MGT8039 Strategic Leadership Case Study

MGT8039 Strategic Leadership Case Study

Problem Statement:

You need to consider how you will identify the range of issues and problems in the following problem statement.

ABC Private Hospital (ABC) ©

Please Note: This problem statement is fictional. Any resemblance to actual names and places is purely coincidental. The case problem is for the advanced study of MBA and Master’s Students studying Strategic Leadership.

Problem statement: Peter Smith is the new CEO at ABC Private Hospital (herein referred to as: ABC) and is located in North Queensland. ABC has been supporting Queenslanders with health care since 1980 and over the years has evolved from a 50-bed facility to a world-class tertiary medical facility offering the latest treatments and first-class patient care. ABC is a 400-bed hospital featuring 12 operating theatres, a 24-hour private emergency service and over 30 specialised clinical services.

ABC prides itself on excellent patient service and is equipped with the most advanced medical, surgical and diagnostic technology. The hospital provides the very best care to patients and covers a geographical region of more than 80,000 square kilometres.

With a consistent and steady profit increase over a period of 5 years including relatively stable management, Peter has worked at ABC for 10 years, his latest role being the Chief Financial Officer before being promoted to the CEO role, replacing Meg Davies. The Board consists of 12 members (there are 10 male and two female) and all Board members enjoyed a good working relationship with Meg. However, since Peter has stepped into his new role, he has consistently complained about ineffective senior management at the hospital indicating that staff were not working to capacity, noted that the number of patient complaints has risen 5% each year for the last three years in a row, and that there was an ineffective quality assurance system in place to deal with and manage patient concerns.

During Meg’s 7-year tenure as CEO, she instigated and facilitated the expansion of services to include a new Mental Health Service which was received well and operating effectively over the past two years. This new service was beginning to return a small profit for the first time. Meg’s leadership behaviours could be described as relational, personable and inspiring as she facilitated the expansion of this new service. She worked collaboratively with nurses, doctors, allied health professionals and administrative staff to achieve a world-class health service that specialized in post-traumatic stress disorder (PTSD), drug and alcohol, depression and anxiety, and military veteran’s mental health. Meg was able to build and staff this new facility in only five years, as she was able to encourage and motivate all stakeholders to achieve the outcomes required.

As the new-CEO, Peter wants to move from a ‘relaxed but purposeful’ pace to one that is more focused on the balance sheet, improving profits, reducing the number of patient complaints and improving productivity. To facilitate his ‘vision’ he has decided to implement a new management information system. The purpose of this new system was to -: gather data to make better decisions; coordinate, control and analyse this data (for example, identifying patient concerns, recording staff and patient incidents – such as falls, medication mistakes and so on); record infection rates and unplanned readmissions. He also wants to implement a new Accreditation scheme to drive safety and quality improvement. Peter’s leadership style was observed to be aggressive, getting the job done regardless, and controlling every operational aspect of the hospital.

Peter wants to put strict systems and procedures in place to ensure that ABC is running smoothly and efficiently. He wants to reward employees for the tasks they perform. Peter prides himself on his commitment to patient and staff safety as a priority. He has indicated that the time is right for the hospital to invest in a new management information system which will allow him to gather data about the processes within the hospital with the aim of creating efficiencies and improving and increasing profit. Peter also wants to spend money and allocate resources towards a new Accreditation scheme as well.

Peter’s leadership style is different to that of the previous CEO – Meg Davies. Meg was liked by all employees. She was a people person, willing to go the extra mile for her employees when they needed help and they were prepared to work above and beyond to achieve the outcomes required each year. Meg was able to set clear goals and milestones. She was committed to and worked with people, encouraging them to ‘get the job done’.

Peter believes that the previous CEO Meg was too focused on people and his agenda as the new CEO was to focus on the hospital’s financial results. One of the benefits of implementing a new management information system was to streamline processes to ensure efficiencies and cut red tape.

Within the first six months of Peter’s tenure as CEO, problems began to appear. Four out of eight senior managers from the top management team had resigned. They indicated that Peter was not collaborative, was making decisions on his own without consultation and they did not understand the reasons why he was so aggressively pursuing the new management information system idea as they were already gathering appropriate data and making informed decisions. In addition, the cost of the new management information system and accreditation scheme were going to be expensive and the top management team did not understand why these were necessary.

Peter met with the Board to explain his ‘vision’. However, the Board disagreed with his ideas regarding them as being an unnecessary cost and too expensive. They did not see why these changes needed to be made, as ABC already had a management information system and accreditation scheme in place and minor updates/changes to these existing systems would provide the additional data that he wanted. Peter argued that he wants to improve efficiencies at ABC to provide patients with a good quality health service and he highlighted that this new technology will increase the share price based on higher growth and higher profits leading to stronger profit and growth forecasts by market analysts.

Problems became elevated when during the end of month Board meeting, Peter disagreed vocally with the Chairperson on future hospital strategy. The Chair convinces other Board members that Peter’s strategies are too expensive at this time and that his ideas are unnecessary. The Chairperson indicated that whilst they were responsible for operating a private hospital with the aim of making a profit, the Board were primarily concerned with key stakeholders (such as patients). All 12 Board members were concerned with the increasing costs of providing health care and whilst they had no choice but to pass on incremental increased costs to patients each year, they were determined that only the minimum costs were passed onto patients. Their mission was that good health care should remain affordable to all patients. Peter has fears that the Board are not protecting its shareholders who want increasing returns on their investments.

To Peter’s credit, he emphasizes the importance of a safe environment for patients and staff and he unveils a detailed future Strategic Plan of hospital activities going forward.  However, he does not receive support from the Board. To make matters worse, Peter is confronted with complaints from the top management team who complain directly to the Board about his leadership style. Peter decides that there is significant conflict because of the manner in which he operates.

To manage this situation, Peter decides to consult you as the Hospital’s Director for Leadership and Change. He seeks your advice about what strategies are open to him in dealing with these issues.

Case Study 1:  Task Required:

Based on less than perfect information supplied about ABC problem statement, where you may need to fill in the ‘facts’ by adding more assumptions that you think may assist you in solving case issues, you are required to act as the Hospital’s Director of Leadership and Change to address the issues and challenges:

  1. We can define the role of strategic leaders in terms of their responsibilities for managing resources and capabilities of their firms so as to create and maintain competitive advantage (Iszatt-White & Saunders 2017). Based on this definition and other definitions of strategic leadership, provide a working definition of strategic leadership and compare/analyse this in relation to CEO Peter Smith at ABC Private Hospital? Use Reading 2.7 Flood, Hannan, Smith, Turner & Dawson (2000) in your answer. (700 words)
  2. Based on Reading 1.5 Allio (2016) discuss and explain how Peter Smith can ‘learn to be a leader’ and acquire relevant leadership knowledge and skills? (600 words)
  3. Advise Peter Smith about any issues he should be aware of with regard to Agency Theory and Stakeholder Theory. You need to use Solomon (2013) Chapters 1, 2 and 9 in your answer in addition to other literature. (700 words)

Note:  Please use the specific selected readings and chapters as outlined above.  All theory based on the readings in Module 1 and 2 including your textbook and references included on the Study Desk. Please use Harvard AGPS referencing for listing and quoting references.

Case Study 2:  Task Required:

Based on your analysis of ABC in Case Study 1, you are now required to continue your advice to the CEO Peter Smith.  Assuming less than perfect information where you may need to fill in the ‘facts’ by adding more assumptions that you think may assist you in solving case issues, you are required to:

  1. In Reading 3.5 Appelbaum & Paese (2003) outline nine roles of strategic leadership. Discuss the roles you think Peter Smith currently displays and which roles he needs to consider in his position as a strategic leader at ABC? (600 words)
  2. Based on Reading 4.1 Chapman (2002) and Reading 4.2 Tosey and Robinson (2002) what are the key strengths of transformational leadership and change and how can Peter Smith use this leadership approach to convince a skeptical Board? (700 words)
  3. Leadership of the Board is the chairman’s primary duty (Tricker 2015, p. 347). What recommendations would you suggest for ABC that will enhance/promote Board effectiveness? Refer to Tricker 2015 Chapter 14 and Solomon 2013 Chapter 4 in your response.  (600 words)

Note:  Please use the specific selected readings and chapters as outlined above.  All theory based on the readings in Module 3 and 4 including your textbook and references included on the Study Desk. Please use Harvard AGPS referencing for listing and quoting references.

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