Prof. Name
Date
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 mastered 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).
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 as
Struggling with online classes or exams? Get expert help to ace your coursework, assignments, and tests stress-free!