Pontificia Universidad Católica de Chile
Angel Mansilla, Corporate Affairs Manager at the Chilean Safety Association (ACHS), a leading healthcare nonprofit specializing in workplace accident and disease prevention and treatment that managed seven hospitals, 27 clinics and 70 medical centers in Chile, was drafting a report for the Board on a plan to deal with ACHS’ hospital infrastructure excess capacity in several regions. Mansilla’s plan hinged on forging an alliance between ACHS and its leading competitor, the Chilean Construction Chamber’s Safety Association (MSCCC, for its Spanish acronym). By late 2003, as a result of its efficient accident prevention practices, which translated into lower accident rates, ACHS’ hospital infrastructure had become excessive to serve the needs of injured workers.
To deal with its excess capacity, ACHS could forge an alliance with MSCCC to lower infrastructure operation and maintenance costs. Another course of action involved increasing its service sales to private patients. By law, healthcare organizations were able to expand their service offerings to patients not employed by partner companies (private patients). By 2003, around 20% of ACHS’ patients were private. However, both alternatives carried the risk of driving ACHS away from its mission, reinforcing the arguments in favor of turning healthcare association into for-profit institutions. ACHS also faced an additional challenge: the succession of its 80-year-old chairman, Eugenio Heiremans, who had chaired its Board for 45 years. Some ACHS executives had suggested that, in light of its importance, the decision to enter into an alliance with a major competitor should wait until ACHS’ succession had been sorted out.
This case is suitable for any graduate program on business management focusing on nonprofits and dealing with strategic analysis and planning, decision making, and market analysis. It may also prove useful to discuss organizational leadership and succession issues in nonprofit organizations.