econ 101

Medford University is a research university with 10,000 students. It has a good liberal arts undergraduate program, a top-rated medical school, and a fine law school. Employs about 12,000 people. A majority of these employs work at the university hospital. Lately, the university has faced significant financial pressure. It is intense competition for quality students with other colleges. Recent financial donations have been small. The hospital is under immense pressure to reduce the cost because of changing health care regulations and insurance coverage.

The university currently spends about 100 million annually on fringe benefits (health insurance, retirement plans, etc.). It also faces large future payments of promised medical benefits to current and future retirees. The president of the university, Hiromi Kobayashi, has appointed a task force to design a new fringe benefits package. The task force consists of faculty and staff from departments throughout the university. He task force has been asked to consider the university tenuous financial condition. President Kobayashi wants to reduce expenditures on fringe benefits (while maintain quality of the faculty and staff). The president has appointed the chief administrator if the hospital the chair of the task force. The president also appointed one of her key assistance, the vice provost, to serve as the secretary of the task force (to take minutes and coordinate the meeting schedules).

  • Why did the president appoint a task force to consider the issue of fringe benefits? The human resource department could design new plan.
  • Should the president anticipate a task force member making attempts to cut university expenses? What steps can the president take to increase the likelihood that the task force members have this objective as a major priority?
  • Why was the administrator of the hospital appointed chair of the task force? The chair in turn will delegate work to the subcommittees of the task force. What advise would you offer the chair when appointing subcommittee chairs?
  • Does the president want to commit to accepting the committees report or does she want to reserve the right to make modifications?
  • Why did the president appoint a key assistant as secretary to the task force?