Question

1. What are the main differences between upstream and downstream vertical structures in a manufacturing organization and those in a healthcare organization? 400 word

Answer 1

Solution

The Vertical integration structure refers to a structure in which the company owns its upstream suppliers in market as well as its downstream buyers. The Upstream in a manufacturing firm refers to the process of searching for raw materials as well as extracting it. Raw materials are then used in manufacture of goods & services in firm. This enables manufacturing company to produce goods & services which it offers to their customers in market. This enables them to generate some funds which it uses to finance its operations in market. In order to ensure process of production in firm doesn’t stop, it has to have an upstream stage in its production.

The Downstream on other hand refers to process where manufacturing firm processes its raw materials into finished goods which it offers in market. Sales stage of finished goods is also included in this stage. In a healthcare organization however, upstream as well as its downstream is very different from that of a manufacturing firm. This is because in a healthcare organization, upstream stages refer to process of looking for customers / rather waiting for them in healthcare facility in order to treat them. Downstream stage on other hand refers to stage where doctors as well as physician in healthcare facilities treat patients for various ailments. This enables them generate some income since the patients pay in exchange of services they get.