ORGANIZATIONAL SLACK 

RESOURCES AND QUALITY OF DAVID C MOHR PHD DAVID C

. MOHR

, PHD

January 18, 2012HERC Health Economics Seminar
Authors

2

 David C. Mohr, PhD1,2 Gary Young, JD, PhD1,3 y g, , 1 Center for Organization, Leadership and Manag

Research,p , De artment of Veterans Affairs, VA Bos

Healthcare System, Boston, MA

 2 Dep y g, artment of Health Policy and Management, 

University School of Public Health, Boston, MA

 3 Northeastern University y Center for Health Policy 

Healthcare Research, Boston, MA
Acknowledgements

3

 Based on work supported by the Department o

Affairs, HSR&D for IIR 05-221

 Justin Benzer James Burgess Martin Charns Sharon Goodman Amresh Hanchate Michael Mayo

-Smith
Disclaimer

4

 The views expressed in this article are those of 

and do not necessarily reflect the position or pD f V Aff i h U i d Department of Veterans Affairs or the United government.

 N f l fl f No financial conflicts of interest
Interaction question

5

 Which best describes you?

 Researcher/Investigator Programmer Administration/p y olic

y maker

 Clinical Other
Objective

6

 Audience members will become familiar w

 Organizational slack: definition, theory, and 

measurement

 Debate around organizational slack Research on organizational slack Application of concept to VA primary care Considerations for extending understanding 

and potential application to own work
7 Organizational slack over
Organizational slack resource

8

 Concept from organizational theory Re

p g resents extra or

ganizational resources 

to meet demands

 Dilemma: Managers struggle with how to 

efficient operations & extra resources to aunexpected threats/opportunities
Organizational slack resource

9

 Slack is a “cushion” of actual or potential reso

• Allows adaption to internal stress; strategically re

proacti l h ive response to external c

hanges

 Allows

 a.) Internal maintenance of existing coalitions, reso

conflict resolution, workload protection

 b Facilitates strategic behavior of innovation sati

b. Facilitates strategic behavior of innovation

, sati

politics (1,2)

 Related to Related to efficiency concept among perform

“efficiency

” concept among perform

models, like IOM six aims
Types of slack: Ease of recov

10

 Available 

– most easy to recover, liquid, r

not yet used in organization

 Cash, underutilized employees

 Recoverable 

– recovered with some effor

redesign or reconfiguration 

 inventory sales expenses overhead expense

inventory, sales expenses

, overhead expense

 Potential – recovered over longer term fro

envi t ith t ff t ironment 

with great 

effort 

 Generate additional capital or debt
Slack measurement

11

 Financial and non-financial forms

 Unused staffing, space, social capital, cash a

assets(4)

 Reputation

 Commonly used financial measures(5)

 Debt/equity Long-term debt/assets R&D/ l sa es Administrative expenses/sales Working capital/sales
Slack measurement

12

 Ratio of employees per adjusted patient d Alberta Context Tool 

( ) 7

)

 Nine-items assessing health care staff perce

slack in staffing; p ; s

pace

; and time

 Slack time (single-item) (8) C b t di t t l 

Can b

e an ou

tcome, predi

c

tor, or con

trol v
Interaction question

13

 Do you consider organizational slack:

 Good (“cushion”) Bad (inefficient)  It de

pends

 Unsure
14 Debate
Slack as a resource

Sl k b fi i l i l f 

15

 Slack as resource

–

benefi

cial, essential to fa

innovation, risk taking, enhance performance 

 Hiring/staffing more employees than needed to 

upgrades or increasing demand

 Expand hospital services, campuses, partnering 

agencies

 Seeking prestigious affiliations (Magnet, Carey  Improve employee working conditions and bene Conflict resolution – allows powerful organizatio

with different or conflicting goals to resolve diffwithout negative impact to organization 

 Allows for “thinking time” (10), valuable in know

based organizations
Slack as a resource

16

 Protective 

 Buffer against environmental changes 

 absorbs environmental shocks (increase in patie

bad publicity) and internal changes (new guideperf ) b ll i d i formance measures) b

y

allowing

a

daptive r

 Less worried about failure, so an innovative 

lik l d l lik

ely to develop

 Without slack, more likely to focus on “short-

perf f “l formance at expense

of “long-term” 

resu 
Slack as inefficiency

Sl k i ffi i (11 12)

17

 Slack as ineffi

ciency(11

,12)

 Too much money or resources spent to provide t

p / p / qy roduct

/service or the 

product

/service 

qualit

y e

what is needed Defined as inefficient in some economic theories Slack implies inefficiency because resources and de

in equilibria

 Leads to bad decision making and inefficient re

all ti ( llocation (sati fi i ti

sfi

cing, liti lf politics, or self-servi 

ing ma

behaviors) that hurts performance

 “Selfish” management behaviors to maximize profit

ab di ifi i ll f d 

bout diversification, or personall

y pre

ferred organ

structure
Slack as inefficiency

18

 IOM suggest reducing quality waste and 

administrative and production costs as thecare away from patients(13)

 Money, time, staffing spent on other activitie

money away from patient care delivery

 Icarus

paradox - success leads to over-con

 Less attention paid to changing environment 

of responsiveness hurts performance in long

-

 Resource constraint theory – firms with few

resources use them more efficiently
Compromise view

19

 Curvilinear relationship exists between sla

success (1)

 Slack is good up to a point, but too much sla

negative outcomes

 Some pursuit of innovation can lead to bette

organizational performance

 Should have surplus of resources for unfores

and opportunities, but it should be limited to irresponsible behavior
Yerkes-Dodson Law

20

 Relationship between physiological and m

arousal and performance


21 Prior research
Interaction question

22

 How often do organizational/clinic-level v

influence your research/policy thinking or 

 Most of the time Some of the time Hardly ever Seldom
Prior research

23

 Research on slack sometimes ambiguous Meta-analysis of 66 studies to examine sl

performance relationship (5)

 Results showed positive relationship betwe

and performance (profitability)

 Firms appear to se slack to impro e perfor

Firms appear to use slack to improve perfor

 Limited research in healthcare, but some e

interest in this topic (7, 10,14,15)
Prior research

24

 Slack influences organizational behavior a

performance

 Innovation and adoption success (4,16)

 Utilization of research finding in hospitals (7)

 Learning from patient safety failure events ( Differences in care q y y

uality and efficiency m

explained due to slack (15) 

 Thus, resource allocation can lead to better resu
Prior research

25

 Knowledge slack related to organizationa

innovation, and performance (18)

 Financial slack related to corporate socia

resp y( ) onsibility (19)

 Hospital financial slack and 30-day Medi

mortality rates (20)

 Increases in slack may lead to more risky 

d i i (21) decisions (21)

 Curvilinear relationship with R&D investme
26 Primary care example
Study rationale

27

 Clinics with greater slack should allow for 

provider and support staff flexibility and see their own patients and provide appropreventive tests and procedures

 Can lead to more positive patient perceptio

overall care experience.

 To the extent there is too much organizati

inefficient practices may continue, leading care delivery quality. 
Methods

28

 Multi-level study with patients nested with

care clinics (n=568) in the Veterans HealtAdministration

 Two indep pp endent samples of patients

 Patient satisfaction surveys (n>62,000)

 Overall quality of care (0/1) Continuity of care (0/1)

 Technical quality of care (n>28 000) Technical quality of care (n>28,000)

 Influenza vaccination (0/1)
Methods

29

 Based on VA’s Primary Care Management 

(23, 24, 25)

 VA has standard staffing guidelines for p

care developed after extensive review & benchmarking & internal testing

 See also Stefos et al (26) 
Methods:

Organizational slack resource

30

 Panel size per clinic capacity

 Measure indicated percent that the clinic wa

below VA guideline 

 (0=at guideline; .10=10% slack, -.10 = de

slack)

 Supp p p ort staff per provider

 Support staff per provider – number of extr

s a pe p ov de beyo d gu de e taff per provider beyond guideline
Methods: Influenza vaccinatio

31

 Providers generally accept guidelines, but 

always followed in full compliance

 Higher demand during period Time 

p pg ressures for all 

preventive 

guidelines

 Patient preferences and characteristics

 Organizational change interventions asso

greatest change in vaccination(27)

 Th i i l l k l l Thus, organizational 

slack may

play

a role
Methods: Patient sample inclu

32

 EPRP dataset

 Influenza vaccination measure (Sept 06 to M

 Included only patients matched to SE data

primary care clinic visit during Sept 06 to 

 Patients at least 50 years old to meet gui T l f 28 059 b i fi l l 

Total 

of 28

,059 

o

bservations final analys
Methods: Patient experience 

measures

33

 SHEP survey 

 Administered equally to patients making spe

visits, primary care visits – both new and est

 Only included patients with survey results ma

primary care visits

 63,892 patients 54% response rate nationally and average 

( ) 11% SD

) at clinic-level
Methods: 

Continuity of care 34 Continuity of care

 Patients with regular care provider more like

receive care services (28)

 In busy clinics, patients may not be able to g

appointment with own provider, slack resourinfluence availability of provider

 Was the provider you saw during your most 

your regular provider--the one you usually syou come to the VA (0/1)

 N=49,924
Methods: Overall quality of c

Wid l d li i 

35

 Wid

ely used to assess quality perceptions 

should be sensitive to organizational resou

 Overall, how would you rate the quality o

received during the past 2 months? (0/1)

 n=54,518 

 Tetrachoric correlation was .28 between t

measures

 Patients in SHEP and EPRP sample were d
Control variables:

Patient-level

36

 Patient-level

 Age Sex

Marital status

 Visit frequency during time period to primar Quality of life (PCS and MCS)

 For SHEP measures only
Control variables:

Clinic-level

37

 U.S. Census Regions (4 areas) Urban or rural clinic location Community-based or hospital-based M b f C il f T hi H it l Mem

ber

of Council 

of Teaching Hospit

als

 Operating at least five years (proxy for c

maturity)

 Robert W. Care

y py award within 

past 3 

yea
Control variables:

Clinic-level

38

 Support staff mix 

– RNs to total support s

 Clinic size 

( ) Total FTEE

)

 Provider type index (mix of MDs to NP/PA F ll u

-ti id i d time provider i

n

dex

 Group-oriented organizational culture (AE
Analysis

39

 SAS PROC GLIMMIX

 Adjusted odds ratios

 Patient variables entered in Level 1 Clinic variables entered in Level 2 Organizational slack linear & quadratic t

 Panel size to capacity slack Support staff per provider slack  Clinic-level covariates correlation less than ρ 
Findings: Adjusted Odds Rati

40

Or

ganizational slack Influenza Continuit

y of O

vaccination

y

care

o

Panel size per capacity 1.32 0.94 

P l 

2

Panel size per capacity

2 0.11* 0.72 

Support staff per provider 1.07* 1.05* 

Support staff per provider

2 Support staff per provider 0 97 . * 0 97 . * 

* Indicate 

p<.05
Panel size per clinic capacity 

and influenza vaccination

41
Support staff per provider s

and influenza vaccinations

42
Panel size per clinic capacity 

and overall quality 43
Support staff per provider s

and continuity of care 44
Other findings

45

 Marginal effects examined

 Improvement for continuity and vaccination o

up to 1 and 1.15 FTE beyond staffing guide

 For overall quality and vaccination, improve

4% (n=1248) and 7% (n=1284) beyond gu

 Beyond this amount – probability of a “good” p

outcome started to decline
Other findings

46

 Based on graphs, we also tested whether 

logarithmic function would fit data better

 Our results would not have changed, n.s. find

 Clinic-level covariates

 Geographic region significant for all measu Teaching affiliation group affiliation, group-oriented organiz

oriented organiz

culture, clinic size, and provider type index s2 out of 3 models
Summary

47

 Having insufficient resources is far worse t

having too many in this study

 Additional staffing resources contributed t

levels of q y, y p 

uality, but only to a certain poi

 at which point, more staff appeared to mak

minimal contributions to quality, and may sligdecrease quality
Impact of limited resources

48

 Lower performance due to resources (29)

 Barriers to capability: staff unable to perfo

previously successful work strategies due to resources

 Barriers of will: staff less motivated because 

job resources
Impact of excessive resources 

49

 Staffing above guidelines can create pro

 Excess staff can create coordination problem Can reduce collective effort / lead to social 

(30)

 Taking accountability for testing may decrease 

may get sent back for more detail
Implications

50

 Finding the right mix of staffing resources

resource-constrained work environment is a greater challenge

 New models of primary and specialty care  Having too few resources can be detrimenta

p gy erformance rather than having too many

 Appear to support VA guidelines Consider cost of adding new staff to curre

models, would a .5 FTE lead to a big diffe

 Oh f b d l 

Other factors beyond quality measures to co

personnel changes
Limitations

51

 Only VA was used Staffing ,j 

 measures such as turnover, job ro

vacancy rates, scopes of practice not acco

 Potentially important antecedents or measur

 Used clinic-level scores rather than provid Cross-secti l ona Did not distinguish among different types 
Other areas for consideration

52

 Financial performance metrics Assess staff 

pp g erce

ptions of or

ganizationa

influence on workplace perceptions and qcare

 Influence on implementation and quality 

improvement practice within VA initiatives

 Apply to settings with other developed sta

guid li e nes
Other areas for consideration

53

 Assess ease of recovering/acquiring slack 

different dimensions

 Management actions to maintain/utilize sl

obtain resources

 Workplace and team design impact
Polling question

54

 How might you consider using the concept 

organizational slack within your own work

Open ended
Contact information

55

 David C. Mohr, PhD

 Investigator, HSR&D COLMR, Boston VAMC David.Mohr@va.gov

 Gary Young, JD, PhD

 Associate Director, HSR&D COLMR, Boston V ga.young@ d neu.e

d

u
Works cited

1 B L J (1981) O h f l l k A d 

56

1. Bourgeois, L.J. (1981), On the measurement of organizational slack, Academy 

Journal, Vol. 6 No. 1, pp. 29-39.

2. Bowen, F. E. (2002). Organizational slack and corporate greening: Broadeni

B iti h J l f M t British Journal of Management, 13(4) 305 13(4): 305-316.

3. Bourgeois L, Singh V. (1983) Organizational slack and political behavior with

management teams. Academy of Management;43–7.

4. Nohria, N, & Gulati, R. (1996). Is slack good or bad for innovation? Academy 

Journal, 39(5), 1245–1264.

5. Daniel, F., Lohrke, F. T., Fornaciari, C. J., Turner Jr., R. A., (2004) Slack resourc

perf t ormance: a meta-anal iys s. J l f B i R h Journal of Business Research, 57 565 57: 565-574.

6. Forte, M., Hoffman, J. J., Lamont, B. T., & Brockman, E. N. (2000). Organizatio

environment: Strategic Management Journal, 21: 753-773.

7. Mallidou, A. A., Cummings, G. G., Ginsburg, L. R., et al. (2011). Staff, space, 

dimensions of organizational slack: A psychometric assessment. Health Care 

36(3), 252-264

8 . L k hi o s n, B V Gil A & B E (2009) C f i fi i i 

B., Van Gils, A., & Bauer, E. (2009). Crafting firm competencies to im

performance. European Management Journal, 27: 186-196.
Works cited

9 C R M h J (1963) Th b h l h f h f E l d Cl ff 

57

9. Cyert R, March J. (1963) The behavioral theory of the firm. Englewood Cliff

Hall.

10. Kerfoot, K. (2006). Beyond busyness: Creating slack in the organization. Nu

24 168 24, 168-170 .

11. Jensen M. (1986) Agency costs of free cash flow, corporate finance, and ta

Rev; 76:323–9.

12. March J, Simon H. (1958) Organizations. New York: Wiley.

13. Institute of Medicine (IOM). (2001) Committee on Quality of Health Care in 

the Quality Chasm: Washington, DC: National Academy Press

14. Miller D. (1990) The Icarus paradox: how exceptional companies bring about 

New York: Harper Collins.

15. Zinn, J., & Flood, A. B. (2009). Slack resources in health care organizations – 

or muscled to be exercised? Health Services Research, 44(3):812-820.

16. Valdmanis, V. G., Rosko, M. D., Mutter, R. L. (2008) Hospital Quality, Efficien

Differentials. Health Services Research, 43(5): 1830-1848.

17. Chuang, Y. -T., Ginsburg, L.,& Berta, W. (2007). Learning from preventable 

and near misses. Health Care Management Review, 32, 330-340. 
Works cited

18 G M l V J Ll M F J & V d J A J (2008) Th 

58

18. Garcia-Morales, V. J., Llorens-Montes, F. J., & Verdu-Jover, A. J. (2008). The 

Transformational Leadership on Organizational Performance through KnowInnovation. British Journal of Management, 19: 299-319.

19 . Arora, P &. Dh dk arwa ar, R (2011) C t G d C t 

R. (2011). Corporate Governance and Corporate 

Responsibility (CSR): The Moderating Roles of Attainment Discrepancy and Corporate Governance: An International Review, 19(2): 136–152

20 . Youn, K I & Wan T (2001) Effects of Environmental K. I., & Wan, T. (2001). Effects of Environmental Threats on the Quali

Threats on the Quali

Care Hospitals. Journal of Medical Systems,25 (5) 319-331.

21. Moses, O. D. (1992). Organizational slack and risk-taking behaviour: Test

strategy Journal of Organizational Change Management; 5, 38-54

22. Kim, H., Kim, H. & Lee, P. (2008). Ownership Structure and the Relationship 

Slack and R&D Investments. Organization Science, 19(3): 404-418.

23 VHA Advisory Group on Physician Productivity and Staffing (2005) 23. VHA Advisory Group on Physician Productivity and Staffing. (2005). Relatio

Relatio

care panel size in the VHA to health care outcomes, Washington, DC: DepartmAffairs.
Works cited

24 M S h M F b KL (2003) VHA Ph i i d i i d ffi 

59

24. Mayo-Smith M, Frisbee KL. (2003). VHA Physician productivity and staffing 

of the primary care subcommittee, Washington, DC: Department of Veterans 

25. Veterans Health Administration. (2009) Primary care management module (P

W hi t DC D t t f V t Aff i Washington, DC: Department of Veterans Affairs.

26. Stefos T, Burgess Jr JF, Mayo-Smith MM, et al. (2011). The effect of physicia

health care outcomes. Health Serv Manage Res. ,24(2):96-105.

27. Stone EG, Morton SC, Hulscher ME, et al. (2002) Interventions that increase 

immunization and cancer screening services: A meta-analysis. Ann Intern Me

28. Xu KT. (2002) Usual source of care in preventive service use: a regular doc

regul it lar site. H lthea Serv R es., 37(6) 1509 37(6):1509-1529.

29. Hoegl M, Gibbert M, Mazursky D. (2008). Financial constraints in innovation 

less more? Res Policy.; 37:1382-1391.

30. Karau SJ, Williams KD. (1993) Social loafing: a meta-analytic review and 

integration. J Pers Soc Psychol. ; 65(4):681-706.