With hospitals nationwide facing budget cuts and slimmer pro

With hospitals nationwide facing budget cuts and slimmer profit margins, Dekalb County’s Medical Center decided to cash in on one of the most consistently profitable services––delivering babies. It initiated a three-year project to build a $55 million state-of-the-art women’s center with 18 labor and delivery suites. When the hospital decided to commit its resources to obstetrics, it was engaging in:

benchmarking

alternative problem solving

strategic planning

portfolio evaluation

tactical control

what is the correct answer for this question?

Solution

The hospital is engaging in Strategic planning.

Strategic planning is an organizational management activity that is used to set priorities, focus energy and resources, strengthen operations, ensure that employees and other stakeholders are working toward common goals, establish agreement around intended outcomes/results, and assess and adjust the organization\'s direction in response to a changing environment.

The environment change that is happening here is hospitals facing budget cuts and slimmer profit margins. In order to realign with the changes and to remain afloat with profits, the Dekalb County Medical Center decided to cash in on one of the most consistently profitable services––delivering babies. Its strategy is to invest heavily on obstetrics that has be very profitable, so that they could achieve maximum returns out of their investment. Investment in any other service would probably result in less or no profits as compared to obstetrics.