Assignment Module 2(3)

8/3/2019 Assignment Module 2(3)

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Introduction

In this assignment I will address the issue of strategy. I will review some of the key writers on strategy

and discuss how their ideas have influenced thinking about this topic. In particular I will concentrate on

strategic design and planning, on emergent strategy, on logical incrementalism and on strategic intent. I

will review the strategic direction of one organisation. I will discuss the relationship of the strategic

direction to the organisations espoused mission, vision and overtly stated values. I will analyses an

aspect of strategy formulation and implementation in that organisation as an example of the problems

that may occur in strategy formulation and implementation. I will also make a number of

recommendations to improve strategy implementation in this organisation. I have chosen to study the

organisation where I work which I will refer to as HT. I will compare some of the issues about strategy

in the Health Service with another organisation. I am a parent governor at a junior school and I will

briefly review strategy formulation at this school, known as HJS.

Definitions of Strategy

The Oxford English Dictionary defines strategy as the art of war. It is derived from the Greek word,

strategos, meaning the role of a general or commander of an army. It should be made clear from the

outset of this assignment that I will not be using the word strategy in the military context but in a

business or organisational setting. Ideas about strategy abound and many definitions exist. Quinn (1999

a) defines strategy as the pattern or plan that integrates an organisations major goals, policies and

actions into a cohesive whole. Egan (1993) speaks about strategy as a set of activities that will be used

to produce the desired result.

It defines who we are, what we are about, where we are going, what we have to offer, what our major

goals are. pg33.

Porters (1996) notion of strategy concerns the choice organisations make to perform activities

differently, and by inference more successfully than their rivals do. Pettegrew and Whipp (1991)

quoting from Chandler, speak of strategy as the determination of the basic long-term goals of an

enterprise, the adoption of a course of action and the allocation of resources to carry out these goals.

The reader should realise from this limited collection of writers on strategy that thinking concerning

this field is not uniform. However, it should be apparent to the reader that there is some agreement

about the centrality of strategy for effective organisations. Strategy incorporates notions of

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organisational focus, alignment and consistency of direction over time. Strategy can be viewed as plan,

perspective, position, pattern or ploy (Mintzberg 1999 a, 1994). The reader may also note that the idea

of intention is implicit in the definitions of strategy given above. Organisations view strategy as a

means of realising intended and deliberate long-term objectives.

Key Strategic Ideas

Military-diplomatic strategies have existed since prehistoric times and ideas about strategy can be

traced in the maxims of Sun Tzo, Machiavelli, Napoleon and Rommel, to name but a few. Modern

thought about business strategy can be traced back to two books written around 1960: Philip Selznicks

Leadership in Administration (1957) and Alfred D. Chandlers Strategy and Structure (1962).

Selznick introduced the notion of matching the internal state of an organisation with its external

environment. Chandler developed the idea of strategic implementation and its relationship to

organisational structure. The Design school, the name by which the ideas of Selznick and Chandler

became known, further flourished following the publication of a Harvard Business School textbook,

Business policy: Text and Cases (1965). Its authors, particularly Kenneth Andrews, coined the

Design Schools motto Establish fit. This echoed Selznicks idea of a match between the internal

facets of an organisation and the external world it traded in. Andrews is among the key authors of the

famous SWOT- the assessment of strengths and weaknesses of an organisation in the light of the

opportunities and threats in its environment. This basic analytical tool remains in widespread use

although Hill and Westbrook (1997), reviewing its use by UK manufacturing firms argue that it gives a

very simplistic analysis of frequently complex internal and external business issues. They found that

the results generated by SWOT analyses were rarely used in subsequent strategic decisions.

Around the same time as the ideas of the Design School were developing, H. Igor Ansoff published his

influential book, Corporate Strategy, (1965). Here he laid out details of the model widely referred to

as the Planning School. The reader should consult Mintzbergs extensive critique of strategic planning

for more details (1994). In brief, the planning model proposed by Ansoff and developed by Steiner

(1969), amongst others, lays out specific steps to be followed in both strategy formulation and

implementation. It begins with objective setting, formally assesses the external and internal conditions

of the organisation by some form of audit, evaluates the strategies with a major orientation toward

finance and then proceeds with very detailed arrangements for strategy operationalisation. Here Steiner

breaks the process down into substrategies and hierarchies of long, medium and short-term plans. The

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overarching intention in this model is control. Each budget, plan and action program should be

controlled and be carried out exactly as specified.

In 1980 Michael Porter published a book called Competitive Strategy. In many ways Porters ideas,

referred to by Mintzberg as the positioning school, overlay most of the premises of the design and

planning school models. However Porter dispenses with one key design idea, that all strategies must be

unique. Porter introduces the notion of generic strategies. He argues that organisations could compete

based on product differentiation or cost leadership and focused market scope. The key feature of this

model is the use of analysis to identify the most competitive position. As with the design and planning

models, strategies are proscriptively engineered and emerge from the process full blown. Once again

there is an implicit assumption that the intended strategy can be fully realised by detailed analysis and

control.

In order to illustrate some of these models I will draw the readers attention to the history of strategy in

The National Health Service. In 1962 the government published A Hospital Plan for England and

Wales, which noted that capital expenditure had risen from 8.7 million in 1949/50 to over 31

million in 1962/62 without any demonstrable sense of progress in a co-ordinated direction. The plan

reviewed the existing provision of beds, providing norms for each major care group and integrated

these in terms of highly detailed and specific proposals for each region and within each region for each

hospital management committee. The Health service continued to plan throughout the 1970s. The

DHSS produced a comprehensive handbook entitled Guide to Planning in the National Health

Service (1975) that set out in detail the tasks to be performed at each level of the structure and

explained the ideas of annual and strategic planning. The following year the guide was implemented

(1976). Following a brief departure from central planning with the creation of the Internal Market, the

Chief Medical Officers of England and Wales, Kenneth Calman and Dierdre Hine, published a report

on cancer services. They proposed a centralist planning school model for the national development of

this service. The Calman-Hine approach has become the model for other planned developments in

Health policy. With the appearance of National Service Frameworks for Mental Health , Older People

and Coronary Heart Disease, central government is imposing strategic direction on Health Authorities,

Hospital Trusts and Community services. Through the National Service Frameworks, national

standards will be set and specific, proscriptive service models will be explicitly defined. These

programs will put into place detailed strategic action plans to implement the service models and

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establish performance indicators against which progress, within an agreed timescale, will be centrally

monitored. The government are using the planning model not only for strategic change in aspects of the

health service but have set out a comprehensive plan called The NHS Plan (DOH 2000) for strategic

reform of the whole NHS. Ministers and advisors conceived the highly proscriptive plan separately

from operational staff.

Chief among the critics of the planning and design schools is Mintzberg ((1994, 1996) Mintzberg and

Walters (1985) Mintzberg, Ahlstrand and Lampel (1988)). Other writers (Davies and Ellison 1998)

echo his provocative assertion that strategic planning is an oxymoron. They argue that planning

prevents strategic thinking, extrapolates patterns from the past and present, and projects them forward

into the future. Johnson and Scholes (1999) are equally critical of strategic planning. They contend that

as most strategies require implementation through people, issues such as culture and politics are

important for strategic success. Most planning processes are not designed to take account of this. They

make the point that the formal separation of planning and operation reduces the ownership of any

subsequent action in strategy implementation. This reduces the likelihood of successful

implementation. They suggest that the planning process becomes focused on finding the one correct

strategy to be completely and perfectly realised. I present the reader with an illustration of the

limitations of strategic planning, medical workforce planning. The national overview of supply and

demand for doctors in both primary and secondary care has consistently been found to be inaccurate.

The reader can witness the shocking waste of 300 qualified trainees in Obstetrics and Gynaecology for

which there are no consultant jobs. At the same time there is a national shortage of trained specialists in

psychiatry, in anaesthetics and other medical specialities.

In contrast to the models of strategic thinking outlined above, Mintzberg presents the notion of

emergent strategy. He contends that in the real world, deliberate design and planning are subverted.

The strategy that emerges is a combination of that part of the intended strategy that is realised and the

appearance of unintended strategy. I would direct the reader to Quinns account of the Honda story

(1999 b), also described by Prahalad and Hamel (1990). These authors take a different perspective than

the Boston Consulting Groups report of the same events (1975). The Boston Consulting Group argues

that Hondas competitive success in world markets was due to their deliberate and sustained strategic

efforts. Other authors have reflected that their success was more serendipitous and that they were able

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to exploit their core competencies to evolve an unassailably competitive position. I would concur with

the later view.

At this point I will present an important strategic theory which develops Mintzbergs notion of

emergent strategy. Quinn recognises as Mintzberg had before him, that real strategy evolves as internal

decisions and external events flow together. In his study of ten major organisations he makes a number

of important findings. Effective strategies tend to emerge incrementally and opportunistically. Such

strategies need to be managed and linked together by a process he defines as logical incrementalism

(Quinn and Voyer 1999), (Quinn 1978). The process follows a broad direction but is not linear or

discrete, it is more like fermentation than woodwork. It manages the balance between structured

implementation with formalised commitment, programs and budgets, and loose flexibility with the

capacity to capture the initiative and deal with the unknowable. Allied to Quinns logical

incrementalism is another key strategy theory promoted by Hamel and Prahalad, known as Strategic

Intent. The reader is directed to a fuller account of this theory in their book Competing for the Future

(1990). They present strategy as organisational stretch in contrast to the Design schools notion of

external and internal fit. In this model, organisations use strategy as a means of becoming rather than

simply achieving. The notion of core competence is central to strategic intent. Organisations are

encouraged to invent their future based on the development of their core competencies.

I now draw the readers attention to the role of organisational mission, vision and values in crafting

strategy. At this point the reader can see that Quinns and Hamel and Prahalads ideas about strategy

formulation and implementation consider issues such as organisational power, politics, culture and

vision in addition to the traditional economic questions. Schein (1996) addresses in the notion of

organisational culture. He talks of engineering, COE and operator cultures that frequently do not

understand each other and are often out of alignment. He argues that such cultural diversity must be

appreciated and managed for strategies to be successfully constructed and implemented. The values

within the organisational subcultures must be aligned to achieve full strategic success. Narayan Pant

and Ran Lachman (1998) present the need for congruence between core organisational values and

values that are implicit in organisational strategy. They argue that dissonance between core values

contained within a strategy and core organisational values will undermine the success of such a

strategy. Peters (1992) description of Total Strategy incorporates the notion of harmony between

culture, policy, plans and markets. He suggests that if these powerful forces are not in alignment when

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developing and implementing strategy, such strategies are unlikely to be successful. Johnson and

Scholes (1999) also comment on the importance of culture in understanding strategic change. They

coin the term taken for grantedness in their discussion of culture. They contend that such issues have

an important influence in the development of strategy and that value-laden paradigms, that is sets of

assumptions held in common within an organisation or industry, constrain strategy development.

Having considered the role of organisational values in strategy, I would like to return the reader to the

notion of strategic intent and introduce the related ideas of mission and vision. Stacey (1992) addresses

a range of concepts vital to discussions of the role of intent in strategic management. He argues that

vision, values and mission embody not only a sense of future state and desired destination but also

what drives business behaviour. They define what the business is there for. Peters (1982) comments

that each of his excellent companies were clear on what they stood for and took the process of value

shaping seriously as they pursued their chosen strategy. He argues that some of their success came out

of their strong sense of mission. Their clear thinking concerning what they were about helped them

formulate and successfully implement their strategy. Bartlett and Ghoshal (2000) present three key

aspects of mission. They contend that for organisations to develop an effective sense of mission there

needs to be clarity, continuity and consistency. Organisations can achieve clarity in their thinking about

mission by keeping things simple, relevant and by reinforcement. Continuity means that despite

changes of leadership and adjustment in short term priorities the company remains committed to the

same core set of strategic objectives. Consistency is accomplished by ensuring everyone shares the

same vision. I contend that mission as described above by a numbers of authors has many similarites to

notions of core competence, previously described. It address what organisations are, what they are

capable of, what activities they perform and how they perform them. I also venture to suggest that the

reader may also note the overlap between vision, that sense of future destiny, and Hamel and

Prahalads strategic intent. From the writing referred to above the reader can see how central mission

vision and values are in thinking about strategy formulation and implementation. This is especially the

case in considering emergent strategy and strategy in learning organisations (Senge 1990). Senge

makes this point when he calls on leadership to share the vision behind the strategy.

Related to the notion of core competence is what Kaplan and Norton refer to as a balanced scorecard

(1996). They argue that businesses should find ways to measure all those things that are critical to

strategic success, including aspects of their core competencies. As well as monitoring finance and

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tangible outputs they should measure intangible aspects of their activities. These notions are echoed in

the Business Excellence model. The balanced scorecard can become a powerful tool enabling the board

to lead and monitor strategic change. I turn the readers attention to consider the role of the board in

dealing with strategy. Mintzberg (1999 b) identifies three tangible roles of the board. Its first task is to

hire and fire the CEO. The next role is to exercise control at times of management crisis. The third job

is to review major decisions of management as well as its overall performance. He argues that boards

have considerable difficulty exercising these aspects of control, especially outside directors. This view

is also echoed by Garratt (1996) and Tricker (1996). Directors receive little or no training in strategic

thinking. Many directors are managers prior to promotion onto the board. They bring management type

thinking into the boardroom. They tend to behave more as managers with a focus on short-term activity

in single business units rather than as directors with a global overview of long-term corporate direction.

The outside directors may be appointed as a way of establishing contacts between organisations or be

used to enhance the organisations reputation. Either way there may little directorial competence or

organisational commitment. Rindova (1999) reasons that Boards have limited contributions to strategy

because they operate from a framework of corporate governance. Their lack of technical knowledge

and operational involvement limits their effectiveness. An alternative framework, that of a cognitive

perspective, allows Boards to use their generic problem solving skills to deal with complex problems.

Their ability to think outside of given organisational assumptions and to bring representative variety

reduces the likelihood of groupthink and helps to reduce blind spots.

In turning to strategy implementation, Beer and Nohria (2000) discuss theory E and O stratagies in

engineering corporate success. Theory E strategies are usually economically driven hard changes

often involving layoffs. Shareholder value is the only measure of success. Theory O change is based on

organisational capabilities and works on corporate culture and politics. These authors contend that

implementation of strategic organisational change requires a balance of top-down theory E strategies

and bottom-up theory O strategies that take into account organisational culture and politics. Kotter

(1996) describes organisations that fail to implement change effectively. He reports that they often

allow a culture of complacency to develop and become bogged down in implementing change. Another

error he addresses is the failure to generate a coalition of key stakeholders at the outset of strategy

formation and implementation. As Kotter points out, organisations underestimate the power of vision

and undercommunicate the vision to its staff and other relevant stakeholders.

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Kotter comments about the importance of relevant stakeholders in strategy implementation. Baetz and

Bart (1996) published a study of mission statements. They found that many firms had mission

statements but few found them of use. They argue that mission statements that are developed with the

involvement of key stakeholders aid strategic thinking. Such organisations tend to develop constructive

attitudes towards their stakeholders and can deal with potential conflicts of interest that might

undermine strategy implementation. I will return to this notion in considering the example of strategy

implementation discussed below.

The Strategic Direction of HT

HT is a third wave NHS Trust providing acute and community services to a population of

approximately 220,000 people. Its strategic direction can be followed not as a single explicit plan but

as a sense of general intent. The Trust began on 1st April 1993. At that time its strategic aim was to

maintain excellent local hospital and community services by providing best use of its resources. It had

been a pilot site for the Resource Management Initiative in the 1980s, and senior management

believed that despite the uncertainty of the times, rational planning and tight control over budgets and

actions would be the means by which this strategy could be implemented. It was also around this time

that senior management articulated the overriding purpose of the Trust in its mission statement

(appendix z). This was developed with little or no involvement of the staff in the Trust or other relevant

stakeholders. I contend that this lack of involvement has produced a lack of commitment, which is a

key factor in difficulties with strategy implementation. Senior management wished to reduce the

number of HTs hospital sites and centre all its services onto the main DGH site. By doing so it hoped

to make more efficient use of financial resources, a strategy in keeping with the value-for-money ethic

espoused by the Trust Management. By 1994 it had closed two sites and a management consultancy

report was commissioned to progress the closure of the main support hospital SLH. Over the last six

years HTs senior management has allowed this strategy to drift. Other politically charged local issues

have pushed SLH from HTs attention. Despite the obvious problem that this strategy vacuum creates,

the board hears little or nothing about it. There are no processes by which such signals can be amplified

to compete with the stronger organisational messages around waiting lists and performance.

HT is now pursuing a major change in strategic direction. Senior management have submitted a plan to

merge with a neighbouring integrated Trust and form a single Acute Hospitals Trust. This will result in

HT no longer having a responsibility for community services. A large element of HTs mission over

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the past seven years has been to provide a seamless service between hospital and community. I believe

that the vision and values of much of HTs staff have not changed. Such a major change in mission as

driven by the new strategy may fall foul unless these cultural issues are addressed. Problems have

already occurred with the new strategy. HT is the local hospital. Several of the recent capital

developments have been funded by large public donations. The new strategy of combining with the

nearby Trust is moving services into a neighbouring town. The new organisation is no longer the local

hospital. Not surprisingly the CHC, on behalf of the patients, the local newspaper and several local

MPs have been actively resisting the proposed changes. HTs senior management failed to take into

account how incongruent its strategy was with the deeply held values of relevant stakeholders. The

issues outlined above demonstrate the weakness of HTs position as regards to mission, vision and

values in respect of strategy because it did not involve relevant stakeholders in developing its mission

and thereby address such conflicts of interest.

I expect that within two years the local population of HT will have not only the existing Hospital Trust

providing care but that there will be several, level four Primary Care Trusts and a Community and

Mental Health Trust. The appearance of these new organisations will require the Hospital Trust to

think clearly about which services it should continue to provide and which it should leave to others. If

it fails to do this it may fall foul of Porters growth trap (1995). I will return to this theme as I develop

the discussion about the strategic issues this Hospital Trust faces.

Analysis of Strategy Formulation and Implementation

In 1996 two events occurred at HT. Early in the year the whole Trust took part in an exercise called

Strategy Week. During this time more than 400 staff were involved in workshops, discussions and

focus groups. The weeks conference generated a mixture of forecast, invention and environmental

analysis (appendix b). After this excursion into a more emergent and collaborative approach at strategic

thinking a more familiar event occurred. Later the same year the Director of Planning produced a

document entitled Prospects 2000 and Beyond. A Strategic Direction for Local NHS Provision. This

document articulated a number of detailed strategic options. It was only circulated to members of the

Trust Board and general managers. This relatively small group settled on a strategic option that took no

account of the outputs of the previous Strategy Week. The document, and some of the work that

followed, took Porters ideas of positioning and Steiners planning model. The senior management

team established a range of core services that it believed the Trust could sustain for the future and

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identified activities that it would give away to neighbouring Trusts. They then went on to form sub-

strategies in specific area. There were finance, human resources, capital planning, and corporate

development strategies.

The intent was to develop partnerships with neighbouring Trusts. This was seen as a means of

engineering clinical services for significantly larger populations than the 220,000 inhabitants of the

local town. The reader can see how this intent of providing specialist clinical services based on

populations of 500,000 was to become closely aligned with advice emerging from the Royal Colleges

about accreditation of specialist services and about the Governments thinking concerning the new

District General Hospitals. This strategic intent has been incrementally pursued, with some success in

reconfiguring ENT, Ophthalmology and Medical Oncology services. These services now function as a

common unit across the two towns. However the strategy has ground to a halt over Childrens and

Womans Services. The commitment that Quinn identifies as important for strategy implementation is

not present. Senges call on leadership to share the vision behind the strategy and Narayan Pants

comments on the need for congruence between organisational values and strategy are some of the

issues that have undermined HTs progress in moving its strategy forward. At the same time the

government has recently published several key strategic plans which HT is struggling to implement.

The Calman-Hine report had been part of the original driver to reconfigure cancer services across the

two towns, which HT has been partially successful in doing. The Calman-Hine approach, embodied in

National Service Frameworks (NSFs) is imposing strategic direction on HT. Much of HTs mission is

now seen to be implementing these NSFs and The NHS Plan. With so much planning going on, it is not

so surprising that HT has relied on planning as its main means of strategy management. I would

contend that there has been an important shift in HTs mission such that senior management now see it

as providing secondary care, technology based, services for the two neighbouring towns rather than

integrated hospital and community services for the local town.

There is little evidence that HTs senior management spent time on sharing the vision behind their

strategic intent with the internal stakeholders. This is particularly important for the culture of the

consultant staff. The mission statement appeared without any sense of ownership from key

stakeholders. There is a tacit assumption by senior management that acceptance of employment with

HT equals full alignment with all its beliefs, values and mission. HT has become complacent, as Kotter

describes. This is also the view of the Chief Executive. HT was a leading organisation 15yrs ago with

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respect to General Management and Resource Management. Senior managers have assumed that

competence and commitment to change and improvement are widespread.. This complacency has

caused HT to become bogged down in implementing change. HT has also failed to generate support for

its new strategy from key stakeholders at the outset.. It is clear that some of the drivers for service

reconfiguration and Trust merger come out of the Royal Colleges and are part of the professional

bureaucracy culture. There are, however major differences in expectation between the consultants and

senior management which have surfaced as the strategic plans have been made specific. HTs senior

managers and directors are currently doing nothing to promote its mission, values and vision as far as

strategy is concerned. As Kotter points out, HT has underestimated the power of vision. It has made no

attempts at co-opting other influential individuals in the locality, eg MPs or local councillors, to

promote the vision.

HTs board, in common with many other corporate boards, has difficulty with its governance role over

management. Its eyes and ears are hampered by the limited amount of information concerning internal

and external activity it receives. External directors have little experience of the clinical and non-clinical

activity. They are in a position to ask searching questions of clinical directors and general managers but

do not have the background to know if the answers are reasonable or credible. As a consequence the

board is unable to effectively hold management to account for its performance in any way other than

over the numerical targets. The boards time and energies are universally taken up with the

governments performance targets of waiting lists and waiting times. The board does not critically

review management decisions and as a consequence makes little or no contribution to HTs capabilities

in strategy formulation or implementation.

A Survey of the Extent to which Strategy is understood and applied

at HT

In order to collect evidence about how widespread understanding was about strategic issues within HT,

I sent a questionnaire (appendix a), which I had previously piloted, to thirty senior and middle

managers. I chose these managers at random from clinical and non-clinical areas. I also made sure that

staff whose area of responsibility covered the acute hospital and staff from community services were

included. I received twenty replies.

Table 1. The number (%) of positive responsesin reply to the question about where

the initial influence for the

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reconfiguration of clinical services

came from

Health Authority 16 (80%)

Royal Colleges 9 (45%)

National Government Policy 6 (30%)

Chief Executive 4 (20%)

Trust Board 3 (15%)Local Consultants 2 (10%)

Neighbouring NHS Trust 0 (0%)

Community Health Council 0 (0%)

Huddersfield Examiner (local paper) 0 (0%)

Primary Care 0 (0%)

Local MPs 0 (0%)

Table 2. The number (%) of positive responses

in reply to the question about where

the decision to proceed with Trust

Merger was taken.

Trust Board 13 (65%)

Trust Management Team 9 (45%)

Chief Executive 8 (40%)

Consultants Committee 1 (5%)Individual Directorates 0 (0%)

The results in Table 1 show that most of the respondents see the origin of the reconfiguration agenda as

coming from outside the Trust. Most of the managers (80%) felt that the Health Authority had initiated

the need for change, with fewer seeing the Royal Colleges (45%) or National Government Policy

(30%) as the primary drivers. Only a minority sees the change as beginning inside the Trust. The

figures in Table 2 show that the majority of the managers contacted in this survey see the Trust Board

or the senior management team as the place where the strategic decision about reconfiguration of

services and Trust merger is taken. Only one person felt that this was a decision taken by the medical

consultants and no one saw the individual directorates as having a role here.

In considering the factors influencing the decision to reconfigure clinical services and proceed with

Trust merger there was a high degree of concordance between responses. Most (90%) replied that

establishing a critical mass of population size to support the clinical specialities was the major strategic

influence. Other replies focused on the economies of scale which Trust merger would bring, allowing

resources to be invested in clinical services. In response to the last question about how the new

organisation after merger might be different or better, there was no clear consensus. Most people

responded in very vague terms and portrayed the new Trust as being much like the old one. No one

articulated how the merged Trust would be different from its two component parts.

Table 3. The number (%) of positive responses in reply to the question about the various processes,

tools or techniques which respondents had used in considering issues around Trust Merger.

Time Outs 15 (75%) Financial Forecasting 6 (30%)

Team Briefing 14 (70%) Benchmarking 5 (25%)

Outside Consultancy 14 (70%) Action Learning Sets 4 (20%)

Public Consultation 12 (60%) Scenario Planning 4 (20%)

Focus Groups 9 (45%) Gap Analysis 4 (20%)SWOT Analysis 9 (45%) PEST Analysis 3 (15%)

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Option Appraisal 9 (45%) Decision Analysis 0 (0%)

The results in Table 3 show that most of the managers contacted in the survey have been involved in

some form of process concerning Trust Merger. The reader can see that most of these processes are

non-analytical or generate soft rather than hard data. Only a minority have undertaken more formal,

hard analytical processes.

It is interesting to note the high number of managers who view the Health Authority as the main driver

the strategic change. This is not the view of the Health Authority (Sands 2000), nor it is the view of a

number of executive and non-executive directors. They feel the main influences for change have come

direct from Government and the Royal Colleges. The majority of managers view the Trust Board and

the Trust Management Team as the place where these strategic decisions are taken. I contend that this

evidence, taken together with the lack of clear vision within the management about the new

organisation, indicates a very centralist approach to strategy formulation. There is little evidence that

the vision and mission underpinning the strategic drive is widely appreciated at a middle management

level. Despite the widespread involvement of managers in briefings, time outs and public consultation,

HTs senior management has failed to effectively convey the content of the reconfiguration strategy.

This has resulted in a lack of engagement in and commitment to the strategy process. Equally, HT has

not engaged its external stakeholders in this same process. I would argue that this is one of the major

reasons for the halt in progress of HTs strategy. I would equally argue that over the past four years HT

has pursued its strategic intent in an incremental fashion. The evidence I present confirms much of the

strategy formulation to have been in the planning mode. I would maintain that this is an entirely usual

and expected means by which a Hospital Trust would formulate strategy. I suggest that in seeking to

use rational planning as a model HT has not used sufficiently robust or rigorous analytical tools in

strategic construction or implementation. This may reflect a lack of competence in these areas and may

account for a high degree of reliance on outside management consultants. I would argue that HT in its

limited use of SWOT analysis has committed the same errors described by Hill and Westbrook (1997).

Recommendations about how strategic processes and management

can be improved

In seeking to improve strategic thinking within HT there are a number of changes that I would

recommend. I have discussed the role of HTs board in this assignment. The majority of managers

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assume that the Board has a key decision making role in strategy formulation. The view of executive

and non-executive directors is that the Board functions as a rubber stamp to strategic decisions already

taken by the Senior Management Team. HTs Board is not provided with enough timely information or

enough time to consider any strategic issues. It is kept at such a distance from operational matters that

its members find it impossible to make any strategic decisions. I recommend that HTs board is

provided with a balanced scorecard. In addition to the traditional performance data such as finance,

waiting times, waiting lists, etc. the balance scorecard should report on how well HTs strategy has

been communicated to its internal stakeholders. It should contain data describing the presence or

absence of the strategic core competencies within HT, such as leadership qualities and proficiency with

analytical tools and should review the degree to which HTs staff understand the vision and mission of

HT in pursuit of its strategic direction. The Board should audit its own competencies in establishing

policy, strategic thinking and its ability to supervise the Senior Management Team. It should also make

its accountability for strategic decisions more organisationally transparent. The board should behave

more as Rindova reasons and use their generic problem solving skills to deal with complex problems.

Along with limitations in strategy formulation, HT must improve its ability to implement such

strategies. There needs to be both top-down and bottom-up processes to drive the strategic change. I

have identified major limitations in HTs ability to use hard theory E strategies, as Beer and Nohria

(2000) discuss and to deal with internal culture and politics with bottom-up strategies. HT must make

its clinical and non-clinical directors more organisationally accountable. It must more clearly define

areas of work which it will and will not do in the future and exploit its core competencies to avoid

Porters growth trap. It must become for proficient at organisational analysis if it is to continue to rely

on strategic planning and positioning. It must also become better at dealing with its own cultures and

the cultures of its relevant stakeholders. If it continues to plan, and I believe it should, it must become

less secretive and more collaborative and co-operative. HT must seek to bring greater alignment

between the professional and managerial cultures. I could achieve this by encouraging greater

collaborative project working between clinicians and managers. It could also develop common

leadership development for clinicians and managers and use a common appraisal process. One thing

HT must address is to affirm its sense of mission in light of the change in strategic direction. As

Bartlett writes mission as to be clear, consistent and continuous. HTs leaders must share the

underlying vision such that the sense of HTs mission is no only widely understood but that its staff

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and other relevant stakeholders are committed to it. It may even need to re-define its mission statement

with much greater involvement from stakeholders. Individuals at Board, Director and Manager level

must begin to amplify weak signals to create a sense of urgency for the strategic change. This has not

occurred over previous aspects of HTs strategy. The mission must have continuity such that strategic

drift does not occur with the arrival of new Directors and managers. To prevent this middle managers

and other staff must be able to convey to senior managers important aspects of strategic action

together with those issues relating to core competence. HT must address the culture of arrogance and

complacency that which has developed if is to implement the large strategic agenda it faces over the

next ten years.

Strategy in Schools

Much of the discussion about strategy in the Health Service, local and nation, is echoed in the school

system. Schools have had to meet the challenges of self-management. Central government has been

very proscriptive in establishing policy. The literacy and numeracy strategies were imposed on HJS, as

on every other primary school in the country. The school was told not only what to teach but when,

how and how long to teach it for. The strategy came fully formed with detailed actions for

implementation. The OFSTED inspection process, which the school underwent two years ago, has

encouraged HJS to extend its short-term plans into a strategic framework of the three-year school

development plan. This is a highly rational process which the head and deputy-head teacher work

through. They plan to plan and deliver the detailed strategic document to the governing body at the

same point in the school year, each year. Each part of the plan is carefully costed and programs are

budgeted for.

My observations of the school over the past four years are that little or no strategic thought goes on.

The planning is seen as necessary to implement the imposed strategy but no choices are made about

what the school will or will not do. There is no analysis of the external environment or internal

capabilities. Past events and experiences are projected into the future and nothing of significance

changes. I believe that there are a number of consequences of this lack of strategic focus. A number of

activities have been pushed to the side of the school curriculum because of the increased emphasis on

numeracy and literacy. The staff struggle to deliver some of these now marginalised topics because of

the lack of available resources and time. Another problem is a lack of flexibility. A recent sharp

increase in the number of children coming into the school resulted in very large year three classes. The

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school funds had been committed to existing budgets in order to deliver each of the programs on the

school development plan. It took two terms before the increased income the school received, because

of the extra children, could be used to employ an additional member of staff. This was to enable the

school to run three much smaller classes rather than two very large ones. The cumbersome planning

process was too slow to respond to the rapid change in the environment. Much like the health service,

the school is running just to stand still.

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Appendix m

Mission

To become the best provider of health care by building on our firm

foundations and continuously evaluating and improving services to

all our users. We will care about how those services are provided

through the development of an excellent workforce.

Aims

Providing good quality health care for the local population within the resourcesavailable.

Striving to maintain and improve the health of the population.Promoting the practice of effective efficient and economic services in clinicaland non-clinical areas.Valuing, empowering and developing our staff.Providing integrated care across Primary and Secondary services.Promoting and providing selected services to a wider area.Working in constructive partnerships with other agencies and industries.Caring for the environment.

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Values and Principles

To ensure the highest possible quality health care and improvement

in health means that all patients, relatives and carers who use our

service should identify with:-

an organisation with people who care being treated as an individual

being given choice

being well informed

feeling safe and confident

We will promote

Equity- fairness across our service users

Effectiveness- doing the right things with the right outcome

Appropriateness- doing the right things to the right people at the right timeand in the right place

Sensitivity- having respect for peoples individual needs

Flexibility- responding appropriately to each individuals personal,environmental and cultural needs

Working in partnership- with patients, relatives and carers, otherOrganisations

Where principles conflict hanging onto ourIntegrity of Intent

Appendix z (The NHS Plan, DOH (2000) London: HMSO)NHS core principlesWe the undersigned support these principles, and commit ourselves to a modernisedNHS on the basis of these principles reflected in this NHS Plan.

1. The NHS will provide a universal service for all based on clinicalneed,not ability to pay.Healthcare is a basic human right. Unlike private systems the NHS will not excludepeople because of their health status or ability to pay. Access to the NHS will continueto depend upon clinical need, not ability to pay.

2. The NHS will provide a comprehensive range of servicesThe NHS will provide access to a comprehensive range of services throughout primaryand community Healthcare, intermediate care and hospital based care. The NHS willalsoprovide information services and support to individuals in relation to health promotion,disease prevention, self-care, rehabilitation and after care. The NHS will continue toprovide clinically appropriate cost-effective services.

3. The NHS will shape its services around the needs and preferencesofindividual patients, their families and their carers

The NHS of the 21st century must be responsive to the needs of different groups andindividuals within society, and challenge discrimination on the grounds of age, gender,ethnicity, religion, disability and sexuality. The NHS will treat patients as individuals,withrespect for their dignity. Patients and citizens will have a greater say in the NHS, andthe

provision of services will be centred on patients needs.4. The NHS will respond to different needs of different populations

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Health services will continue to be funded nationally, and available to all citizens oftheUK. Within this framework, the NHS must also be responsive to the different needs ofdifferent populations in the devolved nations and throughout the regions andlocalities.Efforts will continually be made to reduce unjustified variations and raise standards to

achieve a truly National Health Service.5. The NHS will work continuously to improve quality services and tominimise errors

The NHS will ensure that services are driven by a cycle of continuous qualityimprovement. Quality will not just be restricted to the clinical aspects of care, butinclude quality of life and the entire patient experience. Healthcare organisations andprofessions will establish ways to identify procedures that should be modified orabandoned and new practices that will lead to improved patient care. All thoseproviding care will work to make it ever safer, and support a culture where we canlearnfrom and effectively reduce mistakes. The NHS will continuously improve its efficiency,productivity and performance.

6. The NHS will support and value its staffThe strength of the NHS lies in its staff, whose skills, expertise and dedicationunderpinall that it does. They have the right to be treated with respect and dignity. The NHSwillcontinue to support, recognise, reward and invest in individuals and organisations,providing opportunities for individual staff to progress in their careers andencouragingeducation, training and personal development. Professionals and organisations willhaveopportunities and responsibilities to exercise their judgement within the context ofnationally agreed policies and standards.

7. Public funds for healthcare will be devoted solely to NHS patients.The NHS is funded out of public expenditure, primarily by taxation. This is a fair and

efficient means for raising funds for healthcare services. Individuals will remain free tospend their own money as they see fit, but public funds will be devoted solely to NHSpatients, and not be used to subsidise individuals privately funded healthcare.

8. The NHS will work together with others to ensure a seamlessservicefor patients.

The health and social care system must be shaped around the needs of the patient,notthe other way round. The NHS will develop partnerships and co-operation at all levelsofcare between patients, their carers and families and NHS staff; between the healthand social care sector; between different Government departments; between thepublic

sector, voluntary organisations and private providers in the provision of NHS services to ensure a patient-centred service.

9. The NHS will help keep people healthy and work to reduce healthinequalities

The NHS will focus efforts on preventing, as well as treating ill-health. Recognisingthatgood health also depends upon social, environmental and economic factors such asdeprivation, housing, education and nutrition, the NHS will work with other publicservices to intervene not just after but before ill health occurs. It will work with othersto reduce health inequalities.

10. The NHS will respect the confidentiality of individual patientsand provide open access to information about services, treatmentand performance

Patient confidentiality will be respected throughout the process of care. The NHS willbe open with information about health and healthcare services. It will continue to use

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information to improve the quality of services for all and to generate new knowledgeabout future medical benefits. Developments in science such as the new geneticsofferimportant possibilities for disease prevention and treatment in the future. As anationalservice, the NHS is well-placed to take advantage of the opportunities offered by

scientific developments, and will ensure that new technologies are harnessed anddeveloped in the interests of society as a whole and available to all on the basis of

need.

Appendixy

Prof Sir George Alberti PresidentRoyal College of Physicians of LondonBarry Jackson PresidentRoyal College of Surgeons of EnglandProf Mike Pringle PresidentRoyal College of General PractitionersDr Ian Bogle Chairman of Council

British Medical AssociationStephen Thornton Chief ExecutiveNHS ConfederationDr Michael Dixon ChairmanNHS AllianceChristine Hancock General SecretaryRoyal College of NursingBob Abberley Head of HealthUNISONKarlene Davis General SecretaryRoyal College of MidwivesDr Jenny Simpson Chief ExecutiveBritish Association of Medical Managers

Sir Jeremy Beecham ChairLocal Government AssociationHarry Cayton Chief ExecutiveAlzheimers Society Dr Peter Smith ChairNational Association of Primary CareRabbi Julia Neuberger Chief ExecutiveKings FundProf James McEwen PresidentFaculty of Public Health MedicineNatalie Beswetherick ChairAllied Health Professions ForumMelinda Letts ChairwomanLong Term Medical Conditions AllianceBarbara Meredith Policy and

Communications ManagerAge ConcernLondon and The Patients ForumDelyth Morgan Chief ExecutiveBreakthrough Breast CancerDiana Whitworth Chief ExecutiveCarers National AssociationEoin Redahan Director of PublicRelationsThe Stroke AssociationBob Gann Director

The Help for Health TrustPaul Richard Streets Chief ExecutiveDiabetes UKSir Alexander Macara Chairman

National Heart ForumSir Nicholas Young Chief ExecutiveMacmillan Cancer Relief

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Assignment Module 2(3)

Documents

Transcript of Assignment Module 2(3)