Background on the California Hospitals Case Study According to Bai (2013) the study looks into the board sizes and their occupational back ground of their directors on board and how they influence social performance in a for-profit and non-profit hospital organization in California. The case study provides empirical evidence that quantitatively measured the social performances of the boards of for-profit and non-profit of California hospitals. The empirical evidence is proven through the Hypotheses for both for-profit and non-profit organizations and the measure of their social performance, that broken down in three hypotheses. The purpose of the study is to fill the gap in the study and bring some insight …show more content…
The first hypotheses reference to board size and social performance for-profit organizations, the issues of conflict with managers and stakeholders can’t seem to be solved through contracts due to high cost making it unreasonable to write a complete contracts (Bai, 2013). This part of the corporate governance that causes these conflicts, which are part of the board of directors that authorized by the stockholders to improve the decision making with managers, that weak governance reduces social performances (Bai, 2013). “Hypotheses 1A Board size is negatively associated with social performance in for-profit organization” (Bai, 2013, P. 173). Shows the essential roles of non-profit board and they fulfill their duties by making sure that stewardship of the resources are manage assets for stakeholders. By doing this the board size increase meaning that the board brings in more charitable resources that making it a fixed operational …show more content…
This is where physicians serve on the non-profit board of directors and do not receive any compensation. Theses physicians chose to serve on because they believe in the charitable mission and want to fulfill the mission by participating in all board activities. ““Hypotheses 2b the presence of government officials on the board is positiviely associated with social performance in non-profit organizations” (Bai, 2013, P.174). The whole purpose is physicians that serve as the board of directors put a lot of pressure on management to focus on more social