The impact of the board’s strategy-setting role on board-management relations and hospital performance

Abstract

Active strategy-setting by a governing board may generally improve hospital performance. Diverse members of governing boards should be involved in strategy-setting for hospitals. However, high board-management collaboration quality may be compromised if managerial autonomy is too highly restricted. Consequently, hospitals should support board-management collaboration about empowered contrasting board roles.

Board Heterogeneity and Organisational Performance: The Mediating Effects of Line Managers and Staff Satisfaction

“…As such, the paper extends insights reported elsewhere (Büchner et al, 2014;Raes et al, 2013) about the need to extend UE research beyond the inner circle of TMTs and gives greater consideration to other steps in the chain linked to the internal organisational context (Nielsen, 2010). As suggested by Carpenter et al (2004) and confirmed by the findings here reported, future studies would need to account for the possible existence of an indirect relationship between TMT composition and performance outcomes.…”

“…Confidence in this finding is also reinforced by the multiple outcome measures used -going beyond the approach taken in many previous studies (Büchner et al, 2014) -to focus on performance from the patient, manager and staff perspectives. What transpires from the findings is that the cognitive, symbolic and communicative consequences of TMT heterogeneity, as theorised by Milliken & Martins (1996), have a positive impact on the overall performance of hospitals and, more in general, organisations.…”

“…Specifically, it has been noted the more open and participative organisational climates generated by heterogeneous TMTs can help to align the styles and practices of line managers in ways that support, rather than detract from wider organisational strategies. Focusing on German public hospitals, for example, Büchner et al (2014) suggest that more diverse TMTs are better able to communicate with line managers, increasing trust and co-operation. Precisely, they note that 'because of their diversity-related varied ideas, creativity, and innovativeness, governing board members may be open-minded to new ideas generated by hospital managers' and that 'this positive attitude of boards decreases the potential for conflict in their collaboration with hospital managers and fosters intergroup cooperation' (p. 11).…”

“…In the English context, these boards represent the main governance device within organisation, as they are responsible for setting the overall policy and strategic direction of the hospital and overseeing its implementation, providing leadership and being accountable for the organisational performance (Veronesi et al, 2013). Moreover, a number of studies have already focused on hospitals as a setting to explore the impact of governing board heterogeneity (see for example Büchner, Schreyögg, and Schultz (2014) and NaranjoGil et al (2008)). These studies suggest that public hospitals are highly susceptible to the influence of more heterogeneous TMTs, therefore making them ideal test cases to further explore the impact of internal mediating factors.…”

“…First, unlike many previous studies of board heterogeneity, the paper uses a wider range of performance outcomes including staff satisfaction, offering a more comprehensive set of measures than used in prior research (Büchner et al, 2014;Carpenter et al, 2004). Second, answering calls made in previous reviews of the field (Carpenter et al, 2004;Nielsen, 2010), for the first time in this area of study, the methodological approach employs Partial Least Squares (PLS) path modelling to explore the multi-level nature of relationships between boards, the styles and practices of line managers, staff satisfaction and aggregate performance outcomes.…”