Shouldice Hospital Limited

1. Executive Summary

Shouldice hospital is a specialized hospital in the repair of external abdominal hernias in Canada. The hospital was established by Dr. Shouldice the founder of a new and superior surgical technique, now known as the Shouldice method, for repairing hernias which yields better medical results as well as a significantly shorter recovery time.

The Shouldice Hospital is a successful organization and admired by most of the people who had relation with it or who have heard of it. Moreover, some of the hospitals and surgeons take benefit of the Shouldice method in their advertisement although they hardly perform it perfectly. This leads the hospital to become notorious. Shouldice is operating at its "best operating level" for a service company with limited flexibility in its plant, a specialized work force but are failing to meet all the demand for its chosen market niche. Adding additional capacity to meet the unmet market need may upset the existing work force and lower service quality. Failing to meet the market demand may invite competition that could eventually cause Shouldice to lose market share and end up with excess capacity.

2. Hospital Background:

Dr. Edward Earle Shouldice graduated from the University of Toronto in 1916. By 1940, Dr. Shouldice was operating a private medical and surgical practice, lecturing at the University of Toronto, and pursuing research work in areas of advancing medical knowledge. During World War II, he was called to serve on the Medical Examining Board. Dr. Shouldice, a major in the army, found that many young men willing to serve their country had to be denied enlistment. These men needed surgical treatment to repair their hernias before they could be pronounced physically fit for military training.

In 1940, hospital space and doctors were scarce, especially for this non-emergency surgery that normally took three weeks of hospitalization. Dr. Shouldice resolved to do what he could to alleviate the problem. Contributing his services at no fee, he performed an innovative method of surgery on seventy of these men, hastening their induction into the army. The delighted recruits soon made known their success stories and by the war's end, more than 200 civilians had contacted the doctor and were awaiting surgery. The scarcity of hospitals beds however, created a major problem. There was only one solution; Dr. Shouldice decided to open his own hospital.

3. Business Strategy and Competitive Advantages

3.1. High level of Operational efficiency and Cost effectiveness

Shouldice depends on a unique operations strategy that is based on focusing on a single type of surgery. This strategy enabled the management to excel in serving the patients while minimize the cost and increase the hospital friendly environment. Another aspect that contributes to the high level of operational efficiency is the standardized method of operating and managing the hospital, which is very unique aside from the case of any ordinary hospital because of the complexities involved in an ordinary hospital. And again the operations strategy impacted the method of managing even the timing for each patient. As a result of all that the cost of surgery is reduced to a competitive level, largely due to the standardized operations and the low complexity.

3.2. New Innovative technique

Shouldice offers a new technique to cure the hernia, which is the protrusion of an organ through a weakness in the abdominal wall; this technique was invented by the founder during the world war two. This technique allows the patient to go back very quickly to his routine actually after just four hours patients are encouraged to start walking around the place and feel more comfortable. Patients return to work in an average of 8 days after an operation at Shouldice. Many start work right away.

3.3. An excellent model of service delivery

In Shouldice, the benefit of specialization and focus are best demonstrated. Everything in the hospital including the facility, the processes as well as the infrastructure is designed to providing superior medical service to the hernia patient. This unique environment is an exclusive strength of the Shouldice hospital. The smallest details such as:

 The flooring as well as the venue steps are designed and implemented to facilitate the necessary environment for the application of the Shouldice service concept, which highly recommends patient physical activity and mobility after the operation and emphasizes the need for the patient to take care of himself.

 Recreational areas and facilities are intended to encourage the patients to socialize with their peers in order to share their experiences and fears and optimally reduce their anxieties.

 The matching of roommates based on similar backgrounds and the scheduling of their operations at the same time are examples of the effort and care exerted to create a friendly and warm environment, which is believed to lead to faster recovery and recuperation.

3.4. The Shouldice philosophy

It is also reflected in the employee relationships with each other and their bond with the Shouldice hospital. It is believed that employees must be happy and content to be able to support the warm and friendly environment necessary for the healing process.

 Employees enjoy a reasonable workload as well as an above market average basic salary in addition to the profit sharing system, which increases their feeling of belongingness and their sense of responsibility for the success of the Hospital.

 The surgeons themselves are very carefully selected and their personal attitudes as well as hobbies are matched against the hospital's strategy. They are intensively trained in the Shouldice method and offered a huge amount of experience as a result of the high number or operations executed; team rotation and team consultations also aim at enhancing experience. This in turn leads to a very high success rate of operations as well as a minimal recurrence rate. Surgeons are also offered an above market average salary as well as profit sharing plan and a reasonable work load in an effort to retain them and make them more content with their jobs.

 The Shouldice hospital has no formal organization chart, which is an indication of their home like attitude. This freedom is believed to serve as a motivating factor and encourage employee to reach their full potential without having a fixed job description obscuring them.

This philosophy