Introduction
Healthcare management has evolved with time given the changing market dynamics as well as the evolution in management science. The management has changed from strategic planning to strategic management that has a holistic view of organizational planning and management. In that respect, the following discussion seeks to demonstrate the strategic management process’ nature, its application, benefits and effects on healthcare organizations. To achieve the objective, the discussion begins with identification of the major components of the process noting their significance. Then, there is an explanation of the effect that an organization’s mission and values have on the process. That is followed by an outline of the process’ benefits to healthcare organizations. The discussion also indentifies the effect that the process has on an organization’s decision making and financial performance. Finally, the discussion provides an overview of the process’ effect on an organizations response to its environment.
Discussion
Major Components of strategic management and their significance
Strategic management has four basic and major components including the environmental scanning, strategies formulation and implementation as well as control and evaluation. Each of the components is significant (Hugher & Wheelen, 2007). Environment scanning is crucial in identifying the factors that could influence operations and performance hence need to be addressed. The strategies formulation component is crucial as it entails identifying and choosing the most suitable strategies given the organizations capabilities and position in the market. Further, the implementation process is crucial as it brings the planned actions to life and entails applications of resources in the most effective way. Finally, control and evaluation are crucial for ensuring that the planed actions are effectively followed and any deviations identified as rectified or have adjustments made to address them (Michael, 2001).
Organizations mission and values importance to strategic formulation
Given that a mission defines the unique and fundamental purpose that sets an organization apart from the other firms, t identifies an organizations operations’ scope by defining its markets and products (Duffy, 2000). On the other hand, an organization’s values determines the parameters within which its resources should be applied and the nature of its products and services’ delivery. In that respect, the two have a great importance in that they provides guidance for strategic planning regarding the limits of the possible strategies, the expected end means as well as suitable approaches for the strategic actions (Swayne, Duncan & Ginter, 2008).
Benefits of a strategic management process to a healthcare organization
Strategic management process has three steps that have several benefits to healthcare organizations. The three include strategic thinking, planning, and the strategic momentum management, all which have the following benefits (Alan, 2006).
Offers a clear concept, specific goals and guidance while enhancing consistency in an organization’s decision making.
Improving financial performance through effective resources allocation.
Helps the management understand the organization’s current position while thinking about its future.
Enhances overall coordination in healthcare organizations.
Helps with identification of the market change signals.
Encourages change and innovation within organizations as means of meeting dynamic environment needs (Swayne et al., 2008).
In that respect, the organizations that embrace strategic management tend to outperform their peers, who do not. That is because they attain appropriate match between their environment and structure, strategy, as well as processes, which have a positive impact on their performance (Hugher & Wheelen, 2007).
Strategic management effect on decision making and financial success
Strategic management entails considering the long term objectives and operations and has three key aspects that influence decision making. It involves unusual decision making that has no precedent. The process is also consequential in that the strategic decisions tend to commit substantial amount of an organizations’ resources while demanding allot of commitment. Finally, the process is directive as it set precedents future actions (Hugher & Wheelen, 2007).
Regarding the effect on financial performance, the process enhances the success as it evolves through sequential phases that seek to identify appropriate targets, strategies and controls for enhancing finances. The phases include financial planning that seeks better means of control by meeting annual budgets. The second phase is the forecast-led planning, which seeks more effective means of growth by predicting the organization’s future. The third phase is the externally oriented strategic planning that seeks to increase responsiveness through strategic thinking. Finally, the process involves the final phase strategic management, which seeks competitive advantages by implementing and evaluating as well as controlling suitable measures (Hugher & Wheelen, 2007).
Strategic management effect on how an organization responds to its environment
Organizations’ success is greatly dependent on how well they adjust to environmental changes. In that respect, adjusting organizational strategies to address change in market factors enhances performance. However, adjusting to the change requires a process that entails consideration of the market environment as well as respective organizational position and deciding on the suitable measures that can enhance its positioning (Kotter, 2007). Thus, with strategic management being the process that involves the considerations, the process has great effect on how organizations address environment changes. That is through clear identification of the factors that need to be addressed, identifying available strategic alternatives and choosing the most suitable ones, implementing them and controlling the programs while evaluating the goals achievement (Swayne et al., 2008).
Conclusion
In view of the discussion, it is clear that the four crucial components of the strategic management include environmental scanning, formulation of strategies, implementation and evaluation as well as control. On the other hand, the strategic planning has been identified to be subject to an organization’s mission and values as they specify the end means as well as value parameters within which resources are to be applied and service/products delivered. Further, the discussion has identified the process to have several benefits for healthcare organizations including improved performance, better coordination, suitable future planning and resources use. In respect to the process effect on decision making and performance, the discussion has identified that the process entails a long terms perspective for decision making. On the other hand, the sequence applied in planning helps in clear identification of goals as well as resource needs’ hence a suitable process for fitting strategic actions to the end means. Finally, the process has been noted to be a crucial guide in indentifying environmental change as well as suitable approaches that could effectively address them to enhance success.
References
Alan M. Z. (2006). Advancing the State of the Art in Healthcare Strategic Planning. Frontiers of Health Services Management, 23(2), 1-25.
Duffy J. (2000). Measuring Customer Capital. Strategy & Leadership, 28(5), 1- 32.
Hugher, D. & Wheelen, T. (2007). Essentials of Strategic Management. 4th Ed. New Jersey: Prentice Hall.
Kotter, P. (2007). Leading Change: Why Transformation Efforts Fail. Harvard Business Review 85(1).
Michael A. M. (2001). Strategic Renewal: Becoming a High Performance Organization. New Jersey: Prentice Hall.
Swayne, L., Duncan, W. & Ginter, P. (2008). Strategic Management of Healthcare Organizations. 6th Ed. California: Willey.
