The Unhealthy Hospital
When Bruce Reid was hired as Blake Memorial Hospital's new CEO, the mandate had been clear: Improve the quality of care, and set the financial house in order.
As Reid struggled to finalize his budget for approval at next board meeting, his attention was focus on one issue; the future of six off-site clinics. The clinics had been set up six years earlier to provide primary health care to the community's poorer neighbor- hoods. Although they provided a valuable service, they also took funds away from Blake's in-house services, many of which were underfunded. Cutting hospital personnel and freezing salaries could affect Blake's quality of care, which was already slipping. Eliminating the clinics, on the other hand, would save $256,000 without compromising Blake's internal operations.
However, there would be political consequences. Clara Bryant, the recently appointed commissioner of health services, repeatedly insisted that the clinics were an essential service for the poor. Closing the clinics could also jeopardize Blake's access to city funds. Dr. Winston Lee, chief of surgery, argued forcefully for closing the off-site clinics and having shuttle buses bring patients to the hospital weekly. Dr. Susan Russell, the hospital's director of clinics, was equally vocal about Blake's responsibility to the community, and suggested an entirely new way of delivering health care: A hospital is not a building, 'she said, it's a service. And wherever the service is needed, that is where the hospital should be'. In Blake's case, that meant funding more clinics. Russell wanted to create a network of neighborhood- based centers for all the surrounding neighborhoods, poor and middle income.
Besides improving health care, the network would act as an inpatient referral system for hospital services. Reid considered the proposal: If a clinic network could tap the paying public and generate more inpatient business, it might be worth looking into. Blake's rival hospital, located on the affluent side of town, certainly wasn't doing anything that creative. Reid was concerned, however, that whichever way he decided, he was going to make enemies.
1. What sources of power does Reid have in this situation? Do you believe using legitimate power to implement a decision would have a positive effect at Blake Memorial? Discuss.
2. What influence tactics might you use if you were in Reid's position?
3. Do you see ways in which Reid might use the ideas of transformational leadership to help resolve this dilemma?
1. Reid has power based on the authority of his position or legitimate power. Since he is new to his position, he may not have expert or referent power. Expert power is based on the individual's unique knowledge and skills that the employees in the hospital may or may not believe Reid has. Referent power is based on the follower's need to please the leader due to personal identification with the leader. Reid may have some expert power but it is very unlikely that he has referent power at this point in his leadership of the hospital. As the new CEO he certainly has coercive power and reward power. The coercive power is based on punishment and reward is the ability of the agent to proved rewards for compliance. Both of these types of ...
This solution discusses power types, influence tactics, and transformational leadership style in relation to an issue faced by a new CEO.