THE EFFECTS OF FORMALIZATION ON DEPARTMENTS OF A MULTI‐HOSPITAL SYSTEM*

Abstract

ABSTRACT This study tests five propositions concerning the relationships between formalization, technological complexity and organizational performance. Propositions are based on Hage's axiomatic theory, but reinterpreted in terms of Lawrence and Dyer's readaptation hypothesis. Data were collected by questionnaire from 348 respondents from 92 units of an eight‐member government‐operated multi‐hospital system. Measures were of formalization, complexity, co‐ordination, climate for change, quality of care and morale. In general, more support was found for the readaptation hypothesis than for the traditional hypotheses of the Hage theory. In nursing units, formalization tended to have small, negative effects, and management decision‐making should probably aim to loosen up structures. In non‐nursing (clinical services) units, effects were greater and largely positive, suggesting the need for tightening up structures in order to promote readaptation.