| Summary: | Background Global economic recession coupled with internal inefficiencies and corruption has led to a period of austerity in the South African healthcare system.This paper examines the strategies used by management in response to austerity in the three public hospitals and their effect on organisational functioning.Methods We used a comparative qualitative case study approach, collecting data using a combination of in-depth interviews with managers, and focus group discussion and interviews with shop stewards and staff.Results Austerity, imposed by the introduction of a provincial cost containment committee, has led to a reduction in staff, benefits, shortages of equipment and delayed procurement and recruitment processes. Managers in the first hospital maintained training on labour relations for staff and managers, they jointly planned how to cope with reduced staff and initiated a new forum for HR and finance staff. These strategies improved the way actors engaged, enabling them to resolve problems. Good communication ensured that staff understood what was within the hospitals control and what was not. A second hospital relied on absorptive strategies, such as asking staff to do more with less. The result was resistance, and greater use of sick leave. Some staff gave their own money to help feed patients but were angry at management for putting them in this difficult position. Leadership in the third hospital did not manage actors well either; help from the Government’s Expanded Public Works Programme was rejected by the unions, managers did not attend meetings as they felt their contributions were not listened to. Poor communication meant that the managers and staff did not understand what was within the hospital’s control and what was not; a misunderstanding led to a physical fight between managers.Conclusion Organisational resilience in the face of austerity requires leaders to manage different stakeholders well. Hospital managers who promote democratic or participatory leadership and management, open communication, teamwork and trust among all stakeholders will lead better functioning organisations. A special focus should be placed on such practices to develop the resilience of health systems’ organisations.
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