Intraorganization conflicts of interest in hospitals adapting to a changing ecosystem

Abstract

PurposeHealth systems function in an ecosystem that is turbulent and competitive because of demographic, economic, political, technological and lifestyle changes and sociopolitical influences, requiring hospitals to adopt comprehensive business strategies. Failure to do so may result in duplication, waste and deficits. This original article uses the prism of agency theory to examine differences in approach at two levels of hospital management and the consequent problems in the incorporation of necessary changes. Agency theory posits an inherent conflict of interest in organizations, including health organizations: the managers (agents) always aim to maximize their profit or personal interest instead of that of the owner or organization (principal), potentially causing difficulty in managing the organization. The aim is to generate recommendations for policymakers.Design/methodology/approachThe study is based on 30 semi-structured, in-depth interviews with key figures in the health system and on two levels of hospital management: senior managers and heads of selected departments. The analysis used a categorical qualitative methodology.FindingsThe main findings are five key themes: views of business behavior, asymmetry of interests, asymmetry of information, transparency and cooperation between various levels of management and ambivalence toward business in hospitals. The two levels of management are clearly divided in terms of interests, information and activity, leading to difficulty in cooperation, efficiency and achievement of organizational goals.Originality/valueUsing agency theory, this study provides a systemic and organizational view of hospitals' management and environmental adaptation. Understanding the processes and increasing cooperation at various managerial levels can help make the system more efficient and ensure its survival in a dynamic market.