Preprint Article Version 1 This version is not peer-reviewed

Organizational Management Culture and Employers' Health Insurance Offering Strategies in the US: An Ubuntu Based Random Utility Modeling Approach

Version 1 : Received: 11 March 2018 / Approved: 12 March 2018 / Online: 12 March 2018 (07:33:47 CET)

A peer-reviewed article of this Preprint also exists.

Niankara, I. (2018) “Organizational Management Culture and Employers’ Health Insurance Offering Strategies in the US: An Ubuntu Based Random Utility Modeling Approach”, Global Business and Economics Review, Vol. 20, No. 4, pp.503-520. Niankara, I. (2018) “Organizational Management Culture and Employers’ Health Insurance Offering Strategies in the US: An Ubuntu Based Random Utility Modeling Approach”, Global Business and Economics Review, Vol. 20, No. 4, pp.503-520.

Journal reference: Global Business and Economics Review 2018, 20, 503-520
DOI: 10.1504/GBER.2018.10012139

Abstract

This article takes an approach to explaining the behavioral manifestations of the decision making in US companies’ offer of health insurance that is grounded not only on their cost minimizing behavior, but also in a humanness dimension based on the African concept of Ubuntu. In this way, we define an Ubuntu based Random Utility modeling framework, describing the choice process as a tripartite decision making, and implemented using a nationally representative random sample of 1,061 American companies from the Dunn and Bradstreet Business data, supplied by Survey Sampling International to the Associated Press-NORC Center for Public Affairs Research. The results from the three sequentially implemented specifications showed that the relationship between management culture and health plan offering strategy is dependent on other relevant co-variates, which when left out, leads to the problem of omitted variables bias. However, when all variables are included but assumed to enter the relationship exogenously, this results in management culture not having any statistically significant effect on companies' decisions about scope of health plan offering. When the exogeneity assumption is relaxed through a recursively Bivariate Probit model, the system of two equations produces a highly significant management culture effect. In fact, in this later case we see that companies with groups and formal committee management culture are 1.58 times less likely to choose a multiple plan strategy over a single plan strategy, hence failing to show the more wholesome plan offering that would theoretically prevail under Ubuntu style management.

Subject Areas

affordable care act; discrete choice modeling; employer health insurance; ubuntu

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