K. Gautam et J. Goodstein, INSIDERS AND BUSINESS DIRECTORS ON HOSPITAL BOARDS AND STRATEGIC CHANGE, Hospital & health services administration, 41(4), 1996, pp. 423-440
Many hospitals are eager to incorporate practices of boards in busines
s organizations. Yet little evidence exists on the desirability of ''c
orporate'' board features in hospital settings. We examined the effect
s of two characteristics of corporate boards-the relative dominance of
insiders and of directors with business-related occupations on strate
gic changes within hospitals. We studied 335 hospitals in California i
mmediately following legislative reforms in 1982. We found that hospit
al boards with a higher proportion of insiders and business directors
made more changes in their mix of services in response to legislative
reform. In addition, this relationship held for nonproprietary hospita
ls but not for proprietary hospitals. Limitations and implications of
the results are discussed.