Page 106 - DMGT520_ORGANIZATION_CHANGE_AND_DEVELOPMENT

Unit 7: OD Intervention

Notes


Case Study Reorganization as Rebirth

ike many organisations in the 1980’s, St. Francis Regional Medical Center of Wichita,
Kansas, tried downsizing. A layoff of 400 people was a horrible experience, both
Lfor those who left and for those who stayed. The 1990’s brought a change in the
health care environment, and the hospital’s administration needed to change the structure
and culture in order to remain competitive.
The management team re-mapped the ideal management structure to run things without
regard to the structure that was actually in place. To make such radial change work, they
defined specific job titles, but not specific people. They dissolved the old organisational
chart and created a new one, unveiling a chart that had all the new titles on it with no
names. Those who wanted to be part of the new organisation had to apply for whatever
position they felt they were most qualified to fill. Imagine having to apply for whatever
position they felt they were qualified to fill. Imagine having to apply to a company you’d
been with for fifteen years! The restructuring also meant a rethinking of corporate culture.
An examination of culture revealed that making decisions at the hospital become bogged
down by management and dictated by policy.
Eliminating old policies allowed the team to look at things as possibilities rather than
restrictions. Two task forces were formed to look at service lines and functional realignment.
A consulting firm was called in to help the hospital make the transition. The consulting
firm helped strategize and create a time line for the changes.
At the reorganisation meeting, each employee was given an 80-page bound booklet
complete with vision statement, the organisational chart, timetable, reorganisation fact
sheet, copies of all position descriptions, and a question and answer section. The result
was terror, confusion, upheaval, and little by little, understanding cooperation and success.
Instead of approaching the reorganisation as a shameful secret, the task forces highlighted
the changes in the new culture and tied the internal changes to the changes in the health
care industry. Each week “The Grapevine: Reorganisation Update” was distributed. In the
first official day of the new organisation, employees were given flowers and a message
stating “Today starts a new beginning focused on you”.
The new corporate culture involves management by contract. The new VPs walk the
hallways and touch base constantly with what’s going on. The result of the reorganisation
is decision making at lower levels, which results in faster actions. No more ideas die
because of red tape. The reorganisation is fluid and ongoing with employees and managers
still incorporating the new management philosophy and corporate culture into their
daily work lives.
Questions
1. Had you been a part of such a situation, how had your initial reaction been and why?
2. After analysing the case, do you think that such massive change was indeed required
for St Francis Regional Medical Center or was there a mid way out?
Source: M.S. Egan, “Reorganisation as Rebirth,” HR Magazine (January 1995) Page 84-88.

LOVELY PROFESSIONAL UNIVERSITY 101