Association for Public Policy Analysis & Management

Research Objective and Motivation. Public organizations commonly have multiple goals characterized by high levels of ambiguity. While goal ambiguity has been found to be associated with organizational characteristics and performance, few empirical studies investigate how it conditions the effect of management on organizational performance. This study addresses this gap by exploring how goal ambiguity influences the relationship between organizational management and performance in the context of public, nonprofit and for-profit US nursing homes. Nursing home care provides an interesting empirical context for this research. Past studies found that management strategies were critical in promoting long-term quality care. Additionally, nursing home administrators face multiple and conflicting goals such as service quality, efficiency, scope, and access.

Data and Methods. Our analysis considers three dimensions of management – sharing power, innovation, and external management – and tests how these management strategies interact with goal ambiguity and, thereby, affect service quality. The data on nursing home administrators’ assessments of goal ambiguity as well as management strategies come from a recent Nursing Home Administrator survey. We combine these data with archival performance indicators provided by the Centers for Medicare and Medicaid Services, a federal oversight agency. We use two measures of service quality in nursing homes: total number of health deficiencies and the overall 5-star quality ratings. We also utilize area socio-economic characteristics derived from the Area Health Resource Files (AHRF) of the US Bureau of Health Professionals. OLS with robust standard errors and state fixed effects, negative binomial models, and ordered logit with state fixed effects are used to examine the relationship between management, perceived goal ambiguity and two measures of service quality.

Findings and Implications. Our preliminary findings suggest that the effect of external management on service quality indeed varies significantly at different levels of goal ambiguity. Lower levels of goal ambiguity appear to enhance the effect of external management strategies on organizational performance. Our findings illuminate the role of organizational goals in performance management. They also suggest practical implications for managing nursing homes and setting health policies in the context of growing elderly population.