In late 2002, researchers in the Schools of Nursing and Health Studies and the School of Management at Central Queensland University met with the Director of Nursing at a small regional ‘for profit’ private hospital. The purpose of the meeting was to explore ways in which the researchers and the hospital could work more closely together. The findings to date of the resulting action research study investigating organisational factors affecting performance and outcomes in a small regional private hospital are discussed in this paper. The researchers and management were interested in understanding the interplay between these organisational factors and performance with a view to organisational change, and consequently have explored issues and aspects of working practices that may be in need of change to improve both organisational performance and employee satisfaction. The research also identified management and employee perceptions of the organisational culture and structure, and sought to identify those aspects that may be in need of redesign.