Business And Strategic Management

Running head: BUSINESS AND STRATEGIC MANAGEMENT
BUSINESS AND STRATEGIC MANAGEMENT
Name of the student
Name of the University
Author note

1BUSINESS AND STRATEGIC MANAGEMENT
Introduction
The healthcare market of the United States of America includes several organizations
located in the different regions, most of which have been recognized to be privately owned.
Over the years, the organizations in this industry have strategized various means to increase
the scope of their business and thereby gain a competitive edge in the market (Silva et al.
2015). The essay will further discuss the case of Mount Auburn Hospital of Boston, and their
proposed strategy of forming a merger in order to develop their business operations in the
Boston healthcare market.
Boston Healthcare Market in 1993
The Boston healthcare market in 1993 was characterized by an availability of
adequate workforce, the industry having gradually grown at a rate of 4.7 per cent between the
years 1993 and 1997 (Hutson 2015). This healthcare market not only consisted of private
hospitals but also non-hospital healthcare settings in the suburbs of Boston. Mount Auburn
Hospital can be identified as a recognized community hospital in Cambridge and affiliated
with the Harvard Medical School (Mountauburnhospital.org 2020).
The strategic position of the hospital can be analyzed with the help of the Porter’s five forces
model. This model helps in evaluating the external competitive forces that may be working
upon the organization, and the various threats and opportunities thus available (Dobbs 2014).
 Competitive rivalry – The hospital faces a high threat of competitive rivalry from the
other hospitals of the regional health network of CareGroup as well as merger
formations like that of Massachusetts General Hospital and Brigham and Women’s
Hospital (Tsai and Jha 2014).

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 Bargaining power of the suppliers – The hospital faces low threat from the
bargaining power of the suppliers; as it is a community hospital, part of the regional
health network.
 Bargaining power of the customers – The hospital faces low threat from the
bargaining power of the customers as healthcare services and facilities always remain
in demand irrespective of economic situations.
 Threat of new entrants – The hospital faces low threat of new entrants due to the
limitation regarding skilled workforce in the sector.
 Threat of substitutes – The hospital faces high threat of substitutes due to the
presence of several non-hospital healthcare facilities in the region.
Merger Proponents
The current merger proponents as observed in the merger between the Massachusetts
General Hospital and Brigham and Women’s Hospital can be identified to be based on the
strategy of providing enhanced standards of healthcare services to the patients
(BostonGlobe.com 2020). Reinforcement of the health systems and expanding them to meet
the growing requirements of the patients at affordable rates is another primary factor
influencing mergers in the healthcare industry (Fiercehealthcare.com 2020). These merger
proponents are aligned with the interests of the Mount Auburn Hospital in creating an
enhanced system of healthcare services for its patients. The proposition for the new POE
(Physician Order Entry) project, aimed at improving the stages of ordering and dispensing
medical services highlights the strategy of the hospital in creating enhanced healthcare
systems, that can be propelled further through appropriate mergers that may aid in the data
collection and processing operations. In this regard, it can be said the situation of Mount
Auburn Hospital is similar to that of the merger proponents in the case of Massachusetts
General Hospital and Brigham and Women's Hospital.

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Benefits to Stakeholders
The different stakeholders that can be identified in Mount Auburn Hospital and the
impact of the merger on their stakeholders can be discussed as follows:
 Patients – The impact of the merger on the patients as external stakeholders of the
hospital may be considered positive. It is so because, the merger will ensure provision
of enhanced quality of services to the patients at lower costs (Guerin-Calvert and
Maki 2014).
 Physicians and employees – The physicians and employees of the hospital and its
partner company will face certain challenges due to the merger but will ultimately be
benefitted. These challenges may include conflict situations due to differences in
opinions and methods of conducting organizational activities. However, the merger
will also lead to an improvement in the infrastructure and technology available to
provide healthcare services to the patients. Such improvements will ultimately help in
the enhancement of the performance of the physicians and employees from a
professional outlook.
 Insurance companies – The insurance companies will be benefitted from the merger,
as it will help in the improvement of services provided to the patients, thereby
reducing the rate of failure in curing ailments and diseases.
 Pharmaceutical companies – The pharmaceutical companies will be benefitted from
the merger, as increased amount of resources will increase the demand for advanced
drugs to cure difficult ailments in an efficient manner.
However, remaining independent is also an option for Mount Auburn Hospital in the
case that they are able to acquire the required resources for the enhancement of their current
healthcare service standards. The introduction of the POE system will improve the efficiency
of the staff and employees in being able to track the data of the patients.

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Pros and Cons of Alternative Options
The alternative option available to the hospital is the introduction of the POE system.
The pros of the system include enhancement in data collection and processing, along with
order and delivery systems. The cons of the system include the requirement for adequate
resources and capital to incorporate the system, along with resistance and conflict among the
employees during the change implementation process.
Recommendations for Robert Todd
The following recommendations can be provided to the head of Information Systems
of Mount Auburn Hospital, Robert Todd:
 Communicating the need for the introduction of the POE system with the hospital
administration and employees so as to prevent discrepancies and conflicts in the
change implementation process.
 Evaluating the funds and resources required to efficiently carry out the change
implementation process.
 Considering collaboration with an Information Technology firm that can provide the
required POE system and manage the training procedure among the employees, so
that they may be able to adapt with the new system and utilize it efficiently.
Conclusion
From the above discussion it can be deduced that in order to bring about development
in business activities and gain a competitive advantage in the healthcare market, Mount
Auburn Hospital may engage in the formation of a merger, which will not only enhance the
quality standards of it services but also reduce its cost of operations. However, an alternative
available to the hospital is the introduction of a POE system that will enhance their
operational efficiency. Furthermore, such a change can be effectively managed through

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possible collaborations with an organization that may be able to provide the POE system and
train the employees of the hospital to use it in an efficient manner.

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References
BostonGlobe.com (2020). Does Partners HealthCare still need to grow? - The Boston Globe.
[online] BostonGlobe.com. Available at:
https://www.bostonglobe.com/opinion/editorials/2019/02/01/does-partners-healthcare-still-
need-grow/pChJMd1io16taA2dnsnOzI/story.html [Accessed 21 Jan. 2020].
Dobbs, M.E., 2014. Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review.
Fiercehealthcare.com (2020). Partners HealthCare announces rebrand along with 5-year
strategic plan. [online] FierceHealthcare. Available at:
https://www.fiercehealthcare.com/hospitals-health-systems/partners-healthcare-announces-
rebrand-along-5-year-strategic-plan [Accessed 21 Jan. 2020].
Guerin-Calvert, M.E. and Maki, J.A., 2014. Hospital realignment: Mergers offer significant
patient and community benefits. Center for Healthcare Economics and Policy.
Hutson, M.A., 2015. The urban struggle for economic, environmental and social justice:
Deepening their roots. Routledge.
Mountauburnhospital.org (2020). About Us - Mount Auburn Hospital. [online]
Mountauburnhospital.org. Available at: https://www.mountauburnhospital.org/about-us/
[Accessed 21 Jan. 2020].
Silva, B.M., Rodrigues, J.J., de la Torre Díez, I., López-Coronado, M. and Saleem, K., 2015.
Mobile-health: A review of current state in 2015. Journal of biomedical informatics, 56,
pp.265-272.
Tsai, T.C. and Jha, A.K., 2014. Hospital consolidation, competition, and quality: is bigger
necessarily better?. Jama, 312(1), pp.29-30.