CC BY
92
DOI https://doi.org/10.18551/rjoas.2018-09.43
BUSINESS STRATEGY ANALYSIS OF ODIS HOME CARE IN THE FIELD
OF HUMAN RESOURCES
Kamal Lucyawati*
Postgraduate Program, Faculty of Economics and Business, University of Esa Unggul, Indonesia
Syah Tantri Yanuar Rahmat, Iswanto A. Heri, Indrawati Ratna
Faculty of Economics and Business, University of Esa Unggul, Indonesia
*E-mail: [email protected] ORCID: 0000-0002- 1197-325X
ABSTRACT
One of the degenerative diseases that require prolonged treatment is stroke in which the hospital has limitations in providing care for stroke so that other health facilities such as Home Care are required. Professionally managed Home Care is a new business in Indonesia that requires development. Many things have contributed to the company development such as analyzing the business environment, developing business strategies, business model canvas, operational strategies, marketing, human resources (HR) and finance. Good management and strategy on human resources also affect business development, especially for new companies. ODIS Home Care is a company engaged in health care services so that the role of HR is required to improve the company's operations. To analyze and improve the effectiveness of the company, the McKinsey 7S framework management model was used. This model consists of Strategy, Skills, Shared Values, Staffing, Structure, Systems and Style. The seven concepts are interconnected and some affect each other directly or indirectly. The seven concepts were described in detail and implemented into the ODIS Home Care Company in its business development.
KEY WORDS
Strategy, business, development, home care, McKinsey 7S Framework.
The increasingly advanced technology development can indirectly lead to an increase in life expectancy. The increase in life expectancy results in an increasing number of elderly people which is related to the increasing number of degenerative or disease sufferers due to the deterioration of body cell function. One of the degenerative diseases that require long-term treatment is stroke. Health facilities that can provide health services include hospitals and Home Care. However, hospitals find it difficult if they have to take care of patients for a long time, such as the limitations of health workers and beds. Therefore, there is need for other health facilities that can provide services for a long time, such as Home Care. Generally, not all patients continue health care at home after receiving hospital treatment. It may be due to lack of information about Home Care or not knowing the existence of health facilities that can provide follow-up services after returning from the hospital. There are also patients who consider that their diseases are not serious but after their health condition is getting more serious they just look for Home Care. It provides an opportunity for Home Care to provide an explanation of the importance of advanced care at home.
Currently, Home Care has several weaknesses such as lack of flexibility in services by hospitals that have Home Care services as well as by the existing Home Care, difficulties in accessing Home Care because the information about its whereabouts is still lacking, and some of them cannot be accessed online. Limitations on the number of Home Care make prospective clients have difficulty to find it. Home Care also does not have clear service standards, so the success rate of the service is difficult to measure. It makes patients and families need better Home Care. Home Care definition by Thome et al., (2003) is a service
that suits the needs of the individual of patients and families which are planned, coordinated and provided by service providers who are organized to provide services at home through staff or arrangements based on work agreements (contracts) (Farrero, 2001).
RESULTS AND DISCUSSION
Before making a decision to make a business, an analysis of the business environment, business strategy, business model canvas, operational strategies, marketing, human resources (HR) and finance need to be made in advance. In a new business, location plays an important role because the strategic location influences whether or not the company will be well-known quickly. By having a strategic location and easy access to reach, a business will make the company grow faster; in addition, it also requires good management to manage it. This Home Care was located in a quite strategic location in Tangerang City. Analysis of the business environment carried out on Home Care was based on general trends, Porter's Five Forces, industry analysis, and market analysis.
Based on the analysis results of general trends in terms of demand and supply, it was found that the number of patients with degenerative diseases such as strokes was increasing but not comparable with the number of the available Home Care. In terms of demography, the population was quite dense which was necessary to assist government programs in improving the quality of health. The socio-cultural aspect found a problem whether or not the sick elderly people were treated at nursing home or at home in which home care was the family choice. In terms of politics/ law, the Home Care licensing process was facilitated because it helped government programs to improve public health. In terms of technology, Home Care applied online-based applications that could be downloaded for free in the gadgets of prospective patient and their families to see what Home Care had provided so that they could follow the instructions easily. In addition, in terms of macroeconomics, it was found that these matters were related to the existence of the ASEAN Economic Community (AEC) policy and the National Health Insurance program (JKN) or Social Security Organizing Agency (BPJS). The AEC policy required that Home Care had quality human resources and always be innovative in order to compete and provide the best service in accordance with the needs of service users. Regarding to BPJS program that had many limitations and members, it was an opportunity for Home Care Company to assist patients in continuing their home care.
Based on the analysis of Porter's Five Forces theory, the pressure from newcomers was in a position with high pressure because it required a small capital and easy licensing process. The bargaining pressure of the buyer for this business was in moderate pressure due to competitive costs and the clients did not have much information. Bargaining pressure from suppliers was in moderate pressure due to cooperativeness with hospitals and health colleges with rigorous selection. The pressure of the replacement product was in low pressure because the clients felt uncomfortable in the hospital and some alternative products were less flexible. Competition from the existing competitors put it in a low pressure position because of the low number of Home Care and the differentiation of online services and service options.
Based on the analysis results, the development of the Home Care industry is in a growth position. Meanwhile, according to market analysis, Home Care was the type of consumer market and business market. As a consumer market, Home Care provided health services such as home visits, home stays and renting and selling medical devices. Moreover, in the business market, Home Care did partnerships with health workers. Thus, based on the analysis above, it was decided to create a Home Care business called ODIS Home Care. In summary, the description could be seen in the picture below.
Figure 1 - Business Environment Chart of Home Care Based on the SWOT analysis, the following results were obtained: Table 1 - Business Opportunities and Threats
OPPORTUNITIES (O)
O1. The patients do not feel comfortable to be treated in hospitals and the families cannot afford to treat
them at home.
O2. There is no Home Care managed by private agency outside the hospitals in Tangerang City.
O3. The increasing number of the sufferers of degenerative disease.
O4. Difficulty in finding a person who is in charge to accompany and care for the patient.
O5. The regulation of easy licensing for Home Care establishment in Tangerang City.
O6. The location is near to the housing of the prospective clients and hospital as the supplier.
O7. The existing Home Care has not optimally implemented health service standards.
O8. The existing Home Care has not optimally applied technological development
O9. The large number of BPJS members.
THREATS (T)
T1. Home Care business does not need big capital so that it is easy to follow.
T2. ACE policy (establishing free trade).
T3. There are various substitute products (hospitals, doctors, and acupuncturists).
T4. The termination of cooperation with HR before the completion of contract period.
T5. There are hackers that interfere with service.
The EFE matrix analysis of ODIS Home Care showed the findings that the opportunities were greater than the threats. Similarly in the IFE matrix, ODIS Home Care's strength calculation results were greater than its weaknesses. In CPM analysis, ODIS Home Care conducted a differentiation strategy by providing service options according to patient
needs, namely home visits or home stays, providing easy access through online applications, providing communities related to client illnesses, and facilitating training for health workers.
Table 2 - Business Strengths and Weaknesses
STRENGTHS (S)
51. Use online-based services.
52. Have competent and certified human resources.
53. Have an informed consent so that both partied will be protected.
54. Provide various health care facilities (such as home visit, home stay, etc.)
55. Provide excellent services.
56. Provide free medical consultation.
57. Join a community that has the same type of illness.
58. Conduct seminar and training.
59. Have health service standards.
510. Apply patient safety standards.
511. Have a medical record to monitor the condition of the patient. WEAKNESSES (W)
W1. It is a start-up business.
W2. Home Care services are quite expensive.
W3. Home Care industry is not yet familiar to the public.
W4. Having limitations in service when an emergency case occurs.
W5. Technology limitation when it is used by many people in the same time (server down).
SWOT Matrix in ODIS Home Care was based on four types of strategies, namely SO (Strengths - Opportunities), WO (Weaknesses - Opportunities), ST (Strengths - Threats) and WT (Weaknesses - Threats). SO strategies included recruiting and training more people, providing protection for Home Care and patients, and developing online and offline services, (Jackson et al., 2003). WO strategies consisted of seeking information about patients in need and offering services and collaborating with hospitals. ST strategies included continually innovating and providing training for HR. Meanwhile, WT strategies included socializing and educating as well as developing competence in its services.
Based on SPACE matrix analysis, the calculation results found that ODIS Home Care was in quadrant I position which meant that it was in business development, ODIS Home Care would use aggressive way to achieve its success. Meanwhile, on a large strategy matrix, ODIS Home Care applied a backward integration strategy by setting up a training center, forward integration with establishing nursing home or convalescent hospital and developing markets by opening branches and partnering with health workforce. In the QSPM, there as an option to recruit and train human resources or develop online services (SO strategies). The calculation results presented the choices in developing online services.
ODIS Home Care applied SIPOC (Suppliers Inputs Process Outputs Customer) analysis to provide an overview of customer service processes.
Table 3 - SIPOC Analysis
Supplier Input Process Output Customer
Hospital Patient Healthcare workers who provide services Reduce morbidity/ disability Patient or client
Business Model Canvas on ODIS Home Care described the people involved in activities, facilities and resources, and activities in providing services to patients. This model made the company to run its business with structured steps in order to work optimally and provide satisfaction to customers.
HR Strategy. ODIS Home Care provided health services to the patients in conducting its business so that the role of human resources was required to improve the company's operations. To have more effective company's operations, the McKinsey 7S framework management model was used in which it was a model for analyzing the organization and its effectiveness. The basic scope of this model contained seven internal aspects of the organization that must be aligned to achieve organizational success. This model was used to look at the interrelations between formulation and strategy implementation and helped the managers to focus on the importance of linking selected strategies to diverse activities that
might affect the implementation of the strategy. McKinsey's 7-S Concept, comprising: The Hard S's, which were feasible and easily identifiable factors, such as Structure, Strategy & Systems, and The Soft S's or factors that were difficult to define, i.e. Shared Values, Skills, Staff and Style, (Hanafizadeh and Ravasan, 2011). The seven concepts were interconnected and some affected each other directly or indirectly. To be able to provide optimal service, ODIS Home Care required competent and professional human resources in providing services to patients.
8. Key Partners Health workers Company of medical equipment Hospital Health college 7. Key Activities Recruiting qualified and competent human resources Introducing Home Care Determining the type of the service Providing services based on the needs of the patients 2. Value Propositions Application-based health services in patient's home Communities that have the same type of illness Free consultation Home Visit Home Stay 4. Customer Relationships Service through the application Information from the hospital 1. Customer Segments Elderly patients with degenerative diseases (stroke) in the upper middle class
6. Key Resources Technology Competent and certified human resources 3. Channels Smartphone (electronic media) External Marketing Website
9. Cost Structure Permanent and non-permanent employees The use of application The office does not need to be spacious 5. Revenue Streams Through the patients and the families (customers) Through advertisement
Figure 2 - The Business Model Canvas of ODIS Home Care
Figure 4 - McKinsey 7S Framework (Source: Harvard Business School, Management Consulting
Club, Case Interview Guide)
Strategy is an organizational formula used to maintain and build sustainable competitive advantage in competition (Kho, 2016). ODIS Home Care was a health service in a patient's home headquartered in Tangerang City. In carrying out the company's strategy, ODIS Home Care applied differentiation strategies, namely home visit (HV) services and home stay (HS). In addition, ODIS Home Care had the advantage of using online-based services that could be downloaded for free so that the potential customers could easily get information according to their needs. ODIS Home Care had competent and certified human resources (doctors and nurses) to provide excellent or best service (service excellence) as well as service delivery in accordance with the Standard Operating Procedure (SOP) starting from the registration of the patient until the completion of health care.
ODIS Home Care had a goal to manage human resources in serving the patients directly and indirectly. The HR management objective of ODIS Home Care was to provide assurance that the management had performed its duties well in recruiting and selecting competent human resources according to the company's needs. ODIS Home Care ran the activity of HR recruitment by explaining in detail the SMART patterns (Specific, Measurable, Attainable, Result-oriented, and Time bound) (Wibowo, 2014).
Table 4 - Short-Term HR SMART
NO S M A R T
1 Recruiting competent and certified health workers 100% Conducting evaluation of health personnel service twice a year Cooperating with college health First year
2 Lowering employee turnover 10% Holding an event of togetherness once a year Increasing the sense of engagement Second year
Table 5 - Medium-Term HR SMART
NO S M A R T
1 Increasing the knowledge of health workers 100% Conducting training twice a year Conducting training for health workers Fifth year
2 Lowering employee turnover 10% Making stay-the-night event, 3 days 2 nights, once a year for outstanding employees Increasing the sense of engagement Fifth year
Table 6 - Long-Term HR SMART
NO S M A R T
1 Lowering employee turnover 10% Developing partnerships with health workers (the person in charge from the branch office) Increasing the sense of engagement Tenth year
ODIS Home Care, in achieving its company goals, provided a competent and certified workforce, provided continuous training, opened opportunities for self-actualization, and provided employee protection. Its functional objective was to provide appropriate training both technically and non-technically to employees in order to develop themselves and to provide the best service to the community. Its social goal was to meet the patient's need for their follow-up care at home. Ease of access provided through online applications helped the people to get optimal health services. Personal goals of ODIS Home Care employees were to pay attention to the needs of their employees in achieving their goals while still prioritizing company goals.
Skill is the ability of the employees needed by the company in order to perform their work appropriately in accordance with what was expected so that it could assist the company in achieving its goals (Kho, 2016). ODIS Home Care employed competent and experienced employees in their field to provide quality services. According to Kotler and Keller (2008), there were five indicators of service quality i.e. reliability, tangible, assurance, responsiveness, and empathy. ODIS Home Care conducted training according to the needs of health workers who were involved in patient services. The training aimed to improve performance, provide the latest knowledge in patient services, and provide management skills.
Shared values are standards or norms that guide behavior for all employees and company management (Kho, 2016). Shared values are also called culture. Edgar H. Schein (Tika, 2014) defined the culture as follows: "culture is a pattern of basic assumption invented, discovered, or develop by given group as it learns to cope with is problem of external adaptation and internal integration - that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way perceive, think and fill in relation to those problems".
ODIS Home Care had a corporate culture in serving with empathy and effective communication. Empathy is a mental state that makes a person feel or identify themselves in the same state of feeling or mind as other people or groups (Setiawan, 2016). Meanwhile, effective communication means that the information conveyed can be understood and gives a positive response.
Table 6 - Employee Training Plans
No Type of Training Month
1 2 3 4 5 6 7 1 8 9 10 11 12
1 Orientation for new employees
2 Effective communication 1 H
3 Basic Life Assistance
4 Patient safety ■
5 Time management
6 Team building
7 Empathetic character
8 IT Innovation
ODIS Home Care, in carrying out its business, needed to apply ethics in HR because its employees were mostly non-permanent status where they were more likely to move out of the company so they were required a code of ethics in their work. ODIS Home Care was required to enforce the application of the code so that employees could provide the best service.
Staffs are employees needed by the company (Kho, 2016). ODIS Home Care required skilled and professional employees. For the short term, ODIS Home Care planned to employ six employees consisting of directors, marketing, finance, general affairs and human resources. Meanwhile, for the medium and long term, the company would increase its employees gradually. For the head office, which was responsible for managing and developing all the branches, it took about 25 employees whereas the branch office took six people.
ODIS Home Care also had non-permanent employees i.e. doctors and nurses who worked in accordance with the needs. ODIS Home Care, especially in serving stroke patients, would work with neurologists, internists, cardiologists and medical rehabilitation from the closest partner hospitals as consultant physicians if necessary.
Human resource planning is a systematic process to forecast employee needs (supply) and supply in the future, both in number and type, so that the human resources department can plan the implementation of recruitment, selection, training, and other activities more appropriately (Sunyoto, 2015). ODIS Home Care was a business engaged in the field of health care services that required enough health workers to serve patients. Health workers who were needed a lot, especially nurses, were required to organize nursing staff in planning, organizing, staffing, coordinating and controlling. Planning the amount of required human resources must be in accordance with the target of the patient by employing permanent and non-permanent employees so that the burden of HR costs was not too large because of the flexibility of the number of active employees. Permanent employees were employees who worked in the office and did the operational tasks of the company and performed home visit services. Meanwhile, non-permanent employees were employees who worked at patient's home and served both home visit and home stay.
ODIS Home Care required competent and professional employees in conducting business in the field of health care services so that it required detailed planning to meet the needs of human resources. A well-planned and well-programmed recruitment system would help the management get the labors according to company criteria. Recruitment could come from inside of the company/ internal and outside of the company/ external. Internal recruitment prioritized existing employees to fill new positions. Meanwhile, external recruitment was looking for new people from outside of the company with certain requirements. ODIS Home Care was a new company so that employee recruitment methods
mostly came from external recruitment. Every candidate who met the requirements would continue at the next stage.
Selection is the process of screening employees to occupy a position at all levels and promotion. The selection process aimed to obtain employees in accordance with the specified requirements in which it chose the best candidates through the competence test. The selection steps were the selection of curriculum vitae, selection test, interview, reference check, medical check-up and job offering (Aprinto and Jacob, 2013). From the selection process, it could be determined whether the prospective employees would be accepted or rejected. ODIS Home Care had some steps in the selection process of prospective employees. The selection process used is as the following:
Figure 5 - Employee Selection Flow of ODIS Home Care
If a job applicant was accepted by the company to be an employee then he/she would be placed in the planned position. Similarly, the employees who got mutations, transfers or demotions, they would occupy a new position in accordance with company regulations. However, the new employee would firstly undergo the orientation. The new employee orientation program at ODIS Home Care aimed to introduce the vision, mission, culture, policy and workplace environment so that they had the right perception and could do their job well.
Compensation is the total remuneration received by an employee as a result of their performance of work to the organization in the form of money or other, which might include salaries, wages, bonuses, incentives and other benefits such as medical benefits, holiday allowance, meal allowance, and others. Direct compensation was in the form of wages or salaries, bonuses, and commissions, while indirect compensation was an effort to increase employee comfort and satisfaction such as benefits (Sunyoto, 2015). The aim of providing compensation and payroll was to create employee loyalty and retention, especially nonpermanent employees who easily switched the jobs. ODIS Home Care would provide appropriate compensation and payroll for employee performance to improve their work motivation and minimize employee turnover. The rewards were in the form of financial and non-financial rewards.
A structure regulates the work system, communication, authority and responsibility and delegation of tasks to certain work units or people to achieve organizational goals (Kho, 2016). ODIS Home Care applied a functional organizational structure in carrying out HR functions in which the division was based on management functions such as marketing, finance, general and human resources at the first establishment of the company which would then develop based on the needs. This organizational structure could be applied in small companies because it was easy to monitor. In addition, this form could reduce the company's operating costs and run more effectively. At the beginning of the business, ODIS Home Care applied a simple organizational structure to reduce waste. However, due to the business development and the establishment of branches in various strategic areas, it required a wider structure in order to better manage its business.
The organizational structure of ODIS Home Care, at the beginning of its business, used a simple functional structure to work optimally. This structure was applied to permanent
employees working in the office of ODIS Home Care. Meanwhile, non-permanent employees were outside the structure because they worked in a patient's home. The development of organizational structure would take effect when ODIS Home Care opened a branch in a designated place. This structure would make the management worked better and well-organized in accordance with its function.
The system is the company's processes and procedures that contain daily operational activities and decision making within the company (Kho, 2016). ODIS Home Care applied a lean system and blueprint service to run its business with the aim of reducing excessive things such as registration and payment which could be done online to save time. To support this, ODIS Home Care employed a Customer Relationship Management (CRM) marketing system that aimed to build a close relationship between Home Care and its patients, (Knox et al., 2007). Thus, the planning, implementation, control, evaluation and budget could be applied optimally. ODIS Home Care used performance assessments related to reward-punishment and work systems or industrial relations.
Performance assessment/ performance appraisal is the process by which an organization evaluates or assesses employee performance (Sunyoto, 2015). ODIS Home Care conducted performance appraisal once every six months to determine salary increases or incentives annually. Performance appraisal was useful for establishing policies to be taken by the company. This performance appraisal was required to be carried out carefully and thoroughly so that the employees did their job appropriately so that it provided satisfaction for patients who received health services. The assessed aspects were knowledge of their work, leadership, initiative, work quality, cooperation, decision making, creativity, reliability, planning, communication, intelligence, problem solving, delegation, attitude, effort, motivation and organization (Rivai and Sagala, 2009). They were grouped into technical, conceptual, and interpersonal skills.
Industrial relation is the relationship between the three parties consisting of employers, employees, and government. Industrial relation is a system of relationships formed between actors in the process of producing goods/ services including the employers, workers and the government based on the values of Pancasila and the 1945 Constitution (Aprinto and Jacob, 2013). The companies needed to implement harmonious industrial relations especially between the employers and employees in order to create a working atmosphere conducive to work.
Company rules are regulations that are made and written by the employer regarding the terms of employment and corporate rules. The applicable company regulation in ODIS Home Care was a guide for the employer in doing business. The regulation provided direction to employees in performing their obligations and knowing their rights which ultimately would improve their performance and welfare.
Work violations are any speech, writings, and deeds of the employees who violate company regulations. Work violation sanctions are disciplinary penalties applied by the employer to the employees who violate it (Rivai and Sagala, 2009). There are three levels of work violations, namely minor, moderate and severe violations. Employees who violated ODIS Home Care regulations would be sanctioned according to their level of violation. It meant that the heavier the violation, the more heavily the sanctions that were going to be received even the disrespectful dismissal.
Style is a management leadership style used by an organization to achieve its company goals (Kho, 2016). The leadership style used by ODIS Home Care was based on situational leadership theory. This theory was developed by Paul Hersey and Kenneth H. Blanchard at the Center for Leadership Study in the 1970s. This theory was developed several times; last developed by Paul Hersey and Kenneth H. Blanchard and Dewey E. Johnson in 1996. Effective leadership behavior was determined by the interaction of 3 factors consisting of task behavior, relationship behavior and follower readiness. Situational leadership theory described the task behavior on the horizontal part and relationship behavior in the vertical part.
Style 1 (S1) or situational leadership style is a telling leadership style in which the task behavior is above the average while the relationship behavior is below the average. The
head of ODIS Home Care provided direction and training needed by permanent and nonpermanent employees in order to provide optimal health services in accordance with the vision and mission.
Style 2 (S2) is a selling leadership style in which the task behavior and relationship behavior is above average. Employees at ODIS Home Care required ongoing direction in order to better serve the patients.
Style 3 (S3) or participating leadership style shows the characteristics that the relationship behavior is above the average and the task behavior is below average. Employees were equipped with various skills through provided the training but they were still hesitant to apply that knowledge so that the leader's role was needed to give them the motivation to implement the knowledge.
Style 4 (S4) or a delegating leadership style finds that task behavior and relationship behavior are below the average. The role of leaders begins to diminish as the employees are able to do their work and apply their knowledge they have gained so they can provide service independently.
ODIS Home Care implemented a gradual situational leadership style in accordance to the company's conditions, in which firstly the leader's role actively affected employee behavior. However, it would slowly make the employees played a role in solving the problem and could even provide input for the company.
CONCLUSION
Technological developments in the field of health have an impact on increasing life expectancy in which it leads to an increase in the number of people with degenerative diseases that require special care. The hospital has limitations in providing long-term care so it requires other health facilities such as Home Care to care for these patients further. It provides an opportunity for the entrepreneurs to do business in the field of health such as establishing a Home Care company. Based on the business environment analysis on Home Care in terms of general trends, Porter's Five Forces theory, industry analysis and market analysis, it could be concluded that there was still a great opportunity to establish this business.
ODIS Home Care provided online application-based care services at the patient's home or hospitals if the patient was still being treated and needed assistance in which the family was busy. Therefore, it played a role in solving the problems of the family. Patients and their families could download Home Care application and directly use them in accordance with the patient needs. They could follow directions easily so they could determine what they need immediately.
ODIS Home Care applied the management model of McKinsey 7S framework in implementing human resource strategies to analyze the organization and its effectiveness. The seven "S"-s were strategy, skills, shared values, staffing, structure, systems and style. ODIS Home Care, as the business planning discussed in this article, provided a lucrative business opportunity. Support from qualified health workers would make the company grow well.
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