Principles of Practice Management

02 Sep

CASE – 1 

Aravali Hospital was built two years ago, and currently has a workforce of 215 people. The hospital is small, but because it is new, it is extremely efficient. The board has voted to increase its capacity from 60 to 180 beds. By this time next year, the hospital will over three times as large as now, in terms of both beds and personnel.

The administrator, Maya Joshi, feels that the major problem with this proposed increase is that hospital will lose its efficiency. “I want to hire people who are just like our current team of personnel—hardworking, dedicated talented, and able to interact well with patients. If we triple the number of employees, I do not see how it will be possible to maintain our quality of patient care. We are going to lose our family atmosphere. We will be inundated with mediocrity, and we will end up being like every other institution in the local area—large and uncaring.”

The chairman of the board is also concerned about the effect of hiring such a large number of employees. However, he believes that Joshi is over-reacting. “It cannot be that hard to find people who are like our current staff. There must be a lot of people out there who are just as good. What you need to do is develop a plan of action that will allow you to carefully screen those who will fit into your current organisational culture, and those who will not. It is not going to be as difficult as you believe. Trust me. Everything will work out just fine”.

As a result of the chairman’s comments, Joshi had decided that the most effective way of dealing with the situation is to develop a plan of action. She intends to meet with her administrative group and determine the best way of screening incoming candidates, and then helping those who are hired to become socialised in terms of the hospital’s culture. Joshi has called a meeting for day after tomorrow. At that time, she intends to discuss her ideas, get suggestions from her people, and then formulate a plan of action.


1. What can Joshi and her staff do to select the type of entry-level candidates they want?

2. How can Joshi ensure that those who are hired come to accept the core cultural values of the hospital? What steps would you recommend?


CASE – 2

Leo Medical Diagnostic and Research Center has patented its new invention of poly fiber cardiovascular valve. The product developed is a novel one and can be manufactured at a very low cost. The utility and life of the product in laboratory testing was found to be more than the life of the patients. The product could enhance the life of patient by at least five years. Considering all these factors Leo Medical Diagnostic and Research Center chose to set a unit to manufacture the product. However, the company has a dilemma. As the product is new and requires the acceptance of medical community, it is considering appointing a promotion and sales co-coordinator to manage the promotional and communication efforts of the firm.


(a) Do you think the number of units of a product to be manufactured is a random number? Explain your reasoning.

(b) How does one determine the number of units of a product to be manufactured in an organisation?

(c) What are the elements you would take into consideration for forecasting the production and sales requirement of the product developed by Leo Medical Center?

(d) How would you go about planning and organising the manufacturing and selling efforts of the organisation?


CASE – 3

Hari Mohan has a position on the corporate planning staff of a large company in a high technology industry. Although he has spent most of his time on long-range, strategic planning for the company, he has been appointed to a task force to reorganize the company. The president and the board of directors are concerned that they are losing their competitive position in the industry because of an outdated organisation structure. Being a planning expert, Hari Mohan convinced the task force that they should proceed by first determining exactly what type of structure they have now, then determining what type of environment the company faces, now and in the future, and then designing the organisation structure accordingly. In the first phase, they discovered that the organisation is currently structured along classic bureaucratic lines. In the second phase, they found that they are competing in a highly dynamic, rapidly growing and uncertain environment that requires a great deal of flexibility and response to change.


(a) What type or types of organisation design do you feel this task force should recommend in the third and final phase of the approach to their assignment?

(b) Explain how the systems and the contingency theories of organisation can each contribute to the analysis of this case.

(c) Do you think Hari Mohan was correct in his suggestion of how the task force should proceed? What types of problems might develop as by-products of the recommendation you made in question 1?


CASE – 4

Bharat Engineering Works Limited is a major industrial machineries besides other engineering products. It has enjoyed market preference for its machineries because of limited competition in the field. Usually there have been more orders than what the company could supply. However, the scenario changed quickly because of the entry of two new competitors in the field with foreign technological collaboration. For the first time, the company faced problem in marketing its products with usual profit margin. Sensing the likely problem, the chief executive appointed Mr Arvind Kumar as general manager to direct the operations of industrial machinery division. Mr Kumar had similar assignment abroad before coming back to India.

Mr Kumar had a discussion with the chief executive about the nature of the problem being faced by the company so that he could fix up his priority. The chief executive advised him to consult various heads of department to have first hand information. However, he emphasised that the company lacked an integrated planning system while members of the Board of Directors insisted on introducing this in several meetings both formally and informally.

After joining as General Manager, Mr Kumar got briefings from the heads of all departments. He asked all heads to identify major problems and issues concerning them. The marketing manager indicated that in order to achieve higher sales, he needed more sales support. Sales people had no central organisation to provide sales support nor was there a generous budget for demonstration teams which could be sent to customers to win business.

The production manager complained about the old machines and equipments used in manufacturing. Therefore, cost of production was high but without corresponding quality. While competitors had better equipments and machinery, Bharat Engineering had neither replaced its age-old plant nor reconditioned it. Therefore to reduced the cost, it was essential to automate production lines by installing new equipment.

Director of research and development did not have specific problem and therefore, did not indicate for any change. However, a principal scientist in R&D indicated on one day that the director of R&D, though very nice in his approach, did not emphasize on short-term research projects, which could easily increase production efficiency by at least 20 per cent within a very short period without any major capital outlay.


(a) Discuss the nature and characteristics of the problems in this case.

(b) What steps should be taken by Mr Kumar to overcome these problems?


CASE – 5  

The president of Simplex Mills sat at his desk in the hushed atmosphere, so typical of business offices, after the close of working hours. He was thinking about Rehman, the manager in-charge of purchasing, and his ability to work with George, the production manager, and Vipulabh, the marketing and sales manager in the firm.

When the purchasing department was established two years ago, both George and Vipulabh agreed with the need to centralise this function and place a specialist in charge. George was of the view that this would free his supervisors from detailed ordering activities. Vipulabh opined that the flow of materials into the firm was important enough to warrant a specialised management assignment. Yet since the purchasing department began operating it has been precisely these two managers who have had a number of confrontations with the new purchase manager, and occasionally with one another, in regard to the way the purchasing function in being carried out.

From George’s point of view, instead of simplifying his job as production manager by taking care of purchasing for him, the purchasing department has developed a formal set of procedures that has resulted in as much time commitment on his part as he had previously spent in placing his orders directly with vendors. Further, he is specially irritated by the fact that his need for particular items or particular specification is constantly being questioned by the purchasing department. When the department was established, George assumed that the purchasing manager was there to fill his needs, not to question them.

As Vipulabh sees it, the purchasing function is an integral part of marketing function, and the two therefore need to be jointly managed as a unified process. Purchasing function cannot be separated from a firm’s overall marketing strategy. However, Rehman has attempted to carry out the purchasing function without regard for this obvious relationship between his responsibilities and those of Vipulabh, thus making a unified marketing strategy impossible.

In his previous position, Rehman had worked in the purchasing department of a firm considerably larger than Simplex. Before being hired, he was interviewed by all the top managers, including George and Vipulabh, but it was the president himself who negotiated the details of the job offer. As Rehman sees it, he was hired as a professional to do a professional job. Both George and Vipulabh have been distracting him from this goal by presuming that he is somehow subordinate to them, which he believes is not the case. The people in the production department, who use the purchasing function most, have complained about the detail that he requires on their requisitions. But he has documented proof that materials are now being purchased much more economically than they were under the former decentralised system. He finds Vipulabh’s interests more difficult to understand, since he sees no particular relationship between his responsibilities for efficient procurement, and Vipulabh’s responsibilities to market the firm’s products.

The president has been aware of the continuing conflict among three managers for some time, but on the theory that a little rivalry is healthy and stimulating, he has felt that it was nothing to be unduly concerned about. But now that much of his time is being taken up by much of what he considers to be petty bickering, the time has come to take some positive action.


1. Is George’s view of the situation realistic?

2. How do you evaluate Vipulabh’s position?

3. How might this conflict be associated with factors in the formal organisation?

4. What should the president of Simplex Mills do now?