Externally driven crises in the healthcare industry

Crisis is inevitable, especially in international business interactions. However, crisis is not necessarily an end failure; rather, it can be a new opportunity for an organization to understand the particular business factors that are necessary for the smooth functioning in the contemporary market. Evaluating the particular crisis elements related to the industry that poses a serious threat for the organization is an important and primary step towards intervention and prevention of the same. This research takes up the Healthcare industry of Egypt to critically understand and analyze the various kinds of crisis that can be associated with the industry practices and the existing market.

Crisis can be fundamentally divided into two kinds: externally driven crisis and internally driven crisis. There are also crises that result from a mixture of both external and internal drivers.

Externally driven crises are essentially the particular incidents happening in the external environment of an organization that has a direct influence on the success and progress of the organization concerned. External drivers of crisis can vary from financial troubles to ethical failures (Lachlan 648). In case of a deteriorating financial health of a particular country, the existing businesses in the primary sectors like health and education start declining. Unethical practices in a particular industry may result in significant damage of mass-confidence in the entire sector. The organizations working in related industries are intricately connected with one another, thus affecting each other with their respective successes and failures.

External crises in the healthcare industry would include threats of declining governmental investment for development of healthcare organizations, rising inequity in the healthcare sector—making most of the products and services inaccessible for most, failure of some other organization performing in the same industry—leading to failing trust and confidence of people in the entire industry, and/or changing needs and requirements of the consumers, influenced by the changing political, technological and environmental scenarios of the business market (Medford-Davis, Laura and Bobby Kapur 15). Externally driven crises do not only arise from existing conditions but also from past events or occurrences that have a significant impact on the industry stakeholders.

Most external crises are unanticipated and hence hold the maximum power to pose a threat. External crises can again be divided into two types: controllable and uncontrollable. Some of the periodic external crises include financial downfalls, outdated technology issues; employee turnover, etc. can be pre-estimated and prepared for through liquidity plans and other crisis prevention techniques (Parmer 1216). On the other hand, crises like natural disasters, terrorism activities or outbreak of epidemics or other issues arising from a confluence of external and internal drives, are unexpected and mostly uncontrollable by the organization in concern.

Effects of external crises on healthcare industry stakeholders

The healthcare industry shares a wide range of stakeholders varying from governmental institutions to the direct consumers of their products and services. In cases of externally driven crises like declining governmental assistance and investment in the industry sector, which leads to poor progress of the industry in terms of employment, awareness, equipments and technology, the stakeholders that are directly affected include the direct customers, the government of the country and the senior management team of the concerned organization (Jiang 680). Each of the stakeholders gets affected differently as the effect of risen crisis, and responds in their own ways to resolve the issue. The effects of this crisis on the different stakeholders of the industry are briefly discussed below:

End Users: Declining governmental intervention and assistance in the healthcare sector strengthens the existing inequity and makes the necessary products and services unaffordable for most of the end users or customers (DiStaso, Michail Vafeiadis and Chelsea 223)

 Privatization of healthcare institutions makes the healthcare products and services accessible only for a certain section of the society. As a primary necessity, healthcare requires more inexpensive and affordable offers.

Ministry of Health: Ministry of Health in Egypt would be another major stakeholder in this scenario to face dire consequences of declining governmental support and involvement in the various healthcare processes of Egypt. Lesser investment towards healthcare industries would turn it into a money-making business, annihilating the country’s public health and safety, and therefore resulting in a governmental failure (Lachlan 520).

Healthcare Enterprises: Another major stakeholder in the crisis event would be the healthcare enterprises and organizations in the country. Keeping up with the technological revolution in the healthcare industry is almost impossible without governmental assistance and investment. For lack of funds, most organizations would not be able to afford the best equipments or skilled doctors that are required in today’s context.

This research takes up the context of Alfa Health Care in Libya, which deals with a wide range of pharmaceutical Companies and produces specialized products and services for the healthcare industry. Alfa Health Care also has its own distribution channel, which dispenses quality healthcare products in the market of Libya (Lin 577). The main objective of this Company is to provide an all-round healthcare assistance to its consumers by providing essential tools, solutions and services that take care of the customers’ complete benefits.

This research explores the various crisis incidents that were internally driven and had the capacity to affect the success of the organization significantly.

Internally driven crises in the Healthcare Industry

Some of the major crises that could arise in the organizational structure are internally driven, as in, they are caused by failures or incompetence of the existing processes. The internal environment of a healthcare organization plays an important role in determining the organization’s relevance and efficiency in the existing healthcare market. Some of the internal factors of the Alfa Health Care of Libya that can drive major crisis incidents are briefly discussed below, in their specific order (5 being the most dangerous crisis factor and 1 being the least dangerous):

1. Physical Environment:The physical structure of the healthcare organization is an important internal element that has the capacity to drive major crisis incidents. Various aspects of service-providing including patient-safety, consumer satisfaction and functional efficiency depend on the style of architecture and quality of building materials (Rice and Patric 613). The building’s architecture is also responsible for the amount of consumption of energy and other resources. Functional efficiency of the organization is in threat due to insufficient space for storage of medical facilities. If not resolved with care, the growth of the organization might be stunted or have worse impacts on its consumers.
2. Resources: Insufficient and inefficient resources are some persistent challenges faced by the Alfa Health Care. Due to economic instability and financial fallout in the past year, the Company is stuck in debts and is unable to afford necessary resources like specialized doctors, formally trained nurses, top-skilled pathologists and more, who contribute a significant amount in the success of the organization (Liu 25). Insufficient or inefficient resources do not only slow down the medical and pharmaceutical processes but also diminishes their quality of production.
3. Technology:One of the major internal factors that have been posing a serious threat to the organization is their failure to update their technology in the field of healthcare products and services. The rapidly changing technological environment has made some significant contributions to the healthcare industry (Westerman 175). However, failing to implement the latest technological gadgets due lack of skilled labors who can operate the new tools and techniques is another technological as well as financial block that has the potential to drive a major crisis event. Reduced economic assistance from the government has affected the budget of the Alfa Health Care Company and made most of the technological developments inaccessible to the organization.
4. Transportation: Another major internal driver of crisis is transportation and delivery of produced goods and products to the Libyan market for sale. The transportation services require the organization to depend on external suppliers like transportation agencies, drivers, etc. Unreliable external suppliers are a consistent threat to the organization that can drive crisis incidents to the organization’s processes. Insufficient number of transporting vehicles like trucks and minivans is also a major issue for the organization as it increases their dependence on external suppliers.
5. Organizational Miscommunication: Organizational communication is one of the most necessary elements of a business organization. Especially in healthcare sector, organizational disharmony can be negative consequences—not only on the organizational performance but also on consumers’ satisfaction (Henderson 454). Various disagreements and clashes sprang up in the organization soon after its financial fallout, which exposed its weak and inefficient senior management team. Absence of skilled leadership qualities amongst the management team of the Company is an important internal driver of crisis incidents.

Conclusion

To conclude, crisis management is a complex process involving many layers intricately connected to each other. External crises drivers are the particular factors in the external environment of an organization that directly affects the performance of the organization, for example natural disasters, governmental indifference, etc. On the other hand, internal drivers of crises within the organization include insufficient funds for affording necessary technology and resources. The research uses the case of Alfa Health Care organization based in Libya, to demonstrate the effects of internal and external drivers of crises in an organization and its stakeholders. Nonetheless, with proper evaluation and analysis, overcoming and resolving the crises situations are possible.

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