MOUNTAIN WEST HEALTH PLANS INC.:CASE ANALYSIS REPORT

Submitted by : PORFERIO A. SALIDAGA, JR.

Submitted to : Dr. George Fong

Subject : Management Dynamics

Date : May 02, 2012

Problem

Inefficiency of the performance of customer service personnel, and higher labor cost.

Objective

To increase efficiency of the performance of the customer service personnel, and lower the labor cost.

Analysis of Relative Facts

Mountain West Health Plans Inc. is health insurance company with an ever-increasing costs of its service customer department which is a labor intensive unit The previous director Evelyn Gustafson has just retired and is now replaced by Erik Rasmussen, a young man with a new bachelor’s degree in business administration. Considering the following strengths, weaknesses, opportunities, and threats, how would the company solve its problem on inefficiency and high labor cost?

Opportunities:

1. The market is wide, hence the customer potential is high for health insurance business.

Threats:

1. Dissatisfaction of customers due to the inexperienced customer service personnel and the length of time they spent on hold.

Strengths:

1. Erik Rasmussen,

SO Strategies (Growth Strategies)

S1,O1. Erik Rasmussen, being young, should be tasked to study

ST Strategies (Diversifying Strategies)

the new head of the Customer Service Dept. is a young man with a bachelor’s degree in business administration;

2. Subordinates adore a leader who knows how to motivate them.

thoroughly the human resource of the company and to come up with a short-term and long-term strategies to improve the efficiency of the human resource of the company and minimize turnover, and how this study would contribute to customer satisfaction and widen the market share of the company in the insurance business;

S2, O1: Motivate the personnel by:

(a) Changing Rasmussen’s approaches from being job-centered leader, into an employee-centered leader. The customer service department is a labor-intensive department, and as such, it must give focus more on looking after for the needs of his subordinates so that job commitment may be solicited. As shown in Blake and Mc Canse’s Leadership Grid, work accomplishment is achieved from committed people, and that interdependence through a common stake in organization purpose leads to relationships of trust and respect. Furthermore, as stated by Chris Lowney, leadership is not a position but influence. Instead of applying the position power in attaining the goal of the company, Rasmussen must instead use the interpersonal influence tactics, and among them are: use of rational persuasion; making people like him; developing allies; relying on the rule of reciprocity; and rewarding the behaviour of subordinates he wants.

Evelyn, the predecessor of Rasmussen was adored by his subordinates because she is a

S2, T1: To improve the skills of the employees by transforming Rasmussen into a leader who knows how to motivate them, and by regularly sending them to trainings focused on customer service.

leader whom they can trust. She did not have to use her position power to bring out results.

(b) Job enrichment: To give employees control over the resource necessary for performing tasks, make decisions on how to do the work, experience personal growth, and set their own pace. This would result, as shown by research, employees’ greater sense of involvement, commitment, and motivation, which in turn contributes to higher morale, lower turnover, and stronger organizational performance. (Daft, 499)

This strategy would be more effective instead of the statistical standards and time and motion study applied by Rasmussen which are effective only on machine productions but not on services done by human beings.

To make an employee efficient, he must not be considered as a machine but a human being made up of components of attitudes: cognitions, affect, and behaviour. And such attitudes influence how well a person perform on the job.

Weaknesses:

1. Erik Rasmussen being new and has no actual experience in leading the people in his department, has effected drastic

WO Strategies (Niching Strategies)

W1, O1: To improve the company’s standing in the market, the company should develop a decentralized team communication channel in communicating the goals of the organization to the workers. The customer service department, being just a component of the whole organization, its

WT Strategies (Slowing Down Strategies)

changes without establishing trust and respect from the subordinates but only from position power;

2. Noisy working place;

3. The employees are doing a day-to-day string of stressful calls.

communication networking can easily be facilitated and controlled, hence, individuals should be given the opportunity to communicate freely with other team members. Subordinates must be given the opportunity to air their views on certain changes that may affect their works.

W2, W3 O1: It must improve the workplace that is conducive for working to minimize stress among the workers.

Alternatives

1. S1, O1: Study thoroughly the human resource of the company and to come up with a short-term and long-term strategies to improve the efficiency of the human resource of the company and minimize turnover.

Advantages: The outcome may be a guide for future human resource programs.

Disadvantages: It cannot answer the present human resource problem of the company.

2. S2, O1: Application of employee-centered kind of leadership, interpersonal influence tactics, and concept of job enrichment.

Advantages: Improves people effectiveness as they are given the power how to do a task thereby developing their creativity.

Disadvantages: Management control is loosen so effective performance monitoring may suffer.

3. W1, O1: Develop a decentralized team communication channel.

Advantages: The decision is more reliable, and may get a wider acceptance as it is a product of deliberation of many persons.

Disadvantages: The decision-making process may take longer because the information is passed among individuals before it reaches the decision-maker.

4. W2, W3 O1: Physical improvement of the workplace, minimizing noise and clutter.

Advantages: It lessens stress in the workplace, hence may improve the productivity of workers.

Disadvantages: It can be costly and may not materially affect productivity.

5. S2, T1: Regular trainings of employees to develop their leadership skills on customer service.

Advantages: It may heighten motivation and a venue to identify potential future leaders.

Disadvantages: It can be costly and may not affect productivity.

Solution

Alternatives recommended are a combination of number 2, 4, 5. I believe that with a highly motivated employees, working in a peaceful workplace can produce higher output, and in effect can lower cost.