Cost reductions or reputation enhancement as motives for mergers: the logic of multihospital systems
Article Abstract:
Two motives for the creation of local multihospital systems were investigated. These two motives are to reduce cost and to enhance reputation. For the study, financial data was culled from the California Office of Statewide Health Planning and Development. The 1988 database was used as a source of the service offerings and utilization, costs, staffing and financial performance in California's multihospital systems. Results showed that hospital systems had levels of service offerings and administrative expenses that were similar to those of random groups of hospitals with similar attributes. It was also discovered that multisystem hospitals possessed less heterogenous service combinations and financial profiles than did random hospital collections. In addition, it was found that there were higher price-cost margins and profits in systems possessing greater homogeneity.
Publication Name: Strategic Management Journal
Subject: Business
ISSN: 0143-2095
Year: 1995
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Getting to know you: a theory of strategic group identity
Article Abstract:
The notion of a strategic group identity is introduced to advance a theory on cognitive strategic groups. Cognitive groups are said to come about as a result of managers' cognitive segmentation of their environment for the purpose of minimizing uncertainty and dealing with bounded rationality. As the group identity grows, the groups form, with the influence of macro and micro variables, into significant substructures that are greater than the sum of their parts. Groups are described as having a strong identity when they are adequately accepted and supervised by members in a manner that direct their individual behavior. These strategic groups with strong identities can have an impact on the performance of the firm. The conditions allowing the creation of strong identities and their progressive shifts are described.
Publication Name: Strategic Management Journal
Subject: Business
ISSN: 0143-2095
Year: 1997
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Do strategic groups exist? An economic framework for analysis
Article Abstract:
A study investigated the existence of strategic groups. This analysis posits that the presence of a strategic group depends on whether the performance of a firm in the group is influenced by group characteristics and not by firm and industry characteristics. Based on the 'new economics of industrial organization,' an empirical testing model was developed to separate genuine group effects, which refer to group-level effects, from spurious effects, which refer to firm or industry-level effects. This model argues that while strategic interactions are important to produce a group-level effect on profitability, mobility barriers are required to retain both groups and their effects over time. Findings revealed evidence of the existence of strategic groups.
Publication Name: Strategic Management Journal
Subject: Business
ISSN: 0143-2095
Year: 1998
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