In search of excellence: fact or fiction?

This study attempted to test the validity of principles of management espoused by Peters and Waterman in their book In Search of Excellence. A sample of excellent and nonexcellent hospitals was identified using financial criterion. A survey instrument was then mailed to each sample hospital that gathered information about management practices and beliefs in the organization. Our results do not provide much empirical support for the seven major attributes of excellent companies identified by Peters and Waterman. Of the seven attributes, only "close to the customer" was found to be positively correlated with excellent hospitals. Excellent hospitals were more likely to define physicians as their customers and were more likely to accumulate information about their customers.