Strategicmanagement 120531090511-phpapp02

StrategicStrategic
ManagementManagement
Prof E. B. Rillon
BG AFP (Ret)CPH 2011

ObjectivesObjectives
 After the session, participants will be able to;After the session, participants will be able to;
1.1. Provide a rationale for the importance ofProvide a rationale for the importance of
strategic management in healthcarestrategic management in healthcare
organizations.organizations.
2.2. Explain the concepts of strategicExplain the concepts of strategic
management , strategic planning, strategicmanagement , strategic planning, strategic
issues and concerns, strategy.issues and concerns, strategy.
3.3. Discuss the strategic mgt/planning processDiscuss the strategic mgt/planning process
(Ginter et al.)(Ginter et al.)
4.4. Analyze strategic issues both external andAnalyze strategic issues both external and
internal environment.internal environment.
5.5. Understand how directional strategies areUnderstand how directional strategies are
formulated.formulated.

White Water ChangeWhite Water Change

Definition of TermsDefinition of Terms
 Strategic ManagementStrategic Management
 Management process with the objective ofManagement process with the objective of
making the organization compatible with andmaking the organization compatible with and
successful in its external environment.successful in its external environment.
(Duncan, Ginter & Swayne.)(Duncan, Ginter & Swayne.)
 Attempts to achieve a productive andAttempts to achieve a productive and
creative fit between the organization’screative fit between the organization’s
external environment and its internalexternal environment and its internal
environment.environment.

cont.cont.
 Strategic PlanningStrategic Planning
 Is the set of processes used in an organization toIs the set of processes used in an organization to
understand the situation and develop decisionunderstand the situation and develop decision
making guidelines (the strategy) for themaking guidelines (the strategy) for the
organization.organization.
 StrategyStrategy
 A pattern in a stream of decisions positioning anA pattern in a stream of decisions positioning an
organization within its environment and resulting inorganization within its environment and resulting in
the “behavior” of the organization. It is a future-the “behavior” of the organization. It is a future-
oriented plan that provides decisions-makingoriented plan that provides decisions-making
guidelines for managers.guidelines for managers.

cont.cont.
 Key Performance/Result Area (KRA)Key Performance/Result Area (KRA)
 Identifies activities that must be accomplished toIdentifies activities that must be accomplished to
achieve the mission e.g. adequacy in HR.achieve the mission e.g. adequacy in HR.
 Strategic IssuesStrategic Issues
 Fundamental policy questions or criticalFundamental policy questions or critical
challenges that affect an organization'schallenges that affect an organization's
mandates, missions and values, products,mandates, missions and values, products,
clients, cost, organization and managementclients, cost, organization and management

4 Major Stages of4 Major Stages of
Strategic PlanningStrategic Planning
1.1. Analysis of the situationAnalysis of the situation
 External environment (opportunitiesExternal environment (opportunities
and threats)and threats)
 Internal Environment ( Strength andInternal Environment ( Strength and
weaknesses)weaknesses)
2. Strategy Formulation2. Strategy Formulation
3. Strategy Implementation3. Strategy Implementation
4. Strategic control and Evaluation4. Strategic control and Evaluation

Planning JourneyPlanning Journey
Where Are We NowWhere Are We Now
How Shall We Get There?How Shall We Get There? How Do We Know ThatHow Do We Know That
We Are There?We Are There?
Where Do We Want To Go?Where Do We Want To Go?

Elements of StrategicElements of Strategic
Issue Statement (Bryson:Issue Statement (Bryson:
1995)1995)
 Describe succinctlyDescribe succinctly
 Be framed as question that the org. can doBe framed as question that the org. can do
something about it.something about it.
 Factors that make the issue a challengeFactors that make the issue a challenge
be listedbe listed
 What in the mandates, mission, values,What in the mandates, mission, values,
SWOT make it strategicSWOT make it strategic
 Statement of the consequences of failingStatement of the consequences of failing
to address the issue.to address the issue.

Examples of Strategic Issues
Issue Strategic Issue
Inflation How can we caution
the effect of inflation
in hospital
organization?
Failure to address
the issue will lead
increased cost of
operations

External Environmental ScanExternal Environmental Scan
1. External Environmental Opportunities/Threats1. External Environmental Opportunities/Threats
List of Issues/TrendsList of Issues/Trends EvidenceEvidence
(Provide information(Provide information
regarding existence ofregarding existence of
issue/trend)issue/trend)
Impact toImpact to
OrganizationOrganization
(1-10)(1-10)
Probability ofProbability of
continuing in nextcontinuing in next
3-5 years3-5 years
(1-10)(1-10)

Internal EnvironmentInternal Environment
FrameworkFramework

Internal Environmental ScanInternal Environmental Scan
3. Internal Environment Strengths/Weaknesses3. Internal Environment Strengths/Weaknesses
SubsystemSubsystem Issues/Issues/
StrengthsStrengths WeaknessesWeaknesses
EvidenceEvidence Impact toImpact to
OrganizationOrganization
(1-10)(1-10)
Probability ofProbability of
continuing incontinuing in
next 3-5 yearsnext 3-5 years
(1-10)(1-10)
1.Organizational1.Organizational
CultureCulture
2. General2. General
ManagementManagement
3. Admin3. Admin
4. Marketing4. Marketing
5. Clinical5. Clinical
6. Physical6. Physical
FacilitiesFacilities
7. Financial7. Financial
8. Information8. Information

Stakeholder AnalysisStakeholder Analysis

Strat Mgt Process Con’tStrat Mgt Process Con’t
Directional

Strategy Types andStrategy Types and
RolesRolesStrategyStrategy
DirectionalDirectional
AdaptiveAdaptive
Market EntryMarket Entry
PositioningPositioning
OperationalOperational
RoleRole
Who we are?Who we are?
What should we be?What should we be?
How the organization will expand,How the organization will expand,
contract or stabilize operations.contract or stabilize operations.
Provide methods for access to theProvide methods for access to the
market. Not necessary formarket. Not necessary for
contraction strategies.contraction strategies.
Positioning the organizationPositioning the organization
vis-à-vis other organizations withinvis-à-vis other organizations within
a marketa market
Developed for the functional areasDeveloped for the functional areas
(marketing, finance, information(marketing, finance, information
system, HRM, etc.)system, HRM, etc.)

Vision: a compelling,Vision: a compelling,
conceptual image of theconceptual image of the
desired futuredesired future
ComponentsComponents
1.1. A Clear Hope For theA Clear Hope For the
FutureFuture
2.2. Challenging andChallenging and
Excellence ConcernsExcellence Concerns
3.3. Inspirational andInspirational and
EmotionalEmotional
4.4. Empowers EmployeesEmpowers Employees
First and ClientsFirst and Clients
SecondSecond
5.5. Prepares for the FuturePrepares for the Future
6. Memorable and6. Memorable and
Provides GuidanceProvides Guidance
DescriptionsDescriptions
1. A future where communities, health agencies,1. A future where communities, health agencies,
and private sector cooperate to increase healthyand private sector cooperate to increase healthy
life for all.life for all.
2. Strive for excellence, display initiative and2. Strive for excellence, display initiative and
demonstrate achievement.demonstrate achievement.
3. Forging alliances with public and private3. Forging alliances with public and private
sectors to ensure timely, cost-effective publicsectors to ensure timely, cost-effective public
health interventions.health interventions.
4. Value employees.4. Value employees.
5. Catalyst for progress5. Catalyst for progress
6. Memorable terms – catalyst, public health6. Memorable terms – catalyst, public health
leader, innovation, core values, etc.leader, innovation, core values, etc.

Vision StatementVision Statement
ChecklistChecklist
Yes No
Does the Vision statement provide a clear picture of the
organization’s ideal future with respect to quality
management?
Is the vision statement inspiring and challenging?
Is the vision statement brief enough to be memorable?

ISDH Health VisionISDH Health Vision
StatementStatement
 The Indiana State Dept. of Health isThe Indiana State Dept. of Health is
committed to act as a catalyst forcommitted to act as a catalyst for
progress that will resolve in healthierprogress that will resolve in healthier
people in a healthful environment.people in a healthful environment.

Mission: the reason forMission: the reason for
beingbeing
 ComponentsComponents
1.1. Target customers and marketsTarget customers and markets
2.2. Indicates principal services deliveredIndicates principal services delivered
3.3. Geographical areas which theGeographical areas which the
organization concentratesorganization concentrates
4.4. Identifies organization philosophyIdentifies organization philosophy
5.5. Confirms organizations preferred selfConfirms organizations preferred self
imageimage

Mission StatementMission Statement
GuideGuideWho:Who: We at VMMC are committed to provideWe at VMMC are committed to provide
What:What: Comprehensive, quality, tertiary level of health careComprehensive, quality, tertiary level of health care
servicesservices
To Whom:To Whom: To our veterans and their authorized dependentsTo our veterans and their authorized dependents
Where:Where: All over the countryAll over the country
How:How: To improve the quality of care given, we embark in theTo improve the quality of care given, we embark in the
provision of continuous education and training to all our staffprovision of continuous education and training to all our staff
and would be providers of care and research both clinical andand would be providers of care and research both clinical and
operational.operational.
We strive to provide quality of life by giving our clients aWe strive to provide quality of life by giving our clients a
variety of supportive services to meet their physical,variety of supportive services to meet their physical,
psychological and spiritual needs.psychological and spiritual needs.
We also contribute to the promotion of health and welfare toWe also contribute to the promotion of health and welfare to
the community through periodic outreach programs.the community through periodic outreach programs.
AffirmationAffirmation
of Value:of Value:
We are a caring community that values integrity and dignity ofWe are a caring community that values integrity and dignity of
those who are served as well as those who serve.those who are served as well as those who serve.

Mission Statement Checklist
YES NO
Does it clearly state what you do and who you serve, that is,
what business you are in?
Does it describe your setting (e.g. urban/rural/teaching/non-
teaching)?
Is it broad enough so that all staff in the organization ca see
how they contribute?
Will it make sense to average citizens of they see it on the
hospital/clinic wall?
Will you be embarrassed if you see it on the front page of
the newspaper?

Hierarchy ofHierarchy of
Goals:
-long term, positive statements that express an idealized vision o
a quality of life that is almost universally accepted. Purposely stated in a
general and abstract form so that they remain constant throughout rapid
social change.
EG
Strategic Concern
How can we continue giving quality and affordable healthcare at
RMC in the midst of rising cost of operations?
Goal: Strengthen financial viability.

Hierarchy ofHierarchy of
Objective:
-specific, measurable, accurate, realistic, time bound statement
of how the goal can be achieved.
Objective 1. After 2 years, increase income by 100% from 1M to
2M.
(Can be policy/purpose, service/result; resource;
implementation)
Objective 2. Establish streamlined billing and collection system
after 2 years.
Activities:
-demonstrate how project will be accomplished.

Strategic Implementation:Strategic Implementation:
Operational StrategiesOperational Strategies
Deals with putting strategies to workDeals with putting strategies to work
Requires coordinated efforts of theRequires coordinated efforts of the OrganizationalOrganizational
FunctionsFunctions of:of:
•• MarketingMarketing
•• Information SystemsInformation Systems
•• Human ResourcesHuman Resources
•• Finance, andFinance, and
Organization-wide Efforts to Attain VisionsOrganization-wide Efforts to Attain Visions
•• Organization CultureOrganization Culture
•• Organization StructureOrganization Structure
•• Facilities and EquipmentFacilities and Equipment
•• Ethics and Social ResponsibilityEthics and Social Responsibility

Strategic ControlStrategic Control
A system to support managers inA system to support managers in
accessing how well the organization’saccessing how well the organization’s
strategy compare to its progress and instrategy compare to its progress and in
the accomplishment of goals and howthe accomplishment of goals and how
well discrepancies are detected. Itwell discrepancies are detected. It
monitors, evaluates, and adjusts themonitors, evaluates, and adjusts the
strategic implementation, the strategystrategic implementation, the strategy
and the situational analysis.and the situational analysis.

Fundamental Elements ofFundamental Elements of
Strategic ControlStrategic Control
1.1. Setting objectives and pre-determinedSetting objectives and pre-determined
standardsstandards
2.2. Measuring performanceMeasuring performance
3.3. Comparing the objectives andComparing the objectives and
standards with actual performancestandards with actual performance
4.4. Determining the reasons for deviationsDetermining the reasons for deviations
5.5. Taking corrective actions if necessaryTaking corrective actions if necessary

Synergy FormulationSynergy Formulation
Strategic
Issues
Strategic
Goals
Adaptive
Strategy
Market-
Entry
Strategies
Positioning
Strategies
Implementation
Strategies
Control
Strategies
1. Lack of
competent
and
committed
personnel
Proper
training and
proper
recruitment
Recruitment
standards
and
continuous
training
Intensive
recruitment
efforts -
nationwide
Added
fringe
benefits
Human Resource Performance
Evaluation
2.
3.
4.
6.

STRATEGIC SCORE CARD
Goals &
Objectives
KRA Indicator Base
line
Year
(2010)
Year
(2011)
Year
(2012)
Activity Milestone
Goal #1. Achieve
financial viability
by 2012 (20M)
Increased
income
Rate of
increase:
Annual
Income
10M 13M 15M 20M Intensify
collections
Increase pay
clients

Operational PlanningOperational Planning

Problem Tree
Increase of
Infectious diseases
Low coverage vaccination
Poor service delivery
Poor motivation
Of staff
Poor incentives
Insufficient supply
Of vaccines
Low demand
of services
Poor
knowledge of
the program
Poor promotion
Poor
acceptance
of program
Afraid of side
effects
Decreased
confidence in
Health Services
Increased demand for
curative services
Increased cost for
Health Services
Effects:
Core Problem:
Causes:

Objectives Tree
Decrease of
Infectious diseases
Increased coverage vaccination
High quality service delivery
Increased
motivation
of staff
Good working
atmosphere
Adequate supply
Of vaccines
Inc. demand
of services
Good
knowledge of
the program
Increased
promotion
Acceptance
of program
Information
About
vaccination
effects
Increased
confidence in
Health Services
Decreased demand for
curative services
Decreased cost for
Health Services
Ends:
Core Objective:
Means:

PROJECT PLANNING
MATRIX 1
Summary
of
Objectives
& Activities
Objectively
verifiable
indicators
Means/Sources
of verification
Assumptions
Overall goal
Project
purpose
Results
/outputs
1.
2.
3.

PPM 2
Main Activities Specification of
Inputs
Costs for
each
activity
1.1
1.2
1.3
2.1
2.2
…

Ghant Chart
Activities Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
A-1
A-2
A-3
A-4
A-5

Schedule of
Activities
No. Activity Indicator Time
Frame
Responsib
ility
HR
Needs
Material
Needs
Cost Remark
1.1
1.2
1.3

MONITORING AND
EVALUATION
Monitoring
- An ongoing activity accompanying the process of
implementation of a project
Supervision
-Control of the performance of the human
resources during the process
Corrective and thus implies training
Related to how the human resources
work.

INDICATORS
 Measures that can be used to help
describe a situation that exists and to
measure changes or trends over a period
of time. Enables one to assess degree to
which project inputs activities, outputs,
effects and impacts have been achieved.

Indicators ( con’t)
 Purpose:
1. analyze/interpret present situation
2. make comparisons
3. measure changes over time
Types:
Input indicators- what is available( what we have). E.g. no of
staff, availability, access.
Process indicators- informs how project is doing.( source:
prog. Planning matrix, operational plan. Activities needed to
achieve results are process indicators. E.g. TNA etc.
Process indicators allow periodic check if on time.

Types of indicators
(con’t)
 Output Indicators- describe goods, svcs
produced by project activities. E.g.
immunization
 Outcome/Impact- refer to the overall
objective/goal of the project. Measures
actual changes in conditions of core
problem.

Good Indicator
 Relevant
 Valid- sensitive and specific
 Reliable
 Easily available

Monitoring Template
What ?
Who
Where
How
to collect
Often
analyze
To monitor (Focus)
Is going to monitor?
To get data (source
of verification)
tool
OVI
Reports, observation
Check list
Dummy table

Evaluation
 A punctual activity at any time of the
planning or implementing or project.
 Related with the structure/input, process,
and output/outcome.

EVALUATION
 Input- staff, logistics required
 Process- how activities are carried out
within time allowed, resources specified
at the volume and quality agreed upon
 Output- objectives attained?
achievement of obj. reduced
constraints to program

 Evaluation is a critical analysis of the
project that leads to certain conclusions
about the program.
lagging behind
inefficient
ineffective
proceeding as planned
doubtful impact

 Based on conclusion it leads to
recommendations or proposal such as:
discontinue
rectify difficulties and proceed
give it one more try
replicate in other areas
can still be improved

Good Ethical and SocialEthical and Social
Guiding Principles of HCOGuiding Principles of HCO
Robert Goldman:Robert Goldman:
1. Put patient welfare first.1. Put patient welfare first.
2. Avoid unnecessary services/2. Avoid unnecessary services/
3. Maintain high standards of honesty and3. Maintain high standards of honesty and
accuracy.accuracy.
4. Be accountable to the public.4. Be accountable to the public.
““Patients must come before profits if the hospitalPatients must come before profits if the hospital
is to profit.”is to profit.”

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