Question

• Growth or expansion strategies.
• Concentrate resources strategies, for increased leverage.
• Diversification strategies to expand services or products in unrelated areas.
• Retrenchment or reduction of products and services strategies:

(a) Retrenchment by way of a turnaround or downsizing.

(b) Retrenchment by way of divestiture or selling parts.

(c) Retrenchment thru liquidation or closure/bankruptcy.  

• Stability strategies via maintaining current operations.
• Cooperation strategies through collaboration partnerships.
• Strategic partnerships with other organizations with mutual interests.
• Outsourcing alliances by purchasing services.

Do a little research and find a health care organization that followed one of these strategies. In 250 words Tell us about the organization, the strategy that they followed, the outcome that they hoped for and whether this strategy was successful. If the strategy was not successful, tell us why you think it was not successful and what you think might have been a better strategy.

Be sure to cite your sources using APA format.

Answer 1

Retrenchment can be carried out by the following ways –

1. Downsizing
2. Retirement schemes
3. Liquidation
4. Contractual Employment
5. Partial Selling

The objectives of retrenchment is to cut down on the diversity of operations in order to make the organization more stable and financially viable.

A very prominent example from the healthcare industry for such a strategy is Georgiana Medical Center. Recently closed in March 2019, this healthcare facility took a lot many steps to survive till it finally decided to liquidate. This medical facility started in 1956 and since then operated and extended its services in the town of Georgiana. The rising costs in healthcare and cuts in reimbursement costs led to making this facility becoming financially not a viable venture. But all this did not happen in a day. Signs of losses began to crop up 10 years ago and the organization began a retrenchment strategy to downsizing its operations and concentrating more on the common disease departments. But this strategy failed. The major reasons for this strategy to fail were as below –

1. The downsizing created negative sentiments in the public and the employees
2. The cut - down on operations led to protests
3. Even though the cut – down was introduced there were certain accompanied facilities that still continued to operate and incur costs
4. The best employees left the organization

This all led Georgiana Medical Center to its fate of closure and the turnaround strategy through retrenchment failed. Had the public and employee relations been managed well perhaps their strategy could have succeeded. The closure of the facility has left at least 50 people out of jobs.

Source - Alabama News Report & Georgiana Medical Center (Official Site)