Analysis of physical function as a measure of nursing home resident ou
tcomes in 10 nursing homes revealed that organizational design variabl
es were important. Results were consistent with contingency theory, wh
ich posits that to maximize performance organizational structure shoul
d be adjusted to variations in task difficulty and variability. This s
tudy revealed that better resident outcomes sometimes are achieved in
faster-paced nursing homes when employees are less closely supervised
and when the basis for job assignment is clear and consistent. A more
hierarchical structure may be effective when workload is heavy. Howeve
r, when workload and pace are held constant, better outcomes are assoc
iated with smaller hierarchies and non-specific job assignment. Implic
ations for management and future research are discussed.