Magnolia Therapeutic Solutions - Case Study Example

? Magnolia Therapeutic Solutions Case The case of Magnolia Therapeutic Solutions includes the issue about the importance of a certain decision to be taken, especially for an organization’s future advantage. It also includes significant things that a manager should do in order to prevent future problems. In addition, this paper touches the differences between profit and non-profit organizations. Furthermore, the concept of risk management is also being analyzed. Keywords: management, budget plan, risk management, decision. Introduction Below are the answers to several questions within the context of Magnolia Therapeutic Solutions Case. Question 1 How could your decision be compared to the board’s decision? Why did you make this decision? What effect did organizational infrastructure and culture have on your decision? Definitely, I would not approve the budget. In the first place, I would find considerable support of my decision prior to my approval of it. There must be reliable references or supporting evidences needed in the first place in order to justify my decision. A budget needs to have substantial references or supporting facts in order not to have a shortfall or over calculation in the future. Thus, it should guide and even predict future actions or moves (Hutton & Phillips, 2009). In the case of Mary Stewart’s decision, she failed to consider the point that her assumption would be subjected to environmental factors. Being confident that the government would renew its grant given to Magnolia in 2001, Mary assumed that the budget in 2002 would be substantially higher as compared to that of the previous year. Furthermore, she also failed to consider the ailing economy and so was able to address the steeper demands with regard to the development department. This would incur additional cost which eventually led to having one third of her staff laid off; it had negative impact on the remaining staff and organization that could cause stagnation of the organization in years to come. With the kind of decision that I have taken, I could have probably saved one third of my staff. The point is I would not have focused on giving substantial budget for the development department. This has to be considered in the first place because overspending would not be the right approach, especially in a poor economic condition. My decision would remarkably maintain the potential teamwork at Magnolia because everyone would be encouraged to potentially use and maximize only what was available. Question 2 What do you think were the main causes behind the problems that Magnolia ultimately suffered? What would you have done differently to avoid those problems? In the first place, considering that Magnolia was not a profit organization, there was a clear evidence of poor financial management within the organization. This becomes clear when one looks at the way the budget was emancipated in 2002. Lack of financial knowledge was one of the main reasons. This eventually led to poor organizational structure, which also resulted in lacking the ability to handle financial resources in the best way possible. Furthermore, Mary was made assumptions without any reliable basis. In other words, Mary herself lacked managerial skills in handling the organization, particularly within the context of planning strategy. As reflected on how the planned budget in 2002 turned out, Mary simply was missing the point on how to efficiently handle the financial resources. If I were Mary, I should have hired a financial consultant who could give me professional advice on what to include in my budget plan for 2002. Furthermore, knowing this would help me to come up with good plans in the future. The point in here is that Mary’s organization was still moving forward closer to financial stability. In other words, this has to remain her critical area of consideration prior to displaying any ambitions as to other future plans. As for me, since the organization was already doing great in its service and became popular in its field, financial management should also have been given more attention. Question 3 What differences in acquiring revenue, accruing expenses, and training key personnel are there between a non-profit organization’s inability to thrive and a for-profit organization’s inability to thrive? Cite at least three differences. For non-profit organization, especially in the case of Magnolia, acquiring revenue would depend on external financial grants coming from the government, private organizations and other independent groups willing to extend financial help. For profit organization, revenue would be achieved based on creating product and service offerings, share capital and much more. Based on these, non-profit organization would be too dependent on external grants which in the absence of them will eventually hinder potential future success. On the other hand, profit organizations rely on producing more revenue by targeting more profit. Failure to obtain profit will lead to business failure. Accruing expenses might be too important in the profit organization because in the end it seeks to find out profitability. Failure to document significant expenses will result in incorrect figure for profit. On the other hand, accruing expenses is also important in the case of non-profit organization because it would substantially provide them the needed information prior to allocating future budgets. Failure to do so will only lead further to budget shortfall. Training key personnel on the other hand is very important for both profit and non-profit organization. Both organizations consider personnel as potential resources of an organization. Training personnel in the case of non-profit organization is always equated to the greater good of the community. However, in the case of profit organization, training personnel is always equated to making profit. In other words, creation of profit, managing revenue and strategic reactions, and managing human resource are among the three most common differences between profit and non-profit organizations (Jegers, 2008; Glaeser, 2006; Stein, 2002). Question 4 What is Magnolia’s deficit in terms of risk management? Risk management is about trying to prepare something for future upset within future plans (Hopkin, 2010). In the case of Magnolia, there was no specific plan like this in the first place. Thus, Magnolia’s deficit in terms of risk management is not being concern at all in respect of potential risks in future. Mary did not have any consideration on future risks because of her inability to have substantial plan in regard to the future. What she did was purely based on assumptions that have no remarkable basis in the first place. This resulted to potential drawbacks in failed management of any available resources which even led to her inability to manage the human resource as well. Mary did not prioritize any potential risks and this can be depicted on how she decided to create a budget plan that has no significant considerations for future risks. There were no remarkable options developed just in case the first plan would not turn out the right way. Mary did not consider asking herself questions like “What if...” This should be fundamental in her approach considering that there are important external factors that may come along, which at some point would be out of someone’s control. References Glaeser, E. L. (2006). The governance of not-for-profit organizations. Chicago, IL: University of Chicago Press. Hopkin, P. (2010). Fundamentals of risk management: Understanding evaluating and implementing effective risk management. London: Kogan Page Publishers. Hutton, S., & Phillips, F. (2009). Non-profit kit for dummies. 3rd ed. Hoboken, NJ: John Wiley & Sons. Jegers, M. (2008). Managerial economics of non-profit organizations. Oxon: Routledge. Stein, T. S. (2002). Workforce transitions from the profit to the non-profit sector. New York, NY: Springer. Read More