STRATEGIC CHOICES AND FINANCIAL PERFORMANCE
Nath and Sudharshan (1994, pp. 43-61) investigated the development of competitive advantage within the acute care hospital industry, and in turn the effects on financial performance of the development of a competitive advantage. Nath and Sudharshan (1994, pp. 43-61) emphasized the development of coherence in strategy formulation and implementation as a means of developing a competitive advantage in the acute care hospital industry. The essence of their analysis was the measurement and assessment of the relationship between strategic coherence and financial performance. Nath and Sudharshan (1994, pp. 43-61) found that higher levels of financial performance among acute care hospitals was associated with higher levels of strategy coherence within these hospital organizations. Concurrently, Nath and Sudharshan (1994, pp. 43-61) found that levels of financial performance among acute care hospitals varied in a positive relationship with occupancy level indicators for these hospitals.
Burda (1989, pp. 24-35), Nyman and Bricker (1989, pp. 586-594), and others have previously established a positive relationship between financial performance and occupancy rates in the delivery of health care services. By contrast, researchers and analysts have consistently either found no relationship between strategic planning and financial performance or have concluded that such a relationship exists without being able to demonstrate the validity of such conclusions through the results of unambiguous empirical research (Chakavarthy, 1986, pp. 437-458; Hansen and Wernefelt, 1989, pp. 399-411).
Conclusions such as those drawn by Nath and Sudharshan (1994, pp. 43-61) are highly relevant to an acute care hospital industry that is reeling from the combined impact of sociological and governmental induced change, and is reaching out for almost any idea that offers hope for future financial ...