CASE C- I AM FROM THE GOVERNMENT- AND I AM HERE TO HELP YOU

CASE C- I AM FROM THE GOVERNMENT– AND I AM HERE TO HELP YOU

Summary of the Case

This case discusses evolution of mentally retarded people care industry, which resulted in ways that were different from past hospital-based treatment. The new industry provided an opportunity for entrepreneur like Jay Carlos and family to open a home for patients who were mentally retarded adults. They entered the industry with little knowledge about it after discovering its potential to make profit. In addition, this industry had many regulations by the federal and state agencies. One of the major problems the company faced was staffs exposure to hepatitis B, which is a blood-borne pathogen, due to attack by residents. Federal laws provided regulations under Occupational Safety and Healthy Act (OSHA), which directs employers to protect their employees from such risk. Leigh who was in charge of ensuring compliance with such regulation helped the company develop a cost effective policy to deal with the risk. However, her policy involved immunization of both residents and newcomers in the home, as opposed to employee vaccination. As a result, an unexpected visit by OSHA inspector made Jay to consult with his lawyer and a friend in the federal state, which raised different advice. His lawyer advised him to disagree with any search in the moment, as he did further research to check flaws with regulation compliance. On the other hand, his federal friend gave him another entrepreneur in the industry, who directed him to comply with the search and to begin the employee vaccination program. If he had agreed, this program would cost the company a lot and Jay was in dilemma on whether to follow his lawyer’s advice to take OSHA to court and challenge their interpretation of the regulation or just implement the employee vaccination program (Donald et al., 2007).

Regulatory Dilemma

Using the case of East Hampshire Homes, these dilemmas emanate from differences in the interpretations of state and federal agency laws by management. In this case, an article of OSHA regulation provided the management of the home with discretion on determining the risk of their employee due to exposure to blood as they attended the mentally retarded. The same law also requires employer to provide vaccination to their employee exposed to risk by the nature of their work (Donald et al., 2007). In this case, the choice of policy developed by Management of the East Hampshire Homes can be termed as unethical decision that emanated from denial of injury. This kind of decision allows individual to consider a behavior us unethical only if party that it would hurt are identifiable (Appannaiah et al., 2010).

In interpreting the risk to employee, Leigh thought that her company employees had little exposure to the risk because residents did not change frequently. As a result, she considered immunization of the residents to be the most cost effective alternative to handling the risk. Her decision is unethical because she is justifying it by arguing that immunization of residents minimizes the risk, thus ignoring risk due to hepatitis that can result from other employees. Jay can therefore resolve the difference in regulatory requirement by developing ethics in leadership. This should be through development of honesty and morality in leadership as well as being accountable for their actions.

Porter’s Five Forces model

Porter’s model consists of the following forces rivalry among competing firms, threat of substitute, bargaining powers of buyers, bargaining powers of suppliers, and threat of new entrants (QuickMBA, 2010).

Rivalry

In this industry, rivalry is intense due to the great number of competitors competing to provide care to the mentally impaired. There is a lot of specialization as some firms majored in care for those with highest degree of mental problems, others began as non-profit organizations, and still others like East Hampshire Homes began as small business run by psychologists. Because of its smaller nature East Hampshire Homes, do not control a wide segment of the industry market.

Threat of Substitute

There is little substitute to care based treatment. Demand for homes based care is higher as prior to it the only alternative existing for parents and relatives of the mentally impaired was medication to control their unsocial behavior. As a result, homes developed as an alternative approach to assist the patients to improve their behavior.

Bargaining Power of Consumer and Suppliers

This industry is growing. It has many consumers who are relatives looking for opportunities to help their patients improve their behavior. As a result, the buyers are not specifically looking for cheap alternatives but rather an opportunity to have their patients in these homes. On the suppliers bargain power, labor supply is important in this industry. This is because employee’s turnover is at 35-40% annually and it directly affects industry profitability (Donald et al., 2007).

Threat of New Entrants

This industry has threats from new entrants who would drive the profits down. One such barrier is government regulations. While the government has enabled many firms to enter into the industry, through regulations by Federal and State agency, it ensures only certain firm continues to operate. This is through regulations like OSHA which drive the operating costs higher and limit the new entrants.

In conclusion, care industry is an expanding industry since its development, but suppliers bargain power and government regulations threaten firms’ profitability.

Reducing Staff turnover rate

Reliance on hired nurses can be one of the factors that is making Jay’s firm to experience high employees turnover. To solve the problem I Would recommend that he consider hiring nurses on permanent basis.
In addition, he should practice employee motivation through rewards and best practices in the firm to improve their retention.
Nature of work also exposes employee to the risk of contracting hepatitis B, and collaborating with government and employee in determining how to handle this issue can be an effective way to solve employee confidence.

References

Appannaiah, H. R., Reddy P. N., & Kavitha B. R. (2010). Organizational Behavior. Mumbai. Himalaya.

Donald, L. L., & Parnell J. A. (2007). Organizational Theory A Strategic Perspective. Atomic Dog.

QuickMBA. (2010). Porter’s Five Forces a Model for Industry Analysis. Retrieved on 29 Nov. 2011, from http://www.quickmba.com/strategy/porter.shtml.