Session 7 - Strategic Management

Session 7 / Chapter 4
HPAd 201 Principles of Health Administration
Strategic Management
Department of Health Policy and Administration

College of Public Health, University of the Philippines Manila
The SEAMEO TropMed Centre for Public Health, Hospital Administration,
Environmental and Occupational Health
Session Objectives
a. Explain why strategic management has
become important in todays dynamic
environment
b. Differentiate between strategic management,
strategic planning and strategy
c. Understand the benefits of strategic
management for organizations
d. Describe a model of strategic management
that could be applied to health care
organizations
Why Strategic Management?
Dynamic, turbulent,
confusing, threatening
environment
Health care has
become a complex
business using many
of the same
processes and much
of the same language
as most sophisticated
business corporations
The whitewater phenomenon
Environmental changes
come from national and
international health care Legislative/ Economic
reform efforts, Political
international and Health
domestic economic and Care Social/
Competitive
market forces, Orgzn Demographic
demographic shifts and
Technological
lifestyle changes,
technological advances
within the health care
industry
Examples of environmental changes that
have affected and may continue to affect
health care organizations and their
management:
Paradigm shift from
reactive health care to
a more holistic,
population-based
wellness (POLITICAL)
management:
Global budgets for
providing care to
defined populations
Expenditure targets
(ECONOMIC)
management:
Payment based on
performance
(COMPETITIVE)
management:
Growth of new
technology
emphasizing
outpatient, workplace
and home treatment
(TECHNOLOGICAL)
management:
Aging of the
population
(DEMOGRAPHIC)
management:
Changes in the
supply and education
of health
professionals
(SOCIO-ECONOMIC)
management:
Restrictive
reimbursement
environment
Capitated payments
(COMPETITIVE)
management:
Payment of a larger
portion of total health
spending by third-party
payers such as
government, insurance
companies and corporate
employers
(COMPETITIVE)
These environmental uncertainties and
competitive pressures have moved health care
organizations to adopt strategic management.
Strategic management was embraced as a way
to anticipate and cope with external forces
beyond their control.
As more health care organizations adopt
strategic management and incorporate strategic
processes into their operations, it is important
that health care managers understand the
concept, language and process.
What is Strategic Management?
THE FOUNDATIONS
Early strategists were Sun-tzu, Homer, Euripides
Many of the terms commonly used in relation
to strategy objectives, mission, strengths,
weaknesses were developed by the military
Strategy comes from the Greek strategos
(a general) which in turn comes from roots
meaning army and lead
Greek verb strategeo means to
plan the destruction of ones
enemies through effective use
of resources
THE FOUNDATIONS
Over the past 50 years, strategic management has
been developed primarily in the business sector
Strategic management concepts have been
employed within health care organizations only in
the past 25-30 years
Prior to 1970, few incentives for HCO to employ strategic
management because they were independent, free-
standing, not-for-profit institutions
More recently, national policy initiatives have been
designed to enhance quality of care, provide access to
care, and contain costs
STRATEGIC MANAGEMENT
STRATEGIC PLANNING
STRATEGY
-philosophy of managing that attempts to
orchestrate a fit between the organizations external
environment and its internal situation
EXTERNAL INTERNAL
ENVIRONMENT SITUATION
Vision, Human
Values, Resources,
Political, Culture, Marketing,
Regulatory, Finance, Information
Economic, Technological, Organization Systems
Social, Competitive
-philosophy of managing that attempts to
orchestrate a fit between the organizations external
environment and its internal situation
EXTERNAL INTERNAL
ENVIRONMENT SITUATION
Vision, Human
Values, Resources,
Political, Culture, Marketing,
Regulatory, Finance, Information
Economic, Technological, Organization Systems
Social, Competitive
Involves four processes:
1. Situational Analysis
2. Strategy Formulation
3. Strategy
Implementation
4. Strategic Control
Strategic Planning
Is the actual process
of creating strategy
Identifying the desired
future of the
organization and
developing decision
guidelines
Results in a plan or
strategy
Organization-specific
Strategy
Behavioral pattern that emerges from a
stream of decisions concerning the
positioning of the organization within its
environment
A sequence of decisions relating the
organization to its environment that
exhibits a logical consistency over time
Strategy
The means an
organization
chooses to move
from where it is
today to a desired
state some time in
the future
Road map to the
future
Benefits of Strategic Management
a. Will improve long-term financial performance
b. Organization will have a self-concept, specific
goals, guidance and consistency in decision
making
c. Managers would understand the present, think
about the future and recognize the signals that
suggest change
d. There will be both vertical and horizontal
communication
e. Overall coordination within the organization will
be improved
f. Innovation and change will be encouraged
within the organization
Duncan, Ginter, Swayne, 1995
What Strategic Management is NOT
WHAT IT IS NOT WHAT IT IS

A quick fix for an Takes years to
organization that has become a part of the
fundamental values and culture of
problems the organization
A yearly retreat Must be a adopted
where the as a philosophy of
management meets
managing the
to talk about key
issues only to return organization
to business as
usual

A process of An attitude that
completing requires little
paperwork, endless paperwork
forms and meeting
deadlines
Simply extending the Attempts to identify
organizations the issues that will
current activities into be important in the
the future future

A question of: How Asking the
will we provide this questions:
service in the Should be provide
future? this service in the
future?
What services are
we providing that are
no longer needed?
What new services
will be needed?
A Model of Strategic Management
Model of strategic
management process
that illustrates and
organizes the major
components for
health care
organizations
Uses systems approach
Identify important variables
and interrelationships
Seeing the big picture
instead of devoting excessive
attention to minor aspects of
the system
Requires strategic
thinking
Constantly reinvents the
future
Believes that an imagination
can be made real
DESCRIBING THE MODEL
1. The SM process
occurs within the
organizations
context or setting,
which is made up
of:
-General environment
(Broader)
-Health care environment
(More specific)
2. Managers engage
in several strategic
management
processes:
Situational Analysis
Strategy Formulation
Strategy
Implementation
Strategic Control
3. Situational analysis
involves analyzing and
understanding the situation
which is accomplished by
3 separate processes:
-External environmental
analysis
-Internal environmental analysis
-Development of the
organizations mission, vision,
values and goals
Situational Analysis: A Closer Look
These 3 influences must be
understood before a
strategy may be formulated
Success is a matter of being
effective in the environment
(doing the right thing)
Strategy is influenced by
internal resources,
competencies and capabilities
of the organization
Strategy is driven by a
common vision and set of
common organizational
values and goals
Situational Analysis: A Closer Look
Identifying and Revealing the relevant
understanding STRENGTHS and
OPPORTUNITIES and WEAKNESSES and how they
THREATS taking place translate into competitive
outside the organization advantages and disadvantages
MISSION is a VISION is that

general statement view of the future
of what that management
distinguishes the believes is
organization from optimum for the
all others of its GOALS broadly specifyorganization
type VALUES are the the major direction of
fundamental the organization and
beliefs that the link the mission to
organization holds organizational action
dear
4. Issues in the
external
environment directly
and simultaneously
affect all 3
situational analysis
processes.
Moreover, the 3
processes affect
one another
5. Strategy Formulation
-Involves making decision
using the information
gathered during the
situational analysis
-Decisions will result in
broad organizational
strategies for the
organization
-Decisions concerning
these strategies are
sequential
Strategy Formulation: A Closer Look
1. DIRECTIONAL strategies provide the general direction for the
organization
2. ADAPTIVE
4. COMPETITIVE or
strategies indicate
3. MARKET ENTRY POSITIONING strategies
the method for
strategies indicate identify how the
carrying out the
how the adaptive organizations products and
directional strategies
strategy will be services will be positioned
(Expand, Contract or
accomplished (Buy, vis--vis other organizations
Status quo)
Cooperate, Internal (Cost leadership, Project
development) differentiation)
6. Strategy Implementation
-Implementation strategies
that accomplish the
organizational strategy are
developed in key areas
that create value for the
organization
a. Support strategies affect
entire organization and cut
across all units (Culture,
Structure, Strategic resources)
b. Service delivery strategies
(Pre-service, Point-of-service,
After-service)
c. Unit action plans (Unit
objectives, activities, funds)
7. Strategic Control
-Establishment of standards
-Measurement of performance
-Evaluation of organizational
performance against standards
-Taking corrective action if
necessary
8. Actions taken by
the organization will
affect other
organizations and
individuals in the
health care industry
as well as those in
the general
environment
(Impact)
The model provides a
useful framework or map
for conceptualizing and
developing strategies for
an organization.
It may be applied to a
variety of types of HCO
(large or small) operating
in dramatically different
environments
It facilitates strategic
thinking at all levels of
the organization
Scope and Perspective of Strategic Management
Scope and perspective

of the SM process
should be carefully
considered before the
process begins
Strategic decisions
may vary at the
different levels
Requires a systems
perspective
Hierarchy of strategies
must be consistent
and support each other
(means-ends)
References
Ginter, Swayne and Duncan. Strategic Management of Health Care
Organizations 4th Edition. Blackwell Publishing, USA, 2002
Lorenzo. Strategic Management in Principles and Practice in Health
Administration (HPAd 201 Module). UP-CPH, 19__

Session 7 - Strategic Management

Enviado por

Dados do documento

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Session 7 - Strategic Management

Enviado por

Direitos autorais:

Formatos disponíveis

Session 7 / Chapter 4

HPAd 201 Principles of Health Administration

Department of Health Policy and Administration

WHAT IT IS NOT WHAT IT IS

WHAT IT IS NOT WHAT IT IS

WHAT IT IS NOT WHAT IT IS

MISSION is a VISION is that

Scope and perspective

Você também pode gostar