The Evolving Macro Business Environment
The National Health Service is a public organization which takes care of the medical and health related problem of the citizens of the United Kingdom (Mellet, H., 1995). The basic function of this organization is to cater to the public health requirements and to tend to those in need of medical assistance when they need it.
In recent times however, the macro-business environment has changed for the organization. With the advent of new diseases, the increasing population, the entrance of increasing number of migrants, and other macro level factors, the business environment has seen a drastic change.
The macro environment incorporates factors such as the political, social, economical and technological changes. The drivers with regard to the Public Health sector which immediately affect the sector can be differentiated along the four significant mentioned categories.
With regard to political changes, changes regarding taxation and political swaying during election times reflect on the organization directly. The social changes are relatively less primary in nature in this sector as the sector is more bureaucratic in nature and is not a direct influence. The economical changes are more direct in nature keeping in light the recent economic slump faced worldwide and the lack of revenues earned from taxes and other bodies due to the unemployment issue becoming rampant throughout the state. finally, with regards to technological changes, in the health sector with the advent of new diseases and the improvements in technology to cure those diseases constant evaluation and reevaluation of the existing policies (Kayne, S., 2005).
The political factors mentioned earlier include the government’s decisions regarding what to include under the health care packages and how much return to bestow on people who wish to avail the package. The number of diseases is constantly increasing as medical advancements are taking place. Which diseases to add to the list of diseases covered by the NHS is a political driver. Governments use institutions such as Health Care, Taxation, and Public Welfare to manipulate the vote bank and during election periods and other public motivating or pleasing times, governments tend to bring amendments into these sectors of the government to sway the vote bank in their favor (Donaldson, L, 2008). The National Health Service has seen activity during periods near elections and the administration is required to adjust their plans and is evolving with regards to global activities.
With regards to the global activities, if a government in one country provides a generous package then neighboring countries and their governments are faced with the dilemma of evaluating their systems to make them more accommodating else the public gradually feels dissatisfied with the way governments are running their business. This pressure is felt highly in the European part of the world due to the proximity of so many neighboring countries where each country has some sort of benefit over the other. The NHS has to compete with the other Health care bodies in Europe.
A gradually increasing issue that is being addressed by the NHS is the threat of biological warfare. With increasing terrorist activities across the globe, with the western world being the prime target, governments are addressing the threat of biological weapons which may be used by these terrorists. Provisions are being made concerning these threats and the NHS has to adjust its existing policies to take into account if any such event should transpire (Paquete, L., 2004).
The social drivers in this sector have little to no influence since the government is the major deciding body regarding the administration of the sector. Yet one social factor has a very direct effect in this sector. The United Kingdom is the hub of migrant movement with races from Asian countries and other parts of the world moving towards a better lifestyle. This movement has resulted in raising the people relying on the Health Care system for all their medical needs in an exponential manner. The rising number of dependents has resulted in the government shortlist the diseases covered under the health care program and also the level of government support that the people would be receiving. The facilities available have to also be closely monitored to accommodate the rising number of dependents.
Catering to a larger base requires full-time management and properly qualified employees to manage the system else disorder will prevail. The health sector has seen tremendous improvement in its management skills with improved systems being implemented with the support of technology and skilled staff and personnel.
Aside from the increasing population demographic, one other factor identified is the increasing number of people unemployed who rely on the NHS for all their health care needs. The economic slump and migrant nature is the cause for this dilemma. Many people migrate and live off the unemployment benefits and if they fall ill they rely on the NHS. The number of people availing of the services is increasing as it provides an easy way out for these people. Seeing them abuse the privilege has induced locals to also adopt this behavior as well.
Technological drivers relate to the advancements in the technology of the sector with their effects on the operations of the sector. For the NHS, the advent of the computer era has resulted in improved databases, faster records recalling and increasing the size of the databases more expansively. Computers in hospitals have centralized hubs which are linked to the government database and the government can observe and monitor the activities taking place in any hospital of the state. Centralized storage has improved the communication flow between the hospitals-patients-government. Instead of each party working on its own, the improvement in the technology has resulted in quicker service and much more customer satisfaction.
The NHS has its working website which brings the entire cornucopia of information to the computer of the customer. People can go to the official website with their queries and can access advice and apply via the medium. This improvement in technology has helped control the system.
Aside from improved technologies related to management purposes, improvement in technology applied in the medical sector has helped to cure patients and to provide efficient diagnostic reports (Healthcare Technology, 2009). This also increases the cost for which management should try to find the best technology to meet their requirements which include accurate diagnosis and cost-efficiency. For this purpose, the sector should keep its eyes open and scan the international environment to check out whether other public sectors of the world have cured this problem.
The recent upheaval with the mortgage bubble bursting has adversely affected every government sector. The Health sector has found no relief or shelter from this storm. Governments are too busy providing relief to their banking and financial bodies to concentrate much on healthcare and other institutions. The remedy most governments are suggesting worldwide is to increase taxes for dealing with other public sectors and gather funding for them. But with unemployment also spiking this measure seems ludicrous.
Aside from the said economic meltdown, the health sector also depends on the fiscal and monetary proposals proposed for those years. These are relatively constant as aside from periods of war or famines the general policies remain pretty much the same with slight increases or decreases in percentages. But since this era is one with an anomaly in the business world thus the management needs to keep on its toes regarding the performance of the health sector as it cannot afford to bear any losses nor can it make any expansionary measures.
The lack of injection of capital in the health care sector and the increasing number of dependents is going to adversely affect the operations of the sector and management needs to come up with approaches to handle the situation.
Will Drivers be Accelerating in the Near Future?
The chance of all the drivers accelerating is highly improbable. Yet there are some drivers which need to be checked continuously. The economic drivers will most probably accelerate and affect the health sector more and more in the immediate years as until the economic situation does not become stable the situation will worsen for the public welfare sectors of the government. The Health sector will suffer due to the current economic situation.
Another driver which should be carefully monitored is the technological driver. Both are related to communication channels and medical advancements and new procedures. Since costs would need to be cut in the prevailing economic conditions then the best alternative to combat the situation is by improving the technology of the sector and make it highly cost-effective with improved processes and cheaper operations (both in the medical sense and administrative ones).
Strategic Management Tool- STEP Analysis
The reason behind selecting STEP (or PEST) Analysis is that it is the most comprehensive strategic tool employed to create management decisions that take into account the various macro-level factors of the country (Joyce, P.,1999). After identifying the factors which lie in the four separate categories, management can address them in their manner of importance and management can also see where it is lacking and how it can improve on it.
This tool for analyzing the operations is very beneficial as it takes into account all those variables which may affect the performance of the organization and holds them in contrast to the others. Each sector can be observed independently and trends can be derived from this approach.
Yet to be on the safe side, to narrow down the factors and come to a more narrowed down selection, I would also incorporate SWOT Analysis as well as the STEP Analysis. The SWOT Analysis takes into account the internal and external factors (Johnson, G, 2002). We could then see which factors we can control and on which we have little or no control and can try to overcome them.
SWOT Analysis would take the factors stated broadly in the STEP Analysis and categorize them into factors that can be turned to Strengths and Opportunities and which factors are Weaknesses and could become Threats. These categories would provide us a much clearer picture and combined the two would give us a better picture of the overall performance of not only the sector but also the management actions and how they can be beneficial for the growth of the industry/ organization and also the sector as well.
Implications of Primary Change Drivers Strategic Leadership & Management
Strategic Leadership and Management does not just simply deal with the present but has to anticipate the future direction of the sector and industry and plan in a manner that the organization is prepared for any issue or problem that may arise. With regards to the primary change drivers in the health care sector management has a tough job on its hands. The Public Health Sector cannot charge its customers so gaining revenues to run their operations by charging more is unfeasible. Then also the increasing number of patients must be addressed.
The implications which arise from the primary change drivers paint a grim picture of the situation. Management needs to plan for the next 4-5 years (estimated time for the economy to stabilize after the current meltdown) and budget in a manner so that they can stay afloat throughout this time. Leadership would have to create plans to tackle situations on the spot and build confidence in an uncertain time. Building motivation and creating satisfaction amongst customers is responsibility leaders today have to accomplish.
Implications of Primary Change Drivers on the Structure of the Organization
Regarding the implications on the structure of the organization, the primary change drivers might influence the organization to take a look at its current structure and encourage it to become a bit decentralized and the individual hospitals might need to specialize in specific services rather than provide a full range as the specialization will reduce costs as designated places would handle only certain cases rather than having one hospital cater to the entire list of ailments.
Yet there will not be much changed in the overall structure of the sector by the drivers since this current situation is temporary and making hasty restructuring decisions will only be premature.
In conclusion, we can see that the primary drivers of this sector, though apocalyptic at first glance for the industry, are indeed only temporarily hazardous and if the sector can muster through the time for them to stabilize then it will come out relatively unscathed.
(2009) Healthcare Technology. Healthcare Technology – BERR [Internet]. Web.
Donaldson, L. (2008) The UK Public Health System: Change and Constancy.London.
Johnson, G. and Scholes, K. (2002) Exploring Corporate Strategy, Harlow, Pearson Education (SWOT)
Joyce, P. (1999) Strategic Management for the Public Services, Buckingham, Open University Press. (STEP)
Kayne, S. (2005) Winds of Change: Good News for Public Health. New Zealand. Australasian Business Intelligence
Mellet, H.; Marriot, N. (1995) Managerial Objectives in the NHS. Journal of Management in Medicine (UK)
Paquete, L. (2004) Bioterrorism in Medical and Healthcare Administration.CRC Press