Institutional and Economic Influences on the Adoption and Extensiveness of Managerial Innovation in Hospitals: The Case of Reengineering

Abstract

In the recent past, a number of managerial innovations—including product line management, total quality management, and reengineering—have swept through the hospital industry. Given their pervasiveness and their cost, understanding the mix of factors that influences their adoption is of theoretical interest and practical relevance. The research reported here focuses on this general question by examining influences on the adoption and extensiveness of a particular managerial innovation, hospital reengineering. The results suggest that while economic and institutional factors have influenced the adoption and extensiveness of hospital reengineering, institutional forces play a more important role. The greater influence of institutional forces may be attributed to the high degree of uncertainty in health care, the causal ambiguity of the innovation, and the anticipatory actions of hospitals attempting to position themselves in a rapidly changing environment.