Healthcare Management & Strategy WGU C432

Business-Level Strategy - ANSWER The strategic scope and direction of strategic business units (SBUs). SBUs focus on specific product/service lines while under the umbrella of corporate direction. Corporate-Level Strategy - ANSWER The overall strategic scope and direction of a corporation. The primary function of corporate-level strategy is to allocate capital funds to SBUs and decide which businesses to enter or exit. Emergent-Strategy - ANSWER a pattern of actions that develop over time and become an organization's strategy de facto. This type of strategy is identified by examining decisions that were made and the patterns that occurred as a result. Also called realized strategy. Functional-Level Strategy - ANSWER Strategic scope and direction at the operating division, department, or project level. This type of strategy is driven by product or service line. Prospective Strategy - ANSWER A planning function that forecasts an organization's future situation and designs means to guide an organization's future decisions. Four-Firm Concentration Ratio - ANSWER A measure of market concentration calculated by summing the market shares of the four largest firms in a market. Herfindahl-Hirschman Index (HHI) - ANSWER A measure of market concentration calculated by squaring the market share percentage of each organization in a market and then summing the numbers. Industry - ANSWER A particular category of business or economic activity; an aggregation of sellers whose products are close substitutes. Market Structure - ANSWER The organizational characteristics of a market that exert a strategic influence on the intensity and form of competition. Markets - ANSWER Places, systems, and processes through which buyers and sellers exchange goods and services. Medical Terminology - ANSWER The procedures, equipment, and processes used to deliver medical care. Monopolistic Competition - ANSWER One of the four basic types of market structures. Monopolistic competition exists in markets composed of many organizations offering differentiated products. Monopoly - ANSWER One of the four basic types of market structures. Monopolies exist in markets that are dominated by a single organization. Oligopoly - ANSWER One of the four basic types of market structures. Oligopolies exist in markets dominated by a few large organizations that offer similar or identical products. Patient-Origin Study - ANSWER Data that describe the proportion and number of an organization's customers (patients) who come from different geographic locations. This data can be arrayed and graphed to display the provider's primary and secondary service areas. Perfect Competition - ANSWER One of the four basic types of market structures. Perfect competition exits in markets composed of many small organizations that produce an undifferentiated, homogeneous product. Societal Environment - ANSWER The public and socioeconomic factors surrounding and influencing an organization, such as general economic conditions, population demographics, cultural values, governmental regulations, and technology. Broad Differentiation Strategy - ANSWER A type of strategy aimed at offering products that consumers perceive to be distinct from competitors' products and that appeal to a wide segment of a market. Broad Low-Cost Strategy - ANSWER A type of strategy aimed at providing low-cost products to a broad customer segment. Business Model - ANSWER The underlying structure of an organization; the means through which an organization creates and delivers value to its customers and earns revenues. Customer Value - ANSWER The perceived benefits of a product or service. Consumers may find value in many aspects of products and services, including range and type, degree of customization, availability and accessibility, and quality/cost trade-off. First Movers - ANSWER Organizations that are the earliest to enter a market or an industry. Focused Differentiation Strategy - ANSWER A type of strategy aimed at offering products that consumers perceive to be distinct from competitors' products and that appeal to a limited industry niche or customer segment. Focused Factories - ANSWER A manufacturing strategy that concentrates on core (often single) products and a defined set of technologies and customers. Focused Low-Cost Strategy - ANSWER A type of strategy aimed at providing low-cost products to a limited subset of the broad mass market. Generic Strategy - ANSWER Commonly used strategies that combine a target market (ex. a small segment of a population) and a type of differentiation (ex. low cost). Inputs - ANSWER The combination, type, and mix of resources an organization uses to provide a product or service, such as personnel; materials; and strategic assets such as facilities, equipment, location, patents, networks, and partnerships. Isomorphic - ANSWER The tendency of organizations in a market to become similar in form and structure, offer similar products, and adopt similar practices over time. Middle Strategy - ANSWER A strategy that seeks to deliver low cost and differentiation simultaneously. Portfolio Analysis - ANSWER A method of assessing an organization's products or SBUs that considers various factors, including competitive position, profitability, growth, and mission importance. Process - ANSWER A series of steps that transforms inputs into products/services (outputs). Processes usually are established to organize functions and interface with external entities. Profitability - ANSWER The degree to which the revenues generated by a product or service exceed the costs of producing that product or service. Accountable Care Organization (ACO) - ANSWER A payment and healthcare delivery model in which a group of healthcare providers work together to coordinate a patient's care, improve quality, and reduce costs. Acquisition - ANSWER The purchase (or merger) of an existing organization. Through this method of growth, the acquiring organization gains an established product in the market and may also reduce competition by eliminating one of its competitors. Affordable Care Act (ACA) - ANSWER A law passed by the federal government in 2010 that seeks to decrease the number of uninsured to improve health outcomes and streamline the delivery of healthcare. Diversification - ANSWER Strategic expansion into different businesses. Horizontal Expansion - ANSWER The acquisition and/or merger of two or more organizations that produce similar products or services. Internal Expansion - ANSWER A method of business growth that builds on an organization's capabilities and resources and may include developing new products and services, launching marketing efforts to increase market share, or introducing existing products into new markets. Most-Favored-Nation Clause - ANSWER A clause in a contract between a provider and an insurance company that guarantees that the provider will charge the insurance company prices that are lower than the prices the provider charges all other insurance companies it does business with. Networks - ANSWER Joint ventures and alliances between established organizations for growth purposes. By forming networks, organizations can enter a market more quickly and with minimal risk. Related Diversification - ANSWER Expansion into a different business that uses similar technologies (also called concentric diversification) or adds new products or services to an organization's existing offerings (also called horizontal diversification). Transaction Cost Economics - ANSWER A theory that suggests organizational boundaries are influenced by organizations' efforts to mitigate the costs of transactions and contractual hazards that are incurred by buying and selling assets and services. Transfer Pricing - ANSWER The "price" charged for intra-organization trade. (ex. the sale or transfer of goods and services within an organization). Unrelated (conglomerate or lateral) Diversification - ANSWER The addition of new products or services that have little or no overlap with an organization's current products/services and assets. Vertical Expansion - ANSWER Acquisition of a business that is a source of supplies for the acquiring organization (backward expansion) or that purchases from the acquiring organization (forward expansion). Vertical Integration - ANSWER Assimilation of the vertical components of an organization through greater internal control and coordination. Virtual Integration - ANSWER Coordination of intra-organization processes, flows, and outcomes through contractual, non- owned mechanisms. Joint-Venture Alliance - ANSWER A partnership between a small number of organizations in which each member has a direct ownership position in a shared investment and directional authority over the investment. Network Outsource Alliance - ANSWER An arrangement in which a core organization outsources functions to contract organizations. For example, some pharmaceutical companies use this type of alliance for drug discovery and clinical trials. Physician-Hospital Organization (PHO) - ANSWER A strategic alliance between a hospital and its medical staff, established to develop new services and compete effectively for managed care business. Pooled Interdependence - ANSWER An arrangement in which organizational subunits group their resources but mostly have their own separate processes and require little coordination. Pooled Service Alliance - ANSWER An arrangement in which the resources of a large number of organizations are grouped to produce value for member organizations. Group purchasing organizations (GPOs) are an example of this type of alliance. Reciprocal Interdependence - ANSWER An arrangement in which organizational subunits have multiple interactions and make multiple exchanges of outputs/products among organizational subunits prior to producing a final outcome. Complex products that necessitate constant learning and communication are developed through reciprocal interdependence. Resource Interdependence - ANSWER The relationships, dependencies, and interactions among organizational resources. Sequential Interdependence - ANSWER An arrangement in which resources/tasks are handed off from one organizational subunit to another. Information, materials, products, and resources must be highly coordinated among organizational subunits because these exchanges occur in a particular order. Strategic Alliance - ANSWER A mutually beneficial, long-term, formal relationship formed between two or more parties to pursue a set of common goals or to meet a critical business need while remaining independent organizations. Also called quasi-firm and hybrid arrangement. Mission - ANSWER A statement of an organization's purpose, aims, and values. Stakeholders - ANSWER Persons whom have a claim to or obtain some benefit from an organizations. Strategic Intent - ANSWER Statements expressing the ethics that guide an organization's actions and processes and the organization's standards for behavior among its staff. Values - ANSWER Statements expressing the ethics that guide an organization's actions and processes and the organization's standards for behavior among its staff. Vision - ANSWER A statement of the desired future state of the organization. Barriers to Entry - ANSWER Obstacles that impede an organization from entering a market. Certificate of Need (CON) - ANSWER State laws in the US that require organizations to obtain approval from a state planning agency before beginning a major capital project. Delphi Group Technique - ANSWER A method of achieving consensus among members of a group. Content experts make forecasts, develop solutions, or identify issues, and then these inputs are summarized, re-reviewed, and revised until a general consensus is reached. Economies of Scale - ANSWER Reductions in unit cost granted to purchasers of large volumes of products or services. Exit Barriers - ANSWER The costs an organization will incur if it exits a market. Five Forces Model - ANSWER A framework devised by Michael Porter that identifies five factors affecting the degree of competition in a market and the ability of established organizations to influence prices: (1) the potential for new entrants, (2) the threat of substitute products, (3) the power of suppliers, (4) the power of buyers, and (5) rivalry among competing sellers. Force Field Analysis - ANSWER A technique used to evaluate whether environmental influences support or undermine an organization's decisions/plans. Group Purchasing Organizations (GPOs) - ANSWER Alliances formed to give member organizations greater negotiating power and concessions on price, delivery times, and quality when purchasing products/services. Mobility Barriers - ANSWER Intra-industry obstacles that impede organizations in a strategic group from joining and competing in another group. Examples of mobility barriers include advertising, expenditures on research and development, distribution channels, breadth of product lines, and patents. Nominal Group Technique (NGT) - ANSWER A group method of identifying an issue or choosing a solution. Each member of a group suggests a solution, and then the group eliminates duplicate solutions and ranks those that remain to determine which should be chosen. PEST Analysis - ANSWER An analytical method of deriving forces that are driving change in an industry. Categories of forces explored include political, economic, social/cultural, and technological. Scenario Analysis - ANSWER A technique of proposing alternative futures that could come to pass if a specified environmental change occurs. This type of analysis is used by leaders to better understand and plan for future contingencies. Strategic Groups - ANSWER Clusters of organizations that use the same or similar strategies in an industry. By classifying organizations into strategic groups, leaders can better analyze the structure of an industry. Switching Costs - ANSWER The costs associated with changing a product, brand, marketplace, or supplier. White Paper - ANSWER An authoritative paper or analysis of an issue or a problem. Benchmarking - ANSWER Comparison of internal data to those of outside organizations for purposes of evaluating an organization's performance. Core Competencies - ANSWER The internal activities and functions central to fulfilling an organization's mission. Core competencies are strategically valuable and the essence of what makes an organization unique in providing value to its customers. Internal Environmental Analysis - ANSWER Evaluation of an organization's products, assets, operations, and other factors to determine whether the organization is carrying out its mission effectively and efficiently. Intangible Resources - ANSWER An organization's non-physical assets, including reputation, brand names, employees' skills, and industry knowledge. Organizational Capabilities - ANSWER Internal resources, such as physical assets, human resources, reputation, culture, and processes and routines, that enable an organization to accomplish its mission. SWOT Analysis - ANSWER An analytical tool used to develop an overview of an organization's strategic situation and better understand its environment. This type of analysis examines four important aspects of an organization: (1) strength, (2) weaknesses (internal environment), (3) opportunities, and (4) threats (external environment). Tangible Resources - ANSWER An organization's physical assets, including land, buildings/plant, equipment, cash, and personnel. TOWS Analysis - ANSWER A variant of SWOT analysis that helps leaders make better strategic decisions. Leaders compare external opportunities and threats to internal strengths and weaknesses to determine whether their organization's strengths can leverage its opportunities, minimize its threats, and so forth. Trend Data - ANSWER Data that portray changes over time (generally from one year to the next). Valuable Resources - ANSWER Resources that lack substitutes and are critical, rare, and difficult to imitate. Value Chain - ANSWER The internal processes or activities that an organization performs to create value for its stakeholders. The value chain provides a framework for analyzing an organization's strengths and weaknesses across the flow of product or services development and delivery. Accounts Receivable - ANSWER The monies customers owe to a business for goods and services they have received. Acid/Quick Ratio - ANSWER The combined amount of an organization's cash and marketable securities divided by its current liabilities. This ratio examines an organization's ability to pay its current liabilities with cash and cash equivalents. Activity Ratios - ANSWER Measures of how efficiently an organization uses its resources. Asset Turnover - ANSWER An organization's operating revenues divided by its total assets. This ratio identifies the amount of money each dollar of assets creates over a defined period. Average Payment Period - ANSWER An organization's accounts payable divided by its annual purchases divided by 365. This ratio presents the number of days an organization takes to pay its credit purchases. Balance Sheet - ANSWER A financial statement of an organization's assets, liabilities, and capital at a given point in time. Current Ratio - ANSWER An organization's current assets divided by its current liabilities. This calculation determines the degree to which an organization can pay its current liabilities with liquid assets. Days Cash on Hand - ANSWER The combined amount of an organization's cash and marketable securities divided by its operating expenses less depreciation, all divided by 365. This liquidity indicator evaluates how many days an organization could pay its daily operating expenses without additional cash inflows. Days in Account Receivable - ANSWER An organization's accounts receivable divided by its average daily revenue. This ratio show how many days of billings are owed to the organization and the average time it takes for a bill to be paid. Debt Ratios - ANSWER Measures indicating how an organization's assets are financed and its capacity for additional debt. Also called capital structure ratios. Inventory Turnover - ANSWER The cost of supplies (cost of goods sold) divided by an organization's average inventory. This ratio measures the number of times inventory is used or sold during a specific period. Liquidity - ANSWER An organization's ability to convert assets to cash. Long-Term Debt to Net Assets - ANSWER An organization's long-term debt divided by its net assets. This ratio measures the proportion of an organization's assets that is funded by debt. Net Assets to Total Assets - ANSWER An organization's net assets divided by it total assets. In the case of a not-for-profit organization, this ration indicates the proportion of assets that is financed by retained earnings and donations; in the case of a for-profit organization, this ratio indicates the proportion of assets that is financed by equity from profits and private contributions (the sale of stock and private investments). The higher the ratio, the lesser the debt and the greater an organization's capacity to borrow and to pay back existing debt. Net Margin - ANSWER An organization's net income divided by its total revenues. This ratio demonstrates the actual flow of all revenues, including non-operating revenues, into an organization. Net Present Value - ANSWER A measure that extends the concept of time value of money to evaluate the cumulative present value of an investment, which is the difference between the present value of cash inflows and the present value of cash outflows. Operating Margin - ANSWER An organization's net operating income divided by its net operating revenues. This ratio measures the percentage of revenues from operations (the organization's primary businesses) that accumulates as profits and exceeds expenses. Operating Statement - ANSWER A financial statement containing operating results for a specific period; includes revenues (monies taken in), expenses (monies paid out), and the difference between the two (profit or loss). Also referred to as profit and loss (P&L) statement, revenue statement, statement of financial performance, earning statement, and statement of operations. Present Value - ANSWER The value of future earnings in today's terms, calculated by multiplying future earnings by [1/(1+i)n], where i equals the interest or discount rate and n equals the number of years in the future. Profitability Ratios - ANSWER Measures that examine an organization's ability to produce earnings or profits. Ratio Analysis - ANSWER A quantitative analysis that uses financial data from an organization's financial statements to highlight its financial strengths and weaknesses. Return on Assets - ANSWER A ratio calculated by dividing net profits by total assets; shows the amount of earnings/profits gained for each dollar of invested assets. Time Value of Money - ANSWER The concept that money available at the present time is worth more than the same amount in the future because the value of money diminishes over time as a result of inflation, risk, and uncertainty of returns from investments. Times Interest Earned - ANSWER A ratio that shows an organization's ability to produce the earnings/profits necessary to pay the interest costs on its loans. For for-profit organizations, it is calculated by dividing an organization's profits (EBIT or EBITDA) by its interest expense. For not-for-profit organizations, it is calculated by dividing an organization's net revenues less expenses plus interest expense by its interest expense. Four P's - ANSWER attributes that have traditionally been used to establish an organization's market position: (1) product, (2) price, (3) promotion, and (4) place. Gap Analysis - ANSWER A method of identifying the distance between the organization's current position and its desired position with regard to its mission, vision, and values. Goals and Objectives - ANSWER Goals are broad results that an organization seeks to achieve. Objectives are narrower "stepping stones" that quantifiably support and elaborate on goals. Marketing - ANSWER The activities involved in promoting products and services, including creating, communicating, and delivering offerings that customers value. Marketing Plan - ANSWER A written document that details an organization's marketing strategies. Planning Structure - ANSWER The person(s) or unit that has responsibility for strategic planning. Positioning - ANSWER Designing and promoting an organization's products and services so that they occupy a distinctive place in the market. Project Charter - ANSWER A tool commonly used in project management that clarifies a project's key components, including scope, desired outcomes, participants, resources, time frames, and responsible parties, and ensures that the project's definition and desired outcomes coincide with the organization's strategic priorities and goals. Segmentation - ANSWER The division of a market into subsets of consumers with similar needs and wants; enables marketers to focus their marketing efforts on consumers most likely to buy a product or use a service. Strategic Plan - ANSWER A formal, written document that guides an organization's actions and informs stakeholders about the organization's direction and future activities. Strategic Priorities - ANSWER The most important areas addressed by a strategic plan. Business Plan - ANSWER A written document that defines, analyzes, and promotes a specific proposal, line of business, or innovative concept. Market Analysis - ANSWER A study that examines competitors and relevant markets, including the market position in which an organization is/will be placed, relative to other industry competitors. Marketing and Sales Management - ANSWER An organization's approach to promoting and selling its products/services, including the type of marketing to be used (ex. salespersons, direct mail, media advertising), the distribution channels to be used, and any related advantages (ex. internet, distributors, retailers). Organization and Management - ANSWER The structure, management team, ownership, and governance of organization. Service or Product Line - ANSWER The particular kind of type of services or products offered by an organization. Chain of Command - ANSWER The formal channel that defines the line of authority and reporting relationships up and down an organization's hierarchy. Corporate Structure - ANSWER An overarching management configuration that controls and supervises divisions or SBUs. A corporation is a legal structure that can be instituted to limit owners' personal liability and centralize management under a governing board. Differentiation - ANSWER Dividing and separating activities, functions, and products to make them distinct from others. Division of Labor - ANSWER Specialization of work that breaks down tasks within a production process so that personnel become highly proficient in components of the process. Integration - ANSWER Combining, coordinating, and collaborating duties and tasks to facilitate communication and efficiency. Span of Control - ANSWER The number of subordinates reporting to a supervisor. Strategic Business Units (SBUs) - ANSWER Profit centers in an organization that focus on a product line or market segment. Coalition - ANSWER An alliance of individuals and groups that support a cause or an effort. Leaders' and Participants' Readiness - ANSWER The degree of experience leaders and participants have leading change, their skill levels, their motivation, and their values. Organizational Readiness (Preparedness) - ANSWER The degree to which an organization understands planned changes and the rationales behind them, the alignment of an organization's culture with the planned changes, and leaders' and participants' readiness (preparedness) for change. Hubris - ANSWER Excessive pride and arrogance. Strategic Management - ANSWER Overseeing and directing daily activities in an organization to ensure they support achievement of the organization's mission and vision. Responsibilities may include designing organizational structures, policies, and procedures; evaluating budgets and progress toward goals; and coordinating staff training. Strategic Thinking - ANSWER Collecting, collating, and assembling disparate pieces of information to make decisions. Annual Budget Process - ANSWER Yearly generation of action plans and budgets to drive implementation of strategies and subsequent control of problems and evaluation of progress. Balanced Score Cards - ANSWER A monitoring system used to simultaneously evaluate multiple metrics and gather feedback on strategic progress. Budget Variance - ANSWER The difference between a budgeted amount and actual expenditures. Capital Budget - ANSWER The estimated dollar amount to be expended on projects in a given fiscal period. Dashboards - ANSWER A data visualization tool that displays the statuses of key metrics and performance indicators. Flexible Budget - ANSWER A budget that changes according to actual (not forecasted) activity volumes. Gantt Chart - ANSWER A bar chart that lays out the schedules, steps, and time frames of a project or projects. Governing Board - ANSWER An overarching entity whose principle responsibility is to oversee and direct an organization. Key Performance Indicators (KPIs) - ANSWER Critical milestones that can be used to measure progress toward an objective or a goal. Medical Staff - ANSWER An organized body of licensed professionals who are approved and given privileges to practice medicine at hospitals and other healthcare facilities. Static Budget - ANSWER A budget that is based on forecasted volumes and does not change when the volume of activity deviates from the forecast. Statistical Budget - ANSWER Merger of an organization's capital budget forecasts with estimated statistical projections for an organization's services or products for a given fiscal period. Strategic Action Cycle - ANSWER The four stages of the strategic management cycle: (1) strategic planning, (2) budgeting, (3) implementing strategy, and (4) controlling problems/monitoring progress. Strategic Planning Committee - ANSWER A standing or an ad hoc committee that is responsible for organizing and leading the organization's strategic planning process. Unfreezing - ANSWER The culture or practices that you wish to change. Change - ANSWER Add and/or take away according to your change plan. Freezing - ANSWER Now set the standard, and monitor to make sure it holds the new shape. Degree of Interdependence - ANSWER Reciprocal (high); sequential (moderate); pooled (low) External Stakeholders - ANSWER Customers, Suppliers, Governments, Local Communities Internal Stakeholders - ANSWER Employees, Investors, Board, Ot