Building Capabilities to Improve the Performance of Public Organizations: A Comparative Case Study of Different Turnaround Trajectories of UK's Public Hospitals

Over the past 20 years, governments in many countries around the world have sought to implement governance mechanisms to measure and assess the performance of public service organizations. Consequently, organizations considered as poorly performing are often subject to increased pressure to turn their performance around. Based on literature on organizational capabilities, this research sought to identify the capabilities whose development and use explain a public organization’s ability to improve its performance and sustain good performance in the long run. This research applied longitudinal and comparative case studies method into two Hospitals Trusts represent two different turnaround trajectories: one case of a successful turnaround and one case of less-successful turnaround. The purpose was to examine how the development of a set of capabilities over time accounted for the differences in the performance outcome and trajectory of the two cases. The findings revealed the following capabilities as advantageous for good performance: collective leadership; action-oriented culture; effective clinical-managerial relationship; supportive external context; performance control capability; coordination capability of the key delivery process; sensing capability and learning capability. These findings add relevant insights to the existing literature and can be of practical value for public managers faced with challenge of turning the performance of their organizations around.