Organizational Culture and Its Relationship with Hospital Performance in Public Hospitals in China
To measure perceptions of organizational culture among employees of public hospitals in China and to determine whether perceptions are associated with hospital performance. Hospital, employee, and patient surveys from 87 Chinese public hospitals conducted during 2009. Developed and administered a tool to assess organizational culture in Chinese public hospitals. Used factor analysis to create measures of organizational culture. Analyzed the relationships between employee type and perceptions of culture and between perceptions of culture and hospital performance using multivariate models. Employees perceived the culture of Chinese public hospitals as stronger in internal rules and regulations, and weaker in empowerment. Hospitals in which employees perceived that the culture emphasized cost control were more profitable and had higher rates of outpatient visits and bed days per physician per day but also had lower levels of patient satisfaction. Hospitals with cultures perceived as customer-focused had longer length of stay but lower patient satisfaction. Managers in Chinese public hospitals should consider whether the culture of their organization will enable them to respond effectively to their changing environment.
Organizational Culture and Its Relation-
ship with Hospital Performance in Public
Hospitals in China
Ping Zhou, Kate Bundorf, Ji Le Chang, Jin Xin Huang, and
Objective. To measure perceptions of organizational culture among employees of
public hospitals in China and to determine whether perceptions are associated with
Data Sources. Hospital, employee, and patient surveys from 87 Chinese public
hospitals conducted during 2009.
Study Design. Developed and administered a tool to assess organizational culture in
Chinese public hospitals. Used factor analysis to create measures of organizational cul-
ture. Analyzed the relationships between employee type and perceptions of culture
and between perceptions of culture and hospital performance using multivariate
Principal Findings. Employees perceived the culture of Chinese public hospitals as
stronger in internal rules and regulations, and weaker in empowerment. Hospitals in
which employees perceived that the culture emphasized cost control were more proﬁt-
able and had higher rates of outpatient visits and bed days per physician per day but
also had lower levels of patient satisfaction. Hospitals with cultures perceived as
customer-focused had longer length of stay but lower patient satisfaction.
Conclusions. Managers in Chinese public hospitals should consider whether the
culture of their organization will enable them to respond effectively to their changing
Key Words. Business and management, comparative health systems/international
health, hospitals, organization theory
In 2009, the Chinese government announced a major health car e system
reform, with public hospitals being an important target for reform efforts. Pub-
lic hospitals generate the bulk of their revenues from regulated fees charged
to patients and insurers. As the government sets fees for basic services very
low to make these services more accessible to patients, hospitals have strong
© Health Research and Educational Trust
CALL FOR PAPERS FOR THEME ISSUE: GLOBAL HEALTH SYSTEMS
Health Services Research
incentives to over-provide more proﬁtable high-tech services and pharmaceu-
ticals to remain ﬁnancially viable. A key objective of the proposed reforms is
to change the behavior of public hospitals.
A key determinant of the effectiveness of the proposed reforms will be
how public hospitals respond to potentially dramatic changes in their external
environment. While major organizational changes without changes in organi-
zational culture often fail (Umiker 1999), little is known about the organiza-
tional culture of Chinese public hospitals. The main purposes of this study
were to determine how employees perceive organizational culture in China’s
public hospitals, to compare perceptions of hospital culture among different
types of employees, and to examine the association between employee per-
ceptions of hospital culture and hospital performance.
While consensus does not exist on how to deﬁne organizational culture
(Cooke and Rousseau 1988; King and Byers 2007; Zhang, Li, and Pan 2009),
a commonly used deﬁnition is “the set of shared, taken-for-granted, implicit
assumptions that a group holds and that determine how it perceives, thinks
about, and reacts to its various environments” (Kreitner and Kinicki 200 8).
Thus, the essence of culture is a core of basic assumptions. Behavioral norms
and values are a manifestation of these assumptions, and values and norms, in
turn, encourage activities that represent the expression of organizational
culture (Hatch and Cunliffe 2006).
Organizational climate, in contrast, is deﬁned as employees’ shared per-
ceptions regarding an organization’s policies, procedures, and practices,
which in turn serve as indicators of the types of behavior that are rewarded
and supported in work settings (Schneider, Gunnarson, and Niles-Jolly 1994;
Zohar and Luria 2010). Organizational culture is a broader concept than orga-
nizational climate, and organizational culture can be used to explain why an
organization focuses on certain priorities. While our study focuses on organi-
Address correspondence to Di Xue, Ph.D., M.P.H., M.D., Professor, Director, Department of
Hospital Management, School of Public Health, Fu Dan University, Shanghai, 2 00032, China;
e-mail: firstname.lastname@example.org. Ping Zhou, Ph.D., is with the Department of Hospital Administra-
tion, School of Public Health, Fu Dan University, Shanghai, China. Kate Bundorf, Ph.D., M.B.A.,
M.P.H., is with the School of Medicine, Stanford University, Stanford, CA. Ji Le Chang, M.D., is
with the Health Bureau of Gansu Province, Gansu Province, China. Jin Xin Huang, M.B.A., M.
D., is with the Health Department of Hubei Province, Hubei Province, China.
2140 HSR: Health Services Research 46:6, Part II (December 2011)
zational culture, we refer to some studies on organizational climate, particu-
larly in the context of patient safety, which examine related issues.
Assessment of Hospital Culture
Two conceptual frameworks are often used to assess hospital culture: the Deni-
son model and Quinn and Rohrbaugh’s competing values framework (CVF).
The Denison framework is based on four cultural traits: mission, consistency,
adaptability, and involvement (Denison 1990). Miss ion refers to a long-term
direction for the organization; consistency refers to the values and systems that
are the basis of a strong culture; adaptability refers to the ability to translate
the demands of the business environment into action; and involvement refers
to building human capability, ownership, and responsibility. Each of these
traits is characterized by three sub-dimensions. The Denison model has been
used to assess culture in a variety of industries (Hatch and Cunliffe 2006).
Studies in the health services ﬁeld often use Quinn and Rohrbaugh’s
CVF (Quinn and Rohrbaugh 1981). In the CVF, there are two sets of compet-
ing values. The ﬁrst is centralization and control over organizational processes
versus decentralization and ﬂexibility. The second is whether the organization
is oriented toward its own internal environment and processes or the external
environment and relationships with outside entities (such as regulators, suppli-
ers, competitors, partners, and customers).
In our study, we developed a tool for organizational culture assessment
(TOCA) drawing from both models. We used three dimensions (consistency,
adaptability, and involvement) mainly from Denison model; we used CVF to
form a fourth dimension of “orientation,” which reﬂects the extent to which
the organization focuses on external expectations of stakeholders. We also
added the elements of “internal regulations and rules” and “cost control” to
the dimension of consistency, to capture salient issues for Chinese public
Different Perceptions of Hospital Culture
A subculture is a subset of an organization’s members who identify themselves
as a distinct gro up within the organization and who routine ly take action on
the basis of their unique collective understandings (Hatch and Cunliffe 2006).
Subcultures may form within a hospital among employees who hav e similar
interests, who share professional, gendered, occupational identities, or who
interact more due to shared territory or equipment. For example, in U.S.
Hospital Culture and Hospital Performance 2141
hospitals, different types of employees have different perceptions of organiza-
tional patient safety climate (Thomas, Sexton, and Helmreich 2003; Hart-
mann et al. 2008; Singer et al. 200 9), with senior managers having more
positive perceptions than either frontline workers or supervisors (Singer et al.
2008). As managers, physicians, health technicians, nurses, and othe r employ-
ees in public hospitals in China have different functions and work under differ-
ent environments, they may represent different subcultures within a hospital
with dif ferent perceptions of the organizational culture. On the basis of ﬁnd-
ings of Singer et al. (2008), we propose that a key factor in determining per-
ceptions of organization culture is the extent to which employees interact with
patients. We hypothesize that managers’ perceptions of organizational culture
will differ from those of frontline workers who intera ct directly with patients.
Relationship between Hospital Culture and Hospital Performance
While both managers and academic researchers believe that organizational
culture can in ﬂuence performance (Kreitner and Kinicki 2008), studies of the
correlation between organizational culture and organizational performance
do not produce consistent results (Damanpour 1992; Denison, Haaland, and
Goelzer 2004; Kreitn er and Kinicki 2008). In the health care ﬁeld, studies
have analyzed different indicators of performance, such as quality improve-
ment activities, patient-care quality and efﬁciency, effectiveness of provider
teams, health care provider job satisfaction, and patient satisfaction, making it
difﬁcult to identify consistent relationships across studies (Coeling and Wilcox
19 88; Platonova et al. 2006; Williams et al. Konrad 2007; Zazzali et al. 2007).
In addition, a vast majority of literature on the organizational culture of hospi-
tals examines the United States or other high-income countries. Little is
known about hospital organizational culture in countries with different socio-
economic and cultural environments (Helfrich et al. 2007).
We analyze the relationship between organizational culture and four
types of perform ance indicators, which encompass key concerns of policy
makers and the public regarding hospital behavior. The indicators include
resource use per patient (length of stay [LOS]), productivity in resource use
(outpatient visits per physicia n per day [OVPPPD], bed days per physician
per day [BDPPPD]), short-term proﬁtability, patient satisfaction with medical
care, and employee satisfaction.
When examining the relationship between culture and performance,
we develop hypotheses based on a subset of the sub-dimensions of culture
within each of the dimensions we identify above (see Appendix SA2 for a
2142 HSR: Health Services Research 46:6, Part II (December 2011)
list of the dimensions and sub-d imensions). We develop hypotheses based
on sub-dimensions, rather than on dimensions, because the different
sub-dimensions may have different relationships with speciﬁc performance
measures. The sub-dimensions within a dimension, however, are highly
correlated by construction. Thus, in empirical models, we drop one sub-
dimension from each dimension we analy ze, and our method for choosing
the dropped sub-dimensions is discussed in the data analysis section.
Finally, our performance measures encompass only a subset of possible
hospital performance indicators. Thus, we identify hypotheses only for the
subset of the dimensions of culture we assess for which we have strong a
priori hypotheses regarding their effects on the available performance mea-
sures. We hypothesize that the following relationships exist between speciﬁc
aspects of culture and these four types of indicators of organizational perfor-
mance (also see Table 1).
Orientation. A hospital with a culture emphasizing social responsibility will
put the interests of society ahead of those of individual hospitals or patients.
Public hospitals in China have relatively high occupancy rates (90.0 percent
in average in 2010) and relatively long LOS (10.7 days in average in 2010)
(Chinese Ministry of Health 2011). And the perception exists that capacity
constraints prevent many people who need treatment from receiving it.
Thus, the notion of social responsibility in this context refers to reducing
LOS for individual patients to provide access for more patients. While the
possibility exists that this may not be in the social interest due to negative
effects of shorter stays on quality of care, because LOS is unusually long in
China relative to other countries, we believe that this type of unintended
effect is unlikely.
We propose that hospitals compete based on proﬁtability, which is dri-
ven by the volume of proﬁtable services they provide as they are paid by fee-
for-service. Thus, we hypothesize that, hospitals with cultures emphasizing
competition will use resources more productively, resulting in more outpa-
tient visits and BDPPPD, and will be more proﬁtable.
Consistency. We hypothesize that a culture emphasizing cooperation among
employees will be associated with a greater employee satisfaction. A strong
culture of internal rules and regulations, in contrast, will be associated with
lower levels of employee satisfaction. Theoretically, a consistency culture will
Hospital Culture and Hospital Performance 2143
enable an organization to make consistent efforts to reach its goals. The
TOCA allows us to measure the extent to which the culture is consistent with
respect to the goal of cost con tainment, but not other goals. We hypothesize
that a hospital with a culture of cost containment will have shorter LOS, more
OVPPPD, and more BDPPPD as cost containment goals create pressure to
use resources more efﬁciently. This, in turn, will lead to a greater short-term
proﬁtability but lower patient satisfaction.
Involvement. Involvement cultures emphasize the development of organiza-
tional manpower. Consistent with other research demonstrating a positive
Table 1: Hypotheses of the Relationship betw een Hospital Culture and
LOS OVPPPD BDPPPD ROIOE
Increase Increase Increase
Cost control Increase Increase Increase Decrease
Customer focus Increase Decrease Increase
Note. Cell entry indicates the direction of change in the performance measure associated with an
increase in the strength of the culture measure. The table includes a subset of the sub-dimensions
measured in the TOCA. We did not develop hypotheses for the sub-dimensions of sustainable
development, core values, team orientation, and creating change due to concerns over multicollin-
earity in empirical models. See the data analysis section for a discussion. We did not have any
hypotheses for the relationship between organizational learning and the available performance
measures. Thus, these sub-dimensions are not included in Table 1.
BDPPPD, bed days per physician per day; ESOHDR5Y, employee satisfaction; LOS, length of
stay; OVPPPD, outpatient visits per physician per day; ROIOE, ratio of operational income over
2144 HSR: Health Services Research 46:6, Part II (December 2011)
association betw een involvement cultures and employee satisfaction and
greater efﬁciency in the delivery of medical care (Platonova et al. 2 006), we
hypothesize that employee satisfaction will be greater in public hospitals with
cultures emphasizing capability development and empowerment.
Adaptability. Organizations with a culture of adaptability can make timely
adjustments to strategic objectives in response to changes in the external envi-
ronment (Zhang, Li, and Pan 2009). While public hospitals with more adapt-
able cultures will have better performance as a result, the effect on indicators
of performance depends on the hospital objectives. As we do not observe the
objectives of hospitals, our hypotheses are limited to speciﬁc aspects of adapt-
ability. We hypothesize that organizations with a culture of customer focus will
have higher levels of patient satisfaction, as well as longer LOS and fewer
OVPPPD, as employees place a greater focus on patient care.
The primary data sources are surveys of 93 public hospitals, their employees,
and their patients in Shanghai, Hubei Province, and Gansu Province con-
ducted between June and October of 2009. The selection of regions and the
sampling of hospitals within regions were designed to capture varying levels
of socioeconomic status within China. We ﬁrst selected three provinces repre-
senting high, middle, and low levels of socioeconomic status. We then selected
three districts or prefecture-level cities representing high, middle, and low lev-
els of socioeconomic status within each province. Finally, we randomly
selected three to four tertiary hospitals, three to four secondary hospitals, and
three to four community hospitals in each district or city. In Shanghai, nine
tertiary general hospitals were selected from the region as a whole (because
tertiary general hospitals are distributed very unequally among the districts).
In the hospital survey, we collected measures of hospital performance that are
routinely reported to the government, including LOS, outpatient visits per
year, bed days per year, number of physicians in the hospital, annual hospital
operational income, and annual hospital operational expense.
Employee and patient surveys were administered in each hospital using
paper-based questionnaires. For the employee survey, 10 percent of managers
(at least 10 managers) and 10 percent of physicians, nurses, and health
Hospital Culture and Hospital Performance 2145
technicians (at least 30 in each group) were randomly selected to receive a sur-
vey in the secondary-level and tertiary general hospitals, and 50 percent of the
managers, 10 physicians, 5 nurses, and 5 health technicians were r andomly
selected to receive a survey in community hospitals. If this algorithm resulted
in fewer than 20 people surveyed in a community hospital, then all employees
in the community hospital were selected for the survey. In thi s study, “man-
ager” refers to employees with manag ement responsibilities at top and middle
levels, including physician-ma nagers, nurse-m anagers, and technician-manag-
ers. Frontline workers are employees without management responsibilities
who interact directly with patients.
In their survey, employees evaluated 80 statements regarding the
organization’s culture. The rating scale was 1 (fully disagree), 2 (essentially
disagree), 3 (partially disagree), 4 (partially agree), 5 (essentially agree), and
6 (fully agree). When the data were analyzed, the rating scores of the state-
ments that were phrased negatively were reversed so that a higher score
represents a view that the cultu re is stronger along a particular dimension.
The employee survey also included questions about employee characteris-
tics and satisfaction with the overall hospital development in the most
recent 5 years. The rating scale for the satisfaction question was 1 (very dis-
satisﬁed), 2 (dissatisﬁed), 3 (relatively dissatisﬁed), 4 (relatively satisﬁed), 5
(satisﬁed), and 6 (very satisﬁed). All responses to the employee survey were
For the patient survey, 50 patie nts treated in the outpatient setting and
50 patients admitted to each hospital were randomly selected to receive an
anonymous questionnaire. The scale for the question for overall satisfaction
with medical care provided in the hospital was the same as that for employee
Organizational Culture. We used the TOCA to develop measures of orga-
nizational culture. The TOCA included 80 items, grouped into four
dimensions, including orientation, consistency, involvement, and adapt-
ability, and 13 sub-dimensions (see Appendix SA2 for a sample question,
translated from Mandarin, from each sub-di mension). We consulted with
experts of hospital management in developing questions and adjusted
some questions based on the results of pilot tests. Using factor analyses,
we developed measures of organizationa l culture from the items on the
TOCA. The scores were calculated according to the framework of the
2146 HSR: Health Services Research 46:6, Part II (December 2011)
TOCA and were weighted according to the loadings of the ﬁrst eigenvec-
tor on the dimensions of organizational culture in principal component
We conducted item analysis (item correlation and Cronbach’s alpha),
exploratory facto r analysis (principal factor analysis with rotate = promax),
and conﬁrmatory factor analysis (structural equation model) to test the reli-
ability and validity of the TOCA (Hoyle 1995; Byrne 2001; Grembowski
2001; Arbuckle 2003; Cole, Ciesla, and Steiger 2007). In conﬁrmatory factor
analysis, we used modiﬁcation indices (MIs) to modify the model and used the
ﬁtness indices to select the best model from alternative models. Based on these
analyses, four dimensi ons based on 73 items were ultimately included in the
TOCA (see Appendix SA3). Orientation (F1) included the sub-dimensions of
social responsibility (F11), sense of competition (F12), and sustainable devel-
opment (F13); consistency (F2) included the sub-dimensions of core values
(F21), internal regulations and rules (F22), cooperation (F23), and cost control
(F2 4); involvement (F3) included sub-dimensions of capability development
(F31), team orientation (F32), and empowerm ent (F33); and adaptability (F4)
included the sub-dimensions of creating change (F41), organizational learning
(F4 2), and customer focus (F43). The item scores were correlated with the total
score (correlation coefﬁcients ranged from 0.43 to 0.81) and were also corre-
lated with the related dimension score (the correlation coefﬁcients ranged
from 0.59 to 0.85).
The analysis of TOCA’s structural equation model using a randomly
assigned calibration sample (n = 1,718) showed that the root-mean-square
error of approximation (RMSEA) = 0.053, the stand ardized root mean
square residual (SRMR) = 0.052, the normed ﬁt index (NFI), the incremental
ﬁt index (IFI), non-normed ﬁt index (NNFI), and the comparative ﬁt index
(CFI) were greater than 0.85, and that the goodness-of-ﬁt index (GFI), the
adjusted goodness-of-ﬁt (AGFI), and the parsimony goodness-of-ﬁt(PGFI)
were 0.760, 0.745, and 0.714, respectively. The analysis of TOCA’s structural
equation model by using a randomly assigned validation sample (n = 1,719)
showed that RMSEA = 0.052 and SRMR = 0.051, that NFI , IFI, NNFI, CFI
were all greater than 0.85, and that GFI, AGFI, and PGFI were 0.769, 0.754,
and 0.722, respectiv ely. The TOCA adequately satisﬁed standard tests of
goodness of ﬁt ( Janssen, Jonge, and Bakker 1999; Henderson, Donatelle, and
Acock 2002; Hau, Wen, and Cheng 2004).
Assessments of within-group agreement are required to determine
whether aggregated individual-level scores can be used as indicators of
group-level constructs (Dunlap, Burke, and Smith-Crowe 2003). Four
Hospital Culture and Hospital Performance 2147
complementary measures, ICC(1), ICC(2), r
, and the F-statistic from a
one-way analysis of variance (
ANOVA), are frequently used to justify statistically
the aggregation (Zohar and Luria 2005; Vogus and Sutcliffe 2007). Intraclass
correlation coefﬁcients (I CCand ICC) measure homogeneity within the
group (values of the former between 0.05 and 0.30, and values of the later
equal to or above 0.7 are acceptable). R measures the degree to which individ-
ual responses within a group are interchangeable (values of 0.7 or greater are
acceptable). A signiﬁcant F-statistic resulting from a one-way
group mem bership as independent variable demonstrates differences between
the groups (Vogus and Sutcliffe 2007). Based on the results of these tests, the
measures of organizational culture constructed in this study were character-
ized by high homogeneity within and high heterogeneity between the hospi-
tals (see Table 2).
Hospital Performance. Six indicators were used to measure hospital perfor-
mance, including LOS, OVPPPD, BDPPPD, ratio of operational income
over operational expenditure (ROIOE), patient satisfaction, and employee
Table 2: Test of Homogeneity of Culture within Hospitals
Culture ICC(1) ICC(2) F Value (One-Way ANOVA)r
Total 0.1952 0.9000 10.00*** 0.9916
Orientation 0.1870 0.8951 9.53*** 0.9710
Social responsibility 0.1264 0.8429 6.37*** 0.93 25
Sense of competition 0.1528 0.8700 7.69*** 0.8730
Sustainable development 0.2021 0.9038 10.40*** 0.9305
Consistency 0.1841 0.8932 9.37*** 0.9698
Core values 0.1799 0.8906 9.14*** 0.9298
Internal regulations and rules 0.1360 0.8538 6.84*** 0.9218
Cooperation 0.1431 0.8610 7.20*** 0.8351
Cost control 0.1492 0.8668 7.51*** 0.8121
Involvement 0.1660 0.8807 8.39*** 0.96 41
Capability development 0.1763 0.8881 8.94*** 0.9019
Team orientation 0.1490 0.8666 7.49*** 0.9310
Empowerment 0.1243 0.8404 6.27*** 0.8467
Adaptability 0.1677 0.8820 8.48*** 0.9658
Creating change 0.1804 0.8909 9.17*** 0.9245
Organizational learning 0.1225 0.8382 6.18*** 0.9097
Customer focus 0.1545 0.8714 7.78*** 0.8613
***p < .001.
2148 HSR: Health Services Research 46:6, Part II (December 2011)
satisfaction with overall hospital development in recent 5 years (ESO-
We calculated means of the factor scores for the dimensions and the sub-
dimensions of organizational culture both overall and by type of employee
(manager, physician, nurse, and others). Analysis of variance was used to ana-
lyze the differences in the perception of organizational culture among different
groups of employees.
We estimated mixed linear models using restricted maximum likelihood
to analyze the ﬁxed effect of job type on employee perception of organiza-
tional culture, controlling for other employee characteristics and for hospital
random effects. We restricted these models to the total score and the four
dimensions of organization al culture as little difference existed across the sub-
dimensions of a particular dimension.
We estimated separate hospital-level multinomial logistic regressions for
each of the six indicators of hospital perform ance to analyze the relationship
between organizational culture and hospit al performance. The dependent var-
iable for each model was a three-level indicator of relative performance (less
than the 25th percentile, greater than or equal to the 25th percentile and less
than the 75th percentile, and greater than or equal to the 75th percentile). The
independent variables for each model were nine sub-dimensions of organiza-
tional culture. We dropped four sub-dimensions due to the existence of multi-
collinearity among sub-dimensions. The sub-dimensions that had the highest
variance inﬂation factor (VIF) were dropped one by one until all the VIFs of
sub-dimensions <10 (using “PROC REG” with the option of “VIF” in SAS ).
The dropped sub-dimensions included sustainable development, core values,
team orientation, and creating change. Although we had no hypotheses for
the sub-dimension of organization learning, we include d it in the model as a
control variable. These models also included controls for hospital type (ter-
tiary, secondary, and community) and location (province).
Characteristics of Sur veyed Hospitals, Emp loyees, and Patients
Eighty-seven hospitals (9 3.55 percent of 93 sampled hospitals) participated in
the survey. Twenty-nine (33.33 percent) were tertiary general hospitals, 28
Hospital Culture and Hospital Performance 2149
(3 2.19 percent) were secondary-level general hospitals, and 30 (34.48 percent)
were community hospit als. Hospitals from Shanghai, Gansu Province, and
Hubei Province accounted for 37.93, 29.89, and 32.18 percent, respectiv ely, of
the participating hospitals.
A total of 3,437 hospital employees participated in the survey (75.69 per-
cent respon dent rate); 52.87 percent of employee respondents were from ter-
tiary general hospitals, 31.48 percent from secondary-level general hospitals,
and 15.65 percent from community hospitals. A total of 22.84 percent were
managers, 31.62 percent were physicians, 27.14 percent were nurses, and
18.33 percent were other types of employees. The average age was
35.99 years and 37.65 percent were male. In all, 15.33 percen t had master
and/or Ph.D. degrees, and 42.03 percent had worked at the hospital for
15 years or more. A total of 3,245 employees of 87 hospitals had no missing
data for the questions on organizational culture.
A total of 8,276 patients from 87 hospi tals participated in the patient sur-
vey with 35.33 percent from tertiary, 3 3.11 percent from secondary, and 31.56
percent from the community hospitals; 48.36 percent of the patients were
male and 49.43 percent received care in the outpatient setting. The response
rate for the patient survey was 95.13 percent.
The mean and standa rd devia-
tion of patient age were 47.32 and 19.39, respectively.
Employee Perceptions of Hospital Culture
Overall, employees perceived the organizational culture as strong along most
dimensions (mean of the total score was 4.75, corresponding to a response
between partially and essentially agree) (see Table 3). The orientation dimen-
sion had the highest mean score (5.03) and involvement had the lowest (4.54).
Among the sub-dimensions, internal regulations and rules received the high-
est mean score (mean = 5.25), while empowerment received the lowest
(mean = 4.27).
Differences existed among the different types of employees in their rat-
ings of each sub-dimension of organizational culture except organizational
learning (see Table 3). On each measure, managers gave the highest ratings.
The analyses using mixed linear models showed that job type was highly cor-
related with perceptions of organizational culture after controlling for other
employee characteristics and hospital-level random effects (see Table 4). Con-
sistent with the unadjusted results, in the multivaria te models, managers gave
higher rankings than othe r types of employees for each dimension of organiza-
2150 HSR: Health Services Research 46:6, Part II (December 2011)
Table 3: Factor Scores of Hospital Culture Overall and by Type of Employee
(No. = 3,245)
(No. = 727)
(No. = 993)
(No. = 855)
(No. = 578)
Mean SD Mean SD Mean SD Mean SD Mean SD
Total 4.75 0.75 4.86
Orientation 5.03 0.74 5.15
Social responsibility 5.17 0.74 5.19
Sense of competition 5.08 0.86 5.24
Sustainable development 4.84 0.92 5.01
Consistency 4.71 0.79 4.83
Core values 4.60 0.90 4.76
Internal regulations and rules 5.25 0.78 5.32
Cooperation 4.42 0.94 4.53
Cost control 4.64 1.03 4.77
Involvement 4.54 0.88 4.67
Capability development 4.60 1.00 4.80
Team orientation 4.75 0.84 4.77
Empowerment 4.27 1.05 4.43
Adaptability 4.72 0.85 4.80
Creating change 4.65 0.97 4.82
Organizational learning 4.83 0.85 4.80 0.86 4.82 0.86 4.91 0.86 4.83 0.78 2.44
Customer focus 4.67 0.94 4.80
If the groups are marked with the same letter, their factor means do not differ statistically by using the Student-Newman-Keuls multiple range test.
Analysis of variance:
***p < .001,
**p < .01,
*p < .05.
Hospital Culture and Hospital Performance 2151
Table 4: Analysis of the Relationship between Employee Job Types and Perceptions of Organizational Culture
Tscore Orientation Consistency Involvement Adaptability
Estimate t Value Estimate t Value Estimate t Value Estimate t Value Estimate t Value
Intercept 5.168 39.26*** 5.305 40.84*** 5.162 37.90*** 5.108 34.01*** 5.110 35.19***
Fixed effect (manager)
Physician 0.180 4.70*** 0.152 4.02*** 0.188 4.57*** 0.237 5.22*** 0.143 3.27***
Nurse 0.196 4.32*** 0.166 3.70*** 0.171 3.52*** 0.259 4.84*** 0.187 3.63***
Others 0.201 4.62*** 0.224 5.22*** 0.199 4.29*** 0.239 4.65*** 0.141 2.85**
subject = hospital
0.116 Z = 5.33*** 0.113 Z = 5.37*** 0.112 Z = 5.22*** 0.134 Z = 5.12*** 0.128 Z = 5.21***
Null Model Likelihood
= 808.1*** v
= 814.2*** v
= 792.7*** v
= 921.2*** v
***p < .001,
**p < .01,
*p < .05.
A total of 2,907 employees in 85 hospitals were included in mixed linear model. The models include controls for the ﬁxed effects of employees’
characteristics (education, gender, age, working year) and hospital characteristics (level and location); the manager group is used as comparison group
that is indicated in parentheses.
Unstructured variances and covariances.
2152 HSR: Health Services Research 46:6, Part II (December 2011)
Table 5: Logistic Analyses of the Relationship between Organizational Cul-
ture and Hospital Performance
LOS OVPPPD BDPPPD
wald Estimate v
wald Estimate v
Intercept 1 9.0045 3.9422* 0.8337 0.0347 0.5674 0.0205
Intercept 2 5.0465 1.3039 3.6244 0.6602 2.3011 0.3369
Social responsibility 3.7925 6.6219* 0.1207 0.0067 1.8535 2.0732
Sense of competition 1.7349 1.3888 0.9186 0.3930 0.2218 0.0287
1.1659 0.4781 1.3498 0.6540 1.8528 1.5572
Cooperation 3.0717 3.35 35 1.6674 1.0291 1.7539 1.4994
Cost control 0.9000 0.6917 2.3967 4.2677* 2.0297 3.8621*
3.0678 4.4796* 0.2678 0.0370 1.2197 0.7899
Empowerment 1.9174 1.5139 0.3719 0.0581 1.1494 0.6206
0.0647 0.0016 2.0458 1.6668 0.8527 0.3234
Customer focus 4.7267 6.8484** 2.8 921 2.8065 2.0387 1.7487
63.1026*** 68.8052*** 33.0794**
ROIOE Patient Satisfaction ESOHDR5Y
wald Estimate v
wald Estimate v
Intercept 1 4.0291 1.0046 4.6435 1.3159 29.2377 24.1139***
Intercept 2 1.2123 0.0921 7.5392 3.3615 25.0232 20.4407***
Social responsibility 0.3322 0.0614 0.943 8 0.5258 0.7156 0.252 4
Sense of competition 0.7220 0.3075 0.9472 0.5133 2.8728 3.4300
1.0923 0.5476 1.5352 1.0114 2.2137 1.6843
Cooperation 2.0494 2.0680 2.2671 2.3564 0.2639 0.0254
Cost control 2.2069 4.5433* 2.1136 4.1452* 1.5167 1.8540
Capability development 1.1415 0.7614 2.0279 2.2739 1.5978 1.3333
Empowerment 0.4277 0.0948 0.8007 0.2983 1.6559 1.0066
1.6039 1.1550 1.5152 1.0143 1.5034 0.8605
Customer focus 2.2064 2.0667 4.1336 6.3826* 1.2081 0.4305
31.3077** 30.7479** 69.9228***
Note. Models estimated using hospital-level multinomial logistic regressions.
***p < .001,
**p < .01,
*p < .05.
The models include controls for hospital level and location.
BDPPPD, bed days per physician per day; ESOHDR5Y, employee satisfaction with hospital
development in recent 5 years; LOS, length of stay; OVPPPD, outpatient visits per physician per
day; ROIOE, ratio of operational income over operational expense.
Hospital Culture and Hospital Performance 2153
Relationship between Hospital Culture and Hospital Performance
In this section, we discuss the extent to which the results of the performance
models were consistent with our hypothesized relationships (see Table 5).
As hypothesized, a culture emphasizing social responsibility was nega-
tively associated with LOS, but we found no evidence that a culture emphasiz-
ing competition was associated with more productive use of resources.
Among the consistency sub-dimensions, cost control produced ﬁndings
most consistent with our hypothesized relationships. Hospitals in which
employees perceived that the culture emphasized cost control were more prof-
itable and had higher rates of outpatient visits and BDPPPD, and also had
lower levels of patient satisfaction. We found no ev idence that employee satis-
faction was associated with either a culture of internal rules and regulations or
a culture of cooperation as hypothesized.
We found no evidence that the sub-dimensions of involvement were
associated with employee satisfaction as hypothesized .
As hypothesized, hospitals in which employees perceived the culture as
customer-focused had longer LOS. However, they also had lower patient sat-
isfaction, which was opposite the hypothesized effect and OVPPPD were not
lower as hypothesized.
Assessment of the Organizational Culture of Public Hospitals in China by Using the
How to promote effective organizational culture within health care institutions
is a management issue that transcends national boundaries. While there is
increasing interest in the relationship between organizational culture and
health service outcomes, many researchers have expressed concern over the
reliability and validity of the instruments measuring organizational culture
and the relevance of these instruments to the speciﬁc industry in which an
organization operates (Chatman and Jehn 1994; Gershon et al. 2004; Kralew-
ski et al. 2005). In our study, we developed an instrument (TOCA) with high
content validity by drawing on established models, which have been validated
in other cultural and/or industry contexts, and by adapting our instrument for
the speciﬁc conditions in China. As discussed earlier, the TOCA demon-
strated high internal reliability, relatively high construct validity, and some
degree of cross validity. The TOCA also had external validity because it was
2154 HSR: Health Services Research 46:6, Part II (December 2011)
developed by surveying a large and represe ntative sample of managers, physi-
cians, nurses, and other employees in the tertiary general hospitals, sec ond-
ary-level general hospitals, and community hospitals in China. Statistical tests
supported the measurement of culture at the hospital level by demonstrating
both homogeneity within hospitals and heterogeneity across hospitals in
employees’ perceptions of culture.
Organizational Culture in Public Hospitals in China
Our results indicate that the typical culture of public hospitals in China focuses
more on social responsibility, sense of competition, and sustainable develop-
ment, and less on capability development, team orientation, and empower-
ment. In addition, the culture of public hospitals, reﬂecting the culture of
China, emphasizes internal and centralized control. These results raise the
concern that public hospitals in China may not be prepared for the possibility
of dramatic changes in their external environments created by reform. Hospi-
tal managers may want to consider emphasizing cultures with greater involve-
ment and adaptability.
Different Perception of Organizational Culture by Managers and Non-Managers
Our study revealed that managers tended to give higher scores to each
measure of organizational culture in public hospitals in China. The ﬁnding
that the managers’ perceptions of organizational culture differ from those of
non-managers is consistent with research on organizational climate from the
United States (Singer et al. 2009). We believe that, because the managers had
more inﬂuence on the formation of organizational culture, they may be more
aware of the organizational culture than non-managers. The gap between
managers and non-managers in their assessment of the strength of organiza-
tion culture may be an explanation for the lack of evidence, in some cases, of a
relationship between culture and performance. To close the gap in the percep-
tions of organizational culture between managers and non-managers in public
hospitals in China, it is necessary to form more shared assumptions, values,
and norms between managers and non-managers, so that they have similar
bases from which to perceive and assess the organizational culture.
Relationship between Perceptions of Hospital Culture and Hospital Performance
Some dimensions of organizational culture were associated with hospital
performance. In many cases, these relationships were consistent with
Hospital Culture and Hospital Performance 2155
expectations. For example, hospitals with a strong culture of social responsi-
bility tended to have shorter LOS, perhaps responding to the demands of
medical societies and gove rnments at all levels in China to increase the efﬁ-
ciency of inpatient care. In contrast, hospitals with cultures emphasizing cus-
tomer focus had longer LOS despite the pressure to reduce the LOS from the
government and medical societies. Hospitals with a culture of cost control
appear to provide patient care more productively and to have a greater ﬁnan-
cial return, at the expense of patient satisfaction. In some cases, however, the
relationships we observed were seemingly contradictory. For example, patient
satisfaction was not higher in hospitals in which employees believed that the
culture was customer-focused. These types of contradictions, however, have
also been observed in other studies (Quinn and Rohrbaugh 1983).
More generally, these results demonstrate some of the conﬂicting inter-
ests facing public hospitals in China. For example, hospitals with cultures
of soc ial responsibility promote shorter hospital stays, while those with cus-
tomer-focused cultures provide longer stays. In addition, we ﬁnd no evidence
that hospitals are ﬁnancially rewarded for their efforts to be more customer-
focused. Finally, our results point to important tensions in employee satisfaction.
Neither a culture of empowerment nor a culture of capability development
tended to increase employee satisfaction with hospital development.
Predictive Validi ty
Predictive validity was strongest for the measure of the extent to which the
culture emphasized cost control. In this case, the empirical results supported
each of our hypothesized relationships and we did not ﬁnd statistically signiﬁ-
cant effects for the performance measures for which we did not develop
We found less support for the predictive validity of the measure of a cul-
tural emphasis on competition. A possible explanation for the lack of hypothe-
sized effects is that the measure of a culture of competition was characterized
by relatively low variation across hospitals, particularly relatively to the mean
(mean = 5.08, SD = 0.86). Perhaps the degree of variation across hospitals
was inadequate to identify the effect. It is also possible that a culture emphasiz-
ing hospital competition manifests itself along alternative dimensions of per-
formance, which we were unable to measure in our study. Further analysis of
the effects of this dimension of culture on hospital performance seems war-
2156 HSR: Health Services Research 46:6, Part II (December 2011)
We also found little support for the predictive validity of measures of cul-
ture, which, we hypothesized, would be associated with employee satisfaction.
In this case, we believe that the most likely explanation is related to the way in
which we measured employee satisfaction. In this study, employee satisfaction
was based on “hospital development in the last 5 years.” Measures more
directly related to job satisfaction may be more strongly associated with the
dimensions of organizational culture, which we examined. Alternatively, it is
possible that the dimensions of organization culture, which are associated with
employee satisfaction, differ between employees of Chinese public hospitals
and those in other settings.
We also note that our analysis included a limited number of hospital-
level control variables, although we did include the key characteristics of hos-
pital type and geographic locations, and the results may be affected by omitted
In the era of health care reform, public hospitals in China face strong pressure
to be more sensitive to socia l responsibility. It is likely that the public hospitals
will experience dramatic changes in the future. Our resul ts suggested that
organizational culture in public hospitals were ill-prepared to respond to the
changes and its environment. Hospital managers and health policy makers
should focus more on organizational culture and its implications for hospital
Joint Acknowledgment/Disclosure Statement: This research pr oject was funded by
a grant from the National Natural Science Foundation of China, grant number
70873023. We gratefully acknowledge the signiﬁcant contributions of the fol-
lowing members of the research project team: Jun Chao Zhang, Zhi Liu Tang,
Rong Wu, Jia Yan Huang, Ping Wang, Fei Bai, Yuan He, and Jia Bao Fu. The
authors thank all the colleagues above for their help in gathering information,
analyzing data, and sharing their views with us in the research. The authors
also acknowledge all the hospitals that provided assistance with data collection
in this research project. Bundorf was funded by a Fulbright fellowship from
the U.S. government.
Hospital Culture and Hospital Performance 2157
1. In Appendix SA4, we present results of 2-way ANOVA in which we test whether signif-
icant differences exist by hospital after controlling for employee job type. We also
test the effect of hospital and job type interaction. The results provide support for
the existence of signiﬁcance between hospital variation independent of employee
2. We calculate the response rate assuming that hospitals distributed the survey ques-
tionnaires to 100 randomly selected patients as instructed. The hospitals may have
distributed slightly more or fewer surveys.
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Additional supporting information may be found in the online version of this
Appendix SA1: Author Matrix.
Appendix SA2: Factor Labels and Statement Examples of the TOCA.
Appendix SA3: Structural Equation Model for Organizational Culture
in Public Hospitals.
Appendix SA4: Variance among Jobs and Hospitals by Two-way
Please note: Wiley-Blackwell is not responsible for the content or func-
tionality of any supporting materials supplied by the authors. Any queries
(other than missing material) should be directed to the corresponding author
for the article.
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