A combination strategy is one that simultaneously combines the

elements of master strategies, enabling the achievement of the primary

objective. It is a network of diverse strategies that are interconnected
and interdependent on one another. Depending on the data, it may be
linked to either poor or better performance.

Combining strategies are advantageous, particularly when the business

is large and operates in a complicated environment. The corporation
comprises various enterprises, each of which belongs to a different
industry and necessitates a different response. It further facilitates the
sequential application of several diverse strategies at various future
points in time.
 Combination strategy entails simultaneously employing other master
strategies, such as stability, expansion, or retrenchment. It is any major
strategy a company uses in collaboration with another in the same
business or a separate business at certain points to increase efficiency.
Competitive strategies are the choices made by the company to
position itself for success in a particular market or sector.

This includes choosing how the business will compete in each industry
or strategic business unit (SBU). Understanding the factors that
influence the intensity of the competition and how to compete
effectively is necessary for developing a competitive strategy
in strategic management.

Organizational levels such as corporate, company, and functional levels

all have a role in formulating strategies. Based on the levels of strategy,
the approach differs. The highest level of strategic decision-making is at
the corporate level, which includes actions about the firm’s goal, the
acquisition and distribution of resources, and the coordination of
multiple SBUs’ plans for the best performance. There are different
corporate combination strategy options.

The expansion strategy includes intensifying, diversifying, buying, and

merging businesses, forming strategic alliances, and other expansion
methods. Other strategies include stability, retrenchment, combination,
and turnaround strategies. The strategies mentioned above don’t have
to be used in succession. Combining the approaches mentioned above
is feasible to meet specific scenarios. For example, an organization
might look for stability in some areas of operation, expansion in others,
and retrenchment in others. Combination strategies are hence a
preferred option.
 Simultaneous combination strategies

 During the divestment of a product line or strategic business unit (SBU)

while simultaneously incorporating it into another SBU or product line.
 When a company or business uses a turnaround strategy for
some commodities and pursues a growth strategy for others.
 The corporation may be harvesting for some products, and for others, it
is pursuing growth.

Sequential combination strategies

The business may utilize sequential strategies in the following ways:

 Starting with a growth strategy and moving on to a stability approach

later.
 Deploying the growth plan after implementing the turnaround strategy
as soon as the situation on the ground improves.

Combination of simultaneous and sequential strategies

Example 1 Cotton Club is a clothing company specializing in

manufacturing comfort clothes for small babies (0–1 years). At first, it
produced only normal clothes, but slowly it started manufacturing
socks and hats for babies (stability). Later, it expanded to produce
clothing for children and adults (shifting focus to capturing market
segments of other age groups—expansion). Finally, to concentrate
more on business development, it decided to discontinue
manufacturing baby shoes as it was not profitable (retrenchment).

Here, multiple stability, expansion, and retrenchment strategies were

employed to grow the business, thus adopting a combination strategy.
Example #2

Incorporated in June 1980 by airline investor Frank Lorenzo, Texas Air

Corporation, usually known as Texas Air, is headquartered in Houston,
Texas. The corporation’s subsidiary, “Eastern Air Lines,” reported a loss
of $885.6 million in 1989. On the other hand, another company carrier,
Continental Airlines, showed improvement. Following the loss of
Eastern, Texas Air changed its name to “Continental Airlines Holdings”
in June 1990 to reflect that the company’s core business is Continental.
In 1991, Eastern Air Lines filed for bankruptcy and was liquidated.

Here, the company made two major decisions or strategies quickly. The
first was to keep what was profitable, renaming it Continental Airlines
Holdings, and the second was to cut off what was not profitable by
liquidating Eastern Air Lines.

Strategic choice process

 1.Focusing on alternatives – The aim of this step is to narrow down the
choice to a manageable number of feasible strategies. It can be done by
visualizing a future state and working backward from it. Managers
generally use GAP analysis for this purpose. By reverting to a business
definition it helps the managers to think in a structured manner along
any one or more dimensions of the business.
 At the Corporate level, strategic alternatives are -Expansion, Stability,
Retrenchment, Combination
 At the Business level, strategic alternatives are – Cost leadership,
Differentiation or Focused business strategy.

2. Analyzing the strategic alternatives- The alternatives have to be

subjected to a thorough analysis that relies on certain factors known as
selection factors. These selection factors determine the criteria on the
basis of which the evaluation will take place. They are:
Objective factors – These are based on analytical techniques and are
hard facts used to facilitate strategic choice.
Subjective factors – These are based on one`s personal judgment,
collective or descriptive factors.

3. Evaluation of strategies – Each factor is evaluated for its capability to

help the organization to achieve its objectives. This step involves
bringing together analysis carried out on the basis of subjective and
objective factors. Successive iterative steps of analyzing different
alternatives lie at the heart of such evaluation.

4. Making a strategic choice– A strategic choice must lead to a clear

assessment of alternatives which is the most suitable alternative under
the existing conditions. A blueprint has to be made that will describe
the strategies and conditions under which it operates. Contingency
strategies must be also devised

The GE matrix has been developed to overcome the obvious

limitations of BCG matrix. This matrix consists of nine cells (3 × 3)
based on two key variables: 1. Business strength; and 2. Industry
attractiveness. The horizontal axis represents “business strength”
and the “vertical axis represents“, “industry attractiveness”. The
business strength is measured by considering such factors as: 1.
Relative market share 2. Profit margins 3. Ability to compete on
price and quality 4. Knowledge of customer and market 5.
 Competitive strengths and weaknesses 6. Technological capacity
7. Calibre of management Industry attractiveness is measured
considering such factors as: 1. Market size and growth rate 2.
Industry profit margin 3. Competitive intensity 4. Economies of
scale 5. Technology 6. Social, environmental, legal and human
aspects The individual product-lines or business units are plotted
as circles. The area of each circle is proportionate to industry
sales. The pie within the circles represents the market share of
the product line or business unit. The nine cells of the GE matrix
represent various degrees of industry attractiveness (high,
medium or low) and business strength (strong, average and
weak). After plotting each product line or business unit on the
nine cell matrix, strategic choices are made depending on their
position in the matrix. In Figure 9.5, business ‘A’ has strong
business strength and has high industry attractiveness. Such a
business has high potential for growth. It deserves expansion
strategies through large investments. Business B has strong
business strength, but medium/low industry attractiveness. Such
a business needs a cautious approach. Business C is weak in
business strength though its industry attractiveness is high.
Business D is weak in business strength and also low in
attractiveness. Broadly considered, the company should build
business A, maintain business B and make some hard decisions on
what to do with businesses C and D.

Stop light strategy model - It is a framework that evaluates business

portfolio and provides further strategic implications. Each business is
appraised in terms of two major dimensions – Market Attractiveness
and Business Strength. If one of these factors is missing, then the
business will not produce desired results.

Strategy Choice - Harvest/divest Select/earn

Invest/expand

The strategies are chosen depending on the zone in which the

product or business unit happens to fall:
1. If the product falls in the ‘green zone’, i.e., if the business
strength is strong and industry is at least medium in
attractiveness, the strategic decision should be to expand, to
invest and to grow.
2. If the product falls in the ‘yellow zone’ i.e. if the business
strength is low but industry attractiveness is high, it needs caution
and managerial discretion for making the strategic choice.
3. If the product falls in the ‘red zone’ i.e. the business strength is
average or weak and attractiveness is also ‘low’ or ‘medium’, the
appropriate strategy should be divestment. Thus, products or
business units in the green zone are almost equivalent to “stars”
or “cash cows”, yellow zone are like ‘question marks’ and red
zone are similar to ‘dogs’ in the BCG matrix.

Directional Policy Matrix (DPM)

This matrix was developed by Shell Chemicals, UK. It uses two
dimensions- viz. “business sector prospects and the “company’s
competitive capabilities”. Business sectors prospects are divided
into attractive, average and unattractive; and company’s
competitive capabilities into strong, average and weak, as shown
in the following Figure 9.7. This gives a 9-cell matrix.

Divestment Both competitive capabilities and business prospects

of the business units are weak. Loss making units with uncertain
cash flows fall in this quadrant. Since the situation is not likely to
improve in the near future, these businesses should be divested.
The resources released could be put to an alternative use.
Phased Withdrawal Here the SBU is in an average to weak
competitive position in the low growth unattractive business, with
very little chance of generating enough cash flows. Gradual
withdrawal from such SBUs is the strategy to be followed. The
cash released can be invested in more profitable ventures.

Double or Quit Though business prospects look attractive here the

company’s competitive capabilities are weak. Either invest more
to exploit the prospects or, if not possible, better “exit” from the
SBU.
Custodial Here both competitive capabilities and business
prospects are unattractive or average. Bear with the situation
with a little bit of help from the other product divisions or get out
of the SBUso as to focus more on other attractive businesses.

Try Harder Here business prospects are attractive, but

competitive capabilities are average; strengthen their capabilities
with infusion of additional resources.

Cash Generation Here the SBU has strong competitive capabilities,

but its business prospects are unattractive. Its operations can be
continued at least for generating cash flows and profits. However,
further investments cannot be made in view of unattractive
business prospects.
Growth Here the SBU has strong competitive capabilities, but its
business prospects are average. This SBU requires additional
infusion of funds. This would help the SBU to grow.

Market Leadership Here the SBU has strong capabilities, and its
business prospects are also attractive. It must receive top priority
so that the SBU can retain its market leadership.

Profit Impact of Market Strategy (PIMS)

PIMS was invented by General Electric in the 1960s to examine

which strategic factors most influence cash flows and the
investment needs and success. PIMS model is based on analysis of
data presented by companies to derive general laws. Actually, the
model uses statistical relationships derived from the past
experience of companies. Typically, the Strategic Planning
Institute develops an industry characteristic, using
multidimensional cross sectional regression studies of the
profitability of more than 2000 companies. The industry
characteristic is compared with performance in the concerned
company so as to find the clue to appropriate strategic
approaches. The model is characterized by scientific objectivity
but it involves analysis of relationship that is based on
heterogeneity of business and time periods. PIMS, of course, has
certain inherent drawbacks. It assumes that short-term
profitability is the primary goal of the firm. The analysis is based
on the historical data and the model does not take note of further
changes in the company’s external environment. The model
 cannot take account of internal-dependencies and potential
synergy within organisations. Each firm is examined in isolation.

Major issues involved in the implementation of strategy

The causes for failing strategies vary, but the majority of them
revolve around the fact that plan implementation is time-
consuming and difficult. Understanding the most prevalent
problems in strategy implementation can help you avoid them
and better position your organization for success.

1. Ineffective Strategy

A new vision is the goal of a plan. If you’re embarking on a huge,

company-wide endeavor, start small to ensure that your objectives are
feasible and attainable. Don’t assign ambiguous responsibilities, get
caught up in buzzwords, or overburden departments with too much
information too quickly.

2. Ineffective training

Without sufficient training for personnel who will be expected to

execute, a new strategic initiative will never get off the ground. Finding
the correct training choice saves money by avoiding unnecessary
downtime, improves or teaches new abilities, and provides follow-up to
ensure that employees use what they’ve learned in their everyday
work.

3. Resources are scarce.

The consultants or board members brought in to develop, execute, and

give training, as well as the cost of any new associated technology, is
the most prevalent direct costs of implementing a new strategy. This
 can be prohibitive for businesses of any size, particularly small to mid-
sized businesses and non-profit organizations.

4. Communication breakdown

From the top-down, an effective communication strategy must be

implemented.

It’s not uncommon for teams to be resistant to change, especially if

they’ve been working together for a long time. And nothing sabotages
the success of a strategic execution more quickly than a lack of team
participation. Each person’s new function, importance to the result, and
the ultimate benefit of a change in their present routine should be
communicated clearly from the start.

5. Failure to follow-through

Any new strategy’s implementation is never complete. Regular formal

evaluations of the new strategy should be conducted to examine
procedures, confirm that the plan is working as intended, and make any
necessary adjustments.

As a result, training should be part of this ongoing process assessment.

This type of continual training is cost-effective, team-oriented, and can
be based on a curriculum that changes as the company’s strategy
changes.

6. Not Setting Objectives

It might be tough to come up with a strategic goal because there are so

many variables to consider, such as geography, culture, organizational
objectives, resources, and skill set.
To accomplish so, you must choose a goal-setting process that is
compatible with your organization’s DNA rather than one that you are
familiar with

7. Unrealistic expectations

We all know that day-to-day task execution is critical for a successful

implementation. Setting the correct expectations across all
departments is great, as is setting small milestones along the road to
keep you and your workers on track. It also provides a sense of
accomplishment and serves as a motivator.

You may utilize project management software to assist you not only
define microtasks and milestones but also track how you’re progressing
toward your final goal.

Issues in strategy implementation

Lack Of Clarity About The Strategy- Barriers To Strategy

Implementation

One of the main reasons why a strategy is difficult to implement is

because employees do not understand it. When instructions are
unclear, it makes it hard for people to follow them.

For example, if you are given an assignment and have no idea what
you should do or how you should do it, you will be unable to
complete the task successfully.

When employees do not understand what they need to do to

achieve their goals, they cannot get anything done. This can also
cause problems for businesses because if employees are confused
about their tasks, they will be unable to complete any work
efficiently, which means mistakes will be made.

Lack Of Commitment To The Strategy- Barriers To Strategy

Implementation

Lack of commitment to the strategy can have several consequences

for strategy implementation. First, it makes it difficult for
employees to see how their actions contribute to the overall
strategy's success or failure.

Second, it makes it difficult for employees to feel invested in the

strategy's success. They may not feel proud of their work or
organization if they don't see a clear connection between their
work and its impact on the company's goals.

Finally, a lack of commitment will likely create resistance among

employees who don't believe in what they are asked to do. This
means that even if you have enough people doing what needs to be
done right now. You may lose them over time as they become
frustrated by how things are being run.

Lack Of Communication And Engagement With Employees-

Barriers To Strategy Implementation

Communicating your strategy to employees is critical for its

successful implementation. If employees don't know or understand
the strategy, they will not be able to help implement it. This can
cause many problems: employees doing their jobs incorrectly or
inefficiently, or not at all, will slow down the company's progress
toward the goals set by the strategy.
A lack of communication also means that employees don't know
what they're supposed to do and when making them less
productive and more likely to make mistakes.

Inability To Deliver On The Strategy's Goals And Objectives-

Barriers To Strategy Implementation

When creating a strategy, it is essential to clearly understand how

the goals and objectives will be achieved. This can be challenging
regarding strategy implementation because many barriers can
prevent this from happening.

5. Lack Of Integration With Other Strategies Or Initiatives -

Barriers To Strategy Implementation

One of the most common reasons that strategies are difficult to

implement is a lack of integration with other initiatives or
strategies. This can happen for several reasons, but one of the most
common is simply not being aware of all the initiatives underway at
once.

Failure To Measure Progress Against Key Performance Indicators

(KPIs)- Barriers To Strategy Implementation

Strategy implementation is a continuous improvement process; any

new strategy will come with unique challenges to overcome. But
one of the biggest hurdles to overcome in implementing your
strategy is the failure to measure progress against your key
performance indicators (KPIs).
Weak Leadership- Barriers To Strategy Implementation- Barriers
To Strategy Implementation

The last barrier to successful strategy implementation is weak

leadership. Even with all the best intentions, a strategy may fail
without strong leaders who can guide the team. Leaders must be
able to motivate, inspire and direct others for a strategy to be
implemented appropriately.

Leaders also need good communication skills so everyone involved

is on the same page and understands the company's goals.

Lack Of Resources- Barriers To Strategy Implementation

Lack of resources is a significant barrier to successful strategy

implementation. It often manifests as a lack of financial, human, or
technological resources. If your company doesn't have enough
money to support its strategy, it will be tough for you to implement
that plan.

If you don't have enough people on board or don't have the right
people in place to execute your vision, then you'll struggle too. And
if your technology isn't up to snuff (or lacking), you'll find yourself
in a pickle when it comes time for you to take action.

Organizational culture and behavior factors

Organizational culture sets the tone for an organization. It depicts
acceptable behaviors and defines the appropriate way to act.
Culture is formed by an organization’s values and beliefs which
are infused throughout the organization from upper management
through entry-level employees. Culture sets the stage for
everything an organization does and helps to outline their
operational procedures. Since there is such a wide variety of
industries and organizations, there is no exact right or wrong type
of culture to have. Organizational cultures will differ from
business to business just as the organizational culture within
family units can be dramatically different from one family to the
next.
While every organization has a culture all their own, some
cultures are stronger or weaker than others. A company with a
stronger culture, centered around their values and mission, tend
to be more successful than companies with a lackluster approach
to their values and goals. It is not enough to simply establish a
mission, values and goals; instead, these components must be
integrated into every daily process and ingrained within every
member of the organization. Organizational culture needs to be
nurtured and valued throughout an organization in order to
establish a strong and healthy culture. Organizational culture
incorporates how a company operates on every level. In order to
truly understand an organization’s culture, you must be able to
dissect each component. The first step to a deeper understanding
of organizational culture is to define and understand external and
internal factors that influence organizational behavior

Factors that affect organizational culture

Top Leadership Principles

2. Nature Of The Business

The purpose, market and operations of an organization have an impact

on employees’ behavior. Does your organization make a meaningful
difference through your products and services in the lives of your
clients and customers? That has a direct impact on your organizational
culture and how your employees feel about working for you.

3.Company Values, Policies and Work Ambiance

Employees develop the values emphasized in the policies, procedures

and work environment. At TruPath, we asked our employees to identify
and define the fundamental truths that serve as the foundation for our
system of beliefs and behaviors.

Our employees created five “TruPrinciples” and offered their

definitions for each:
4.Clients and External Parties

Who you work with is one thing, but who you work for is another. The
clients that the company serves are an often overlooked factor that
affects organizational culture.

5. Recruitment and Selection

Perhaps no factor is more important to organizational culture than

recruiting and selecting the right types of employees. The type of
employees hired by an organization has the largest effect on its culture
– especially when a company is in high growth mode and is rapidly
adding new employees.

Organization Structure
 OS of a company:

 Forms the basis of employee reporting and relations

 Decides the post of employees in their administrative divisions
 Formulates a system of coordination and interdependence in an
organization
 Establishes a well-defined workflow aimed at attaining organizational
goals

OS contains the following six essential elements:

 Work design: It defines the nature and job description of a particular

position
 Administrative division: It involves the grouping of jobs into
departments to facilitate the coordination of work.
 Deputation: It means the power conferred to each employee and
department in the organization.
 Management ratio: It refers to the number of employees that are
reporting to a supervisor.
 Hierarchy: It creates various levels of authority arranged in the order of
delegated powers in the organization.
 Centralization or decentralization: It presents the mode of operation
followed in an organization.
Centralization or Centralized Organizational Structure

In this system, all the powers of decision-making rest at the

topmost level of the management. They take the shape of a
pyramid with the leader or executive team at the top responsible
for making all decisions. Below them are departmental managers
overseeing supervisors. These supervisors lead the workers at the
lowest level in the hierarchy.

Decentralization or Decentralized Organizational Structure

In this system of OS, an organization’s middle- and lower-level

managers make decisions as per the local culture or laws. This
leaves the top management to direct its attention to major
decisions
Types of Organizational Structure

Hierarchical

This is a type of centralized organizational structure. There is a

hierarchy of workers with leaders at the top, the workers below, and
supervisors placed in between to get the work done. It is more of a
linear OS where the delegation of power emanates from the top
management. It is a widely popular form of OS and is seen in companies
like Amazon.

This system concentrates decision-making at the top level. As a result,

the organization suffers from a lack of creativity as innovative ideas
have to work their way up through various levels of management. Also,
each employee communicates with their immediate superior and
subordinates only. This reduces coordination at various levels of power
and departments. Nevertheless, it is a salient feature of most
government organizations.

Flat

This organizational structure is devoid of any hierarchy. No one

commands or controls the employees. Instead, decisions are made at
every level of management. Therefore, it is usually used in small
companies with few employees or new startups. However, with time
and business growth, some form of hierarchy creeps into the
organization; otherwise, it may cause chaos and inefficiency in the
organization.

Flatarchy

It includes features of both hierarchical and flat OS. It is a temporary

form of OS that comes into existence only when a new product is
created, a new service is being tested, or when a company seeks to
develop a new customer support system.

By employing flatarchy, an organization can have specialized teams to

handle the development of new products or services more creatively
and efficiently. It is the best tool for an organization to tackle the
change in market or industry sentiments without creating capital-
intensive departments or reforming the OS.

Functional

The functional organizational structure creates a fixed set of

departments based on certain functions like HR, accounts, marketing,
etc. It segregates the workforce based on the requirements of each
department. For example, an accounting department will employ
accountants and work to manage the firm’s finances in the best
possible manner.
Likewise, the HR department will look after the recruitment, payroll,
and administration of the firm. Moreover, the functional OS allows the
employees to work for a particular functional role without worrying
about the other departments. So, for example, a sales executive won’t
be worried about a firm’s accounting work and vice versa.

Divisional

This type of organizational structure comes into play when a firm has
grown exponentially to become a giant in its sector. For example, a
giant clothing company will require separate divisions based on
customer groups, product types, and geographical locations.
 Hence, it will create a ladies’ fashion garment division, kids wear
division, men’s wear division, and affordable clothing division. Each
division will have its own production, marketing, human resource, IT,
and sales teams. In this manner, the company could manage
the product line or geography with all necessary functional resources.

Matrix

Under this organizational structure, there is no clear demarcation of

roles and responsibilities of resources. Resources may be shared across
different teams to ensure their maximum utilization. It is the least used
OS as it is quite complex and confusing and may prove counter-
productive.

The employees have to play a dual role in this OS. For example, the
customer service representative in many banks also acts as their
cashier. It may reduce operating costs but badly affects the employee’s
quality of work and the firm’s efficiency. It is a form of decentralized
OS.

Benefits of Organizational structure

 Swift decision-making possible – The organizational structure helps the

flow of information effortlessly across different levels of management.
It enables quick decision-making.
 Coordination between different geographical divisions of a company –
OS promotes easy administration and working of an organization at
 multiple locations. A well-defined OS enables better coordination
between different units at various locations to ensure the attainment of
common organizational goals.
 Enhances efficiency and productivity – OS improves the level of
efficiency as the staff knows their roles and responsibilities, and the
supervisor knows what to expect of their subordinates. Thus, it
improves productivity in general.
 Empowers employees – When workers have specific roles and duties
according to their skill set, they learn and become competent. Thus, OS
boosts their confidence and empowers them.
 Reduces conflict within an organization – If an employee knows the
scope of his work, there is no possibility of conflict with other workers.
Thus, OS reduces friction among the workers.
 Better communication among members – OS establishes excellent
communication between the management, supervisors, and workers.
This promotes an effective flow of information and work.

Role of leadership

Administer the Enterprise– As the leadership manager, administers the

enterprise efficiently. Leader issues the necessary commands for this
but before doing this he/she takes care of their practicality, utility and
efficiency of the person performing it.

Motivation and Coordination– An efficient leader provides the

necessary motivation to his subordinates to get the desired work done,
so that they get ready to do the maximum work. He also takes their
advice in the execution of the work and provides Full support in
removing their difficulties. Also establishes effective coordination in
their works. With the help of motivation and coordination,
subordinates do their work very well. Which leads the organization
towards development.

Strategist- Strategy is all about integrating organisational activities and

allocating the scarce resources within the organisational environment
so as to meet the present objectives. Leaders are the ones who make
Strategies for the future to achieve objectives of organisation. Leaders
develop vision mission, set goals and objectives for the organisation.
Strategies are needed at all level of organisation. Leader formulate
winning strategies, execute those strategies and also monitor the
results.

Transforming Potential into reality - A skilled leader creates proper

synergy in the work of his subordinates and motivates their efforts in a
certain direction. Leader makes all tools of the group active and makes
maximum use of them. This helps to transforming potential to reality.

Create loyalty in the group - Effective leadership plays an important

role in keeping employees loyal to the objectives of organisation. It
brings activity by eliminating inactivity in their efforts.

Changing management in a Social Process- Through efficient

leadership, management transforms into a social process. As result
where employee is ready to give his/her best for the progress of the
organisation management is also willing to provide all possible facilities
for them

Resource allocation
Resource allocation is the distribution of resources – usually
financial - among competing groups of people or programs. When
we talk about allocation of funds for healthcare, we need to
consider three distinct levels of decision-making.

Level 1: Allocating resources to healthcare versus other social

needs.

Level 2: Allocating resources within the healthcare sector.

Level 3: Allocating resources among individual patients.

An Example of Resource Allocation Let's consider an example: A

community receives a gift of $100,000 from a wealthy donor to
spend on healthcare, education and housing. The funds can be
distributed among the three areas or dedicated to a single area,
such as healthcare.
Level 1 : At this level, community members consider how to
distribute the funds among one, two or three of the competing
programs. For example, should the funding be split in three equal
portions or should one program, possibly under-funded in the
past, get all or most of the money?
Level 2 : Assuming that healthcare gets a portion of the $100,000,
the next decision community members face is how best to direct
the spending among competing healthcare interests. Should most
or all of the funds go to hospital care and medical equipment?
What about the public education program that promotes healthy
lifestyles and behaviors (like exercise or immunizations) that
prevent disease? Or, community members could decide to spend
the money to purchase health insurance for those who can't
afford it.
Level 3 : The next level of decision making involves distributing
the financial resources among individuals. Most communities
have policies and guidelines to insure fairness in these situations.
Decisions at this level include: Who gets the next available heart
for transplant? And, who sees the doctor first when there are
many people waiting in an emergency room?