The Sullivan Hospital System

Case Brief:
The Sullivan Hospital System (SHS), was facing some concerns with their organisation.
One, the market share loss to other local hospitals, which they had experienced over the past
six to nine months. Two, there was a decline in patient satisfaction measures. CEO Ken
Bonnet decided to address these issues by revising the SHS organization. He needed
passionate support from all the organizational divisions, which comprised of the nurses, the
physicians, and the managers.
Ken and Sue Strasburg, president of the smaller of the two hospitals, decided to initiate a
change in the organisation with the support of their senior team, includes the top
administrative forces from the two hospitals within the system of SHS.
A three-day retreat was conducted with all the management teams to start the course of
transformation. Throughout discussions with administrators from other hospitals and business
conferences, the team thought that the systems needed a significant overhaul of its Total
Quality Management, also known as TQM, process due to two primary reasons. They first
thought an enhanced patient care method would give practitioners an excellent reason to
utilize the hospital, increasing market share. Then second, they were very delayed on the
policies of the Joint Commission on Accreditation of Healthcare Organizations. The team all
agreed they needed the sufficient skills and experience associated with achieving a more
sophisticated TQM process.
The first meeting's purpose was to assemble to learn about TQM, engagement, other
strategic change processes, and the issues needed to address to implement a more
sophisticated process. The meeting guided them through exercises to get the team to research
plans of judgment planning, how team-based problem resolution had advanced, and explore
their understanding of the hospital's current mission, goals, and strategies.

Diagnosis:
After the three day retreat the team was convinced to hold off on the work design
implementation long enough to conduct a diagnosis. As part of diagnosis the wide variety of
data collection about whole of SHS including the interviews of senior level managers and
sampling of mid-level managers and staff (Eg. Nurses, ancillary professionals, environmental
service providers). All of the staff were unanimous about the commitment over the breadth of
the services provided by the organisation and values that underly in delivering those services.
But the questions about the organisation’s objectives and goals received differing answers.
The senior management was clear on the objectives and goals of the organisation listed in the
strategic plan. These goals include improving patient satisfaction levels and reducing
overtime and to increase the market share. But mid-level managers and staff were little and
different perception of these goals and how people in the organisation can help achieve them.
Some people believed that SHS achieved its objectives through SHS’s designation as the
area’s primary trauma centre while others believed they achieved goals by ‘low cost’, by
squeezing every penny of cost no matter how it impacted the patients.
 There was consensus regarding the organisation being to centralised and managers felt
little empowerment make decisions. Some of the financial policies were dictated from their
corporate office. These policies limited managers capacity to make decisions to spend money
especially if it wasn’t allocated in the budget. In addition, some of the other employees are
interviewed either individually or in small groups, organisation annual reports and other
archives are reviewed. The data collection efforts revealed the following organisation design
features:
1. The hospitals’ structure was more bureaucratic than organic.
Each hospital has a CEO and two to five direct reports. The finance, marketing and
Human resource departments are centralised at its corporate office. There were formal
guidelines regarding finance, spending and patient care and so on.

2. The basic work design of the hospital can be categorised as traditional.

Most jobs were individually based, job specifications described the skills, knowledge, and
activities expected of a particular position, even though there was a high level of demanded
interdependency and complexity entailed in patient care. When two agencies needed to
regulate activities, the work was restrained by standard operating procedures, formal
paperwork, and tradition.

3. Control and Information systems were out of date and resolute

The perspective of the staff and middle management little to no operational information
was shared, about costs, productivity, or patient well-being. Cost information for budgeting
versus spending was available to middle management and annual performance reviews to
meet target budgets. Managers were aware that the information in the system was extremely
inaccurate. Management felt unable to contribute to change, due to the system being
centralized in the corporate headquarters, resulting in them devising methods to get the
correct numbers, from the system, by keeping their own personal records.

4. The Human Resource Systems were fundamentally generic and centralized in the
corporate office - There was a lack of nurses, and internal career postings were
updated weekly. Training past required technical education requirements to
secure certification was non-existent. There was a merit-based pay system that
gave raises according to annual performance; however, raises hardly kept up with
the cost of living. There were informal arrangements of appreciation given by
individual managers.

 Q1.A.  Assemble the diagnostic data into a model 

Organizational Diagnostic Model

Q1. B. Feedback to the senior administrators of the hospitals.

After diagnosis, below are the observations and issues that need immediate attention.
 1. Group consensus on Sullivan hospital System, mission and values, along with their
unwavering commitment to the services that are provided to their patients.
2. However, disconnect in the strategic goals and objectives for the organization. 
3. Lower level managers, staff unaware of the hospital goals/objectives or plans
4. Mixed consensus among low level staff.
5. Staffs responses to the overall direction of the organization and its goals varied: They
have completely different perception of their organisation objectives.
a. The hospital achieved its objectives through its designation as the area’s
primary trauma centre.
b. Objectives achieved through low cost strategy no matter impact on patient
care
6. Full consensus that organization too centralized & restrictive policies on the
allocation of needed resources
7. It is not clear who or when to engage the large consulting firm on work redesign
project.

Q1. C. What’s your sense of the organization’s current structure and

employee involvement issues?

 SHS organizational structure designed is too centralized and restrictive which inhibits
employee’s engagement and decision-making process.
 Middle managers/supervisor must get permission before making decision within their
departments which inhibits staff’s ability to do their job effectively.
 Lack of adequate equipment in patient care areas.
 Low employee morale along with lack of control has impacted the service they provide to
their patients, resulting in low patient satisfaction scores. 
 The work design is uniform with the majority of the jobs being “individual based” with
details/skills listed for that particular job.
 Lack of sufficient information provided to managers/supervisors on the operations of
various departments.
 HRD is not viewed as a strategic business partner.
 No reward system has been established.
 No flexibility to make changes in policy by HRM staff.

Q2. What changes would you recommend? Is a total quality

management intervention appropriate here? What alternatives would
you propose?

RECOMMENDATIONS:
1. Implement the Matrix structure 
Implementing the matrix structure will give the organization the ability to respond and adapt
faster to changes within the healthcare industry flexibility in terms of sharing information,
resources and practices to achieve a common goal.
2. Make Human Resource department a strategic business partner in the organization
Allow them more autonomy in making hiring decisions, implementing training and
development for employees as well as an efficient rewards/ and performance appraisal
system based on employee’s performance and meeting the goals and objectives for their
jobs and the organization.
3. Reorganizing Sullivan hospital system higher level management position by
downsizing its executive management positions.

IS TQM APPROPRIATE:
In our opinion, the TQM should be implemented as the final step. After the restructuring,
downsizing and redesigning of the organization and the hospital has clearly defined its goals,
objectives and strategic plan to all stakeholders that will be affected by the changes.

Alternative: High Involvement Organizations

The reasons for suggesting a high involvement organisation is

 To reduce the difference in goals of organization as perceived by upper and lower level
employees by increased employee engagement
 TQM focuses on particular processes while HIO addresses all organization features
 Like structure, work design, information-control system, policies, reward systems
 Medical personnel, nurses etc interact with patients hence their involvement in decision
making process will help in increasing patient satisfaction
 Organization structure becomes more decentralized empowering employees to take
decisions
 Better job designs that provide employees with high levels of discretion, task variety and
meaningful feedback to enhance involvement

Q3. Design and implementation plan for your preferred intervention. 

1. Implement the Matrix Structure (flexibility, adaptability & authority giving to mid-
level managers)
2. Downsize executive management team (more organized and cohesive structure better
communication)
3. Clearly define goals and objectives for the organization's future
4. HRM as strategic business partner
5. Effective communication and sharing of information throughout the organization
6. Training & development of staff
7. Implementation of Rewards system and a cohesive performance appraisal process for
employees (tied to meeting performance metrics and goals and objectives)
8. Implement collaborative teamwork and employee engagement
 9. Total Quality Management will be implemented

PART II

Q1. Critique SHS's visioning process

Organizational vision must include several qualities in order to be successful:

1. It receives contributions from a variety of sources.
2. It attracts the involvement of individuals with the specialist skills needed.
3. It can be communicated easily and in detail.
4. It is powerfully motivational in effect.
5. It intends to serve an important need for other people

 In spite of the Sullivan Hospital System’s brand popularity and strength and its widely
shared mission, several elements of the organization are disjointed. 
 SHS's core process was the delivery of patient care with emphasis on severe cases and
indigent care, and it produced a relatively broad range of services in line with its
mission.
 Patient care following life-saving interventions was poor.
 There are a variety of misfits firstly between the inputs and the design components
and secondly among the design components themselves.
 Despite of the fact that first draft of vision was boring and unreal, the senior
management and steering committee agreed to it.

Q2. What implications does the visioning process have for the intervention you
want to implement? How can you take advantage of the process in your action
plan?

 The initial focus would be to revise the vision of SHS, the mission statement, and
incorporate cultural values that drive the organization as part of a revised strategic
plan.
 The approach is to use the large group intervention method to implement the
visioning process.
 Large group interventions are designed to help people collaborate effectively by
thinking and acting from a whole-systems perspective.
 “Whole systems” refers to the way an organization operates internally through its
processes and externally through its relations to customers and other stakeholders.
 Unlike the traditional approaches, LGIs engage the whole system at a single point in
time. Because they are based on collaboration, shared information, and system
integration.
 LGI models encourage the simultaneous participation of many individuals across the
organization, and thus help to reduce resistance, inspire motivation, and build strategy
ownership across the entire system.