COMPETITIVE ENVIRONMENT, ENACTED STRATEGY AND ORGANIZATIONAL PERFORMANCE RELATIONSHIPS IN THE ACUTE CARE HOSPITAL INDUSTRY: 1980--1982

Scholars studying organizational performance generally have come to believe that the relative effectiveness of competitive strategies is determined jointly by a firm's existent resources and by the underlying competitive forces within its industry. Empirical evidence validating such presumed relationships, however, has been limited to cross-industry study populations comprised primarily of consumer and industrial product "busineses." In contrast to previous studies, the present research seeks to examine the structure - strategy - performance relationships within a single human service industry, the general, acute care hospital industry.; In keeping with its stated objectives, the research reported in this document was conducted in five stages. First, the 97 counties (i.e. geographical markets) included within the study population were grouped into relatively homogeneous competitive environments utilizing a K-Means clustering algorithm. Second, the same analytical technique was employed to identify each of the 816 study population hospitals having similar types of enacted strategies. Third, the relationship between acute care hospitals' enacted strategy types and their average occupancy rates (i.e. organizational performance) was examined within each previously identified competitive environment. Fourth, alternative explanations of the differing levels of performance among study population hospitals were sought through an analysis of potential moderating and/or confounding variables. Finally, the relative influence of competitive environment and enacted strategy type on the average occupancy rates of acute care hospitals was reassessed after controlling for other significant variables.; In its analysis of the hospital industry, this research found: (1) metropolitan, acute care hospitals operated within one of three types of competitive environments during the study period; (2) medical school affiliated hospitals competed utilizing one of three types of enacted strategies, while non-affiliated hospitals employed one of two different strategies; (3) differences in hospital bed-sizes were significantly related both to hospitals' average occupancy rates and enacted strategy types, and (4) after controlling for bed-size variations, no significant difference was found in the average occupancy rates of hospitals enacting one type of strategy or another within the same competitive environment. These findings offer unique insights into the basis of firm-level competition within the acute care hospital industry, as well as suggest possible extensions to the traditional business strategy concept.