Success of horizontal strategic alliances in healthcare: A combined resource dependence and competitive advantage theory perspective

Erin Harrison Cannon, The University of Texas School of Public Health

Abstract

Changes in the external environment have brought financial and competitive pressures to hospitals, which have necessitated a need for innovative action to solidify the survival of the organization—one such action being a joint venture. Joint ventures can be stratified into two types, vertical and horizontal. The main difference between vertical and horizontal alliances stems from the level of patient care from which the parent firms originate. In vertical alliances, partner firms come from different levels of care, while horizontal alliances consist of member firms from the same level of care, usually in the form of direct competitors. Vertical alliances are well studied in the empirical literature, while there is a lack of understanding in the literature in regard to horizontal alliances. The purpose of this research was to examine what organizational factors are associated with success of horizontal alliances between hospitals. In order to quantify and predict which organizational factors would be associated with horizontal alliance success, the combined perspectives of resource dependence and competitive advantage theories were used. This research addressed a gap in the literature on horizontal alliances by providing a descriptive picture of the current landscape and creating a building block for a new area of research in the healthcare strategic alliances literature. The research study included a survey sent to 290 hospital executives who ran joint ventures (identified through the AHA dataset 2005–2011) to poll them on their perspectives related to their joint venture’s success or failure in regard to the accomplishment of original objectives and financial success. It was found that the prevalence of horizontal alliances in hospital joint ventures is less than 50% of the total hospital joint ventures in the marketplace. Additionally, it was also determined that the number of horizontal joint ventures in the market steadily increased after 2008. A descriptive picture was painted, showing the demographic differences between horizontal and vertical joint ventures. Finally, a series of five theory-driven hypotheses was tested to determine the success factors for horizontal joint ventures. ^

Subject Area

Biostatistics|Management|Public health

Recommended Citation

Cannon, Erin Harrison, "Success of horizontal strategic alliances in healthcare: A combined resource dependence and competitive advantage theory perspective" (2016). Texas Medical Center Dissertations (via ProQuest). AAI10126228.
http://digitalcommons.library.tmc.edu/dissertations/AAI10126228

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