Health Care Strategic Management and Planning
Task 1: Relationship between strategy formulation and situational analysis
Strategy formulation and situational analysis make up two of the three parts of strategic planning that create a strategic plan. The situational analysis helps in gathering information about the internal and external environments. This information is then used in strategy formulation in developing selecting strategic alternatives for an organization. According to Vrontis & Thrassou, (2006), organizations cannot develop effective strategies without first analyzing internal and external environments within which they operate. Environmental scanning through situational analysis serves as an essential step to the strategic formulation.
According to Ginter et al, (2013), situational analysis through internal and external environmental analysis and refinement or development of directional strategies provide results that form the basis of strategy formulation. The three activities represent the situation of an organization. Therefore, they must be understood first before strategy formulation. The integration of the three activities during situational analysis shows what an organization should, wants, and can do forming the basis for formulating strategy (Ginter et al, 2013). Therefore situational analysis and strategy formulation are related in that situational analysis provides essential information that serves as the basis for strategy formulation.
Task 2: Strategic Alternatives
A retrenchment strategy can be linked together with a penetration strategy. Retrenchment strategy is considered when costs are increasing reducing profitability but the market is still feasible (Ginter et al, 2013). It involves the reduction of the scope of operations. For example, it may involve a reduction of employees to reduce operational costs. On the other hand, a market penetration strategy is implemented through marketing strategies to increase market share (Ginter et al, 2013). After a retrenchment strategy has redefined its target market, it can be linked with a penetration strategy to increase market share within the new target market.
There are some other logical combinations of strategies that organizations may consider. For example, diversification and market development can be linked. An organization can use related diversification to enter a market related to its current operations (Durmaz & Ilhan, 2015). Such an organization may combine the strategy with a market development strategy to achieve greater volume in this new market (Ginter et al, 2013). Organizations may also consider a retrenchment and harvesting combination. For example, after implementing a retrenchment strategy through asset reduction, an organization may link the strategy with harvesting strategy especially if it experiences a long-term decline.
Vertical integration can also be combined with market development for a full range of services and wide market coverage (Ginter et al, 2013). In most cases, organizations will combine strategies for effectiveness. The use of a combination of strategies is related to organizational vision. The vision plays a role in determining which strategies to use to achieve it. Organizations use a combination of strategies to achieve their visions (Ginter et al, 2013). It is however important that organizations realize that change is inevitable. The changes may require modification in strategies to meet the needs of the new situation. After all strategic management is a continuous process.
Task 1: Mission, vision, and Values Statements
An organization’s mission is its purpose. It is the reason that organization exists. It is defined as a broadly defined and stable statement of purpose that differentiates one organization from the other in the same industry. It also identifies the scope of an organization’s operations (Ginter et al, 2013). Mission statements are enduring. However, they should be flexible as changes are inevitable if organizations are to remain relevant.
According to Ginter et al, (2013), effective mission statements should have four characteristics. They should be statements of purposes that are broadly defined. They should be enduring. They should be unique. They should also identify the scope of operations. This makes up a well-conceived and communicated mission statement. Also, an effective mission statement should have some of the following components. It should provide target customers and markets, indicate products or services delivered, and specify the target geographical area (Ginter et al, 2013). An effective mission statement should also identify the philosophy, and indicate the preferred organization’s self and public images.
Health care organizations apply these principles differently in developing their mission statements. These statements have all or some of the characteristics and components of an effective mission statement as discussed in the textbook readings. Let us look at some examples of mission statements. Encompass Health is a public for-profit health care organization. Its mission is to “deliver the highest quality integrated inpatient and home-based care, seamlessly connecting with other providers across the healthcare continuum. For decision-makers committed to higher-quality patient care, we inspire confidence in the achievement of unparalleled outcomes, more quickly and cost-effectively” (Comparably, 2020). Steward Health Care is a private for-profit health care organization. The organization states its mission as “providing the highest quality of care with compassion and respect. We dedicate ourselves to delivering affordable health care to all in the communities we serve, being responsible partners in the communities we serve, and serving as advocates for the poor and underserved in the communities we serve” (Comparably, 2020).
Ascension is a private non-profit healthcare company. Its mission is “Rooted in the loving ministry of Jesus as a healer, we commit ourselves to serving all persons with special attention to those who are poor and vulnerable. Our Catholic health ministry is dedicated to spiritually centered, holistic care which sustains and improves the health of individuals and communities. We are advocates for a compassionate and just society through our actions and our words” (Ascension, 2020). Kings County Hospital Center is a public non-profit organization. Its mission is “to provide quality healthcare services to a culturally and linguistically diverse population, regardless of their ability to pay. We recognize that every patient and every employee has great value. Therefore, our highest organizational priority must be respect for our patients, our visitors, and one another” (Patient Point, 2013).
When it comes to the characteristics of an effective mission, the four missions from private, public, for-profit, and non-profit organizations share similarities. First, all the missions are well-formulated showing the purpose of each organization. Second, these mission statements emphasize the uniqueness of every organization. For example, unlike other organizations, the mission statement presents Kings County Hospital Center as a unique organization by stating that it serves a diverse population regardless of their ability to pay (Patient Point, 2013). Third, all the missions identify the scope of their operations. For example, they all specify that they are in the health care business.
According to Ginter et al, (2013), there is no one way to write a mission statement. Different organizations will emphasize different factors in their mission statements. These differences are identifiable among the four mission statements. Some components of an effective mission are highlighted in some mission statements and not in others. All the missions provide evidence of their target customers and markets and the services or products provided. However, on the services provided, private and public for-profit organizations emphasize on quality and cost while private and public non-profit organizations focus on quality and community wellbeing. The four missions fail to specify the geographical area within which they serve. Two mission statements in non-profit public and private organizations identify their unique beliefs. For example, the private non-profit organization, Ascension illustrates their faith-based philosophy (Ascension, 2020). This is not clear in the for-profit private and public organizations’ missions.
A vision describes what an organization will look like and be like while fulfilling its mission. It is an expression of hope (Ginter et al, 2013). An effective vision should have certain characteristics. It should be inspiring, clear, about excellence, provide a sense of direction, and empower employees. Most health care organizations applied some of these principles in developing their visions. For example, the vision statement of Encompass Health is that they believe the delivery of integrated care across the healthcare continuum is critical in the achievement of the best outcomes for patients. According to the statement, the organization exists to provide a better way to care to elevate expectations and outcomes (Comparably, 2020). This vision possesses four characteristics of an effective vision. First, it is inspiring with a clear goal of improving care outcomes. Second, it is clear and about excellence with the intention of improving care. Third, it provides direction. However, it fails to empower employees.
The second vision statement is by Ascension. It states, “We envision a strong, vibrant Catholic health ministry in the United States which will lead to the transformation of healthcare. We will ensure service that is committed to health and well-being for our communities and that responds to the needs of individuals throughout the life cycle. We will expand the role of the laity, in both leadership and sponsorship, to ensure a Catholic health ministry of the future” (Ascension, 2020). This vision possesses four characteristics of an effective vision. First, it is inspiring with a clear goal of improving community health and wellbeing. Second, it is clear. Third, it is about excellence with the purpose of transforming healthcare. Fourth, it provides direction. However, it does not empower employees.
Another vision statement is by Kings County Hospital Center. The vision is “to be the hospital of choice for the residents of Brooklyn and our employees. We strive to deliver the highest quality healthcare services with an emphasis on patient safety in a customer-centered environment” (Patient Point, 2013). This vision also possesses four characteristics of an effective vision. First, it is inspiring with a clear goal of being the hospital of choice. Second, it is clear. Third, it is about excellence with the purpose of delivering the highest quality care. Fourth, it provides direction with an emphasis on patient safety. However, it does not empower employees.
Based on this analysis, vision statements in private, and public for-profit and non-profit organizations possess certain characteristics of an effective vision (Ginter et al, 2013). They are inspiring, clear, about excellence, and provide a sense of direction. Also, all the statements fail to apply the principle of empowering employees. Instead, they put their clients and patients first.
Values make an organization unique. They are the important principles that an organization stands for. They ensure that organizations behave ethically and make socially responsible decisions (Ginter et al, 2013). Other values guide the behavior of members of a specific organization. They focus on the key responsibilities an organization believes to have to all stakeholders. The values should be well developed and articulated. They should clarify the expected behavioral norms.
While some value statements apply these principles, others do not. For example, the values of Encompass Health are; empathy, doing what is right, focusing on the positive, and being stronger together (Comparably, 2020). Steward Health Care values are respect, stewardship, compassion, excellence, and accountability (Comparably, 2020). Ascension values include integrity, services of the poor, creativity, reverence, and dedication (Ascension, 2020). Kings County Hospital’s values are integrity, accountability, respect, compassion, and excellence (Patient Point, 2013). Looking at value statements from the private and public for-profit and non-profit organizations, it is clear that similarities exist. All the statements focus on key responsibilities that every organization believes it has to all stakeholders. They are also well-developed, articulated, and clarify the expected behavioral norms in every organization.
Task 2: Strategic Thinking Map – Hierarchy of Strategic Decisions and Alternatives Memorial Medical Center
According to Ginter et al, (2013), health care organizations have many strategic alternatives they can choose. The Hierarchy of Strategic Decisions and Alternatives helps managers to think strategically in strategy formulation. Based on Exhibit 6-4, Strategic Thinking Map, the following section will select different alternatives for Memorial Medical Center. The first strategy type is directional strategies. They provide a broad direction for an organization (Ginter et al, 2013). As part of this type of strategy, Memorial Medical Center has a mission, vision, and values. The mission is to improve the health of the community they serve. The vision is being a national leader through excellence in providing patient care. The values are service to humanity, respect, responsibility, the value of employees, and excellence (Memorial Medical Center, 2020).
The second type of strategy is adaptive strategies. These strategies determine if an organization should expand its scope, contract, or maintain it (Ginter et al, 2013). Organizations can choose from strategic choices. Memorial Medical Center used an enhancement strategy for adaptive strategies. This takes the form of quality programs aimed at making the organization more efficient. The hospital adopted an integrated transformation approach to reengineer the operating system, build collaboration, and streamline organizational structure to improve quality and reduce costs (Memorial Medical Center, 2020). After adaptive strategies, there are market entry strategies. The strategies provide methods through which an organization can enter or access the market. For the adaptive strategies, Memorial Medical Center formed an alliance with HSHS St. John’s Hospital for a collaborative effort to improve the services they deliver (Memorial Medical Center, 2020).
The next type of strategy is competitive strategies (Ginter et al, 2013). Memorial Medical Center chose its strategic posture and how to position its services for adaptive strategies. The strategic posture is how the organization behaves within the industry. The hospital takes the analyzer’s strategic posture by balancing stability and change. While it maintains stable operations, it also searches for new opportunities with the greatest potential. For the positioning strategies, Memorial Medical Center goes for a marketwide strategy through differentiation where the hospital emphasizes quality (Memorial Medical Center, 2020). Finally, for the implementation strategies, the health care organization used unit action plans in carrying out value-added service delivery.
Ascension (2020). Mission, Vision and Values. Retried from https://ascension.org/our- mission/mission-vision-values
Comparably (2020). Encompass Health Mission, Vision & Values. Retrieved from https://www.comparably.com/companies/encompass-health/mission
Comparably (2020). Steward Health Care System Mission, Vision & Values. Retrieved from https://www.comparably.com/companies/steward-health-care-system/mission
Durmaz, Y. & Ilhan, A. (2015). Growth Strategies in Busınesses and a Theoretical Approach. International Journal of Business and Management, 10(4), 210-214.
Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2013). Strategic Management of Health Care Organizations (7th ed.). San Francisco: Jossey-Bass.
Memorial Medical Center (2020). About Memorial. Retrieved from https://www.memorialmedical.com/about
Patient Point (2013). Kings County Hospital. Retrieved from http://www.healthyadvice.com/Kings-County-Hospital-Center
Vrontis, D. & Thrassou, A. (2006). Situation Analysis and Strategic Planning: An Empirical Case Study in the UK Beverage Industry. Innovative Marketing, 2 (2), 134-151.