HealthSouth is in need of creating a professional image and adopting ethical principles while addressing the following problems: unhappy coworkers and managers, improper business practices including creating falsified statements and unlicensed people performing physical therapy, and unethical behavior involving corporate leaders and the CEO. There are signs of lack of leadership and purpose within this company and unethical procedures that need to be addressed in a timely manner. We have provided within this case a framework to turn this downward cycle around and make HealthSouth a profitable and ethical organization.First, we will separate accounting duties which will help people remain honest.
Second, all employee’s personal references, work history, education and licenses will be checked and verified separately by Human Resources. Third, board members will consist of members with a variety background and will be elected. The board of directors will also approve all employee’s bonuses and salaries. Putting these principles in place will help turn-around the culture at HealthSouth.HealthSouth is recovering from a near fatal corruption and fraud saga. On all fronts, there are issues of trust and faith in the company.
This includes its employees, stockholders, bond holders and customers. The rumors within the company are a by-product of its ongoing struggles and challenges. When someone works for a company that has a poor reputation, the honor in the work is limited. The low morale is simply a consequence of the decisions of the former leaders. The rumors of continued inappropriate business practices could possibly mean two things.One, that there is continued mistrust.
Whether or not ethical decisions are being made within the company still may produce mistrust. This could explain why the current CEO is being named as someone who is a part of the inappropriate practices. This understanding and assessment would be the ‘less painful’ option since the underlying assumption is that ethical decisions are being made. The only thing to address would be the wounded hearts of the employees. The second option is that employees, and CEO, are still practicing unethical behaviors.This would be the worst case scenario since changing the culture would involve terminations as well as trainings.
With a history of corruption and lies, changing the culture in any direction would be a significant challenge. Furthermore, changing the culture to a Christian-centered ethical driven organization is a 180 degree turn, which would be the hardest to do. A deep combing of the internal operations would have to be performed in order to make recommendations on best practices for internal financial control. RecommendationsThe firm should separate the duties of accounting clerks. Duties would be divided for income, expense, PPE (property plant and equipment), liabilities, and cash account.
Each person would only prepare one side of each entry and all entries signed off by department manager, having the third person sign off helps keep you honest. Posting expenses to asset account overstates assets, decreases expense and increases profits. Equipment should be purchased through a closed bid system. The firm would offer preapproved companies to bid for specified equipment.
Employee’s personal references, work history, education and licenses would be checked and verified separately by Human Resources. All licenses would be display in appropriate work areas. All employees will receive continual job training and required to stay up to date on technology. Billing will be verified to employee time card and scheduling of treatment rooms and equipment. Board members will consist of members with a variety background. An election committee will be formed to interview and make recommendation for possible members.
No member will be related to another member and only two members from the same field. Having broad scope of opinions and skills will give the firm a better foundation to build on. Employee’s salary and bonus will be approved by the Board of directors. Stock options and the selling of options must have prior approval by the board. Selling of employee stock will not be allowed if the outcome will affect the company. Conclusion HealthSouth is in desperate need of looking at the problems that are bringing this organization down.
They really need to start from the beginning and establish ethical principles. It will take time, and they must start from the top, but this company can turn their image around. Putting an ethical organizational culture into place is very important in the healthcare field. This firm does have an opportunity to improve employee relations and build an ethical company. After ethical systems are established within the company, HealthSouth can build confidence with clients and the external business community.
