Liberty University Indiana OrthoIndy Hospital Strategy Tactics Case Discussion all you will do is answer my 1 question and combine it with the document con

Liberty University Indiana OrthoIndy Hospital Strategy Tactics Case Discussion all you will do is answer my 1 question and combine it with the document containing my group mates work. 6
VISION
ACHE’s vision, mission and values provide the basis for organizational direc- tion and decision making in
service to the organization and profession. ACHE’s fundamental purpose (mission) and the
essential core values of the profession form the foundation for our strategy. Creating the desired
long-term future (vision) is a fundamental guiding principle for ACHE’s strategic direction.
Vision: To be the preeminent professional society for healthcare executives dedicated to improving health.
Mission: To advance our members and healthcare management excellence. Core Values: As members of the
American College of Healthcare Executives,
we are committed to:
•
•
•
•
Integrity: We advocate and demonstrate high ethical conduct in all we do.
Lifelong Learning: We recognize lifelong learning is essential to our ability to innovate and
continually improve ourselves, our organizations and our profession.
Leadership: We lead through example and mentoring, and recognize caring must be a
cornerstone of our professional interactions.
Diversity and Inclusion: We advocate inclusion and embrace the differences of those with
whom we work and the communities we serve.
— American College of Healthcare Executives, “Strategic Plan, 2017–2019,” 2017
125
126 Strategic Healthcare Management
Stakeholders
Persons who have a claim to or obtain some bene t from an organization.
Learning Objectives
After reading this chapter, you will
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•
•
•
understand who organizational stakeholders are and their importance in creating the
company’s strategic intent;
comprehend that strategic intent consists of three components: mission, vision, and values;
know the importance of values to a company and how they can be identi ed; and
recognize the differences between mission and vision statements and be able to describe
how they are created.
Stakeholders and Organizational Purpose
Organizations are created to accomplish some aim or output for a group(s) of stakeholders ef
ciently and effectively. Stakeholders are individuals and groups that have some investment in an
organization or obtain some bene t from it. Ultimately, organizations exist for the bene t of their
stakeholders. For instance, the values, mission, and vision of the American College of
Healthcare Execu- tives (ACHE) de ne healthcare professionals as ACHE’s stakeholders and
its purpose as advancing members and healthcare management excellence. Other organizations’
outputs might be the manufacture of cars or prescription drugs or the provision of community
bene ts or healthcare services, to name a few.
Types of stakeholders range extensively, but major classi cations include internal groups and
external groups. Internal stakeholders have connections inside an organization. Employees,
investors, stockholders (of publicly held companies), and board members are internal
stakeholders. External stakehold- ers may include customers, suppliers, governments, local
communities, and the general public. As shown in exhibit 6.1, a reciprocal relationship
exists between an organization and its stakeholders; as the Agency for Healthcare Research
and Quality (AHRQ) states, stakeholders are “persons or groups that have a vested interest. . . .
Stakeholders may be patients, caregivers, clinicians, researchers, advocacy groups,
professional societies, businesses, policymakers, or others. Each group has a unique and
valuable perspective” (AHRQ 2014). For example, organizations seek to attract customers
by offering products or services that bene t the consumer and at the same time seek bene ts
in the form of payments or other types of support (e.g., reputation, regulatory approval).
The number of stakeholders can appear immense for a healthcare organization and may
include
•
•
•
•
•
•
•
•
•
•
•
program managers and staff;
local, state, and regional coalitions;
advocacy partners;
state education agencies, schools, and other educational groups;
universities and educational institutions;
local government, state legislators, and state governors;
privately owned businesses and business associations;
healthcare systems and the medical community;
religious organizations;
community organizations; and
private citizens (Sharfstein 2016).
An organization must consider both its stakeholders’ needs and the support it requires
when formulating and implementing its strategies. If the organization fails to consider one
or both of these interests, stakeholders may withdraw their contributions, and the organization
may incur serious negative consequences as a result. For example, key governmental entities might
refuse to grant crucial approvals, investors may withdraw critical capital funds, or cus- tomers may
seek services and products from other organizations. Neglecting to attend to the interests of
key stakeholders can contribute to poor imple- mentation of strategic decisions and
subsequent failure. Integration and an understanding of key stakeholders are important in
all organizations but can
EXHIBIT 6.1
Relationship Between Stakeholders and Organization
External stakeholders:
Customers Suppliers Governments Local communities
Organization
Internal stakeholders:
Employees Investors Board Others
Benefits
Support
Support
Benefits
128 Strategic Healthcare Management
be especially critical in public organizations, many of which are healthcare
Strategic intent
Statements, including mission, vision, and values, that describe an organization’s perception of
its purpose,
its direction,
and acceptable conduct.
providers (Bryson 2004; Huotari and Havrdova 2016).
Strategic Intent
One of leaders’ key functions is to craft their organization’s strategic intent in order to signal where
the organization needs to go. For example, ACHE aims to be the preeminent professional society for
healthcare executives. Strategic intent is a key gauge of an organization’s relationship with its
stakeholders. It identi es stakeholders most important to the organization and the bene ts they are to
receive. It also should be a statement of commitment to stakehold- ers and the basis on which the
organization de nes its successes and failures. Strategic intent should aim to ful ll the organization’s
mission and should express the organization’s values and the stakeholders’ values. It de nes what
an organization does, how the organization accomplishes it, and what the desired outcomes are.
Strategic intent informs all of an organization’s decisions about its future. Organizations that are unclear on
their strategic intent or base their activities on multiple strategic intents set con icting priorities, waste
resources, suffer from indecision, and frustrate their workforce (Ice 2007). Strategic intent should be
realistic and unambiguous and directly re ect the beliefs and desires of senior managers. A statement
meeting these criteria often is dif cult to establish. Even if an organization has taken the time to craft a
written document de ning its strategic intent, it may not be tied to the organization’s actions (Pitt
2001). Properly constructing and communicating strategic intent “in ways that are both
unambiguous and persuasive, setting forward what is to be sought in the longer run” is critical to
organizational success (Useem 2016).
As illustrated in exhibit 6.2, strategic intent is composed of the values, mission, and vision of an
organization. Although in practice these terms some- times are used interchangeably—especially
mission and vision—they have dif- ferent de nitions and purposes. Strategy texts commonly order
these terms as mission, vision, and values; however, values are the foundation of the mission and
vision and therefore should precede them.
Values indicate how the organization should act; they de ne acceptable and unacceptable behavior.
Mission re ects these values by expressing the organization’s standards and purpose. Vision
provides direction by depicting the organization’s desired future state. Values, mission, and vision
are inter- related and, if properly crafted, enable employees to understand and articulate the
organization’s core strategy and priorities.
For organizations to enjoy sustainable prosperity, they must be driven by their mission and vision
and be committed to practicing a set of values. Values need to be incorporated into all organizational
operations and processes,
Chapter 6: Stakeholders, Values, Mission, and Vision 129
Strategic Intent
EXHIBIT 6.2
Relationship Between Strategic Intent and Mission, Vision, and Values
Mission Values
Vision
including hiring, performance review, promotion, reward, and dismissal (Nelson and Gardent 2011; Regan
2012).
As stated in chapter 1, organizations’ diverse strategic intents drive widely different strategies.
Diverse organizational intents engender dissimilar values, missions, and visions as well as different
approaches to strategy, espe- cially in the healthcare sector, where different segments consist of a
dissimilar mix of for-pro t and not-for-pro t organizations. Exhibit 6.3 shows that the percentage of
for-pro t organizations in different healthcare service segments varies from only 21 percent among
acute care hospitals to almost 100 percent
Acute care hospitals1 21 Hospice programs2 63 Psychiatric hospitals3 69 Home health agencies2 80 Nursing
homes4 70 Dialysis centers5 86 Medical device companies* ≈ 100 Pharmaceutical companies* ≈ 100 Physician
practices* ≈ 100
Source: American Hospital Association (2017);1 Kaiser Family Foundation (2014a);2 Span (2014);3 CDC (2016c);4 Johnson (2014).5
*Estimated.
EXHIBIT 6.3
Percentage of US Healthcare Organizations That Are For- Pro t, by Type
Percentage for Pro t
130 Strategic Healthcare Management
among pharmaceutical companies, physicians, and medical device companies. In addition, strategic intent
differs among academic medical centers; community- owned facilities; rural and urban organizations;
large corporations; and small, family-owned companies. Strategic intent also may vary between singlemarket organizations and organizations that are part of multimarket systems. Further- more, different
healthcare organizations may have different stakeholders and different purposes.
Although organizations differ in their emphasis and focus, the basis of all successful strategies is the
organization’s strategic intent: its values, mission, and vision. Too often, however, a disconnect exists
between the writing of the strategic intent and its inculcation in an organization’s strategies and
actions. The components of the strategic intent sit in a document on the CEO’s desk or are inscribed
on a plaque hanging on the wall. Researchers have noted that executives often compose beautiful
strategies that are never implemented. Staff members do not internalize the written documents or use
them as guides to making dif cult decisions (Walston 2017).
When managers write the strategic intent and seek to communicate it to stakeholders, yet the
intent does not inform and drive strategic actions, serious damage can result. Organizations create
problems for themselves when they espouse wonderful-sounding values, missions, and visions and
then act contrarily to these dictates. They nd themselves at odds with their stakehold- ers and may face
civil and criminal penalties. The indictments and nes they suffer can lower their stock prices, tarnish
their public image, and damage their employees’ morale.
Values
As stated earlier, values are the foundation of an organization’s mission and vision. They express
the ethics that guide an organization’s actions and pro- cesses. Values should be the nal metric by
which an organization determines whether it has succeeded or failed. If an organization achieves its
goals or benchmarks, especially nancial ones, but does so by violating its values, it has failed. Likewise, if
an organization with a culture and embedded values that promote innovation makes an honest but
unpro table investment or if it fails to achieve a written strategy because of changing market
conditions, it still could be deemed a success.
As exhibit 6.4 shows, Thomas J. Watson, Jr., past CEO of IBM, believed that following organizational values
is more important than organizational outcomes. The ultimate criteria for evaluation should not be
bad investments and untoward results but rather the application of organizational values, which, in this
case, were innovation, trust, and respect.
Many organizations set aside their value statements and fail to ingrain them into their culture. Too
often statements are used only as marketing slo- gans, or organizations xate on nancial results and
pro ts. When managers
Chapter 6: Stakeholders, Values, Mission, and Vision 131
Thomas J. Watson Jr., CEO of IBM between 1956 and 1971, was a key gure in the information revolution.
Watson embedded in IBM the values of innovation and creativity. In one case, a young executive had made
some investments that did not work out, and the decision cost IBM several million dollars. He was summoned
to Watson’s of ce, fully expecting to be red. As he entered, he asked Watson whether he wished him to resign.
Watson is said to have replied that he had just spent a couple of million dollars educating the junior executive,
so why should he be red?
Source: Schein (2010).
stress nancial outcomes and ignore other stated values, ultimately a company’s culture, reputation, and
long-term viability suffer.
Emphasis on short-term pro ts is a common mantra of for-pro t rms seeking to maximize
shareholder value. Scholar have long suggested that this single-minded focus is awed at its core and not
sustainable over the long term (Drucker 1959). A primary value of maximizing pro ts cannot motivate
large groups of employees to deliver exceptional performance, and organizations driven by pro ts
lose their direction over time (Sabria 2016). They are ships without a real rudder to direct their
actions. Leaders may practice contingent ethics, changing their values from situation to situation, and
make opportunistic short-term decisions that have disastrous long-term consequences.
If adhered to appropriately, values can be essential principles guiding all of an organization’s actions and
the basis of its culture. Values should create the ethical environment in which all employees
function. They should inform organizational decisions and be used to resolve con icts. For values to
function as a guide, all internal stakeholders should be aware of them, accept them, and integrate them
daily into their organizational decisions and actions (Nelson and Gardent 2011). Authors have
suggested that ingrained values in hospitals contribute signi cantly to lower patient mortality rates
(Curry et al. 2011).
Values should endure across time. Strategies will (and should) change, but values should not. Values must be
deeply embedded in an organization’s culture and in the hearts and minds of its employees, not just written
and hung on a wall.
Values should be based on the core beliefs and expectations of key share- holders. The following guidelines
describe one method for understanding and establishing an organization’s values (Walston and Chou
2012):
• Obtain key stakeholders’ expectations for the organization. In some organizations, the owners
might be the only group deemed to be truly important. In others, multiple groups—including
owners, customers, employees, and suppliers—might be powerful enough to be included. As
discussed in chapter 8, one way to identify key stakeholders is to ascertain who would suffer the
most if the organization ceased to exist.
EXHIBIT 6.4
Interpreting Results on
the Basis of Organizational Values
132 Strategic Healthcare Management
Once key stakeholders are identi ed, the organization can conduct surveys or interviews to
determine which values stakeholders believe
to be important. Questions might focus on what employees want the organization to be known for;
what makes employees proud to be af liated with the organization; who the organization’s heroes
are, and why; and, among the organization’s ethical values, which ve are most important.
•
•
Identify common values among stakeholders. Commonly expressed values should be identi
ed and related values merged to establish the ethical base of an organization’s purpose.
Managers should place an emphasis on values that distinguish the organization from its
competitors.
Make values visible and tangible to employees. Make organizational values visible and tied to
performance. Clearly incorporate the values into employees’ (including the CEO’s)
evaluations to assess how well they live these ideals. Link values to measurable strategic
outcomes, such as satisfaction scores or error rates.
•
Keep values memorable. Express values in terms that stakeholders understand and can
remember. As a rule of thumb, organizations should establish no more than seven values.
The best values statements consist of more than just a word or a phrase; they also include a
brief description.
Organizations can also use written values to shape employees’ attitudes toward different
categories of stakeholders. Values’ in uence on staff is espe- cially important in healthcare,
given its many vulnerable stakeholders. A good example of a values statement aiming to
instill expected behaviors is that of Dignity Health (formerly Catholic Healthcare West), a
large hospital system in California, Arizona, and Nevada (Dignity Health 2017):
Dignity Health is committed to providing high-quality, affordable health care to the communities we serve.
Above all else we value:
Dignity: Respecting the inherent value and worth of each person.
Collaboration: Working together with people who support common values and vision
to achieve shared goals.
Justice: Advocating for social change and acting in ways that promote respect for all persons and demonstrate
compassion for our sisters and brothers who are powerless.
Stewardship: Cultivating the resources entrusted to us to promote healing and wholeness.
Excellence: Exceeding expectations through teamwork and innovation.
Chapter 6: Stakeholders, Values, Mission, and Vision 133
Dignity Health (2008, 2) also has a document titled “Standards for Mission Integration” that
addresses organizational identity, spirituality, ethics, and community health at both local and system
levels. It states, “The Standards for Mission Integration re ect the future we, as a system, are aspiring to
realize. The Standards provide us with a framework to identify, measure and improve the ways in
which the mission of our health care ministry is carried out. They also are a tool that will help us
assess how our values are being lived out in the day-to-day operations of our organization. Each
facility is expected to establish and support an overall mission integration process, supported by an
annual plan.”
These standards expand on Dignity Health’s written values and provide key metrics for evaluating how
successfully the system is implanting its orga- nizational identity, spirituality, and ethics. For
example, local indicator ethics standard 9 states (Dignity Health 2008, 7):
[Dignity Health] promotes ethical integrity in organization and business practices and in patient care.
1.
2.
3.
Each facility uses a structured process of ethical re ection for strategic, business and management decisionmaking and priority setting.
Employee recruitment and evaluation integrates measures to gauge congruence with [Dignity Health] core
values.
Each facility has an Ethics Committee for clinical ethics policy development, education and case consultation, or
has the resources of an Ethics Committee available to it. Each Ethics Committee:
• Is appropriately chartered within the organization;
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•
•
Maintains minutes for submission to the appropriate local hospital …
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