Evaluating financial merits of hospital product divisions and service proposals

Large Chain of General Hospitals on the West Coast

How is this new division going about making financial evaluations on new service proposals? The same as our divisions making goods?

The best way for this new division to be able to evaluate the various pieces of financial information on the new service proposal is to use: top down and bottom up analysis. Top up analysis is when you are having managers create various teams that are delegated a host of different responsibilities called sub-systems. Under this basic approach each executives is given specific duties that they are expected to cover. In a larger organization, this allows them to create areas of specialization that can be used to analyze the product and the impact that any kind of marketing strategy will have on the profit margins. ('What is the Difference between Top Down and Bottom Up,' 2011) ("Concept Project Evaluation," n.d., pp. 50 -- 53) (Filiv, 2008)

While, bottom up analysis is when you are starting at the lowest levels of a company and you are organizing everyone into different sub-systems. As, each team will have certain duties that are designed to contribute to the success of the organization. When you move up through the chain of command, the efforts of each team are combined together. This is the point that the combined efforts of each sub-system will contribute to the larger success of the firm. ('What is the Difference between Top Down and Bottom Up,' 2011) ("Concept Project Evaluation," n.d., pp. 50 -- 53) (Filiv, 2008)

These different elements are important, because they are showing that the most effective ways to evaluate new products is to use of these two approaches. The reason why, is because each sub-system will allow you to create a team that can focus on designing and building new products. Once this occurs, is when the group can work independently by exclusively focusing on the product and the how it can positively affect the company's bottom line results. This is when they can make an honest assessment about the underlying challenges facing the organization and what steps needs to be taken when introducing this product.

The same as our divisions making goods?

Under either approach, the division that will be responsible for designing new products will work alongside other segments of the company. Where, they are focused on helping to augment the current array of merchandise that a firm is providing to customers. Once this occurs, it will ensure that each segment is able to build off the ideas of others. This is when our organization will be able to meet the demands of consumers before anyone else. ('What is the Difference between Top Down and Bottom Up,' 2011) ("Concept Project Evaluation," n.d., pp. 50 -- 53) (Filiv, 2008)

However, at the same time the division that is working on new products will be separate from other segments of the company. The reason why, is because the staff in these areas need to be able to focus on introducing innovative features that will give them firm an advantage over competitors. The only way that this can be achieved is through having certain amounts of segregation inside the organization. ('What is the Difference between Top Down and Bottom Up,' 2011) ("Concept Project Evaluation," n.d., pp. 50 -- 53) (Filiv, 2008)