CEO Decision-making at Prairie Health Services
(3 pages of text)
This case focuses on a significant problem faced by county-owned Prairie Health Service’s administrators: What could be done to reduce multiple billings and other redundancies among the four divisions of the organization? The administrators’ goal was to implement an integrated records management system that would streamline the registration and billing processes for patients, thereby increasing efficiency and timeliness, as well as reduce financial losses. While this was a fiscally responsible goal for the organization, the records management software package selected by the CEO was inadequate for the task. Rather than listen to the recommendations of his division administrators who had spent considerable time researching potential software, the CEO seemed to be basing his selection decision on the personal relationship he had developed with sales representatives from one of the software firms.
- Identify and evaluate the sources of the CEO’s power.
- Develop an objective framework by which the board of directors could have made an informed decision about the adoption of a software package.
This case is suitable for an undergraduate management, leadership, or ethics course. For a course in management, this case may be linked to discussions of effective versus ineffective leadership, examining the sources of a CEO’s power, and how a CEO’s use of power may enable or hinder effective leadership decisions. This case is also appropriate for use in leadership and ethics courses.
This case demonstrates the ways in which the power and influence used by a member of upper management resulted in a poor organizational decision. It is also an example of how poor and/or unethical decisions may be made by top administrators, even when objective data is available to make a more prudent decision. We recommend assigning Prairie Health Services within a section of a course that focuses on effective and ineffective leadership and/or power and influence’s effect on leadership. To understand the sources of power, we suggest assigning a reading that introduces students to the different sources of leadership power as well as to some of the controversy that can arise when a leader is unethical or indiscriminate in the use of power or influence.
Health Care Services
United States, Small, 2003
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