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ANALYZING MANAGERIAL DECISIONS: Medford University Medford University is a research university with assistants, the vice provost, to serve as secretary of about 10,000 students. It has a good liberal arts the task force (to take minutes and coordinate undergraduate program, a top-rated medical school, meeting schedules). and a fine law school. It employs about 12,000 people. A majority of these employees work at the 1. Why did President Kobayashi appoint a task university hospital. Lately, the university has faced force to consider the issue of fringe benefits? significant financial pressures. It is in intense She could have asked the university's human competition for quality students with other col- resources department to design a plan. leges. Recent financial donations have been small. 2. Should the president anticipate that all mem- The hospital is under intense pressure to reduce bers of the task force will strive to cut costs because of changing health care regulation university expenses? What actions can the and insurance coverage. president take to increase the likelihood that The university currently spends about $100 mil- the task force members have this objective as a lion annually on fringe benefits (health insurance, major priority? retirement plans, and so on). It also faces large fu- 3. Why did the president appoint the administra- ture payments of promised medical benefits to cur- tor of the hospital as the chair of the task rent and future retirees. The president of the uni- force? The chair, in turn, has delegated much versity, Hiromi Kobayashi, has appointed a task of the work to subcommittees (a health insur- force to design a new fringe benefit package. The ance committee, a retirement committee, and task force consists of faculty and staff from depart- so on). What advice would you offer the chair ments throughout the university. The task force has in appointing subcommittee chairs? Explain. been asked to consider the university's tenuous fi- Does the president want to commit to accepting nancial condition. President Kobayashi wants to the committee report or does she want to re- reduce expenditures on fringe benefits (while serve the right to make modifications? Explain. maintaining the quality of the faculty and staff). 5. Why did the president appoint a key assistant The president has appointed the chief administra- as secretary of the task force? tor of the hospital as the chair of the task force. The president also has appointed one of her key More complete answers to these questions can be developed by incorporating the material in the appendix to this chapter