醫管策略管理Strategic Management of

Health Care Organization

Week 6

(Oct 24, 2006)

Strategic ReviewReview the current mission, vision, goals and objectives of the health care organization. If these are explicit versus implicit, draft these as you think they would be given the current status of the health care organization.

Session 3The Nature of Strategic Management

Internal Assessment

Internal Assessment

Discuss the statement:

--”internal strengths and weaknesses only have

meaning when related to external opportunities

and threats”.What does it mean when it is said that health care

organization has a sustained competitive advantage?

SWOT Analysis

Internal

--strengths and weaknessesExternal

--opportunitiesWhat is the difference between objective and

subjective strengths and weaknesses?What is the difference between absolute and

relative strengths and weaknesses?

Phases of Internal Environment Analysis (Ⅰ)

Surveying: Identifying Potential Strengths and Weaknesses

--Organizational SubsystemsInspecting: Categorizing and Rating Strengths

and Weaknesses

--Resources, Competencies, Capabilities

Phases of Internal Environment Analysis (Ⅱ)

Assessing Value Added for Sustained Competitive Advantage

--Cost Drivers

--Uniqueness DriversCompetitive Advantage

--Resources, Competencies and capabilities

Organizational Subsystems (Ⅰ)

What are the subsystems an organization should monitor to assess its relative strengths and weaknesses?

Are any of these more or less important than others?

Organizational Culture --General Management Subsystem --Information Subsystem

Organizational Subsystems (Ⅱ)

Organizational Culture --General Management Subsystem * Administrative Subsystem * Marketing Subsystem * Clinical Subsystem * physical Facilities Subsystem * Financial Subsystem * Human Resources --Information subsystem

Subsystems Strengths and Weaknesses

Staff Information and intelligenceTechnical CapabilitiesSynergyKey: How the organization links or coordinates

the various subsystems

Categorizing and Rating Strengths and Weaknesses (Ⅰ)

Resource-based view of strategy: value, expensive-to-copy resources key to sustainable competitive advantage

Resources: the stocks of human and nonhuman an factors that are available for use in producing goods and services

--tangible and intangible

Categorizing and Rating Strengths and Weaknesses (Ⅱ)

Competency: knowledge and skills that may be a source of sustained competitive advantage

--competency is knowledge and skill based and therefore human

Categorizing and Rating Strengths and Weaknesses (Ⅲ)

Capabilities: a health care organization’s ability to deploy resources and competencies, in combination, to produce services and obtain competitive advantage

--perform basic functions better than competitors

--make dynamic change through learning, renewal,

and change over time

--develop strategic insights, recognize and arrange

resources and competencies to develop novel

strategies

Competencies and Capabilities

Threshold competencies

--Competencies minimally required knowledge

and skills necessary to compete in an area Distinctive competency

--Highly developed strength that can be crucial in sustaining competitive advantage

Capabilities as “collective learning” Architectural competencies

--Convert resources and threshold skills into strategic

assets

ASSIST (Assessment Internally for Strategy) Analysis (Ⅰ)

Step 1: Identify key strategic resources, competencies, and capabilities

Step 2: Each of the following questions should be answered about each resource, competency, or capability

--Value --Rareness --Imitability --organization --sustainability

ASSIST (Assessment Internally for Strategy) Analysis (Ⅱ)

Step 3: Assign a value between 1 and 5 for each of the questions

--Adequate (1): minimum required to be in this service --Attractive (2):greater than minimum but not string advantage --Potential (3): sufficient to attract attention, important strategy consideration --Competitive (4): represents a clear competitive advantage --distinctive (5): none of your competitors can duplicate

Competitive Advantage

Build and maintained by adding value to health care services

Value is added in one of two ways:

--1. Providing equal quality services at a lower

cost than competitors

--2. Providing higher quality services at the

same cost

Value Chain Analysis (Ⅰ)

What is a value chain analysis?What is the importance of this to strategic

management?What is the difference between primary and

support activities?

Value Chain Analysis (Ⅱ)

Value System: Supplier-Organization-Customer Value is indirectly measured by the amount

customers are willing to pay for the hospital’s services

Value chain consists of value activities (primary and support activities) and margin

Understanding the value chain allows for understanding and controlling primary cost drivers

Margin: difference between total value generated (revenues) and cost of accomplishing the value activities

Value Chain Analysis (Ⅲ)

Primary Value Activities

--Inbound Logistics

--Operations

--Outbound Logistics

--Marketing and Sales

--Service

Value Chain Analysis (Ⅳ)

Support Activities

--Procurement

--Technology development

--Human resources management

--Organizational infrastructure

Evaluating Competitive Advantage (Ⅰ)(Overcoming Limitations)

The essential character of new directions in strategic thinking is the acceptance of “ an aspiration that creates, by design, a chasm between ambitions and resources.”

“Stretch” is the single most important task of senior management

“Stretch” is accomplished through resource leveraging-systematically setting the most possible from available resources

Evaluating Competitive Advantage (Ⅱ)(Overcoming Limitations)

Leveraging: concentrating, accumulating, complementing, conserving, and recovering resources

Prioritizing goals and focusing on a few things, concentrating resources

Focusing on the right things: those that make the greatest impacts on the patients perceives values

Integration of knowledge of external environment with understanding of organizational resources, competencies, capabilities, and aspirations.