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NURS FPX 6216 Assessment 1 Instructions: Mentor Interview

Student Name

Capella University

NURS-FPX 6216 Advanced Finance and Operations Management

Prof. Name

Date

Mentor Interview

Knowledge regarding business and financial management is one of the critical knowledge aspects for a nursing leader, as it allows them to effectively analyze the current healthcare trends, both local and international, to bring practical, patient-centered outcomes within their organization. Researchers have highlighted that combining clinical and business skills helps nurses maximize their growth within the healthcare system while meeting the demands of the ever-evolving healthcare community (Figueroa et al., 2019).

This comprehensive knowledge empowers nurses with their leadership and management skills, adapting them to become more proactive regarding their decision-making abilities and allowing them to challenge traditional ways and bring innovative reforms (Mlambo et al., 2021). One of the critical aspects of business management within healthcare is budgeting and resourcing. The current assessment is based on a mentor interview with Ms. Liu, a master’s level nursing leader with three years of experience in business management and facility care hospital budgeting. She has worked at Florida Community Care for four years. The current interview was based on a discussion of different budgeting approaches, budget management, and their effect on the quality of care within the organization where Ms. Liu has been working.

Comparison Between the Management of the Operating and Capital Budgets

The interview began by discussing the difference between managing an operating budget and managing a capital budget. Ms. Liu identified that these budget categories are two distinct and essential processes of the financial management process within an organization. She highlighted that both budgeting processes serve the same purpose of financial decision-making but differ in their approach, durations, strategic objectives, assets, purchases, and funding. Ms. Liu highlighted that the operating budget is a short-term period focused on revenue generation and day-to-day expenses, covering routine operational expenses such as salaries, utilities, supplies, and other ongoing operational activities.

The operational budget can be prepared annually and is flexible. The capital budget is a long-term investment in things such as buildings, machinery, technology, and infrastructure. It involves significant expenditures with extended paybacks. Literature review by Michelon et al. (2020) explains the capital budget as a systematic planning method that helps organizations evaluate and invest in long-term beneficial assets such as machinery, facilities, and technologies, while the operational budget is a subdivision that allows organizations to become more structured in their financial spending and keep track of it (Srithongrung et al., 2019).

NURS FPX 6216 Assessment 1 Instructions: Mentor Interview

Furthermore, she enlightened us that operational budgeting focuses on portability and liquidity, while capital budgeting focuses on long-term strategic capabilities, productivity, and competitiveness. The discussion proceeded on the processes and the flexibilities within the budget approaches and decision-making processes. She highlighted that operational budgeting decision-making is primarily based on optimizing current resources and managing operational efficiency; therefore, the approval for this sort of budgeting falls under the department heads.

While the capital budget is focused on risk assessment, evaluation of potential opportunities, and long-term impact assessment, approvals fall under the domains of the board of directors and CFOs. However, knowledge gaps involve the requirements associated with the comprehensive return on investment analysis, the impact of investment on technological advancement and how it affects the operational and capital budgeting processes, and the market conditions that may affect the need for budgeting and its application.

Allocating Resources for Labor, Equipment, and Services

The interview further delved into discussing how the allocation of resources occurs within this kind of budgeting. The budget allocation holds a significant place as it allows a fair resource distribution between labor, equipment, and services, helping the organization to be more confident in its practices and care provision. Researchers have indicated that efficient budgeting heavily relies on proper resource allocation, which helps the organization allocate budgets with quality (Bouzari et al., 2023).

Ms. Liu strongly urges that budgeting should be aligned with a need-based assessment of the organization, which provides the organization with a clear idea regarding the current prioritized needs and adjusts the resources accordingly. She explained that the allocation process is based on the assumption that leaders conduct a need assessment, develop a year- or two-year-long plan, allocate resources, and then evaluate the process. Also, it is assumed that the required resources will be readily available without shortages when needed, and the estimated cost will reflect the actual market conditions.

NURS FPX 6216 Assessment 1 Instructions: Mentor Interview

The process begins with assessing the needs and then identifying the resources required for labor, equipment, and services. The budget division is based on liquidity and probabilities, as labor’s budget is flexible because it covers salaries and training. The equipment has a fixed budget as it is a one-time purchase, and maintenance is usually carried out with every new budget. In contrast, the service budget is higher as it is associated with vendors, contractors, and outsourcing.

Like many organizations, her organization also uses Outlook and Excel for communication and spreadsheets that show yearly trends, expenses, revenues, and timelines and compare them to past-decade trends, reflecting on the success rate and highlighting areas for improvement. After allocation, content monitoring is done to see if the budgeting is aligned with goals, and evaluation is based on revenue generation and a balanced scorecard. Kruk et al. (2018) have highlighted that high-quality healthcare systems are based on equal and balanced resource distribution that aligns with the organization’s needs and facilitates decision-making.

Effective Approach to Profitability and Fiscal Success

The practical approach to profitability and fiscal success is based on strategic planning through need-based analysis, risk assessment, SMART goal setting, and SWOT analysis, which helps the organization readily identify the need and allocate resources. Risk assessment provides a comprehensive assessment that can help achieve profitability and success by estimating and mitigating risk (Srinivas, 2019).

Also, the SMART goals help the organizations reach their targets on time and ensure that the staff is motivated and enthusiastic about success. Ms. Liu highlighted that the process used for strategic planning in Florida Community Care is SWOT analysis, through which the organization identifies its strengths, weaknesses, opportunities, and threats and then compares them with its balanced scorecard, which helps in highlighting the financial, internal, learning and growth, and customer aspects, aligns with SWOT analysis, and provides a comprehensive strategic plan to improve the organization’s goals.

Research has highlighted that the combination of the SWOT analysis and balanced scorecard provides comprehensive and detailed information regarding the organization’s current status, helping the organization strategically utilize the internal and external information to plan to enhance its strengths and opportunities while managing its threats and weaknesses (Quezada et al., 2019). However, alternative approaches that can be utilized for gaining profitability include using cross-functional teams to explore unique ideas and working on strategies that help in increasing revenue, such as becoming environment-friendly care set-ups, enhancing care pricing, using standardized hygiene protocols, using degradable supplies, or utilizing integrated electronic health record systems.

Nursing Leader’s Approach to Budget Management

A nursing leader’s approach to budget management is essential for ensuring the efficient allocation of resources. The role of the nursing leader is to plan a budget that aligns with the organization’s goals and requirements. A qualified nurse can show proficiency in patient-centered care and fiscal responsibility, which are essential to the organization’s continued success (Mlambo et al., 2021). Therefore, the nurse leader’s budget should be aligned with regulatory requirements and demonstrate accuracy in revenue and expense management. Similarly, a transformative leadership style involving all stakeholders, access control measures, and strategically allocating resources can help nursing leaders demonstrate practical budget management skills.

Research has highlighted that well-structured training and education on budget management through a multidisciplinary approach can help the

nurse leader gain skills (Paarima et al., 2021). The effectiveness of a budget can be evaluated against measurable goals and against the balanced scorecard (Fuertes et al., 2020), the roadblocks to decision-making can be identified through budgeting, and the budgeting process can be easily defined.

Conclusion

In conclusion, the interview session with Ms. Liu, a nursing manager at Florida Community Care, provided in-depth information regarding the difference between operational and capital budgeting, which provides information on need-based resource allocation and varying levels of flexibility in the budget for labor, equipment, and services. Further, strategic planning and effective strategies can help the nursing leader become more confident in their budget management planning and evaluation. At the same time, risk assessment is crucial in strategically evaluating organizational goal alignment.

References

Bouzari, P., Gyenge, B., Ebrahimi, P., & Fekete-Farkas, M. (2023). Problem solving and budget allocation of SMES: Application of NCA approach. Computation, 11(3), 48. https://doi.org/10.3390/computation11030048

Figueroa, C. A., Harrison, R., Chauhan, A., & Meyer, L. (2019). Priorities and challenges for health leadership and workforce management globally: A rapid review. BMC Health Services Research, 19(1), 239. https://doi.org/10.1186/s12913-019-4080-7

Fuertes, G., Alfaro, M., Vargas, M., Gutierrez, S., Ternero, R., & Sabattin, J. (2020). Conceptual framework for the strategic management: A literature review—descriptive. Journal of Engineering, 2020, 1–21. https://doi.org/10.1155/2020/6253013

Kruk, M. E., Gage, A. D., Arsenault, C., Jordan, K., Leslie, H. H., Roder-DeWan, S., Adeyi, O., Barker, P., Daelmans, B., Doubova, S. V., English, M., García-Elorrio, E., Guanais, F., Gureje, O., Hirschhorn, L. R., Jiang, L., Kelley, E., Lemango, E. T., Liljestrand, J., … Pate, M. (2018). High-quality health systems in the Sustainable Development Goals era: Time for a revolution. The Lancet Global Health, 6(11), e1196–e1252. https://doi.org/10.1016/S2214-109X(18)30386-3

NURS FPX 6216 Assessment 1 Instructions: Mentor Interview

Michelon, P. D. S., Lunkes, R. J., & Bornia, A. C. (2020). Capital budgeting: A systematic review of the literature. Production, 30, e20190020. https://doi.org/10.1590/0103-6513.20190020

Mlambo, M., Silén, C., & McGrath, C. (2021). Lifelong learning and nurses’ continuing professional development, a metasynthesis of the literature. BMC Nursing, 20(1), 62. https://doi.org/10.1186/s12912-021-00579-2

Paarima, Y., Kwashie, A. A., & Ofei, A. M. A. (2021). Financial management skills of nurse managers in the Eastern Region of Ghana. International Journal of Africa Nursing Sciences, 14, 100269. https://doi.org/10.1016/j.ijans.2020.100269

Quezada, L. E., Reinao, E. A., Palominos, P. I., & Oddershede, A. M. (2019). Measuring performance using SWOT analysis and a balanced scorecard. Procedia Manufacturing, 39, 786–793. https://doi.org/10.1016/j.promfg.2020.01.430

Srinivas, K. (2019). Process of risk management. In A. G. Hessami (Ed.), Perspectives on Risk, Assessment and Management Paradigms. IntechOpen. https://doi.org/10.5772/intechopen.80804

Srithongrung, A., Yusuf, J.-E. (Wie), & Kriz, K. A. (2019). A systematic public capital management and budgeting process. Capital Management and Budgeting in the Public Sector, 1–22. https://doi.org/10.4018/978-1-5225-7329-6.ch001

NURS FPX 6216 Assessment 1 Instructions: Mentor Interview