Strategies & Alternatives

Chapter 5 Directional Strategies

Why Directional Strategies Are Important

As suggested by James Brian Quinn, strategic decisions set the overall direc- tion for an organization and shape its goals as well as its products and services, markets, and service delivery and support activities. The broadest strategic decisions are the directional strategies – vision, mission, values, and strategic goals – because they provide general limits for all subsequent organizational decisions. The directional strategies essentially document strategic thinking concerning “who we are, what we want to be, how we are going to behave, and what we want to achieve.”

“Strategic decisions are those that determine the overall direction of an enterprise and its ultimate viability in light of the predictable, the unpredictable, and the unknowable changes that may occur in its most important surrounding environments. They ultimately shape the true goals of the enterprise.”

—JAMes BriAn Quinn, sTrATegy AuThor AnD DArTMouTh professor

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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164 Strategic management of HealtH care organizationS

Directional strategies are profoundly important; they initially set all other activities in motion. The directional strategies create the first signs of momentum for the organization. They rest solidly on a close examination of the reasonably predictable changes that the strategic thinking activities (awareness, anticipation, analysis, and interpretation) have synthesized concerning the organization’s environment (external environmental analysis) and itself (internal analysis). in addition, to a considerable extent, the directional strategies must be able to weather the unpredictable and unknowable changes that will inevitably occur to guide subsequent organizational decisions. Vision, mission, and values are relatively enduring, whereas strategic goals may be short or long term, and will naturally evolve as some are accomplished and others are modified in a changing environment.

A change in the directional strategies is usually evolutionary rather than revo- lutionary. Therefore, directional strategies should be re-examined and modified over time, allowing an organization to remain nimble enough to maneuver in its changing environments. Transforming an organization’s identity and what it does is never an easy task. re-invention can be traumatic for the organization, but sometimes necessary for survival.

Because the directional strategies are relatively enduring, they must take an organization through good times and bad, and are difficult to change en masse; therefore, strategic managers must carefully create the organization’s directional strategies.

use concepts in this chapter to craft exciting and enduring directional strategies!

learning objectives

After completing the chapter you will be able to: 1. Discuss how external environmental analysis, service area analysis, and internal

analysis provide the context for developing the directional strategies. 2. Describe the roles of and relationships among mission, vision, values, and

strategic goals. 3. Develop a mission statement incorporating the important characteristics and

components of organizational missions. 4. Compose an organizational vision statement using the relevant characteristics

and components of organizational visions. 5. Develop a values statement based on established characteristics and components

of organizational values. 6. Use service category critical success factors to imbue strategic goals. 7. Develop a set of strategic goals that contribute to the mission, move the

organization toward the realization of its vision, and are consistent with the organization’s values.

8. Discuss the important issues in the governance of health care organizations and the role of boards of directors in creating and maintaining policy-making direction.

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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Chapter 5 DireCtional StrategieS 165

Strategic Management Competency After completing this chapter you will be able to develop directional strategies for a health care organization.

Directional Strategies

Mission, vision, values, and strategic goals are appropriately called directional strategies because they guide strategists when they make key organizational decisions. The mission captures the organization’s distinctive purpose or reason for being – it is a broadly defined and enduring statement of purpose that dis- tinguishes one organization from other organizations of its type and identifies the scope of its operations in product, service, and market (competitive) terms. The vision creates a mental image of what leaders want the organization to achieve. it is an expression of hope for a desired future state – a description of what leaders want the organization to accomplish when it is fulfilling its mission. Values are the fundamental or guiding principles that are held dear by members of the organi- zation and shape the organization’s culture. These are principles the managers and employees will not compromise while they are in the process of achieving the mission and pursuing the vision and strategic goals. Strategic goals are bench- marks or end results related to critical success factors; consequently, the goals should provide more specific direction that accomplishes the mission and vision. unfortunately, there is rarely a clear distinction among the concepts and terms actually used in these statements – especially in the mission, vision, and value statements. studies of actual statements reveal that even when the statements are clearly labeled there is a wide variety of terms used to express the ideas contained in them.1 from an analysis of 100 firms in the Fortune 500, it was suggested that many mission statements are written at an educational level above what would be effective to communicate to all stakeholders.2

The Process for Establishing Directional Strategies

exhibit 5–1 provides an overview of the process for establishing the directional strategies. The exhibit demonstrates the sequence and the need to understand the broadest external analysis to the more narrow internal analysis followed by the narrower still service area competitor analysis. only after a thorough understand- ing of the situation the organization faces are the directional strategies formulated.

Step 1: Review Results of Situational Analysis in Chapter 2 guidelines for a situational analysis were developed and it was noted that an understanding of the external environment is essential for organizations to answer the question, “What should we be doing?” The “rules of success” are written outside the organization and these rules must be clearly understood before an effort is made to develop the mission, vision, values, and strategic goals

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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166 Strategic management of HealtH care organizationS

of the organization. A critical aspect of the external environment is the nature of the competitors in the organization’s market space (Chapter 3, service Area Competitor Analysis).

The more organizational leaders know about the strengths and weaknesses of competitors, the more likely they will be able to position the organization to establish or maintain its ability to compete effectively (its competitive advantage) as covered in Chapter 4. A complete review of the organization’s situation with regard to external and internal factors is necessary before beginning the process of formulating the directional strategies.

Step 2: Develop a Statement of Mission Chester Barnard, in his seminal book, The Functions of the Executive, stated that only three things are needed to have an organization: (1) communication, (2) a willingness to serve, and (3) a common purpose. The inculcation of the “belief in the real existence of a common purpose” is, according to Barnard, “the essential executive function.”3 purpose, among other things, helps managers make sense of the environment. When the purpose of an organization is clearly understood, the

EXHIBIT 5–1 The Process for the Development of Directional Strategies

Step 1 – Review Results of Situational Analysis – External Analysis, Service Area Competitor Analysis, and Internal Analysis

Step 2 – Develop a Statement of Mission

Step 3 – Develop a Statement of Vision

Step 4 – Develop a Statement of Values as Guiding Principles

Step 5 – Develop Strategic Goals

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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Chapter 5 DireCtional StrategieS 167

ESSEnTIAlS foR A STRATEgIC THInkER 5–1

What is the long-term care industry?

The long-term care industry is comprised of organizations that provide rehabilitative, restora- tive, or ongoing skilled nursing care to patients who require assistance with daily living. A variety of facilities dedicated to the intensity of care required have developed over time. The “old folks home” may now be a memory care facility, a skilled nursing facility, a rehab facility, and so on. The following list represents the main types (listed in ascending order by intensity of care).1

Independent lIvIng

Adult communities usually impose age restric- tions, offer social activities, and provide increased security. Generally, these facilities do not offer medical services but may facilitate access to care by providing convenient transportation, sched- uled visits from contract providers, and so on. Typically, residents are age 75 or younger.

Congregate Care faCIlItIes (CCfs)

These facilities provide social activities, security, and non-health related services such as meals,

housekeeping, and transportation for shopping and health care appointments. The target age population is 75–82 years.

assIsted lIvIng faCIlItIes (alfs)

Although there is no uniformly accepted defi- nition of ALFs, the U.S. Department of Health and Human Services defines ALFs as residences that provide either routine general protective oversight or assistance with activities necessary for independent living to mentally or physically limited persons. These facilities generally pro- vide care for individuals between the ages of 70 to 90+ years.

skIlled nursIng faCIlItIes (snfs)

The statutory definition of a skilled nursing facility as provided in the Social Security Act is an insti- tution (or a distinct part of an institution) that is engaged in providing skilled nursing care and related services for residents who require medical or nursing care, or rehab services (for the rehabili- tation of injured, disabled, or sick persons), and is

complexity of the environment can be reduced; leaders are able to analyze their situation in light of the goals the organization wishes to achieve. Thus the com- plex environment is no longer a “mere mess of things.” As a statement of purpose, the mission plays an important role in focusing strategists’ attention on relevant aspects of the environment.

for example, if the Ceo of a long-term care facility attempts to consider all the turbulence in the organization’s environment, it will be overwhelming. Can anyone effectively track all of the changes taking place in biotechnology, cultural values, demographics, and politics? however, if the Ceo focuses on only those aspects of the environment that relate to the mission of the long-term care organi- zation, the task becomes more manageable. essentials for a strategic Thinker 5–1, “What is the Long-Term Care industry?” provides an overview of this expanding industry.

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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168 Strategic management of HealtH care organizationS

The common purpose (mission) to which Barnard referred is the reason that organizations exist. some organizations exist to make money for the owners; some are founded to provide health care to indigent patients; others are started to deliver health services as conveniently as possible, or to provide care to individu- als who belong to the same managed care plan.

Mission: A Statement of Distinctiveness in the hierarchy of goals (end results and organizational plans to accomplish them), the mission captures the organization’s distinctive character. Although a well-conceived mission is gen- eral, it is more concrete than vision. An organizational mission is an attempt to capture the essence of the organizational purpose and commit it to writing. stryker Corporation, an international leader in the development of medical technologies, has a mission statement that is simple and to the point – “Together with our customers, we are driven to make healthcare better.”4 emphasis is placed on the interactions with customers, physicians, researchers, and so on, in the development of innovative products and services. This simple statement is used to coordinate the actions of thousands of employees in more than 100 countries.

An organizational mission is a broadly defined and enduring statement of purpose that distinguishes a health care organization from other organizations of its type and identifies the scope of its operations in product, service, and mar- ket (competitive) terms.5 The mission statement of the university of Texas MD Anderson Cancer Center in exhibit 5–2, for example, distinguishes the center from other health care organizations in the service area by its relationship with the university of Texas; its emphasis on a specific disease (cancer); its commit- ment to the integration of patient care, research, education, and prevention; and its intention to accomplish these through education at the undergraduate as well as graduate levels.

not primarily for the care and treatment of mental diseases. Nursing facilities offer the most intense level of long-term care for individuals requiring around the clock care; they generally have transfer agreements with one or more hospitals.

Medicaid is the primary payer of long-term care services. Over 60 percent of the patients in nursing homes as well as almost 20 per- cent of residents in assisted living facilities,2 are Medicaid recipients. Medicare recipients, by comparison, return to their home after a relatively short stay of 36½ days for purposes of rehabilitation.

The future of the long-term care industry appears very promising because of the aging

of the population and advances in medical science that have prolonged human life. As the population ages, the demand for rehabilitative services, assisted living services, and treatment of chronic conditions increases.

referenCes

1. These definitions taken from: Long Term Care

Education. (www.ltce.com/learn/skilledcare.

php).

2. Payment for services information is from:

www.ahcancal.org/advocacy/

StateLongTermPostAcute/Pages/default.

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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Chapter 5 DireCtional StrategieS 169

MD Anderson developed an effective logo that states that MD Anderson Cancer Center is dedicated to “Making Cancer history” with a bold red line through the word “cancer”. With cancer “wiped” out, MD Anderson is definitely making history. since 1990 when U.S. News & World Report began a ranking of hospitals, MD Anderson has been ranked first or second, and has received the top ranking nine times in the past ten years.

Although mission statements are relatively enduring, they must be flexible in light of changing conditions. The changes facing academic medicine will continue to impose pressures on specialized centers of excellence such as MD Anderson because of the substantial costs involved in integrating patient care with the teach- ing and research mission and the increasing reluctance of payers to reimburse for educational costs. essentials for a strategic Thinker 5–2, “What Are Academic Medical Centers?” highlights the nature and some challenges facing academic medical centers. Despite the challenges, MD Anderson has retained its mission statement for a number of years and has remained focused on its distinctiveness in a rapidly changing environment.

EXHIBIT 5–2 Mission Statement of the University of Texas MD Anderson Cancer Center

The mission of the University of Texas MD Anderson Cancer Center is to eliminate cancer in Texas, the nation and the world through outstanding integrated programs in patient care, research, education and prevention, and through education for undergraduate and graduate students, trainees, professionals, employees, and the public.

Source: University of Texas MD Anderson Cancer Center.

ESSEnTIAlS foR A STRATEgIC THInkER 5–2

What are academic medical centers?

According to the Association of American Medical Colleges (AAMC), an academic medical center (AMC) is a “university-based hospital or health system that is organizationally or admin- istratively integrated with a medical school.” Despite the Association’s singular definition, AMCs are diverse and complex – no two are alike. They differ in organizational, operational, financial, and governance structures. At their core, AMCs typically include a medical school, a teaching hospital, and faculty who teach medi- cal students and specialty trainees as well as provide clinical care for patients. The current

trend is toward greater alignment among these three components, yet no single corporate struc- ture is considered ideal. Of the approximately 140 allopathic medical schools, only 25 percent are fully integrated such as the University of Michigan Health System where the medical school, hospital, and faculty practice fall under one corporate structure. On the other end of the spectrum, fewer than 10 percent operate as separate entities, similar to George Washington University. In between are multiple examples of “corporate” alignment between school and hos- pital (University of Virginia), school and faculty

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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170 Strategic management of HealtH care organizationS

(Columbia University Medical Center), and hos- pital and faculty (Vanderbilt University Medical Center). Where an AMC falls along this alignment continuum is a product of its institutional history, culture, and financial interrelationships.

Not only do AMCs provide patients and their communities with health care services ranging from everyday needs to the most specialized care, in addition, they:

● Offer unique care and services not available anywhere else in their market.

● Teach the next generation of health care professionals and train these professionals in new care delivery models.

● Develop technologies, forge new discover- ies, and conduct research that improve the health and well-being of the citizens they serve.

According to a 2016 Advisory Board Outlook, AMCs account for only 5 percent of hospitals in the United States, but they deliver 25 percent of all clinical care and represent 100 percent of the hospitals featured on U.S. News & World Report’s 2016–2017 Honor Roll. In addition, AMCs pro- vide 41 percent of all hospital-based charity care and 28 percent of all Medicaid services while training over 100,000 residents annually.

Despite serving as a “safety net” for critical services, AMCs are economic engines, respon- sible for nearly $34 billion in state tax revenue

and more than 3.5 million full-time jobs (1 out of every 40 wage earners works either directly or indirectly for an AMC). A 2011 AAMC study estimated that the combined economic impact of AAMC member medical schools and teaching hospitals was over $587 billion.

Most AMCs have characteristics that can make planning challenging, especially their tripartite mission of clinical care, research, and educa- tion. Planning around a single mission is difficult enough, but to embrace and acknowledge all three can be insurmountable. Many times the goals and objectives for one mission can be at odds or in conflict with another. Plans to grow and invest in a strategic clinical service may result in less funding or resources to pursue research initiatives. Conversely, using limited capital to build more lab research space may require post- poning the expansion of patient clinics.

In addition to having several missions, AMCs have multiple stakeholders (i.e. chief execu- tives, deans of medical schools, department chairs, hospital or service line directors, etc.) and multiple channels of engagement with varying levels of oversight and scopes of responsibility. The relationship among these various organiza- tional components is often poorly defined but highly co-dependent and leads to an extensive consensus-driven decision-making process.

Source: David Randall, Senior Vice President, Strategy and Business

Development, University of Alabama at Birmingham Health

System.

Mission statements are sometimes not the true “living documents” that are capable of encouraging high performance. studies of mission statements confirm that the full potential of this directional strategy is rarely achieved.6 often mission statement creators seem to feel obligated to make reference to specific stakeholder groups such as patients or communities because of institutional pressures and refer to pressing social issues because of policy decisions within the organization.7 To be effective, mission statements must be carefully crafted to the organization’s unique purpose.8

one study of hospital mission statements found that almost 85 percent of the respondents had mission statements; however, some of the executives who

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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Chapter 5 DireCtional StrategieS 171

completed the survey did not perceive a high level of commitment to the state- ment by employees or that specific actions were influenced very much by the mission.9 Another study of state-level departments of public health indicated that more than 90 percent had formal, written mission statements. Despite the frequency with which formal mission statements are encountered, a great deal of confusion exists regarding their value and the influence that these statements actually have on behavior within organizations.10

This confusion is unfortunate because the mission statement is a crucially important part of strategic goal setting. it is the superordinate goal that stands the test of time and assists top management in navigating through periods of turbulence and change. it is, in other words, the stake in the ground that provides the anchor for strategic planning. it must be emphasized, however, that mission statements, even at their best, can never be substitutes for well-conceived and carefully formulated strategies.11 A sense of mission is not a guarantee of success. A positive relationship between mission statements and performance assumes a commitment to the organizational purpose. This is especially true of health care organizations.12 The organization has to adhere to the mission and regularly review it to be sure that it remains relevant. When the mission is carefully crafted, mission fulfillment influences a variety of key psychological states related to employee motivation (e.g. employee engagement, organizational identification, and so on).13 it has been suggested that “mythopoetic leaders,” who use the mission of the organization to anchor behaviors, can be instrumental in building robust cultures that can lead to a competitive advantage.14

Mission statements remind managers in health care organizations to ask questions of themselves and their colleagues. it is important to ask individuals throughout the organization the following questions as the answers radically affect how the organization performs. These questions include:

● Are we not doing some things now that we should be doing? A rehabilitative medicine center, after analyzing the environment and studying its own referral patterns, might determine that it should enter a joint venture with a group of surgeons to provide outpatient surgery services. The rehabilitative medicine center, located in a professional building adjacent to an acute care hospital, had simply been referring patients requiring surgery to the hospital. however, insurance company policies and patient preferences suggested that the majority of surgeries could be performed on an outpatient basis.

● Are we doing some things now that we should not be doing? The rehabilitative medicine center, after extensive analysis, concluded that it should divest its rehabilitative equipment business and contract with medical and sports equipment suppliers for needed services.

● Are we doing some things now that we should be doing, but in a different way? Throughout its history the rehabilitative medicine center required patients to come to the facility for services. for many patients, particularly those with serious injuries, travel to the facility was difficult and often impossible. As a strategic response, the center purchased a mobile trailer with a fully equipped diagnostic and treatment facility that can transport services to local high schools and industrial locations.15

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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172 Strategic management of HealtH care organizationS

An organization should carefully evaluate strategic decisions using its mission statement when new opportunities are presented. The above three questions may be used to determine whether or not the new opportunity is consistent with its essential distinctiveness. Moreover, these questions are important guards against mission drift, which is the tendency to move into businesses and programs not in line with the stated mission.16 As an example, Cancer Treatment Centers of America’s (CTCA) mission statement (see exhibit 5–3) provides guidance for its leaders and employees in its network of hospitals across the country in determin- ing whether or not new opportunities should be pursued. CTCA has established a reputation for “treating the whole person.” in pursuit of this central goal, the use of state-of-the-art technologies is prioritized and treatment teams include medi- cal oncologists, spiritual support personnel, rehabilitation therapists, dietitians, radiation oncologists, naturopathic clinicians, and more. Adherence to the mis- sion enables CTCA to evaluate any and all innovative and even sometimes less conventional cancer care.

EXHIBIT 5–3 Mission Statement of Cancer Treatment Centers of America

Cancer Treatment Centers of America (CTCA) is the home of integrative and compassionate cancer care. We never stop searching for and providing powerful and innovative therapies to heal the whole person, improve quality of life, and restore hope.

Source: Cancer Treatment Centers of America.

Another important function of mission statements is to assist the strategic leader in asking “what should we not be doing?” if leaders do not ask this ques- tion each time they face a new opportunity they open themselves to two dys- functional possibilities. The first is mission drift and the second is mission creep. Mission drift occurs when the mission is altered, often unintentionally, and the organization fades into areas it should not pursue. indeed, mission statements do eliminate certain areas of operation (for example, a well formulated mission state- ment would discourage a health care organization from entering the construction industry). When organizations devoted primarily to health care delivery engage in businesses where they have little or no experience the results are unsuccessful more often than not.

Another temptation for organizations is mission creep. in this case the health care organization does not drift into an unfamiliar activity, it simply allows itself to add on more and more related activities to the point where the diversity of operations becomes unmanageable. Consider a local public health department founded by a local government to ensure the health of the public. initially, this was interpreted as providing disease control services, vital records, and health policy advocacy. Then the absence of primary care resources for the local medi- cally indigent population required the health department to open primary care clinics; because many in the local population did not have the transportation required to receive the services of the primary care clinics, health officers decided to devote some minimal resources to home health activities. over time the demand for home health grew and consumed more and more limited resources.

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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Chapter 5 DireCtional StrategieS 173

eventually, the local health department with essentially the same budget it had when it was founded, was providing a portfolio of services that included disease control, primary care, and home health and was considering additional services in the area of environmental health. This example demonstrates how organiza- tions can overwhelm their resources by allowing too many activities and services to creep into their organizational missions, even while proceeding with the best of intentions.

Characteristics of Mission Statements The mission statement of shriners hospitals for Children (exhibit 5–4) illustrates some of the important characteristics of an effective mission statement. The product portfolio (specializing in services to children with neuromusculoskeletal conditions, burn injuries, and other special health care needs) is articulated in the mission statement so that interested parties can immediately understand the uniqueness of shriners hospital for Children. Clearly, this is not the typical children’s hospital. Moreover, insights are given into the shriners hospital for Children’s concern for family, diversity, and so on. using the shriners mission statement, four important characteristics of effective mission statements can be illustrated:

1. Missions are broadly defined statements of purpose. Well-formulated mission statements are written and communicated to those involved in doing the work of the organization. They are broad but also, in a sense, specific. The shriners hospital for Children’s mission statement specifies the specific type of work it does. That is, mission statements should be general enough to allow for innovation and expansion into new activities when advisable (shriners covers this with the phrase “other special healthcare needs”) yet narrow enough to provide direction.17

2. Mission statements are enduring. The purpose, and consequently the mission, of an organization should not change often and should be enduring. people are committed to ideas and causes that remain relatively stable over time. shriners hospital for Children has evolved from specializing in pediatric orthopedic care in the 1920s, to burn units, to its present portfolio. The consistent underlying theme has been its focus on children and their families.

3. Mission statements should underscore the uniqueness of the organization. shriners hospital has a number of unique qualities including its focus on children, its emphases on education and research, and its non- discriminatory philosophy of providing care without regard to the patient’s ability to pay.

4. Mission statements should identify the scope of operations in terms of service and market. however, it is important for the mission statement to specify what business the organization is in (health care) and who it believes are the primary stakeholders.18 note that shriners hospital for Children clearly identifies the type of conditions it is committed to treating.

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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174 Strategic management of HealtH care organizationS

These characteristics illustrate the essential properties of well-conceived and communicated mission statements and outline worthy ideals that are always in the process of being achieved by strategic leaders in health care institutions.19 The mission provides direction. Mission statements are not easy to write, but fortu- nately there is general agreement on what they should include.

Components of Mission Statements There is no one best way to develop and write mission statements. research has shown, however, that in non-profit organizations the content of mission statements is influenced by interorganiza- tional peers or other non-profits in their own networks.20 studies of Canadian not-for-profit hospitals indicate that they emphasize a variety of factors in their mission statements.21 To define the distinctiveness of an organization, mission statements must highlight uniqueness. some of the more important components of a mission are discussed and illustrated with the use of mission statements from a variety of health care institutions.

● Mission statements target customers and markets. frequently the mission statement provides evidence of the kind of customers or patients the organization seeks to serve and the markets where it intends to compete. exhibit 5–5 provides the mission statement of the Cleveland Clinic. This mission statement clearly states who are considered the customers or stakeholders of the Clinic – the patients, researchers, and all employees. ultimately, the mission is to provide better care for the sick by investigating the reasons for their illness, providing education to those who serve the patients, and engaging in research.

The mission of The Cleveland Clinic is to provide better care of the sick, investigation into their problems, and further education of those who serve.

Source: Cleveland Clinic.

EXHIBIT 5–5 Mission Statement of The Cleveland Clinic

● Mission statements indicate the principal services delivered or products provided by the organization. A specialized health care organization might highlight the special services it provides in its mission statement. Amedisys

EXHIBIT 5–4 Mission Statement of Shriners Hospital for Children

Shriners Hospitals for Children has a mission to: ● Provide the highest quality care for children with neuromusculoskeletal conditions, burn

injuries and other special healthcare needs within a compassionate, family-centered and collaborative care environment.

● Provide for the education of physicians and other healthcare professionals. ● Conduct research to discover new knowledge that improves the quality of care and quality

of life of children and families.

This mission is carried out without regard to race, color, creed, sex or sect, disability, national origin or ability of a patient or family to pay.

Source: Shriners Hospitals for Children.

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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● Mission statements specify the geographical area within which the organization intends to concentrate. This element is most frequently included when there is a local, state, or regional aspect to the organization’s service delivery. The California Department of public health’s mission statement provides an example of this component of mission statements (see exhibit 5–7).

EXHIBIT 5–6 Mission Statement of Amedisys, Inc.

To provide patient-centered care every day and be the leading healthcare at home team in the communities we serve.

Source: Amedisys, Inc.

EXHIBIT 5–7 Mission Statement of California Department of Public Health

The California Department of Public Health is dedicated to optimizing the health and well- being of the people in California.

Source: California Department of Public Health.

EXHIBIT 5–8 Philosophy Statement of Amedisys, Inc.

Taking care of your loved ones as we would our own – that is the philosophy Amedisys was built on. This simple concept, coupled with our core beliefs, has guided Amedisys growth in becoming one of the nation’s leading health care companies focused on bringing home the continuum of care.

Source: Amedisys, Inc.

● Mission statements identify the organization’s philosophy. frequently the mission of an organization will include statements about specific and distinguishing beliefs, values, aspirations, and priorities. Although not specifically part of the mission statement, it is useful to see the statement of philosophy that Amedisys provides in addition to its mission statement (see exhibit 5–8).

● Mission statements confirm an organization’s preferred self-image. how a health care organization views itself may constitute a singularity that should be included in the mission. The mission statement of fresenius Medical Care makes it clear that it views itself as the standard setter when it comes to health care (see exhibit 5–9).

is a home health and hospice care company dedicated to providing a continuum of care in the home setting. its mission statement reflects its goal to deliver complete home health and hospice services to patients in their homes (see exhibit 5–6).

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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176 Strategic management of HealtH care organizationS

● Mission statements specify the organization’s desired public image. This image customarily manifests itself in statements such as the organization’s desire to be a “good citizen” or a leader in the communities where its operations are located or a similar concern. however, organizations may have a particular approach or focus that they want to communicate to the public. The mission statement of promise healthcare, a long-term acute care hospital (LTACh) (see exhibit 5–10), expresses its intent to be known as a high-quality, professional, and compassionate organization.

EXHIBIT 5–10 Mission Statement of Promise Healthcare

Promise Healthcare’s mission is to deliver the highest quality of professional and compassion- ate care to our patients and their loved ones.

Source: Promise Healthcare

not every one of the characteristics should necessarily be included in the mission statement.22 Any particular statement will likely include one or several of these components but seldom will include all. The organization must decide which of these, or some other characteristics, really account for its distinctiveness and emphasize them in the mission statement. interestingly, studies have found that higher-performing organizations generally have more comprehensive mis- sion statements. elements such as organizational philosophy, self-concept, and desired public image were particularly associated with higher-performing organi- zations in the sample studied.23

Building a Mission Statement for a mission statement to be useful a leader must begin the discussion concerning the need to examine or re-examine the organization’s mission to clearly state its purpose. This statement helps all employees focus their efforts on the most important priorities. one process that can be conducive to building mission statements is to convene a group of interested employees (administrative and non-administrative) who understand the issues facing the health care system as well as the strengths and weaknesses of the organization. each member of the group should understand the “big picture” and be able to look at things from the perspective of the Ceo, not just from his or her personal viewpoint.

prior to actually writing the mission statement, everyone should understand why a mission statement is being written or rewritten and the desire for a well- understood and widely communicated statement of organizational distinctive- ness. Without a common ambition shared among organizational members, the usefulness of the mission statement and its ultimate purpose will not be realized.

EXHIBIT 5–9 Mission Statement of Fresenius Medical Care

To deliver superior care that improves the quality of life of every patient, every day, setting the standard by which others in the health care system are judged.

Source: Fresenius Medical Care.

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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Chapter 5 DireCtional StrategieS 177

once commitment has been established, assessments should be made of what makes the organization successful from the perspectives of employees and other key stakeholders. further, consideration should be given to what perceptions of success will be in the future.

After the group has been given time to think about the organization, its dis- tinctiveness in its environment, as well as the likely future it will face, the group should meet in a planning retreat. often it is useful to remove the participants from the office, and encourage unplugging from social media to have the oppor- tunity to truly focus on the organization’s mission. To stimulate strategic thinking, each person should be asked to reflect on the mission statement components listed in exhibit 5–11. recognizing that some members may not have been previously involved in writing a mission statement, this exhibit was developed to encourage initial thought without introducing too much structure into the process. group members should be asked to present key words relative to each of the compo- nents. The key words should be recorded and eventually used as the raw material for the mission statement. participants can be encouraged to generate the key words through a series of fill-in-the-blank statements listed under each mission statement component.

EXHIBIT 5–11 Strategic Thinking Map for Writing a Mission Statement

Component key Words reflecting Component

1. Target customers and clients:

“The individuals and groups we attempt to serve are …” Do not be limited to only the obvious.

2. Principal services delivered:

“The specific services or range of services we will provide to our customers are …”

3. Geographical domain of the services delivered:

“The geographical boundaries within which we will deliver services to our customers are …”

4. Specific values:

“Specific values that constitute our distinctiveness in the delivery of our services to customers are …”

5. Explicit philosophy:

“The explicit philosophy that makes us distinctive in our service area is …”

6. Other important aspects of distinctiveness:

“Other factors that make us unique among competitors are …”

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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178 Strategic management of HealtH care organizationS

After discussion and fine-tuning of the language, a draft of the mission state- ment can be developed. The draft should be refined by the group until there is consensus on the wording and meaning of the mission statement. once the group is satisfied with the statement, it should be circulated among key individuals to gain their input and support.

Top-Level Leadership: A Must for Mission Development for a mission statement to be a living document, employees must develop a sense of ownership and commitment to the mission of the organization. involving employees is there- fore essential in the development and communication of the mission. however, top-level leadership must be committed. Management must stay engaged in the mission development process but not dominate it. Board rooms and executive suites can produce great ideas for mission development but everyone must com- mit to the mission for it to be achieved.24

Developing a mission statement is a challenging task. frequently, attempts are made to formulate “blue sky” statements of environmental and competitive con- straints and little more. for example, it is of little real value to state that a health care organization is devoted to being a good citizen in the community and to paying wages and benefits comparable to those of other organizations in the area. realistically, the organization must be a good citizen and, if it wants employees, its wages and benefits must be competitive.

The role of the chief executive officer in formulating the mission should not be underestimated. Mission statement development is not a task that should be del- egated to a planning staff. The Ceo, the leadership team, and other key individu- als who will be instrumental in accomplishing the mission should provide input.

Although the process appears to be simple, the actual work of writing a mis- sion statement is time consuming and complex, with many “drafts” before the final document is produced. The strategic thinking map (exhibit 5–11) is useful for identifying clients, services, and domain; however, the development and com- munication of a well-conceived mission statement requires use of the compass (leadership) as well.

Step 3: Develop a Statement of Vision The mission is developed considering the needs of stakeholders – groups who have a vested interest in the success and survival of the organization. Vision, on the other hand, is an expression of hope. it is a description of the organization when it is fulfilling its purpose.25 Vision involves creating compelling images of the future and produces a picture of what could be and, more importantly, what a leader wants the future to be.26

effective visions possess four important attributes: idealism, uniqueness, future orientation, and imagery.27 Visions are about ideals, standards, and desired future states. The focus on ideals encourages everyone in the organization to think about possibilities. it is dynamic and collaborative, a process of articulating what the members of an organization want to create. Vision communicates what the organization could be if everyone worked diligently to realize the potential. health care organizations need leaders who are forward looking. effective visions

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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Chapter 5 DireCtional StrategieS 179

are statements of destination that provide direction to where the organization’s leadership collectively wants to go. finally, visions are built on images of the future. When people are asked to describe a desirable place or thing, they almost always do so in terms of images. images motivate people to pursue the seemingly impossible. one study of archival information in 151 hospitals and experiments with 62 groups of full-time employees found that leaders who used specific combinations of large amounts of vision imagery and smaller amounts of values improved organizational performance by triggering a shared sense of organiza- tional goals thereby improving coordination.28

Origins of Vision health care leaders develop vision from an appreciation of the history of the organization, a perception of the opportunities present in the environment, and an understanding of the strategic capacity of the organization to take advantage of these opportunities. All these factors work together to form an organization’s hope for the future.

History and Vision An organization’s history is comprised of a variety of events and activities including the founder’s philosophy. The story of st. Jude Children’s research hospital began with Danny Thomas, a struggling enter- tainer, who prayed to st. Jude Thaddeus, the patron saint of hopeless causes and said, “show me my way in life and i will build you a shrine.” Thomas’ fortunes changed and he became one of the best known stars in the entertain- ment industry.

in the 1950s, Thomas enlisted members of the business community in Memphis to build a hospital for children. supporters became convinced that rather than a general hospital for children, a research hospital devoted to childhood cancers would be a better option. Thomas and his wife devoted their time to funding the hospital and eventually enlisted fellow Americans of Arabic-speaking descent to assist. The American Lebanese syrian Associated Charities (ALsAC) now raises hundreds of millions of dollars annually to support st. Jude. over 9 million donors and more than one million volunteers contribute to make st. Jude’s the nation’s largest health care charity.

Think of the inspirational impact of the relationship between the history and vison of st. Jude to employees, donors, and all other stakeholders. Danny Thomas’ dream was that “no child should die in the dawn of life.” in 1962 the survival rate for childhood cancer, for example, was 20 percent. As of 2017, it is over 80 percent. And, no child is turned away for an inability to pay.29

Vision and the Environment The vision must be relevant to the larger sys- tem and be sensitive to the changes taking place in the general and health care environments. for example, essentials for a strategic Thinker 5–3, “What Are health Care sharing Ministries?” demonstrates how some religious organizations reacted to the passage of the Affordable Care Act in 2010 that offered an exception to the individual insurance coverage mandate allowing individuals with simi- lar ethical or religious beliefs to form organizations to share medical bills. This resulted in the emergence of health care sharing ministries.

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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180 Strategic management of HealtH care organizationS

ESSEnTIAlS foR A STRATEgIC THInkER 5–3

What are Health care Sharing ministries?

Health Care Sharing Ministries (HCSM) are faith- based not-for-profit organizations that allow mem- bers who share the same religious beliefs and values to share the risks of their health care expenses. Customarily, these ministries are 501(c)(3) organiza- tions that are considered legal alternatives to the individual mandate under the Affordable Care Act. The ACA allowed an exception for individuals with a “common set of ethical or religious beliefs” to share one another’s medical bills.1

Members join health sharing ministries for a variety of reasons. Some join because they can obtain less expensive coverage. The lower cost is made possible by the fact that these ministries are not required to include coverage in areas such as mental health, preventive care, and vision coverage for children. Others join because required procedures in insurance plans violate their personal religious beliefs.

It is estimated that half a million people rely on HCSMs for their health coverage. Some of the larg- est HCSMs include Samaritan, Medi-Share, Christian Healthcare Ministries, and Liberty HealthShare. It is important to note that HCSMs are not insurance companies in the conventional sense. Perhaps the most important issue is that they are not regu- lated and represent potentially riskier alternatives than traditional health care insurers. This risk was highlighted by the actions of a Circuit Judge in Kentucky who ruled that Medi-Share must cease operations in the state unless it obtains regulatory approval from the state Department of Insurance.2 Kentucky and other states, notably Washington and Oklahoma, have been unsuccessful in their efforts to close down HCSMs. It is estimated that 30 states exempt HCSMs from the same regulations as insurance companies, although some fear this leaves members without protection if their health care costs are not covered.3

Monthly costs typically range from around $64 for individual coverage to $450 per month for family coverage. The larger plans do not have a maximum limit on the coverage, although some plans have maximum payout of $125,000 per incident and $1,000,000 per diagnosis. Annual personal responsibility amounts (similar to a deductible) have a relatively large range depend- ing on the actual HCSM involved. For example, Medi-Share offers six programs and the annual personal responsibility can range from $1,250 to $10,000 depending on the program selected. Christian Healthcare Ministries’ Gold, Silver, and Bronze options have annual personal responsi- bility of $500, $1,000, and $5,000 respectively.

Medi-Share members participate in a pre- ferred provider organization and are charged negotiated rates as long as they stay in the network. Membership cannot be dropped for developing a medical condition and some HCSMs do not impose annual or lifetime limits.

referenCes

1. Much of this discussion relies on Maya

Dollarhide, “Health Care Sharing Ministries:

Obamacare Alternative,”

www.investopedia.com/…/health-care-

sharing-ministries-obamacare-alternative.asp.

2. Roger Alford, “Judge Shuts Down

Christian Health Ministry Medi-Share in

Kentucky,” Insurance Journal (October 4,

2012), www.insurancejournal.com/news/

Southeast/2012/10/04/265482.htm.

3. Kimberly Leonard, “Christians Find their

Own Way to Replace Obamacare,” U.S. News

(February 23, 2016). www.healthleadersmedia.

com/health-plans/christians-find-their-own-

way-replace-obamacare#.

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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Chapter 5 DireCtional StrategieS 181

Vision and Internal Capacity A leader’s vision is related to the perceived strengths and weaknesses of the organization. The challenge to reconcile vision with internal capacity is illustrated by senge’s integrative principle of creative tension.30 Creative tension comes into play when leaders develop a view of where they want to be in the future (vision) and tell the truth about where they are now. The current reality is heavily determined by the organization’s internal capacity and how this capacity relates to its aspirations.

organizations deal with this creative tension in different ways. if the organi- zation has been successful in the past, it may be aggressive about the future and raise its current aspirations in pursuit of the vision. if it has experienced failure, limited success, or merely has a cautious philosophy, management may choose instead to revise and reduce the vision to bring it more in line with cur- rent reality.

Leaders have visions; organizations gain and lose competitive advantage based on how the vision fits the environment and the strategic capability of the organi- zation to capitalize on opportunities. however, developing a vision is “messy work,” and for this reason it is necessary to examine more closely what organiza- tional vision actually means.

Health Care Strategists as Pathfinders Building a vision for an organiza- tion is frequently referred to as pathfinding.31 When the leader of a health care organization functions as a pathfinder, the focus is on the long run. The goal of the pathfinder is to provide a vision, find the paths the organization should pur- sue, and provide a clearly marked trail for those who will follow. As senge notes, pathfinders have the opportunity to change reality by “holding a picture of what might be that is more important to people than what is.”32

strategic leaders are the key to establish a vision for an organization. The vision-led approach is a philosophy where leaders are committed to strive for high levels of performance that are inspiring although they cannot yet be achieved.33 A primary role of management using this approach is to clarify goals and priorities and ensure that they are understood and accepted by employees.34 individuals become engaged in the organization when they see connections between vision, performance objectives, and personal contributions to the pur- pose of the organization.35

The role of the strategic leader, however, is more than pathfinding. Because executives are responsible for inculcating the purpose into every employee, the leader must also be the keeper of the vision – a champion who communicates and models the vision. This is often the Ceo or another high-ranking executive. employees want to believe that what they are doing is important, and nothing convinces employees of the importance of their jobs more than a leader who reminds them of the shared inspirational vision (especially when things are not going well).

strategic leadership has traditionally focused on top management, particularly the Ceo. This individual is considered the person most responsible for scanning and influencing the environment, developing adaptive strategies, and managing key constituencies.36 unfortunately, the exclusive focus on the Ceo’s role in strategic leadership has implied that middle management has little or no involve- ment in determining the strategic direction of the organization. Admittedly, the primary responsibility of middle management is strategy implementation;

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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182 Strategic management of HealtH care organizationS

however, certain strategic directions require middle-management to give input and be actively involved. The increasing importance of quality as a strategic goal and middle management’s role in keeping this goal before all employees is a good example.37 Quality is an important value to which employees at all levels are able to be committed; middle managers are in the best position to encourage and rein- force this dedication.

Another critical area in which middle management should be involved is in the redefinition of organizational vision. grand strategies and futuristic visions are necessary for health care organizations. if the vision is to inspire nurses, pharmacists, medical laboratory technicians, and others, middle and first-line managers must take the lead in helping to redefine the organizational vision in terms that are meaningful to departments and work groups. finally, with regard to promoting commitment to service and quality, middle managers are in the best position to appeal to the motives that matter most to their health care employees. unfortunately, “most people either don’t know their organization’s vision, don’t understand it, or feel so disconnected from it that they can’t explain how it relates to their day job.”38

Characteristics of Effective Vision if vision is based on hope, it is – in real- ity – a snapshot of the future that the health care leader desires to create. for an organizational vision to be successful it must be clear, coherent, consistent, com- municative, and flexible.39 A clear vision is simple. Basic directions and commit- ments should be the driving forces of a vision, not complex analysis beyond the understanding of most employees.40

A vision is coherent when it “fits” with other directional strategies, including the mission and values. it is consistent when it is reflected in decision-making behavior throughout the organization.41 A vision “communicates” when it is shared and people believe in the importance of cooperation in creating the future that managers, employees, and other stakeholders desire. finally, to be meaning- ful, a vision must be flexible. Because the future is uncertain, an effective vision must remain open to change as the future and the strategic capabilities of the organization evolve over time.

To effectively outline the future and facilitate the pursuit of organizational and individual excellence, visions should possess certain characteristics:

● Visions should be inspiring, not merely quantitative goals to be achieved in the next performance evaluation period. in fact, visions should rarely be stated in quantitative terms. They are, however, nothing less than revolutionary in character and in their potential impact on behavior. The vision of shriners hospital for Children speaks of the inspirational nature of “transforming children’s lives” (exhibit 5–12).

EXHIBIT 5–12 Vision of Shriners Hospital for Children

Become the best at transforming children’s lives by providing exceptional healthcare through innovative research, in a patient and family centered environment.

Source: Shriners Hospital for Children.

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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Chapter 5 DireCtional StrategieS 183

● Visions should be clear, challenging, and about excellence. There must be no doubt in the manager’s mind about the centrality of the vision. if the “keeper of the vision” has doubts, those who follow will have even more. The vision statement of MD Anderson Cancer Center provides a straightforward statement of the hope for this flagship cancer institute – to make cancer history. individuals working at MD Anderson should be able to understand the leadership’s sense of the future from this vision statement (see exhibit 5–13).

EXHIBIT 5–13 Vision Statement of MD Anderson Cancer Center

We shall be the premier cancer center in the world based on the excellence of our people, our research-driven patient care and our science. We are Making Cancer History.

Source: MD Anderson Cancer Center.

EXHIBIT 5–14 Vision Statement of Fresenius Medical Care

To be the trusted provider and valued partner by building the premier integrated renal disease network, expanding into a leading integrated chronic care network.

Source: Fresenius Medical Care.

EXHIBIT 5–15 Vision Statement of Cancer Treatment Centers of America

To be recognized and trusted by people with cancer as the premier center for healing and hope.

Source: Cancer Treatment Centers of America.

● Visions must make sense in the relevant community, be flexible, and stand the test of time. if the vision is pragmatically irrelevant, it will not inspire high performance.

● Visions must be stable, but challenged and changed when necessary. The vision statement of fresenius makes it clear that it intends to be a trusted provider and valued partner in the area of renal disease (see exhibit 5–14); however, the statement includes the possibility of moving to an expanded integrated chronic care network. such a move could be accomplished with little or no change in the vision statement.

● Visions are beacons and controls when everything else seems up for grabs. A well-formulated vision statement guides decision making because it provides inspiration for success in the future. The vision statement for Cancer Treatment Centers of America is simple and to the point both for decision makers and patients (see exhibit 5–15).

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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● Visions empower employees (the organization’s own people) first and then the clients, patients, or others to be served. Because visions should be about inspiration and should drive excellence, it is critical to recognize that employees are the ones who must be inspired first. Many health care organizations make the mistake of devoting resources to pre-service promotion programs designed to enhance potential patients’ image of the organization only to disappoint them when they arrive and are greeted by the same lack of service they experienced before the advertising campaign. The Cleveland Clinic documents point out that this was the founder’s vision when the first patients were accepted in 1921 (see exhibit 5–16). The doctors who founded this world class clinic believed in diverse specialists working and thinking “as a unit.” That philosophy remains alive and well today.

EXHIBIT 5–17 Vision Statement of The Mayo Clinic

The Mayo Clinic will provide an unparalleled experience as the most trusted partner for health care.

Source: The Mayo Clinic.

EXHIBIT 5–16 Vision Statement of The Cleveland Clinic

Striving to be the world’s leader in patient experience, clinical outcomes, research and education.

Source: The Cleveland Clinic.

● Visions prepare for events to come while honoring the past. Although vision is the hope an organization has for the future, it is important to always acknowledge and honor a history of distinction and service. The Mayo Clinic, for example, points out that the values that guide the pursuit of its vision are the expression of the vision of its founding physicians and the sisters of saint francis (see exhibit 5–17). This association dates back to a tornado that struck rochester, Minnesota in 1883 when doctors in the Mayo family teamed with the sisters of st. francis to provide relief to those injured in the community. six years later saint Mary’s hospital was opened by the sisters and the Mayo brothers began seeing patients.

● Visions come alive in details, not broad generalities. The accomplishment of the vision eventually has to lead to tangible results. Although visions are futuristic and based on hope, they require strategic leaders who can articulate the vision and translate it into terms that everyone in the organization understands and supports.42

in the past decade more and more attention has been given to formal vision statements. Vision statements are difficult to write because they require insights into the future. however, there are some useful aids that can assist managers in developing their vision and setting the direction they desire for the future. exhibit 5–18 provides a strategic thinking map to assist in developing a vision

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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Chapter 5 DireCtional StrategieS 185

EXHIBIT 5–18 Strategic Thinking Map for Writing a Vision Statement

Component key Words reflecting Component

1. Clear hope for the future: “If everything went as we would like it to go, what would our organization look like five years from now? How would we be different/better than today?”

2. Challenging and about excellence: “When stakeholders (patients, employees, owners) describe our organization, what terms would we like for them to use?”

3. Inspirational and emotional: “When we think about the kind of organization we could be if we all contributed our best, what terms would describe our collective contributions?”

4. Empower employees first: “How can we ensure that employees understand and are committed to the vision? What needs to be done to get everyone’s buy in?”

5. Memorable and provides guidance: “What types of words should be included to ensure all organizational stakeholders remember and behave in accordance with the vision?”

statement and a series of questions that are a useful aid when thinking about vision statements. planning retreats can be used as effective forums for gaining insights into the thinking of organization stakeholders regarding their hopes for the future.

A Cautionary Note: The Problem of Newness strategic leaders are one of the most important elements in the strategically managed organization. Visionary leaders provide their greatest service by making the organization flexible and able to enter new markets, disengage from old ones, and experiment with new ideas. By entering into a new market first, organizations may achieve first-mover advan- tages that often accrue to those organizations who are the first into a new market.43 Pioneering organizations are those that seek first-mover advantages. A reputation for pioneering can be generated and market position can be more easily estab- lished when there are no, or only a few, competitors. sometimes it is expensive (monetarily and emotionally) for clients and patients to switch to other providers once loyalty and mutual trust have been developed.

however, visionary change, when directed toward early entry into markets, has its drawbacks. referred to as the liability of newness,44 disadvantages of early entry into new markets are typically in the form of risk (uncertainty), the steep (and sometimes long) learning curve, variable demand, and financial outlays for technological investments. innovators often experience pioneering costs. pioneers

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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make mistakes that others learn from and eventually correct. first movers face greater uncertainty because the demand for the service has not been proven. patient and client needs may change and, particularly when large technological investments are required, the first mover may be left with expensive equipment and little demand. Therefore, it is important that the demand for visionary man- agement be tempered with realistic knowledge of the market, consumers, and other factors that will affect the organization. The most substantial rewards often go to the first mover, but the risks are greater.

research confirms the dangers of being the first mover. studies of companies that were first in their markets exclude those firms that failed by focusing only on those that survived, prospered, and eventually dominated their markets.45 note that market leadership has less to do with an organization’s entry into the market and more to do with will and vision. enduring leaders have inspiring visions and the will to realize the vision. These leaders are persistent in the pursuit of their vision, innovative, committed financially, and know how to leverage their assets.

Step 4: Develop a Statement of Values as guiding Principles Values are the fundamental principles that organizations and people stand for – along with the mission and vision, they shape organizational culture. Most often, discussions of organizational values relate to ethical behavior and socially respon- sible decision making. ethical and social responsibility values are important, not just to a single hospital, hMo, or long-term care facility, but to all organizations and stakeholders. There are, however, other values that may be specific to an organization and characterize its members’ behavior in the past or the behavior to which members collectively aspire. for example, total quality management or continuous improvement is a value, as are entrepreneurial spirit, teamwork, inno- vation, and so on.46 it is important that managers, employees, and key stakehold- ers understand the values that are expected in an organization. in addition, values should be more than slick public relations statements. “Talking the talk” is insuf- ficient; “walking the walk” is what matters when it comes to values. essentials for a strategic Thinker 5–4, “What Are professional ethics?” demonstrates the relationship among ethics, values, moral principles, and duties.

ESSEnTIAlS foR A STRATEgIC THInkER 5–4

What are Professional ethics?

Ethics are guidelines for action that are based on values, moral principles, or moral rights and duties. Examples include honesty, respect, and compassion. Ethical guidelines may be reflected in laws, whereas others are norms, customs, and social expectations that develop and are main- tained by mutual consent.

It is useful to distinguish two categories of eth- ics in the health care environment: professional ethics and applied ethics. Professional ethics are the customs, norms, expectations, values, rights, and duties that guide individuals as they carry out particular work roles in society. Professional ethics reflect the societal expectations for people

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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Chapter 5 DireCtional StrategieS 187

who perform specific roles. We expect physicians and nurses to help rather than harm patients. We expect administrators and business officers to accept fiduciary responsibility (act for the benefit of the organization rather than themselves) and to be accountable to stockholders or boards of trustees for their decisions.

The norms guiding professional behavior can change over time, as society’s expectations change. For example, over the past few decades, physicians’ roles have evolved away from the expectation that doctors will make decisions on behalf of patients and their health to the expecta- tion that they will provide all relevant informa- tion to patients and families and help them to make their own decisions about their treatment. As another example, the implementation of the Health Insurance Portability and Accountability Act (HIPAA) in April 2003 represented the legal enforcement of a social expectation that health- related information on patients will be kept strictly confidential; some widely accepted practices of information sharing in health care organizations had to be altered under the HIPAA guidelines because they were not perceived to reflect the priority that members of society placed on confi- dentiality of medical information.

Health care organizations involve the inter- action of many sets of health professionals who, by definition, are bound by differing sets of eth- ics and norms. Decisions that must be made by the organization as a whole must be negotiated across these norms. For example, the imperative to help anyone in need of medical care must be balanced with the imperative to operate organi- zations that are financially sound. Organizations are best served when professionals are able to represent their own guiding values and princi- ples and comprehend the values and principles that guide their colleagues.

In contrast to professional ethics, applied eth- ics is the application of values, principles, and expectations to broader social choices, such as

whether some basic level of health care is a uni- versal right, or whether health care is a commod- ity that individuals can choose to purchase or not. Professional ethics are neutral on this issue; one may be an ethical physician or administrator and make either applied ethics choice. Some social choices have a broad consensus. In the United States the responsibility of society to cover the costs of health care for the elderly is generally accepted. Other social choices are the subject of considerable disagreement and conflict, even when one set of values or expectations has been codified into laws. The rights of individuals to have abortions or to enforce their care prefer- ences at the end of life are examples of ethical conflict that impact health care organizations. Organizations whose decision-making processes are affected by ethical conflicts must consider carefully the values and norms that guide their stakeholders and the laws that represent the cur- rent societal consensus on the issue.

All actions have an ethical component, but the underlying values for a decision may be so widely shared that we do not recognize or consider the implications of ethical choices. For example, we do not question the principle that health care is meant to benefit those who are sick. When faced with a decision about whether to provide effec- tive or harmful treatment to someone who is sick, we automatically make the ethical decision to help rather than to harm the person. On the other hand, we sometimes face situations where alternative courses of action reflect contrasting values. For example, we value individuals’ auton- omy and their right to make decisions about their own health. If an individual wants a treatment that we believe to be harmful, should we respect his or her wishes and provide the treatment, or refuse the treatment and adhere to the principle that treatment should not be provided if it is known to cause harm?

Source: Janet M. Bronstein, PhD, School of Public Health, University

of Alabama at Birmingham.

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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188 Strategic management of HealtH care organizationS

EXHIBIT 5–20 Value Statement of The Mayo Clinic

These values, which guide Mayo Clinic’s mission to this day, are an expression of the vision and intent of our founders, the original Mayo physicians and the Sisters of Saint Francis.

primary value The needs of our patients.

respect Treat everyone in our diverse community, including patients, their families and colleagues with dignity.

Compassion Provide the best care, treating patients and family members with sensitivity and empathy.

Integrity Adhere to the highest standards of professionalism, ethics, and personal responsibility, worthy of the trust our patients place in us.

Core values, beliefs, and philosophy may be clear during the early stages of an organization’s development but become less so as the organization matures.47 Therefore, statements such as MD Anderson’s demonstrate how the organization intends to treat patients, employees, and families (caring); deal with colleagues and vendors (integrity); and encourage personal and professional development; provid- ing an excellent example of how to keep core values at the forefront of organiza- tional operations, even as the organization grows and ages (see exhibit 5–19).

exhibit 5–20 illustrates Mayo Clinic’s well-developed and articulated set of organizational values. Their primary value is “the patient comes first.” Throughout the values statement are references to ideals such as integrity, respect, compassion, and excellence. Anyone reading this set of guiding principles can understand the motivational force such a statement of values might have on employees and the comfort it might provide patients.

EXHIBIT 5–19 Statement of Core Values, MD Anderson Cancer Center

Caring: By our words and actions, we create a caring environment for everyone. ● We are sensitive to the concerns of our patients and our co-workers. ● We are respectful and courteous to each other at all times. ● We promote and reward teamwork and inclusiveness.

Integrity: We work together to merit the trust of our colleagues and those we serve. ● We hold ourselves, and each other, accountable for practicing our values. ● We communicate frequently, honestly and openly. ● By our actions, we create an environment of trust.

discovery: We embrace creativity and seek new knowledge. ● We help each other to identify and solve problems. ● We seek personal growth and enable others to do so. ● We encourage learning, creativity and new ideas.

Source: MD Anderson Cancer Center.

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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Chapter 5 DireCtional StrategieS 189

EXHIBIT 5–21 Value Statement of Stryker

Integrity. We do what is right.

accountability. We do what we say.

people. We grow talent.

performance. We deliver.

Source: Stryker.

Mission, vision, and value statements are tools for “becoming better at what we do.” The usefulness of any of these statements comes from the ownership taken by employees and the observed actions by stakeholders. framed mission, vision, values, and slogans are merely exercises – and futile ones at that – if they are not made real by commitment and action.48 The point is to motivate and guide all employees, managerial and non-managerial; provide high-quality care and respond to external as well as internal customers; to distinguish the organization from others in the perceptions of key stakeholders; and to let everyone know the organization stands for something important. To be most effective, the value state- ment for an organization should capture the guiding principles by which the staff is expected to function while achieving the organization’s mission.49

Step 5: Develop Strategic goals once strategic leaders are confident that the mission, vision, and values are well formulated, understood, communicated, and expressed in writing, they are able to focus on the activities that will make the most progress toward accomplishing the mission and moving the organization toward a realization of its vision – its strategic goals. Well-written mission statements are the beginning point for strategic goal setting. goal setting should be focused on those areas that are critical to mission

not all statements of values or guiding principles are as elaborate as that of the Mayo Clinic or MD Anderson; however, they need to be as well conceived. Value statements can be useful in clarifying to employees the specific behavioral norms that are expected of them as members of the organization. This clarification is effectively accomplished in the values of stryker (see exhibit 5–21).

Source: The Mayo Clinic.

Healing Inspire hope and nurture the well-being of the whole person, respecting physical, emotional and spiritual needs.

teamwork Value the contributions of all, blending the skills of individual staff members in unsurpassed collaboration.

excellence Deliver the best outcomes and highest quality service through the dedicated effort of every team member.

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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accomplishment. strategic thinking would entail asking this important question when attempting to ensure that mission statements and strategic goals are consistent:

Does the mission provide for the formulation of a set of goals that are spe- cific enough to give guidance to the organization yet broad enough to pro- vide for the necessary flexibility?50

Critical success factors provide the targets for strategic goal setting. As dis- cussed in Chapter 3 concerning service area competitive analysis, critical success factors for the service category are similar for all members of a strategic group; however, the factors may vary from one service category to another and one strategic group to another.51 The strategic goals, in turn, become the anchors for objectives and action plans.

Critical Success Factors for the Service Category Critical success factors are the benchmarks that organizations must accomplish if they are to achieve high performance.52 The critical factors for success in a medical practice are not the same as the critical success factors in acute care hospitals.

As an example, pacific Cataract and Laser institute operates in the pacific northwest with ten locations in the state of Washington.53 Cataract surgery (one ser- vice category) is most frequently performed on older adults, whereas refractive sur- gery (another service category) is performed to improve eyesight so that a person can see without corrected vision (no need for eye glasses or contact lenses) in younger adults. Cataract surgery is medically warranted and typically covered by insurance (Medicare for many). The critical success factors for the service category of refractive surgery in the Washington state service area are identified in exhibit 5–22. These critical success factors provide an important bridge between external and internal environmental analysis.54 strategic leaders must continually ask themselves whether the mission, vision, and values of the organization are compatible with the critical success factors. once compatibility is ensured, leaders must prioritize a relatively small number of activities that are absolutely essential to accomplish the mission and build momentum to realize the vision. The application of the critical success factors relative to pacific is briefly noted in the second column. strategic leaders need to ensure that they address the factors that lead to success in the service category.

Strategic Goals strategic goals should be used to coordinate critical success factor activities, providing more specific direction to accomplish the mission and vision. At the same time, strategic goals should be broad enough to allow consid- erable discretion for managers to formulate their objectives for individual units.55 The most appropriate strategic goals possess the following characteristics:

● strategic goals should relate specifically to activities that are critical to the mission; goals that focus on activities that are not mission critical have the potential to divert leadership attention and employee energy.

● strategic goals should be the link between critical success factors and strategic momentum (carrying out unit objectives).

● strategic goals should be limited in number. When too many goals are pursued, the “trivial many” rather than the “critical few” activities are accomplished.

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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Chapter 5 DireCtional StrategieS 191

The Johns hopkins Medical Center’s strategic plan includes six strategic priori- ties which are essentially Johns hopkins Medicine strategic goals. When describ- ing the priorities, the plan states these are “critical areas of focus for the success and sustainability of the institution.” 1. people – attract, engage, develop, and retain the world’s best people. 2. Biomedical research – become the exemplary model for biomedical

research by advancing and integrating discovery, innovation, translation, and dissemination.

3. patient-and-family-Centered Care – Be the national leader in the safety, science, teaching, and provision of patient- and family-centered care.

4. education – Lead the world in the education and training of physicians and biomedical scientists.

5. integration – become the model for an academically-based integrated health care delivery and financing system.

6. performance – create sustainable financial success and implement continuous performance improvement.56

EXHIBIT 5–22 Critical Success Factors Related to a Service Category (Refractive Surgery) in a Service Area (Washington State)

Critical success factors related to Individual organizations

Competitive price Multiple providers are in the service area around Seattle, Washington. The procedure is rarely covered by insurance. Prices have fallen over the past 30 years; however, purchasers are price conscious and the procedure is offered just across the border in Canada at a much lower price.

Latest technology available but choices offered for lower cost, safe options.

State-of-the-art technology is offered and it is faster, less invasive (thus safer), but significantly more expensive. Some individuals are willing to undergo the procedure using older, slower, but safe technology to be able to afford the surgery.

Number of procedures performed

Greater numbers preferred, “practice makes perfect” is backed by research.

Positive satisfaction ratings/ social media reviews

Today’s potential customers for refractive surgery read recom- mendations online and investigate satisfaction scores. Pacific Cataract and Laser has 97 percent of consumers saying they would recommend the Institute to a friend.

Name recognition Many MDs who perform these surgeries advertise; however, Pacific relies on referrals from family eye doctors (over 1,000 of them in the six states where they have offices) and does no advertising.

● strategic goals should be formulated by leaders but should be stated in terms that can be easily understood and appreciated by everyone in the organization.

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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192 Strategic management of HealtH care organizationS

Roles and Responsibilities of Boards of Directors (or Trustees) in Strategic Management

The discussion of directional strategies has emphasized the importance of the involvement and participation of as many people as practical. The governing board (e.g. board of directors, board of trustees) is an important group that should be involved in the development of the strategic direction of the health care organization. The board members should be regularly informed about the strategic goals and the progress being made toward their accomplishment. governing boards have taken on particular importance in the past several years as ethical issues have escalated. health care has not been exempt, as evidenced by major corporate scandals involving companies such as Bausch and Lomb’s renu MostureLoc contact lens solution and waiting time issues at the Veterans Administration. increasingly, the question of the role and respon- sibility of governing boards is discussed in health care management. often not only the individual involved in a scandalous act but the organization and individual board members or the board collectively suffer damages to their reputations.57

four modes of governance have been applied to boards of directors. first is the fiduciary responsibility mode or stewardship of assets; the second is the strategic mode which involves collaborating with management to develop a vision for the future; the third is the generative mode where the board engages in shared creative thinking to make sense of data available to decision makers, and the fourth is the idea of the progressive board that focuses on contributions of individual members to a cohesive and comprehensive whole – the board is viewed as engaging in lively debate, discussion of important issues, and learning from one another.58

in the strategic mode, boards of directors or boards of trustees are responsible for making policies – providing general guidelines under which the organiza- tion will operate. Therefore, boards are important in formulating the mission, vision, and value statements of the organization and, depending on the nature of the membership, boards can represent very complex issues in organizational governance (see essentials for a strategic Thinker 5–5, “What Are interlocking Directorates?”). Board members are not likely to be directly involved in the pro- cess although, in some cases, members do participate. More likely, board members are interviewed during the formulation of the mission, vision, and values and their input is incorporated into the statements. in addition, boards are involved in determining the compensation of key executives, executive succession planning, and similar high-level decision making. With regard to mission, vision, and values the board should be informed about the statements and involved in the strategic thinking that results in their formulation; therefore, the selection of board mem- bers is a critical strategic decision.59

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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Chapter 5 DireCtional StrategieS 193

ESSEnTIAlS foR A STRATEgIC THInkER 5–5

What are interlocking Directorates?

Interlocking directorates occur when members of two or more boards of directors simul- taneously serve on the boards of the same organizations. The two or more organizations involved are said to be interlocked. There is a direct interlock of organizations when one or more members serve on the boards of each organization. Approximately one of every five directors sits on more than a single board, although service on multiple boards does not, in itself, constitute an interlock. Technically, it is a violation of the Clayton Act when an executive or board member serves on the board of a direct competitor. Although there are some exceptions, interlocking boards among competitors are risky.

Many experts believe distinct advantages of interlocking directorates result if the interlocked organizations are not competitors. In a sense, interlocking directorates can be viewed as a social network. This view suggests that direc- tors and executives connected in this manner can communicate faster and more effectively. Because boards are comprised of the more elite corporate and health care leaders, interlocking directorates make it easier for these executives to discuss issues of common interest and it is possible that best practices and innovations are disseminated faster and more efficiently when board members are interlocked. Imagining how a member of one board might observe manage- ment practices in one organization that would be beneficial to other organizations is easy to envision. The repository of expert information a person possesses is the primary reason why individuals are asked to serve on boards; thus, information sharing is a significant benefit of interlocking directorates.

On the other hand, there must be some potential dangers if interlocks among

competitors are outlawed by Section 8 of the Clayton Act. Some fear that interlocking direc- torates create an excessively powerful group of the most influential members of corporate America, academics, the legal profession, and other occupations. With the possible excep- tion of not-for-profit boards, it is admittedly true that corporate boards are comprised of elite members of society. Because board mem- bers are most often business and health care leaders, their concern may be inherently more closely associated with the values of manage- ment rather than rank-and-file employees or, more importantly, society as a whole. In the rare cases where interlocks are among competitors, collusion, price setting, and anti-trust liability represent clear and present dangers and behav- iors to be avoided.

Regardless of the pros and cons, interlocking directorates are a reality of modern business and health care life. Care must be taken when formulating boards of directors to ensure that the board is comprised of individuals who pos- sess the most critical combination of expertise. Further, a careful review of the associations of board members should be undertaken to ensure there are no conflicts of interest.

referenCes

Christine Shropshire, “The Role of the Interlocking

Director and Board Receptivity in the Diffusion

of Practices,” Academy of Management Review

35, no. 2 (2010), pp. 246–264.

Andrew V. Shipilov, Henrich R. Greve, and Timothy

J. Rowley, “When Do Interlocks Matter?

Institutional Logics and the Diffusion of

Multiple Corporate Governance Practices,”

Academy of Management Journal 53, no. 4

(2010), pp. 846–863.

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194 Strategic management of HealtH care organizationS

Health Care Performance and the Usual Suspects Much of the discussion regarding governing boards has related to issues that have been referred to as the “usual suspects.”60 primary attention has been given to questioning how these usual suspects influence the financial performance of an organization. some usual suspects are the number of outsiders on the board, shareholdings of board members, board size, and Ceo duality (Ceo simultane- ously functioning as the chief executive and board chair).61 An issue of particular interest has been board size. A comparative study of board composition by the executive search firm spencer stuart looked at the boards of the s&p 500. The results, reported in the Harvard Business Review,62 noted that boards of these lead- ing corporations are smaller in size, comprised of older members, and are more independent compared with a study conducted decades earlier. A 2014 study by the Corporate Library indicated that the average size of a board was 9.2 members but the size ranged from 3 to 31. The study noted that some experts believe seven is an optimum size for a board; however, no universal agreement regarding board size was promulgated.63

When compared with boards of directors of successful high-technology firms, governing boards in a sample of multihospital health care systems were almost twice as large (11 to 15 members).64 in fact, boards are frequently too large to be effective aids in decision making, and where the goal is stakeholder representation, board members often know so little about health care that Ceos are forced to spend a great deal of their time informing and educating lay members.

Board independence has been another topic that has received attention and has been particularly influenced by the public Company Accounting reform and investor protection Act of 2002 (public Law 107–240), also known as the sarbanes–oxley Act.65 essentially the issue of board independence relates to the number and nature of outside directors (those not employed by the organization). generally, boards are considered more independent if they have a majority of outside members who are not significantly involved in doing business with the focal organization.

primarily because of corporate scandals of recent years and the passage of the sarbanes–oxley Act, board of director research has been reignited.66 This law, which applies to publicly traded corporations, dramatically impacts the fiduci- ary responsibility of chief executive officers and boards of directors. some states have considered enacting similar legislation that would apply to not-for-profit organizations.

Another study examined the issue of outside directors in large investor-owned health care organizations. four major subsamples were examined, including hos- pitals, elder care organizations, hMos, and alternative care facilities (such as psy- chiatric clinics and ambulatory care centers).67 The results were that, in general, governing boards of health care organizations were comprised of more members from outside, rather than inside, the organization. outside representatives were primarily physicians, financial professionals, attorneys, and academics. The inclu- sion of physicians was found to be particularly significant in terms of bottom-line performance. The presence of physicians on governing boards enhanced the

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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Chapter 5 DireCtional StrategieS 195

support of the medical community, improving the organization’s market share and quality.

There are basically two different types of governing boards – philanthropic governing boards are service oriented, broadly represent diverse stakehold- ers, and are concerned primarily with fundraising. Corporate governing boards are typically involved in oversight, strategic planning, and policy making. philanthropic boards are larger and more diverse to gain as much community representation as possible. The inclusion of different types of stakeholders is important and requires that board members be selected from among business leaders, physicians, local politicians, consumers of health care services, and so on. The corporate board is smaller and comprised of individuals who possess expertise that will aid the organization in accomplishing its strategic goals.68 Membership diversity is important, but less so than the actual skills or expertise possessed by the members.

The current trend in health care organizations is toward the corporate board. To a great extent, the trend is the result of the increasingly competitive environment facing health care organizations and the need for expertise in dealing with the complexities of the economic environment. however, it should be noted that vir- tually no research confirms any positive relationship between the size and nature of board membership and organizational financial performance.69

research findings on boards of directors suggest that when profound or radical organizational change confronts a health care organization, the corpo- rate board is more likely to propose effective, positive responses. philanthropic boards, on the other hand, are more likely to be associated with either no change or negative responses to profound change.70 Boards of directors in health care organizations undergoing corporate restructuring (defined as the segmentation of the organization’s assets and functions into separate corporations to reflect specific profit, regulatory, or market objectives) tend to become less philan- thropic and more corporate, not only in composition but also in the way they operate.71

The evidence is underwhelming with regard to the usual topics of board inde- pendence (percentage of outside members), board size, Ceo duality, and so on.72 Although it is dangerous to generalize, some inferences can be drawn from the research on governing boards in health care organizations. in not-for-profit health care organizations, governing boards are more in line with the philanthropic model. They are generally large (in fact, too large to be effective aids in strategic decision making), do not compensate members, select members primarily as stakeholder representatives, and do not hold the Ceo formally accountable for performance. in this case, the primary motivation for board membership is service and recognition. When health care organizations are profit oriented, their boards take on more corporate characteristics. They tend to be smaller, compensate mem- bers for service, select members for specific expertise, involve the Ceo as a voting member, make him or her formally accountable to the board, and require the par- ticipation of board members in strategic decision making. from the perspective of the individual board member, the motivation to be on a board may be to provide a valuable service to the community, but board membership may be a source of income as well.

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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Board Process: Missing link? The lack of consistent association between factors such as board size, inde- pendence, Ceo duality, member expertise, and organizational performance on financial measures has encouraged researchers to look at different variables. of particular interest is the board process – the means by which boards of directors undertake their work.73

interviews with experienced board members indicate that several behaviors lead to more effective boards:

1. Engage in constructive conflicts (especially with the CEO). it is important that board members debate diverse views among themselves and with the Ceo. An overabundance of insiders on a board may diminish the presence of constructive conflict since debate with the Ceo amounts to debate with the boss.

2. Avoid destructive conflict. personal friction and tension in the boardroom should be minimized. There must be a clear distinction between constructive debate and destructive conflict.

3. Work together as a team. The most important component of board process is teamwork, and it is the primary characteristic of the progressive board. The development of strong team norms, however, is difficult because board members spend little time together. given the members’ limited availability, maximizing board member interaction is critical.

4. Know the appropriate level of strategic involvement. Board members should limit their involvement to major strategic decisions. They should be very careful not to become too involved in the day-to-day management of the organization.

5. Address decisions comprehensively. Board members should consciously attempt to address issues with sufficient depth to make sound decisions. Too often, time demands and conflicting priorities tempt boards to deal superficially with important issues. effective boards find the time needed for important strategic decisions.74

The work of boards of directors is crucial for health care organizations. Boards are created to ensure that strategic leaders have additional expertise available to them for making policy decisions that provide direction to the organization. The effectiveness of the board is a key factor in the effectiveness of the organization.

Strategic Momentum – Evaluating Directional Strategies As part of managing strategic momentum, managers assess the performance of the organization and try to determine whether the mission, vision, values, and goals are – and continue to be – appropriate. To illustrate, hospices today reap billions of dollars annually in Medicare reimbursement. in just two decades since hospices began receiving reimbursement for their services, end-of-life care has emerged as an integral part of the health care system. The demand for palliative

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Chapter 5 DireCtional StrategieS 197

care (end-of-life and comfort care) has increased so rapidly that hospitals and other providers have seized opportunities in this area. one example is a hospice company which states that its mission is “to provide care for dying patients and their families in their homes.” Another hospice, aware of the changes in the environment and concerned with managing strategic momentum, has slightly revised its mission to reflect the change in the competitive environment. its new mission is “to provide end-of-life and palliative care services.” if both organiza- tions should decide to offer services to Alzheimer’s patients living in nursing homes, only the second hospice would be acting in accordance with its mis- sion; therefore, this juxtaposition demonstrates how mission flexibility must be emphasized.75

Decisions to change an organization’s mission, vision, values, and goals are complex and involve many variables. To manage strategic momentum, ques- tions should be asked that concern the fundamental activities and direction of the organization. exhibit 5–23 provides guidance through several questions that will aid managers in their strategic thinking concerning the appropriate- ness of the organization’s directional strategies. perhaps the best approach for managing the directional strategies is to place the vision for the future, the existing mission statement, statement of values, and the organization’s goals next to the questions in exhibit 5–23 and ask the board of directors/trustees and the strategic management team to freely discuss and reach a consensus on each question. This process will either validate the existing mission, vision, values, and goals or indicate that there should be changes to maintain strategic momentum. This process invites clarification, understanding, and reinforce- ment of exactly “what this organization is all about” or “what this organization should be about.”

EXHIBIT 5–23 Strategic Map for Evaluating Directional Strategies

1. Are we not doing some things now that we should be doing?

2. Are we doing some things now that we should not be doing?

3. Are we doing some things now that we should do but in a different way?

4. Are our organization’s mission and vision unique in some way?

5. Is our mission relatively enduring?

6. Do our mission and vision allow for innovation?

7. Do our mission and vision allow for expansion?

8. Is our scope of operations clear (market, products/services, customers, geographic coverage)?

9. Do our mission, vision, and values fit the needs of our stakeholders?

10. Do our fundamental values make sense?

11. Are our strategic goals moving us toward achievement of our mission?

12. Are our strategic goals moving us toward achievement of our vision?

13. Have we addressed the critical success factors?

14. Based on the mission, vision, and values, is the image of the organization what it should be?

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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198 Strategic management of HealtH care organizationS

Chapter Summary

Directional strategies allow leaders to state what they believe the organization should be doing and make explicit how they intend to conduct their business. every attempt should be made to develop and communicate well-conceived and written statements of the organization’s mission, vision, values, and strategic goals.

Directional strategies are the superordinate goals or outcomes that health care organizations plan to accomplish. Leaders should recognize that strategic plan- ning is a logical process. The progression of directional strategies illustrates the importance of the logic. The mission of the organization drives decision making because it is the organization’s reason for existing. The vision provides hope for the future and values tell everyone – employees, stakeholders, patients, and so on – how the organization will operate. The strategic goals more specifically state what the leaders believe is required to achieve the mission.

A mission alone is not enough. The mission, as a statement of purpose that distinguishes the organization from all others of its type, such as the care given to patients, physical location of the facility, the unusual commitment of physi- cians to research as well as to healing, or any other factor that is important in the minds of those served, is only the first step. The mission may motivate a few physicians and department managers, but real motivation comes from visionary leadership.

The vision is a hope that communicates what key stakeholders think the organization should be when the mission is being achieved. Values, as guiding principles, can be powerful motivating forces as well.

even a well-developed and communicated mission is likely to leave the health care strategist with far too many areas of responsibility, resulting in an impossible task. for this reason, critical success factors for the service category must be iden- tified and strategic goals must be set to accomplish the mission. strategic goals help to make the strategist’s job feasible and help focus strategists on those tasks that really make a difference with respect to organizational success.

Management research shows that the existence of goals can be powerfully motivating. Clearly stated and communicated strategic goals provide a sense of direction – they specify what leaders are expected to accomplish and remove anxiety from those who want to succeed. formulating mission, vision, values, and strategic goals and identifying critical success factors are often “messy” and unap- preciated. in the end, however, setting directional strategies is a major responsibil- ity for all strategic leaders.

engaging as many groups as practical in the process of developing direc- tional strategies is important. The board of directors should be involved in the thinking that ultimately results in the mission, vision, and value statements. in addition, board members should be regularly informed about the strategic goals of the organization and the progress being made in their accomplishment. Most importantly, the board should engage in a process that contributes to organizational effectiveness. research confirms that merely electing or selecting a board of directors/trustees comprising an appropriate percentage of outsiders, of individuals with the appropriate expertise, and small enough to be manage- able, will not ensure its effectiveness. The board must also be willing to engage

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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Chapter 5 DireCtional StrategieS 199

in constructive conflict, minimize destructive interpersonal tensions, avoid micromanagement, and devote the time required to make important strategic decisions.

Chapter 6 builds on the directional strategies of mission, vision, values, and strategic goals to address strategy formulation and the strategic alternatives avail- able to health care organizations.

Practical lessons for Health Care Strategic Thinkers

1. organizations need a carefully constructed statement of purpose or mission. Without such a deliberate statement the organization is likely to experience mission creep or mission drift.

2. A vision statement is equally important to provide direction and hope for the future.

3. Value statements provide tangible evidence of the behavioral norms that are expected of everyone. Value statements are, in effect, guiding principles as to how the mission and vision are to be accomplished.

4. Directional strategies are difficult to formulate so leaders are often tempted to hire a public relations firm or consultant to draft these statements; however, formulating statements of directional strategies represents an opportunity to build understanding and communicate expectations to all organizational members.

5. Top level executive buy-in is an absolute necessity for the formulation of directional strategies.

6. strategic leaders need to understand the factors that are required for success in their industry. once these critical success factors are identified they can be used to anchor the formulation of strategic goals.

7. Boards of directors have a critical role in the formulation of directional strategies.

8. health care organizations should carefully consider the expertise needed to effectively set policies and appoint board members who possess and expand the skills required for success.

THE LAngUAgE oF STRATEgIC MAnAgEMEnT: KEy TERMS AnD ConCEPTS

Corporate governing Board Creative Tension Critical success factor first-Mover Advantage Keeper of the Vision

Liability of newness Mission Mission Creep Mission Drift philanthropic governing Board

pioneering strategic goals Values Vision Vision-Led Approach

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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200 Strategic management of HealtH care organizationS

Questions for Class Discussion

1. is it necessary for organizational mission statements to include all the components dis- cussed in this chapter? how do you decide what components to include?

2. Think of an organization that you know relatively well and attempt to construct a mis- sion statement in light of the components of missions discussed in this chapter. What components did you choose to emphasize in the statement? Why? What component do you think really embodies the distinctiveness of the organization?

3. Where do organizational missions originate? how do you explain the evolution of organizational missions as an organization grows and matures? if mission statements are “relatively enduring,” how often should they be changed?

4. indicate two ways in which an organizational vision is different from other types of directional strategies.

5. it has been said that vision is necessarily a responsibility of leaders. Why is it important for health care organizations to have “keepers of the vision?”

6. Who determines the values of the health care organization? What values do you think should be shared by all health care organizations? Why?

7. Why are values referred to as an organization’s guiding principles? in what sense do values constitute a directional strategy for the organization?

8. how many strategic goals should a health care organization develop?

9. how can health care managers more effectively use directional strategies to stimulate higher levels of performance among all personnel?

10. What are critical success factors for an organization? how are they determined? how may they be used?

11. Why is the board of directors an important group to include in the formulation of directional strategies? What is the board’s proper role in formulating these strategies?

12. What is the best way to involve the board in the development of directional strategies? explain your answer.

13. List three reasons why boards of directors or trustees have become increasingly impor- tant factors in the effectiveness of health care organizations.

notes 1. steven h. Cady, Jane V. Wheeler, Jeff DeWolf, and

Michelle Brodke, “Mission, Vision, and Values: What Do They say?” Organizational Development Journal 29, no. 1 (2011), pp. 63–79.

2. setayesh sattari, Leyland f. pitt, and Albert Caruana, “how readable Are Mission statements?” Corporate Communications 16, no. 4 (2011), pp. 282–292.

3. Chester i. Barnard, Functions of the Executive (Cambridge, MA: harvard university press, 1938), p. 87.

4. stryker Corporation website, www.styker.com. 5. perry pascarella and Mark A. frohman, The Purpose

Driven Organization (san francisco, CA: Jossey-Bass publishers, 1989), p. 23.

Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018). The strategic management of health care organizations. John Wiley & Sons, Incorporated. Created from franklin-ebooks on 2023-10-14 00:02:52.

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Chapter 5 DireCtional StrategieS 201

6. forest r. David and fred r. David, “it’s Time to redraft your Mission statement,” Journal of Business Strategy 24, no. 1 (2003), pp. 11–14.

7. s. eric Anderson and Brad Jamison, “Do the Top u.s. Corporations often use the same Words in their Vision, Mission and Value statements?” Journal of Marketing & Management 6, no. 1 (2015), pp. 1–15.

8. Barbara r. Bartkus and Myron glassman, “Do firms practice What They preach? The relationship between Mission statements and stakeholder Management,” Journal of Business Ethics 83, no. 2 (2008), pp. 207–217.

9. C. Kendrick gibson, David J. newton, and Dennis s. Cochran, “An empirical investigation of the nature of hospital Mission statements,” Health Care Management Review 15, no. 3 (1990), pp. 35–46.

10. W. J. Duncan, p. M. ginter, and W. K. Kreiel, “A sense of Direction in public health: An Analysis of Mission statements in state health Departments,” Administration & Society 26, no. 1 (1994), pp. 11–27.

11. Thomas T. Brown, “noble purpose,” Executive Excellence 21, no. 1 (January 2004), p. 7; robert e. McDonald, “An investigation of innovation in nonprofit organizations: The role of organizational Mission,” Nonprofit and Voluntary Sector Quarterly 36, no. 2 (2007), pp. 256–258.

12. Bhavesh s. patel, Lorne D. Booker, hazel Melanie ramos, and Chris Bart, “Mission statements and performance in non-profit organizations,” Corporate Governance: The International Journal of Effective Board Performance 15, no. 5 (2015), pp. 759–774.

13. Teewon suh, Mark B. houston, steven M. Barney, and ik-Whan g. Kwon, “The impact of Mission fulfillment on the internal Audience: psychological Job outcomes in a service setting,” Journal of Service Research 14, no. 1 (2011), pp. 76–87.

14. Chip Jarnagin and John slocum Jr., “Creating Corporate Cultures through Mythopoetic Leadership,” Organizational Dynamics 36, no. 3 (2007), pp. 288–295.

15. David J. forbes and siju seena, “The Value of a Mission statement in an Association of not-for-profit hospitals,” International Journal of Health Care Quality Assurance 19, no. 5 (2006), pp. 409–419.

16. roger Bennett and sharmila savani, “surviving Mission Drift: how Charities Can Turn Dependence on government Contract funding to Their own Advantage,” Nonprofit Management and Leadership 22, no. 2 (2011), pp. 217–228. see also Marshall B. Jones, “Multiple sources of Mission Drift,” Nonprofit and Voluntary Sector Quarterly 36, no. 2 (2007), p. 229.

17. James rajasekar, “A Comparative Analysis of Mission statement Content and readability,” Journal of Management Policy and Practice 14, no. 6 (2013), pp. 131–147.

18. s. g. Leggat and M. holmes, “Content Analysis of Mission, Vision, and Value statements in Australian public and private hospitals: implications for healthcare Management,” Asia Pacific Journal of Health Management 10, no. 1 (2015), pp. 46–55.

19. Aimee forehand, “Mission and organizational performance in the healthcare industry,” Journal of Healthcare Management 45, no. 4 (2000), pp. 267–275. see also Joseph peyrefitte and forest r. David, “A Content Analysis of the Mission statements of united states firms in four industries,” International Journal of Management 23, no. 2 (2006), pp. 296–301.

20. Bradley Koch, Joseph galaskiewicz, and Alisha pierson, “The effect of networks on organizational Missions,” Nonprofit and Voluntary Sector Quarterly 44, no. 3 (2015), pp. 510–515.

21. Christopher K. Bart and John C. Tabone, “Mission statement Content and hospital performance in the Canadian not-for-profit health Care sector,” Health Care Management Review 24, no. 2 (1999), pp. 18–26; Christopher K. Bart and J. C. Tabone, “Mission statement rationales and organizational Alignment in the not- for-profit health Care sector,” Health Care Management Review 23, no. 1 (1998), pp. 54–70.

22. These components adapted from John A. pearce ii and fred David, “Corporate Mission statements and the Bottom Line,” Academy of Management Executive 1, no. 1 (1987), pp. 109–116.

23. ibid. 24. Mary grayson, “Whose Mission is it Anyway?” Hospital

& Health Networks 85, no. 1 (2011), p. 6. 25. Cecilia falbe, Mark Driger, Lauri Larwood, and paul

Miesing, “structure and Meaning of organizational Vision,” Academy of Management Journal 38, no. 3 (1995), pp. 740–767.

26. Deborah Ancona, Thomas W. Malone, Wanda J. orlikowski, and peter M. senge, “in praise of the incomplete Leader,” Harvard Business Review 85, no. 2 (february 2007), p. 97.

27. James M. Kouzes and Barry Z. posner, “envisioning your future: imagining ideal scenarios,” Futurist 30, no. 3 (1996), pp. 14–19. see also shelley A. Kirkpatrick, J. C. Wofford, and J. robert Baum, “Measuring Motive imagery Contained in the Vision statement,” Leadership Quarterly 13, no. 2 (2002), pp. 139–151.

28. Andrew M. Carton, Chad Murphy, and Jonathan r. Clark, “A (Blurry) Vision of the future: how Leader rhetoric about ultimate goals influences performance,” Academy of Management Journal 57, no. 6 (2014), pp. 1544–1570.

29. st. Jude Children’s research hospital Web site. www. stjude.org/about-st-jude/history/html.

30. peter M. senge, “The Leader’s new Work: Building Learning organizations,” Sloan Management Review 31, no. 1 (1990), pp. 13–14.

31. g. B. Morris, “The executive: A pathfinder,” Organizational Dynamics 16, no. 2 (1988), pp. 62–77.

32. senge, “The Leader’s new Work,” p. 8. 33. James C. Collins and Jerry i. porras, “organizational

Vision and Visionary organizations,” California Management Review 34, no. 1 (1991), pp. 30–52.

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34. Timothy W. Coombs and sherry J. holladay, “speaking of Visions and Visions Being spoken,” Management Communication Quarterly 8, no. 2 (1994), pp. 165–189; Bing ran and p. robert Duimering, “imaging the organization: Language use in organizational identity Claims,” Journal of Business and Technical Communication 21, no. 2 (2007), pp. 155–188.

35. “Clear Vision, Dialogue help Align employee Actions to Business goals,” PR News 67, no. 25 (2011), p. 2.

36. howard s. Zuckerman, “redefining the role of the Ceo: Challenges and Conflicts,” Hospital & Health Services Administration 34, no. 1 (1989), pp. 25–38. see also stephen C. harper, “The Challenges facing Ceos: past, present, and future,” Academy of Management Executive 6, no. 3 (1992), pp. 7–25.

37. Arnold D. Kaluzny, “revitalizing Decision Making at the Middle Management Level,” Hospital & Health Services Administration 34, no. 1 (1989), pp. 39–51. see also s. W. floyd and Bill Wooldridge, “Dinosaurs or Dynamos? recognizing Middle Management’s strategic role,” Academy of Management Executive 8, no. 4 (1994), pp. 47–57.

38. shaun spearmon, “your Company Vision: if it’s Complicated, it shouldn’t Be,” october 14, 2013. http:// forbes.com/sites/johnkotter/2013/14/the-reason- most-company-vision-statements-arent-effective.

39. ian Wilson, “realizing the power of strategic Vision,” Long Range Planning 25, no. 5 (1992), pp. 18–28.

40. Les MacLeod, “Mission, Vision, and Value statements: The physician Leader’s role,” Physician Leadership Journal 3, no. 5 (2016), pp. 18–25.

41. David silvers, “Vision – not Just for Ceos,” Management Quarterly 35, no. 2 (1994), pp. 10–15.

42. Tom peters, Thriving on Chaos (new york: Alfred A. Knopf, 1988), pp. 401–404.

43. Jeremy C. short and Tyge payne, “first Movers and performance: Timing is everything,” Academy of Management Review 33, no. 1 (2008), pp. 267–269.

44. The term “liability of newness” was suggested by James March. however, the most extensive treatment of “first- mover” advantages and disadvantages is presented in Michael e. porter, Competitive Advantage (new york: free press, 1986), pp. 186–191.

45. gerald J. Tellis and peter n. golder, Will and Vision: How Latecomers Grow to Dominate Markets (new york: Mcgraw-hill, 2002).

46. L. D. Desimone, “how Can Big Companies Keep the entrepreneurial spirit Alive?” Harvard Business Review 73, no. 5 (1995), pp. 183–186; i. Morrison, “Creating a Vision from our Values,” Modern Healthcare 29, no. 39 (2000), p. 30.

47. susan Taft, Katherine hawn, Jane Barber, and Jamie Bidwell, “The Creation of a Value Driven Culture,” Health Care Management Review 24, no. 1 (1999), pp. 17–32 and fred Wenstøp and Arild Myrmel, “structuring organizational Value statements,” Management Research News 29, no. 1 (2006), pp. 673–685.

48. for some criticisms of these tools see Colin Coulson- Thomas, “strategic Vision or strategic Con: rhetoric or reality,” Long Range Planning 25, no. 1 (1992), pp. 81–83.

49. William A. nelson and paul B. Bardent, “organizational Values statements,” Healthcare Executive 26, no. 2 (2011), pp. 56–59. see also s. eric Anderson and Brad Jemison, “Do Top Corporations often use the same Words in their Vision, Mission, and Value statements?” Journal of Marketing and Management 6, no. 1 (2015), pp. 1–15.

50. steven g. hillestad and eric n. Berkowitz, Health Care Marketing Strategy: From Planning to Action (Boston, MA: Jones & Bartlett publishers, 2004) quoted in “Mission statement is Key to a good Marketing plan: goals should Be Tied to statement,” Hospice Management Advisor 8, no. 2 (2003), p. 17.

51. graham Manville, richard greatbanks, radica Krishnasamy, and David W. parker, “Critical success factors for LeAn six sigma programmes: A View from Middle Management,” International Journal of Quality & Reliability Management 29, no. 1 (2012), pp. 7–14.

52. M. e. freisen and J. A. Johnson, The Success Paradigm: Creating Organizational Effectiveness through Quality and Strategy (Westport, CT: Quorum Books, 1995), p. 3. Also see Vincent r. Kaval and Lawrence J. Voyten, “executive Decision Making,” Healthcare Executive 21, no. 6 (2006), pp. 16–21.

53. pacific Cataract and Laser institute website: www.pcli. com/company/locations.

54. Jeffery K. pinto and John e. prescott, “Variations in Critical success factors over the stages in the product Life Cycle,” Journal of Management 14, no. 1 (1988), pp. 5–18.

55. see also David p. Tarantino, “using simple rules to Achieve strategic objectives,” Physician Executive 29, no. 3 (May 2003), pp. 56–57; fabrizio Cesaroni, Alberto DiMinin, and Andrea piccaluga, “new strategic goals and organizational solutions in Large r&D Labs: Lessons from Centro ricerche fiat and Telecom italia Lab,” R&D Management 34, no. 1 (2004), pp. 45–57.

56. see Johns hopkins Medicine strategic plan at www. hopkinsmedicine.org/strategic_plan/index.html.

57. Michael K. Bednar, e. geoffrey Love, and Matthew Kraatz, “paying the price? Controversial governance practices on Managerial reputation,” Academy of Management Journal 58, no. 6 (2012), pp. 1740–1760 and Amanda p. Cowen and Jeremy J. Marcel, “Damaged goods: Boards Decisions to Dismiss reputationally Compromised Directors,” Academy of Management Journal 54, no. 3 (2011), pp. 509–527.

58. r. p. Chait, W. p. ryan, and B. e. Taylor, Governance as Leadership: Reframing the Work of Nonprofit Boards (hoboken, nJ: John Wiley & sons, 2005); r. Charan, Boards that Deliver: Advancing Corporate Governance from Compliance to Competitive Advantage (san francisco: CA: Jossey-Bass, 2005); J. e. orlikoff, “old Board/ new Board: governance in an era of Accountability,” Frontiers of Health Services Management 21, no. 3 (2005),

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pp. 3–12; Kathryn J. McDonagh, “hospital governing Boards: A study of Their effectiveness in relation to organizational performance,” Journal of Healthcare Management 51, no. 6 (2006), pp. 377–391.

59. p. Michel Maher, Malcolm C. Munro, and flora L. stromer, “Building a Better Board: six Keys to enhancing Corporate Director performance,” Strategy & Leadership 28, no. 5 (2000), pp. 31–32.

60. sydney finkelstein and Ann C. Mooney, “not the usual suspects: how to use Board process to Make Boards Better,” Academy of Management Executive 17, no. 2 (2003), pp. 101–113.

61. Wayne f. Cascio, “Board governance: A social systems perspective,” Academy of Management Executive 18, no. 1 (2004), pp. 97–100.

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63. Corporate Library study cited in “evaluating the Board of Directors,” Investopedia, september 14, 2014. www .investopedia.com/articles/analyst/03/111903.asp.

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67. r. A. McLean, “outside Directors: stakeholder representation in investor-owned health Care

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68. s. M. shortell, “new Directions in hospital governance,” Hospital & Health Services Administration 34, no. 1 (1989), pp. 7–23.

69. Catherine M. Daily, Dan r. Dalton, and nandini rajagopalan, “governance through ownership: Centuries of practice, Decades of research,” Academy of Management Journal 46, no. 2 (2003), pp. 151–158.

70. M. L. fennell and J. A. Alexander, “governing Boards and profound organizational Change,” Medical Care Review 46, no. 2 (1989), pp. 157–187.

71. J. A. Alexander and L. L. Morlock, “Ceo–Board relations under hospital Corporate restructuring,” Hospital & Health Services Administration 33, no. 3 (1988), p. 436.

72. Catherine M. Daily, Dan r. Dalton, and Albert A. Cannella Jr., “Corporate governance: Decades of Dialogue and Data,” Academy of Management Review 28, no. 3 (2003), pp. 371–382; Matthew D. Lynall, Brian r. golden, and Amy J. hillman, “Board Composition from Adolescence to Maturity: A Multitheoretic View,” Academy of Management Review 28, no. 3 (2003), pp. 416–431.

73. see Jeffrey sonnenfeld, “good governance and the Misleading Myths of Bad Metrics,” Academy of Management Executive 18, no. 1 (2004), pp. 108–113; Jeffrey sonnenfeld, “What Makes great Boards great?” Harvard Business Review 80, no. 9 (2002), pp. 106–113.

74. finkelstein and Mooney, “not the usual suspects,” pp. 103–106.

75. “Mission statement is Key to a good Marketing plan,” Hospice Management Advisor, february 1 (2003), pp. 18–19.

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