MCH 501 – HEALTH SERVICES MANAGEMENT

Strategic Management and

Organizational Behaviour
Prof. W. Odero
April 20, 2021

1
 STRATEGIC MANAGEMENT
Objectives
• Explain the definitions and concepts in strategic
management
• Understand the purpose and key steps in
strategic management
• Explain the definition and characteristics of an
organization
• Explain the definition and goals of organization
behaviour
 Strategic Management
• Strategic Management consists of two
concepts:
1) Strategy -

2) Management - the art of getting work done

efficiently and effectively through people.
 What is Strategy?
• Strategy is an action that managers take to attain the
organization’s goals.
• Strategy is a well-defined roadmap of an organization. It
defines the overall mission, vision and direction of an
organization.
• Strategy can also be defined as a general direction set for
the organization and its various components to achieve a
desired state in the future.
• Strategy is normally associated with a long-range
planning, a structured system of objectives and goals, and
a selected way of creating a fit between external
environment, internal resources and capabilities of the
organization
 Strategy…

• Involves making and implementing decisions about

future direction of an organization, and helps to
identify the direction in which an organization is
moving.
• Is the art of managing employees in a manner which
maximizes the ability of achieving the organization’s
objectives
• The objective of a strategy is to maximize an
organization’s strengths and to minimize the
strengths of the competitors.
Strategy …5 Ps
• A strategy is viewed as a:
– Plan – strategy is an integrated plan and outcome of a
deliberate process
– Play – strategy as a manoeuvre/tactic or act to
overcome your opponents or competitors
– Pattern – strategy as a pattern in decisions and actions
– Position – strategy as a mediator between internal and
external environments
– Perspective – strategy as an internal view on the
organisation’s future
 What is Strategic Management?
• Strategic Management involves the identification
and description of strategies that managers can
use to achieve better performance and a
competitive advantage for their organization.
• Strategic Management refers to a set of decisions
and actions which a manager undertakes and
which decides the result of the firm’s
performance.
Strategic Management Concepts
Strategic management answers three
questions :
– “where do you want your business to go”
(direction and goals),
– “how is your business going to get there”
(strategy), and
– “how will you know when you get there”
(evaluation)
Purpose of Strategic Management
An organization employs strategic
management in order to enable an
organization to:
1) Pursue and achieve its mission and goals
2) Attain and survive in a competitive business
environment (sustainability)
3) Satisfy and reward its stakeholders (funders/
sponsors, customers/clients, employees)
Why is Strategic Management important for
organizations?
• Development of goal and vision for the
organization
• Provides opportunity for long-term planning and
survival in a competitive environment
• Increases managerial effectiveness at all levels
• Facilitates more effective resource allocation and
efficient utilization
• Improves employee motivation and performance
• Addresses concerns of stakeholders
 Strategic Management Process

• Strategic management process is the process by

which managers make a choice of a set of strategies
for the organization that will enable it to achieve
better performance.
• It is a continuous process that appraises the business
in which the organization is involved.
 Steps in Strategic Management (SM)
SM has 4 main steps:
1) Environmental Scanning: the process of
collecting, scrutinizing, analysing and providing
information for strategic purposes.
― Involves undertaking SWOT analysis
SWOT analysis of an organization helps in analyzing
the internal and external factors of the organization.
It covers the following aspects:
SWOT …
– Strengths (what is the organization's power,
advantage),
– Weakness (what is lacking in the organization i.e.
skills, resources, systems or something else),
– Opportunities (while leading the way in strategic
management what kind of chances the
organization will have or miss),
– Threats (what kind of risks the organization might
have while leading the way in strategic
management).
2)Strategy Formulation: is the process of
deciding the best course of action/strategies for
accomplishing organizational goals/ objectives.
―
After environment scanning, managers formulate
corporate strategies; and set specific targets/goals
to be met by the organization; decide what is
important for the long-term success of the
organization.
3) Strategy Implementation: means
making the strategy work as intended or
putting the organization’s chosen strategy
into action.
― It includes designing the organization’s
structure, allocating resources, developing
decision making process, and managing human
resources.
4) Strategy Evaluation: is the final step of
strategy management process.
― Involves appraising internal and external
factors, measuring performance, and taking
remedial / corrective actions.
― Evaluation makes sure that the organizational
strategy as well as it’s implementation meets
the organizational objectives
 Steps of Strategic Management Process

These steps are carried in chronological order, when

creating a new strategic management plan. Existing
organizations that have already created a strategic
management plan will revert to these steps as per the
situation’s requirement, so as to make appropriate changes
 Organization and Organization Behaviour

• What is an organization?

– An organization - is a collection of people who

work together to achieve individual and
organizational goals
– It is an entity, such as an institution, bisiness,
agency or an association, that has a collective goal
and is linked to an external environment
 Features of an organization
• An organization normally has 5 common
features:
i. Composition/structure: people - individuals and
groups of individuals
ii. Orientation: towards achievement of a common
purpose/goal
iii. Functions: specified defined functions
iv. Coordination: rational coordination of processes
and activities
v. Continuity: survival and continuity over time
 What is Organization Behaviour (OB)
• Organizational Behaviour - is the study of human
behavior in organizational settings, the interface between
human behavior and the organization, and the
organization itself.
• OB is the study and application of knowledge about how
people - as individuals and a groups – behave and act
within organization
• OB is the study of what people do in an organization and
how their behaviour affect the performance of the
organizations
• It is the study of both group and individual performance
and activity within an organization
 Why is OB important?
• OB helps an individual to understand himself and
others better, i.e., improves interpersonal
relationships in the organization, helps to manage
work-related stress
• OB helps the manager understand the basis of
motivation and what he should do to motivate his
employees, it enables a manager to motivate
employees towards higher productivity and
better results.
• OB helps to maintain cordial industrial relations in
an organization
 Objectives of Organizational Behaviour
• OB is concerned with people within an organization,
how they are interacting, their levels of satisfaction
motivation and performance, and find ways to improve
it in order to achieve most productivity. It seeks to
achieve the following EIGHT Objectives:
1. Job Satisfaction
2. Higher Productivity
3. Finding the Right People
4. Creation of Organizational Culture
5. Improve Leadership and Conflict Resolution
6. Understanding Employees Better
7. Understand how to Develop Good Leaders
8. Develop a Good Team
 Key Factors Affecting Organizational Behavior

• There is a set of interrelated forces that affect

organizational behavior. These are classified into 4 areas:
i. People – managers, non-managerial staff/workers
ii. Structure – vertical vs horizontal arrangement of people
and tasks /lines of authority
iii. Technology – equipment, computers, internet
iv. Environment – internal and external

• There is an interaction between people, structure, and

technology and these elements are influenced by the
environment
 Organizational Structure (OS)
What is an organization structure?
• An Organizational Structure – refers to the way that
an organization arranges people and jobs so that its
work can be performed and its goals can be met.
• It is the manner in which various sub-units are
arranged and inter-related
• OS is the typically arrangement of lines of
authority, communications, rights and duties in
an  organization. 
 Organization Structure (OS)
• The structure of an organization is the manner
in which various sub-units are arranged and
inter-related
• It is the institutional arrangements and
mechanisms for mobilizing human, physical,
financial and information resources at all levels
of the system.
• It defines how activities such as task allocation,
coordination and supervision are directed
toward the achievement of organizational goals
 Principles of Organization Structure
Modern Organizational structures have 5 Basic
Principles:

i. Specialization: - facilitates division of work into units

for efficient performance. Work can be specialized both
horizontally (e.g., departments/ units) and vertically
(chain of command)
ii. Coordination: -refers to integrating the objectives and
activities of specialized departments to realize broad
strategic objectives of the organization.
iii. Departmentalization: - is a process of horizontal
clustering of different types of functions and activities
on any one level of the hierarchy. It is conventionally
based on purpose, product, process, function, personal
things and place
iv. De-centralization and Centralization: De-
centralization refers to decision making at lower levels
in the hierarchy of authority. In contrast, decision
making in a centralized type of organizational structure
is at higher levels.
―Every organizational structure contains both
centralization and de-centralization, but to varying
degrees.
v. Line (Professional) and Staff
(Administrative) Relationships:
Line authority refers to the chain of command, or to
the superior-subordinate linkages, that extend
throughout the hierarchy. It is an important aid to
communication and coordination.
• Line and staff personnel have different functions,
goals, cultures and backgrounds.
 Types of Organizational Structure
• There are 4 types of organizational structures: - Functional,
Divisional, Matrix and Flat.

i. Functional: in a functional organization structure, people

who do similar tasks are grouped together based on
specialty. E.g., doctors, nurses, accountants, cleaners, etc.
ii. Divisional/Service Units: in a divisional structure, an
organization groups workers into teams based on the
products or services that meet the needs of a certain type
of customer. E.g., in a hospital setting: Surgical,
Paediatric, Radiology, Pharmacy, Finance, Catering.
• This kind of structure ensures workers making similar
products/services can achieve greater efficiency and higher
output
iii. Matrix Structure - combines Functional and
Divisional Models.
― It groups people into functional departments of
specialization, then further separates them into
divisional units/services and products.
― In a matrix structure the team members are
given more autonomy and expected to take on
more responsibility for their work; increases the
productivity of the team, and allows managers to
cooperatively solve decision-making problems
through group interaction.
iv. Flat Organizational Structure (FOS): -
attempts to disrupt the traditional top-down
management system.
― In FOS, management is decentralized so there is
no everyday boss. Each employee is the boss of
him/herself, eliminating bureaucracy and red
tape and improving direct communication.
Examples of organizational structure
Typical vertical structure:
 University Management Structure
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 Summary statement
• Strategic Management is a set of decisions and actions
which a manager takes to achieve goals, better
performance and a competitive advantage for their
organization. It involves 4 critical processes:
environmental scanning, strategy formulation, strategy
implementation and strategy evaluation.
• Organization Behaviour is the study of what people do in
an organization and how their behaviour affect the
performance of the organizations, while Organizational
Structure is the way that an organization arranges people
and jobs so that its work can be performed to meet its
goals.
• Key References
1. Basic Strategy Concepts (Chapter 1): Jones &
Bartlett Publishers
2. Sireen Khemesh. Strategic Management/ Basic
concepts: 2019
3. Joan Bragar Galer et al. Managers who Lead: A
Handbook for Improving Health Services.
Management Sciences for Health, 2005