The role of leadership styles and their applicability to the success or failure of mergers, acquisitions and alliances is the focus of this research. Any leadership study, to be relevant, must also focus on the needs of those served by the organizations studies. That is why in the proposed Change Management Equilibrium Model have customer-driven processes at their center or core. The focus of the research to either validate or refute the model is based on consistency and collaboration as two factors that also serve to create greater levels of integration between the two or more healthcare providers merging or changing their organizational structures to better serve the market. This market orientation is what many public-ally-owned and operated healthcare providers struggle with, as often the source of funding becomes their "customer" or whom they serve (Brinkmann, O'Brien, 2010). Studies by AMR Research for example show that nearly 60% of the members of a medical value chain have no idea who the real customer is for their services. This pervades the healthcare industry, as the sources of funding are often seen as the customer (Brinkmann, O'Brien, 2010). The for-profit healthcare providers often see the insurance companies, funding sources in the government, or even very large employers as their primary customer as that is where the majority of revenues accrue. In the public or government-run healthcare providers, the focus is entirely on the sources of government funding and the politicians responsible for keeping the organizations' funding viable and available over time. The actual patient is not in the highest priority of any of these organizations and as a result, accuracy and quality of care often suffer significantly during mergers, acquisitions and alliances (Drummond-Hay, Bamford, 2009).
The problem this dissertation addresses is a multifaceted one that concentrates on how to bring more effective change management strategies into public and private healthcare providers that are merging or changing their structures to acquisitions and alliances. This research also addresses the validity and reliability of the proposed Change Management Equilibrium Model from the standpoint of its scalability and applicability to mergers, acquisitions and alliances. This dissertation concentrates on leadership and its role in creating more effective change management strategies by combining transactional and transformational leadership mindsets and approaches. Making mergers, acquisitions and alliances between public and privately-run healthcare organizations succeed requires that leadership teams balance transformational and transactional leadership approaches, anchoring them in collaboration and fueling trust. Only when this triad of factors is taken into account can the integration of two or more desperate firms be successful, which is the design impetus for the proposed Change Management Equilibrium Model. Putting the patient and their needs at the center of any merger, acquisition or alliance will fuel the development of shared objectives of two most likely highly desperate and different organizations. The proposed Change Management Equilibrium Model specifically focuses on how organizations can accomplish this level of focus with regard to their organizational structures as they go through significant change. Mergers, acquisitions and alliances are all very turbulent and often leave entire industries completely re-defined and re-ordered as a result. The focus of this dissertation on how the effects of transformational vs. transactional leadership affect patient care and potentially influence for the positive the customer-driven processes in organizations is the focus of this research.
2.0 Literature Review/Survey/Requirements
The objective of this literature review is to provide a solid background of research and contextual analysis of the data presented to alleviate the lack of knowledge in the area of change management as it applies to healthcare organizations. Studies suggest that the more myopic or internally focused a government entity, the greater the lack of focus and accountability on the patients' welfare and satisfaction levels with treatment. The evidence of just how myopic and inward-centric government-run organizations had become is evident when merger and acquisition activity begins to their privatization. Mergers and acquisitions references in this analysis suggest that there is a lack of formal frameworks and structure for successfully transforming government-run healthcare organizations into privatized businesses. This is because the patient, their care, satisfaction levels and long-term needs are often ignored for the sake of internal process efficiencies. The streamlining of processes takes precedence over the quality of care to patients over time when state-run healthcare facilities have little to no accountability for their performance.
This is a strategic issue for the healthcare industry, because the provisioning and quality of care delivered to patients is a heavily dependent on the quality of change management initiatives at both the business process and management levels of an organization. Factors that contribute to the greatest levels of dependency include cultural norms that reinforce resistance to change and the stability of the status quo over the ability to create significant and meaningful improvements on behalf of patients. Stability and the status quo are the most important values in these organizations. The concept of the patient as a customer is not considered or in public healthcare organizations decades in existence, even seen as part of among the most critical aspects of their operation. Successful change management initiatives reflect transformational objectives where the organization's employees can readily identify with the new direction and take ownership for their specific tasks to make the new organizational vision happen (Swedish, 2009). Therefore, included in my analysis are the concepts of transformational leadership (Avolio, Yammarino, 2002) which have shown to be a key success factor in successful change management initiatives and strategies throughout the healthcare industry (McCutcheon, 2009).
For public government healthcare sector organizations, change is likely to be exceptionally difficult. First, there is the issue of how different government healthcare sector organizations manage the patient experience through a multitude of different processes. Often these processes have little to do with actual patient improvement or much less satisfaction, but more about cot mitigation and process efficiency reporting. The perception of efficiency becomes more important than patients' health and continued improvement. Second, there is the factor of financing, which is often based on government grants, not customers and contracts with health maintenance organizations as commercial healthcare providers typically have. Third, there is the issue of standards of performance, which vary significantly between government-sponsored medicine and private practice, a point shown in the nationalization of healthcare in the United Kingdom (Drummond-Hay, Bamford, 2009).
The result is a practical contribution to the body of research of how organizations can better navigate the challenges and risk of integrating public sector healthcare organizations into the private sector. This research effort looks at how this can be accomplished from a pragmatic and focused standpoint without affecting the quality of care for patients who may be receiving treatment during the transition. Public government healthcare sector organizations' successful integration into private sector firms without adversely affecting the provision of care for patients is also included as part of the analysis. Taken together all of these factors make a significant contribution to the area of research supporting the model presented in this dissertation.
Integrating transformational leadership and change management is also pivotal in creating more effective communication strategies. For change management to have a lasting effect there needs to be a clear, overarching vision or direction of the organization, often defined by the leader, which seeks to galvanize the change as real and accomplishable (Brinkmann, O'Brien, 2010). In the following section, the practical implications of transformational leadership on change management are also discussed. Transformational leadership leads to greater trust, and with trust, more effective integration of organizations from the public healthcare and private healthcare sectors (Al-Mailam, 2004). This is also substantiated by analysis of how leaders that have transformational skill sets show greater restraint in using negative outcomes, choosing to create a culture of shared ownership and trust over time (Antonakis, House, 2002). This is also validated by the studies completed by Brinkmann and O'Brien (2010) that illustrate how transformational leadership in healthcare facilities lead to greater resiliency in organizational structures and the ability to overcome obstacles to growth. The studies of Brinkmann and O'Brien (2010) however did not differentiate between government-run healthcare organizations and those from the private sector. While the series of studies illustrate the importance of transformational leadership in managing healthcare organizations to patient-centric goals and objectives (Brinkmann, O'Brien, 2010) the study of leadership variation on financial performance is incomplete and often only cursory (Antonakis, House, 2002) (Avolio, Yammarino, 2002). The implications of transformational leadership on the long-term performance of healthcare organizations, either private or public, are incomplete as a result.
2.2 Development of theories/current status
A leader's impact on the success or failure of any initiative or strategy that requires exceptional levels of change on the part of employees is the single greatest factor in its success or failure (Tatli and Ozbilgin, 2009). Organizations must change to survive. If leaders are ever going to be trusted, they need to learn how to be transformational in scope. Taking a transformational vs. authoritarian mindset to the task of creating change…