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Strategic Management Aspects in Health Care

Introduction

The main aspect of strategic management is its ability to manage changes and helping the organization to adapt to dynamic environment. In that regard, it can be stated that Health Care Organizations (HCOs) are organizations that perfectly fit into the category of organizations working in dynamic environment, the influence of which is influenced by a combination of factors concerned with the relationships between facilities, physicians, patients as well as governments and business (Swayne, Duncan, & Ginter, 2006). Thus, strategic management helps to position the organization most effectively within the changing environment. In that regard, this report provides an analysis and a proposal of the strategies that should be implemented to manage organizational change in HCO, as well as the consultation services available for the facilitation of strategies implementation. The report is tailored to the specific needs of United Medical Health (UMH), a health care organization, upon which request this proposal was conducted by HealthExecs.

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Background

The primary areas of underperformance come in the aspects of planning, budgeting and capital budgeting. Additionally, marketing can be seen as an overlooked aspect, which UMH has not been paying any attention. Accordingly, the customers as participants of the health care market were not evaluated in terms of satisfaction and needs. Currently, the only option considered by the organization, as a potential solution to such underperformance, is downsizing.

Strategy

Planning

UMH should consider strategic planning for the purpose of managing planning issues within the organization, were strategic planning would help the organization establishing its goals and missions as well as a step-by-step process for creating a strategy, which can be used to form a documented strategic plan (Swayne, et al., 2006, p. 21). The services that HealthExecs can provide in strategic planning include the assistance in providing an analysis of the external and internal analysis of the environment, i.e. outlining the goals, the capabilities of the organization, in the context of the company’s vision and mission. Such analysis will help the organization in the formation of detailed strategic plan for a specified period of time (Swayne, et al., 2006).

Budgeting

Financial management is an important aspect in the organization, which can be a determinant in the company’s success or failure. Financial management should be strictly connected with the organizational goals and plans, previously established, where the allocation of resources should correspond to the goals established by UMH as well as their fund requirements (Rabin & Steinhauer, 1988). The basis for financing in the corporate sector is the fees for the delivered services, and thus, solely based on market variables such as demand, price, supply, collection rates and return on investment. The main strategy can be seen through adequate allocation of resources, which is based on the established target goals at the beginning of the fiscal year. In that regard, an aspect of the strategy that should be implemented in terms of budgeting can be seen through establishing a system of control and feedback, through which the budget will be adjusted. Accordingly, a self-imposed budget, rather than top-down budget, will help the management of the organization’s UMH departments to be fully involved in the process of budgeting. The services that HealthExecs can provide in that matter includes a comprehensive analysis of the variances in the financial reports provided, establishing the areas of inefficiencies, and identifying the opportunities to reduce the costs (Advantages and Disadvantages of Standard Costing). Accordingly, implementing a flexible budget would help the organization recognizing variable costs as well as the centers, which are good candidates for the implementation of a flexible budget (McLean, 2003, p. 153).

In terms of capital budget, the problem of capital rationing can be solved through the identification of all the projects that would maximize the organization’s values. In that regard, linear programming can be recommended as strategy, on which basis capital rationing could be solved, through the identification of the priorities, where a period budgets are limited, and several projects are available for consideration. Linear programming would determine the highest level of the objective functions function possible considering the constraints (McLean, 2003, p. 212). The services of the HealthExecs would assist in assessing the risks, which will turn the analysis of the company from mere expectations into realistic assessment of variables.

Marketing

Overlooking marketing in UMH can be seen as a result of a common belief that “patients (lay consumers) do not possess the knowledge required to make an informed determination of the quality of care obtained” (O’Connor & Bowers, 1990, p. 194) In that regard, it can be stated that the strategy that should be taken is the orientation on consumers through service marketing and service management. Such traditional approach in the area of health care can be adjusted to include the transmittal of quality promises through internal channels, rather than public. Additionally, an emphasis could be put on internal marketing as well, where the employees of the organization will be considered as the first market, which also influence the motivation and help them be more consumer oriented (O’Connor & Bowers, 1990, p. 212).

The services of HealthExecs can be seen through providing an analysis of the consumers’ satisfaction, based on which the factors of the quality determinant in the decision making can be identified. Accordingly, the identification of consumers’ profile will help in the identification of the type of knowledge responsible for such choices, as well as the areas that should be filled in and promoted though the marketing strategies. As indicated in the finding in Hibbard and Jewett (1997), “Hibbard and Jewett (1997), “If consumers do not understand certain types of comparative plan information, they are more likely to ignore them or to consider them unimportant” (Lubalin & Harris-Kojetin, 1999, p. 71). In that regard, the role of HealthExecs can be seen through analyzing the specifics of consumers’ profiles, in order to assist the company in their marketing plan using Comparative Plan Information.

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Conclusion

It can be seen that there several opportunities, which UMH can take advantage of, considering the strategies proposed in this report. Accordingly, the services provided by HealthExecs will help the company in the process of implementing the strategies as well as in evaluating the results of strategies’ implementation.

References

Advantages and Disadvantages of Standard Costing. Web.

Lubalin, J. S., & Harris-Kojetin, L. (1999). What Do Consumers Want and Need to Know in Making Health Care Choices? Med Care Res Rev, 56(suppl_1), 67-102.

McLean, R. A. (2003). Financial management in health care organizations (2nd ed.). Clifton Park, NY: Delmar Learning.

O’Connor, S. J., & Bowers, M. R. (1990). An Integrative Overview of the Quality Dimension: Marketing Implications for the Consumer-Oriented Health Care Organization. Med Care Res Rev, 47(2), 193-219.

Rabin, J., & Steinhauer, M. B. (1988). Handbook on human services administration. New York: M. Dekker.

Swayne, L. E., Duncan, W. J., & Ginter, P. M. (2006). Strategic management of health care organizations (5th ed.). Malden, MA: Blackwell Pub.

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