources of income. (2) Rising consumer expectations for one-stop shopping. (3) Growing physician demand for control over working conditions, such as procedure scheduling and nurse hiring

Bhuian, et al., 2005, Journal of Business Research

Managers of not-for-profit hospitals

Survey: n=231

Market orientation is most effective when the firm maintains a moderate level of entrepreneurial orientation. This finding is consistent with contingency views of entrepreneurship, which suggest that a high degree of entrepreneurship is not always desirable in certain market and structural conditions. The view of entrepreneurship as a dynamic capability, forces management to consider the internal implications of strong entrepreneurial values.

Thorne, 2002, Health Services Management Research

Physicians, managers and hospitals

Case study

Structural and ideological changes threaten medical dominance. Clinical directors respond to the changes by creating new forms of expertise through managerial assimilation, to extend their jurisdiction and domain within the organization and in the market.

Fletcher, 2005, Journal of the American College of Radiology

Physicians

Theoretical paper

Many physicians have become entrepreneurs of medicine by investing in enterprises delivering ancillary medical services. Ancillary medical services represent the full range of diagnostic and therapeutic procedures that are performed above and beyond a physician’s personal, professional care of a patient.

Stone, 1997, Journal of Health Politics, Policy and Law

Physicians

Theoretical paper

The insulation of medical judgement from financial concerns was always a fiction. The ideal of the doctor immune for commercial influence was developed by a medical profession that sought to expand its authority and its market. Now, the opposite ideal – the image of the doctor as ethical businessman whose financial incentives and professional calling mesh perfectly- is promoted in the service of a different effort to expand power and markets. Images of the doctor as an entrepreneur, a risk taker, and as a ‘general manager’ of his patient’s medical care convey the symbolic message that the clinical doctors are still in control.

Feinstein, 2003 Perspectives in biology and medicine

Physicians

Theoretical paper

Doctors formerly worked in practices conducted as an individual cottage industry or in larger groups. As corporations gained control over the patients and settings of medical practice, doctors became employees who had to comply with the corporations’ precepts and guidelines. However, doctors tried to gain or regain power. Some attended business schools or forming their own smaller health care system, others joined unions, created ad hoc committees to defend health care, joined groups of nurses going on strike and placed advertisements blaming offending hospitals.

RELATION BETWEEN INTEREST DISSATISFACTION, VALUE COMMITMENTS AND ENTREPRENEURIAL ORIENTATION IN HOSPITALS

We found five papers that dealt with the relation between interest dissatisfaction and reformative commitment in hospitals: two surveys and three essays. Every article was weighted based on empirical rigor and the extent to which it was related to the research question. An overview of the review results in order of quality of design and resulting material, can be found in table 3.

According to the articles found in our review, there seems to be a strong correlation between the presence of two rival logics on the one hand and both interest dissatisfaction and a reformative commitment on the other hand. Organizational members who continuously experience the presence of two rival logics (Reay & Hinings, 2009) will focus their interest dissatisfaction on the other group, which is held responsible for diminished autonomy or the unfavorable distribution of resources (Hoogland & Jochemsen, 2000). Depending on the intensity of interest dissatisfaction, it will provide a strong drive for a defensive commitment or a reformative commitment.

Research among physicians being exposed to managed care indicates that during the process in which health plans began imposing restrictions on their clinical autonomy, physicians increasingly found themselves dissatisfied with the role of “double agents” with potentially conflicting responsibilities to patients and insurers (Pham, 2004). Over time, their interest dissatisfaction channeled into both a defensive value commitment towards the business-like healthcare logic as well as a reformative commitment among physicians towards the traditional logic of medical professionalism. In the section ‘implications for practice’ we will elaborate on this.

Both resulted in practices based on a hybrid logic of medical professionalism combined with entrepreneurship derived from the business-like healthcare logic (Pham, Devers, May, & Berenson, 2004; Stone, 1997; Volz, 1999).

Hospital managers can influence the relation between interest dissatisfaction and value commitments by paying attention to physicians’ interests. For example, physicians driven by a reformative towards the traditional logic of medical professionalism may be facilitated by

creating an organizational environment where proactiveness, innovativeness and constructive risk-taking are both encouraged and rewarded. Likewise hospital managers, can show commitment to the professional autonomy and development of physicians driven by a defensive value commitment towards the business-like healthcare logic in order to commit them to hospital-wide entrepreneurial initiatives (Wood, Bhuian, & Kiecker, 2000).

Our review yielded limited results concerning the relation between interest dissatisfaction and value commitments. No results were found on the relation between interest dissatisfaction and entrepreneurial orientation. Neither did we find evidence on the presence of value commitments among individual physicians and physician groups. Still, the surveys of Pham (2004) and Wood (2000) provided valuable input on the relation between interest dissatisfaction and defensive or reformative value commitments. Interest dissatisfaction can stimulate entrepreneurial activities of physicians holding a defensive or reformative value commitment. Hospital management can influence the level of dissatisfaction of physicians and nature of entrepreneurial activities, by paying explicit attention to their interests.

Table 3 (Results presented in order of sample size and methodological rigor)

Review Question 3: How are interest dissatisfaction, reformative commitment and entrepreneurial orientation related in hospitals?

Reference

Focus

Methodology

Main Finding

Pham, et al., 2004, Health Affairs

Physicians and managers

Survey n=270 interviews

Physician and non-physician respondents reported heightened entrepreneurial activities among physicians and medical groups, to increase practice revenue. In the post–managed care era, physicians have responded to mounting financial pressures with a range and intensity of activities that evoke images of “free agents” defending their own financial interests and challenge established professional norms.

Wood, et al., 2000, Journal of Business Research

Hospital managers

Survey, n=237

Organizational entrepreneurship seems to facilitate market orientation. This finding indicates that management can influence the level of market orientation by creating an organizational environment where innovativeness, proactiveness, and constructive risk-taking (the essence of organizational entrepreneurship) are encouraged and rewarded.

Stone, 1997, Journal of Health Politics, Policy and Law

Physicians

Theoretical paper

From just after the Civil War, when medicine began to professionalize, until the late 1970s, doctors and policy makers believed that clinical judgment should not be influenced by the financial interests of doctors. Under managed care, the old norm is reversed. A good doctor takes financial considerations into account in making clinical decisions. The new cultural image of doctors as entrepreneurs masks their considerable loss of clinical autonomy under managed care.

Hoogland & Jochemsen, 2000,Theoretical medicine and bioethics

Physicians

Theoretical paper

Professional autonomy has traditionally been a central characteristic of professions, and certainly the medical profession. However, today medical professional autonomy is facing three main threats.

1) Internal erosion of professional autonomy due to a lack of internal quality control by the medical profession and the use of its autonomy for its own interest.

2) The increasing upward pressure on health care expenses due to growing technical options.

3) A distorted understanding of the profession as being based on a formal type of knowledge and related technology, but neglecting other normative dimensions of medical practice.

Volz, 1999, Marketing health services

Physicians

Theoretical paper

A growing number of physicians create discount networks out of anger and frustration about their loss of professional autonomy and financial compensation to managed care. They are seeking niches among patients lacking good health insurance coverage or who are dissatisfied with their plans.

IMPLICATIONS FOR PRACTICE

We investigated the influence of intra-organizational dynamics between hospital managers and physicians on entrepreneurial behavior in a hospital setting. Based on the neo-institutional model of Greenwood and Hinings (1996), we derived three review questions to relate intra-organizational dynamics to hospital entrepreneurship. We will summarize our findings per review question.

First, we found that contextual changes have severely altered the relationship between managers and physicians in hospitals as power dependencies have shifted and intensified. Physicians’ economic autonomy has been diminished while there have been continuous efforts to bring clinical care within a management framework. This has resulted in high levels of interest dissatisfaction among physicians, depending on their perceived power dependence on hospital management,

Second, our review indicates that growing power dependence on hospital managers has heightened both defensive and reformative value commitments among physicians. As part of a defensive value commitment, physicians defend their position and autonomy while being pushed to adopt entrepreneurship brought by the business-like healthcare logic in order to protect their position and autonomy effectively. As part of a reformative value commitment towards their traditional logic of medical professionalism, physicians are pulled towards entrepreneurship by the prospect of increased autonomy and income.

Third, literature reveals that interest dissatisfaction can stimulate entrepreneurial activities of physicians holding either a defensive or reformative value commitment. Hospital managers can influence the relation between interest dissatisfaction and value commitments as well as the tendency to- and nature of physician’ entrepreneurship by paying attention to physicians’ interests. For example, physicians driven by a reformative towards the traditional logic of medical professionalism can be facilitated by an organizational environment where proactiveness, innovativeness and constructive risk-taking are both encouraged and rewarded by hospital management. Likewise hospital managers, can show commitment to the professional development and autonomy of physicians driven by a defensive value commitment towards the business-like healthcare logic in order to commit them to hospital-wide entrepreneurial initiatives.

Many studies of hospital entrepreneurship address different types of research questions and focus on specific aspects of hospital entrepreneurship rather than applying an integrative framework as we used for our review. Our synthesis therefore constitutes only a starting point for further studies based on primary evidence and we invite the testing of resulting hypothesis against empirical evidence. Especially, further research into the nature of intra-organizational dynamics as drivers of hospital entrepreneurship is necessary.

Therefore, we propose to operationalize interest dissatisfaction, power dependence and value commitments and to test them longitudinally in a hospital setting. This will provide empirical evidence and understanding in four areas:

Do high levels of interest dissatisfaction among physicians will result in a stronger entrepreneurial orientation or conversely; do low levels of interest dissatisfaction lead to moderate entrepreneurial orientation;

The relation between the degree of interest dissatisfaction and levels of entrepreneurial orientation necessary for physicians to engage in entrepreneurship;

The nature of value commitments among individual physicians and physician groups and the influence of these commitments on the nature of entrepreneurial initiatives: physician-driven and/or hospital-related;

Hospitals may increasingly be managed or owned by entrepreneurs. Tracking intra-hospital dynamics in these settings could provide valuable insights on the development of both hybrid logics and entrepreneurship.

These questions will gain relevance as governmental budget deficits as for instance caused by the recent banking crisis will most probably result in severe pressure on healthcare spending, this will strongly impact both hospital managers and physicians. If the two groups disagree on the best course of action, tensions and interest dissatisfaction may rise and result in entrepreneurial initiatives.

Next, the original model of Greenwood (1996) contains capacity for action defined as “the ability to manage the transition process from one logic to another” (Greenwood, 1996: 1039).

It represents the ability to translate the outcome of intra-hospital dynamics into change. As a result, we suggest to include capacity for action in future when entrepreneurship is taken as output variable.

Finally, we know little about the exact sequence of activities in the process resulting in physicians’ entrepreneurship. We did not encounter any information in the literature on the interactions and decision-making processes of both physicians and managers in order to realize entrepreneurial initiatives. Qualitative research addressing these questions would provide important additional insights into the question as to how and when entrepreneurship takes place in a hospital setting.

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