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Pressure Ulcer
Immaculate Mart Home has an occupancy rate of 99% with 293 patients occupying its total of 296 beds. The facility is a non-profit home and is not part of a multiple nursing home ownership. It has a below average RN per resident per day of approximately 43 minutes compared to that of the state of Pennsylvania of 55 minutes.
It has a Long Term Pressure Ulcer Percentage (LTPUP) of 2.4% and a short term pressure percentage (STPUP) of 2.1%. In September 24th 2015, PA was awarded a rating of 5 out 5 by the CMS of the Dept. Health for Human Services. This rating means that the nursing home is way above average based on quality measures, staffing, and health inspections.
Chapel Manner Nursing Home has a 95% occupancy rate with 229 patients using its total of 240 beds. It is part of a multiple nursing home ownership and it is a for profit organization. Its RN Hours/Resident/ Day is 57 minutes with an average of 2.29 minutes of Physical Therapy Staff. It has a LTPUP of 2.3% and a STPUP of 1.4%. It received a 2 out 5 overall rating. A score that implies that the facility is rated below average based on staffing, quality measures, and health inspections.
Fair View Care Center is a for profit nursing home that accepts Medicaid. It has a capacity of 36 beds. Its RN Hours/Resident/Day is averaged at 44 minutes and that of physical therapy staff is less than one minute. Moreover, it has 0.0% of its long staying patients as well as short staying patients with pressure ulcers.
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Baptist Health Care Center: This is a non-profit nursing home that has a total of 140 beds, all fully sprinkled with 138 beds occupied. It has an occupancy rate of 99%. It accepts both Medicaid and Medicare and it is not located within a hospital. It has a LTPUP of 2.8% and a STPUP of 1.6%
Its reported physical therapy hours are 0.03 per day and the total nurse staffing hours per patient daily is 4.47. In addition, it has a quality rating of 3 and a RN staffing rating of 4.
Some of the risk factors that predispose an individual to developing pressure ulcers include immobility, inactivity, smoking, poor nutrition, use of corticosteroids, and urinary or fecal incontinence.
Some of the strategies that can be used to prevent pressure ulcers include frequent weight shifting, using cushions or specialized mattresses that relieve pressure, protect and clean affected skin, maintaining a balanced diet, and proper health standards such as avoidance of smoking (Coleman et al., 2013).
Awareness can be increased by first laying out facts to the nursing home staff about the consequences of pressure ulcers, how they develop, and how easily they can be prevented. For instance, the staff should be aware that in 2013, the condition caused a totally of 29, 000 deaths up from 14, 000 in 1990 (Lachenbruch et al., 2016). This therefore, begs the nursing staff to implement urgent interventions against pressure ulcers.
Lachenbruch, C., Ribble, D., Emmons, K., & VanGilder, C. (2016). Pressure Ulcer Risk in the Incontinent Patient: Analysis of Incontinence and Hospital-Acquired Pressure Ulcers from the International Pressure Ulcer Prevalence (TM) Survey. Journal of Wound Ostomy & Continence Nursing.
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Management of Complex Projects: The Seikan Tunnel in Japan
Introduction
Project management is one of the aspects that cannot be ignored whenever there is need to have a project. This may be for simple as well as complex projects. Management of complex projects is demanding. This is because the complexity of the projects involves many requirements. This calls for dedication from those tasked with seeing a complex project to completion.
The completion should be within the expected standards. This essay is focusing on various aspects of mega projects. This is done through analyzing one of the complex projects that have been carried out across the globe. This essay will focus on the Seikan Tunnel in Japan.
The project
The Seikan Tunnel in Japan is a project that brought to birth a dual gauge railway line. This tunnel is 53.85 kilometers long. It is worth noting that part of this length is under water. The length of portion of this tunnel that is under water is 23 kilometers. It is interesting to learn that the portion that is immersed under water is found 302 feet below the sea level. It is worth noting that the Seikan Tunnel comes second in terms of tunnel lengths in the world. This means that it is beaten in length by the Channel Tunnel.
The project goal
Each project set for implementation should always have a goal (Huang 2010, p.28). The purpose of implementing this project was to offer transports solution to users in the location of this project. The Seikan Tunnel connects Honshi and Hokkaido Islands in Japan. The fact that it is dual carriage gives users an opportunity to maximize on efficiency. It is interesting to learn that the need to give people returning home after World War II contributed immensely in calling for a project like the Seikan Tunnel.
Additionally, the increased traffic witnessed in the route that eventually accommodates this tunnel pushed for implementation of this project to ease it. This project was meant to reduce the transport challenges facing users in this area such as ferry accidents. For example, sinking of 5 ferries ferrying about 1430 passengers increased the need for this project.
Type of project approach
The Seikan Tunnel project was implemented through the use of traditional project framework. This was through planning around the general processes of a project. The traditional approach concentrated on commencement, proper planning and design, construction, contrl and finishing of the project. This framework created ease in handling each task.
The project success measures
For a project to be successful, there are certain measures that have to be put in place (Weissenberger & Kotch 2007, p. 24). For that matter, this project had its success measures too. One of the success measures for this project was completion within the set time. This project had time set for all stages. Completion within the stipulated time would deem this project successful. As a matter of fact, it was completed within the expected time.
The other success measure for this project was continuous progress. The project was to be declared successful if all phases continued without stalling. The continuity was necessary since it means that the project would be completed within the set duration. Thirdly, acceptance of this project was the other success measure. In project management, acceptance from stakeholders is very crucial (Windapo & Goulding 2013, p.431).
This is because implementing a project that none of the targeted persons would not want to be associated with is useless. Luckily, this project received wide acceptance from stakeholders thus being declared successful.
The other vital success measure for this project was based on budgeting. This measure guided that the project’s completion within the set budget would deem it successful. The Seikan Tunnel was planned to operate with a budget of about $4.0 billion. Fortunately, it was completed with US $3.6 billion. This means that the budget was adhered to thus the project becoming successful as per this measure.
The project web
The implementation of this project saw the presence of a wide project web. This touched on the contractors, government, media, observers and multinationals among others. The Japan Railway Construction public was created to handle this project. Several suppliers were given tenders to supply the required materials. Most of these suppliers were multinational companies.
The media and observers ensured that information about the project trickled to the stakeholders. Zeng et al. (2009, p.19) say that the media is an important partner in project management. On the other hand, the government ensured that the project was properly secured and funded.
The Seikan Tunnel project organization
This project had project-based organization. This was evident from the fact that various functional sections were created during the project implementation. These departments had individuals assigned to them for the long periods of the implementation. This led to the project having defined authority from the project managers. Additionally, each and every individual in the project implementation group had tasks to handle thus need for upholding high levels of responsibility.
The Project life cycle of Seikan Tunnel
This project took a total of 43 years to be completed. Over the 43 years, the project went through several stages. Below is a matrix showing the stages and events over the 43 years of the project.
Date
Main event
April 1946
Surveying for the project commenced
March 1954
The Japan Railway Construction public was established to oversee implementation of the Seikan Tunnel
September 1971
The main tunnel construction kicked off
January 1983
The Seikan Tunnel piloting was done
March 1985
The Seikan main tunnel was confirmed
March 1988
The Seikan Tunnel was opened
Problem areas that had to be overcome during the project life cycle
Mega projects are known to have problems that have to be overcome for a project to be completed (Zolkos 2012, p. 21). For the Seikan Tunnel, the problem areas were found in;
Inadequate expertise
Expertise is one thing that each project should have (Sullivan 2001, p. 78). This means lack of adequate expertise becomes a problem that should be dealt with so that it does not disrupt a project. At some point during the implementation of this project, certain expertise became inadequate. This threatened the success of this project. In a bid to save the project from failure, the project managers moved with speed and acquired individuals who had the required expertise to drive this project to completion.
For example, the use of tunnel boring machines had to be stopped for sourcing of blasting expertise. This was brought about by discovery of hard rock that could not be bored successfully.
Design
The design of a project is very important in implementation. The design for this project had to be altered to make it more suitable for the project. It is worth noting that only small alterations were done.
Unforeseen Disruptions
The implementation of this project saw some minor disruptions. The weather and surroundings would get turbulent sometimes. The weather sometimes disrupts continuity of projects (Sharma 2009, p. 45). This would affect continuity of operations for this project. This was a major threat to the time that was set for completion of this project.
Areas of good practice in the Seikan Tunnel project implementation
In the implementation of this project, several areas witnessed good practices. These good practices led to successful completion of the Seikan Tunnel. These good practices include;
Environmental practices
The environment is one thing that many implementers of mega projects fail to respect (Ali et al. 2008, p.670). It is worth noting that taking care of the environment should be concern for everyone involved in implementation of complex projects (Loo 2009, p. 30). With this in mind, this project saw the environment taken care of. This was through the use of environment friendly technology. This project was implemented in a way that had efforts to see carbon emissions reduced. Additionally, the other habitats of the environment were not affected.
During the implementation of this project, eco-friendly materials were used. The project managers ensured that material selection was proper to avoid those unfriendly to environment. The suppliers were informed that they should adhere strictly to the specifications forwarded to them.
For example, water was not contaminated in any way. The soil was also prevented from effects of corrosive processes.
Human resource
Human capital is usually the backbone of a project (Pardo et al. 2009, p. 31). Human resource management during the implementation of The Seikan Tunnel project was excellent. It is worth noting that the best practices in the management of human capital were put into use. This made the project managers have the best of their time when implementing this project.
The working conditions for the employees for this project were made good. Each one of the employees was made to work under conditions that respect human dignity. Additionally, matters of employee safety were handled properly. This was through ensuring that standards related to safety of employees were adhered to. The procedures regarding the use of tools and machinery were put in a way that protected the employees better.
To make it better, the human resource function ensured that the employees felt appreciated. This was through recognizing exceptional performance during the implementation of this project. The employees were given attractive incentives. This boosted their morale thus increasing the level of output.
Accountability
This project was able to be declared full of accountability. The project managers were found to have taken care of the allocated resources. This means that after taking stock of what was allocated to them; auditors were satisfied with the use of all resources that were offered for use during implementation of this project. There were no cases of mass corruption reported as is the case when other major projects are being implemented. Proper records were available for any interested party to go through.
Innovation
The Seikan project was one of the projects where innovation is known to have played a major role. This project saw the project managers coming up with new ways of doing things. The processes and equipments used had creative aspects that led to increased efficiency.
User participation in the project
Users of a project are the stakeholders. These are the people who are beneficiaries of a project that is being implemented (Ling et al. 2015, p .45). During the execution of this project, the users had full participation. The project managers ensured that there was freedom for the users to interact with all stages of the project. This was arrived at for the purpose of reducing the negative impacts of criticism as a risk in project implementation. The users had full access to all information regarding the designs and progress of this project.
This brought about wide acceptance. The project managers would listen to the perspectives of the users. This was necessary for the purpose of building on the plan that the project was based on. From the fact that users participated well, the project management became more geared towards completing it. This is because the users became source of assurance that the project was necessary for them.
The users had a huge influence of standards set for the project. It is worth noting that many mega projects end up not fulfilling the expectations of users due to project managers who disregard the standards agreed for the project. This did not happen during execution of this project. The users were keen when looking at the design and other documented standards. This close monitoring put pressure on the project managers to a point of making the implementation of this project follow rules to the letter.
The users were able to succeed in getting the expected standards through arranging meetings. They would discuss deeply about the progress of this project. Each one of the users would give contributions for the benefit of the meeting. The fact that the meetings were consistent made the user participation strong.
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Core capabilities or competencies involved in implementation of the Seikan Tunnel
During the implementation of this project, there were evident core competencies. These competencies are always credited for the success of this project. One of the core competencies is the integration of technology into the project implementation process. Technology is known to increase efficiency in projects (Meyers 2013, p.65). Technology was widely used to drive most of the processes for the project.
Information was managed through the use of the best information handling technological platforms. This made it easy to use and execute the project from an informed perspective. Additionally, technology was integrated into the communication bit during the project. Technological involvement in the communication channels for the project was a major plus for the project.
The second core competence during the implementation of this project was proper project management. It is worth noting that the project managers were quite skillful. This led to proper execution of all aspects of the project.
Another core competence for this project was proper risk management. Risk management is a very important aspect to consider while handling projects (Sridhar 2011, p.63). During the execution of this project, risk management was done efficiently. This led to reduction of negative effects of risks that were identified. Qiao (2007, p. 14) says that proper risk management reduces project hardships.
Another key competence factor during the execution of this project was proper management of human capital. The human resource management function for the project is credited for having done its job properly. All the time that the project was continuing, all matters related to the affairs of the workforce were handled as expected. This reduced unrests and disruptions from the workers for the project. Strazewski (2009, p. 34) says that mitigation of employee related risks is very important since it makes project implementation successful.
Broader issues affecting megaprojects; The Seikan Tunnel in focus
Mega projects are usually faced by several broad issues. Theodore (2014, p. 88) says that broad issues affect projects are usually caused by the fact that numerous processes and operations take place. Generally, the complexity of mega projects brings rise to issues that have to be managed. These broad issues include;
Risks
Risk is always present in all projects, whether minor or complex. However, the risk level in major projects is much higher. This calls for a very solid risk management function for complex projects. During the execution of this project, several risks were identified. One of the identified risks was about the project design. There was fear that the design would show some weaknesses towards the end of the project life cycle.
This made the project managers become apprehensive throughout the project. To mitigate this risk, the project handlers ensured that the designers of the project kept confirming the reliability of the project design. Additionally, the project managers made several consultations with experts in design to try and get assurance. At the end of the project, only immaterial alterations were made to make the project design a success.
The other risk that was identified by the risk function for this project was high labor turnover. Generally, complex projects are known to be full of work. Many a times workers tend to burn out or opt out due to poor conditions at work (Suriyamathi et al. 2013, p. 54). This identified risk did not affect the project since proper human resource management was done during the project.
To do away with this risk, all project employees for the project were treated as per the international labor standards. This was through ensuring that remuneration to the employees was as per the expected standards. Additionally, payments to the employees were disbursed on time to avoid workforce unrest. To ensure that the risk does not disrupt the project continuity, the project managers ensured that the conditions at work were up to the expected standards. This made employees work properly thus avoiding negative effects of high employee turnover risk.
Decision making
For projects to be completed successfully, decision making should be done in an efficient way. This is because decisions that are made determine the level of achievement to be expected. Proper decision making in projects leads to continuity of projects in proper ways. On the other hand, if decision making for a project is poor, negative occurrences will affect the plan towards successful completion. For complex projects, decision making is usually very difficult.
During execution of this project, several challenges occurred during decision making. It is worth noting that complex projects call for many decision makers. Therefore, the process of decision making becomes very complicated and slow. The decision making process for this project was very hard since managers were many. The many decision makers took long time for decision making. This is because they had to consult each other. Opposed suggestions by some of the decision makers took more time for the purpose of discussions and explanations as to why certain opinions could not be upheld.
Cultural
Cultural differences usually affect mega projects. This is because the many employees are required for complex projects are drawn from diverse cultures. This brings about cultural diversity within the workforce in a project. This was the case during the lifecycle of this project. The project managers brought in individuals from various cultures. This was caused by many reasons, need for expertise being one. With cultural differences, attitudes towards tasks approaches were different. This created some sort of sluggish participation from laborers. As a result, the project time was consumed in the process of harmonizing the cultures.
Labor
Labor management is the other broad issue that affects mega projects. This happens to be a very sensitive issue since complex projects are usually labor intensive. Therefore, the project handlers should always ensure that labor matters are managed in a way that does create stability of the workforce. During the life cycle of this project, the workforce was well handled. This means that project was able to continue without alarming cases of workforce dissatisfaction. The minor cases of complains that were forwarded were amicably settled.
Political
The politics prevailing in areas where complex projects are being held affects the continuity. It happens that in areas where there is political instability projects tend to stall or become abandoned completely. During the lifecycle of this project, the political waters were cool. This gave this project an opportunity to continue without disruptions. It is worth noting that the political leaders within the geographical location of the project did not want to interfere with the project. The instances that saw the political leaders enquire about the project were all friendly. This gave motivation to the managers of the project thus pushing for completion.
Criticism
It is common practice for people to criticize projects. It is a global thing for people to spoil the image of mega projects (Riley 2013, p. 91). This is always through trashing those projects on basis of prioritization. During the execution of this project, criticism was identified as one of the risks.
The criticism directed towards this mega project was based on the fact that the amount of money used could be used for other projects that are better in terms of meeting the needs of the common citizens. To ensure that this did not affect this mega project, the project managers ensured that proper public participation was done. The project managers created a system that made all stakeholders aware of what the project was all about.
Conclusion
Management of complex projects is known to be quite demanding. Therefore, the people in charge of such kind of projects should ensure that proper planning is done. The goal of the project should be the guiding tool for all processes. To make it better, the life cycle of mega projects should be monitored to ensure that it does not get disrupted. The stakeholders should be managed well to ensure that the project continues with understanding. All challenges should be handled with sobriety and efficiency. It is worth noting that good practices should be priority when drawing the strategic plan for complex projects.
Risk management during project implementation should be done in a good way. This calls for the need to have a reliable risk function during the life cycle of a mega project. All risks should be identified and mitigated properly to ensure that the project does not become disrupted.
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Strategic Planning
Strategic planning is a detailed step by step, formulation and implementation of processes that are to be followed by top management of an organization in order to realize the long time objectives. Jhpiego, is an NGO that involves in dispensation of medical services globally aiming much on gynecological aspect. Being an organization which has roots everywhere in the world, its success much be drawn from formulation and implementation of a strategic plan (Rothwell, 1998). Dr. Leslie Mancuso is the foundation’s CEO. Being on the top management of the organization, she has a lot to do with success of Jhpiego’s strategic plan.
Dr. Leslie Mancuso has presented some paramount roles of leaders in strategic planning and management. During the drafting of the strategic plan, leaders need to spearhead crafting of the strategy, setting goals and objectives, formulate the mission and vision, executing the strategy, evaluating performance and also monitoring. In addition, Leslie displays a lot of involvement in any activity that relates to strategy implementation which has enhanced her success in the global organization (sadler, 2003). A leader need to be interested with the implementation of a strategy and hence guide the juniors. Leaders should again should communicate a message of organizational values to the juniors. Such values include justice, fairness and equity.
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In today’s health organizations, strategic planning has a long list of importance. Firstly, the future cannot be predicted therefore, a strategic plan act as a seer in how well organization will be managed for tomorrow (Government of USA, 2005). Secondly, it gives the overall direction to the management, especially to departments such as finance, human resource, marketing and organizational development, strategy. Thirdly, strategic planning provides a benchmark on what is being done now and what ought to be done. These guarantees a brighter future of nay health organization.
Leaders should display their competence using the SWOT analysis strategy (Upvall & Leffers, 2011). They need to strengthen their strengths which will in return appear to override their weaknesses. Some of the talents that should be presented to juniors are visionary, inspirational, strategic and tactical.
Rothwell, W. J. (1998). Linking HRD Programs with Organizational Strategy: Twelve Case Studies from Real world of Training (2nd ed.). New York, USA: ASTD.
sadler, P. (2003). Strategic Management. London, UK: Kogan Page Limited.
Upvall, M. J., & Leffers, J. (2011). Global Health Nursing: Building and Sustaining Partnerships. New York: INU Publishers.
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An Overview of Mayo Clinic’s Facility Utilization Management Program
Mayo clinic is a sophisticated health care organization, which runs a variety of health care facilities, medical schools, and health science schools in the United States (Kashyap et al, 2016). This organization has developed an elaborate healthcare facility management program, which is aimed at enhancing the functionality of its facilities and personnel by integrating the most qualified health specialists and staff with a well-designed and equipped environment. Mayo clinic provides health care services to millions of patients from within the country and outside at a reduced cost (Miller et al., 2014).
The health care provider has facilities that are located in some of the following areas; Rochester, Jacksonville, Minnesota, Phoenix, Arizona, Scottsdale and Florida. In fact, its clinical campuses in Rochester are regarded as the world’s most integrated clinical facilities (Kashyap et al, 2016). In Mayo clinic, facility utilization and management program is based on empirical and evidence based strategies, which are aimed at providing the clinicians and other health care service providers with a conducive work environment, and the clients with high quality services, depending on urgency, and in the most appropriate and efficient manner (Kashyap et al, 2016).
Facility utilization management is also regarded as a venture that assists the management to reduce the overall costs of running the facility. It is therefore implemented in a prospective, concurrent, and retrospective approach (Kashyap et al, 2016). The health care provider has also developed the ‘at-risk care delivery program’, which is meant to increase the effectiveness of health care provision to its clients, as well as an enabling environment for the physicians and other staff members.
For instance, the at-risk care delivery program is designed to provide clients with; a well-planned discharge schedule for inpatients; provision of services with minimum variation for all clients; and a continuum of high quality care services to both inpatients and outpatients in the clinic, and all these being designed to result in minimization of any unnecessary care that could be provided to patients, and as such, an overall reduction of costs incurred in service delivery to patients is achieved (Kashyap et al, 2016).
Critique of the Facility’s Utilization Program In Light Of the Standard Utilization Management Programs
Facility Utilization Management (FUM) in this organization is evident in the systems and procedures that it has adopted as an effort to achieve health care savings. In particular, FUM is achieved through effective management of patients’ care as well as minimizing unnecessary care that is given to the patients (Kashyap et al, 2016). Physicians and other medical staff in Mayo clinic have been sensitized to the need to adhere to FUM guidelines as health service providers, as an effort to increase the accountability of medical service provision to patients who are regarded as payers in the system.
As such, they are required to provide health care services in accordance with the patient’s needs and the medical necessity that arises from the need, which in this case should be provided to the patient in the most efficient and appropriate manner at all times (Massimino et al., 2015). To achieve this, Mayo clinic has adopted the necessary technology to oversee efficient and economical service provision to patients including hospital admission programs, length of stay management, and precertification programs (Julianna et al., 2013).
All these programs are designed to provide patients with services in the most economical manner, where costs are aligned with the type of service provided. These programs have been adopted in all areas within Mayo clinic’s health facilities including medical, substance abuse, laboratory, and surgical sectors.
FUM within Mayo clinic is performed retrospectively and concurrently as deemed necessary. The specific objectives include maintaining the average number of patients who receive services, but at a reduced cost; establishing a DRG-guided inpatient health care facility; and to effect free for service outpatient services as a containment strategy to cut down on costs (Kashyap et al, 2016).
In its prospective review programs, Mayo clinic evaluates patients’ perceived medical or care need before admission, and assesses its appropriateness in terms of the proposed service requirement against any available medical information about the patient’s condition. This is followed by conducting an extensive consultation to determine the necessity for the required services or procedure (Julianna et al., 2013). If positive outcomes are obtained, then the patient is admitted for services or provided with outpatient services, if negative, alternative treatment options are discussed with the patient (Kashyap et al, 2016).
The prospective review program may be seen as a cost effective measure since it prevents the patient from being given unnecessary treatment services, and the health facility from incurring costs from the services provided, medicine and consultancy fees for physicians. The likely disadvantage in the program is that prospective reviews are bound to take lots of time if they are to be effective and meaningful (Massimino et al., 2015). In addition, the type of review may not be effective in cases where patients require emergency services, and this is because unnecessary costs would still be incurred during the diagnosis.
In its retrospective review programs, Mayo clinic conducts a detailed analysis of the duration of stay among other metrics in all its institutions and health facilities, including an analysis of the length of stay at the physician(s) level. Retrospective review is aimed at identifying any gaps in care provision, and whether there exist anomalous utilization patterns in the system (Kashyap et al, 2016). The information provided is used to make updates on clinical guidelines and registries according to care outcomes, after which necessary adjustments are made.
The retrospective review may be seen as an important venture because it helps management to optimize the health service outcomes, and at the same time achieve a reduction in the overall costs of operating the clinics. In addition, gaps in the utilization of medical staff and facilities may also be identified through the review, which would allow the appropriate adjustments to be effected. If effectively done, this would be reflected as reduced operation costs.
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In its concurrent review programs, Mayo clinic emphasizes that its physicians and the medical staff screen patient’s conditions or health service requirements before admission, which is a means of determining the medical necessity of the patient’s need requirements (Kashyap et al, 2016). Information from the screening procedure is also used to determine the appropriateness of the patients’ perceived requirement. As an effective care management program, the screening procedure helps determine the appropriate duration required in giving the patient the required service care, and this information is used to schedule the period of stay from admission to when the patient is discharged.
The concurrent review program may be seen as an effective venture in as far as cost reduction in care provision is concerned. This is so because; information obtained from the screening procedure may be used by physicians to prescribe the correct treatment. Specifically, it allows the nurses and medical staff to provide health care services in an efficient manner while focusing on the anticipated outcomes (Kashyap et al, 2016). In this case, wastage of time and medication is minimized; the clinic is also able to anticipate the appropriate bed days for scheduling.
On the other hand, the clinic is able to cut down on costs incurred through bed stays and admission services, which is because the applicability of the provision of home support services may be evaluated during the screening procedures. In addition, the patients are also able to receive high quality services and the needed attention, since the nurses and physicians would need to monitor the patient’s progress in an effort to adhere to the schedule and discharge plans.
Massimino, P. M., Joseph, M. L., & Kopelman, R. E. (2015). Hospital Performance and Customer-, Employee-and Enterprise-Directed Practices: Is the Mayo Clinic Reputation Deserved?. Journal of Management Cases, 28.
Merten, Julianna A., et al. “Utilization of collaborative practice agreements between physicians and pharmacists as a mechanism to increase capacity to care for hematopoietic stem cell transplant recipients.” Biology of Blood and Marrow Transplantation 19.4 (2013): 509-518.
Miller, R. C., de los Santos, L. E. F., Schild, S. E., & Foote, R. L. (2014). Organizational Culture and Proton Therapy Facility Design at the Mayo Clinic. International Journal of Particle Therapy, 1(3), 671-681.
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Change Management
Abstract
Management accounting is also commonly denoted as managerial accounting. It is in practice the process of handing over accounting data belonging to the firm to its board or executives so that they can make progress reports and quality decisions for growth. How well-kept books are determines the success in the projects a company sets out to do and often results in the growth of the business or empire.
Consequently, accountants and other persons in the finance department are mandated with the task of ensuring that management accounting is properly done and that all records are and neatly kept. In line with international accounting principles, management accounting must ensure that accounts are audited before they are brought for review and analysis by management.
This practice of audit is crucial to the sanctification of erroneous accounting data in order for there to be accountability and credibility. The information computer in management accounting portfolio is often done with the aid of computerized management information system. It draws data from smaller transaction processing systems and often affects the way activities are performed in an organization. Here is a look at how the Toyota Company applies management information to conduct management accounting and how that benefits the company moving forward.
1. Introduction
1.1 Background on Change Management at Toyota
The Toyota Motor Corporation is a leading automobiles manufacturer headquartered in Toyota, Japan. The company boasts of the largest fleet of automobiles in the world with the brand even splitting to accommodate space entities affiliated to the mother plant. Toyota manufactures virtually all sorts of vehicle; from cheap salon cars to low consumption SUVs, Toyota even has a luxury automobile; the Lexus.
The company was founded by Japanese engineer Kiichiro Toyoda in 1937 and from its humble beginning; the company has grown over time to become the most successful in the automobiles industry. The Toyota brand currently sells its products in a host of nations outside Asia, especially Africa, Europe and the Americas. Due to her success in manufacturing, Toyota has grown internationally renowned. As shall later be discussed, the Toyota Production System is known as one of the most efficient systems globally (Yang, Yeh & Yang, 2012).
1.2 Why Toyota invests in change management
The fleet of cars under the Toyota name is all made in a unique way that takes advantage of low fuel consumption and comfort. Toyota is extensively involved in research and often releases models every few years. This is, however, as subject to consumer demand for its products. It is necessary to note that the company manufactures a large fleet of models and keeps remodeling and reselling to profit from every successful model. For this reason, every Toyota model in the past has had improvements.
The company encourages renovation and development as it incorporates the sleek and beautiful outline of its vehicles within a well-designed package that sees the consumer fork out less money but for more commodities. Fuel efficiency and concern over the environment are other factors that have made the company favorite among most Non-governmental organization (Helper & Henderson, 2014).
1.3 Factors that promote change at Toyota
Toyota’s motto is; ‘always a better way’. There indeed is a better way in the way Toyota conducts its policies and manufacturing processes. The company is very crucial on its need to cut waste. Using its esteemed Toyota Production System, the company ensures that they cut losses and always register a profit margin. Save for the time of the global recession, the company has consistently made profits.
That said; there need be mention that the company is sufficiently geared towards consumer satisfaction. The company has a declared aim to; “ever have better products ….To achieve our goal we design parts with good features, and standardize these for each region, spanning different platforms. This provides better efficiency and cost reduction, with the resulting savings used to improve products further.
This virtuous cycle for building better cars leads to sustained growth.” This is the working principle behind the production system that looks to cement the Toyota values into its work force. The company maintains a highly industrious work ethic that sees its employees always take their work with utmost seriousness and pride (Becker, Carbo & Langella, 2010).
2. Literature review
2.1 Employment culture and practices at Toyota
Toyota is aware of the need to maintain high credibility standards in its work force. This calls for the vetting and rigorous interviewing of its work force. However, the same hardly calls for bureaucracy and other measures than instigate discrimination. The company ensures that they get the qualified staff to undertake all the activities and functions required of them. This creates an industrious staff that is committed and dedicated to its role at the company. The success of Toyota has taken years of history, investment in product development and a strong culture.
What is more important is that the company has always learned from its mistakes and done better to improve an unfortunate situation. According to Sui Pheng & Shang (2011); even with challenges in testing that have led to the recalling of some of its major brands, the company has ultimately managed to maintain its customers. The Toyota brand keeps growing among its competitors due to the ability to utilize human labor and machine efficiency in a completely effective model.
Toyota’s work force has over 300,000 employees. This has made the company especially get great popularity and prominence across the world. Management accounting enables employees to justify their actions and often account for excesses every once in a while (Abdel-Maksoud, Cerbioni, Ricceri & Velayutham, 2010). Management thus takes advantage of the fact that most of the activities undertaken in the firm can be accounted for. Employees have to be accountable to management for their actions and activities in a company.
To achieve this in the best way, companies that have methods such as performance contracting often finds themselves on the receiving end with most employees being resistant to this form of accountability. However, as employees become used to their efforts and how to exercise their efforts towards growth, the company grows substantially. This leads to an increased appreciation for the management accounting practices and principles.
According to Yamao & Sekiguchi (2015); employees are often resistant to management accounting. This is because most persons are unable to account for the use of miscellaneous resources. Processes such as auditing and the confirmation of accounts can be really scary and thus often, they are afraid of them. Managers thus ensure that the systems in a working environment are enough to ensure that employees essentially account for their work.
Managerial reports, transaction processing systems, as well as registers, are some of the key areas of accountability in a firm. The use of these extensively can ensure that no single employee is complacent in their work. Toyota especially practices this form of accountability to have all employees reporting to a higher authority and that failure to prove productive can lead in dismissal. While employees may work under pressure due to such constraints, they need to be as practical as possible in what they do.
2.2 The Manufacturing process at Toyota
According to Hibadullah, Fuzi, Desa & Zamri (2013); the manufacturing process at Toyota can be underlined by one singular word; Monozukuri. Basically, the word stands for ‘manufacturing things’. It is a Japanese principle that decries complacency and advocates for consistent innovation. Toyota has been on the forefront of manufacture in Japan. The company has continued to uphold the Monozukuri culture thus verily coming up with new models and designs every financial year.
The investment in research and development is quite large. This allows for there to be consistency in development and innovation throughout the entire automobile industry. With time, accelerated development has lessened cost of production since the templates have grown in volumes. The expertise and experience of the engineers have also augmented. That is why the Monozukuri culture is not only for Toyota, but for Japan.
According to Helper & Henderson (2014) manufacturing at Toyota is one of the most efficient waste management practices ever developed by the organization. Indeed, the company is very particular about the lean manufacturing model. Toyota prides in manufacturing for the larger market. With very few luxury car models and brands; the concentration is on developing products for the larger consumer market without having to minimize on quality.
The balance between quality and volume is achieved by precise designing. The design process takes consideration of change factors such as engine capacity, steering capability, brake system improvements and the development of better safety measures with each model. All these changes are made without necessarily affecting the cost of the vehicle to a point that may make the vehicle unaffordable.
2.3 Lean Manufacturing Strategy
Toyota has redefined Monozukuri as the art of translating design data into finished products. This has been necessitated by the development of these designs through research. The company prides itself in understanding the market well. Researchers go to extend of even hiring houses around the target areas so as to monitor their movements, their taste as well as what would suite them best. Toyota car designers and engineers work together to put the beautiful car designs into perspective.
This is so as to have a great final product that is as well feasible to manufacture and importantly, leave room for improvement (Prakash & Kumar, 2011). While there may actually be little room for this improvement, the company has often written records with new inventions that have suited the market, against a tide that was not on their side. In essence, pulling market forces towards it has been a result that inevitably happened as a consequence of proper planning and implementation of the Monozukuri culture and principle.
The Toyota Production system is a designed working system that seeks to eliminate; muri, mura and muda. Muri is the overburdening of personnel with redundant work. It is singled out as one of the activities that lead to inefficiency in a firm. Mura, on the other hand, is the waste that accrues from activities that are done in excess. The system seeks to reduce these wastes in a number of ways as shall be later identified in this paper. Muda is the process of eliminating waste.
The system identifies seven types of wastes; waste due to overproduction, waste due to time on hand (wastage of time), waste due to inefficient transportation, waste that occurs in the processing itself, waste due to unutilized stock or property at hand, movement and defective products. Having identified these wastes, the system proposes methods to ensure that they are eliminated; therefore, the company can become more productive. The rest is a look at some principles that help in waste reduction and proper utilization of resources (Hibadullah, Fuzi, Desa & Zamri, 2013).
2.3.1 Kaizen
The Kaizen is a Japanese principle for continuous improvement. Toyota production system uses the Kaizen to eliminate wastes that result from time wasting, defective products and unutilized stock. Indeed, the kaizen is a very crucial value for most Japanese companies. Those who abide by it work with deadlines to ensure that they have products ready for a waiting market. Knowing that the desire for new and better automobiles is insatiable, Toyota invests in the redevelopment of models of very kind each year.
It is only inevitable that as this practice continues, the company finds it easy to come up with a new product to compete against other market leaders. There is indeed no market front that Toyota cannot venture. This is because they do not just enter the market to produce a similar product; they offer cheaper yet better products thus entirely convincing the consumer. With the spirit of Kaizen, the company always scales new heights in automobile development (Hibadullah, Fuzi, Desa & Zamri, 2013).
In the company’s hiring practices; Kaizen is also practiced. For instance; Toyota is very efficient in the company’s interviewing. Eliminating non-valuable processes in an organization is crucial to the growth and development of an institution. This is because; the non-value-adding processes are costly just like the operational expenses incurred by any other process in the organization or business. They impose an extra cost to the business yet do not offer any benefit. For instance, the process of hiring new employees is very elaborate. It includes vetting, sifting through applications and choosing the most appropriate candidate.
However, it may be unnecessary to have four or five interviews. Minimizing the interviews to one often makes the interviewing process effective. For efficiency, a company would choose to have aptitude tests to minimize the number of applicants to interview. Value addition thus does not have to have a lot of bureaucratic processes that may not be necessary. It is all about saving time and minimizing cost, effectively leading to efficiency (Senge, 2014).
2.3.2 Just in Time
Just-in-time policy ensures that products are delivered to the consumer on demand and within a specified period of time. Toyota believes that if a product is delivered late, then it is as good as not delivered. The same applies to all departments within the company; no one is allowed the luxury of time. Employees are consistently on their toes trying to meet very strict deadlines and often do so in order to live by this principle. The just-in-time policy ensures that the waste of time is eliminated for good.
It involves aspects of punctuality in job reporting, delivery of goods, development of new designs and even the completion of the manufacturing process (Prakash & Kumar, 2011). Essentially, these time limits are set even before the employee embarks on the task. Working to meet deadlines is a great policy that ensures that work is done in a convenient time. The result is that the company is successful in its undertakings and pushes the employment to higher limits. Even for the employees, the just-in-time policy makes better employees out of them as they continue to observe punctuality.
2.3.3 Jidoka
Jidoka is the intelligent automation of automobiles. As much as possible, Toyota cars are made to accept easy human instructions using levers and gears. With the introduction of the auto cars from the use of the manual cars, Jidoka was extensively applied. Indeed, the issue of intelligence in automobiles is a grey area, as cars are just machines. However, with time, these machines have evolved to understand danger situations, accident safety and haptic response.
In the process of troubleshooting erroneous machines and defective system, four steps are applied using the Jidoka principle; detecting the abnormality, stopping the entire production process, fixing the problem and finding ways to ensure that the problem never recurs. This ensures perfection to a great extent but mostly, it leads to elimination of the waste due to production errors that result in defective products (Prakash & Kumar, 2011).
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2.4 Quality challenges at Toyota Corporation
Toyota has been on the center stage of quality development using its Production System. The Jidoka principle of continuous manufacture ensures that with time, the company masters the art through practice. Toyota has however its fair share of quality issues and strategy failures has. These emanate from circumstances that the company has ever been challenged with dealing.
The most pressing of the company’s major quality concerns has to do with the product testing bit. Toyota has thus been on the receiving end of most critic auto magazines and general media over faulty brake systems and air bags. This has often led to the recalling of her products from the market. Only in 2010, the company has to recall volumes of its SUV models for the faulty brake systems. The company has since made efforts to rectify their manufacturing and testing errors with little success.
According to Dedoussis & Littler (2010), strategies put in place by Toyota to deal with her challenges have been communicated by the management on the various occasions the company has been called upon to account for their weaknesses. Mr. Akiyo Toyoda did mention in 2010 that the company was making plans to increase its testing facilities in order to accommodate larger volumes of test cases.
The company also thrives in the fact that it is market specific thus most of its problems hardly affect the entire market. This has been a contributing factor to the company’s growth over the years. Aside from that, the fact that the company has a great consumer appreciation and compensation policy makes it achieve great success with regard to popularity ratings. The company has thus dealt with all its suits and managed to ensure consumer satisfaction even with the defects and challenges with its models from time to time.
With the myriads of success and milestones covered by the company, it would be argued that the company would relent and bask in the glory of her successes. However, there are no limits to what the Japanese auto dealer can achieve. Indeed, with the introduction of relatively cheap automobiles, other manufacturers thought that the practice would be unsustainable. On the contrary, Toyota has continued to prove critics wrong. Not only has the company grown to be more successful, it has consistently led the way in automobile innovations.
Over the last decade, the car that was initially thought of as low class has continued to attract favorites across the globe. Toyota demonstrates that, with proper management accounting principles, any company can achieve success, even with the least amount of time possible. This success nonetheless gets addictive as it sets the benchmark for the next target. As long as the company continuously invests in bettering its products, there are no limits to the amount of income that can be accrued from the same (Zubir, Habidin, Conding, Jaya & Hashim, 2012).
3. Concepts of Change management at Toyota USA
3.1 History of Toyota USA
The Toyota Corporation maintains a subsidiary in the United States dedicated to North American sales. This subsidiary is refered to as the Toyota Motor Sales, USA Inc. The company was founded as an offset of the Toyota Corporation in 1957, and headquartered in Torrance, California. Initially, the American motor market had been controlled by three major market players, General Motors, Ford and Chrysler. Toyota as an entrant began by attempting market domination with a fleet of luxury cars under the brand ‘Lexus.’
The Lexus model was however not as successful in the United States as it had been in the United Kingdom. Sales for many Toyota brands were also low. The company had to come up with a strategy to guarantee market penetration. This was however not a significant challenge to the mother company as the models from Japan were more popular in Asian and European markets than any other Auto manufacturer. Capturing the United States market would mean a little more investment in research (Bunkley, 2016).
In the early 2000s, the USA subsidiary of Toyota Corporation released a new model into the market. The model dubbed ‘Prius’ to target a different market segment; the young drivers. The sleek design and the fairly low cost gained a lot of traction among American teenagers. The fleet of ‘Prius’ vehicles was so successful that Toyota leased the brand to a subsidiary manufacturer to work on developing the brand; which Toyota still owns to date.
The company (Toyota USA) managed to penetrate the American market using lean management and the incorporation of the concept of economies of scale. Although Toyota did not capture the high-end market and still does not make the most revenue out of the United States market, the company continues to research further and is driven by the principles that drive the mother company; Jidoka, Kaizen and Monozukuri. Toyota USA C.E.O; Jim Lentz has on various occasions hinted on the research into the next generation cars ongoing at Toyota USA. However, not many models have been presented by the company (Undercoffler, 2015).
3.2 Lean Management at Toyota USA
Toyota USA has continued to thrive and achieve unprecedented success due to its management accounting practices. The company has consistently devised new ways to improve productivity thus hardly make any wastage. Toyota can be praised for the great turnaround after the recession of 2009. The company posted a net loss of $4.2 billion but was soon able to emerge successful the following year. The management has been interchanged successfully every few year, but that has not changed the company’s management system.
Consistency in the management of resources and basic management accounting has enabled the company to be efficient in spending and utilization of resources. The trickle effect has been the growth of the company to have subsidiaries and affiliates. However, there has been a consistent focus on development more than management policies. Nonetheless, the management has been on the forefront in driving development agenda for the company (Muller, 2016).
Toyota can well manage its fleet as it ensures that no management wastes are recorded. Fleet management is important since it helps the company know how to maintain a consumer base as well as a consistent demand and supply ratio. The gap in demand is always met by supply. With time, the company has increased fleet production to a record high of 10.1 million in the 2013 financial year. In the automobiles business, mistakes cannot be condoned in the development of vehicles as they have to attract a particular design.
The company has a policy to get it right the first time. There is thus little if any room for improvement. The consequence is that the company develops a highly competitive model every time it releases the same onto the market. These models thus have very high demand even years after they have been released. This is very essential as it certifies that its models can often be recalled and resold to other markets if they do not meet the threshold demand for a particular market (Truett, 2016).
3.3 Impediments to Change management in America
While it is necessary to improve a system or process, this improvement does not come automatically. There is need to identify areas where the change process or areas to make the organization better can be isolated for investment. Opportunities for improvement are not easy to identify. There are many factors that impede the identification of the opportunities to improvement. However, two main factors impede the identification of opportunities for improvement.
The investment in these opportunities is first impeded by the financial cost of changing processes. There is significant financial investment involved in making processes efficient. There is also need for research to identify these areas for improvement. Such research desires that there be funds to actualize the same. This is why it is necessary to consider financial implications (Cummings & Worley, 2014).
The second impediment which is a major concern to the process of improvement is the presence of bureaucratic laws and procedures. Many organizations have very rigid structures that seem to be difficult to change or alter. This is why investment in the change process or identification of change areas may be unnecessary or impossible. Where the change process is impeded by a lengthy process, it has time constraints that may not be in the interest of the organization.
It is thus important review organizational processes and laws in order to ensure that they do not affect the organization’s ability to change. Change is important and as such, should be encouraged within the realms of company law and constitution (Senge, 2014).
3.4 Defects and quality problems at Toyota Motor Sales
3.5 Justification of the case study
Toyota indeed presents a lot of challenges to other corporations not only in the automobiles industry, but the rest of the world economy, as well. Toyota being a leading brand; it would suffice that some of the practices that the company boasts of be borrowed elsewhere. This has been demonstrated by the vast acknowledgement of the Toyota Production System as an international standard in management and overall production. The company prides itself in virtues that have seen it grow over the years.
The management and the staffs are indoctrinated into a tradition that appreciates the significance of hard work, determination and progress in everything they do. This has been the cornerstone behind the company’s success. The leadership style is impeccable, and the management has always been accountable for its decisions. Even when there are numerous complaints due to defects, the management never shifts blame to the production teams but instead owns up and cleans its house internally.
In management accounting, the only success that can be derived from the same has to be tangible evidence of growth in the area of concern. In production and automobile development, Toyota continues to set the pace among other leaders in car and motor developers. The central positioning of the company in a highly industrious economy; Japan also gives it an edge over the rest.
The company consistently manufactures models that fit a particular market. Toyota has specially been credited with the development of cheap brands to suit a low income economy, as well as suffice for the third world markets. Toyota’s efficiency in manufacture has enabled its brand of vehicles to be sold cheaper in comparison to other models, at the same category. This has especially popularized its brands for there is always value for money in the same and more so, the re-sale value for most Toyota cars still remains high.
Toyota is a great case study topic. It has been deemed one of the most successful companies of our time and continues to set the pace in automobile development. Aside from being a corporation that upholds high ethics and moral standards, the company prides itself in being the pioneer behind low energy consumption vehicles. This was achieved by development of electron fuel injection model that allowed the vehicle to run on the battery while the fuel maintained the battery charged.
Toyota models are thus mostly manual and affordable despite the effort in the technology used. Toyota has thus essentially lowered the production through consistent management accounting. This has with time been extended to the consumers who have in turn enjoyed reduced prices and affordable cars for them. It is the greatest illustration of proper application of management accounting principles.
The choice of the case study could not have been better. Despite the numerous challenges Toyota faces, it has proved to the world that none of these is insurmountable. With regular changes being made to their production process, the testing bit has often proved to be a challenge. This has especially occurred due to the sampling methods used in the testing process that have often been unfruitful.
This has led to the development of faulty fleets of models from the same plant. Toyota has nonetheless often taken responsibility about the matter and the company Chief Executive; Akio Toyoda has often come under fire, even as far as the company being accused of being ‘lazy’ in its testing policies. Nevertheless, the company has been ranked the 14th most successful corporation in the world as far as revenue development is concerned (Horngren et al, 2012).
It, therefore, should not come as a surprise that this would be the company to base the study on. Being that only a few companies across the globe match up to the prowess and success record of Toyota, it was an inevitable choice that would be inherently natural. More so, there is a need to appreciate that the company has ever been on an upward trend with its management seeing that no one has entirely exclusive executive powers for an entire decade. This has formed the basis for proper management accounting in the company thus pushing the corporation higher the success ladder.
References
Abdel-Maksoud, A., Cerbioni, F., Ricceri, F., & Velayutham, S. (2010). Employee morale, non-financial performance measures, deployment of innovative managerial practices and shop-floor involvement in Italian manufacturing firms. The British Accounting Review, 42(1), 36-55.
Becker, W. S., Carbo, J. A., & Langella, I. M. (2010). Beyond self-interest: integrating social responsibility and supply chain management with human resource development. Human Resource Development Review, 9(2), 144-168.
Bunkley, N. (2016). Carter: Toyota’s bullish on U.S. sales. Automotive News, (6720).
Dedoussis, V., & Littler, C. R. (2010). Understanding the Transfer of Japanese Management Practices. Global Japanization?: The Transnational Transformation of the Labour Process, 4, 175.
Helper, S., & Henderson, R. (2014). Management practices, relational contracts, and the decline of General Motors. The Journal of Economic Perspectives, 28(1), 49-72.
Hibadullah, S. N., Fuzi, N. M., Desa, A. F. N. C., & Zamri, F. I. M. (2013). Lean manufacturing practices and environmental performance in Malaysian automotive industry. Asian Journal of Finance & Accounting, 5(1), 462-471.
Muller, J. (2016). Toyota Recharges. Forbes, 197(7), 50-56.
Prakash, D., & Kumar, C. (2011). Implementation of lean manufacturing principles in auto industry. Industrial Engineering Letters, 1(1), 56-60.
Senge, P. M. (2014). The dance of change: The challenges to sustaining momentum in a learning organization. Crown Business.
Sui Pheng, L., & Shang, G. (2011). Bridging Western management theories and Japanese management practices: Case of the Toyota Way model. Emerald Emerging Markets Case Studies, 1(1), 1-20.
Truett, R. (2016). 5 minutes with … Ed Laukes, vice president of marketing, performance and guest experience, Toyota Motor Sales U.S.A. Automotive News, (6712).
Undercoffler, D. (2015). Toyota targets big leap in U.S. sales for RAV4. Automotive News, (6702).
Yamao, S., & Sekiguchi, T. (2015). Employee commitment to corporate globalization: The role of English language proficiency and human resource practices. Journal of World Business, 50(1), 168-179.
Yang, C. C., Yeh, T. M., & Yang, K. J. (2012). The implementation of technical practices and human factors of the toyota production system in different industries. Human Factors and Ergonomics in Manufacturing & Service Industries, 22(6), 541-555.
Zubir, A. F. M., Habidin, N. F., Conding, J., Jaya, N. A. S. L., & Hashim, S. (2012). The development of sustainable manufacturing practices and sustainable performance in Malaysian automotive industry. Journal of Economics and Sustainable Development, 3(7), 130-138.
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Management accounting is also commonly denoted as managerial accounting. It is in practice the process of handing over accounting data belonging to the firm to its board or executives so that they can make progress reports and quality decisions for growth. How well-kept books are determines the success in the projects a company sets out to do and often results in the growth of the business or empire.
Consequently, accountants and other persons in the finance department are mandated with the task of ensuring that management accounting is properly done and that all records are and neatly kept. In line with international accounting principles, management accounting must ensure that accounts are audited before they are brought for review and analysis by management.
This practice of audit is crucial to the sanctification of erroneous accounting data in order for there to be accountability and credibility. The information computer in management accounting portfolio is often done with the aid of computerized management information system. It draws data from smaller transaction processing systems and often affects the way activities are performed in an organization. Here is a look at how the Toyota Company applies management information to conduct management accounting and how that benefits the company moving forward.
1. Introduction
1.1 Background on Change Management at Toyota
The Toyota Motor Corporation is a leading automobiles manufacturer headquartered in Toyota, Japan. The company boasts of the largest fleet of automobiles in the world with the brand even splitting to accommodate space entities affiliated to the mother plant. Toyota manufactures virtually all sorts of vehicle; from cheap salon cars to low consumption SUVs, Toyota even has a luxury automobile; the Lexus.
The company was founded by Japanese engineer Kiichiro Toyoda in 1937 and from its humble beginning; the company has grown over time to become the most successful in the automobiles industry. The Toyota brand currently sells its products in a host of nations outside Asia, especially Africa, Europe and the Americas. Due to her success in manufacturing, Toyota has grown internationally renowned. As shall later be discussed, the Toyota Production System is known as one of the most efficient systems globally (Yang, Yeh & Yang, 2012).
1.2 Why Toyota invests in change management
The fleet of cars under the Toyota name is all made in a unique way that takes advantage of low fuel consumption and comfort. Toyota is extensively involved in research and often releases models every few years. This is, however, as subject to consumer demand for its products. It is necessary to note that the company manufactures a large fleet of models and keeps remodeling and reselling to profit from every successful model. For this reason, every Toyota model in the past has had improvements.
The company encourages renovation and development as it incorporates the sleek and beautiful outline of its vehicles within a well-designed package that sees the consumer fork out less money but for more commodities. Fuel efficiency and concern over the environment are other factors that have made the company favorite among most Non-governmental organization (Helper & Henderson, 2014).
1.3 Factors that promote change at Toyota
Toyota’s motto is; ‘always a better way’. There indeed is a better way in the way Toyota conducts its policies and manufacturing processes. The company is very crucial on its need to cut waste. Using its esteemed Toyota Production System, the company ensures that they cut losses and always register a profit margin. Save for the time of the global recession, the company has consistently made profits.
That said; there need be mention that the company is sufficiently geared towards consumer satisfaction. The company has a declared aim to; “ever have better products ….To achieve our goal we design parts with good features, and standardize these for each region, spanning different platforms. This provides better efficiency and cost reduction, with the resulting savings used to improve products further.
This virtuous cycle for building better cars leads to sustained growth.” This is the working principle behind the production system that looks to cement the Toyota values into its work force. The company maintains a highly industrious work ethic that sees its employees always take their work with utmost seriousness and pride (Becker, Carbo & Langella, 2010).
2. Literature review
2.1 Employment culture and practices at Toyota
Toyota is aware of the need to maintain high credibility standards in its work force. This calls for the vetting and rigorous interviewing of its work force. However, the same hardly calls for bureaucracy and other measures than instigate discrimination. The company ensures that they get the qualified staff to undertake all the activities and functions required of them. This creates an industrious staff that is committed and dedicated to its role at the company. The success of Toyota has taken years of history, investment in product development and a strong culture.
What is more important is that the company has always learned from its mistakes and done better to improve an unfortunate situation. According to Sui Pheng & Shang (2011); even with challenges in testing that have led to the recalling of some of its major brands, the company has ultimately managed to maintain its customers. The Toyota brand keeps growing among its competitors due to the ability to utilize human labor and machine efficiency in a completely effective model.
Toyota’s work force has over 300,000 employees. This has made the company especially get great popularity and prominence across the world. Management accounting enables employees to justify their actions and often account for excesses every once in a while (Abdel-Maksoud, Cerbioni, Ricceri & Velayutham, 2010). Management thus takes advantage of the fact that most of the activities undertaken in the firm can be accounted for. Employees have to be accountable to management for their actions and activities in a company.
To achieve this in the best way, companies that have methods such as performance contracting often finds themselves on the receiving end with most employees being resistant to this form of accountability. However, as employees become used to their efforts and how to exercise their efforts towards growth, the company grows substantially. This leads to an increased appreciation for the management accounting practices and principles.
According to Yamao & Sekiguchi (2015); employees are often resistant to management accounting. This is because most persons are unable to account for the use of miscellaneous resources. Processes such as auditing and the confirmation of accounts can be really scary and thus often, they are afraid of them. Managers thus ensure that the systems in a working environment are enough to ensure that employees essentially account for their work.
Managerial reports, transaction processing systems, as well as registers, are some of the key areas of accountability in a firm. The use of these extensively can ensure that no single employee is complacent in their work. Toyota especially practices this form of accountability to have all employees reporting to a higher authority and that failure to prove productive can lead in dismissal. While employees may work under pressure due to such constraints, they need to be as practical as possible in what they do.
2.2 The Manufacturing process at Toyota
According to Hibadullah, Fuzi, Desa & Zamri (2013); the manufacturing process at Toyota can be underlined by one singular word; Monozukuri. Basically, the word stands for ‘manufacturing things’. It is a Japanese principle that decries complacency and advocates for consistent innovation. Toyota has been on the forefront of manufacture in Japan. The company has continued to uphold the Monozukuri culture thus verily coming up with new models and designs every financial year.
The investment in research and development is quite large. This allows for there to be consistency in development and innovation throughout the entire automobile industry. With time, accelerated development has lessened cost of production since the templates have grown in volumes. The expertise and experience of the engineers have also augmented. That is why the Monozukuri culture is not only for Toyota, but for Japan.
According to Helper & Henderson (2014) manufacturing at Toyota is one of the most efficient waste management practices ever developed by the organization. Indeed, the company is very particular about the lean manufacturing model. Toyota prides in manufacturing for the larger market. With very few luxury car models and brands; the concentration is on developing products for the larger consumer market without having to minimize on quality.
The balance between quality and volume is achieved by precise designing. The design process takes consideration of change factors such as engine capacity, steering capability, brake system improvements and the development of better safety measures with each model. All these changes are made without necessarily affecting the cost of the vehicle to a point that may make the vehicle unaffordable.
2.3 Lean Manufacturing Strategy
Toyota has redefined Monozukuri as the art of translating design data into finished products. This has been necessitated by the development of these designs through research. The company prides itself in understanding the market well. Researchers go to extend of even hiring houses around the target areas so as to monitor their movements, their taste as well as what would suite them best. Toyota car designers and engineers work together to put the beautiful car designs into perspective.
This is so as to have a great final product that is as well feasible to manufacture and importantly, leave room for improvement (Prakash & Kumar, 2011). While there may actually be little room for this improvement, the company has often written records with new inventions that have suited the market, against a tide that was not on their side. In essence, pulling market forces towards it has been a result that inevitably happened as a consequence of proper planning and implementation of the Monozukuri culture and principle.
The Toyota Production system is a designed working system that seeks to eliminate; muri, mura and muda. Muri is the overburdening of personnel with redundant work. It is singled out as one of the activities that lead to inefficiency in a firm. Mura, on the other hand, is the waste that accrues from activities that are done in excess. The system seeks to reduce these wastes in a number of ways as shall be later identified in this paper. Muda is the process of eliminating waste.
The system identifies seven types of wastes; waste due to overproduction, waste due to time on hand (wastage of time), waste due to inefficient transportation, waste that occurs in the processing itself, waste due to unutilized stock or property at hand, movement and defective products. Having identified these wastes, the system proposes methods to ensure that they are eliminated; therefore, the company can become more productive. The rest is a look at some principles that help in waste reduction and proper utilization of resources (Hibadullah, Fuzi, Desa & Zamri, 2013).
2.3.1 Kaizen
The Kaizen is a Japanese principle for continuous improvement. Toyota production system uses the Kaizen to eliminate wastes that result from time wasting, defective products and unutilized stock. Indeed, the kaizen is a very crucial value for most Japanese companies. Those who abide by it work with deadlines to ensure that they have products ready for a waiting market. Knowing that the desire for new and better automobiles is insatiable, Toyota invests in the redevelopment of models of very kind each year.
It is only inevitable that as this practice continues, the company finds it easy to come up with a new product to compete against other market leaders. There is indeed no market front that Toyota cannot venture. This is because they do not just enter the market to produce a similar product; they offer cheaper yet better products thus entirely convincing the consumer. With the spirit of Kaizen, the company always scales new heights in automobile development (Hibadullah, Fuzi, Desa & Zamri, 2013).
In the company’s hiring practices; Kaizen is also practiced. For instance; Toyota is very efficient in the company’s interviewing. Eliminating non-valuable processes in an organization is crucial to the growth and development of an institution. This is because; the non-value-adding processes are costly just like the operational expenses incurred by any other process in the organization or business. They impose an extra cost to the business yet do not offer any benefit. For instance, the process of hiring new employees is very elaborate. It includes vetting, sifting through applications and choosing the most appropriate candidate.
However, it may be unnecessary to have four or five interviews. Minimizing the interviews to one often makes the interviewing process effective. For efficiency, a company would choose to have aptitude tests to minimize the number of applicants to interview. Value addition thus does not have to have a lot of bureaucratic processes that may not be necessary. It is all about saving time and minimizing cost, effectively leading to efficiency (Senge, 2014).
2.3.2 Just in Time
Just-in-time policy ensures that products are delivered to the consumer on demand and within a specified period of time. Toyota believes that if a product is delivered late, then it is as good as not delivered. The same applies to all departments within the company; no one is allowed the luxury of time. Employees are consistently on their toes trying to meet very strict deadlines and often do so in order to live by this principle. The just-in-time policy ensures that the waste of time is eliminated for good.
It involves aspects of punctuality in job reporting, delivery of goods, development of new designs and even the completion of the manufacturing process (Prakash & Kumar, 2011). Essentially, these time limits are set even before the employee embarks on the task. Working to meet deadlines is a great policy that ensures that work is done in a convenient time. The result is that the company is successful in its undertakings and pushes the employment to higher limits. Even for the employees, the just-in-time policy makes better employees out of them as they continue to observe punctuality.
2.3.3 Jidoka
Jidoka is the intelligent automation of automobiles. As much as possible, Toyota cars are made to accept easy human instructions using levers and gears. With the introduction of the auto cars from the use of the manual cars, Jidoka was extensively applied. Indeed, the issue of intelligence in automobiles is a grey area, as cars are just machines. However, with time, these machines have evolved to understand danger situations, accident safety and haptic response.
In the process of troubleshooting erroneous machines and defective system, four steps are applied using the Jidoka principle; detecting the abnormality, stopping the entire production process, fixing the problem and finding ways to ensure that the problem never recurs. This ensures perfection to a great extent but mostly, it leads to elimination of the waste due to production errors that result in defective products (Prakash & Kumar, 2011).
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2.4 Quality challenges at Toyota Corporation
Toyota has been on the center stage of quality development using its Production System. The Jidoka principle of continuous manufacture ensures that with time, the company masters the art through practice. Toyota has however its fair share of quality issues and strategy failures has. These emanate from circumstances that the company has ever been challenged with dealing.
The most pressing of the company’s major quality concerns has to do with the product testing bit. Toyota has thus been on the receiving end of most critic auto magazines and general media over faulty brake systems and air bags. This has often led to the recalling of her products from the market. Only in 2010, the company has to recall volumes of its SUV models for the faulty brake systems. The company has since made efforts to rectify their manufacturing and testing errors with little success.
According to Dedoussis & Littler (2010), strategies put in place by Toyota to deal with her challenges have been communicated by the management on the various occasions the company has been called upon to account for their weaknesses. Mr. Akiyo Toyoda did mention in 2010 that the company was making plans to increase its testing facilities in order to accommodate larger volumes of test cases.
The company also thrives in the fact that it is market specific thus most of its problems hardly affect the entire market. This has been a contributing factor to the company’s growth over the years. Aside from that, the fact that the company has a great consumer appreciation and compensation policy makes it achieve great success with regard to popularity ratings. The company has thus dealt with all its suits and managed to ensure consumer satisfaction even with the defects and challenges with its models from time to time.
With the myriads of success and milestones covered by the company, it would be argued that the company would relent and bask in the glory of her successes. However, there are no limits to what the Japanese auto dealer can achieve. Indeed, with the introduction of relatively cheap automobiles, other manufacturers thought that the practice would be unsustainable. On the contrary, Toyota has continued to prove critics wrong. Not only has the company grown to be more successful, it has consistently led the way in automobile innovations.
Over the last decade, the car that was initially thought of as low class has continued to attract favorites across the globe. Toyota demonstrates that, with proper management accounting principles, any company can achieve success, even with the least amount of time possible. This success nonetheless gets addictive as it sets the benchmark for the next target. As long as the company continuously invests in bettering its products, there are no limits to the amount of income that can be accrued from the same (Zubir, Habidin, Conding, Jaya & Hashim, 2012).
3. Concepts of Change management at Toyota USA
3.1 History of Toyota USA
The Toyota Corporation maintains a subsidiary in the United States dedicated to North American sales. This subsidiary is refered to as the Toyota Motor Sales, USA Inc. The company was founded as an offset of the Toyota Corporation in 1957, and headquartered in Torrance, California. Initially, the American motor market had been controlled by three major market players, General Motors, Ford and Chrysler. Toyota as an entrant began by attempting market domination with a fleet of luxury cars under the brand ‘Lexus.’
The Lexus model was however not as successful in the United States as it had been in the United Kingdom. Sales for many Toyota brands were also low. The company had to come up with a strategy to guarantee market penetration. This was however not a significant challenge to the mother company as the models from Japan were more popular in Asian and European markets than any other Auto manufacturer. Capturing the United States market would mean a little more investment in research (Bunkley, 2016).
In the early 2000s, the USA subsidiary of Toyota Corporation released a new model into the market. The model dubbed ‘Prius’ to target a different market segment; the young drivers. The sleek design and the fairly low cost gained a lot of traction among American teenagers. The fleet of ‘Prius’ vehicles was so successful that Toyota leased the brand to a subsidiary manufacturer to work on developing the brand; which Toyota still owns to date.
The company (Toyota USA) managed to penetrate the American market using lean management and the incorporation of the concept of economies of scale. Although Toyota did not capture the high-end market and still does not make the most revenue out of the United States market, the company continues to research further and is driven by the principles that drive the mother company; Jidoka, Kaizen and Monozukuri. Toyota USA C.E.O; Jim Lentz has on various occasions hinted on the research into the next generation cars ongoing at Toyota USA. However, not many models have been presented by the company (Undercoffler, 2015).
3.2 Lean Management at Toyota USA
Toyota USA has continued to thrive and achieve unprecedented success due to its management accounting practices. The company has consistently devised new ways to improve productivity thus hardly make any wastage. Toyota can be praised for the great turnaround after the recession of 2009. The company posted a net loss of $4.2 billion but was soon able to emerge successful the following year. The management has been interchanged successfully every few year, but that has not changed the company’s management system.
Consistency in the management of resources and basic management accounting has enabled the company to be efficient in spending and utilization of resources. The trickle effect has been the growth of the company to have subsidiaries and affiliates. However, there has been a consistent focus on development more than management policies. Nonetheless, the management has been on the forefront in driving development agenda for the company (Muller, 2016).
Toyota can well manage its fleet as it ensures that no management wastes are recorded. Fleet management is important since it helps the company know how to maintain a consumer base as well as a consistent demand and supply ratio. The gap in demand is always met by supply. With time, the company has increased fleet production to a record high of 10.1 million in the 2013 financial year. In the automobiles business, mistakes cannot be condoned in the development of vehicles as they have to attract a particular design.
The company has a policy to get it right the first time. There is thus little if any room for improvement. The consequence is that the company develops a highly competitive model every time it releases the same onto the market. These models thus have very high demand even years after they have been released. This is very essential as it certifies that its models can often be recalled and resold to other markets if they do not meet the threshold demand for a particular market (Truett, 2016).
3.3 Impediments to Change management in America
While it is necessary to improve a system or process, this improvement does not come automatically. There is need to identify areas where the change process or areas to make the organization better can be isolated for investment. Opportunities for improvement are not easy to identify. There are many factors that impede the identification of the opportunities to improvement. However, two main factors impede the identification of opportunities for improvement.
The investment in these opportunities is first impeded by the financial cost of changing processes. There is significant financial investment involved in making processes efficient. There is also need for research to identify these areas for improvement. Such research desires that there be funds to actualize the same. This is why it is necessary to consider financial implications (Cummings & Worley, 2014).
The second impediment which is a major concern to the process of improvement is the presence of bureaucratic laws and procedures. Many organizations have very rigid structures that seem to be difficult to change or alter. This is why investment in the change process or identification of change areas may be unnecessary or impossible. Where the change process is impeded by a lengthy process, it has time constraints that may not be in the interest of the organization.
It is thus important review organizational processes and laws in order to ensure that they do not affect the organization’s ability to change. Change is important and as such, should be encouraged within the realms of company law and constitution (Senge, 2014).
3.4 Defects and quality problems at Toyota Motor Sales
3.5 Justification of the case study
Toyota indeed presents a lot of challenges to other corporations not only in the automobiles industry, but the rest of the world economy, as well. Toyota being a leading brand; it would suffice that some of the practices that the company boasts of be borrowed elsewhere. This has been demonstrated by the vast acknowledgement of the Toyota Production System as an international standard in management and overall production. The company prides itself in virtues that have seen it grow over the years.
The management and the staffs are indoctrinated into a tradition that appreciates the significance of hard work, determination and progress in everything they do. This has been the cornerstone behind the company’s success. The leadership style is impeccable, and the management has always been accountable for its decisions. Even when there are numerous complaints due to defects, the management never shifts blame to the production teams but instead owns up and cleans its house internally.
In management accounting, the only success that can be derived from the same has to be tangible evidence of growth in the area of concern. In production and automobile development, Toyota continues to set the pace among other leaders in car and motor developers. The central positioning of the company in a highly industrious economy; Japan also gives it an edge over the rest.
The company consistently manufactures models that fit a particular market. Toyota has specially been credited with the development of cheap brands to suit a low income economy, as well as suffice for the third world markets. Toyota’s efficiency in manufacture has enabled its brand of vehicles to be sold cheaper in comparison to other models, at the same category. This has especially popularized its brands for there is always value for money in the same and more so, the re-sale value for most Toyota cars still remains high.
Toyota is a great case study topic. It has been deemed one of the most successful companies of our time and continues to set the pace in automobile development. Aside from being a corporation that upholds high ethics and moral standards, the company prides itself in being the pioneer behind low energy consumption vehicles. This was achieved by development of electron fuel injection model that allowed the vehicle to run on the battery while the fuel maintained the battery charged.
Toyota models are thus mostly manual and affordable despite the effort in the technology used. Toyota has thus essentially lowered the production through consistent management accounting. This has with time been extended to the consumers who have in turn enjoyed reduced prices and affordable cars for them. It is the greatest illustration of proper application of management accounting principles.
The choice of the case study could not have been better. Despite the numerous challenges Toyota faces, it has proved to the world that none of these is insurmountable. With regular changes being made to their production process, the testing bit has often proved to be a challenge. This has especially occurred due to the sampling methods used in the testing process that have often been unfruitful.
This has led to the development of faulty fleets of models from the same plant. Toyota has nonetheless often taken responsibility about the matter and the company Chief Executive; Akio Toyoda has often come under fire, even as far as the company being accused of being ‘lazy’ in its testing policies. Nevertheless, the company has been ranked the 14th most successful corporation in the world as far as revenue development is concerned (Horngren et al, 2012).
It, therefore, should not come as a surprise that this would be the company to base the study on. Being that only a few companies across the globe match up to the prowess and success record of Toyota, it was an inevitable choice that would be inherently natural. More so, there is a need to appreciate that the company has ever been on an upward trend with its management seeing that no one has entirely exclusive executive powers for an entire decade. This has formed the basis for proper management accounting in the company thus pushing the corporation higher the success ladder.
References
Abdel-Maksoud, A., Cerbioni, F., Ricceri, F., & Velayutham, S. (2010). Employee morale, non-financial performance measures, deployment of innovative managerial practices and shop-floor involvement in Italian manufacturing firms. The British Accounting Review, 42(1), 36-55.
Becker, W. S., Carbo, J. A., & Langella, I. M. (2010). Beyond self-interest: integrating social responsibility and supply chain management with human resource development. Human Resource Development Review, 9(2), 144-168.
Bunkley, N. (2016). Carter: Toyota’s bullish on U.S. sales. Automotive News, (6720).
Dedoussis, V., & Littler, C. R. (2010). Understanding the Transfer of Japanese Management Practices. Global Japanization?: The Transnational Transformation of the Labour Process, 4, 175.
Helper, S., & Henderson, R. (2014). Management practices, relational contracts, and the decline of General Motors. The Journal of Economic Perspectives, 28(1), 49-72.
Hibadullah, S. N., Fuzi, N. M., Desa, A. F. N. C., & Zamri, F. I. M. (2013). Lean manufacturing practices and environmental performance in Malaysian automotive industry. Asian Journal of Finance & Accounting, 5(1), 462-471.
Muller, J. (2016). Toyota Recharges. Forbes, 197(7), 50-56.
Prakash, D., & Kumar, C. (2011). Implementation of lean manufacturing principles in auto industry. Industrial Engineering Letters, 1(1), 56-60.
Senge, P. M. (2014). The dance of change: The challenges to sustaining momentum in a learning organization. Crown Business.
Sui Pheng, L., & Shang, G. (2011). Bridging Western management theories and Japanese management practices: Case of the Toyota Way model. Emerald Emerging Markets Case Studies, 1(1), 1-20.
Truett, R. (2016). 5 minutes with … Ed Laukes, vice president of marketing, performance and guest experience, Toyota Motor Sales U.S.A. Automotive News, (6712).
Undercoffler, D. (2015). Toyota targets big leap in U.S. sales for RAV4. Automotive News, (6702).
Yamao, S., & Sekiguchi, T. (2015). Employee commitment to corporate globalization: The role of English language proficiency and human resource practices. Journal of World Business, 50(1), 168-179.
Yang, C. C., Yeh, T. M., & Yang, K. J. (2012). The implementation of technical practices and human factors of the toyota production system in different industries. Human Factors and Ergonomics in Manufacturing & Service Industries, 22(6), 541-555.
Zubir, A. F. M., Habidin, N. F., Conding, J., Jaya, N. A. S. L., & Hashim, S. (2012). The development of sustainable manufacturing practices and sustainable performance in Malaysian automotive industry. Journal of Economics and Sustainable Development, 3(7), 130-138.
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Differential Diagnosis
The patient has presented with various symptoms and sign that prompt the need for a unique and proper differential diagnosis. The differential diagnosis is meant to enhance the better treatment and management strategies after identification of the main disorder. A differential diagnosis of endometriosis disorder which is also associated with musculoskeletal pain would be carried on the patient (Nelson et al, 2012).
The symptoms for endometriosis include heavy bleeding and irregular periods, dyspareunia problems, painful urination. E.g. during menstruation and pelvic pain especially in the lower abdomen. Some of the differential diagnosis include tests for generalized pelvic pain, pelvic adhesions and levators spasm. caused by musculoskeletal causes and also primary and secondary dysmenorrhea. Dyspareunia evaluation would be carried by assessment of pelvic vascular congestion. The patients only had irregular periods and dyspareunia problems as the main symptoms reported.
Primary Diagnosis
The primary diagnosis for primary and secondary dysmenorrhea caused by musculoskeletal pain is essential for the patient which is carried out through physical examination (Nelson et al, 2012). Primary phases is due to pain causes while secondary is due to organic diseases. Biochemical tests can also be used during clinical assessment. The patient reports pain in various parts of the body which necessitates the tests such as DNA probe testing and abdominal ultrasonography (Nelson et al, 2012).
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Treatment and Management
Medical treatment for endometriosis includes the use of medication such as danazol to relieve symptoms of the disorder. Use of agents such as goserelin and leuprolide is vital medication for relieving pain. Treatment for the musculoskeletal pain includes taking dosages like norepinephrine, serotonin, eszopiclone and ramelteon. Surgical treatment is recommended for the advances in endometriosis disorder (Apte et al, 2012).
Other pharmacological treatment measures include taking vaginal estrogens, local anesthetics, corticosteroids as management for dyspareunia. Clinical guidelines such as the emphasis on exercises, therapeutic massage, and osteopathic manipulations are essential for management of her condition (Lier et al, 2016).
Education would be provided to the patient regarding the importance of following the right prescription provided. Education on the necessity for modification of sexual positions during intercourse and offering psychological treatments would be vital in treatment and management of the condition suffered by the patient (Nelson et al, 2012).
The multidisciplinary approach would be adopted by incorporating effective pain management sessions for the patient, clinical psychology, physiotherapy as well as psychosocial drugs (Lier et al, 2016). The adoption of these strategies is effective in the management of the medical problems facing the patient.
Lier, R., Mork, P. J., Holtermann, A., & Nilsen, T. L. (2016). Familial Risk of Chronic Musculoskeletal Pain and the Importance of Physical Activity and Body Mass Index: Prospective Data from the HUNT Study, Norway. Plos ONE, 11(4), 1-13. doi:10.1371/journal.pone.0153828
Nelson, P., Apte, G., Justiz, R., Brismeé, J., Dedrick, G., & Sizer, P. S. (2012). Chronic Female Pelvic Pain-Part 2: Differential Diagnosis and Management. Pain Practice, 12(2), 111-141. doi:10.1111/j.1533-2500.2011.00492.x
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Unethical Practice by Computer Sciences Corporation
Ethics & Finance Paper
Introduction
This paper discusses one of the most significant illegal and unethical practice which had been caused by Computer Sciences Corporation for which the company and its management was also charged by the US government. This is known as the Medicaid fraud under which the company had been involved in two fraudulent schemes. Both of these schemes had used the computer programs for circumventing the requirement that once the private insurance coverage becomes exhausted then only the billing of the Medicaid should be performed (Office, 2014).
Along with these two schemes, the third fraud scheme focused on the use of the defaulting. Under this scheme the company had falsified all the diagnosis codes which had been submitted systematically to Medicaid. This paper analysis this issues with specific emphasis on Sarbanes Oxley Act 2002.
Mistakes made by Computer Sciences Corporation
The main problem of Computer Sciences Corporation is that the company has good people but they all are poorly managed. The employees of the company are rated by those people who do not work with the employees on a regular basis. The appraisers at Computer Sciences Corporation are not the day to day supervisors but they are outside managers who have just a single role which is to rate all the employees in specific jobs.
Apart from this, the mid-level managers at Computer Sciences Corporation who have never interacted with the employees of the company had to forcefully downgrade the performance ratings of their employees in order to meet the required 40% quota level (Anna, 2013). This is highly unethical practice and these are the mistakes which resulted in the above fraudulent schemes.
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Steps which could have been taken
Some of the steps which could have been taken to avoid such unethical practice are:
The day to day supervisors should have been tasked with appraising the employees.
Managers need to interact and know their employees and learn about their traits. There are certain traits which can indicate a manipulative behavior.
Supervisors need to listen and observe the employees to identify the risks of the potential fraud.
All the people working within the organization should be clearly made aware of the fraud, its different types and the reporting system.
The internal control should be made stronger by the leaders of the company. Examples of such internal controls which could have avoided the unethical practice to occur at Computer Sciences Corporation are segregation of the duties, supervision and documentation. The documentation seems to be weak at Computer Sciences Corporation.
Finally, a positive corporate culture needs to be created at Computer Sciences Corporation where the employees should be satisfied and work in a positive work environment to prevent theft and fraud.
Role of Market Pressures on Unethical Practice
There are many arguments that the role of the market pressures and the competition in the market can cause the firms to engage in unethical practice. This is because unethical practice can lower the costs of the firm. For example, when companies make use of child labor then they can hire such labor at cheap rates and lower its costs but this is highly unethical and even illegal in many countries.
Competition could only raise the ethical standards in a long run however, companies engage in unethical behavior to make their firm more competitive in the short run (Miller, 2015). Therefore, when competition starts to increase in the market based on any factor such as market share, stock prices, cost structures etc, then firms indulge in unethical behavior to remain competitive in the market.
Influence of Finance
Finance also plays an important role in pressurizing the firms to conduct unethical behavior. When companies compete with one another then they compare their performance on the basis of their profitability, shareholder wealth, stock prices, and growth in EPS etc. However, when the financial performance of firms is deteriorating due to any external factor, then indulge in unethical and fraudulent practices such as creative accounting. The case of Computer Sciences Corporation for devising its three fraud schemes is also an example of creative accounting. For example, when the company had falsified all the diagnosis codes which had been submitted systematically to Medicaid is a true example of creative accounting.
Influence of Sarbanes Oxley Act of 2002
The Sarbanes Oxley Act had been enacted in 2002 after a series of the corporate scandals and financial abuses to make the corporate governance systems strong and enhance the compliance and ethics programs. The major influence of this act has been in the role of the leadership in an organization to avoid fraudulent and unethical behaviors. This act had defined the responsibilities for CFO and the CEOs and also enhanced the engagement and professionalism of the audit committees.
This act had guided the best law to guide he best practices within the board room. It has also enhanced the focus of the regulators and state courts and most importantly increased the consciousness of the public in raising the standard of corporate governance in firms.
Recommended Changes for Companies
Some of the recommendations for the companies to avoid financial statement fraud and present the financial statements to the public are as follows:
Internal controls need to be made strong to detect any action or unusual behavior by those who prepare the financial statements of the company.
All the main accounting functions should be segregated and measures should be taken to reduce the incentives for the fraud.
A strong control environment should be created which should be controlled by the top management to ensure best corporate governance practices.
Finally, management should also conduct the examination of its financial statements by an outside consultant. This will help the company to avoid behaving aggressively for committing unethical practices.
Conclusion
Overall, the Sarbanes Oxley Act 2002 is the best guide for Computer Sciences Corporation in order to avoid the unethical treatment of its employees and prevent the fraudulent activities which have taken place in the past. Sarbanes Oxley Act 2002 has reshaped the corporate America today. Computer Sciences Corporation needs to pay close attention on its internal controls, segregation of the duties, supervising its employees, appraising the employees through their day to day supervisors and promoting the best practices of corporate governance.
The main issue currently faced by Computer Sciences Corporation is that the company is the unethical treatment of its employees. Human Resource Management is the key aspect of any organization and all the employees should be given more independence and freedom in decision making. Finally, whistle blowing should be encouraged within the organization as this would overcome the problem of fraud. Whenever there would be any sort of unusual activity or unethical behavior, the employees would have a route to report that and save the company from severe allegations.
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Overview of the case study
The case study of a 42 year of African American female during her routine gynecologic examination reports of bleeding between her periods for some months. She has three children, is sexually active with one partner. Her examination indicates that she has irregular intrauterine mass, 4cm in diameter that is not painful on touch.
Diagnosis, treatment and management of the Gynecologic Condition
The patient is experiencing abnormal uterine bleeding due her history of pregnancy. Uterine bleeding is a common occurrence. When assessing patient with the common gynecologic conditions it is important to question the patient pregnancy status, her reproductive status to understand the source of bleeding (Lethaby et al, 2015).
Irregular intrauterine non-tender mass about 4 cm in diameter is a sign of abdominal or pelvic mass that can occur at any age. A woman experiencing intrauterine non- tender mass might complain of various symptoms, but there are a number of possible causes of pelvic mass. In evaluating the patient, the first step includes getting a good medical history of the patient regarding the pain, any family history of such similar problem and also knowing if the patient has regular periods or not or the history of pregnancy (Singh et al., 2013).
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Physical examination of the gynecologic conditions needs to include a palpation of the abdomen to detect a palpable mass, abdominal pain, and CVA tenderness. Pelvic exam needs determine cervix compression or uterine enlargement and also tenderness associated with vaginal lesion. Further examination can be done through ultrasound or CAT scan (Chaudhuri et al., 2014).
If the ultrasound suggests an abdominal mass the patient needs to seek for further advice from a gastroenterologist or general surgeon. Treatment for abdominal, uterine bleeding includes mediation like prostaglandin inhibitors (Kokaine et al, 2014). Surgery may be recommended or change in contraception. Some of the suggestion for managing abnormal uterine bleeding including taking iron supplements t and eating a balanced diet. Patients need to avoid drugs like aspirin that might contribute to excessive bleeding.
References
Chaudhuri, S., Datta, S., Paul, P. C., Mukherjee, S., & Malo, S. (2014). Cytologically Diagnosed Ovarian Carcinoma Turned Out To Be a Case of Chronic Ectopic Pregnancy. Journal of Interdisciplinary Histopathology, 2(2), 116-120
Kokaine, L., Lemanis, A., Sapovalovs, S., Abolins, A., & Balodis, A. (2014). Torsion of Arteriovenous Malformation–A Rare Case of Acute Abdomen. American Journal of Medical Case Reports, 2(11), 229-231.
