Leading in Inter-Organizational Networks

Matthias Mitterlechner

Leading in Inter-Organizational Networks Towards a Reflexive Practice

Leading in Inter-Organizational Networks

Matthias Mitterlechner

Leading in Inter-Organizational Networks Towards a Reflexive Practice

Matthias Mitterlechner University of St. Gallen St. Gallen, Switzerland

ISBN 978-3-319-97978-6 ISBN 978-3-319-97979-3  (eBook) https://doi.org/10.1007/978-3-319-97979-3 Library of Congress Control Number: 2018950496 © The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature Switzerland AG 2019 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Acknowledgements

This book results from a research project that started in September 2011. It would not have been possible without the invaluable contributions of many people. The research center “Organization Studies” at the University of St. Gallen has provided a uniquely collegial and inspiring context for developing and writing this book. I particularly wish to thank Johannes Rüegg-Stürm, who sparked my interest in organization studies many years ago and who created ideal conditions for starting this project in the first place. He has been a tremendous source of inspiration, a mentor, and a supporting friend all along my academic career. I am also grateful for my collaboration with Harald Tuckermann, who has been an insightful and caring colleague for many years. Furthermore, I would like to thank the entire Organization Studies team for their continuous support, fun, and intellectual inspiration at numerous seminars and retreats in the Swiss mountains. I also wish to express my gratitude to the Avina Foundation for trusting in this project and to the University of St. Gallen for supporting my academic development with a faculty position. v

vi     Acknowledgements

Doing qualitative longitudinal research as reported in this book builds on years of trusting relationships with partners in the field. I am indebted to numerous executives, professionals, and politicians, who provided me with unconstrained access to their everyday work and firsthand insight into the challenge of working across organizational boundaries. I particularly thank Philipp Gunzinger, Joachim Koppenberg, Claudia Farley, and David Fehr for their openness and ongoing trust in our collaboration. This book has benefited greatly from high-quality conversations with scholars from around the world. Special thanks go to four international reviewers and to the participants of the sub-theme “Practices of InterOrganizational Collaboration” at the 32nd Egos Colloquium in Naples, who offered extremely helpful feedback to earlier versions of this book. I also thank Liz Barlow, Madeleine Holder, and Gabriel Everington from Palgrave Macmillan, who initiated and managed the publication process with great dedication and care. Ellie Bradsher Schmidt patiently edited the text and brought it into publishable language and shape. Finally, writing this book was largely possible because of the unconditional support of my family members Andrea, Carina, and Lea Maria. They granted me the freedom to pursue my passion for research including countless days in the field and nights in the office. They are the joy of my life, and my gratitude to them is boundless. St. Gallen August 2018

Contents

1 The Need for Reflexive Leadership in Inter-Organizational Networks 1 Research Question and Research Issues 3 Relevance to Research and Managerial Practice 5 Theoretical Perspectives 8 Empirical Perspectives 11 Contributions and Structure of the Book 14 References 19 2 Theoretical Foundations of Leadership in Networks 27 Action- and Structure-Oriented Theories of Leading in Networks 28 Affordances and Limitations 33 Toward a Practice Theory of Leading in Networks 34 Summary and Outlook 37 References 38

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3 Reconstructing Leadership in Networks as a Reflexive Practice 43 Principles of Practice Theory 45 Networks as Bundles of Inter-Organizational Practices 52 The Practice of Leading in Inter-Organizational Networks 56 The Meaning and Role of Reflexivity in Leadership Practice 63 Summary and Outlook 69 References 70 4 Methodology 81 Longitudinal Qualitative Comparative Case Study Design 81 Research Context and Field Access 83 Data Collection and Analysis 89 Research Aim and Ethical Considerations 93 Summary and Outlook 95 References 95 5 A Practice-Theoretical Model of Reflexive Leadership in Networks 99 Assumptions About Networks, Leadership, and the Role of Reflexivity 99 A Closer Look at the Model 101 Summary and Outlook 104 References 105 6 Case Study I: Peripheral 109 Starting Conditions (2000–2002) 111 Period 1 (2003–2006): Peripheral’s Birth 119 Period 2 (2007–2008): Peripheral’s Pilot Phase 135 Period 3 (2009–2013): Integrating Care 150 Summary and Outlook 166 7 Case Study II: Urban 167 Starting Conditions (2000–2006) 169 Period 1 (2007–2009): Urban’s Launch 177

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Period 2 (2010–2012): Building Urban 188 Period 3 (2013–2014): Ambulatory Primary Care 212 Summary and Outlook 228 8 Discussion 229 Comparative Analysis and Theorization 230 Theoretical Implications 261 Practical Implications 267 References 271 9 Conclusion 281 References 285 Appendix 1: Review of Literature on Leadership in Networks 287 Appendix 2: Additional Data from Peripheral 295 Appendix 3: Additional Data from Urban 301 Appendix 4: Data Sources Peripheral 309 Appendix 5: Data Sources Urban 311 Appendix 6: Questions for Reflexive Practitioners 313 References 315 Index 337

List of Figures

Fig. 1.1 Argumentative structure of the book 17 Fig. 5.1 A practice-theoretical model of reflexive leadership in networks 100 Fig. 6.1 A practice-theoretical model of reflexive leadership in Peripheral 110 Fig. 6.2 Integration process as proposed by the third Care Commission 127 Fig. 6.3 Peripheral’s governance structure as suggested by the third Care Commission 128 Fig. 7.1 A practice-theoretical model of reflexive leadership in Urban 168 Fig. 7.2 Structure of MHD as of 2006 172 Fig. 7.3 Organizational structure of Commission Urban 178 Fig. 7.4 Urban’s governance structure as of November 2009 182 Fig. 7.5 Division of roles and responsibilities among TT, EC, and SC 192 Fig. 7.6 Attendance of leadership constellation members in reflexive spaces 220 Fig. 8.1 Peripheral’s structure to reflect 237

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Fig. 8.2 Urban’s structure to reflect Fig. 8.3 Seven starting points for enabling reflexive conversations in networks Fig. 8.4 Peripheral’s virtuous leadership dynamics Fig. 8.5 Urban’s vicious leadership dynamics

238 240 257 257

List of Tables

Table 2.1 Action- and structure-oriented theories of leadership in networks Table 2.2 Practice-oriented theories of leadership in networks Table 3.1 Principles of practice theory Table 3.2 Theoretical traditions in network research Table 3.3 Central ideas of the practice of leading in inter-organizational networks Table 3.4 Recent advances in conceptualizing reflexivity Table 4.1 Theoretical sampling of comparative case study Table 4.2 Sources of data collected between September 2011 and December 2015 Table 6.1 Organization-level structures (2000–2002) Table 6.2 Leadership constellation members in period 1 Table 6.3 Peripheral’s hospital discharge working table Table 7.1 Planned implementation projects as of 2006 Table 7.2 MHD implementation projects launched between 2007 and 2009 Table 7.3 Urban’s annual events calendar Table 7.4 Reflections about Urban’s strategy in Executive Committee meetings

29 35 45 52 58 65 85 90 113 123 157 174 181 192 193 xiii

xiv     List of Tables

Table 7.5 Reflections about Urban’s strategy in Think Tank meetings Table 7.6 Agendas of Urban’s General Meetings Table 7.7 Agendas of Urban’s Annual Meetings Table 7.8 Reflections about Ambulatory Primary Care Table 8.1 Building blocks of a practice theory of reflexive leadership in networks

196 200 201 216 231

1 The Need for Reflexive Leadership in Inter-Organizational Networks

Scholars have long recognized the growing importance and prevalence of collaboration in inter-organizational networks that consist of three or more partner organizations (Huxham, 2003; Huxham & Vangen, 2000b; Müller-Seitz & Sydow, 2012; Sydow & Windeler, 1998). Strategy researchers argue that organizations engage in inter-organizational networks (networks, for short) to secure competitive advantage (Dyer & Singh, 1998). They also contend that today’s competition increasingly takes place among blocks of allied firms rather than among single, isolated companies (Gomes-Casseres, 1996; Vanhaverbeke & Noorderhaven, 2001). Public policy experts additionally submit that networks composed of a variety of government, nonprofit, and business organizations are essential for tackling collective action problems, such as integrated health, migration, environmental protection, or poverty alleviation (Kenis & Provan, 2006). Solutions for these issues necessarily “sit within the inter-organizational domain” (Huxham & Vangen, 2000b, p. 1159) and can be addressed effectively only if several organizations collaborate. Many governments around the world therefore seek to improve their effectiveness and efficiency by transforming the structures © The Author(s) 2019 M. Mitterlechner, Leading in Inter-Organizational Networks, https://doi.org/10.1007/978-3-319-97979-3_1

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of their service delivery from hierarchies and markets toward networks (Crosby & Bryson, 2010; Currie, Grubnic, & Hodges, 2011; Currie, Lockett, & Suhomlinova, 2009; Huxham & Vangen, 2000b; Kenis & Provan, 2006; Kickert, Klijn, & Koppenjan, 1997). In view of the rising importance and prevalence of network-based collaboration both within and across the private and public sector, it is quite astonishing how little we know about how member organizations actually practice leadership in the networks in which they are engaged. Huxham and Vangen (2000b) notice that with few notable exceptions “the literature on collaboration—including that on private sector alliances—has had little to say about leadership. Some texts make passing reference to leaders, but the concept is rarely discussed in detail” (p. 1160). In a similar vein, Crosby and Bryson (2010) observe that “leadership language and scholarship have been remarkably scarce in the academic literature on collaboration” (p. 212). One reason may be that previous research has focused on leadership between people, in groups or within organizations, neglecting more complex inter-organizational contexts such as supply networks, public–private partnerships, regional clusters, and other inter-organizational innovation systems (Sydow, Lerch, Huxham, & Hibbert, 2011). Regardless of the causes, there seems to be a growing need for advancing research and theory on the practice of leadership in interorganizational networks. Leadership is understood here as the exertion of influence in order to make things happen, often despite a lack of formal authority (Huxham, 2000; Huxham & Vangen, 2000b; MüllerSeitz & Sydow, 2012). Leadership is widely seen as a critical ingredient for effective collaboration in networks (e.g., Bryson, Crosby, & Stone, 2015; Chrislip & Larson, 1994; Crosby & Bryson, 2005; Huxham & Vangen, 2000b, 2005; Müller-Seitz, 2012; Müller-Seitz & Sydow, 2012; Provan, Fish, & Sydow, 2007; Vangen & Huxham, 2003). Crosby and Bryson (2010) argue that “leadership work is central to the creation and maintenance of cross-sector collaborations that advance the common good” (p. 212). Provan et al. (2007) suggest that “it is imperative that network researchers understand how whole networks operate, how they might best be structured and managed, and what outcomes might result. At present, network researchers in business, public management, and

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health care services have only a marginal understanding of whole networks, despite their importance as a macro-level social issue. Enhancing this knowledge is clearly a challenge that researchers in all sectors must take seriously” (p. 512). Sydow, Schüssler, and Müller-Seitz (2016) similarly contend that forming networks is not only a strategic but also a leadership issue, calling for reflexivity in the leadership of networks. This book reports on a study designed to address this challenge and meet the need and opportunity for more theory in this area. It aims at theoretically conceptualizing and empirically describing the practice of reflexive leadership in the context of networks.

Research Question and Research Issues This study explores the following research question: How do member organizations practice leadership in a reflexive way in the networks in which they are involved? This research question entails five research issues. First, there is a need to adopt a dynamic view on leading in networks. Theory building on networks has mainly focused cross-sectional analyses (Ahuja, Soda, & Zaheer, 2012; Bizzi & Langley, 2012; Lorenzoni & Lipparini, 1999). Although longitudinal research has become more common in recent years, we still know very little about the dynamics of leading in networks. As Clegg, Josserand, Mehra, and Pitsis (2016) note, “the question of the management of network dynamics, while crucial, remains under-researched” (p. 281). Provan and Kenis (2008) therefore argue for more systematic research on how leadership in networks emerges and changes over time. Lorenzoni and Lipparini (1999) similarly suggest that there is “still a strong need for better theories on network evolution and change” (p. 318). Second, there is a need to study the interplay between leadership practice and network effectiveness. Raab and Kenis (2009) argue that scholars need to develop network theories that are able to explain the emergence, functioning, effectiveness, and failure of networks. Regarding leadership practice, they suggest explaining network effectiveness by observing the actions of individual actors, which are based

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on the cultural norms of the professions and the sectors in which these actors are embedded. In a similar vein, Provan et al. (2007) argue for a closer analysis of network effectiveness. “If we are to understand about networks and network performance, then it is essential that network effectiveness be addressed” (p. 509). Third, there is a need to study leadership in networks from multiple analytical levels. Relevant analytical levels span the societal, field, network, organizational, group, and individual level (Sydow & Duschek, 2011). It has been suggested that leadership in networks should be studied at least from the network and the two neighboring levels, i.e., the organizational field and the organization level. “At the same time, it is clear that at a more micro level, organizations should be brought back into network-level research to investigate, for example, how, on the one hand, organizations are affected by their engagement in different types of networks and how, on the other hand, organizations get ready for networking. On a more macro-level, the more or less recursive interplay between whole networks and regional clusters, organizational fields, or complete societies should also be put on the agenda of network researchers” (Provan et al., 2007, pp. 511–512). At present, multi-level theorizing has remained scarce in network research (Sydow et al., 2016). This lack of multi-level research provides one explanation for our still poor understanding of the temporal evolution of networks. “The fact that the development of networks has remained poorly understood is due to a lack of research on the co-evolution of network, network environment, and network organizations” (Sydow & Duschek, 2011, p. 203, my translation). Fourth, there is a need to study leadership in heterarchical networks. A recent literature review (Müller-Seitz, 2012) reveals that the few studies that do exist on leadership in networks tend to focus on leadership in hierarchical networks. In hierarchical networks, a single organization (sometimes called a “hub firm,” “strategic center,” or “network orchestrator”) officially presides over a network and exerts, at least in part, formally legitimated leadership. Heterarchical networks, by contrast, consist of more or less equal partners that do not formally dispose of a leading actor (Müller-Seitz & Sydow, 2012). In heterarchical networks, leadership tends to be more dispersed and temporary, and activities and

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decisions are frequently based upon consensus across network partners (Sydow et al., 2016). In these networks, leadership-exerting organizations only have the capacity to set some boundary conditions but might not be able to exert strong influence on their networks due to a lack of formal authority (Müller-Seitz, 2012). Müller-Seitz (2012) points out that the study of leadership in heterarchical networks is closely connected to the first research issue, i.e., the need to adopt a dynamic perspective on leadership. “Because the organization responsible for the exertion of leadership in heterarchical networks can vary over time because of conflicting outcomes from consensus-based decision-making processes (Huxham, 2000; Provan & Kenis, 2008), longitudinal and more process-oriented studies are likely to be more suitable for understanding leadership in heterarchical networks” (p. 439). Fifth, there is a rising need for reflexivity (Cunliffe, 2004; Cunliffe & Easterby-Smith, 2004) in the leadership of networks. Huxham (2000) has long argued that those who take leadership roles in networks need to be serious reflexive practitioners. Sydow et al. (2016) make a similar call for reflexivity in leading and managing networks, arguing for an institutionalization of reflexivity in organizations in general and in networks in particular. At the moment, however, we know little about how reflexivity can be institutionalized in the leadership of networks. Research is largely still concerned with the collection of questions and problems rather than with the creation of satisfying answers (Sydow & Duschek, 2011).

Relevance to Research and Managerial Practice A more detailed theoretical conceptualization and empirical description of the practice of reflexive leadership in networks is highly relevant because it relates to emerging issues in at least three research fields and is of considerable importance for managerial practice. First and foremost, as indicated previously, the practice of reflexive leadership turns into an increasingly relevant field of study for network scholars (Müller-Seitz & Sydow, 2012; Sydow, 2004; Sydow et al., 2016; Sydow & Windeler, 1998, 2003). Nosella and Petroni (2007)

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emphasize that leadership in networks is an extremely interesting topic that has been dealt with very little in the literature. They therefore propose that “further research could study this topic more thoroughly and, more generally, study the different ways networks, especially multilateral networks, are managed” (p. 198). Provan and Kenis (2008) equally propose that the role of leadership in networks needs to be addressed in greater depth. They argue that a closer investigation of leadership is crucial because only then can we understand why networks produce certain outcomes—including the poor performance of some of them. Second, exploring reflexive leadership in networks resonates with recent advances and emerging questions in the broader leadership literature, in particular in the emerging leadership-as-practice field (e.g., Denis, Lamothe, & Langley, 2001; Denis, Langley, & Rouleau, 2005, 2010; Denis, Langley, & Sergi, 2012; Raelin, 2016). Leadership-aspractice scholars draw from social theories of practice (Bourdieu, 1990; Giddens, 1984; Reckwitz, 2002; Schatzki, 2002, 2012; Schatzki, Knorr Cetina, & Von Savigny, 2001) and make the argument that leadership occurs as a social, collective practice, as opposed to residing in the traits and behavior of particular leader-individuals. They thereby question and reconstruct one of the most fundamental assumptions of traditional leadership studies. They aim to increase the relevance and meaningfulness of leadership research by focusing on the “mundane aspects of managerial work and leadership” (Alvesson & Sveningsson, 2003, p. 1436), deeply probing into everyday leadership practice (Knights & Willmott, 1992). Researchers in this field are particularly interested in developing an understanding of how leadership can be conceptualized and studied when organizations are considered as practices rather than static entities (Crevani, Lindgren, & Packendorff, 2010). Third, the aim of this study is connected to emerging questions in the debate on reflexivity in leadership practice (e.g., Boud, Cressey, & Docherty, 2006; Cunliffe, 2004; Cunliffe & Easterby-Smith, 2004; Cunliffe & Jun, 2005; Gorli, Nicolini, & Scaratti, 2015; Nicolini, Sher, Childerstone, & Gorli, 2004; Reynolds & Vince, 2004; Rüegg-Stürm & Grand, 2015). This debate has gained substantial momentum since the turn of the millennium. With regard to the public sector, Cunliffe and Jun (2005) argue for instance that reflexive leadership is crucial to

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public administration because it can lead to more critical and responsible action, which, in turn, can provide a basis for organizational transformation. Similarly, Boud et al. (2006) propose that the growing need for reflexive leadership practice is constituted by structural changes in the production regime from stable markets and physical mass products toward volatile, flexible, and knowledge-intensive markets, products, and services. They argue that this latter regime requires new forms of responsiveness, learning, and reflexivity at work. While the growing importance and significance of reflexive leadership practice is well established, empirical studies are still rare in this nascent field. Researchers have therefore called for more empirical studies that shed light on how leadership is practiced in a reflexive way (Antonacopoulou, 2004; Cotter & Cullen, 2012; Cunliffe & Easterby-Smith, 2004). Finally, a robust theoretical conceptualization and thick empirical description of reflexive leadership in networks is also of considerable relevance for managerial practice. As Silvia and McGuire (2010) point out, “just as organizations require some degree of leadership to function effectively, so too do collaborative, integrated structures require leadership that facilitates productive interaction and moves the parts toward effective resolution of a problem” (p. 265). There are, however, substantial limitations with regard to the transfer of knowledge and insights from single organizations to networks because leadership in networks is likely to be significantly different from leadership in organizations (Huxham & Vangen, 2000b; Müller-Seitz, 2012; Provan & Lemaire, 2012). Networks are unique forms of organizing—neither markets nor hierarchies (Powell, 1990)—that need to be analyzed and understood in their own right (Kenis & Provan, 2006). In contrast to traditional organizations, networks cannot be led by hierarchical fiat (Podolny & Page, 1998). In networks, reflexive leadership turns into a joint effort (Huxham & Vangen, 2000b) that needs to be collectively accomplished by a constellation of distributed, legally autonomous organizations (Beyer & Browning, 1999). In view of the ubiquity of networks in both the public sector and private sector, practitioners will need to become increasingly sophisticated in their understanding of the leadership practices required for effectively accomplishing this task (Huxham & Vangen, 2000b; McGuire & Silvia, 2009; Silvia & McGuire, 2010).

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Theoretical Perspectives To develop a theoretical conceptualization of the practice of reflexive leadership in networks, this book draws on advances in four research fields. First, this research is situated in the recent practice-turn in the social sciences (Feldman & Orlikowski, 2011; Feldman & Worline, 2016; Giddens, 1984; Nicolini, 2012; Reckwitz, 2002; Schatzki et al., 2001). In essence, practice theory proposes a distinct social ontology, conceiving of the social as “a field of embodied, materially interwoven practices centrally organized around shared practical understandings” (Schatzki, 2001, p. 3). It thereby differs from other social theories, which privilege individual action or social structure in defining the social (Reckwitz, 2002; Schatzki, 2001). Practice theory, with a focus on structuration theory (Giddens, 1984), will provide the main organizing framework of this research. Second, network scholars are increasingly interested in conceiving reflexive leadership in networks from a practice-theoretical perspective (e.g., Araujo & Brito, 1998; Huxham, 2003; Huxham & Vangen, 2000b; Martin, Currie, & Finn, 2008; Müller-Seitz & Sydow, 2012; Sydow, 2005; Sydow et al., 2011, 2016; Sydow & Windeler, 1997, 1998). Drawing on Giddens’ (1984) structuration theory, Sydow and Windeler (1998) argue, for instance, that an adequate analysis of leadership in networks requires an exploration of how leadership action and leadership structure are mutually related. Scholars adopting this view suggest that practice theory offers a potentially promising alternative to traditional action- and structure-oriented notions of leadership in networks for at least two reasons. On the one hand, practice theory is best placed to provide a dynamic account of leadership in networks and thereby to increase the practical relevance of research on this topic. On the other hand, practice theory is able to conceptualize the interplay between action and structure as a duality rather than as a dualism. To develop this argument in more depth, Chapter 2 will provide an overview of extant research on leadership in networks. In a first step, it will review a selection of established research, which tends to emphasize

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either action or structure when theorizing leadership in networks. In a second step, it will shed light on some of the affordances and limitations of this line of research. In a third step, it will review studies that call for advanced practice theories on reflexive leadership in networks. These studies submit that practice theories are able to capture the recursive interplay between action and structure over time. Third, leadership scholars are increasingly interested in conceptualizing leadership from a practice-theoretical perspective. They assume that leadership occurs as a practice rather than from the traits or actions of individuals (Denis, Kisfalvi, Langley, & Rouleau, 2011; Denis et al., 2001, 2005, 2010; Raelin, 2016). The emerging leadership-as-practice perspective thereby offers a potentially valuable theoretical alternative to individualistic notions of leadership in complex and pluralistic contexts such as networks (Denis et al., 2005, 2010; Denis, Langley, & Rouleau, 2007; Huxham & Vangen, 2000a; Vangen & Huxham, 2003). Pulling together recent ideas from practice, network, and leadership scholars, Chapter 3 will develop theoretical foundations for conceptualizing leadership in networks from a practice-theoretical perspective. It will proceed in four steps. In a first step, it will review key principles of practice theory with a special focus on Giddens’ (1984) structuration theory (Feldman & Orlikowski, 2011; Feldman & Worline, 2016; Giddens, 1984; Nicolini, 2012; Reckwitz, 2002; Schatzki et al., 2001). In a second step, it will review contemporary definitions of the term “network” and suggest adopting a view of a network as a social system in which the activities of at least three legally independent organizations are coordinated in time-space (Müller-Seitz & Sydow, 2012). From a practice-theoretical perspective, a network can thus be understood as formed by a bundle of inter-organizational practices, which are practices that transcend the boundaries of individual organizations (Müller-Seitz & Sydow, 2012; Sydow, Van Well, & Windeler, 1997). In a third step, it will review latest insights into leadership in networks and suggest a view of leading in networks as the exertion of influence by a single or several organizations in order to reflexively coordinate the activities in the network (Müller-Seitz & Sydow, 2012; Sydow & Windeler, 1998). In a final step, in view of the reflexive nature of leading in networks, it

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will clarify the meaning of the term “reflexivity,” which leads to the final relevant research field. Fourth, reflexivity scholars are increasingly interested in studying the role of reflexivity in leadership practice (Boud et al., 2006; Cunliffe, 2004; Cunliffe & Easterby-Smith, 2004; Cunliffe & Jun, 2005; Gorli et al., 2015; Nicolini et al., 2004; Reynolds & Vince, 2004a). Building on Dewey’s (1910) early ideas about learning through reflective experience and Schon’s (1983) theory of the reflective practitioner, these scholars have advanced the meaning of the notion of “reflexivity” into three directions. First of all, they have drawn a distinction between “reflection” and “reflexivity” (Cunliffe, 2004; Cunliffe & EasterbySmith, 2004; Cunliffe & Jun, 2005). The notion of “reflection” is rooted in an objectivist ontology and describes an analytical process in which an individual actor constructs a “mirror” image in order to solve an objectively given problem. By contrast, the term “reflexivity” builds on a social-constructionist ontology and suggests a view of reflexivity as a conversational practice through which actors question traditional practices and explore new possibilities for joint action (Cunliffe & Easterby-Smith, 2004; Cunliffe & Jun, 2005). In addition, and related to the previous point, they have proposed that reflexivity is a collective rather than an individual accomplishment (Boud et al., 2006; Raelin, 2001; Reynolds & Vince, 2004a). Reflexivity is not the isolated act of an individual but occurs in the midst of practice and is shared in the presence of others. Finally, reflexivity scholars have recently argued that reflexivity is not an objective and value-neutral practice as implied by a realist ontology, but situated in socio-political structures (Antonacopoulou, 2004; Cunliffe & Easterby-Smith, 2004; Nicolini et al., 2004). Reflexive practice is enabled and constrained by these socio-political structures and recursively changes them over time. Taken together, Chapters 2 and 3 provide the theoretical background of this book. While Chapter 2 sheds light on traditional theoretical ideas about leading in networks, Chapter 3 provides important conceptual sensitizing devices for theorizing leadership in networks as a reflexive practice.

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Empirical Perspectives To empirically describe the practice of reflexive leadership in networks, I conducted a longitudinal, qualitative comparative case study in the Swiss healthcare sector. I conducted a qualitative comparative case study because qualitative cases are particularly useful for studying “how” and “why” questions in unexplored fields (Eisenhardt & Graebner, 2007). Both criteria applied in this research. As mentioned before, research on leadership in networks has generally remained scant. In addition, we currently lack an in-depth empirical understanding of how leadership in networks is practiced and why it produces certain outcomes. Moreover, I conducted a comparative case study because comparative cases are typically considered as more compelling and robust (Yin, 2014). I conducted the case study in the Swiss healthcare sector. Health care is a particularly well-suited context for studying leadership in networks because policy makers and organizational leaders around the world currently strive to improve the delivery of healthcare services by means of better inter-organizational collaboration. Practitioners and researchers suggest that more coordination among provider organizations is required to adapt a highly fragmented healthcare system to population aging, increasing frailty at old age and a rapid rise in the number of people with multiple health and care needs (e.g., Amelung, Hildebrandt, & Wolf, 2012; Goodwin, Sonola, Thiel, & Kodner, 2013; Kodner & Spreeuwenberg, 2002; Nolte et al., 2016). Leadership is found to be a critical success factor for implementing these new integrated care and population health models (e.g., Ling, Brereteon, Conklin, Newbould, & Roland, 2012; Nolte et al., 2016). In view of current ambitions to transform health care toward more inter-organizational coordination and the critical role of leadership in this context, I conducted the case study in collaboration with two healthcare networks in Switzerland, “Peripheral” and “Urban.”1

1In

order to protect the identity of my research partners, I will use pseudonyms throughout the book.

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Peripheral was located in a rural region secluded by mountains at the Swiss border. The most important network members were the regional hospital, an outpatient care organization, an inpatient care home, a thermal spa, and several regional social services organizations. Due to its effectiveness, it was considered as a pioneer network in Switzerland. Urban was located in one of the major cities in Switzerland. It included the most important healthcare provider organizations in the city—among others the municipal health department, the municipal pharmacy association, general practitioners, health insurance companies, an ethics foundation, social services organizations, nurses, three hospitals, an outpatient care organization, and an education foundation. Similar to Peripheral, the Swiss public considered Urban as one of the most promising initiatives to advance integrated care in Switzerland. Over time, however, it lost some of its initial momentum due to various difficulties, which will be empirically described and theoretically explained in this book. Reporting on these two case studies, this book generates several findings. First, it shows that individual network member organizations are unable to reflexively coordinate network activities on their own. Rather, leadership in networks is accomplished by a constellation of co-leaders (e.g., Denis et al., 2010). The leadership constellation typically consists of delegates from member organizations, but at times, it may also include delegates from the organizational field level, for example, representatives from political authorities. Leading in networks is hence a collective, multi-level, and widely distributed undertaking (Huxham & Vangen, 2000b; Sydow et al., 1997). Second, leadership constellations reflexively coordinate network activities by establishing reflexive spaces. Reflexive spaces are episodic communicative events that involve several actors who are colocated in the same physical or virtual space (Bucher & Langley, 2016; Hendry & Seidl, 2003; Seidl & Guerard, 2015). In everyday life, these actors are physically distributed across the various organizations constituting a network. Reflexive spaces separate these actors from their everyday practice and thereby provide them with a communicative occasion for

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jointly reflecting on mutual dependencies and new ways of coordinating practices across organizational boundaries. Third, leadership constellations reflexively coordinate network activities by enabling reflexive conversations. Practical reflexivity about the coordination of activities across organizational boundaries is a conversational accomplishment (Cunliffe & Easterby-Smith, 2004; Cunliffe & Jun, 2005). The two case studies provide a few clues about how leadership constellations enable reflexive conversations. Leadership constellations may enhance the reflexive quality of conversations by creating transparency about decision-relevant information; by allowing for improvisation and experimentation; by deploying visual mapping tools; by building personal ties; by showing understanding for differences; by providing solution-oriented support; and by wisely orchestrating reflexive spaces. Fourth, leadership constellations reflexively coordinate network activities by exercising power. In structuration theory, power is a means for getting things done and as such, directly implied in human action (Giddens, 1984). In networks, however, in which member organizations lack formal hierarchical fiat, powerful interventions need to be considered as useful and legitimate (Müller-Seitz & Sydow, 2012). The findings reported in this book suggest that meaningfulness and legitimacy are sustained by consensual decision-making and communication on “equal footing.” By contrast, dominant interventions from one network member, despite best intentions, can create unintended consequences. They may not only trigger questions about their usefulness and legitimacy, but also induce other network members to assume a passive role in their network, which may eventually frustrate the reflexive coordination of network activities. Finally, leadership constellations do not act in a vacuum. Their reflexive actions are situated in structural properties at the organization, network, and organizational field level. Over time, the recursive interplay between reflexive leadership action and structural properties at these three levels creates virtuous and vicious leadership dynamics. The book proposes that these different leadership dynamics provide an explanation for the divergent effectiveness of inter-organizational networks.

14     M. Mitterlechner

Contributions and Structure of the Book With these empirical findings, this book contributes several insights into current debates on leading in inter-organizational networks (Huxham & Vangen, 2005; Müller-Seitz & Sydow, 2012; Provan et al., 2007; Sydow et al., 2016), leadership-as-practice (Crevani et al., 2010; Denis et al., 2001, 2010; Raelin, 2016), and reflexivity in leadership and management (Antonacopoulou, 2004; Cotter & Cullen, 2012; Cunliffe & Easterby-Smith, 2004; Gorli et al., 2015). First and foremost, this book contributes to the inter-organizational network literature by proposing a novel practice-theoretical model of reflexive leadership in networks. It thereby improves our currently marginal understanding of how inter-organizational networks are led in different ways (Huxham & Vangen, 2000b; Müller-Seitz & Sydow, 2012; Provan et al., 2007; Provan & Kenis, 2008; Sydow et al., 2016). Second, this book suggests a rare dynamic perspective on leading in networks, demonstrating how leadership action and structural properties at various levels recursively interrelate over time. A dynamic perspective on leading in networks is timely because leading in networks consumes and takes place in time (Sydow, 2004) and because it creates knowledge about how leadership is actually done in networks (Langley, Smallman, Tsoukas, & Van de Ven, 2013). With this dynamic account of leading in networks, the book differs from most previous research on this topic, which has foregrounded either leadership action or structure in a cross-sectional way. Third, this book contributes a multi-level study to network research. Despite several calls (e.g., Brass, Galaskiewicz, Greve, & Wenpin, 2004; Provan et al., 2007), multi-level research on networks has remained scarce and still waits to be implemented (Sydow et al., 2016). This book responds to these calls and proposes a practice-theoretical model that considers multiple analytical levels—including the organization, network, and organizational field level. The model illuminates how leadership action is recursively intertwined with these three levels. It also suggests that leading in networks cannot be adequately understood and explained without considering these three levels.

1  The Need for Reflexive Leadership in Inter-Organizational …     15

Fourth, this book contributes to our understanding of leadership practice in heterarchical networks. In contrast to hierarchical networks, heterarchical networks consist of more or less equal partners that do not formally appoint a leading actor. The book adds a “reflexive twist” to previous research on this topic (Browning, Beyer, & Shetler, 1995; Huxham & Vangen, 2000b; Müller-Seitz & Sydow, 2012; Sydow, 2004), shedding light on preconditions allowing members of heterarchical networks to reflect jointly on the coordination of activities across their organizational boundaries. Fifth, this book constitutes a move toward an understanding of how reflexivity can be institutionalized in networks (Huxham, 2000; Sydow et al., 2016). Although several scholars have made calls for more reflexivity in leading networks, we still know little about how this is accomplished (Sydow & Duschek, 2011). The practice-theoretical model suggested in this book offers a dynamic perspective on institutionalizing reflexive leadership in networks. Sixth, this book suggests an alternative approach for operationalizing network effectiveness. The multiplicity of stakeholders involved in assessing the performance of networks and the normative character of all assessment criteria makes measuring network effectiveness extremely problematic (Kenis & Provan, 2009; Provan & Milward, 1995). Sydow and Windeler (1998) propose that effectiveness assessments are context-dependent social constructions and as such, both outcome and medium of reflexive leadership action. Denis et al. (2010) shed light on the substantive, symbolic, and political consequences of leadership action. This book combines these complimentary research angles in order to offer a novel endogenous and dynamic approach for empirically assessing network effectiveness. Seventh, this book contributes a conceptualization of leadership practice to leadership-as-practice research (Crevani et al., 2010; Denis et al., 2010; Raelin, 2016). In contrast to traditional perspectives, leadership-as-practice scholars understand leadership as a social practice rather than as traits or behaviors of individuals. At the moment, the field lacks an understanding of how to conceptualize and study leadership when organizations and networks are considered as a web of conjoined practices rather than static entities (Crevani et al., 2010). The model

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presented in this book provides a possible approach for conceptualizing leadership as a practice and thus may serve a source of inspiration for future research on this issue. Finally, this book contributes to the current debate on practical reflexivity in leadership and management (Antonacopoulou, 2004; Cotter & Cullen, 2012; Cunliffe & Easterby-Smith, 2004; Gorli et al., 2015). Scholars in this field have recently argued that the practices that support or interrupt moments of practical reflexivity have generally been under-researched (Cotter & Cullen, 2012), and that future research could explore new methods with which to sustain practical reflexivity (Gorli et al., 2015). This book provides new insights into such practices and methods, showing how reflexive leadership action in networks is recursively related to structural properties at the organization, network, and organizational field level. On this basis, it shows how reflexive leadership in this context is a dynamic and highly fragile exercise. This book also contains several implications for leadership practice. Most importantly, by presenting and empirically illustrating a practice-theoretical model of reflexive leadership in networks, it provides practitioners with a novel conceptual tool for reflecting on their own concrete leadership situation (Feldman & Orlikowski, 2011; Huxham & Vangen, 2005; Langley, 2010). The proposed model, if understood and used as a practical conceptual tool, draws attention to virtuous and vicious leadership dynamics in networks. On this basis, it suggests four “areas of reflexivity” for coping with these dynamics (see Appendix 6—questions for reflexive practitioners). This book will proceed as follows (see Fig. 1.1). Chapter 2 will explore the theoretical foundations of leading in networks. The majority of extant research on this topic can be divided into two streams. Action-oriented studies theorize leading in networks as the purposeful actions of individual or collective actors. Structure-oriented studies, by contrast, attribute leadership to certain structural features of a network, including social coordination mechanisms. Taken together, the two streams have provided important theoretical foundations for conceptualizing and describing leadership in networks. At the same time, the two streams are not without limitations. On the one hand, their findings tend to be relatively static. On the other hand, there is only little connection between the two streams as an explanation of how

1  The Need for Reflexive Leadership in Inter-Organizational …     17

Fig. 1.1  Argumentative structure of the book

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leadership action and leadership structure are dynamically (recursively) related. In view of these limitations, several scholars have recently suggested that an adequate understanding of leading in networks requires an analysis of the dynamic interplay between leadership action and structure. They propose practice theory, which is able to capture the dynamic interplay between action and structure, as a conceptual alternative for conceptualizing and describing leading in networks. Chapter 3 will follow the path of these scholars and introduce conceptual foundations for reconstructing leadership in networks from a practice-theoretical perspective. In a first step, it will introduce basic ideas and principles of practice theory with a special focus on Giddens’ structuration theory. In a second step, it will explore different conceptualizations of the term “network” and adopt an understanding of a network as a social system in which the activities of at least three legally independent organizations are coordinated in time-space (Müller-Seitz & Sydow, 2012). In a third step, it will review current notions of the term “leadership” and draw on latest research conceptualizing leadership as a practice rather than as trait or behavior of individual people. On this basis, it will adopt an understanding of leading in networks as the exertion of influence by one or multiple organizations in order to reflexively coordinate the activities in the network (Müller-Seitz & Sydow, 2012; Sydow & Windeler, 1998). In a final step, it will explore the meaning of the term “reflexivity.” Tracing recent changes in how the concept is understood in the literature, it will adopt a view of reflexivity as a conversational, collective, and socio-politically situated practice through which actors question traditional practices and explore new possibilities for joint action (Cunliffe & Easterby-Smith, 2004; Cunliffe & Jun, 2005). Chapter 4 will outline the approach to data collection and data analysis for a longitudinal qualitative comparative case study in the Swiss healthcare sector. Data gathering included 63 semi-structured interviews, 105 observations, 78 archival data points, and 3 feedback workshops to validate insights. In my data analysis, I followed an abductive approach where emerging theoretical ideas are refined in an interplay with increasingly detailed empirical analysis (Klag & Langley, 2013). In line with practice-theoretical ideas, this research aims to

1  The Need for Reflexive Leadership in Inter-Organizational …     19

produce theoretical rather than statistical generalizations (Feldman & Orlikowski, 2011). Theoretical generalizations provide conceptual tools for reflecting on concrete situations. The chapter will conclude with a few ethical considerations that emerged in the course of this research. Chapter 5 will present a novel practice-theoretical model of reflexive leadership in inter-organizational networks. The model conceptualizes leadership in networks from a practice-theoretical perspective. It draws on the theoretical foundations established in Chapter 3 and the empirical fieldwork outlined in Chapter 4. It proposes that leading in networks is a collective practice accomplished by a leadership constellation. The leadership constellation reflexively coordinates network activities by establishing reflexive spaces, by enabling reflexive conversations, and by exercising power. The leadership constellation’s actions are situated in structural properties at the organization, network, and organizational field level. Chapters 6 and 7 will empirically describe the practice-theoretical model with the help of the two case studies, Peripheral and Urban. Chapter 8 pursues three related goals. First, drawing on Chapters 6 and 7, it will elaborate on the practice-theoretical model introduced in Chapter 5 and thereby provide the foundations of a practice theory of reflexive leadership in networks. Second, it will offer a theoretically grounded explanation for Peripheral’s and Urban’s divergent effectiveness. Finally, it will propose implications for theory and leadership practice. Chapter 9 will conclude the book, summarizing key insights, explaining the boundary conditions of the research, and suggesting avenues for future explorations of reflexive leadership in inter-organizational networks.

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2 Theoretical Foundations of Leadership in Networks

Leadership in networks is a sparsely researched field. In addition, the few studies that do exist on the topic have presented a rather incoherent picture (Müller-Seitz, 2012). This chapter will review these studies, deconstruct some of their basic assumptions, and suggest reconstructing leadership in networks from a practice-theoretical perspective. The first section will explore the theoretical foundations of leadership in networks, dividing extant research into two fields. On the one hand, action-oriented studies theorize leadership in networks as the purposeful actions and properties of collective or individual actors. On the other hand, structure-oriented studies locate leadership in certain structural features of networks. These characteristics include, for instance, the structural design of whole networks or social coordination mechanisms such as culture or reputation. The first section will review a selection of particularly important and illustrative studies conducted in both fields. An encompassing literature review is featured in Appendix 1. The second section will deconstruct some of the underlying assumptions of these theoretical foundations. First, it will argue that the insights generated by this research tend to be relatively static, hiding how leadership in networks evolves over time. Second, it will propose © The Author(s) 2019 M. Mitterlechner, Leading in Inter-Organizational Networks, https://doi.org/10.1007/978-3-319-97979-3_2

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that there is only little connection between the two approaches. On the one hand, action-oriented studies explain leadership by analyzing the activities, purposes, goals, intentions, and interests of collective or individual actors. They thereby risk overestimating the possibilities of individual agency as the structural context of action is often missing in these studies. On the other hand, structure-oriented studies tend to lack an explicit concept of human agency, overemphasizing how agents’ actions and behaviors are constrained by structure. In view of these restrictive assumptions, the third section will propose to reconstruct leadership in networks from a practice-theoretical perspective, reviewing the studies of Sydow and Windeler (1998), Araujo and Brito (1998), Huxham and Vangen (2000), and Martin, Currie, and Finn (2008). These studies share the idea that practice theory is able to deal with the limitations of traditional leadership theory by conceptualizing leadership action and structure as recursively and dynamically related over time. This line of reasoning will be developed in more depth in Chapter 3.

Action- and Structure-Oriented Theories of Leading in Networks Since the mid-1800s, social theory has been divided into two streams: individualism and societism (Schatzki, 2005). Individualism explains social action by resorting to the purposes and intentions of individual actors, placing the social on the level of intended or unintended products of subjective interests. Societism takes the opposite view and assumes that there are social phenomena that cannot be decomposed into the characteristics of individual actors or groups of actors. It explains social action by pointing to collective structures expressing a “social ought” (Reckwitz, 2002). Existing research on leadership in networks mirrors these two streams (see Table 2.1 for an overview). On the one hand, action-oriented studies theorize leadership in networks in the individualist tradition as the purposeful actions of collective or individual actors. On the other hand,

2  Theoretical Foundations of Leadership in Networks     29 Table 2.1  Action- and structure-oriented theories of leadership in networks Social ontology Theoretical approaches Individualism

Societism

Manifestations and exemplars

Collective actors: Purposeful actions of hub firms, strategic centers, network orchestrators, or lead organizations (e.g., Haecki & Lighton, 2001; Lorenzoni & Baden-Fuller, 1995) Individual actors: Purposeful actions of collaborative managers, champions, boundary spanners, or integrative leaders (e.g., Eglene, Dawes, & Schneider, 2007; O’Leary, Choi, & Gerard, 2012) Structural network design Structure-oriented research: Leadership through structure (e.g., Provan & Kenis, 2008; Provan & Milward, 1995) Social coordination mechanisms (e.g., Jones, Hesterly, & Borgatti, 1997) Action-oriented research: Leadership as purposeful action

structure-oriented studies locate leadership in the societist tradition in certain structural features of a network. Action-oriented studies theorize leadership in networks as the purposeful actions of collective or individual actors. At the collective level, research analyzes the actions of collective actors, which are variously called “hub firms” (e.g., Dhanaraj & Parkhe, 2006), “strategic centers” (e.g., Lorenzoni & Baden-Fuller, 1995), “network orchestrators” (e.g., Batterink, Wubben, Klerkx, & Omta, 2010), or “lead organizations” (Provan & Kenis, 2008). These collective actors ensure the survival, effectiveness, and performance of their networks by coordinating and steering change in a given direction (Boari & Lipparini, 1999). Some studies in this tradition shed light on the roles and capabilities of these collective actors. For example, Lorenzoni and Baden-Fuller (1995) argue that the strategic center of a network plays an important role as a leader, value creator, rule setter, and capacity builder.

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An effective strategic center has the capability to conceptualize a convincing business idea it shares with its network partners. Other studies zoom in on the concrete actions characterizing the leadership role of these organizations. For instance, Haecki and Lighton (2001) contend that successful network orchestrators excel in five actions. First, they create information standards facilitating inter-organizational communication and data sharing. Second, once information standards are set, they move key business processes online and make these processes available to employees, partner companies, and customers. Third, they implement rigorous performance standards maintained through customer and partner firm evaluations and intervene if a member’s activities threaten the network brand. Fourth, they ensure cooperation and maintain trust through value-sharing mechanisms and adequate incentive systems. Finally, they develop innovative products and services across the network by creating permanent or project-based cross-organizational teams. At the individual level, research mainly draws on the general leadership literature and locates effective leadership in networks in the behaviors, skills, and charisma of particular leader-individuals (see, e.g., Bass & Bass, 2008; Parry & Bryman, 2006 for recent reviews of the general leadership literature). These studies investigate the role of individual actors in networks, starting from the assumption that what matters is the people representing an organization, agency or jurisdiction at the table—“and whether they have the necessary skills to be an effective collaborator” (O’Leary, Choi, & Gerard, 2012, p. 70). Research alternatively calls these individuals collaborative managers (e.g., Alexander, 2006; Getha-Taylor, 2006), champions (e.g., Eagle & Cowherd, 2006), boundary spanners (e.g., Donahue, 2006; Williams, 2002), or integrative leaders (e.g., Morse, 2010; Silvia & McGuire, 2010). For example, Eglene, Dawes, and Schneider (2007) analyze effective leadership behavior in public sector networks. Assessing behavior in terms of communication strategies, they find that successful leaders’ communication strategies focus on inspirational values, consultation, and coalition building. Successful leaders also emphasize people rather

2  Theoretical Foundations of Leadership in Networks     31

than information and tasks, and they are characterized by a charismatic style they adapt to changing situations. With a similar theoretical background and research interest, O’Leary et al. (2012) investigate the skills of senior government officials engaged in inter-organizational collaborations. They find that individual attributes and interpersonal skills are the most important characteristics of successful collaborators. The three most important attributes are an open mind, patience, and self-confidence. They conclude that “individuals are the strongest factor in whether a collaboration is catalyzed or hindered” (p. 82). While action-oriented studies of leadership in networks locate leadership in the actions, roles, behaviors, and properties of collective or individual actors, structure-oriented studies attribute leadership to certain structural features of a network. These features include, for instance, the structural design of whole networks (e.g., Capaldo, 2007; Provan & Kenis, 2008; Provan & Milward, 1995) or social coordination mechanisms such as culture or reputation (e.g., Jones, Hesterly, & Borgatti, 1997). Concerning the structural design of whole networks, Provan and Milward (1995), in a seminal article, propose a preliminary theory of network effectiveness, drawing on a comparative case study conducted in four US mental health delivery networks. They explain network effectiveness by various structural and contextual factors including network integration, external control, system stability, and environmental resource munificence. Their findings indicate that networks are more effective if they are tightly integrated and led by a central core agency. Centralized leadership facilitates integration, coordination, monitoring, and control. With respect to other structural and contextual factors, the study suggests that network effectiveness is enhanced if networks are fiscally directly controlled by the state (rather than by regional agencies) and under conditions of general system stability and resource abundance. In a similar way, Provan and Kenis (2008) address the impact of governance structures on network effectiveness. They identify three basic forms of network governance and develop propositions as to how each form is likely to be effective and under which conditions. Shared

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network governance is likely to be effective under conditions of few network participants, high and decentralized trust, high goal consensus, and a low need for network-level competencies. Lead organization governance is likely to be effective under conditions of a moderate number of network participants, low and centralized trust, moderately low goal consensus, and a moderate need for network-level competencies. Network administrative governance is likely to be effective under conditions of a moderate to high number of network participants, moderate trust, moderately high goal consensus and a high need for network-level competencies. Investigating social coordination mechanisms, Jones et al. (1997) start from the assumption that networks entail special problems of adapting, coordinating, and safeguarding exchanges, as they rely on autonomous organizations that collaborate in a context of high demand uncertainty, interdependence, and customized, complex tasks. The study suggests that these problems can be overcome by four social coordination mechanisms: restricted access to exchanges, macro-culture, collective sanctions, and reputation. Restricted access refers to a reduction in the number of exchange partners within a network. Collaborating with fewer partners reduces coordination and monitoring costs and increases interaction frequency, which can contribute to a smoother collaboration and higher identification among network partners. Macro-culture is a system of widely shared assumptions, values, and professional knowledge. It enhances coordination among network partners by creating convergence of expectations, by allowing idiosyncratic language to summarize complex routines and information, and by specifying rules for appropriate action under unspecified contingencies. Collective sanctions involve punishing network members violating network norms, values, or goals. They safeguard exchanges in networks by defining and reinforcing the parameters of acceptable behavior. Finally, reputation involves an estimation of character, skills, reliability, and other attributes important to network exchanges. It protects exchanges by spreading information about behavior among parties. The study concludes that the social mechanisms of restricted access, macro-culture, collective sanctions, and reputational concerns interact to decrease coordination costs and enhance the safeguarding of customized exchanges.

2  Theoretical Foundations of Leadership in Networks     33

Affordances and Limitations Taken together, the studies reviewed above constitute the theoretical foundations for understanding leadership in networks. Their contributions cannot be overrated. Action-oriented studies have provided valuable insights into the activities, behaviors, and competencies of collective and individual leadership actors in networks. Structure-oriented studies enrich these insights by emphasizing the decisive role of certain structural features for network effectiveness. These features include, for instance, the overall network structure, governance structures, and social coordination mechanisms. At the same time, despite these major contributions, this line of research is not without drawbacks. First, many studies in either of the two fields tend to produce rather static knowledge. As Parkhe, Wasserman, and Ralston (2006) have observed, “Many social science studies are alleged, often correctly, to represent cross-sectional snapshots rather than to capture processes that deal with important changes over time. Network studies are not an exception to this general rule” (p. 562). The studies reviewed above build on cross-sectional research designs and thus have difficulties to capture how leadership in networks evolves over time. This is unfortunate because, as Doz and Hamel (1998) have long suggested in the context of alliances, the temporal dynamics of leadership are at least if not more important than initial structural considerations. “Managing the alliance relationship over time is usually more important than crafting the initial formal design” (p. xv). In a similar vein, Sydow (2004) reminds us of the importance of time in the leadership of networks. “Forming, organizing, managing, and terminating interfirm networks is a task that takes place in time (and space) and consumes many resources – including time” (p. 202). Second, and related to the first point, studies on leadership action and leadership structure have remained conceptually unconnected. On the one hand, action-oriented studies explain leadership in networks by shedding light on the activities, purposes, goals, intentions, and interests of collective and individual actors. They thereby tend to overestimate the possibilities of individual agency, downplaying that the actions of individual and collective actors are embedded in social structures that simultaneously enable and constrain (although not determine) these

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actions (Ibarra, Kilduff, & Wenpin, 2005; Sydow, 2004). As Emirbayer and Goodwin (1994) write for networks, “Any empirical instance of action is structured simultaneously by the dynamics of societal as well as cultural structures, even though – in principle, at least – it is never completely determined and structured by them” (p. 1443). On the other hand, structure-oriented studies frequently lack an explicit concept of human agency. They thus tend to overemphasize how agents’ actions and behaviors are constrained by structure. Burt (1992), an important representative of structure-oriented studies, regards people and organizations not as sources of action but as vehicles for structurally induced action. Studies in this tradition thus tend to overlook how structures are constituted and re-constituted by reflexive human action. Emirbayer and Goodwin (1994) note, “Of course, if cultural and societal (network) structures shape actors, then it is equally true that actors shape these structures in turn” (p. 1445). This issue has been recently also taken up by network scholars. Parkhe et al. (2006) argue that the structural perspective “risks understating the role of the very actors composing the network” (p. 561). Gulati and Srivastava (2014) also point out that “researchers have treated structure as more or less given, and have paid less attention to how actors create, perpetuate, and modify structure through their actions” (p. 76). In sum, although action- and structure-oriented studies of leadership in networks have enormously advanced the field of leadership in networks, many studies in this tradition have difficulties in conceptualizing how social action and structure dynamically interrelate over time. These difficulties may provide one explanation for the hitherto relatively limited relevance of inter-organizational studies for managerial practice (e.g., Bell, den Ouden, & Ziggers, 2006; Sydow, 2004).

Toward a Practice Theory of Leading in Networks In view of these problems with the current state of research on leading in networks, several network scholars have proposed to re-conceptualize leadership in networks from a practice-theoretical perspective (see

2  Theoretical Foundations of Leadership in Networks     35 Table 2.2  Practice-oriented theories of leadership in networks Social ontology

Theoretical approach

Manifestations and exemplars

Practice theory

Leading in networks as a nexus of practices

Leadership accomplished as selection, allocation, regulation, and evaluation practices (Sydow & Windeler, 1997, 1998) Leadership actors deploy creative powers to reform the rules by which they are recursively enabled and constrained (Araujo & Brito, 1998) Leadership enacted in leadership actions and leadership media (Huxham & Vangen, 2000, 2005) Network structures have no causal force without the agency of involved actors (Martin et al., 2008)

Table 2.2 for an overview). They theorize leadership in networks as a nexus of practices (Schatzki, 2005) and understand practice theory as a valuable conceptual alternative for overcoming the limitations of individualist and societist theories of action. Sydow and Windeler (1998) argue that an adequate analysis of networks requires an investigation of how “structures form from action and how actions flow from structures” (p. 266). Based on this assumption, they propose a perspective of leadership in networks that is anchored in Giddens’ (1984) structuration theory. Drawing on structuration theory, Sydow and Windeler (1997) propose that leadership in networks is accomplished through four contextually situated and recursively interrelated practices: selection (of organizational partners), allocation (of resources, tasks, and responsibilities within the network), regulation (formulating and implementing the rules of collaboration), and evaluation (formal procedures for monitoring the performance of the network partners and the network as a whole).

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Similarly, drawing on a case study conducted in the Portuguese port wine industry, Araujo and Brito (1998) find that the recursive interplay between action and structure is crucial for understanding the dynamics of industrial networks. In contrast to previous research, which has focused predominantly on the role of structures for the governance of industrial networks, they add the role of agency. They find that actors exercise a substantial degree of discretion in interpreting and sorting out potentially contradicting network rules. In addition, these actors often deploy considerable creative power to reform and transform the rules by which they are enabled and constrained. Equally inspired by practice-theoretical considerations, Huxham and Vangen (2000, 2003) understand leadership in networks as the “mechanisms that make things happen.” Their theory has two strands. The first strand is concerned with the media through which leadership is enacted, i.e., the structures, processes, and participants of a collaboration. Huxham and Vangen argue that these media are important because they determine key factors such as who has an influence on shaping the collaboration agenda, who has power to act, and which resources are available for collaborating. Leadership media thus provide a form of “contextual leadership.” The second strand is concerned with the leadership actions carried out by network participants. It focuses on the actions individual participants carry out in order to shape collaboration agendas, addressing what participants actually do in order to cope with, or build on, the constraints or possibilities provided by the leadership media. Huxham and Vangen thereby conceptualize leadership in networks as enacted not only through the actions of participants, but also through things that happen because of the structures and processes embedded within a collaboration, which then points to an interplay between leadership structure and action. Referring to Huxham and Vangen’s work, Martin et al. (2008) examined the role of leadership in the establishment and consolidation of service reform in the English National Health Service. They find that the structures, processes, and participants of networks provide essential resources for effective leadership action. At the same time, they find that network structures have no causal force without the agency of the

2  Theoretical Foundations of Leadership in Networks     37

involved actors, thus also concluding that leadership action and leadership structure are recursively interrelated. In sum, these scholars share the idea that practice theories may constitute a fruitful conceptual alternative to individualist and societist theories of action (Reckwitz, 2002; Schatzki, 2005; Schatzki, Knorr Cetina, & Von Savigny, 2001). Practice theories of social action assume that action and structure can only be separated analytically; in practice, they are in a dynamic, recursive relationship with one another. With this core assumption, practice theory has the potential to overcome the limitations of the traditional lines of inquiry.

Summary and Outlook In this chapter, we have reviewed extant research on leadership in networks, identifying two fields characterized by opposite assumptions about action and social order. Studies in the first field adopt an individualist theory of social action, analyzing the actions of collective or individual leadership actors. Collective actors are alternatively called hub firms, network orchestrators, strategic centers, or lead organizations. Individual actors are variously called integrative leaders, collaborative managers, champions, or boundary spanners. Research in this field locates leadership in networks in these actors’ roles, abilities, purposes, motives, interests, and actions. Studies in the second field draw on a societist theory of social action. These studies attach leadership in networks to structural features and coordination mechanisms of a network. They share the societist assumption that actors are vehicles for socially induced action, i.e., that individual action is determined by social structure. Taken together, research conducted in these two fields has laid the theoretical groundwork for understanding leadership in networks. At the same time, it is not without limitations. It tends to produce rather static knowledge and has difficulties to capture the dynamics of leadership in networks over time. Both approaches share the assumption that social action and structure are ontologically separate. As a result, action-oriented studies tend to overemphasize the possibilities of

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individual agency, downplaying that action is situated in enabling and constraining social structures. In the same way, structure-oriented studies tend to underestimate the reflexive character of human conduct, hence overstating the constraining forces of social structure. In response to these concerns, several scholars have recently paved the way for reconstructing leadership in networks from a practice-theoretical perspective. They argue that practice theories afford a more balanced understanding of the recursive interplay between leadership action and leadership structure. Chapter 3 will follow in this line of thinking. It will provide the conceptual foundations for reconstructing leadership in networks from a practice-theoretical perspective. This perspective theorizes the interplay between reflexive leadership action and structure as a dynamic duality rather than as a dualism.

References Alexander, R. (2006). Kirk Emerson and the U.S. Institute for Environmental Conflict Resolution. Public Administration Review, 66, 156–157. Araujo, L., & Brito, C. (1998). Agency and constitutional ordering in networks. International Studies of Management and Organization, 27(4), 22–46. Bass, B. M., & Bass, R. (2008). The Bass handbook of leadership: Theory, research, and managerial applications (4th ed.). New York: Free Press. Batterink, M. H., Wubben, E. F. M., Klerkx, L., & Omta, S. W. F. (2010). Orchestrating innovation networks: The case of innovation brokers in the agri-food sector. Entrepreneurship and Regional Development, 22(1), 47–76. Bell, J., den Ouden, B., & Ziggers, G. W. (2006). Dynamics of cooperation: At the brink of irrelevance. Journal of Management Studies, 43(7), 1607–1619. Boari, C., & Lipparini, A. (1999). Networks within industrial districts: Organising knowledge creation and transfer by means of moderate hierarchies. Journal of Management and Governance, 3, 339–360. Burt, R. S. (1992). Structural holes: The social structure of competition. Cambridge: Harvard University Press. Capaldo, A. (2007). Network structure and innovation: The leveraging of a dual network as a distinctive relational capability. Strategic Management Journal, 28, 585–608.

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Dhanaraj, C., & Parkhe, A. (2006). Orchestrating innovation networks. Academy of Management Review, 31(3), 659–669. Donahue, A. K. (2006). The space shuttle Columbia recovery operation: How collaboration enabled disaster response. Public Administration Review, 66, 141–142. Doz, Y. L., & Hamel, G. (1998). Alliance advantage: The art of creating value through partnering. Boston: Harvard Business School Press. Eagle, K., & Cowherd, P. (2006). Collaborative capital planning in CharlotteMecklenburg County, North Carolina. Public Administration Review, 66, 146–147. Eglene, O., Dawes, S. S., & Schneider, C. A. (2007). Authority and leadership patterns in public sector knowledge networks. American Review of Public Administration, 37(1), 91–113. Emirbayer, M., & Goodwin, J. (1994). Network analysis, culture, and the problem of agency. American Journal of Sociology, 99(6), 1411–1454. Getha-Taylor, H. (2006). Preparing leaders for high-stakes collaborative action: Darrell Darnell and the Department of Homeland Security. Public Administration Review, 66, 159–160. Giddens, A. (1984). The constitution of society: Outline of the theory of structuration. Cambridge: Polity Press. Gulati, R., & Srivastava, S. B. (2014). Bringing agency back to network research: Constrained agency and network action. In D. J. Brass, G. Labianca, A. Mehra, D. S. Halgin, & S. P. Borgatti (Eds.), Research in the sociology of organizations: Contemporary perspectives on organizational social networks (pp. 73–93). Bingley: Emerald. Haecki, R., & Lighton, J. (2001). The future of the networked company. The McKinsey Quarterly (3), 26–39. Huxham, C., & Vangen, S. (2000). Leadership in the shaping and implementation of collaboration agendas: How things happen in a (not quite) joined-up world. Academy of Management Journal, 43(6), 1159–1175. Huxham, C., & Vangen, S. (2003). Researching organizational practice through action research: Case studies and design choices. Organizational Research Methods, 6(3), 383–403. Huxham, C., & Vangen, S. (2005). Managing to collaborate: The theory and practice of collaborative advantage. London and New York: Routledge. Ibarra, H., Kilduff, M., & Wenpin, T. (2005). Zooming in and out: Connecting individuals and collectivities at the frontiers of organizational network research. Organization Science, 16(4), 359–371.

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Jones, C., Hesterly, W. S., & Borgatti, S. P. (1997). A general theory of network governance: Exchange conditions and social mechanisms. Academy of Management Review, 22(4), 911–945. Lorenzoni, G., & Baden-Fuller, C. (1995). Creating a strategic center to manage a web of partners. California Management Review, 37(3), 146–163. Martin, G. P., Currie, G., & Finn, R. (2008). Leadership, service reform, and public-service networks: The case of cancer-genetics pilots in the English NHS. Journal of Public Administration Research and Theory, 19(4), 769–794. Morse, R. S. (2010). Integrative public leadership: Catalyzing collaboration to create public value. Leadership Quarterly, 21(2), 231–245. Müller-Seitz, G. (2012). Leadership in interorganizational networks: A literature review and suggestions for future research. International Journal of Management Reviews, 14, 428–443. O’Leary, R., Choi, Y., & Gerard, C. M. (2012). The skill set of the successful collaborator. Public Administration Review, 72(Special issue), 70–83. Parkhe, A., Wasserman, S., & Ralston, D. A. (2006). New frontiers in network theory development. Academy of Management Review, 31(3), 560–568. Parry, K. W., & Bryman, A. (2006). Leadership in organizations. In S. R. Clegg, C. Hardy, T. B. Lawrence, & W. R. Nord (Eds.), The Sage handbook of organization studies (pp. 447–468). Thousand Oaks, CA: Sage. Provan, K. G., & Kenis, P. (2008). Modes of network governance: Structure, management, and effectiveness. Journal of Public Administration Research and Theory, 18(2), 229–252. Provan, K. G., & Milward, H. B. (1995). A preliminary theory of interorganizational network effectiveness: A comparative study of four community mental health systems. Administrative Science Quarterly, 40(1), 1–33. Reckwitz, A. (2002). Toward a theory of social practices: A development in culturalist theorizing. European Journal of Social Theory, 5(2), 243–263. Schatzki, T. (2005). Peripheral vision: The sites of organizations. Organization Studies, 26(3), 465–484. Schatzki, T., Knorr Cetina, K., & Von Savigny, E. (2001). The practice turn in contemporary theory. New York: Routledge. Silvia, C., & McGuire, M. (2010). Leading public sector networks: An empirical examination of integrative leadership behaviors. Leadership Quarterly, 21, 264–277. Sydow, J. (2004). Network development by means of network evaluation? Explorative insights from a case in the financial services industry. Human Relations, 57(2), 201–220.

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Sydow, J., & Windeler, A. (1997). Komplexität und Reflexivität in Unternehmungsnetzwerken. In H. W. Ahlemeyer & R. Königswieser (Eds.), Komplexität managen (pp. 147–162). Wiesbaden: Gabler. Sydow, J., & Windeler, A. (1998). Organizing and evaluating interfirm networks: A structurationist perspective on network processes and effectiveness. Organization Science, 9(3), 265–284. Williams, P. (2002). The competent boundary spanner. Public Administration, 80(1), 103–124.

3 Reconstructing Leadership in Networks as a Reflexive Practice

This chapter will provide the conceptual foundations for theoretically reconstructing and empirically describing leadership in networks as a reflexive practice. For this purpose, it will review recent literature theorizing leadership in networks from a practice-theoretical perspective. This review will be accomplished in four consecutive steps. The first section will introduce basic ideas and principles of practice theory, laying special emphasis on Giddens’ structuration theory. It will clarify the dynamic and recursive relationship between action and structure, present practice theory as a distinct social ontology, and point out how practice theory provides conceptual room for reflexive action. It will thereby provide key concepts for conceptualizing both networks and reflexive leadership in networks from a practice-theoretical perspective. It lays special emphasis on structuration theory because Giddens is broadly considered one of the leading practice theorists and because structuration theory has been influential for previous researchers theorizing networks and leadership from a practice-theoretical perspective. The second section will review the breadth of contemporary definitions of the term “network,” dividing the field into two main traditions: social network analysis and the network governance tradition. Drawing on the © The Author(s) 2019 M. Mitterlechner, Leading in Inter-Organizational Networks, https://doi.org/10.1007/978-3-319-97979-3_3

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network governance tradition, it will suggest adopting a practice-theoretical perspective and define a network as a social system in which the activities of at least three legally independent organizations are coordinated in time-space. From a practice-theoretical perspective, a network can be understood as formed by a bundle of inter-organizational practices, which are practices that transcend the boundaries of individual organizations. The activities constituting a network are enabled and constrained by structural properties at three levels: the network level, the organizational field level, and the organization level. The third section will review recent advances in leadership theory, focusing on contributions from both leadership-as-practice and network scholars. Taken together, these contributions suggest a definition of leading in networks as the exertion of influence by a single organization or several organizations in order to reflexively coordinate the activities in the network. Drawing on practice theory, these contributions also converge on the idea of reflexivity as an inherent feature of leadership in networks. The fourth section will expand on the idea of reflexivity as a defining characteristic of leadership in networks. Since little is known about how reflexivity is institutionalized in the leadership of networks, this section will review the broader literature on reflexivity in leadership practice for initial clues. It will find that current research understands reflexivity as a conversational, collective, and sociopolitically situated practice, through which actors question traditional practices and explore new possibilities for joint action. Drawing on these latest insights pulled together from practice, leadership-as-practice, network, and reflexivity research, this chapter provides a set of “sensitizing concepts ” for theoretically conceptualizing leadership in networks as a reflexive practice, and for empirically describing how member organizations reflexively practice leadership in the networks in which they are involved. Drawing on this set of sensitizing concepts, subsequent chapters will propose a novel practicetheoretical model of reflexive leadership in networks. They will also describe the dynamics of the model by means of two empirical case studies conducted in the Swiss healthcare sector.

3  Reconstructing Leadership in Networks as a Reflexive Practice     45 Table 3.1  Principles of practice theory Principle

Short description

The duality of action and structure

Action and structure form a duality rather than a dualism The basic unit of social analysis are practices rather than individual action or social structure Social reality is made up of an assemblage of practices Practices are non-individualist phenomena. Individuals consist in the performance of practices As a part of their practice, individuals routinely and reflexively monitor the flow of actions Power, conflict, and politics are constitutive elements of practice

Practices as unit of social analysis

Practice theory as a distinct social ontology Individuals as carriers of practices

Reflexivity as a quality of practice

The political angle of practice

Principles of Practice Theory As a theoretical paradigm, practice theory is an unsettled intellectual landscape with many sources, influences, and instances (Feldman & Orlikowski, 2011). Important practice scholars from the social sciences include Bourdieu (1990, 2013), Giddens (1979, 1984), Latour (2005), Ortner (1984), and Schatzki (2001, 2005, 2006). Their theories show some substantial epistemological, theoretical, and methodological differences (Golsorkhi, Rouleau, Seidl, & Vaara, 2010), depending on whether they build on the philosophies of Heidegger, Wittgenstein, Dewey, Schutz, and others (see also Feldman & Worline, 2016). Rather than providing a unified “grand theory,” practice theory hence offers a broad “family of ideas” connected by a web of historical and conceptual influences (Nicolini, 2012). Given these similarities, it is possible to identify some common features and principles characterizing the family of practice theory (Feldman & Worline, 2016). Six principles are particularly important for the purpose of this book (see Table 3.1 for an overview). First, practice theory offers a conceptual alternative to individualist and societist theories of action (Schatzki, 2005). Individualist and societist theories of action share two basic assumptions. First, they assume

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that individual action and structures are ontologically independent of one another. Second, they assume that either individual rational interest or social norms are the basis for social action (Feldman & Worline, 2016). Practice theory differs from these theories in the way it grasps the conditions of human action and social order (Reckwitz, 2002). From the perspective of practice theory, individual action and social structures can only be separated analytically; in practice, they are in a recursive relation to each other, forming a duality rather than a dualism (Feldman & Worline, 2016). For Schatzki (2005), practice theories thus steer a path between individualism and societism. “Like societist ontologies, they immerse the relevant features of individuals in wider, distinctly social settings in the absence of which people with these features would not exist. Like individualist ontologies, however, they deny that the wider contexts in which these features exist fundamentally diverge in character from these features: properties of individuals are ontologically continuous with the distinct social contexts in which they exist” (p. 469). Overcoming the dualism between action and structure is also one of the primary purposes of structuration theory. For Giddens (1984), action and structure are not two independently given sets of phenomena, a dualism, but represent a duality. In addition, the relationship between action and structure is recursive rather than linear. “Human social activities, like some self-reproducing items in nature, are recursive. That is to say, they are not brought into being by social actors but continually recreated by them via the very means whereby they express themselves as actors. In and through their activities agents reproduce the conditions that make these activities possible” (p. 2). From this perspective, structure is simultaneously constraining and enabling. “Most forms of structural sociology, from Durkheim onward, have been inspired by the idea that structural properties of society form constraining influences over action. In contrast to this view, structuration theory is based on the proposition that structure is always both enabling and constraining, in virtue of the inherent relation between structure and agency” (p. 169). The vocabulary of practice theory in general and structuration theory in particular therefore stands in opposition to both individualist and

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societist models of explaining action (Schatzki, 2005). This difference enables us to understand both the importance of action in creating and re-creating structures and the importance of structures in constraining and enabling action (Feldman & Worline, 2016). Second, practice theory locates “the social ” in practices. Practices— rather than individual actions or normative structures—are the unit of social analysis in practice theory (Reckwitz, 2002). As Giddens (1984) writes, “The basic domain of the social sciences, according to the theory of structuration, is neither the experience of the individual actor, nor the existence of any form of societal totality, but social practices ordered across space and time” (p. 2). Although viewing practices as the unit of social analysis, practice theory does not provide a single, coherent definition of the term “practice” (Nicolini, 2012). Reckwitz (2002) defines a practice as a “… routinized type of behavior which consists of several elements, interconnected to one other: forms of bodily activities, forms of mental activities, ‘things’ and their use, a background knowledge in the form of understanding, know-how, states of emotion and motivational knowledge” (p. 249). Drawing on Reckwitz (2002), Whittington (2006) understands practices as “shared routines of behaviour, including traditions, norms and procedures for thinking, acting and using ‘things’” (p. 619). For Schatzki (2005), practices are “organized human activities” (p. 471)—such as political practices, cooking practices, educational practices, management practices, or design practices. In Giddens’ structuration theory (1979), a social practice is an “ongoing series of practical activities” (p. 81). Despite differences in definitions, practice theory converges on the principle that practices are social and collective in the sense that they involve multiple people whose activities are organized (Schatzki, 2012). It generally views practices as a typified way of behaving and understanding carried out by different people at different locales at different points of time (Reckwitz, 2002). In addition, practice theory converges on the principle that practices have two recursively related components: actions and structure. With regard to actions, a practice is an organized, open-ended, spatial-temporal manifold of actions (Schatzki, 2005). It represents a

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pattern that is filled out by a multitude of single and often unique actions reproducing the practice (Reckwitz, 2002). To capture these unique actions, Whittington (2006) proposes the term “praxis,” referring to concrete situated activity and what people actually do in practice. Similarly, Feldman and Worline (2016) suggest that a practice is constituted “through the actions of many individuals knotted together with the actions of other individuals who may or may not share a common identity and may or may not be aware of one another’s actions” (p. 208). For Giddens (1984), as mentioned before, practices encompass those actions that recursively produce and reproduce the structures that constrain and enable these very actions (Feldman & Orlikowski, 2011). The multitude (set) of actions composing a practice is organized and coordinated by structure. Practice theorists conceptualize structure in different ways. For Schatzki (2005), structure encompasses: (1) understandings of the actions constituting the practice (e.g., knowing how to deliver lectures in an educational practice), (2) rules in the sense of explicit directives, admonishments, and instructions participants in the practice observe or disregard, (3) teleological orderings (socially accepted end-project-action combinations), and (4) general understandings (e.g., about the nature of work or proper teacher–student interactions). For Giddens (1984), structure refers to rules of signification and legitimation and to authoritative and allocative resources of domination implicated in the production and reproduction of social order. These rules and resources are “transformed” into sanctions, power, and communication among actors in interaction. The distinction between rules of signification and legitimation and resources of domination is an analytical one. In interaction, meaning, normative elements, and power interlace. “Structures of signification always have to be grasped in connection with domination and legitimation” (Giddens, 1984, p. 31). Action and structure are in a dynamic and recursive relationship, which means that actors refer to these structures in their practices, thus producing and reproducing them over time. Giddens (1984) additionally suggests that structures exist only as they are instantiated in action. “Structure has no existence independent of the knowledge that agents have about what they do in their day-to-day activity” (p. 26). Structures

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are only reproduced to the extent that the members of a practice continue to draw on them in action. Third, practice theory represents a distinct social ontology, proposing that social reality is made up of an assemblage of practices. In individualist theories of action, the social world is populated by independent individuals confronting one another with their decisions. In societist theories of action, the social world is seen as a system of normative rules and expectations, to which actors conform or become deviant. From the perspective of practice theory, the social world is populated by an assemblage of practices (Reckwitz, 2002). Assemblage means that practice theory depicts the world in relational terms as being composed by—and transpiring through—a bundle of practices (Nicolini, 2012). Any practice is embedded in a whole web of other practices (Feldman & Worline, 2016), and the effects of one practice will vary according to the presence or absence of other practices (Jarzabkowski, Kaplan, Seidl, & Whittington, 2016; Nicolini, 2012; Seidl & Whittington, 2014). For Giddens (1984), regular activities bring together people into social systems, which are made up of “reproduced social practices” (p. 17). Interrelated practices thus become the primary building blocks of social reality (Feldman & Orlikowski, 2011). Fourth, practice theory reserves a specific space for individual agency. In individualist theories of action, the individual agent is an independent, self-interested, rational decision-maker. In societist theories of action, the individual agent is a norm-following and role-playing actor. In practice theory, individual agents are “carriers of practices” (Reckwitz, 2002, p. 250). They “consist in” the performance of practices, which includes patterns of bodily behavior and routinized ways of understanding, knowing how, and desiring (Reckwitz, 2002). These typified patterns of bodily behavior, understanding, knowing how, and desiring are integral elements and qualities of a practice in which single individuals participate, not qualities of the individual (Reckwitz, 2002). Whittington (2006) uses the term “practitioners” to conceptualize the mutual constitution of practice and agents. Practices are non-individualist phenomena (Schatzki, 2005). Although practices are enacted through the actions of individuals, they are never simply the actions of an individual (Feldman & Worline, 2016).

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Fifth, practice theory provides conceptual room for reflexivity. As carriers of practices, individual agents are “neither autonomous nor the judgmental dopes who conform to norms: They understand the world and themselves, and use know-how and motivational knowledge, according to the particular practice” (Reckwitz, 2002, p. 256). In practice theory, reflexivity is an important quality of a practice because its ongoing performance requires constant adaptation to new circumstances “so that practicing is neither mindless repetition nor complete invention” (Nicolini, 2012, p. 5). For Giddens (1984), the reflexive monitoring and ongoing adjustment of action is an integral component of practice. As a part of their practice, individual agents continuously monitor the flow of their actions, as well as the social and physical aspects of the contexts in which they move. Human agents are therefore assumed to have the capacity to understand what they do while they do it. This inherent reflexivity allows them to adjust their actions when circumstances change. “Social practices are constantly examined and reformed in the light of incoming information about those very practices, thus constitutively altering their character” (Giddens, 1990, p. 38). The reflexive monitoring and adjustment of practice operate on the level of practical and discursive consciousness. Practical consciousness consists of the things actors know tacitly about how to “go on” in the contexts of social life without being able to give direct discursive expression. It is about knowing the rules and tactics whereby daily life is constituted and reconstituted across space and time. On the level of discursive consciousness, actors are able to provide verbal descriptions of what they do and provide reasons for doing it. The verbal rationalization of action usually presumes that individuals are asked by others why they act as they do. Such questions are frequently asked in instances in which the activity concerned is puzzling in some way, particularly if it appears to depart from the habitual modes of conduct of a particular person. Although structuration theory accords individual agents reflexive capacities to understand what they do while they do it, it also assumes that the knowledgeability of human agents is bounded by the

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unconscious and unacknowledged conditions and by unintended consequences of action. The unconscious includes “those forms of cognition and impulsion which are either wholly repressed from consciousness or appear in consciousness only in distorted form” (Giddens, 1984, pp. 4–5). In addition, human knowledgeability is bounded because the flow of action continually produces consequences that are unintended by actors. These unintended consequences may form unacknowledged conditions of action in a feedback fashion. Sixth, practice theory emphasizes the importance of power, conflict, and politics as constitutive elements of the social reality we experience (Nicolini, 2012). For Giddens (1984), power is “the means for getting things done and, as such, directly implied in human action” (p. 283). In structuration theory, power relations enact structures of domination over time, which means that they have both enabling and constraining implications for everyday action. However, the exercise of power should not be understood as a linear process. In structuration theory, all forms of dependence offer some resources whereby those who are subordinate can act otherwise and influence the activities of their superiors. This two-way character of the distribute aspect of power is summarized with the concept of “dialectic of control.” Overall, practice theory suggests including a “political angle” in all forms of studying human practice (Nicolini, 2012; Ortner, 1984). In sum, this section has highlighted six important principles of practice theory. If used as a sensitizing framework (Reckwitz, 2002), these principles have a certain heuristic potential to provide new insights into the dynamics of reflexive leadership in networks. Feldman (2010) notes in this regard that “these theories … provide new insights into the potential for collaboration in organizations and policy domains. They allow us to rethink fundamental concepts such as agency, structure, power, objectivity, and subjectivity in ways that make it possible to explore the processes of adjustment that produce stable patterns” (p. 160). The following two sections will draw on these principles, reviewing recent research on networks and leadership in networks from a practice-theoretical angle.

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Networks as Bundles of Inter-Organizational Practices Research on networks is highly fragmented, with several disciplines contributing to the field. The variety of disciplines spans social network theory, transaction cost theory, resource dependence theory, strategic choice theory, stakeholder theory, organizational learning, and institutional theory (e.g., Barringer & Harrison, 2000). Due to this multitude of perspectives, assumptions, and implied methodologies, it is difficult to define the term “network” in a consistent and generally accepted way. Huxham (2003) notes that “even the most basic terminology is subject to varied interpretations and there seems to be little agreement over usage of terms such as ‘partnership’, ‘alliance’, ‘collaboration’, ‘network’ or ‘inter-organizational relations’” (p. 402). Provan, Fish, and Sydow (2007) add that “a shared language with definite, concrete meanings in the study of networks has not been developed” (p. 481). Despite this diversity, it is possible to identify two main traditions shaping the field, each one with a different understanding of the term “network” (see also Grabher & Powell, 2004). Table 3.2 provides an overview of these traditions. The first tradition is social network analysis. This structuralistic tradition usually defines a network as a set of nodes and ties. Borgatti and Halgin (2011), for example, define a network as “a set of actors or nodes along with a set of ties of a specified type (such as friendship) that Table 3.2  Theoretical traditions in network research Theoretical tradition

Short description

Social network analysis

Understands networks as sets of nodes and ties Analyzes how structural network characteristics and node positions yield certain outcomes for individuals, groups, or organizations Domain 1: Understands networks as a distinct type of governance structure regulating economic exchange (vs. markets and hierarchies) Domain 2: Explores the question of how to design and lead networks

Network governance

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link them” (p. 2). This tradition assumes that social actors are embedded in patterns of ties that constrain behavior. These patterns of ties yield a particular network structure and actors occupy positions within this structure. Social network analysis is then concerned with describing network structures and node positions (e.g., centrality) and with relating these positions to specific outcomes such as performance, satisfaction, innovativeness, or survival (Borgatti & Halgin, 2011; Brass, Galaskiewicz, Greve, & Wenpin, 2004). In management research, social network analysis has been applied to understand the antecedents and consequences of interpersonal, inter-group, and inter-organizational relationships (for a recent review, see Brass et al., 2004). The second tradition, which is more relevant for this book, is the network governance tradition. It consists of two related research domains (Grabher & Powell, 2004; Oliver & Ebers, 1998). A first domain regards networks as a distinct type of governance structure that regulates economic exchange. The roots of this domain go back to the seminal works of Coase (1937) and Williamson (1975), who explained the emergence of markets and hierarchies as distinct forms of regulating economic exchange based on transaction cost theory. Later, Powell (1990) proposed that network forms of organization are a third, distinct form of coordinating economic activity. Elaborating on how networks differ from markets and hierarchies, he suggested that the logic of exchange in networks is characterized by relational means of communication, the norm of reciprocity, reputational concerns, and an open-ended tone with interdependent partners striving for mutual benefits. In networks, “transactions occur neither through discrete exchanges nor by administrative fiat, but through networks of individuals engaged in reciprocal, preferential, mutually supportive actions” (p. 303). Drawing on these seminal studies, Podolny and Page (1998) suggested a definition of networks as “any collection of actors (N ≥ 2) that pursue repeated, enduring exchange relations with one another and, at the same time, lack a legitimate organizational authority to arbitrate and resolve disputes that may arise during the exchange” (p. 59). Their definition includes a wide range of joint ventures, strategic alliances, business groups, franchises, relational contracts, or outsourcing agreements.

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A second research domain within the network governance tradition deals with the question of how to design and lead networks in order to improve competitive positions, address collective action problems, and reduce uncertainty (Grabher & Powell, 2004). Most studies presented in Chapter 2 are rooted in this domain. Some of these studies are conducted without an explicit definition of what they understand a network to be (e.g., Haecki & Lighton, 2001; Lorenzoni & Lipparini, 1999; Nambisan & Sawhney, 2011; Provan & Milward, 1995; Silvia & McGuire, 2010; Williams, 2002). Others adopt a relatively broad understanding of networks, defining them variously as “loosely coupled organizations” (Dhanaraj & Parkhe, 2006, p. 660), “multi-organizational arrangements” (O’Leary, Choi, & Gerard, 2012, p. 70), “groups of three or more legally autonomous organizations that work together to achieve not only their own goals but also a collective goal” (Provan & Kenis, 2008, p. 231), or as “a select, persistent, and structured set of autonomous firms” (Jones, Hesterly, & Borgatti, 1997, p. 914). Müller-Seitz and Sydow (2012) recently suggested a definition of networks that is rooted in practice theory. They define a network as a “social system in which the activities of at least three formally independent legal entities are coordinated in time-space, i.e., there is some reflexively agreed upon inter-firm division of labor and cooperation among the network members” (p. 108). For three reasons, this definition is particularly attractive for the purpose of this book. First, the definition is rooted in a practice-theoretical ontology and implies an analysis of inter-organizational networks as bundles of recursively reproduced practices (Müller-Seitz & Sydow, 2012). Sydow, Van Well, and Windeler (1997) state more precisely that “interorganizational relationships are formed by means of interorganizational practices,” whereby inter-organizational practices are practices that transcend the boundaries of individual organizations (p. 53). This perspective thus reflects the social ontology of practice theory, which proposes that the social world is populated by a web of recursively reproduced practices. In this view, a network “exists” only in and through the ongoing performance of its constituent practices (Schatzki, 2005). In terms of structures, Sydow, Schüssler, and Müller-Seitz (2016) suggest that the inter-organizational practices constituting a network

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are enabled and constrained by structures on at least two levels besides the network level: the organizational field level and the level of the participating member organizations. According to DiMaggio and Powell (1983), the organizational field level refers to “sets of organizations that, in the aggregate, constitute a recognized area of institutional life, key suppliers, resource and product consumers, regulatory agencies, and other organizations that produce similar services or products” (p. 48). Practitioners usually talk about the organizational field level in terms of an industry or branch, possibly restricted to a particular geographic region (Sydow et al., 2016). Like the network and organization level, the organizational field level enables and constrains collaboration across organizational boundaries (Phillips, Lawrence, & Hardy, 2000). At the level of the member organizations of a network, Sydow et al. (2016) define an organization as “a mainly formal social system governed by hierarchy and exhibiting a certain degree of institutionalized reflexivity, which for this very reason, allows it to sustain at least some degree of autonomy from the environment” (p. 16). The network, organizational field, and organization levels are recursively related, which means that practices on one level shape and are shaped by practices on other levels. “Network practices are … viewed as embedded in the social context of the interfirm network, the industry, and the society, which, in turn are produced and reproduced by these practices” (Sydow & Windeler, 1998, p. 267). Second, the definition is useful because it theoretically specifies the number of network members. In contrast to Podolny and Page’s (1998) definition, Sydow and Müller-Seitz’s (2012) definition suggests that inter-organizational practices transcend the boundaries of at least three formally independent legal entities. This qualification is important because it acknowledges the different social dynamics that emerge in the transition from two to three network members. As Simmel (1950) argues, the participation of a third member gives a network a new quality compared to a dyad (see also Powell, 1990; Windeler, 2001). For instance, the participation of a third member creates new opportunities for agency such as the option to play two or more actors against each other, or the option to create value for the network by bringing

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together multiple actors with a diverse and complementary knowledge base (Sydow et al., 2016). Finally, the definition is useful because it allows for dynamics and reflexivity in the study of networks. Practices in general and inter-organizational practices in particular are not static but continuously evolve as actors reflexively deal with changing circumstances, opportunities, and arising problems (Giddens, 1984, 1990; Schatzki, 2005). By recurrently performing inter-organizational practices, agents reproduce and stabilize networks, but they also change them as “recursive human practices are repeated again and again, although not identically each time” (Gherardi, 2006, p. xiv). In this reflexive sense, Sydow et al. (1997) suggest that the ongoing performance of inter-organizational practices is not simply a copy of existing structures but that it may also contribute to structural changes at the organizational field, network, and organization levels. In sum, this section has provided an overview of how extant research has conceived of the term network, identifying social network analysis and network governance as the two main traditions defining the field. Sydow and Müller-Seitz (2012) recently proposed a perspective on networks as formed by bundles of inter-organizational practices, which are practices that transcend the boundaries of individual organizations. This view is particularly relevant for the purpose of this book because it is rooted in a practice-theoretical ontology, acknowledges the specific social dynamics of three or more network members, and allows for reflexivity and dynamics in theorizing networks.

The Practice of Leading in Inter-Organizational Networks The notion of leadership has long been a major area of interest among social scientists and organization scholars (Parry & Bryman, 2006). Leadership is assumed to make a special, significant, and positive contribution to organizations and other social systems, including networks. Against this background, research has been interested in identifying and

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describing the qualities of “effective leadership.” The majority of this research has been leader-centered, focusing on the traits, abilities, and actions of individual leaders (Wood, 2005). Over the years, however, the outcome and practical relevance of this leader-centered line of inquiry has been increasingly questioned (e.g., Burack, 1979; Cullen-Lester & Yammarino, 2016; Fiedler, 1996; Hosking, Dachler, & Gergen, 1995; House & Aditya, 1997; Mintzberg, 1982; Sashkin & Garland, 1979). Alvesson and Sveningsson (2003) even raise doubts that the construct of leadership says something valuable and valid about what managers actually do. On this basis, they propose to think through the issue in new ways, asking researchers to open up to fresh vocabularies and new lines of inquiry that deviate from the traditional models. Organization scholars have recently joined this call for new leadership theories, arguing that leader-centric models may be ill-equipped for dealing with the issues and complexities organizations face in today’s networked and knowledge-driven societies (e.g., Uhl-Bien, 2009; Uhl-Bien, Marion, & McKelvey, 2007). The limitations of the traditional model become particularly evident in contexts in which work is accomplished by highly trained professionals. In these settings, formally appointed leaders are unlikely to possess conventional managerial authority relying on hierarchical control, and they are frequently unable to unilaterally determine new practices without the support of these professionals (Mintzberg & McHugh, 1985; Oborn, Barrett, & Dawson, 2013). These contexts thus require a “post-heroic” conception of leadership (Baecker, 2012; Fletcher, 2004) that acknowledges that power and control may be distributed widely throughout a system (e.g., Balogun, 2003; Denis, Lamothe, & Langley, 2001; Denis, Langley, & Cazale, 1996; Denis, Langley, & Rouleau, 2005; Rouleau, 2005). Responding to these concerns raised by leadership and organization scholars, research has recently suggested reconstructing the notion of leadership as a social practice (Denis et al., 2001, 2005; Denis, Langley, & Rouleau, 2010; Endrissat & Von Arx, 2013; Raelin, 2016c, 2016d). The following section will shed light on ideas from scholars of the emerging “leadership-as-practice” field. It will combine their ideas with the latest insights from network scholars who also adopt a practice

58     M. Mitterlechner Table 3.3  Central ideas of the practice of leading in inter-organizational networks Central idea

Short description

Leadership occurs as a practice

Leadership is a social, jointly accomplished practice Leadership denotes the distinct practice through which a single or multiple organizations exert influence to reflexively coordinate network activities Leadership action is recursively situated in structures Leadership is accomplished collectively by a constellation of co-leaders Leadership requires power to act. In networks, powerful interventions, however, depend on the consent of the led Leadership in networks may produce contradictory and unintended consequences, which turns it into a largely nonlinear and unpredictable practice

Leadership is concerned with the reflexive coordination of network activities

Leadership is a contextually situated practice Leadership is a collective practice Leadership is a politically fragile practice

Leadership is a dialectic practice

perspective on leadership. To do so, it will concentrate on six central ideas that are particularly relevant for the purpose of this book (see Table 3.3 for an overview). First, in contrast to traditional lines of inquiry, leadership-as-practice research assumes that leadership occurs as a practice rather than residing in the traits and behaviors of individuals (Raelin, 2016c). It decenters leadership from individual “leaders” and focuses on structured, patterned action. “Leadership does not rely on the attributes of individuals, nor does it focus on the dyadic relationship between leaders and followers, which historically has been the starting point for any discussion of leadership. Rather, it depicts immanent collective action emerging from mutual, discursive, sometimes recurring and sometimes evolving patterns in the moment and over time among those engaged in the practice” (Raelin, 2016b, p. 3). Second, conceived as a practice, leadership is concerned with coordinating and providing direction. Nicolini (2012), who theorizes organizations

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as both the site and result of work activities and thus, as bundles of work practices, suggests that leadership is a particular form of practice that aims to ensure that these social and material activities work more or less in the same direction. In a similar way, Simpson (2016) argues that leadership resides in those moments that re-orient the flow of practice toward new directions. Viewed from a practice perspective, leadership in networks is thus concerned with providing a sense of direction to the flow of the inter-organizational practices constituting the network. Sydow and Windeler (1998) argue in this sense that leadership tries “intentionally and reflexively to shape network processes and relationships in order to coordinate the activities in the network” (p. 268). If a network is understood as a social system in which the activities of at least three legally independent organizations are coordinated in timespace, leadership denotes the distinct practice through which a single or multiple organizations exert influence to reflexively coordinate the activities in the network (Müller-Seitz & Sydow, 2012; Sydow & Windeler, 1998). Third, like any other action, leadership action is recursively situated in structures. This means that concrete leadership action, or leadership “praxis” in Whittington’s (2006) terms, is shaped by and shapes the structures to which it refers (Endrissat & Von Arx, 2013). This view implies a need to look simultaneously at structural properties and the micro-level detail of action in situ in order to understand how leadership occurs and achieves results (Denis et al., 2010). From a practice-theoretical perspective (and in contrast to a structural perspective on leadership in networks), leadership action is not determined by structures. Rather, agents are accorded the capacity to reflexively monitor their actions and the consequences of these actions and to adjust the practices in which they are engaged over time (Giddens, 1984). Along these lines, Raelin (2016b) regards reflexive leadership action as a constraint to structure. “Leadership becomes evident when agency appears as a constraint to structure. At times, it may even transform it. Using such resources as self-consciousness or deliberation, agents can use individual and collective reflexivity to overturn the historical contexts and expectations imposed on people and institutions” (p. 5).

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In the context of networks, Araujo and Brito (1998) find that leadership emerges through both the gaps and incompleteness of structural constraints and by purposeful action aimed at reconfiguring these constraints in a manner that advances a particular section of interests. They argue that “actors often deploy considerable creative powers to reform and transform the rule systems and roles allocated to them in particular structures” (p. 24). Martin, Currie, and Finn (2008) similarly contend that without “the will and the agency of its actors, as expressed through leadership at various organizational levels, the network has no causal force” (p. 788). Sydow, Lerch, Huxham, and Hibbert (2011) hence suggest that “leadership in general aims at creating, producing, reproducing or transforming – via direct and indirect actions – a social order that is always precarious and requires leadership as one ‘organizing activity’ (Hosking, 1988)” (p. 330). On this basis, they conceive of leadership as “reflexive structuration.” With this notion, they refer to the capacity of actors to make things happen by influencing others based upon a reflexive monitoring of their action, its consequences, and contextual conditions (Giddens, 1984). Denis et al. (2010) argue that the recursive relationship between reflexive leadership action and its structural consequences is at the heart of the dynamics of leadership. With regard to consequences, they differentiate between three dimensions. Substantive consequences are those that concern concrete structural change. Symbolic consequences refer to the evolution of meaning among relevant stakeholders. Finally, political consequences concern effects in terms of the distribution of power and the evolution of leadership roles within a leadership constellation. Fourth, leadership-as-practice scholars suggest that leadership is accomplished collectively by a constellation of co-leaders (e.g., Denis et al., 2010; Gronn, 2002; Hodgson, Levinson, & Zaleznik, 1965). Analyzing leaders in a healthcare environment, Denis et al. (2010) find, for example, that the “activities central to their practices would have been impossible if these individuals had not succeeded in aligning themselves with others in leadership positions with whom they then coordinated their actions” (p. 75). In a similar vein, Raelin (2016b) argues that the practice of leadership is intrinsically collective and not dependent on any one person to mobilize action on behalf of everybody

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else. He defines a leadership constellation as a group of agents effecting leadership at any given time. In principle, leadership action can be distributed widely across a network (e.g., Buchanan, Addicott, Fitzgerald, Ferlie, & Baeza, 2007), but frequently it is concentrated in a constellation of people who have grown into and assume a specialized leadership role (Wimmer, 2009). Raelin (2016b) argues that “in the process of engagement, leadership may emanate from the actions of particular individuals who, often because of historical reasons, may be able to suggest meaning with a high degree of insight” (Raelin, 2016b, p. 4). In the context of networks, Sydow et al. (1997) similarly suggest that agents may succeed in transforming structures, especially when acting collectively. They conceive of leaders as those “who, more than others, are thought of as influencing the social activities and relationships towards the production, reproduction or transformation of a social order (Bass & Stogdill, 1990; Drath et al., 2008)” (Sydow et al., 2011, p. 331). In Whittington’s (2006) terms, these agents can be understood as “leadership practitioners.” Fifth, in order to exert influence and make things happen (Huxham & Vangen, 2000), the leadership constellation requires power to act. Denis et al. (2001) analyzed leadership and change in several pluralistic healthcare settings, which were characterized by divergent objectives and diffuse power relations. They found that in pluralistic contexts, a leadership constellation might accomplish change if it succeeds in assembling a variety of skills, expertise, sources of influence, and legitimacy. However, the power of the leadership constellation to act is fragile because their actions are constantly being reevaluated by other powerful constituencies. In fluid, pluralistic power contexts such as health care, leadership depends on the “consent of the led” (Denis et al., 2001, p. 833). The variety of objectives pursued in such contexts increases the likelihood that certain groups ultimately see the actions of the leadership constellation as meaningless and/or illegitimate, which may feed back into the credibility, legitimacy, power, and composition of the leadership constellation itself. Related conditions and dynamics apply in networks as they show similar characteristics of pluralism in the sense that objectives frequently diverge and power relations are diffuse (Huxham, 2003). With regard

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to the latter, individual organizations are unable to direct the activities of other network members via hierarchical fiat. “It is also important to highlight that leadership in inter-organizational networks differs significantly from leadership in individual organizations in that networks cannot direct the planned endeavors of other network organizations via fiat (Podolny & Page, 1998; Williamson, 1975)” (Müller-Seitz, 2012, p. 430). Leadership in networks rather involves a subtle exertion of influence to coordinate the practices of independent, powerful organizations (Beyer & Browning, 1999; Müller-Seitz, 2012). To exert influence, leaders nevertheless rely on power to act. Referring to structuration theory, Sydow et al. (2011) argue that leaders are able to lead because they have easier access to and/or better command of allocative and authoritative resources (such as public funding or a formal mandate to exert influence). Access to and/or better command of allocative and authoritative resources provides leaders with a more central position (relative to others) to exert influence. However, like in other pluralistic contexts, effective leadership requires a subtle interplay between resources of domination and rules of signification and legitimation. To be effective, powerful interventions need to make sense to those who are led, and they need to be considered as legitimate. If leadership actions are not considered to be useful and legitimate by the network members, they might be questioned and trigger changes in the leadership constellation of the network (Müller-Seitz & Sydow, 2012). Finally, leadership-as-practice scholars have suggested that leadership is dialectic, which means that leadership practice may produce contradictory and unintended consequences (Denis et al., 2010). Collinson (2005) argues, for instance, that apparently successful leadership practices may generate their own resistance and that consent may be superficial, hiding open or covert dissent among followers. He finds that “leaders exercise considerable control and … their power can also have contradictory outcomes which leaders either do not always understand or of which they are unaware” (Collinson, 2005, p. 1435; cited in Denis et al. 2010, p. 80). Simpson (2016) similarly finds that leaders cannot perfectly anticipate the context and outcomes of their actions, which turns leadership into a largely unpredictable practice.

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The dialectic of leadership seems to be relevant also in networks. Drawing on Giddens’ (1984) stratification model of the agent, Sydow and Windeler (1998) contend that the formation and reproduction of a network “depends, at least in part, upon social and economic forces beyond managerial intent and control” (p. 268). This dialectic relates to the “dialectic of control” (Giddens, 1984) that is present in all social systems. According to the dialectic of control, all forms of dependence offer some resources whereby those who are subordinate can influence the activities of their superiors—they can always act otherwise. In the context of networks, research has hence suggested that network member organizations, even those that are powerfully led by a dominant hub firm, can always act otherwise. This turns leadership in networks, as in other pluralistic contexts, into a largely nonlinear and unpredictable practice (Sydow, 2004). In sum, this section has reviewed recent advances on the concept of “leadership,” focusing on and combining insights from leadership-as-practice and network scholars. These scholars understand leadership as a collective and situated practice accomplished by a leadership constellation. Leadership in networks is concerned with coordinating network activities, i.e., with coordinating the inter-organizational practices constituting a network. Leadership requires power to act and is dialectic, meaning that it can produce contradictory and unintended consequences. As a result, leadership is a largely unpredictable and nonlinear practice.

The Meaning and Role of Reflexivity in Leadership Practice Previous sections have repeatedly referred to the notion of reflexivity as a key aspect of leadership practice. At the most fundamental level, practice theorists regard reflexivity as an elementary aspect of human action. Reflexivity plays a pivotal role in Giddens’ (1984) structuration theory, which regards the reflexive monitoring and ongoing adjustment of action as an integral component of practice.

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Drawing on these theoretical foundations, leadership-as-practice scholars understand reflexivity as one of the defining characteristics of leadership. As mentioned before, Raelin (2016a) regards reflexivity as a critical resource for agents to question and change historical contexts and institutionalized expectations. He even sees the orchestration of what he calls “public reflection” as one of the defining characteristics of leadership understood from a practice-theoretical perspective. “The orchestration of the dialectical process of public reflection is perhaps the most fundamental characteristic of leadership in a leadership-as-practice orientation” (Raelin, 2011, p. 200). Reflexivity has also been emphasized by practice-oriented network scholars. For example, Huxham (2000) notes that those who take leadership roles in a network need to be seriously reflexive practitioners. Reflexivity is also a key concern for Sydow and Windeler (1998), for whom leaders try “intentionally and reflexively to shape network processes and relationships in order to coordinate the activities in the network” (p. 268, emphasis added). Their notion of reflexivity refers to “the capability of agents (and systems) to monitor and rationalize action, processes, and contexts with respect to what has happened, happens, and will happen or has to be done” (ibid.). On this basis, Sydow et al. (2016) argue not only for reflexive practitioners but also for an institutionalization of reflexivity in networks. Although reflexivity plays a pivotal role in practice theory, its exact meaning has remained elusive. This section will therefore propose a reading of reflexivity as a conversational, collective, and politically situated practice, reviewing the latest research on the concept of reflexivity. At the outset, it is important to note that the literature defines reflexivity in different ways. As Cunliffe (2003) suggests, the concept of reflexivity has emerged within a broad spectrum of disciplines including philosophy (e.g., Dewey, 1910; Heidegger, 1959), linguistics (e.g., De Saussure, 1993; Wittgenstein, 1953), the natural sciences (e.g., Ashmore, 1989; Latour, 1988), anthropology (e.g., Clifford & Marcus, 1986), sociology (e.g., Garfinkel, 1967; Giddens, 1984, 1990), psychology (e.g., Gergen & Gergen, 1991), and recently, management studies (Boud, Cressey, & Docherty, 2006; Cotter & Cullen, 2012; Cunliffe, 2004; Raelin, 2001; Reynolds & Vince, 2004a; Schon, 1983; Storey &

3  Reconstructing Leadership in Networks as a Reflexive Practice     65 Table 3.4  Recent advances in conceptualizing reflexivity Recent conceptualizations of reflexivity

Short description

Reflexivity as a conversational practice

Reflexivity is a conversational practice rather than a mental technique for solving objective problems Reflexivity is a collective practice rather than an individual capability. It occurs in the presence of others Reflexivity is a politically situated rather than a value-neutral practice

Reflexivity as a collective practice

Reflexivity as a politically situated practice

Salaman, 2009). Definitions of reflexivity vary according to their theoretical background. Despite this variety of definitions, it is possible to identify three important shifts in how the literature currently conceptualizes reflexivity (see Table 3.4 for an overview). First, recent research regards reflexivity as a conversational practice, as opposed to a mental technique for solving objective problems. Traditional research understood reflexivity as a disciplined approach of individual learning from experience to make considered choices among alternative courses of action. Rooted in a realist ontology, it assumed that reflexivity is concerned with developing accurate descriptions about an external reality that can be objectively discovered (e.g., Dewey, 1910; Schon, 1983; Woolgar, 1988). Recent research, by contrast, regards reflexivity as a conversational practice through which actors unsettle, examine, and potentially change traditional practices. This line of research is grounded in a social-constructionist ontology, which assumes that social realities are continuously created and recreated through language in everyday interaction and conversation (e.g., Berger & Luckmann, 1967; Gergen, 1999). Cunliffe and Jun (2005) are important representatives of the social-constructionist stream, suggesting a distinction between the terms “reflection” and “reflexivity.” The notion of “reflection” is rooted in the realist tradition and refers to a cognitive activity through which people resolve objectively given problems without questioning the ends, means, and relevance of the practice that underlies these problems in the first place. The term

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“reflexivity,” by contrast, is rooted in a social-constructionist ontology and refers to a conversational practice through which actors “question their assumptions, practices, and actions and their impact on the organization and the community at large” (p. 233). Reflexive conversations thus provide a foundation for exploring new possibilities for joint action (Cunliffe & Easterby-Smith, 2004). Second, and closely related to the first point, recent research regards reflexivity as a collective practice rather than as an individual capability. Traditional research regarded reflexivity as an individual capability. For example, Dewey (1910) and Schon (1983), two progenitors of the concept of reflexivity (Vince & Reynolds, 2009), understood reflexivity as an individual learning process based on personal experience. Recent research departs from this view, conceptualizing reflexivity as a collective practice (Raelin, 2001; Reynolds & Vince, 2004a). Raelin (2001), for instance, suggests that reflexivity occurs in the midst of practice and is shared in the presence of others. Reynolds and Vince (2004b) similarly argue that “less emphasis needs to be placed on reflection as the task of individuals, and more emphasis needs to be put on creating collective and organizationally focused processes for reflection” (p. 1). The collective perspective on reflexivity has gained importance because in today’s complex organizations, individuals alone are unable to address or solve meta-organizational problems. Building on Raelin (2001) and Vince (2002), Nicolini, Sher, Childerstone, and Gorli (2004) contend that “individualized, private reflection is incapable of reaching, exposing and affecting the institutionalized assumptions and logic that regulates organizational action, and it is also at risk of becoming a sterile effort, given that individuals alone are seldom in positions to make substantial organizational changes” (p. 81). Scholars understanding reflexivity as collective practice have begun to shed light on social conditions facilitating reflexivity. For one thing, they have found that collective reflexivity depends on the availability of “reflexive spaces” (e.g., Bucher & Langley, 2016; Hendry & Seidl, 2003; Hodgkinson, Whittington, Johnson, & Schwarz, 2006; Howard-Grenville, Golden-Biddle, Irwin, & Mao, 2011; Kellogg,

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2009; Nicolini et al., 2004).1 Reflexive spaces can be understood as episodic communicative events that involve several actors who are co-located in the same (physical or virtual) space (Seidl & Guerard, 2015). In their daily routine, these actors are physically distributed across the multiple practices constituting their social system. Reflexive spaces separate these actors physically, temporally, and symbolically from the performance of their daily practices and thereby provide them with an occasion for jointly reflecting on these practices and their mutual interdependencies from a communicative distance (Bucher & Langley, 2016). In the words of Rüegg-Stürm and Grand (2015), reflexive spaces “are communication spaces that consistently interrupt everyday activities and processes in order to communicatively process the status quo and suitable alternatives from a favorable distance” (p. 179). Research has suggested that these spaces facilitate reflexivity (Abzug & Mezias, 1993; Hendry & Seidl, 2003; Mezias, Grinyer, & Guth, 2001; Nicolini et al., 2004; Seidl & Guerard, 2015) and thereby support distributed actors in aligning activities (Boden, 1995; Brinkerhoff, 1972) and in coordinating future action (Clifton, 2009; Hodgkinson et al., 2006; Huisman, 2001; Mintzberg, Raisinghani, & Theoret, 1976). For another thing, scholars have recently begun to explore the role of communicative linkages among reflexive spaces (Seidl & Guerard, 2015). Jarzabkowski and Seidl (2008) found, for example, that it is insufficient to study reflexive spaces in isolation, arguing that most strategic developments “unfold over a series of successive meetings” (p. 1417, italics in original). Nicolini et al. (2004) similarly contend that organizational change depends on a “structure to reflect,” i.e., a set of communicatively well-connected reflexive spaces. In this sense, Rüegg-Stürm and Grand (2015) argue that effective strategy work is not empowered by

1The

literature variously calls reflexive spaces “reflective spaces” (Bucher & Langley, 2016), “liminal occasions” (Howard-Grenville et al., 2011), “relational spaces” (Kellogg, 2009), or “strategic episodes” (Hendry & Seidl, 2003). A typical example of a reflexive space is a strategy workshop, which involves “taking managers away from their ordinary responsibilities for a day or two to consider their organization’s long-term strategic direction” (Hodgkinson et al., 2006, p. 480). The purpose of strategy workshops is to reflect on the existing strategic orientation of an organization, generate new ideas and solutions, and formulate new strategic directions (Hodgkinson et al., 2006).

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individual reflexive spaces, but by their coherent interaction over time. The resulting “management architecture” pre-structures “whether and how openly debates and structured analysis procedures are carried out and formal decisions are taken” (p. 192). Finally, recent research conceptualizes reflexivity as a politically situated rather than a value-neutral practice. Research rooted in a realist ontology understood reflexivity as a key element for rational problem-solving. It implied a view of reflexivity as a value-neutral, disinterested practice of developing efficient and effective means for achieving desired ends. Current research questions this perspective, suggesting that aspects of practice which are taken for granted are actually situated in power and control structures (e.g., Antonacopoulou, 2004; Cotter & Cullen, 2012; Cunliffe, 2009; Cunliffe & Easterby-Smith, 2004; Nicolini et al., 2004; Raelin, 2012; Vince & Reynolds, 2009). The institutionalization of reflexivity hence requires a consideration of the sociopolitical structures within which is situated. Cunliffe and Easterby-Smith (2004), for example, point out that power structures can have a major impact on reflexivity. Referring to Argyris and Schon (1978), they propose that chances of reflexivity are reduced when certain powerful individuals impose viewpoints and interpretations unilaterally on other organizational members. They submit that if reflexivity is to be facilitated, then both individual managers and wider organizational power structures will have to support the sharing of information and open interrogation of its meaning. In a similar vein, Nicolini et al. (2004) studied reflexivity practices in the British National Health Service (NHS), observing the unfolding of a program designed to foster reflexivity and organizational learning among middle managers of a large UK Health Authority. They found that the dynamics of the program were shaped and impeded by the sociopolitical structures of the NHS, which were characterized by fragmented responsibilities and accountability. At an early stage, middle managers decided to launch the program in a bottom-up fashion because they were unable to secure support from the elusive “top” of the organization. Later, they wanted to communicate provisional results to a group of senior managers, hoping to win them over as champions for ideas developed in the program. Most invited senior managers

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did not attend the scheduled meeting, and those who did hesitated to make commitments, thus reproducing the NHS’s fragmentation and undermining the effectiveness of the reflexivity program. Nicolini et al. (2004) concluded that the same sociopolitical structures that made it impossible to rally senior-level support for the program at the outset made these senior managers ignorant of the relevance of their presence for the middle managers at a later stage. In sum, both practice theorists and leadership-as-practice scholars conceive of reflexivity as an inherent quality of human practice. This section has reviewed the latest research on the concept, pointing to three developments. Reflexivity is now understood as a conversational, collective, and sociopolitically situated practice through which actors question their traditional practices and explore new possibilities for joint action.

Summary and Outlook This chapter has provided important conceptual foundations for theoretically reconstructing and empirically describing leadership in networks as a reflexive practice. In a first step, this chapter has introduced basic principles of practice theory. Practice theory offers a theoretical alternative conceptualizing the interplay between structure and action as a duality rather than as a dualism. Locating “the social” in practices, it represents a distinct ontology, which views social reality as made up of an assemblage of practices. It also provides conceptual room for reflexivity and emphasizes the importance of power, conflict, and politics as basic elements of social reality. In a second step, this chapter has reviewed how extant research conceives of the term “network.” Arguing from a practice-theoretical ontology, it has suggested adopting a definition of networks as a social system in which the activities of at least three legally independent organizations are coordinated in time-space. This suggests a perspective on networks as formed by an assemblage of inter-organizational practices, which are practices that transcend the boundaries of individual organizations.

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These inter-organizational practices are enabled and constrained by structural properties at the network, organization, and organizational field levels. In a third step, this chapter has reviewed recent advances in leadership theory, shedding light on contributions from leadership-as-practice and network scholars. These scholars suggest an understanding of leading in networks as the exertion of influence by a single or several organizations in order to reflexively coordinate the activities in the network. They also concur on the idea that reflexivity is an inherent feature of leadership understood as a practice. In a fourth step, this chapter has then explored how recent research has defined the term “reflexivity.” It has found that the current literature theorizes reflexivity as a conversational, collective, and sociopolitically situated practice, through which actors question their traditional practices and thus explore new possibilities for joint action. Building on these conceptual foundations, Chapter 4 will outline the approach to data collection and analysis. Chapters 5–8 will present the empirical findings in three steps. In a first step, Chapter 5 will present a novel practice-theoretical model of reflexive leadership in networks. The model will combine empirical insights with sensitizing concepts suggested in this chapter. In a second step, Chapters 6 and 7 will describe the dynamics of the model by means of two empirical case studies conducted in the Swiss healthcare sector. In a third step, Chapter 8 will compare the two case studies, elaborate on the theoretical model presented in Chapter 5, and hence offer a theoretically grounded explanation for Peripheral’s and Urban’s divergent effectiveness.

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4 Methodology

This book explores the question of how member organizations practice leadership in a reflexive way in the networks in which they are involved. This chapter will provide an overview of the methods used for studying this question. It is structured into four sections. First, it will argue why a longitudinal qualitative comparative case study design was appropriate for studying the research question of this book. Second, it will explain why the healthcare sector, in general, and Peripheral and Urban, in particular, provided a pertinent context for studying leadership in networks. Third, it will describe my approach to data collection and analysis. Fourth, it will conclude with reflections about the aim of this research and ethical considerations.

Longitudinal Qualitative Comparative Case Study Design To explore the research question of how member organizations reflexively practice leadership in the networks in which they are engaged, I conducted a longitudinal qualitative comparative case study in the Swiss healthcare sector. This research design was appropriate for four reasons. © The Author(s) 2019 M. Mitterlechner, Leading in Inter-Organizational Networks, https://doi.org/10.1007/978-3-319-97979-3_4

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First, according to Eisenhardt and Graebner (2007), case studies are particularly suitable for studying questions that address the “how” and “why” in unexplored areas. Eisenhardt (1989) further notes that case studies enable researchers to investigate the dynamics within particular settings. Both criteria were relevant in this research, which aimed to explore an under-researched area (reflexive leadership in networks) from a dynamic, practice-oriented perspective. Second, and related to the first point, I focused on qualitative data, which have the ability to explicate complex social dynamics. Qualitative research has remained an underutilized methodology both in leadership and in network studies, but in this case, it facilitated a deep probe into the recursive dynamics of reflexive leadership in networks. Quantitative data would have been insufficient to uncover the intricacies and nuance embedded in my research question (Eisenhardt & Graebner, 2007). As Martin, Currie, and Finn (2008) note, “where quantitative approaches permit the statistically based identification of apparent correlations between cause and effect, qualitative methods … are particularly useful in elucidating the mechanisms which give rise to such correlations (Lee, 1999; Silverman, 2004). As such, they are well suited to the study of ‘processes’ within organizations (Langley, 1999; Pettigrew, 1997)” (pp. 778–779). In addition, qualitative approaches are useful when relatively little is known about an area of study or when a fresh perspective is needed, which was also applicable in this research (Johnson, Langley, Melin, & Whittington, 2007). Third, to explore the recursive dynamics of leadership in networks, I collected longitudinal data. As Langley, Smallman, Tsoukas, and Van de Ven (2013) note, longitudinal data are necessary to observe how practices unfold over time. Longitudinal research is also recommended by network scholars, especially those doing practice-theoretical research in heterarchical networks. These scholars argue that longitudinal studies are particularly suitable because leadership in these contexts is fragile and subject to ongoing changes due to conflicting outcomes from consensus-based decision-making processes (Müller-Seitz, 2012). The longitudinal research design enabled me to observe these fragile dynamics over time.

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Finally, while a single-case study can richly describe the process of a phenomenon such as the practice of leadership in networks, a comparative case study typically provides a stronger base for theory building (Yin, 2014). In order to generate the compelling and robust results that can be obtained from multiple cases, I conducted a comparative case study (Yin, 2014). As Eisenhardt (1991) notes, multiple cases are a powerful means to generate theory by permitting replication and extension among individual cases.

Research Context and Field Access The healthcare sector turned out to be a particularly attractive context for this study. Due to the progress and increasing specialization of medicine, health care has developed into a highly fragmented industry, in which the outpatient, inpatient, and rehabilitation sectors are extensively separated, and in which collaboration and information exchange among the different service providers are frequently poor (e.g., Amelung, Hildebrandt, & Wolf, 2012). At the same time, there is a growing recognition that collaboration among healthcare providers needs to improve in order to deal with the growing prevalence of chronic diseases and rising healthcare costs in Western countries. The goals of better inter-organizational collaboration (frequently called “integrated care”) are to enhance the quality of care, quality of life, patient satisfaction, and system efficiency. Improving these outcomes is particularly pressing for patients with complex, longterm conditions that cut across multiple services, providers, and settings (Kodner & Spreeuwenberg, 2002). However, experience from the field shows that the actual implementation of integrated care often lags behind conceptual agreement (e.g., de Stampa et al., 2010), pointing to problems of “collaborative inertia” (Huxham, 2003). Among several other factors, leadership has been identified as a key contributor and barrier to effective collaboration (e.g., Ling, Brereteon, Conklin, Newbould, & Roland, 2012; Nolte et al., 2016). In view of the critical role of leadership in developing integrated care networks, I conducted the study in collaboration with two

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healthcare networks operating in a peripheral (hereafter: “Peripheral”) and urban (hereafter: “Urban”) region in Switzerland. Peripheral was founded in January 2007, initially consisting of a regional hospital, an outpatient care organization, a thermal spa, and a retirement home. Later, the network expanded to include several regional social service organizations. Urban was founded in November 2009. Its founding members spanned some of the most important healthcare providers in the city, including the municipal health department (which operated hospitals and retirement homes), the municipal pharmacy association, four general practitioner (GP) associations, three health insurance companies, an ethics foundation, two GP group practices, the regional branch of ProElderly, the professional association of nurses, three hospitals, a municipal outpatient care organization, and an education foundation. More details about the two networks will be provided in Chapters 6 (Peripheral) and 7 (Urban). Case selection is an important step in building theory from case study research (Eisenhardt, 1989). In selecting cases, I followed Pettigrew’s (1990) advice to sample “polar types,” in which the phenomenon of interest is more easily observable (see also Eisenhardt, 1989). Selecting “polar types” means that researchers sample extreme cases in order to be able to observe contrasting patterns in the data (Eisenhardt & Graebner, 2007). In this research, I selected two networks that, according to key informants from the two networks, differed with regard to context and effectiveness (see Table 4.1). While key informants described Peripheral as a “success story,” Urban was repeatedly described as a “network in crisis.” This book arose from an emerging interest in exploring and explaining the performance differential between the two networks with a particular focus on the role of “leadership” in this context. Longitudinal qualitative research requires the collection of rich and sensitive data. As Langley (2009) notes, this raises important pragmatic questions regarding field access, researcher roles, and reciprocity arrangements. We gained access to Peripheral and Urban by offering the two networks “reflexive innovation partnerships,” which is customary for our research team at the University of St. Gallen. However, the initiation and concrete design of the two partnerships differed between the two cases.

4 Methodology     85 Table 4.1  Theoretical sampling of comparative case study Dimension

Peripheral

Urban

Geography

Rural region secluded by mountains Roughly 8000 inhabitants, 1000 km2, strong demographic aging Relatively weak economy, driven by tourism and health care High, described as “success story”

Metropolitan area

Demography

Economy

Effectiveness

Roughly 380,000 inhabitants, 90 km2, stable demographic aging Relatively strong economy, driven by financial sector and commerce Low, network described as “in crisis”

In Urban’s case, field access was prepared in Spring 2013, when our research team wrote a letter to the city council member politically responsible for health. In this letter, we asked her if she would be interested in a collaboration with our research team. She forwarded our inquiry to Urban’s Executive Committee, who invited the head of our research team and me to one of their next meetings, which took place in September 2013. The Executive Committee was particularly interested in understanding the benefits they could expect and the costs in terms of time and material expenses. We offered to bear all material costs and explained the advantages to participating in a “reflexive innovation partnership.” The partnership would last until December 2015 and include full access to network members, documents, and meetings. In exchange, we would provide a final research report and intermediate feedback workshops at a frequency that aligned with the preferences and interests of Urban’s Executive Committee. Urban’s Executive Committee unanimously voted in favor of our research proposal. The fieldwork began in October 2013 and formally ended as planned in December 2015. In Urban’s case, the return service eventually consisted of three feedback workshops in which I described my observations and initiated reflexive conversations by submitting open-ended questions. I refrained, however, from providing direct operational advice as a consultant would do, acting as an “empathetic but nonparticipant ” observer (Langley, 2009, p. 421).

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The situation was different in Peripheral, where the head of our research team and I explored the possibility of supporting Peripheral and the regional tourism organization as facilitators of a project to develop and market new health tourism products for the Swiss and German travel market. The project had been initiated by Peripheral’s leadership constellation, who expected that health-conscious tourists would make a financial contribution to Peripheral’s overhead costs. The project was also attractive for the regional tourism organization, which hoped for additional revenue streams beyond the peak season, which was characterized by alpine sports in winter and summer. Our research team was interested in the project because it provided an opportunity to gain close-up access to Peripheral and study the formation and development of the network. The field phase started in September 2011 and ended in September 2015, when the health tourism project officially ended. My role during this time can best be described as a “research oriented action researcher ” (Eden & Huxham, 2006; Huxham & Vangen, 2000, 2003). In research-oriented action research (RO-AR), interventions—in my case as facilitator of the health tourism project—are a means to research ends. At the same time, the intervention has to be of importance to the practitioners involved. “RO-AR requires both an involvement by the researcher with members of organizations over matters that are of genuine concern to them and over which they intend to take action, and most importantly, a primary commitment of the researcher to advance a field of knowledge in a manner that has some general implications” (Eden & Huxham, 2006, p. 393). This orientation differentiates RO-AR from other forms of action research. Unlike other variants, RO-AR does not imply any of the following: a particular ideological perspective like empowerment or participation (e.g., Whyte, 1991); that the practitioners in the researched organizations are necessarily concerned with or even conscious of the research aspect of the intervention (e.g., Reason & Bradbury, 2000); a sharp distinction between researcher- or client-initiated interventions (e.g., Schein, 1995); hypothesis testing and field experiments (e.g., Lewin, 1946); or a primary concern with the practical development of the research partner (e.g., Reason & Bradbury, 2000). In RO-AR, the

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research and action agendas are conceived as interdependent but separate, i.e., the research agenda may deviate from the action agenda. In my case, the action agenda resided in the development and creation of new health tourism products in collaboration with Peripheral and the regional tourism industry. Despite some overlaps, my research agenda differed from my action agenda, residing in a historical reconstruction of leadership practice within Peripheral. This specific focus makes RO-AR similar to ethnographic and other forms of process and practice-oriented research (Cunliffe, 2015; Langley, 2009). On one hand, RO-AR provides an opportunity for collecting data containing powerful insights. As Huxham and Vangen (2003) note, it “can provide rich data about what people do and say—and what theories are used and usable—when faced with a genuine need to take action” (p. 385). On the other hand, it raises similar questions about data integrity and data interpretation (Langley, 2009). To address these questions, Huxham and Vangen (2003) suggest three standards of rigor, which include reflexivity in the design of the intervention, systematic data collection, and a transparent approach to data analysis. In the following paragraphs, I will describe the design of the intervention, focusing on three related choices (Huxham & Vangen, 2003); in the subsequent section, I will outline my approach to data collection and data analysis. A first design choice refers to the degree to which the research agenda is overtly shared with the practitioners involved (Huxham & Vangen, 2003). In my case, we openly communicated our research agenda from the beginning of the collaboration with Peripheral and the regional tourism organization. This early clarification of expectations was helpful and even necessary because it committed Peripheral to provide me with access to data that reached beyond the confines of the health tourism project. For example, in my role as a researcher, I had access to classified Executive Committee minutes and to interview partners who were not involved in the health tourism project but still played a key role for Peripheral as a whole. Role transparency was also important in informal conversations and interviews. It allowed me to ask questions about Peripheral that would not have been expected from me in my role as a facilitator of the health tourism project. At the same time, I agree with

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Huxham and Vangen (2003) that the combination of the two roles and the transparent communication of it facilitated my interaction with Peripheral’s practitioners; it made my presence less intrusive on them than other research approaches would have been. In my role as a project facilitator, I had a legitimate reason for being involved, and conversations about the health tourism project (my action agenda) blended smoothly into conversations about Peripheral’s long-term development and current leadership challenges (my research agenda). A second design choice refers to the visibility of data collection. In some cases, practitioners view visible data collection as intrusive, leading to “aggravated data” that are difficult to interpret (Huxham & Vangen, 2003). In my case, since my dual role was fully transparent for everyone in the field, visible data collection was unproblematic and practitioners did not feel inhibited or offended. Indeed, my role as project facilitator legitimized me to take extensive notes during meetings and interviews, and I recorded whatever seemed relevant both for my action agenda and for my research agenda. Concerning my action agenda, I converted my handwritten notes into detailed minutes, which I electronically distributed to project team members after each meeting. Concerning my research agenda, I transferred additional insights into an electronic field diary after each meeting. These insights referred to “between-thelines” information, like emotions in meetings or new information about Peripheral beyond the health tourism project. A final design choice refers to the riskiness of the action intervention (Huxham & Vangen, 2003). The risk level of the health tourism project was comparatively high because we had no guarantee of a positive outcome. As Huxham and Vangen (2003) point out, it is likely that research collaborations end once the practitioners are discontent with the action intervention. We took several measures to cushion this risk. First, we established a steering committee composed of Peripheral’s CEO, the CEO of the regional hospital, the CEO of the regional tourism organization, the head of our research team at the University of St. Gallen, and myself. We convened roughly every six months during the field phase. The steering committee provided a space for taking joint decisions on the health tourism project and for reflecting on repercussions on the research project. Second, from the beginning,

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the steering committee established several principles of collaboration, which included un-bureaucratic and appreciative communication and a framing of the collaboration as a revision-friendly learning process. In combination, these measures contributed to a stabilization of our “reflexive innovation partnership” throughout the field phase. Since the practitioners continuously considered the health tourism project as “on track” and eventually also as successful, I was able to pursue my research agenda without disruptions throughout the field phase.

Data Collection and Analysis Case studies usually combine multiple data sources including documents, interviews, and observations (Eisenhardt, 1989). These qualitative data sources correspond well to a practice-theoretical ontology where recursive dynamics rather than static actions or structures are the primary focus of attention (Langley et al., 2013). Additionally, the triangulation of multiple data sources makes ethnographic research more trustworthy (Langley, 2009) and, as mentioned before, increases the rigor of RO-AR projects (Huxham & Vangen, 2003). Therefore, data gathering in Peripheral and Urban included semi-structured interviews, observations, archival data, and feedback workshops, as summarized in Table 4.2. To gain extensive insights into the emergence and development of Peripheral and Urban and to limit hindsight bias, I conducted semi-structured interviews with numerous informants from multiple hierarchical levels, professional groups, and functional areas, as well as outside observers from the political, social, and economic context of the two networks. According to Eisenhardt and Graebner (2007), it is unlikely that this broad range of informants engages in convergent retrospective sensemaking and/or impression management. The range of interview partners included Peripheral’s and Urban’s senior management (who were also members of the Executive Committees or Boards of Directors of the member organizations constituting the two networks), health professionals (physicians and nurses), and support functions (e.g., management support, HR, finance, and IT), as well as informants

90     M. Mitterlechner Table 4.2  Sources of data collected between September 2011 and December 2015 Source

Peripheral

Urban

Total

Interviewees Senior management Health professionals Administration Network context Observations Strategy meetings Project meetings Archival records Strategy presentations Financial reports Meeting minutes Feedback workshops

35 10 9 6 10 96 15 81 46 1 9 36 0

28 13 7 2 6 9 5 4 32 2 6 24 3

63 23 16 8 16 105 20 85 78 3 15 60 3

in the wider context of the two networks. In these interviews, which lasted about 1.5 hours each, I asked my conversation partners to describe the historical evolution of both their “home organization” and the network in which they were involved. As a part of this historical reconstruction, I asked for critical turning points, challenges, dilemmas, frictions, and adopted solutions. Data in observations were recorded on a standardized template, which consisted of the following fields: type and name of the meeting, place and date of the meeting, present and excused meeting participants, flow of conversation, and interpretation. In the flow of conversation field, I recorded utterances of meeting participants and decisions taken during the meeting. After the meetings, I converted my handwritten notes into digital meeting minutes. In addition, I wrote down personal impressions, ideas, first hypotheses, and comments of meeting participants prior to and after the end of the formal part of the meeting. In these field notes, I recorded whatever impressions occurred because, as Eisenhardt (1989) submitted, it was difficult to know what would be useful for my future theorizing. Eventually, my field notes comprised 92 typewritten pages. In both cases, I had unrestricted access to all relevant historical and current documents including strategy papers, financial data, and meeting minutes. This allowed me to enrich the insights I generated in

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interviews and observations. As Langley et al. (2013) note, archival data are particularly suitable for tracing event chronologies over very long periods. Since both Peripheral and Urban developed over a period of several years, documents turned out to be a particularly valuable data source. Finally, to provide a return service to Urban, I conducted 3 feedback workshops in the context of our reciprocal “reflexive innovation partnership.” Preparing and conducting these workshops were not only a way of providing value for my research partners, but also a way of corroborating and strengthening the meaningfulness of my data analyses and interpretations. The key challenge of doing qualitative case studies lies not so much in collecting data as in making sense of them to generate a valuable theoretical contribution (Langley & Abdallah, 2011). A further challenge in ethnographic and RO-AR projects is to describe the data analysis and theorizing process as transparently as possible (Huxham & Vangen, 2003). In my data analysis, I followed an abductive approach. Abduction includes both inductive and deductive steps where emerging theoretical ideas are refined alongside increasingly detailed empirical analysis (Eisenhardt & Graebner, 2007; Klag & Langley, 2013; Langley, 1999). My abductive analysis proceeded in three stages. In the first stage, I reviewed the recorded data, aiming to develop an initial understanding of how Peripheral and Urban emerged and evolved over time. This review was inspired by Pettigrew’s (1990, 1997) generic framework of the content, context, process, and outcome of change. After I had reviewed the data, I used the software package Atlas.ti and its “network function” to code the data using Pettigrew’s framework, and to visually map them onto temporal brackets (Langley, 1999). These temporal brackets did not constitute phases in the sense of a theoretical sequential process but marked empirically decisive turning points (e.g., the formal inauguration of Peripheral and Urban), allowing an examination of how actions in one period led to structural changes affecting action in the next (Denis, Lamothe, & Langley, 2001; Langley, 1999). In the second stage, I consulted the literature, looking for theoretical lenses to better understand the empirical data and develop richer

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theoretical explanations. In this stage, I was inspired by what I had found to be empirically relevant in stage one. For instance, one of Peripheral’s interviewees argued that eventually it was roughly “10 persons who pulled the cart.” Data like this raised my interest in the relevance of leadership and the role of leadership constellations in the development of networks. The theoretical lenses I found particularly helpful for making sense of my data at this point were drawn from the literatures on practice theory, structuration theory, leadership in networks, and leadership-as-practice, as reviewed in Chapters 2 and 3. I used a combination of these lenses as sensitizing devices for re-analyzing the data, this time coding for leadership constellations, their actions, and the substantive, symbolic, and political consequences of their actions at the organizational field, network, and organization level. Again using Atlas.ti, I first analyzed the data within the two cases, which helped me deepen my understanding of each case before identifying patterns across the cases (Eisenhardt, 1989). In a second step, using simple Word tables, I compared the two cases to search for theoretical mechanisms recurring over time (Langley, 1999; Langley et al., 2013). In the third stage, after I had compared the two cases and consulted additional practice-oriented literature on leadership in networks, I became more interested in the relevance of reflexivity in leadership practice. To consider the role of reflexivity, I once again went back to the literature and eventually re-coded the data along new theoretical constructs, such as reflexive spaces or reflexive conversations. At the same time, I became concerned with new ways of modelling the dynamics of reflexive leadership practice, drawing valuable inspiration from the representations of Barley and Tolbert (1997), Jarzabkowski (2008), Howard-Grenville, Metzger, and Meyer (2013), and Jay (2013). Overall, this third step helped me further elaborate on my emerging practice-theoretical model of reflexive leadership in networks. The final model resulting from this abductive analysis will be presented in Chapter 5 and empirically described in Chapters 6 and 7. Additional supporting data will be provided in Appendix 2 (Peripheral) and Appendix 3 (Urban). Throughout the three stages, I used the software package Atlas.ti as a research database. The software helped me code raw data and visualize emerging dynamics across temporal brackets. As Langley (1999) notes,

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visual graphical representations are particularly attractive for the analysis of longitudinal data because they allow the simultaneous representation of multiple dimensions and parallel developments. To ensure the validity of the findings, I conducted feedback workshops (with Urban) and repeatedly submitted interim findings of my analyses to academic conferences (Mitterlechner, 2014, 2016a, 2016b) and paper workshops within our research team at the University of St. Gallen. Feedback from these researchers, who were not directly involved in my fieldwork, brought a valuable outsider’s eye to the evidence and helped me rethink and refine initial interpretations (Eisenhardt, 1989). In addition, I submitted the theoretical and empirical analyses presented in this book to my four contact persons from Peripheral and Urban. They confirmed the analyses and approved of their publication. My two contact persons from Peripheral unanimously noted that “first of all, we are deeply impressed by the scope and depth of your analysis. Moreover, we fully agree with your analyses and conclusions.” My first gatekeeper from Urban commented that “for me, it was both strange and very interesting to read about Urban in this anonymous form. The history and the process (the development or the lack of development) became accessible in a very different way.” Urban’s second contact person remarked that “for me, it was thrilling to view Urban from this perspective. Your description is meticulous, rigorous, and fair. It is consistent with my perception and experience. I checked a few facts, and they are correct.”

Research Aim and Ethical Considerations Exploring how practice-theoretical research can contribute to progress and knowledge accumulation in the social sciences and organization studies, Langley (2010) introduces an important distinction between normal science and practice theory. Normal science focuses on the accumulation of knowledge through the elaboration of nomological networks and statistically significant relationships among variables. Practice theory, by contrast, views progress in terms of an increased idiographic understanding of the nature of practical activity.

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The research presented in this book is rooted in the practice-theoretical perspective. It aims to contribute to scientific progress and the improvement of practice through theoretical rather than statistical generalizations (Feldman & Orlikowski, 2011). While normal science is concerned with statistical generalizations to enhance instrumental prediction, theoretical generalizations are not directly usable in instrumental ways (Langley, 2010). Instead, they provide conceptual tools for reflecting on concrete situations. Theoretical generalizations constitute handles for reflexive practice (Huxham & Vangen, 2005) in the sense of principles that can explain and guide action across different contexts (Feldman & Orlikowski, 2011). Practice-theoretical research also raises distinct ethical questions. A first question refers to the confidentiality of data and findings. As Langley (2009) notes, “researchers must provide a degree of confidentiality and protection to their respondents” (p. 422). In consultation with my research partners, I took several measures to deal with this concern. Most importantly, I agreed with my research partners that findings would be published only after their pre-reading and explicit approval. Furthermore, I anonymized both the names of my research partners and the authorship of direct quotations used in this book. A second question refers to dealing with sensitive information. While researchers are obliged to protect the integrity of their research partners, they also have a duty to report on what they see in order to improve learning about the phenomena they study (Langley, 2009). Some of the findings presented in the empirical chapters of this book may evoke among some readers the impression of “weak” leadership behavior. This interpretation would, however, be simplistic and run against the purpose of this book, which is a reconstruction of collective leadership practice beyond traits, competencies, and qualities of individuals or groups. By definition, leadership practices describe the dynamic interplay between collective action and a highly complex, multi-level structural context, which, in their dynamic interplay, may have intended and unintended consequences beyond the control of any individual actor (Giddens, 1984). The protagonists at both sites and their efforts to integrate health care in their particular regions elicit my full respect and unconfined appreciation (see also Rüegg-Stürm, 2002).

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Summary and Outlook This book explores the question of how member organizations practice leadership in a reflexive way in the networks in which they are involved. This chapter has outlined the methodology used for exploring this question. The research presented in this book builds on a longitudinal qualitative comparative case study conducted in the Swiss healthcare sector. Data gathering included semi-structured interviews, observations, archival data, and feedback workshops with research partners. Data analysis followed an abductive approach including inductive and deductive steps. The analysis revealed a novel practice-theoretical model of reflexive leadership in networks. Chapter 5 will introduce the model. Chapters 6 and 7 will describe the model by means of the two case studies Peripheral and Urban. Comparing Peripheral’s and Urban’s divergent effectiveness, Chapter 8 will elaborate on the model and propose theoretical and practical implications.

References Amelung, V., Hildebrandt, H., & Wolf, S. (2012). Integrated care in Germany—A stony but necessary road! International Journal of Integrated Care, 12(27 March), 1–5. Barley, S. R., & Tolbert, P. (1997). Institutionalization and structuration: Studying the links between action and institution. Organization Studies, 18(1), 93–117. Cunliffe, A. L. (2015). Using ethnography in strategy-as-practice research. In D. Golsorkhi, L. Rouleau, D. Seidl, & E. Vaara (Eds.), Cambridge handbook of strategy as practice (pp. 431–446). Cambridge: Cambridge University Press. de Stampa, M., Vedel, I., Mauriat, C., Bagaragaza, E., Routelous, C., Bergman, H., … Henrad, J. C. (2010). Diagnostic study, design and implementation of an integrated model of care in France: A bottom-up process with continuous leadership. International Journal of Integrated Care, 10(18 February): 1–9. Denis, J. L., Lamothe, L., & Langley, A. (2001). The dynamics of collective leadership and strategic change in pluralistic organizations. Academy of Management Journal, 44(4), 809–837.

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Eden, C., & Huxham, C. (2006). Researching organizations using action research. In S. R. Clegg, C. Hardy, T. B. Lawrence, & W. R. Nord (Eds.), The Sage handbook of organization studies (pp. 388–408). London: Sage. Eisenhardt, K. M. (1989). Building theories from case study research. Academy of Management Review, 14(4), 532–550. Eisenhardt, K. M. (1991). Better stories and better constructs: The case for rigor and comparative logic. Academy of Management Review, 16(3), 620–627. Eisenhardt, K. M., & Graebner, M. E. (2007). Theory building from cases: Opportunities and challenges. Academy of Management Journal, 50(1), 25–32. Feldman, M. S., & Orlikowski, W. J. (2011). Theorizing practice and practicing theory. Organization Science, 22(5), 1240–1253. Giddens, A. (1984). The constitution of society: Outline of the theory of structuration. Cambridge: Polity Press. Howard-Grenville, J., Metzger, M. L., & Meyer, A. D. (2013). Rekindling the flame: Processes of identity resurrection. Academy of Management Journal, 56(1), 113–136. Huxham, C. (2003). Theorizing collaboration practice. Public Management Review, 5(3), 401–423. Huxham, C., & Vangen, S. (2000). Leadership in the shaping and implementation of collaboration agendas: How things happen in a (not quite) joined-up world. Academy of Management Journal, 43(6), 1159–1175. Huxham, C., & Vangen, S. (2003). Researching organizational practice through action research: Case studies and design choices. Organizational Research Methods, 6(3), 383–403. Huxham, C., & Vangen, S. (2005). Managing to collaborate: The theory and practice of collaborative advantage. London and New York: Routledge. Jarzabkowski, P. (2008). Shaping strategy as a structuration process. Academy of Management Journal, 51(4), 621–650. Jay, J. (2013). Navigating paradox as a mechanism of change and innovation in hybrid organizations. Academy of Management Journal, 56(1), 137–159. Johnson, G., Langley, A., Melin, L., & Whittington, R. (2007). Strategy as practice: Research directions and resources. Cambridge: Cambridge University Press. Klag, M., & Langley, A. (2013). Approaching the conceptual leap in qualitative research. International Journal of Management Reviews, 15(2), 149–166.

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Kodner, D. L., & Spreeuwenberg, C. (2002). Integrated care: Meaning, logic, applications, and implications—A discussion paper. International Journal of Integrated Care, 2(14 November), 1–6. Langley, A. (1999). Strategies for theorizing from process data. Academy of Management Review, 24, 691–710. Langley, A. (2009). Studying processes in and around organizations. In D. A. Buchanan & A. Bryman (Eds.), The Sage handbook of organizational research methods (pp. 409–429). Los Angeles: Sage. Langley, A. (2010). The challenge of developing cumulative knowledge about strategy as practice. In D. Golsorkhi, L. Rouleau, D. Seidl, & E. Vaara (Eds.), Cambridge handbook of strategy as practice (pp. 91–106). Cambridge: Cambridge University Press. Langley, A., & Abdallah, C. (2011). Templates and turns in qualitative studies of strategy and management. In D. D. Bergh & D. J. Ketchen (Eds.), Building methodological bridges (pp. 201–235). Bingley: Emerald. Langley, A., Smallman, C., Tsoukas, H., & Van de Ven, A. H. (2013). Process studies of change in organization and management: Unveiling temporality, activity, and flow. Academy of Management Journal, 56(1), 1–13. Lee, T. W. (1999). Using qualitative methods in organizational research. Thousand Oaks: Sage. Lewin, K. (1946). Action research and minority problems. Journal of Social Issues, 2(4), 34–46. Ling, T., Brereteon, L., Conklin, A., Newbould, J., & Roland, M. (2012). Barriers and facilitators to integrating care: Experiences from English integrated care pilots. International Journal of Integrated Care, 12(24 July): 1–11. Martin, G. P., Currie, G., & Finn, R. (2008). Leadership, service reform, and public-service networks: The case of cancer-genetics pilots in the English NHS. Journal of Public Administration Research and Theory, 19(4), 769–794. Mitterlechner, M. 2014. Coping with fragility: The practice of leading strategic change in pluralistic organizations. Academy of Management Annual Meeting. Philadelphia, PA. Mitterlechner, M. (2016a). The dynamics of reflexive network leadership. European Group of Organization Studies Meeting. Naples, Italy. Mitterlechner, M. (2016b). Network leadership and the dynamic effects of dominant and coequal structuration patterns. Academy of Management Annual Meeting. Anaheim, CA.

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Müller-Seitz, G. (2012). Leadership in interorganizational networks: A literature review and suggestions for future research. International Journal of Management Reviews, 14, 428–443. Nolte, E., Frolich, A., Hildebrandt, H., Pimperl, A., Schulpen, G. J., & Vrijhoef, H. J. M. (2016). Implementing integrated care: A synthesis of experiences in three European countries. International Journal of Care Coordination, 19(1–2), 5–19. Pettigrew, A. M. (1990). Longitudinal field research on change: Theory and practice. Organization Science, 1(3), 267–292. Pettigrew, A. (1997). What is a processual analysis? Scandinavian Journal of Management, 13(4), 337–348. Reason, P., & Bradbury, H. (Eds.). (2000). The handbook of action research: Participative inquiry and practice. London: Sage. Rüegg-Stürm, J. (2002). Dynamisierung von Führung und Organisation. Bern, Stuttgart, Vienna: Haupt. Schein, E. H. (1995). Process consultation, action research and clinical inquiry: Are they the same? Journal of Managerial Psychology, 10(6), 14–19. Silverman, D. (2004). Qualitative research: Theory, method and practice. London: Sage. Whyte, W. F. (Ed.). (1991). Participatory action research. Newbury Park, CA: Sage. Yin, R. K. (2014). Case study research: Design and methods. Los Angeles: Sage.

5 A Practice-Theoretical Model of Reflexive Leadership in Networks

This chapter will present a practice-theoretical model of reflexive leadership in networks. It is structured into three sections. The first section will recapitulate important assumptions and definitions underlying the model, drawing on the theoretical concepts discussed in Chapter 3. The second section will describe in detail the component parts and dynamics of the model. The final section will provide a summary and an outlook on subsequent chapters.

Assumptions About Networks, Leadership, and the Role of Reflexivity The theoretical model (see Fig. 5.1) depicts leading in networks, incorporating practice-theoretical considerations of networks, leadership, and reflexivity, as discussed in Chapter 3. First, the model draws on the idea that inter-organizational networks are social systems in which the activities of at least three legally independent organizations are coordinated in time-space (Müller-Seitz & Sydow, 2012). It assumes that networks are formed by bundles of © The Author(s) 2019 M. Mitterlechner, Leading in Inter-Organizational Networks, https://doi.org/10.1007/978-3-319-97979-3_5

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Fig. 5.1  A practice-theoretical model of reflexive leadership in networks

inter-organizational practices, which are practices that transcend the boundaries of individual organizations (Müller-Seitz & Sydow, 2012; Sydow, Van Well, & Windeler, 1997). The inter-organizational practices forming a network are situated in structural properties at the organizational field, organization, and network level (Sydow & Duschek, 2011; Sydow, Schüssler, & Müller-Seitz, 2016). This view on networks is grounded in a practice-theoretical ontology, which proposes that the social world is populated by an assemblage of practices (Feldman & Orlikowski, 2011; Feldman & Worline, 2016; Nicolini, 2012; Reckwitz, 2002). Second, the model understands leading in networks as the exertion of influence by one or several organizations in order to reflexively coordinate the activities in the network (Müller-Seitz & Sydow, 2012). If a network is formed by a bundle of inter-organizational practices,

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leadership denotes the distinct practice through which member organizations reflexively try to provide a sense of direction to these practices (Nicolini, 2012; Simpson, 2016; Sydow & Windeler, 1998). Third, building on practice theory, the model assumes that reflexivity is an inherent quality of practice (Giddens, 1984, 1990; Nicolini, 2012; Reckwitz, 2002). As Giddens (1984) notes, “(H)uman agents or actors … have, as an inherent aspect of what they do, the capacity to understand what they do while they do it” (p. xxii). These reflexive capacities allow actors to constantly monitor, examine, and reform social practices in light of new information about these practices (Giddens, 1990). In this sense, scholars have conceived of reflexivity as one of the most important characteristics of leadership in a leadership-as-practice orientation (Raelin, 2011). Drawing on recent advances in research on reflexivity, the model assumes a notion of reflexivity as a conversational, collective, and socio-politically situated practice through which actors question traditional practices and explore new possibilities for action (Antonacopoulou, 2004; Cunliffe & Easterby-Smith, 2004; Cunliffe & Jun, 2005; Gorli, Nicolini, & Scaratti, 2015; Nicolini, Sher, Childerstone, & Gorli, 2004; Raelin, 2001; Reynolds & Vince, 2004). Building on these practice-theoretical considerations on network, leadership in networks, and the role of reflexivity in leadership practice, the following section will describe in detail the component parts and dynamics of the model.

A Closer Look at the Model At the heart of the model is the recursive interplay (black thin arrows) between leadership action (see action realm in white boxes) and structure (structural realm in shaded wide arrows) over time (dashed vertical lines). The practice of leadership in networks thus has two components that are recursively related over time: structure and leadership action (Denis, Langley, & Rouleau, 2010; Giddens, 1984; Raelin, 2016b). In terms of structure, the model shows how leadership action is recursively related to structures at the organizational field, network, and organization level (Sydow & Duschek, 2011; Sydow et al., 2016).

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As mentioned before, the organizational field level refers to sets of organizations that, taken together, constitute a recognized area of institutional life (DiMaggio & Powell, 1983). In the two case studies presented in this book, the organizational field level refers to the Swiss healthcare sector and included, for instance, political-administrative actors, patients, and national financial incentive systems. The organization level is composed of legally independent organizations understood as social systems governed by hierarchy and exhibiting a certain degree of institutionalized reflexivity (Sydow et al., 2016). In the case of Peripheral and Urban, this level included hospitals, outpatient care organizations, social service organizations, and many others. Finally, the network level refers to a distinct social system in which the activities of three or more legally independent organizations are coordinated in time-space (Müller-Seitz & Sydow, 2012). Networks are formed by bundles of inter-organizational practices, which are practices that transcend the boundaries of individual organizations (Sydow et al., 1997). In the two cases presented in this book, these practices primarily included inter-organizational patient referral, treatment, and information exchange practices. In terms of leadership action, the model shows that leadership action is both enabled and constrained by and recursively influences structures at the organizational field, network, and organization level (Giddens, 1984). The model proposes that individual network members are unable to lead a network on their own (see also Huxham & Vangen, 2000). Rather, leading in networks is a collective practice accomplished by a leadership constellation (Denis et al., 2010; Gronn, 2002; Hodgson, Levinson, & Zaleznik, 1965; Raelin, 2016a; Sydow et al., 1997; Wimmer, 2009). In line with Sydow, Lerch, Huxham, and Hibbert (2011), the model understands a leadership constellation as composed of those “who, more than others, are thought of as influencing the social activities and relationships towards the production, reproduction or transformation of a social order” (p. 331). In the case of Peripheral and Urban, the leadership constellation included, for example, CEOs, Board of Directors, and Members who were delegated from their respective organizations to coordinate network activities. The model proposes that leadership constellations reflexively coordinate network activities in three ways.

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First, they reflexively coordinate network activities by establishing reflexive spaces. Reflexive spaces are episodic communicative events involving several actors who are colocated in the same physical or virtual space (Seidl & Guerard, 2015). They interrupt the ongoing flow of network activities and thus provide actors with an opportunity for jointly reflecting about these activities and how they are interrelated from a communicative distance (Bucher & Langley, 2016; Hendry & Seidl, 2003; Rüegg-Stürm & Grand, 2015). In the case of Peripheral and Urban, reflexive spaces typically included inter-organizational project teams, workshops, or bilateral conversations. Second, leadership constellations reflexively coordinate network activities by enabling reflexive conversations. While reflexive spaces provide an important condition enabling reflexivity, they are not sufficient. The reflexive coordination of network practices is ultimately accomplished in conversations through which distributed actors question received practices and explore new possibilities for joint action (Cunliffe & Easterby-Smith, 2004; Cunliffe & Jun, 2005). The two case studies will describe how Peripheral’s and Urban’s leadership constellations enabled reflexive conversations, for example, by providing transparency or by providing solution oriented support to project teams. Third, leadership constellations reflexively coordinate network activities by exercising power. Exercising power is a precondition for getting things done (Giddens, 1984). However, exercising power in interorganizational networks is a fragile undertaking. On the one hand, it cannot be exercised by hierarchical fiat (Podolny & Page, 1998; Powell, 1990); leading in networks implies the coordination of activities among “more or less independent and often similarly powerful organizations” (Müller-Seitz & Sydow, 2012, p. 110). On the other hand, the way it is exercised can have a major impact on the potential of reflexivity (Cunliffe & Easterby-Smith, 2004; Nicolini et al., 2004). Effective leadership action hence requires that powerful interventions are considered as useful and legitimate by network members (Giddens, 1984; MüllerSeitz & Sydow, 2012). The two case studies presented in the book will describe different ways of exercising power and their consequences on subsequent leadership action.

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Structure and leadership action are in a recursive relationship (Denis et al., 2010; Giddens, 1984). For one thing, leadership action is enabled and constrained by structures at the organizational field, network, and organization level (Sydow & Duschek, 2011; Sydow et al., 2016). For another thing, reflexive leadership action recursively affects these structural levels in substantive, symbolic, and political ways (Denis et al., 2010). Substantive consequences refer to concrete structural changes. Symbolic consequences refer to the evolution of meaning among stakeholders. Political consequences refer to changes in the legitimacy and credibility of the leadership constellation and their actions. These consequences may be intended or unintended by the leadership constellation (Denis et al., 2010; Giddens, 1984; Sydow & Windeler, 1998). In either case, they form acknowledged or unacknowledged conditions of further action in a feedback fashion (Giddens, 1984). This recursive relationship turns leading in networks into an unpredictable practice (Sydow, 2004).

Summary and Outlook This chapter has introduced and described a novel practice-theoretical model of reflexive leadership in inter-organizational networks. The model builds on practice-theoretical conceptions of networks, leadership, and reflexivity. At its core, it proposes that leadership action and structure are in a recursive relationship, assuming a duality rather than a dualism. As such, leading in networks cannot be attributed to the behaviors, traits, and activities of individual “leaders,” nor to certain structural features of a network. Rather, it conceives of leading in networks as a reflexive practice through which actors collectively question traditional inter-organizational practices and explore new ways of coordinating their activities across organizational boundaries. To portray the recurring nature of the recursive interplay between leadership action and structure, Fig. 5.1 depicts two cycles progressing over time (see Howard-Grenville, Metzger, & Meyer, 2013, for a similar approach). The following chapters will describe the dynamics of the model with the help of two case studies conducted in the Swiss

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healthcare sector. Chapter 6 will describe the model with the help of the case study “Peripheral,” which was a healthcare network in a geographically remote and mountainous Swiss region. Chapter 7 will describe the model with the help of the case study “Urban,” which was a healthcare network formed in one of the most vibrant cities in Switzerland. Both networks were broadly considered to be pioneering initiatives for advancing integrated care in Switzerland. Chapter 8 will compare the divergent effectiveness of the two networks, thus elaborating on the model. It will conclude with the theoretical and practical implications of this research.

References Antonacopoulou, E. P. (2004). The dynamics of reflexive practice: The relationship between learning and changing. In M. Reynolds & R. Vince (Eds.), Organizing reflection (pp. 47–63). Aldershot: Ashgate. Bucher, S., & Langley, A. (2016). The interplay of reflective and experimental spaces in interrupting and reorienting routine dynamics. Organization Science, 27(3), 594–613. Cunliffe, A. L., & Easterby-Smith, M. (2004). From reflection to practical reflexivity: Experiential learning as lived experience. In M. Reynolds & R. Vince (Eds.), Organizing reflection (pp. 30–46). Aldershot: Ashgate. Cunliffe, A. L., & Jun, J. S. (2005). The need for reflexivity in public administration. Administration & Society, 37(2), 225–242. Denis, J. L., Langley, A., & Rouleau, L. (2010). The practice of leadership in the messy world of organizations. Leadership, 6(1), 67–88. DiMaggio, P. J., & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2 April), 147–160. Feldman, M. S., & Orlikowski, W. J. (2011). Theorizing practice and practicing theory. Organization Science, 22(5), 1240–1253. Feldman, M. S., & Worline, M. (2016). The practicality of practice theory. Academy of Management Learning & Education, 15(2), 304–324. Giddens, A. (1984). The constitution of society: Outline of the theory of structuration. Cambridge: Polity Press. Giddens, A. (1990). The consequences of modernity. Cambridge: Polity Press.

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Gorli, M., Nicolini, D., & Scaratti, G. (2015). Reflexivity in practice: Tools and conditions for developing organizational authorship. Human Relations, 68(8), 1347–1375. Gronn, P. (2002). Distributed leadership as a unit of analysis. The Leadership Quarterly, 13, 423–451. Hendry, J., & Seidl, D. (2003). The structure and significance of strategic episodes: Social systems theory and the routine practices of strategic change. Journal of Management Studies, 40(1), 175–196. Hodgson, R. C., Levinson, D. J., & Zaleznik, A. (1965). The executive role constellation. Boston: Harvard Business School Press. Howard-Grenville, J., Metzger, M. L., & Meyer, A. D. (2013). Rekindling the flame: Processes of identity resurrection. Academy of Management Journal, 56(1), 113–136. Huxham, C., & Vangen, S. (2000). Leadership in the shaping and implementation of collaboration agendas: How things happen in a (not quite) joined-up world. Academy of Management Journal, 43(6), 1159–1175. Müller-Seitz, G., & Sydow, J. (2012). Maneuvering between networks to lead: A longitudinal case study in the semiconductor industry. Long Range Planning, 45, 105–135. Nicolini, D. (2012). Practice theory, work, & organization. Oxford: Oxford University Press. Nicolini, D., Sher, M., Childerstone, S., & Gorli, M. (2004). In search of the ‘structure that reflects’: Promoting organizational reflection practices in a UK health authority. In M. Reynolds & R. Vince (Eds.), Organizing reflection (pp. 81–104). Aldershot: Ashgate. Podolny, J. M., & Page, K. L. (1998). Network forms of organizations. Annual Review of Sociology, 24, 57–79. Powell, W. W. (1990). Neither market nor hierarchy: Network forms of organizations. In B. M. Staw & L. L. Cummings (Eds.), Research in organizational behavior (Vol. 12, pp. 295–336). Greenwich, CT: JAI Press. Raelin, J. A. (2001). Public reflection as the basis of learning. Management Learning, 32(1), 11–30. Raelin, J. A. (2011). From leadership-as-practice to leaderful practice. Leadership, 7(2), 195–211. Raelin, J. A. (2016a). Introduction to leadership-as-practice. In J. A. Raelin (Ed.), Leadership-as-practice: Theory and application (pp. 1–17). New York: Routledge.

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Raelin, J. A. (2016b). Leadership-as-practice: Theory and application. New York and London: Routledge. Reckwitz, A. (2002). Toward a theory of social practices: A development in culturalist theorizing. European Journal of Social Theory, 5(2), 243–263. Reynolds, M., & Vince, R. (2004). Organizing reflection: An introduction. In M. Reynolds & R. Vince (Eds.), Organizing reflection (pp. 1–14). Aldershot: Ashgate. Rüegg-Stürm, J., & Grand, S. (2015). The St. Gallen Management Model. Bern: Haupt. Seidl, D., & Guerard, S. (2015). Meetings and workshops as strategy practices. In D. Golsorkhi, L. Rouleau, D. Seidl, & E. Vaara (Eds.), Strategy as practice. Cambridge: Cambridge University Press. Simpson, B. (2016). Where’s the agency in leadership-as-practice. In J. A. Raelin (Ed.), Leadership-as-practice: Theory and applications (pp. 159–177). New York: Routledge. Sydow, J. (2004). Network development by means of network evaluation? Explorative insights from a case in the financial services industry. Human Relations, 57(2), 201–220. Sydow, J., & Duschek, S. (2011). Management interorganisationaler Beziehungen: Netzwerke, Cluster, Allianzen. Stuttgart: Kohlhammer. Sydow, J., Lerch, F., Huxham, C., & Hibbert, P. (2011). A silent cry for leadership: Organizing for leading (in) clusters. Leadership Quarterly, 22, 328–343. Sydow, J., Schüssler, E., & Müller-Seitz, G. (2016). Managing inter-organizational relations: Debates and cases. London: Palgrave. Sydow, J., Van Well, B., & Windeler, A. (1997). Networked networks: Financial services networks in the context of their industry. International Studies of Management & Organization, 27(4), 47–75. Sydow, J., & Windeler, A. (1998). Organizing and evaluating interfirm networks: A structurationist perspective on network processes and effectiveness. Organization Science, 9(3), 265–284. Wimmer, R. (2009). Führung und Organisation–zwei Seiten ein und derselben Medaille. Revue für postheroisches Management, 4, 20–34.

6 Case Study I: Peripheral

This chapter will describe the dynamics of the practice-theoretical model of reflexive leadership in networks with the help of the case study “Peripheral.” Peripheral was a healthcare network in a rural region in Switzerland. The main healthcare organizations in this region were a hospital, an outpatient care organization, a retirement home, and a thermal spa providing healthcare and relaxation services to the regional population and tourists. To describe the dynamics of the model, this chapter is structured into four sections, which will map the emergence and development of Peripheral onto four distinct temporal brackets: (0) starting conditions, (1) Peripheral’s birth, (2) Peripheral’s pilot phase, and (3) integrating care. Each section will describe important structural properties at the organizational field, organization, and network level. The sections will also describe how, over time, these structural properties were both a medium and an outcome of the actions of a regional leadership constellation. In terms of reflexive leadership action, the four sections will describe how the leadership constellation coordinated network activities by establishing reflexive spaces, enabling reflexive conversations, and exercising power (see Appendix 2 for more data). In sum, this chapter will describe how a collection of initially © The Author(s) 2019 M. Mitterlechner, Leading in Inter-Organizational Networks, https://doi.org/10.1007/978-3-319-97979-3_6

109

Fig. 6.1  A practice-theoretical model of reflexive leadership in Peripheral

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independent healthcare organizations formed a fine-mesh regional health and social services network. Over a period of eleven years, these organizations effectively coordinated shared service activities (such as IT, finance, and/or HR) and patient-centered activities (patient referral, treatment, and information exchange activities) across their boundaries. Figure 6.1 provides an overview of the events that will be explored systematically in the following sections.

Starting Conditions (2000–2002) This section will describe Peripheral’s starting conditions, focusing on the time between 2000 and 2002. It will shed light on structural properties at the organizational field, network, and organization level.

Organizational Field-Level Structures Geographically, Peripheral was a healthcare network located in a region with a size of 998 km2. The region was remote and secluded by mountains. Car travel from the main town of the region to the cantonal capital took roughly 2 hours, depending on the traffic. Before the opening of a 19-km car-railway tunnel in November 1999, car drivers had to cross a 2383-m mountain pass, which was dangerous in winter due to avalanches. Car transportation to the next regional hospital took roughly 1 h. Transport to the next central hospital took roughly 2 hours by car or 0.5–1 hour by air, although helicopter transportation was possible only if weather conditions allowed (D-P01, see Appendix 4). Demographically, in the year 2000, the region had about 7000 inhabitants, with about 2000 people living in the main town. More than other areas in the canton, the region was challenged by rural exodus and demographic aging. The share of people aged 65 or more was high compared to more central regions in the canton (D-P01). Politically, the region was composed of twelve villages, each one headed by a mayor. The 12 mayors, together with four regional

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delegates to the cantonal parliament, formed the so-called Regional Council. Compared to the decade before, the political climate in the region had substantially improved. In the 1990s, the relationship between the main town and the smaller surrounding villages had been marked by aversions and hostilities. By the turn of the millennium, this relationship had improved and the politicians in the Regional Council had begun to think and act as a joint region. This shift toward more collaboration had created a favorable climate for innovation. “I know how people function in this region. New ideas are usually received well. … We work relatively apolitically and task oriented and support one another. We pull together, this has never been an issue since I came here 15 years ago. Of course, there is always critique, but in principle we pull together and do not fight one another. This is different compared to [region B] where people tear one another apart over resources. This has not been the case here” (Regional Council, member). Economically, the main town was the center of the region and about to recover from a debt crisis that had forced it to restructure its finances and to cut public spending in the late 1990s. Blessed with beautiful nature and a rich cultural heritage, regional employment and income depended on tourism and tourism-associated sectors such as commerce and construction.

Organization-Level Structures The main organizations responsible for providing health care for the regional population and visiting tourists were a small regional hospital, an outpatient care organization, a retirement home providing long-term inpatient care, and a thermal spa providing healthcare and relaxation services (see Table 6.1 for an overview). The regional hospital was opened in July 1908 (D-P02). It was responsible for the primary and emergency care of the regional population, as well as for tourists and guests visiting the region. Equipped with 30 beds, it offered surgery, internal medicine, obstetrics, and anesthesiology services for its patients. In 1978, the hospital CEO opened

6  Case Study I: Peripheral     113 Table 6.1  Organization-level structures (2000–2002) Organization

Starting conditions (2000–2002)

Regional hospital

• 30 beds, primary and emergency care for regional population and tourists • Deficits carried by canton (85%) and regional municipalities (15%) • Ill-defined responsibilities among governance committees • Outpatient treatment and social services for regional population • Transformation from a deficit—to a performance-oriented financing system • Individualistic culture, nurses expect a right to a say in the organization • A cooperative providing 50 long-term inpatient beds for the regional population • Transformation from a retirement home to a home with qualified care • Joint-stock company owned by the main town of the region • Touristic beacon and economic engine for the region • Increasingly scarce management capacities

Outpatient care organization

Retirement home

Thermal spa

a new inpatient residential care home. The care home was physically integrated into the hospital building, which allowed residents to benefit from instant care by physicians and graduate nurses. In 2000, the hospital was deficit-financed, with the canton assuming 85% and the regional municipalities assuming 15% of the annual deficit. Consequently, neither people in the hospital nor the politicians in the Regional Council had a very strong incentive to look at the costs. “The mayors of the region, who constituted the Hospital Commission, decided on the budget. But they were not extremely interested in reducing budgets because the canton had to pay for 85% of the deficit and the municipalities only 15%. That’s it. If a physician requested CHF 200,000, they paid CHF 30,000 and the canton 170,000” (hospital, member). As a further consequence, politicians in the Regional Council were not particularly interested in health care. They regarded the funding of the hospital as unavoidable rather than as an important item for

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the regional budget. The treasurer of the regional main town recalled, “When we made the budget, we said that we had to swallow the pill and pay our share. For me this was an expression of a necessary evil” (main town, treasurer). With respect to internal cost control, the information systems of the hospital were only rudimentary. “It was a blind flight … With the numbers and information we had, we were unable to lead our business. We didn’t have the information to manage our expenses and financials” (hospital, member). Owned by the regional municipalities, the hospital was a foundation regulated and licensed by the Cantonal Department of Justice, Safety, and Health (CDJSH). It was governed by a Hospital Commission, a so-called Giunta, and an Executive Committee. The Hospital Commission was composed of the 12 mayors of the region. The Giunta was a seven-headed subcommittee of the Hospital Commission and was presided over by the same person as the Hospital Commission. The Executive Committee consisted of a CEO, two chief physicians (surgery and internal medicine), and the head nurse (D-P02). The competencies among the different committees were ill defined. Operational and strategic responsibilities were blurred. If operational issues like the recruitment of a secretary or the purchase of a new medical device could not be resolved in the Executive Committee, they were escalated into the Giunta or the Hospital Commission. Decisionmaking processes were accordingly tedious and politicized. “When I attended Executive Committee meetings, political games started off: ‘For this decision I have to pull her or him to my side, and as a return service I will support her or him in the next decision.’ It’s human, it’s human, but it was very bad for the cause” (hospital, member). These political games created lasting conflicts among the physicians and the CEO, poisoned the collaboration climate in the hospital, and obstructed development and change. They also damaged the reputation of the hospital among the regional population. The outpatient care organization provided outpatient treatment and social services for the regional population, supporting people who were in acute psychological, physical, or social crises, such as births, illnesses, accidents, or death. For these people, the organization offered care,

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palliative care, medication, relief, financial advisory, housekeeping, and meal services (D-P03). The organization was in the midst of a profound transformation process from a deficit—to a performance-oriented financing system. While the canton and the regional municipalities had paid the deficits of the organization in the past, the new financing system paid the outpatient care organization only for effectively delivered services. This change in the payment system entailed completely new requirements for recording delivered services and collecting statistical data (I-P01). The organization was an association with 30 employees (29 female, 1 male). It was led by a Board of Directors (BoD), whose chairman was heavily involved in operational issues, in particular in personnel planning, recruiting, and administration. Later, in line with new cantonal governance requirements, the chairman delegated these operational activities to a new CEO. The new CEO had previously been the mission controller of the organization, responsible for tasks such as clarifying client needs and duty planning (I-P02). Given the geographical span of the region, the nurses worked in a very decentral way. In the mornings, they often drove to their clients from their homes without checking-in in the operations center located in the main town of the region. In some cases, the mission controller physically saw the nurses only once per week. As the nurses worked in an autonomous manner, their management was quite challenging. “People in our organization are individualists. They have to deal with ever changing situations in their daily work. … This is good because it simplifies organizational challenges. At the same time, they are challenging. They necessarily have to think and reflect in their work, but one has to be able to deal with that. You can’t just say, ‘jump,’ and they do it, but they reflect, ‘Do I have to jump today or only the day after tomorrow?’ So you have to lead them differently. They appreciate that they have a right to a say in our organization” (outpatient care organization, member). The retirement home was opened in 1956, offering long-term inpatient care for people who required support and did not want to be alone. Over the years, it was enlarged twice and was officially allowed by the CDJSH to provide 50 inpatient beds. It had the legal form of a

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cooperative and was governed by a BoD, an Operations Commission (which was a subcommittee of the BoD), and a CEO (D-P04). Strategically, the retirement home slowly developed from a pure retirement home into a home with qualified care. “We were a retirement home. Our residents were autonomous. Then we realized a change, people needed more intensive care. So we had to adapt the structure of our employees, recruiting qualified nurses. The canton also demanded that we have a head nurse in our house” (retirement home, member). The new demand for qualified care was driven by demographic aging and changing family structures in the region. While the elderly had been supported by their families in the past, children now left the region for their education and often did not return. The thermal spa was opened in 1993. It was one of the first spa installations of the kind in Switzerland. It acted as a tourist beacon and an economic motor for the region. It was located in the heart of the main town and, thus, in walking distance to surrounding hotels and other tourist facilities, such as the funicular. It offered different therapeutic and mineral water baths, a large sauna area, and a variety of physical and spa treatments including massages, lymphatic drainage, acupuncture, shockwave therapy, and physical therapy. Over time, the thermal spa had additionally accepted service agreements for the management of the ice rink, the indoor swimming pool, and the cinema, all located in the main town (D-P05). The thermal spa was a joint-stock company owned by the main town of the region. It was governed by a BoD, whose chairman was the mayor of the main town, and a CEO, who had joined the thermal spa in 1993. The CEO was also a regional delegate to the cantonal parliament and thus a member of the Regional Council. In economic terms, the thermal spa was successful and had developed positively since its opening. “We’ve had increasing visitor frequencies and profits until 2002. The opening of the car-railway tunnel in November 1999 gave us another boost” (thermal spa, member). As the thermal spa flourished and grew, management capacities and expertise increasingly became a bottleneck. HR was an example. “I did not have a deputy. If I had been absent, we would have been unable to continue to pay the wages. … As I only had one to one and a half days

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per week for HR, I had to deal with many things I had no clue about” (thermal spa, HR head).

Network-Level Structures The regional hospital, the outpatient care organization, the retirement home, and the thermal spa were legally independent entities located in walking distance from one another in the main town of the region. Despite the geographical proximity, care activities among the four organizations were hardly coordinated. This was particularly true for patient referral activities, i.e., for the handling of patients possibly requiring post-acute care after a hospital stay, for example, after a surgery. Post-acute care options principally included a hospital discharge without additional care, a discharge to home with support from the outpatient care organization, a discharge with intermediate or long-term care in the hospital-associated care home or retirement home, or a discharge with a transfer to another hospital, health resort, or rehabilitation clinic. The four organizations lacked coordinated referral practices, both for deciding on who was responsible for patients with complex needs and for identifying an optimal treatment path for them. Coordination and agreement on next steps occurred sporadically and each time anew (D-P06). This lack of coordination increasingly created discontent among the regional population, not least because the region had too few long-term inpatient beds. When all long-term inpatient beds were occupied in the retirement home or the residential care home of the hospital, patients requiring long-term care embarked on a “rotation journey” from the acute part of the hospital to the outpatient care organization and back into the hospital (I-P02). The four organizations also differed with regard to treatment activities, which meant that specific medical practices such as the treatment of wounds after a surgery were uncoordinated among the four organizations. Attempts by the outpatient care organization to coordinate these activities across organizations were repeatedly rejected by the hospital. “We suggested a standardization of our wound treatment approach. But

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the hospital rebuffed us when we suggested a regular exchange to analyze and evaluate wounds. People from the hospital argued that it was unnecessary to invest in this because they already had their own concept” (outpatient care organization, member). People in the outpatient care organization attributed these rejections to an implicit professional hierarchy between the hospital and their own organization. “The outpatient care organization had always been the grey duck. ‘They don’t have the expertise of a nurse in the hospital.’ This had always been a hierarchical issue” (outpatient care organization, member). Information exchange activities were equally uncoordinated, which created a lot of paperwork for those involved. “People made things complicated for one another. When people in the hospital transferred a complex patient to the outpatient care organization, they printed a discharge report and forwarded a hard copy to the outpatient care organization only if they were lucky. Usually they sent it to the patient’s general practitioner (GP) by mail or fax, and the GP then forwarded the report to the outpatient care organization. Although people in the hospital knew exactly that the outpatient care organization needed the report. People from the outpatient care organization then entered the information into their system. There was no interest in facilitating this process” (hospital, member). The lack of coordinated referral, treatment, and information exchange activities weighed upon the relationships among the four organizations. Relationships were frequently strained by mutual accusations and recriminations. If something went wrong with a transferring patient (e.g., an unexpected re-hospitalization or an inadequate treatment of wounds), the involved organizations blamed one another and the issue was shifted back and forth among them (I-P01, I-P03). Relationships were additionally characterized by competitive elements, in particular between the hospital and the retirement home, and the hospital and the thermal spa. In the first case, the hospital and the retirement home competed for the same patients for their inpatient services (I-P04). In the second case, the hospital and the thermal spa competed for physical therapy clients. Over the years, the physical therapy team from the thermal spa had succeeded in luring patients away from the hospital (I-P05).

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Period 1 (2003–2006): Peripheral’s Birth This section will describe how a constellation of regional leaders began to reflect on the possibilities of coordinating care and other back-office activities among the hospital, the outpatient care organization, the retirement home, and the thermal spa. Their deliberations were enabled and constrained by the starting conditions described above and additional changes at the organizational field and organization level. At the organizational field level, the Swiss parliament started debate about the introduction of a new financing regime for the Swiss hospital sector. Once implemented, the new regime would oblige the Regional Council and hence the regional municipalities to fully pay for future losses of the hospital. Moreover, the CDJSH reviewed the service portfolio of all hospitals in the canton against the backdrop of a cantonal budget crisis. In this context, they also demanded that all regions provide an updated plan for the future demand and supply of long-term inpatient beds. Long-term inpatient bed planning became a top priority for the Regional Council not only in view of the CDJSH’s request, but also because the regional population showed growing discontent with the limited number of long-term inpatient beds. At the organization level, the governance crisis in the hospital escalated and eventually resulted in the departure of the CEO. The outpatient care organization still struggled with the administrative requirements surrounding the new performance-oriented payment system, and the thermal spa observed flattening growth rates due to new competition in Switzerland and abroad. Enabled and constrained by these changes, the Regional Council initiated the formation of a regional leadership constellation, which consisted of delegates from the hospital, the outpatient care organization, the retirement home, and the thermal spa. Collectively, this leadership constellation began to reflect on how they could respond to the difficult inpatient bed situation and their organization-specific challenges by coordinating care and other back-office activities across the boundaries of their organizations.

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Organizational Field-Level Changes At the national level, the Swiss parliament started discussing a revision of the funding in the hospital sector, which was regulated inconsistently across Switzerland. Depending on the canton, health insurers had to pay different shares for the same services, and the cantons were legally obliged to cover the deficits of their hospitals. This deficit-financing system obstructed competition and created disincentives for the hospitals to operate efficiently (D-P07). To address these inconsistencies, the Swiss parliament discussed a new payment system called “Swiss DRG” (Swiss Diagnosis Related Groups). Swiss DRG proposed to replace the prevalent deficit payments with the payment of a lump sum for each hospital stay, which would be classified according to a range of different criteria including principal diagnosis, secondary diagnosis, required treatments, and the severity of a case group (D-P07). At the cantonal level, a new councilman took over the CDJSH in January 2003. He assumed a difficult office. In April, the canton had to communicate a fiscal deficit of CHF 21.4 million for the year 2002, a record deficit for the canton. To reduce the deficit, the cantonal parliament mandated the government to put together a reform package without increasing taxes. The cantonal government followed this request and suggested several measures questioning the structures and services of all departments including health (D-P08). To reduce spending in health care, the CDJSH took two measures. On the one hand, they examined the structure of the cantonal hospitals, reviewing the service portfolio of all hospitals. “It was a time when the canton suffered from financial deficits. Then they began to look for saving potentials. One saving potential was to downsize hospital services” (hospital, member). On the other hand, they asked all regions in the canton to submit an updated plan for the provision of long-term inpatient beds. “The region had to make a plan for the long-term need of inpatient care” (Regional Council, member). The plan should include an assessment of current and future quantitative and qualitative needs. At the regional level, the shortage of long-term inpatient beds turned into an area of growing discontent. From the perspective of patients requiring long-term inpatient care, the shortage led to long waiting

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times for an empty bed and endless rotations between ambulatory and acute care. Two events pushed the problem on the political agenda of the Regional Council. First, as mentioned before, the CDJSH asked the Regional Council to update the regional plan for the provision of inpatient beds. Second, the regional population started writing complaint letters to the Regional Council, discontent with the whole situation. “This was unfortunate for all involved. Politicians became active after a second letter had asked them to take measures, which coincided with the plan required from the canton” (outpatient care organization, member).

Organization-Level Changes In the hospital, the conflict between the CEO and the physicians escalated in 2003 after two chief surgeons resigned. Their departure prompted the remaining physicians to write a letter to the Hospital Commission. In this letter, they threatened to leave the hospital as well if the CEO remained in charge (I-P06). The Hospital Commission reacted to this letter and mandated an external mediator to analyze the situation. Because of this external analysis, the CEO and the hospital agreed to part ways (I-P07). The external consultant also recommended restructuring the governance of the hospital, advice the Hospital Commission took to heart. The Hospital Commission decided to divide operational and strategic competencies among the different committees and to trim down the Executive Committee to a dual leadership team consisting of a medical and an administrative director. “After these restructurings we had a ‘two-legged’ leadership team: a permanent administrative director and an additional medical director. The medical director assumed this role as a part-time assignment and rotated every other year” (hospital, member). After the first rotation, however, the permanent administrative director left the hospital and the second medical director in charge was appointed sole new CEO of the hospital. These reorganizations calmed the situation in the hospital (I-P07). At the same time, the new CEO and his team observed significant challenges looming on the horizon.

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For one thing, the chairman of the Hospital Commission was also a member of the Health Commission of the cantonal parliament. In this role, he closely followed the discussions about the planned new national hospital payment system. “I was in the Health Commission of the cantonal parliament. This enabled me to see into which direction the journey goes” (Hospital Commission, chairman). Swiss DRG implied that the hospital had to become cost-effective or else the regional municipalities, which owned the hospital, would have to carry the remaining deficits. For another thing, the CDJSH, under the influence of the cantonal budget crisis and their review of the service portfolio of the cantonal hospitals, had worked out a recommendation for the regional hospital. In view of comparatively small caseloads, they proposed to merge the orthopedics department into the next regional hospital and to replace the obstetrics ward with ambulatory delivery nurses. Calculating the implications of this proposal, people from the hospital were concerned that this proposal would entail the end of the hospital. Recalled the first medical director, “My time as a medical director was stressful. The canton revised the service agreements and proposed to close down the obstetrics and orthopedics departments. Given the size of our hospital, this proposal put us under enormous pressure to protect the existence of the hospital” (hospital, first medical director). The outpatient care organization still struggled with the consequences of the new performance-oriented payment system. Paying for effectively delivered services rather than deficits, both health insurance companies and the CDJSH now required detailed information about the quantity and quality of delivered services. “There were many changes because everyone started defining what they had to pay for … They therefore asked us to provide information about what we did, how long we did it, and who did it” (outpatient care organization, member). These new transparency requirements pushed the expertise and the resources of the organization to its limits. “We completely lacked professional knowledge about payments and financial control. Neither me nor my CEO, a professional nurse, had a clue” (outpatient care organization, member). After an all-time high in 2002, the frequency of guests visiting the thermal spa began to decrease. “Economically, we had observed a

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continuous decrease since the peaks in 2001 and 2002” (thermal spa, member). One reason for the decreasing growth rate was a construction boom of similar resorts both in Switzerland and in neighboring countries (O-P03). The new resorts lured clients away from the thermal spa. People from the thermal spa noticed this development and therefore launched an initiative to build up a musculoskeletal rehabilitation clinic in order to tap into new revenue sources. They developed a corresponding concept and applied at the CDJSH for a service license.

The Formation of a Regional Leadership Constellation In 2003, the Regional Council initiated the formation of a regional leadership constellation. Enabled and constrained by expectations from the regional population and the CDJSH, they invited delegates from the hospital, the outpatient care organization, and the retirement home to reflect on the coordination of care activities in the region. The emerging leadership constellation initially consisted of a designated healthcare delegate from the Regional Council, as well as the respective BoD chairmen and CEOs from the hospital, the outpatient care organization, and the retirement home (see Table 6.2 for an overview). Later, they were joined by the BoD chairman and CEO of the thermal spa, when the new head of the CDJSH supported the Table 6.2  Leadership constellation members in period 1 Organization

1st Care Commission

2nd Care Commission

3rd Care Commission

Hospital

Hospital Commission chairman, CEO BoD chairman, CEO Healthcare delegate BoD chairman, CEO –

Hospital Commission chairman, CEO BoD chairman, CEO Healthcare delegate BoD chairman, CEO BoD chairman

Hospital Commission chairman, CEO BoD chairman, CEO Healthcare delegate –

Outpatient care Regional Council Retirement home Thermal spa

BoD chairman, CEO

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rehabilitation clinic request under the condition that the two joined the deliberations. To reflect on the coordination of care activities among their organizations, the leadership constellation established a variety of reflexive spaces.

Establishing Reflexive Spaces Between 2003 and 2006, the leadership constellation established a series of closely aligned reflexive spaces. First, they established three consecutive “Care Commissions” (I-P08). The Care Commissions were inter-organizational project teams reporting to the Regional Council. Second, they organized informal bilateral conversations, which took place between the formal Care Commission and Regional Council meetings. Finally, they established reflexive spaces for including the regional population and employees from the involved organizations in their deliberations. At first, the leadership constellation established three consecutive Care Commissions. The first Care Commission consisted of the healthcare delegate from the Regional Council, as well as the respective BoD chairmen and CEOs from the hospital, the retirement home, and the outpatient care organization. It was initiated by the Regional Council and had the mandate to reflect on the current supply and future demand of longterm inpatient care in the region. This analysis became the foundation of the new long-term inpatient bed plan required by the CDJSH and a starting point for the resolution of the regional bed shortage. In the course of their deliberations, the Care Commission traveled abroad, looking at care strategies of regions that were structurally similar to their own. In one region, they were shown an innovative care concept emphasizing ambulatory before inpatient care. “The region, which was comparable to our own, had a minimum of inpatient beds as everything was oriented towards ambulatory care including the education of family members. We said, ‘This should be our model, home care as long as possible’” (Care Commission, member). The members of the Care Commission liked this decentralized approach and regarded it as a blueprint for their region.

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After their return, the Care Commission submitted a report and recommendation to the Regional Council. In this report, they argued that the implementation of the outpatient-before-inpatient care model would require a closer coordination of activities among the retirement home, the hospital, and the outpatient care organization. “It was about the main regional healthcare providers. We wanted to bring them under one roof ” (Care Commission, member). Supporting this proposal, the Regional Council asked for operational details on the planned collaboration, which were to be specified in the second Care Commission. The second Care Commission initially consisted of the same members as the first one. Later, they were joined by the mayor of the region’s main town in his role as BoD chairman of the thermal spa. The new head of the CDJSH had told him that he would support his rehabilitation clinic request only if he joined the second Care Commission. The Care Commission members admitted him not as a provider of care services but to sound out a possible coordination of back-office activities such as IT or HR. In the course of their deliberations, the second Care Commission encountered the problem that the four organizations had different legal and financial backgrounds. The hospital was a loss-making foundation. The outpatient care organization was an association with few financial reserves. The retirement home was a wealthy cooperative. The thermal spa was a successful joint-stock company owned and financed by the main town of the region. These different backgrounds raised concerns with respect to a possible coordination of care and back-office activities. People from the retirement home were concerned that their assets would be used to recapitalize the hospital and the outpatient care organization (I-P01, I-P02, I-P04). Regional Council members feared that the hospital would be cross-subsidized by payments from the region to the outpatient care organization and that all regional villages would have to pay for the thermal spa, which was owned solely by the main town (I-P09). To address the concerns of the retirement home, the second Care Commission explored the option of merging the hospital and the outpatient care organization into a joint foundation. The foundation would negotiate a building rights contract with the retirement home.

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They figured that this option would grant building rights (for long-term inpatient beds) in the spirit of the envisioned network while protecting the financial assets of the cooperative and leave the legal form of the retirement home intact (I-P08). While the BoD chairman of the retirement home supported this option, his BoD rejected the solution and withdrew his negotiation mandate. This event marked the end of the deliberations with the retirement home (I-P08). Although the retirement home had left the conversations, the remaining members of the second Care Commission became increasingly interested in a possible collaboration among their organizations. They speculated that a better coordination of care and back-office activities could help address not only the long-term inpatient bed shortage in the region, but also some of their organization-specific challenges. People from the outpatient care organization expected, for instance, that a collaboration would increase their political weight and provide them with additional expertise. “I hoped that we could gain political weight. And also that we could benefit from knowledge-sharing” (outpatient care organization, member). In terms of the governance of the planned network, the second Care Commission still reflected on the option of merging the hospital and the outpatient care organization into a foundation, with the foundation completing a service agreement with the thermal spa. Since they did not want to wait until the retirement home BoD changed their minds, they submitted these ideas to the Regional Council. The Regional Council accepted the proposal and thereby cleared the way for the third Care Commission (I-P08). The third Care Commission consisted of the healthcare delegate from the Regional Council and the respective BoD chairmen and CEOs from the hospital, the outpatient care organization, and the thermal spa, with the CEO of the spa chairing the commission. The team was mandated by the Regional Council to reflect on the operational details of the collaboration suggested by the second Care Commission. They met for the first time in Spring 2006 and started reflecting on the potentials and conditions of forming a network among the three organizations. After six months of deliberations, the third Care Commission came up with

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the following suggestions for the attention of the Regional Council (D-P09): • They proposed to merge the hospital and the outpatient care organization into a new foundation called “Peripheral.” Since the Care Commission members had identified back-office synergies with the thermal spa, they suggested a cooperation agreement between Peripheral and the thermal spa. • The rationale for the collaboration included a more effective appearance vis-à-vis public partners, a more attractive market presence, the joint development of existing and new strategic products, the sharing of knowledge and expertise, and an opportunity to coordinate patient/client activities, as well as realizing cost synergies through the coordination of back-office activities such as finance, HR, marketing, quality management, facility management, IT, and procurement. • The third Care Commission suggested a profit center model under a joint governance structure but with far-reaching operational autonomy for the three previously independent organizations. The model would be supported by a clear, transparent, and individual financial reporting of the three profit centers to avoid the blending of financial results and business risks.

Fig. 6.2  Integration process as proposed by the third Care Commission

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Fig. 6.3  Peripheral’s governance structure as suggested by the third Care Commission

• They proposed an integration process in three steps (see Fig. 6.2, my illustration). In a first step, they would implement the governance of the collaboration. Influenced by recent experiences in the hospital, they suggested separating the competencies of the strategic and operational committees of the collaboration. This step would take three months. • In a second step, which would take two years, they would coordinate the back-office activities of the three organizations by centralizing them into a new department called “Services.” In this period, they would also develop a new regional care concept for resolving the regional long-term inpatient bed crisis. • In a final step, they would coordinate patient-oriented referral, treatment, and information exchange activities across Peripheral. Concerning the first step, the third Care Commission sketched the following governance structure of the collaboration (see Fig. 6.3, my illustration):

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• Peripheral and the thermal spa would be linked via a cooperation agreement. • Peripheral’s new Foundation Board would consist of the 12 mayors of the municipalities constituting the region. • Peripheral’s new BoD would consist of the former chairman of the Hospital Commission, the former BoD chairman of the outpatient care organization, the healthcare delegate from the Regional Council, and the BoD chairman of the thermal spa. The former chairman of the Hospital Commission would become Peripheral’s new BoD chairman. • Peripheral’s Executive Committee would consist of the former CEOs of the hospital and outpatient care organization plus the CEO of the thermal spa. The CEO of the thermal spa would chair Peripheral’s new Executive Committee and, in addition, head the planned shared Services department. The third Care Commission ended their work in Fall 2006 and submitted their proposal to the Regional Council for approval. The Regional Council adopted the proposal in their next meeting. In addition to establishing the three formal Care Commissions, the leadership constellation routinely engaged in informal bilateral deliberations. These bilateral deliberations took place between formal events and helped to reflect on controversial issues before they were put on the agenda in formal committees. “I know how people function here in the region; new ideas are usually well accepted. … Although we pre-discussed things. Sometimes you have to approach people and say what you do before the topic enters formal committees” (Care Commission, member). For example, informal bilateral deliberations took place before the second Care Commission discussed their proposal in the Regional Council. Before this meeting, two Care Commission members approached the incoming chairman-elect of the Regional Council, informally reflecting with him on the proposal in advance. “We did not have any setbacks, but sometimes we had to re-position the project at the political level when the chairman of the Regional Council changed. We had to tell him how and why” (Care Commission, member).

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Moreover, the leadership constellation established a range of reflexive spaces for including the regional population and employees from the involved organizations in their deliberations. On the one hand, the leadership constellation organized town hall events, inviting the regional population to reflect on the future of the regional healthcare system. In one of these town hall events, they invited the new councilman of the CDJSH. “This was a very smart move. He [the new councilman of the CDJSH] appeared in regional town hall events where he justified himself to the public and said that he could not guarantee the existence of the regional hospital” (hospital, member). On the other hand, the leadership constellation included employees from the involved organizations in their deliberations. The hospital CEO exemplified this as he regularly asked his physicians for feedback and improvement potentials. A senior physician recalled, “Much happened at the level of the CEOs. We were always well informed but not operationally involved in the integration. We were always asked for synergies and improvement potentials, but the implementation occurred at the level of the CEOs” (hospital, senior physician). Similarly, the BoD chairman and CEO of the outpatient care organization reflected early on with their staff regarding their concerns and the way forward. “We communicated early and very consistently with our employees to address their fears; for example with regards to competition, job losses or concerns that they would be dominated by nurses of the hospital. These concerns included questions such as, ‘What does it mean if we dissolve the association? Will we have lay-offs? Will we have new employment contracts?’ These were important questions for our employees we had to address early” (Care Commission, member). The leadership constellation tailored their communication to the needs of the different organizations. Communication was most intensive in the outpatient care organization. “This group was the most difficult to lead, it required high personal attention” (O-P01).

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Enabling Reflexive Conversations The leadership constellation encountered a variety of problems when reflecting on the potentials of a regional network among the hospital, the outpatient care organization, the retirement home, and the thermal spa. One of the greatest challenges was the different financial and legal background of the four prospective partner organizations. As mentioned before, the different financial and legal background of the four involved organizations raised substantial issues. For example, the BoD chairman and CEO of the wealthy retirement home were concerned that their assets would be used to recapitalize the hospital and the outpatient care organization. “They were a cooperative with substantial assets. They argued that they were unable to hand over these assets. This was one of the main criteria” (Care Commission, member). The politicians in the Regional Council were concerned that their payments to the outpatient care organization would be unwarrantedly redirected to the hospital and that their villages would soon have to co-finance the thermal spa, which was owned by the main town of the region. Recalled a member of the Care Commission, “When I raised the topic, the pessimists frequently argued that I wanted to involve the outpatient care organization and other organizations to reduce the deficit of the hospital” (Care Commission, member). To facilitate reflexive conversations about these issues, the leadership constellation provided as much transparency as possible about their plans when preparing important meetings. In particular, they ensured that Care Commission and decisive Regional Council meetings were perfectly prepared in terms of understandable and transparent documentation. An example was the collaboration proposal the third Care Commission submitted to the Regional Council. The proposal contained detailed calculations of the expected financial implications of the planned collaboration, differentiating between definable quantitative and long-term, difficult-to-calculate qualitative results (D-P09). The transparent documentation of meetings assured the leadership constellation and the Regional Council members that the financial flows among the hospital, the outpatient care organization, and the thermal spa would not be unduly blended. It thus allowed them

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to deliberate on the pros and cons of the planned collaboration in an informed, factual, and detailed way. “The hospital was the largest deficit item for the municipalities. When we founded Peripheral, we always promised that we were as transparent as possible so that everyone was able to notice that the outpatient care organization, long-term care, and acute hospital care were reported separately. Of course, we had economic synergies, which we also reported. Although they trusted us, we had to show that we did not make any cross-subsidies to support the hospital, which did not happen” (Care Commission, member). Eventually, the transparent preparation and documentation of meetings helped the leadership constellation alleviate many concerns among themselves and the politicians and, thus, to move on without major setbacks—except for the withdrawal of the retirement home. “I can’t say that we had a time when the project was destined to fail. I don’t think so because we prepared and documented the issues the population or the Regional Council had to decide very carefully. We prepared the decisions in a way that everyone understood the issue. This is what allowed us to move on without a serious setback” (Care Commission, member).

Exercising Power The deliberations about the formation of a network among the hospital, the outpatient care organization, the retirement home, and the thermal spa were enabled and constrained not only by legal and financial questions. They also entailed questions of decision-making autonomy, power, and zones of influence. The politicians in the Regional Council aimed to find solutions that protected their reputation among the regional population and that did not make them vulnerable to attacks from political opponents. In this regard, they were concerned that the future network would lead to politically unwanted layoffs and a concentration of power among the future leaders of the network. “Of course, we had external voices who were afraid that a collaboration would lead to job losses in the region and a power concentration in my person” (Care Commission, member).

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The prospect of a collaboration also created concerns among the prospective partner organizations. Both the members of the leadership constellation and the employees in their organizations were concerned that the planned network would curtail the decision-making autonomy of each organization. For example, people in the hospital feared that they would be taken over by the thermal spa. “Basically it was about trust-building measures. Who prevails, and who loses? We were concerned that the economically oriented thermal spa would soon dominate the hospital” (hospital, member). The leadership constellation addressed these issues by establishing a consensus-based decision-making approach among equal partners. Recalled a Care Commission member, “We were fortunate to have people who did not have to distinguish themselves. Nobody had to be the boss or the king” (Care Commission, member). This approach included mutual respect for the differences among the involved organizations. “I think we had the courage to live-and-let-live regarding diversity” (Care Commission, member).

Impact at the Organizational Field, Organization, and Network Level The actions of the leadership constellation had several consequences at the organizational field level. Symbolically, the events of this period sensitized the Regional Council and the regional population for the crucial role of the healthcare sector for their region. Politicians, who had previously not been very interested in health care, developed a sense for the importance of health care for the tourism industry and the regional population. “We realized the importance of the institutions and fought for the cantonal service agreements … We realized that the tourism industry would have a significant marketing disadvantage. A lack of an adequate health provision meant that we would have to fly out every second patient to other hospitals. And this was the point when we started to fight, to build new structures to reach our goals” (Regional Council, member).

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The regional population also realized how important a functioning healthcare sector was for the quality of life in their region, which translated into a substantive outcome. Alarmed by the potential closure of their hospital, they formed an association called “Friends of the Hospital.” The mission of the association was to increase the trust of the regional population and of tourists in the hospital. To reach this goal, they collected donations for patient—and employee-centered projects. The association was supported by regional opinion leaders and external people regularly visiting the region as guests (D-P10). Politically, the Regional Council supported the three Care Commissions, asking the third Care Commission to implement the proposed model. “The Regional Council adopted the proposal, and we moved on without the retirement home” (Care Commission, member). They also mandated the leadership constellation with taking action against the still unresolved long-term inpatient bed crisis in the region. The actions of this period also had consequences at the organization level. Symbolically, they contributed to a new spirit of optimism in the future network partners. The hospital was an example. “The outlook and the perspective of the CDJSH shocked us. We could have concluded, ‘Okay, in this case it does not make sense to invest, and we start to dismantle the hospital without too many lay-offs.’ But we thought, ‘No, we have to adopt a forward-strategy, like the pioneers who built the hospital 100 years ago.’ The hospital is important as an employer and provider of basic services” (Hospital Commission, member). Politically, the employees of the hospital, the outpatient care organization, and the thermal spa trusted and supported the leadership constellation and their actions. An employee in the outpatient care organization recalled. “I trusted my CEO. I knew it would turn out well. She had kept us in the loop, but I was only marginally involved in the process” (outpatient care organization, member). At the network level, symbolically, the actions of the leadership constellation created a collaborative spirit among the hospital, the outpatient care organization, and the thermal spa. The collaboration proposal submitted to the Regional Council symbolized this new spirit. “At the end, it was certainly a push from the canton; but I also believe that people in the region realized that in the long run the provision of health

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care can be protected only through collaboration” (Care Commission, member). Politically, the members of the leadership constellation trusted and supported one another. A Care Commission member described their relationship as follows: “We quickly realized that it matched, which I think is decisive. If it matches, you don’t have to write long papers, they kind of don’t matter anymore … Since we had a trust basis, it just went off” (Care Commission, member).

Period 2 (2007–2008): Peripheral’s Pilot Phase Enabled and constrained by these changes at the organizational field, network, and organization level, the leadership constellation moved on to reflect on how they could best implement the first two steps of the collaboration model suggested by the third Care Commission, i.e., specifying the governance of their collaboration, coordinating back-office activities, and resolving the regional long-term inpatient bed crisis (see Fig. 6.2). Like in the previous period, they reflected on these issues by establishing reflexive spaces, enabling reflexive conversations, and exercising power. The leadership constellation’s actions were enabled and constrained by two additional changes at the organizational field level. First, hospital planning remained an unpredictable business on the cantonal political agenda, although the canton had meanwhile reduced its deficits. This ongoing uncertainty reinforced the leadership constellation’s forward-looking efforts to coordinate care and back-office activities. Second, the CDJSH again changed the care payment system, financially supporting the development of ambulatory services at the expense of inpatient care. This revision provided an additional impetus for the leadership constellation’s outpatient-before-inpatient care strategy.

Organizational Field-Level Changes The period between 2007 and 2008 was marked by two relevant changes at the cantonal level. First, in March 2007, the cantonal

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treasurer announced a financial surplus of CHF 121.3 million, a record result that helped to reduce the debts of the canton (D-P11). Although this financial result reduced immediate pressures for further cost-saving measures at the cantonal level, people from the regional hospital noticed that the topic of hospital planning was not entirely removed from the table. “Hospital planning is an ongoing topic, also in my party. There are opinions like, ‘Is it good to have so many hospitals? Is it good that they are operated by the regions, or wouldn’t it be better if they were owned by the canton, as the socialists have suggested for a long time?’ Of course, I understand the politicians. They pay a large share of the costs and thus want to have a say. I understand them. But we need to be ready because this means that we can expect quite a few changes. It is therefore important to remain ahead of the times and of other actors, otherwise we perish” (Care Commission, member). Second, in this period, the CDJSH again changed the care payment system. “The canton deliberately tries to create financial incentives for developing outpatient care services and for reducing the development of long-term institutions” (D-P12). Supporting the development of outpatient care, the CDJSH reduced subsidies for building new inpatient care facilities, instead increasing financial contributions to deficits produced by outpatient care services.

Peripheral’s Leadership Constellation The collaboration model adopted by the Regional Council in period 1 was effective from January 1, 2007. In period 2, Peripheral’s leadership constellation hence consisted of the new BoD and Executive Committee (see Fig. 6.3). Collectively, they began to reflect on how to implement the first two steps of the collaboration model, i.e., specifying the governance of the collaboration (step 1), as well as coordinating back-office activities, and developing a new regional care concept for resolving the regional shortage of long-term inpatient beds (step 2). To reflect on these issues, they established five new reflexive spaces: governance workshops, shared services workgroups, inter-organizational

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department head meetings, bilateral conversations with employees, and a fourth Care Commission.

Establishing Reflexive Spaces One of the leadership constellation’s first actions was to reflect on the governance of their new collaboration. In a series of governance workshops, they reflected on the delegation of decision-making competencies. “We re-organized ourselves in a way that we made joint workshops to define decision-making responsibilities” (Peripheral, Executive Committee member). They emphasized two issues. First, sensitized by recent governance issues in the hospital, they wanted to separate the competencies between the strategic (BoD) level and operational (Executive Committee) level. “Previously, the strategic and operational levels have not been separated … Now we lead differently” (Peripheral, BoD member). Second, they aimed at delegating decision-making competencies as far as possible to the involved organizations. From the perspective of Peripheral’s new CEO, this meant that, “Even if I have a CEO function, I delegated the competencies to X (the CEO of the hospital) and Y (the CEO of the outpatient care organization). They decide autonomously for their business. I am available if there are issues we have to discuss or resolve together. But we consistently delegate the competencies” (Peripheral, CEO). Having resolved these governance questions, the leadership constellation started reflecting on how they could realize synergies by coordinating back-office activities across their organizations. These activities included facility management, marketing, quality management, food and beverage, procurement, IT, finance, and HR. To reflect on this question, they established so-called shared services workgroups, thus involving the functional heads of the hospital, the thermal spa, and the outpatient care organization in their deliberations. In HR-related workgroups, the leadership constellation and the functional heads reflected on how they could coordinate HR activities like recruitment, onboarding, training, performance evaluation, holiday

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regulations, or compensation across Peripheral and the thermal spa. The coordination of these HR activities required a standardization of role groups. “In workshops we defined the role groups of our organization, from the person tearing off the cinema ticket to the chief physicians and residents, although the latter were specific to the hospital and thus easier to manage. But we had to find a solution for those roles we had in all businesses, defining a horizontal salary range within a role group and a vertical difference between employees and line managers” (Peripheral, Executive Committee member). The leadership constellation and the functional heads established similar workgroups for other back-office activities. In finance, they launched a workgroup for reflecting on the coordination of Peripheral’s budgeting and financial reporting activities (I-P10). In IT, they initiated a workgroup for reflecting on how a joint technological platform for Peripheral and the thermal spa could look (I-P03). In addition to these workgroups, the leadership constellation established regular inter-organizational department head meetings. With these meetings, they aimed to involve the department heads in their deliberations on the coordination of back-office activities. Recalled a department head from the thermal spa, “I was involved in Peripheral through joint department head meetings, together with department heads from the hospital. We discussed centrally managed topics such as HR, for instance new forms and guidelines for the compensation of holidays and performance reviews” (thermal spa, department head). These meetings provided an important space for reflecting with department heads on the purpose, meaning, and implications of the new governance model and the inter-organizational coordination of back-office activities. Written e-mail communication was frequently insufficient. “Initially we made some mistakes, thinking that we could communicate certain changes by sending out an e-mail to the department heads. This turned out to be problematic. We had to explain to them why we made certain changes. While the changes made sense to us, they did not make sense to our employees” (Peripheral, functional head). In addition to these shared services workgroups and inter-organizational department head meetings, the leadership constellation

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established bilateral conversations with employees, especially with those who were negatively affected by the collaboration. The changes sweeping through the hospital, the outpatient care organization, and the thermal spa entailed not only benefits but, in some cases, also substantial downsides for employees. For one thing, the collaboration raised fairness questions. One example was the coordination of HR activities, particularly the compensation system. A harmonized salary model meant that employees would be confronted with relative income gains and losses. “At the end we had some delicate issues to resolve. An example was the harmonization of the compensation model. For instance, the nurses in the hospital and in the outpatient care organization. Would they have the same salary or was there a good reason why one group would earn CHF 200 more” (Peripheral, Executive Committee member)? For another thing, the collaboration entailed negative consequences for the career paths of some individuals because roles and jobs were reshuffled. “We had to redefine responsibility areas and re-allocate people so that they were able to bear these responsibilities” (Peripheral, Executive Committee member). For instance, one functional head of the hospital gave up his role in the ongoing restructuring. “Some people had to give up tasks they would have liked to keep but said, ‘Okay, I agree for the sake of the overall organization’” (hospital, functional head). To reflect on how they could address and optimally resolve these issues, the leadership constellation invited employees to numerous bilateral conversations. Bilateral conversations were held with the above-mentioned functional head of the hospital, which were essential for him to come to square with his role change. “Then there was the proposal to centralize activities across Peripheral rather than continue with three or four insular solutions. People discussed it with me, justifying it well, and showing me alternative options. Then I said with a good conscience, ‘Okay, this is fine for me’” (hospital, functional head). Besides implementing the collaboration model suggested by the third Care Commission, the Regional Council had mandated Peripheral’s leadership constellation with tackling the regional long-term inpatient bed crisis. To deliberate on this issue, Peripheral’s leadership

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constellation established a fourth Care Commission. The strategic level of the fourth Care Commission included the CEO of the outpatient care organization, who chaired the commission, Peripheral’s CEO, and the CEO of the regional branch of a national service organization for elderly people (ProElderly, a pseudonym). At the operational level, the fourth Care Commission was headed by an employee of ProElderly. In addition, it included a member of Peripheral’s Foundation Board (i.e., a mayor of a regional municipality), a member of Peripheral’s BoD (the healthcare delegate from the Regional Council), two nurses, two family caregivers, and a priest from the region. People from the retirement home decided not to participate in the Care Commission, but they were regularly informed about the progress of the deliberations (D-P12). The Care Commission started their work immediately after the Regional Council had confirmed their mandate in April 2007. Drawing on the request of the Regional Council, they aimed at developing an adequate and sustainable model for the long-term provision of care services in the region. To reflect on this issue, they analyzed the current situation and picked up expectations and expertise from professional nurses, politicians, and affected families. To include expectations from the regional population, they invited the public to moderated “World Café” events. These events provided the regional population with an opportunity to give feedback and play an active role in the development of the future care strategy. The fourth Care Commission summarized the result of their deliberations in a new regional care model consisting of the following building blocks (D-P12): • The new care strategy constituted an alternative and supplement to the existing care infrastructure in the region. The main philosophy was a focus on ambulatory care rather than an expansion of inpatient beds. • At the heart of the strategy was the establishment of a new case management unit that would centrally coordinate a regionally provided service mix consisting of outpatient, semi-inpatient, and inpatient

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service offerings. The two main tasks of the unit would be the central coordination of care activities for patients with complex needs and the development of a prevention offering for the regional population. • The implementation of the model would require six concrete measures: (1) establishing the case management unit, (2) expanding the services of the outpatient care organization, (3) developing supportive services for family caregivers and volunteers, (4) developing temporary inpatient care services, (5) building up small, decentralized “care groups” in the regional municipalities and recruiting care families, and (6) a permanent revision and development of the strategy. The decentralized “care groups” would be a complementary service to the existing inpatient care offering of the retirement home and the hospital. Their distinguishing features would be an alternative room offering with a home-like atmosphere and daily routines resembling those at home (O-P04). The Care Commission bundled these ideas in a proposal, assuming that the implementation of the model would require three years. About a year after they had started with their deliberations, the Care Commission submitted the proposal to the Regional Council. On August 19, 2008, the Regional Council adopted their proposal and mandated Peripheral’s leadership constellation with its implementation.

Enabling Reflexive Conversations The deliberations about the governance model, the coordination of back-office activities, and the new regional care model were characterized by a high degree of uncertainty about the scope and depth of the collaboration among the hospital, the outpatient care organization, and the thermal spa. At first, the members of the leadership constellation had very different ideas about what collaboration actually meant for them. One of Peripheral’s functional heads recalled, “The different actors, who were also in the Executive Committee, had completely different opinions about the meaning of a ‘common way.’ A ‘common way’ can mean a

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joint organization with an integrated structure, but it can also mean, for instance, a shared HR head who is recurrently present in all three locations. This is also a ‘common way.’ For us it was unclear because we heard different opinions” (Peripheral, functional head). Moreover, definitions made in one reflexive space had repercussions on those made in other reflexive spaces. For example, definitions made in the HR workgroup or the fourth Care Commission had consequences for the IT workgroup reflecting about IT infrastructure. In the case of HR, the IT workgroup had to define access rights reflecting the future HR organization. In the case of the fourth Care Commission, the IT workgroup had to provide for headcount growth in either the inpatient care home of the hospital, the outpatient care organization, or both, depending on the regional care strategy proposed by the commission (I-P03). To enable reflexive conversations about these ambiguities and inter-dependencies, the leadership constellation adopted an improvisational step-by-step approach. Peripheral’s CEO explained the approach as follows: “It [Peripheral] was built in dialogue, step by step, not everything had been finished by January 1st. … We structured the changes in a way that we did the easiest things first and took our time to see how it goes to be ready for corrections. People got used to it, and we didn’t have any bottlenecks. It was a silent process” (Peripheral, CEO). In the case of IT, the improvisational step-by-step approach meant that the IT workgroup started their deliberations based on temporary assumptions about the final governance and collaboration model, which they continuously adapted as things became clearer over time. “At the beginning we assumed that collaboration would be rather weak, that employees would remain in their areas, and that Peripheral would be more of a holding organization. … Initially we built the IT on the basis of this assumption and set up only a cosmetic structure. It was only in 2008 when we realized that things would be different; when someone from the thermal spa took over the HR department covering Peripheral as a whole” (Peripheral, IT workgroup member). The improvisational step-by-step approach also underpinned deliberations about options for people who were particularly negatively affected by the collaboration. In each case, the leadership constellation

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improvised, searching for feasible solutions in conversations with those affected. “We found extra-solutions for people who potentially would have lost their jobs. Nobody ended up on the street” (Peripheral, Executive Committee member). An example of a person who benefited from this improvisational approach was the functional head of the hospital, who was offered an alternative senior management role in Peripheral. The leadership constellation also communicated their improvisational step-by-step approach to important stakeholders, in particular to politicians and employees. This upfront communication protected them from unrealistic expectations and enabled them to reflect on their agenda with all the time and diligence required. “They communicated that they needed two years for setting up Peripheral, emphasizing that things need time to develop. They positioned the two years as a ‘pilot phase.’ This provided the Board of Directors and the Executive Committee with the time and serenity that was required to systematically build things up” (Peripheral, functional head). Moreover, like in the previous period, the leadership constellation enabled reflexive conversations by preparing meetings and decision-making proposals as understandably and transparently as possible. For one thing, transparency eased the concerns of politicians, fearing that the foundation of Peripheral would blur financial flows and create hidden cross-subsidies among the involved operations. For another thing, transparency helped the leadership constellation and stakeholders like the Regional Council to make decisions in an efficient and informed manner. “Our meetings are quick thanks to a good documentation … Like that people can look things up and prepare them, but also revisit them after two years. Documentation is a lot of work, but very effective” (Peripheral, functional head). An example of the thorough documentation was the preparation of the documentation of the future care model, which had to be decided by the Regional Council. To prepare this decision, the leadership constellation, drawing on the work of the fourth Care Commission, put together three strategic options, calculating and presenting the expected financial consequences of each option for the municipalities (D-P12). This detailed presentation of the business case allowed politicians

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to have a fact-based conversation about each option and to take a well-supported decision in the Regional Council meeting. The documents that served as a discussion basis in the decisive meetings of the Regional Council, Foundation Board, BoD, and Executive Committee meetings were usually prepared by Peripheral’s CEO. They had the form of ring binders and were widely recognized as “Yellow Bibles.” They were Yellow because they had a distinctive yellow cover sheet. They were called Bibles because they contained all information meeting participants needed to know in advance in order to have a factual discussion, avoid exhaustive discussions, and take their decisions in an informed manner (O-P01). With the help of the Yellow Bibles, Peripheral’s meetings earned a reputation as the best prepared and conducted ones in the region. “I can certainly say – and I work in many committees, also in the Foundation Board of a school and so on – that Peripheral’s committees are the most effective in the region. For instance, Board of Directors meetings are very well prepared, which allows us to collaborate productively and in a goal-oriented way” (Peripheral, BoD member).

Exercising Power In terms of exercising power, the leadership constellation continued with the consensual decision-making approach among equal partners. In this period, they ensured that all network members were represented equally in the emerging governance structures (see Fig. 6.3) and paid attention to the equal distribution of the benefits of the collaboration. With regard to representation, Peripheral’s new BoD was composed of the three former BoD chairmen of the hospital, the outpatient care organization, and the thermal spa plus the healthcare delegate from the Regional Council. The former chairman of the Hospital Commission was appointed chairman of Peripheral’s BoD. Peripheral’s new Executive Committee consisted of the former CEOs of the hospital, the outpatient care organization, and the thermal spa, with the CEO of the thermal spa appointed both CEO of Peripheral and head of the inter-organizational Services department. These appointments created

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an equal representation of the three formerly independent organizations in Peripheral’s governance structure. Regarding the distribution of the collaboration gains, the leadership constellation placed emphasis on an equal distribution, as far as it was operationally possible. The new centralized IT department exemplified this rule, serving all operations equally. “We built the IT department in a way that it considered all businesses equally. Of course, some businesses needed more services than others. The hospital, which was most complicated and time-critical, required, of course, a faster response than the outpatient care organization. But we really tried to ‘live’ Peripheral” (Peripheral, IT head).

Impact at the Organizational Field, Organization, and Network Level The actions of the leadership constellation had several substantive, symbolic, and political consequences at the organizational field, organization, and network level. At the organizational field level, substantively, the leadership constellation’s actions resulted in a new care model for the region. On August 19, 2008, the Regional Council adopted the proposal of the fourth Care Commission, paving the way for a new regional care strategy (D-P13). The strategy was based on the principle “ambulatory before inpatient care.” After the positive message from the Regional Council, the leadership constellation proceeded with implementing the proposed strategy. They started setting up the case management unit and planning three new care groups, which would be located in different municipalities of the region. Upon completion, the three care groups would provide additional space for 23 elderly people. In addition, the leadership constellation supported a request from the retirement home, which had asked the CDJSH to increase the number of inpatient beds from 50 to 65 (D-P14). In combination, these measures calmed the inpatient bed crisis in the region. Symbolically, these achievements strengthened the collaborative spirit in the region. “I also believe that Peripheral contributes a lot that the

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region grows together even stronger than before” (Regional Council, member). Politically, one of the greatest concerns of Peripheral’s leadership constellation was recreating trust with the regional population. “At the strategic level, the main challenge was to anchor Peripheral in the region so that the population trusted the organization and to develop an effective collaboration between us and the operational level” (Peripheral, BoD member). Although the regional population had difficulties to understand the new organizational structure and the new name of the collaboration (they still talked about the “hospital” and the “outpatient care organization” rather than about “Peripheral”), they trusted Peripheral’s leadership constellation and the overall direction of the organization. An impressive sign of this trust was the support of the renovation of the hospital, which cost the region roughly CHF 10 million. “After we had formed Peripheral, we renovated the hospital. I think that without the renovation we would no longer exist. We renovated for roughly CHF 10 million. The proposal had to be adopted by the population at the time we formed Peripheral. People simply trusted in us that we would succeed” (Peripheral, Executive Committee member). Noting the population’s support, the politicians in the Regional Council and, thus, Peripheral’s Foundation Board also trusted Peripheral and the leadership constellation, supporting the direction of the collaboration. “The members of the Foundation Board have little reason for opposition because the things we do are always up to date and well substantiated. I think the Foundation Board fully trusts us. This is important because eventually they have to make certain decisions” (Peripheral, functional head). In fact, many politicians were relieved that they found a leadership constellation to whom they could delegate increasingly complex healthcare questions. “Health policy has changed so much in recent years. For example, the financing of care. Most people in the municipal councils lose the overview. I think it is difficult to keep the overview, and at the same time, we realize the importance of health care. We need someone who professionally monitors both the service organizations and the financing system to give us a certain guarantee that we do not pay more than we actually need to” (Regional Council, member).

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At the network level, substantively, the leadership constellation’s actions resulted in a new governance structure that was documented in Peripheral’s organization chart and Delegation of Authorities (DoA). The DoA were an openly accessible document clarifying the decision-making competencies for all employees at all hierarchical levels. “At the end we had an operations manual … defining the competencies for all employees and hierarchical levels, from the Foundation Board to the normal employee” (Peripheral, Executive Committee member). Moreover, by the end of period 2, the leadership constellation had successfully coordinated back-office activities across the hospital, the outpatient care organization, and the thermal spa. The range of coordinated activities included facility management, laundry, marketing, food and beverage, quality management, procurement, IT, finance, and HR. The coordinated activities were pooled in a new central shared services department called “Services.” Peripheral’s new COO described his role as follows. “Internally, we collaborate closely with the thermal spa, in the area of laundry services and so forth. Very closely … We also have other areas such as IT. This is a very close collaboration” (Peripheral, COO). The newly created department was headed by Peripheral’s CEO and provided coordinated back-office activities for the hospital, the outpatient care organization, and the thermal spa. Symbolically, the leadership constellation’s actions brought people from the three previously independent organizations closer together. This created a climate in which people began to talk to one another rather than shifting problems back and forth. “Mistakes, of course, happen now and then. But before shouting them from the rooftops, people now think about how to solve the problem. It’s no use, everyone serves the same clients” (Peripheral, functional head). Politically, the members of the leadership constellation worked for the cause rather than playing political power games. “It also depended on the people and the chemistry that was just right among them. Although we had different parties, we didn’t play political games but worked for the cause” (Peripheral, BoD member). What had changed, however, was the status of the outpatient care organization relative to the hospital. By the end of period 2, the outpatient care organization had developed from the “grey duck” to an

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equal partner within Peripheral. This new status provided the CEO of the outpatient care organization with the opportunity to raise the topic again of improving referral, treatment, and information flow activities between her organization and the hospital. “We had more weight in developing things, for instance in the management of interfaces, care management and so on. Under one roof, we were an equal partner, which we had not been before” (outpatient care organization, member). At the organization level, substantively, the coordination of the back-office activities increased the professionalism of these services in Peripheral and the thermal spa. An example of the increased professionalism was shown in the upgrade of the financial information and controlling system, which had long been a concern for people in the hospital. “I think we professionalized a lot, e.g. in HR, finance. We substantially increased the professionality of different areas. … A personal benefit for me was that we had a better organization and a more reliable financial control” (hospital, member). A further example was the complete renovation and upgrade of the IT infrastructure of the thermal spa and the outpatient care organization. “When we built up Peripheral’s IT, we pushed the thermal spa from the IT stone age into the third millennium. We completely rewired the thermal spa. They didn’t even have the cables for plugging in computers. This was a huge project. We introduced user accounts, improved security, and adapted the network to Peripheral’s standard. The thermal spa underwent an organizational and technical revolution. … The same was true for the outpatient care organization” (Peripheral, functional head). The increasing quality of the services relieved people in the different businesses, for example, in the outpatient care organization. “The requirements for quality management had continuously increased. We had managed them somehow besides everything else, although feeling uncomfortable. When we integrated the services, we felt safe that it would work and run well” (outpatient care organization, member). The central coordination of the back-office activities not only increased the quality of these services but also reduced their costs. For instance, the shared provision of IT reduced both infrastructure and personnel costs. “Our size allows us to save costs. This applies to trivial costs such as software licenses. Our size allows us to buy them extremely

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cheap. The costs for software and hardware at this level would be much higher for a single organization like the outpatient care organization. … But the largest cost pie is know-how. Our IT department has two people. A small business like the outpatient care organization would have to buy this know-how from outside, which would equal the price of our IT department as outside vendors charged on an hourly basis. The costs would be much higher” (Peripheral, functional head). In the hospital, these changes sparked new energies to tackle the renovation of dated infrastructure and to invest in new services. In Summer 2007, the hospital CEO opened a new department for complementary medicine, which was one of the first of the kind in Switzerland. A few months later, in Spring 2008, he invited the regional population to visit the results of renovation works in the hospital, which included a new design of the 2nd floor, a renovated emergency care unit, and a brandnew entrance area on the ground floor. In sum, the realization of quality and cost synergies were an important foundation for maintaining and protecting the existence of the three organizations. “Synergies are the only chance to maintain each business separately. Single-handed attempts would have become difficult for all parties” (Peripheral, Executive Committee member). Symbolically, the Delegation of Authorities provided Peripheral’s employees with orientation and thus also smoothed the previous governance issues in the hospital. “Peripheral provided clear structures with regards to decision-making competencies. Which issues are decided by operational committees, department heads, the Executive Committee, the Board of Directors, and so forth? Uncompromising and very good guidelines were made. I think this was an important condition for calming the situation” (hospital, member). At the outset, the consistent delegation of decision-making competencies overwhelmed some people in the hospital, who had been accustomed to escalating all decisions into the Executive Committee or above. “At the beginning, we had department heads who were a) completely overwhelmed and b) not used to these broad responsibilities. In the past, they had asked the hospital CEO to approve very small things” (Peripheral, Executive Committee member). People from the hospital struggled not only with the enlarged competencies they were granted by Peripheral’s new governance structure, but also with the

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sharp separation of strategic and operational competencies. “Now we lead completely differently. But it needs time and communication until people who were used to the old system adopt the change” (Peripheral, BoD member). At the end of the period, the consistent delegation of decision-making competencies—in combination with the new department head meetings—strengthened the role of the department heads and thereby increased their motivation and self-responsibility. “This created a significant motivation push because they were able to assume responsibility for their areas” (Peripheral, Executive Committee member). Politically, during period 2, Peripheral’s leadership constellation was concerned that they would lose people along the way. One of Peripheral’s functional heads observed, for instance, that not everyone supported the collaboration. “There were enemies and employees who didn’t see the purpose and benefits of the collaboration” (Peripheral, functional head). Across the board, however, employees in the three organizations supported the leadership constellation’s actions, including the hospital physicians. “I have to admit that I was surprised that the physicians almost without exception accepted the new organizational structure. I’ve always thought, ‘Uh, this could cause some headwind’” (Peripheral, functional head).

Period 3 (2009–2013): Integrating Care Enabled and constrained by these outcomes at the organizational field, network, and organization level, the leadership constellation began to reflect about implementing the third step of the collaboration model, i.e., the inter-organizational coordination of patient referral, treatment, and information exchange activities (see Fig. 6.2). Their actions were additionally enabled and constrained by two events at the organizational field level. On the one hand, in 2012, Switzerland introduced the new hospital payment system Swiss DRG, which further increased efficiency pressures on the regional hospital. On the other hand, referring to these growing efficiency pressures, the CDJSH publicly invited all hospitals in the canton to foster inter-organizational collaboration,

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pointing to Peripheral as a role model. Both events encouraged the leadership constellation to continue coordinating activities across organizational boundaries.

Organizational Field-Level Changes On January 1, 2012, Switzerland introduced the new hospital payment system discussed by the Swiss parliament in the previous periods (Swiss DRG). The introduction and definition of the base rates steering the system created heated debates in Switzerland’s healthcare sector. Among others, on November 13, 2012, the Swiss price supervisor, a national office for the supervision of prices in important economic sectors, joined the debate, recommending base rates for University Hospitals and non-University Hospitals to the Swiss cantons. Base rates were standardized economic costs and served as the calculation basis for diagnosis-related lump sums paid for various hospital stays. Each diagnosis (e.g., an inflamed appendix) would be allocated a cost weight and multiplied with the base rate. Base rates would be negotiated among hospitals, health insurance companies, and the Swiss cantons. Benchmarking cost data from hospitals across Switzerland, the price supervisor recommended a base rate of CHF 9674 for University Hospitals and CHF 8974 for non-University Hospitals (D-P15). The recommendation of the price supervisor initiated a debate within the CDJSH in Peripheral’s canton. On the one hand, the CDJSH was interested in low base rates because according to the payment system, the canton had to pay 55% of all case costs. On the other hand, the CDJSH was interested in an area-wide provision of health care in the canton. In an interview in a regional newspaper, the cantonal councilman for health and director of the CDJSH argued that the recommendation of the price supervisor could threaten the existence of many cantonal hospitals. “If the base rate is set according to the recommendation of the price supervisor, the majority of our cantonal hospitals could be threatened.” He added that collaboration among providers was a crucial means for improving the cost efficiency of health care in the canton. “Relevant is the cost efficient leadership of a hospital rather than the

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number of hospitals. A larger hospital is not automatically cheaper. … Some of our regional and relatively small hospitals are among the most efficient, for example Peripheral’s hospital. I don’t think that fewer hospitals reduce health care costs. In addition, different regions would suffer from a poor health provision. In terms of healthcare costs, the lever is collaboration among service providers and the economic leadership of the services” (D-P16).

Peripheral’s Leadership Constellation Like in the previous period, the leadership constellation consisted of Peripheral’s BoD and Executive Committee members. Together, they began to reflect on the question of how they could coordinate patient referral, treatment, and information exchange activities across Peripheral and additional regional social services organizations. To reflect on this question, they established two new reflexive spaces: a workgroup called “Care Management” and a series of bilateral exchanges with regional social services organizations.

Establishing Reflexive Spaces At first, the leadership constellation established a Care Management workgroup, which directly reported to Peripheral’s Executive Committee. They composed the workgroup as follows (D-P06): • • • • • • •

CEO of hospital (chairman of the workgroup) 2 hospital chief physicians (internal medicine and surgery) Head nurse of hospital Head of case management Head of hospital residential care home A senior hospital physician with IT expertise CEO of outpatient care organization

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The leadership constellation set up the workgroup with two related aims. On the one hand, they aimed to reflect on the coordination of patient-centered referral, treatment, and information exchange activities between the hospital and the outpatient care organization (D-P06). On the other hand, they aimed to reflect on the role and responsibilities of the new case management unit according to the new regional care strategy developed by the fourth Care Commission in period 2. According to this strategy, the case management unit would be the heart of the ambulatory regional care philosophy and act as a central information and contact hub dealing with all questions regarding aging and care in the region. It would provide patients and families with information about ambulatory and inpatient care services in the region and facilitate tailor-made services for patients with complex needs (D-P06). In addition, the leadership constellation initiated a series of bilateral exchanges with regional social services organizations in order to enlarge the network. After Care Management had started their work, the leadership constellation realized that they needed to enlarge the regional network in order to offer patients with complex needs professional, comprehensive, and tailor-made care and social services. One organization was ProElderly, which provided social services (e.g., advice on finances, health, and law) for elderly people in Switzerland. “When we established the case management unit, it became clear that we needed a closer contact with ProElderly to develop complementary services” (Care Management, member). Other examples were collaborations with the regional guardianship office or regional branches of national social service organizations, such as the Swiss Dementia Association. To establish contact with these additional organizations, the leadership constellation established a series of bilateral exchanges. An example of such an exchange was one with the regional guardianship office, which was needed whenever a guardianship issue came up in the course of treating a patient. “In July we have a meeting with the ladies from the guardianship office. They can show us their strengths so that we don’t forget them if we have a guardianship question” (Care Management, member).

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Enabling Reflexive Conversations In this period, the leadership constellation enabled reflexive conversations about the coordination of care activities across organizational boundaries by visually mapping the path of patients leaving the regional hospital, by developing trust and rapport with the new network partners, and by showing understanding for the manifold perspectives involved in the care of patients with complex needs. First, in the context of the Care Management workgroup, the leadership constellation enabled reflexive conversations by creating a table that mapped the path of patients leaving the hospital (D-P06). This table helped the team reflect on the question of how to coordinate referral, treatment, and information exchange activities within Peripheral and across additional external provider organizations (e.g., GP, retirement home), including the role of the new case management unit. The Care Management workgroup usually met in the hospital CEO’s office. Between June 2011 and October 2012, they met five times (D-P06). Each meeting lasted for roughly two hours. The first meeting took place on June 1, 2011. The hospital CEO, who chaired the workgroup, welcomed the team members. He mentioned the regional care strategy adopted by the Regional Council in the previous period and outlined key ideas behind the new case management unit for the coordination of care activities in the region. After this introduction, the team reflected on the status with respect to the transition of patients from one provider organization to the next. They concluded that although the coordination of care activities had recently improved, there was still potential to improve the management of interfaces among the different organizations. More specifically, they identified the following three issues (D-P06): • Complex patients were particularly challenging and required collaboration with multiple service organizations, including providers outside of Peripheral.

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• It was challenging to provide all involved organizations with complete and timely patient information. The hospital nurses did not systematically record the patients’ care histories. • The hospital lacked a systematic patient discharge practice. The practice of transferring patients from the hospital to long-term care and rehabilitation was fragmentary. On the basis of this problem analysis, Care Management decided to systematize hospital discharge activities and update the existing hospital information system (called “Phoenix”) in order to facilitate the collection and exchange of patient information across Peripheral. They also decided that in the future, the new case management unit would handle all patient applications to long-term inpatient care—including the retirement home. The second meeting took place on June 28, 2011. In this meeting, Care Management reflected on an optimal allocation of responsibilities for discharging patients from the acute part of the hospital and decided the following: • The case management unit would be responsible for all complex patients and all new applications to long-term inpatient care. • Hospital nurses would be responsible for returns to long-term inpatient care and applications to outpatient care. • Physicians would be responsible for all transfers to rehabilitation clinics. To facilitate the information flow among the involved organizations, the project team confirmed their decision to upgrade Phoenix, the existing hospital information system. The senior physician with IT expertise invited workgroup members to submit change requests. The third meeting took place on August 22, 2011. In this meeting, the workgroup re-assessed the status of Phoenix after the first change requests had been implemented and decided to submit further change requests to the IT expert. They also reflected on an ideal starting point for launching the hospital discharge process and decided that physicians

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and nurses should enter discharge information into Phoenix within 48 h after hospital entry or else required data fields would turn red. As a next step, in order to consolidate their previous decisions, the project team decided to develop a table graphically mapping the future hospital discharge practice. The CEOs of the hospital and the outpatient organization agreed to create a first draft and circulate it among the workgroup members. In the following months, the workgroup co-created by way of circulation a simple table mapping the future hospital discharge practice. In the fourth meeting, which took place on August 31, 2012, the project team agreed on the solution shown in Table 6.3. The table mapped the different options for discharging patients from the hospital (field “Discharge to …”). Going forward, hospital physicians and nurses were expected to trigger the hospital discharge by entering discharge information into Phoenix within 48 h after hospital entry (field “Trigger”). The table also allocated responsibilities for patient transitions (field “Responsible”) and defined which patient information (field “Required forms”) was provided to which internal and external business partners (field “Involved/informed”). The table thus helped the workgroup to jointly reflect on an optimal coordination of patient referral, treatment, and information exchange activities within Peripheral and across external organizations. The final meeting took place on October 23, 2012. The workgroup once again reviewed the table and agreed to submit it to Peripheral’s Executive Committee for final approval. Second, the leadership constellation enabled reflexive conversations by establishing trust and rapport with the new regional network partners. Working on the new hospital discharge practice, the leadership constellation realized that a seamless provision of care—especially for patients with complex care and social service needs—required an extension of their network to additional organizations, for instance, to regional GP, ProElderly, or the regional guardianship office. “Guardianship is a recurrent issue we have to consider in our round tables” (Care Management, member). However, expanding the network was challenging because the required organizations were initially concerned that Peripheral would

6  Case Study I: Peripheral     157 Table 6.3  Peripheral’s hospital discharge working table Discharge to

Trigger Required forms

Responsible Involved/informed Peripheral

External

Home w/o help Home with meal service

P/C