Organisational failure and turnaround process in NHS hospital trusts.

Since 1997, public services improvement has been at the centre of the national policy
agenda in the UK. The greater visibility of poor quality and performance has led to an
increasing interest among policy makers, health care managers and clinicians in
understanding the processes by which underperforming organisations can
'turnaround' their situation. The aim of this thesis is to contribute to a wider
understanding of organisational failure and turnaround processes in the public sector,
particularly health care organisations.
A conceptualisation was carried out concerning organisational failure and the
turnaround process in the for-profit sector in relation to a range of theoretical
frameworks and models. As a result, the 'stages' theory was selected as a conceptual
framework with which to organise and interpret the findings of the empirical part of
the study.
A comprehensive review was conducted to examine the findings of empirical studies
regarding the processes of organisational failure and turnaround across a range of
public services. The review showed insufficient empirical studies in this field in the
health sector. The review concluded that a range of both external and internal factors
contributed to organisational failure and various triggers were identified, which
initiated the process of change. A range of turnaround interventions were identified
including reorganisation, retrenchment and repositioning strategies.
A qualitative case study of a purposefully sampled hospital Trust, involving semistructured
interviews (57 interviewees from different organisations) and a review of
background documents were carried out to explore the symptoms and causes of
organisational failure, factors that triggered the process of change, and the perceived
effectiveness of a variety of turnaround interventions. Symptoms of organisational
performance failure were identified, including financial deficit, lack of good external
relationships, inability to meet core targets, lack of clear management systems and
low staff morale. These markers had not been taken seriously by the previous senior
management team. Symptoms of failure reflected the presence of secondary and
primary causes of failure. Poor managerial leadership, poor financial control and
performance management, lack of an open culture, distraction by two large projects
and the lack of clinician engagement were perceived as internal causes of failure and
the high level of policy changes within the NHS as the key external cause. The level of
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deprivation in the area was also thought to have had a negative impact on
performance. The replacement of the Chief Executive Officer and executive members
of the Board and the public reporting of poor performance and external investigation
reports were perceived as the main triggers for change. The Trust's managers were
able to develop and implement their action plan and turnaround performance without
receiving direct intervention from external organisations. The interventions deployed
within the Trust may be classified under three key categories: i) Reorganisation
(replacement of the Chief Executive Officer and executive members of the board,
internal restructuring and increased involvement of clinical staff in the management
of the organisation, and an increased focus on performance management); ii)
Retrenchment which aimed to stabilise the crisis situation using tight financial
control and focus on main performance targets); iii) Repositioning strategies which
aimed to sustain performance improvement by attempting to change organisational
culture, better stakeholder management and external relationship and developing
new vision. Several unintended consequences of turnaround interventions (e.g.
distortions of clinical priorities and presence of stress and anxiety among staff) were
identified.
The findings of this study make a significant contribution to our understanding of
organisational failure and the turnaround processes and reinforce and expand those
of recent studies in the public sector, particularly in health care.