Case Analysis of Naivete or Boldness

This is a case about Denise Foley, who used to be a Chief of Nursing in a hospital and now is the Senior Vice President and Chief Operating Officer. The argument that she depicts is about her career and the prospects of the hospital. She has an overall view of the situation and a rational analysis of every aspect of the hospital faced. Stakeholders The major stakeholders in this case are Denise Foley, the new Chief Operating Officer, the consultant, the hospital’s CFO, and the customers of the hospital. Denise Foley, the Senior Vice President, makes important decisions related to the future of the hospital.

She considers that she has to give conscientious and carful advice to her CEO. Firstly because the hospital had given her a chance to complete her MBA and Foley wants to give it back. Secondly for personal reasons, the wrong decision would lead to her career crisis, which will place an economic burden on her family. As a MBA graduate, Foley analyzes the merits and shortcomings of selling the hospital to a for- profit institution.

Although this could relieve the hospital’s financial difficulties in a short period, the fate of the hospital is not optimistic and the customers in the community will face medical treatment problems, such as people in the community cannot find a place to have mental health examination. However, as the COO, Foley is responsible for making the CEO’s strategy work. The dilemmas make her struggling in her inner heart. The new CEO’s career is also at stake. It is known that the previous CEO had been fired from the hospital. Though the reasons for the layoff were not clear, the financial 1 difficulties of the hospital could have been a cause.

He wants to save his job and is under pressure to solve the hospital’s financial problems. However, he is helpless and has no one to turn to. He agrees with the consultant’s advice after hearing that many non-profit hospitals go through this kind of difficulties in the same way, but, the consultant’s decision is not overall to the whole incident about the hospital’s fate. For the consultant, his or her work is only to offer advice that gains profit for the hospital. The consultant has no responsibility for the eventual fate to the hospital. The only idea that he or she has proposed is to sell the hospital to a for-profit institution could help the hospital gain profit in current situation.

He or she has no worries unlike Foley and the CEO or the community and customers. For the hospital’s CFO, his position is a little bit passive. As a chief to manage the financial issues, the financial problems were definitely blamed on him by many people including the new CEO. Due to a lack of confidence in him by the CEO, no one asks his advice. But if the CEO sells the hospital to a for-profit institution, he has to risk having the professional crisis or even worse losing his job. For the customers of the hospital, the sale will be a serious problem.

On the one hand, after selling the hospital to the for-profit institution, the community will have only one local hospital medical service provider so the service fee will be higher, the service quality will be lower as a result of losing competition. On the other hand, if Foley was right that the service array would be cut, customers who need mental healthcare would be in trouble. Reasons and Rationalizations 2 As has been noted, the most vulnerable parts of both Foley and the CEO are the concerns of their own future career and the development of the hospital. The CEO is the decision- maker and Foley is the decision supporter.

If they make the wrong decision, the direct consequence will be that they lose their jobs and the severe consequence will be the bad effects to the whole community that people will not have a good medical service at a property price and a suitable department. The consultant, a critical person in this incident who makes the CEO hesitated, painted a hopeless financial picture for the institution. The assessment could have been manipulated on purpose by consulting the CEO so he could earn a lot of money. If Foley thinks his assessment is wrong, she has to find the rational arguments against him and have a reasonable argument to persuade the CEO.

First, what Foley can do is to distinguish their hospital from the for-profit institution. According to the Business Dictionary: “A business or other organization whose primary goal is making money (a pro? t), as opposed to a non pro? t organiza? on which focuses a goal such as helping the community and is concerned with MONEY ONLY AS MUCH AS NECESSARY TO KEEP THE ORGANIZATION OPERA? NG. ”1 THAT MEANS IF THE hospital will be sold to a for-profit institution, the medical service will not be the main goal which is a conflict purpose of a hospital who want to save people.

Second, Foley has to anticipate the outcomes if he sells the hospital to the for-profit institution. It is said that the main goal of a for-profit institution is making money, so after buying the hospital, the for-profit institution will do so. As has been assumed, the hospital services such as the mental healthcare center, some community services and charitable offerings would be cut because they are all traditional service offerings that provide little 1 http://www. businessdictionary. com/definition/for-profit-organization. html#ixzz3PrZtaIMf 3 profit. It will save cost at the very beginning, however, if this action cannot make profit,

the new owners will close the hospital. The result will cause everyone in the hospital to lose their job including Foley and the new CEO. So it is not a good solution for the prospects of the hospital. Third, Foley anticipates the outcome of keeping the hospital in their administration. Foley’s institution is a non-profit one that always doing community service and performing charitable offerings in the past. A hospital is a public charity that gives to the whole community. The mental healthcare center in her hospital is the only one in this area which contributes to the mental health of the community.

Foley could start from this aspect and develop the mental health center. Nowadays, there are so many competitions that make everyone feel mental stress sometimes. So mental health is important to everyone. It is now a less profitable service, but it is profitable. This center would be a most profitable facility, provided that it can be developed rationally and properly. For instance: advertising the comfortable environment of the care center, doing education public service announcement showing of the mental health, providing the free pick-up bus for people who wants to have a mental health examination.

The more people who come, the more profit is gained. After the center having a good reputation, not only people in the community but also people in other communities will be attracted to the center. When the number of customers begins to rise, the other departments will also be developed. In a word, it will be a bright future after keeping the hospital and developing it wisely. Last but not least, Foley is responsible for a better suggestion than selling the institution in order to convince the CEO. She has to talk with the hospital’s CFO and find out the 4 reason that caused the financial difficulties.

Although the CFO is a person that being ignored, he is a very important person to judge the financial problems, whether the reason for financial crisis is revenue deficit, excessive waste or other factors. If there is revenue deficits, what is the reason? Maybe there is a traffic problem on the street to the hospital, people cannot go there conveniently, and maybe the service in the hospital is too bad and keeps the customers far away. If there is excessive waste, what is the reason?

Maybe there are so many employees getting paid without obtaining profit, and maybe there are many devices working at a low efficiency. Once Foley can find the primary cause of the financial problems, she can offer a proposal to revise and save the hospital as well as her institution. Foley as a MBA graduate, has the ability to analyze the reason and make a clear analysis report to the CEO. What should Foley do? Foley has to face the misunderstanding of others. It is true that she is worried about her job and she doesn’t want to give her family a heavy burden if she loses the job. However, it is also true that Foley is a good person who wants to give back to the CEO that provided her a better career, as well as she wants to do good things in the community for the commitment in her inner heart.

Although some say that she was being over scrupulous, she always analyzes those incidents in an overall view. So after analyzing every aspect of the whole situation, Foley has to talk to the new CEO with full preparation. Now she has abundant reasons to argue with the consultant who will judge her the most harshly. Firstly, Foley could talk to the CEO about her desire of giving back to the hospital and the commitment in her heart. As a Senior Vice President, this kind of talk is needed 5 because she has to let the CEO know that her challenge is not a defection but the hope of the hospital.

Then Foley has to give the report to the CEO, which will include the analysis of the financial crisis reasons, the outcome analysis of selling the hospital to the for-profit, as well as the outcome analysis of keeping the hospital in their own administration and the good advice of developing the health care center. Foley has done her best to persuade the CEO to not sell the hospital and has done what she could do to benefit the hospital as a Senior Vice President and the COO. The CEO is the ultimate arbiter and the eventual decision-maker. If the CEO could count on her support, the hospital may really have a prospect. Otherwise, when she quits her job, there will be no torments in her heart.

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