The
lawsuit came about as follows. The Act, passed in 1988, was designed
to give Boards the resources and control needed to treat SMD clients
either within the community or in State Hospitals, by giving them
direct control over the state funds designated for SMD clients.
Prior to the Act, most of the state's SMD funds went directly
from ODMH to the ODMH-operated State Hospitals to pay for very
expensive inpatient care. The Act mandated a 6-year phase-in period
during which the amount of these funds available to Boards increased
from 0% to 100%. In 1993 six Boards filed suit, charging that
ODMH was failing to distribute funds at the levels specified in
the Act. That year, Boards were to have the option of receiving
60% of the state's SMD funds, but were actually limited to about
30%. ODMH asserted that these funds were needed to maintain the
State Hospitals, but some Boards argued that they did not have
the funds needed to treat those SMD clients who were no longer
hospitalized.
Six
months later, the presiding judge approved an ODMH motion that
all Boards had to join the case as: a) plaintiffs, b) defendants
(side with ODMH), c) intervenors (willing to continue to negotiate
out-of-court with ODMH), or d) non-parties (waive their right
to participate). As a result, 13 Boards (24%) ended up as plaintiffs,
11 (21%) joined with ODMH as defendants, 25 (47%) became intervenors
and 4 (8%) took the non-party stance.
A
STRATEGIC ISSUE DIAGNOSIS MODEL FOR INTERORGANIZATIONAL RESPONSES
The
four stances in the lawsuit can be conceptualized as indicating
varying levels of organizational resistance to institutional pressures,
as per Oliver (1991). Drawing on the institutional and resource
dependence perspectives, she proposes a typology of five responses
that vary from passive conformity to active resistance. The four
stances fit into this typology as follows. Defendants are examples
of acquiescence (blind adherence to pressure or a conscious decision
to comply), the most passive response. Compromise, a more active
response, is an attempt to balance, pacify or bargain, and describes
intervenors, who are willing to continue to negotiate with ODMH.
Boards taking the non-party stance fit into the avoidance category,
the next most active response, because they are actively eluding
institutional pressures. Plaintiff Boards are the most resistant,
demonstrating a response of defiance. Oliver's fifth category,
manipulation, does not apply here.
Our
model (Figure 1) predicts that the quality of the relationship
between organizations is a proximal cause of organizational resistance.
The IOR literature (e.g., Oliver, 1990; Ring & Van de Ven,
1994) argues that the health of a dyadic relationship impacts
co-determined organizational responses. Healthy IORs, characterized
by interpersonal trust and equity, will have a strong commitment
to maintaining the working relationship and to developing effective
conflict resolution mechanisms (Ring & Van de Ven, 1994).
In other words, a high quality relationship will reduce the likelihood
of using formal and legal mechanisms for resolving conflict.
Issue
interpretation is the next link in our model. Issues can be framed
in multiple ways, and the appropriateness of a frame for a research
project depends on the context and the response being studied.
Here, control and feasibility are the frames most relevant to
the quality of working relationships between Boards and ODMH and
to the response to institutional pressure. Control is salient
because the Act was designed to shift control to Boards and the
lawsuit is a fight over control of funds. Board perceptions of
control over implementing the Act will have a positive effect
on the quality of the working relationship with ODMH and will
indirectly affect the extent of resistance to institutional pressure.
Feasibility of successful implementation is also salient, given
the legal obligation to implement the Act in the midst of a funding
crisis. Those with a positive feasibility frame would have fewer
difficulties working with ODMH; those who see low feasibility
would make an external attribution and blame ODMH for not releasing
the funds. Framing the issue as feasible is predicted to lead
to a better working relationship with ODMH, and, indirectly, affect
the stance taken in the lawsuit.
Our
model contains contextual factors, based on Thomas et al.'s (1994)
model. At the individual level, work experience provides knowledge
and confidence (e.g., Frederickson, 1985), leading to perceptions
of control and feasibility. At the group level, we include information
processing capacity of top management.
Research
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