Diversity, entrepreneurial innovation, and performance of healthcare sector in the COVID‐19 pandemic period

• Published date: 01 December 2022
• Author: Hani El Chaarani,Lukman Raimi
• Date: 01 December 2022
• DOI: http://doi.org/10.1002/pa.2808

RESEARCH ARTICLE

Diversity, entrepreneurial innovation, and performance of

healthcare sector in the COVID-19 pandemic period

Hani El Chaarani

1

| Lukman Raimi

2

1

Beirut Arab University, Beirut, Lebanon

2

Department of Business (Entrepreneurship),

Universiti Brunei Darussalam, Bandar Seri

Begawan, Brunei

Correspondence

Lukman Raimi, Department of Business

(Entrepreneurship), Universiti Brunei

Darussalam, Bandar Seri Begawan, Brunei.

Email: lukman.raimi@ubd.edu.bn

This research explores the correlation between diversity, entrepreneurial innovation,

and performance of the Lebanese healthcare sector during the COVID-19 pandemic

period. It aims to analyze the nature of the following correlations (a) the impact of

workforce diversity on entrepreneurial innovation, (b) the impact of workforce diver-

sity on performance, and (c) the impact of entrepreneurial innovation on perfor-

mance. Using a cross-sectional survey design, we collected the primary data from

heterogeneous respondents including 870 patients and 261 executives leading

87 major private hospitals and other medical centers in Lebanon. Structural

Equation Modeling (SEM) is employed to predict multivariate causal relationships

between latent constructs and measured variables. The results of the SEM model

reveal that gender diversity (GD) is a key success factor of workforce performance in

the Lebanese healthcare sector since it can increase both process innovation (PI) and

organizational innovation (OI) and also enhance organizational performance (OP) and

patient satisfaction (PS). The results indicate that age diversity (AD) especially the

presence of youth in medical centers has a positive and significant impact on organi-

zational performance and patient satisfaction. Finally, the results of this study show

that the presence of women and youth in the Lebanese healthcare sector improves

entrepreneurial innovation and thus, leads to enhance the performance level and the

quality of healthcare outcomes. This research provides original information that sup-

ports executive managers in the healthcare sector during crisis periods. Managerial

practices and policies designed to foster diversity can improve workforce perfor-

mance and the quality of medical outcomes.

KEYWORDS

COVID-19, diversity, entrepreneurial innovation, healthcare sector, performance

1|INTRODUCTION

Since the emergence of the COVID-19 pandemic in the last quarter of

2019, the global healthcare industry has continued to face adverse

operational, financial, and medical challenges. The World Health

Organization (2020) reports that the ravaging pandemic has lowered

the occupancy rate in the healthcare sector across countries, which

have negatively affected the profitability and sustainability of most

hospitals and clinics. Additionally, the pandemic has destroyed jobs

across sectors and rendered several occupations obsolete and redu-

ndant‑a situation that calls for upgrading and upscaling of existing

skills to help employees and employers cope adequately with the pan-

demic (Osland et al., 2020). It is reassuring to report that several orga-

nizations in emerging economies are already adopting diversity

practices and entrepreneurial innovation to gain a competitive

advantage in the changing business environment (El-Chaarani &

El-Abiad, 2018; Grubbs, 2020; Raimi & Yusuf, 2020). The service pro-

viders across different sectors are already rethinking and reinventing

Received: 11 October 2021 Revised: 6 December 2021 Accepted: 19 December 2021

DOI: 10.1002/pa.2808

J Public Affairs. 2022;22(Suppl. 1):e2808. wileyonlinelibrary.com/journal/pa © 2022 John Wiley & Sons, Ltd 1of20

https://doi.org/10.1002/pa.2808

their operations and business models because of the threat of uncer-

tainty imposed by the pandemic (Kilic, & Marin, 2020). Thus, this new

article attempts to help this new call of managerial updating to help

medical organizations in resolving their new challenges during the

COVID-19 pandemic period through a new organizational design

adopting both diversity practices and entrepreneurial innovation.

In Lebanon, which is the research context, the threat caused by the

pandemic to the healthcare sector is severe and devastating in terms of

the number of infections, and death, and patients waiting to be tested.

The devastation has been described as ‘an insult over injury for

Lebanon’(Bizri et al., 2021) and a crisis in a crisis (Chehayeb, 2020)

because the country is slowly recovering from the harsh political and

economic crises of the past decades (Bizri et al., 2021) including the

ongoing uprising against institutional corruption and political mis-

management in the country (Neal & Tansey, 2010). At present, there are

615,532 confirmed cases, 8218 deaths, and a total of 2,814,277 vaccine

doses have been administered (World Health Organization, 2021). For

the health sector in Lebanon to keep hospitals open, attend to patients

with coronavirus and those with other ailments, save jobs in the sector,

pay salaries, and cope with the effect of the pandemic, the managers

need financial interventions from the government and external donors.

This has not been forthcoming, hence the healthcare sector is

responding proactively and innovatively to the changing times by using

different types of innovative practices. What types of innovative prac-

tices are being adopted in coping with the ravaging pandemic in the

health sector in spite of lean resources calls for investigation?

The adoption of novel practices such as proactiveness, strategic

planning, and process innovation by managers in the period of eco-

nomic recessionary and political crisis is well reported in the literature

(Archibugi et al., 2013a; Archibugi et al., 2013b; Brzozowski

et al., 2019). However, the adoption of entrepreneurial innovation to

drive organizational performance does not happen in a vacuum, it is a

phenomenon that relies on a context or situation. Previous

researchers that studied the impact of entrepreneurial innovation on

performance have therefore suggested the introduction of an auxiliary

factor or a moderating variable for investigating the causality of the

two variables (Bizri et al., 2021; Covin & Slevin, 1989; Jones & de

Zubielqui, 2017; Li & Atuahene-Gima, 2001). And Rosenbusch

et al. (2011) particularly recommended that such auxiliary factors

should come from the business external environment.

Therefore, the current study considered diversity as a relevant factor

in investigating the impact of entrepreneurial innovation on performance.

Diversity in the context of this study covers diversity refers to workplace

policy that recognizes, understands, and accepts personality differences

of employees based on their race, gender, age, class, ethnicity, physical

ability, race, sexual orientation, spiritual practice, and other social and psy-

chological orientations (Dike, 2013). Diversity dimension such as gender

diversity, age diversity and value diversity should be of utmost concern to

managers of the healthcare sector in the pandemic period and beyond

because empirical studies confirmed that diversity impact on the perfor-

mance of business activities and outcomes (Grubbs, 2020).

Apart from diversity, the top- and middle-line managers in the health

sector during the pandemic have also embraced entrepreneurial

innovation in their medical and managerial activities. Entrepreneurial

innovation finds relevance in the present setting because it allows organi-

zations to create a competitive advantage in the market domain, by

substituting, improving, renewing, and reinventing new products, services,

and processes while responding to entrepreneurial opportunities (Nițu-

Antonie et al., 2017). The application of entrepreneurial innovation

extends is finding novel ways and means of delivering new, improved,

better goods or services to the people and the society by using new tech-

nologies and processes that fit local conditions (Brzozowski et al., 2019;

Kinicki & Williams, 2010;Wolf,2006). Some of the innovative strategies

include flexible managerial methods and new service plans that fit the tur-

bulent environment (Ratten, 2020). From an empirical standpoint, the

adopted innovative practices during the crisis are anticipated to improve

financial performance and enhance customer satisfaction in the medical

and non-medical sectors (Mejri et al., 2018; Chierici et al., 2019;El-

Chaarani et al., 2021; Vrontis et al., 2021).

The diversity dimensions that could complement entrepreneurial

innovation are age, race, background, education, and ethnicity. Studies

have shown that these diversity dimensions have been given serious

attention by managers during crises because of the plausibility of

enhancing productivity, customer satisfaction, and financial performance

(Gomez & Bernet, 2019; Jones et al., 2020;Lee&Kim,2019).A growing

body of empirical studies and theories have investigated the impact of

diversity on the performance of business activities and outcomes

(Grubbs, 2020). Many studies highlighted that diversity leads to improve

financial performance and productivity of teamwork. However, there is

no study showing the relationship between diversity, innovation, and

performance in the health sector during the pandemic crisis leaving

decision-makers and executives without clear guidelines. This research

fills some gaps by addressing and answering the following question:

what are the impacts of diversity and entrepreneurial innovation on the

performance of the Lebanese healthcare sector during the COVID-19

pandemic period? What is the impact of entrepreneurial innovation on

the performance of the Lebanese healthcare sector? Is there any indirect

impact of diversity on the performance of Lebanese healthcare?

Since 2019, the Lebanese healthcare sector is suffering from eco-

nomic instability, collapse of banking sector, shortage of medical

materials and human resources. Thus, the Covid-19 virus came at a

worst time in Lebanon. The first objective of this study is to provide

new insights related to workforce diversity for managers and execu-

tives in Lebanese healthcare sector to improve the performance of

their medical organization during the pandemic period. The second

objective of this research is to explore the relationship among work-

force diversity, entrepreneurial innovation, and performance of

healthcare sector during crisis periods, where the finding would help

in exploring the specific impact of age and gender diversity on innova-

tion and performance of medical centers.

This research is different from previous studies since it examines

a new subject based on a new sample of medical centers and hospitals

during 2021. In addition, this article provides a development to the lit-

erature by exploring the role of workforce diversity and innovation in

healthcare sector, where no prior research has explored the multiple

links in healthcare sector during high level of instability.

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