Why do you think the board chose Mr. Josephson over Mr. Larson for the CEO position?( 1 page 275 words )2. What challenges did Mr. Josephson face when he arrived at Centuria? How did he deal with them? ( 1 page 275 words )
3. Contrast the changes Mr. Josephson made at Centuria with those made by Mr. Roberts. Please be as specific .as you can. What aspects of the organization did the TUL Program affect, for example? How? What other aspects, ( 1 page 275 words )if any, did Mr. Josephson address, and how?4. How, if at all, have the cultural changes at Centuria prepared the organization for success in an environment with a high concentration of managed care? What obstacles remain? What challenges does Mr. Josephson face in overcoming them?( 1 page 275 words )Centuria Health System
When I arrived at Centuria, the prevailing emotions among midlevel managers and senior VPs alike rangedfrom fear to panic. In an organization unused to major change, people feared that I would come in and begin“swinging the ax.” Moreover, Centuria was very protective of its fledgling new culture. The organization hadworked hard to change, and people were concerned that I would not understand or embrace the new culture andthe values.The speaker was David Josephson, recently appointed CEO of Centuria Health System. He continued:Over a period of three months, I interviewed 100 people—physicians, board members, community leaders,managers—asking them for their opinions of Centuria’s strengths, weaknesses, and future direction. The interviewprocess gave me an opportunity not only to establish a personal connection with representative membersof all constituencies of the hospital community, but to begin to plant the seeds of a vision and a directionfor the hospital.Now, some two years later, Mr. Josephson was assessing the changes he had made at Centuria,and wondering if he had prepared the organization adequately for the challenges it was facing in amanaged care environment.BACKGROUNDCenturia Health System, located in Northern California, was founded as Centuria Hospital duringCalifornia’s gold-rush days, by the wife of a successful prospector. The hospital grew steadilyover the years to its current size of 500+ beds, and was a regional teaching hospital. In addition,during the past two years, Centuria had expanded its activities in response to the intense competitionand high penetration of managed care in the Northern California region. This expansion includedthe development of an IPA-type HMO (called “Physician’s Health Plan, or PHP), a regionalcancer center, a regional pediatric center, an ambulatory services center, and an outpatient rehabilitationcenter. Three years ago, in recognition of its increasingly diverse activities, it changed itsname to Centuria Health System.Centuria had a staff of 570 physicians and 2,800 employees, and treated some 120,000 peopleeach year, serving an eight-county population of nearly one million. Prior to the major changes ofthe past couple of years, it had been thought of, by members of the staff, Board, and town alike, as“a sleeping giant.” Located in a mid-sized city, it had always been the major hospital, more thantwice the size of the next largest hospital in town, and had never known significant competition. Thecost-plus reimbursement environment that prevailed from 1965 to 1984 contributed to the sleepinggiantimage. During that era, there were no external pressures to contain costs or streamline operations.Centuria’s employees were loyal—when you took a job at Centuria, you became part of “theCenturia family,” and had every intention of staying on for the rest of your working days. Theprime example of Centuria longevity was Mr. Josephson’s predecessor, Christopher Roberts, whohad been at the hospital for 32 years, until he retired.HBSP Product Number TCG143THE CRIMSON PRESS CURRICULUM CENTER

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