1. MHC has adopted two strategies in term of market position.

First, they have adopted

market leader. Their subsidiaries are the focus of the market leader strategy. They are
focusing on making their subsidiaries the market leader by developing new medical
technologies. Their other strategy is to become a cost leader. They want their divisions
to provide the services required at the lowest cost possible. The case mentions cutting
cost by letting people go to accomplish this goal. However, I feel that achieving both at
the same time is very difficult. I think that MHC should focus on one strategy. There is a
conflict between these strategies as one requires high costs and the other requires less
cost meaning that research will get low funding, if any. For example, if a company wants
to be a cost leader, they have to provide their services at the low cost, if not the lowest.
This means that it cannot fund its R&D department enough to be the innovators. They
have to delay the procurement of new technology. On the other hand, if a company
wants to be a market leader, they have to adopt new technologies as soon as it is out so
that they have an edge over their competitors in the creation of new techniques and
technologies. Since MHC has been experiencing lower profits for several years, they
need to focus on cost leadership and get more revenue. After that, they can focus on
improving their technologies.
As mentioned in the case, due to the regulation change in healthcare by the
government, MHC have experienced a loss in profit since 1989. There is also the
medical technologies that is very dynamic. Due to this, MHCs external environment is
dynamic. The main influences that MHC may face are as follows:
Government Regulations

All hospitals have to follow the rules and regulations set by the government and also
some medical organizations. Due to this, there will be some procedures or steps that
the hospital may have to follow which may increase their cost and hence hampering
their cost leader strategy.
Technology Changes
Changes in technology happens almost every other day. Due to this, they will have to
face a dilemma whether to buy the new technologies and make their service better or
save money and hamper their services. Also, regulations may also prevent use of
certain technologies affecting the hospital.
Insurance/pharmaceutical industries
The changes in insurance laws/policy and the research outcome of pharmaceutical
industries also affects MHC. For example, the recent mandatory health insurance law
has seen a lot of changes in medical field in terms of profitability.
2. MHC has treated their subsidiary and regional offices differently. They treat them like
they are two different entities. According to the case, MHCs subsidiary corporations
have to pay for the development of the new technologies. On the other hand, the
regional offices are to pay for the use and the maintenance of the new technologies.
The fit between this structure and the competitive strategy does not make sense as the
subsidiaries may end up selling the technologies to other competitors compared to the
regional offices. This will be profitable for the subsidiaries and the regional offices will
face losses.

MHC can make a few changes in their structure to maximize the effectiveness of their
competitive strategy. First, they can allow the regional offices to seek their own
technology providers which may lead to lower costs hence improving to succeed on
their cost leader strategy. On the other hand, they can also allow their subsidiary
corporation to partner with individual hospitals or the region as a whole. This may help
both of them to have profits at the same time.
The case also mentions that there is a difference in pay within the same employee
levels which is keeping them from promoting employees. So, if they change this and
make the pay similar in the same level, they can move their employees around and
make sure that they have right people making decisions.
3. As mentioned in the case, there are some employees at the executive levels that are
incapable of implementing the cost reduction strategy. Hence, there are some
executives who do not have the KSAs needed to implement the competitive strategy.
The case also mentions that some of the employees that are working in the rural areas
have not been keeping up with the technological advances. So, the market leader
strategy does not align with the KSAs of these employees. However, the case mentions
that there are some managers who have been keeping up with the technological
advances and also know about the cost cutting procedures. It would be the right thing to
put these employees in the decision making posts but unfortunately, the HR department
cannot recognize these employees. So, the HR people also do not have the KSA to
identify employees who have good potential. The employees in the same position do
not possess the same knowledge and skills either. The HR department has many

places to improve. They have not done a good job in aligning the KSAs of the
employees with their competitive strategy.
4. As mentioned in the above answer, the HR department is not organized and does not
know all the employees strengths or weaknesses. They have executives who is not
current with their competitive strategy and some who are not up to date with technology.
In order to do so, MHC should develop a HRPS in order for the HR department to work
functionally and allowing the company to have the right people in the right places. Since
many employees have KSA deficiencies, they need to conduct training to fill them. In
order to do this, first MHC needs to use the training process model. These are the steps
that MHC needs to follow:
i. Perform a need analysis: By performing need analysis, MHC will be able to identify its
training needs. Technological advances, cost cutting procedures are some that they
need training on.
ii. Design a Training: MHC needs to set the objectives of the training and design the
training accordingly. The objective should be to make sure everyone is familiar with the
new technology and the executives are able to use the cost cutting methods.
iii. Develop the training: MHC needs to develop the training so that the training aligns
with the strategy it is trying to implement.
iv. Implementing the training: MHC needs to make sure that the training is successful
and it is carried out the way it was meant to be.
v. Evaluating the training: The final stage is for the HR department of MHC to evaluate
the results of the training and determine if all the objectives of the training were met.

5. If I was the HRD manager, first, I would tell the Planning Team that the key
employees lack the skills that are needed to implement the strategy. I would tell them
that the structural design of the company does not suit the strategy and would suggest
them to either change the strategy or the organizational structure in order to be
successful. I would also inform them about the need of a process or a system to identify
the KSAs of the employees so that they can be placed in the organization accordingly
so that the unfortunate events of the case would not occur and the strategy would be
successful. I would ask them to train the executives so that all the employees are on the
same skill level so that when conducting the strategy, there are no problems of skill gap.
This will ensure that every process will run smooth.
6. Given the strategy, first of all. The HR department will have to implement a HRIS
system that can track the employees. They will need to track the following:

Job descriptions
Salary
Trainings completed

Positions
Performance evaluations

This will ensure hat MHC has correct data while developing and implementing
strategies. This way, they can have the right people at the right place. After this,
they will need to look into their recruitment methods. They need to make sure
that the employees on a positions has enough qualification and skills to perform
their job. The case mentions that they do not. This can ensure the correct
implementation of the strategy and also the support they need. The third step for
them is to make sure that they have the right goals and requirements set when
hiring employees so that they will never have to face the problem mentioned in
the case. Their final step would be to complete the training process model
created in the above question.

The source of support will come from the top level managers and other non
managerial employees. Top level managers will support it because this will
ensure that the organization is on the right track and is aligning to the
organizations competitive strategy. The non-managerial employees will also
support it because the training will allow them to gain valuable knowledge and be
able to apply for the managerial positions.

The source of resistance will be from the managers because they will feel
threatened. They will be afraid that the employees will take their job and they
might be left out. They will also feel threatened hat their power over the other
employees will be lowered.

Organization Development will be critical for the strategy to work. Areas in which
collaboration with the Organizational Development would be advisable are as
follows:

Cultural Change: Since there are going to be a lot of changes in the skills and
positions of the employees, MHC needs to change its culture in order to fit the
organizational strategy. For example, there needs to be more restrictions and
control for the managers so that they will be capable of carrying out the tasks
necessary for the competitive strategy.

Change in Personnel: They need to move employees around so that there is a

right person at the point where decisions are needed to be made. It is also
mentioned in the case study.

References

Blanchard, P. N., & Thacker, J. W. (2010). Effective training: Systems, strategies,

and practices. Englewood Cliffs, NJ: Prentice Hall.