Question

QUESTION 34 Which of the following is the underlying assumption when selecting the liquidation strategy: Internal resources are available for investment at an opportune time. The organization cannot be sold as a viable on-going operation. Joining with another organization will improve operations and earnings. The organization has a market, but is less than it formerly was. 2.5 points

QUESTION 35 Which of the following are reasons why organizations adopt a reactor posture: Top management has not clearly articulated the organization’s strategy Management does not shape the organization’s structure and processes to fit the strategy. Management tends to maintain its current strategystructure relationship despite environmental changes. All the above. 2.5 points

QUESTION 36 Although there are many strategies available to health care organizations, it is critically important that they focus on a single strategy ,and not pursue more than one strategy simultaneously. True False 3 points

QUESTION 37 Since related and unrelated diversification are considered risky strategies, why do health care organizations engage in such strategies? Check all that apply: Often it is thought that if the organization can successfully engage in operations outside its core, new markets and new opportunities will emerge It is never a good strategy for a healthcare organization to engage in a diversification strategy Diversification strategies, in many cases, are selected because markets have been identified outside the organization’s core business that offer potential for substantial growth Healthcare organizations should stay within the focus of their mission, so diversification should be avoided

Answer 1

Solution –

Question 34 – The assumption when selecting a liquidation strategy is: The organization cannot be sold as a viable ongoing operation

Clarification – Liquidation of a company is actually collecting the assets of a company and selling it off to pay its debts which the company cannot do so through conduct of normal business. Hence the assumption when going in for liquidation is that normal business cannot fulfill the revenue/profit requirements for survival of business.

Question 35 – The organizations adopt a reactor posture when – The management has not clearly articulated the organization’s strategy

Clarification – When the strategy of the organization is not clearly articulated then the strategy structure relationship becomes such that the organization reacts as per the business environment changes. The reason is that the organization is not clear on their strategy and objectives and hence to remain afloat reacts to the business environment as and when required.

Question 36 – False – Healthcare organizations can pursue multiple strategies

Clarification – Healthcare organizations can pursue multiple strategies provided they are not conflicting but complementing with each other such as innovation strategy and expansion strategy.

Question 37 - Diversification strategies, in many cases, are selected because markets have been identified outside the organization’s core business that offer potential for substantial growth.

Clarification – Healthcare organizations have been exposed to environmental pressures and competitive pressures through other means of healthcare services and hence the diversification strategy becomes imperative. It is necessary to ensure that during diversification the tax status and antitrust limits are not breached and hence the healthcare organizations never indulge in diversification till they have identified the opportunities outside.