Organizational arrangements as a key to enhancing innovativeness and efficiency – analysis of a restructuring hospital in Finland

BACKGROUND: Challenged to innovate and improve efficiency both at the policy level and in everyday work, many health care organizations are undergoing radical change. However, in many earlier studies, the significance of individuals’ perceptions of their organization and its innovativeness and efficiency during restructuring is not well acknowledged. Our study examines how various organizational arrangements; performance-, hierarchy-, tradition-, and leader-focused types, as well as collaborative and fragmented ones, connect to reaching innovativeness and efficiency in health care during restructuring. METHOD: We built on previous organization and management research, innovation studies, and on research focusing in health care restructuring, and conducted an exploratory quantitative case study in a public sector hospital in Finland. Data comprising 447 responses from 19 professional groups across the hospital was analyzed using hierarchical regression analysis. RESULTS: Our results demonstrate that multiple, co-existing organizational arrangements can promote innovation and efficiency. The perceptions of the organizational members of the nature of their organization need to be generally positive and reflect future-orientation to show positive connections with efficiency and innovativeness; fragmentation in the members’ perceptions of the character of their organization and their inability to go beyond established organizational traditions pose risks of inefficiency and stagnation rather than fruitful exploration. Our study further shows, somewhat surprisingly, that while collaborative organizational arrangements are positively related to increases in perceived efficiency, the same does not apply to innovativeness. CONCLUSIONS: Our study addresses understudied, yet inherently important aspects in providing high-quality health care: the relationships between different organizational arrangements and exploitation and exploration-related outcomes. In particular, examination of individuals’ perceptions (that may have even more weight for the subsequent developments than the actual situation) adds insight to the existing knowledge that has addressed more objective factors. Implications on how to support high levels of performance are drawn for management of professional and pluralistic organizations undergoing restructuring. Our findings also generate information that is useful for policy making concerned with public sector health care.