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Merger And Acquisition Case Study In Uk Nurse

Main findings and implications

As the number of mergers involving university hospitals and AHCs is set to grow, academic and clinical leaders are looking for new approaches to ensure success of post-merger integration and academic-clinical collaboration. The main contribution of this article is of an empirical nature. We used a mixed-methods organisational culture approach to examine the perceptions of the pre-merger and the preferred future culture at one of two NHS trusts during their post-merger integration and strategic partnership with the University of Oxford. We identified key differences and similarities in the perceptions of pre-merger culture across the two merging NHS trusts and the University, as well as a number of cultural issues that have important implications for the success of post-merger integration and for strategic partnership with the University.

Qualitative responses indicated that the pre-merger culture of the clinical enterprise at the NOC differed from that at the ORH in a number of ways. Respondents perceived the NOC to be more team-oriented and entrepreneurial, as well as less hierarchical. Qualitative responses regarding rational culture were inconclusive, as respondents did not provide many comments on the differences and similarities in rational culture, and instead concentrated on the general contextual factors related to rational culture. Respondents at the NOC were particularly concerned about losing their identity and familial environment following the merger, and also feared that in the merged organisation enterprise and innovation would be lost to complexity and bureaucracy. According to the NOC Executive Team, the size and scale of the NOC made it possible to develop a culture of informal contact and accessibility. Managers and clinicians were able simply to call in to the office of the Chief Executive and other members of the Executive Team, have a conversation in the corridor, or at the coffee stand. Face-to-face contact made clinicians feel that they were able to get answers, that communication was easier, and that they were able to influence and be heard in a way that is much more difficult to achieve in a bigger organisation. At the same time, qualitative insights from our previous research at the ORH suggest that parties in both NHS trusts share common challenges such as paying more attention to staff development, working in partnership with managers, and overcoming the negative effects of current adverse financial conditions.

Although the NOC sample is not large enough to draw firm comparisons with the ORH, it is important to note that the qualitative results from the NOC support the quantitative finding that the NOC is more team-oriented and entrepreneurial, may support the quantitative finding that both NHS trusts have the same level of rational culture, and do not support the quantitative finding that the ORH is more hierarchical than the NOC. We hypothesise that this is either because the small sample size did not allow reliable quantitative measurements, the NOC personnel misapprehended the relative hierarchicality of the NOC and ORH, or there are problems with the validity of the CVF instrument. Alternatively, the quantitative results may reflect the fact that both NHS trusts shared the same systems of governance and standard operating procedures affecting more deeply-rooted perceptions of organisational culture, whereas the qualitative results may reflect more transitory perceptions of the work environment.

Pre-merger cultures of the clinical enterprise at both the NOC and the ORH are primarily distinct from the academic enterprise, suggesting that clinician-scientists work across two different cultures and that there is a formidable challenge in aligning these cultures to manage this cultural diversity. Notwithstanding the limitations of the small NOC sample for drawing comparisons with the large ORH sample, it is interesting to note that the quantitative results from both NHS trusts support the qualitative finding that the culture of the clinical enterprise is primarily distinct from the culture of the academic enterprise. However, because the relationship between the clinical and academic enterprises is one of partnership rather than merger, there is an acceptance of needing to learn how to operate effectively in these two different cultures. Indeed, as many pointed out, they have long been doing so in their pre-Agreement collaborations. Insights from the NOC Executive Team reveal that since the NHS is a centrally run and funded health system there are indeed people in the NHS who feel that they have to perform certain tasks and duties because of central targets. Therefore, it would be desirable to enhance the culture by moving away from the hierarchical culture towards a more team-based and rational culture, where people would feel engaged and supported, and where entrepreneurial culture could flourish as well. However, the university-type entrepreneurial culture based on individual achievements and governance structures without clear reporting lines and accountability would not be optimal for health service delivery. Our qualitative findings suggest that major issues for respondents are how to reconcile different priorities in academic and clinical innovation and service delivery, how to build inclusive teams, and how to enable “symbiotic working” between the academic and clinical enterprises.

The Joint Working Agreement served as an important ameliorating consideration in reaching merger and holds promise as a common relationship schematic by which to address differences in organisational culture for successful post-merger integration. In so doing, it is important to ensure that despite their smaller size, the academic enterprise at the NOC is as influential as its clinical enterprise, and that the NOC (as was) is as proportionately influential as the former ORH in its relationship with the University. Moreover, it is imperative to develop more efficient processes for sharing and extending best practices between the former NHS trusts, while recognising that there are constraints on the extent to which some best practice can be shared and scaled up. In particular, the NOC Executive Team stressed the importance of getting the right balance and understanding between a more entrepreneurial university culture and the constraints within which the NHS operates. Being a statutory public organisation governed through contracts with healthcare commissioners, any NHS trust has to deliver services that are required by commissioners in accordance with the health needs of the local population. An NHS trust cannot choose to focus on a particular group of patients or a particular condition because of its interest and research potential. Likewise, an NHS trust cannot prioritise the likelihood of innovation over the need to provide good standards of service and to comply with various safety regulations. These constraints make some aspects of entrepreneurial culture difficult to reconcile with the NHS service delivery model, and the high levels of entrepreneurial culture observed in the University may not be attainable in the NHS. Nevertheless, the influence of that culture may serve to encourage what entrepreneurialism is feasible and beneficial in a clinical context.

The merger was viewed as a necessity, but also one with some promise. The majority of respondents detailed a movement from rejection, to resistance, to a gradual willingness to enter into merger. Whilst the long-term goal for the NOC and the ORH to come together was shared by many in the local health economy, including the Strategic Health Authority and commissioners, the NOC Executive Team stressed that the NOC could not have contemplated a merger until the new leadership of the ORH started to change it, and it developed to the point where it became in the interests of both organisations to come together. Also, there was a clear sense of the changing landscape in clinical research and service provision, and of the need to develop a common identity with the University. However, there is still a minority who feel demoralised and disenfranchised. They were particularly concerned with the dangers of receiving very little support from managers, the NOC losing its identity and clinical distinctiveness, and NHS clinicians losing out to university clinical academics in terms of prestige and opportunities. These concerns need to be addressed urgently through effective staff engagement strategies.

We found that changes aimed at strengthening translational research and NHS/university collaboration were disruptive at the outset, but that those who needed to collaborate had been doing so anyway. Respondents particularly stressed the importance and positive impact of the NIHR Oxford Musculoskeletal Biomedical Research Unit (BRU) for translational health research and innovation across the academic and clinical enterprises at the NOC. A similarly positive impact of the NIHR Oxford Biomedical Research Centre (BRC) was found at the ORH [29]. Moreover, the Joint Working Agreement itself evolved from the joint governance arrangements for the NIHR Oxford BRC and BRU. Mergers of university hospitals with existing NHS/university collaborations and proposals for new collaborations should be assessed as to whether they add value to the existing collaborations in the long run, and any such merger should try to minimise the disruption at the outset.

History shapes perceptions of organisational culture and successful post-merger integration. The history of separateness and lack of collaboration between the NOC and the ORH has created memories and stereotypes that negatively affect the staff’s attitudes towards integration and collaboration. According to the NOC Executive Team, the NOC was historically perceived by many in the local health economy as not just separate but isolated; an ivory tower, and not a team player. In turn, the ORH was historically perceived by many NOC members as the “big beast on the hill”: not well-managed and consuming all the attention and resources, as opposed to the “small and beautiful” NOC. At the same time, the history of the NOC’s success while being a separate organisation has helped the staff develop a strong shared vision, identity, and loyalty to their organisation that positively affect staff engagement. Likewise, the history of successful academic-clinical collaboration with the University of Oxford, as exemplified by the NIHR BRU, helped undertake strategic partnership with the University. The latter served as an important ameliorating consideration in reaching the merger. Preserving identities of the merging organisations within a devolved organisational structure is likely to have a positive impact on staff engagement.

Finally, the national policy context played a major role in setting the agenda for the merger as well as in influencing the post-merger integration and strategic partnership with the University. The government policy of designating Academic Health Science Centres every five years provided incentives for the two NHS trusts to consider merger and to formalise their strategic partnership with the University through the Joint Working Agreement. Yet, the major driver for the merger was the government requirement for all NHS trusts to achieve Foundation Trust status. Given that the government repeatedly changed application deadlines and rules for Foundation Trust status, it created added uncertainty and complexity. What is more, the current adverse financial conditions and the unintended consequences of government health care reforms threaten to send doctors and academics retreating back into their silos. Strong fair leadership will be required both nationally and locally for the success of mergers and post-merger integration in university hospitals and academic health centres.

Strengths and limitations

The main strength of this study is that it uses a systematic mixed-methods assessment of organisational culture as a means of assisting successful post-merger integration and academic-clinical collaboration in an AHC. This study provides empirical evidence to help academic and clinical leaders in a given AHC identify differences and similarities in culture across the academic and clinical enterprises and resolve cultural issues early in post-merger integration and strategic partnership with a university. In order to produce more complete knowledge, this study uses a mixed-methods approach that exploits the strengths of both quantitative and qualitative methods as well as countering the limitations of each [62]. The survey achieved a 53% response, which is higher than in our previous study at the ORH [29], and relatively good for surveys involving clinicians. A seminal study of mail surveys published in medical journals found that surveys of physicians had a mean response rate of 54% compared to 68% mean response rate among non-physicians [63]. Taking into consideration that a survey's response rate may indicate the extent of non-respondent bias, any response rate below 100% can be regarded as a survey’s limitation. Therefore, the richness and diversity of the qualitative data counters the limitations of the quantitative survey and provides a degree of validity that cannot be achieved by quantitative methods alone. Given the empirical and methodological strengths of this study, its results can be used to formulate hypotheses for future research and to improve practice. In particular, academic and clinical leaders in other AHCs contemplating merger will benefit from an increased evidence base that the cultures of their legacy organisations may differ, that the CVF instrument may have limitations in AHC settings, and that a mixed-methods approach may enhance the validity of an assessment of organisational culture in an AHC.

This study has several limitations. It is a single-site study analysing the perceptions of organisational culture and post-merger integration in an academic health centre from the perspective of one merging NHS trust, rather than from both. It focuses on one staff group, i.e. clinician-scientists, rather than all staff groups. Surveying and interviewing all staff groups might have yielded different results. Moreover, the CVF instrument did not capture well the historical issues that the former NOC Executive Team deemed to be important for the success of the post-merger integration. As noted elsewhere, the CVF instrument was not specifically designed for academic medicine [29], and there are concerns about the validity of the CVF instrument in non-academic settings as well [41]. The disagreement between the qualitative and quantitative findings regarding hierarchical culture may indicate problems with the validity of the hierarchical subscale. Respondents did not provide many comments on the differences and similarities in rational culture, and instead concentrated on the general contextual factors related to rational culture. These limitations provide further evidence around the validity of the CVF instrument in AHC settings and may support concerns raised by Helfrich et al. about the validity of the instrument when applied to non-managers [41]. Therefore, caution should be exercised in generalising the results of this study and in using the CVF instrument in other AHC settings without prior validation.

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