ANALYZING MANAGERIAL DECISIONS: Interwest Healthcare Corp. Interwest Healthcare is a nonprofit organization system for both management planning and main- that owns 10 hospitals located in three western taining federal aid. Six months ago, she invited the states. Cynthia Manzoni is Interwest's CEO. Vijay hospital administrators and staff members from the Singh, Interwest's CFO, and the administrators of corporate financial office to a retreat at a resort. the 10 hospitals report to Manzoni. The purpose was to communicate to the hospital Singh is deeply concerned because the hospital administrators the problems with the data entry and staffs are not being careful when entering data into to stress the importance of doing a better job. The the firm's management information system. This meeting was acrimonious. The hospital people ac- data involves information on patient intake, treat- cused Singh of being a bureaucrat who did not care ment, and release. The information system is used about patient services. Singh accused the hospital to compile management reports such as those relat- staffs of not understanding the importance of accu- ing to the costs of various treatments. Also, the sys- rate reporting. By the end of the meeting, Manzoni tem is used to compile reports that are required by thought that she had a commitment by the hospital the federal government under various grant pro- administrators to increase the accuracy of data en- grams. Singh reasons that without good informa- try at their hospitals. However, six months later, tion, the management and government reports are Singh claims that the problem is as bad as ever. less useful and potentially misleading. Moreover, Manzoni has hired you as a consultant to ana- the federal government periodically audits the infor- lyze the problem and to make recommendations mation in the reports submitted by Interwest and that might improve the situation. might discontinue aid if the reports were deemed in- accurate. Thus, Singh is worried about the manage- 1. What are the potential sources of the problem? rial implications and the potential loss of federal 2. What information would you want to analyze? funds. 3. What actions might you recommend to increase Singh has convinced Manzoni that a problem ex- the accuracy of the data entry? ists. She also realizes the importance of an accurate 4. How does your view of behavior affect how you might address this consulting assignment