Reference no: EM133437424

Case Study: Flowerville City Hospital was losing money, and the hospital's executive director knew action had to be taken to reduce expenses. Since most of the costs were related to labor, the choice was clear - reducing staff. The natural target for staff reduction was the unit on the fifth floor. This unit mainly serves 'observation' patients but has been understaffed for some time. Patients on the fifth floor could easily be transferred to other units, and closing those floors would save a lot on operating costs.

About forty employees worked on the fifth floor, all reporting to Lily Joe, the nursing manager. The hospital management decided that since the floor was completely sealed off, Lily's services were no longer needed. However, there are several factors that complicate this decision. First, the hospital has a 'reassignment' rather than 'layoff' policy and as such has a commitment to place fifth floor staff in other open positions for which they are qualified within the hospital. Although it is not clear how many of the 40 staff could be transferred to other units. Second, most of the employees on the fifth floor were long-time staff, compared to employees in other units. However, they tend to be difficult to set up. Indeed, the fifth floor unit had developed a reputation for being an uncooperative bunch who consistently resisted change, and most managers felt that the quality of care provided by the nurses in the fifth floor unit was unsatisfactory at best. Similarly, Lily is generally regarded as the hospital's most ineffective nursing manager. As a result of all these factors, the managers in the other units were extremely reluctant to accept the transferred fifth floor workers.

A series of management meetings were held to plan the closing of the fifth floor unit. The meeting was planned by the hospital director and attended by the director of personnel, the director of community relations, and the communications/labor relations consultant. Initially, management considered not including Lily in these meetings, but later decided that it would 'look better' for her to be included in the planning process. Everyone who participated in the meeting was sworn to secrecy; there was no mention of closing the fifth floor unit until those plans were actually announced. Nevertheless, rumors quickly started circulating on social media and group chats that something was 'in the works' and that the fifth floor unit was specifically targeted by management.

Finally, a plan was developed. On Wednesday morning, the hospital director and director of personnel plans to meet with the fifth floor unit staff to inform them of this plan and provide them with details about their transfer to another unit (for those whose positions have been found) or (for those who will terminated) regarding the severance package provided by the hospital. Soon after, the upper management will hold a general meeting. Letters to the medical staff of the 5th floor unit signed by the hospital director will be sent out to all staff by Monday afternoon (so most will arrive by Tuesday), and a unit meeting will be held on Wednesday afternoon to discuss the situation in detail. with all the staff.
However on Monday morning, two days before the layoffs occurred, a group of medical staff from the 5th floor unit met with the hospital director and chief administrative officer to confirm the news. The group wanted to know the exact number of vacant positions they could fill if the 5th floor unit closed. However management did not provide an answer. The group is frustrated and demands an exact number of vacant positions before a letter of announcement is written and plans proceed.

However, at the same time, the organizational grapevines work very quickly. The fifth floor unit will be closing, maybe this week, rumors started to spread. Indeed, the fifth floor unit staff group who had met with management already knew of the plan. On the hospital's computer system, a staff member on the fifth floor unit typed in an announcement that was communicated throughout the hospital: 'We are longtime, loyal employees who are about to be thrown out into the street by the hospital. If you want to help, we started a fund to support those who would be harmed by the hospital management. Please send your contribution to (name, address of fifth floor unit staff)'.
On Wednesday, fifth-floor unit staff came to work in black suits and black armbands. They covered the curtains in the patient's room with black sheets which made the patient very confused. When no one came to inform them that their floor was being closed, they became even more irritated.
On Thursday, tensions escalated. While upper management continued to debate the amounts involved in the layoffs and the suitability of the communications plan, the staff on the fifth floor unit waited for someone to tell them whether they would continue or be fired. Finally, the situation became unbearable. A nurse started crying, and soon everyone was sobbing and hugging each other. The personnel director was summoned, and when he went to the fifth floor and saw what was happening, he told all the staff to just go home. With the help of the deputy director, he supervised the transfer of the fifth floor's patients to another floor.

On Friday, the hospital officially announced that its fifth floor unit had closed.

Source: Based on Andrews and Herschel, Organizational Communication, 'Case 2: Employee Layoffs,' pp. 125-127, ©1996. Reproduced with permission of Pearson Education, Inc.

Discussion questions:
1. Analyze and explain what are the reasons for spreading rumors about layoffs occurring among the medical staff of the fifth floor unit.
2. Is it ethical to involve Lily joe in the fifth floor unit closing plan discussion meeting? Explain your reasons.
3. How do you think this problem should be handled? Explain your answer.
4. How is communication one of the determining factors for the health of an organization? Explain your reasons.
5. Identification and analysis of the influence of new trends in organizational communication that are influenced by developments in information and technology. Relate the results of your analysis to case communications at Flowerville City Hospital.
6. What are the formal and informal channels of communication in the organization? Use these definitions to identify the lines of communication that exist in the case of communication at Floweville City Hospital.
7. What are grapevines? What is the role of grapevines in organizational communication? What should be the role of organizational management to control grapevines? Explain your reasons.
8. In your opinion, what kind of information should be communicated to the employees of the organization? And how to convey those types of information? Explain your reasons.
9. Analyze and explain how grapevines played a role in the communication case of Flowerville City Hospital.
10. Analyze and explain the ethical and moral responsibilities of organizational management in designing and implementing communication strategies within their organizational environment. You can analyze the decisions made by the upper management in the case of Communications City Hospital of Flowerville.