Synopsis
The Ivey Business School Foundation’s publication highlights the Institute on Aging’s decision to shift operations to consider revenue generation alongside the core mandate of taking care of the older people’s wellbeing. Through a number of measures adopted by the new chief executive officer, Tom Briody, several administrative alterations made the objective attainable (Pike & Sathe, 2018). For instance, the structural changes involved more people engaged in the top management with the fortification of business development that was nonexistent in the earlier system. Attention was given to the company expenses such as insurance brokerage, legal fees, and contractual engagements. After weathering the storm of internal resistance to change and smoothing relations with external partners, the leadership successfully implemented operational efficiency strategies through new techniques and emphasis on financial targets. Fundraising to realize sufficient capital was made possible with the help of consultancy engagement. With the help of staff morale incentives and inclusivity in decision-making, the management succeeded in controlling the initial reaction to organizational priorities and reputation. The organization recorded a growth in gross revenue from twenty-eight million to forty-five million dollars.
The registration of organizations has to indicate whether they are for-profit or non-profit entities. The delineation sets out various terms of operation for the organizations based on their profitability standing. The operational protocols border on ethical considerations because the sector in which the institution operates has other players that cause a sense of competition to be at play. For instance, non-profit entities enjoy tax exceptions and have multiple benefits for their employees that are not replicated for their profiteering colleagues. Therefore, when a non-profit begins operating like a monetary-driven enterprise, it infringes on the competitiveness of the for-profit entities, upsets the organizational culture, and disturbs the stakeholders’ conscience. The need to implement a shift could be motivated by the desire to have seamless operations despite uncertainty in reliance on external funding. Although it is debatable the justification for a non-profit to behave like a profitable entity, there are profound bearings on ethical, public service values, human resources, policy, and budget considerations.
Information Bases
To manage the situation adequately, it is imperative to have information on various statistical information about people and businesses of interest to the organization. Accordingly, the management needs to know the number of senior citizens that would require the institution’s services presently. Moreover, it is imperative to have a precise projected rise in the number of admissions to the institution shortly and in the long term. Such data would help determine the resources the organization would be spending every financial year and the staff that would be engaged. Due to the business exploits that the organization has opted to pursue, it is incumbent on the management to seek information on a feasibility study on the business ventures the company is involved.
The information has to be sought from various sources, analyzed, and further research conducted. The targeted demographics database could be obtained from Gallup, Statista, NationMaster, NumberOf.net, DataMarket, and other government agencies such as the Census Bureau. Business feasibility information can be drawn from statistical data on market trends and sector-specific profitability to gauge the best options. Business portfolio experts can provide critical insights if engaged on a contractual or permanent basis towards such aims. Research and analysis on handling the novel operations can be facilitated through forecasting methods that can enable the organization to adjust its capacity accordingly and have accurate determinations of the business prospects.
Ethical Concerns
The vital ethical concern is that the organization is registered and reputed as a non-profit entity that is attempting to shift to a for-profit outfit. The government has in place student loan repayment incentives for employees engaged continuously in non-profit organizations that are not granted to their profit-oriented organizations. The equitable policy makes it lucrative for the recent graduates to be attracted to non-profit organizations. As a result, the organization’s change gives it an unfair advantage in attracting skills when it is engaged in competitive exploits. Further, the government accords non-profit entities with various tax reliefs due to their nature, nobility of their undertakings, and hurdles they face in raising finances for their operations (Svara, 2015). Other profit-leaning organizations equally appeal to the community through social corporate responsibility programs but still contend with tax regimes.
An amicable resolution stratagem has to be developed to handle the ethical crisis at hand. Firstly, the justification of the rising number of senior citizens in the country that need the organization’s services makes a good case for the aggressive search for additional finances. The projection of one hundred million senior citizens in the next five decades is telling of the level of stretch on resources that the establishment shall have to handle. It is so that it prepares early enough. If anything, much of the profits shall be spent on the organization that presently has to rely on philanthropic donations that may not be consistent. Furthermore, a clear separation of the organization’s business venture entities would help circumvent the ethical upheavals. The separation would enable government agencies to handle the businesses like any other profit-making enterprise. Such profits are not used by individuals but handed over to the institute to sustain their undertakings.
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Public Service Values
Public service perspectives are geared to cause civil servants to serve and communicate with the community seeking their services effectively. According to the literature by Denhardt, the novel approach to public service is founded on democratic tenets, accountability to the public, and servant leadership, where the endeavors of officials are meant to answer to the needs of the locals rather than lording over them (Denhardt & Denhardt, 2015). In the case of altered core values of the institute on aging, the public service model applies several ways. Firstly, public service manifests variably, and in the execution of its mandate, the institution is exhibiting a way of serving the public. In addition, in the operations of the organization, it can be distinguished from a private sector establishment. The staff engaged have to understand that theirs is a noble calling especially given the nature of their duties as directly or indirectly related to the wellbeing of the elderly. The constitutional values involve conforming to the key objectives of the institution despite the systemic alterations applied. Moreover, the guiding principles in the institute’s operations and management have to be founded on accountability, transparency, proficiency, equity, and other idyllic doctrines of public interest.
Human Resource Problems
The case study indicates undertones of disapproval by most of the staff, which are not pleased with the change in leadership. Organizational culture is a critical pillar in human resources. It is the basis for the induction process and enables the employees to execute their mandate with certainty to conform to the philosophy. The change to a profit-making outfit alters the organizational culture completely and calls for a novel induction exercise to acclimatize the workers to the new operations. However, the top management’s motivation efforts and inclusivity in decision-making are appropriate for improving the employees’ attitude towards the leadership and the new work approach. Another resolution to the situation at hand would be enhanced communication to appraise the workers of various determinations and augment the opportunity to take in their insights.
Policy
The key policy issue for determination is whether the organization continues to exist as a non-profit or otherwise. Such resolution would be fundamental in establishing the organization’s relationship with external entities such as government agencies, business competitors, and the community. A way to resolve such a vital outlook of the organization is to have the businesses registered separately instead of having them operate with the organization’s name. In such a manner, the separate entities would be subjected to every privilege, responsibility, and regard as the other businesses operating in the state. Moreover, the organization retains its reputation and external relations as before, only that it has more revenue sources to finance its operations.
Budget
The Institute on Aging has critical budget issues that cannot be resolved through cost-cutting alone. With a financial reserve of barely eight million that gets whittled by up to four million annually despite large loans from lending agencies, the organization is on the edge of bankruptcy. The growing number of senior citizens in the country is not helping matters much as the institution is only likely to admit a higher number. The leadership’s resolve to engage in business-oriented ventures is a welcome solution as it uplifts the institution from its financial distress. The approach is justified in the face of value and ethical regards, as the organization would have to cease operations if the financial strain remains unresolved.
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References
Denhardt, J. V., & Denhardt, R. B. (2015). The New Public Service: Service not steering (4th edition). Armonk, NY: ME Sharpe.
Pike, J., & Sathe, V. (2018). Institute on aging: When non-profits operate like for-profits. Ivey Business School Foundation. Web.
Svara, J (2015). The ethics primer for public administrators in government and nonprofit organizations. 2nd edition. Sudbury, MA: Jones and Bartlett Publishers.