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Factors influencing the decision makers of hospitals to adopt strategic alliances with physicians in ambulatory surgery centers

ProQuest Dissertations and Theses, 2011
Dissertation
Author: Donald J Sapp
Abstract:
The study of strategic management pursues a continual understanding of the factors that influence an organization's adaptation to innovation and change. The U.S. health care industry is one in which hospital managers face countless issues that require the organization to seek strategic decisions that provide a sustainable, competitive advantage. Frustrated with hospitals' historical unwillingness to adopt ambulatory surgery centers (ASCs), physician specialists established strategic alliances among themselves or with well-funded surgery center companies to reduce the (a) cost, (b) complexity, (c) time, and (d) risk involved in the development of these facilities. Based on competition with their referring physicians and physicians' acceptance of strategic alliances with ambulatory surgery center management companies, hospital managers reacted. The framework for the study was a cross-sectional, one-time assessment of managerial attitudes and perceptions utilizing a survey instrument from a population of hospital executives and senior managers regarding their willingness to adopt physician strategic alliances (PSAs) in ASCs. Review of the literature enabled identification of influential factors and offered support to the chosen framework within which answers to the research questions were pursued. The research questions tested various hypotheses regarding hospital decision makers' perceptions of the (a) need, (b) relative value, (c) complexity, and (d) risk of innovation with physician strategic alliances in ambulatory surgery centers. As a result of this study, the data indicate that hospital senior managers' willingness to recommend PSAs in ASCs may be dependent on their perception of need and relative value but may not be dependent on their perception of organizational complexity or risk.

v Table of Contents Acknowledgement iv List of Tables viii

List of Figures x

CHAPTER 1: INTRODUCTION 1

Background 2

Statement of the Problem 3

Purpose of the Study 4

Rationale 5

Research Questions and Hypotheses 6

Significance of the Study 8

Definitions of Terms 9

Assumptions and Limitations 10

Nature of the Study 11

Theoretical Framework 12

Organization of the Remainder of the Study 12

CHAPTER 2: REVIEW OF THE LITERATURE 14

Decision Making and the Diffusion of Innovation 14

Strategic Alliances and Health Care Organizations 26

Factors Influencing the Growth of Strategic Alliances 28

An ASC Management Company’s Business Strategy for Innovation Adoption 37

Ambulatory Surgery Centers versus Hospital Outpatient Surgery Departme nts 39

Gaps in the Literature Regarding Research of Alliances in ASCs 42

Summary 43

vi CHAPTER 3: METHODOLOGY 45

Research Design 45

Appropriateness of Design 47

Research Questions and Hypotheses 47

Population 49

Informed Consent and Confidentiality 50

Instrumentation 51

Data Collection 52

Data Analysis 54

Data Coding 54

Validity and Reliability 54

Minimum Sample Size Determination 58

Summary 59

CHAPTER 4. DATA COLLECTION AND ANALYSIS 60

Data Collection, Response Rates, and Population 60

Demographic Characteristics of the Sample 61

Descriptive Statistics 65

Exploratory Factor Analysis 68

Hypothesis Testing 77

Summary of Data Collection and Analysis 84

CHAPTER 5. DISCUSSION, IMPLICATIONS, RECOMMENDATIONS 86

Discussion 86

Summary of Research Findings 86

Study Design 88

Discussion of the Findings 89

vii Summary of Hypothesis Testing Results 91

Implications of the Study 92

Conclusion 94

REFERENCES 96

APPENDIX: ONLINE SURVEY INSTRUMENT 106

viii

List of Tables

Table 1. Variables by Category, Measurement Technique, and Scale 47

Table 2. Survey Questions, by Series, for Each Variable 52

Table 3. Pearson’s r Correlations Coefficients 57

Table 4. Kendall’s tau_b Correlation Coefficients 57

Table 5. Position Frequency Distribution 62

Table 6. Position and Recommendation Cross-Tabulation 63

Table 7. Coded Position and Recommendation Cross-Tabulation 63

Table 8. Experience and Recommendation Cross-Tabulation 64

Table 9. Coded Years of Experience and Recommendation Cross-Tabulation 65

Table 10. Variable Mean and Standard Deviations 66

Table 11. Inter-Item Correlation Matrix 67

Table 12. Remaining Inter-Item Correlation Matrix 69

Table 13. Communalities of Survey Items 70

Table 14. Total Variances Explained 73

Table 15. Component Correlation Matrix 73

Table 17. Rotated Structure Matrix 76

Table 18. Hypothesis Testing: Correlation Analysis 79

Table 19. Crosstabulation for Hypothesis 1: Independent of Perceived Need 79

Table 20. Chi-Square Tests for Hypothesis 1 80

Table 21. Crosstabulation for Hypothesis 2 80

Table 22. Chi-Square Tests for Hypothesis 2: Independent of Relative Value 81

Table 23. Crosstabulation for Hypothesis 3: Independent of Organizational Complexity 82

Table 24. Chi-Square Tests for Hypothesis 3 83

ix Table 25. Crosstabulation for Hypothesis 4: Independent of Risk 84

Table 26. Chi-Square Tests for Hypothesis 4 84

x List of Figures Figure 1. Model of five stages in the innovation-decision process 17 Figure 2. Five stages in the innovation process in organizations 18 Figure 3. Test-retest scatterplot 56 Figure 4. Scree plot of components 71

1 CHAPTER 1: INTRODUCTION The study of strategic management pursues a continual understanding of the factor s that influence an organization’s adaptation to innovation and change (Young, Charns, & Shortell, 2001). Notably, the most influential people affecting innovation and change in organizations a re top executives (Damanpour & Schneider, 2006). Research indicates that top manager s’ attitudes and perceptions of strategic issues affect the range of solutions considered in a n organization (Dewar & Dutton, 1986; Hage & Dewar, 1973; Thomas & McDaniel, 1990). For these reas ons, theories of strategic organizational adaptation and change focus on the role of mana gerial action and strategic choice (Lam, 2006). The U.S. health care industry is one in which hospital managers face countless i ssues that require the organization to seek strategic decisions that provide a sustainable , competitive advantage (Tabak & Jain, 2000). Hospital managers have tended to facilitate admi nistrative innovations, while clinicians have routinely focused on technological change (Gloube rman & Mintzberg, 2001). The costs and strategic implication of introducing a new technolog y allow senior management and the governing board to exert a greater influence on the i nnovation- adoption decision (Mintzberg, Lampel, Quinn, & Ghoshal, 2003). Diffusion of innovation and technology throughout health care service organizations requires key support from hospi tal managers (Glouberman & Mintzberg, 2001; Greenhalgh, Robert, Macfarlane, Bate, & Kyriakidou, 2004; Peirce, 2000). One segment of the health care industry, the freestanding ambulatory surgery center (ASC), utilizes an innovative, focused-factory concept that combines contempora ry strategic alliances with physicians, hospitals, and management companies to change the expe ctations and requirements for surgical services that do not need a hospital admission (Her zlinger, 1997;

2 Skinner, 1974). Frustrated with hospitals’ unwillingness to adopt ASCs, many physicia n specialists have established their own strategic alliances with othe r physicians or well-funded surgery center companies to reduce the (a) cost, (b) complexity, (c) ti me, and (d) risk involved in the development of these facilities. Research supports organizational structur es with strategic alliances to reduce vulnerability and uncertainty (Faulkner, 2003; Goes & Park , 1997). Based on competition with their referring physicians to schedule outpatient procedures and physicians’ acceptance of strategic alliances with ASC managem ent companies, hospital managers reacted (Kadrie, 2006). Much of the increase in numbers of surgery cent ers in 2005 was the result of hospital companies’ attempts to capture business that their outpatient departments would have otherwise lost to another new surgery center (Feinste in, 2005). The factors involved in decision makers’ choices to establish or reject new surgery c enters are not well understood. The primary objective of this research was to evaluate hospit al decision makers’ attitudes and perceptions of the (a) need, (b) relative value, (c) complexity, and (d) risk of hospital-physician strategic alliances in ASCs. A secondary objective of the research study was to identify the connection of these decision makers’ attitudes and perceptions t o their willingness to recommend to their hospitals new or expanded strategic al liances with physicians in ASCs. Background

The freestanding ASC market segment embraced innovation and changed the public ’s expectations and requirements for surgical services that do not need a hospital ad mission. ASCs offered physicians the ability to create an efficient work environment tha t increases productivity and provides a safe, affordable alternative to hospital-based surgery. The compl exity of this innovation involves two constructs: (a) the fundamental element of the innovation and (b) the

3 organizational alliances required for implementation (Denis, Hébert, Langl ey, Lozeau, & Trottier, 2002; Greenhalgh et al., 2004). Physicians formed strategic alliances with local ASCs as the means to introduce to consumers this innovative approach to health care. ASCs can be established as freest anding facilities not affiliated with any particular hospitals or can be affil iated with hospitals, if such alliances are recommended by the hospitals’ managers. For ASCs affil iated with a hospital, the recommendation for the hospital or its physicians to establish strategic alliances may have been predicated on the assumption, valid or otherwise, that sector profits would be share d with the hospital. Hospital decision makers responded to these alliances in various ways , and thus, illuminates the importance of the hospital managers’ perceptions regarding this innovative approach to health care relative to their willingness to recommend physici an strategic alliances (PSAs) in ASCs for their organization. Statement of the Problem

Hospital managers may have realized their worst fears in not recommending that their hospitals align with freestanding ASCs, as such competitor ASC joint ventures have resulted in lost volume and revenue to hospitals. Volume growth at ASCs instead of at hospitals i s based on physicians’ and patients’ preference for ambulatory care when admissi on for overnight care is not required. Feinstein (2005) remarked that the 1.3% decline in hospital-based outpati ent surgery in 2005 was evidence of weak volume growth overall in the hospital industry. Additionally, Koenig, Doherty, Dreyfus, and Xanthopoulos (2009) found that 70% of the ASC growth in Medicare volume from 2000 to 2007 was attributed to a shift from the higher cost

hospital outpatient surgery departments (HOPD) to the lower cost ASC. As a r esult, reductions in surgical volume have forced hospital managers to consider physician alliance s in ASCs from

4 different strategic perspectives and to make future choices accordingly (Holm, 2000; Joyce & Cronin, 1985; Zuckerman, Kaluzny, Montgomery, Ford, & Trout, 1991). Kadrie (2006) conducted a study of hospital managers’ strategic planning rel ative to the emergence of ASCs and specialty hospitals. Results of that study indicate d that only 17% of hospital managers believed strongly that ASCs and specialty hospitals provide a strategic advantage, while 68% reported believing specialty hospitals and ASCs do not provide a strategic advantage. In addition, 49% of the study’s respondents reported that they intended to ent er into joint venture ASCs and specialty hospitals with local physicians as one of a combina tion of strategies to respond to the continued growth of ASCs and specialty hospitals. T he problem is that little information is available to identify the factors that contribute to these hospital managers’ strategic decisions. This study examined the perceptions and attitudinal factors that influence hospital managers to recommend PSAs in ASCs, with the perceived innovati on characteristics of (a) need, (b) relative value, (c) complexity , and (d) risk. Purpose of the Study The purpose of this study was to identify those elements that contribute to hospita l managers’ willingness to recommend strategic alliances with ASCs to the hospitals’ surgeons as a means to implement the concept of innovative-focused factories for outpatient sur gery. By collecting and assessing the criteria that hospital managers have used i n making their decisions regarding these strategic alliances, both the ASC market segment and hospi tal managers will be better informed about the decision-making process. The ASC market segment mig ht present alternative alliance strategies and hospitals might realize greate r benefits from this innovative approach to health care.

5 Rationale

The diffusion of an innovation is an uncertainty reduction process grounded by the exchange of information among decision makers (Rogers, 2003). Hage and Dewar (1973)

expanded upon the generally acknowledged concept that top managers’ attitudes and perceptions are important, determining that these leaders’ explanatory capacity was greater than organizational factors in predicting organizational innovation. Lease’s (2005) r esearch on the adoption of biometric security technologies addressed the concepts of innovation adoption and managers’ perceptions. The implication of the results of Lease’s study a re that a positive perception of (a) security effectiveness, (b) need, (c) reliability, and (d) cost-effectiveness correlate with information technology and security managers’ will ingness to recommend such technologies. A common theme underlying innovation adoption theories is the inclusion of managers’ perceptions of a new technology as independent variables (Rogers, 2003). The framework and methodological approach applied in Lease’s study served as a guid e for this study’s research design. Rogers’ (2003) innovation decision process and Ajzen and Fishbein’s (1973, 1977) theory of reasoned action (TRA) have led researchers to conclude that at titudes or perceptions about technology are influential in the decision to adopt an innovation. The choice to recommend a new technology or innovation is based on the decision maker’s perceptions of ( a) organizational need, (b) relative value, (c) complexity, and (d) risk (Fleur en, Wiefferink, & Paulussen, 2004; Lease, 2005; Rogers, 2003; Sitkin & Weingart, 1995). Drawing from these

relevant concepts, four research questions and hypotheses were developed to support the research study.

6 This study evaluated hospital executives’ and senior managers’ perceptions of (a) organizational need, (b) relative value, (c) complexity, and (d) risk of PSA s in ASCs. The results of this study may help these individuals establish a framework for underst anding the factors that influence their adoption decisions. An additional benefit may be realized from me aningful insight regarding the utilization of PSAs in ASCs. These strategic alliances might facilitate the stabilization and strengthening of growth in the hospitals’ outpatient surgical s ervices. Research Questions and Hypotheses The objective of this research study was to provide hospital decision makers with greater insight into the factors that contribute to their choice to adopt or recommend PSAs in ASCs. The importance of the effect of top managers’ perceptions on the diffusion of innovation into a n organization has been documented (Ettlie, 2000; Kimberly & Evanisko, 1981; Peterson, Smith, Martorana, & Owens, 2003; Pierce & Delbecq, 1977; Rogers, 2003; Tabak & Barr, 1999). A manager’s decision to adopt an innovation is correlated to the perceived (a) need, (b) relative value, (c) complexity, and (d) risk of an innovation (Ekmekci & Turley, 2008; Ettlie, 2000; Greenhalgh et al., 2004; Lease, 2005; Rogers, 2003; Tabak & Jain, 2000). The study sought to answer four primary research questions that measured the relevant aspects of the health care managers’ perceptions of PSAs in ASCs based on a c orrelation to (a) organizational need, (b) relative value, (c) complexity, and (d) perceived ris k. These determinants influence the choice to recommend or not recommend a service innovat ion or new technology and were managed as dependent variables. Secondarily, demographic inf ormation collected from the study provided insight into the relational strength of (a) managerial position, (b) organizational size, and (c) years in current management position a s moderating variables. The four primary research questions investigated were as follows:

7 1. What is the relationship between perceived need for a PSA in an ASC and the hospital manager’s decision to recommend a PSA in an ASC? 2. What is the relationship between perceived relative value for a PSA in an ASC and the hospital manager’s decision to recommend a PSA in an ASC? 3. What is the relationship between perceived organizational complexity of a P SA in an ASC and the hospital manager’s decision to recommend a PSA in an ASC? 4. What is the relationship between perceived risk of a PSA in an ASC and the hos pital manager’s decision to recommend a PSA in an ASC? The study tested four pairs (null or H 0x and alternative or H ax ) of hypotheses: H 01 : The hospital manager’s decision to recommend a PSA in an ASC is independent of the perceived need for an ASC. H a1 : The hospital manager’s decision to recommend a PSA in an ASC is not independent of the perceived need for an ASC. H 02 : The hospital manager’s decision to recommend a PSA in an ASC is independent of the perceived relative value for an ASC. H 2a : The hospital manager’s decision to recommend a PSA in an ASC is not independent of the perceived relative value for an ASC. H 03 : The hospital manager’s decision to recommend a PSA in an ASC is independent of the perceived organizational complexity of a PSA for an ASC. H a3 : The hospital manager’s decision to recommend a PSA in an ASC is not independent of the perceived organizational complexity of a PSA for an ASC. H 04 : The hospital manager’s decision to recommend a PSA in an ASC is independent of the perceived risk of a PSA in an ASC.

8 H a4 : The hospital manager’s decision to recommend a PSA in an ASC is not independent of the perceived risk of a PSA in an ASC. Significance of the Study

Personality traits of decision makers have been acknowledged, but little resea rch exists on the combined effects of individual and organizational variables relative to innova tion decision making in top management teams (Tabak & Barr, 1999). This study contributes to the data on innovation adoption in complex health care organizations that utilize interorganiz ational strategies and strategic management. The role of hospital managers’ pe rceptions was examined to determine these individuals’ willingness to adopt a complex organizational mode l combined with the focused factory processes of innovations in ASCs. Results of the researc h add to the knowledge base involving interorganizational strategy and strategic managem ent in complex health care organizations, particularly highlighting the influence of human perceptions on the adoption of PSAs in ASCs. Understanding hospital managers’ perceptions regarding PSAs should help est ablish a framework for these individuals to make fully informed decisions for these PSAs . The study offered insight into the power of perception and the reasons hospital executives may oppose PSAs, regardless of the strategic importance of such alliances or decl ines in outpatient surgery volumes resulting from other joint-ventured ASCs. Results of the study may bene fit both hospital and ASC managers by offering information about the effects of their management colleagues’ attitudes and perceptions regarding adoption of physician joint ventures in existing markets.

9 Definitions of Terms

The following terms were used in the study. Ambulatory surgery centers (ASCs). Separately state-licensed and federally certified Medicare facilities for surgical procedures that do not require an overnight hospital admission (Chukmaitov, Menachemi, Brown, Saunders, and Brooks, 2008).

Hospital decision makers. Hospital chief executive officers (CEOs), chief operations officers (COOs), chief financial officers (CFOs), and chief nurs ing officers (CNOs) involved in determining the establishment of strategic alliances in ASCs. Hospital outpatient surgery departments ( HOPDs ) . Facilities that remain licensed under a hospital and are typically housed on the hospital’s campus (Chukmaitov et al., 2008).

Physician strategic alliance in ASCs (PSA). A hospital/physician ASC, as described in the Office of Inspector General Safe Harbors for ASCs; one investor must be a hospital; one investor must be a physician qualified to do procedures in the ASC; the ASC must be separa te from the hospital; the physicians must provide one third of their outpatient volume to the cent er as an investment requirement; profits are distributed pro-rata of investment (C ode of Federal Regulations, Title 42, §1001.952(r)(4)).

Strategic alliance. “[A] particular mode of inter-organizational relationship in which the partners make substantial investment in developing a long-term collaborative ef fort, and common orientation” (Mattson, 1998, as cited in Faulkner, 2003, p. 624).

Technology/innovation acceptance. An individual’s psychological state with regard to his or her voluntary or intended use of a particular technology (Chau & Hu, 2002).

10 Assumptions and Limitations

The study assumed that legal strategic alliances result from the organi zation’s fundamental desire for physicians to be involved in ASCs. The study did not see k to determine the best choice of organizational form for strategic alliances but assumed ph ysicians prefer a joint ventured ASC over one that does not allow ownership. This distinction was intended to illuminate the complexity of the ASC sector, with strategic allianc es being the preferred organizational standard for physician engagement. Many legal structures ex ist, and compliance issues must be resolved. In cases where compliance issues arise, legal c ounsel should be sought. It was not the intention of this study to determine the best joint venture struct ure to minimize legal and business issues but to analyze the theoretical framework of attr ibutes for successful strategic alliances. No attempt was made to determine differences be tween multispecialty and single-specialty ASCs. No differentiation was made between (a) inde pendently owned ASCs, (b) joint-ventured ASCs with hospitals, and (c) joint-ventured ASCs without hospital ownership. The study was limited to health care professionals occupying a senior ma nagement role in a hospital. Categorization of management role was made based on the individual’s title in the organization as depicted in the Florida Hospital Associations Directory of Hospi tals (2011) and was not dependent on an explicitly defined management role. The study was limi ted specifically to PSAs in ASCs and did not include representation by other health care str ategic alliances or innovations. The survey was also limited geographically to include only hospital s in Florida, although ASCs are concentrated heavily in California and Texas as well (Koenig et al., 2009). Given this geographic limitation, the perceptions of the sample of hospital senior managers participating in the study were assumed to be representative of those of all hospital managers throughout the United States. Similarly, mailing lists of senior managers i n over 6,500 hospitals

11 nation-wide may be obtained through the American Hospital Association (AHA) wit h these same titles (AHA, 2011). Accordingly, with regard to the sample population, the assumption was made that

participants in the study who completed the surveys had responsibilities and decis ion-making authority not significantly different from those of other hospital executive s in similar roles throughout the United States. Each member of the sample population had an equal opportunit y to complete the survey via direct mail and an email link to the online survey; randomn ess of the target sample was preserved. A potential response limitation may be due to the sur vey’s distribution by direct mail and email only; no attempt was made to provide access to the survey through other distribution means, such as personal interviews or telephone correspondenc e. As such, nonresponse was also analyzed to determine significance. Nature of the Study

Physician strategic alliances in ASCs are a means to provide cooperati ve and congruent choices through which hospitals and physicians can increase the volume of outpati ent surgery. This study sought to explain relationships among variables related to these P SAs, ASCs, and hospitals. The study’s research paradigm was a quantitative, non-experiment al correlation design. The theoretical assumption of the quantitative approach is that element s of an object under study can be regarded as relatively independent of each other (Smith, 1983). Acc ording to Smith (1983), the practical assumption is that the object under study does not change ra pidly or in such a way as to make it impossible to be explained in terms of its separate elements. All things being equal, a correlation research design known as factor analysis assessed the association or relationship of the variables under study to each other. Hypothesis t esting and Chi Square test of independence determined the independence of each factor.

12 Smith (1983) believed the key strength of the analytical approach is the attempt to be grounded in science, without bias from the observer or creators, and the independence as sociated with the parts of the whole. From this empirical research, the purpose is to produce vali d inferences about the accuracy of the research questions. The validity of this r esearch design is a function of four components: (a) construct validity, (b) statistical conc lusion validity, (c) internal validity, and (d) external validity. Theoretical Framework

Innovation diffusion theory (IDT; Rogers, 2003) and the TRA (Ajzen & Fishbei n, 1973, 1977) reinforce the assertion that attitudes or perceptions about technology are instrumental in the decision to adopt innovations. Rogers (2003) acknowledged that the innovation decision is a process through which an individual passes from gaining initial knowledge of an innovati on to confirming an innovation adoption decision. Rogers reiterated that this behavior invol ves managing an important characteristic of innovation decision making: uncertaint y. Similar to IDT, TRA hypothesized that individual behavior is driven by intentions grounded by an individual’s attitude. A top manager’s intention to adopt innovations based on TRA suggests that the individual’s attitudes about certain behaviors determine the individual’s intention to behave, which predicts the subsequent actual behaviors (Ajzen & Fishbein, 1973, 1977; Tabak & Jain, 2000). Organization of the Remainder of the Study

A review of the literature is presented in Chapter 2. Included in this revie w are an analysis and evaluation of the two topics that form the foundation of the research init iative, as well as documentation to support the theoretical framework of the study. The re search study design and methodology to test the hypotheses are presented in Chapter 3. Chapter 4 r eviews the

13 results of the data collections and analysis, while Chapter 5 provides the discus sion, implications, and recommendations from the results of the study.

14 CHAPTER 2: REVIEW OF THE LITERATURE

The purpose of this study was to determine whether (a) organizational need, (b) relative value, (c) complexity, and (d) risk regarding PSAs in ASCs, as perceived b y hospital decision makers, contribute to the implementation of innovative, focused factories for outpa tient surgery. Understanding the importance of hospital managers’ perceptions of the outpatient surgery- focused factory concept may offer a framework within which these manage rs, physicians, and ASCs can support the development of well-informed decisions that improve patient care a nd satisfy business objectives. The results of the study may provide both hospital and ASC managers with insight into the influence of their management colleagues’ attitudes and perceptions on the adoption of PSAs in ASCs. Decision Making and the Diffusion of Innovation

Background of the Theory Diffusion, invention, and innovation are the pillars that support the circulation of new products, processes, and practices into society (Hall, 2006). According to Rogers (2003), the diffusion paradigm was established in the 1940s. Rogers defined the diffusion of innovations as a universal process of social change. Diffusion studies proliferated in the Unit ed States during the 1950s, after which, in the 1960s, research into the diffusion paradigm expanded to include developing nations. The 1970s marked the beginning of reflective criticism on past dif fusion research, when research on innovation shifted its focus to organizational impleme ntation rather than organizational innovativeness or adoption (Rogers, 2003). According to Rogers (2003), four common elements of the diffusion process are pres ent in every diffusion research study: (a) innovation, (b) communication channels, (c ) time, and (d) the social system. The author noted that approximately two thirds of all empir ical

15 generalizations reported in diffusion publications still identify the study of va riables relating to individual innovativeness as the most popular. He categorized innovation adopters along a relative timeline—(a) innovators, (b) early adopters, (c) early majori ty, (d) late majority, and (e) laggards—and commented that innovations would spread through a community in a distribut ion pattern similar to that of a normal bell-shaped curve. Rogers identified links to s ocioeconomic status, personality characteristics, and communication behaviors as differen ces in attributes of early adopters, as compared with other innovators along the adoption continuum. Early adopters tend to be opinion leaders who may assist managers in targeting new technology app ropriately and persuade others to adopt the innovation (Rogers, 2003). The innovation decision-making process begins when potential adopters engage in knowledge-seeking behaviors regarding expectations and consequences of using the innovation. An individual’s passage from gaining knowledge, to forming an attitude toward the innovation, to making a decision to adopt or reject it, to implementing and confirming this decis ion are milestones in the innovation decision-making process (Rogers, 2003). From a sociologic al perspective, Rogers (2003) determined that attitudes toward a new technology ar e essential to innovation diffusion. According to Rogers, the adopter’s perceived characteristi cs of the innovation are based on (a) the relative advantage of the innovation, (b) the compatibilit y of current operations and social norms, (c) the complexity of the innovation, (d) trial ability and ease of the potential adapter’s ability to test the innovation, and (e) observability and ease of post trial evaluation. The innovation decision process consists of five stages: (a) knowledge, (b) persua sion, (c) decision, (d) implementation, and (e) confirmation. In the knowledge stage, the human tendencies of selective exposure and perception establish and interpret communic ation messages

Full document contains 119 pages
Abstract: The study of strategic management pursues a continual understanding of the factors that influence an organization's adaptation to innovation and change. The U.S. health care industry is one in which hospital managers face countless issues that require the organization to seek strategic decisions that provide a sustainable, competitive advantage. Frustrated with hospitals' historical unwillingness to adopt ambulatory surgery centers (ASCs), physician specialists established strategic alliances among themselves or with well-funded surgery center companies to reduce the (a) cost, (b) complexity, (c) time, and (d) risk involved in the development of these facilities. Based on competition with their referring physicians and physicians' acceptance of strategic alliances with ambulatory surgery center management companies, hospital managers reacted. The framework for the study was a cross-sectional, one-time assessment of managerial attitudes and perceptions utilizing a survey instrument from a population of hospital executives and senior managers regarding their willingness to adopt physician strategic alliances (PSAs) in ASCs. Review of the literature enabled identification of influential factors and offered support to the chosen framework within which answers to the research questions were pursued. The research questions tested various hypotheses regarding hospital decision makers' perceptions of the (a) need, (b) relative value, (c) complexity, and (d) risk of innovation with physician strategic alliances in ambulatory surgery centers. As a result of this study, the data indicate that hospital senior managers' willingness to recommend PSAs in ASCs may be dependent on their perception of need and relative value but may not be dependent on their perception of organizational complexity or risk.