Acquisition of Abbott Hospital - Case Study Example

Introduction Organizational change is considered as one of the key strategic decisions firms have to make in order to achieve the desired objectives. To ensure smooth transition to the new and desired state within the organization requires delicate management of various issues which should be taken into consideration. Organizing and managing change also requires a focus and involvement from the top management of the firm to ensure that every stakeholder is involved at each level. This paper will go through the case study of "Acquisition of Abbott Hospital, Parts 1 and 2,” and will explore various issues faced by management in managing the change before and after the acquisition of the hospital. Strategic Issues in the change-Part-1 A closer analysis of the various facts and figures presented in the study suggests that all the stakeholders were either not informed about the change or their feedback was not incorporated effectively. The fact that Sister Mary Theresa controlled almost all aspects of the pre-acquisition period suggests that the communication was not readily disseminated at all levels. Besides, the communication was relatively one-way with others just following the suit rather than raising the voice against the proposed acquisition. A key strategic issue in this was the lack of the effective human capital i.e. the resistance from the medical community and the doctors/staff working at the hospitals. Since the overall size of medical community at local level was relatively small therefore this can be a significant issue provided a limited availability of trained and skilled medical staff at the local level. It is also critical to note that the Mt. Mercy there is a clear lack of systems requirements as most of the orders and the strategic vision flows from the single source. Having a decentralized organizational structure can actually help an organization to share the responsibility while at the same time have more feedback before any decision is made. Strategic Issues in the change-Part-2 A key strategic issue while dealing with the change was that of creating a cohesive culture for both the hospitals. Due to relatively different strategies being adapted at these two hospitals, significant employee motivation issues emerged causing a decline in the revenue and profitability for the firm. It is evident that after the acquisition, the employees of the Abbott hospital are not considering themselves as part of the new organization. In order to achieve the economies of scale and to improve the efficiencies, it is critical that the organization must focus on developing a certain degree of trust within their employees. Interviewing the employees and not giving them their seniorities when they transfer to Mt. Mercy may be some of the reasons as to why the hospital may have not achieved the desired results initially. Post-acquisition period also suggests that the employees at the Abbott Hospital may not be entirely satisfied with the approach undertaken by the Mt. Mercy. Some of the practices of Abbott Hospital were in direct conflict with the code of ethics followed by the Mt. Mercy. This may not result into strategic alignment of all the guiding principles of running the hospitals. Such behavior can result into strong employee demotivation and can further reduce the employee morale. In order to motivate the employees to accept the change, it is critical that the top management must involve itself to share the strategic vision of the organization besides making an effort to retain the human capital available at both the hospitals. Corporate Stakeholder Strategic Communication Analysis - Part-I A closer analysis of the stakeholders of the hospital would suggest following stakeholders: Sisters of the Sacred Heart This is probably the most important stakeholder group among all as it controls the Mt. Mercy Hospital and ensures that hospital follows the overall philosophy and objectives of the trust. To this group, the overall message was precise and exact with little variations as the Mt. Mercy has been able to spell out the new vision for the hospital to flourish and expand. As such the communication towards the sisters of the sacred heart was mostly direct and policy oriented in nature. Auston Council of Governments The council has the power to actually grant the certificate which can allow Mt. Mercy to actually go for the acquisition of the hospital. The overall nature of the communication to the council was that of relational wherein an attempt to establish the integrity and trust was made. Besides, Mt. Mercy also made the case for the fact that the proposed acquisition will result into reduction of cost and improvement of services. Doctors and other Medical Staff Another stakeholders group is that of the medical fraternity itself which was also opposing the move. The communication to this group was relatively transformational as the message clearly stretched their vision of having a multi-purpose hospital within the city. This stakeholder group may not be as strong as the case may be however, it matters because they are from the group which actually delivers the services to the patients. Corporate Stakeholder Strategic Communication Analysis- Part II The initial phase of the communication was focused upon actually integrating and assimilating the overall communication with the employees of the hospital. The fact that all employees were being asked to be interviewed suggested that the Sister Marry Theresa was more focused upon assimilating and integrating the information in order to ensure that all employees and their roles and contribution is well documented and understood. It is also critical to note that the overall tone of the communication might suggests that the Sister Marry Theresa might be taking lead in terms of deciding on the strategic issues. At some point, Sister Marry Theresa has been engaging on the issues of strategic conversations and the dialogue with various other stakeholders. The conversations with the Adam Sampson also need to be considered from the perspective of innovation and asking the right questions. Though some of the moves made by Sister Marry Theresa were not welcomed by the Adam Sampson but he accepted them considering the overall fact that she was calling the shot. From this overall perspective, it can easily be suggested that different stakeholders may not be at ease with the overall approach of Sister Theresa while dealing with different stakeholders. Communication Effectiveness and conflicting values- Part- 1 One of the key aspects of the overall role of Sister Theresa is her approach towards the work and how she actually controls the overall work environment. At the start of the acquisition period, her role was that of convincing the board of directors and making a case for the acquisition which she performed relatively well. At the first level, she was able to set the goals i.e. to acquire the hospital and also disseminated this message across the whole group of related stakeholders. What is however, critical to note that board of directors might not have the exact information i.e. costs and other benefits to be achieved from the project. As such it is critical that all the information should have been shared with the board of directors before seeking their consent and approval for the acquisition. Though she was successful in her various leadership roles however, there was a need for more improvement in terms of how overall communication message flowed across different channels within the different organizational hierarchies existing in the organization. (Argenti, 2010) It is therefore important that the members of the boards shall not support her actions until all the required information is presented. Some of the information such as issuance of bonds, the overall procedure of raising the money, the costs involved and the efficiencies to be gained need to be clearly discussed with the board before members can actually allow her to proceed with the proposed strategic move. Communication Effectiveness and conflicting values- Part II The first six months of the operations at the hospital suggested that the proposed takeover missed on some of the targets. The actual revenue actually was less than the projected revenue and there was also a significant reduction in the number of surgeries. This suggested that the overall targets may have been missed and the perceived benefits of the proposed takeover may have not been achieved. Considering the overall situation, the leadership role which is more predominating is that of the director which is more of a rationalistic communication role played by Sister Theresa. Under this role, Sister Mary Theresa has been calling the shots by making majority decisions without actually referring to other stakeholders i.e. board of directors etc. such type of leadership roles may not be able to garner the support from all the stakeholders in longer run. A closer look at the different communication events leading to the resignation of Dr. Coletti would suggest that there may be lack of transparency in the communication. The lack of disclosures regarding the transparency and ethical principles while communicating complete information to all the stakeholders may be two of the important causes leading to the resignation of Dr. Coletti. Apart from this, it was clear that the instructions were coming from the top and communication was relatively one-way with very little feedback from other concerned stakeholders. The lack of communication and not entertaining the overall feedback received from employees and other participants may be the direct causes of the overall low performance of Abbot after the takeover. (Goodman & Hirsch, 2010) Potential conflicts arising from differing values and ethical issues- Part I One of the key differences between the ethical values of the two organizations was the basis on which these organizations actually operated. Abbott actually allowed legalized abortion along with the sterilization whereas both these were not being practiced at the Mt. Mercy. It was also due to this practice of Abbott that many doctors joined the hospital and also attempted to formulate a smaller cluster around the hospital to offer the relative services. From the perspective of the management, this can result into not achieving the desired level of synergies as staff with different values and motivation may not be able to perform at the desired level. (Cornelissen, 2011). The leadership of the Mt. Mercy therefore needs to actually take into consideration as to whether it has been able to communicate its values properly to the personnel or not. In order to reconcile such differences, it is critical that the leadership must be able to clearly communicate its values to all stakeholders and must reconcile the differences arising due to such conflict of values. Lack of alignment in the ethical values may not result into the strategic alignment of all the objectives and the vision of the organization. When two merging organizations differ on their core values and ethics, change may be relatively hard to accept by the employees and other stakeholders. The value alignment therefore is necessary if Mr. Mercy is willing to achieve long term and sustainable competitive advantage in a market where other players are also expanding at relatively same pace. Potential conflicts arising from differing values and ethical issues- Part II One of the key conflicts in this regard was how the benefits of the employees were being taken away after the acquisition. What is important to note is the fact that leadership at the Mt. Mercy actually ignored the fact that having the right kind of benefits to the employees may be one of the biggest motivations. However, if a conflict of interest arises in this regard, it may create serious ethical issues and concerns. Further, the practice of legalized abortion as well as sterilization was stopped by the Mt. Mercy which was clearly against the overall interests of the medical community and the public. Since abortion was legalized therefore it was relatively easier for the medical community to actually refer to the patients which required such services. The conflict between the benefits offered to the staff and the intended outcome i.e. excellent patient care may have been the reasons for low performance and conflict of interest between the concerned stakeholders. The past events i.e. not taking feedback from the medical community and ignoring their advice may have been one of the key reasons as to why the commercial interests of the medical community and that of the hospital clashed with each other. The fact that Mt. Mercy attempted to created its monopoly and the resistance of the same from the medical community might have been the reasons as to why some of the past events remain un-reconciled. Managerial Communication & Leadership During the last 14 or so weeks, I have found this course so beneficial in my current position as a Director of Human Resources at a local university. Communication is key to success within an organization and many times, we become involved in projects or overloaded with work that we communicate only through email. As we know, sometimes emails are not the best approach in every situation and can be construed in a negative way. I was guilty of this as well. I have made a conscience effort this semester to communicate more on either the phone or scheduling time with managers in addressing any issues or concerns they are having. It builds better employee relations and also employee morale. I am already starting to see a difference and taking time to mentor other leader’s in doing this as well. In my leadership role within my organization, this class has helped me grow as a leader in implementing a more participative environment. Every year we do performance appraisals and have the manager’s self-review themselves but really many managers’ fail to find out where their staff wants to go in their career. I implemented a career goals assessment form for all management staff to fill out as part of their self-review. This helps the manager as well as the leaders know what the employee’s areas of interests are and helps us better prepare with our succession planning. In addition, this summer we will be having a picnic for management staff in helping them become better leaders and building teams. We will do different activities and have teams that become competitive and hand out prizes and trophies for everyone’s efforts. A good leader is one who is always learning, and looking to take the next steps in making things better! References Argenti, P. (2010). Corporate Communication. Washington: McGraw-Hill Education. Cornelissen, J. (2011). Corporate Communication: A Guide to Theory and Practice. London: SAGE. Goodman, M. B., & Hirsch, P. B. (2010). Corporate Communication: Strategic Adaptation for Global Practice. New York: Peter Lang. Read More