BAHM328

HEALTHCARE STRATEGIC MANAGEMENT

Assoc. Prof. Dr. Norizah Mohd Mustamil
What do you hope to get from this module?
What does strategic management mean to you?
 The aim of this module
• To help candidates develop skills in business
analysis and strategic thinking.
• The exercises will help them deepen their
understanding of the strategy context both internal
and external to their organisations and familiarize
them with the thought-leadership literature in the
strategy field.
• The candidates will be required to apply key strategy
concepts to organisational contexts and to develop a
critical appreciation of the role and impact of strategy.
• The module will explore key ideas and theories in the
field and how companies successfully develop and
implement strategies.
Course Learning Outcomes
CLO1: Assess strategic business
analytics and account the
relationships between this CLO 2: Display strategic
discipline and other areas of leadership in creating a learning
business to make holistic and an ethical organization.
judgments in analysing business
situations.

CLO 3: Assemble strategic

CLO 4: Explain how business
approaches in adopting key
entities can lose their competitive
success factors to managing a
advantage.
healthcare business.
 Content of the Course

Strategic Analysis Strategic Strategic Strategy Monitoring Case Analysis

Formulation Implementation and Control
Strategic leadership

Davis B . & Davis B. 2007

 • Strategic management is the art and science of formulating,
implementing, and evaluating cross-functional decisions that enable
an organization to achieve its objectives.

Defining • Strategic management is used synonymously with the term strategic

planning. Sometimes the term strategic management is used to refer

Strategic to strategy formulation, implementation, and evaluation, with strategic

planning referring only to strategy formulation.
Management • Three questions need to be analysed ;
• Where are we now?
• Where do we want to go?
• How are we going to get there?
Stages in strategic management

Strategic Analysis

Strategic Formulation

Strategic Implementation

Strategy Monitoring and Control

Strategy Analysis & Formulation

• developing a vision and mission

• identifying an organization’s external
opportunities and threats
• determining internal strengths and weaknesses
• establishing long-term objectives
• generating alternative strategies
• choosing particular strategies to pursue
The decision of…
• What new businesses to enter
• What businesses to abandon
• Whether to expand operations or diversify
• Whether to enter international markets
• Whether to merge or form a joint venture
• How to avoid a hostile takeover
Strategy Implementation

• Requires a firm to establish annual

objectives, devise policies, motivate
employees, and allocate resources so
that formulated strategies can be
executed
• Often called the action stage
Strategy Monitoring and Control

• Determining which strategies are not working well

• Three fundamental activities:
 reviewing external and internal factors that
are the bases for current strategies
 measuring performance
 taking corrective actions
 •Competitive Advantage
• any activity a firm does especially well compared to activities done
by rival firms, or
• any resource a firm possesses that rival firms desire.

**A firm must strive to achieve sustained competitive advantage

Key Terms in • Strategists
Strategic • Individuals most responsible for the success or failure of an
Management organization
• Help an organization gather, analyze, and organize
information
• Vision and Mission Statements
• A vision statement answers the question “What do we want to
become?”
• A mission statement answers the question “What is our business?”
 • External Opportunities and Threats
– economic, social, cultural, demographic,
environmental, political, legal, governmental,
Key Terms in technological, and competitive trends and events that
could significantly benefit or harm an organization
Strategic • Internal Strengths and Internal Weaknesses
Management – an organization’s controllable activities that are
performed especially well or poorly
– determined relative to competitors
The Basic SWOT Matrix Format
 • Long-Term Objectives
– specific results that an organization seeks to achieve in
pursuing its basic mission
– long-term means more than one year
– should be challenging, measurable, consistent,

Key Terms in reasonable, and clear

• Annual objectives
Strategic – short-term milestones that organizations must achieve
to reach long-term objectives
Management – should be measurable, quantitative, challenging,
realistic, consistent, and prioritized
– should be established at the corporate, divisional, and
functional levels in a large organization
• Policies
– the means by which annual objectives will be achieved
 Benefits to a Firm That Does Strategic Planning
• Strategic management allows an organization to be more proactive than reactive in shaping
its own future;
• It allows an organization to initiate and influence (rather than just respond to) activities-
and thus to exert control over its own destiny.
 Financial Benefits

• Organizations using strategic-management concepts show

significant improvement in sales, profitability, and
productivity compared to firms without systematic
planning activities
• High-performing firms tend to do systematic planning to
prepare for future fluctuations in their external and
internal environments
 • Enhanced awareness of external threats
• Improved understanding of competitors’ strategies
Nonfinancia • Increased employee productivity

l Benefits • Reduced resistance to change

• Clearer understanding of performance-reward
relationships
Why Some Firms Do No Strategic Planning
No formal training in strategic management
No understanding of or appreciation for the benefits of planning
No monetary rewards for doing planning
No punishment for not planning
Too busy “firefighting” (resolving internal crises) to plan ahead
View planning as a waste of time, since no product/service is made
Laziness; effective planning takes time and effort; time is money
Content with current success; failure to realize that success today is no guarantee for success
tomorrow
Overconfidence
Prior bad experience with strategic planning done sometime/somewher
Pitfalls in Strategic Planning (1 of 2)
• Using strategic planning to gain control over decisions and resources
• Doing strategic planning only to satisfy accreditation or regulatory requirements
• Too hastily moving from mission development to strategy formulation
• Not communicating the plan to employees, who continue working in the dark
• Top managers making many intuitive decisions that conflict with the formal plan
• Top managers not actively supporting the strategic-planning process
• Not using plans as a standard for measuring performance
Pitfalls in Strategic Planning (2 of 2)
• Delegating planning to a “planner” rather than involving all managers
• Not involving key employees in all phases of planning
• Not creating a collaborative climate supportive of change
• Viewing planning as unnecessary or unimportant
• Viewing planning activities as silos comprised of independent parts
• Becoming so engrossed in current problems that insufficient or no planning is done
• Being so formal in planning that flexibility and creativity are stifled
 Comparing Business and
Military Strategy

• A fundamental difference between military and

business strategy is that business strategy is
formulated, implemented, and evaluated with an
assumption of competition, whereas military
strategy is based on an assumption of conflict
• Both business and military organizations must
adapt to change and constantly improve to be
successful
 How to Gain and
Sustain Competitive
Advantage
Core Values •A core values statement specifies a firm’s commitment to
integrity, fairness, discipline, equal employment
Statement opportunity, teamwork, accountability, continuous
improvement, or other such exemplary attributes.
 Vision Statement
A vision statement should answer the basic question: “What do we want
to become?”
What Do We Want to Become?
• The vision statement should be short, preferably one sentence, and as many
managers as possible should have input into developing the statement.
• The vision statement should reveal the type of business the firm engages.
 Mission Statement

A declaration of an It answers the It is essential for A declaration of an It answers the It is essential for
organization’s pivotal question effectively organization’s pivotal question effectively
“reason for being.” “What is our establishing “reason for being.” “What is our establishing
business?” objectives and business?” objectives and
formulating formulating
strategies. strategies.
 • A good mission statement allows for the generation and
consideration of a range of feasible alternative objectives
and strategies without unduly stifling management
creativity.
Characteristic • A mission statement needs to be broad to reconcile
differences effectively among, and appeal to, an
s of a Mission organization's diverse stakeholders

Statement • Stakeholders
• – include employees, managers, stockholders, boards
of directors, customers, suppliers, distributors,
creditors, governments (local, state, federal, and
foreign), unions, competitors, environmental groups,
and the general public.
 Broad in scope; does not include
monetary amounts, numbers, Fewer than 150 words in length Inspiring
percentages, ratios, or objectives

Characteristics
of a Mission Identifies the utility of a firm’s Reveals that the firm is socially Reveals that the firm is

Statement products responsible environmentally responsible

Includes nine components:

customers, products or services,
markets, technology, concern for
survival/growth/profits, Reconciliatory Enduring
philosophy, self-concept,
concern for public image,
concern for employees
Insight on •Mission statements are not designed to express
concrete ends, but rather to provide motivation,
Scope of general direction, an image, a tone, and a
philosophy to guide the enterprise. An excess of

Mission detail could prove counterproductive since

concrete specification could be the base for
rallying opposition; all in the firm need to be
Statement onboard with the firm’s mission.
 • Do not offer me things.
• Do not offer me clothes. Offer me attractive looks.
• Do not offer me shoes. Offer me comfort for my feet and the
pleasure of walking.
• Do not offer me a house. Offer me security, comfort, and a place that
is clean and happy.
• Do not offer me books. Offer me hours of pleasure and the benefit of
knowledge.

Considerations • Do not offer me CDs. Offer me leisure and the sound of music.
• Do not offer me tools. Offer me the benefits and the pleasure that
come from making beautiful things.
• Do not offer me furniture. Offer me comfort and the quietness of a
cozy place.

• Do not offer me things. Offer me ideas, emotions, ambience,

feelings, and benefits.
• Please, do not offer me things.
 Mission Statement Components

Survival, growth, and

Products or services- Markets-
Technology-Is the firm profitability-Is the firm
Customers-Who are What are the firm’s Geographically, where
technologically committed to growth
the firm’s customers? major products or does the firm
current? and financial
services? compete?
soundness?

Philosophy-What are Distinctive Public image-Is the

the basic beliefs, competence-What is firm responsive to Employees-Are
values, aspirations, and the firm’s major social, community, and employees a valuable
ethical priorities of the competitive environmental asset of the firm?
firm? advantage? concerns?
Importance of Vision and Mission Statements

To make sure all To provide a basis for

employees/managers prioritization of key internal
understand the firm’s purpose and external factors utilized to
or reason for being. formulate feasible strategies.

To provide a basis for

To provide a basis for the organizing work, departments,
allocation of resources. activities, and segments
around a common purpose.
 1. Achieve clarity of purpose among all managers and employees.

Provide a basis for all other strategic planning activities, including internal and external
2. assessment, establishing objectives, developing strategies, choosing among alternative
strategies, devising policies, establishing organizational structure, allocating resources,
and evaluating performance.

3. Provide direction.

Ten Benefits 4. Provide a focal point for all stakeholders of the firm.

of Having a 5.

6.
Resolve divergent views among managers.

Promote a sense of shared expectations among all managers and

Clear 7.
employees.

Project a sense of worth and intent to all stakeholders.

Mission and 8. Project an organized, motivated organization worthy of support.

Vision 9. Achieve higher organizational performance.

10. Achieve synergy among all managers and employees.

 •A widely used approach includes:
• Select several articles about these statements and

Developing ask all managers to read these as background

information.

Vision and • Ask managers themselves to prepare a vision and

mission statement for the organization.

Mission • A facilitator or committee of top managers

should then merge these statements into a
single document and distribute the draft
Statements statements to all managers.
• A request for modifications, additions, and deletions
is needed next, along with a meeting to revise the
document.