Change and Culture Case Study 1 The struggling economy, the emergence of new technology and the government’s healthcare reform is pushing hospitals to seek refuge in another resulting in a merger. A merger is the consolidation of two establishments into a single legal entity (Hayford, 2012). In the health care industry, mergers are rising in numbers. Mergers transpire due to a variety of reasons; to increase in size to gain better negotiation power with managed care providers who tend to bypass smaller organizations, to penetrate new markets to attract additional customers, to improve efficiency evolving from centralized administrative practices, and to express overall value of promoting readily available comprehensive care by shoring up smaller community-based facilities, keeping them from closure (Liebler & McConnell, 2008). Despite the reason for the merger, when two health care organizations merge, the organizational dynamics change considerably from the leaders in the board room to the medical staff on the hospital floors, and the impact has a short and long-term ripple effect throughout the newly formed organization as performance, mission, values, and culture will be restructured. The restructure of a new organization resulting from a merger and the role of the middle manager in developing an environment that the combined staff can work on will be analyzed further. Additionally, a description of the newly formed organization from the merger in terms of system and shape will be discussed.
Case Study Scenario
A healthcare organization, Kindred Hospital, has merged with a previous competitor, Highland Hospital. The employees perceived the competition as an enemy that provided poor quality of care. Highland hospital, however, has in place inpatient and outpatient services that Kindred hospital does not.
(a) What impact will the sale have on the culture of the new combined organization?

(b) As a Middle manager, what can one do to ensure that the combined staff will work together to provide quality of care without taking on a competitive stance?

Finally, describe what the organization will look like, in terms of systems and shape.
Effect on the New Organizational Culture
The merger of two competing hospitals, Kindred and Highland, will create a new organizational culture that will impact and challenge the values and beliefs of the staff, the vision and goals of the organization, and the daily norms of dealing with each other, the clients, and the stakeholders. Changes in the environment will produce stresses and strains inside the group, forcing new learning and adaptation. At the same time new members coming into the group will bring in new beliefs and expectations that will influence currently held expectations (Schein, 1990). Management and employees will have to adapt to a new set of policies and procedures as well as new expectations and goals as the new organization slowly evolves. Depending on the extent of reorganization, structural changes within a healthcare organization, such as merging departments or groups or realigning departments under different managers can provoke hard feelings and generate considerable resistance (Liebler & McConnell, 2008).
The values and beliefs of the staff within the organization will be challenged as new employees are added to the roster and new leaders take charge. The changes that will occur as a result of the merger will produce stress in all employees, causing some to resist the change and others to reevaluate their roles in the organizational structure. It is imperative that management gains the employees’ trust and assure each one that the effects of the changes occurring will be short-term and will contribute to the formation of a better organization. Managers must encourage staff to learn from one another maintaining an environment that remains focused on the organization’s success.
The vision and goals of the organization will be redefined as two distinct establishments are consolidated into one entity. The vision and goals of Kindred can be combined with those of Highland creating a stronger, more defined vision and goals. The new organization will be fully committed to providing high quality of care, patient safety and satisfaction, accountability, and cost-effective services. The accountability of each organization especially to the regulatory agencies must be reviewed. In a merger of a hospital, the purchaser can take over severe regulatory liabilities. It is significant to ensure that the hospital’s survey history and results such as accreditation surveys are in order (Brown, Werling, Walker, Burgdorfer & Shields, 2012).
The daily norms of dealing with each other, the clients, and the stakeholders will be disrupted as the operational and functional elements of the organization are enhanced. Successful merger takes time and changes with the daily norm that employees are accustomed with are inevitable. The culture of the entire organization rather than the managers alone is expected to have an effect on “the way things are done” in an organization (Scahill, Harrison, Carswell, & Babar, 2009). Employees need to embrace the change and be ready to adapt to the rapidly evolving organizational structure with the support and guidance of the middle manager.
Middle-Manager’s Role
The middle manager will face many challenges in ensuring the combined staff will work together to provide quality of care without taking a competitive stance. Before attempting to control and make any changes with the combined staff, it is vital for a middle manager to gain the trust of both set of employees. An effective middle manager will generate trust through engagement, commitment, and communication. Encouraging, supporting, and interacting with the employees daily as changes take place within the organization. Fostering participation is the best way to enhance morale and generate commitment to the changes by allowing employees to provide feedback to the change occurring as the merger takes effect. An open line of communication among employees and management must be established to ensure information is conveyed properly. By allowing staff to communicate their ideals and concerns regarding the organizational restructure that is occurring will prevent them from resisting the changes that are taking place. According to Liebler & McConnell (2008), it has been repeatedly demonstrated that employees are more than likely to understand and comply when they have a voice in defining the form and substance of the change. As each staff adjusts to the newly restructured organizational culture, the middle manager needs to emphasize the significance of delivering high quality of care despite the changes that are occurring within the organization. According to Hayford (2012), hospital mergers have the potential to affect quality of care. If the merger creates financial benefits, the combined hospital may reinvest these gains in quality improvement. The financial impact of the merger between Kindred and Highland hospital will have a positive effect on the quality of care that the middle manager must take advantage of.
As mentioned earlier, Highland hospital before the merger was known to provide poor quality of care, therefore, the focus should be on the employees originating from that hospital. The middle manager must be responsible for introducing Quality improvement by conducting educational trainings on the significance of delivering high quality of care and its impact on the organization’s reputation and success. The merging of the two hospitals requires each employee’s effort, energy, and full participation to ensure high quality of care is delivered.
New Organization’s System and Shape
The consolidated organization will have a system that is well integrated and aligned with a centralized organizational structure. The executive team will have the sole power to make decisions for the new hospital. Under the governance of a community-based board of trustees, the merged hospital serves the public interest by improving the community health with the scope and expertise of its resources, and offering the most innovative and effective medical technologies to deliver high quality of care. An open line of communication among leaders and employees will be well established to ensure effective flow of communication up the chain of command as well as down the chain of command.
The shape of the newly formed organization will have the dual pyramid form that is unique to the healthcare organization. Led by a Chief Executive Officer (CEO) who is responsible for the administrative branch and a Chief Medial Staff (CMS) who oversees the medical sector of the organization, the new organization will have two lines of authority (Liebler & McConnell, 2008). The merger of Kindred and Highland hospital created a new healthcare facility that has a high level of trust that works both ways from leader to employees and vice versa, a clear set of expectations clearly communicated among all staff, and a clear set of defined roles and responsibilities accepted and understood by all employees.
Conclusion
The merging of two distinct establishments, Kindred and Highland hospitals, restructures the organizational culture impacting the values and beliefs of the staff, the vision and goals of the organization, and the daily norms of dealing with one another, the clients, and the stakeholders. The fundamental part of implementing change in the organization belongs to the middle manager. The significance of gaining the employees trust by the middle manager before attempting to instill change within the organization must be emphasized to avoid generating resistance as well as confusion and fear. The middle manager must engage, support, and encourage employees daily while changes from the merger are taking effect. The newly formed system will yield a vibrant, dynamic, engaged and committed organization, well integrated and aligned resulting in more, grounded, productive and happier working environment.

References
Brown TC Jr; Werling KA; Walker BC; Burgdorfer RJ; Shields, J. (2012). Current trends in hospital mergers and acquisitions. Healthcare Financial Management: Journal Of The Healthcare Financial Management Association, 66(3), 114.
Hayford, T. B. (2012). The Impact of Hospital Mergers on Treatment Intensity and Health Outcomes. Health Services Research, 47(3pt1), 1008-1029.
Liebler, J., & McConnell, C. (2008). Management principles for health professionals (5th ed.). Sudbury, MA: Jones and Bartlett Publishers
Scahill, S., Harrison, J., Carswell, P., & Babar, Z. (2009). Organisational culture: An important concept for pharmacy practice research. Pharmacy World & Science, 31(5), 517-21.
Schein, E. H. (1990). Organizational culture. American psychologist, 45(2), 109.