This study collected survey data from 76 hospitals in Taiwan to test a multilevel model addressing the issue of TQM adoption as one type of organizational adaptation. We focused on the extent of TQM adoption by the individual hospitals as the dependent variable. As for the independent variables, we selected five multilevel constructs: the scope of the network cooperation, the nature of the network relationship, organizational identity, adaptation strategy and organizational citizenship behaviour. Results from regression analyses indicate that both the nature of the network relationship and prospector strategy are positively and significantly related to the extent of TQM adoption. However, subsample analyses show that while only the prospector strategy is related to TQM adoption for for-profit hospitals, only the nature of the network relationship is related to TQM adoption for non-profit hospitals. The overall results seem to suggest that larger hospitals and non-profit hospitals are in a better position to utilize the network relationship than the smaller hospitals and for-profit hospitals. As a result, these smaller hospitals and for-profit hospitals have to rely more on their own prospector strategy to facilitate the implementation of TQM to cope with the uncertainties ushered in by the National Health Insurance programme. It is hoped that our cross field research will help the study of TQM in new directions.
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