An Empirical Investigation

Abstract

The rapid changes in the Saudi private sector hospital environment have exerted significant pressures on the

hospitals to pay attention to marketing strategies in general and health service strategy in particular. Therefore this

research investigates the influence macro environment factors have on the health service strategy made by the

hospital managers. This study proposes and tests a four factor macro environment model that explains the

considerable variation in health service strategy in the hospitals. These factors include political/legal (P), economic

(E), social/cultural (S), and technology (T). In order to explore this issue, a triangulation method was used to collect

primary data through a questionnaire, which was administered in the private sector hospitals in the Western Region

in Kingdom of Saudi Arabia (KSA) and, via in-depth semi- structured interviews with hospital managers and

experts in the health services in KSA. All Saudi general private sector hospitals in Western Region were targeted in

this research rather than a representative sample of these hospitals. A purposive sampling strategy was used to

choose the participants in this research. In total, 120 senior managers (including general managers, administrative

managers, medical managers, public relation managers, nursing manager, and out patients clinic managers)

participated in this study. The results confirm significant differences in the influence of macro environment factors

on health service strategy. Furthermore, the results show that the hospitals might benefit further by placing more

emphasis on an integrated health service strategy and recognising the macro environment influences on their

hospitals. The results also highlight several implications for future research in health services marketing and fill in

several gaps in the existing literature on health services marketing.

Keywords: Macro environment, Health service strategy, KSA

1. Introduction

The new environment reality affecting the operation and performance of organizations is being characterized by

continuous and often unpredictable change. As a result, many calls have been voiced for organizations to build the

ability to respond and adapt to changing and uncertain environmental conditions, in order to sustain their

competitive situation (Cardwell & Bolon, 1996; Godiwalla et al., 1997; Chung, 2008; Aapo & Tomas, 2008).

Macro environment has been the subject of considerable research in both business and marketing literature recently.

Furthermore, it became an area of primary concern to all organizations, depending critically on a subtle

understanding and analysis of both the industry within which the hospital will compete, and the competitors working

in same arena.

Studying macro environment factors is an important issue in terms of the increased pressure placed upon hospitals

and the competition that exists between hospitals.

Any attempt at conceptualizing the term "macro environment" should, at some stage, involve an attempt to answer

certain questions, such as:

 What is the meaning of macro environment in hospital industry?

 What are the main factors of macro environment? And how do they influence health organizations?

Godiwalla et al. (1997) noted that the senior management team's perception of organisational environments

significantly affects the strategic choices they make. If their perception of the environment is favourable and filled

with opportunities, then the organisations strategic postures would be aggressive and externally-oriented.

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Alternatively, if they perceive the environment to be fraught with danger then the organisation would be most

defensive in its strategic posture.

Since the patient and his or her accompanying persons are the beneficiaries in any hospital from a marketing

standpoint they are to be considered consumers who have many needs and demands, which have increased with the

heightened awareness among Saudi people of modern health care. This trend can be identified through study and

analysis. In other words, marketing activities in the health sector require extensive studies be conducted as well as

hiring effective marketing expertise and staff to satisfy the needs and wants of the target market, while also

achieving management and organisational goals. To accomplish this, health care service providers and marketing

decisions makers must adapt their strategies and modify their services according to the macro environment in which

they grow up and survive.

In order to improve ways of handling marketing problems the private sector hospital management should be

analysing marketing activities more effectively by shedding light on the surrounding environmental conditions, and

updating knowledge about both current and future marketing decisions in their hospitals. This may be achieved by

considering marketing as being a sub-system operating in the larger system which is the surrounding environment