It is a competitive market and this market sells more than goods and services. It propagates a certain reputation. It tries to work in a way such that it gets a strong exclusive identity. This identity stems from the market’s efforts to provide the best service and accountability to its consumers who pay to avail the facilities it offers. Contemporary institutions like schools, hospitals, universities, prison systems and other similar facilities have also imbibed this corporate culture. They treat their consumers with the same perspective as any other organization would. Consequently use of keen business acumen and strategies mark their modus operandi. With major focus on providing quality services to their consumers, these institutions are justified in incorporating business models to guide the way they function.
“A business model is a conceptual tool that contains a big set of elements and their relationships and allows expressing the business logic of a specific firm. It is a description of the value a company offers to one or several segments of customers and of the architecture of the firm and its network of partners for creating, marketing, and delivering this value and relationship capital, to generate profitable and sustainable revenue streams.”(Osterwalder, Pigneur and Tucci, 2005). Going by this definition, a business model suggests pragmatic methods to deliver according to customer expectations. The use of such a definitive approach is indeed a very brilliant take on the overall organizational and functional processes of social institutions.
In case of the health and hospital sector, there is a presence of diverse customer segments. Subsequently, not only diagnosis and treatment but there are a host of other services that the consumers (patients in this case) expect and need to be provided with. The techno-boom has managed to provide an advanced health system with better communication facilities and reduced medical errors with more focus on better healthcare for the patient. This can only fall in place if the health sector adheres to certain standard operating procedures and gives its consumers the requisite facilities. This system has to be able to adapt to the constantly changing business and technological environment.
In today’s competitive market, educational institutions are sellers offering not only courses and degrees, but also a professional edge to their consumers (students in this case). Consequently, a business model like CRM (Customer Relationship Management) is a very competent approach to deal with them. According to this model all relationships pass through four stages of exploration, expansion, commitment and continuation or dissolution. (Bejou, David, Treating Students like Customers). The explanation of this model is nothing but an endorsement of the social commitment of such services. The only difference is the service gets a more structured perspective by incorporating corporate ethos.
The critics of corporatization of such institutions cite ethical problems and label the trend as commodification. However, they should look at it as process improvement. This has not only improved the quality of service delivered but has also reshaped attitudes where organizations and their employees have become more accountable. The implementation of an effective corporate culture engages employees at a fundamental level, and translates that engagement into high performance.
An effective culture also aligns with the business strategy to ensure the organization meets its long-term goals. (Dentchev, Niolay, Integrating corporate social responsibility in Business models)
Use of business models gives an institution a structured perspective. The services assume an accountable dimension which is indispensable both in terms of customer satisfaction and competitive advantage.
References
Dentchev, Niolay, Integrating corporate social responsibility in Business models, Web.
Bejou, David, Treating Students like Customers, Web.
Osterwalder, Pigneur, Tucci, Web.