Abstract
Incorporating strategic planning and a well defined and elaborated financial planning are indeed one of the best and most important ways health service organizations (HSOs) can perform. This will make sure that their budget distributions are properly targeted to ensure long-range results. When one considers the strategic financial planning, with great assurance of a long series to its success, yearly budgets need to be clearly analyzed to serve a long period in regard to the organizational perception.
This paper discusses a gradual approach to strategic financial planning and its elaborated use to the healthcare industry by explaining further the amalgamation of these processes in order to accomplish a successful structure for the health service organizations’ missions and visions. Pacific Clinic is an appropriate organization that I will use to show how it has successfully strategized its financial planning to achieve its objectives.
Introduction
Strategic planning is a well-explained structure that helps any business organization to reach its success for a long period of time without experiencing failures. This plan only occurs after a unified commitment by the senior managers with an objective to follow a set of aims that are developed to promote the company’s vision and mission. Financial planning, if explained in a wider depth, would mean the progression of scrutinizing financial opportunities of the organization by carrying out a choice of these opportunities that will ensure the success of the organization. This is indeed one of the best ways of making your business successful among the organizations that provide healthcare services (Soyka, P. A. 2012).
Creating a multi-year estimation for that particular organization provides the financial reality that will entirely support the organization without problems in order to achieve its vision and mission.
The company’s mission and vision statement
For a company to achieve successful strategic financial planning, it is very essential that a mission and a vision statement of that particular organization are established in an appropriate planned manner. After the mission and vision statements have been made, then it means that there must be a long-range plan to ensure that these statements are put into effect (Khosrowpour, 2000).
The next step within the structural development of the vision and mission statement will be giving out the necessary support and responsibilities by each specific department in order to achieve the goals already established. In addition, each specific department must give support to the statements established. However, it is significant to note that before a long-range plan is created and these departments develop supporting goals, there should be coordination among the departments responsible for finance to develop a strategic plan that is in line with the assets and capital of the organization. All these strategic plans will never work if there is no capital to carry out during the implementation of the plan (Khosrowpour, 2000).
The mission of the Pacific Clinic is to provide empathetic healthcare of the required quality in its setting of education and matters pertaining to research. The vision of Pacific Clinic was indeed established with leaders of high integrity and personality who on the same note are visionary. They came up with the following core values and principles, compassion. All the members of the organization are required to be committed to compassionate care which include high level of respect for the patients’ and their supporting families.
The second principle was a guarantee of quality services; a commitment to achieve high quality has greatly made Pacific Clinic’s legacy of achievements and innovations which results to effectual and exceptional care of the patients (Olsen, 2012). The core value number three is collaboration; the organization’s staff work collectively as a team in order to share their experiences which in turn creates and enhances professionalism in regard to matters pertaining healthcare. Our delivery of services also depends entirely on matters of high integrity.
Members are also trained on matters pertaining general ethics within the organization. This will absolutely promote the provision of high level of healthcare services. The last core value of Pacific Clinic is general commitment. Pacific Clinic as an institution recognizes its strong accountability to the society in which it dwells, and even to the trustee members who in turn do oversee the necessary management resources (Olsen, 2012).
In fact, most healthcare organizations do associate their healthcare organizations’ mission and vision statements with the core values just the way Pacific Clinic company does. These values do provide a common direction for the whole organization. Once these statements have been established in conjunction with the core values, the organizations will always reach its set of goals and objectives. Pacific Clinic has mission statements which have been created by its major departments. Each department must support the major mission statements of the entire organization. The trustee of the Pacific Clinic has both the finance and investment committee which helps in matters related to financial management and resources.
Performance of the organization
Before the establishment of financial planning, it is also very essential to know the history of the organization especially during economic depression. In a healthcare service organization, performances will consist of a number of signs that can be able to reflect their mission and vision statements. In the year 2008, the annual report indicated that they have eight enterprise goals that are looking forward their mission and vision statements (Olsen, 2012).
In comparison to the data they reported in the year 2002-2004, there existed a great difference in terms of financial and management improvement. The number of patience being admitted increased in the year 2008 than ever before. This is an indication of how important putting a strategic plan in regards to vision and mission statement. The performances of the organization had greatly changed as new community programs were being developed. The education of the children also got enhanced up to some appropriate level which is worth being desired (Olsen, 2012).
Financial performance in regard to the company’s statements
For every healthcare service organization to maintain its excellent credit performance, it must have long term clinical recognition which will support its credit strength. Pacific Clinic has been rated the first among other organizations as from the time it established strategic financial planning. The organization has managed to achieve an Aa3 rating which also includes a positive outlook (Roussel, 2006). Pacific Clinic has achieved these positive rating due to strategic plans it made. Initially before the establishment of these plans, it was unable to be recognized as far as performance is concerned. In the first three months of the year 2008, their profit of operation was 8.0% as compared to the year 2004 which was 4.2%.
Despite other factors like economic hardships, Pacific Clinic has been able to recognize economic pressures before they really happen by constituting them in their strategic plans. Pacific Clinic has also failed to fill unnecessary positions but instead increased the physician workloads. As result, the patience being admitted was still stable even at the times of hardship or the times of economic recession. Admission rate was absolutely stable at 150,000 annually with general hospital visits increasing to over 4.2 million. Pacific Clinic has also created a method which will help it to restructure its debt.
Evaluation of the external environmental opportunities
An integrated financial planning consists of assessment to prospective market and the existing competitors, The Pacific Clinic leaders do review their financial and external environment which ensures that its strategic plan is in line with the strength of the organization and the competitive environment. Pacific Clinic has developed new strategies to maintain its position as a dominant industry as compared to others. It has always continued with its integration of care to patience. The Pacific Clinic has maintained its reputation over a long period of time (Roussel, 2006).
Pacific Clinic has greatly expanded its service in the surrounding environs. As per the moment, they operate 25 family health centers with their well developed pharmacies and even surgery centers. The company has also carried out a marketing research to open and develop new markets for its administration. This type of research was conducted by means of a questionnaire. So many people were pleased with the operations of the organizations.
Only 1% managed to complain on some areas of the operations of the business. This 1% number claimed that the company had not reached the remote areas. So a step was promised by the organization to expand its services even in remote areas. This only took effect a week later since the company had already established its strategic plans. What remained so far was to carry out the establishment of healthcare centers in the specific remote areas. These establishments are based on general provision of health matters. The highly qualified staff will be expected to be in those centers as soon as they are accomplished (Roussel, 2006).
One of the essential components of making a strategic plan is carrying out external analysis identifying the direct competitors. The Pacific Clinic’s direct competitors include Egerton Clinic in Mississippi, Trizah Hospital in California among others which the organization has identified and is working on. The entire recognition of Pacific Clinic has increased from 20% to 38% after the establishment of the strategic plan.
Based on the recent analysis of its strengths and weaknesses, Pacific Clinic has managed to identify the fact behind its success and has focused on four niche specialists like specialists dealing with matters pertaining the heart diseases, rheumatology, urology and lastly gastrointestinal disorders. Hearts care is ranked the first then followed by the remaining three. These defined specializations have in deed promoted the performances of the organization. Many people have indeed been looking and searching for the location of where Pacific Clinic is. One of our main strength is the company’s name and reputation. The company has entirely been known across the world and therefore we do not need to spend a lot of capital on advertisement (Roussel, 2006).
Maximizing the organization’s return to share holders
Strategic leadership is greatly in concern with matters related to management strategies and processes which will in turn increase the general performances of the organization. If this has taken place, there will be an irreversible increase of value to the shareholders of the company. In order to increase shareholder’s value, those concerned with management must try by all means to pursue the company’s strategies that will highly influence and increase the profitability of the organization. In order to achieve such a goal a company must have a competitive advantageous environment. After the establishment of this strategic leadership, profits will start to grow and grow thereby enhancing the shareholder’s return (Mooij, 2010).
In addition, maximizing shareholder value is the crucial goal of making profit among companies. This risk capital if in any case the company becomes bankrupt, it will not be refunded. Shareholders are the lawful title-holders of the corporation and therefore their shares stand for a claim on the profits the companies makes. Managers on the same note are required to demonstrate ethical behavior by becoming socially responsible in order to maximize shareholder value (Mooij, 2010). Shareholder value is the profits that shareholder gets from buying the shares in an organization.
The company must also know that competition is an endless process therefore they must be ready at all time to outweigh other organizations. The company’s success depends entirely on its objectives and the goals it achieves. The shareholder value will only be defined by the success of the organization (Mooij, 2010).
Merges and Acquisitions
This paper discusses the compatibility on merger and acquisition outcomes. In a detailed analysis, we explore various organizations on their usage and exploitation of mergers and acquisitions specifically the Pacific Clinic Company. In order to carry out a successful merger and acquisition, one needs to know the history of that particular firm in which it wants to combine with (Roussel, 2006).
Mergers and acquisitions involve the coming together of two companies to become a single body. These two organizations might be hostile to each other or friendly. In some cases, these amalgamating organizations might be co-equal to each other while in some instances one organization may completely dominate the other. Mergers involve two firms with the same amount of resources. If it happens that one firm or organization is smaller than the other; this situation is referred to as acquisition (Roussel, 2006).
Compatibility
Pacific Clinical firm always looks forward in ensuring that its engagement in merger and acquisition is compatible to the new organization. Compatibility is greatly important in conflict resolution matters. If there is internal diversity within the firm then it means that the normal functioning of the organization is also at stake (Roussel, 2006). To ensure that the company remains competitive, compatibility must be put into great consideration. So cultural similarity is very essential and will always have a positive effect to the shareholders.
A merger and acquisition are an important tool which needs to be implemented in order to achieve and make the company successful. It will identify the main requirements that should be put into consideration within the company so that it can maximize its profits. It will also be of great use as the company will be able to know various objectives it needs to put in place in order to avoid conflict, for example, complementarities (Roussel, 2006).
Strategies to the success of a merger and acquisition
Structural similarity
Size and structural similarity is essential as it will define how the organization’s members are required to coordinate and divide their responsibilities. If, for example, the organizations have similar structures then would mean that they have no difficulty in working under the new structure since the new firm’s structure is the same as the predecessor. Merger and acquisition created by different structures must look forward in ensuring that it establishes a logical structure for efficient functioning (Williams, 2009).
Familiarity
If members have great tie with each other then it would mean that they will have a similar frame references and cultures. If the organization’s members are familiar to each other leadership and decision making matters will be easy to make since they have similar ideas (Williams, 2009).
Complementarity
Firms that have similar balanced bundles of resources will always perform better. Two organizations that are complementary in terms of resources will do better to maximize their profits. Others which are in line with complementarity include geographical comlementarity, human and social complementarity, prior experiences to mergers and acquisitions (Williams, 2009).
Larger firms
Large organizations have better chances of accommodating people thereby making great profits. This type of firm is also easy to manage as it is spacious and flexible. It allows the storage of surplus goods.
Motivation of employees
Compensation
Compensation can be a tool which will greatly motivate employees to commit themselves to work. There are two types of compensation and they include; monetary and non-monetary. In this case, monetary rewards include health benefits, additional benefit (bonuses), commissions, and salary among others (Manas, 2002). Non-monetary rewards include safe and healthy working environment, equality and fair treatment of workers, recognition of workers’ effort when it comes to matters related to the success of the business. Compensation is one of the main strategies in business that promote, attract and it also on the same note makes you to remain competent as a firm. This should be done by offering salaries that do not appear to be lower that the market rates (Manas, 2002).
Appreciation of the best performers
Those who perform well in the firm should be rewarded and the e-mails should be sent to all the members in order to motivate them so that they also work hard to achieve such a reward. Ranking of members can also motivate the working team. One should given a rank in order to motivate others top work tirelessly hard. When it comes to rewards pertaining increment of salary, the company needs to identify its financial stability. It should put into consideration the profits the company is making. The capital of the company should reach the strategic goals that are put forward in order to achieve the desired goals without depleting the current financial status. Pacific Clinic always has some capital set aside for rewarding its workers. This is deducted from monthly profit from the company (Manas, 2002).
Ethics
This is the acceptable code of conduct that controls people’s behavior in a given organization. Pacific Clinic discourages unethical behaviors by offering training programs before employing any new members to the organization (Beatty, 2010). They are trained by experts. Misconducts are greatly discouraged by the firm and such members can lose their positions of work since it demeans the reputation of the company. Ethical members are also having guarantee to various forms of rewards which makes them to continue with the same spirit (Boyle, 2001).
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