Organizational Culture in Hospitals

Kelsey Straeter




            Colorfully and accurately defined by Arnold, Capella, and Sumrall, “Hospitals are human institutions, not buildings, bottom lines, strategic analyses, or five-year plans. A hospital is a living organization-- people make a hospital work and its culture ties people together, giving meaning and purpose to their day-to-day activities and lives” (1987, p. 20). Although all hospitals have cultures, the cultures do not all produce the same effect on the organizations. Some cultures help hospitals adapt well to constantly changing environments while others hinder this ability.

            The following research will attempt to prove that culture is a critical aspect of every hospital’s existence. It will therefore confirm that the ability to overcome the challenges that stand in the way of a healthy culture is critical to an organization’s success. There are countless factors that affect the culture and life of a hospital, but the subsequent review of literature will be focusing on three of the main elements. The challenges presented by the following components will be explored: external environments, management (broken down into diversity management and physicians in management), and the role of conflict. 


Review of Literature

Describing Culture

            Shaw (2002) claims that as far as organizational culture is concerned, the definition varies depending on which perspective it is viewed from. He states that according to the human relations perspective, culture is how employees make sense of their work and attribute meaning to organizational experiences. On the other hand, rational structuralists hold that culture is made up of the beliefs that top managers have about how they should run the company. Lastly, systems theorists assert that culture is made up of the “underlying values, beliefs, and principles that serve as a foundation for an organization’s management system” (Shaw, 2002, p.212). These are only a few of the many different perspectives held on organizational culture.

            Regardless of the differing definitional views of culture, most experts do agree that a strong, dominant culture is a major benefit to any organization (Shaw, 2002). A strong culture can have many positive effects including “conflict reduction, coordination and control, reduction of uncertainty, motivation, and competitive advantage” (Shaw, 2002, p.212). However, it can be a hindrance if the shared ideas interfere with the growth and development of the organization or cause people to think improperly and make bad decisions (Shaw, 2002).


   External Environments

            Given the importance of a strong organizational culture, it is essential to realize the role that external environments play in developing them. As suggested by Arnold, Capella, and Sumrall (1997), the way an organization deals with the challenges in its many external environments determines how successful it will be in the short and long term. Success would be rather easy for hospitals to attain if their environments were static; however, most hospitals face dynamic and complicated ones. The different external environments of a hospital are considered to be “uncontrollable variables.” These can be grouped into the following categories: “cultural and social, competitive, political and legal, economic, and technological” (Arnold et al., 1997, p. 18). According to Arnold et al., in order to maximize its strengths and minimize its weaknesses, a hospital must put extra effort into organizing the controllable variables in its environment, such as marketing and personnel for example.

            Hospitals also should modify their internal variables so that they can adapt to the ever-changing external variables. This essentially means that they need to be oriented towards the external environments and not be so inwardly focused. Many hospitals become too concerned about internal factors, and this hinders their ability to adapt to the changes going on around them (Arnold et al. 1997).

            Arnold et al. firmly believe that if hospitals would implement the “marketing concept” and more innovation into their organizational cultures, they would be able to deal much more effectively with external factors. This philosophy is reiterated by Peters and Austin who claim, “There are only two ways to create and sustain superior performance over the long haul. First, take exceptional care of your customers [patients] via superior service and superior quality. Second, constantly innovate. That’s it” (1985, p. 20).

            According to James Henley, the basic idea behind the marketing concept is that an organization should first and foremost fulfill the needs and wants of the customer while also satisfying organizational goals. Put simply, the marketing concept can be summed up with three words: “Customer is king.” (“Marketing Concept and Philosophy,” 2000). While this concept is crucial for the management of hospitals, it is not something that can simply be administered by managers or the marketing department. Rather, it must be adopted by the by the organization as a whole, meaning that it requires participation from every position, ranging anywhere from executive jobs to the lowest jobs in the hierarchy. It is simply a “way of doing business” (“Marketing Concept and Philosophy,” 2000.) It not only contributes to the internal well-being of a hospital but also provides a way for a hospital to keep in touch with outside factors in the environment (for example, potential patients).

             Due to the marketing concept’s evident benefits, several experts assert that external environments can be dealt with much more effectively once it is implemented into an organization’s culture. However, although marketing and the prioritization of customer/patients’ needs are clearly important, they haven’t gotten the attention that they should in the hospital setting. Judith S. Neiman, Director of the Society for Hospital Planning and Marketing (SHPM) of the American Hospital Association reinforces this concern in saying, “while people talk about marketing’s importance, it is not receiving the responsibility we think it deserves” (Arnold et al., 1997, p. 19).



            In addition to adapting to external environments, hospitals must also pay close attention to the role of management in developing and maintaining a healthy organizational culture. Two different challenges associated with management will be discussed: diversity management and physicians in management.


Diversity Management

            Diversity management is a very important subject for managers to address. As of 1999, “28% of U.S. residents were members of a racial or ethnic minority group,” and the U.S. Census Bureau expects this to rise to 40% by 2030 (Dansky, Weech-Maldonado, De Souza, & Dreachslin, 2003, p. 243). Diversity affects every organization, but the health care field is expected to be affected more than any other by the demographic shift considering that 1 in every 3 new jobs is projected to be in health care according to the U.S. Bureau of Labor Statistics (Dansky et al., 2003). This creates major challenges for managers who will have to deal with a much more culturally diverse labor force. However, the upside is that several new studies suggest that culturally diverse organizations tend to perform better than homogeneous ones as well as have a competitive advantage over them (Dansky et al., 2003).

            Diversity management has been known to improve organizational culture by “enhancing workforce and customer satisfaction, improving communication among members of the workforce, and improving organization performance” (Dansky et al., 2003, p. 244). Although it obviously has its benefits, diversity proves to cause many difficulties for managers as well. One of the newest studies performed by the American College of Healthcare Executives (ACHE) found that there is an obvious relationship between ethnicity and how people view their relationships at work and employment opportunities (Dansky et al. 2003). Literature in general management has come to similar conclusions. A survey of federal employees found that African Americans and whites have quite differing views on organizational culture. The following results were discovered according to two different studies:

            People of color believed that attitudinal and cultural barriers in the organization limit their career accomplishment, while white men were more likely to agree that affirmative action has leveled the playing field. Another study of managers found that African-Americans felt less accepted within an organization, perceived that they had less job discretion, received lower ratings on both performance and potential for promotion, and were less satisfied with their careers. (Dansky et al., 2003, p. 244)

            Multiculturalism, the representation of “people with different group affiliations of cultural significance” is at the core of diversity management (Dansky et al., 2003, p. 244). However, diversity in the workforce is only one dimension of multiculturalism that hospitals must deal with. Hospitals also have to be able to cater to the differing needs of culturally diverse patients by providing them with the care that best suits them. One way to work towards providing appropriate care is to include members of these minority groups in the work force, particularly in management positions, because they are likely to be more knowledgeable about how to meet the patients’ various demands. Whenever the top management is mostly white, they are more likely to be “out of touch with the cultural context of the patient population and workforce” (Dansky et al., 2003, p. 244). Also, it is interesting to note that hospitals that approach diversity proactively by seeking to embrace the diversity among its employees seem to be more successful that those who resist it and only integrate diversity in their organization when it is necessary to meet affirmative action quotas (Dansky et al., 2003).

Physicians in Management

            Due to the high demands and dynamic environments of today’s hospitals, the need for experienced physicians in management is growing. In their practices, physicians are the ones who provide the patient care and therefore influence the speed and extent to which changes are made. Consequently, hospitals need their input and professional perspectives to be incorporated into management in order to be profitable in such a competitive and complex type of organization (McAlearney, Fisher, Heiser, Robbins, & Kelleher, 2005).

            However, the problem at hand is that many physicians are being promoted to top management positions without having the expertise to effectively carry out management tasks. The false assumption made by many is that simply because doctors have excellent skills and knowledge in patient care, they must be skilled at managing a hospital (given that a hospital’s primary mission is patient care).  McAlearney et al. parallel this misconception in saying, “Although [physicians] possess critical insights and skills in caring for their patients, families, and caregivers, clinical training and experience typically provide an insufficient background to enable these individuals to lead healthcare organizations or large group practices” (2005, p. 11). In fact, the biggest challenge for physicians who get placed in management positions is having to change their focus from an individual level (on the patient) to a focus that encompasses the entire organization. For most doctors, this requires a complete “cultural shift” (McAlearney et al., 2005, p.11).   

Role of Conflict

               In addition to the management issues, conflict presents another unique challenge to a hospital’s organizational culture. According to Sotile and Sotile, perhaps the most “important, stressful, and time-consuming” task for those in the medical field today is dealing with conflict in the workplace (1999, p.57). A survey indicated that two out of three nurses reported being verbally abused by physicians at least once every two to three months. More recent studies show that even this is quite an understatement to the amount of verbal abuse that occurs. Many of the physicians who display this type of behavior are often unaware of the interpersonal damages being caused as a result of their actions. However, doctors are not the only ones causing these relationship tensions. Health care professionals of all kinds have to deal with a coping paradox: “the very skills they learn in order to manage their busy, stressful lives damage their relationships; and as relationship tensions mount, they redouble their use of these same coping strategies, only to beget further relationship tensions” (Sotile & Sotile, 1999, p.58).

                  A major problem that emerges from this is that those victims of inappropriate behavior tend to react with either passive or passive-aggressive behavior, which results in more conflict. An example of passive behavior would be workers calling off on days that they are scheduled to work with someone that they are intimidated by or don’t get along with. Instances of passive-aggressive behavior can be seen when nurses “accidentally” forget orders from a verbally abusive physicians or when they find any reason to call and wake a physician on call throughout the night (Sotile & Sotile, 1999).

            Obviously, this type of conflict can have quite damaging effects on organizational culture. When managed inadequately, interpersonal conflict can make the patients feel isolated, dishearten the staff, increase the rate of turnover, ruin valuable relationships, and potentially lead up to “corporate divorces” (Sotile & Sotile, 1999, p. 57). Sotile & Sotile claim that hospital managers can’t solve conflict caused by physicians by merely strengthening their own skills in conflict management or by punishing the doctors. A much bigger context much also be addressed. The real challenge for management is to get involved in manners that promote a “culture of appropriate interpersonal dynamics throughout the organization” (1999 p. 57). They say that in order to do so requires “learning to think and to intervene systemically,” meaning that the decisions managers make should be made with the best interests of the entire organization in mind, not just certain parts (1999, p.57).


            Overall, it is evident that many factors pose significant challenges for hospitals, and those described here were not even an all-inclusive list. Given the very dynamic nature of their environments, hospitals are subject to even more difficulties with managing their workplace than most other organizations. Particularly in focus for this research were the effects that these challenges have on organizational culture.

            The first item discussed was external environments, and it was brought to attention that the best way to deal with them is through concentrating on the controllable variables of the organization such as the marketing concept. Next, the issues of diversity management and physicians in management were introduced. It can be seen that effective diversity management is crucial to the life of a hospital given the new diverse demographics that hospitals are going to be facing. People who approach diversity reactively rather than proactively pose problems for hospitals. Likewise, physicians without proper expertise who are placed in top management positions create difficulties because they don’t have the necessary leadership skills. Lastly, the role of conflict was explored, and it has been coined as the most complex challenge that hospitals face. As a result of conflict, physicians often create interpersonal distance with other workers (i.e. nurses), causing a whole string of negative effects. To effectively manage workplace conflict, several experts suggest approaching the problem from an organizational perspective rather than an individual perspective as has been practiced often in the past.

            Clearly, external environments, management issues, and conflict all create major obstacles that hospitals must work hard to overcome in order to develop a strong organizational culture. However, the hard work required is worth the productivity and successfulness that building this culture will provide.  This is further exemplified by Edgar H. Schein, the guru of the field, who states, “Culture is an abstraction, yet the forces that are created in social and organizational situations that derive from culture are powerful. If we don’t understand the operation of these forces, we become victim to them” (Smith, Francovich, & Gieselman, 2000, p.74).



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Dansky, K., Weech-Maldonado, R., De Souza, G., & Dreachslin, J. (2003, July). Organizational strategy and diversity management: Diversity-sensitive orientation as a moderating influence. Health Care Management Review, 28(3), 243-253. Retrieved March 28, 2008, from MEDLINE with Full Text database.

Henley, J. (2000). Marketing concept and philosophy. In Reference for business. Retrieved April 8, 2008 from 

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Smith, C., Francovich, C., & Gieselman, J. (2000, December). Pilot test of an organizational culture model in a medical setting. The Health Care Manager, 19(2), 68-77. Retrieved March 28, 2008, from MEDLINE with Full Text database.

Sotile, W., & Sotile, M. (1999, July). How to shape positive relationships in medical practices and hospitals. Physician Executive, 25(4), 57-61. Retrieved March 28, 2008, from MEDLINE with Full Text database.