Today, it is important for non-profit organizations to determine their goals and strategy. Strategic planning enables a business to identify its processes as well as to make them successful. As a health care administrator, I will consider the strategic plan and the approach used in creating the operating budget. Identifying its mission and priorities will enable it to maintain a successful operation of the organization.
To become successful, the organization will need to develop a strategic plan. The plan includes the vision statement, purpose statement, strategic goals, and financial statements for the agency. The vision statement will be “Our vision is to provide people with the best medical services for free.” The purpose statement will be “To enable people of all social layers to maintain their health.” The strategic goals will include the following:
- To increase the number of clients.
- To restructure the organization.
- To hire the best medical workers.
- Increase the number and quality of medicines.
- To improve the image of the center.
Then, the financial statements will be:
- Sales: $4,200,000.
- Cost of goods sold: $2,820,000.
- Interest: $62,000.
- Depreciation: $35,000.
- Taxes: $130,000.
After creating the plan, the organization should consider how to make the points work. At this stage, it is important to understand how the plan is ready for execution and whether it can be implemented in real life. The center managers should make telephone calls and address the necessary organizations to communicate with potential partners. The connections will enable the directors to find the channels for purchasing medicines and medical equipment.
The next stage in creating the strategy is organizing operations so that all the processes can be conducted (Bryson, Edwards, & Van Slyke, 2018). It is important to employ workers and establish connections between them and departments. The employees should be provided with training and constant assistance for the first time. It may also be helpful to implement a probation period for all the newly-found workers. The management should consider the possible issues or accidents related to the execution of the plan.
The next step would be to buy the necessary materials and equipment for the organization (Bryson, 2018). All the costs and revenues connected are to be calculated, and the operating budget is to be provided. After purchasing the materials needed, the strategic plan is ready for execution. The center should establish an exact date of the beginning of the operation and make it known to the public. When all the processes are completely thought over, the agency should start working.
In constructing its operating budget, the agency will use the activity-based costing process (ABC). It is referred to as “a costing method that assigns costs to the related products and services” (Kenton, 2020). The first stage is to identify activities; to do this, the managers should exactly write down their operations to define their costs. The second stage is to “directly estimate costs to activities and cost objects” (Kenton, 2020). The director should assess the cost of materials and medicines needed and the processes to be done. Thirdly, the costs should be assigned to cost activity cost pools.
The fourth stage is for the managers to calculate the rates of activity cost drivers. The necessary calculations can be made in Excel; the maximum and minimum rates should be found, as well as the average points. Then, the operating budget managers are to “assign costs to cost objects” (Kenton, 2020). The last step is to prepare budget reports to make a conclusion and summarize the results and outcomes figured out in creating the budget.
References
Kenton, W. (2020). Activity-based costing (ABC). Investopedia. Web.
Bryson, J. M., Edwards, L. H., & Van Slyke, D. M. (2018). Getting strategic about strategic planning research. Web.
Bryson, J. M. (2018). Strategic planning. In Defining public administration (pp. 208-229). Routledge.