Matching structure and strategy : Towards a market orientation in health care

Laing, Angus Wallace and Galbraith, A. (1997) Matching structure and strategy : Towards a market orientation in health care. International Journal of Nonprofit and Voluntary Sector Marketing, 2 (2). pp. 114-124. ISSN 1465-4520

Abstract

The introduction of an ‘internal’ or ‘managed’ market mechanism into the National Health Service required fundamental structural reorganisation, involving the separation of purchaser and provider functions. While a degree of structural change has occurred among the emergent purchasing organisations subsequent to the initial reforms, there is a lack of corresponding evidence of ongoing structural change in acute provider units. Despite the existence of a direct relationship between organisational structure and strategy, the extent of change in the organisational structure of hospitals is questionable. Indeed at the macro level current acute hospital structures, that is NHS Trusts, are remarkably similar to ‘pre-reform’ structures, despite the unsuitability of these structures for the market orientation required by the internal market. Such prevalence arguably reflects the marginal effect that current managerial structures have had on those delivering services and the predominance of the medical hierarchies. Specifically, those responsible for the marketing of hospital services in current structures are not directly linked to those who deliver the service, in spite of the introduction of clinical directorate structures. Part of a broader study of the market behaviour of acute NHS Trusts in Scotland, this paper explores the organisational avenues open to health care providers to overcome this separation in the pursuit of market-led service delivery and concomitant market orientation.