The following excerpt is from "Integrating Strategic and Financial Planning" by Lee Ann Runy (2005), which appeared on hospitalconnect.com (www.hhnmag.com/hhnmag app/hospitalconnect/search/article.jsp? dcrpath=HHNMAG/PubsNewsArticle/data/0506HHN FEA Gatefold &domain=HHNMAG):

Integrating strategic and financial planning is the best way for health care organizations to ensure that they are spending money wisely.

Too often, projects get approved only to be shelved because the money isn't available. And, hospitals need an accurate vision of their community and the needs and wants of their customers before embarking on costly expansions and new services. It is a dynamic process: Just as budgets must be updated yearly, strategic plans must be reassessed to ensure that the organization's assumptions and projections are on track.

It is important that plans remain up-to-date or the organization risks costly, unnecessary expenditures or may miss out on a good opportunity. A thorough planning process incorporates strategic planning, financial and operational planning and capital allocation.

"A financial plan without strategy isn't much of a plan," says Blaine O'Connell, chief financial officer at Froedert Hospital in Milwaukee. "A strategic plan without financial backing isn't much of a strategy.

a. What is the relationship between strategic planning and financial planning?

b. What does financial planning involve?

c. What do you think "operational planning" means in the excerpt?

d. What do you think "capital allocation" means in the excerpt?

e. Explain why you agree or disagree with the statement in the excerpt: "A financial plan without strategy isn't much of a plan.