Strategic management in healthcare: key concepts and applications

Strategic Management

A mission statement is a brief statement of maybe a few lines that encompasses every facet of your business. The mission statement, when effective, will outline what the company sees as its business, and its reason for being. A mission statement will "clarify what business you are in, your goals and your objectives" (Entrepreneur, 2003). A mission statement, however, should not restate the obvious as there is insight nor benefit to this. For example, a fast food chain would not benefit from a mission statement of "We sell hamburgers and want to earn a profit." An effective mission statement reflects a mission -- something not yet accomplished, but that lies at the heart of what you do and who you are.

Swales and Rogers (1995) note that a mission statement sets the tone for the corporate culture, and therefore should reflect that corporate culture. The mission statement is a cue from which the organization and all of its stakeholders both internal and external can derive a sense of what the company is about. The mission statement is, in essence, one of the most important communication tools between management and the stakeholders. It is worth remembering that a mission statement that only exists on the company's About Us page is not worth anything. A mission statement earns legitimacy through the actions of management and of the company. If the employees and other stakeholders do not see the mission statement in the actions of management, then the mission statement is worthless. The mission statement can serve to instill the sense of direction and corporate values into the employees (Klemm, Sanderson & Luffman, 1991). Thus, one of the key traits of a mission statement is that it requires some degree of buy-in in order to have genuine value.

In this case, the organization is a health care company, a company that owns and operates multiple health care facilities. Designing a mission statement for a healthcare company requires balancing the obvious -- that the organization is about healthcare, and that it wants to help patients, with a greater concept of how the organization wishes to contribute to society. The optimal mission statement will therefore be relatively free of cliches about delivering value for shareholders and generic buzzwords like sustainability should be avoided without further clarification.

The mission statement for the healthcare company is as follows:

City Health Care's mission is to improve the quality of life for the members of our community, by helping people live longer, and in better health, through the use of innovative medicine and a high standard of customer service.

This mission statement hits upon many different key points. First, it defines the primary stakeholder, in this case the patient. Second it defines the interest of that stakeholder -- a longer, healthier life -- and we know intrinsically that this has value to the stakeholder. The geographic scope is also mentioned -- in our community. This company is community based, and not interested in expanding beyond that. That it is "our" community is also a positive point. Innovative medicine and a high standard of customer service are the two mechanisms by which the higher quality of life will be delivered.

2.

A mission statement is defined as the statement by which you explain what your company does, how it does it, where it does it, and preferably also makes reference to the key stakeholders of the organization. Mission statements are important because they have an effect on organizational performance by helping to set the tone for the corporate culture and guiding the staff members towards specific outcomes that have been given precedence in the mission statement (Germain & Cooper, 1990).

The mission statement for City Hospital is as follows:

"City Hospital aims to provide the highest quality of care in the metro area, and become a destination healthcare provider for Medicare patients."

This mission statement highlights some target markets, which is important, and some strategic goals, including how it seeks to win competitive advantage in the marketplace. This may not be the most inspiring mission statement ever written, but it does provide a clear sense of strategic guidance.

3.

A mission statement are "important in the language of business affairs (Swales & Rogers, 1995). The represent a communication between management of an organization and its stakeholder. The communication of the mission statement should reflect just that -- it's mission. That means what it wants to do, how it wants to do it, and to whom it wants to do it. In business terms, that means the target market, the industry and business, and what competitive strategy the company wants to follow. A well-crafted mission statement should be enduring, and therefore not loaded down with too many specifics, or tactical elements; everything about the mission statement should be focused on strategy (David, 2003).

The mission statement for City Hospital is therefore:

"City Hospital will save the patients of Big City money on their care, by focusing on a high level of efficiency and exceptional customer service, in addition to value-added services."

Here we have geographic scope, a strategic focus on a low cost strategy, and how the company intends to execute on that strategy. These are timeless elements, and therefore put together they make for an effective mission statement.

4.

From answering this question, I have been able to learn a few things. The first is what a mission statement actually is. Some of the sources outlined the mission statement, while others pointed out the differences between the mission statement and the vision statement. There is also the role that the mission statement plays in strategy formulation. An effective mission statement, I learned, has a direct role to play in the formulation of a good strategy; the mission statement and the strategy should be closely aligned.