Psychoanalyst, social scientist and management consultant Dr. Elliott Jaques introduced the world to the concept of organizational culture in 1951 in his book The Changing Culture of a Factory. He defined it as the sum of organizational values shaped and reinforced by leadership. In the years that followed, researchers studied the effects of organizational culture on everything from employee performance to project success to creativity and innovation. Again and again, studies showed that organizational culture—whether positive or negative—has a profound impact on business success.
This is especially true in the business of healthcare, where a healthy culture can promote not only healthier balance sheets but also healthier patients. The influence of organizational culture on quality healthcare delivery cannot be overstated. One meta-analysis of thousands of studies and articles found that positive organizational and workplace cultures correlated with reduced mortality rates, falls, length of stay and hospital-acquired infections—and increased satisfaction and quality of life among patients.
Given that, aspiring and acting healthcare leaders have an obligation to learn everything they can about what it takes to promote positive organizational culture in healthcare. Enrolling in the right MBA program is key, which is why Case Western Reserve University’s Online MBA in Healthcare Management is a different kind of healthcare-focused business master’s program.
“Hierarchy-oriented cultures are common in healthcare environments where things must be done right the first time.”
Weatherhead School of Management’s MBA specialization in healthcare management trains not only career changers looking to transition into healthcare administration and career advancers aiming for the c-suite but also career crossers who want to move away from clinical work into management. This healthcare management program (explored in more detail below) has a healthcare core that makes up approximately 40 percent of the Master of Business Administration curriculum and includes virtual interviews and summer residencies during which students see the cultures of different healthcare systems in action. To understand why this online program includes real-world experiences, it helps to look more closely at the importance of organizational culture.
What is organizational culture?
Many people mistakenly associate organizational culture with perks like foosball tables, free lunches and Friday happy hours, but organizational culture is actually the values, beliefs, goals, standards and behaviors that define a company or institution. Mission statements and vision statements can help shape organizational culture, but organizational culture as a whole is much broader and more complicated than either. It’s not easily summed up because organizational culture encompasses so much and can evolve through both action and inaction. Some organizations work proactively to develop a positive organizational culture. Others do little to shape the company or institutional culture, and what evolves may be positive or negative.
According to the Organizational Culture Assessment Instrument (OCAI), there are four primary types of organizational culture:
- Adhocracy-oriented cultures prize entrepreneurial, creative and innovative behavior. Visionaries and risk takers may rise through the ranks fastest. Organizations with adhocracy-oriented cultures often use competition as a motivator, which can lead to higher levels of stress.
- Clan-oriented organizational cultures are team-oriented and value participation, cohesion, shared beliefs and commitment. Leaders prioritize morale when making decisions, which is an effective approach in small, tight-knit organizations but a much less effective one in larger companies and institutions.
- Hierarchy-oriented cultures are common in healthcare environments where things must be done right the first time. Leaders develop formal policies and procedures to promote efficiency and timeliness—and prevent mistakes. Hierarchy-oriented organizations are often quite stable, but stability can become rigidity.
- Market-oriented cultures tend to be results-oriented and achievement-focused. Leaders support employee development and entrepreneurship, and it doesn’t matter how things get done as long as they get done. Productivity is sometimes prized over all else, which can lead to burnout.
None of these organizational cultures (or the many variants of them) can lay claim to being best because there are advantages and disadvantages associated with each. That’s why it’s so important for culture to develop around values. According to the Harvard Business Review, “Great culture should provide continuous alignment to the vision, purpose, and goals of the organization.” Different healthcare organizations have different values and, ideally, develop unique cultures that support those values.
Why organizational culture matters
Pfizer CEO Ian Read, quoted in Training, summed up the impact of organizational culture: “Culture touches and influences every function in an organization, from research and development to manufacturing to sales. Get it right, and culture can transform your company’s performance and help sustain success for years to come. Get it wrong, and you’ll pay dearly for it.”
“Creating a positive organizational culture across an organization and within individual departments is largely a matter of proactive leadership.”
There’s ample proof backing up his assertions in informal and scholarly research looking at how organizational culture affects business and other outcomes. Consider that:
- The companies that consistently make Fortune’s annual 100 Best Companies to Work For list see higher average annual returns and outperform both the S&P 500 Index and the Russell 3000 Index.
- Companies with strong positive cultures experience an increase in revenue growth four times greater than those without.
- Organizations with top quartile cultures (as measured by McKinsey’s Organizational Health Index) post shareholder returns 200 percent higher than those in the bottom quartile.
- Glassdoor‘s Best Place to Work list is populated by companies that outperform the overall market by 115.6 percent.
In healthcare settings, positive organizational culture correlates with:
- Better adherence to infection-control practices
- Better quality of care
- Ethical behavior
- Higher patient-perceived levels of integrated care
- Increased ability to provide uninterrupted treatments
- Success in Electronic Health Record (EHR) implementation
Additionally, positive organizational culture empowers rapid adaptation across settings, making it easier to respond to market or patient demand. Research suggests companies and institutions with certain types of cultures are more likely to be first to market and to satisfy customer (or patient) needs. And positive cultures support teamwork, enhance morale, reduce stress and increase job satisfaction.
How does organizational culture develop?
In some organizations in the healthcare industry, leaders create culture; in others, culture evolves. Healthcare environments are unique because they’re typically composed of multiple cultures. While the overall culture of most organizations is hierarchical by tradition and design, departments may create their own subcultures. This is likely because these departments may have very different working environments and goals.
Consider three departments in a typical community hospital:
The doctors and nurses in the emergency department deal with life-or-death situations around the clock plus patients with relatively benign medical needs. The main function of the ER is to stabilize patients so they can be cared for by other providers. During busy shifts, providers see a lot of patients.
In the ICU, doctors and nurses monitor and support patients in critical condition 24/7. The goal is not necessarily to heal but rather to keep people alive, which may require especially high levels of organization, observation, and documentation. Providers operate in a strictly controlled environment and care for fewer patients, but treat the patients most likely to crash.
A hospital’s outpatient care departments, on the other hand, typically operate more like medical practices. Providers work during normal business hours, treating patients whose medical needs are seldom critical. Their days are much more predictable, as are the common stressors (workload issues, resource issues and operational issues).
Other patient care departments—e.g., pathology, radiology, surgery, etc.—have very different goals, as do non-clinical departments such as finance, human resources, medical recordkeeping and IT.
Employee personalities also shape organizational culture, and whether an organization is achievement-focused, detail-oriented, motivated by risk or close-knit may shift as people come and go. Leaders can do a lot, however, to foster the elements of positive organizational culture (e.g., collaboration, trust, innovation, fairness and recognition) regardless of where an organization falls on the grids of OCAI culture types.
Measuring organizational culture in healthcare
Quantitatively assessing organizational culture in healthcare environments and other settings is challenging because there’s no consensus about what metrics to measure. There are various instruments for measuring organizational culture that look at employee beliefs, satisfaction, engagement and stress levels as well as patient satisfaction and outcomes, and some companies and institutions even apply Big Data to cultural assessments by using language processing algorithms to study employee communication in Slack and email. Because many culture types can be positive, however, the best metrics for accurately measuring culture may vary from one institution to the next.
What does positive organizational culture in healthcare look like?
Positive organizational culture in healthcare settings is:
- Collaborative
- Communicative
- Compassionate
- Ethical
- Mission- and value-driven
- Patient-focused
- Receptive
- Respectful
- Supportive
- Transparent
What are the risks of poor organizational culture in healthcare?
Prioritizing organizational culture in healthcare settings is important because negative culture can have dire consequences. Healthcare institutions with negative cultures experience churn, financial losses and employee engagement issues just like companies in the corporate world, but in medicine, negative culture can threaten provider performance, patient safety and patient outcomes. It sounds hyperbolic, but consider that one study found that providers in hospitals with positive organizational culture are more likely to follow guidelines for perioperative antibiotic use.
How does leadership influence organizational culture?
Creating a positive organizational culture across an organization and within individual departments is largely a matter of proactive leadership. Leaders can do a lot to foster the elements of positive organizational culture (e.g., collaboration, trust, innovation, fairness and recognition) regardless of where an organization falls on the grid of OCAI culture types. For example, executives and department heads should always:
- Communicate organization and department goals clearly and articulate how everyone from the head of surgery to facilities personnel contribute to achieving those goals.
- Define process enhancements and behavior changes that will align actions with values, and showcase instances in which organizational development contributes to success.
- Encourage teamwork and the open exchange of ideas within and across departments.
- Ensure expectations are manageable and contribute to a coherent employee experience.
- Listen to, acknowledge and address employee concerns regarding resources, processes and policies.
- Make sure everyone understands the impact of their work and the value of their contributions.
- Model positive culture at every level.
- Recognize top performers and encourage those who want to become top performers by supporting professional development initiatives.
- Support employee efforts to change and grow.
- Take employee engagement and satisfaction as seriously as patient satisfaction.
How CWRU’s online MBA in healthcare management prepares graduates to enhance organizational culture in healthcare
Weatherhead’s Online MBA in Healthcare Management is a business school degree program that teaches advanced business fundamentals and competencies related to strategic healthcare management. The program can prioritize organizational culture in healthcare because of Case Western Reserve’s strong relationships with notable patient care systems such as Cleveland Clinic, University Hospitals, MetroHealth and the Louis Stokes Cleveland VA Medical Center. Additionally, the university’s prime location in the Cleveland Innovation District and the Cleveland Health-Tech Corridor gives students access to healthcare institutions, MedTech startups and biomedical firms that make the student experience even richer. Healthcare MBA candidates see the impact of organizational culture in healthcare first hand when they meet with healthcare leaders in the “Dialogues in Healthcare Management” course and spend time in collaborating organizations.
Weatherhead School of Management is also an internationally recognized pioneer of positive change theory—Dr. David Cooperrider and Dr. Ron Fry developed the Appreciative Inquiry model at the school—and many faculty members are experts in elements of healthy organizational culture. KeyBank Professor, chair and professor of organizational behavior Dr. Diana Bilimoria, for example, researches how corporate, academic and nonprofit organizations can reinvent themselves and establish practices that attract and retain a high-performance, diverse workforce. Associate professor Dr. Ellen Van Oosten researches change at the individual and organizational level, leadership development and effectiveness and emotional intelligence. Their research helps inform the MBA specialization in healthcare management curriculum in core courses such as “Leadership Assessment & Development” and “Managing People & Organizations” that support students as they discover and expand their emotional intelligence and leadership potential so they can manage people in the healthcare field more effectively.
Demand for MBAs is high in healthcare, according to a Corporate Recruiters Survey conducted by the Graduate Management Admissions Council, and the U.S. Bureau of Labor Statistics reports that salaries for healthcare managers and administrators are accordingly competitive. It’s more difficult to quantify demand for healthcare leaders capable of mapping out and fostering positive organizational culture in healthcare. Given the many benefits of a healthy culture in medical settings, however, it’s highly likely that there are many more career opportunities and leadership roles out there for healthcare MBA graduates with skills and knowledge related to culture.
Are you an early or mid-career business or healthcare professional with a minimum of two years of work experience ready to take advantage of the opportunities detailed above? Review Case Western Reserve’s healthcare management degree admission requirements, or apply now and in about two years, you will have not only a highly respected business degree but also what it takes to make healthcare better and patients safer by changing the way healthcare businesses run.