MGT 702 Final Exam Questions with Correct Detailed Answers

MGT 702 Final Exam Questions with Correct Detailed Answers 1. The environmental assessment documents steady progress toward benchmark on quality, cost, and patient satisfaction, but the forecasts show a substantial decline in total revenue, driven by reduced ED usage and fewer admissions for chronic diseases that are being managed with fewer hospitalizations. There is much emotional response. The CMO says the forecasts must be wrong. The CFO says the revenue losses endanger the borrowing covenants. The CEO says, "We'd better think about it overnight, but I want to meet tomorrow to pursue it." What should the VP planning say when the team reconvenes? - ANSWER "We need fundamental restructuring—changed services or a revised merger or acquisition strategy." 2. You're on the team at step 4 of exhibit 14.9: "Senior leadership and medical staff rank the lists from all service lines and activities." You notice that two proposals from two different units are synergistic; if done together, they will generate bigger improvements and be significantly cheaper than the individual proposals claim. But these are not units that report to you; if their proposals move up, funding chances for your units go down. What should you do? - ANSWER Raise your hand, and explain your idea. 3. At the annual retreat, a board member says, "You keep talking about a community health strategy, broadening our services to meet more health needs. But why should we expand our mission? Our HCO is making good headway with excellence in care. Why shouldn't we stick with it?" You reply: "We will stick with it. We shouldn't attempt population health if it means lower quality and satisfaction scores for inpatient care. But..." - ANSWER "...the move could reduce community healthcare costs and improve community health. It also helps our clinicians; we can plan future needs better. If our competitors move and we don't, we might lose market share." 4. The orthopedic surgeons are worried. They think they are losing market share to a competing HCO. The chief of surgery tells the COO, "I think we should do something about it." The COO replies: - ANSWER "Our marketing director and I will meet with them. Thanks for telling me." 5. You are on the team preparing for the board's annual retreat. The intern asks you why the HCO uses "five forces" to structure strategic OFIs, instead of SWOT. You reply, "That's a question that we've thought about with some care. We've chosen five forces because..." - ANSWER "...the detail— customers, technology, resources, competitors, and potential changes—helps review all stakeholder concerns." 6. At a PIC meeting, a service line with fewer patients than their capacity asks that the HCO do more general advertising, "getting our name out in front of people, on billboards, TV, internet ads." As VP of marketing/strategy, you recognize the request as seeking a branding campaign. It's your job to make clear that branding... - ANSWER ...should be backed by high performance on quality and satisfaction. 7. Taking over as the new COO, you're checking out media relations. Meeting with the marketing director, you want to hear that her team... - ANSWER ...has a record of widely read releases, including social networking and crisis communications plans for negative events, and calls on the COO frequently for quotations. 8. The training program for first-line managers should demonstrate that they have learned that marketing/strategy... - ANSWER ...is available for consultation when questions arise, can help design new patient services, and help promote associate support of mission, vision, and values. 9. You're the fellow, invited to sit in with the team preparing the strategic review for the board retreat. The VP marketing/strategy is chairing. During a break, she asks you if you can evaluate the HCO's risk posture. "No," you say, being candid, "but I did learn a framework for understanding risk— analyzers, prospectors, defenders, and reactors." Choose your best next comment: - ANSWER "Analyzers deliberately balance innovation with excellence, looking for tested, low-risk change. Some research supports analyzers as the best posture for NFP HCOs." 10. You are the fellow at an HCO like Sharp HealthCare, in a city like San Diego, and your HCO is promoting its ACO. It wants to attract as many healthy and moderately ill patients as possible to balance those with chronic disease. The marketing VP tests you by asking, "What do we need to think about with this campaign?" You say: - ANSWER "We should advertise at sites where people tend to be healthy. Maybe health and fitness clubs, churches, and senior citizen activities." 11. Your HCO has an excellence-in-care mission. It began adopting the principles in chapters 1-3 three years ago. Outcomes, patient satisfaction, and associate satisfaction have all risen to the top 20 percent, many measures to the top 10 percent. Market share has risen, and profit has increased. Without plant expansion, the HCO will soon reach capacity. In the meantime, your two competitors have lost market share. One, which invested unwisely in new construction, may be financially challenged. Your senior management team is considering the following list of strategic options for the board retreat.1—Begin discussions to acquire the faltering competitor.2—Begin discussion to merge with the other, healthier competitor.3—Use your demonstrated superiority to lure away a few of the best physicians still working at the faltering HCO.4—Expand and strengthen your relationship with primary care providers, and plan to st - ANSWER 1, 2, and 5 12. The chief of orthopedics drops by your office. "I hear you chair our HCO's space management program," he says. "Ortho is growing steadily. Our PTs do a good job, but the space is crowded, not as comfortable for patients as our biggest competitor, City-Wide PT. I note that the Social Service Department space next to PT isn't used all that much. Could you relocate them and give us their space?" "We can certainly look into it," you reply. You continue: - ANSWER "Internal consulting can help PT plan the space, prepare a formal proposal, and also forecast the impact on the unit scorecard. I'll ask Sarah Smart, the leader there, to meet with you. The space committee will review the proposal. We have a good record of working out solutions." 13. In your internship at Sutter Health, the VP for environment asks you how you would evaluate their materials management. You reply: - ANSWER "Materials management should have its own unit scorecard. I'd look for benchmarks and OFIs." 14. One of your responsibilities is linen service. It is supplied by an outside contractor on a three-year contract with 14 months to go. You receive a solicitation from a competing supplier, which claims it can cut laundry costs by 20 percent. "Thank you," you reply. "Our current supplier has a contract through more than a year from now." You continue: - ANSWER "I'll see that your company is notified when we solicit bids for the next contract. You should understand that we will rate service as the prime objective—no shortages, no late deliveries, no wrong items. We will only consider bidders with a substantial record of excellent service."