AH XXXXXXXXXX
Treating an unhealthy organisational culture: the implications
of the Bundaberg Hospital Inquiry for managerial ethical
decision making
Gian Luca Casali1,3 BBA, MBA, Lecture
Gary E. Day2 DHSM, MHM, RN, EM, FCHSE, Senior Lecturer and Health Management
Program Conveno
1School of Management, Queensland University of Technology, Gardens Point, QLD 4000, Australia.
2School of Public Health, Griffith University, Brisbane, QLD 4500, Australia.
3Co
esponding author. Email: XXXXXXXXXX
Abstract. Thispaper explores the interplaybetween individual values, espousedorganisational values and the values of the
organisational culture in practice in light of a recent Royal Commission in Queensland, Australia, which highlighted
systematic failures in patient care. The lack of congruence among values at these levels impacts upon the ethical decision
making of health managers. The presence of institutional ethics regimes such as the Public Sector Ethics Act 1994 (Qld) and
agency codes of conduct are not sufficient to counteract the negative influence of informal codes of practice that undermine
espoused organisational values and community standards. The ethical decision-making capacity of health care managers
emains at the front line in the battle against unethical and unprofessional practice.
What isknownabout the topic? Value congruence theory focusses on the conflicts between individual andorganisational
values. Congruence between individual values, espoused values and values expressed in everyday practice can only be
achieved by ensuring that such shared values are an ever-present factor in managerial decision making.
What does this paper add? The importance of value congruence in building and sustaining a healthy organisational
culture is confirmed by the evidence presented in the Bundaberg Hospital Inquiry. The presence of strong individual values
among staff and strong espoused values in linewith community expectations and backed up by legislation and ethics regimes
were not, in themselves, sufficient to ensure a healthy organisational culture and prevent unethical, and possibly illegal,
ehaviour.
What are the implications for practitioners? Managers must incorporate ethics in decision making to establish and
maintain the nexus between individual and organisational values that is a vital component of a healthy organisational
culture.
Early in 2005, a Commission of Inquiry into the operation of the
Bundaberg Hospital in Queensland, and in particular the conduct
of one surgeon, found serious
eaches of clinical and
professional practice. The range of issues identified and the
subsequent recommendations by the Bundaberg Hospital
Commission of Inquiry were not new for the health care
sector.1 Many other jurisdictions, such as New South Wales
(Campbelltown and Camden Hospitals), Victoria (Royal
Melbourne Hospital), Western Australia (King Edward
Memorial Hospital), the United Kingdom (Bristol Royal
Infirmary), South Africa (TownHill Hospital), Canada
(Winnipeg Health Sciences Center, and Krever Commission of
Inquiry), Slovenia (Celje Hospital), Scotland (Glasgow’s
Victoria Infirmary) and New Zealand (Southland District
Health Board and the Princess Mary’s Hospital), have had
similar inquiries with similar outcomes and recommendations.2
Arguably, whereas these inquiries were conducted for various
easons, in different health services, and in a variety of locations,
there are common areas of concern.
* Each of the inquiries concluded that the quality of care was
elow reasonable standards.
* Concerns about substandard care were often raised by a few
dedicated and altruistic staff members.
* Communication was problematic between the hospital and
the formal controlling agency responsible for assuring the
protection of patients.
* There was a
eakdown in formal organisational procedures in
elation to sentinel reporting of adverse medical events.
* There was a poor sense of teamwork and collaboration.
* There was poor communication between the health care
organisation, patients and their relatives.
Despite repeated investigations into these systemic
weaknesses and the myriad of recommendations to prevent
these incidents re-occu
ing, health systems continue to
experience critical incidents and catastrophic system failures.
These continued health system failures and an alternative
approach to considering ethical decision making will be
� AHHA XXXXXXXXXX/AH XXXXXXXXXX/10/010073
CSIRO PUBLISHING Feature
www.publish.csiro.au/journals/ahr Australian Health Review, 2010, 34, 73–79
Governance
discussed in light of the Bundaberg Hospital Commission of
Inquiry and associated case studies. The discussion of such case
studies is not an excuse for blaming individuals; rather it is aimed
at finding solutions by uncovering the underlying reasons behind
the recu
ence of similar poor choices across health care facilities
around the globe. This analysis focusses particularly on the
decision-making processes that contributed to the need for an
inquiry. The intent is not merely to discuss these case studies as
isolated situations, but as related symptoms of an underlying
pathology, which is often misdiagnosed. Past experience teaches
us that when bad decisions have been made the first reaction has
often been tofind someone to blame – a scapegoat, or ‘bad apple’.
This study, on the other hand, argues that those decisions have
more likely been influenced by an endemic systematic malaise –
an unhealthy organisational culture. However, it is not sufficient
to simply shift the blame entirely to the organisational level;
ather, asLiedtka3has argued, closer attentionneeds tobegiven to
the relationshipbetween the organisation and individual in action.
The presence of strong individual values among staff and
strong espoused values in line with community expectations and
acked up by legislation and ethics regimes were not, in
themselves, sufficient to ensure a healthy organisational
culture and prevent unethical, and possibly illegal, behaviou
in Bundaberg Hospital. Indeed, somewhat surprisingly, one
eview into the Queensland health system prompted by the
events at Bundaberg Hospital, reported that it heard claims
that, on occasion, the Queensland Health Code of conduct had
een ‘used as a tool to bully or intimidate Queensland Health
staff ’.4 The Foster review claimed that the Code of conduct had
een ‘written in a style typically reflective of the formal
prescriptive and bureaucratic aspects of culture, rather than an
inspiringpatient or consumer centred approach’4 (p. 58).Whethe
the problem of the misuse of the Code of conduct can in fact be
attributed to such stylistic issues is debatable, and no evidence
was given in the review to support this opinion. It is more
plausible to suggest that when the values expressed through
everyday practices, such as bullying, contend with espoused
values, such as those embodied in the Public Sector Ethics Act
19945 and the agency-specific Code of conduct,6 the health of
the organisational culture is by definition weakened, and
opportunities arise for individuals to knowingly engage in
wrongdoing without fear of reprisals. Globally, organisational
culture is now routinely identified as a factor in dysfunctional staff
and systemperformance.Thedifficulty is that cultures canbehard
to change, and such change still requires individual action.
Congruence between individual values, espoused values and
values expressed in everyday practice can only be achieved by
ensuring that such shared values are an ever-present factor in
managerial decision making. Managerial ethical decision
making, then, is crucial to establishing and maintaining the
nexus between individual and organisational values that is a
vital component of a healthy organisational culture.
Organisational culture and its link to ethical
decision-making processes
When defining ‘unhealthy’ and ‘healthy’ organisational cultures
it is useful to start with a metaphor used by Aristotle.7 In the
Nicomachean ethics, he posed the question, what constitutes a
‘good knife’? Aristotle defines goodness in terms of purpose; he
argued that the very function of a knife is to cut and, therefore,
a good knife is a sharp knife.7 Similarly, it can be argued that the
unique function of a good organisational culture is to promote
shared values, artefacts and behaviours that have been deemed
acceptable. Specifically, a healthy organisational culture actively
promotes congruence between the values of the organisation and
the individuals working in it. Arguably, then, an unhealthy
organisational culture would be one that expresses values and
ehaviours contrary to the shared values of staff members and the
espoused organisational values. Liedtka3 talks of ‘strong’ and
‘weak’ rather than ‘healthy’ and ‘unhealthy’ organisational
cultures, but the effects are similar. ‘In diagnosing a ‘strong
corporate culture’ we look for the existence of shared meanings,
eliefs, and values. The more universal these understandings are
among organisational members, the stronger the culture.
Conversely, a ‘weak culture’ lacks such common themes.
Beliefs held by members are more diffuse’3 (p XXXXXXXXXXStrongly
held individual values can aid decision making in the face of
corporate mixed messages, but ‘muddled organisational
ehaviour’ can also be exploited by those ‘with little apparent
sense of wrong-doing’3 (p. 808).
Liedtkas’s insights into the importance of values congruence
to building and sustaining a healthy organisational culture are
confirmed by the evidence presented in the Bundaberg Hospital
Inquiry. Nevertheless, value congruence theory3 focusses mainly
on the conflict between individual and organisational values.
In the situation described in the Bundaberg Hospital Inquiry,
however, therewas ahigh level of congruencebetween individual
staff values and those espoused by the organisation. It is the
disjuncture between these individual and espoused values and
those put into practice in managerial decision making, that seem
to have created the opportunity for individuals to indulge in
substandard practices with little awareness of their wrongdoing.
Decisions are the building blocks of organisational climate o
culture and can be usefully described as ‘choices guided by
values’. The application of values through decision-making
procedures replicates the organisational culture across time
and space. Just as DNA encodes information from one
generation to another, so too is a recognisable organisational
culture transferable from one generation to another and from
one place to another through the transmission of values.
Organisational culture is the personality of an organisation,8,9
and it comprises the assumptions, values, norms, tangible signs
(artefacts) of the organisation, its members and thei
ehaviours.10 The concept of culture is particularly important
when attempting to manage organisation-wide change.9,10
Decision makers are coming to realise that, despite the best-
laid plans, organisational change must include not only changing
structures and processes, but also changing the corporate
culture.10 Trevino and Nelson,11 for example, have argued
that, in setting the standards for assessing the rightness of an
action, not only are the individual values of the decision make
important, but other factors, such as organisational culture, also
play a very important role.
As previously suggested, organisational culture is made up of
values; more specifically, by desires for goods – tangible and
intangible – that are considered important by individuals.12 It is
possible to identify three sources of values that equally can
74 Australian Health Review G. L. Casali and G. E. Day
influence the organisational culture and, indirectly, the
managerial decision-making process: individual values1;
espoused organisational values2; and those values actually
embedded in the daily practice of the organisation.3 The
esults of a study of 1800 staff from two major tertiary
hospitals undergoing amalgamation in Queensland, the state in
which the Bundaberg Hospital is situated, indicated five main
staff values: care and compassion, integrity, honesty,
professionalism, and dignity.13 The two main sources of
espoused organisational values were the Public Sector Ethics
Act 19945 and the Queensland Health Code of conduct.6 They
oth promote values such as respect for persons, integrity, respect
for the law