Section 1
Duke University Children Hospital faced deep crisis in 1996 where there was a decrease in the Medicaid allowances and a sudden increase in the patients with capitated reimbursement. The expenses for the hospital were down yet the cost per case for the children services increased leading to a decrease in the net margin. The hospital targeted programs that needed to be eliminated and services were to be reduced. There was a decline in the sales and staff and patient satisfaction was at its lowest.
Kurt Lewin change model has three phases to change. The three are Unfreeze, Change, and Freeze. In the unfreezing phase, group members become uncomfortable with the status quo. In the case of the University hospital, John Meliones, the chief medical director realized that the hospital faced a financial challenge. He was aware of the difficulty that the CEO and the CFO are facing in trying to turn around the hospital yet the different departments were not working towards a common goal. Different players, for example, the physicians affected a significant proportion of the cost structure of the hospital. Mellioness realized that the entire organization was a collection of fiefdoms where different goals were being pursued by different groups (Spector, 2013).
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The second phase of the model involves altering the existing behavior. From the case study, it is the inner transition from the current operations to the desired mode established by Melliones and the team. They started by creating s shared sense of responsibility and realigned patterns of behavior. The team formulated an approach that emphasized on the interdependence between financial performance and excellence in healthcare. The agenda was to make the patient happy and to enable them to have excellent healthcare. The team further formulated a motto for the strategic renewal dubbed "No margin, no mission". The team further moved the implementation to a new unit and operationalized new behavior by redesigning roles, responsibilities, and relationships (Spector, 2013).
The third stage is freezing or refreezing which involves establishing stability. The changes, in this case, are adopted becoming the new norm. The team redesigned new responsibilities for all the members and developed a scorecard where performance would be measured against. The scorecard looked at financial performance, internal business processes and the perception of the customers. Additionally, it looked at the ability of the hospital to earn and grow and how it can reinforce the new behaviour (Spector, 2013).
Section 2
Mp Chip is determined to implement a new strategy that will drive new traffic to the business and improve service delivery following a three-year decline in revenues that has affected the performance of the company. Recently the firm has recorded a decline in its working capital resulting in a slide in the financial performance ratios compared to the industry. The matter was compounded by the slow recovery of the company following the global economic depression that hit the country. As the purchasing power of the consumers declined, the company was forced to take cost reduction measures including laying off and voluntary early retirement of some of the employees. The recovery period was not smooth as some of the employees were affected by the restricting that affects all departments in the company. The company's employees are no longer innovative and appear to be less concerned about their performance and any initiative to address the issue is met with resistance and no noticeable change takes place as the employees revert back to the way they conduct business. Such behaviors have contributed to the decline in the profit margins and a sudden increase in the number of complaints from the clients. The stock is currently underperforming and the company is finding it hard to meet its working capital requirements (Spector, 2013; Weiss, 2013).
Mr. Chip the chief operating officer realized the need to employ his leadership skills to turn around the company to stability and boost the confidence of the investors. An in-depth analysis of the firm established deep-rooted issues that were affecting the performance of the company. The employees were no longer motivated and they were fearful of the future of the company. Different departments were also competing against each other and there were internal wrangles as some perceived that others were being favored. Similarly, there were blame games and employees complained of frustration from other key departments or officers. The culture of the firm could not support meaningful growth (Spector, 2013; Weiss, 2013).
Mr. Chip decided to use Lewin's Change model to adjust the current culture of the company. He created a team of five senior officials from different departments where they benchmarked the current performance against the desired results and other best-performing companies in the industry. They developed a framework to diagnose the identified problems affecting the organization. The team in consultation with the rest of the employees established five goal areas that needed to be addressed. They included operations, marketing, human resources, supplies and finance and accounting. They established turn around strategies that could address the goal areas. Their next agenda was to redesign the roles, responsibilities, and relationships of the employees to suit the desired goals. They then conducted a training needs assessment and hired a trainer to conduct the required training. Jobs were also realigned and some of the employees were promoted to new roles. The final stage was realigning the pay structure and the reward system where pay by performance was adopted. A team was established to oversee the new changes and Mr. Chip headed the team. Issues that emerged were addressed and changes were made where necessary. Finally, the organizational structure was changed to reflect the new roles and responsibilities. In a record two years, the performance of the company improved. Upon completion of the restructuring exercise, the organization embarked on a program to address customers’ complaints and to increase the market share of the company (Spector, 2013; Weiss, 2013).
The organizational change was however not smooth as some of the employees that were unwilling to adapt to the new structure were dropped. Mr. Chip had a difficult time selecting a coercive team that had the agenda of the company at heart. In the initial stages, the reaction from the employees was discouraging as some were unwilling to change due to the fear of the unknown. However, with the leadership of Mr. Chip the company was able to wither the storm and regained its lost glory (Spector, 2013; Weiss, 2013).
References
Spector, B. (2013). Implementing organizational change: Theory into practice (3rd ed.). Pearson.
Weiss, J. (2012). Organizational change . San Diego, CA: Bridgepoint Education.
