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Organizational Performance in Environmental Uncertainty on the Indonesian Healthcare Industry: A Path Analysis

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  • MF. Arrozi Adhikara
  • Maslichah
  • Nur Diana
  • M. Basjir

Abstract

The COVID-19 pandemic has created turbulence in the healthcare industry, resulting in a decline in financial performance, planning, control, and systems. This has caused managers to perform specific actions related to budgeting for their benefit, resulting in budgetary slack and affecting hospital performance, which is influenced by environmental factors and organizational conditions. Therefore, this research aimed to obtain empirical evidence of the mediating role of management control systems and budgetary slack on the effect of environmental uncertainty on hospital performance. The method used was an explanatory causality approach, a primary data source, a survey data collection technique, and a research sample consisting of hospital managers. The simple random sampling technique was employed, using an individual unit of analysis, a cross-sectional time horizon, and path analysis to evaluate the data. Subsequently, the results showed that environmental uncertainty positively affects management system control and budgetary slack. The research also revealed the positive influence of management system control on budgetary slack and hospital performance and fiscal margin on hospital performance. Furthermore, the control process and budgetary slack as mediating actions indicated that budgeting is pessimistic for goal congruence, making hospital performance efficient but ineffective.

Suggested Citation

  • MF. Arrozi Adhikara & Maslichah & Nur Diana & M. Basjir, 2022. "Organizational Performance in Environmental Uncertainty on the Indonesian Healthcare Industry: A Path Analysis," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 11, March.
    • Handle: RePEc:bjz:ajisjr:2219
    DOI: https://doi.org/10.36941/ajis-2022-0058
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    References listed on IDEAS

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    1. Andry & Ewaldo & Arrozi Adhikara & Rokiah Kusumapradja & Sri Handayani, 2023. "The Role of Mediation Barriers to Self-Efficacy in Improving Hospital Revisitation: Empirical Evidence in the Healthcare Industry in Indonesia," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 12, January.

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