Case Study on Castle Nursing Home

Topics: Net present value, Rate of return, Cash flow Pages: 10 (3100 words) Published: May 6, 2013

Executive Summary: This report is commissioned to examine the current position of Castle Nursing Home PLC, since it is evident that the top-line and bottom-line have been adversely affected. The report draws attention to the existing status of Castle Nursing Home. The strategy to grow and re-organize has resulted in the need to streamline its operations, so as to retain its focus, quality of services and reputation among the public. Further investigation into the organizations financial statements, proves the company is going through a rough patch but has chances of improvement. This report also provides clear insights as to what strategies the organization can use, to help improve the existing conditions.

Key Words: Operations, Quality Improvement Techniques, Competitive Advantage, Systems Approach, Capital Investment, Investment Appraisal Techniques.

Introduction: Castle Nursing Home PLC is a chain of residences for old age pensioners in Northern England. Due to its growth, it has become exceedingly tough to maintain consistency in its operations. Various publications highlight that the organization is being engulfed by its disjoint, mismanaged procedures and goes further to state that the organization is losing focus of its reason for existence. Castle Nursing Home now has to undo all the effort taken till date, despite having no clear focus and strategic plans at hand for the future. From the available financial statements, we can observe that the overall turnover as well as the net profit of the organization has reduced. This report frames the present position of the business as well as the strategies the organization can use to help boost the business’s operations as well as its status, for all its residents, staff and shareholders.

Applying Strategies into Castle Nursing Home:
As mentioned earlier, Castle Nursing Home is planning to undo the effort put in till date and restart from scratch. For this, Castle Nursing Home can adopt certain strategies such as:          Understanding the role and importance of operations to the organization. The importance of performance management and undertaking performance appraisal. Importance of using quality improvement techniques to increase its quality of services to gain a competitive advantage. Understanding the importance of information and the various types of information systems that could assist the management. The significance of viewing the organization in terms of systems approach. The use of quantitative techniques to help decision-making. The pros and cons to cash-flow forecasting. Importance of a break-even analysis and marginal costing in decision-making. Use of capital investment decisions and Investment appraisal techniques.

Now that we have identified opportunities for Castle Nursing Home, let us see how it can implement these. Joseph G .Monks defines operations management as the process by which resources flow into an organization, get pooled and transformed to add value in accordance with the various rules as defined by the management. As seen, the weakness of Castle Nursing Home lies mainly in its operations. To streamline this, Castle Nursing Home can adopt operations management. Operations concentrates on five main areas: Capacity

(ability to meet demands), Quality (accordance to customer expectations), Process (activities that convert input to output), Inventory (stock possessed by the business) and Workforce (those who maintain and manage operations). These crucial areas are the foundation for any organization. Hence despite being costly, operations management is vital for the survival of Castle Nursing Home to enhance productivity, efficiency and competitive advantage. Competitive Advantage is the superiority gained by an organization over its competitors in the same market. It is said to be achieved when the organization is applying values or strategies that are not being used...
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