HealthSouth Case Study

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Case Study
HealthSouth (B)

Executive Summary
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. Problem

Setting up expense as assets to reduce expense and improve profit/loss statement Falsify paperwork for purchases/Purchasing used equipment and billing the government for new Creating false entry to boost income

Claims of unlicensed personal performing physical therapy
Claims of billing for nonexistent therapy
Board members personal friends
CEO Scrushy sells stock causing stock prices to drop dramatically Giving company executives bonus to cover possible legal costs

Environment - SWOT Analysis
Internal:Strengths:
* New board of directors put in place
* Opportunity for organization to become Christian centered and improve image
Weaknesses:
* Employee conflict and conflicts of interest are present * Unethical climate and unethical leaders
* Unhappy managers and frontline workers in the company...
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