8 MAKING MAJOR CHOICES Performing Strategic Analysis and Making Decisions
Starting Point
Go to www.wiley.com/college/Lombardi to assess your knowledge of the basics of analyzing and making decisions. Determine where you need to concentrate your effort.
What You’ll Learn in This Chapter ▲ Two responsibilities of strategic management ▲ Three levels of organizational strategy ▲ Essential values for making decisions ▲ The Portfolio Planning Approach to decision making ▲ Tools for preparing to make decisions ▲ Strategies for analyzing situations ▲ Three models for implementing decisions ▲ Ways to effectively communicate strategic decisions
After Studying This Chapter, You’ll Be Able To ▲ Calculate the importance of competitive advantage in strategic decision making ▲ Examine typical levels, types, and steps of strategic decision making ▲ Apply common strategic decision-making tools and techniques ▲ Examine standardized procedures for formulating and implementing decisions ▲ Practice methods for communicating strategic decisions ▲ Distinguish methods of measuring the effectiveness of decisions
Goals and Outcomes ▲ Master the terminology and tools related to strategic decision making ▲ Describe the steps of strategic decision making ▲ Choose appropriate information-gathering tools for decision making ▲ Analyze situations as part of the decision-making process ▲ Compare methods for formulating and implementing strategic decisions ▲ Create plans and processes for strategic decision making ▲ Evaluate the appropriateness of strategic decisions
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8.1 UNDERSTANDING LEVELS AND TYPES OF STRATEGY 213
INTRODUCTION The ability to analyze situations strategically and make timely decisions is a key managerial responsibility. Strategic decisions are formulated and implemented at various levels within organizations and for several common purposes. Good deci- sions are driven by values and utilize standardized approaches. To make strate- gic decisions, managers have a range of tools and techniques they can use to gather information, analyze the information, and finally implement their deci- sions. Throughout the decision-making process, communicating with others and evaluating outcomes are both critical to successfully making strong, strategic decisions.
8.1 Understanding Levels and Types of Strategy
In order to successfully make good decisions, managers need to understand the strategic demands and expectations that all modern businesses—including health care organizations—operate under.
An organization with competitive advantage operates with an attribute or combination of attributes that allows it to outperform its rivals. The goal for any organization, however, is not just to achieve competitive advantage but to make it sustainable, even as rivals attempt to duplicate and copy a success story. A sustainable competitive advantage is one that is difficult for com- petitors to imitate. Competitors have trouble catching up, let alone getting ahead.
A strategy is a comprehensive action plan that identifies long-term direction and guides resource utilization to accomplish an organization’s mission and objectives with sustainable competitive advantage. It is a plan for using resources with consistent strategic intent; that is, with all organizational energies focused on a unifying and compelling target.1
To gain competitive advantage, an organization must deal with market and environmental forces better than its competitors.2 The task of crafting strategies with this potential can be daunting.
While a discussion of strategy and competition may seem extreme or out- of-sync with the essential care-giving services and purposes of most health care organizations, the truth is that all organizations—including health care organizations—are competing for limited resources, patients, and money. For example:
▲ When a teaching hospital’s public relations materials highlight the hospital’s alliance with a research university and its ability to provide “state-of-the-art cancer care” to patients, the hospital is capitalizing on its competitive advantage.
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▲ When a medical billing department partners with an outside collections service to begin offering three simple methods of low-term payment for its patients, the department is establishing a sustainable competitive advantage in the complex and often frustrating world of medical claims billing and collections.
▲ When a family planning clinic initiates a pilot program to facilitate adop- tion services (in addition to its already established birth-control and cri- sis-pregnancy services), the clinic is responding strategically to the needs of its patients.
8.1.1 The Strategic Management Process
The demands of intense competition call for strategies that are often bold and fast-moving. Strategic management is the process of formulating and imple- menting strategies that create competitive advantage and advance an organiza- tion’s mission and objectives.
The essence of strategic management is to look ahead, understand the envi- ronment, and effectively position an organization for competitive success in changing times. Figure 8-1 describes two major responsibilities in the strategic management process.
The first responsibility is strategy formulation, which involves assessing existing strategies, organization, and environment to develop new strategies
Identify current mission, objectives, and strategies
Analyze: • Mission and objectives • Values and corporate culture • Internal strengths and weaknesses • Environmental opportunities and threats
Implement strategic plans: • Mobilize resources • Utilize management systems and practices
Evaluate results and renew strategic management process
Revise mission and objectives and select new strategies: • Corporate • Business • Functional
Strategy Formulation— Creating strategies
Strategy Implementation— Putting strategies into action
Figure 8-1
The responsibilities involved in the management process.
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8.1.2 LEVELS OF STRATEGY 215
and strategic plans capable of delivering future competitive advantage. As management consultant Peter Drucker points out, this process asks five strate- gic questions:
1. What is our mission? 2. Who are our customers? 3. What do our customers value? 4. What have been our results? 5. What is our plan?3
The second responsibility is strategy implementation. After strategies are cre- ated, they must be acted upon successfully to achieve the desired results. As Drucker says, “The future will not just happen if one wishes hard enough. It requires decision—now. It imposes risk—now. It requires action—now. It demands allocation of resources and above all, of human resources—now. It requires work— now.”4 This work is the responsibility for actually putting strategies and strate- gic plans into action; it is the process of implementation. All this, in turn, requires a commitment to mastering the full range of strategic management tasks listed here.
▲ Identify organizational mission and objectives. Ask: What business are we in? Where do we want to be in the future?
▲ Assess current performance in regards to mission and objectives. Ask: How well are we currently doing?
▲ Create strategic plans to accomplish purpose and objectives. Ask: How can we get where we really want to be?
▲ Implement the strategic plans. Ask: Has everything been done that needs to be done?
▲ Evaluate results; change strategic plans and/or implementation processes as necessary. Ask: Are things working out as planned, and what can be improved upon?
For more information about the planning process, specifically mission state- ments, core values, and objectives, refer to section 6.4.
8.1.2 Levels of Strategy
Successful health care organizations formulate strategies at several specific levels.
At the level of corporate strategy, top management directs an organization as a whole toward sustainable competitive advantage. Corporate strategy describes
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the scope of operations by answering the strategic question, “In what industries, service sectors, and/or markets should we compete?”
In many of today’s large-scale, diversified health care conglomerates such as university hospitals and multiclinic partnerships, corporate strategy identifies the different areas of business in which the larger organization intends to compete. Top-level managers and vice presidents typically make these high level corpo- rate strategic decisions, determining resource allocation, new business acquisi- tion and divestiture, and the overall mix of the organization’s business portfolio. Increasingly, corporate strategies for large health care organizations include inter- national ventures and strategic alliances.
At the level of business strategy, top- and mid-level management set the direction for a single business unit. Business strategy typically describes strate- gic intent with respect to a given market or major service/department, such as a hospital’s surgery division or an inner-city’s emphasis on diabetic services for lower-income patients. The selection of business strategy involves answering the strategic question, “How are we going to compete for customers within this industry, service sector, or market?” Typical business strategy decisions include choices about product/service mix, facility locations, new technologies, and the like.
At the level of functional strategy, middle- and low-level management guide the use of resources to implement business strategy. This level of strategy focuses on activities within a specific functional area of operations, such as marketing, patient care, finance, human resources, or research and development. The strate- gic question to be answered in selecting functional strategies is, “How can we best utilize resources to implement our business strategy?”
8.1.3 Types of Strategies
The types of strategies that health care organizations pursue can be classified in several general types.
Growth strategies pursue larger-size and expanded operations. Growth strategies are popular in part because growth is necessary for long-term survival in some sectors. There is a tendency to equate growth with effectiveness, but that is not necessarily true. Management must manage any growth in order to achieve the desired results. Some organizations grow through concentration— that is, by using existing strengths in new and productive ways and without tak- ing the risks of great shifts in direction. Others grow through diversification, the acquisition of or investment in new businesses and services in previously unrelated areas.
Retrenchment strategies reduce the scale of operations in order to gain efficiency and improve performance. The decision to retrench can be difficult to make because some may (often incorrectly) perceive retrenchment as an admission of failure. But in today’s era of challenging economic conditions and
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8.1.3 TYPES OF STRATEGIES 217
uncertainty, retrenchment strategies have gained renewed respect. Some common retrenchment strategies include
▲ retrenchment by turnaround: A strategy of “downsizing” to reduce costs and “restructuring” to improve operating efficiency;
▲ retrenchment by divestiture: Selling parts of the organization to refocus on core competencies, cut costs, and improve operating efficiency;
▲ retrenchment by liquidation: Closing operations through the complete sale of assets or the declaration of bankruptcy.
Stability strategies maintain the present course of action without major oper- ating changes. Stability is sometimes pursued when an organization is doing well and the environment is not perceived to be changing. Stability strategies are also used when time is needed to consolidate organizational strengths after a period of growth or retrenchment. Of course, organizations can also pursue stability by default when decision makers are unwilling to make strategic changes.
Cooperation strategies are becoming increasingly popular, given the popular- ity of business networks and collaborative partnerships. Strategic alliances, in which two or more organizations join together in partnership to pursue an area of mutual interest, are becoming much more common in health care. One way to cooperate strategically is through outsourcing alliances, contracting to pur- chase important services from another organization. Many health care organiza- tions today, for example, have begun outsourcing their IT functions to technical firms in the belief that these services are better provided by a specialist firm.
F O R E X A M P L E
Emergent Strategies In the real world, strategy formulation is complex and demanding. Strate- gies are rarely developed at one point in time and then implemented step by step. Many strategies take shape, change, and develop over time as mod- est adjustments to past patterns. Such modern workplace realities have led management consultant Henry Mintzberg to identify what he calls emergent strategies,5 which develop progressively over time as “streams” of decisions made by managers as they learn from and respond to work situations. Emer- gent strategies allow managers and organizations to become good at imple- menting and combining strategies, not just formulating and discarding strategies in rapid succession. For more real-world insight from Mintzberg, visit his Web site (www.henrymintzberg.com), which features free excerpts from his research, books, and presentations.
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8.2 Formulating Strategies and Making Decisions
When strategies are being developed, savvy health care organizations remember to focus on achieving sustainable competitive advantage. Major opportunities for competitive advantage include the following areas:6
▲ Cost and quality: Where strategy drives an emphasis on operating effi- ciency and/or product or service quality.
▲ Knowledge and timing: Where strategy drives an emphasis on learning, innovation and speed of delivery to market for new ideas.
▲ Barriers to entry: Where strategy drives an emphasis on creating a mar- ket stronghold that is protected from entry by others.
▲ Financial resources: Where strategy drives an emphasis on investments and/or loss sustainment that competitors can’t match.
8.2.1 Appreciating What It Takes to Make Decisions
Managerial decisions have direct impact on the work lives and overall perfor- mance of other individuals. Given the limited resources in today’s health care arena, managers also often make decisions that concern a number of areas: human resources, operational equipment, and financial expenditures, to name a few.
Every decision you make has consequence, not only on the work life of oth- ers, but also on the long-term progress of your department or team. Although at first this responsibility may seem overwhelming, it is something managers must confront on a daily basis.
• Identify and define competitive advantage, strategy, and strategic management process.
• Compare competitive advantage and sustainable competitive advantage.
• Describe the two responsibilities of the strategic management process.
• List characteristics of strategies at corporate, business, and func- tional levels.
• Define various types of strategies, including growth, retrenchment, stability, and cooperation.
• Provide specific examples of growth, retrenchment, stability, and cooperation strategies.
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8.2.1 APPRECIATING WHAT IT TAKES TO MAKE DECISIONS 219
Team members look to managers to direct their work activity, and the orga- nization depends on managerial decisions to help effect positive action. Addi- tionally, patients rely on managerial decisions for positive outcome with the health care they receive.
Five essential values drive the decision-making process for managers:
▲ Accountability: Managers must use all the tools available to them in accomplishing their set goals. In addition, they must be accountable for how those resources are used. In analyzing data and taking into account the potential ramifications of their decisions, managers assume accountability on several levels. They must be accountable not only for the decision made, but also for how the decision was determined, what data were analyzed, and which course of action was pursued in arriving at the final decision.
▲ Adaptability: To demonstrate the flexibility needed for managing health care delivery in a turbulent business climate, managers must embrace a certain degree of adaptability. Adaptability means being flexible in consid- ering options, being able to deal with a wide range of people, and having a versatile business approach. Managers must take care, however, to avoid being too adaptable; that is, becoming wishy-washy or irresolute by constantly straying from an established course of action, or spending so much time considering options that the manager ultimately fails to arrive at a set course of action.
▲ Dependability: Staff depends on leaders to make timely decisions that, for the most part, are correct and specify a proper course of action. Con- stant reluctance to take stands or making decisions without communica- tion or staff input does not promote the perception among staff and the organization that a manager is dependable.
▲ Responsibility: A strong manager embraces responsibility for making decisions, takes ownership for decisions, and views the management role as a commitment to organizational excellence. These attitudes mandate selfless participation in the decision-making process so as to consider at all times what is good for the organization and to consider both the pos- itive and negative ramifications of a decision on staff and the entire orga- nization. (All decision making must be done while keeping in mind the organization’s objective of providing stellar health care service to all its patients.) Managers who shirk responsibility may be seen as being overly political, figureheads, or worse. Even when managers delegate a particu- lar task, they ultimately must take responsibility for the outcome.
▲ Visibility: Visible leaders are present and on the scene. In conducting their activities, they are around to hear the cheers and the boos. Further- more, a manager’s visibility does not diminish in critical times or in situ- ations that are out of the norm. At no time should a visible manager hear the question, “Who’s in charge?”
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8.2.2 Utilizing the Portfolio Planning Approach
The portfolio planning approach is a basic method of formulating strategy and making decisions, in which managers allocate scarce organizational resources among competing opportunities. In the portfolio planning approach, resources include var- ious products, services, business units, and departments or divisions.7
Figure 8-2 summarizes a portfolio planning approach developed by the Boston Consulting Group known as the BCG matrix. The matrix ties strategy formulation to an analysis of business opportunities according to market growth rate and market share.8 The matrix shows the following four possibilities, with each linked to a possible strategic direction.
▲ Stars are high-market-share opportunities in high-growth markets. They produce large profits through substantial penetration of expanding mar- kets. The preferred strategy for stars is growth, and further resource investments in them are recommended.
▲ Question marks are low-market-share businesses in high-growth mar- kets. They do not produce much profit but compete in rapidly growing markets. They are the source of difficult strategic decisions. The preferred strategy is growth, but the risk exists that further investments may not result in improved market share. The most promising question marks should be targeted for growth; others are retrenchment candidates.
▲ Cash cows are high-market-share businesses in low-growth markets. They produce large profits and a strong cash flow. Because the markets
F O R E X A M P L E
Adapting at Sloane-Kettering Memorial Sloane-Kettering Cancer Center (www.mskcc.org) is known world- wide for its innovative research into the causes and treatment of cancer. In November 2004, the institution, frustrated by an ongoing shortage of excep- tional cancer researchers, decided to respond creatively and flexibly to the situation and create its own innovative doctoral program. Sloane-Kettering’s new Graduate School of Biomedical Sciences trains basic laboratory scien- tists to work in research areas directly applicable to human disease, partic- ularly cancer. “Right now, there aren’t enough basic scientists who under- stand the biological challenges faced by clinicians,” MSKCC president Harold Varmus said. “The new program we’ve designed will provide unpar- alleled opportunities to gifted and creative students who are inspired to attack clinical problems through research.” Beginning July 2006, 10 to 12 graduate students annually will enroll in the intensive program, which leads to the newly created degree of a PhD in cancer biology.
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8.2.2 UTILIZING THE PORTFOLIO PLANNING APPROACH 221
offer little growth opportunity, the preferred strategy is stability or modest growth. The choice of terms is very descriptive; “cows” should be “milked” to generate cash that can be used to support needed investments in stars and question marks.
▲ Dogs are low-market-share businesses in low-growth markets. They do not produce much profit, and they show little potential for future improve- ment. The preferred strategy for dogs is retrenchment by divestiture.
Question Marks—poor competitive position in a growing industry
Recommended strategy � growth or retrenchment; apply resources to accomplish positive turnaround or pull back if outlook poor
Stars—dominant competitive position in a growing industry
Recommended strategy � growth; add resources and build the business further based upon market projections
Dogs—poor competitive position in low- growth industry
Recommended strategy � retrenchment; divest, sell, liquidate the business to eliminate resource drain
Market Share of SBU Products/ Services
M a rk
et G
ro w
th R
a te
f or
S B
U P
ro du
ct s/
S er
vi ce
s
Cash Cows—dominant position in low- growth industry
Recommended strategy � stability or modest growth; maintain benefits of strong cash flow while keeping resource investments minimum
Low
SBU � Strategic Business Unit
Low
High
High
Figure 8-2
A portfolio model for corporate strategy formulation.
• Identify and define portfolio planning approach, opportunities, and resources.
• List four business areas in which organizations can have competi- tive advantage.
• Discuss the five values that drive managerial decision making.
• Explain the purpose of the portfolio planning approach to strategic decision making.
• Describe the four possible outcomes of the portfolio planning approach.
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8.3 Tools for Making Strategic Decisions
Managers can utilize numerous resources, strategies, and tools for data collec- tion and analysis during the process of formulating strategic decisions. The fol- lowing sections cover some of the most common and useful aids.
8.3.1 Collecting Data
Data collection and analysis should happen early in the strategic decision-mak- ing process. Managers must collect as much information as possible, and then make a timely decision based on the information at hand.
Often, health care managers have problems with this phase because they mis- takenly believe that a magical answer can solve all problems. For example, if your organization cut your department’s budget, as a manager, you may believe that some magical solution can help deal with limited financial resources and some- how make the department staff feel good about the cut. Unfortunately, no right answer exists toward addressing the dilemma imposed by a limited budget.
Managers can also make the mistake of believing that the more time that they spend collecting data, the more accurate their decision will be. Given the high visibility of a manager’s position, too much time can be spent collecting information and becoming involved in a research process that instead of signal- ing a leader may demonstrate a manager who is afraid to make a decision. Not only is this perception extremely harmful to the manager’s reputation, but also the manager who spends more time on research than action does not inspire confidence or generate positive results on a consistent basis.
Therefore, remember two guidelines when collecting data:
▲ Try to obtain valid, realistic information. Do not expect a one-size-fits- all solution from colleagues or other sources. By recognizing that each situation is unique, a manager brings his or her individual style and approach to problem resolution.
▲ Recognize that the time frame for making a decision is as important as the decision itself. After you have the information you need, rely on an intelligent gut feeling to arrive at an informed decision. Then initiate the action and begin implementation of your plan.
8.3.2 Studying Established Past Actions
Savvy managers utilize past action—including the actions of predecessors or peer managers—to help formulate new strategies. Assuming someone else’s decision was correct, you can gain some insight into your problem and a potential solution.
Keep in mind, however, that what worked in the past may not necessarily suit current or future circumstances. Nonetheless, the overall dynamics of the situation may be similar and give you some clue for constructing your own plan of action.
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For example, in examining how other managers at your health care organiza- tions have responded to budget cuts, you can learn about potential reactions your staff may have toward working with reduced resources. By learning from others’ mistakes as well as their positive contributions, you gain insight into what did not work and what did work. In a similar vein, you can ask colleagues for their ideas on what they would do or, better yet, what they did in the past to help staff deal with departmental budget cuts. In both cases, you can find valuable information that provides a strong general frame of reference for formulating your strategy.
8.3.3 Researching Formal References
Formal references are anything that can be construed as “book knowledge,” including journals relevant to your technical area, management texts that offer pragmatic solutions, or your organization’s manual of standard operating proce- dures. Standard operating procedures typically include specific protocols and policies that your organization has adopted or specific bylaws applicable to the situation that you are currently confronting.
8.3.4 Analyzing Hard Data
Hard data can include any information that may have been generated by a ques- tionnaire, form, or survey. Measurable data, or quantitative information, can give you some outlook on the possible impact of your decision.
For example, a manager can gather hard data on departmental budget cuts by reviewing organizational history relative to adverse reaction to budget cuts
F O R E X A M P L E
Survey Data Points to Dramatic Increase in Peanut Allergies According to research published in the December 2005 issue of Journal of Allergy and Clinical Immunology (JACI), peanut allergies in children have increased 100% from 1997 to 2002. Scott Sicherer, MD, and Hugh Samp- son, MD, of Mount Sinai School of Medicine (www.mountsinaihospital.org) conducted 13,493 formal phone surveys and spend 2 years analyzing the hard data they collected. According to Sicherer and Sampson, their data shows that.4% of U.S. children were diagnosed with fatal peanut allergies in 1997, while.8% had been diagnosed in 2002. “This study confirms what we’ve been hearing from growing numbers of families, school administra- tors and other institutional leaders—food allergy is increasing,” said Anne Muñoz-Furlong, founder and CEO of the Food Allergy & Anaphylaxis Net- work. Additional research, surveys, and analysis is planned to determine possible causes of the dramatic increase in peanut allergies.
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and employee perceptions toward dealing with them. Whether a questionnaire is used or questions are asked informally in a meeting, a survey of staff attitudes to previous budget cuts generates data to assist you in making decisions. (Gath- ering hard data can also help strengthen the communication link between department colleagues and staff.)
8.3.5 Predicting Advantages and Potential Disadvantages
An important element of data collection is considering the advantages and dis- advantages of your options. Who will benefit from your action? How might pos- itive interpersonal effect best be achieved? Also consider when positive results may be realized, and set a time frame of realization of positive output.
Again using the budget-cut example, consider who would be involved with making the budget cuts, when some positive effects could be seen despite the cuts, and what the overall impact of the cuts might be. Set a projected implementation schedule and list the overall benefits, if any, that might emerge from the cuts.
At the same time, identify potential negative fallout, including adverse reac- tions and unfavorable perceptions that may arise. By anticipating negative fallout, you take the first step toward addressing problems and effecting positive action.
8.3.6 Following Your Instincts
The final element of data collection is trust in your instincts. Instinctual reaction gives credence to your insight into the problem at hand, the decision you have arrived at, and the action plan you implement. It also mandates a certain amount of introspection—that is, considering the impact a decision will have not only on staff but also on your own activities. Instinctual reaction also means trusting your intelligence and ability to consider the facts objectively, subjectively ana- lyze data, and use common sense to arrive at a course of action.
• Identify and define hard data and formal references.
• List and describe common tools for data collection and analysis.
• Discuss the process of data collection, including the two main guidelines for successful data collection.
• Compare the relative usefulness of studying past actions, reviewing formal references, analyzing hard data, making predictions, and following instincts as part of the decision-making process.
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8.4 Analyzing Information
After collecting all significant data, you now must move to the action phase of the decision-making process. This phase entails reviewing all the information col- lected and setting a course of action and a specific plan for achieving the action. Action analysis allows managers to examine the viability of their plans and try to predict whether their decisions are sound and the courses of action will be effective.
Action analysis begins with a data review within the context of four essential factors: the environment, the various functions involved in the action plan, the business consequences of the action taken, and the historical precedent of the action. These four types of analysis allow you to examine every conceivable angle of a decision before taking action.
8.4.1 Environment Analysis
Environment analysis takes into account the theoretical and physical environ- ment in which you operate and the action plan that will be undertaken. Figure 8-3 shows the sphere of influence surrounding a health care team, as well as interaction between critical groups (represented as arrows).
An environment analysis allows managers to look specifically at workplace dynamics while making decisions. The example in Figure 8-3 shows a reha- bilitation unit at a metropolitan hospital. The model can assist managers in determining areas that may be most affected by budget cuts, identifying poten- tial areas of concern, and arriving at some suggestions for undertaking the action.
Information that is helpful to consider while conducting an environment analysis include the department’s size, the daily volume of patient services, and the revenue the department generates.
Less tangible environmental factors include the prevailing mood of the orga- nization, employee morale in your department, and the administration’s attitude toward your department. For example, a department that has direct patient con- tact traditionally has greater visibility within the organization and consequently gets quicker action and support for carrying out its actions. Hence, as a man- ager, you must consider your department’s status as a factor in your decision- making process.
Finally, environment analysis must take place over a time continuum. Seek to determine what the past status of the department has been, what its present conditions and objectives are, and what its future objectives may be. This view- point can be expanded to include the entire organization. Past, present, and future objectives that might bear on the decision at hand should be factored into the decision-making equation.
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8.4.2 Function (Role) Analysis
Function analysis basically asks, “Who can do what to make this happen?” In the following approach to function analysis, you evaluate every role affected by implementing and executing a strategic action plan.
1. Consider function analysis on your immediate department. Try to draw an accurate picture of how you can use various available staff resources, given the staff’s roles and functions. Do you have enough staff to carry out the action? Is the range of staff talent sufficient (for example, in technical ability) and balanced in terms of individual contribution? Consider the performance levels of the various individuals in your department. If your action plan is to be a group process, be certain to include the stronger players on your action team. If significant individual action is required, again consider various individuals’ roles, as well as their strengths and weaknesses, and then set your plan accordingly.
Figure 8-3