Headski business case study

Philosophy of Management

In the healthcare sector, it has recently become common for a physician to occupy a managerial function. The question that arises here relates to the necessity of having a physician serve as CEO, instead of his working directly with patients and having a positive influence upon the population's health. In the case of non-medical administrators, the healthcare institution would be governed from a business standpoint, with focus on budgets and other financial matters. The physician CEO on the other hand would be able to integrate the financial and administrative operations with the healthcare related operations into a united whole. "What does the physician CEO do that an administrator can't? You can have a wonderful administrator, but that person can't point the practice in a direction. [...]the physician CEO is the one to supply the vision and lead the charge. He or she should be looking out for the practice as a whole, seeking out consensus among the physician owners, and making final decisions" (Physician Compensation Report, 2000).

A relevant example of a worthy physician serving as chief operating officer can be found at the Eagle Physicians & Associates, run by Bruce Brenholdt. The physician has a background of 36 years in which he worked in medical administration and prior to joining Eagle, he had run various physician owned healthcare facilities in Wisconsin and Minnesota. He was also an active player in the medical and administrative operations run by the University of Iowa, College of Medicine, the Mayo Clinic-Jacksonville and the medical centers within the University of Kentucky and the University of Missouri (the Business Journal, 2008).

Head Ski Company Inc.

Not long after it had commenced its operations, the Head Ski Company began to register tremendous profits. The industry was developing faster than ever and the market demands were shifting rapidly. Founder Howard Head was able to develop and implement the most suitable strategies to seize the changes in the micro and macro environments; as such, the company managed to raise its profits from $59,000 to $402,482 in only seven years (Harvard Business School, 1982). Under the leadership of Howard Head, the ski manufacturing organization had enjoyed favorable reports from customers across the globe, satisfied with the high quality of the products and the high quality of the additional and complementary services.

The problems that could however be identified by a critical eye could refer to a slow production process, due to intense manual labor and the lack of manufacturing technologies (the technologies however existed on the market, but to ensure the high quality and the uniqueness, Head Ski Company continued to handle most of the production manually). Then, to ensure that the product reach the final customer only through specialized vendors which are able to properly offer support and deliver the complementary services, the number of distributors was limited. Head worked through franchising operations with the vendors and the selection process was rather ruthless; some distributors had to wait up to eight years to get the Head Ski franchise. This meant however that the number of facilities selling the skis was quite reduced (the success of this approach resided in that the population, already a fan of the Head skis, could not purchase them just from any place, and this then offered the skis a sense of uniqueness, the sense of limited editions, which always make the item more desirable to the audience). Another issue was related to the marketing operations and saw that the advertising would only be done through specialized magazines. This had the advantage of addressing the proper audience, but since the Head skis were generally designed for amateurs rather than professional skiers, the advertisements did not cover all potential customers.

Despite the limitations posed by slow production and limited market coverage through marketing operations, the manufacturer managed to achieve sustained growth, based mostly on the high quality of the products and services. But the single element of high quality is no longer the sole determinant of corporate success. Since the company had mostly been based on producing skis meeting the highest standards of quality, part of the administrative operations were overlooked. In other words, the company under Howard Head had been focused on product management, rather than business or market management.

The situation turned however when Harold Seigle was appointed the new chief executive officer of Ski Head Company. He developed and implemented various strategies relating to the internal and external environments of the organization. His leadership began with a corporate restructuring that would align Ski Head to the modern organizational models. In response to the changes implemented, Howard Head said: "I think that this is typical of the kind of business that starts solely from an entrepreneurial product basis, with no interest or skills in management or business in the original package. Such a business never stops to plan. The consuming interest is to build something new and to get acceptance. The entrepreneur has to pick up the rudiments of finance and organizational practices as he goes along. Any thought of planning comes later. Initially he is solely concerned with the problems of surviving and building" (Howard Head, Harvard Business School, 1982). In other words, he himself had realized the limitation of Ski Head and was aiming to support the changes brought in by Seigle.