Part A: Case study â IKEA
Part A of this EMA will be marked out of 60 marks. The word limit is 2400 words.
Read the case study, which you can find in the assessment area and on the study planner in Week 23, and answer the following questions:
Part B: Presentation
Part B of the EMA will be marked out of 20 marks.
Drawing on your work with the IKEA case study, create a presentation showing the main opportunities and threats that IKEA face over the next five years. Make sure to address the critical areas of IKEAâs global expansion strategy and its sustainability strategy.
Your presentation should use no more than 6 slides and 300 words. Your first slide should be a title page for your presentation.
IKEA
Introduction
IKEA is an internationally known global brand and pioneering home furnishings retailer. It has grown rapidly since it was founded in Sweden in 1943. Today, it is the worldâs largest furniture retailer, recognised for its Scandinavian style.
IKEA carries a range of 9500 products, including home furniture and accessories. This wide range is available in all IKEA stores, and customers can order much of the range online through IKEAâs website. As of June 2019, there are 423 IKEA stores operating in 52 countries (IKEA Group, 2019a). A staggering âŹ38.8 billion ($44.6 billion) worth of IKEA goods were sold in 2018 with a similar projected forecast for 2019 trading (Ringstrom and Dowsett, 2018).
IKEAâs strategy is underpinned by its vision, which it believes is the foundation of its growth. The IKEA vision states they aim âto create a better everyday life for the many peopleâ and âto offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford themâ (IKEA Group, 2019b).
1 Flat-pack pioneers
IKEA is associated with products that are simple, low cost but also stylish. This has given IKEA a very broad appeal to different groups of consumers and ensured that IKEA products appealed in both the business and consumer markets. Starting as early as 1956, the company were the pioneers of flat-pack furniture. This offered a great solution for all sorts of customers who were looking for stylish high quality furniture at an affordable price. The flat-pack approach to furniture design allows IKEA to reduce costs across the supply chain, from initial design, standardised manufacturing of components, to transport costs and warehousing. Part of the approach to cost saving is in store location. IKEA stores are commonly built on the outskirts of cities where business rates and operational costs are cheaper and customers can park easily.
Due to the way IKEA produces and sells its furniture it has also ensured that it is readily available and convenient. Conventional furniture makers often only begin production once an order has been placed by a customer. This means that it can often take several weeks for delivery. By contrast, IKEAâs products are instantly available in their stores and easy to transport home in customersâ own vehicles. The flat-pack business model has continued to be beneficial for IKEA as it allows a further significant cost saving at the end of the value chain. Effectively, IKEA have outsourced the highly costly assembly part of the value chain directly to customers who are willing to trade the extra work of self-assembly for a large saving on the retail price they pay. This helps IKEA maintain high profits.
The IKEA business model is reliant on a highly effective approach to procurement. With 31 trading service offices of procurement staff in 26 countries, IKEA sources from over 1400 worldwide suppliers. With the bulk purchasing power behind IKEA and the large procurement team it is able to negotiate prices between 20% and 40% lower than any of its competitors. Over time, IKEA has demonstrated that it can successfully manage global suppliers while also maintaining the quality of its products, key to maintaining its brand reputation. The network of service offices is crucial to their global procurement activity, as each office is geographically spread out so that they can cultivate strong working relationships with all local suppliers, wherever in the world they happen to be.
IKEA staff also visit all of the suppliers on a regular basis, not only to continue to build relationships with their suppliers but also to build on their quality control processes. As part of this, IKEA is a strong believer that it should only work with ethical suppliers and as such it inspects the working conditions and the social conditions surrounding the factories, ensuring it adds value to the local communities it works with. Some 66 per cent of IKEAs products are sourced from Europe. However, to keep costs down IKEAâs largest supplier is China, which provides 18% of all IKEA products. Production of a single product is spread across multiple suppliers and optimised in order to reduce prices. IKEA also purchases raw materials and hardware in bulk, which is sold to its suppliers to help them keep the final cost down.
IKEAâs supply chain is supported by cutting-edge IT infrastructure. The complexity of the supplier network and the large range of products has meant that over time IKEA has found it necessary to develop its own systems. This is more expensive than buying standard IT systems to manage its stocks. However, this does mean it can manage the demands of stores and ensure effective distribution of its stock between them. Ensuring that nothing stays in storage for long is key to keeping IKEAs inventory costs low as everything is built to shelf rather than built to order like most other furniture manufacturers.
2 Global expansion
IKEA has a long history of expansion beyond its natural markets in Western Europe.
IKEA has always adopted an ethnocentric strategy for internationalisation, weighing up the effect of the local culture against IKEAâs own to select relevant products. In the early days IKEA often ignored local tastes and preferences in favour of keeping costs low, but learned the hard way in the US that this wasnât appropriate and adapted to the way furniture is purchased there. To do this greater control was handed over to the US subsidiary, allowing them to customise products for the local market. This led to increased costs, but this localisation approach was essential in order to see market growth in the US. This strategy has been repeated in other markets to help IKEA adapt to local culture and purchasing behaviour.
Over recent years, IKEA has been looking for growth by expanding into emerging markets with a growing middle class, such as China and India. In August 2018, the company opened its first Indian store in Hyderabad and saw around 40,000 customers on its first day (TNN, 2018). Further stores are to be opened in Mumbai and Delhi.
In order to remain successful IKEA needs to further adapt its product lines to local demand and ensure that pricing strategy is correct. âWe are selling many products from our global portfolio at a lesser cost in India and working on lower margins, but we know the volumes will make up for this,â Amitabh Pande, Strategic Planner at IKEA India said (Das, 2018). On IKEAâs India website, the leading corner sofa-bed is tagged at about 37,500 Indian Rupees, while the same item is sold in the UK for about 43,000 Indian Rupees, representing a significant price difference between the two markets. Average income is still much lower in emerging markets, meaning prices have to be lower, and with many people still only using public transport central city locations are essential. Consequently, IKEA is having to change a traditional part of its business model. In developed markets, customers assemble the furniture themselves. In India this is not common practice, so IKEA has partnered with home services company, UrbanClap, to help customers put together their furniture after purchase (Das, 2018).
The company says it realised localisation of products to suit the needs of Indian families and customers was the key ingredient to win over a market that is extremely sensitive to price. In adapting to the Indian market IKEA undertook more than 1000 home surveys to see how Indians lived (Goel, 2018). âThere is nothing more powerful than watching and talking to those people in their natural environment. We watched how they cooked, slept, and sat, and then we thought how we could tweak our existing products to suit them,â an IKEA India spokesman said (Das, 2018). Indian families tend to spend a lot of time together, far higher than global averages. So IKEA added more folding chairs and stools that could serve as flexible seating. Indians are also known to prefer hard mattresses for sleeping, a complete opposite to the global norm, which made IKEA work with its local suppliers to launch such mattresses just for Indian consumers (Goel, 2018).
Sustainable vision
Since it was founded IKEA has always had concern for people and the environment. The IKEA vision âto create a better everyday life for the many peopleâ puts this concern at the heart of the business. IKEA has responded to the publicâs rising concern for sustainability in its choice of product range, suppliers, stores and communication. It has also spotted business potential in providing sustainable solutions. IKEAâs concern for people and the environment encourages it to make better use of both raw materials and energy. This keeps costs down and helps the company to reach its green targets and have an overall positive impact on the environment.
To meet its vision IKEA provides many well-designed, functional products for the home. It prices its products low so that as many people as possible can afford to buy them. However, in creating low prices IKEA is not willing to sacrifice its principles. âLow price but not at any priceâ is what IKEA says. This means it wants its business to be sustainable. IKEA supplies goods and services to individuals in a way that has an overall beneficial effect on people and the environment.
IKEA does not produce its own raw materials, but it needs these to develop its products. Consequently, it works closely with primary sector suppliers to ensure a sustainable impact on the people and the environment in which it operates. IKEA designs its own products. At the design stage, IKEA checks that products meet strict requirements for function, efficient distribution, quality and impact on the environment.
IKEA uses a tool â the âe-Wheelâ â to evaluate the environmental impact of its products. The âe-wheelâ has several checkpoints, which are divided into five phases: raw material, manufacturing, distribution, use and end of life (IKEA Group, 2019c). This also helps suppliers improve their understanding of the environmental impact of the products they are supplying (see Figure 1).
Figure 1: The e-Wheel
Around 50 per cent of IKEAâs products are made from wood or wood fibres. IKEA ensures that the wood it uses comes from sustainable sources. It also works to ensure that at the end of a productâs life the wood can be recycled. IKEA creates many design solutions to minimise the use of materials. For example:
Since 2015 IKEA has reached its goal of phasing out wooden pallets from its global transport network; it now uses only paper pallets and loading ledges. Cotton is used in many of IKEAâs products. Because conventional cotton farming is often harmful to the environment and the people who grow it, IKEA works with the cotton farmers so that 100 per cent of the cotton used is from more sustainable sources certified by the Better Cotton Initiative, of which IKEA is a founding member (IKEA Group, 2015).
Each of these ideas helps IKEAâs products to be more sustainable and reduce the impact on the environment.
A close working relationship with all suppliers is fundamental to IKEAâs sustainability vision. During manufacturing IKEA specifies to its producers that waste should be avoided. Where waste does occur IKEA encourages suppliers to try to use it in the manufacture of other products. IKEA has a code of conduct called the IKEA Way of Purchasing Home Furnishing Products (IWAY). This contains minimum rules and guidelines that help manufacturers to reduce the impact of their activities on the environment. The IWAY code of practice expects suppliers to:
A product in use should not have a harmful effect upon consumers or their environment. For example, it should not cause allergies. If it uses energy, it should do so efficiently. When a product comes to the end of its useful life, it should be possible to reclaim or recycle the materials that make up the product. Such materials can then be re-used for making other products. To monitor suppliers, IKEA regularly carries out an IWAY audit. This involves talking to employees and inspecting documents and records. IKEA visits suppliers on-site on a number of occasions to ensure that they are following the code of conduct.
By the end of 2020, IKEA aims to be running on 100 per cent renewable energy. So far, the company has installed more than 700,000 solar panels at IKEA locations around the world and owns approximately 157 wind turbines in Europe and Canada. A further 104 wind turbines are being constructed in the US. Last year, the company committed to rolling out solar across all its Australian east coast stores and warehouses. To date, IKEA has invested âŹ2.5 billion in renewable energy and assisting communities most impacted by climate change (Energy Monitor Worldwide, 2015).
As a global organisation IKEA has chosen to undertake a leadership role in creating a sustainable way of working. IKEA has formed partnerships with UNICEF and other global agencies to combat child labour by raising awareness and addressing the root causes. It has educated suppliers to understand how and why sustainable production is vital. This has helped IKEA differentiate itself from its competitors.
Case study written by Matthew Hinton
In: Operations Management
Human resource management Case
Gerald Mahoney was working in the womenâs shoe department and doing the best that he could to sell a fairly expensive pair of boots to a young lady who obviously could afford to shop at a much classier store. For some unfathomable reason, however, she decided to shop at Marcyâs. After a few minutes of trying on several pairs of boots, Gerald was able to gently persuade Ms. Monahan to buy one of the storeâs most expensive boots. He rang up the sale and was complimenting himself on his persistence when out of the blue the customer said:
âWhy is an obviously highly talented man like you, who has just sold me a pair of shoes I probably donât need or even want, working at a place like Macyâs? My name is Ms. Monahan, and I am the director of recruiting and training at Home Builders, and I can tell from the way that you have handled this sale that you would make a superb home salesperson. Hereâs my card. Why not call me tomorrow morning, and we can arrange a time for you to come in?â
Gerald thanked Ms. Monahan for her kind words and told her he certainly would call her. He called the next day and she seemed quite receptive to his call. She asked him to fax over a resume and said that she would get back to him (or her assistant would), in order to set up an appointment for him to interview with her and some of the key salespeople in the firm. Gerald ended up faxing his resume three days after talking to Ms. Monahan. Her office emailed him with a link to an online blank job application, which he quickly filled out. A nerve-wrecking week went by, and Gerald finally received an appointment for an interview for the following week.
The interview started at 9. a.m.. First, before he met with anyone, Gerald took a battery of tests and filled out a set of questionnaires. The exams included everything from basic math to what
seemed to be an IQ test, to questions about self-image, his honesty, and his preference about the type of work he liked to do. Rather than having a long break for lunch they had a working lunch where HR went through the entire compensation package: a base salary plus commission, medical benefits, and a really good retirement plan where the firm contributed 5% of his salary.
His first interview that afternoon seemed to set the tone for the rest of the day. Gerald had a wonderful interview with the Sales Director, Sam Arden, and found it easygoing, laid-back. Sam, after telling Gerald about the firm and the job, asked Gerald some brief standard questions about his background and sales history and what made Gerald special enough to become a sales associate with Home Builders. Gerald expected these questions and was quite prepared. The next series of questions, however, were very different from anything he had experienced before. Sam would tell him a little story and then ask Gerald what he would do or say if he were the sales associate in the fictional story. No one had ever asked Geraldâs opinion about anything at his prior job and he felt he had finally found a firm that cared about what he thought. Gerald thought he sailed through these scenarios with flying colors.
After the interview with Sam, Gerald was directed to a small conference room where three people who identified themselves as area managers and one person from HR asked him a series of questions about his selling approach, his work habits, and his ability to work with a sales partner. This session was repeated in another room with another three area managers and another person from HRM. Both of these sessions included a series of follow-up questions that Gerald was happy to answer. In both of these interviews after the one with Sam, he was always asked to explain the most difficult sales situation he has ever faced and how he has handled it. However, apparently he was not the only candidate the company was looking at since in the second interview with the area managers and the HRM representative he sat together with a different candidate in the room and both were asked the same questions to which they often had similar but sometimes also very different answers. Gerald felt that his answers were overall much better than the responses of the other candidate. He even felt that the interviewers had to make suggestions to the other person in terms how to answer, basically giving the other candidate only the option to agree or disagree with the suggested answers. They never did this when they asked him questions. At 5 p.m. the last session ended and Sam walked in and told Gerald he would contact him in a week to let him know the decision of Home Builders.
In the days after Gerald left, some HRM personnel of Home Builders screened Geraldâs online profile accessing his Facebook and Twitter as well as Instagram account. From the list of his contact on those three social media HRM randomly picked a few individuals and contacted them in order to get some references. Gerald learned about it only by chance as one of his friends contacted him via email asking if he could respond to Home Builderâs request â Gerald answered affirmative. Later he would find out that ten other of his acquaintances, friends and even a coworker at Marcyâs had been contacted by Home Builders.
A week went by, and Gerald had not heard anything from Home Builders. He finally called and was told that a letter was in the mail to him and he should await arrival. Three days later, and with continued impatience at work and at home, Gerald received the letter. The first word he read, âcongratulationsâ, sent him into an ecstatic frenzy. He then read further and realized that
12
this is not what he was told. Their job offer was commission-based only, and, assuming that medical and dental packages ran about the same cost and that coverage was the same as his current job, Gerald would lose paid vacation time but perhaps gain in terms of contributions to a retirement plan. Gerald though: âThis is not the same great deal that I was told about during the interview process! Who sold who in the job?â.
At the same time as Gerald was asking this question to himself, Angie was standing at her (former) desk at Home Builders picking up her personal items and wondering how she had gotten into this mess. At one shoulder was the head of HR and at the other was one of the security officers. They were there to escort her out of the building as soon as she retrieved her personal items. Thinking back, the last hour or so had been a whirlwind. She had come to work like she had for the past several months, maybe a little late and a little hungover, but she was there. Shortly after she had sat down at her desk to start making phone calls, her supervisor had called her into her office. She asked her to accompany her to the HR Managerâs office. Once there, she saw a printout of her Facebook page, but at least they werenât the postings she first had considered putting up. She was really glad that when she graduated from college she had purged her account of all previous personal pictures.
Angie knew, like all of the other employees, that management had recently been going through some of the social networking sites to review potential recruits before they decided to hire them, but she didnât know anything about management reviewing current employeesâ webpages. Well, she thought, my pages are pretty clean since I was warned about this by career services in college. However, what she saw next really bothered her. There was the highlighted section of her blog from last Thursday. She had forgotten about that! In the post, she had noted that she had a whopping hangover because of the night out on Wednesday and saw her post: âI think Iâll call in sick because I just canât face working for that idiot with this headache. Iâll take a pill and relax today taking a sunbathâ. Well, now they knew that she wasnât sick. How could she have been that stupid?
As she sat there, she suddenly realized that this was no normal conversation â it looked more like an inquisition. And when the HR manager informed her that the company was going to terminate her employment by today â i.e. right away - and she would be required to pick up her personal belongings right now, she couldnât believe it. What had happened to freedom of speech? What had happened to a personâs right to have a life outside of work? Could they monitor her personal communications that had nothing to do with work and then use them against her? She wasnât sure, but she thought that was wrong. Nonetheless, here she was cleaning out her desk with a security guard next to her. She should have been more careful: the internet is full of references to people fired for things that they posted on their personal webpages. And it doesnât necessarily matter if you set your pages to private. Your friends may still capture comments that youâve made on their pages without you even knowing about it. In addition, recruiters may use your âfriendâ list to find people to call for references, and if your friend is unaware of the purpose of the call, they might say something that youâd rather wish they didnât. Employers can look at who has recommended you on sites such as LinkedIn and may approach those references as well.
As Angie finished packing her personal belonging she noticed that the security guard had filmed her cleaning out her desk. While she was walking to the exit, she already saw the recording being streamed on the video monitors placed all around the corporate headquarters and other employees were watching it and staring at her while she was walked through the crowd followed by the security guard like a criminal. The subtitle of the video said: âThis is how we deal with problematic employees!â... This seems to have been a modern version of the medieval pillory punishment which publicly exposed and shamed culprits. Some of her colleagues were also her friends and after her dismissal they did not want to meet her anymore. In the evening after her dismissal she started to have depressions and a first panic attack - both even got more intensive with time passing! A large part of her social network and friendship was cut off as a result and this further pushed her into a severe depression in the months after the incident. Angie soon needed psychoanalytic treatment and antidepressant medication to get by.
Not long ago her career in the company seemed to have been quite bright: she was asked to attend various workshops that were designed to train future junior managers. Apparently, she was in the roster of those employees who may be promoted into leadership positions she thought. Angie was familiarized in one of those workshops with strategic management and business strategies and analyzed her own companyâs strategy using Porterâs concept of business strategies. A leadership workshop, as it was called, was also quite interesting: next to some presentations about some leadership theories and HRM issues she would be asked to engage into some role plays â one was about âdemocratic leadershipâ and the other about how to discipline subordinates. Now she was the one to be disciplined while she was never in the position to use what she has learned by herself. But, perhaps, at least she learned something in the workshop which will help her to address the way she was dealt with by the company: how they handled her case was not correct, she thought!
While Angie encountered this problem, Nora, one of several supervisors at Home Builders that has 50 sales teams, each with 10 members, was busy with performance evaluation. For this, Nora was supposed to use a graphical rating scale that has four performance indicators (1. Quality of work; 2. Quantity of work; 3. Politeness; 4. Integrity) with a 6 point scale ranging from 6 = (outstanding/best) to 0 = (problematic/poor). Employees will receive a corresponding performance bonus on top of their base pay depending on the rating. If they receive a rating of 1 on all four indicators (= 4) they will receive a 4% bonus and so on (a rating of 0 on the rating scale for all items will, of course, result in a 0% bonus) with a maximum of a 24% bonus pay. Nora can, of course, not observe all employees permanently and, therefore, usually simply looks at the subordinateâs work behavior and work outcome one week before the performance evaluations are due. Nora considers this as a ârandom sampleâ for evaluating work behavior and outcome. However, Noraâs subordinates are all aware of the fact that their performance is only monitored that particular week. Nora usually gives all employees scores between 4-5 (4= very good and 5 = excellent) in order to not upset anyone. Nora feels confident that this is fair since all subordinates demonstrated actually very good/excellent work in that particular week. Yet, there are significant differences in performances throughout the year. There are two subordinates in the team, who are actually outperforming any others in the company on all of the indicators!
But Anton has also to deal with another problem: one his subordinates, Carl, has been caught being involved in a scheme of fraudulent sales with a kick-back scheme. Anton is fuming since this particular team member had received a great reference from his previous supervisor - even highlighting the very high moral standard. Fact is that Carl was involved in some illegal schemes even at his previous employer as Anton found out later. The supervisor who provided the excellent reference only did not learn about those activities only since he omitted the regular auditing duties since he was too busy. Anton reports this fact to Ms. Monahan who decides that it is now payback time. Ms. Monahan is aware of the fact that the fraudulent subordinateâs wife is expecting soon to give birth to a child. Ms. Monahan instructs the HRM department specifically to wait to inform Carl about his immediate dismissal on the day when the birth of the new child has been confirmed to make him feel miserable. Of course, as is the practice at Home Builders, a short video clip will be created and screened on the video monitors of the company while Carl will be pictured being escorted outside of the premises by security personnel.
Question: Identify all the HRM issues and carefully analyze them while using relevant concepts and theories you have been familiarized with and suggest how Home Builders could have avoided the various problems.
In: Operations Management
Please include all inputs and outputs in details with pictures:
General rules: Create homework, compose specifications or any text by using a common document-creation tool, such as MicrosoftÂź Word.
Detailed Hints: Refer to the wwweb or lecture notes for this class to design, implement, and debug solid SW solutions. Be concise, complete, and precise.
Abstract: Compute the performance data for the schedulers of three types of Operating Systems. Do not get scared! Only the timing for each scheduler is of interest. You can compute these timing data by hand or by actually implementing a simulator. Either solution is feasible and permitted. The simulator measures key performance data, such as throughput, wait time, and turn-around time. You may also manually compute these numbers without having to run them in a simulation environment.
If you chose to âmanuallyâ compute the data, i.e. without implementing a SW simulator, the amount of âgenerated performance dataâ is allowed to be way less detailed than what is suggested here.
One OS is a strict batch system with a non-preemptive First Come First Serve (FCFS) scheduler. The second OS uses a non-preemptive, high-priority first (HPF) scheduler, while the third OS uses a preemptive round robin (RR) scheduler with a variable time-quantum with varying context switch overhead. Design meaningful input data, run them through all schedulers, generate output data, and interpret and discuss the results. To start your simulations, use the sample data from this HW assignment. In addition, provide 2 additional, meaningful input scenarios, more complex than the samples given here.
Detail: HomeWork 1 consists of the following parts with equal weight each:
Input: Input to the schedulers is a list of processes, for which you happen to know the execution time in milliseconds. For your program input, each process is represented by a triple of decimal numbers id, time, priority. These multiple processes are scheduled and compete for the CPU resource. Here id is the name of the process; time is the time in milliseconds that process id needs to run to completion, and priority is the priority of process id. A plausible input sample for two processes with process id 1 and process id 4 is:
1 2 3
4 50 6
Depending on the scheduler, priority may be ignored. The meaning of triples is as follows:
1 2 3 process 1 uses 2 milliseconds to run, has priority 3
4 50 6 process 4 uses 50 milliseconds, has priority 6, with 0 being the highest
Use the definitions below to compute for each process Throughput, Wait Time, and Turn-around Time. Compute these for each of the 3 schedulers; also compute the average for all processes.
For the preemptive RR scheduler, vary the time quantum q from 1 to 5 milliseconds (ms). Also, for each q selected, vary the overhead o of a context switch from 0 ms up to q itself. There is no need to vary the o beyond q. When a process scheduled by the RR system has received all time needed to completion, do not add a final o unit in the computation of the total time for that process. Also the first time around, act as if the initial schedule overhead o is 0. Use the sample outputs below as a guide for the detail you should generate for this HW.
Definitions:
Throughput: Number of jobs (processes) completed per time unit
Waiting Time: The total time a process is in Ready Queue
Average Waiting Time: Average Waiting Time of n processes is: total waiting time by n
Turn-around Time: span of time of submission to completion time
Example 1:
Enter triples: process id, time in ms, and priority:
For example:
1 12 0
3 9 1
2 99 9
process 1 needs 12 ms and has priority 0, very high,
process 3 needs 9 ms and has priority 1.
and so on ...
1 2 3
2 1 2
Process list in FCFS order as entered:
1 2 3
2 1 2
End of list.
fcfs wait of p1 = 0
fcfs wait of p2 = 2
average wait for 2 procs = 1
fcfs turn-around time for p1 = 2
fcfs turn-around time for p2 = 3
average turn-around for 2 procs = 2.5
fcfs throughput for 2 procs = 0.666667 proc/ms
<><> end FCFS <><>
Process list in HPF order:
2 1 2
1 2 3
End of list.
hpf wait of p2 = 0
hpf wait of p1 = 1
average wait time for 2 procs = 0.5
hpf turn-around for p2 = 1
hpf turn-around for p1 = 3
average turn-around for 2 procs = 2
hpf throughput for 2 procs = 0.666667 proc/ms
<><> end HPF schedule <><>
Process list for RR in order entered:
1 2 3
2 1 2
End of list.
preemptive RR schedule, quantum = 1 overhead = 0
RR TA time for finished p2 = 2, needed: 1 ms, and: 1 time slices.
RR TA time for finished p1 = 3, needed: 2 ms, and: 2 time slices.
RR Throughput, 2 p, with q: 1, o: 0, is: 0.666667 p/ms, or 666.667 p/us
Average RR TA, 2 p, with q: 1, o: 0, is: 2.5
preemptive RR schedule, quantum = 1 overhead = 1
RR TA time for finished p2 = 3, needed: 1 ms, and: 1 time slices.
RR TA time for finished p1 = 5, needed: 2 ms, and: 2 time slices.
RR Throughput, 2 p, with q: 1, o: 1, is: 0.4 p/ms, or 400 p/us
Average RR TA, 2 p, with q: 1, o: 1, is: 4
preemptive RR schedule, quantum = 2 overhead = 0
RR TA time for finished p1 = 2, needed: 2 ms, and: 1 time slices.
RR TA time for finished p2 = 3, needed: 1 ms, and: 1 time slices.
RR Throughput, 2 p, with q: 2, o: 0, is: 0.666667 p/ms, or 666.667 p/us
Average RR TA, 2 p, with q: 2, o: 0, is: 2.5
preemptive RR schedule, quantum = 2 overhead = 1
RR TA time for finished p1 = 2, needed: 2 ms, and: 1 time slices.
RR TA time for finished p2 = 4, needed: 1 ms, and: 1 time slices.
RR Throughput, 2 p, with q: 2, o: 1, is: 0.5 p/ms, or 500 p/us
Average RR TA, 2 p, with q: 2, o: 1, is: 3
preemptive RR schedule, quantum = 2 overhead = 2
RR TA time for finished p1 = 2, needed: 2 ms, and: 1 time slices.
RR TA time for finished p2 = 5, needed: 1 ms, and: 1 time slices.
RR Throughput, 2 p, with q: 2, o: 2, is: 0.4 p/ms, or 400 p/us
Average RR TA, 2 p, with q: 2, o: 2, is: 3.5
<><> end preemptive RR schedule <><>
Example 2:
Enter triples: process id, time in ms, and priority:
For example:
1 12 0
3 9 1
2 99 9
process 1 needs 12 ms and has priority 0, very high,
process 3 needs 9 ms and has priority 1.
and so on ...
1 10 5
2 8 1
3 12 7
Process list in FCFS order as entered:
1 10 5
2 8 1
3 12 7
End of list.
fcfs wait of p1 = 0
fcfs wait of p2 = 10
fcfs wait of p3 = 18
average wait for 3 procs = 9.33333
fcfs turn-around time for p1 = 10
fcfs turn-around time for p2 = 18
fcfs turn-around time for p3 = 30
average turn-around for 3 procs = 19.3333
fcfs throughput for 3 procs = 0.1 proc/ms
<><> end FCFS <><>
Process list in HPF order:
2 8 1
1 10 5
3 12 7
End of list.
hpf wait of p2 = 0
hpf wait of p1 = 8
hpf wait of p3 = 18
average wait time for 3 procs = 8.66667
hpf turn-around for p2 = 8
hpf turn-around for p1 = 18
hpf turn-around for p3 = 30
average turn-around for 3 procs = 18.6667
hpf throughput for 3 procs = 0.1 proc/ms
<><> end HPF schedule <><>
Process list for RR in order entered:
1 10 5
2 8 1
3 12 7
End of list.
preemptive RR schedule, quantum = 1 overhead = 0
RR TA time for finished p2 = 23, needed: 8 ms, and: 8 time slices.
RR TA time for finished p1 = 27, needed: 10 ms, and: 10 time slices.
RR TA time for finished p3 = 30, needed: 12 ms, and: 12 time slices.
RR Throughput, 3 p, with q: 1, o: 0, is: 0.1 p/ms, or 100 p/us
Average RR TA, 3 p, with q: 1, o: 0, is: 26.6667
preemptive RR schedule, quantum = 1 overhead = 1
RR TA time for finished p2 = 45, needed: 8 ms, and: 8 time slices.
RR TA time for finished p1 = 53, needed: 10 ms, and: 10 time slices.
RR TA time for finished p3 = 59, needed: 12 ms, and: 12 time slices.
RR Throughput, 3 p, with q: 1, o: 1, is: 0.0508475 p/ms, or 50.8475 p/us
Average RR TA, 3 p, with q: 1, o: 1, is: 52.3333
preemptive RR schedule, quantum = 2 overhead = 0
RR TA time for finished p2 = 22, needed: 8 ms, and: 4 time slices.
RR TA time for finished p1 = 26, needed: 10 ms, and: 5 time slices.
RR TA time for finished p3 = 30, needed: 12 ms, and: 6 time slices.
RR Throughput, 3 p, with q: 2, o: 0, is: 0.1 p/ms, or 100 p/us
Average RR TA, 3 p, with q: 2, o: 0, is: 26
preemptive RR schedule, quantum = 2 overhead = 1
RR TA time for finished p2 = 32, needed: 8 ms, and: 4 time slices.
RR TA time for finished p1 = 38, needed: 10 ms, and: 5 time slices.
RR TA time for finished p3 = 44, needed: 12 ms, and: 6 time slices.
RR Throughput, 3 p, with q: 2, o: 1, is: 0.0681818 p/ms, or 68.1818 p/us
Average RR TA, 3 p, with q: 2, o: 1, is: 38
preemptive RR schedule, quantum = 2 overhead = 2
RR TA time for finished p2 = 42, needed: 8 ms, and: 4 time slices.
RR TA time for finished p1 = 50, needed: 10 ms, and: 5 time slices.
RR TA time for finished p3 = 58, needed: 12 ms, and: 6 time slices.
RR Throughput, 3 p, with q: 2, o: 2, is: 0.0517241 p/ms, or 51.7241 p/us
Average RR TA, 3 p, with q: 2, o: 2, is: 50
preemptive RR schedule, quantum = 3 overhead = 0
RR TA time for finished p2 = 23, needed: 8 ms, and: 3 time slices.
RR TA time for finished p1 = 27, needed: 10 ms, and: 4 time slices.
RR TA time for finished p3 = 30, needed: 12 ms, and: 4 time slices.
RR Throughput, 3 p, with q: 3, o: 0, is: 0.1 p/ms, or 100 p/us
Average RR TA, 3 p, with q: 3, o: 0, is: 26.6667
preemptive RR schedule, quantum = 3 overhead = 1
RR TA time for finished p2 = 30, needed: 8 ms, and: 3 time slices.
RR TA time for finished p1 = 36, needed: 10 ms, and: 4 time slices.
RR TA time for finished p3 = 40, needed: 12 ms, and: 4 time slices.
RR Throughput, 3 p, with q: 3, o: 1, is: 0.075 p/ms, or 75 p/us
Average RR TA, 3 p, with q: 3, o: 1, is: 35.3333
preemptive RR schedule, quantum = 4 overhead = 0
RR TA time for finished p2 = 20, needed: 8 ms, and: 2 time slices.
RR TA time for finished p1 = 26, needed: 10 ms, and: 3 time slices.
RR TA time for finished p3 = 30, needed: 12 ms, and: 3 time slices.
RR Throughput, 3 p, with q: 4, o: 0, is: 0.1 p/ms, or 100 p/us
Average RR TA, 3 p, with q: 4, o: 0, is: 25.3333
preemptive RR schedule, quantum = 5 overhead = 0
RR TA time for finished p1 = 20, needed: 10 ms, and: 2 time slices.
RR TA time for finished p2 = 23, needed: 8 ms, and: 2 time slices.
RR TA time for finished p3 = 30, needed: 12 ms, and: 3 time slices.
RR Throughput, 3 p, with q: 5, o: 0, is: 0.1 p/ms, or 100 p/us
Average RR TA, 3 p, with q: 5, o: 0, is: 24.3333
some outputs I have to cut because Chegg say the question is long
In: Computer Science
A Near-Death Experience
I remember everything that happened that day before the surgery was supposed to take place. I remember rolling into the preholding area. I remember telling the anesthesiologist that I was very uncomfortable about the block. He told me not to worry, that he had done it a hundred times. He will tell you now that he has never said that again. In fact, he will tell you that when he saw the list of things I wanted, his immediate reaction was, “She is going to be a pain.” Today, his thinking has changed to, “This is a patient who has some experience and we need to have a conversation before the surgery.” So his practice has changed because of what happened that day.
From the beginning, I had a bad feeling about this surgery. I had signed many consent forms, but this was the first time I had looked at a form and had the word “death” pop out at me. I don’t know why I felt that way, but when I think back I would say to any patient, “If you have a bad feeling, honor that feeling. It does not matter how crazy you feel, honor that bad feeling.”
The last thing I remember is saying goodbye to my husband. Then we went into the preoperative holding area, and that was where they injected the block. The procedure consisted of going in past the blood vessels into the nerve. To do this they have to pull back on the needle; if there is no blood then they are sure they are into the nerve. But when the anesthesiologist pulled back on the needle there was no blood, so he put the medication in, and apparently it went into the blood vessel anyway. What they think happened was that he did not get any blood because it was a broken-down vessel. Bupivacaine is a cardiotoxic drug and within a minute I had a grand mal seizure followed by a full cardiac arrest. They called a cardiac code and started advanced cardiac life support right away, but after 15 minutes I was still unresponsive.
Luckily for me, there just happened to be a doctor there who had experience with this. He knew that the only way to save my life would be to get me onto cardiac bypass right away. Again, things were in my favor that day: there was a cardiac suite already prepared for another patient, with a cardiopulmonary bypass machine primed and ready. They bumped the other patient and within 35 minutes they had opened my chest and had me hooked up to a cardiopulmonary bypass machine so that the medication could be flushed out of my system.
My husband was not even out of the main lobby before I had the cardiac arrest. He got a phone call from the orthopedic surgeon who had stood by in horror watching the whole incident unfold. The surgeon said, “Mr. Kenney, there has been a problem with the anesthesia. We had to crack your wife’s chest; you need to come in.” My husband just dropped the phone and immediately returned. My husband didn’t know where to go, but a woman from admitting recognized him and brought him into a room. He was left alone in a small room until somebody came to get him. I think about that now. Somebody should have been with my husband.
The anesthesiologist and orthopedic surgeon waited for a while before they came to talk to him. As soon as they opened the door my husband physically went after them. He said, “What have you done to my beautiful wife?!” The orthopedic surgeon’s reply was, “It doesn’t look good. We don’t know what the outcome is going to be.”
When I woke up I was on a ventilator in the intensive care unit. No one wanted to talk about what had happened. Someone told me I had had an allergic reaction to the anesthesia. I knew intuitively that was wrong, so right away, as I lay there in the hospital, I felt unsafe and untrusting. That was not a good mental state to be in after what I had been through. My husband did not want to leave my side and did not want anybody near me; I’m sure he was marked by the staff as a difficult family member. I found out years later that they did not ever ask him to leave. They actually changed their practice because they saw that my husband’s voice helped calm me down. I was the first patient to change this practice.
I remember worrying about my children. There was no support for any of my family members. You could see that the staff felt bad for me, but nobody was talking. My orthopedic surgeon could barely look at me. I remember writing a note asking if he had replaced my ankle. He shook his head and looked down. It took me a good week to grasp that my ankle had not been replaced.
I felt abandoned. I had a rewired chest, broken ribs, and I looked as though I had been beaten up. I remember taking that first shower and having somebody wash me because I could not do it and feeling the most vulnerable I had ever felt in my life. I got my chart before I left the hospital and it said right on the front, “Allergy to PENICILLIN and BUPIVACAINE.” That was the route they were going.
Alone at Home
When I left the hospital, I received instructions on caring for my incision and information about a visiting nurse. That was all. I never got a phone call. All I got was a bill. I had had many day surgeries when they would call me the next day and ask how I was doing. This time they almost killed me and I didn’t even get a call.
A week after I got home I received a letter from the anesthesiologist, Dr. van Pelt. I did not know that he had tried to see me several times in the hospital, but that multiple things had stopped that from happening. In the letter he said he was sorry for what had happened and that he believed in open and honest communication. He gave me his home telephone number and cell number. I had no idea that what he was doing was so ahead of the time. My feelings at the time were that this was damage control. I filed the letter, and did not think about it for a long time.
When I got home, Christmas was coming. My kids were all still reacting to what had happened. I was trying to take care of their needs, and I was physically very limited. It was a slow recovery. At the time, I coped by focusing on being thankful to be alive and taking care of my family.
A couple of months later I was feeling better physically. My family and friends thought I had moved on, but I know today that I had not yet processed my emotions. Then, while at a wake for a 14-year-old child, I began to feel guilty. I felt guilty that I got to live and this child had died. It was like the floodgate opened, and every feeling I had been pushing down just came out. I began crying and felt as though I was never going to stop. I remember crying over folding towels. I just felt isolated and alone for months.
I needed a cortisone shot in my right ankle due to severe pain because I had not had the ankle replaced. I made an appointment to see my orthopedic surgeon. I went in and told him that I thought we should talk about what had happened. His entourage left the room and he told me what the day was like for him.
He said, “That day is burned in my memory like the birth of my children, although those were joyful occasions and this was not. Linda, you are a miracle.” By that time everybody was telling me I was a miracle and I did not believe it. He said, “No, Linda, you are a miracle from God,” and he began to cry.
My first reaction was, “What? What are you doing?” But then compassion came over me and I looked at him in a different light. I felt bad for him. It was the first time that anybody had showed me that they cared and that this had had an effect on them, too. As the patient, I needed this. It really made me feel better to see this reaction, but almost at once he stopped the story and would not finish. He got up, walked to the door, and left.
A few days after this meeting I called the hospital to ask if there were other patients I could talk to who had gone through this same thing. I knew I could not be the only one and I needed others to talk to. They never called me back. Months later I called my orthopedic surgeon again and asked whether he thought it would be reasonable for me to invite Dr. van Pelt for coffee. That was when I found out that Dr. van Pelt was no longer in Boston. I felt as though the floor had dropped out from under me. I thought I had missed the opportunity to ever hear the anesthesiologist’s perspective and get closure on our shared event.
Luckily for me, the orthopedic surgeon was very proactive. He reached out to the head of anesthesia department, who contacted Dr. van Pelt. This ultimately led to my phone conversation with Dr. van Pelt, which was wonderful for me because I got to hear how affected he was. I felt as though I finally had gotten to hear the truth from somebody.
I was the first person who had asked him how he was doing. This struck me as so odd. Eventually I met other people who had been on the code team and all they could do was cry. I remember meeting a nursing supervisor who had been taking care of the patient next to me and I told her I often wondered how the other patients going into surgery dealt with seeing this scene unfold right in front of their eyes. She said that for the people who stayed overnight, she went up to see them in their rooms. She took it upon herself to do this all on her own.
I called the hospital and told them that I could not read the writing in the chart, but that I would like to know who everybody was on my code team because I wanted to write them a letter. It was coming up on my 1-year anniversary and I really wanted to thank them for doing their job. I knew that for them it was just their job, but I wanted to articulate how this had affected my family and me and what it meant to us. I never got a phone call back. I have been told that they were just waiting for the lawsuit. The culture at the time was not to speak to anybody involved in a serious adverse event, but I did not know this.
Moving Forward
After a year I wrote a letter to the administration. I said that patients left their facilities all the time after something had gone wrong and asked why we were not supporting them. I offered to help them make the change. I received a letter back a couple of months later. It was very cold and written in legal terms. It made me so angry, I wanted to lash out and hurt them back. I remember thinking, “Now I know why patients sue!”
Then, finally, nearly 2 years after the event, Dr. van Pelt and I met. I was finally able to put a face to the man who was part of an event that had such an impact on my life. We had shared this extremely emotional event and I didn’t even know what he looked like. By this time I had met a number of clinicians and I believed the system had failed us both. I wanted to change that. I remember telling him I wanted to start an organization, although at the time I had no idea what it would look like. MITSS—Medically Induced Trauma Support Services—had a brainstorming brunch in April of 2002, and Dr. van Pelt was one of the many invited guests. This was where we developed the mission of MITSS and ideas for how we would carry it out. Dr. van Pelt was one of the first board members of MITSS.
I was so naïve; I really thought that if I started this organization all the hospitals would send us the people who needed our support. I was so wrong. Three years to the day after my adverse event, I scheduled an appointment with the risk manager of the hospital. I had MITSS brochures and I was going there to see if she would give them to all her patients and family members. I left early, all ready for the meeting, and after I left she called the house canceling the appointment. So can you imagine the look on her face when I showed up? But we have become good friends, and she tells me now that they did not know what to do. They did not know what I wanted. They assumed I wanted something, but all I wanted was to be part of a solution. They could not comprehend that. It has taken years for me to build credibility with this hospital. What struck me was that if we are not acknowledging that these events happen, not doing disclosure or apology, then how can we get to the support piece? It has been a journey. I am now starting to see some progress, but it has been slow.
The institution finally made changes and promised to put our brochures throughout the hospital. But when I would go in, I would find our brochures on the shelves in the closets. Then Dr. van Pelt and I had our pictures on the front page of the Wall Street Journal and suddenly it was a different game. After this publication, I had the opportunity to meet with the hospital, and we were given office space at the hospital. Once I began to learn what the challenges were for the medical community we could look for solutions together, because sometimes they just didn’t see them. They needed the patient’s perspective. It has been a rewarding partnership. I wish people would take the opportunity to embrace their patients when things go wrong because amazing things can happen.
Conclusion
Seven years after the incident described in this chapter, Linda Kenney had her long-postponed ankle replacement surgery. While every effort was made to allay her and her family’s fears before surgery, postoperatively she developed a surgical site infection that required rehospitalization and intravenous vancomycin antibiotics. After more years of acute issues and breakdown in the replaced ankle, Linda finally had the ankle replacement removed and a total ankle fusion in 2014. Her nonprofit organization, MITSS, has continued to grow during this time. It is now entirely consumer-led and is a leading source of information on supporting patients and healthcare professionals following medical harm.
Questions
1. How much of a problem do you believe the policy of not disclosing errors to patients might be? Can you envision circumstances in which this would create ongoing problems for patients and their families?
2. What adverse effects have you seen on clinicians who were involved in a medical error? What do you think could be done to alleviate these adverse effects?
3. Research some of the full-disclosure programs that have been developed and discuss their major components. What barriers do you see to provider disclosure following error? How do full-disclosure programs overcome the barriers to transparency that exist on both sides?
4. Much of this story is a lack of compassion in health care. Do you think there are forces that discourage compassion in day-to-day dealings with patients? If so, how do you think they could be overcome?
5. Which of the core competencies for health professions do you think are most relevant for this case? Why?
In: Nursing
Due to Covid-19 pandemic, stores are temporarily closed, but e-commerce growth in the market remains strong. Most of the growth we have seen in athletic footwear, for example, has come from the online channel. Provide your information technology strategy for short-term, mid-term and long term range planning. (Atleast 2-3 pages of word)
CASE STUDY
Source: The Star Online, New Straits Times
THE economy may be slowing and the retail industry is going through
a rough patch, but Al-Ikhsan Sports Sdn Bhd believes this is as
good a time as any for it to shine. âThe economy is soft, even
globally. I think Malaysia is fairly stable in that sense. When the
economy faces rough weather, thatâs when the true strength of
retailers can be seen. âWhen the economy does well, everyone does
well. You can hide your inefficiencies and all that. But if you can
grow your business when the economy is down, it shows the strength
of the company. As the economy gets tougher, Al-Ikhsan will become
more relevant,â says chief executive officer Vach Pillutla. At a
time when most businesses are looking to downsize their physical
presence, Al-Ikhsan is looking at ways to expand its number of
outlets. The company currently has 131 stores under five different
retail models, namely, the Al-Ikhsan Sports chain (116 outlets),
Sports Warehouse (4), Football Republic (6), Sneaker Street (2) and
Factory Outlets (3). The homegrown sports retailer has carved a
name for itself in the market by selling products from
international sporting brands such as Nike, Adidas, Puma and Umbro
at an affordable price. Pillutla says it is planning to open 12 to
14 new doors every year, with 80% of its expansion plans focused on
the entry- to mid-level concept. Although the retail industry has
become increasingly competitive, he notes that the companyâs
advantage in staying ahead of the pack is its core mission to stay
affordable.
2
âOur core purpose will keep us going for the next few years. As
long as we are able to communicate our core purpose properly to
consumers, I think they will keep coming back,â he says. Tapping
the bottom As consumers become a little more tight-fisted,
retailers have been trying to diversify into either the more
premium or niche markets to maintain margins and profitability.
Pillutla notes that unlike most emerging markets, the local retail
space has two very distinct segments: the high-end and entry-level
segments. âMost emerging markets have a very big middle-class
segment. It works like a typical pyramid, where the well-heeled
consumers make up the smaller segment at the top and the entry
level is much bigger. As the economy grows, the middle-class will
expand and other consumers will aspire to move up the pyramid.
âMalaysia is different in the sense that people are either at the
top end or at the entry level. Thereâs very little middle-class. So
brands and retailers who try to stay in the middle of the spectrum
donât do well because consumers who see a middle-class brand are
either willing to trade up or trade down. So you either have to be
at the upper-end or lower-end of the market, â he explains. Hence,
he believes that there is also money to be made at the bottom of
the pyramid. âPeople at the bottom of the pyramid are also
aspirational. They, too, want things and if you can make it
affordable for them, you can tap that market. Consumers are the
king. So we have to keep our brand focus and give them what they
want,â he adds. Although margins may be thinner at the entry-level,
Al-Ikhsan has a variety of retail concepts which can be pushed out
to meet the needs of the market it is in and grow its volume.
Pillutla says its Sports Warehouse brand, for example, which
focuses on entry-level consumers, is a concept that still has legs
to go, particularly in smaller towns. âWherever that has a
catchment of 50,000 people, we can do any one of our concepts. We
started the Warehouse this year and it has shown very strong
results so far. We can
3
see another 35 to 40 Sports Warehouse outlets over the next three
to five years. Our next position is to move down, deeper,â he says.
That said, he maintains that Al-Ikhsan also has enough variety of
products to cater to a wider range of consumers. âOur stores have
products from different brands. We can have prices for certain
products that go up to RM600. So while we make products affordable
to consumers, we are also able to sell them at a certain level of
prices if the brand can command that price. In that way, we can
cater to a wider range. âBut we always try to stay to our core
purpose, to stay affordable. We are about making Malaysia fit and
active since 1993 by making brands affordable to consumers. That is
our strength and our core purpose. It cannot go away.â Al-Ikhsan
was founded by Ali Hassan Mohd Hassan in 1993 in a small shop in
Holiday Plaza, Johor. His entrepreneurial pursuit had started
earlier on as a student in Universiti Teknologi Malaysia to fund
his studies. He sold trinkets and such and managed to graduate with
a diploma. When he started the business, he was diligent to ensure
that he maximised every opportunity to keep sales going. He built a
good rapport with his customers and kept his sports products
affordable. Ali Hassanâs success in growing Al-Ikhsan was obvious
when the retailer caught the eye of government-linked private
equity firm Ekuinas, which bought a 35% stake in the company in
2016. Ali Hassan and his wife still holds the remaining 65% of the
company and he has stayed on as its chairman. Pillutla thinks the
company is only halfway through âwhat we are really capable of
doingâ. As long as the sports industry continues to grow, Al-Ikhsan
will be able to grow in tandem. He adds that its retail concepts
are also applicable to any emerging market, making it easier for it
to expand overseas when the time is right.
4
On the horizon Over the next three years, the company will continue
to expand into tier-2 and -3 cities. It will also continue its
focus on the entry-level concept stores like the Sports Warehouse.
Another thing that the company will be paying close attention to in
the coming years is its private label. Pillutla hopes to make its
private label and licences more relevant to the masses as he views
this as a good channel for Al-Ikhsan to have a deeper engagement
with its consumers. âWe want to create products that consumers
want. I think our house brand can grow to be a significant brand
pillar for us, maybe making up to 30% of the brands we have,â he
says. With these strategies in place, the retailer is aiming to
keep its double-digit growth every year â a target that Pillutla
says is âabsolutely achievableâ. âThatâs the job of professional
CEOs like us. Thereâs a limit to what founders and entrepreneurs
can do for a company because the thing about professional CEOs is
that we donât think from our hearts. âWe see opportunities, we look
at our current capabilities and we think in terms of how we can
build that capability for future growth. We are a bit disconnected,
so we donât make decisions based on emotions. But that is not to
say that one is right and one is wrong. It is just a way of
working. âIn business, you need data and experience to take a very
informed action, so that youâll have stronger chances of success.
And we believe we have a formula here,â he says. âThe challenge for
us is more internal. We are no longer small. And we need to
continue to drive and align our people towards our mission. As long
as we understand our core, we can have market share,â he says.If
all goes well, the company is eyeing listing plans in two to three
yearsâ time. The companyâs three concepts â Al-Ikhsan, Football
Republic and Sneakers Street â are vital to promote sustainable
growth for its retail sports business in order to mitigate the
seasonal impact.
5
âOur three concepts are catered for entry to mid-level consumers
and up to high-end consumers. Football Republic is a specifically
designed for personalisation or customisation of footballâs boots
and attire, targeting professional amateur players or fansâ.
âSneakers Street category is a sports lifestyle concept that offers
affordability for sneakers and accessories to consumers,â he said.
Pillutla said the company aspires to have stability in its business
earnings with promising growth for long-term sustainability, while
adapting to the current market needs. âWe want to aggressively
expand our market reach, especially in East Malaysia and outside
the country with about eight stores are expected to be opened this
year. âFor long-term expansion plan, we target to open up to 30
stores by 2021,â he said, adding that this would allow the company
to reach about 145 Al-Ikhsan stores nationwide. Pillutla said the
company also plans to open 15 Sneakers Street stores in the next
three years, with initial four stores to be opened this year,
followed by additional five Football Republic stores in the future
from the current five stores. He said Al-Ikhsan is currently in the
discussion with various parties to expand its business in other
market in Southeast Asia region, while providing numerous choices
to consumers. âWe have âreasonableâ allocation for capital
expenditure (capex) as it will be financed internally. The cost of
each store will typically be depended on its size and location,â he
said, citing that it is important for the company to have
single-digit or lowest double-digit rent-to-sales ratio. Pillutla
said capex should not be extremely high as the company on its
self-sustaining mode to generate sustainable earnings, while
reducing its debt. The companyâs inventories is also important to
keep its earnings healthily to avoid inventories not age beyond
certain points. âWe will also embark on digital platform â Omni
Channel â to complement our existing retail stores. This allows
customers to choose and buy our products virtually through
6
mobile app or online platform. The initiative would also enhance
our efficiency and productivity, as it easily helps us to monitor
our inventories,â he said. "Our commitment is to keep Malaysia fit
and active by making sports affordable for all. We also need to
understand consumers well and must change ourselves based on what
consumers want,â he said in a media interview here recently.
Al-Ikhsan will launch a new e-commerce online platform (website)
next month, a move that will help the company become a global
player in the sports retail segment. âWe are ranked 64th largest
sports retailer in the world. Therefore, when consumers look at us,
they donât just perceive us as a Malaysian company but rather
benchmark us as a global player,â Pillutla said. âI donât think,
even our founder Tuan Haji Ali, thought that we could reach this
stage,â says Vach Pillutla, Chief Executive Officer of Al-Ikhsan
from his office at Taman Tun Dr Ismail. The company, with its
various concept outlets, is by far the largest sports retailer in
Malaysia, commanding over 20 percent market share in the sports
equipment, apparel and footwear segment. âTen million people have
walked through our doors every year. To put things into
perspective, almost one third of the Malaysian population visited
Al-Ikhsan stores.â He expects Al-Ikhsanâs e-commerce platform to
contribute about 5.0 per cent of the total sales over three years.
âIn general, the overall retail sector grows about 4.0 per cent to
5.0 per cent annually, while the sports retail around 8.0 per cent
to 9.0 per cent. âGlobally, most markets are likely to remain
stagnant but I think Malaysia continues to perform quite well in
sports retail,â he said. He also said Al-Ikhsan continued to learn
about consumers and offered products and services at prices
preferred by customers. âAs long as we continue to pursue it, we
are not worry about competitions. For the next three years, we
intend to open up to 14 stores annually in the Peninsular Malaysia
with
7
concepts including Football Republic and Sneakers Street, depending
on the market and catchment to match consumersâ demand,â he said.
He did not divulge further on how much capital the company would
invest, saying that it had sufficient money to fork out internally.
As stated earlier, Ekuiti Nasional Bhd (Ekuinas) acquired a 35 per
cent stake in Al-Ikhsan in July 2016 for RM68.6 million. Ekuinas
chief executive officer Syed Yasir Arafat Syed Abd Kadir said the
first two years since the partnership with Al-Ikhsan were about
stabilising the company, in particular improving its back-end
support. âWe need to ensure that we have strong back-end processes
before exploring growth. We focus on effective resource planning -
an inventory software system - as well as execute strategic
business plans, recruit the right talent and strengthen existing
brands under us,â he said. Syed Yasir Arafat said it was important
for the government-linked private equity fund manager to strengthen
Al-Ikhsanâs foundation and expand in certain areas, while offering
different products not only active brands but promoting in-house
products. âWe have about 30 brands under Al-Ikhsan. We employ
around 1,200 staff and command about 30 per cent local market share
in multi-retailer segment.â Syed Yasir added that since Ekuinas
invested in Al-Ikhsan, the former had managed to more than recoup
its investment. âFrom Ekuinasâ perspective, Al-Ikhsan has strong
liquidity and sufficient cashflow to grow, with good inventory
management. Hence, Al-Ikhsan doesnât require further capital
injection to expand further,â he added. Al-Ikhsan founder and
chairman Ali Hassan Mohd Hassan believes the sports retail business
was growing with abundance of opportunities locally. âWe are
investing about RM1mil in each new outlet, inclusive of renovation
and stocks.â Ali Hassan said strengthening the companyâs position
in the local sports goods retailing segment would discourage
foreign companies from taking over the domestic market.
8
He said it was important to stop these companies from expanding in
Malaysia, as local players should be given the opportunities. He
said prospects for sports goods in Malaysia were bright as the
goods sold here were the second cheapest in the world after the US.
Ali Hassan said by having a formidable presence in the urban and
rural areas, it would be almost impossible for foreign sports goods
retailers to gain a strong footing here. He said the company
catered to customers who were serious in sports and those who were
into sports fashion. He said Malaysians were brand conscious and
more customers were willing to spend money on branded items.
âPreviously, there was a huge pressure from the sports brand
principals as they demanded for growth based on the global trend.
âSimilarly, they expected growth from Al-Ikhsan in Malaysia due to
opportunities in sight. Hence, we decided to partner with Ekuinas
to support our future growth and become more competitive,â he said.
Through the partnership, Ali Hassan said Al-Ikhsan had undergone
due diligence exercise to evaluate the companyâs weaknesses and
strengthens. âEkuinas had helped us to find new team members, while
consolidating our stores and improving the back-end
processes.
9
In: Operations Management
TASK
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In the contemporary management environment, mergers and acquisitions are hot topics; particularly as mergers and acquisitions are among the most commonly used strategies for growth. The pitfalls of mergers are well known and well-studied in the management literature.
Yet, there are some fundamental challenges that organisations keep stumbling over. One of them is integration. Preoccupation with due diligence and political factors surrounding merger negotiations too often leaves a crucial piece in the merger puzzle left till it is too late â integration of cultures and structures and people. It is well known today that poor results from mergers can so often be put down to people issues.
In this major assessment you are asked to analyse the following case and answer the questions below using a business report format. Further detail on the format of the business report are provided below.
Questions
Using the knowledge that you have gained from the subject up to and including Topic 9, Managing people, answer the following questions.
Case study: Who goes, Who stays?
HBR CASE STUDY
The merger between two pharmaceutical companies generated headlines first-and then headaches. One reason: CEO Steve Lindell has two executives for every available slot. As the stock price drops and talented people head for the exits, he must quickly decide whom to keep and whom to let go. Pass the aspirin.
The merger announcement between DeWaal Pharmaceuticals and BioHealth Labs was front-page, top-of-the-hour news. Pictures of CEO Steve Lindell and chairman Kaspar van de Velde, beaming at each other like long-lost friends at a college reunion, had appeared in newspapers around the world. DeWaal, based in the Netherlands, was an established European drugmaker, and BioHealth, head-quartered just north of New York City, had in recent years become competitive at the highest tier of the market. Both companies made and sold a wide range of drugs, from over-the counter pain relievers to AIDS medications. The new mega company, DeWaal BioHealth, would reap the benefits of scale: it would consolidate plants and staff while having more products to push through its distribution channels. Global headquarters would be in New York, but European manufacturing and sales would continue to be directed from Rotterdam. The new company's combined revenues were projected to top $8 billion.
Now, two months later, the TV cameras had moved on to a new story, and the hard labor of integration loomed. Ever since the announcement, Steve had worked tirelessly on clearing the regulatory hurdles presented by the FTC and the European Commission. And he noted with a mixture of satisfaction and relief that all signs pointed toward approval in the near future.
Yet Steve knew that the anticipated victory would be just the beginning of the game. The real challenge would lie in bringing together two very different cultures as quickly and efficiently as possible. He had to get the new company moving, and the first hurdle-it looked more like a pole vault to Steve-was selecting the top layers of management. At the moment, there were some 120 people on two continents for about 65 senior-level jobs.
Steve drained his third cup of coffee of the morning and checked his watch. Already 11AM. He'd been at the office since 6:30 and in meetings for the past three hours. Now he had an hour to prepare for his meeting with Kaspar at one of New York's finest restaurants. Steve had suggested the company cafeteria, but Kaspar had cajoled him into making the drive to the city by invoking "the need to maintain a civilized life in this frantic world of ours." The meeting's agenda consisted of one item: deciding who would fill the high-level management posts.
The Exodus
As Steve gathered up the mass of papers he would need and stuffed them into his briefcase, there was a knock on his half-open door. Alison Whitney poked her head in and said, "Hey -- got a minute?"
Alison was BioHealth's director of sales and marketing. She had shot into that position a year ago, at age 33, after establishing herself as the company's best sales rep. She had an easy, bantering relationship with Steve and was known for having her finger on the organization's pulse.
"I'm just out the door. What's up?'
"Yeah, I know, I know. You're meeting with Kaspar - that's what I need to talk with you about. I'll keep it brief."
"Fire away."
"I just have to let you know, before you make any final decisions about people, that everyone, and I mean everyone, here at corporate is terrified. Right or wrong, they think Kaspar is calling the shots. We've already lost, what, five people? And I can tell you, without naming names, that I know of three or four others who are weighing serious offers right now. Like I said, I had to let you know."
This wasn't the first time Steve had heard that people were confused about who was in charge. The question had already been raised by a handful of Wall Street analysts and a Business Week reporter. The confusion puzzled and irritated Steve. He was, after all, the leader of the bigger organization and the new company's CEO -- end of story. True, Kaspar had lost none of the drive and charisma that had made him one of Europe's most respected CEOs, but he was 62 and widely presumed to be on the road to retirement. That's why he had agreed to the position of chairman, Steve figured. But Kaspar, with his ability to charm the media, seemed to be creating the perception that he had more say in key decisions facing the new company than Steve.
The two men had worked well together during the merger negotiations. They had carefully traded off the positions at the very top of the new organization. Kaspar had insisted on having his people lead HR, operations in Europe, and global marketing; Steve, in return, had held out for COO, CFO, and head of R&D. Overall, Steve had been happy with the horse trading. The reports of tension between the two were based only on rumors, but Steve knew rumors could sometimes become facts if they are not quickly dispelled. All this flashed through his mind as he faced Alison.
Steve exhaled a big rush of air. He already knew what Alison didn't: that DeWaal's Albert Schenk, based on his extensive knowledge of global markets, was going to take over as the new company's director of sales and marketing. Steve was planning to offer Alison a job as head of U.S. marketing, but he wasn't sure she'd take it. He hated the thought of losing her.
"Look, Alison, do me a favor. Try to calm people down a little. I can guarantee you that our best people will have jobs - I'll see to it one way or another. And remember: this deal is going to be rewarding financially to the people who stay-that includes you. So a little more patience is in order. Okay?"
After a pause, Alison quietly responded. "Sure. Okay. Well" She looked a little embarrassed. "Have a good lunch, and watch out for that third martini."
Steve, who rarely drank, forced a smile. With a short wave, Alison left, and Steve realized that his heart was pounding. Four more people about to leave? That was news he could have done without. Just this morning, he had learned that a leading brokerage was downgrading BioHealth's stock from buy to hold. Steve had watched nervously in the past two months as BioHealth's stock price dipped 20% once the initial euphoria over the deal wore off. He knew that part of the drop was attributable to a general softening of the market, but stories about difficulty with the integration process had certainly contributed. As the company's stock options became less valuable to his managers, could he really be so surprised that people were heading for the exits?
Steve picked up the phone and dialed Bruce Bollinger, who would accompany him into the city.
"Bruce, you ready to roll? Let's go."
Going Nowhere Fast
Bruce had been BioHealth's head of HR. It was widely known that Bruce wasn't exactly a workaholic, but in Steve's eyes he made up for his 9-to-5 mentality in other ways. Bruce and Steve went way back. They had worked together for years, and the two played golf together every chance they got. Bruce was known for his stand-up comedy routines at company functions and his good humor on the golf course, which he treated like a second office. More important, he wasn't afraid to give his boss tough messages when he thought Steve needed to hear them, and he had a way of cutting through the baloney at staff meetings. When Kaspar had insisted on naming Christian Meyer as the head of HR, Steve had reluctantly agreed to demote Bruce to director of corporate training.
As Steve walked out of his office, he heard Brace booming down the hall at him. "Did you see that Tiger pulled out another one? I watched all 18 holes. Unbelievable."
Steve waited for him to catch up and replied, "No, no, I missed it. These days, I'm not sure I'd recognize my clubs if they fell on my big toe."
"You've got to get out more" Bruce continued to analyze Tiger's round until they ducked their heads into the car.
As they drove along, at first rapidly and then haltingly in the stop-and-go traffic of Manhattan, Steve unburdened himself to Bruce about the tough staffing decisions that lay ahead.
"You know, I don't care what the investment bankers say, I like to go with my gut. I like to look people in the eye and find out what they've really got. And I'm not that impressed with a lot of the people from DeWaal. Somehow our guys just seem to get it, and I can't get a good read on the Dutch. All right, so eight of them have left us already. They don't want to move to New York. They're fearful. Alison tells me that our people are too. I mean, I knew the headhunters would be hovering, but I can't believe they got to Sandy Allen. I always thought she would take my job someday, and what really gets me is that I negotiated hard to get the CFO job for her. Anyway, I'm sympathetic to every someone's fears and I'm trying to be as objective as possible, but ... Brace, help me out here"
Bruce looked up from the interview notes and résumés he'd been flipping through. "I think this meeting today is crucial" he said. "We've got to get resolution on our key people. Don't worry, I'll take on Meyer."
Steve hated to admit it, but Christian Meyer had become a bit of a thorn in his side. He wanted to do a lot of testing of the executives-for IQ, for emotional intelligence, for who knew what else. And he constantly talked about the fairness of the process. Steve's view was that fairness was a noble goal - and one they would strive for - but he had to look at the big picture, And speed, as the market
"We need to get on with this even if we don't make the perfect choices right now, we can fix things later. Meanwhile, we've got to consolidate where we can and get the reps up to speed on all our products."
As they pulled up to the restaurant, Bruce got in a final word. "One more thing: if I see Kaspar working his charms on you and getting the upper hand, I'll signal you by knocking over my beer."
Trouble Abroad
They had reserved a small private room at the restaurant. Steve and Bruce were on time; Kaspar and Christian, staying at nearby hotel, walked in 15 minutes later. After an exchange of pleasantries, the four sat down and ordered.
Steve, remembering what he'd been told about European corporate etiquette, held back form jumping straight to business. He reminded himself that they had the rest of the afternoon. Still, unlike his counterpart, he wasn't much for small talk -- and Kaspar's discourse ran from the fate of the euro to Quentin Tarantino, from Afro-Cuban music to the problems of reaching the world's poorest people with desperately needed medications.
That last topic, in a roundabout way, finally got them to the task at hand as the coffee arrived. Both DeWaal and BioHealth had several foreign plants, and Steve wanted to nail down which ones would remain open and who would run them.
Steve's plan for Asia went like this: they would close the DeWaal plant in Indonesia, which was redundant, and keep the BioHealth plant in Shanghai. Steve believed it was imperative to maintain a presence in China, and he was prepared to offer someone from DeWaal the number two spot there to sweeten the pill.
Meanwhile, the Dutch company had an operation in Bangalore, India, and the U.S. company had one in Bombay. The Bangalore plant was extremely efficient, and Steve was prepared-in the interests of fairness and despite his fear of seeing the headline "Lindell Caves to van de Velde (Again)" -- to close down the Bombay operation, The question was who to put in charge. The Dutch fellow -- what was his name, Peter Krug? -- had headed up the Bangalore operations for three years, and his resume was impressive. But Steve had a candidate too. Vijay Naipaul, who had been in the United States the past ten years since coming to business school from Delhi, was an ambitious and talented executive. If not for the merger, Steve would have put him in charge of operations at the Bombay plant. Being in charge of India would be his dream job, and Steve had been told by his COO that Vijay might walk if he get the job. Steve hoed that Kaspar wasn't too attached to Krug.
He quickly laid out his thoughts on Asia, hoping to move on to the touchy question of R&D management.
Kaspar looked up from his espresso and broke into a broad grin. "Oh dear, Steve, what are you saying. You know they will have my head in Rotterdam if we close the Indonesia plant-ties to the former colonies and all that. And you know, there are outstanding people running that plant. Really and truly! As for India, well, yes, by all means close the plant, but can we decide so quickly who will run the remaining one? Christian tells me we have a ways to go in the process of deciding such matters -- isn't that so, Christian?"
Steve jumped in . "Well, I'm sure we could find another spot for Krug. Perhaps if he and Naipaul were co-leaders of the Bombay plant...."
He was interrupted by the sound of a beer bottle falling to the floor.
In: Operations Management
1. Please list and discuss the roles played by the concept of new technology as it relates to the decision to build factory #5: Even if sales volume is flat, profits are low, and interest rates are high, why would a firm desire to build factory #5, at least in theory?
2. What is residential construction and sales volume, exactly? How many housing units are built, and sold, in this country in a typical year (before March, 2020)?
3. What are six of the occupations that are involved in this sector of the economy? That is, when there is a 20% drop in this activity, residential construction and sales volume, which workers lose their jobs? Why?
4. What could our government do to help cause a rise in residential construction and sales volume in our economy? Please list and discuss three actions that our government could take, at least in theory. What are the forces that may cause a rise or a drop in this area of the economy in the next 12 to 24 months?
***those are the lecture you can follow:
+ New Plant and Equipment Construction, Residential Construction and Sales Volume: One of the greatest factors influencing the volume of factory (new plant and equipment) construction is the R&D (research and development) of new technology. Of course, WE HAVE TO BUILD THE NEW FACTORY! In our factory #5 example, the R&D AND CONSTRUCTION of Factory #5 may result in a. a dramatic drop in the cost per unit (the cost per pair of shoes, in our hypothetical) and/or b. The introduction of a product that isâŠ.. NEW! And IMPROVED!, thus causing a rise in Demand, where, if it captures the imagination of the consumer, we may RAISE THE PRICE and increase profits by a great amount. Letâs say that our price per pair currently is $30 per pair, and our cost per pair currently is $27, for a profit of $3 per pair. If a new method of mass producing shoes that saves on labor costs is âinventedâ, for lack of a better word, we will want and need to build this new factory. Letâs say that Factory #5 lowers the cost per pair to $21 by using less than half of the workers used by Factory #4. We will build this new factory! $30 per pair minus $21 per pair yields a profit of $9 per pair!!!! BUT WE MUST SELL THOSE NEW SHOES!!! If our rivals are building this factory, and we do notâŠ. We will die. (We have rivals) - VERY few firms are true monopolies. Factory #5 may mass produce TWO million pairs of shoes compared to #4 with one million pairs in yearly output. We may build factory #5, then shut down factory #1⊠thus resulting in FEWER WORKERS ON OUR PAYROLL⊠SAD BUT TRUEâŠ..Our sales could be dropping along with our profits. Interest rates may rise. We will still need to build that factory. Especially if the product mass produced by this new factory causes a rise in Demand. YET THERE IS A FINITE SUPPLY OF LOANABLE FUNDS AND EQUITY FINANCING available, thus, we have a tragedy: some firms are doing so well that they wish to expand---but are denied financing. What is the proper role of the government? The Obama Admin. lent money directly to Tesla in order for them to expand in Fremont. This may be called âindustrial policyâ. It worked out well. If not, Obama may have been a one term President, even though he was an excellent leader by any metric. Yet the government could be criticized for âplaying favoritesâ since THERE IS A FINITE SUPPLY OF FUNDING that the government may access. If the ânewâ Mercedes Benz assembly plant built in Alabama (yes, this is on U.S. soil) represented a new and improved SUV, then why did this German firm build the plant here? On U.S. soil? Cheaper labor (the U.S. workers make less and have fewer benefits than their German counterparts),---incredible, but trueâŠthe firm will enjoy lower distribution costs (all those rich people on the east coast of the U.S. will buy our cars), and it is easier to ship them from Alabama than from Germany, while avoiding any possible hikes in tariffs the Trump Admin may levy NOW OR LATER---- do you trust Trump? Are you feeling lucky today? How about the next 20 years? I mean, your buyers are here on the East Coast, and Alabama offered HUGE tax incentives to Daimler (Mercedes Benz) to build the plant in Alabama instead of South Carolina, home to a BMW plant. Alabama had to âoutbidâ South Carolina for the new factory. Also, the German firm avoids any and all possible labor disruptions by dockworkers in the U.S.---now, and for the next 20 years. We do not care if the firmâs headquarters are in Germany. If they build the factory on U.S. soil, then the expenditure is part of the Total Spending on U.S. goods and services = C+ I+ G+(X-M) equation. More on this later! âResidential Construction volume and Residential Sales volumeâ is not just some area of the economy---the Total Spending equationâthat we have to study. It is WHERE WE LIVE. It is at the CENTER of OUR NUMBER ONE PROBLEM AS A SOCIETY: LACK OF âAFFORDABLEâ HOUSING UNITS. As you may know, government regulations play a huge role is this area of Total Spending. We start with the basic facts: There is a certain volume of new housing units built, about 1.1 million units per year in America (historical average), and total housing units SOLD each year (about 5 million units sold per year, historical average). Fine. Dry. What is the human element? WHO ARE THE SEVEN MILLION PEOPLE (more or less, in a normal year) who have jobs related to the building and the selling of residential units? On the building side, we have home building companies, who buy land, hire workers to assemble parts: lumber, tiles, windows, window coverings, dry wall, plumbing, electrical supplies, cement, dozens of other materials. These parts are made by workers---very labor intensive in many cases. On the âsellingâ side, we have realtors who represent the buyers, realtors who rep the sellers (often a 100% commission job), title company workers, loan officers at a bank who may be paid a wage plus a bonus IFâŠ.IF and when a deal goes through, termite inspectors, building inspectors, and many many others. THIS IS AN INCREDIBLY LABOR INTENSIVE INDUSTRY---and almost no other industry is more dependent upon the supply of loanable funds. (Capital markets) What forces are at work that may cause a 20% rise, or (possibly) a 50% fall in the volume of residential construction and residential sales activity? STAY TUNED!
+ Residential Construction Volume and Sales Volume: Forces that may cause a rise or fall: Okay! So we have established that roughly 1.1 million housing units are built per year in a normal year (historical average), from mansions to âADUsââ(granny flats, in-law apts., many other names)âADUs are often built âŠ.. âextralegallyâ --- I love that phrase! ---without the proper permitsâŠ. And roughly 5 million housing units will be SOLD in a normal year----NOT THIS YEAR---more on that later----. WHAT ARE THE FORCES THAT MAY CAUSE OR INFLUENCE A RISE OR A FALL IN THESE BUSINESS SPENDING CATEGORIES? Okay: home building companies will buy land, employ labor, but LOTS of raw materials (plumbing, electrical, windows, window coverings, drywall, nails, dozens of other items) and use plant and equipment to BUILD HOMES AND SELL THEM FOR A PROFIT. The average house in the U.S. sold for about $350,000 last month. (before the pandemic hit the U.S. on a scale that will change spending patterns)âŠ. Now, some homes in the South and the Midwest may sell for about $250,000---Grand Rapids, Michigan comes to mind------A small townhome in the Canoas Garden area of San Jose may sell for $700,000 (my realtor friend next door just listed one---heâll get 2.5% of the sale as a commission---orâheâll get-----nothing (if it does not sell)---he lives on 100% commission. I couldnât do it. So letâs say a home building company in the central valley will build a home for $400,000 and sell it for $440,000âthis is just an example. The company building the homes cannot simply build 8 homes, then 8 more, then 8 moreâŠ.. without selling some. With a time lag that may be variable, RESIDENTIAL CONSTRUCTION VOLUME IS TIED TO RESIDENTAIL SALES VOLUME! If home sales volume drops in March, macroeconomic theory, and common sense, will lead one to conclude that residential construction volume will drop 3 months or six months later. Thus, the forces that cause a rise or fall in SALES volume will also be the forces that cause a rise or fall in construction volumeâwith, in theory, a time lag. Also, in order to build a home, a home builder must apply for building permits. Letâs say that all of a sudden the volume of PERMIT APPLICATIONS tanks---drops in halfâŠ. New building volume will definitely drop----with a time lag. This volume is sometimes called a âleading economic indicatorâ. Okay: what causes a rise or fall in home buying (and selling ) volume? 1. âTHE GENERAL STATE OF THE ECONOMYâ. Letâs say that 5 million familiesâcouples, single people, families---letâs say they are couples---are THINKING about buying a condo, (they may or may not)âŠ.which means MOVING out of the situation they live in nowâŠ.. (stressfulâŠâŠmany couples do fine together---until they buy a condo togetherâŠâŠ)---perhaps they are living in an apartment and paying $2800 a month in rent---the mortgage on the new home or condo will be a higher amount under our model. WHAT WILL MAKE THEM GIVE THEMSELVES THE âGREEN LIGHTâ?? In theory, their income must be HIGHâŠ. And RISINGâŠ. And EXPECTED TO RISE FURTHER IN THE FUTURE. Letâs say that a certain percentage of these couples, wherever they live in the U.S., will be BARELY ABLE to make the monthly payments---the mortgage---on the home loan. IN THEORY, they must have GREAT EXPECTATIONS regarding their future income. If they---either one of them, loses their jobâŠ. Or believe they MAY lose their jobâŠ. Or suffers a drop in hours at work⊠or BELIEVE that they may soon see a drop in hours at workâŠ. Then they WILL NOT WANT TO TRY TO BUY A HOUSE. Imagine how many people out there were considering buying a house or condo just a month ago⊠and now⊠no wayâŠâŠ Okay: IF the couple gives themselves the green light (one party is going to be more excited about the plan than the other party, most likely)âŠâŠâŠâŠâŠâŠâŠ.. thenâŠâŠâŠâŠâŠâŠâŠâŠâŠ they must get FINANCING! Letâs do a Midwest example then multiply by 3x for a townhome in San Jose: Letâs say a house costs $250K ($250,000) in Grand Rapids, Michigan. The couple has $50,000 to put down, which is a 20% down payment, which is considered the âhistoric averageâ required down payment (a family can buy a house with less money down in some cases---also, each deal is different---also, the government is very much involved in this process, especially for military veterans). A $250,000 house with $50,000 down means this couple must borrow $200,000 from the financial and capital marketsâthe yearly loan pool. With a historic average 5% interest rate on the loan, including points and fees, this couple will have monthly mortgage payments of about $1200 a month (historic average for this house)âŠ(3x all these numbers for that condo in San Jose). Letâs say that the lending institution---it can be a bank or some other financial entity--- requires that this couple DEMONSTRATE a gross income level of AT LEAST ---AT LEAST---THREE TIMES the monthly mortgage payment---remember, there are other costs associated with living in that house: insurance, property tax and maintenance/repair costs---the roof and the sewer line are the BIG ones. If this couple earns their income by dealing pot on the black market, they may not get loan approval from the bank---which I find interesting----the bank does the ULTIMATE âcredit checkâ on this couple. New mortgage firms make it seem easy and âfunâ to apply for a home loan. It is not. This couple, under this model (x3 for San Jose) must earn AT LEAST 3x $1200 a month or at least $3600 a month or about $43,000 a year, (sounds low, I know, I know,,,) to qualify for the loan. THIS IS JUST A MODELâŠ..Letâs say that all of a sudden interest rates (r) rise from 5% to 7 Âœ % ----owing to the Fed pursuing âcontractionary monetary policyâ -----(they are doing the OPPOSITE right now, more on this later). The couple, in theory now have monthly payments of about $1800 a month, forcing them to show to a lender gross income of 3x 1800= $5400 a month, or about $63,000 a year, higher than the national median level of income. MANY MANY FAMILIES IN THE U.S. earn over $43,000 a year but under $65,000 a year. A HUGE PERCENTAGE OF BUYERS----OR POTENTIAL BUYERS ---- WHO WOULD HAVE QUALIFIED AT 5% interest now CANNOT QUALIFY at 7 1/2 %. This is an inexact science, but there is NO DOUBT that there would be a huge drop in residential sales volume, immediately, and with a time lag of 3 to 6 to 9 to 12 months, a huge drop in home BUILDING volume as well. So we would see a huge wave of layoffs in ONE sector, followed by a huge wave of layoffs in ANOTHER sector. SO MANY roofers lost their jobs in the 2008 to 2009 recessionâŠ.that the industry really never fully recovered, according to some studies. These two industries are VERY dependent on the supply of loanable funds, and interest rates. OTHER FACTORS: TAX POLICY: this couple MAY now âdeductâ their monthly mortgage payments and property taxes from their declared income for FIT and SIT purposesâat least in theory. Okay⊠it is complicated⊠they have to make just the ârightâ amount of money for it to work, but at least some couples in some parts of the U.S. can subtract the mortgage and the property tax from their declared income for FIT and SIT purposes.. Consult you tax professional! Here is the model: A couple in San Jose making, say, $160,000 MAY be able to deduct some or most of their mortgage payments and their property tax payments from their income------if they are in the 22% FIT bracket and the 9.3 or 10.23% SIT bracket, then âthe government will be paying part of their mortgage for themâ---in theory. It is complicated. There may be a âtax incentiveâ for this couple to BUY a condo in san jose instead of renting that same condo in San jose. Why would this couple want to buy a condo in the first place? Why not keep renting? Obviously, if you rent, your landlord can evict you at any time (in theory) and a landlord can in theory conduct a yearly inspection of the property. My friend would call me every year to help him move all of his pot plants because the landlord was coming by. True story. Every year, there were more pot plants. Two of the dumbest things I have ever done: buying a truck⊠and telling my friends that I had a truckâŠ.ANOTHER FACTOR: LOCAL GOVERNMENT REGULATIONS! (G REGS) Wow, has this issue been in the news lately! If you want to build a housing unit on YOUR OWN land, you need a PERMIT from the governmentâpossibly several governmental entities in factâŠ. A homeowner needs a permit to convert her garage into an âaccessory dwelling unitâ---- AND MANY GOVERNMENT ENTITES ARE SAYING NO! Many local governments are very anti growth: Cupertino, Palo Alto, Santa Cruz--- there is a huge battle: our governor states that we need 3.5 million new housing units in our stateâŠ. But local authorities are blocking any huge wave of new construction. In order to comply with GOVERNMENT REGULATIONS, a home builder must spend TIME and MONEY---letâs say that 30 years ago it would cost $10,000 and six months to apply for and get approval to buildâno lumber, no nails, just approval. Letâs say that now it can cost two years and WELL OVER $100,000. PER UNIT, in some citiesâŠ.Over a 30 year time span, in theory, We will see a drop in the volume of residential construction. Another factor: The DEBT and THE DEFICIT: EVEN BEFORE THE PANDEMIC our government on the federal level was borrowing about $1,000 Billion a year form the yearly loan pool, with estimates of it rising to about $1300 Billion a year after this year---now it will be MUCH HIGHER THAN THAT----BUT FOR THE RIGHT REASONS----OUR GOVERNMENT MUST HELP ALL THE PEOPLE WHO HAVE LOST THEIR JOBS. NOW. RIGHT NOW. The DEFICIT--- THE AMOUNT OF MONEY OUR GOVERNMENT BORROWS FROM THE LOAN POOL--- is high, and rising. âCrowding Outâ is the concept that SOME of that loan money that our G is borrowing would have gone to fund residential construction. In other words, FEWER HOUSING UNITS ARE BUILT EACH YEAR EVERY YEAR since about 1983 owing to the fact that our government has been borrowing âtoo much moneyâ from the loan pool. It will be getting worse from now on---the government will be borrowing even more each year, and the debt will rise at a faster pace---MUCH MUCH MORE ON THIS LATER. Finally, there are âCHANGES IN OUR CULTUREâ: a person, 26 or 27 or 28 years old, might be âin the marketâ to buy a condo a generation ago. Now, she might have much better ways to spend her money. People in that age group are delaying marriage, delaying family formation, and often delaying buying a condo EVEN THOUGH THEY HAVE THE MONEY. This is their right, of course. But it can help explain, in theory, very slowly, a long term drop in volume in housing starts and housing sales. Buying a house at age 30 and making that last mortgage payment at age 60âor earlier----used to be called âThe American Dreamâ. Now, for many Americans, the dream is out of reach.
In: Economics
Carilion Clinic
Case History/Background
Nestled in the Commonwealth of Virginia between Salem and Vinton is the city of Roanoke, whose population was approximately 98,000 in 2010. The metropolitan area population was about 309,000. Bisected by the Roanoke River and circled by the Blue Ridge Mountain Parkway, Roanoke is the commercial and cultural hub of western Virginia and southern West Virginia.
The community that became Roanoke was established in 1852. Early economic development of Roanoke resulted from its importance as the junction point for the Shenandoah Valley Railroad and the Norfolk and Western Railway. These railroads were essential for transporting coal from western Virginia and West Virginia. Roanokeâs service area includes a regional report, shopping malls, a regional hub for United Parcel Service, and manufacturing plants for General Electric, Yokohama tires, and Dynax, a maker of friction-based automobile parts.
Carilion Clinic
Carilion Clinic employs almost 12% of Roanokeâs population. The clinic includes 9 freestanding hospitals, 7 urgent care centers, and 220 (and increasing) practice centers, and it employs over 650 physicians in more than 70 specialties. The clinic has 1,026 licensed beds, not including 60 neonatal intensive care unit beds. The clinic had 48,659 admissions in fiscal year 2014-15.
The clinicâs joint ventures and related companies include the following:
Carilion Clinic Physicians, LLC (real estate holding company)
Carilion Emergency Services, Inc.
Carilion Behavioral Health, Inc.
In March 2010, the same month and year the Affordable Care Act became law, the clinic was ordered by the Federal Trade Commission to divest itself of an outpatient surgical center and an imaging center. Both had been acquired as it sought to re-create âThe Mayo Clinicâ medical delivery model.
Led by Edward G. Murphy, M.D., from 1998 to 2011, Carilion Health System became Carilion Clinic, a vertically integrated health-care system. During Murphyâs tenure the system expanded to include graduate and undergraduate medical education programs, a school of medicine (through a partnership with Virginia Polytechnic Institute and State University Virginia Tech), and, perhaps most impressively, Carilion established an accountable care organization in partnership with Aetna insurance company.
Dr. Murphyâs total compensation was almost $2.3 million in 2007. Nancy Agee, the clinicâs chief operating officer at the time, earned the next highest salary of about $800,000. When Murphy resigned in 2011, Ms. Agee was promoted to president and CEO. In fiscal 2014, Carilion Clinic net revenue was $1.5 million. Ageeâs salary was $1.9 million.
CONTROVERSY IN ROANOKE
Despite its philanthropic mission and positive effect on Roanoke, Carilion Clinic has not always enjoyed a good relationship with its community.
In May 1988, the U.S. Justice Departmentâs Antitrust Division sought to prevent the merger of Roanokeâs two hospitals: Memorial Roanoke Hospital and Community Hospital of Roanoke Valley. The lawsuit sought to block the merger because of the monopoly it alleged would result. Less than one year after the suit was filed, the Fourth Circuit U.S. Court of Appeals found for defendants Memorial Roanoke Hospital and Community Hospital of Roanoke Valley.
The merger between defendant hospitals would not constitute an unreasonable restraint of trade under the Sherman Act $1. The merger would strengthen the competition between the hospitals in the area because defendant hospitals could offer more competitive prices and services.
In the two appeals that followed, courts found for defendant hospitals, which then merged and were named Carilion Health System. The decision provided legal basis for what is now the Carilion Clinic.
IN A MARKET: WHAT CONSTITUTES A MONOPOLY?
A monopoly occurs when one or more persons or a company dominate an economic market. This market domination results in the potential to exploit or suppresses those in the market or those trying to enter it (supplier, provider, or consumer).
During the 19th century, the U.S. government began prosecuting monopolies under the common law as âmarket interference offensesâ to block suppliers from raising prices. At the time, companies sometimes sought to but all supplies of a certain material or product in an area, a practice known as âcornering the marketâ.
In 1887, Congress passed the Interstate Commerce Act in response to railway companiesâ monopolistic practices in small, local markets. This legislation protected small farmers who were being charged excessive rates to transport their products. Congress addressed monopolistic practices further by passing the Sherman Antitrust Act of 1890, which limited anticompetitive practices of businesses. The act blocked transfer of stock shares to trustees in exchange for a certificate entitling them to some of the earnings. The Sherman Act was the basis for the Clayton Antitrust Act of 1914, the Federal Trade Commission Act of 1914, and the Robinson-Patman Act of 1936, which replaced the Clayton Act.
Antitrust or competition laws address three main issues:
Prohibit agreements or practices that restrict free trade and competition among business entities.
Ban abusive behavior by a firm dominating a marker, or anticompetitive practices that tend to lead to such a dominant position.
Supervise the mergers and acquisitions of large corporations, including some joint ventures.
The Herfindahl-Hirschman Index (HHI)helps implement these laws by providing a mathematical method to determine market âdensityâ, or the concentration of the market. Antitrust laws and methods of calculating market density, such as HHI, are imperfect and can leave gaps that may be exploited.
Since its establishment, the mission of the Federal Trade Commission has remained largely unchanged. Laws affecting private enterprise and government agencies have not. It is possible this mal juxtaposition underlies many of the difficulties in the healthcare industry.
VERTICAL INTEGRATION: THE MAYO CLINIC MODEL
The Mayo Clinic is the leading example of vertical integration in the delivery of healthcare in the United States. Founded in Rochester, Minnesota, in 1863, the Mayo Clinic began as the medical practice of William Worrall Mayo and his two sons, who were also physicians. It grew to include a comprehensive array of specialties. Mayo developed different levels of care across the health services continuum. The result was a vertically integrated health system. Mayo physicians are salaried at market levels, and they control the management structure.
Mayo Clinic is headquartered in Rochester, Minnesota; it has satellite clinics elsewhere in the United States. In addition, Mayo and various medical centers worldwide have consulting and referral relationships. Mayo provides excellence and dedication in delivery of services with a constant, and self-admittedly stubborn, commitment to core values, which include that the needs of the patient come first, the integration of teamwork, efficiency, and mission over profit.
Mayo has been long recognized for high performance, research and innovation. It has ranked at or near the top of âHonor Rollâ hospitals through the history of U.S. News and World Reportâs best-hospital rankings. In 2015 - 2016, Mayo clinic had more number one rankings than any U.S. hospital or system. Eight specialties ranked number one: diabetes and endocrinology, gastroenterology and gastrointestinal surgery, geriatrics, gynecology, nephrology, neurology and neurosurgery, pulmonology, and urology.
FORESHADOWING A MAYO CLINIC CLONE
Even before Murphy took the helm in 2001, Carilion Health System actions had stirred significant, but manageable, controversy in the community. Much of the controversy resulted from the antitrust case in 1988. After the court ruled that the merger did not violate federal law because it posted no threat of monopoly, the hospital continued its previous work in the community.
After becoming CEO, Murphy began to vertically integrate the Carilion Health System. His formal plan was presented in fall 2006. Part of evolving to a Mayo-style organization included acquiring physician practices in the community; some were closed after acquisition.
WHO IS EDWARD G. MURPHY, M.D.?
Edward. G. Murphy earned his BS from the University of Albany, New York, and his medical degree (with honors) from Harvard University Medical School. Although he never practiced medicine. Murphy was a clinical professor at the University of Albany School of Public Health and an adjunct assistant professor at Rensselaer Polytechnic Institute School of Management. Before leaving New York state he was also a member of the New York State Hospital Review and Planning Council, and he served on its executive committee as the vice chair of the fiscal policy council.
From 1989 to 1991, Murphy served as the vice president of clinical services at Leonard Hospital, a 143-bed facility north of Albany, New York. In 1991, he was promoted to president and CEO of Leonard Hospital until it merged with St. Mary Hospital fo form Seton Health system in 1994. Murphy became president and CEO of that new health system and stayed with Seton until 1998, when he relocated to Roanoke to head Carilion Health System.
During his tenure at Carilion Clinic, Murphy managed the growth of that two-hospital health system into a vertically integrated model of healthcare delivery anchored by a 500-physician specialty group practice that included nine not-for-profit hospitals, undergraduate medical programs, an array of tertiary referral services, and a multistate laboratory service. In 2007, Murphy announced plans for the Virginia Tech Carilion School of Medicine, which opened in 2010. In 2010, Murphy was paid $2.27 million ($1.37 million in salary and $900,000 in benefits).
Murphyâs other roles in the Roanoke community included memberships on the boards of Healthcare Professionals Insurance Company and Trust; Luna Innovations, Inc; and Hometown Bank. He is past chair of the Art Museum of Western Virginia. He also served in an influential position with the council on Virginiaâs Future, which works to frame the growth and progress of the state, including businesses, people, and the health of the population.
Murphy left Carilion to become chairman of Sound Physicians, a national provider of Intensivist and hospitalist services. In 2012, he became the operating officer of Radius Ventures, a venture capital firm that invests in health-related companies.
VERTICAL INTEGRATION: BECOMING A âCLINICâ
Murphy was always clear about his plans for Carilion Health System. In an August 2006 interview, âRight now...our core business is hospital services. In the new model, the core business will be physician services; the hospital will become ancillary. In a 2007 interview for Health Leaders Magazine, Murphy explained, âIâve been enamored of this model of healthcare delivery for a long time.â
In Fall 2006, Murphy, his staff, and the leadership board of Carilion Health System announced their plan to create a new model for Carilion management characterized by teamwork and salaried physicians and other caregivers focused on patients across the spectrum of care. Murphy explained:
The essence of the clinic model is that hospitals stop becoming independent businesses and start becoming ancillary services to the physician practiceâŠ.If hospitals eventually want to provide better and more cost-effective healthcare, itâs a necessary shift.
The transformation was planned for seven years with an 18-month phase -in of its new name, Carilion clinic. Plans for Carilion Clinic included a 50-50 partnership with Virginia Tech University in Blacksburg, Virginia, to establish a private, not-for-profit clinical research institute and a new medical school. Further, from 2007 to 2012 Carilion clinic would add four or five fellowships for physicians to support its mission.
Ground was broken for the much-anticipated university in early 2008. On July 20, 2009, the Virginia State Council for Higher Education approved the Virginia Tech Carilion School of Medicine as a postsecondary institution. Itâs first class matriculated in fall 2010.
THE WALL STREET JOURNAL EXPOSE
Usually, an organization is pleased if the Wall street Journal publishes an article about it. That is, of course, unless the story ignites a firestorm that leads to separate citizen and physician coalitions working against the organization and raises the specter of a word from Carilion Clinicâs prehistory: monopoly.
âNonprofit Hospitals Flex Pricing Power. In Roanoke, Va., Carilionâs Fees Exceed Those of Competitors: The $4,727 Colonoscopyâ was published on the front page of the Wall Street Journal August 28, 2008. The author, John Carreyrou, explored Carilionâs history, including the 1989 antitrust case, its expandingâmarket clout,â and the strides toward its goal of vertical integration. The article suggested that some of the means used were questionable.
Carreyrou asserted that skyrocketing healthcare costs in Roanoke were partially caused by, or possibly even led by, Carilion Clinic.
In a press release, Carilion Clinic denied monopolistic practices or exploitative pricing and claimed it faced robust competition from Lewis-Gale Medical Center located in nearby Salem, Virginia. Carilion Clinic defended its pricing practices by noting it must cross-subsidize emergency departments and care for the uninsured.
Unsettling to some, however, was Carilionâs practice of suing patients for unpaid medical bills. After Carilion obtains a court judgement, a lien is placed against the patientâs home. A lien on real property puts a âcloudâ on the title, which prevents the owner from conveying the property with a clear title until the lien has been satisfied. Responding in the Wall street Journal, Murphy stated,
Carilion only sues patients and places liens on their homes if it believes they have the ability to pay ⊠If youâre asking me if itâs right in a right-and-wrong sense, itâs not...But Carilion cannot be blamed for the countryâs âbrokenâ healthcare system.
Murphy asserted that Carilion efforts to protect its financial interests meet legal requirements, but may be morally flawed. This position appears inconsistent with Carilionâs mission that âPatient Care Comes First.â
WHERE WERE THE LOCAL MEDIA?
As reported by Carreyrou, Carilion Clinic complained several times to editors of the Roanoke Times regarding reporter Jeff Sturgeonâs coverage of the system. Shortly after the complaints, and mainly in response to a May 2008 article by Sturgeon, Carilion greatly reduced advertising in the Roanoke Times. About the same time, Sturgeon, the paperâs longtime health issues writer, was reassigned.
Even after Sturgeonâs reassignment, Carilion continued to be frontpage news in the Roanoke Times. Reporter Sarah Bruyn Jones covered community reaction to the Wall Street Journal article and the impetus it gave to local coalitions. Her articles included the following: âCarilion Critics Draw Hundreds to Meetingâ (September 2008); âFed Agency Looks into Carilion Purchaseâ (September 2008); âCarilion Footprint Expands in Dealâ (August 2008); and âCarilion to Buy Cardiology Practiceâ (August 2008). Joneâs reporting put Carilion practices at the forefront for Roanokeâs citizens, but, as noted by Carreyrou, Carilion growth seemed unstoppable.
THE BACKLASH
The August 2008 Wall Street Journal article resulted in a community uproar and fueled physician'sâ efforts to air their concerns about Carilion, including its anti competitive actions and unfair pricing, and their desire to have open referrals for patients from outside Carilionâs health network. Citizen and physician coalitions met in hotel conference rooms and community centers to discuss the âunfair practices and behaviorsâ ifof Carilion Clinic. One, the citizens Coalition for Responsible Healthcare, sponsored a petition that read as follows:
To Dr. Murphy and the Carilion Health System Board of Directors:
Please reconsider your Carilion Clinic plans. I want to keep my right to choose my doctor, even if he or she is an independent physician. Please rethink spending $100 million of my communityâs money on a Clinic model that could ruin our hospitals! Monopolies are never good for healthcare.
The Coalitionâs website offered copies of the Wall Street Journal article, video recordings of their meetings, information about a new forum program, and membership form for those who wished to join their efforts.
The citizen coalitions stated they intended to focus on the negative impact of Carilionâs transformation to a physician-led clinic that they asserted will increase costs and drive out many local physicians. Murphyâs plan was to bring into Carilion as many physicians as possible; all of whom will be salaried. The concerns of citizen coalitions stemmed from the scope of the effort, which resulted in closure or sale of many physician practices. Unaffiliated physicians asserted they could not compete. Further, Carilionâs system of internal referrals, added to the purchase of existing practices, gave many specialists no choice but to leave, or stay and fight.
Despite the controversy, Carilion has shown no signs of slowing: it has stayed the course outlined in Fall 2006.
CARILIONâS RESPONSE
On August 28, 2008, less than 24 hours after publication of Carreyrouâs Wall Street Journal article, Carilion responded. Statements published in newspapers and posted on Carilionâs website, as well as press releases, stated the allegations and conclusions drawn from them were misleading and misinformed.
In response, Carilion directed readersâ attention to the Virginia Hospital and Health care Association PricePoint Website. It showed that Carilionâs prices are comparable to surrounding hospitals and are generally lower than its closest competitor, Lewis-Gale Medical center in neighboring Salem, Virginia. To support their position on pricing,Carilion stated âMedical care in hospitals is more expensive ⊠having staff and technology at the ready has its costs. Also mentioned was Carilionâs Lifeguard helicopter, which is subsidized service. Carilion provided $42 million in charity care in 2007 and an additional $25 million in free care (bad debt written off), thus illustrating its dedication and support of its service area. Carilion supports research and education substantial resource commitments that add major costs to the organization and provide subsidize services tiot the community.
In explaining the policy to sue patients, Carilion stated that efforts are made to qualify patients for public programs, as needed. Further, Carilion said only âa small fraction of the nearly 2 millionâ patient billings each year go to court.
Court filings are a final resort, and we try to be flexible. If the judgement includes a lien on an individualâs property, we do not foreclose on the lien. The lien is satisfied if and when the property is sold.
In response to concerns about its internal referral practice, Carilion stated that referrals are sent from physician to physician in the system with the intention of sending patients to better, more-qualified physicians who have earned the referral. The âearn, not forceâ mentality contributes to the goal of well-coordinated care and service, which is the first choice of patients.
Carilionâs press release closed by describing a wasteful and poorly organized U.S. healthcare system that is hoped to improve with the vertically integrated clinic model of providing care. The hope is that comprehensive, high quality, and cost-effective care will put the patient first. The reader of the press release is reminded that what happened at Mayo could be replicated at Carilion.
CURRENT SITUATION IN ROANOKE
As noted, Carilion Clinic has a medical school partnership, an expanding physician practice with a robust specialty list, and its own accountable care organization, which continues to show progress and increased membership.
Three decades after the hospital merger controversy began in Roanoke, Virginia, the economic and healthcare environments have changed, the population is increasing, and healthcare costs are rising. When the antitrust case was brought in 1988, Roanoke had among the lowest health insurance premiums in Virginia; now, they are among the highest.
Discussion questions to be answered
1) Identify the problems Carilion Clinic faces as it seeks to become a comprehensive, vertically integrated healthcare provider.
2) Briefly explain the summary of the case
3) Identify the most important factors/facts of the Case study
4) Explain the critical issues that is the most important health administration problem/issue to be solved and if applicable, identified secondary problems.
5) Identify the recommended solution of the case. At least three realistic alternative solutions.
6) Identify the relevant concepts and tools for example, methods, techniques, principles,theories, and or models.
In: Nursing
Article summary
A Community-Based Family Intervention Program to Improve Obesity in Hispanic Families 16 WMJ âą DECEMBER 2012 programs. Publicity was primarily in the form of posters, announcements, and word of mouth. Families with schoolage children were encouraged to enroll. Families with children younger than school age were offered on-site childcare. The 8-week program included a 40-minute classroom component followed by a 40-minute physical activity session that concluded with a healthy family dinner to promote good eating habits. The classroom program was based upon the 3 crucial components used in the We Can! curriculum and became program objectives. Program objectives helped families: (1) improve food choices; (2) increase physical activity; and (3) reduce screen time. Screen time is the amount of time a person spends in front of a television, computer, or video game screen. Because many of the household decisions regarding television viewing, food preparation, and recreational activities are made by adults, the program was designed to present parallel messages to both the adults and children. The overall goal of the program was to encourage additional communication between parents and their children, leading to cooperative decisionmaking involving nutrition and physical activities for all family members. The educational component was divided into 2 groups, one consisting of adults and the other of school-age children. Adult educational programming was presented in Spanish by a bilingual health educator and a bilingual registered nurse. All written materials were made available in Spanish and English, with literacy level considerations. Childrenâs classes were presented in English. Bilingual staff included a registered nurse and exercise instructor from the HCHRC and a health educator from the Waukesha Public Health Division. Although the adults and children attended separate nutrition lessons, both discussed the importance of making healthy food choices and being active. A variety of activities and games were incorporated into the curriculum to strengthen the understanding of the lesson objectives (Table 1). All family members participated in the same exercise/physical activity session. The sessions were taught by the bilingual health promoter, a certified, bilingual exercise instructor. Physical activities proved to be a very popular component for all family members and strengthened the concept of being active together and enjoying physical activity. Participants had different levels of mobility and the exercises were selected with that in mind. The exercise sessions had 3 distinct dimensions: warm-up, exercise, and cool down. Physical activity included aerobic/cardiovascular (endurance), anaerobic (speed/strength), flexibility, and coordination exercises. The physical exercise equipment consisted of fun and inexpensive materials that many families already have at home, such as balls, jump ropes, hula hoops, lies in order to diminish health disparities such as those seen between the Hispanics and non-Hispanic whites in the areas of obesity. This article describes the study and specific individual and community outcomes. METHODS Where there are many lifestyle programs for children, few involve the full family unit and take the Hispanic culture into consideration. For example, the Fit Kids Program11 was structured with primarily the English-speaking child in mind and had a program fee. Given the high percentage of low-income Hispanic families in Waukesha, any program fee or language barrier could economically or socially exclude participation. The We Can! curriculum promotes awareness of healthy food choices and discusses the importance of physical activity with a particular focus on energy balance and family.10,12 It is available online at no cost, and the first 2 weeks of materials were already translated into Spanish. The curriculum is endorsed by the National Heart, Lung, and Blood Institute10,12 and strives to further the Healthiest Wisconsin 2020 focus areas and objectives regarding nutrition, healthy foods, and physical activity.13 It also addresses important overarching goals of Healthy People 2020 to reduce obesity and disparities.6,7 The Waukesha County Public Health Division collaborated with the Hispanic Community Health Resource Center to facilitate the We Can! curriculum in a series of nutrition and exercise classes. After translating the remaining curriculum into Spanish and including other culturally appropriate supplemental handouts, a family exercise component was added to each class. Community partnerships were sought to host activities, promote participation, and provide support for sustainability. Partners included White Rock Public Elementary School, La Casa de Esperanza (community center) and the local YMCA. Participants were recruited through convenience sampling using community outreach methods at local churches, medical clinics, schools, self-service laundries, and community Table 1. Nutrition Session Themes Week 1 Program Overview Week 2 Energy Balance Week 3 Body Mass Index and Portion Control Week 4 Energy In* and Reading Nutrition Labels *Energy In is the amount of calories consumed through dietary intake. Week 5 Energy In and Healthy Substitutions Week 6 Energy Out* and the Importance of Physical Activity in Energy Balance *Energy Out is the amount of calories burned through physical activities and normal daily functions. Week 7 Decreasing Screen Time Week 8 Program wrap-up with post-test, evaluation and program surveys VOLUME 111 âą NO. 6 17 with the intent of measuring behaviors about healthy choices in nutrition and activity. Children also were asked true and false knowledge questions in a group setting, which included knowledge about nutrition labels, portions, physical activity, and general health. No biometric blood testing was done with children. Child participants were measured for height, weight, and body mass index (BMI) percentile pre-program and postprogram. RESULTS The program served 47 families: 57 adults and 54 children. The average age for adults was 32 years. Of the adults, 89% were women and 11% men. One 16-year-old participant was given a choice to participate in the adult or the childrenâs educational component. He chose to attend the adult class; however, a decision was made not to participate in biometric testing. The survey included assessment of familiesâ habits related to food choices, sweetened beverage consumption, physical activity, and screen time. Adult health risk assessments (HRAs) were performed approximately 1 week prior to the start of each program and 1 week following. HRA assessments included biometrics: total cholesterol, LDL cholesterol, HDL cholesterol, triglycerides, fasting glucose, height, weight, BMI percentile, waist circumference and blood pressure. The HCHRC hosted all screenings and offered a post-screening healthy breakfast. The biometric testing in the adultsâ post-program intervention showed some improvements in reducing cardiac and diabetes risk factors (Table 2). This included improvements in systolic and diastolic blood pressure, glucose, weight, BMI, and waist circumference. Blood pressure data collection averaged a 3.5 mm Hg decrease systolically (P=.0132) and decreased 2.36 mm Hg diastolically (P=.0357). Blood glucose decreased by 3.08 points (P= .0253) comparing pre-program and postprogram collections. Weight decreased by 2.03 pounds overballoons, spoons and eggs, and foam pool toys. The participants were able to take home elastic bands to continue exercises taught. A family dinner encouraged participants to implement some of the strategies and decision-making skills covered in each weekâs lesson. Demonstration and participation in snack and meal preparation encouraged participants to use healthy ingredients and substitutions. The participants practiced portion control and had many opportunities to experience new healthy foods. A closing ceremony anchored the last class, at which each participantâs accomplishments were recognized with a certificate of completion. Program incentives were awarded upon successful program completion and included YMCA memberships at a discounted rate. As an incentive for children, $50 was given toward the purchase of a bicycle to further promote physical activity. The program educators secured and fitted bicycle helmets for each child participant. Participants were encouraged to suggest any changes or to share any thoughts. Participants who completed the program were encouraged to register for other exercise classes and community health programs available at the HCHRC. For this study, data was collected before and at the conclusion of the 8-week program. Progress toward program objectives was measured through knowledge testing, lifestyle surveys, and biometric testing. Pre- and post-program lifestyle surveys, and knowledge and biometric testing for adults were facilitated. Testing and surveys were available in Spanish and English. In addition, adult test questions and response choices were read aloud at both pre- and post-assessments to ensure understanding. Children were given pre- and post-program survey questions that reflected the lifestyle behaviors of children participants. These were administered by a public health educator, Table 2. Biometric Results for Adults Program Year Unit of Measure Sample Size Pre-program Ave Post-program Ave Change P-valuea Systolic BP 2006-2010 mm Hg 50 108.34 104.84 decrease 3.5 0.0132a Diastolic BP 2006-2010 mm Hg 50 67.84 65.48 decrease 2.36 0.0357a Cholesterol 2006-2010 mg/dL 52 174.96 170.79 decrease 4.17 0.3616a HDL 2006-2010 mg/dL 52 44.94 46.52 increase 1.58 0.2663a LDL 2006-2010 mg/dL 48 104.71 97.44 decrease 7.27 0.1157a Triglycerides 2006-2010 mg/dL 50 145.92 154.36 increase 8.44 0.4678a Glucose 2006-2010 mg/dL 52 96.62 93.54 decrease 3.08 0.0253a Waist 2006-2010 in. 52 37.33 36.79 decrease 0.54 0.0345a Weight 2006-2009 lbs 37 156.97 154.95 decrease 2.03 0.0024a BMI 2006-2009 37 27.97 27.62 decrease 0.35 0.0103a Knowledge Test 2006-2010 % correct 57 38% 88% Increase of 50 0.0001b percentage points aStatistical significance tested using paired t test bStatistical significance tested using unpaired t test 18 WMJ âą DECEMBER 2012 lack of motivation as a barrier to physical activity. For the third program objective, decreased screen time, lifestyle surveys for adults in 2008 showed that prior to program participation, 100% of participants reported watching more than 2 hours of television per day. Postprogram, that number dropped to 47%. In 2009, participants viewing more than 2 hours of television per day dropped by 34% by the program completion. Reportedly, in 2010, the number of participants watching more than 2 hours of television dropped by 65% at the end of the program. The childrenâs scores yielded similar findings. An overall goal of the study was to increase communication between parents and their children to facilitate cooperative decision-making involving nutrition and physical activities. Anecdotal evidence obtained through parentâs comments suggests that increased family communication of nutrition and physical activities had occurred. (Table 3) The HCHRC created a monthly support exercise group post program in response to participantsâ comments. It reinforced nutrition and exercise concepts previously learned in the program and encouraged families to continue exercising together. Program participants led this exercise support group, which evolved into a monthly âFamily Exercise Nightâ that is held during the winter months. In addition, a total of 16 walking sessions are offered as a counterpart during the summer months. Participants of all ages continue to walk together and numbers have surpassed 100 walkers. Other programmatic outcomes included a culturally appropriate We Can! curriculum translated into Spanish and available for use as well as pre-screening and post-screening HRA forms, Release of Information for HRAâs form, Release of Liability form, and a Photo Consent form, all translated into Spanish. COMMUNITY OUTCOMES The We Can! program served not only to improve the knowledge and individual behaviors of the participants, but it also facilitated a variety of systems changes in the community due to its collaborative nature. For example, the local YMCA provided gym memberships at a discounted rate, which were awarded all (P= .0024) and BMI decreased by 0.35 (P= .0103). Waist circumference decreases over the 4-year period averaged .54 inches (P=.0345). Each of the core evaluation measurements was linked to one of the program objectives in order to measure the programâs effectiveness. The first objective to improve food choices was measured through didactic testing of both adults and children. Comparisons of pre-program to post-program knowledge testing for adults revealed an average of a 50 percentage point increase over the span of the program. In 2008, there was a 50% decrease in soda consumption among adults. In 2009 and 2010, there was a 20% decrease of soda consumption among adults post program (Figure 1). For children, pre-program nutrition knowledge scores for children averaged 20%, while post-program knowledge scores averaged 80%. There was a 33% decrease in soda consumption among children in year 2008. In 2009 and 2010, there was a 40% decrease in soda consumption among children. The second program objective was to increase physical activity. In an analysis of pre-program and post-program data, there was an average 60% drop in adult participants reporting Figure 1. Knowledge Testing Results for Adults by Program Year. 0 10 20 30 40 50 60 70 80 90 100 A verage Test Percentage Program Year Pre-program Post-Program Table 3. Participant Comments Participant 1 âI loved the program because it gave me the opportunity to be with my children. Also I learned that exercising as a family is fun.â Participant 2 âI am very pleased that there are programs like this because, aside from learning about good nutrition and health, we spent time as a family discussing what we want to do in the future.â Participant 3 âIt seemed to be a great program, very complete for health. I loved that there are people concerned about the health of others. Thank you with all my heart. It also served to unite our family on what we should eat and how to exercise as a family.â VOLUME 111 âą NO. 6 19 ability. A community approach was necessary to change both individual eating and exercise habits as well as to diminish environmental barriers to achieve a healthy and active lifestyle. Time for community conversations, strategic partnerships and grant writing became the first steps in developing community programs that address health disparities of minority populations. Collaboration between key community organizations and health institutions was essential in improving health in a social ecological approach. A strong collaboration between leadership at the Waukesha Public Health Division and management at Waukesha Memorial Hospital provided the framework to explore new ways to improve Hispanic health in Waukesha County. With hospital restructuring, health care reform, and state budget reductions, finding future funding for multiple year prevention programming may be challenging. The intent of this initiative was to provide a communitybased program to diminish the incidence of overweight and obesity in Hispanic families by promoting awareness of healthy food choices and the importance of physical activity in a culturally acceptable fashion with a particular focus on energy balance. Using the We Can! curriculum and intervening at an individual, family, and community level, program goals were achievable. The ability to replicate the program year after year has resulted in additional programmatic and system changes. Changes occurred in community systems, which positively affected the built environment with increased availability of and improved access to safe places for family physical activity. The results of this program evaluation are encouraging. This program has had a meaningful impact on the participating community members and the community at large. Funding/Support: This project was funded by a State of Wisconsin MCH Title V Services Block Grant from the Maternal and Child Health Bureau, Health Resource and Services Administration, US Department of Health and Human Services. Financial Disclosures: None declared. REFERENCES 1. CDC. Differences in prevalence of obesity among black, white, and Hispanic adults â United States, 2006-2008. MMWR Morb Mortal Wkly Rep. 2009; 58(27):740-7444. 2. The Surgeon Generalâs Call to Action to Prevent and Decrease Overweight and Obesity. Rockville, MD: Office of the Surgeon General (US); 2001. http://www. surgeongeneral.gov/topics/obesity/calltoaction/CalltoAction.pdf. Accessed August 31, 2012. 3. Nestle M, Jacobson MF. Halting the obesity epidemic: a public health policy approach. Public Health Rep. 115(1):12-24. 4. Wisconsin Department of Health Services, Division of Public Health. Obesity, nutrition, and physical activity in Wisconsin. Executive summary. http://dhs.wisconsin. gov/health/physicalactivity/pdf_files/executivesummary.pdf. Accessed August 31, 2012. upon successful program completion. This encouraged families to maintain an active lifestyle post-program. Bilingual program staff interpreted and oriented one family to the gym equipment and activities at the YMCA. That family in turn oriented and interpreted for the remaining participants. Through this, the YMCA was made aware of the need for bilingual signage and staff. They have since hired 3 bilingual individuals to improve access for Spanish speakers. Meals were served by a local Hispanic cafĂ©, which agreed to create some dishes especially for the program. The meals were so popular with program participants that the cafĂ© added a healthy-options section to its menu, featuring many of the program entrĂ©es. System changes occurred in the built environment (community structures). After a report to the Waukesha Collaborative Hispanic Network, a community stakeholder group comprising 23 organizations, a call was made to city leaders to ask for improvements to a neighborhood intersection. The 5-way intersection was perceived by local residents as unsafe and created a barrier to a local park. Pedestrian-friendly lights were installed with audible cues. A partnership with a local elementary school and a wellknown water systems company resulted in the promotion and increased consumption of drinking water in schools. The Waukesha Public Health Department staff assisted the School District of Waukesha in their development of a school wellness policy. The HCHRC staff worked with County Parks and Recreation Department to assist with Spanish translation of their childrenâs program brochure. DISCUSSION The adapted We Can! curriculum, when combined with a physical activity and meal preparation component, showed some evidence in decreasing cardiac and diabetes risk factors in Hispanic families. Some biometric improvements were achieved, such as lowering BMI. Surveys pre- and post-program showed increased knowledge relating to energy balance and nutrition and revealed positive attitude changes regarding healthy behaviors. Limitations included the lack of a control group with which to compare the programâs effects, and the inability to control variables such as other sources of education from media or reading nutrition education materials that may have affected learning. There were no follow-up biometric measures planned beyond those of post-program. Collecting biometric measures at 6 months and 12 months post-program could yield additional evidence of long-term clinical impact. The community was involved in every step of the program, including program development, system changes and sustain-
In: Nursing
team 7 provide a 3-4 paragraph answer for the following questions
1-What are 4 key things you learned about the topic from reading their paper?
2-How does the topic relate to you and your current or past job?
3-Critique the paper in terms of the organization and quality.
In todayâs technological age, employers have a plethora of options on how and where to find employees. Companies often choose between two different sources to find candidates: internal or external sources. The Internal sources that organizations use to acquire new hires include locations for walk-ins, career programs, website job listings, employee referral, internships, and pay for new hire services by career search websites. External sources can vary from job postings or job posting sites, to local recruiters, and career fairs. Often, the internal sources are the most effective method that employers have when it comes to finding employees.
Internal sources have three significant methods to successfully convert applicants to interviews. The first one is Website job listings. On the job listing the human resource department directly handles with every applicant, which is quickly evaluated, responds with acknowledgement for every application. The second one is career programs, it immediately has new hires for-go a training program that could be paid by the employer or educational grants or out of pocket. This career program would allow the new hires to be ready for joining the company. The last method is walk-in and career fairs. This means that new hires would be recruited in specific locations to directly apply with human resources.
Websites like Indeed and Monster have great career builder tools for online applicants which is one of the reasons why external sources have become successful in finding candidates for employer. Some companies want more options to recruit new hires rather than official websites, walk-in, career programs, career fairs, and employee referrals so they usually have external sites like monster and indeed.com promote paid advertisements for positions. This is why external individual companies that have been paid to have certain positions advertised are considered an internal source. These types of sources end up giving the highest percent of interviews and hires. Human resource departments have been recruiting employees today in a much more specific way. They have utilize their incentives as tools to target quality employees in to staying with the company or recruit talent. These tools and incentives were not always available in the past, so some companies have been creative in utilizing these tools to widen their candidate pools and hire the individual that meets the qualifications of their ideal employee.
The way employers hire candidates is broken down to straight forward metrics from SilkRoad technology, a global provider of social talent management solutions that has been partnered up with over 700 of its customers to uncover which recruitment methods yield the most interviews and hires. SilkRoad collected data from OpenHire, an applicant tracking system, that measures the 222,308 job postings, 9.3 million applicants to the 147,440 interviews, ending up to the 94,155 hires, into a rate. These measurable rates would help optimize recruitment, advertising budgets, and new sources of hire. External online recruitment marketing sources hires are about half of all interviews and search engines, considered an external source, produced over 90% of interviews. Companies in today's industry are utilizing the internet and other mobile technologies for new hires which can lead to a quicker turnaround in finding quality employees.
Companies lean towards using online methods of hiring since more
than half of the interviews are created by online applications. The
external online recruitment market is a resource that companies can
pay to have an internal process made to acquire new hires specific
to their needs. Examples of these external recruitment markets are
Monster, hcareers.com, and indeed.com. These companies supply
several tools as online applications to successfully find new
hires. I personally believe utilizing internal sources is the
better choice because you are able to create a physical presence
while meeting the HR department. Local recruiters like CERS and
Octagon Technologies have added physical tools within communities
to collect new hires. Career fairs also have a social dynamic as a
physical location for getting local talent.
Once a company knows what employee they are looking for and what
sources they are utilizing to find them, they must research what
benefits they will offer to entice the employee and create loyalty
to the company. Companies normally implement standard employee
benefits that include covering 50% of a universal Health insurance
plan and providing 2-weeks paid vacation after the first year of
joining the company. Then for more innovative employee incentive
ideas for talent, companies tend to use 20% discounts and stay
bonuses, also known as retention bonuses due to the fact that they
attempt to reward the employee for staying with the company for
different increments of time. Other employee incentives that
companies use to promote an attractive program are referral bonuses
after a new hire has past the a certain time mark with the company,
onboarding or hiring bonuses where students can work to get loans
and tax incentives to attract young talent, and remote work options
which gives hires an advantage of todayâs technologies allowing
them to work at home. The option I believe is most popular with
employees would be cash bonuses and company profit sharing.
Once companies find the employees they must also focus on
retaining them. It cannot be underestimated how paramount it is to
ensure that employees remain at the company they work for. There
are many key factors on how to ensure employee retention is secured
and why that is so. The cost effectiveness of employee retention is
what is most important for human resource departments when
discussing the post hiring stage of the company. This also plays in
line with the immersion period for when employees begin their job
at the company. Orientation and company culture is what is
key.
It is not cost effective at all when a company loses employees and
has high turnover rate. Turnover is extremely expensive and this
factor is what many human resource departments fear during the
hiring process. Finding the qualified applicant is just as
important as ensuring the applicant will stay with the company.
Replacing an employee can cost up to 50-60% of the annual salary of
a position. In addition to the cost of turnover, there are also
unfilled position cost. With an unfilled position at a company
productivity is down and soft costs and be exponentially
increased.
With new employment it must be noted that the anticipated results
of a new employee are not immediate. Companies with too high of
expectation during the orientation period may put too much pressure
on an employee. It is better to take time and allow the new
employee to immerse themselves into the company culture and truly
understand how to do their job. This is otherwise known as the
âlearning period.â Company culture is also something to be taken
into consideration in regard to employee retention.
Employee retention can easily be secured through a positive company
culture. Cultures vary from one company to another however, hostile
cultures that make employees feel uncomfortable and unwelcome will
experience higher turnovers. Sexual harassment should be taken very
seriously, and company culture should reflect that. As a new
employee, one would want to feel welcome and feel part of a culture
where they can be comfortable. There is enough stress getting used
to a new job, if the company culture is accommodating then employee
will want to stay. By implementing the company culture, team
building, and employee engagement and ensuring that companies are
invested in their employeeâs workplace happiness, employees will
invest in the company they work for and the company can decrease
their turnover rates.
It is incredibly important when working for a company for all employees to have a positive mindset, which will result in a supportive environment. An enthusiastic surrounding will result in higher productivity, as well as an increase in the companyâs success. When a person feels supported and accepted due to the cheerful surrounding at their job, that individual will want to see the business flourish by working harder, rather than an employee who feels discouraged about their negative work environment. Countless adults are at work more than they are at home, so why not make it worthwhile? There are five main tips that will improve a positive work environment: make a strong effort to connect with teammates, show appreciation and positivity towards peers, have open ears and listen to other peopleâs ideas, have trust in the coworkers around, and lastly to be spontaneous.
The first pointer of a constructive work environment is to make a strong connection with teammates. When someone goes out of their way to interact with their peers, it shows a sense of consideration that they care for the business they represent, and that ends up radiating motivation to individuals in all sorts of ways. This is because unless that person is a one-man team, it is critical to work with the people around to make the company thrive and be successful. Also, anyone can send a message in an email, but that lacks getting to know that coworker face-to-face and will end in short messages and not-so connecting responses.
Another suggestion would be to show appreciation towards coworkers as much as possible when they accomplish a task for the business. This may seem like stating the obvious, but it is surprising how often a company is insufficient in awarding a workmate when they do a superior job. From my experience, one of the top complaints told by employees is that they feel like they do not matter to the company, and how all their hard work is not being appreciated enough. Without them, the company would not be where they are today, and to show gratitude managers can do a quick âgreat jobâ or a 5-minute appraisal out of the day. This will even make that coworker work harder than they already were because they feel invested in the work that they are doing. A business owner or manager will only gain by giving something as simple as a âthank you.â
To develop a positive work locality, it is significant to have open ears as well as an open mind when listening to other peopleâs ideas. It does not matter if it is the CEO or the janitor, everyone has their own personal ideas and first-hand experiences with the company. This goes along with trusting team members, which will also create a positive work environment. Nothing is more valuable than trust, whether it is work-related or something personal. Without trust, it is like a train with no tracks- the train will go nowhere. When delegating with peers, it is important for managers to try to let go of wanting to take control of everything, and allow them to help with the tasks needed to be complete. Trust is a very powerful word that can take years to build, yet seconds to break. If someone is incapable of trust, that individual will not be able to work well with others, and therefore will crumble in the business, which will negatively impact the workplace.
The last part of tips that will improve a positive work environment is being spontaneous. Employment does not always have to be so serious; it is okay to have some enjoyment at work. An average American works at least 45 hours a week, which ends up being a little less than 1/3 of the week; why not make the most of it by connecting well with the team and collaborate together to reach the same goal. When teams work nicely together, whether it is during downtime in the office or coming up with a last minute work party for the Super bowl, the outcome is incredible and will not only make anyone feel better about themselves, but create a pleasant work environment.
After discussing why having a positive work environment is so predominant when uncovering different ways of how to maintain a successful business, it is an appropriate transition into the next topic that will help properly acquire and retain employees: the importance of team building. Forbes described team building as having a bad rap, but it is actually one of the most important investments a manager or CEO can make for the company. Not only will team bonding increase collaboration, but it will also ease confrontation in the workplace. Team building has also been known to initiate trust, and engage the employees into wanting to work harder. This is fantastic for the companyâs culture, which will plant a seed into impressive fortune.
A way of engaging in team building is to not make the employees feel like it is a typical day in the office. When taking time out of the day to generate team bonding, it is vital to spend time and get to know each other, as well as voice experiences that will aid in working towards a specific goal. This will result in a positive fellowship with one another, yet in a more organic way. Believe it or not, happiness and learning go hand in hand. Testing out different activities with the staff can generate a cheerful mood among employees, which will conveniently help the business itself.
When companies look to make their employees feel valued they must first look at how they approach employee engagement and how their employees are reacting to it. Do employees feel disengaged or feel included in their organization? To find this out companies are utilizing new resources to uncover the current state of their employee engagement. In 5 Tips for Measuring Employee Engagement, Saige Driver goes over 5 ways a company can approach seeing where their employee engagement at. The first step is to define what employee engagement actually means to the organization. Each individual member of a company may have a different idea of what employee engagement means to them and how they feel employee engagement should be approached, so by defining what employee engagement means to the organization as a whole it will better portray what their initiatives and plans are trying to achieve.
The number one way to measure engagement and how employees feel is through individual, anonymous surveys. With changes in technology companies are now able to utilize apps that send out frequent surveys regarding events that have happened throughout the year and get immediate answers about how employees feel this contributes to their engagement. Driver suggest sending âsuper-short surveys â one or two questions maximum. This makes it easier for managers to collect survey data regularly and drive timely actionâ, and âprotecting employees by making the surveys anonymous encourages critically transparent feedback even if the feedback is negativeâ (Driver, 2017). By having these surveys, companies get data that they can utilize to formulate action plans for engagement that actually work. The most important part of these surveys to focus on is ensuring that they are asking the right questions. The article suggests using qualitative and quantitative questions to get well rounded feedback from employees. Questions should ask, What do we do to make you feel valued at work? and also ask, Why does this make you feel valued?
Another way to measure employee engagement that also makes employees feel valued is by having individual, informal, and candid conversations with employees. Surveys are a great way to get data for a plan, but when speaking directly with the source of the surveys, managers are able to acquire more details about answers given. Driver also discusses how exit interviews are a great way to find out why an employee is leaving and what changes should be made to ensure more employees do not leave, but that conducting interviews with employees that choose to stay and grow with the company may be even more insightful because they will discuss why they are staying and this will show a company what part of their employee engagement plan is actually working. Personally, I work for a company that has defined employee engagement and has presented workshops on what it is, but does nothing to actually promote employee engagement into the company. Many employees rely on myself as a manager to make them feel valued which in turns exhausts the management team because we do not have anyone above us do the same.
There should be a balance of engagement all down the line of a company from the top to the bottom, each tier being motivated and made to feel valued. The way I make my employees feel valued is by being there for them and not shying away from my responsibilities to them. If they have a table the is angry I will do my best to turn their experience around not for the guest, but to ensure that they guest does not take their anger out on my employee. The other way I attempt to make employees feel engaged is by thanking them. When I see them doing something good, or something that goes above and beyond I recognize them with a free crew meal, tickets for a drawing, or just a simple thank you. I also like to write encouraging messages and quotes on the mirrors at work so employees are reminded daily and throughout the day that I appreciate them.
The final step to ensuring companies find the best way to make employees feel engaged is by ensuring that surveys or individual conversations are conducted frequently throughout the year. My suggestion would be to have surveys sent out right after engagement events happen to see how employees are feeling about the event, and employee conversations should be planned in advance so they have time to have questions to ask managers and have solutions for issues they may be facing every day. Making employees feel valued does not always take an large amount of money to accomplish, but it will take time to find the right balance that works for the employees currently working in the company and for future employees. Not every idea will work for everyone, but by having an action plan in place, companies are more likely to find a good mix to ensure that their employees are staying loyal and are contributing to the success of the company for years to come.
Throughout the paper we described different methods of finding, acquiring, and retaining employees. It started with the research that went into these effective methods and covered the advantages that new hires can take advantage of in order to qualify for certain or additional incentives, standard incentives that most full-time companies should use. These included dynamic incentives that some companies offer and cash incentives that directly create a positive impact. We focused on why retaining employees is just as important as finding the right candidate for a company, and team building was discussed which we learned is a more recent trend for companies to focus on to ensure that they have employees that work together to make the company successful. We also looked into making work more âfunâ or âenjoyableâ since the average employee spends majority of their week at work. We explored employee engagement, what it means, and how companies can implement it into their human resources plan. All of these topics are crucial in finding a workforce that contributes directly and continuously to the success of the organization's mission. It is not without its difficulty to find the best mix of what works for a company and its employees, but once a company finds that balance they are guaranteed a happy workforce that will lead to their companyâs success
In: Operations Management