Organizations increasingly are faced with the need to restructure and realign their structures, processes, and products to remain competitive. Periodically, specific management strategies to revitalize and renew organizations become extremely popular for a time. However, such popularity seems only to last short periods for many of these strategies as managers seemingly become quickly disillusioned and often claim poor results from their implementations. Yet, other organizations continue instituting the respective strategy and profess dramatic improvements. Some management researchers attribute differences in results according to the relative degree of institutional forces that motivate adoption for legitimacy and normative reasons. Others assert that change efforts are made for rational, technical reasons and adoptions are a result of economic forces. This research explores this contradiction and examines why organizations adopt reengineering, a relative new management renewal strategy; what external and internal factors influence what they implement; and what the competitive outcomes result. This research combines both institutional and technical perspectives and examines reengineering efforts in U.S. acute care hospitals. A national survey on restructuring and reengineering collected detailed data from approximately 875 hospitals. The survey data were combined with financial, activity, and area data to allow empirical analyses. First, an event history analysis explores the motivators for implementation. Second, a Tobit analysis examines the influences to the content of change strategy. Finally, first-differenced OLS analyses investigate the competitive outcomes of reengineering. My findings suggest that institutional and technical factors affect both the likelihood of adoption and content of reengineering. Area HMO penetration, number of area cumulative adoptions, and organizational financial resources, past experience, and market share significantly influence the adoption of reengineering. Relative cost position, market share, uncertainty, and temporal position affect the content of reengineering. Institutional forces and integrative mechanisms also appear significant effects on competitive outcomes. Hospitals that codified their process, implemented earlier, and balanced their change program with the degree of environmental technical change improved their competitive performance. This research demonstrates that both institutional and technical forces are both factors in organizational change and the subsequent outcomes and should be conjointly considered in both theoretic and practical examination of organizational change.
