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Hospital boards and hospital strategic focus: The impact of board involvement in strategic decision making

Ford-Eickhoff, Karen; Plowman, Donde Ashmos; McDaniel, Reuben R. Jr.

Health Care Management Review:
doi: 10.1097/HMR.0b013e3182099f6e
Features
Abstract

Background: Despite pressures to change the role of hospital boards, hospitals have made few changes in board composition or director selection criteria. Hospital boards have often continued to operate in their traditional roles as either "monitors" or "advisors." More attention to the direct involvement of hospital boards in the strategic decision-making process of the organizations they serve, the timing and circumstances under which board involvement occurs, and the board composition that enhances their abilities to participate fully is needed.

Purposes: We investigated the relationship between broader expertise among hospital board members, board involvement in the stages of strategic decision making, and the hospital's strategic focus.

Methodology/Approach: We surveyed top management team members of 72 nonacademic hospitals to explore the participation of critical stakeholder groups such as the board of directors in the strategic decision-making process. We used hierarchical regression analysis to explore our hypotheses that there is a relationship between both the nature and involvement of the board and the hospital's strategic orientation.

Findings: Hospitals with broader expertise on their boards reported an external focus. For some of their externally-oriented goals, hospitals also reported that their boards were involved earlier in the stages of decision making.

Practice Implications: In light of the complex and dynamic environment of hospitals today, those charged with developing hospital boards should match the variety in the external issues that the hospital faces with more variety in board makeup. By developing a board with greater breadth of expertise, the hospital responds to its complex environment by absorbing that complexity, enabling a greater potential for sensemaking and learning. Rather than acting only as monitors and advisors, boards impact their hospitals' strategic focus through their participation in the strategic decision-making process.

Author Information

Karen Ford-Eickhoff, MBA, is Research Assistant and PhD Candidate in Organizations and Strategy, College of Business Administration, University of Tennessee, Knoxville. E-mail: KFE@utk.edu.

Donde Ashmos Plowman, PhD, is Dean, College of Business, University of Nebraska-Lincoln.

Reuben R. McDaniel Jr., EdD, is Charles and Elizabeth Prothro Regents Chair in Health Care Management, McCombs School of Business, University of Texas at Austin.

© 2011 Lippincott Williams & Wilkins, Inc.