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MGT603 Systems Thinking
MGT603: Systems Thinking
Name
Course
Date
Abstract
The activities and operations within the emergency department often have life and death consequence implication. Other than providing needed immediate care, hospital emergency department personnel also play a role in assorting and directing patients to relevant departments where they will be best served. Organizations that operate based on complex and long system archetypes are prone to challenges such as longer patient waiting hours, loss of life due to delayed needed healthcare service delivery e.t.c. Also, the structure of an organizations system archetype is important because it dictates how fast the decision making process will be or not. This report is a case study that explores systems modeling tools including archetypes and how they impede organizational performance, application of value stream mapping analysis for a case study hospital emergency department and to reduce patient waiting times.
Table of Contents
TOC o “1-3” 1. Introduction PAGEREF _Toc450572701 h 3
2. System Archetypes PAGEREF _Toc450572702 h 4
2.1 System archetypes that may impede Performance PAGEREF _Toc450572703 h 4
2.1.2 Systems that fail PAGEREF _Toc450572704 h 5
2.1.2 Drifting goals PAGEREF _Toc450572705 h 5
2.1.3 Shifting the Burden PAGEREF _Toc450572706 h 5
2.1.4 Limits to success PAGEREF _Toc450572707 h 6
2.1.5 Growth and Underinvestment PAGEREF _Toc450572708 h 7
2.1.6 Success to Successful PAGEREF _Toc450572709 h 7
2.1.7 Escalation PAGEREF _Toc450572710 h 8
2.1.8 Tragedy of the outcomes PAGEREF _Toc450572711 h 8
2.2 Current State Value Stream Map Analysis PAGEREF _Toc450572712 h 10
2.3 Recommended new State Value Stream Map PAGEREF _Toc450572713 h 11
2.4 Intended and Unintended Consequences PAGEREF _Toc450572714 h 12
3. Conclusions PAGEREF _Toc450572715 h 13
4. Recommendations PAGEREF _Toc450572716 h 14
5. References PAGEREF _Toc450572717 h 14
MGT603: Systems Thinking
1. IntroductionThe world is presently scrambling with the devastating effects of the global Coronavirus pandemic. Hospitals are at the center of the race to contain the spread while seeking long-term solutions such as vaccines and other viable treatment regimens. So far, Hospital emergency departments have proved vital to the overall success of interventions towards beating COVID19 in any medical institution because it is tasked with the provision of first line medical care assistance to patients coming in need of mediate care. The activities and operations within the emergency department often have life and death consequence implication. Other than providing needed immediate care, hospital emergency department personnel also play a role in assorting and directing patients to relevant departments where they will be best served. According to Sözen et al., (2017), operational efficiency or lack of it within hospital emergency departments is dependent on the existing system archetypes that dictate the flow of service as well as communication and treatment.
Organizations that operate based on complex and long system archetypes are prone to challenges such as longer patient waiting hours, loss of life due to delayed needed healthcare service delivery e.t.c. Also, the structure of an organizations system archetype is important because it dictates how fast the decision making process will be or not. The emergency department operates based on the principle of urgency and therefore quick decision making contributes significantly to the effectiveness of service delivery and the general operational efficiency of the department as well as the entire medical facility. A casing example in this report is the challenges faced by medical facilities in effectively handling the rising cased of corona virus infections across the globe. This paper posits that system archetypes promote organizational learning in a hospital emergency department and that has the potential to significantly improve general service delivery efficiency. Therefore system archetypes must be continuously evaluated and modified to prevent undesirable outcomes such as long hospital queues and delays in service delivery to patients among other unintended and undesirable outcomes.
2. System ArchetypesSystem archetypes are essential and highly effective tools used to study understand organizational behavior patterns; patterns that reflect the underlying gaps and disconnections within the systems being studied. According to Vaillancourt et al., (2014), system archetypes are tools used by managers to identify patterns of behavior in within organizational systems and serve as a medium for gaining deeper understanding of the underlying systems structures and how the observed organizational behaviors originate. Gillies & Maliapen, (2008), in support, explains that system archetypes do not describe one specific problem within a systems but rather a series of problems with causal factors and that is the value they create in terms of offering deep insights into complex and dynamic systems and system behavioral outcomes.
2.1 System archetypes that may impede PerformanceThere are currently 8 common system archetypes. These include systems that fail, drifting goals, shifting the burden, limits to success, growth and underinvestment, success to successful, escalation, and tragedy of the outcomes.
2.1.2 Systems that failThese are often the quick fixes that are passed on disguised as solutions to address symptoms of a seemingly urgent problem. The drawback that arises from such fixes is that they tend to set in motion unintended consequences. These consequences may not always be evident at the onset but will add to the problem in the long-term.
2.1.2 Drifting goalsThis refers to fixes that are applied in the case where there is a significant gap between the system performance and the target goal. The solution is usually to lower the goal or target but in the long run, this fix result in the unintended outcome of lowered organizational performance or productivity. In this case, managers are always faced with the problem of organizational performance that fails to meet the set goals. Rather than finding proper solutions, the managers apply symptomatic solution by finding justifications for lowering the targets to a level that seems easily achievable rather than applying the fundamental solution of finding the performance impediment. In the long run, this archetype becomes a performance impediment because the organization will be forced to adjust its goals downward each time the performance fails to meet targets and this creates a culture of laxity towards goal setting and so the organization will spiral into a downward trend of setting lower and lower targets just to ensure that the goals are achieved regardless.
2.1.3 Shifting the BurdenThis is a situation where managers opt to address symptoms of the problem with both short term and fundamental solutions. Managers often adopt this approach as a way to deflect pressure. When a problem occurs, they seek symptom-based quick fixes that will make the problem go away rather than making a commitment to finding long-term solution. This approach impedes organizational performance because when a quick fix is applied and the problem goes away, the organization’s need to find fundamental solutions also goes away until the same problem reoccur. The outcome behavior overtime is that this pattern will continue until the quick fix applied in one area of the system ends up creating more problems in other system functionality areas thereby creating a performance gridlock.
2.1.4 Limits to successThis is a situation where particular efforts become constrained such that the effort no longer generates positive performance outcomes. Behavior overtime is that the overall organizational performance becomes stagnated no matter how much effort is applied. In this type f archetype, the efforts to sustainably achieve growth will be successful in the early stages but eventually, the system reaches the limits to growth and the efforts applied no longer generate desired outcome in terms of growth. A good example can be drawn from the case study of the hospital emergency department operations. The department manager faces the problem of reduced number of patient attendances because of longer waiting times and long queues at the reception.
To address the problem, the manager decided to eradicate some of the services along the treatment chain that are deemed non-essential. The resultant effect is that the patients are attended to faster and the waiting times are reduced significantly thereby encouraging more people to come to the facility. The long-term behavior is that since the facility is working with limited staff, the huge numbers of patients overwhelm the service providers and therefore the patients will still have to wait longer in queues however fast the providers attend to the patients. The outcome is that overtime, most of the patients will opt to seek help elsewhere.
2.1.5 Growth and UnderinvestmentThis archetype points to the significance of addressing the dynamics in investment balancing loop especially from the managerial decision-making perspective. This is observable in a case where an organizational growth is approaching limit that could easily be avoided by investing in capacity but the managers opt to save on cost instead. The behavior overtime is the resultant performance degradation thereby resulting in low quality product and or service delivery. The decline in product or service quality causes significant decline in demand by targeted consumers of the product or service. The decline in demand consequently leads to decline in revenues, which in turn reduces resources available for investment.
2.1.6 Success to SuccessfulThis archetype is observed in a situation where two or more interventions are competing for the same limited resources, the most successful intervention gets assigned significantly higher amount of resources at the expense of the others. Success to successful archetype therefore creates insights into the trend of rewarding performers while neglecting underperformers. In an organization, the management is likely to fall into the trap of rewarding better performing employees, departments or products by allocating more resources to them at the expense of the underperforming ones without proper understanding of the underlying conditions or factors. Instead, a manager should critically evaluate the circumstances and conditions that contribute to the observed performance gaps and derive a resource allocation strategy that maximizes the potential of all the involved efforts. Otherwise, the rewarded efforts will continue to improve in performance while the unrewarded efforts continue to decline further in performance. This is not a desirable situation for any organization seeking to create and sustain its competitive advantages.
2.1.7 EscalationManagers are expected to create and sustain organizational competitive advantages and superiority over competitors through escalation structures. Managers justify their actions and decisions based on the strong belief that they are acting in the best interest of the company even if the implication of the decision stand to reduce the organization’s value to the customers, and other stakeholders. In the long run, the organization gets caught up in cutthroat action-reaction competition schemes, which in the long run harm the company and its interests, which the managers claimed to be protecting in the first place.
2.1.8 Tragedy of the outcomesThis archetype gives insights into the concept of reductionist thinking and its implication for overall organizational success. A properly functional organization is a collective of resources including people, space, finances, and systems among other resources. These resources are interlinked into a functional system with each aspect significantly dependent on the activities of the other systems. The problem arise when people in an organization for example continue to operate in a manner that does not recognize and appreciate the fact that there are interconnections within the system that contribute to their ability to perform assigned duties and achieve set goals and targets. Eventually, they end up placing too much pressure on such common resources which consequently collapse therefore incapacitating all the other dependent factors from functioning properly as expected including the people. A typical example of common resource is the IT department in a hospital setting. All hospital departments depend on the IT department top function yet when each department asserts increasing pressure on the system without considering the needs of the other departments, the IT department become too constrained for resources and when it eventually collapses, all the other departments cannot continue to function effectively as expected.
-287020115570002.2 Current State Value Stream Map AnalysisThe presented value stream map for the hospital emergency room gives a representative insight into the underlying system structures contributing to the lengthy waiting times. The lengthy waiting times can be traced to existing system archetypes including growth and underinvestment, as well as tragedy of the outcomes. The concept of growth and underinvestment is traceable to the limited space and personnel within the facility. The chine of service delivery is spread across with significant dependency on the attending nurse. The hospital should hire additional staff or capacity build the attnendants at the first level of triage to be able to perform the basic patient examinations. The records station and the ER should be within the same space or proximity to eliminate time wastage in the waiting area. Additionally, the attending doctor and the nurse should work in the same room so that; once the nurse is done examining the patient, the attending doctor takes over. The increased dependency on the attending nurse creates immense pressure on him/her to work faster and see more patients; this may lead to high risks of burnout and collapse, which may then lead to the breakdown of the entire service delivery chain.
2.3 Recommended new State Value Stream Map-57150018478500
Several research studies have been carried tout to determine the effectiveness of value stream mapping as a tool for improving organizational turnaround time in sectors such as healthcare as well as industrial production systems (Satyadi, 2012; Ramaswamy et al., 2017; Aizat Ahmad, 2019). After extensive fact analysis and consideration of existing value stream map, this report recommends adopting the lean approach as proposed by Improta et al., (2018). Their findings on similar problem for the emergency department at AORN Cardarelli hospital proved that lean approach significantly reduces patient waiting time to half the time used in the previous service delivery system. The lean method has proved to be efficient because it is based on simplified and streamlined operational efficiency attributable to task specification, streamlined communication, simple process architecture and results based or evidence based problem solving interventions. The proposed approach is to digitize the health information management system as well as computerization of the major procedures to eliminate time wasted waiting for information and communication transfer between the departments. Additionally, the proposed value stream mapping creates a service delivery system where the medical staff has been reorganized so that those who are interdependent are closely connected to create seamless uninterrupted workflow through out the process.
2.4 Intended and Unintended ConsequencesThe new value stream mapping has significantly reduced the patient waiting time by eliminating process interruptions and fast tracking diagnostic processes through computerization. These interventions will be effective for the long-term but has one major unintended out come. That is the risk of tragedy of outcomes. The system has been highly computerized from records management, communication as well as diagnostic procedures. This creates additional pressure on the existing IT department, which if not properly capacity built, may become overwhelmed, and breakdown resulting in a complete service delivery shutdown. Additionally there is the archetype of growth and underinvestment archetype. The management can opt for the proposed computerization and information system digitization but if they do not invest in capacity building the staff with knowledge and skills for operating and managing the equipment then the waiting time may double since the technology is new to them and they have to take time performing diagnostic procedures with limited knowledge and skills. The healthcare providers are also highly likely to commit errors as a result and this may have significant negative implications for the patients as well as the hospital as a whole in cases of misdiagnosis and wrong treatment related adverse events.
3. ConclusionsSystem archetypes promote organizational learning in a hospital emergency department and that has the potential to significantly improve general service delivery efficiency. They are essential and highly effective tools used to study understand organizational behavior patterns; patterns that reflect the underlying gaps and disconnections within the system being studied. There are 8 major archetypes that can influence or impede organizational performance and must be critically evaluated and understood during decision-processes. Also, value stream mapping is a great tool for visualizing emergency hospital department operational processes for ease of service delivery standardization and problem identification, evaluation and problem solving. Through the lean method, an organization can easily improve its turnaround time, especially in hospitals where timely decisions and interventions mean the difference between life and death for the patients.
4. RecommendationsBased on the findings of this report, the following recommendations are put forward for consideration. Organizations intending to sustain competitive advantage need to critically evaluate its systems to identify existing gaps and formulate long-term solutions rather than symptom based interventions, which are bound to cause additional problems in the long-term. There is need for further studies on value stream mapping approaches to come up with standardized methodologies for addressing related organizational process challenges regardless of the type of industry of business activity in future.
5. ReferencesAizat Ahmad, A. (2019). Process Time improvements through the application of Value Stream Mapping support Lean System. International Journal Of Advanced Trends In Computer Science And Engineering, 8(1.6), 310-317. https://doi.org/10.30534/ijatcse/2019/4681.62019
Gillies, A., & Maliapen, M. (2008). Using healthcare system archetypes to help hospitals become learning organisations. Journal Of Modelling In Management, 3(1), 82-99. https://doi.org/10.1108/17465660810860390
Improta, G., Romano, M., Di Cicco, M., Ferraro, A., Borrelli, A., & Verdoliva, C. et al. (2018). Lean thinking to improve emergency department throughput at AORN Cardarelli hospital. BMC Health Services Research, 18(1). https://doi.org/10.1186/s12913-018-3654-0
Ramaswamy, R., Rothschild, C., Alabi, F., Wachira, E., Muigai, F., & Pearson, N. (2017). Using Value Stream Mapping to improve quality of care in low-resource facility settings. International Journal For Quality In Health Care, 29(7), 961-965. https://doi.org/10.1093/intqhc/mzx142
Satyadi, C. (2012). Practical Application of Value Stream Mapping in Process Improvement of Emergency Department Testing Turnaround Time. American Journal Of Clinical Pathology, 138(suppl 2), A250-A250. https://doi.org/10.1093/ajcp/138.suppl2.201
Sözen, S., Celik, S., Akpinar, C., Güven, F., Yel, C., Kavalci, C., & Salt, Ö. (2017). Analysis of the patients admitted to emergency department due to urogenital trauma and investigation of factors that affect mortality. Journal Of Acute Disease, 6(2), 70-73. https://doi.org/10.12980/jad.6.2017jadweb-2016-0066
Vaillancourt, S., Shahin, I., Aggarwal, P., Pomedli, S., Hayden, L., Pus, L., & Bhattacharyya, O. (2014). Using Archetypes to Design Services for High Users of Healthcare. Healthcarepapers, 14(2), 37-41. https://doi.org/10.12927/hcpap.2015.24107
MGT603 Systems Thinking (2)
MGT603: Systems Thinking
Name
Course
Date
Abstract
The activities and operations within the emergency department often have life and death consequence implication. Other than providing needed immediate care, hospital emergency department personnel also play a role in assorting and directing patients to relevant departments where they will be best served. Organizations that operate based on complex and long system archetypes are prone to challenges such as longer patient waiting hours, loss of life due to delayed needed healthcare service delivery e.t.c. Also, the structure of an organizations system archetype is important because it dictates how fast the decision making process will be or not. This report is a case study that explores systems modeling tools including archetypes and how they impede organizational performance, application of value stream mapping analysis for a case study hospital emergency department and to reduce patient waiting times.
Table of Contents
TOC o “1-3” 1. Introduction PAGEREF _Toc450572701 h 3
2. System Archetypes PAGEREF _Toc450572702 h 4
2.1 System archetypes that may impede Performance PAGEREF _Toc450572703 h 4
2.1.2 Systems that fail PAGEREF _Toc450572704 h 5
2.1.2 Drifting goals PAGEREF _Toc450572705 h 5
2.1.3 Shifting the Burden PAGEREF _Toc450572706 h 5
2.1.4 Limits to success PAGEREF _Toc450572707 h 6
2.1.5 Growth and Underinvestment PAGEREF _Toc450572708 h 7
2.1.6 Success to Successful PAGEREF _Toc450572709 h 7
2.1.7 Escalation PAGEREF _Toc450572710 h 8
2.1.8 Tragedy of the outcomes PAGEREF _Toc450572711 h 8
2.2 Current State Value Stream Map Analysis PAGEREF _Toc450572712 h 10
2.3 Recommended new State Value Stream Map PAGEREF _Toc450572713 h 11
2.4 Intended and Unintended Consequences PAGEREF _Toc450572714 h 12
3. Conclusions PAGEREF _Toc450572715 h 13
4. Recommendations PAGEREF _Toc450572716 h 14
5. References PAGEREF _Toc450572717 h 14
MGT603: Systems Thinking
1. IntroductionThe world is presently scrambling with the devastating effects of the global Coronavirus pandemic. Hospitals are at the center of the race to contain the spread while seeking long-term solutions such as vaccines and other viable treatment regimens. So far, Hospital emergency departments have proved vital to the overall success of interventions towards beating COVID19 in any medical institution because it is tasked with the provision of first line medical care assistance to patients coming in need of mediate care. The activities and operations within the emergency department often have life and death consequence implication. Other than providing needed immediate care, hospital emergency department personnel also play a role in assorting and directing patients to relevant departments where they will be best served. According to Sözen et al., (2017), operational efficiency or lack of it within hospital emergency departments is dependent on the existing system archetypes that dictate the flow of service as well as communication and treatment.
Organizations that operate based on complex and long system archetypes are prone to challenges such as longer patient waiting hours, loss of life due to delayed needed healthcare service delivery e.t.c. Also, the structure of an organizations system archetype is important because it dictates how fast the decision making process will be or not. The emergency department operates based on the principle of urgency and therefore quick decision making contributes significantly to the effectiveness of service delivery and the general operational efficiency of the department as well as the entire medical facility. A casing example in this report is the challenges faced by medical facilities in effectively handling the rising cased of corona virus infections across the globe. This paper posits that system archetypes promote organizational learning in a hospital emergency department and that has the potential to significantly improve general service delivery efficiency. Therefore system archetypes must be continuously evaluated and modified to prevent undesirable outcomes such as long hospital queues and delays in service delivery to patients among other unintended and undesirable outcomes.
2. System ArchetypesSystem archetypes are essential and highly effective tools used to study understand organizational behavior patterns; patterns that reflect the underlying gaps and disconnections within the systems being studied. According to Vaillancourt et al., (2014), system archetypes are tools used by managers to identify patterns of behavior in within organizational systems and serve as a medium for gaining deeper understanding of the underlying systems structures and how the observed organizational behaviors originate. Gillies & Maliapen, (2008), in support, explains that system archetypes do not describe one specific problem within a systems but rather a series of problems with causal factors and that is the value they create in terms of offering deep insights into complex and dynamic systems and system behavioral outcomes.
2.1 System archetypes that may impede PerformanceThere are currently 8 common system archetypes. These include systems that fail, drifting goals, shifting the burden, limits to success, growth and underinvestment, success to successful, escalation, and tragedy of the outcomes.
2.1.2 Systems that failThese are often the quick fixes that are passed on disguised as solutions to address symptoms of a seemingly urgent problem. The drawback that arises from such fixes is that they tend to set in motion unintended consequences. These consequences may not always be evident at the onset but will add to the problem in the long-term.
2.1.2 Drifting goalsThis refers to fixes that are applied in the case where there is a significant gap between the system performance and the target goal. The solution is usually to lower the goal or target but in the long run, this fix result in the unintended outcome of lowered organizational performance or productivity. In this case, managers are always faced with the problem of organizational performance that fails to meet the set goals. Rather than finding proper solutions, the managers apply symptomatic solution by finding justifications for lowering the targets to a level that seems easily achievable rather than applying the fundamental solution of finding the performance impediment. In the long run, this archetype becomes a performance impediment because the organization will be forced to adjust its goals downward each time the performance fails to meet targets and this creates a culture of laxity towards goal setting and so the organization will spiral into a downward trend of setting lower and lower targets just to ensure that the goals are achieved regardless.
2.1.3 Shifting the BurdenThis is a situation where managers opt to address symptoms of the problem with both short term and fundamental solutions. Managers often adopt this approach as a way to deflect pressure. When a problem occurs, they seek symptom-based quick fixes that will make the problem go away rather than making a commitment to finding long-term solution. This approach impedes organizational performance because when a quick fix is applied and the problem goes away, the organization’s need to find fundamental solutions also goes away until the same problem reoccur. The outcome behavior overtime is that this pattern will continue until the quick fix applied in one area of the system ends up creating more problems in other system functionality areas thereby creating a performance gridlock.
2.1.4 Limits to successThis is a situation where particular efforts become constrained such that the effort no longer generates positive performance outcomes. Behavior overtime is that the overall organizational performance becomes stagnated no matter how much effort is applied. In this type f archetype, the efforts to sustainably achieve growth will be successful in the early stages but eventually, the system reaches the limits to growth and the efforts applied no longer generate desired outcome in terms of growth. A good example can be drawn from the case study of the hospital emergency department operations. The department manager faces the problem of reduced number of patient attendances because of longer waiting times and long queues at the reception.
To address the problem, the manager decided to eradicate some of the services along the treatment chain that are deemed non-essential. The resultant effect is that the patients are attended to faster and the waiting times are reduced significantly thereby encouraging more people to come to the facility. The long-term behavior is that since the facility is working with limited staff, the huge numbers of patients overwhelm the service providers and therefore the patients will still have to wait longer in queues however fast the providers attend to the patients. The outcome is that overtime, most of the patients will opt to seek help elsewhere.
2.1.5 Growth and UnderinvestmentThis archetype points to the significance of addressing the dynamics in investment balancing loop especially from the managerial decision-making perspective. This is observable in a case where an organizational growth is approaching limit that could easily be avoided by investing in capacity but the managers opt to save on cost instead. The behavior overtime is the resultant performance degradation thereby resulting in low quality product and or service delivery. The decline in product or service quality causes significant decline in demand by targeted consumers of the product or service. The decline in demand consequently leads to decline in revenues, which in turn reduces resources available for investment.
2.1.6 Success to SuccessfulThis archetype is observed in a situation where two or more interventions are competing for the same limited resources, the most successful intervention gets assigned significantly higher amount of resources at the expense of the others. Success to successful archetype therefore creates insights into the trend of rewarding performers while neglecting underperformers. In an organization, the management is likely to fall into the trap of rewarding better performing employees, departments or products by allocating more resources to them at the expense of the underperforming ones without proper understanding of the underlying conditions or factors. Instead, a manager should critically evaluate the circumstances and conditions that contribute to the observed performance gaps and derive a resource allocation strategy that maximizes the potential of all the involved efforts. Otherwise, the rewarded efforts will continue to improve in performance while the unrewarded efforts continue to decline further in performance. This is not a desirable situation for any organization seeking to create and sustain its competitive advantages.
2.1.7 EscalationManagers are expected to create and sustain organizational competitive advantages and superiority over competitors through escalation structures. Managers justify their actions and decisions based on the strong belief that they are acting in the best interest of the company even if the implication of the decision stand to reduce the organization’s value to the customers, and other stakeholders. In the long run, the organization gets caught up in cutthroat action-reaction competition schemes, which in the long run harm the company and its interests, which the managers claimed to be protecting in the first place.
2.1.8 Tragedy of the outcomesThis archetype gives insights into the concept of reductionist thinking and its implication for overall organizational success. A properly functional organization is a collective of resources including people, space, finances, and systems among other resources. These resources are interlinked into a functional system with each aspect significantly dependent on the activities of the other systems. The problem arise when people in an organization for example continue to operate in a manner that does not recognize and appreciate the fact that there are interconnections within the system that contribute to their ability to perform assigned duties and achieve set goals and targets. Eventually, they end up placing too much pressure on such common resources which consequently collapse therefore incapacitating all the other dependent factors from functioning properly as expected including the people. A typical example of common resource is the IT department in a hospital setting. All hospital departments depend on the IT department top function yet when each department asserts increasing pressure on the system without considering the needs of the other departments, the IT department become too constrained for resources and when it eventually collapses, all the other departments cannot continue to function effectively as expected.
-287020115570002.2 Current State Value Stream Map AnalysisThe presented value stream map for the hospital emergency room gives a representative insight into the underlying system structures contributing to the lengthy waiting times. The lengthy waiting times can be traced to existing system archetypes including growth and underinvestment, as well as tragedy of the outcomes. The concept of growth and underinvestment is traceable to the limited space and personnel within the facility. The chine of service delivery is spread across with significant dependency on the attending nurse. The hospital should hire additional staff or capacity build the attnendants at the first level of triage to be able to perform the basic patient examinations. The records station and the ER should be within the same space or proximity to eliminate time wastage in the waiting area. Additionally, the attending doctor and the nurse should work in the same room so that; once the nurse is done examining the patient, the attending doctor takes over. The increased dependency on the attending nurse creates immense pressure on him/her to work faster and see more patients; this may lead to high risks of burnout and collapse, which may then lead to the breakdown of the entire service delivery chain.
2.3 Recommended new State Value Stream Map-57150018478500
Several research studies have been carried tout to determine the effectiveness of value stream mapping as a tool for improving organizational turnaround time in sectors such as healthcare as well as industrial production systems (Satyadi, 2012; Ramaswamy et al., 2017; Aizat Ahmad, 2019). After extensive fact analysis and consideration of existing value stream map, this report recommends adopting the lean approach as proposed by Improta et al., (2018). Their findings on similar problem for the emergency department at AORN Cardarelli hospital proved that lean approach significantly reduces patient waiting time to half the time used in the previous service delivery system. The lean method has proved to be efficient because it is based on simplified and streamlined operational efficiency attributable to task specification, streamlined communication, simple process architecture and results based or evidence based problem solving interventions. The proposed approach is to digitize the health information management system as well as computerization of the major procedures to eliminate time wasted waiting for information and communication transfer between the departments. Additionally, the proposed value stream mapping creates a service delivery system where the medical staff has been reorganized so that those who are interdependent are closely connected to create seamless uninterrupted workflow through out the process.
2.4 Intended and Unintended ConsequencesThe new value stream mapping has significantly reduced the patient waiting time by eliminating process interruptions and fast tracking diagnostic processes through computerization. These interventions will be effective for the long-term but has one major unintended out come. That is the risk of tragedy of outcomes. The system has been highly computerized from records management, communication as well as diagnostic procedures. This creates additional pressure on the existing IT department, which if not properly capacity built, may become overwhelmed, and breakdown resulting in a complete service delivery shutdown. Additionally there is the archetype of growth and underinvestment archetype. The management can opt for the proposed computerization and information system digitization but if they do not invest in capacity building the staff with knowledge and skills for operating and managing the equipment then the waiting time may double since the technology is new to them and they have to take time performing diagnostic procedures with limited knowledge and skills. The healthcare providers are also highly likely to commit errors as a result and this may have significant negative implications for the patients as well as the hospital as a whole in cases of misdiagnosis and wrong treatment related adverse events.
3. ConclusionsSystem archetypes promote organizational learning in a hospital emergency department and that has the potential to significantly improve general service delivery efficiency. They are essential and highly effective tools used to study understand organizational behavior patterns; patterns that reflect the underlying gaps and disconnections within the system being studied. There are 8 major archetypes that can influence or impede organizational performance and must be critically evaluated and understood during decision-processes. Also, value stream mapping is a great tool for visualizing emergency hospital department operational processes for ease of service delivery standardization and problem identification, evaluation and problem solving. Through the lean method, an organization can easily improve its turnaround time, especially in hospitals where timely decisions and interventions mean the difference between life and death for the patients.
4. RecommendationsBased on the findings of this report, the following recommendations are put forward for consideration. Organizations intending to sustain competitive advantage need to critically evaluate its systems to identify existing gaps and formulate long-term solutions rather than symptom based interventions, which are bound to cause additional problems in the long-term. There is need for further studies on value stream mapping approaches to come up with standardized methodologies for addressing related organizational process challenges regardless of the type of industry of business activity in future.
5. ReferencesAizat Ahmad, A. (2019). Process Time improvements through the application of Value Stream Mapping support Lean System. International Journal Of Advanced Trends In Computer Science And Engineering, 8(1.6), 310-317. https://doi.org/10.30534/ijatcse/2019/4681.62019
Gillies, A., & Maliapen, M. (2008). Using healthcare system archetypes to help hospitals become learning organisations. Journal Of Modelling In Management, 3(1), 82-99. https://doi.org/10.1108/17465660810860390
Improta, G., Romano, M., Di Cicco, M., Ferraro, A., Borrelli, A., & Verdoliva, C. et al. (2018). Lean thinking to improve emergency department throughput at AORN Cardarelli hospital. BMC Health Services Research, 18(1). https://doi.org/10.1186/s12913-018-3654-0
Ramaswamy, R., Rothschild, C., Alabi, F., Wachira, E., Muigai, F., & Pearson, N. (2017). Using Value Stream Mapping to improve quality of care in low-resource facility settings. International Journal For Quality In Health Care, 29(7), 961-965. https://doi.org/10.1093/intqhc/mzx142
Satyadi, C. (2012). Practical Application of Value Stream Mapping in Process Improvement of Emergency Department Testing Turnaround Time. American Journal Of Clinical Pathology, 138(suppl 2), A250-A250. https://doi.org/10.1093/ajcp/138.suppl2.201
Sözen, S., Celik, S., Akpinar, C., Güven, F., Yel, C., Kavalci, C., & Salt, Ö. (2017). Analysis of the patients admitted to emergency department due to urogenital trauma and investigation of factors that affect mortality. Journal Of Acute Disease, 6(2), 70-73. https://doi.org/10.12980/jad.6.2017jadweb-2016-0066
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MAKING FINANCIAL DECISIONS
MAKING FINANCIAL DECISIONS
TASK 1
There are different types of accounting records and such records are important in any organization. One of the common account records is the income statement. An income statement provides one with an accurate description of the company’s profitability over a set period of time. An income statement could be described as an accounting statement that matches a company’s revenues with its expenses over a given period of time usually a quarter or a year. An income statement is composed of several items including sales, costs, increase and decrease in intangible value, taxes, and outstanding shares. Another key accounting record is the balance sheet. A balance sheet categorizes a company’s resources such as assets, liabilities and owner’s equity. According to Pandey (2002, p.67) the components of a balance sheet are divided into current and long-term categories. Pandey (2002, p.68) further observes that these components are listed in order of liquidity. Beside a balance sheet and income of statement, a statement of cash flows is also very important in a business. Cash flow statement provides one with information about a company’s cash receipts and cash payments. According to Khan and Jain (2003, p.56) a cash flow statement has several objectives. Firstly, it is effective in predicting the amounts of timing and ascertaining of future cash flows. Secondly, it indicates how cash is used and generated. It also helps the creditors, stockholders and customers to determine the flow of cash in a business. Thirdly, it helps an entrepreneur to understand the differences between net income and net cash flow from operating activities. Finally, it helps an entrepreneur to examine a company’s investing activities and financing transactions.
Needless to say, it is important for an entrepreneur to understand different accounting concepts the common of which are business entity, matching concept, money measurement, going concern, accounting period, cost concept, realization concept and accrual concept. To understand the importance of each of these concepts it is instructive to examine their roles. To start with, a business entity treats a business and an owner as two different entities. In other words, a business entity is the very basis of accounting concepts, conventions and principles. The money measurement concept allows an entrepreneur to distinguish between transactions that can be expressed in terms of money and those that cannot. The going concern concept assumes a business entity can carry out its activities for an indefinite period of time. This concept is important as it facilitates the preparation of financial statements. The accounting period concept is important in calculating tax, predicting future prospects of a business and helping an entrepreneur to procure credit from financial institutions. The accounting cost concept requires all assets to be recorded in the books of account at their purchase price. This requirement is helpful in the sense that it allows an entrepreneur to calculate depreciation of fixed assets. Another key concept is the dual aspect concept which allows an entrepreneur to detect errors and the realization concept which makes accounting information more objective. Equally important is the accrual concept which helps an entrepreneur to know the actual expenses and income during a particular period of time. Using this concept an entrepreneur should be able to calculate the net profit of his or her business. Finally there is the matching concept which states that revenue and expenses should be recorded in the same accounting period. This concept should help an entrepreneur to ascertain the exact amount of profit or loss of the business.
In order to effectively run a business it is also important for an entrepreneur to understand the factors that influence the structure of accounting system. One of factors is the company’s need for accounting information. Accounting information that is generated in a company could be useful not only to the investors but also the creditors and the management. It is also worth noting that accounting systems are influenced by the nature of the business and the operations of that business. Other factors that come into play include the perception of the employees and the management, the level of training accorded to the users, the nature of implementation and the implementation partners, and the resources available for the operation of the system.
TASK 2
Risk in any business could affect both primary and supporting assets.
Failing to manage risk can lead to litigation. Litigation can end being costly as businesses are forced to incur a number of injurious costs including attorney fees, out-of-pocket expenses, and foregone revenues. Failure to manage risk could also lead to sanctions from private and public regulatory bodies such as the Securities and Exchange Commission. It could also lead to impaired professional reputation as a result of adverse publicity.
In any organization there is a possibility of risk occurring. Fraud in an organization manifests itself in many ways. For instance, fraudulent financial reporting could occur due to improper revenue recognition, overstatement of assets and understatement of liabilities. Other actions that are fraudulent include misappropriation of assets, revenues or assets, conflict of interests, discrimination, antitrust practices and environmental violations.
In an organization, fraud and risk can be prevented and detected through a number of ways. Firstly, fraud and risk can be managed through auditing and monitoring. However, according to Prasanna (2006, p.71) it is not possible to audit every fraud and misconduct risk and so it becomes necessary to perform a risk assessment before hand. For this method to work, it is imperative to have competent employees who should have a comprehensive understanding of what fraud is and what its red flags are.
Beside auditing and monitoring, fraud and risk can be prevented and detected through proactive data analysis. Proactive data analysis has been found to be effective in identification of suspicious transactions, assessing the effectiveness of internal controls and monitoring fraud threats and vulnerabilities. Organizations could choose to either use continuous transaction monitoring or retrospective based analysis. The former allows organizations to continuously monitor areas that pose strong risks while the later allows organizations to analyze transactions in one or two-year increments.
Another prominent way of fraud prevention and detection is the use of process controls. According to Prasanna (2006, p.71) process controls are effective in detecting fraudulent activities. In his view Pandey (2002, p.81) observes that to effectively manage risk and fraud in an organization, the management should put in place internal controls. But what are internal controls? According to Charles, Gary and John (2009, p.80) internal controls refer to the procedures and policies that are adopted by the management to ensure a business entity operates in an efficient and profitable manner. Internal controls safeguards both physical and un-physical assets. This is achieved by conducting reliable and safe back-up procedures, clearing assignment of duties and controlling operating environments. It is also worth noting that one of the other roles of an internal control system is producing accurate and complete accounting records and timely preparation of financial reports. Most importantly, a control system is composed different component. The first component is maintenance of a control environment. In order to avoid risk and fraud it is important for all the stakeholders to understand, be aware and commit themselves to the policies and procedures established. A strong control environment should be implemented using tight budgetary controls and effective internal audit functions. The second component is risk assessment which is the act of identifying, prioritizing and implementing risk management strategies, policies and procedures. The third component is control activities which include accounting systems and specific control policies and procedures. In this regard, setting up an accounting and portfolio tracking system could be helpful play an important role in the process of data preparation, data entry, and transaction processing and document generation. Control procedures could include activities such as performing independent checks, separation of duties, authorization and approval of transactions and activities, use of adequate documents and records, and maintaining physical control over assets and records. The fourth component is information and communication. In this regard, internal audit reports, monitoring and evaluation reports need to be shared among the stakeholders. Finally, internal control cannot be effective without continuous monitoring and supervision. This can be achieved by strengthening the internal audit functions.
TASK 3
Factors to consider when planning for an audit
In this scenario audit risk is high because the company’s financial statements are likely to be misstated. It is also highly possible that the auditor will fail to detect such material misstatements. Given these possibilities, the auditor is likely to issue an inappropriate opinion on the financial statements. To effectively conduct the audit it will imperative for the audit to keep the audit risk at low levels.
Given the prevailing circumstances it will be important for the auditor to ascertain the degree to which users will rely on the client’s financial statements. Using incomplete or erroneous documents could prove injurious to the users and the auditor. It is also worth noting that some businesses have high levels of inherent risk. To deal with this problem, the auditor is required to identify inherently risky areas and gather appropriate evidence regarding those areas. Inherent risk is also determined by the integrity of the management, results of pervious audits and client motivation to misstate the financial statements. Another important component of audit risk is detection risk. In this scenario detection risk is high and as such the auditor will be required to select proper audit procedures.
Another important concept in the auditing process is materiality. In this regard, the auditor should determine whether the misstatements will distort the view given by the financial statements and influence the understanding and economic decisions of the users. The scope of audit is also very important and it should help the auditor all areas of concern. In order to improve the accuracy of the audit report it will important for the auditor to get an assurance from the client as to whether the information contained in the accounting records is reliable and sufficient. Most importantly, the auditor will be required to apply the compliance test and substance test examine the validity of the information contained in the financial records.
Audit tests
Audit tests will play an important role in detecting any misstatements in the financial statements. According to there are several types of tests that can be used during the auditing process and they include: risk assessment procedures, test of controls, substantive tests of transactions, analytical procedures, and tests of details of balances. The risk assessment procedures can be used by the auditor to assess the risk of material misstatement in the financial statements. In this case, analytical procedures will also be important for preliminary analytical review. Given that conducting a detailed audit may be difficult, analytical procedures will give the auditors an accurate view of the level of material misstatements.
TASK 4
Purpose of an audit report
Auditing plays a pivotal role in providing the internal and external parties with financial information about particular information. The information generated by an audit could be helpful to the employees, the management, shareholders, lending institutions, regulatory agencies and security market. According to Prasanna (2006, p.81) auditing is an important social control mechanism for promoting accountability. There are four types of audit reports, each of which is discussed below.
Types of audit report
Qualified opinion
A qualified opinion is issued when a report fails to conform to generally accepted principles of accounting. A qualified opinion is also expressed when there no sufficient audit evidence. A qualified opinion contains an explanatory paragraph contains a paragraphs where the auditor highlights the reasons why the audit report is not unqualified
Unqualified opinion
It states that the financial statements were prepared were prepared in accordance with the generally accepted accounting principles and is presented when auditor ascertains that each of financial records is free of any misrepresentations. This kind of report is repaired by an unbiased third party and its titles contain the word “independent.”
Adverse opinion
In Charles, Gary and John’s (2009, p.80) view this is the worst type of an audit report that a business entity can receive. This report does not conform to generally accepted accounting principles and indicates that the financial records provided by the business have been grossly misinterpreted. When a auditor expresses an adverse opinion he or she is required to include an explanatory paragraph that should contain all the reasons for his or her adverse opinion.
Disclaimer of opinion
A disclaimer of opinion is expressed when the auditor is unable to make an informed opinion as to the fairness of presentation of the financial statements in conformity with GAAP. It is also appropriate if the auditor is unable to perform a sufficient audit. When this happens, the auditor is required to issue a disclaimer explaining the issues why the opinion of the firm’s financial status could not be determined.
Constituents of an audit report
An audit report should have a title indicative of the word “independent.” The title is followed by an address and an introductory paragraph. The introductory paragraph indicates the responsibility of the external auditor, and the management. It also contains the company’s financial statements including the balance sheet, statement of income, and statement of cash flows. An audit report also has a scope paragraph indicating the purpose, the nature and the scope of the audit. In any report, there must also be an opinion paragraph which indicates the auditor’s assessment of corporate risks and controls. An opinion paragraph is followed by an explanatory paragraph. A sample of an auditor report is detailed below.
AN INDEPENDENT AUDITOR’S REPORT_____________________
The Board of Directors,
Upton Company,
New York.
We have audited the accompanying balance sheet of the Upton Company which comprise of the balance sheet as of 31st December 2012 and other financial statements for the year(s) ended then.
Scope paragraph
The audit was conducted according to the generally acceptable accounting principles. The prevailing standards requires the auditors to examine whether financial statements are free from material assessment, to examine evidence supporting the amounts and disclosures in the financial statements, and evaluate the principles used.
Opinion
In our opinion, the financial statements give a true view of the financial position of Upton Company as of 31st December 2012, and of the results of its operations for the year ended in accordance with GAAP.
Stratton and Briggs limited
24th December, 2012_____________________________________________________________
Purpose and contents of a management letter
A letter of management is written by the auditor towards the end of the audit. It contains information on weaknesses that have been identified by the auditor and recommendations of how they can be mitigated. The letter of management serves several purposes. Firstly, it enables an auditor to give his or her comments regarding accounting records, systems and controls. Secondly, it highlights any materials errors and ways through which they can be rectified. Thirdly, it offers the management constructive advice and improves the quality of the evidence gathering process. A letter of management starts off with an opening paragraph, after which any matters arising from the audit are listed. A raft of weaknesses and recommendations are then listed. The letter ends with a concluding paragraph. An example of a management letter is show below.
__________________ MANAGEMENT LETTER___________________________
Stratton and Briggs limited
Certified accountants and registered auditors
London
The Directors,
Upton Company,
New York.
Dears Sirs,
Audit for the year ended 31st December 2012
We are writing to you regarding the matter arising from the audit for the year ended 31st December 2012. Our responsibilities are guided by the relevant regulations and in accordance with generally acceptable accounting principles. This report has been prepared for the use by the management and others within the organization and none of its contents may be disclosed to external parties. The matters detailed in this report reflect matters coming to our attention during the auditing process.
Forecasting
Present system
Appropriate forecasting procedures are not undertaken and this problem can be attributed to the significant turnover in the finance management directorate.
Implications
The management does not receive reliable information for the decision-making process.
Recommendations
A strong financial management framework should be put in place.
We would be pleased to discuss the above issues at your own convenience.
Yours faithfully
Stratton and Briggs limited________________________________________________________
Reference List
Charles T. H., Gary L. S., and John A. E. (2009). Introduction to
Financial Accounting. Pearson Education
Khan, M. Y. & Jain, P. K. (2003). Financial Management – Text and Problems.
New Delhi: McGraw Hill Publishing Company Limited, New Delhi
Pandey, I. M. (2002). Financial Management. Vikas Publishing House Pvt.
Prasanna, C. (2006). Financial Management – Theory and Practice. New Delhi:
Hill Publishing Company Limited,