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Organizational Change

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Change and Culture Case Study 1

In the world of health care mergers and acquisitions are common. There are many factors behind two companies merging into one. Market competitiveness is a common reason for health care organizations to merge with other health care organizations. This strategy can increase competiveness and market share. When two companies merge together, they combine as one and create a new entity of its own. The creation of a new health care entity can provide new challenges for the organization. New internal processes, communication, job responsibilities, and cultural differences can impede the success of the new organization. Organizational culture may not be exactly defined, but it exists. The culture of an organization develops slowly over time from what the employee population brings into the organization. The culture of an organization is also reflected in the daily operations of the organization (Brown, Werling, Walker, Burgdorfer, & Shields, 2012). Blending two cultures that are adversaries is a difficult task. With proper consideration and strategy the employees can be eased into the merging organizations new structure. This is a large project and will result in failure if many details are not taken into consideration. Once the merger is complete, re-evaluation is necessary to make changes to any areas that are experiencing difficulty. This is an evolutionary change process that takes time.

Mercy Hospital has been in direct competition with Cox Hospital in the southern Missouri community area for decades. Mercy Hospital has emerged as one of the largest employers, remained competitive in the health care market, and has expanded into surrounding states. Cox Hospital has not been able to keep up with Mercy Hospital. There was a time when both hospitals remained at an equal level of competitiveness. In the recent decade, Mercy Hospital has built a level one trauma center, surgery center, and most recently an orthopedic hospital. Mercy Hospital has also acquired many smaller hospitals and clinics in rural areas. This strategy has expanded the Mercy name. If a patient in a rural area is seen and requires a major surgery and the smaller local Mercy Hospital cannot provide this type of care, the patient is directed to the larger Mercy facility. This keeps all the revenue coming in within the system. Mercy Hospital provides all the up-to-date technology and services required by an educated consumer population seeking excellence in health care. Mercy Hospital continues to grow and recently re-branded by using the name of Mercy before each facility name. A new logo and advertising campaign was initiated for consumers. The new logo is a shadowed cross with a nice color scheme. This logo is present on all the facilities, clinics, physicians' offices and everything affiliated with Mercy. The new logo is easily identified and an impressive market strategy. The new marketing of the re-branding has been received well by the community. No detail has been left unturned. Even the employee population has new uniform colors and a new policy on patient quality and care. The hospital provides a new training program for employees focused on how each patient, friend and family member is touched by the employee they encounter in the care process. Cox Hospital has not followed in the same path as Mercy. Cox Hospital has not expanded with the times and often will refer patients to Mercy. Cox Hospital was also a focus in a Medicare Fraud case. The quality of care provided has diminished substantially. Mercy is the leading choice in healthcare within the community. There is a history of consumer and employee rivalry between these two organizations. Recently, Mercy announced that it has purchased Cox Hospital. There will no long be a Cox Hospital; it will integrate into Mercy Hospital offering a north and south location. Mercy Hospital administration will have to incorporate new leadership roles and the task of creating a new organizational culture from two healthcare rivalries. This will not be an easy task. A new culture must evolve (Mercy, 2012).

Mergers can affect the design of an organization. The initial changes take place at the administrative level. Executive positions and unnecessary management positions may be cut or reduced. Some of the jobs of administrators and support staff may be joined. The initial focus will need to be on the mission, values, and goals of the united organization. This will than flow down to the managers for staff integration. Mergers and acquisitions are concerning to an employee. The outcome can be positive or negative and depend on the way the merger is handled. When mergers take place subordinates are usually the last to know. When this occurs, the employees may be resistant to change. The administrators often do not work with the subordinates staff and may not understand or be aware of how this makes an employee feel. Change can cause fear within the employee population. Often times with mergers there can be layoffs, changes in job descriptions, changes in educational requirements, decreases in pay and benefits, and a change in an employee's reporting manager (Makri, 2012).

Despite the merging of two health care entities with the same commitment to health care, the fact remains that they are two very different organizations. The cultural clash cannot be avoided



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