Melco Management Accounting Research
Discussion Paper Series
No.MDP2017-010
Inter-organizational Network Structures in Healthcare and Social
Welfare Organizations
December 2017
Kana Okada*
Research associate, Niigata Sangyo University,
Faculty of Economics
4730 Karuigawa, Kashiwazaki City, Niigata Prefecture, 945-1393, Japane-mail: kokada@econ.nsu.ac.jp
Yoshitaka Shirinashihama
Associate Professor, Yamagata University,
Faculty of Humanities and Social Sciences
1-4-12 Kojirakawa-machi, Yamagata City, 990-8560, Japan
Makoto Kuroki
Associate Professor, Yokohama City University,
International College of Arts and Sciences22-2 Seto, Kanazawa-ku, Yokohama City, 236-0027, Japan*Corresponding author

The Melco Foundation
Nagoya, Japan
Discussion Paper Series of the Melco Management Accounting Research, in order to promote
the study of management accounting, has published this unfinished paper onto the Web. Pleaseobtain the permission of the author when citing this paper.

Inter-organizational Network Structures in Healthcare and Social Welfare
Organizations

Kana Okada
Yoshitaka Shirinashihama
Makoto Kuroki

Abstract

This study aims to explore the management structure of lateral relationships inthe coordination of healthcare and social welfare service using Meer-Kooistra andScapens’ (2008; 2015) concept of minimal structure. To do so, we employ the caseof a Japanese start-up network for healthcare and social welfare services that uses
an IT information sharing system, the “Ni-Yon Net.” The case studies show thatfour structures—technical, social, economic, institutional—existed prior to theinitiation of the “Ni-Yon Net” project. They also highlight that, in addition toattaining profit targets (economic structure), a project’s socially significance (social
structure) is a key driver in investment decisions. This study also reveals thatcoordination within the healthcare and social welfare service industry is possible
under specific structures when government pressure is not strong. The findings
deepen the understanding of the role of management control in network settings.

Keywords: Network structure, Minimal structure, Healthcare and social welfare organizations,
Lateral relationship, Control mechanism

1.

Introduction

Organizations seek various types of coordination with other companies to stimulate
economic activities. Several studies have investigated control archetypes in inter-firm settings byclassifying the supplier–buyer relationship as market-based or hierarchical/bureaucratic and using
various alternative models (Caglio & Ditillo, 2008). However, an alternative model that cannot beclassified as market-based or hierarchical is the network-like structure (Håkansson & Lind, 2004,
2007). The abovementioned studies view inter-organizational relationships as embedded within abroader network, in which actors are not involved in a dyadic setting. In the context of new publicmanagement, research has focused on network-like structures in which new control structuresencourage cooperation (Kraus & Lindholm, 2011; Newberry & Barnett, 2001).
However, the mechanism of management control systems in network settings remains
insufficiently explored. While some studies investigate management control systems in network
settings, they tend to focus on dyadic inter-organizational relationships (Caglio & Ditillo, 2008),
whereas in reality, managerial issues and the role of accounting in network settings are more
complex than dyadic relationships. Thus, further research that accounts for multiple parties, noninterested parties, or third parties (Lind & Thrane, 2010) is warranted.
Thus, in this study, we investigate inter-organizational accounting in a network by focusing
on the management structure of lateral relationships (Van der Meer-Kooist & Scapens, 2008).
More specifically, we examine healthcare and social welfare service networks built voluntarily inOsaka by private organizations in the district.
The objective is to disentangle complex cooperative relationships and explain the role ofmanagement accounting in the emergence of networks that face government pressure or indirect
effects of third parties. In other words, we explore structures that enable cooperation in a lateralrelationship embedded in a network. Further, we draw on minimal structures (Kamoche & Cunha,
2001; Van der Meer-Kooistra & Scapens, 2008; 2015) to demonstrate the reciprocal working offour structures when a corporation joins a network.
This study makes the following two contributions to the inter-organizational accounting
literature. First, we investigate complex networks that include multiple actors. We contribute to thebody of research on governance structure in complex networks (Chua & Mahama, 2007;Håkansson & Lind, 2004; Mouritsen & Thrane, 2006) by elaborating on the function of structuresin lateral relationships.
Second, we discuss cooperation in the context of new public management and healthcare
reforms. Little is known about the critical role of management accounting and certain mechanisms
in facilitating cooperation between new public management and healthcare reform. An exception is
Grafton et al. (2011), although they use government intervention as a precondition for cooperation.

1

By contrast, we examine a case study in which government pressure is limited and explore theeffects of management accounting and governance structure on voluntary cooperation among
healthcare institutions.
The remainder of this paper is structured as follows. Section 2 reviews the literature on interorganizational control in network settings in the public sector. Section 3 introduces our theoreticalframework, and Section 4 presents the research methods. Section 5 introduces the case study, while
Section 6 discusses the data and theoretical contributions. Section 7 presents concluding remarks,
followed by this study’s limitations and suggestions for future research.

2.

Literature Review

This study is positioned at the crossroads of two research strands: studies on network settings
and those focusing on cooperation or coordination among public organizations. In this section, we
review each stream and clarify the focus of the present analysis.

2. 1

Network settings
Traditionally, management accounting has aimed to control the intra-organizational aspectsof business and been used in combination with cost calculations for make-or-buy decisions.
Recently, however, new types of relationships such as strategic alliances or long-term close
relationships with suppliers have been observed. To explain the elaborate relationships with
suppliers, many studies have highlighted the importance of relationships between two firms. These
relationships can be characterized as dyadic relationships. According to Caglio and Ditilo (2008, p.
878), the relationship “between two clearly identified firms, e. g., the assembler and subcontractor‘A’” or “a generic relationship between a buyer and supplier” can be deemed dyadic. A majority ofinter-organizational studies are based on this dyadic relationship (Håkansson & Lind, 2007) andmany of them clarify important issues (Dekker, 2003, 2004; Gietzman, 1996; Ittner et al., 1999).
Dyadic relationships, however, are unable to discuss the complex situation involving
multiple competitive buyers, suppliers, regulators, and governments. As a result, some researchers
call for analyses at the network level (Chua & Mahama, 2007; Coad & Cullen, 2006; Cooper &Slagmulder, 2004; Kajuter & Kulmala, 2005; Kastberg, 2014; Mouritsen & Thrane, 2006; Thrane& Hald, 2006).

2

The definition of network structure remains unclear. Some studies see it from a theoreticalstance, while others view network settings as objectives. The former comprises studies that adopt
the industrial network approach (Håkansson, 1987; Håkansson & Lind, 2004; Håkansson &Snehota, 1995). By contrast, we view network settings within the sphere of objectives. Lind andThrane (2010) classify inter-organizational settings into multiple categories, from single
relationships to complex networks1.
In exploring networks from an objectives standpoint, the first type of network is represented
by firms that manage several counterparts in one direction (Thrane & Hald, 2006). Cooper andSlagmulder (2004) focus on a case in which focal firms introduce inter-organizational costmanagement within supplier networks and use inter-organizational cost management as a means to
reduce information asymmetry. The difference between the contexts of the relationships with eachsupplier affects the characteristics of the contract. On the other hand, Lind and Stromsten (2006)
focus on the relationship between the focal company and its customers. A focal company changes
its accounting techniques depending on its technical and organizational interfaces with its
customers (Lind & Stromsten, 2006). For example, in a customer relationship with high technicaland organizational interfaces, the focal company employs lifetime profitability analyses to evaluate
performance because long-term development is important for the relationship (Lind & Stromsten,2006).
Although the aforementioned studies emphasize one-to-many relationships, they capture theviewpoint of only one firm, that is, a buyer or supplier. Another type is a relationship in which one
focal firm has simultaneous reciprocal relationships with multiple counterparts. Related studies
reveal how a focal firm manages both upstream and downstream interactions. For example, Thraneand Hald (2006) assume that firms manage different product supply chains. In this case, anaccounting protocol such as KPIs is used to coordinate both ends. In other situations, the accounting
system functions as a mediator. Thrane and Hald (2006) focus on the constructive perspective ofinter-organizational controls and highlight the function of accounting as both an integrated andfragmented entity within the supply chain. In addition, they describe the boundary between
organizations as fluid and not necessarily coinciding with legal boundaries. Carlsson-Wall et al.
(2009) view the interactions between a supplier and focal firm through the process of target costingfor two components (i.e., motors and gears). In this case, a problem in one component can induce

1

While Thrane and Hald (2010) suggest five types of situations (one relationship, serial relationshipin a chain, several counterparts in one direction, multiple counterparts in two directions, andcomplex systems or networks including third parties such as competitors) in network settings, ourresearch focuses on three types.

3the development of a second component by the firm, because both components are interrelated.In
terms of problem solving, this situation describes a control pattern that cannot be explained using ahierarchical structure.
The two types of situations discussed above are considered network settings with contractors.
However, a firm must manage interested parties that are not limited to those creating contracts.
Thus, a comprehensive research is one that accounts for various actors such as competitors, alliancepartners, and regulators (Lind & Thrane, 2010). Håkansson and Lind (2004) define the relationshipbetween a partner and another supplier as a strategic alliance in which both are responsible forcomponent specifications. Chua and Mahama (2007) describe a network constructed from many
actors such as suppliers or other companies that own shares in the focal company (e. g., Australian
Research Council). Chua and Mahama (2007) follow the transformation of a network using actor
network theory (Latour, 1987) to show that accounting is not as important when a network isformed. However, when changing a network, accounting stimulates actors’ behavior through themobilization of accounting numbers, prices, or the telephone-switching system. Kastberg (2014)
also discusses the networking of various actors and criticizes the mainstream literature for focusing
on the mediating role of accounting in an inter-organizational setting. Kastberg also presents analternate perspective of accounting as a destabilizing device.
As demonstrated, network settings can be complicated and this is particularly true given theinterdependence among stakeholders. Some research has pointed to the need for greater emphaseson the network formation process (Chua & Mahama, 2007; Kastberg, 2014). Therefore, our study
focuses on complex systems or networks.

2. 2

Network setting coordination in new public management
Inter-organizational coordination was first discussed in the new public management

literature over the past ten years. Related studies suggest that government intervention orcommission is a strong driver that encourages coordination between organizations. For example,
the health sector reforms in Victoria (Grafton et al., 2011), modernization of government agenda(Kurunmaki & Miller, 2006), and national healthcare (Kurunmaki & Miller, 2011) are led byauthorities and are not voluntary. These studies state that governments or regulators play a criticalrole when introducing accounting methods. Grafton et al. (2011) view inter-organizational
relationships with a network setting and consider integration as an “effective collaboration, among
diverse organizational entities” and that a “range of structural and control configuration could
reflect effective collaboration” (p. 244). Further, the authors explain the integration of core clinical4

service activities using Oliver’s (1991) frameworks and the differences in reactions whenorganizations are mandated to form a network.
Kurunmaki and Miller (2011) discuss the influence of interventions stipulated in the 1999
Health Act. They focus on the articulation of a new policy to create partnerships or stimulate
cooperation among organizations using the “flexibilities” of lead commissions, integrated
provisions, and pooled budgets. In addition, the authors characterize inter-organizational
relationships and management control as a hybrid organizational practice or process that emerges
from government intervention. However, this does not mean they overlook local control practices.
The policy is operationalized through management control practices, which they call “mediating
instruments,” within organizational and professional boundaries. Kurunmaki and Miller (2011)
suggest that political and local viewpoints are crucial to understanding organizational collaborations
and management control practices. The interest of political ideals frames a new approach toresource allocation and management. However, these management control systems areoperationalized in a local setting.
Carlsson-Wall et al. (2011) focus on local cooperation between home help units andhealthcare centers and show that an informal hierarchy based on professional knowledge is createdthrough inter-organizational cooperation. They conclude that cooperation can be encouraged
through social or personal control in a local context.
In sum, previous studies characterize coordination between different professionalorganizations in a public sector-specific context and emphasize the role of the government as amediator. This is because solving conflicts between various professional organizations entails theobligation of cooperation imposed by the government.
On the other hand, voluntary cooperation between healthcare and social care institutions is
yet to be thoroughly researched (i.e., when there is less government pressure). In Japan, there isrelatively limited government pressure and one reason for this is that many Japanese hospitals are
privately owned. In addition, Japan’s government policies do not force organizations to cooperate.
For instance, the government’s community-based integrated care system aims to efficiently
integrate hospital care, home healthcare, and social care; however, the government does notinterfere to the extent of forcing partners to cooperate. Thus, Japan is a good case to examine thetype of control that drives and encourages voluntary coordination. Given the absence of strong
government interventions, we examine lateral relationships among multiple organizations.

53.

Conceptual Framework

Understandably, the scope of control should not be constrained to the narrow view of interorganizational control, which is used as an administrative tool by managers to influence behavior ofsubordinators (Carlsson-Wall et al., 2011). When discussing inter-organizational relationships, it isimportant to involve both non-profit and public sectors because many of these organizations havenorms or values that are not observed in private sectors relationships, and non-accounting
professions managed by norms, values, and self-control (Abernethy and Stoelwinder, 1995;
Carlsson-Wall et al., 2011; Llewellyn, 1998). Adopting these assumptions, we explore theapplication of the holistic structure of control and minimal structure (Kamoche & Cunha, 2001;
Meer-Kooistra & Scapens, 2008, 2011).
3. 1

Lateral relationshipStudies have suggested that the configuration of accounting and context encouragecoordination or information sharing among organizations. Thrane and Hald (2006) note that therelationship between context or boundary and accounting is inter-related and complementary. In
addition, they state that “structural set-up determines the spaces where symbolic alliances form andaccounting gradually emerges as an actor that redefines supply field structures and boundaries” (p.
312). Thus, it is useful to not distinguish between the underlying context and accounting andconsider both within the same dimension, which is governance structure.
To understand inter-organizational governance structure within a lateral relationship, we
adopt the concept of minimal structure (Kamoche & Cunha, 2001; Van der Meer-Kooistra &Scapens, 2008; 2015). Based on Van der Meer-Kooistra and Scapens’ (2008) definition, we definelateral relationships as being characterized by interdependence, complexity and continuous change
and require forms of governance that emphasize exchange of knowledge, cooperation as well ascompetition, flexibility, standardization, and shifts in the leadership role.
We observe lateral relationships in the context of the design and control of networks formed
around new public management and healthcare reform. For instance, various professionalorganizations are required to cooperate under the government policy to integrate healthcare andsocial care. Under these circumstances, the configuration of multiple governance structure enables
certain cooperative practices.

6

3. 2

Minimal structure
Meer-Kooistra and Scapens (2008) suggested the notion of minimal structure on the basis of

Kamoche and Cunha (2001)2, who exploit the concept to explain the process of new productdevelopment within a firm. Using minimal regulations, arrangement or creative improvisation
becomes possible. Creativity occurs within a minimal structure when there is sufficient room tomaneuver. We adopt the concept of minimal structure because this is the one that has been
proposed in the context of lateral relationships. Ahrens and Chapman (2004) discuss how tightnessof control creates room for flexible activities by dividing controls into coercive and enabling control.
However, both types assume a hierarchical relationship and thus, they differ from minimal
structures.
Kamoche and Cunha (2001) present two structures as minimal structures, although they doso in an inter-firm setting. Meer-Kooistra and Scapens (2008, 2015) expand this notion to lateralrelationships and revise minimal structures to include four structures (technical, social, economic,
institutional structure). They add economic and institutional structures to explain relationships thattranscend the boundaries of an organization.
Table 1 lists the functions of the minimal structures described in Meer-Kooistra and Scapens(2008). Social structures refer to behavioral norms established by communicating or sharing theorganization’s cultural behaviors. Trust and integrity emerge from teamwork with these structures,
which also include a tacit perspective.
A technical structure governs the technical aspects of products and production techniques(Meer-Kooistra & Scapens, 2008) and information sharing through information systems such as IT
devices. Basic knowledge between the members of cooperative organizations creates a technicalstructure.
An economic structure is the types of transaction determined by organizations; for example,
delivery and payment are structures that regulate relationships between organizations. These
structures also entail the measuring of performance and contributions.
An institutional structure denotes the rules and regulations that members share and adhere to.
According to Meer-Kooistra and Scapens (2008), these regulations include those established by thegovernment as well as organizations, such as contracts and conditions of employment. MeerKooistra and Scapens (2008) view institutional structures differently from the notion of institutions
discussed in institutional theory. Institutional structures are simply “regulations and rules (both2

Kamoche and Cunha (2001) were inspired by jazz improvisations, which include visible
structures, such as a melody, harmony, rhythm, theme, or interval, and non-visible ones, that is, callresponse, eye contact, or jamming.

7

internal as well as external to the organization) which define how transactions and relationshipshould be structured” (Meer-Kooistra & Scapens, 2008, p. 374). In addition, Meer-Kooistra andScapens (2015) use economic and institutional structures to define the sphere within which a
product process occurs while social and technical structure describes day-to-day operations.

Table 1. Overview of Elements in the Four Structures (Meer-Kooistra & Scapens,
2008)
Economic Structure

Institutional Structure

Social Structure

Technical Structure

Nature of market:

Law and governmental

Behavioral norms andBasic businessvolatility and extent ofregulation

valuesknowledge

Visibility andOther institutional

Communication andTechnologicalmeasurability of

regulations (e.g., ISO)

networking

knowledge about

competition

performance andproducts andefficiency

processes

Characteristics ofType of contract

transactions: e.g.,

Teamwork andEmployees’

information sharing

technical

quality, delivery, andcompetencies

payment
Characteristics ofOrganizational

physical and non-arrangements

Trust and integrity

Information systems
and information-

physical asset

processing

investments

techniques

Frequency and volume

Formal nature ofof transactions

relationship

Leadership

Availableaccounting
procedures andtechniques

Length of relationship

Arrangement forindividual andorganizational learning8In this study, we adopt the concept of minimal structure to explain the governance structurethat encourages cooperation within a network setting; in particular, we use the four structures toshow that groups embedded in a network maintain order, correspond flexibly, and share
information.

4.

MethodWe use a single case study method (Yin, 1989) to clarify the structure of network settings.
We do so for two reasons: first, there are a limited number of cases in Japan that can be used toconstruct network settings for healthcare and social welfare services because most service providers
are privately owned organizations. Second, a single case study is best suited to clarify the structureof network settings. More specifically, a single case study allows us to account for the numerous
aspects in a network setting and the many stakeholders who generally have ulterior motives.
We focus on a healthcare and social welfare service network in Nishiyodogawa-ku inJapan’s Osaka district. The area facilitates a shared, electronic information system that maintains
health records (“Ni-Yon Net”) and is used for healthcare services. The network consists of a large
hospital (Chibune General Hospital of Aijinkai Healthcare Corporation), a medical association3 in
Nishiyodogawa-ku, several health clinics, home-visit nursing stations, and homecare workers’
offices.
The number of elderly people in Japan is expected to peak by 2025 and this prompted theJapanese government to set up the community-based integrated care system. This reform has two
main objectives: improve sustainability by revising the remuneration for care-providing facilities
and integrate the establishment of a new service system (Figure 1). These goals are expected to
produce an efficient and effective healthcare and social welfare service network in each district.
However, unlike in Europe, the healthcare and social welfare services in Japan are mainly provided
by private non-profit organizations. Thus, the networks are voluntarily built by privateorganizations in each distinct.

3

A medical association is a professional organization representing a physician.

9Figure 1. Community-based Integrated Care System by 2025

Source: MHLW (2014) report on the study group for Japan’s International Contribution to “Active
Aging”

Given these conditions, Chibune General Hospital plays an important role in the
Nishiyodogawa-ku network. The Hospital decided to invest in the voluntary provision of an
improved shared system for the region. This unique system is called “Ni-Yon Net.” A member on
the board of directors of Aijinkai Healthcare Corporation, who is also the vice deputy chairman of a
medical association in Nishiyodogawa-ku and the department director of internal medicine at
Chibune General Hospital, mainly facilitated the shared, electronic health record system andcreated “Ni-Yon Net,” which was later used by other organizations in the Nishiyodogawa-ku
network.
We conducted a semi-structured interview with individuals associated with the
Nishiyodogawa-ku network and the “Ni-Yon Net” project (e.g., board of directors of Aijinkai
Healthcare Corporation or persons in charge of the network). The objective of the interview was toobtain an overview of the roles of the four structures in the network. A total of four interviews (witheight persons) were conducted from July 2015 to February 2016 (see Appendix). The average
length of each interview was 2 hours. All interviews were recorded and transcribed. We also
analyzed qualitative and quantitative documents related to the “Ni-Yon Net.”

10

5.

Case Study

An analysis of the interview results reveals that the four structures (economic, institutional,social, and technical) affected the construction of the “Ni-Yon Net.” In this section, we first
introduce the management control systems of Aijinkai Healthcare Corporation, of which Chibune
General Hospital, a main player in the creation of “Ni-Yon Net,” is a member. In addition, we
describe the effect of the management control systems on the behavior of Chibune General
Hospital. Second, we discuss a previous version of an inter-organizational ICT system at
Nishiyodogawa-ku, “a. i. net”. Finally, we describe the creation process for the “Ni-Yon Net,”
which is based on a. i. net. More specifically, we explore the decision-making process for the NiYon Net-related investment, pressure from the Osaka-fu medical association on the
Nishiyodogawa-ku medical association, and mutual trust between Chibune General Hospital andNishiyodogawa-ku medical association. Notably, there are no acute care hospitals in
Nishiyodogawa-ku, except Chibune General Hospital.

5. 1Management control systems in Aijinkai Healthcare Corporation4
Aijinkai has a rigid budgeting system. Monthly director meetings (Riji-kai) are held toreview the profitability of departments and wards. One of the directors highlighted the importanceof having a profit target since Aijinkai is a private hospital and the significance of achieving thistarget is understood throughout the hospital. For instance, a staff member mentioned that even if
one department does not meet this profit target, all other departments and the medical corporation
as a whole would not receive new medical equipment.
Aijinkai also has an investment decision-making system (capital budgeting system), where
all investment alternatives must be subject to two reviews: first, six managing directors (Jyomu-kai)
discuss the profitability, cash flow, and qualitative importance of alternatives. Once the alternatives
are approved, a meeting is held with more than 40 directors (Riji-kai). Following this two-step
review, each hospital can invest in the alternatives. Even if hospitals have enough money, they needpermission from members in the two meetings if the investment requires more than 3 million yen.

4

In addition, Aijinkai has a unique performance management system whose management is basedon objectives and quality control activities. However, the system is not related to the creation of“Ni-Yon Net,” and thus, we do not describe it in detail.

11

5. 2.

“a. i. net:”” home medical care coordination using an ICT system
Chibune General Hospital has provided open access to their electronic medical records forclinics
clinics, visiting nurse stations,
stations and other hospitals located in Nishiyodogawa
Nishiyodogawa-ku
ku and surrounding
regions (Figure 2).
2) They initiated this program for two reasons.
reasons First, the Hospital wanted toincrease patient referrals
referrals from other medical institutions
institutions. By providing access to their electronic
medical records
records, other institutions were able to keep track of the medical care their patients received
after being referred to Chibune General Hospital
Hospital. This information sharing was expected tofacilitate coordination between Chibune General Hospital and other medical institutions and widen
the preference for the Hospital among physicians of clinics and other medical practitioners.
practitioners
Figure 2.
2 Illustration
llustration of Coordination
oordination in “aa. i. net”

Second, Chibune General Hospital wanted to be certified
ed as a hospital that supports
community healthcare cooperation (Chiiki(Chiiki-iryou
iryou Shien Byoin).
Byoin The Japanese medical insurance
system reimburses all types of medical care and this amount increases if a hospital satisfies certain
conditions
conditions,, for example, a high referral rate,
rate, and is certified.
certified

12

Following the establishment of “a. i. net” in 2011, Chibune General Hospital’s referral rateincreased from 30% to 50%. However, it was observed that “a. i. net” had not sufficiently
penetrated adjacent medical institutions. This is because “a. i. net” was a one-to-many network (i.e.,
Chibune General Hospital to other medical institutions) and its information flow is one way; forexample, a medical institution cannot electronically share its medical records of patients with
Chibune General Hospital and other medical institutions. Because of this one-way information
sharing, the coordination between Chibune General Hospital and other institutions remained
limited. In sum, the merit of “a. i. net” was not sufficiently large for certain medical institutions andthus, it was unable to penetrate as many adjacent medical institutions as expected.

5. 3.

“Ni-Yon Net:” reciprocal information sharing and coordination“Ni-Yon Net” is based on “a. i. net,” but it has additional functions (Figure 3). “Ni-Yon Net”

is a many-to-many network and has reciprocal information flow. Under this system, Chibune
General Hospital lends Apple iPads to clinics and home nursing stations; physicians and nurses canthen access the Hospital’s electronic health records from anywhere (including a patient’s home)using the iPad application. In addition, they can use the application to record the medical services
they provide to patients and their health conditions as well as upload pictures and medical
documents of the patients.

13

Figure 3.
3 Illustration
llustration of Coordination
oordination in “Ni
Ni-Yon Net””

According to the director of Chibune General Hospital,
Hospital physicians in hospitals and clinics
and nurses in home nursing stations can also use the “Ni
Ni-Yon Net” to coordinate their home visits,
visitwhich can be rather challenging without an interinter-organizationalorganizational ICT system.
system In addition,
addition a private
cliniciannician mentioned that the exchange of patient information using “Ni-Yon Net”
N contributes toimproved care quality.
quality

5. 4.

Construction
onstruction process of the “Ni-Yon
Yon Net”
Chibune General Hospital set up “Ni-Yon Net”
N for several reasons.
reasons One of the key

objectives of “a. i.. net,” and thus, “Ni-Yon
Yon Net,” is to increase the number of patients and referral
rates. To reinforce this goal, the director improved the functioning of the ICT network.
network In fact, a

14

private clinician mentioned that, because of “Ni-Yon Net,” he preferred referring patients to the
Chibune General Hospital.
The Japanese Ministry of Health, Labour and Welfare promotes home healthcare andsubsidized projects that encourage cooperation within home healthcare institutions in eachprefecture. As a result, the Osaka-fu medical association stipulated the implementation of homehealthcare-related projects in every district medical association. However, the Nishiyodogawa-ku
medical association was lagging behind in terms of home healthcare projects and thus, facedpressure from the Osaka-fu medical association 5 .Given this pressure, the former chairman of
Nishiyodogawa-ku medical association suggested the utilization of the subsidy from the Osaka
Prefecture to improve “a. i. net” and encourage cooperation within the local healthcare sector,
which triggered the launch of “Ni-Yon Net.”
However, Osaka Prefecture’s subsidy, which was set up for the development of an ICT
system to support home healthcare cooperation, amounted to 20 million yen, whereas theinvestment for “Ni-Yon Net” amounted to 40 million yen. This meant that the Chibune General
Hospital had to invest 20 million yen. Thus, the department director of the Chibune General
Hospital, who is also the vice deputy chairman of the Nishiyodogawa-ku medical association anddirector of Aijinkai Healthcare Corporation, became involved in the decision-making process
regarding the investment in “Ni-Yon Net.” Since the investment amount was more than 3 million
yen, the director was required to convince the managing directors and other directors of thisinvestment.
In the meeting of managing directors (Jyomu-kai), the decision to invest in the project wasapproved without objection. In addition to increasing the referral rate, the project was consideredsocially significant as it involved local medical institutions and the medical association. This, andthe approval by Osaka Prefecture through the grant of the subsidy, consolidated Chibune General
Hospital’s position in Nishiyodogawa-ku and enhanced its reputation.
In June 2015, “Ni-Yon Net” was successfully initiated and seven months later, 21 medical
institutions in Nishiyodogawa-ku joined the network (one hospital, 18 clinics, and two homenursing stations). During this phase, the system reported 20 physicians and 42 nurses as users who
provided information on a total of 62 patients with their consent.
“Ni-Yon Net” has been successful in Nishiyodogawa-ku thus far. According to the director,
other districts are considering the introduction of an inter-organizational ICT network; however,many of them are yet to introduce similar systems owing to severe competition within districts and
5

The Nishiyodogawa-ku medical association initiated two other programs related to homehealthcare: one promotes inter-professional collaboration and the other examines the distribution ofsocial resources in the district.

15

difficulties in achieving cooperation from medical associations. Moreover, the competition would
lead to other hospitals proposing countermeasures in response to an inter-organizational ICT
network. These factors render it increasingly difficult for hospitals to construct inter-organizational
networks and local medical associations to cooperate with certain hospitals.
On the other hand, there are no acute care hospitals in Nishiyodogawa-ku, except the
Chibune General Hospital. Thus, when Chibune General Hospital initiated “Ni-Yon Net,” otherhospitals did not propose countermeasures. In addition, the Hospital’s physicians have served as
directors of the Nishiyodogawa-ku medical association for many years and thus, both entities wereable to establish a cooperative relationship based on mutual trust.

6.

Discussion

According to Meer-Kooistra and Scapens (2008), a governance approach for lateralrelationships is based on minimal structures that are composed of economic, institutional, social,
and technical structures. On the one hand, the minimal structure regulates lateral relationships andon the other hand, it leaves room for maneuverability, thus allowing organizations to respond to
new situations. In the case of “Ni-Yon Net,” minimal structures affect new lateral relationships
within healthcare institutions in Nishiyodogawa-ku.
More specifically, economic structures affected Aijinkai’s decision-making process forinvestments in the ICT network. Given the high priority given to attaining a profit target, “Ni-Yon
Net” (formerly “a. i. net”) was expected to increase the number of patients and referrals, which inturn would expand revenue. A high referral rate also allows hospitals to obtain a certification forsupporting community healthcare cooperation.
Next, effects of the social structure on the investment process were observed. During ameeting of managing directors (Jyomu-kai), the directors highlighted the social significance of theinvestment and promoting cooperation in home healthcare services. As a result, the decision toinvest in this system was made with no objection. Further, the social structure partly contributed tothe success of constructing “Ni-Yon Net.” The trust relationship between the Chibune General
Hospital and the Nishiyodogawa-ku medical association helped establish a cooperative relationshipbetween each other.
Institutional constraints motivated Chibune General Hospital to set up “Ni-Yon Net.” The
medical association in Osaka Prefecture put pressure on the Nishiyodogawa-ku medical association
to initiate home healthcare projects. Osaka Prefecture also introduced a subsidy to develop an ICT
system that facilitated home healthcare cooperation. The vice deputy chairman of Nishiyodogawa-16

ku medical association, who was also the department director of Chibune General Hospital,
decided to utilize this subsidy to enhance the functions of “a. i. net.” Finally, technical structures,that is, electronic medical records, a connection server, iPads, and the application software
facilitated inter-organizational information flow and coordination.
These structures as a whole contributed to the establishments of “Ni-Yon Net.” Previous
research (Meer-Kooistra & Scapens, 2015) on the Phenom (electron microscope) project showsthat the four structures played a role during the product development process: institutional structures
provided the context for cooperation, economic and technical structures were established at the startof the project, and social structures (mutual reliance among project team members) were developed
during the development stages. By contrast, in our research, the four structures existed before thelaunch of project and provided the context for coordination. In addition, this research demonstrates
the effect of economic and social structures on investment-related decision-making in a non-profit
organization. That is, a decision-making process in a network of for-profit organizations (Miller &O’Leary, 2005) is mainly driven by the economic structure, whereas in non-profit organizations,investments are economically and socially motivated.

7.

Conclusions

This study analyzed the structures that promote inter-organizational coordination using aminimal structures framework. In particular, we explored “Ni-Yon Net,” an inter-organizational
home healthcare network based on economic, institutional, social, and technical structures. This
research, to the best of our knowledge, is the first to address lateral coordination, thus contributing
to the inter-organizational management accounting literature. We showed that minimal structures
provide the context for lateral coordination and play various roles in those presented in previous
research (e.g., Meer-Kooistra & Scapens, 2015). In addition, studies on decision making in forprofit inter-organizational networks highlight that economic structures are the main driving force ofinvestment. By contrast, this research shows that in non-profit organizations, both economic andsocial structures affect the decision-making process.
Despite its contributions, this study is subject to certain limitations. First, the results anddiscussion presented here are based on Aijinkai’s staff members and private clinician and do notinclude the viewpoints of nurses in home nursing stations. Future research should, therefore,
interview nurses from home nursing stations to provide holistic insights.
Inter-organizational ICT networks in the healthcare sector are likely spread throughout Japanand other countries, particularly in the public sector (Barretta & Busco, 2011). In other words, there17

is considerable potential for research on lateral relationships in home healthcare and the roles ofminimal structures in these networks. The current study serves as a starting point for such efforts.

Acknowledgements
The authors thanks staff at Aijinkai Healthcare Corporation for accepting being interviewed
and allowing data use.

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Appendix

Table A1. Summary of Interviews
Role

Board of director

Organization

Front Office in Aijinkai Healthcare

DateTime (hours)

July 17, 2015

Corporation
Department chief
Board of director

1. 0

Front Office in Aijinkai Healthcare

August 26, 2015

Corporation
Department chief

2. 5

Vice deputy chairman andMedical Association in Nishiyodogawa-ku

department director ofand Chibune General Hospital

January 6, 2016

internal medicine
Aiwakai Social Welfare Corporation
Department chief
Director

2. 5

Tai Internal Medicine Clinic

Total

February 16, 2016

2. 0
8. 0

21