As part of a larger study, the effect of market orientation on business performance in American hospitals was studied in an environment marked by changing demographics and pressure from third parties (i.e. government agencies and insurance companies) to lower costs. Also analyzed was the effect of ties with Health Maintenance Organizations (HMOs) on market orientation and business performance.
There were 160 responses from hospital executives located in 42 states. For those hospitals, our results indicate that market orientation had a positive effect on business performance, especially in terms of profit margin. The research also indicated that HMO affiliation had little effect on the surveyed hospitals in termn of market orientation and organizational performance.
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