Strategic Leader Actions of Healthcare Managers in Turkey more

STRATEGIC LEADER ACTIONS RELATED TO THE EFFECTIVENESS OF HOSPITAL MANAGERS IN TURKEY ÖZGÜR UĞURLUOĞLU Hacettepe University Faculty of Economics and Administrative Sciences Department of Health Care Management E-mail:ougurlu@hacettepe.edu.tr YUSUF ÇELİK Hacettepe University Faculty of Economics and Administrative Sciences Department of Health Care Management E-mail: yucelik@hacettepe.edu.tr JOHN PISAPIA Florida Atlantic University Leadership and Policy Studies jpisapia@fau.edu Corresponding Author 561/297-3556 Presented at the American Institute of Higher Education - 4th International Conference March 17-19, 2010, Williamsburg Virginia, USA STRATEGIC LEADER ACTIONS RELATED TO THE EFFECTIVENESS OF HOSPITAL MANAGERS IN TURKEY ABSTRACT The purpose of this study was to identify strategic leader actions that distinguish effective hospital managers in Turkey. Three constructs framed the study: leader actions, organizational-personal characteristics and hospital manager effectiveness. This study used a quantitative non-experimental design and multiple regression and correlation techniques to identify the relationships between the variables examined. Four hundred forty (440) hospital managers participated in the study. Results revealed that all leader actions [transforming, managerial, political and ethical] were related to the health care manager’s effectiveness. The use of transforming actions by the managers was the strongest predictor of the health care manager’s effectiveness. Leader actions were influenced by the complexity of the organizational environment, the region where the managers were employed, the type of hospital (research or general), the competition status in that region, and the bed capacities of their hospitals. No significant associations were found for personal characteristics. Key words: strategic leadership, health care management, public sector Introduction Providing healthcare services in almost all countries is increasingly problematic. Over the past 30 years healthcare delivery has evolved from highly regulated, fairly predictable business into competitive and dynamic business (Zuckerman, 2000). Major forces in healthcare environment include the rise of cost containment mechanism, increased regulatory oversight, increased use of technology, and existence of and reliance on performance and outcome indicators. As a result of these complexities, healthcare organizations must seek innovative ways to deliver healthcare more efficiently and effectively (Guo, 2003). They must balance quality of life issues and with bottom line profits in a complex and rapidly changing competitive environment (Hartman & Crow, 2002). They must work smarter and more efficiently with fewer available resources and a workforce that may not be prepared to adjust quickly to the changing environment (Wallick, 2002). The Turkish context In 2003, the Turkish government passed The Public Finance Management and Control Law No: 5018 into law to address some of these complexities and to improve public sector management in general. A centerpiece of this law was the emphasis on the strategic management as the tool to drive improvement by requiring public organizations to prepare their strategic plans. As a part of Public Finance Management Reforms, macro-level budget preparation, ensuring fiscal discipline, distribution of resources according to strategic priorities, monitoring efficiency in resource usage, providing accountability and improving public accountability had been emerged as important topics (State Planning Organization [SPO], 2006). It was thought that strategic planning would provide effectiveness for public finance management and also support, develop and strengthen the organizational culture and identity (SPO, 2006: 1). As a result, public managers, particularly public healthcare managers, in Turkey are required to have more strategic leadership skills than before to manage and cope with strategic management process. This paper presents the findings of a study of the use of strategic leader actions and effectiveness in hospitals under the direction of the Turkish Ministry of Health. Purpose The purpose of this study is to identify strategic leader actions that distinguish effective hospital managers in Turkey. The three questions which guided the study asked if (a) the actions of the hospital mangers influenced their effectiveness, (b) personal and organizational characteristics of the managers moderated the manager’s actions and their effectiveness, and (c) a predictive model of strategic leader actions, organizational and personal characteristics and manager effectiveness could be found. Six related hypotheses were tested. Importance of the study The study is important because it inquires into the ability of hospital managers in Turkey to implement an important policy initiative. Are health care managers who act strategically more effective than those who don’t? If a relationship between actions and effectiveness can be established, training programs specific to hospital managers could be developed. The study also provides new information to effectiveness hospital management practices that can be emulated by others. Finally, it adds to the developing strategic leadership literature and results can help identify potential outstanding leaders and future research areas. Conceptual Framework Dealing with rapid, complex and often discontinuous change requires leadership (Swayne et al., 2006). As Spinelli, 2006 suggests new leadership strategies are required by healthcare organizations in order to remain viable to meet the current challenges. Health care organizations must have leaders who understand the nature and implications of external change, the ability to develop effective strategies that account for change, and the will as well as the ability to actively manage the momentum of the organization. Health care leaders must understand the changes taking place in their environment and they should not simply be responsive to them, but strive to create the future. Health care leaders must see into the future and create new visions for effectiveness. These activities are collectively referred to as strategic management and are fundamental in leading organizations in dynamic environment (Swayne et al., 2006). While several descriptions of strategic management have been practiced in the past, Henry Mintzberg, (1994) the Canadian management scholar, says strategic planning from a highly quantitative perspective is dead in today’s fluid environments. He concluded that the search for the definitive quantifiable solution to the future is no longer attainable. In fact, it can stifle commitment, narrow vision and make change less likely. New models of strategic management which place more emphasis on synthesis rather than pure analyses are being identified. Pisapia’s (2009a) model bridges the new and the old. Pisapia defines strategic leadership as the ability (as well as the wisdom) to make consequential decisions about ends, actions and tactics in ambiguous environments. He uses the term strategic leaders to identify leaders who are able to lead and manage simultaneously, and hence guide transformations with a profound appreciation of stability during times of uncertainty. Such leaders, he says, practice the mantra of common ends and values, and adaptable ways and means. The central tenet of Pisapia’s strategic leadership theory is that leaders who are able to think and act strategically will be able to create more supportive organizational environments and achieve more valuable organizational outcomes. This ability to work in a strategic way, he believes, must extend through every level of the organization. Effectiveness in his strategic model of leadership is dependent on how proficiently the organization responds and readapts to its everevolving context and how effective the leader is in continually renewing the systems of learning within the organization. He identifies the ability to think agility and act as an artist as the core competencies required to run two protocols: - strategic thinking and strategic execution. Strategic execution is the guiding framework of this study. In this portion of the model, Pisapia suggests that strategic execution is facilitated when the leader or manager acts like an artist. Like an artist, they use a palette of leader actions – managing, transformative, political and ethical – to develop and execute their plans. He theorizes that leaders who are able to use the full array of the four actions will be more effective in more contexts than leaders who are not able to use a wide array of actions. Three constructs framed the study: leader actions, organizational-personal characteristics and hospital manager effectiveness. The relationships of these constructs are found in Figure 1. This framework suggests that personal and organizational characteristics of hospital managers influence leader actions, and leader actions, personal and organizational characteristics combine to influence hospital managers’ effectiveness. Leader Actions According to Sperry (2003), to become an effective healthcare manager, managers must have the core set of skill includes the various operational (such as commitment and motivation), relational (such as communicating and negotiating effectively) and analytic (such as thinking and deciding strategically) skills. According to Zweel and Lubawski (2000) effective healthcare managers can tell the strengths and weaknesses of their institutions; they are aware of societal, demographic and health care trends and implications of those trends to the organization. They are also aware of the nuances of prestige, status and power within their organization. And they must have the ability to make tough decisions. Pisapia (2006; 2009a) says, that one of the reasons that leaders in complex environments fail is that they use a limited set of actions (i.e., task/relationships or transforming/transactional) to influence followers to join in common cause. He asserts that in today’s sometime turbulent environment, leaders need to be able to lead and manage simultaneously to guide transformations. This expectation puts a premium on horizontal and collaborative actions as well as the traditional hierarchical actions of past models. He grounds his strategic leadership model in holistic learning processes of strategic thinking and strategic execution which are guided by leaders using managerial, transforming, political and ethical actions to transform or stabilize their organizations. (See Pisapia, 2009a for a full description of the actions). Three previous studies using this theory have been conducted. Yasin (2006) found that University Deans who were able to use a wide array of strategic leader actions were more effective than those who used a more limited array. Like Yasin, Reyes-Guerra (2009) found that school principals who were able to use a wider array of these actions were more effective than those principals who used a more limited repertoire of actions, and that managerial actions are necessary when implementing centrally dictated policies. Finally, Urdegar (2007) and Reyes-Guerra (2009) found that components of the transforming, political and ethical actions were associated with more cohesive work cultures. These studies lend support to Pisapia’s proposition that effective leaders use a wider array of these actions than less effective leaders. Therefore, in this study it is expected that the hospital managers’ use of strategic leader actions would be related to their effectiveness. Environmental and Personal Characteristics As Pisapia and many others note, context is important. Kolb et al. (2001) believed that organizational environment is an important factor influencing how the leader behaves. According to them, environment dictates the choice of structure and the way the communication is implemented in the organization. Cook (2001) claimed that internal and external environment of the organization is a factor that impacts and contributes to dominant leadership style in the organization. According to Hinkin and Tracey (1999) organizational settings may play a very large role in the transformational leadership process and transformational leadership would be more likely to be found in organization effectively navigating turbulent environment. According to Osborn et al. (2002), leadership and its effectiveness depends on a wide variety of environmental and organizational conditions apart from the style of leadership. Leadership is not only the incremental influence of a leader toward subordinates, but most important it is the collective incremental of leaders in and around the system. In this study, the organizational environment was determined in two ways. First, the hospital manager’s view of the environment as complex or stable was measured. Then other objective measures of complexity - competition status, urban/rural status, type of hospital, region and number of beds in the hospital - were measured. In addition to the environmental variables, personal characteristics and traits of the leader may also affect their style of leadership and eventually their effectiveness. The study of leader characteristics and traits has a long history. In fact it was the first organized approach to studying leadership. By analyzing the personal, psychological and physical traits of strong leaders, researchers hoped differentiate leaders from nonleaders (Griffin, 2002; Luthans, 1981). Hundreds of traits studies were conducted during the 1930s and 1940s and some research founded a significant correlation between individual leader attributes and a criterion of leader effectiveness (Yukl, 2002). In this study several personal characteristics of leaders - position, working experience, age, gender and strategic management training - were identified to determine if they are related to both the use of strategic leader actions and leader effectiveness. Therefore, in this study it is expected that the hospital managers’ use of strategic leader actions would be influenced by both organizational and personal characteristics. Effectiveness Luthans (1988) differentiated effective managers from effective managers. According to him effective leaders refers to “those who have been promoted relatively quickly” and effective leaders refer to “those who have satisfied, committed subordinates and high performing units” (p.137). But in the leadership literature “successful leader” and “effective leader” have often used interchangeable. This study adopts Luthan’s view of leader effectiveness is the result of satisfying committed subordinates and high performing units as the criterion variable. Leadership scholars have used different indicators for evaluating leadership effectiveness or effectiveness. Some objective criteria include followers’ productivity and the amount of work completed or group and organizational outcomes. Some subjective criteria include rating of effectiveness obtained from the leader’s peers, subordinates or superiors (Howell & Costley, 2006; Yukl, 2002). The effectiveness in this study was measured by the hospital managers’ perception of effectiveness. Items measuring effectiveness included; ability to create, articulate and implement a vision, ability to bring about change in the organization, maintenance of a orderly work environment, and ability to satisfy internal and external stakeholders. Two level of effectiveness were created: most effective and somewhat effective. Method This study used a quantitative non-experimental design employing statistical analysis via multiple regression and correlation techniques to identify the relationships between the variables examined. Four hundred forty (440) hospital managers in charge of hospitals under the auspices of the Ministry of Health participated in the study. Sampling power was tested and deemed acceptable. The characteristics of the study participants are summarized in Table 1. Of the sample, 43.2% were physician, 30.7% were administrator who had formal training in faculty of economics and administrative sciences, 15.2% were hospital administrators who had formal training in health administration and remaining 10.9% were from other health care or non-health care professionals. Head physicians or their deputies composed 43.6% of the sample, 56.4% held hospital administrator and their deputies. Males composed of 85% of the sample and females 15%. The mean age of sample was about 41 years and the mean working years were about 17 years. About fifty percent (49.8%) of the sample were above 42 years of age. Half of respondents (51.8%) had working experience more than 18 years. The big majority (90.5%) had not received postgraduate education. A total of 312 respondents (70.9%) reported that they had not been trained about strategic management. The Strategic Leadership Questionnaire (SLQv1) was the primary data collection tool. The SLQv1 measures the use of managing, transforming, political and ethical leader actions. The SLQv1 used a panel of experts in the field to create the validity measure on the scale. Psychometric testing of the SLQ revealed that reliability for all four action scales was above .816 on the Cronbach Alpha measure. Overall instrument reliability was .910. The SLQ also provides a self reported measure of leader effectiveness, [Alpha .897] and the respondent’s perception of the complexity of their environment. The SLQv1 was translated into Turkish by three bilingual academicians with doctoral degrees in health administration and back translated into English by a sworn translator. The back translated version and the original version were found to be quite similar. The content validity of the translated version was verified and validated by two experts experienced in strategic management. Complexity was also measured by the number of beds in the hospital, type of hospital, and the level of competition found in the hospital’s environment. The personal characteristics studied were position, work experience, age, gender and strategic management training. Simple correlation and multiple regression analyses were used to examine study hypotheses. Level of significance was set at p<0.05 and p<0.10. The self reported data from participants was seen as a limitation of the study. Results from hypotheses testing The first hypothesis: Ho1 that there are no significant relationships between the hospital manager’s use of transformational, managerial, ethical and political leadership actions and their effectiveness was tested through a multiple regression. Table 2 displays the multiple regression analysis conducted to investigate the relationship of leader actions and leader effectiveness. On the table The 10 effectiveness items representing the leader effectiveness from SLQV1 have a different response scale. In this scale, “1” points out “extremely effective” and “5” points out “not effective.” Results of analysis show R² value of 0.219 and overall relationship was significant (F (4,435) =30.463, p<0.05). Results further indicate that these four actions contributed 21.9% of the variance for the leader effectiveness. As seen in Table 2, the Beta values for the transformational, managerial, ethical and political leader actions were -0.305, -0.135, -0.115, and 0.083 respectively. Based on these beta values, transformational leadership was the strongest predictor of leader effectiveness and followed by managerial, ethical and political leadership. However it should be noted that transformational leadership was significant at the 0.05 level (p<0.05), while managerial, ethical and political leadership were not significant. Political leader actions were negatively related with effectiveness. But when it was further analyzed with simple linear regression, it was found that political leadership was significantly related in the positive direction to leader effectiveness (F=27.179, p<0.05). The results of these analyses indicate a significant relationship among hospital manager actions and their effectiveness. Therefore, Ho1: which stated that there are no significant relationships between the hospital manager’s use of transformational, managerial, ethical and political leadership actions and their effectiveness is rejected. The second hypothesis Ho2: that there is no relationship between organizational characteristics and the hospital manager’s use of leader actions was tested using four multiple regression analyses between organizational characteristics and each of the strategic leader actions – transformational, managerial, political and ethical. Table 3 displays the results of multiple regression analysis between organizational characteristics versus transformational leadership. Six organizational characteristics were regressed against the use of transformational leader actions – environment (stable or complex), region, hospital type, rural/urban, completive status, and hospital beds. As seen on the table, the relationship between organizational characteristics and transformational actions was significant. The results indicated that an R² value of 0.07 and overall relationship were significant (F (12.427) =3.031, p<0.05). Overall, the organizational characteristics represent about 7.8% of the variance in transformational leadership and the model was significant (p<0.05). However, examination of the six organizational characteristics reveals that only organizational environment and region produced significant results. Based on the Beta values as seen in Table 3, organizational environment (0.214) produced a significant positive relationship with transformational leadership actions; meaning that transforming actions were used more often as the perceived organizational environment became more stable. The other significant relationship between the region variable and transformational actions was negative; meaning that fewer transforming actions were used by managers in the Aegean Sea and Central Anotalia. Table 4 displays the results of multiple regression analysis between the six organizational characteristics and managerial leader actions. As seen on the table, the relationship between organizational characteristics and managerial actions was significant. The analysis results are presented in on Table 5. Results of analysis show R² value of 0.392 and overall relationship was significant (F (12.427) =6.457, p<0.05). Overall, the organizational characteristics represented about 15.4% of the variance in managerial leadership and the model was significant (p<0.05). Organizational environment, number of beds and region were statistically significant for alpha equaling 0.05 in predicting managerial leadership actions used by leaders. According to Beta values for managerial leader actions, organizational environment (0.347) was the strongest predictor of managerial actions, followed by number of beds and region. All relationships were positive, meaning that as the environment was perceived as being more stable, and the number of beds rose so did the use of managerial actions. Table 5 displays the results of multiple regression analysis between the six organizational characteristics and ethical leader actions. As seen on the table, the relationship between organizational characteristics and ethical actions was significant. Results of analysis displayed R² value of 0.130 and overall relationship was significant (F (12.427) = 5.316, p<0.05). The results indicate that together these organizational characteristics contributed 13.0% of the variance for the ethical leadership and the model was significant (p<0.05). In the regression model, only perceived organizational environment and number of beds appeared to be significant for alpha equaling 0.05 in predicting the use of ethical leaders’ actions. As seen in Table 5, organizational environment produced strongest Beta value (0.308), followed by number of beds (0.224). These findings seem to say two different things. On the one hand, as the perceived organizational environment becomes more stable there is more use of ethical actions. On the other hand as hospital beds rose, so did the use of ethical actions. Table 6 displays the results of multiple regression analysis between the six organizational characteristics and political leader actions. As seen on the table, the relationship between organizational characteristics and political actions was significant. Results of analysis demonstrate that organizational characteristics combined contributed 14.4% to the variance in political Leader Actions. R² value was 0.144 and overall relationship was significant (F (12,427=5,988, p<0.05). The analysis of individual organizational characteristics yields a similar pattern as the results for transformational, managerial, and ethical actions. Only perceived organizational environment (Beta=0.355) appeared to be significant for alpha equaling 0.05 in predicting the use of political actions. The number of beds in the hospital, while important, did not rise to the .05 significance criterion. The results found on Table 2,3,4, 5,and 6 indicate that transformational, managerial, ethical and political leader actions were significantly influenced by organizational characteristics; particularly organizational environment, region, hospital size. Therefore, Ho2: which stated that “There is no relationship between organizational characteristics and the use of leader actions” is rejected. The third hypothesis Ho3: stated that there is no relationship between personal characteristics of hospital managers and their use of strategic leader actions was tested by using four multiple regression analyses between the hospital managers personal characteristics (work experience, age, position, strategic management training, and gender) and each of the strategic leader actions. No statistically significant relationships were found therefore due to space limitations the data are not reported. The full data set can be retrieved from Uğurluoğlu (2009). The fourth hypotheses Ho4: stated that there are no predictive relationships among the hospital managers use of leader actions, contextual and personal characteristics and their effectiveness was tested through multiple regression analyses to demonstrate a predictive model between the leader’s action and their effectiveness. As seen on Table 7, the results of this analysis produced a significant model (F (21.418) =6.480, p<0.05, Adjusted R2 = 0.246). All variables as a whole were good at predicting the leaders’ effectiveness. Together these variables contributed 24.6.0% of the variance for the effectiveness and the model was significant (p<0.05). In the regression model, transformational leader actions and competition status were significant for alpha equaling 0.05 in predicting leaders’ effectiveness. Additionally managerial and political leader actions were significant at the alpha 0.10 in predicting leaders’ effectiveness. As seen in Table 7, transformational leadership produced strongest Beta value (0.293). Therefore, Ho4 which stated that there are no predictive relationships among the hospital managers use of leader actions, contextual and personal characteristics and their effectiveness is rejected. Discussion Results revealed that all four leader actions [transforming, managerial, political and ethical] were related to the health care manager’s effectiveness. However, the use of transforming actions by the managers was the strongest predictor of the health care manager’s effectiveness. The results also showed that the hospital manager’s effectiveness was significantly influenced by the complexity of the organization’s environment. Transforming and political actions were used more often as the perceived environment became more stable. Higher use of managerial and ethical actions was found more often in perceived stable environments and as the number beds rose. The findings indicate that the important environmental moderators of the manager’s actions were the complexity of the organizational environment, the region where the managers were employed, the type of hospital (research or general), the competition status in that region, and the bed capacities of their hospitals. Similar to Yasin’s (2006) study using the same instrumentation with University Deans, personal characteristics of gender, training, position, age and experience did not significantly influence the relationship of leader actions and their effectiveness. A predictive model explaining 25% of the variance [Adjusted R2 = 0.246, p<0.05) was produced for hospitals in environments where there was no competition. In these stable environments transforming actions [p<0.05] were the strongest predictors of effectiveness, followed by managerial and political leader actions [p<0.10]. Based on the findings, public hospital managers would benefit from training in all four leader actions. However, transformational actions had the most impact on their effectiveness in stable environments as perceived by the leader and complex environments as determined by the number of beds in the hospital. As the number of beds increased so did the use of transforming actions. This finding is consistent with Bass and Avolio (1990), Bass (1990), Gellis (2001), Lowe et al, (1996), and Spinelli (2006) who reported that managers who behave like transformational leaders are more likely to be seen by their colleagues and employees as effective leaders and results in lower turnover rates, higher satisfaction and commitment. Our second conclusion is that the environment significantly enhanced the probability of leaders’ use of specific leader actions. Contextual factors have often appeared in the research literature as influencing leader actions (Cook, 2001). However, most studies support the proposition that transformational leader actions are more likely to be found in organizations effectively navigating turbulent environments (Hinkin & Tracey,1999), better in non routine situations (Eisenbach et al., 1999; Yukl, 2002), and managerial actions more likely to be found in stable environments (Rowe, 2001). However, Yasin (2006) using the same instrumentation as this study with Deans of Universities found a significant relationship between political actions and stable environments. When perceived stability increased so did political actions (r=0.475, p<0.05). He found no increased use of the other leader actions in stable environments. Furthermore, this study did find contradictory evidence on the main finding. Leaders from Marmara Region who work in the most competitive sector in Turkey reported the highest use transformational leadership; much more than leaders from Central Anatolia (t=-2.228, p<0.05) and leaders from Aegean Sea (t=-1.893, p<0.10). Additionally, similar to Velioglu and Vatan (2002) that bed capacity [a proxy for organizational complexity] of hospitals affects leader behavior. In this study as bed capacity increased so did the use of managerial, ethical and political leadership. Finally, the results generally support Pisapia’s theory of strategic leadership that effective leaders use a multifaceted set of leader actions. But in this study it is unclear why self reported stable environment was associated with increased leader effectiveness, and leaders’ use of strategic leadership actions more in relatively stable environments. One explanation to this might be due to fact that the leaders working in relatively stable environment but managing organizations with many problems (like public hospitals in Turkey) have to react more strategically to move their organizations forward and solve the problems. Or it could be that that since stability is not normally associated with organizational growth and change, the presence of increased use of transforming as well as ethical and political leader actions may be the reaction to trying to move a stable organization into a more innovative direction. More likely, the finding could be a study design issue. Most of the hospital managers participating in the study practiced in Ministry of Health hospitals which traditionally are more stable and distinctive environments compared with the private hospitals. Perhaps the sampling did not include enough hospitals in a complex environment. Furthermore, it is possible that the perceptions of participants were not accurate in their interpretation of complexity and that the more objective number of hospital beds and competitive status should have been given more weight in the analysis of complexity. When the data are considered from this perspective, Pisapia’s theory is supported. When complexity increased as measured by number of beds and competitive hospital status, leaders who used a wider array of actions were more effective. At this point, we leave this finding to future studies to explore. There are several implications of these results for practice and future research. First, health care managers need to develop new skills in strategic execution. While the concept of strategic planning is becoming increasingly important in the changing public system in Turkey, the traditional strategic management skills based in analytics and data will not meet the needs of modern health care managers. Seventy one percent (71%) of respondents in the study reported that they had not been trained about strategic management. Strategic management training for the healthcare managers may help to improve their strategic leadership skills. The type of training that the results of this study points toward is based on developing two core competencies: agility of the mind and artistry of action which drive strategic thinking and strategic execution which enable hospital managers to influence their employees to positive ways and create a cohesive organizational context. In challenging times leaders must develop and execute an actionable plan. Second, future studies examining the differences in terms of leader actions of public and private hospitals should be supported and conducted. Such studies will provide an opportunity to find strategic approaches needed to whole health care system. Finally, hospital manager effectiveness was measured by their personal perception in this study. 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