Case Study of Reach Out, a business providing therapy to children with autism.
Rosamma Karishma Joseph – 11C
Australian International School, Sharjah
IB Business & Management
This is a preview of the whole essay
- SWOT Analysis
The SWOT analysis is used to analyze a firm’s internal strengths, weaknesses and external opportunities and threats. It gives us an idea about Reach Out’s current position.
- Main characters:
- Laura Chan
- Co-founder of Reach Out
- Designation - Director – Communicating & Networking,
Her roles included:
- Maintain the network of families with children affected by Autism
- Contact local university to create a database of students who were willing to conduct therapy sessions for families with autistic children
- Write the blog detailing daily challenges while looking after Toby
- Assigning students to conduct therapy sessions with families
Her leadership style – Laissez-Faire
- Employees were given more decision-making power.
- Consequently, there was no sense of direction.
- Neil Johnson
- Co-founder of Reach Out
- Designation – Director – Finance & Strategy
His roles included:
- Train Andrew, new part-time manager
- Identify and analyze problems prevalent in the organization
- Come up with possible solutions to these problems
- Come up with strategies to increase revenue for Reach Out
- Conduct market research to find publishers for production of PECS cards
His leadership style – Autocratic
- Enjoys taking decisions independently.
- Does not prefer employee input.
- Andrew Grandin
- Designation – Scheme Manager
His roles included:
- Overseeing the therapist scheme
- Managing therapists
However, due to his difficulties with social situations, working with adults, computing skills there were several complaints about him from the families. He wasn’t much of an asset to Reach Out as estimated.
- Mission statement:
This is a statement that outlines the purpose of Reach Out’s existence. Reach Out’s mission statement is, “To provide online support for families of children with autism and to offer them communication resources at a greatly reduced price. “ This gives an account of Reach Out’s aspirations to operate as an organization with ethical considerations.
- Vision statement:
Reach Out has a vision statement, “No child with autism will be left behind.” This gives a brief account of a Reach Out’s aspirations in the distant future. This gives an impression to the general public about the drive and enthusiasm with which Reach Out would like to work towards the cause of Autism.
- Objectives of Reach Out:
Objectives are used to outline the goals of Reach Out (what it wants to achieve) and assess Reach Out’s performance. It provides a sense of direction and a basis for decision making. They are relatively shorter term goals. Primary goal of Reach Out is an ethical objective. Ethical Objectives are aims of an organization that fall within a moral framework or fair business practices. Reach Out aims to help children with autism. Reach Out also aims to promote this important cause through Laura’s blog – by adding podcasts and video clips and having a professional-looking website. Reach Out wants to help provide low priced PECS cards / communication resources for families of children with autism.
- The stakeholders:
A stakeholder in a business includes any individual or group that is affected by the business and therefore has an interest in the activities of the business. The following diagram shows the stakeholders of Reach Out:
Suppliers of PEC cards
Special Interest Groups for autism
Families of children affected by autism
Stakeholders are of two types – external and internal. Reach Out’s internal stakeholders are:
- Laura – As the owner of Reach Out and the Director – Communication & Networking, Laura is concerned with creating the database for families that wish to seek help from Reach Out. Also, she regularly updates her blog, with details about the challenges she faces while dealing with her autistic son, Toby. This blog helps attract more people to Reach Out and spreads awareness about Autism. Laura invests her time into Reach Out and in turn receives a fixed monthly salary. She also ensures Reach Out operates ethically.
- Neil – As the co-owner of Reach Out and Director – Finance & Strategy, Neil is concerned with maximizing revenue for Reach Out (through the sale of PECS cards and therapy sessions) and identifying key problems in the organization and evaluating them. He is affected by the working environment and by the success of Reach Out, since his income is earned through a performance related pay system.
- Andrew – As the manager of Reach Out, Andrew was responsible for managing therapists and overseeing the scheme. Failure to manage his responsibilities well led to Neil questioning his role and presence in Reach Out.
- Therapists – Consisted the students looking for experience from the local university. They were concerned with the number of therapy sessions to be conducted at Reach Out, financial benefits (wages, salaries) and attaining experience at Reach Out.
Reach Out’s external stakeholders include:
- Families of children affected by Autism – They formed the customer base at Reach Out. They determine the financial position of Reach Out. Their feedback on Reach Out is vital to the success of the organization.
- General public – They provide Reach Out with donations. They are interested in the performance of Reach Out and the services offered. With increase in reputation, Reach Out can manage to acquire more financial resources from the general public.
- Suppliers of PECS cards – These are a key source of Reach Out’s revenue. If Reach Out maintains a good relationship with its suppliers, it can manage to receive quality goods on time and at a good price. Suppliers will be interested in the financial position of Reach Out and if they would be able to pay the outstanding amounts in time.
- Areas of Concern:
- Neil’s Option 1 – In this idea, the families would be asked to pay a higher fee. This would contradict Laura’s aim of ensuring Reach Out behaves ethically and is not profit oriented. They also might lose goodwill while the charity may lose reputation and the image of Reach Out will be spoiled.
- Neil’s Option 2 – In this idea, Reach Out would become a brand with a range of products including T-shirts, mugs. While this would raise revenue for Reach Out, donations may dry out as the general public does not see their money put to good use. Also production of these goods will require initial investment and this may take time to recover.
- Economic recession – In case of an economic recession, all donations may dry out. Charities are mainly run through donations and in an extreme case this may cause Reach Out to shut down.
- Andrew’s lack of computing skills is a serious area of concern because managing therapists and overseeing the scheme requires technological input.
- Unqualified therapists – This is a health and safety issue and Reach Out is likely to face legal action due to employment of unqualified therapists working with children.
- Conflict between Laura and Neil – Laura wishes to maintain Reach Out’s image as a charity and charge as little as possible while Neil looks at raising prices to increase revenue. Also Neil’s disapproval of Andrew is not well received by Laura. Neil also does not appreciate Laura’s laissez-faire style of leadership. These clashes in opinions between the co-owners of the charity, is a concern for the smooth functioning of Reach Out.
- Financial requirements – Reach Out will require a lot of finances to produce the PECS cards and conduct market research. Also the salaries of the therapists, Andrew, Laura and Neil put a financial strain on Reach Out’s budget.
- Dependence on N-Pharma for sponsorship – This may not be well received as it may be seen by some in the form of a PR exercise. This may tarnish the reputation of Reach Out.
- Inconvenience and absenteeism of therapists – Therapists face difficulty in conducting sessions and attending university lectures. If this issue is not resolved it may result in fewer students willing to conduct these therapy sessions.
- Andrew’s inefficiency – The complaints received regarding Andrew’s mismanagement of appointments will not help in developing the reputation of Reach Out. It will create a negative public image in the market.
- Cheap prices of PECS cards – Pricing the PECS cards too low in resulting in Reach Out struggling to pay therapists with enough money. This is behaving as a demotivator and the quality of Reach Out’s services may deteriorate.
- Informal communication between Laura, Neil, Andrew – This has caused a breakdown in communication between management and therapists, management and families.
- Corporate Culture of Reach Out:
This defines what is considered ‘normal’ to the organization – Reach Out and how the workers are meant to behave within an organization. This culture will be based upon a foundation of ideas, beliefs, and values of the management. Corporate culture is defined as the traditions and norms within an organization such as dress code, work ethos, attitude towards punctuality etc. Mission statements generally convey and outline of what the corporate culture of an organization is like. It depends on a variety of factors including:
- Aims, mission statement, vision statement, objectives of organization:
Laura’s aim of ensuring Reach Out operates as a charity by charging low fees for therapy and low prices for PECS cards describes the existence of Reach Out as a not-for-profit organization.
- Structure of organization:
Reach Out has a fairly flat structure. This results in quick decision making. Although with this type of structure, the employees will not take the management seriously because of the flat structure and small number of varied designations. This is also due to the existence of power in the hands of a few.
Therapists are unhappy with their wages and this will reflect the weak culture of Reach Out. Thus they are demotivated and consequently arrive late to the therapy sessions or don’t turn up at all. They are less enthusiastic about achieving the organizational objectives.
All these occurrences point towards the prevalence of the Power Culture, put forward by Charles Handy. According to this culture a group, Laura and Neil possess decision-making power. This type of culture is commonly observed in small organizations.
Every business is subject to change. Changes in a firm refer to new product development to change in organizational structure to new targets. It is any aspect that moves a business away from it routine way of functioning. However most changes must be well communicated to the staff because there will often be a resistance to this change. In such a situation a Force Field Analysis is apt. This is because it helps to create an understanding of the pressures for and against any change in an organization. This aids managers to assess the effects these forces might have and enables them to take a decision. Also through this analysis forces can be strengthened.
The following force field analysis tables will evaluate the changes made in Reach Out.
- One of the first proposed change is to dismiss Andrew from Reach Out.
While hiring Andrew did take some work off Laura and Neil’s shoulders, it did create some problems within Reach Out. As a result of employing him there were several complaints from families regarding the punctuality of therapists and failure to confirm appointments and reply to messages. This was all part of Andrew’s job and he has failed at performing productively at his job. Therefore the reasons to dismiss him outweigh the reasons to retain him.
- Next three changes are looking at the 3 options that Nick put forward in an attempt to increase Reach Out’s revenue:
The driving forces in this context are key because they look at profit and motivating staff. The labour turnover will also be minimal. However, the restraining forces suggest that the image of Reach Out will deteriorate because families will no longer be satisfied with the services they receive at a high price.
The restraining forces outweigh the driving forces. Developing Reach Out as a brand proves to be an expensive option. It jeopardize the financial position of Reach Out in the future. Also money used for the production of accessories will limit the finances required to produce the PECS cards. This is a crucial point because the production of PECS cards is part of the mission statement of Reach Out. Therefore delaying its production will not allow Reach Out to achieve its goals.
The difference in points clearly indicates that this option will work in Reach Out’s favour. It seems to be the most advantageous option for Reach Out. There’s free promotion of Reach Out through N-Pharma. Consequently as more and more people are aware about Reach Out, they might be willing to contribute donations as well. And finally the autism awareness will be raised in the process.
- Centralized or decentralized?
Decision making power is kept in the hands of few people or spread out among the workforce. This can be portrayed through two structures – centralized and decentralized.
- Centralized structures in which the decision making power is majorly in the hands of a few people. Usually this group is the management team. In this structure there is no form of communication between other members of the organization. There is quick decision making and better control. Also there is a better sense of direction. However, there is also delays in decision making, increased pressure and stress on management, inflexibility and Demotivation prevalent in such organizations.
- Decentralized structures are those in which the decision making authority is passed onto other in the organization. In such structures there is input from the workforce, quick day-to-day decision making, high morale, improved accountability and encouragement of teamwork. However there is also loss of control, more chances of mistakes, more reliance on effective communication, and duplication of functions.
Reach Out is clearly a centralized structure. With the firm being rather small in size there is not much need for decentralization. Decisions have high cost implications and therefore are centralized. The decisions are mainly taken by Laura, Neil to a great extent and Andrew, regarding schemes, to some degree. Rapid decisions are taken, without the consent of therapists. There are some delays though, due to amount of decisions to be made. Also the organization is inflexible and workers enjoy limited autonomy. They are also made to follow orders set by the decision makers.
The diagram below illustrates this kind of structure:
Conflict refers to a situation of friction or mutually exclusive goals between two or more parties, such as employees and employers. They are caused by disagreements or incompatibilities between groups and result in lack of cooperation. They also arise at different levels of the organization.
In context of Reach Out conflict can be identified in the following areas:
- Unqualified therapists: Laura’s suggestion of hiring students from the local university looking for experience, to conduct therapy sessions was not well received by Neil. He did not like the idea of employing unqualified staff. He considered it to be unethical. Also Neil was apprehensive about the legal issues regarding health and safety, and child protection.
- Hiring Andrew Grandin: Although Laura believed making Andrew a part of Reach Out would create an impacting impression among the general public, Neil was concerned. This is because Andrew did not have much experience working with adults and he experienced difficulty with some social situations.
- Dismissal of Andrew: Neil wanted to dismiss Andrew from Reach Out because of the number of complaints received regarding punctuality of therapists and absenteeism. It was Andrew’s job to overlook these matters and failure to do so was a growing concern for Neil. However, Laura was determined to retain Andrew because she thought it would improve the image of Reach Out.
- Laura’s leadership style: The way in which Laura is leading Reach Out is termed as laissez-faire. In this type of leadership major decisions are taken by the management and orders are passed onto the workers. The workers are then free to act accordingly to perform as per these orders. There is too much decision making power in the hands of the workers and therefore there is a blurred perception of direction. Nick was also concerned about the manner in which Laura took decisions heavily basing them on her intuition. While Neil preferred a more analytical and scientific approach of reasoning and arriving at a rational conclusion.
- Neil’s idea of charging a higher fee: Neil’s option to increase revenue for Reach Out was to increase the fee of therapy sessions by $5. However Laura did not support this. She felt that it did not reflect the ethical principle of Reach Out to charge families as little as possible. She further stated that it might tarnish the image of the charity.
- Neil’s second option of branding Reach Out: Laura felt that this was nappropriate and did not see how it would aid Reach Out in achieving its goals. She only wanted to sell the PECS cards and help autistic children.
- Neil’s third option of obtaining a sponsorship from N-Pharma: Laura was apprehensive about N-Pharma’s involvement with Reach Out. She was unsure if N-Pharma was actually passionate about helping autistic children or was indulging in a public relations exercise, as part of their corporate social responsibility programme.