Keele Research Repository

This paper investigates Chinese doctors’ informal payment, known as red packets, with reference to the debate on organizational misbehavior, fiddles and control. It aims to examine the internal and external factors that have contributed to the emergence of red packets in health services and the strategies of hospital management in dealing with informal payment. Analysis on the data collected from two hospitals shows that doctors’ misbehavior is influenced by health services’ funding mechanism, payment systems and corruption. More importantly, the study demonstrates the rationality of employee fiddles and management responses. Findings indicate that doctors are mainly responsible for this fiddling, unethical and illegal activity because of the financial gains acquired from patient bribery. However, doctor misbehavior remains under management’s latent control as long as hospital income generation and reputation are not severely threatened. The study contributes to the analysis of informal payment in the field of organizational studies and employment relations, with a fresh perspective offered to extend our understanding of red packets in the context of healthcare marketization reform.