Environmental Strategic Management

An environmental analysis will enable home health agency to gather necessary information and facts to help in the decision making process. This process will also help the agency in the identification of various opportunities that it can take advantage of.

The agency will be able to know the strengths, weaknesses, opportunities and threats of its competitors. The agency will also be able to identify its own strengths, weaknesses, opportunities and threats. It will be in a better position to identify stakeholders’ tastes and preferences, industry drivers and critical success factors, the past, present and future trends both locally, nationally and internationally.

Environmental analysis will enable the agency to develop data banks that can be referred to for quick decision making. It will also help the agency to be proactive in decision making, position itself well in the market, have realistic decisions, reduce business failure levels, and differentiate its stakeholders, their priorities and needs and how to satisfy them.

In Swayne, Duncan and Ginter (2008), an analysis of the environment will make the agency to be able to legitimize management decisions, assess its success or failure based on its benchmarks, reduce conflicts in decision making, anticipate and predict future trends in the business, and ensure consistency in decision making.

Yes, capital allocation is done as per the return anticipated from a project. These projects are initiated within the environmental influence. The returns depend on the environment. If the environment can give higher returns then more capital will be allocated in the health project. The decision to invest in a project in a given environment is dependent on the characteristics of the internal and external environment. This therefore, means that the environment affects both capital allocation and decision making of any given project.

The previous strategic plans that have not resulted in expected returns have been discarded. They include: – the immediate expansion to increase the market, increased employment to improve the output and efficiency and the rolling out of training center. These have been discarded due to the changes in the environment like the external competition and cost of doing business. The environment changes often. There are a number of new businesses that brings competition to the home health agency. They tend to provide distinct services (Porter, 1980).

Once a market is created, entrepreneurs have to take the advantage of new market. This is not in contrary to the market enjoyed by the Home Health Agency. New health agencies have been established; this has increased business competition in this environment. The organization is not market oriented the market changes at a faster rate to that of the organization. This has resulted into unfavorable competition for the business.

Reeve (2002), gives an explanation that; External forces influence organization to a greater extent, much of the decisions taken, for instance investments depend much in the external environment. The forecasting and planning in the past have not been successful sin analysis was not done intensively. But for the last few years this has improved much since the research was carried out effectively.

Environmental analysis does very little to tell about the future of the business. This is because in analyzing the environment, the past and present factors are the ones being considered in order to explain managerial decisions. This is a limitation in that the health agency is unable to foretell any future actions likely to affect its operations.

Even though it defines the way the organization should carry its operations, it does not guarantee success of the organization. The effectiveness of the organization is not reflected in this analysis.

The potential of the organization as indicated by the environmental analysis is not the reflection of potentiality of the organization operations.

  1. The environmental factors within and those without the disaster
  2. The effects of the internal and external factors
  3. Identify the trends on these factors
  4. Identify the relationship amongst the factors
  5. Identify the threats and opportunities in existence in the environment
  6. Identify the available options and alternatives to the strategy
  7. Make decision subject to all the identified factors

References

Porter, M. (1980).Competitive strategy: Techniques for analyzing industries and competitors. New York: The Free Press.

Reeve, R. (2002). Introduction to environmental analysis. New York: John Wiley and Sons.

Swayne, L., Duncan, W., & Ginter, P. (2008). Strategic management of health care organizations (6th ed.).New York: Wiley & Sons Inc.