Strategic management and organisational structure: transformational processes at work in hospitals

There is a substantial amount of organisational restructuring presently occurring in Australian public hospitals. However, there has been a lack of systematic research conducted about this phenomenon. In Australia most literature about organisational restructuring has employed a case study approach. Although there has been a great deal of support for product line management organisational arrangements in recent literature from overseas, little investigation into the adoption of product line management has taken place in Australia. In this paper, a discussion about the relationship between strategic management and organisational structure is presented. Survey results of a sample of nine teaching hospitals in New South Wales are reported. Taken together with other more descriptive literature about organisational restructuring in Australian health care, the evidence from this survey suggests that there are vigorous transformational processes at work, perhaps especially in the larger hospitals. Despite support for it in the literature, product line management is not being adopted on a widespread scale. The shift toward restructuring occurring within Australian hospitals at the moment represents a bout of experimentation with new organisational designs which seems destined to continue. A number of management theorists conclude that there need to be strong linkages between strategic planning and the choice of organisational structure. However, the empirical evidence reported here did not identify such strong linkages. This phenomenon warrants further investigation. The view is put that where these linkages are weak there is a risk that whatever structure is chosen will not be robust or flexible enough to cope with mooted or predicted policy changes to the Australian health system.