Leadership in Health Services: Article Information
Leadership in Health Services: Article Information
Leadership in Health Services: Article Information
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LHS
25,4 From unbalanced to balanced:
performance measures in a
Vietnamese hospital
288
Luu Trong Tuan
University of Finance-Marketing, Ho Chi Minh City, Viet Nam
Abstract
Purpose From the data derived from a Vietnamese hospital, this study seeks to discern which
organisational culture types, leadership styles, and trust types pave the path for the implementation of
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1. Introduction
Numerous organisations are launching the balanced scorecard (BSC) to steer
performance (LaChance, 2006). The BSC permits organisations to highlight both
financial and nonfinancial performance metrics in four perspectives for building and
implementing organisational strategy (Herath et al., 2010) and aligning organisational
performance with organisational vision and strategy. The application of BSCs in health
care settings is rising as well (Gurd and Gao, 2007). In healthcare, the BSC is the meal
for today, with consultants buttressing this miraculous treatment (Aidemark, 2001,
p. 23). However, even though several workshops and conferences on performance
management as well as BSC have occurred in major cities in Vietnam, the application
of this performance measurement system has been limited to few manufacturing and
services companies, and virtually no healthcare services.
Organisational culture, from Osburns (2008) stance, is a spirit cultivated by the
shared values of the organisational members. Culture also acts as an intellectual and
sentimental paradigm (Barker, 1992) that navigates the life of organisational members
and can block the acquiescence of alternative cultures. It is the harmony between
Leadership in Health Services members individual cultural heritage and the organisational culture or unique
Vol. 25 No. 4, 2012
pp. 288-305 common psychology that produces confidence, comfort, and trust (Vaill, 1989). Herath
q Emerald Group Publishing Limited et al. (2010) maintain that a culture of open reporting around the BSC is indispensable
1751-1879
DOI 10.1108/17511871211268937 for its effective implementation. The findings from Lau and Berrys (2010) study reveal
that members perceive the use of nonfinancial metrics as fair through the From
augmentation of the trust they have in their leaders. unbalanced to
From the perspective of attribution theory (Calder, 1977), leaders are accountable for
organisational outcomes. Leadership is also viewed as an endogenous factor balanced
interacting with a multiplicity of other organisational variables including culture to
impact organisational outcomes, to potentially impact the success of the BSC
implementation. 289
In light of the diverse views, the question of how organisational culture, leadership,
and trust influence the BSC implementation, a domain where little evidence of in-depth
investigation, especially in healthcare service, exists, will be unpacked through this
case study of a hospital in Vietnam.
This introductory section will be followed by a succinct overview of the construct
balanced scorecard, and its potential antecedents such as organisational culture,
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leadership, and trust. Then the depiction of the research methodology will bridge this
literature survey with the studys empirical findings, which are then recapitulated and
indicative of practical as well as further research implications.
2. Literature review
2.1 Organisational change in healthcare organisations
Increasing market pressures compel organisations to swap large portions of their
secure traditions for untested paths into the future (Wesley, 1996). Three types of
change organisations tend to undergo include: developmental change: natural
development; transitional change: evolve gradually to a known state; and
transformational change: journeying into the unknown. Transformational change
entails not merely structures and processes but also values and inherent culture of the
healthcare organisation (NHS Institute for Innovation and Improvement, 2006). In Garg
and Singhs (2002) view, the fixed norms of culture may act as resistance to change due
to apprehension amongst its members.
Ginsburg and Tregunno (2005) discuss the impact of culture and leadership on
organisational change in healthcare organisations. Lukas et al. (2007) found five
interactive elements crucial to successful transformation of patient care:
(1) Impetus to transform.
(2) Leadership commitment to quality.
(3) Improvement initiatives that actively immerse medical staff in meaningful
problem solving.
(4) Alignment to attain consistency of organisational goals with resource allocation
and deeds at all levels of the organisation.
(5) Integration to bridge traditional intra-organisational boundaries among
individual components.
These elements drive change by influencing the components of the complex health care
organisation in which they operate:
(1) Mission, vision, and strategies.
(2) Operational functions and processes.
LHS (3) Infrastructure such as information technology and human resources that
25,4 support the delivery of patient care.
(4) Culture.
links strategy and operations by translating strategic goals from the top down and
measures from the bottom up, while Atkinson et al. (1997) build a stakeholder model
that includes measurement for the primary and secondary goals of environmental and
process stakeholders. Kaplan and Norton (1996) unveil a balanced scorecard an
integrative framework fusing financial, customer, internal process, and learning and
growth perspectives steered by organisational vision and strategy.
Balanced scorecard, from Aidemark et al.s (2010) standpoint, is adopted for
measurements linked with the organisational strategy. How balanced scorecard
approach may be used in implementing organisational management strategies is
illustrated by Rasila et al. (2010). Herath et al. (2010) demonstrate how the collaborative
BSC model can be implemented in Microsoft Excel by practitioners to minimise BSC
conflicts. Funck (2007) examines how the balanced scorecard (BSC) has been translated
to suit the public healthcare environment.
BSC has been adopted by a wide range of healthcare organisations, including
national healthcare organisations, hospitals, and psychiatric centres (Zelman et al.,
2003). BSC is used in 65 per cent of Swedish emergency hospitals (Aidemark et al.,
2010). Aidemark (2010) observed that the balanced scorecard (BSC) enables the control
of health care quality. Chan and Seamans (2009) study divulges that patient
satisfaction is the most critical facet of the balanced scorecard in healthcare services.
However, research by Aidemark et al. (2010) found that performance monitoring is of
secondary magnitude, even in emergency hospitals with more than five years
experience with the BSC. Moreover, the BSC is virtually never used in the hospitals
reward systems. Astoundingly, strategy on service innovation within the BSC
framework negatively impacts the organisational outcome of patient satisfaction. Gurd
and Gao (2007) even more surprisingly found that the health of the patients was not as
pivotal as it should be in the development of the BSC in Chinese hospitals.
2.4 Leadership
The most influential contingency approach to leadership is the path-goal theory
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developed by Robert House (Robbins, 2005). From path-goal theory perspective, the
principal goal of the leader is to help subordinates reach their own goals effectively,
and to provide them with the necessary resources and direction to attain their own
goals as well as those of the organisation (Silverthorne, 2001).
The terms transformational and transactional (Burns, 1978) have become pivotal to
the research of leadership and tend to be utilised to make a distinction between
leadership and management. Transformational leadership can be distinguished from
transactional leadership in that transformational leaders are depicted as self-defining
(Kuhnert, 1994), while transactional leaders are more adapted to the rules and their
application, or driven by external contingencies. Transformational leadership and
transactional leadership can be measured using Bass and Avolios (1995) multifactor
leadership questionnaire MLQ 5X (MLQ leader form form 5X) comprising nine
separate scales, five of which represent aspects of transformational leadership, and
four of which represent aspects of transactional leadership (see Table II).
An example of transactional leadership is management-by-exception, whereas
examples of transformational leadership include the leaders providing a sense of
vision, challenging the status quo and providing stimulation and inspiration
(Bass, 1990).
Leadership at the clinical level has evolved within a framework of service groupings
predicated on clinical specialties such as primary health care, internal medicine,
surgery, mental health, and child health (Malcolm and Barnett, 1994). Edmonstones
(2009) study of the National Health Service in the UK revolves around the
disconnected hierarchy in healthcare organisations and suggests that clinical
leadership is the elephant in the room often unaddressed or overlooked.
One dissection of failures of care in which patients lives are harmed or lost divulged
that these problems seem to happen in organisations with inadequate or weak
2.5 Trust
Trust is not merely a psychological state predicated on expectations and on perceived
motives and intentions of others, but also a manifestation of behaviour towards others
(Costa, 2003) comprising the three ensuing stages or types:
(1) Calculus-based trust. Calculus-based trust, as portrayed by Lewicki and Bunker
(1995), is a trust built on perceived benefits and outcomes, balanced by the costs
of sustaining the relationship. It is a trust predicated on deterrence or the
balance of outcomes realised by the trustor and trustee. Its hallmark is control
of behaviours.
(2) Knowledge-based trust. Exercise of control characterises calculus-based trust
whereas exchange of information promotes knowledge-based trust. While
calculus-based trust is contingent on deterrence, knowledge-based trust
depends on how well the trustor can realise and foresee the trustees actions as
alleged by Lewicki and Bunker (1995, p. 149): The better I know the other, the
better I can trust what the other will do because I can accurately predict how
they will respond in most situations. The limits of trust and untrustworthiness
can also be detected by knowledge-based trust through information capital.
(3) Identity-based trust. Identity-based trust is deemed to be a product of reciprocal
understanding. At this [. . .] level of trust, trust exists because the parties
effectively understand, agree with and endorse each others wants; this mutual
understanding is developed to the point that each can effectively act for the
other (Lewicki and Bunker, 1995, p. 151). Each party understands the others
and understands prerequisites for sustaining the trusting relationship.
As Atwater (1988, p. 305) observes, [. . .] the more trust and loyalty expressed by
subordinates toward their supervisor the more positively the supervisor was perceived
to behave, denoting that attitudes of trust and commitment among followers and
leaders were predictors of supportive leadership behaviours. Trust in this view
appears to be built on communication of values, vision, and strategy.
3. Methodology
Case study research, as described by Creswell (2007, p. 73) stance, involves the study of
a phenomenon examined via one or more cases within a setting. This research pursues
LHS Yins (1989) case research method comprising five steps: building of a theoretical
25,4 framework, choice of the case, design of the case research protocol, collation of case
research proof, and dissection of case research proof.
ensuing propositions:
P1a. Adhocracy culture and market culture promote BSC implementation.
P1b. Clan culture and hierarchy culture do not promote BSC implementation.
P2a. Transformational leadership promotes BSC implementation.
P2b. Transactional leadership does not promote BSC implementation.
P3a. Knowledge-based trust and identity-based trust promote BSC
implementation.
P3b. Calculus-based trust does not promote BSC implementation.
P4. BSC implementation influences organisational culture, leadership style, and
trust.
Figure 1 depicts the case research framework displaying the linkages among
organisational culture type, leadership style, trust, and BSC implementation.
Figure 1.
The case research
framework
3.2 Choice of the case From
Hospital A, a joint venture hospital in Vietnam, was chosen for this case research based unbalanced to
on the two dimensions its ownership and its level of process technology
sophistication. Since most leaders in the joint venture hospital were from management balanced
positions of state-owned hospitals, they may carry values and leadership styles from
their previous workplaces to the new working environment, so it can be observed if
these values and leadership styles can be changed with the implementation of the BSC 295
system. A state-owned hospital, on the contrary, under the robust impact of the
Vietnamese governments lasting centrally planned and subsidised economy, may not
be able to change its culture of policies and rules, so some BSC measures may not be
favourably adopted.
Hospital A, furthermore, has a high level of process technology, namely more than
50 per cent of the service value of the hospital was yielded with computer-controlled
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297
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Figure 2.
The linkages between BSC
system implementation
and its antecedents in case
of hospital A
Accompanying the dominant transactional leadership styles of the CEO and the CMO
there was a hierarchy culture with such dominant attributes as rules, procedures
(Deshpande et al., 1993), and homogeneity prevailing through the hospital as observed
by a doctor from department Y:
If you are walking in our hospital, you may hit the rules. The hospital is inherently stifled
with the odour of ether and medicine, and even more suffocated with rules. Policies request us
to prescribe medicines from the hospitals list of medicines, to invite these specific doctors for
consultation, and not to examine patients without payment receipts. I myself have, time after
time, broken this rule to prioritise a patients examination based on the severity of her or his
dyspnea.
The head doctor of department Y, on the contrary, displayed transformational
leadership style. However, his transformational leadership style alone was unable to
immerse his department in the implementation of the BSC system when the CEO and
the CMO highlighted task orientation toward numerical productivity goals such as the
number of patient visits, patients length of stay, the number of subclinical tests, and
profitability.
Similar to the CEO and the CMO, the head doctor of Department Xpreferred
immersing his staff in tasks, operating within the existing environment, circumventing
vulnerabilities, and focusing on predictability rather than change (a transactional
leadership style) (Bass, 1990). The head doctor of the Department of Y, in contrast,
sought to generate change and transform the prodromal stage of the performance
management crisis in the hospital (Fink, 1986) into developmental challenges (Hunter,
2006). Thus, while the information on how the BSC measures were aligned with the
hospital vision and strategy was communicated through department Y, most members
of department X were not aware of this alignment.
LHS However, without the support and encouragement from the top management
25,4 members such as the CEO and the CMO, most members in the hospital neglected this
balanced system. The lack of drive from the top management yielded a loss of
confidence and consequent suspension of the BSC system despite Shanes (1995) claim
that leadership that promotes innovation is not limited to leadership from the upper
rungs of the organisational hierarchy.
298 Under the dome of transformational leadership, knowledge-based trust grew in
Department Y, but not in other departments:
The head doctor is experienced in both treatment as well as HR issues. He knows how to work
with people, how to engage people [. . .] He is understanding, helpful and sharing. His
knowledge is at the mentor level (a doctor from the department Y).
Out of the blue, two doctors in department X left the hospital, taking away a number of
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patients who appreciated their effective medical treatment and advice. Some doctors in
department Y also claimed that without the transformational leadership behaviour of
their head doctor, they would have left the hospital like these two doctors.
Ultimately discerning and deciding to tackle this issue, the CEO invited consultants
including the author, who recommended the use of daily key performance indicators
(KPIs). Paradoxically, all the required information was available on the existing BSC
system but was not being used except by department Y, which was applying few
non-financial measures such as patient satisfaction, recommendations from former
patients, learning, and minimised abuse of antibiotics without antibiotic susceptibility
testing, which aimed at drug resistance reduction. The head doctor of department Y
pointed out the attributes of this balanced system as well as its experimental
implementation in department Y to the CEO. Consequently, the CEO commenced to
look at the BSC measures and realised that this balanced system voiced the hospital
vision and strategy and that his leadership style was inhibiting its implementation.
Realising increased dissatisfaction in several stakeholders, especially patients, the
CEO commenced generating change, starting with the adoption of a transformational
leadership style, as suggested by Bass (1990) that [. . .] when a firm is faced with a
turbulent market-place [. . .] then transformational leadership needs to be nurtured at
all levels in the firm (Bass, 1990, p. 639). He removed some policies on medical
prescription plan and patients length of stay from the measurement of productivity.
He encouraged that as a change in performance measurement, the BSC system be used
on a daily basis to communicate performance information between CEO, management
team, and the clinical and subclinical departments. The CEOs openness to change was
found through an interview:
Our CEO turned to say, Do belong to this hospital and we belong to you in a way that this
hospital is a laboratory for you to experiment your new formula. It can be a failure at the first
try. Adjust the parameters and resume the experiment. I remember Thomas Alva Edison
tested more than hundred times for a successful invention (a doctor from the department Z).
This encouragement by the CEO gave rise to the chief medical officer (CMO) and the
head doctor of department X adopting a transformational style. This adaptation of
leadership style in the top management, over a 18-month period, coupled with training
and coaching on BSC system, led to the extensive use of the BSC measures across all
levels of the hospital that produced significant improvements in internal medical
treatment and surgical treatment, employee commitment, patient satisfaction, and
market share. One crucial factor contributing to increased patient satisfaction was that From
the hospital revoked the policy of pre-payment of surgical operation fee when patients unbalanced to
registered for heart operations even though patients may wait months to a year to be
scheduled for heart operations.
balanced
The BSC system was seen not as a set of performance metrics but as guidelines for
hospital members behaviours, as reflected in some members attitudes:
299
As a compass, the BSC reminds us of the direction in our medical practice. We have reduced
the use of broad-spectrum antibiotics and prescribed antibiotics according to antibiotic
susceptibility testing. Bed covers are now changed at least twice a day and wards are
sterilised at least twice a day as well in order to reduce hospital infections. The BSC reminds
us of smiles sent to patients notwithstanding pressure from patient overload. Our CEO
always encourages us to view every day as Patients Day (a doctor from department X).
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Many pharmaceutical firms offer our hospital as well as physicians high commissions to get
their products prioritised in our prescriptions. However, we no longer prioritise commission
in our choice of pharmaceutical products, but look at their treatment effectiveness. Our CEO
did ask a pharmaceutical firm, instead of offering commissions, as a social responsibility, to
decorate clinical wards with cartoon characters for little patients so that they can occasionally
forget their subcostal pains or dyspnea (a doctor from department Y).
We nurses usually joke to each other, Smiles, please, the BSC is watching you. Deep down,
the BSC has changed and navigated our behaviors (a nurse).
After 21 months since the launching of the BSC system program, most hospital
members developed identity-based trust as they understood the short-term as well as
long-term strategies in the BSC system and were activated to implement it. The
implementation of the BSC, along with the dissemination of transformational
leadership, were shaping a market- or patient-orientated culture in the hospital:
Innovations, not any titles or awards, are the main impetus converting our hospital a leader in
cardiology field. Innovations contribute to patients word of mouth on the hospital services.
The hospitals emphasis on customers and innovation is expressed through the incorporation
of the BSC measures on these dimensions into the hospitals performance measurement
system (a doctor in department Z).
In a nutshell, the original hierarchy culture, together with dominant transactional
leadership style, which are based on rules and tasks, did not generate the right
environment for the hospital to adopt the BSC system as a tool of managing the
performance of its members. The leaders evidently needed some form of internal
stimuli (in this case, drainage of expertise) and external stimuli (diminished patient
retention) to shock their leadership style into transformational leadership. This
transformational leadership style was instrumental in driving the implementation of
the BSC system in the hospital.
Once the BSC system was in place and members at all levels experienced positive
results through its use, the overall culture of the hospital strongly shifted to market
culture. Clinical and subclinical departments use the BSC measures to drive their
performance as well as nourish improvements without being told what to do by the
management.
LHS 5. Discussion
25,4 From this case research, which demonstrates the successful implementation of the BSC
at Hospital A, emerges a pattern as regards the relationships amongst BSC
implementation and its antecedents such as organisational culture, leadership style,
and trust.
The final observation from the case is that leaders do not readily change their
leadership styles. Internal and external stimuli may play a crucial role in motivating
leaders, whether intrinsically or instrumentally, to change their leadership styles.
Working together, strategy maps and balanced scorecards are a framework for
change (Harich, 2004); however, the findings indicate that successful implementation
of BSC also needs changes in such antecedents as organisational culture, leadership,
and trust. In the most favourable cases, leaders can concomitantly adapt these
antecedents into more effective ones; nonetheless, leaders can also focus on one
antecedent, as in this case, the leadership. If leaders find that the dynamic nature of this
antecedent is higher than that of the others, it can activate the others.
The BSC approach may need some ample changes in culture within the organisation
(Chavan, 2009). Organisational culture tends to be deemed a rather inert antecedent.
However, organisational culture can be more swiftly activated if leaders
transformational leadership reaches a high distribution level or has a strong chain
reaction from member to member, not in a hierarchical sequence, but in diverse
directions. Even if this form of distributed leadership extends beyond organisational
members toward other stakeholders, it can extensively impact artefacts of
organisational culture such as legends as well as consolidate trust.
Other organisational attributes can participate in the chain reaction from leadership
to the success of BSC implementation such as employees knowledge sharing or
scenario planning. Herath et al. (2010) allege that information sharing around the BSC
is essential for its effective implementation. Othman (2008) argues that the use of
scenario planning can overcome the lack of external orientation in the BSC. Scenario
planning also makes the BSC more reflective of future changes. Thus, the investigation
of the mediating role of these attributes in the successful implementation of BSC can
provide new paths for research.
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