Facilitating strategy formulation is a vibrant element of business planning that can ensure the sustainability and competitiveness of an organization. Quinn (2009) rightfully notes that this process entails value proposition which is not only directed towards selected market segment but offers continuous value creation activities as well. In so doing, an organization is rendered the ability to forge ahead with activities that allow it to overcome its competitors. Strategy formulation usually enables an organization to; explore its options, determine its mission as well as to carefully select objectives that can enable it to effectively craft its business strategies and action plan adequately.
Using a case study of strategy challenges for Suburban System organization, I will point out the most critical strategy-related challenges that face the organization and how they can be addressed. As noted by Alan Zuckerman, Suburban System is an organization with two hospitals one of which is located at western suburban major metro area while the other is located in semirural area. While the localities of both the hospitals are strategic for their business growth and sustainability, they are faced with inefficiency in maintenance and leadership which have presented a great challenge to the process of strategic formulation. The most hit is the smaller hospital located at the semirural area which has been facing management discrepancy threatening to lead to its closure or disposal.
As observed by Zuckerman (2008), this challenge has seen Suburban system incurring major capital expenditures that are much higher than its routine capital needs. Equally, the flagship hospital though well-located at a major metropolitan area and with its modern operations is striving to meet the needs of the community, has not been without challenges in its strategy formulation. Its major challenge has been how to deal with overpopulation. With 200-bed capacity and further increase in admission from 22 to 27 percent in past five years, the hospital is not able to maintain its capital expenditures thereby spending $50 million to $80 million besides it daily capital needs. This verge of spending is also captured in Suburban’s rural hospital which will have to secure $70 million to $100 million for its base consolidation and be secure from closure.
It is thus obvious that Suburban System lacks competent leadership which can come up with the necessary strategies to address its maintenance challenges. As a recommendation to ensure the development of a strategic plan that would enable the rural hospital not only to grow but also to address financial realities, there is the need for the organization to incorporate effective leadership composition and style (Zuckerman, 2008). Additionally, while maintenance and leadership should play center stage in the implementation of Suburban’s development plan, the organization can also consider improving its current site. This will help it alleviate the situation attributed to the rural hospital. I also agree with Zuckerman that improving the current site would ensure that Suburban system not only recruit new physicians but also incorporates programs that ensure the accessibility of hospitals’ operations. While this would require developing interim investment strategy which will need an additional capital investment, the looming rapid development in its rural neighborhood will make such investment attainable.
As its future plan, Suburban System should consider reaching out to organizations outside its traditional business area especially while carrying out essential developments that would require capital investment partner. The organization should also consider developing an organizational plan that is strategically designed to increase the employee’s involvement. Designing such a plan would ensure that the organization measures its critical success factors as based on employees’ point of view thereby cutting down unnecessary operation cost (Jonker, 2009). This can be achieved in Suburban System if the organization engages in sponsoring programs or activities that are not only entitled to create new markets and new customer value, but those which can also act as tools for raising capital for its development plans.
Moreover, those in the leadership within the organization must be trained to understand leadership as the act of influencing people to co-operate towards a desirable goal (Quinn (2009). Such a concept would allow the leadership to gain skills which can enable them build a relationship around common interests and goals for the betterment of the entire organization. The leadership of the organization must also note that the effectiveness of strategic management can only be well-captured, especially towards organization’s operation, if the existing senior managers create a good business environment. This is based on the fact that while the spheres and ramification of the expected leadership role vary and depend mostly on the position and leader’s tasks specification, what is essential is the ability of the leader to impose good leadership status on his or her subordinate.
It will also be necessary for the organization to improve its ability to systematically assess leadership capacity. This will enable it to launch a strategy initiative which will not cause any scramble while being implemented. This will help Suburban System organization, especially in the smaller hospital, where there is already a significant disagreement among stakeholders regarding how to execute the company’s strategy. Additionally, the organization will have to ensure that only those who possess the ability to lead are put in the positions of leadership. This will help fill the capability gaps which have resulted from the lack of effective leadership ability in the organization as its capital investment does not match with the corresponding customers’ investment.
Additionally, Suburban System’ managers should be trained on democratic leadership skills that would allow them to share key organization’s policies, planning, as well as execution of activities with stakeholders. In so doing, managers would be able to develop and instill responsibility among stakeholders including subordinate staffs. This will not only result into high productivity and quality on healthcare services, but it will also create a sense of belonging among stakeholders. However, in ensuring that this is incorporated in the strategic planning process, all the stakeholders should be engaged either directly or indirectly in all decision making processes. Though Zuckerman (2008) observes that Suburban staff has been involved in identifying options that can help in addressing management challenges associated with the smaller hospital, much can still be done to take such initiatives to another level. This will help the organization to improve on the review of relevant studies concerning its situation thereby being able to outline all the available options.
In the formulation of a beneficial strategy for an organization, I would help the firm to deploy SWOT analysis’s tool. This way, we would be able to develop strategies that can allow the organization to take advantage of the available opportunities and its own strength while also seeking to improve on the points of its weakness to counter the identified internal and external threats. I will discourage the assumption that only managers can effectively and carefully assess organization’s capabilities, weaknesses, and risks. I will instead seek to make the leadership to understand that it is through incorporating stakeholders’ input that efficiency can be realized in any strategy planning process. In this case, I will promote that use of such programs as request program that timely captures and analyzes the value of stakeholders input. The program would help to capture stakeholders’ consultation experience in the strategic planning process.
In conclusion, it is evident that it is management and leadership strategies that have contributed to the negative experiences befalling Suburban System organizations. Lack of effective leadership skills and concepts has rendered the organization, especially its rural based hospital, unattainable. Inability to incorporate effective management strategy has made the organization to spend more than its capital base. It is therefore important for organizations to involve managers who are able to incorporate all their stakeholders in assessing their strengths, weakness, opportunities, and threats associated with the planning and implementation of the firm’s strategy.