Environmental Analysis

Environmental Issues

An organization engaging in strategic management must try to sort out the general information being generated in the external environment and detect the major shifts taking place. Identifying and evaluating the issues in the general environment are important because the issues will accelerate or retard changes taking place within the health care environment and may affect the organization directly.

To develop awareness of changes taking place outside of their own organization, health care managers must thoroughly understand the other types of organizations that are creating changes as well as the nature of those changes. Governments, businesses, educational institutions, religious institutions, research organizations and foundations, and independent individuals generate important information within the general environment. Organizations and individuals in the general environment, acting alone or in concert with others, initiate and foster the macroenvironmental changes in society. These organizations and individuals generate technological, social, regulatory, political, economic, and competitive information that will, in the long run, affect many different industries (including health care). External organizations, engaged in their own processes and pursuing their own missions, are developing new information that will affect other industries, organizations, and individuals.

A government organization that fosters changes in the general regulatory climate (new information) or a business that develops a breakthrough in computer technology (new information) contributes to macroenvironmental changes that, although perhaps not specifically related to health care, may have a significant and long-lasting impact on the delivery of health care. The organization itself may be affected directly by the technological, social, regulatory, political, economic, and competitive information initiated and fostered by organizations in the general environment.

After analyzing the general environment, strategic leaders should look at the health care environment more closely, with the intent of understanding the nature of the issues and changes taking place in a more specific context. For example, organizations and individuals within health care develop and employ new technologies, deal with changing social issues, address political change, develop and comply with regulations, compete with other health care organizations, and participate in the health care economy.

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