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Alliances In Healthcare Organizations

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Health care organizations across the United States have been forming alliances for numerous years. An alliance is a voluntary process, and consists of formal or informal arrangements among two or more organizations for the purpose of ongoing cooperation and the mutual sharing of risks and benefits (NCBI.gov, 2012). Alliances are growing and according to Modern Healthcare’s (2012) annual merger report showed a 3.5 percent increase in the number of mergers and or alliances. Furthermore, from 2009 to 2010 there was over a 73 percent increase in the number of hospitals involved in merger or alliance activity. Alliances typically form for strategic purposes. Alliances allow an organization to promote their mission in an attempt to enhance overall …show more content…
Thus, conditions may exist when a health care organization will seriously seek out and consider an alliance. For example, an organization may be lacking in market shares, so the organization may seek an appropriate alliance in order to increase their competitive position and or advantage (Huang, Tzeng & Ong, 2005). Furthermore, the organization may be lacking in or are forced to purchase expensive resources. Hence, the organization may seek out perspective suppliers in order to form an alliance in order to streamline their logistical system for the goal of cost reduction and or revenue enhancement. Another motivation is knowledge; organizational knowledge and learning are often foundational reasons on why organizations seek out to acquire and or learn from others (Huang, Tzeng & Ong, 2005). Thus, an organization may be looking to improve their product quality by innovating and learning through …show more content…
These stages are the typical norm, but not all alliances must develop in the set pattern of; emergence, transition, maturity, and critical crossroads. During the emergence stage, environmental threats, opportunities and uncertainties often lead organizations to seek out others with similar ideologies (Zajac & D’Aunno, 2012). Hence, organizations that have complementary relationships may seek to form an alliance to either expand their market share, and or reduce their market liabilities (Zajac & D’Aunno, 2012). The second stage of transition allows for mechanisms to be developed that form the command and control structure of the alliance. This stage formalizes ownership ventures, lays out expectations, and reinforces the formal or informal alliance partner agreements (Zajac & D’Aunno, 2012). This stage is very important in the development and reassurance of resource commitment and alliance

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