Analysis of the Healthcare Services Company

The success of a company is significantly determined by the capabilities of the management team to make effective operational decisions. The business leaders need to have a strong understanding of the organization’s operational factors, the internal and the external environment. This paper focuses on the Healthcare Services Company, one of the business players within the clinical sector. It makes an analysis of its situation through the utilization of the McKinsey 7-S framework, the balance Score Card, the SWOT and PESTLE analysis, together with the leadership and cultural assessment. The analyses in the study revealed that the company needs to review its organizational chart to ensure that the suitable attributes are incorporated into the structure for effectiveness. Also, there is the need for the business to increase the product offering, venture into the market and also embrace the latest technology for effectiveness.

Introduction

One of the key success aspects for every company is the making of the informed decisions by the management team. The approach entails a study of the underlying factors, to ensure that they get an understanding of the internal business, external environment and the general situational factors before choosing the right course (Sikdar and Payyazhi 2014, p. 791). The most commonly used tools for the task include the McKinsey 7-S framework, the balance Score Card, the SWOT and PESTLE analysis. The analysis of the company’s current organizational chart helps to understand the existing weaknesses. Therefore, the management team will be better placed to adopt ways of modifying it to ensure that it incorporates the key success factors for effectiveness.

The Healthcare Services Group, Inc., (HCSG) is one of the leading healthcare services providers that has been in operation since 1976. The organization offers a range of services including the housekeeping, linen, laundry, dietary services and the facility maintenance. The organization has divided its services into two main segments of dietary services and housekeeping. Some of the key dietary customer institutions to this company include the nursing homes, rehabilitation centres and hospitals among many others. It offers both onsite and off-site management services and also the consultation services its areas of specialization (Hcsgcorp.com 2018).

McKinsey7-S Framework

The McKinsey 7-S framework is one of the most commonly used organizational analysis tool for business improvement. The approach is used to expose the current cultural problems that exist in the business and thus, help to design the possible future solution in the company and implement the change effectively (Faturrohman et al 2018, p. 1). Therefore, the framework forms an essential change-driven tool for the business. Its main focus is based upon seven elements which include systems, structure, staff, shared values, style, strategy and skills. Therefore, these seven elements provide a critical guide in enhancing changes and improvements in the company.

Firstly, regarding strategy, it refers to the specific actions within the plan that has been adopted to help the organization to maintain and also build the competitive advantage over other business players in the industry. The Healthcare Services Company has adopted a low-cost strategy, whereby it focuses on providing high-quality services to its customers while reducing the cost to the lowest level possible. It strategy puts into consideration the mission statement of the protecting and promoting the health care services at a fair price, yet high-quality products and services. Also, its vision of becoming the most preferred partner to the customers as compared to other competitors has been a great strategy for effectiveness. The company has achieved to implement its strategy through the incorporation into the organizational culture for performance effectiveness.

The second aspect of the structure within the framework defines the segmentation and the reporting structure within the business. The structure forms a critical aspect in the business because it is the key driver towards the effectiveness in the leadership of the company. The organization has divided its leadership structure into two sections: the housing keeping section and the dietary segment. The division had a goal of delivering a consolidated solution for better service delivery to its customers. The structured approach has significantly helped in better management and efficient service delivery (Helms and Nixon 2010, p. 215).

Thirdly, regarding the shared values, defines the aspects that are integrated into the organization’s culture of the business. The shared values are integrated into the operations to enhance the smooth running of the business to enhance the gaining of the competitive advantage over other companies in the sector. Some of the values of the HCSG include beneficent, where the business looks forward towards creating the benefit to other parties, and also being collaborative with others in the industry. Also, the business has an ethical value, where it seeks to be honest and have integrity. Additionally, the business has the values of loyalty and good stewardship for the other stakeholders, whereby it seeks to maintain faithfulness to the mission and to other involved parties.

The systems form the fourth consideration aspect within the McKinsey 7-S framework and entail a definition of the daily practices that the workers undertake in the company towards achieving its core functions. It covers the activities and the procedures that the staff perform to ensure that the job is done. Usually, at the HCSG, there are different workflows that are involved in the service delivery depending on the type of the activity to be conducted. Each of the sections has different roles which either handles the housekeeping aspects in medics or the dietary activities (Hcsgcorp.com 2018). Each of the segment follows a typical system which starts with the establishment of the required services and the general administration of the agreed procedures.

The McKinsey framework also defines the leadership style of the company in its analysis. It essentially examines the key leadership style involved with the structures of the business, to expose any underlying issues for consideration (Looy et al 2014, p. 188). Leadership style is essential in promoting the success of the business. Right leadership approach will help the company to improve in its performance while the wrong one has negative effects on the company. HCSG uses the hierarchical leadership structure in its operations. According to the approach, the workers have the people whom they report to and receive the instructions from them. Usually, the information flow is from the top of the hierarchy.

Lastly, within the framework, there is the staffing factor, defining the workers and the general capabilities that they possess. The staff aspect is essential because they form the main driver of the organization towards attaining the desired business goals. Hiring the rightful workers helps to give the business a high competitive advantage while wrong staff members affect the competitive advantage negatively. HCSG is made up of different staff members with each handling their specific roles and the responsibilities. Lastly, in the framework, there are the skills. It defines the actual competencies that are possessed by the staff which works in the company. HCSG hires a diversity of skills but within the healthcare environment especially with regard to housekeeping and the dietary activities. The fact is true because the main speciality area of the company is with the medics. There is always a link between the staff and their skills in the business.

The SWOT Analysis

The SWOT analysis is one of the framework tools for the investigation of the organization’s internal environment. The approach focusses on four main aspects which include the strength, weaknesses, opportunities and threats. Regarding the strengths, the Healthcare Services Company has many internal capabilities that can give it a competitive advantage over other players in the industry. For example, the organization has a high investment in the informatics, a factor that gives it the capabilities to perform better than others within the sector. Also, the company has been in operation for a long period of time, an aspect that has earned it an established brand name within the business. Besides, the organization has a highly trained staff that is fit to do the job. Usually, the presence of the rightful staff members has a critical contribution towards the success of the business, because of it a source of the competitiveness in the sector.

Secondly, the weaknesses refer to the conditions within the business that can contribute towards the loss of the competitive advantage in the company. The weaknesses usually increase the cost of services to the customers or cause a compromise in the quality of the services offered (Lofstrom et al 2014, p. 232). Therefore, weaknesses have the capabilities of making the company to lose its competitiveness in the industry. HCSG faces the weaknesses in the challenges of managing the diversified services offered within its profile. Also, there are cases where the business faces the communication issues mainly arising from the nature of its organizational structure. Usually, the information sharing is an essential factor that contributes to the success of the company, thus, need for ensuring a smooth information flow in the business. When there is communication discordance in the organization, there are increased chances of failure in the business.

Thirdly, within the SWOT model, there are considerations of the opportunities that exist within the organization’s area of operation. Usually, the opportunities refer to the unexploited potential within the business, yet it has a profitable value. Usually, the opportunities provide a critical platform onto which the business can flourish when used well. One of the key opportunities that can be adopted by the HCSG is the technology, whereby the company can invest in the latest technology and incorporate them into the business. Currently, the technology has become one of the major sources of the competitive advantages to the companies, hence its adoption is a wise move. Also, as an opportunity, there exist new unexploited market areas that the business has not adopted yet (Aghina et al 2017, p. 97). It entails entering new market areas in different nations to do business.

Lastly, the SWOT framework also considers the threats faced by the business. The threats increase the risk of failure for the business, which in turn increases the chances of losing the competitive advantage of the business. One of the threats to the HCSG is the political threats, which comes from the leadership of the countries under operation. The political instability factors cause insecurity thus, affecting the business negatively. As a service company, the HCSG also faces the challenges from the high price growth of the medical technology. The factor increases the cost of production, thus, making it difficult to attain the strategic goals. Additionally, the company faces competition as a threat in from its operational environment. Usually, competition increases the cost and the efforts that are required to deliver the services to the customers.

Leadership Assessment

The existence of the right leadership within the business increases the chances of its success. The right leadership will make the organization to take right moves and thus, deliver the best results as compared to the wrong leadership. It is critical for every organization to make a continuous and periodic assessment of the existing leadership for effectiveness. The approach helps to ensure that the business has the right quality of leadership all the time. Cases, where there is a deviation from the normality in the management, necessitates the embracing of the suitable strategies to regain normality and effectiveness in the leadership. There are many leadership assessment tools that can be used in the management context, with each having both the advantages and the disadvantages (Cameron and Green 2015, p. 35). However, each of the technique has its own advantages and disadvantages.

At the HCSG, the most common type of leadership assessment is mainly conducted through the 360-degree evaluation. According to this approach, the leaders within the organization are evaluated on their skills, influence and the effectiveness in their duties. By so doing, the leaders get the feedback data about their colleagues and thus, embrace the suitable approaches to help the business. Some of the components measured by the approach include the strengths of the leadership, areas that need improvement, the problem-solving skills, the capability to manage pressure, ability to motivate others, listening skills and the planning and setting of goals (Cameron and Green 2015, p. 37). Through the leadership approach, the HCSG has managed to achieve increased awareness, the ability to improve the performance of the leaders, increased trust among the workers and improved organizational culture among many other advantages.

Organizational Culture Assessment

The corporate culture defines the way people conduct themselves within the business organization. Generally, the culture determines the social system methodologies applied in the business. Some of the key business aspects covered within the culture include the dress code, the language, authority symbols, behaviour, assumptions and communication systems among many others (Goodrich and De-Mooij 2014, p. 103). Culture influences the performance of the existing workers in the company and also affects the behaviour embraced by the new staff that joins the business. The management team can use the cultural aspect to integrate the corporate goals into the business operations for effectiveness. Thus, it is always important to understand the prevailing cultural state of the business and ensure that it aligns with the goals of the company.

The Healthcare Services Company as one of the players in the United States is affected by the national culture according to Hofstede’s cultural dimensions. Firstly, in the dimension, comparing the power distance index shows that it is average. The gap between the junior staff and that of the senior staff is not wide, but average. Therefore, this shows that there are little inequalities within the business that may come about due to the differences in the power distance. Secondly, the comparing the individualism and the collectivism, the index is high. The workers within this company prefer making individual decisions rather than the communal ones. Everyone is self-guided, makes personnel decisions and are guided by the personal values. Most of them have little trust in communal decisions that people make, thus, more self-centred.

Thirdly, within the Hofstede’s cultural dimensions, there is the aspect of masculinity and feminist ratio. Usually, the aspect measures how tough people are within the company. At the company, there is a slightly more than average masculinity score. The workers have a slightly more than average consideration of factors such as the heroism, achievement, corporation and many others. Fourthly, within the framework, there is the uncertainty avoidance index. It measures the degree to which people react to the unknown or unpredictable situations. At the Healthcare Services Company, the uncertainty avoidance index is average (Karin-Andreassi et al 2014, p. 55), which means that people have the average level of fear of the uncertain situations that may come about.

Also, within the framework, Hofstede emphasis on the analysis of the level of long-term versus the short-term orientation. At the Healthcare Services Company, they have a short-term orientation within their culture. The focus is mainly made on the present and little efforts on the future. Lastly, as a culture, they have high indulgence level. The US culture has low restraint level. They prefer having fun and avoid the aspects that restrain them.

PESTLE Analysis

The PESTLE analysis provides a powerful tool that exposes the position of the external environment for a given organization. Usually, the information from the external situation is essential in providing a guide to the management team on how they can sound and appropriate decision depending on the prevailing. The main areas of focus within the PESTLE analysis include the political, the economic, social, the technological, the legal, and the environmental factors. Considering the case of the Healthcare Services Company, there are many different factors within its external environment that affects its business.

Firstly, regarding the political factors, the company faces different influencing aspects in regard to the national leadership. The decisions made by the government have a direct impact on the well-being of the business. A state of political stability has a positive influence on the operation of the company, while an occurrence of political instability affects the business negatively. The changes in the government or national leadership affect the way the healthcare or the public institutions run. Politics also influence the rules and the conditions that the market operators must consider for their operations.

Secondly, the economic factors such as unemployment, the financial inflations and the interest rates have an influence on the performance of the company. The factors have a significant influence on the spending capabilities of the population within the nation and also their purchasing power. When the economic condition with the nation or the region is stable, there is a high likelihood that the healthcare business will flourish, unlike the unstable state. Job loss has an impact on the insurance aspects which affects the people’s capabilities to seek the medical services in the company (Zhang et al 2012, p. 863)

Thirdly, social-cultural factors include the aspects such as demographics, beliefs and the values within the different consumer groups. These aspects influence the type of services offered and the perceptions that the consumers have towards them. Due to the social-cultural factors, Healthcare Services Company is forced to ensure that it acts within the social-cultural aspects of the population for effectiveness. There must be an integration of these aspects of the marketing strategy, through a good understanding of the existing culture of the population. Therefore, failure to align the business activities with the organization’s activities has a negative impact on the business.

Fourthly, technologically, the advancements have a critical impact on the performance of the healthcare institutions. There is always new technological equipment coming into the market, thus, affecting the performance of the healthcare organizations. The high technological advancement that takes place within and outside the healthcare companies have an influence on the well-being of these organizations. New concepts of app development and the digital marketing affect the business in the market because they are a source of the competitive advantage. Considering the characteristics of technology, the business is always forced to ensure that it adopts the latest technology in the market for effectiveness.

Legally, the regulations within the area of operation affect the specific activities that the business undertakes. Some laws and regulations are set nationally, while others exist regionally. Some of these legal aspects include the tax policies, whereby the organization has to comply and ensure that it remits the nationally accepted tax ratio. Also, the legal factors have influenced the type of activities that the business conducts, ensuring that the business only deals in the legally accepted activities. Also, some of the insurance mandates and the practices for the consumer protection within the region also affects the company in its operation. The organization does not have an option but to comply with the existing national and regional regulatory conditions.

Lastly, the environmental factors include the acts of God and the man’s activities within the environment that have an impact on the running of the business (Srdjevic et al 2012, p. 3379). Some climatic conditions that can cause destruction to property and life within the US affect the running of the Healthcare Services Company. Also, aspects such as the earthquakes, and other occurrences have a significant influence on the operation of the company. Also, the environmental protection activities within the business tend to promote its well-being. When the business complies with the environmental requirements, it attracts the market, thus, improve its performance. Additionally, the corporate social responsibility activities that help in improving the environmental well-being, promote the performance of the company.

The Balance Score Card

The balanced scorecard (BSC) is a management framework tool that is used to manage the company strategy. The main focus is on the key strategic goals of the healthcare organization and how they can be measured to enhance performance in the company. According to the BSC approach, the organization adopts a system that entails the definition of the indicators under the main perspectives and the periodic reporting (Nikolaou and Tsalis 2013, p. 76). Within each of the BSC perspective, there are exists both the corporate indicators, that be considered by all the workers and also the individual indicators defined depending on the given job descriptions.

The main perspectives of the BSC first include the financial factor, whereby the workers define indicators and set targets in regard to the compliance of the organization’s financial goals. The main emphasis is placed on the budget compliance, cost saving and many other finance-related goals of the company. Therefore, the measure of the financial objectives is essential in helping to the company to attain financial stewardship and growth. Secondly, the BSC defines the customer focus, whereby the focus is made on how the practices within the healthcare can be articulated to the market needs by providing a value proposition that helps the company to stand out in the market. Through the consideration of the customer perspective in BSC, the organization is capable to attain the goals related to the customer satisfaction and the provision of the services to the company clients.

Thirdly, the BSC defines the process aspects, where a focus is made on the ensuring that the Healthcare Services Company makes the investment to improve its process in service delivery. Usually, the process is a critical aspect that must be handled carefully to ensure that both quality and efficiency is attained within the business (Bertels et al 2015, p. 20). Lastly, within the BSC framework, there is a focus on the learning and growth. At this point, the emphasis is placed on what can be done to improve the skill level and knowledge needed in the service delivery. The aspect also has the ability to influence the culture, which is essential in making it possible to ensure the performance of the company. Additionally, learning and growth incorporate the aspects of innovation, which helps to ensure that the workers are capable of delivering the services efficiently.

At the Healthcare Services Company, each employee sets the targets on the key indicators within the defined BSC perspectives and then reports about them at the end of the financial period (Reefke and Trocchi 2013, p. 863). By so doing, the management team is better positioned to determine the achievement level of each worker, and their contribution towards the attaining of the corporate goals. The BSC has significantly helped the business to trace its performance through the setting of the targets or goals, and the monitoring of the achievement gained. The information provided is critical in helping the business leaders to know the right performance decisions to be made.

Recommendations

Leadership Structure Recommendation

The current leadership or the organizational chart of the Healthcare Services Company is made up of two sections that are not efficiently co-ordinated. The company has a top-down, where the senior staff issues the commands and are implemented from top to bottom. This kind of leadership if faced with different challenges, which affects the business and its general well-being. With the current organizational chart, the information flow is not efficient, an aspect that reduces the general performance of the company. Poor information sharing systems makes the organization to lose its competitiveness in the market. Again, with this approach, the creativity level among the workers is reduced sufficiently. Reduced creativity and innovation aspects in the business has a negative impact on the performance and the general competitiveness of the business (Kramar 2014, p. 1069). Additionally, the current organizational chart promotes the fear-based cultures that have a negative impact on the business.

The company has segmented its business into two main categories that make the structure complete. These main sections include the housekeeping and the dietary sector. The model was defined with the main goal of improving the performance and coordination level within the business. Each of the sectors has its own leadership team, which oversees the operation of the sector. At the top of the structure, there is a manager who receives the report from each of the department. Information flows from the senior manager and moves to each departmental leaders that in turn execute it appropriately through the junior staff (as shown below in figure 1.0).

Figure 1.0: The Current Organizational Chart of the Healthcare Services Company (Kramar 2014, p. 1069)

As a recommendation for the improvement of the current organizational chart at the Healthcare Services Company, there is a need to make some improvements that enhance the organizational performance. One of the key aspects that miss in the structure and needs to be embraced is the communication attributes. With the proposed structure, there is an encouragement of the information sharing both vertically and horizontally. The model will enhance smooth communication hence encouraging a good information sharing system within the business. Also, there is a need to establish a coordination sector that helps to put together the two main sections of housekeeping and dietary to enhance effectiveness. By so doing, the information and the coordination gap that exists between the two departments will be eliminated. Therefore, the new corporate chart will foster better performance within the operations of the company (As illustrated in figure 2.0 below).

Figure 1.0: The Recommended Organizational Chart of the Healthcare Services Company (Righi and Saurin 2015, p. 19)

Other Recommendations

As a recommendation, the Healthcare Services Company needs to consider the diversification strategy in its operation for effectiveness. The SWOT analysis performed earlier in this paper revealed the need for more investment into the range of product offering. The analysis helped to expose the strengths, weaknesses, opportunities and threats surrounded by the business. Considering the capabilities of the company, it is possible for it to capitalize on the market by increasing the number of products that it offers to the clients. By so doing, the business will overcome its current threats in the market through the focus on the opportunities. The fact is true because the approach will help the business to gain competitiveness in the market, hence enhancing its performance. Again, the company will enjoy the operational sustainability benefits that come from the diversity.

Secondly, it is important for the business to explore new market areas for business. There are many unexploited market areas that the company can focus upon to enhance its performance. There is need to venture into new nations to seek the market for its services. As an implementation of the process, the Healthcare Services Company should market analysis and venture into new market areas that are likely to deliver the best results. A good study and analysis of the market help to guarantee success in the business after the investment. An increase in the market base has a direct increase in the profitability, sustainability and the general well-being of the business.

Also, it is recommended for the Healthcare Services Company to invest in technology. The PESTLE analysis performed earlier in this paper revealed that the business is facing the technological challenges that impact its operation. In as much as technology changes fast, it is important for the Healthcare Services Company to stay with the changes in effectiveness. An investment in technology is a source of the competitive advantage for the business, and it is likely to make it stand above other players in the sector. The use of obsolete technology does not deliver the best results, and thus, important to adopt the latest technology approaches.

Additionally, from the analysis of the different aspects of the Healthcare Services Company, it is clear that the transformation of the corporate culture can have positive impacts on the business. Usually, the organizational culture defines the values and beliefs that guide people’s operation and the way of conduct in the business. A corporate culture is a powerful tool that has the capability of fostering performance if it is well handled. The company can take a great move of incorporating all the performance factors into the culture for effectiveness. The implementation approach is important because it will change the people’s way of thinking and how they conduct themselves in line with the strategic goals.

Conclusion

In conclusion, the success of the business lies in the capability to embrace the suitable strategic changes that impact the business positively. Usually, the management’s capabilities to make the right decisions is influenced by the amount of the information that they have in regard to their internal business and the environmental factors. At the Healthcare Services Company, there is a need to analyse the business operations and environment and implement changes that are likely to help it improve in its performance. The use of the SWOT analysis tool helped to unveil different factors that lie within the internal environment of the business, thus, providing some guiding information on the decisions that can be made. The McKinsey 7-S, the Balance Score Card and PESTLE analysis also offered an essential information that helps the company to make suitable decisions.

From the analyses, it comes out clear that there is a need to improve the leadership of the business, by considering an integration of the communication and coordination practices in the company. Also, the analyses revealed that the Healthcare Services Company can consider embracing a diversification strategy, whereby it increases the number of the products offered in the market. The model should be incorporated alongside market venture practices for effectiveness. Additionally, there is the need for the company to invest more in technology because it is a critical source of competitiveness, especially through its innovation characteristics. The best way to implement these strategies is through the incorporation into the organizational culture in the business due to its highly effective capabilities of transforming the operations in the business.

References

Aghina, W., De-Smet, A. and Heywood, S., 2014. The past and future of global organizations. McKinsey Quarterly, Vol. 3, pp.97-106.

Bertels, H.M., Koen, P.A. and Elsum, I., 2015. Business models outside the core: Lessons learned from success and failure. Research-Technology Management, Vol. 58, No. 2, pp.20-29.

Cameron, E. and Green, M., 2015. Making sense of change management: A complete guide to the models, tools and techniques of organizational change. London: Kogan Page Publishers, pp. 3