PART 1 – Definition of the situation:  minimum of one page, single spaced, Verdana 12 point font.

Definition of the situation should be a thorough description of the organization and the present situation with detailed personal opinions and views. 

PART 2 – Analysis of the Situation: minimum of two pages, single spaced, Verdana 12 point font.

Analysis of the situation should be a detailed analysis of the management process, organization, contributing factors, and other variables. 

It should include detailed application of course learning objectives. The course learning outcomes for MG 371 are:

1. The student will: Assess application of the management process (planning, organizing, leading, controlling).
2. The student will: Select between alternative strategies to strengthen the organization’s competitive advantage.
3. The student will: Evaluate methods to motivate followers to achieve organizational goals. Evaluation
4. The student will: Differentiate between management practices within a domestic context and within a global context. Evaluation
5. The student will: Contrast outcomes of managerial strategies that employ social responsibility and ethics versus strategies that do not.

When composing your case analysis consider the following concepts that you have studied in this course;

Management Skills, The Management Process, Management Ethics, Social Responsibility, Workforce Diversity, National Cultures, Managing in the Global Environment, Managerial Decision Making, Group Decision Making, The Planning Process, Functional Level, Business Level, and Corporate Level Strategies, Organizational Structure, Output Control and Behavior Control, Expectancy Theory, Needs Theory, Equity Theory, Trait and Behavior Models of leadership, Situational Leadership, Managing Organizational Change, Managing Groups and Teams, Group Dynamics, Recruitment and Selection of Employees, Communication and Information, Management Information Systems, Operations Management, And other factors.

PART 3 – Recommendations: minimum of one page, single spaced, Verdana 12 point font.

The Recommendations section should provide a comprehensive identification of the selected single best solution and explain why it is perceived to be the best solution.  It also includes a complete implementation plan which thoroughly describes the courses of action and order of sequence for their adoption by all levels of management.  

case analysisMarketing Management

THE MG371 CASE

Growth Pains at Mountain States Healthcare

Background

Mountain States Healthcare (MSH) is a regional system of hospitals located

in several large metropolitan areas of New Mexico, Arizona, Utah, Colorado,

and in Acapulco, Mexico. MHS started as a single hospital in Salt Lake City,

Utah, and, due to the business acumen and experience of its officers and

Board of Directors, was quite successful and profitable.

Over the years, Salt Lake Hospital began purchasing other hospitals and

clinics in the state that were not as profitably operated, and eventually

changed its name to Utah Health Group (UHG). Each facility continued to

operate as an independent entity, except that its name was changed to

include “Utah Health Group” and UHG instilled its own successful

management style in the newly purchased facilities. When a hospital was

bought in Denver, Colorado, the firm created a medical facility holding

company in Salt Lake City, named Mountain States Healthcare. MHS treated

each facility as a separate subsidiary, except for the clinics, which were

associated with a larger hospital in the area. MSH continued to grow, adding

facilities from the states it declared as its strategic area.

Later, they added a new division of several clinics, an assisted living facility,

and a hospital in the resort city of Acapulco, Mexico, to take advantage of

medical needs of the large tourist and American retirement population there.

The Mexico venture was the most profitable and fastest growing of the MHS

family.

MSH was a profitable venture, but began to realize that some of its

administrative costs were, collectively, much higher than other medical

holding companies, and reducing the profits that could be used for the

benefit of shareholders. Additionally, the higher overhead costs were

affecting the advantage of some hospitals to compete within their districts.

The divisions had historically set themselves apart from other medical

facilities by offering a full line of specialties within their service packages.

The corporate holding company supported this by sharing resources,

technology, and even personnel between the divisions when needed. This

allowed each of the hospitals to position themselves as medical technology

competent full service providers.

A consulting firm pointed out several areas of administration which could be

consolidated, using the latest technology, to realize a tremendous reduction

in costs. The new VP of Finance, Aaron Nelson, newly promoted from the

state billing office manager’s position, suggested that medical billing should

be the first to consolidate. He reasoned that as each of the facilities had

consolidated the billing operations for all facilities within their five geographic

areas a few years ago, they should be able to completely consolidate all

billing with the latest database technology in a fairly short time, and realize

a substantial cost reduction. This would look very good to the shareholders.

An executive committee of vice presidents was established to set up the new

consolidated office, and it was decided to keep the plan confidential until the

new director of the unit was selected, and to allow the new director to plan

and announce the new unit themselves when it was time. A new

directorate, Medical Billing, was created at MSH to accomplish the operation.

Each of the divisional billing managers was considered for the director

position. The Mexico, Arizona, and New Mexico managers were dropped for

consideration primarily due to their experience and education levels, except

for the Mexico manager who was quietly dropped due to the cultural

differences between Mexico and Utah. This left the leading contenders

Kyle

Christiansen, the Utah manager, and Colleen Kennedy, from the Denver,

Colorado, office.

Kyle had an accounting degree and an MBA, both from BYU, a well regarded

university in Utah, and had elected to take an accounting position with MSH

when it was first formed, rather than go into public accounting with a CPA

firm. He was an aggressive go-getter, and was promoted to manage the

state billing office when Aaron Nelson was promoted to VP following the

successful consolidation of the Utah facilities billing into one entity.

Colleen had a management degree from the U.S. Air Force Academy, and

spent six years in the Air Force creating, installing, and managing computer-

based operations throughout the western states area. She managed, during

the six years, to get an MBA from Colorado State University. She, also,

started with MSH shortly after it was formed; her computer background got

her the position to manage the development of the state billing office, after

which she became the manager of the office.

The executive committee charged with selection of the new Director of

Medical Billing included Kyle’s old boss, Aaron Nelson, who was a strong

advocate of Kyle. When it appeared that there was a strong possibility that

Colleen might be selected, Aaron suggested that a woman director, in the

very conservative state of Utah, might bring a lot of problems and

resentment among the mostly male employees in the current state billing

office which would become the nucleus of the new directorate. This probably

was the primary consideration which resulted in Kyle’s selection.

Current situation

Colleen walked with calm determination into Kyle’s office, without an

appointment; in fact, without waiting for the secretary to announce her.

Once inside, she seated herself in front of Kyle and started talking before he

could regain his composure and open his mouth. Her calm, measured

manner of speech began deteriorating as the words started flowing, letting

her rage begin to take control.

“Kyle, you promised that the only changes you would make would be to

unimportant matters, strictly to improve efficiency. You promised that I

could continue to manage my staff as I had been doing; only we would be

here in Salt Lake City instead of Denver. You cut back on their work roles

and changed their jobs. You eliminated their flex time because you insisted

that they work only when a supervisor could observe them. They felt that

we don’t trust them, that their capabilities are impugned, and that you lied

to them about your promises. Their morale sunk to the bottom; they moved

here from a comfortable existence in Denver to be betrayed; and most of my

old staff have quit.

“You insisted that we move and begin merging the operations before the

new system gets installed and tested. You had us cancel our contract with

our software vendor, arguing that we could come here and use your

software until the new system is up and running, but we ran medical billing

and other financial services for our state facilities; your software can’t

handle the load of our added billing, much less do the other financial

services, and it just broke down. We don’t have any working system!

“You told the offices in Arizona, New Mexico, and Mexico that we are

consolidating their services here, and would be shutting their offices down;

all their employees scrambled to get new positions elsewhere. We now have

all divisions without a billing system! To top that off, not only are we not

able to do the billing, but the Colorado facilities now must to send their

accounting to MSH corporate accounting for consolidation, which is slowing

their operations down. We cannot process the billing from Mexico because

we don’t have any employees who speak or read Spanish and none who

know their office practices.

“I have been asking for a meeting with you, but you are always unavailable.

I sent you complete documentation to show that we are headed for a

disaster, hoping to get you to change your thinking; however, you can’t

seem to be able to change your thinking, and now we are sinking. No one is

billing; our cash position is on life support; most of our best and experienced

people are gone; we have no functioning billing software; and those of us

who are left are spending our time trying to put out the fires which are

springing up every hour.

“You reduced my role and my effectiveness; every suggestion I made to you

was either rebuffed or ignored. I have really tried over the past six months

to help you to pull this together, but it has always been ‘your way or no

way.’ Consider this my ’30-day notice.’

If you don’t shape this up by then, you will have your way, and I’ll have the

highway.”

Kyle, still speechless, sat quietly, with the sound of the slamming door

ringing in his ears. “How did this happen?” he asked himself.

Kyle

Kyle was very pleased upon hearing the news that he had been promoted to

be the director of the new department. “I’ve faced all these problems with

billing operations management before, managing the methods and systems

of digital billing, staff work flow, coordinating different functions, creating

new processes, and keeping internal customers happy,” he thought to

himself, reflecting on the fact that he had been managing the Utah

consolidated billing office for over two months.

“Yes, I’ve done all of this before; now I’ll just have to stay focused and apply

all the solutions that I’ve learned.” The whole idea was to get the division’s

consolidated operations to coordinate their billing processes for greater

efficiency. There was a great deal of pressure on him. This was a test-bed to

be watched by upper management for later application to consolidate other

processes within WSH. He’d simply have to avoid getting sidetracked by

differing agendas, inter-department issues, varying work methods and the

thousand other problems that these kinds of multi-company collaborations

can experience. He knew he could do this if he stuck to his agenda and

pushed forward.

Kyle decided that the best strategy would be to retain all of the Utah

employees and bring in most of the people from the Denver office (which

was the largest of the five and had the most experience), and relocate to a

new, larger building which was recently completed on the MSH campus near

the Executive building. At that time he could eliminate most of the people in

the other three division billing offices and transfer those activities to the new

building. He could already see a promotion to the executive staff after they

saw how he could shape up the new directorate into an efficient, well

disciplined unit, rigidly executing his plan. “Yes,” he thought, “make a plan,

then follow it without deviation. That’s the road to success”

Colleen

Colleen sat in her office, listening to the software consultant. “Colleen, I just

don’t know how to proceed. You only have one partly experienced person

left from your original eight who moved here with you from Denver; none of

the original staff are left who were here when I started, just before you

arrived; and five positions are currently vacant. I don’t see how we can

finalize the design and bring the beta system up. We just don’t have a

sufficient knowledge base to get good design input and certainly don’t have

the people to conduct a run through period on the beta. We have no choice

but to push this whole thing back another 6-8 months, or at least until you

have some staff who’ve had a chance to learn your operations.

Colleen’s mind went numb. She knew it was coming, she could see it all

along, but still it hit like a bomb. She had almost no staff left now and in 2

months the support program for the existing billing software that had been

in use by the Utah office would be terminated by the manufacturer. The new

system was needed not just to replace the old, but was also needed to

handle the new operating processes defined by Kyle. Now the promised new

system wouldn’t be available for 6 months at best, her best staffers were

gone, internal customers were already grousing, and the cash flow would

soon begin to dry up because billings weren’t going out. How did so many

things go wrong through this whole process?

Colleen had managed the physician billing and financial service office. Her

department was the largest of the four billing departments being merged

and her numbers indicated that the Colorado office was far more productive

than the other departments, much better than even Kyle’s old department.

Over the last 6 months there had been many meetings to agree on a plan

that would work for all stakeholders, or at least she thought it was for all

stakeholders. It was clear now that all the problems that kept cropping up

over the 6 months all pointed to the same problem and one clear conclusion.

Colleen had built her operation in Colorado from scratch, and she wasn’t

about to let some early bumps knock her down. The crew she brought to

Utah were her best people, she trained them all and they were a great team.

Her staff had a certain way of getting things done. They liked setting their

own work hours; some were in by 6:00 in the morning, to accommodate

their own personal lives. They particularly liked being responsible for the full

cycle of activities associated with servicing each account.

Kyle had promised that nothing important would change; the merger was

intended only to make their work easier. Yet even before a structure and

date for the merger was set he began to insist that all the staff start at 8:30

and that each billing clerk would be limited to handling just one part of the

billing process instead of the prior method of handling the full life-cycle of

each bill. Regardless of the many objections and countering ideas and

apparent early agreements to avoid changing these things, Kyle’s mind was

made up. He believed that a well disciplined work force would be more

efficient.

As the problems mounted and staff unrest built, Colleen and the staff

suggested many approaches to problems and sought answers and decisions

from Kyle, but in every instance his answer was that he’d have to get back

to them. Regardless of the topic, though, he rarely got back to anyone with

an answer. This drove her people crazy; they worked for doctors and thrived

on the can-do attitude and quick responsiveness of their environment. This

is when the rumbling started among her people.

Colleen heard the words of concern, and she called Kyle many times to

meet. She should have sensed trouble early when, upon winning the new

Director’s job, Kyle did not call to meet with her for 6 weeks. Despite this,

she set up many meetings to review the operation and plan for how to best

make things work; however, he cancelled most meetings and for those when

he did show, he arrived late and left early. When she finally got Kyle to meet

with the staff, he showed little interest in their daily operating issues. In

response to the staff concerns, he assured them that changes would be

minimal and that any changes made would be to make their work easier.

His vague answers left the staff uneasy, so Colleen kept calling Kyle to get

their plans and problems ironed out; however, when she brought up the

continuing staff concerns he told her to simply show a positive attitude to

them and to be reassuring on all their problems.

The bells started to go off to many people when a couple of weeks into the

planning phase Colleen’s most experienced billing clerk announced that she

was leaving to take a new job elsewhere. Other staff members now began

to apply for new jobs elsewhere in the hospital system. This got Colleen’s

attention and another staff meeting was called where everyone voiced their

concerns about the new billing system, their roles, hours, customer relations

and many problems.

The pressure was mounting. Kyle knew his way would work, if the rest of

the people would just follow him. At the meeting he listened to all their

points and felt that he comfortably answered them by pointing out the facts

and benefits of his original plan. They’d heard all this before, however, and

now people were even more uncomfortable. One staffer, seeming to speak

for all, expressed her lack of faith in this approach and an unwillingness to

change a successful operation. In exasperation, Kyle felt the need to exert

authority and told her that his approach had always worked, it would work

here, and she needed to do something about her bad attitude.

Things just got worse. People began to leave in waves. The software project

was falling behind schedule and the physicians who were their internal

customers were getting unnerved. Upper management was expressing

concern.

Colleen had to act.

Adapted from “A Case Of Lost Influence: The Need For Flexibility And

Exchanges”, by Prof. Allan Cohen, Babson University