Strategy Case HCA- AppleTree Consulting
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Transcript of Strategy Case HCA- AppleTree Consulting
AppleTree Consulting
Team Members: Timothy TeoRay YeoNg Soo HweeLiu Jing
1
Question 1
Why did Dr Akhileswaran (Dr. A.) consider Hospice Care Association (HCA) as lacking in strategic direction
and leadership after three months joining it?
2
Question 1
Why did Dr Akhileswaran (Dr. A.) consider Hospice Care Association (HCA) as lacking in strategic direction
and leadership after three months joining it?
3
Strategic Leadership - Definition
“Strategic leadership is the ability to anticipate, envision, maintain flexibility, and empower others to create strategic
change as necessary.”
Source: Hitt, Ireland, & Hoskisson (2007). Strategic Management:Competitiveness and Globalization (7th ed.) Thomson South-Western 4
Strategic Leadership - Facts and Inferences
Important to understand that Dr. A is the strategic leader in this case
He believes that he is “supposed to be looking after the
organization…in fact the CEO’s job” [p.6 para.3]
The board hired him partly for that reason “…they had no option” [p.8 para.3]
The case confirms it“his responsibilities...increasingly
included those of a CEO”[p.1 para.3]
5
Strategic Leadership - Facts and Inferences
“Strategic leadership is the ability to anticipate, envision, maintain flexibility, and empower others to create strategic change as necessary.”
Anticipate
To foresee
The case provides nothing in particular about this, so we don’t know if Dr. A has
the ability to anticipate or not
6
Strategic Leadership - Facts and Inferences
“Strategic leadership is the ability to anticipate, envision, maintain flexibility, and empower others to create strategic change as necessary.”
To mentally picture the future
He lacks the ability to envision, which will be elaborated later under
Strategic Direction
Envision
7
Strategic Leadership - Facts and Inferences
“Strategic leadership is the ability to anticipate, envision, maintain flexibility, and empower others to create strategic change as necessary.”
Maintain Flexibility
To ensure the organization can respond to change
When change came in the form of the means test, Dr. A evidently could not get the
organization to respond effectively, with the result that HCA was still floundering after “more than 9 months to prepare for it” [p.14 para.1]
8
Strategic Leadership - Facts and Inferences
“Strategic leadership is the ability to anticipate, envision, maintain flexibility, and empower others to create strategic change as necessary.”
Empower others
To enable others to contribute to strategic change
During the means-test crisis, “without a leader to turn to, staff became increasingly disillusioned, with
doctors and nurses losing confidence in HCA’s ability to survive the turmoil”[p.7 para.6]. Dr. A failed at even
being visible and inspiring confidence to his followers,let alone empower them to contribute to strategic
change
9
Strategic Leadership - Facts and Inferences
“Strategic leadership is the ability to anticipate, envision, maintain flexibility, and empower others to create strategic change as necessary.”
Create strategic change as necessary
As the case stands currently, the strategic change required to adapt to the new
circumstances has not been reached as “the very existence of the centre” is under threat
10
Strategic Leadership - Conclusion
Anticipate
Envision
Empower others
Create strategic change as necessary
Don’t know
No, see strategic direction
No
No
We conclude that Dr. A probably did not display
effective strategic leadership as he did not create the
strategic change necessary to bring HCA through the
means-test crisis
11
Definition of Strategic Direction
“Determining the strategic direction of a firm involves developing a long-term vision of the firm’s
strategic intent”
Core Ideology
Envisioned Future
12
Strategic Direction - Facts and Inferences
Exists, a main part of which is “spending quality time with the
patients”[p.7 para.6]
But “strained by…additional visits…additional demands of conducting the means tests”
Dr A’s mentality is wondering about the future instead of
planning how to make it happen (p1para6)
Core Ideology
Envisioned Future
13
Strategic Direction - Conclusion
Core Ideology
Envisioned Future
Weak
Weak
We conclude that there is no
evidence to show that there
is strategic direction in HCA
14
Link between Leadership & Strategic Direction
“As strategic leaders, top-level managers must guide the firm in ways that result in the
formation of a strategic intent and mission” (Source: Hitt, Ireland, & Hoskisson (2007). Strategic
Management:Competitiveness and Globalization (7th ed.))
“Creating a compelling vision and developing a strategy to achieve it, is one of leadership’s primary functions. “ (Source: Quality Management Forum, Winter 2004)
15
Link between Leadership & Strategic DirectionLink between Leadership & Strategic Direction
Causal relationship
“Driver drives the car”
LeadershipStrategicDirection
16
Can there be Strategic Direction without Leadership?
Former is already in place from previous management
Intended strategy -> emergent strategy (L1 card game)
Hinge: No; still needs a change catalyst
LeadershipStrategicDirection
17
Limitations
Lack of information with regards to Dr A’s thoughts
Infer from case facts
18
Punchline
In Dr A’s opinion, there was no strategic direction and leadership, as there was a lack of effective leadership.
19
Question 2
Discuss options to improve the financial status in HCA. What more can MOH do to help the sustainability of such Voluntary Welfare Organization in Singapore.
20
Question 2
Discuss options to improve the financial status in HCA.
The existing amount of liquid assets HCA has on hand that can allow them to sustain their existing operations for 2 years at any point
of time.
21
Current Financial Status – Case Details
Year 2000Profit of $1.06 Million
Year 2001Loss of $1.75 Million
Deficit of $690,000
Current funds will last HCA for approximately 18-24 months
Assumption: They have a reserve due to deficit
funding by NCSS
“They only return some of the money to NCSS”22
Possible causes of HCA’s current financial status
Means Testing
Per Visits
23
Is means testing per visit a problem?
Assumptions
Total referrals remain at current level
Number of visits per referrals remain at current level
Distribution of untested visits follow the same distribution of tested visits
24
Total Visits
Number of visits
Types of visits
25
0"
2000"
4000"
6000"
8000"
10000"
12000"
14000"
16000"
Total"Nurse"Visits" Total"Doctor"Visit"
Untested"
Tested"
10"visits"per"untested"
4"visits"per"tested"2"visits"per"untested"
1"visits"per"tested"
Distribution of Visits
0"
500"
1000"
1500"
2000"
2500"
3000"
3500"
4000"
4500"
75%" 50%" 25%" 0%"
Nurse"Visit"
Doctor"Visit"
Number of visits
Subsidy rates for different
means testing bands 26
Funding contribution by different banding
$0##
$50,000##
$100,000##
$150,000##
$200,000##
$250,000##
$300,000##
$350,000##
$400,000##
75%# 50%# 25%#
Nurse$#
Doc$#
Amount of funds received
Subsidy rates for different
means testing bands 27
Conclusion
The current rate of work could actually sustain HCA.
$1,017,620 $1,016,089 vsProjected new funding Old annual funding
Means testing model per visit is not the problem
28
What caused HCA’s current financial status?
Ineffective implementation of means testing
HCA projected there will be a lack of funding due to partial/
lack of documentation
Full documentation is required (Pg 15):-Income tax statements-Pay slips-Employer’s letter-Statutory declaration-Self-declaration-Social Report by MSWs
29
First Solution
Uncooperative patients
Adopt a standardized
policy of proper documentation
Increase the number of trained social workers
Only patients who provide documentation will be
subsidized
Why was implementation ineffective in the first
place?
Nurses were unwilling to ask for documentation from
patients
There was only one medical social worker
30
Second Solution
Doing means testing in an efficient way
Emphasis of a work flow to increase efficiency
Encourage patients to apply for Public Assistance, Medical Fee exemption Card
or Medifund(Shift the burden to other organizations
and increase 75% patients)
Filter out patients under Public Assistance, those who hold a medical fee exemption
card, Medifund recipients and provide priority clearance
31
What is missing?
You need a CEO/finance officer to implement these solutions.
Adopt a standardized policy of proper documentation
Doing means testing in an efficient way
Both solutions are equally important.
32
Implemented together to achieve the optimal effect of improving HCA’s financial status
The ‘Hinge’
What if even after proper documentation, HCA still does not receive sufficient funding as a majority are in higher
bands that are no or little subsidy?
33
Contingency Plans
Patients within the higher bands to pay/pay more for
treatment
Dr A does not want patients to payHe is “adamant that care giving
should continue to be free of charge”
Direct increase in funds
There is a need for a compromise.
34
Unknowns Knowns
Why is HCA sticking with MOH?
NCSS is changing to programme funding. What is the impact on HCA?
LimitationsWe do not know how will this affect the solutions
intended to improve HCA’s financial status
35
How efficient is MOH in funding HCA? Will any time lags lead to liquidity problems?
Question 2
What more can MOH do to help the sustainability of such Voluntary Welfare
Organization in Singapore.
Ensure that VWOs are able to maintain or increase net cash
flows. This includes timing issues.
36
Common Issue facing VMO under MOH
MOH had stated that all funding will be done through means testing and this will require more manpower
across different VWO.
Assumption: Same type of information needed by all VWO and it is logical that a patient visited one of the medical
VWO is likely to visit another VWO.
37
Cooperative Strategy
COOPERATIVE STRATEGY
Joint Ventures Minority Equity
Consortia
Simple Cooperative
Alliances
Need for Integration Complexity of tasks to be undertaken LOW HIGH
HIGH
LOW
Com
patib
ility
of P
artn
ers
38
What type of strategy?
COOPERATIVE STRATEGY
Joint Ventures Minority Equity
Consortia
Simple Cooperative
Alliances
Need for Integration Complexity of tasks to be undertaken LOW HIGH
HIGH
LOW
Com
patib
ility
of P
artn
ers
All VWOs under MOH. They are compatible with one another because same means testing
required
Documentation process is straightforward and it is essentially the
same at different VWOs.
A cooperative alliance strategy will be suitable as they can
synergize and gain economics of scale.
Compatibility
Integration
39
Simple Cooperatives Alliance
Under the alliance, they can share the collected information with other VWOs. This eliminates repeated work. (Assumption: legally
and technically feasible)
Furthermore, data can synergize. With the information, some VWOs can pro-actively seek out patients that qualify for medical
aid and help them be in the 75% range.
40
How it help to sustain?
Reduce overhead cost of admin workers.
For VWOs that uses medical staff for this process, less time is spend on admin and more on patient interaction. Improve
work satisfaction.
Improve funding condition from synergetic actions. Changing the patients’ means-testing band.
41
Punchline
HCA should focus on implementing means testing effectively. MOH can increase sustainability of VWOs through a
cooperative strategy
42
The End
Q & A
43