Question

a) The absence of the profit measure in non-profit seeking organisations causes problems for the measurement of their efficiency and effectiveness.
Required:
(i) Explain why the absence of the profit measure should be a cause of the problems referred to.
(ii) Explain how these problems extend to activities within business entities which have a profit motive. Support your answer with examples.
b) A public health clinic is the subject of a scheme to measure its efficiency and effectiveness.
Amongst a number of factors, the 'quality of care provided' has been included as an aspect of the clinic's service to be measured. Three features of 'quality of care provided' have been listed.
(i) Clinic's adherence to appointment times
(ii) Patients' ability to contact the clinic and make appointment without difficulty
(iii)The provision of a comprehensive patient health monitoring programme
Required:
(i) Suggest a set of quantitative measures which can be used to identify the effective level of achievement of each of the features listed.
(ii) Indicate how these measures could be combined into a single 'quality of care' measure.

Answer 1

a)(i) Profits are a quantitive measure to indicate whether a business is working efficiently and effectively or not. If a business is profitable, it can be safely assumed that the strategies of the organization are good and it is managed well. The absence of a profit measure takes away the common measurable goal everyone is workin towards and thus is a cause of problem which needs to be referred to.

(ii) Even within organizations which are focused towards profit, non-measurement of certain parameters in a quantitative manner which indirectly costs a company is an issue. For example, the attrition of employees is essentially a non-financial factor. However, a great rate of attrition ultimately makes quality suffer in the company and leads to financial consequences. Thus, it should be measured in some way or the other.

b)(i) Quantitative measures which can be used to identify the effective level of achievement of each of the features listed below:

(i) Clinic's adherence to appointment times- A log book recording how many patients were serviced within their appointment time.
(ii) Patients' ability to contact the clinic and make appointment without difficulty- Recording of the appointments made through call and deriving a ratio with regard to the total number of appointments.

(iii)The provision of a comprehensive patient health monitoring programme- A customer feedback form indicating whether they think adequate services are available at the clinic or not.

(ii) All these measures can be combined into a single ' quality of care' measure by asking the customers to rate the quality of services received on a meter and using that as a parameter.