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Tuesday, May 3, 2011



Submitted By:
Dinesh Siwakoti
Tiffin University
MGT 624
Crafting and Executing Strategy
April 14th 2010

Back in Nepal, my brother owns few hospitals and he is a sole distributor of the all Toshiba and some other Korean medical equipment in Nepal.  To be the market leader in the industry they have implemented range of strategy (differentiation strategy to cost leadership strategy) over time in the hospital.  When I worked there as an intern, I visualize how every single action taken by the organization internally affects its strategic choice, its objectives along with the organization wide long term effectiveness and goal achievement.
Strategy is the way or mechanism of the organization that helps to obtain and sustain the competitive advantage and achieve goals. Product or service differentiation and cost leadership is the popular strategy used by different organization. Differentiation strategy is a kind of strategy in which the firm like our hospitals try to create a product or service which is considered very unique in some aspect that the customer values. When I read the chapter, “Managing Internal Operations that Promote Good Strategy Execution” then I realized that internal organizational actions and operations are seriously important to promote the successful strategy execution.
How successful we are in executing the strategy largely depends on the internal climate of the organization that exists within a facility and can determine the staff abilities to accept change in a positive manner. For example, “Poor morale, lack of trust, and a feeling of disengagement with the corporation are internal environmental factors that influence the corporation's ability to reform and succeed”.
For example when our hospital implemented its new differentiation strategy one of the problems our organization faced is that our staff fears about their job and there was lack of trust between employees and the organization. Therefore, a detail and continuous analysis of internal factors and operations is needed in order to successfully implement or execute the strategy. And organization should create a sound working climate and maintain discipline along with the good employee’s motivational practices and mechanism in the organization so that employees are fully motivated towards the strategic mainstream to achieve the corporate goals. One thing that should be taken into consideration is that when we develop and implement a plan or execute our strategy, we have to think in advance about anticipated negative events along with corrective measures that should be initiated by the organization in order to minimize the negative consequence.
Six sigma’s DMAIC (define, measure, analyze, improve, control) process is particularly good vehicle for improving performance when there are wide variations in how well an activity is performed. When I read the book and did little further research on business process reengineering and Continuous Improvement programs like six Sigma and TQM, I found that Continuous improvement technique is more suitable for business like our (Hospitals) because Total Quality management programs stress incremental progress, striving for inch-by-inch gains again and again in a never ending stream.
To successfully implement the differentiation strategy along with differentiated service (for example reducing the waiting time of the patients); key resources needed to support the change is the hospital “bed”. Beds in the hospital is the key resources and if we don’t have sufficient resources (for e.g. Bed) then disturbance that impact directly the quality, timeliness, and effectiveness of the service of the hospital. On the other hand these factors help in measuring the satisfaction of customers or patient outcomes. Another major area that should be taken into consideration is the Emergency Department (ED) arrivals. ED should be renovated and expand in terms of number of patient treatment stations enhancing physicians' abilities to provide prompt and specialized emergency care. Because the goal for the hospital’s ED is to increase patient throughput from the department into the subsequent care areas and staff productivity, and to ensure that all arriving patients can be serviced quickly and efficiently so that the outcome for the patient is increased overall satisfaction and betterment of the patient.
Sometime organization needs to change radically in order to successfully implement the strategy in the organization. if organization is able to clearly define its strategic approach to workplace in terms of  reengineering, reorganization, and redesign,  incorporating the influences of  internal factors and actions, the process  of execution of the strategy and goal achievement may be better managed,  and organization possibly realize highest level of positive outcome on the facility, operations and employees. When our hospital implements different strategy over time one common problem we face is to choose the right person who can steer and direct the change in every operation level of different functional areas. Another important issue is that our own organization culture is sometime come in a way whenever we initiate the change in terms of strategic transformation especially at the operational level. Therefore, organization should provide enough training and understanding about why the change is needed and what are the benefit associated with it for the operation level employees so that change management will be less costly and smooth. Not only this but also we need to develop new policies of the organization and procedures of the doing things so that it will aid strategy execution.
Once when we adopted the strategy of reducing the waiting time of the patients in one of our location we face whole lot of problems even in exchanging information in between care providers in terms of saving time and minimizing their constraints. Beside this Maintaining and strengthening optimal capacity of qualified human resources with proper and continuous training is another key task that we felt is important in order to successfully execute our strategy to reduce the waiting time of the patients. Last and the most important is that in order to achieve the target result we need to provide the decision making authority towards lower level management so that they can decide on their own to foster quick operation.
As a quality management model, TQM can provide many benefits to a hospital, including better output quality, productivity improvement, and an enhanced competitive position (Longest, Rakich, and Darr 2000).  But today Six Sigma is becoming one of the even more popular techniques to address and minimize the continued variation in hospital quality. "Although, TQM encourages data collection and analysis, it is often not implemented so as to produce the level of detail required to understand process variation."(Revere and Black 2003, 378-79).
Though the Six Sigma is popular in the manufacturing and even in service oriented industry in terms of one of the innovative and comprehensive management tool, recently its selective adoption by hospitals and health systems is also widely recognized. Six Sigma is a quality enhancement technique that evaluates the overall process in terms of its ability to perform defect free. Therefore, one of the major objectives of the Six Sigma is to reduce or control and possibly eliminate the number of defects that occur in a given process. In our hospital, we are not applying the Six Sigma boldly but we do apply the basic principle of the Six Sigma. Though, there are so many advantage of Six Sigma in the Hospitals but we face lots of barrier while implementing some key principles of Six Sigma in Hospital. One of the barriers is that we have already invested a lot of our capital in the TQM. But this is not logical enough to say that “we don’t want Six Sigma because we have already invested a lot in TQM”. Six Sigma is from the minds of talented executives who understand the complexity and importance of management when making adjustments to the organization (i.e., improving quality) (Pyzdek 2001). Six Sigma follows formal quality analysis and process improvement to provide hospital administrators with concrete information that allows them to specifically understand what is contributing to error. This information is discovered through an approach that measures process variance according to the Six Sigma scale. The Six Sigma scale reveals the degree to which a process achieves its objectives, and it measures variance based on the unit defects per million opportunities. These successes by various healthcare organizations not only demonstrate Six Sigma's ability to enhance quality improvement but also justify consideration of the Six Sigma program by healthcare management. Once hospital administrators are able to see how well the Six Sigma program works, they can be encouraged by these successes and become optimistic about its success in their own organizations.  (Woodard, Tanisha D)
Beside this, to successfully execute our differentiation strategy we need to have well-conceived state-of-the-art operating system which strengthens organizational capabilities along with the supporting operational level or working level environment for better execution of the strategy. Best execution of our differentiation strategy can only be realized if we have system for training personnel in quality techniques, tracking service quality at different areas, and ensuring all product and technology used in the hospitals meet the quality standard. Beside this, we should have statistical real time information system that permits different functional areas managers to stay on top implementation initiatives and daily operations, and intervene if things seem to be drifting. In addition to this, management should tie some sort of incentives to strategy execution which helps to harmonize the relationship between employees and employers.

Thompson, A.A., Strickland, A.J. & J.E. Gamble (2008) Crafting and Executing Strategy: The Quest for Competitive Advantage 17th edition. New York, McGraw-Hill Irwin
Bowers, M. R., J. E. Swan, and W. F. Koehler. 1994. "What Attributes Determine Quality and Satisfaction with Health Care Delivery?" Health Care Management Review 19 (4): 49-55.
Chong, Y., N. Unklesbay, and R. Dowdy. 2000. "Clinical Nutrition and Foodservice Personnel in Teaching Hospitals Have Different Perceptions of Total Quality Management Performance." Journal of American Dietetic Association 100 (9): 1044.

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