Social Science & Medicine 76 (2013) 115e125

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Social Science & Medicine

journal homepage: www.elsevier.com/locate/socscimed

The relationship between organizational culture and performance in acute

hospitals
Rowena Jacobs a, *, Russell Mannion b, Huw T.O. Davies c, Stephen Harrison d, Fred Konteh e,
Kieran Walshe f
a
Centre for Health Economics, University of York, Heslington, York YO105DD, UK
b
Health Services Management Centre, Park House, 40 Edgbaston Road, University of Birmingham, B15 2RF, UK
c
Social Dimensions of Health Institute, Universities of Dundee and St Andrews, Airlie Place, Dundee DD1 4HJ, UK
d
National Primary Care Research and Development Centre, University of Manchester, Williamson Building, Oxford Road, Manchester M13 9PL, UK
e
Nottingham University Business School, The University of Nottingham, South Building, Block C, Wollaton Road, Nottingham NG8 1BB, UK
f
Institute for Health Sciences, Manchester Business School, Jean McFarlane Building, University Place, University of Manchester, Oxford Road, Manchester M13 9PL, UK

a r t i c l e i n f o a b s t r a c t

Article history: This paper examines the relationship between senior management team culture and organizational
Available online 2 November 2012 performance in English acute hospitals (NHS Trusts) over three time periods between 2001/2002 and
2007/2008. We use a validated culture rating instrument, the Competing Values Framework, to measure
Keywords: senior management team culture. Organizational performance is assessed using a wide range of
Organizational culture routinely collected indicators. We examine the associations between organizational culture and
Hospital performance
performance using ordered probit and multinomial logit models. We find that organizational culture
Competing Values Framework
varies across hospitals and over time, and this variation is at least in part associated in consistent and
English NHS hospital Trusts
predictable ways with a variety of organizational characteristics and routine measures of performance.
JEL code:
Moreover, hospitals are moving towards more competitive culture archetypes which mirror the current
I11
Z10 policy context, though with a stronger blend of cultures. The study provides evidence for a relationship
between culture and performance in hospital settings.
Ó 2012 Elsevier Ltd. All rights reserved.

Introduction group can differentiate themselves from other groups (Throsby,

Culture, with its many definitions and meanings, has always
been hard to pin down (Braithwaite, Hyde, & Pope, 2010; Martin,
2002). Anthropological and sociological approaches tend to
define culture as a set of attitudes, beliefs, customs, values and
practices which are shared by a group (Alvesson, 2002; Ashkanasy,
Wilderom, & Peterson, 2000). The group may be defined in terms of
politics, geography, ethnicity, religion, or some other affiliation. The
characteristics which define the group may be manifested in the
form of signs, symbols, language, artefacts, oral and written tradi-
tion and other means (Brown, 1995). One of the critical functions of
these manifestations of a group’s culture is to establish a distinctive
identity and thereby provide a means by which members of the
* Corresponding author. Tel.: þ44 (0)1904 321425; fax: þ44 (0)1904 321454.
E-mail addresses: rowena.jacobs@york.ac.uk (R. Jacobs), r.mannion@bham.ac.uk
(R. Mannion), hd@st-andrews.ac.uk (H.T.O. Davies), stephen.harrison@
manchester.ac.uk (S. Harrison), Fred.Konteh@nottingham.ac.uk (F. Konteh),
kieran.walshe@mbs.ac.uk (K. Walshe).
2003).
Culture, in this view, functions as a coordinating device (Schein,
1997). Cultural differences can be interpreted in terms of differ-
ences in the beliefs people hold about the way the world works and
about one another, leading to the choice of one set of strategies
rather than another and thereby, sustaining one set of institutions
and technology rather than another (Greif, 1994). Institutions are
therefore formed and held together by the beliefs members hold
about one another and the world.
Sociologists and anthropologists (Richerson & Boyd, 2005) have
accumulated a wealth of evidence on the impact of culture on
economic behaviour. Many institutional economists emphasize
both the links from culture to beliefs and values, and from beliefs
and values to economic outcomes (Guiso, Sapienza, & Zingales,
2006). Culture has been found to influence both economic prefer-
ences (Fernández & Fogli, 2005) and political preferences, and
affect economic outcomes through both these channels.
Within institutional economics there has been increasing focus
on the role of organizational cultural factors in framing economic

0277-9536/$ e see front matter Ó 2012 Elsevier Ltd. All rights reserved.
http://dx.doi.org/10.1016/j.socscimed.2012.10.014
116 R. Jacobs et al. / Social Science & Medicine 76 (2013) 115e125
decisions, shaping preferences and regulating behaviour
(Hermalin, 2000; Jackson, 2009). The main foci of study are the
‘habits of use’ and ‘institutions’ that taken together form the
patterns of an organization’s culture. Here, institutions comprise
the ‘rules of the game’ in a social collectivism or the ‘humanly
devised constraints that shape human interaction and structure
incentives in human exchange’ (North, 1990). Economic institutions
can serve to reduce the inherent uncertainty associated with
complex economic processes so that co-ordination between
different actors is more likely to occur.
Institutional economic theory postulates that an organization’s
core values help shape its members’ preference patterns and in
doing so may affect economic decision-making and performance in
a variety of ways (Carrillo & Gromb, 1999; Hodgson, 1996; Kreps,
1990; Smith, Mannion, & Goddard, 2003).
First, culture may impact upon efficiency, via embedding shared
values, beliefs and norms within the organization, which in turn
help shape the ways in which organizational members interact and
engage with each other. Specific cultural values may be more or less
conducive to (for example): effective decision-making; reporting,
responding to and learning from errors; team based working; and
inter-departmental synergies and creativity.
Second, culture may influence the priority accorded to equity
considerations within organizational strategy, for example by
promoting shared ethical principles of protecting vulnerable
consumers, and establishing arrangements that correct for purely
efficiency-seeking behaviour.
Third, culture may influence the overall economic and social
objectives that an organization pursues. Thus, the corporate culture
may be one of concern for employees and the quality of their
working lives and such considerations may mitigate the impor-
tance of profit maximisation or other economic goals in the orga-
nization’s objective function.
Finally, where interaction and exchange between parties is
complex and difficult to monitor, corporate culture may encourage
co-operation and relationship building among agents (intra- and
inter-organizational partnership working).
There have been a number of empirical studies that have sought
to identify a relationship between organizational culture and
organizational performance. Indeed a clutch of populist texts
dating back to the 1980s proved influential in instilling the notion
that ‘strong cultures’, defined as “a set of norms and values that are
widely shared and strongly held throughout the organization”
(O’Reilly & Chatman, 1996, p. 166), are related to high performance
across a range of industries (Deal & Kennedy, 1982; Denison, 1990;
Peters & Waterman, 1982). This hypothesis is based on the idea that
organizations benefit from having highly motivated employees
dedicated to common goals. Within the literature it is possible to
identify several studies that have purported to show that ‘strong
cultures’ outperform ‘weak cultures’ (Chatman & Cha, 2003) and
evidence suggested that ‘strong’ corporate cultures improved
organizational performance by facilitating internal behavioural
consistency (Sørensen, 2002). This work had a normative aspect in
as much as mechanisms for modifying the cultures of organizations
to approximate those of successful ones were widely discussed and
applied in an effort to improve performance (Barney, 1986). Later
work has thrown considerable doubt on whether such a simplistic
causal relationship exists (Gordon & Di Tomaso, 1992; Wilson,
1992).
A number of empirical studies have sought to identify culture-
performance relationships in healthcare settings. For example
studies have found associations between organizational culture
and the implementation of quality systems in hospitals (Shortell
et al., 1995), the quality of patient-care (Rondeau & Wagar, 1998),
attitudes to and satisfaction with the use of clinical information
systems (Callen, Braithwaite, & Westbrook, 2007), effectiveness of
provider teams and healthcare provider job satisfaction (Gifford,
Zammuto, & Goodman, 2002; Goodman, Zammuto, & Gifford,
2001), outcomes of organizational structural change to clinical
directorate service structures (Braithwaite et al., 2005), and patient
satisfaction (Meterko, Mohr, & Young, 2004). Two studies of senior
management team culture in hospitals in the UK and Canada found
evidence to support a contingent relationship between dominant
management cultures and a range of performance domains
(Gerowitz, 1998; Gerowitz, Lemieux-Charles, Heginbothan, &
Johnson, 1996). Another cross-section study of employees in
Chinese public hospitals examined the relationship between
organizational culture and hospital performance and found
a similar contingent relationship where factors embedded in the
culture (e.g. cost control) were associated with hospital perfor-
mance (e.g. profitability) (Zhou, Bundorf, Chang, Huang, & Xue,
2011). Indeed, the authors have in an earlier study examined the
relationship between organizational culture and performance in
hospitals in a cross-section analysis (Davies, Mannion, Jacobs,
Powell, & Marshall, 2007). Again, no specific causal mechanism is
postulated in these studies, but taken together they support the
view that specific aspects of performance are enhanced in those
cultures that have closely aligned values to the performance.
There has been a dearth of empirical evidence on the longitu-
dinal aspects of culture change and the association with perfor-
mance over time. The aim of this study is to extend the previous
cross-section analysis (Davies et al., 2007) by looking at changes
in senior management team culture in English NHS acute hospitals
over three time periods between 2001/2002 and 2007/2008. We
link this to various performance measures and key characteristics
of healthcare organizations to examine the relationship between
culture and performance to see if organizational values deemed
important within a particular dominant culture coincide with
those aspects of performance at which the organization excels over
time.
We use an established culture assessment instrument, the
Competing Values Framework (CVF) (Quinn & Rohrbaugh, 1981),
which has previously been used to assess culture in a number of
health and non healthcare settings (Gifford et al., 2002; Goodman
et al., 2001; Helfrich, Li, Mohr, Meterko, & Sales, 2007; Jones,
DeBaca, & Yarbrough, 1997; Meterko et al., 2004; Shortell et al.,
2000, 2004; Strasser, Smits, Falconer, Herrin, & Bowen, 2002). The
CVF (shown in Fig. 1) differentiates organizational culture across
two dimensions. One dimension differentiates an emphasis on
flexibility, discretion, and dynamism from an emphasis on stability,
order, and control. For example, some organizations and managers
are viewed as effective if they are changing, adaptable, and trans-
formational. Other organizations and managers are viewed as
effective if they are stable, predictable, and consistent. This
continuum ranges from versatility and pliability on one end to
steadiness and durability on the other. The second dimension
differentiates an internal orientation with a focus on integration,
collaboration, and unity from an external orientation with a focus
on differentiation, competition, and rivalry. For example, some
organizations and managers are viewed as effective if they have
harmonious internal relationships and processes. Others are judged
to be effective if they successfully compete against others. This
continuum ranges from cohesion and consonance on the one end to
separation and independence on the other.
Using these two main dimensions, the CVF articulates four basic
organizational cultural ‘types’ (Cameron & Freeman, 1991). The Clan
culture identifies values that emphasize an internal, organic focus
(‘do things together’), whereas the Rational culture identifies values
that emphasize external, control focus (‘do things fast’). The
Developmental culture identifies values that emphasize external,
 R. Jacobs et al. / Social Science & Medicine 76 (2013) 115e125 117

Relationship-based processes
Focus on: flexibility, individuality, spontaneity

Clan Culture Developmental Culture

cohesive, participative creative, adaptive
leader as mentor leader as risk-taker, innovator
Internal bonded by loyalty, tradition bonded by entrepreneurship External
focus emphasis on morale emphasis on innovation focus
Focus on: Focus on:
smoothing, competition
integration Hierarchical Culture Rational Culture
ordered, uniform competitive, acquisitive
leader as administrator leader as goal-oriented
bonded by rules, policies bonded by competition
emphasis on predictability emphasis on winning

Mechanistic-type processes
Focus on: control, order, stability

Fig. 1. The ‘Competing Values Framework’ for modelling organizational culture.

organic focus (‘do things first’) whereas the Hierarchical culture
emphasizes internal, control values (‘do things right’).
Crucially, organizations (or subgroups within them) are not
deemed to be simply one of these four types; instead, they are seen
to have competing values while nonetheless having a more-or-less
stronger pull to one particular quadrant.
We link data from the CVF culture rating instrument to
a number of measures of performance at English acute hospitals
over three time periods. We hypothesise that those aspects of
performance valued within a given culture should be those aspects
of performance that are enhanced in acute hospitals that exhibit
strong congruence with that culture.
Thus an understanding of the values, beliefs and assumptions
that underpin the CVF allowed a number of a priori hypotheses to
be derived about relationships between culture and performance.
These hypotheses are shown in Table 1 and are based on the key
‘competing values’ as set out in Fig. 1.
Star ratings, a composite performance indicator set by the NHS
healthcare regulator, the Healthcare Commission, were used
between 2000/2001 and 2004/2005 and were one of the most
general overall performance ratings used for hospitals, a headline
measure that had wide implications for that institution’s manage-
ment and accountability arrangements, as well as its reputation
(Jacobs, Martin, Goddard, Gravelle, & Smith, 2006; Mannion,
Davies, & Marshall, 2005a). We specifically examine the relation-
ship between hospital culture types and star ratings. We
hypothesise that Clan cultures may have poorer star ratings and
Rational and Developmental cultures may have better star ratings.
We also examine whether differences in culture types are
associated with various structural and performance measures such
as size of hospital, teaching, specialist, and Foundation Trust (FT)
status. FT status is another marker for high performing organiza-
tions and is awarded to hospitals who meet certain criteria set by
the Department of Health and the FT regulator Monitor. FTs enjoy
greater financial and managerial autonomy from central control
and became operational in 2004/2005. We hypothesise that
specialist, teaching hospitals and FTs, like star ratings, may be
associated with Rational and Developmental cultures with
a greater external focus. Other hypothesised relationships for
performance measures which we examine such as cost, daycase
rates, salaries, cancelled operations and waiting times are all given
in Table 1.
Methods
Senior management sample
Ethics approval for this project was obtained from the NHS
National Research Ethics Committee. We examine senior manage-
ment team culture in English NHS acute hospital Trusts (the legal
entity for individual hospitals or groups of hospitals). Each hospital
is headed by a board consisting of executive and non-executive
directors who will have diverse roles including clinical and opera-
tional management. We conducted a national longitudinal study of
board level managers encompassing three cross sectional surveys:
i) 2001/2002 (T1) with responses from 899 managers from 187
hospitals;
ii) 2006/2007 (T2) with responses from 826 managers from 143
hospitals;
iii) 2007/2008 (T3) with responses from 739 managers from 140
hospitals.

Table 1
Culture and performance e hypothesised relationships.

Dominant culture types: Valued aspects: Expected performance variables favoured:

Clan Tradition, cohesion, commitment, morale Smaller; better staffing levels, staff opinions/morale; higher degree of
wInternal/relational specialisation; higher level of cancelled operations; high levels of trust;
however, may have poorer star ratings.
Developmental Innovation, dynamism, growth, entrepreneurship Lower waiting times; better star ratings; more likely FTs; low level complaints,
wExternal/relational rapidly dealt with; lower clinical negligence; more imaging tests; more likely
specialist; higher consultant and nurse salaries; higher daycase rates.
Hierarchical Order, procedures, stability, predictability Better data quality and financial balance, but perhaps higher costs associated
wInternal/mechanistic with bureaucracy; shorter length of stay.
Rational External competitiveness, achievement More research; more teaching; higher costs; better star ratings; more likely
wExternal/mechanistic FTs; low level complaints, rapidly dealt with; higher management salaries.
118 R. Jacobs et al. / Social Science & Medicine 76 (2013) 115e125
The reduction in the number of hospitals in the sample over
time is the result of hospital mergers over this period. While
mergers and turnover of senior management teams may impact on
culture (Kavanagh & Ashkanasy, 2006), we are unable to track
individual respondents since they were anonymous. In addition, we
do not know if the same managers were responding over time.
Previous studies have usually regarded three or four key senior
managers’ responses as sufficient to validly describe the organiza-
tional culture type (Gerowitz, 1998; Gerowitz et al., 1996). At the
first data gathering (T1) at least three senior managers responded
from 86% of hospitals and four or more replied from 74%. Data from
T2 and T3 were considerably better with 95% (from 143 hospitals in
T2) and 93% (from 140 hospitals in T3) with at least three senior
managers responding respectively, and 89% in both periods where
four or more replied. This provides us with robust estimates of
senior management views.
We tested for the appropriateness of aggregation of respon-
dents’ scores within an organization using various established
methods of assessing congruence (e.g. interclass-correlations, the
F-test and Analysis of Variance (ANOVA) (Dixon & Cunningham,
2006)). We found acceptable levels of agreement.
A variable (weight) was created to take account of the number of
respondents per organization. In some time periods for some
organizations there were as many as 18 respondents, with the
assumption that culture type derived from higher numbers of
respondents provides a more robust assessment. This weight was
used in regressions and with descriptive analyses, but was found in
practice to have negligible effects and is therefore not presented.
Culture and performance measures
The CVF questionnaire offers respondents a series of descrip-
tions of a hospital, arranged in five groups. Respondents have to
‘share 100 points’ for each group across four descriptions
‘according to which description best fits your current organization’
(copy available from the authors). The five groups are based on
descriptions of hospital characteristics, leadership emphasis,
cohesion and rewards. Taken together these ‘points allocations’
add up to a total score (in the range 0e100) for each individual on
each of the four overall culture types, labelled Clan, Develop-
mental, Hierarchical, or Rational. Thus, for instance, the Rational
culture denotes a competitive and acquisitive organization, char-
acterised by goal oriented leadership, bonded by an emphasis on
winning (see Fig. 1).
The CVF uses the two main dimensions (internal versus
external and relationship versus mechanistic processes) in order to
generate the two-by-two matrix that classifies culture as a balance
between the four cultural archetypes. The values denoted by CVF
‘compete’ in the sense that scores in one direction on an axis are
allocated at the expense of scores in the other direction. Although
they are made up of competing values they nevertheless have
a more-or-less strong pull to one particular ‘dominant’ culture
type.
The culture type with the highest score from a respondent
represents that individual’s perception of the organization’s
dominant culture; the actual value represents the ‘strength’ of that
dominant culture type. Scores on each axis of the matrix, along
with dominant culture type and strength were calculated by
aggregating across the individual scores of the senior management
team of each organization.
The concentration of scores within each culture typology was
assessed using the Blau index of heterogeneity (which is one minus
the HirschmaneHerfindahl index) (Shortell et al., 2004). This is
P
calculated as H ¼ 1  p2i , where i is the number of categories
possible (four) and p is the proportion of points assigned to that
culture type. Teams that apportioned points in a 25/25/25/25
pattern (a balanced culture) would receive the highest possible
score on the Blau index of 0.75, whereas teams with all points
concentrated in one culture (a wholly dominant culture) would
receive the lowest score on the Blau index of 0.
The hospital-based culture scores for 2001/2002, 2006/2007
and 2007/2008 were combined with data on various aspects of
performance in 2001/2002, 2005/2006 and 2006/2007 (the closest
available) to assess the relationship between organizational culture
and performance. Performance data comes from a variety of
routinely collected sources and is held in a longitudinal database of
NHS hospitals. Data sources include the Department of Health,
Healthcare Commission, Monitor, NHS Information Centre, Hospital
Episodes Statistics and Hospital Activity Statistics.
Statistical analysis
We sought to examine the relationship between senior
management team culture and star ratings. We did a descriptive
analysis and supplemented this with an ordered probit model of
hospital culture against star ratings (where 0-star hospitals are
worst performers and 3-star hospitals are best performers). The
model is described in the Appendix A.
The ordered probit model could only be run for T1, since star
ratings were scrapped after 2004/2005. The star ratings were set by
the Healthcare Commission and replaced by an annual health check
(no longer a composite indicator).
We then sought to examine differences in culture type accord-
ing to various other structural and performance variables, namely
size, teaching, specialist, and Foundation Trust (FT) status. We used
a dummy variable for teaching, specialist, and FT status. The
number of teaching hospitals in each period was 24 (T1), 17 (T2)
and 19 (T3), the number of specialist hospitals in each period was
20 (T1), 18 (T2) and 15 (T3), whilst the number of FTs was 0 (T1), 26
(T2) and 45 (T3). We created a dummy variable for size, with
hospitals larger than the median average number of beds in any
given period taking the value one and zero if smaller. The cut-off
median bed sizes in each period were 667 (T1), 675 (T2) and 678
(T3) beds.
Finally, we modelled the differences in culture type using
multinomial logit models with various structural and performance
measures as explanatory variables. We were not able to combine
the separate culture scores for each hospital into a single depen-
dent variable for the model and therefore used dominant culture
type as the dependent variable. This amounts to a loss of infor-
mation since hospitals proportionally may belong to one culture
type more than another, but not exclusively to only one. The culture
scores are essentially jointly determined and constrained depen-
dent variables. Nevertheless, the multinomial logit gives us
a flavour of the competing values aspect of culture as represented
by the nominal outcomes. It is also more powerful than looking at
associations in isolation since it shows the significance of all
performance variables simultaneously. We describe the multino-
mial logit in the Appendix A.
The model is run three times using different base categories as
comparison groups in order to make all relevant contrasts across
the four culture outcomes. Multinomial analysis across the three
time periods was hampered for two reasons: first, mergers across
the organizations effectively reduced the number of organizations
in the sample and complicated the task of linking culture to
performance at the same and different time points. Second,
performance variables were not always measured (or measured
consistently) at each of the three time points so certain variables
had to be discarded from the analysis. We therefore ran the model
for the three time periods pooled since this provided the most
 R. Jacobs et al. / Social Science & Medicine 76 (2013) 115e125 119

robust model. We tested a large number of hospital characteristics Table 2

and performance variables including size, teaching, specialist and Descriptive statistics for Blau index and culture strength over time.

FT status, mergers, activity rates, staffing numbers, salaries, various Obs Mean Std. dev Min Max t-Test
measures of financial performance such as retained surplus, clinical Blau index
negligence expenditure, waiting times, length of stay, other 2001/2002 (T1) 187 0.716 0.033 0.528 0.749
measures of efficiency, and regional dummy variables. 2006/2007 (T2) 143 0.727 0.019 0.602 0.749 0.000***
2007/2008 (T3) 140 0.729 0.019 0.495 0.749 0.188
Culture strength
Results 2001/2002 (T1) 187 36.61 6.11 27 64
2006/2007 (T2) 143 34.58 4.97 26 58 0.001***
Dominant culture 2007/2008 (T3) 140 33.76 4.74 27 60 0.078*

*Significant at the 10% level; ***significant at the 1% level.

Fig. 2 summarises our findings in terms of the hospitals’ domi-
nant culture type as reported by senior managers at the three time
points. Results were weighted by the number of respondents per
organization, though this made little difference from unweighted
scores. Over the five-year period between 2001/2002 and 2006/
2007, Clan remained the most dominant type of senior manage-
ment team culture (53% and 46% respectively), although its prev-
alence was in decline with a corresponding large rise in
Hierarchical cultures from T1 (4%) to T2 (13%). Over the same period
Rational cultures accounted for a roughly consistent proportion of
hospitals (30% and 31% respectively). The proportion of Develop-
mental cultures also remained relatively constant.
However, one year later in 2007/2008 Rational culture had
overtaken Clan to become the most frequently reported dominant
culture type (40% of hospitals; representing a 34% increase). These
changes were matched by corresponding falls in the frequency of
Clan as dominant culture to 39%; and, to a lesser extent, Develop-
mental (down from 10% to 9%).
Organizations tended to have reasonably balanced culture types
(a blend of cultures) rather than a wholly dominant culture as
evidenced by the Blau index (Table 2) and indeed are becoming
increasingly more so over time. In concordance with this result, the
mean strength of the dominant culture also declined over the study
period from 36.6 to 33.8. We test whether these changes are
significant over time (t-test) and find that they are for the change
between the first two periods, but not between the last two
periods.
Culture and performance
The results for the descriptive analysis of culture type by
composite star rating for period T1 are given in Fig. 3. This shows
a slight positive gradient for Developmental cultures with lower
proportions found in zero stars (worst performers) and higher
proportions in three stars (best performers). There is also a slight
negative gradient for Clan cultures revealing higher proportions in
the zero star category and lower proportions in the three star
category.
The ordered probit results in Table 3 support the descriptive
findings and show that hospitals with Developmental cultures
were associated with higher Star ratings (higher performance). The
results are significant at the 1% level. It should be noted that these
results suggest an association between performance and culture,
but do not imply causality.
Disaggregating the dominant culture type by size (Fig. 4),
teaching (Fig. 5), specialist (Fig. 6) and FT status (Fig. 7), suggests
that larger hospitals tend to have more Developmental and
Rational cultures with, not surprisingly, a high though declining
proportion of small hospitals in the Clan category (54%).
Teaching hospitals tend to be clustered in Rational cultures and
declining in Hierarchical and Clan cultures. Specialist hospitals
tend to be clustered in the Clan culture, though there has been
a marked decline between T1 and T3 and a marked growth in the

60

50

40
Percent

30

20

10

0
Group / Clan Developmental / Open Hierarchical Rational

T1 T2 T3

Fig. 2. Frequency distribution of culture type, weighted by number of respondents per hospital, T1eT3.
120 R. Jacobs et al. / Social Science & Medicine 76 (2013) 115e125

40

35

30

25

20

15

10

0
0 star (n=10) 1 star (n=36) 2 star (n=87) 3 star (n=50)

Clan Developmental Hierarchical Rational

Fig. 3. Frequency distribution of culture type by star rating, T1.

Developmental culture. FTs (higher performers) tend to be
clustered in the Clan and Rational cultures, though for both FTs
and NFTs the trend is away from Clan and towards Rational
cultures.
Multinomial logit model
In order to simultaneously model the various performance
measures across the three time periods, we use the multinomial
logit model and results are given in Table 4. Not all performance
variables were included, just those that provided the best model fit.
For instance FT, teaching and specialist status were not significant.
Since star ratings were only available in T1, we did not incorporate
them. Those variables significant at the 5% level are highlighted.
We can interpret the results from the multinomial logit as
available beds being higher in Developmental culture compared to
Clan and similarly in Hierarchical compared to Clan and also
Rational compared to Clan.
The findings demonstrate a number of significant relationships
between culture, hospital characteristics and performance. In
summary, the results suggest that:
i) The average number of beds is lower in Clan compared to all
other cultures. (This result corresponds with the findings in
Fig. 4 and Table 4 where small hospitals were predominantly
Clan culture.)
ii) Clinical negligence expenditure as a proportion of total
expenditure is lower in Developmental compared to Clan
culture and is higher in Rational compared to Developmental.
iii) Total number of imaging tests per available bed is higher in
Developmental and Hierarchical than Clan.
iv) Management salaries (as a proportion of total salaries) are
higher in Developmental and Rational than Clan.
v) Consultant salaries (as a proportion of total salaries) are
higher in Developmental than Clan, but lower in Hierarchical
and Rational than Developmental.

Table 3
Ordered probit model of culture scores against star ratings, T1.

Ordered probit estimates Number of obs¼ 183

LR chi2(11)¼ 12.02
2
Prob > chi ¼ 0.0073

Log likelihood¼ 211.156

Pseudo R2¼ 0.028

Star ratings Coefficient Robust standard error z P > jzj 95% Confidence interval
Clan 0.005 0.013 0.420 0.675 0.020 0.030
Developmental 0.040 0.012 3.270 0.001 0.016 0.064
Rational 0.021 0.018 1.150 0.250 0.015 0.057
Cut 1
Cut 2 0.021 0.989 1.958 1.917
Cut 3 0.959 0.985 0.972 2.889
 R. Jacobs et al. / Social Science & Medicine 76 (2013) 115e125 121

80

70

60

50
Percent

40

30

20

10

0
T1 T2 T3 T1 T2 T3 T1 T2 T3 T1 T2 T3
Clan Developmental Hierarchical Rational
S L

Fig. 4. Dominant culture type by size, small (S) and large (L), T1eT3.

vi) Nurse salaries (as a proportion of total salaries) are higher in
Developmental and Rational than Clan.
vii) Median waiting times are lower in Developmental than Clan,
but higher in Rational than Developmental.
viii) Daycases as a proportion of total inpatient spells (a measure
of efficiency) are lower in Hierarchical than both Clan and
Developmental.
The model passes all the tests associated with the multinomial
logit as described in the Appendix A.
Discussion
The aim of this study was to extend previous cross-section
analysis by looking at changes in senior management team
culture in English acute hospitals over three time periods between
2001/2002 and 2007/2008 to examine the relationship between
culture and performance over time and determine whether orga-
nizational values that are deemed important within a dominant
culture correspond with those aspects of performance at which the
organization excels over time.
This study’s contribution is to show that there is evidence that
such associations do exist cross-sectionally, and that at least some
of these relationships persist over time. This study provides
important new information on the changing cultural landscape for
English hospitals, and extends the evidence-base linking culture to
performance in healthcare (Scott, Mannion, Marshall, & Davies,
2003) by demonstrating the enduring nature of some of these
associations.
The Clan culture has remained prominent over the period 2001/
2002 (53%) to 2007/2008 (39%), though it has seen a substantial

100

90

80

70

60
Percent

50

40

30

20

10

0
Clan Developmental Hierarchical Rational
T1 T2 T3 T1 T2 T3 T1 T2 T3 T1 T2 T3
T NT

Fig. 5. Dominant culture type by teaching (T) and non-teaching (NT) status, T1eT3.
122 R. Jacobs et al. / Social Science & Medicine 76 (2013) 115e125

100

90

80

70

60
Percent

50

40

30

20

10

0 T2 T3 T1 T2
T1 T2 T3 T1 T T3 T1 T3
Clan Developmental Hierarchical Rational

S NS

Fig. 6. Dominant culture type by specialist (S) and non-specialist (NS) status, T1eT3.

decline. The rise in the Hierarchical culture as a dominant culture
may be associated with the increase of hierarchical controls and
bureaucratic rules in the NHS, including the development of clinical
guidelines, the introduction of professional protocols and the
implementation of national standards of care (Davies & Harrison,
2003; Harrison & Smith, 2003). The increase in the competitive
Rational culture as the most frequent type in 2007/2008 (40%) may
be associated with changes in the policy context such as the
promotion of patient choice, activity-based funding for acute care
(Department of Health, 2002), stronger commissioning
(Department of Health, 2004) and an expanded role for private
sector providers (Mannion & Street, 2009). In this policy context
competition is clearly articulated as the favoured lever for quality,
safety and overall performance improvement (Department of
Health, 2007). In short, over this period healthcare reforms have
focused on the creation of explicit economic incentives and
implementation of pro-market policies, and we might expect acute
hospitals increasingly to adopt organizational strategies and
management systems associated with the Rational culture (as
implied by Fig. 1), for example to focus on competition as a means
of gaining resources and patients by winning market share.
Overall though, the changes over time across all performance
measures are towards a more blended culture, with a single
dominant culture becoming less prominent. The shift towards
a more blended culture encompasses a significant move out of Clan
towards Rational cultures.

70

60

50

40
Percent

30

20

10

0
T2 T3 T2 T3 T2 T3 T2 T3
Clan Developmental Hierarchical Rational
FT NFT

Fig. 7. Dominant culture type by Foundation Trust (FT) and non-Foundation Trust (NFT) status, T2eT3.
 R. Jacobs et al. / Social Science & Medicine 76 (2013) 115e125 123

Table 4
Multinomial logit model, T1eT3 pooled.

Multinomial regression Number of obs¼ 295

LR chi2¼ 102.35
2
Prob > chi ¼ 0.000

Log likelihood¼ 297.266

Pseudo R2¼ 0.1469

Comparison group A (Clan) B (Developmental) C (Hierarchical)

Dominant culture Coefficient P > jzj Coefficient P > jzj Coefficient P > jzj
B (Developmental)
Average number of available beds 0.003 0.000
Percent clinical negligence expenditure L712.826 0.015
Total no. imaging tests per bed 0.010 0.023
Percent management salaries 0.530 0.004
Percent consultant salaries 0.332 0.001
Percent nurse salaries 0.191 0.002
Median waiting time L0.028 0.044
Daycase rate 1.705 0.417
Constant L18.794 0.000
C (Hierarchical)
Average number of available beds 0.003 0.000 0.000 0.631
Percent clinical negligence expenditure 190.892 0.486 521.934 0.122
Total no. imaging tests per bed 0.014 0.007 0.004 0.532
Percent management salaries 0.190 0.235 0.341 0.117
Percent consultant salaries 0.049 0.702 L0.382 0.009
Percent nurse salaries 0.063 0.285 0.128 0.092
Median waiting time 0.015 0.272 0.014 0.432
Daycase rate L4.984 0.018 L6.689 0.012
Constant 6.851 0.082 11.943 0.022
D (Rational)
Average number of available beds 0.003 0.000 0.000 0.894 0.000 0.648
Percent clinical negligence expenditure 152.437 0.435 560.389 0.050 38.455 0.895
Total no. imaging tests per bed 0.004 0.197 0.006 0.217 0.010 0.067
Percent management salaries 0.226 0.052 0.304 0.099 0.037 0.823
Percent consultant salaries 0.108 0.163 L0.224 0.032 0.158 0.224
Percent nurse salaries 0.103 0.010 0.089 0.153 0.040 0.513
Median waiting time 0.007 0.372 0.036 0.014 0.022 0.111
Daycase rate 1.564 0.278 3.269 0.131 3.420 0.115
Constant L9.441 0.001 9.352 0.030 2.590 0.526

Coefficients significant at 1% or 5% are in bold.

The results from our analysis of the relationship between
culture type and star ratings (in T1), and echoed in the ordered
probit results, show that higher performing organizations tend to
be clustered in the Developmental culture. The results from our
examination of culture change over time relative to various struc-
tural and performance measures, suggest that FTs (those high
performing hospitals with greater financial and managerial
autonomy) tend to be increasingly clustered in the Rational culture.
The Clan and Developmental cultures also tend to be the specialist
hospitals which tallies with the notion of these organizations being
more innovative and entrepreneurial. The Clan culture is also
strongly associated with smaller organizations where cohesion and
staff morale may be easier to maintain.
In terms of the culture/performance relationship, the results
seem to confirm our a priori hypotheses that those aspects of
performance valued within a given culture are enhanced in
hospitals that exhibit strong congruence with that culture. They
also correspond very strongly with previous research (Davies et al.,
2007).
Clan cultures tend to be more internally focused, smaller, and
have a higher degree of specialisation. Dominant Developmental
cultures seem to be associated with proportionally higher consul-
tant and nurse salaries, which may relate to greater concern for
clinical innovation and advancement and clinical teams being given
greater freedoms and responsibilities. However Developmental
cultures also have proportionally higher management salaries
which may be associated with entrepreneurship and growth.
Developmental cultures have lower clinical negligence expenditure
which again supports the notion of these organizations solving
clinical concerns in a dynamic and efficient way. Rational cultures
are also associated with proportionally higher management
salaries, which may reflect the greater emphasis on the role of
managers as acquisitive competitive leaders. Developmental
cultures also use more imaging (these include all imaging and
radiodiagnostic exams and tests, including CT scans, MRI scans,
ultra-sound, and so on) which may suggest a greater focus on
clinical innovation. We find lower waiting times in the Develop-
mental culture which we might anticipate, perhaps being more
innovative and creative with the clinical management of waiting
lists. Finally, daycase rates, a measure of efficiency, tend to be
higher in the Developmental and Clan cultures. We might have
anticipated this with the Developmental culture since we would
expect greater efficiency associated with clinical innovation and
dynamism. This result is perhaps surprising for the Clan culture.
Overall our findings support the hypothesis that specific
domains of performance valued within a dominant culture are
those on which organizations perform best. Future research might
usefully incorporate longitudinal qualitative case studies to explore
in-depth culture-performance relationships and changes over time,
to build on earlier work in this area (Mannion, Davies, & Marshall,
2005b).
As suggested at the outset, the institutional economics literature
argues that the cultural contexts within which senior managers
work, affect their motivations and behaviour (Bowles, 1998). This
124 R. Jacobs et al. / Social Science & Medicine 76 (2013) 115e125
implies that senior managers espousing a particular organizational
culture will influence the way in which those lower down the
organizational hierarchy work and how they interact with others to
influence the hospital’s performance. Organizational culture
therefore appears to matter in the delivery of high performance in
healthcare and our findings also suggest which sorts of cultures
might be expected to enhance which aspects of performance. In the
English NHS, several reforms have been premised on the assump-
tion that major cultural change must be wrought alongside struc-
tural and procedural reform if the desired improvements in
system-wide performance are to be secured (Davies, Nutley, &
Mannion, 2000; Scott, Mannion, & Marshall, 2003). We have
shown that organizational cultures have moved towards more
blended cultures over the time period studied. The real challenge
for the future, therefore, will be in encouraging blends which
underpin valued aspects of performance.
Acknowledgements
Early data collection for this study was funded by the Depart-
ment of Health Policy research programme while the later stages of
data collection were funded by the NIHR Service Delivery and
Organisation (SDO) Research and Development Programme. Ethics
approval for this project was obtained from the NHS National
Research Ethics Committee. Views expressed are those of the
authors and not the funders. An earlier abridged version of this
paper won the best poster prize at the iHEA 6th World Congress,
Copenhagen, Denmark, 8e11 July 2007. We would like to thank
those within the NHS who gave their time to make this investiga-
tion possible. We also thank the editor and four anonymous
referees for very valuable comments received.
Appendix A. Supplementary material
Supplementary data related to this article can be found at http://
dx.doi.org/10.1016/j.socscimed.2012.10.014.
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