10/9/2024

MCH 501 – HEALTH SERVICES

MANAGEMENT

Strategic Management and

Organizational Behaviour
Prof. W. Odero

STRATEGIC MANAGEMENT
Objectives
• Explain the definitions and concepts in
strategic management
• Understand the purpose and key steps in
strategic management
• Explain the definition and characteristics of an
organization
• Explain the definition and goals of organization
behaviour

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Strategic Management
• Strategic Management consists of two
concepts:
1) Strategy
and
2) Management – the art of getting work done
efficiently and effectively through people.

What is Strategy?
• Strategy is a general direction/ road map set for
the organization to achieve a desired goal or state
in the future.
• A strategy defines the overall mission, vision and
direction of an organization.
• Strategy is normally associated with a long-range
planning, a structured system of objectives and
goals, and a selected way of creating a fit between
external environment, internal resources and
capabilities of the organization

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Strategy…
• Involves making and implementing decisions
about future direction of an organization, and
helps to identify the direction in which an
organization is moving.
• Is an action that managers take to attain the
organization’s goals.
• The objective of a strategy is to maximize an
organization’s strengths and to minimize the
strengths of the competitors.

Strategy …5 Ps
• A strategy is viewed as a:
– Perspective – strategy as an internal view on the
organization's future
– Plan – strategy is an integrated plan and outcome
of a deliberate process
– Play – strategy as a manoeuvre/ tactic or act to
overcome your opponents or competitors
– Pattern – strategy as a pattern in decisions and
actions
– Position – strategy as a mediator between internal
and external environments

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What is Strategic Management?

• Strategic Management - refers to a set of
decisions and actions which a manager
undertakes and which decides the result of the
organization's performance.
• Strategic Management involves the identification
and description of strategies that managers can
use to achieve better performance and a
competitive advantage for their organization.

Strategic Management Concepts

Strategic management answers three
questions :
– “where do you want your business to go”
(direction and goals),
– “how is your business going to get there”
(strategy/plan), and
– “how will you know when you get there”
(evaluation)

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Purpose of Strategic Management

An organization employs strategic
management in order to enable it to:
1) Pursue and achieve its mission and goals
2) Attain and survive in a competitive business
environment (sustainability)
3) Satisfy and reward its stakeholders (funders/
sponsors, customers/clients, employees)

Why is Strategic Management

important for organizations?
• Development of goal and vision for the
organization
• Provides opportunity for long-term planning and
survival in a competitive environment
• Increases managerial effectiveness at all levels
• Facilitates more effective resource allocation and
efficient utilization
• Improves employee motivation and performance
• Addresses concerns of stakeholders

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Strategic Management Process:

• Strategic management process is the process

by which managers make a choice of a set of
strategies for the organization that will enable
it to achieve better performance.
• It is a continuous process that appraises the
business in which the organization is involved.

Steps in Strategic Management (SM)

SM has FOUR main steps:
1) Environmental Scanning: the process of
collecting, scrutinizing, analysing and providing
information for strategic purposes.
― Involves undertaking SWOT analysis
SWOT analysis of an organization helps in analyzing
the internal and external factors of the organization.
It covers the following aspects:

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SWOT …
– Strengths (what is the organization's power,
advantage),
– Weakness (what is lacking in the organization i.e.
skills, resources, systems or something else),
– Opportunities (while leading the way in strategic
management what kind of chances the
organization will have or miss),
– Threats (what kind of risks the organization might
have while leading the way in strategic
management).

2) Strategy Formulation: is the process of

deciding the best course of action/strategies
for accomplishing organizational goals/
objectives.
―After environment scanning, managers formulate
corporate strategies; and set specific
targets/goals to be met by the organization;
decide what is important for the long-term
success of the organization.

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3) Strategy Implementation: means

making the strategy work as intended or
putting the organization’s chosen strategy
into action.
― It includes designing the organization’s
structure, allocating resources, developing
decision making process, and managing human
resources.

4) Strategy Evaluation: is the final step

of strategy management process.
― Involves appraising internal and external
factors, measuring performance, and taking
remedial / corrective actions.
― Evaluation makes sure that the organizational
strategy as well as it’s implementation meets
the organizational objectives

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Steps of Strategic Management Process

These steps are carried in a chronological order, when

creating a new strategic management plan. Existing
organizations that have already created a strategic
management plan will revert to these steps as per the
situation’s requirement, so as to make appropriate changes

Organization:
• What is an organization?
– An organization - is a collection of people who
work together to achieve individual and
organizational goals
– It is an entity, such as an institution, a hospital,
business, agency or an association, that has a
collective goal and is linked to an external
environment

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KEY Features of An Organization

• An organization normally has FIVE common
features:
i. Orientation: towards achievement of a common
purpose/goal
ii. Composition/structure: people - individuals and
groups of individuals
iii. Functions: specified defined functions
iv. Coordination: rational coordination of processes
and activities
v. Continuity: survival and continuity over time/
sustainability

What is Organization Behaviour ?

• Organizational Behaviour (OB) - is the study of
human behavior in organizational settings, the
interface between human behavior and the
organization itself.
– It is the study and application of knowledge about
how people behave and act within organization
– It is the study of what people do in an organization
and how their behaviour affect the performance of
the organizations
– It is the study of both group and individual
performance and activity within an organization

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Why is OB important?
• OB helps an individual to understand himself and
others better, i.e., improves interpersonal
relationships in the organization, helps to manage
work-related stress
• OB helps the manager understand the basis of
motivation and what he should do to motivate his
employees, it enables a manager to motivate
employees towards higher productivity and
better results.
• OB helps to maintain cordial industrial relations in
an organization

Objectives of OB
• OB is concerned with people within an organization,
how they are interacting, their levels of satisfaction
motivation and performance, and find ways to
improve it in order to achieve most productivity. It
seeks to achieve the following EIGHT Objectives:
1. Job Satisfaction
2. Higher Productivity
3. Finding the Right People
4. Creation of Organizational Culture
5. Improve Leadership and Conflict Resolution
6. Understanding Employees Better
7. Understand how to Develop Good Leaders
8. Develop a Good Team

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Key Factors Affecting Organizational Behavior

• There is a set of interrelated forces that affect

organizational behavior. These are classified into
FOUR areas:
i. People – managers, non-managerial staff/workers
ii. Structure – vertical vs horizontal arrangement of people
and tasks /lines of authority
iii. Technology – equipment, computers, internet
iv. Environment – internal and external
• There is an interaction between people, structure,
and technology and these elements are influenced
by the environment

Organizational Structure (OS)

What is an organization structure?
• Organizational Structure – refers to the way that an
organization arranges people and jobs so that its
work can be performed and its goals can be met.
• It is the manner in which various sub-units are
arranged and inter-related
• Organizational Structure is the typically arrangement
of lines of authority, communications, rights and
duties in an organization.

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Organization Structure (OS)

• The structure of an organization is the manner
in which various sub-units are arranged and
inter-related
• It is the institutional arrangements and
mechanisms for mobilizing human, physical,
financial and information resources at all
levels of the organization
• It defines how activities such as task
allocation, coordination and supervision are
directed toward the achievement
of organizational goals

Examples of organizational structure

Typical vertical structure:

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Principles of Organization Structure

Modern Organizational structures have FIVE
Basic Principles:

i. Specialization: - facilitates division of work into units

for efficient performance. Work can be specialized both
horizontally (e.g., departments/ units) and vertically
(chain of command)
ii. Coordination: -refers to integrating the objectives and
activities of specialized departments to realize broad
strategic objectives of the organization.

iii. Departmentalization: - is a process of horizontal

clustering of different types of functions and
activities on any one level of the hierarchy. It is
conventionally based on purpose, product, process,
function and place
iv. De-centralization and Centralization: De-
centralization refers to decision making at lower
levels in the hierarchy of authority. In contrast,
decision making in a centralized type of
organizational structure is at higher levels.
―Every organizational structure contains both
centralization and de-centralization, but to varying
degrees.

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v. Line (Professional) and Staff

(Administrative) Relationships:
Line authority refers to the chain of command, or to
the superior-subordinate linkages, that extend
throughout the hierarchy. It is an important aid to
communication and coordination.
• Line and staff personnel have different functions,
goals, cultures and backgrounds.

Types of Organizational Structure

• There are FOUR types of organizational structures: -
Functional, Divisional, Matrix and Flat.
i. Functional structure: in a functional organization
structure, people who do similar tasks are grouped
together based on specialty. E.g., doctors, nurses, lab
techs, accountants, cleaners, drivers, etc.
ii. Divisional/Service Units: in a divisional structure, an
organization groups workers into teams based on the
products or services that meet the needs of a certain
type of customer. E.g., in a hospital setting: Clinical,
Administrative, Support Units (cleaning, catering etc.)
• This kind of structure ensures workers making similar
products/services can achieve greater efficiency and
higher output

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iii. Matrix Structure - combines Functional and

Divisional Models.
― It groups people into functional departments of
specialization, then further separates them into
divisional units/services and products.
― In a matrix structure the team members are
given more autonomy and expected to take on
more responsibility for their work; increases the
productivity of the team, and allows managers to
cooperatively solve decision-making problems
through group interaction.

iv. Flat Organizational Structure (FOS): -

attempts to disrupt the traditional top-down
management system.
― In FOS, management is decentralized so there is
no everyday boss. Each employee is the boss of
him/herself, eliminating bureaucracy and red
tape and improving direct communication. This
structure is rarely practiced in organizations.

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Examples of organizational structures

University Management Structure

UNIVERSITY COUNCIL
UNIVERSITY
MANAGEMENT

ADMINISTRATION, ACADEMIC & PARTNERSHIPS, RESEARCH

FINANCE & STUDENT & INNOVATIONS
ADMINISTRATION AFFAIRS

ADMINISTRATION FINANCE PARTNERSHIPS RESEARCH &

INNOVATION

STUDENT WELFARE SERVICES LIBRARY SCHOOLS & INSTITUTES

DEPARTMENTS

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Summary
• Strategic Management is a set of decisions and actions
which a manager takes to achieve goals, better
performance and a competitive advantage for their
organization. It involves 4 critical processes:
environmental scanning, strategy formulation, strategy
implementation and strategy evaluation.
• Organization Behaviour is the study of what people do
in an organization and how their behaviour affect the
performance of the organizations, while
• Organizational Structure is the way that an organization
arranges people and jobs so that its work can
be performed to meet its goals.

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• Key References

1. Basic Strategy Concepts (Chapter 1): Jones &

Bartlett Publishers
2. Sireen Khemesh. Strategic Management/ Basic
concepts: 2019
3. Joan Bragar Galer et al. Managers who Lead: A
Handbook for Improving Health Services.
Management Sciences for Health, 2005

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