Rosemont Behavioral Health Center Case Study

1653 words - 7 pages

Rosemont Center is located in Columbus, Ohio. It provides for the physical, emotional, mental and spiritual well being of troubled youth and their families. Rosemont is committed to helping children in need; it is dedicated to healing and renewing youths with a history of trouble and abuse. Rosemont provides the unconditional acceptance, treatment, counseling, education and hope that the youths urgently need to be more productive members of the community. Rosemont had two locations, Rosemont-Bay Saint Louis and Rosemont-Jackson (Swayne, Duncan & Ginter, 2008).
Rosemont was on the market for $2.5 million dollars. The furniture and equipment on both locations were old and worn but regardless, it was able to find a buyer. Cates Lewis was the financial broker who undertook Rosemont and his brother Lloyd Lewis was the CEO and managed the organization. Within a short space of time, Rosemont was almost bankrupt; they had spent the $3 million line of credit (Swayne et al, 2008).
Situation Analysis
After an intensive investigation, it was discovered that Rosemont’s financial problems were greater than what the CEO reported. The facility lacked sufficient patient volume to generate the needed revenue. An emergency board meeting was called to brainstorm to see what could be done to salvage the financial situation. A consultant was contacted to help get Rosemont back on its feet.
The consultant in his report stated that two levels of intervention would be needed, the first one would be a comprehensive crisis management program and the second a long term strategic plan to help Rosemont gain a competitive advantage in the near future (Swayne et al, 2008). The consultant TM, Inc laid the out two recommendations: Under Crisis Management, Rosemont will enter into agreement with TM, Inc. and TM, Inc would be responsible for finding and appointing a new CEO, report to the board and they would receive a base pay of $25, 000 per month for a period of nine months. At the end of the nine month period, TM, Inc will provide a five year plan and strategic recommendations. At the end of the contract, TM Inc, reserve the right to buy thirteen percent of Rosemont stock at the fare market price (Swayne et al, 2008).
Response from the board.
As expected the response from the board was a mix one. Some thought the $25,000 per month bill was rather steep and thought this would drive the facility into more debt, the others thought the stock option was outrageous and were very unhappy. Lloyd Lewis was most unhappy because TM, Inc. did not report to him and the consultant firm was also going to find his replacement.
Part of the problem with the board was that all its members were Lloyd’s golfing friends and he was viewed as “Mr. Network” (Swayne et al, 2008, p.620); one of the board members is a recovering alcoholic and his only connection was he was a product of Rosemont Center, the other...

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