Based on the attached case analysis paper, teaching notes,

Based on the attached case analysis paper, teaching notes, and your
outside research of the Mueller-O’Keefe Memorial Home and Retirement Village case study. Please answer the following discussion questions. Please be sure to write down the question, followed by your detailed response to the question.
Questions:
1. The Mueller-O’Keefe Memorial Home and Retirement Village does not currently have a written mission statement, although it is said that everyone knows what it is. In your opinion, is a mission statement needed? Why or why not? How does the religion of the majority of the board members affect the way the Home is run? If applicable, how can a mission statement benefit the organization with regards to planning, development, and achievement?
2. Mr. Polk believes that growth should not be obtained through debt. Instead, he would like to know how the home might best use their available funds to meet the needs of their community. In order to expand on the home’s services, how should funding be used to improve service and care? If you feel this is not realistic, what other funding sources could be used?
3. What can be done to improve organizational structure, reporting, and communication within this organization? What other management leaders are needed? Is it wise to expand Mueller-O’Keefe without fixing the management infrastructure? Why or why not?
4. Should Mueller-O’ Keefe increase their pricing to be in line with the pricing of other facilities? Are lower pricing options attracting people to the facility, and in turn, increasing the demand artificially? What lies in the future for the facility if financial practices continue as they are? How would you make the resident living and other plans introduced for onsite living homes sustainable?
5. Considering that this is the long-range planning committee, which of Cantwell’s options do you think would be most beneficial to the CCRC and why? Which has the least chance of being accepted by the committee and why? How do you feel about Cantwell’s analysis on what units should be expanded? In this case, what is meant by “seat of the pants’ decision making? If a consensus is not reached regarding strategic planning and guidance for the future, what are some potential drawbacks that the organization may face?

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59TEACHING APPLICATIONSThis case is intended for use in a strategic planning and marketing course or in a casestudies course. It may be used in either a graduate health or long-term care adminis-tration–specific course. The case assumes some knowledge of long-term care organiza-tion. Specifically, the reader should be familiar with the concepts of continuing careretirement community, nursing home, personal care, and adult day care. Knowledge ofsuch organizations as Area Agency on Aging and health systems agency is also assumed.Academically, students should have had coursework in organizational behavior,management of health services organizations, and health care financial management.If students are not prepared in these areas, a more basic analytical framework will needto be used. The case may be used in an organization and management of health ser-vices course to introduce the concept of strategic planning. It cannot, however, befully analyzed at that level. It can also be utilized in a health care financial manage-ment course in studying financial statement analysis and working capital management.CASE SUMMARYMueller-O’Keefe Memorial Home and Retirement Village existed in a relativelybenign environment. Started as an old folks home at the turn of the century, it has10Mueller-O’KeefeMemorial Home andRetirement VillageStrategic Planning in a ContinuingCare Retirement CommunityWilliam E. AaronsonTEACHING NOTEThis teaching note is taken from the long-term care management case study collection found inCasesin Long-Term Care Management: Building the Continuum,by Donna Lind Infeld and John Kress, publishedin 1989 by AUPHA/Health Administration Press. Used with permission.
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60Strategic Managementmanaged to evolve and grow, largely through incremental decision making in re-sponse to immediate environmental needs. Nursing care needs became more impor-tant in the 1950s, and there was an increasing need for care of religious group mem-bers that was not being met. When a benefactor offered a sizable endowment, thehome expanded to allow for the addition of nursing care and the admission of peoplewho were not members of the Evangelical Free Church. In the 1960s, retirees foundthe home a nice place to build retirement cottages where they could be assured offuture care in the nursing home. The retirement village continued to grow withoutplanning or forethought. Roads and sewage lines were added in a patchwork pattern.The only attempt at developmental or proactive planning in the 1970s was a dis-mal failure. Thus, it is understandable that the board was reluctant to adopt a strate-gic planning posture. “Seat of the pants” decision making had served the home wellthroughout its history; however, the home suddenly found itself in an organizationallife cycle period of decline. The board recognized both the organizational decline andthe board’s own inability to adjust. Principally, the decline was caused by an increasein unit costs resulting from aging buildings and demands for new programs that werenot projected.The board recognized its shortcomings and decided to hire a consulting firm todevelop a long-range strategic plan. Several board members were not sold on the ideaand were unwilling or unable to move in any strategic direction. There were majorproblems with the lack of knowledge, experience, and judgment in matters of healthcare finance, planning, and development. Areas of expertise in patient care and oper-ations had served them well in the past.The consultant, Steve Cantwell, ran into major obstacles. Although he believedthat he was sensitive to the fit between strategic alternatives and internal capabilities,he was also driven to deliver a product. He was dealing with an organization that wasused to incremental decision making and would have difficulty effecting majorchange. Consequently, options were limited to improvement of current services andminor adjustments in the service line.The strategic assessment Cantwell presented was comprehensive and more so-phisticated than the committee could digest. Early in the process, the board asked thatcomplex statistics be avoided in the report. If the committee and the administrator haddifficulty dealing with strategic assessment, they would likely have even more diffi-culty implementing a strategic plan.The case closes at the point of strategic choice. Regardless of the actual choice,Cantwell is frustrated. He is uncertain whether the home will actually follow his rec-ommendations. He is certain that if no action is taken, the home will face serious con-sequences in the near future.TEACHING OBJECTIVESThe case is intended to develop an understanding by students of the way in whichstrategic planning proceeds. The specific objectives are to:1.Understand the relationship between the expertise of governing boards and exec-utive management and strategic planning posture.2.Be aware of factors that contribute to incremental rather than developmentalplanning.3.Examine the elements of strategic planning: mission, external and internal analy-sis, and choice.
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