National School of Business Management
Analyze Location Change of Asiri Central Hospital
Managing Change: (BMGT2001L)
B.Sc in MGT/HRM – Batch 19 (Group B)
Assignment 02
Submitted By
Walpola, Jinanjalee Lakshani 15208842
Batagoda Siriwardana, Thimali Ruwanthika 15208841
Manikka Arachchi, Nimedha Subodhini 15208777
Kuda Vithanage, Chathurdha Meadini Vithanage 15208811
Lekham Mohottilage, Lakshani Chamodi Gunarathne 15208810
Executive Summary.
This report, as stated as earlier is being prepared as a fulfillment of the requirement of the Managing Change module supervised by Mr. Rajitha De Silva. The purpose of prepared this assignment is identify Re-orientation or Re-creation change of the organization and analyze its impact of the business using change management theories.
We selected Asiri Central hospital for analyze above details. In 2010, they were changed their location from Horton place to Norris canal road. It is a re orientation physical environment change and under this report we discussed about that. There are two theories we learnt. Such as Lewin’s theory and Kotter’s 8 step theory. During this two theories, we selected Lewin’s theory for analyze this particular change. Proved for this change, we presented some data according to the Annual Report. Then we critically analyzed such change according to Lewin’s theory and identified Strengths and Weaknesses. Furthermore we recommended such points for further improvements of the Asiri Central hospital.
Table of Content
1. Introduction
1.1 Asiri Central Hospital
The Central Hospital, one of the most well-appointed and technologically adduced medical facilities, offering international standards in healthcare, was recently added to the Asiri Group of Hospitals. The Asiri Central is a 14 story multi-specialty general hospital situated in No.114, Norris Canal Road Colombo 10, and Sri Lanka. It is a conveniently managed, one stop medical centre that offers different health care facilities by top qualified and suitable experienced consultant specialists of a diverse area from medical to surgical divisions.
The hospital conceits in keeping shoulder- to- shoulder of the fast evolving medical industry while conforming to international care and preservation standards. Every patient who visits The Central can be assured that they will admit the elegant contemporary medical technology and treatment available and identified worldwide. To-date the Hospital cures over 450 thousand patients per year. Medical care is complimented with an appropriated customer service comprising high class in house dining. The Asiri Central's reach to medical care is disorderly in that it is not kosher about technology and super modern basic facilities; it is also about recommitting the standards of optimum patient care. All rooms are equipped with modern comfortable furnishings and fittings in cogitation of patient's requirements. The Hospital provides added benefits such as a three levels of parking area, a wired and Wi-Fi network canopy, a 24 hour pharmacy, immensely automated laboratory and Emergency Services.
Key accreditations and certifications attained by the laboratories of the Asiri central hospital comprise accreditation for ISO 15189:2007 – a global certification steady to medical laboratories. The laboratories have also obtained quality management systems certification and environmental management organ on certification, among multiplex others.
Asiri Central Health has a renowned for continually investing in its infrastructure in order to contribute patients the very latest in medical care.
1.3 Introduction about Change
According the change situation of Asiri central hospital changed their location in 5 years back. Previously they are located at No 37, Horton Place, Colombo 07. In 2010, Asiri central hospital shifted to current location in Norris Canal road. We identified this as Re-orientation physical environment change. Then they had face to different outcome from this change. According to this project discuss about outcomes regarding the location changes of Asiri central hospital. This assignment discusses how to location change dominates to the organizational profit, organizational structure, behavior as well as other financial and non financial aspects.
2. Theoretical Background of Change Management.
Change management is a system; artifact and method to govern the people fragment of the change realize the needed business result. And also it intercalates the organizational tools that can be availed to support individuals’ mien successful personals changes resulting in the cooptation and cognizance of change. This concept is more familiar to the most organizations today and how they manage change, depending nature of the business. There are several theories discuss about change management. Such as Kurt Lewin’s Change theory, John P. Kotter’s 8 step plan for implementing change and Mckinsey 7 s theory. But under this topic discuss about Lewin’s theory and Kotter’s 8 step theory.
2.1 Kurt Lewin’s Theory.
This theory created in 1950 by Kurt Lewin. This model is very easy to understand and there are 3 phases under Kurt Lewin’s theory. Those 3 phases are Unfreeze, change and refreeze. When discuss about Unfreeze stage, need to identify nature of change, what are groups should be changed etc. Under this organization should start motivate the change and it is required to present postures unto working procedures and fit the ground. Communication about expected change is very important at this stage if people are conceived and help. Under change stage, system by encouraging effective communication and enabling people to embrace new directions of working and study new values, postures and behaviors. And also issues are recognized and action plan advanced to empower execution of the change. Under Refreeze, this is the final step in Lewin’s change management process and this is end organization returns to a perception of resolute and the betterment of the change is identified, which is necessary for working the trust from which to embark on the next necessary change. Benefits and other reinforcement by managers are needed on an individual level and more effective execution at an organizational level. This process can be showed as follows,
Driving Forces Resisting Forces Equilibrium
Figure 1 – Process of Kurt Lewin’s Theory
Driving forces are forces that accelerate in a way that reason to change befall. And also provide change because they push the person in the dissentient. Ex- Market needs, Technology, Production capacity etc
Resisting forces are forces that against driving forces. Further resisting forces cover change because they push the person in repugnant ways.
Equilibrium is a condition of being where driving forces equal resisting forces and no change occurs.
2.1.1 Lewin’s framework for change.
Change
Figure 2 – Lewin’ Frame work for change
2.2 Kotter’s 8 step model.
In 1996, John P. Kotter created 8 steps for supporting managers’ deal with transformational process. Stages of Change process are,
1. Increase Urgency – Identify market and competitive realities.
– Identify and discuss major opportunities.
– Accommodate evidence from outside the organization.
2. Build a guiding team – Handle the group with enough power.
Attract key change leaders showing dedication.
Encourage the group work as a team.
3. Get the vision right – Create a vision
Improve methods for achieving that vision.
4. Communicate for buy – in – Build engagement through stories.
Keep communication simple.
Teach new behaviors.
5. Empowering Action – Remove jeopardy from change.
Change structure.
6. Create short term win – Plan and achieve visible performance.
7. Do not let up – Reinforce behaviors
Recognize and benefit personnel linked in the improvements
8. Make change stick – String the connections between new behaviors and corporate success.
During these theories, we selected Lewin’s theory for analyzing the change location in Asiri Central Hospital.
3. Data presentation
This chapter focuses about the presentation and analysis of the profit related data obtained from annual reports of five years of Asiri Hospitals PLC. The purpose of this chapter is to provide the answer to the questions and help determining the results and relationships among the variables.
According to the Annual reports, company believes that the changes that they initiated after the relocation have helped in achieving below mentioned results.
After the company shifted to the new venture in financial year 2010, its gross profit and operating profit has increased.. The given below figures shows the Asiri hospital’s Revenue, Gross Profit and Earnings/loss per share. The below table shows the Income for the 5 years of Asiri Hospitals PLC.
Rs.”000”
Description Financial Year
2009 2010 2011 2012 2013
Revenue 620,194 652,689 29,680 66,300 60,100
Gross Profit 210,967 236,569 19,369 66,300 60,100
Operating Profit & Loss 130,720 160,838 (4,135) 261,373 109,300
Table 1 – Revenue, Gross Profit and Operating profit sourced by annual report
Figure 3 – Revenue (Annual Report)
According to the above statistics, there was a sudden increase in the revenue in the financial year 2010. But there was a sudden drop in the revenue in the year 2011. And also after 2011, it was fluctuated.
Figure 4 – Gross Profit (Annual Report)
When analyzing about gross profit, in 2010 gross profit was increased than previous year. When comparing gross profit in 2010, 2011 had small amount of gross profit and in 2012 gross profit higher than 2011 but it was smaller than 2010. In 2013 they earned gross profit but it was smaller than gross profit in 2010 and 2012. Another special thing was, Revenue and Gross profit were similar in 2012 and 2013. Because during that period there were not cost of sales.
Figure 5 – Operating Profit
When discuss about operating profit/loss in Asiri central hospital, in 2010 operating profit was increased than 2009. But in 2011, they had loss. In 2012 they earned higher profit than 2011. And in 2013 they earned net profit but it was smaller than 2012.
Description Financial Year
2009 2010 2011 2012 2013
Earnings Per Share (3.72) 12.46 (7.90) 5.32 0.09
Table 2 – Earning per Share
In 2009, EPS was a negative value 3.72. From 2009 to 2010 EPS has increased from -3.72 to 12.46. It had been showed a positive perspective of the potential investors regarding the company in that period. But again the EPS had negative value as 7.9 in 2011. Then again it had increased from -7.9 to 5.32. But in 2013 it was decreased till 0.09.
Figure 6 – Earnings/loss per share
The given chart shows Earnings/Loss per share of Asiri central hospital. In 2009 and 2011 they had loss. But in 2010, 2012 and 2013 they had earnings.
4. Analysis and Discussion of the Change.
For analysis Change Management of the business, we selected Asiri Central hospital for our discussion. And also we discuss about How did do their change according to Kurt Lewin’s theory and how to impact it’s to the business. Furthermore we discuss about what are the strengths and Weaknesses according to the change. The change is, in 2010 they moved their location from Horton Place to Norris Canal road. There are different types of changes. Ex- Cultural changes, Structural changes, process changes, Environment changes etc. This change we named as re-orientation of Physical Environment. Main reason for change the location was Expand/ Growth of the business and increased their profit.
In Lewin’s theory, there are 3 plights. Such as Unfreezing, Changing and Refreezing. Unfreezing is creating the right conditions for change the result. And also Unfreezing normally goes through three stages. There are, Define the change management strategy, fit the change management team and develop the sponsorship model. Changing is a, during this step employees start to learn new processes, Systems etc. And this should be carefully planned well executed. This goes through 2 stages. There are, develop the change management plan and take hand and implement plan. Refreezing is re-establishing a new place of stability and appraise gladden levels by reconnecting employees back in to their safe in familiar environment. This also goes through 3 stages. Such as, collect and Analyze feedback, Identify gaps and manages pressures and Implement correct action and celebrate successes.
When apply this theory into practical situation like Asiri Central Hospital location change scenario, in 2009, they identified require to expand their hospital and enhanced medical services which provided their customers. Ex- they decided expand their bed facilities in to 270 beds. But they identified location was not enough to build a new building. If they built a new building, parking space also became smaller. As a result, customer became inconvenience because of smaller parking space. Other reason was, school is located in behind the hospital. Therefore road was also blocked.
According to the change location, they decided management team also needs to change. Because, some decisions of management were not favorable to their customers. They identified it according to complaints of some customers. Furthermore, they required to new talented knowledgeable people for growth of the business. When focus of financial review of the hospital, in 2008/09 they had net losses like 2008-Rs. (31,663,000) 2009- Rs. (83,074,000). Therefore they didn’t pay dividend to their shareholders in 2008 and 2009. And also earning per share also was negative value. Furthermore they required to perform well using suitable business model than before and required to provide agility and flexible services to the customers.
When consider all above mentioned point finally hospital management decided best thing is change the location. They leased Horton place land to the Sri Lankan army started to build new hospital in Norris Canal road. They stopped their services until complete the hospital. But it was also risk for them and they successfully faced that challenge. During the period of hospital was rebuilt, generally, employees were circumspect that old ways being challenged, but there were no clear understanding of the new procedures which will replace them. Therefore before commenced services in the hospital, decided change senior leaders, change managers & supervisors and clearance of excess employees.
Because senior leaders are conductors of the hospital and they are one of two preferred senders of message about change. If they communicate change wrongly, changed become unsuccessful. And also they played role as a needed ad-joint of sponsorship with peers and other middle managers. Managers and supervisors were other preferred sender of messages about change and could be built strong relationship with employees. Because they are work with lower level employees and through this they can be approached to the customers very easily and they can identify customer expectations. So, during this period they appointed new talented management team, managers & supervisors. They held training program for new team and retain employees and to inform new plan also.
After employees ready to change, they commenced commercial operations of Asiri Central hospital on 2nd April 2010 in Norris Canal road. The commencement of new venture and end up of the old hospital was well structured and without habitual problems contacted in such wide change due to detailed structure and proper execution. According to this change, they started Neuro Sciences Unit within the new hospital was made within the month of June 2010. And also they enhanced their bed facilities till 270 in new hospital for convenience for their customers. Further, they provided superior nursing care after the change. They had continued to strengthen the operating model of the Asiri group during the year by appropriating best practices across the hospitals with in group. And also fresh talent management would be strengths of them and it ensured their new venture, “The Central” was successful just like their other hospitals.
When discuss about financial perspective according to the change, in 2009 there were adverse economic conditions worldwide spreading over to Sri Lanka and not so advantageous economic conditions that spreaded during 2010. In 2010, this hospital had recorded and increase in turnover of 5.2% compared to 2009. This compared favorably with a increase cost of sales of only 1.7% compared to 2009. Furthermore operating profit before finance cost and taxes had increased by 23% to Rs. 161 Mn. And also finance costs had decreased by 29.3% compared to year 2009.
Performance of the new venture, so far, had been encouraging as per plan. The hospital had been well received by medical brotherhood and their customers and it was a truly world class facility. Further, new hospital had been provided world class services at bearable price to loyal local customers as well as tourists also.
Finally this takes employees from a period of low productivity in the changing condition to that organizational effectiveness and sustainable performance.
This all can be summarized as follows,
1. Unfreezing
2. Changing
3. Refreezing – Re orientation physical environment
– Changed senior leaders, Managers and supervisors.
– Change location from Horton Place to Norris Canal Road
– Temporally stopped the services also were risk.
– Informed about change to the newly appointed team and retain employees and described how to do it
– Organized training program for ready to their employees.
– Identified financial performance in 2010.
– Compared change situation and previous situation and identified what are the improvements than before and continued further improvements. Ex- Established Neuro Science unit etc
Table 3 – Summarization of Change process
5.1 Strengths and Weaknesses of change the location.
Strengths
• They introduced fresh talented persons in to the top management.
• Provided further medical facilities. Ex- Started Neuro Sciences Unit etc
• Provided huge parking facilities to their customers and charged fair price.
• Provided world class services at affordable price to local customers as well as foreigners.
• Communication problems were solved. Because employees were learnt to communicate clearly and effectively as a result of training program.
Weaknesses.
• Everyone was not happy with the change. Therefore they could deal with lot of frustration.
• Because of this change, medical services were falter in few months. Therefore they couldn’t earn income during those few months.
5. Recommendations.
According to the change situation they incurred many cultural, structural, environmental and process changes in the business. Due to this change, the company faced some problems in the business and also incurred net loss of Rs.4.1 million. So, these are the recommendations we identified to regain these losses and faced reactively for this change situation.
• Conduct training programmes to the employees based on their work schedules
Due to the change in the location the most customers are unaware about the sections, systematic process of the facilities inside the hospital because they were dealing with this hospital for the first time. So, in order to prevent this situation they should train the employees based on their work schedules. (Ex: Train managers according to the new process, Give information about new facilities to the staff and nurses so they can deliver it to the customers/patients)
• Develop a new parking facility system
The hospital provides parking facilities and charged fair price for that. Furthermore they can issue a card with free charges, for the patients who are admitted in the hospital. So these admitted patients don’t have to pay for the parking facility and it will become huge relief to them. Ultimately it increases their satisfaction and lead to attract more customers to the business.
• Upgrade modern facilities
Due to the location change they can expand the hospital by build more medical sections with the use of modern facilities.
• Upgrade medical equipments with the use of new technology
With the expanded location, the hospital management can upgrade their services with the medical equipments which are fully consisted with high technology. As an example we can get laser eye surgery unit. In this case they don’t have this kind of surgery unit and only Nawaloka Hospital has that facility. So, if Asiri Central Hospital can establish a laser eye surgery unit it will positively impact to the customers and in other hand they can attract more customers toward their business.
As another example the Asiri Central doesn’t have the equipments to run the cancer detection tests and in order to that they send the reports to the cancer hospital in Maharagama. So, if they purchased these equipments it will benefit not only to the hospital but to the entire Sri Lankan society.
• Maintain quality and safety standards effectively
The hospital gain more advantages after changing the location. But in other hand they need to consider about the quality and safety standards because it is located near the populous town like Town hall. To prevent from the vehicle emission and ensure the health conditions in patients, the hospital management must frequently maintain the safety and quality standards with the help of hospital staff.
5. Conclusion
For the analyzing purpose, we selected re-orientation change in Asiri Central Hospital. According to that we selected the location change in Asiri Central Hospital as our main research area. Under that we discuss the location change of the hospital from Horton Place to Norris Canal road by using the Kurt Lewin’s 03 steps of change management model.
We identified the limited space to the expansion of the business as the main reason for this re-orientation of physical environment change. With the mind set of expand the business; in 2009 the hospital identified the need of relocate the business.
Then Asiri Central Hospital commenced their operations in Norris Canal road on 2nd April 2010. So, with this location change Asiri Central Hospital provide huge parking area, increase the medical facilities by increasing their beds and room facilities, introduced talented persons into the top management and create systematic process to provide effective communication inside the business. And in other hand they incurred net profit of Rs.161 Million and lagging their business operations over the few months after the change situation.
So, when analyzing the Asiri Central Hospital we can clearly see the company was able to survive over many years by offering excellence healthcare facilities to all Sri Lanka. So, after studying overall change situation we decide this location change in Asiri Central Hospital positively impact to the business and it will help to broaden their boundaries in healthcare facilities. Furthermore they can recognize new healthcare requirements and raise their facilities, equipments according to the change situation to survive and achieve success in the healthcare industry.