Abstract

When decisions are made for a health care organization or system (hereinafter called an "entity") establishing or modifying such essential characteristics as ownership; mission; organizational structure; physical location and markets; product and service lines and mixes; resource acquisition and allocation, and whether to partner or ally, and with whom, strategy is being determined. Those who make these decisions (generally, the entity's senior-level managers and governing board members) are its strategic managers. The process of making and implementing strategic decisions is strategic management. In effect, strategy comprises decisions reflecting what an entity's strategic managers wish it to be and to achieve, as well as how they plan to accomplish this. Strategy is vital because it establishes the entity's position and direction in relation to the overall external environment within which it exists.