Test Bank For The Strategic Management of Health Care Organizations, 7th Edition

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Questions Chapter 1The Nature of Strategic Management

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True/False QuestionsQuestiontitleQuestion stemChoiceDifficulty1 Easy2 Medium3 HardReferenceTopicTF01.01The implementation of Medicare’s prospective payment system in 1983initiated dramatic changes in the health care industry.T1Managing aDynamicEnvironmentChangeTF01.02Management rather than leadership is required to deal with rapid, complex,anddiscontinuous change.F1Managing aDynamicEnvironmentLeadershipTF01.03The objective of long-range planning is to predict for some specified time inthe future the size of demand for an organization’s products and servicesand to determine wheredemand will occur.T2Long-RangePlanning toStrategicPlanningLong-rangeplanningTF01.04Strategies are long range in nature and thus, the time span is the principalfocus of strategic planning.F1Long-RangePlanning toStrategicPlanningStrategy,strategicplanningTF01.05Many of the management methods adopted by health care organizationsoriginated in the business sector.T1StrategicManagement inthe Health CareIndustryManagementtechniquesTF01.06“Strategic thinking maps” are designed toinitiate strategic thinking andstrategic planning.T1Combining theAnalytical andEmergentViewsStrategicthinkingTF01.07In order to effectively deal with a complex situation, the leader must redoubleefforts to become involved with every detail ofthe situation.F3StrategicThinkingLeadershipTF01.08Strategic thinking is an individual intellectual process, a mindset, or methodof intellectual analysis that asks people to position themselves as leadersand see the “big picture.”T1StrategicThinkingStrategicthinkingTF01.09Strategic thinkers examine assumptions, understand systems and theirinterrelationships, and develop alternative scenarios of the future.T1StrategicThinkingStrategicthinkingTF01.10Strategic planning is theperiodic process of developing a set of steps for anorganization to accomplish its mission and vision using strategic thinking.T1StrategicPlanningStrategicplanning

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QuestiontitleQuestion stemChoiceDifficulty1 Easy2 Medium3 HardReferenceTopicTF01.11As a decision-making activity, strategic planning is based solely onquantitative data.F2StrategicPlanningStrategicplanningTF01.12Analyzing and understanding the situation is accomplished by threeseparate strategic thinking activities: (1) external environmental analysis; (2)internal environmental analysis; and (3) the development or refinement ofthe organization’s directional strategies.T1StrategicPlanningStrategicthinkingTF01.13Strategy is driven by a common mission, common vision, and common set oforganizational values and goals–the directionalstrategies.T1StrategicPlanningStrategyTF01.14Developing implementation plans is not an essential part of strategicplanning.F1StrategicPlanningStrategy,implementationTF01.15Decision making isexpedited and consensus more easily reachedwheneveryone in the organization is involvedin the strategic planning process.F2StrategicPlanningStrategicplanningprocessTF01.16Managing strategic momentum concerns the day-to-day activities ofmanaging the strategy to achieve the strategicgoals of the organization.T2ManagingStrategicMomentumStrategic plans,strategicmomentumTF01.17Managing strategic momentum is how an organization constructivelymanages change, evaluates strategy, and reinvents or renews theorganization.T2ManagingStrategicMomentumStrategic plans,strategicmomentum,managingchangeTF01.18Much of thelegitimate workin an organization does notcontribute to theaccomplishment of the strategic plan.F2ManagingStrategicMomentumStrategicplanning,implementationTF01.19Strategic management is a unique perspective that requires everyone in theorganization to cease thinking solely in terms of internal operations and theirown operational responsibilities. It insists that everyone adopt what may beafundamentally new attitude–an external orientation and a concern for thebig picture.T1The Benefits ofStrategicManagementStrategicmanagementTF01.20Strategic managementisa technique that will provide a “quick fix” for anorganization that has fundamental problems.F1What StrategicManagement isNotStrategicmanagementTF01.21Strategic managementis demonstrated in an organization if it has evolvedintoa process of filling in endless forms, meeting deadlines, drawingmilestone charts, or changing the dates of last year’s goals and plans.F1What StrategicManagement isNotStrategicmanagement

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QuestiontitleQuestion stemChoiceDifficulty1 Easy2 Medium3 HardReferenceTopicTF01.22The use of the systems approach requires strategicmanagers to define theorganization in broad terms and to identify the important variables andinterrelationships that will affect decisions.T2A SystemsPerspectiveSystemsapproach,systemsthinkingTF01.23Unit operational strategies may bedeveloped within departments of anorganization such as clinical operations, marketing, finance, informationsystems, human resources, and so on.T2The Level andOrientation ofthe StrategyUnit-levelstrategyTF01.24Corporate-level strategies addressthe question:“What business(es) shouldwe be in?” Such strategies consider multiple, sometimes unrelated, marketsand typically are based on return on investment, market share or potentialmarket share, and system integration.T2The Level andOrientation ofthe StrategyCorporate-levelstrategyTF01.25Strategy developmenthas never beenprimarily a staff activity.F1LeadershipRolesthroughout theOrganizationStrategydevelopment,leadership

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Multiple Choice QuestionsQuestiontitleQuestion stemSelectionsChoiceDifficulty1 Easy2 Medium3 HardReferenceTopicMC01.01Strategic thinking is:a-An organizational-level activity.b-An individual intellectual process.c-An element of long-range planning.d-Not needed to capitalize on change.b2StrategicThinkingStrategicthinkingMC01.02The result of thestrategic planningprocess is:a-More luck than the result of a thoughtful process.b-Strategic thinking.c-A formal document of at least 10 pages.d-A plan or strategy.d1StrategicPlanningStrategyMC01.03Health policya-Is a very broad strategy.b-Is the result of strategic thinking, strategicplanning, and strategic management.c-Determines the rules of the game that apply to allconsumers and providers in the field.d-Does not involve governmental activity.c2StrategicManagementversusHealthPolicyPlanningHealth policyMC01.04Strategic planning fororganizations istypically:a-The sole province of the chief executive officer(CEO).b-The work of the strategic planning department.c-Something that requires consultants to besuccessful.d-A group process.d1AGroupProcess ofKeyPlayersStrategyplanningMC01.05The three stages ofstrategicmanagement are:a-Plan, implement, and revise the plan.b-Leadership, professionalism, and management.c-Strategicthinking, strategic planning, andmanaging strategic momentum.d-Thinking, planning, and doing.c3The Benefitsof StrategicManagementStrategymanagementMC01.06Strategicmanagement is NOT:a-A “quick fix” for organizations with fundamentalproblems.b-Aprocess of completing paperwork.c-A process of extending the organization’s currentactivities into the future.d-All of the above.d1WhatStrategicManagementis NotStrategicmanagement

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QuestiontitleQuestion stemSelectionsChoiceDifficulty1 Easy2Medium3 HardReferenceTopicMC01.07The use of thesystems approachrequires strategicmanagers to:a-Focus on short-term results.b-Define the organization in broad terms andidentify the important variables andinterrelationships that will affectdecisions.c-Become leaders.d-View the organization as a set of mutuallyexclusive sets of work units with separate goalsand objectives.b1A SystemsPerspectiveSystems,systemsapproachMC01.08A clear specificationof organizational levelandorientationdetermines:a-The type and range of decision to be made instrategic planning.b-The quality of strategic thinking.c-Organizational success.d-The individual or organizational unit that isresponsible for developing organizationalstrategy.a1TheLevelandOrientation ofthe StrategyOrganizationstructureMC01.09The dissolution offormal planning staffsis associated with:a-The management theory termed “Theory Z.”b-Systems thinking.c-The general decline in economic activity in theUSA and Europe.d-Organizational learning that strategydevelopment cannot take place in relativeisolation.d2LeadershipRolesthroughouttheOrganizationOrganizationaldesign,leadershipMC01.10An organization maycreate a new,unintended strategyby:a-Applyingeffective leadership.b-Rethinking the relationships among systems inthe organization.c-Implementing the strategy created by its strategicplanning process.d-Applying portfolio theory.c3Lessons forHealth CareManagersStrategyimplementation

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Short Essay QuestionsQuestiontitleQuestion stemRationaleDifficulty1 Easy2 Medium3 HardReferenceTopicSE01.01Describe strategicmanagement in thehealth careindustry.Strategic management concepts have been employed withinhealth care organizationsonly in the past 25 to 30 years. Priorto this time, individual health care organizations had fewincentives to employ strategic management because typicallythey were independent, freestanding, not-for-profit institutions,and health services reimbursement was on a cost-plus basis.In many respects health care has become a complex businessusing many of the same processes and much of the samelanguage as the most sophisticated business corporations.Certainly, in the late 1980s and 1990s many health careorganizations had much to learn from strategically managedbusinesses. As a result, many of the management methodsadopted by health care organizations, both public and private,initially were developed in the business sector.2StrategicManagementin theHealthCare IndustryStrategicmanagementSE01.02Define the majoractivities ofstrategicmanagement.The major activities of strategic management are:(1) strategicthinking,(2) strategic planning, and(3) strategic management.Strategic thinking is an individual intellectual process, amindset, or method of intellectual analysis that asks people toposition themselves as leaders and see the “big picture.”Strategic planning is the periodic process of developing a set ofsteps for an organization to accomplish its mission and visionusing strategic thinking. Strategic management is the actualwork to accomplish specific objectives.2TheDimensionsof StrategicManagementStrategicthinking,strategicplanning,strategicmanagementSE01.03Why is managingstrategicmomentumimportant?Managing strategic momentum: is the actual work toaccomplish specific objectives, concerns decision-makingprocesses and their consequences, provides the style andculture,evaluates strategy performance, is a learning process,and relies on and initiates new strategic thinking and newperiodic strategic planning.2ManagingStrategicMomentumStrategicmanagement,strategicplanning

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QuestiontitleQuestion stemRationaleDifficulty1 Easy2 Medium3 HardReferenceTopicSE01.04Explain the role ofleadership instrategydevelopment.Strategic decision making for health care organizations is theresponsibility of top management. The CEO is a strategicmanagerwith the pre-eminent responsibility for positioning theorganization for the future. The leader must be able to inspire,organize, and implement effective pursuit of a vision andmaintain it even when sacrifices are required.As a result, theleader must have an ability to identify what needs to be donetoday and what can wait. They prioritize constantly; aware thatwars are lost by fighting on too many fronts. They know the keymessages to communicate from daytoday, from audience toaudience. If the CEOdoes not fully understand or faithfullysupport strategic management, it will not happen.2TheImportance ofLeadershipLeadership,decisionmaking,strategicmanagement

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Questions Chapter 2Understanding and Analyzing the General Environmentand the Health Care Environment

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True/False QuestionsQuestiontitleQuestion stemChoiceDifficulty1 Easy2 Medium3 HardReferenceTopicTF02.01In the current health care industry environment,a multitude of interests aredirectly or indirectly involved in the delivery of health care.T1The ImportanceofEnvironmentalInfluencesExternalenvironmentTF02.02Strategic thinking is directed towardpositioning the organization mosteffectively within its changing external environment.T1The ImportanceofEnvironmentalInfluencesExternalenvironment,strategicthinkingTF02.03In order to be successful, health care organization leaders do nothave todevelop an understanding of the external environment in which they operate.F1The ImportanceofEnvironmentalInfluencesExternalenvironmentTF02.04Institutions that anticipate and recognize significant external forces andmodify theirstrategies and operations accordingly will prosper.T1The ImportanceofEnvironmentalInfluencesExternalenvironmentTF02.05Regulations about the privacy of medical records are examples oflegislative/political external issues.T1EvolvingExternalIssuesExternalenvironment,regulationTF02.06Increasingautomation of basic business processes, clinical informationinterfaces, data analysis, and telehealth are NOT examples of technologicalchanges.F1EvolvingExternal IssuesExternalenvironment,technologyTF02.07Cost pressures and intensified competition will NOT lead to furtherconsolidation within the health care industry.F2EvolvingExternal IssuesExternalenvironment,competitionTF02.08APPO (preferred provider organization) isan entity through which varioushealth plans or carriers contract to purchase health care services for patientsfrom a selected group of providers, typically at a better per-patient cost.T2The ChangingLanguage ofHealth CareOrganizations

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QuestiontitleQuestion stemChoiceDifficulty1 Easy2 Medium3 HardReferenceTopicTF02.09Environmental analysis is largely strategic thinking and strategic planningand consists of understanding the issues in the external environment todetermine theimplications of those issues for the organization.T2The ExternalNature ofStrategicManagementEnvironmentalanalysis,strategicthinking,strategicplanningTF02.10Effective environmental analysis occurs through strategic thinking.T1The ExternalNature ofStrategicManagementStrategicthinkingTF02.11External environmental analysis does not inform the analysis of the internalenvironment.F2Determiningthe Need forEnvironmentalAnalysisExternalenvironmentalanalysis,internalenvironmentalanalysisTF02.12A “visionary” is a strategic manager who detects the signs of change andexplores the significance of change before it becomes apparent to others.T1Determiningthe Need forEnvironmentalAnalysisExternalenvironmentalanalysisTF02.13One of the specific goals of environmental analysis isto detect and analyzeearly or weak signals of emerging issues and changes that will affect theorganization.T3The Goals ofEnvironmentalAnalysisExternalenvironmentalanalysisTF02.14Environmental analysis can accurately foretell the future.F1The LimitationsofEnvironmentalAnalysisExternalenvironmentalanalysisTF02.15Comprehensive and well-organized environmental analysis processeswilldetect all of the changes taking placein the external environment.F2The LimitationsofEnvironmentalAnalysisExternalenvironmentalanalysisTF02.16The organization itself may be affected directly by the legislative/political,economic, social/demographic, technological, and competitivechangeinitiated and fostered by organizations in the general environment.T2Components ofthe GeneralEnvironmentGeneralenvironment,change

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QuestiontitleQuestion stemChoiceDifficulty1 Easy2 Medium3 HardReferenceTopicTF02.17Organizationsand individuals within the health care environment developand employ new technologies, deal with changing social and demographicissues, address legislative and political change, compete with other healthcare organizations, and participate in the healthcare economy.T2Components ofthe Health CareEnvironmentEnvironmentalanalysisTF02.18Strategic issues are trends, developments, dilemmas, and possible eventsthat affect an organization and its position within its environment.T1Scanning theExternalEnvironmentEnvironmentalanalysis,scanningTF02.19Environmental scanning is perhaps theleastimportant part of environmentalanalysis.F1Scanning theExternalEnvironmentEnvironmentalanalysis,scanningTF02.20The monitoring function isthe tracking of issues identified in the scanningprocess.T1Monitoring theExternalEnvironmentEnvironmentalanalysis,monitoringTF02.21Forecasting environmental change is a process of extending the trends,developments, dilemmas, and events thatthe organization is monitoring.T1ForecastingEnvironmentalChangeEnvironmentalanalysis,forecastingTF02.22TheDelphi method is the development, evaluation, and synthesis ofindividual points of view through the systematic solicitation and collationofindividual judgments on a particular topic.T2EnvironmentalAnalysis ToolsandTechniquesExternalenvironmentalanalysis, DelphimethodTF02.23A brainstorming group is convened for the purpose of understanding anissue, assessing the impact of anissue on the organization, or generatingstrategic alternatives. In this process, members present ideas and areallowed to clarify them with brief explanations.T2EnvironmentalAnalysis ToolsandTechniquesExternalenvironmentalanalysis,brainstormingTF02.24Dialectic inquiry is a “conflict resolution” process of argumentation.F3EnvironmentalAnalysis ToolsandTechniquesExternalenvironmentalanalysis,dialectic inquiry

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QuestiontitleQuestion stemChoiceDifficulty1 Easy2 Medium3 HardReferenceTopicTF02.25Once strategic management is adopted as the operating philosophy ofmanaging, strategic thinking, strategic planning, and managing the strategicmomentum require frequent validation of the strategic assumptions todetermine whetherissues in the external environment have changed and towhat extent.T2ManagingStrategicMomentum–Validating theStrategicAssumptionsExternalenvironmentalanalysis,strategicthinking,strategicplanning,validatingstrategicassumptions

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Multiple Choice QuestionsQuestiontitleQuestion stemSelectionsChoiceDifficulty1 Easy2 Medium3 HardReferenceTopicMC02.01Health careorganizations DONOT have to copewith change in whichof the followingareas:a-Competitive.b-Economic.c-Weather.d-Legislative/political.c1EvolvingExternal IssuesChangeMC02.02The fundamentalnature of strategicmanagementrequires theawareness andunderstanding ofoutside forces andencourages strategicmanagersto:a-Adopt new ideas.b-Maintain receptivity tonew ways of doing things.c-Expose themselves toabroad view.d-All of the above.d2The ExternalNature ofStrategicManagementEnvironmentalanalysisMC02.03A successful healthcare organizationmust:a-Wait until a crisis arises to react.b-Ignore theexternal environment.c-Anticipate and respond to the significant shiftstaking place within the environment.d-Focus on crisis management.c1The ImportanceofEnvironmentalInfluencesExternalenvironmentMC02.04Organizationswillfind themselves outoftouch with theneeds of the marketwhen they:a-Fail to anticipate change.b-Ignore external forces.c-Resist change.d-All of the above.d1The ImportanceofEnvironmentalInfluencesExternalenvironmentMC02.05TheCenter forMedicare andMedicaid Services(CMS) is:a-A health maintenance organization (HMO).b-Part of the US Department of Health and HumanServices.c-A regulator of certificate of need (CON) laws.d-A provider of electronic medical record (EMR)services.b3The ChangingLanguage ofHealth CareGovernmentagencies

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