A Profit Or Nonprofit Organizational Status Business Essay

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The mergers and acquisitions and other means of multinational operations through foreign direct investment is the most frequently used trend in order to meet the financial goals and to take the advantages from utilizing the resources of other countries who have specialized in some particular resources. The trend of multinational companies has been frequently increasing and different global strategies have been made in order to meet the successful operations of these multinationals. Many cross cultural and management problems also faced by the businesses due to cultural differences and other factors related to them. The large number of multinational operations in health care businesses has been seen in past recent years. Large number of mergers and acquisitions of health care organizations have been successfully implemented. The major concern is to form the effective strategies in order to make the multinational operations successful in the other countries. The paper is about launching a clinic in the exclusive neighborhood. I as a merger and acquisition administrator need to establish a clinic in my exclusive neighborhood country. The clinic must have the specialized departments related to dermatology, gynecology, heart disease, respiratory disease, surgery, and gastroenterology. The business setup with the establishment of each and every specialized department and the hiring of specialized doctors and physicians in the departments that can fulfill the departmental needs and fit to their respective jobs is the issue of concern. The plan related to the nature of organization that weather it needs to build a status of profit organization or not for profit organization, business basic rules, standards and codes of conducts, cost estimation and potential profit projection, all these issues needs close consideration. The effective management of cross cultural needs important consideration. Available pay resources and understanding of country legal laws and regulations for healthcare related business and people expectations are important to closely consider. On the basis of all these factors the consequences about establishment of a business in another country can be determined that will help to make important decisions.

Incorporate a new business

To incorporate a new business relates to health care in some other country is the job of administrator. I as an administrator of merger and acquisition would like to incorporate with this business. Global strategies are important regime to meet the needs of newly incorporated business. As an administrator, it is a big responsibility to make the multinational operations successful in other countries. Incorporation of new clinic required many legal and formal contracts and formalities need to fulfill. Contracts and torts are the basic medical liabilities that the medical institutions have to pay, if they were lagging in their professional needs. The incorporation of new clinic in some neighboring country requires the efficient administration in order to coop with the legal issues as well as the establishment and management of newly formed company. (The Economist. 2007) Many advantages and disadvantages are associated with it. These are following.


The new institution relate to health care ensures the social benefits for the individuals as well as for society. This increase the multinational operations in the company that bring more foreign direct investment that will provide economic advantages to the country.

Large market

To start a business in foreign country, business can get access to the new and large market as compare to its own country. It will provide the economic benefits to the business. In other country where there is the large demand for medical health facility can be the best market to incorporate a clinic. The supply of effective facilities in the target market of the country can benefit the individual as well as the economic development of the country. The country where there is high demand for health care facilities and high prices the customers willing to pay is provides the business with wide opportunities to expand.

Resource utilization

As an administrator it is important to make the effective decision to start a new clinic in the country where there is resources available for the commencement of business. The neighboring country with high demand for the potential customers and the supply of medical professional as well will help the management to take an effective start a business with high potential profit in future by utilize the recourses of that particular country.

Tax relaxation

The start of business in country with tax relaxation provided in that particular country can be a great advantage for newly established business. The countries which are lavishing less tax and provide tax facilities to newly established health care institutes provides immense benefits for the business to incorporate and growth of the company.

High return

The multinational business brings large financial return in future that will bring advantages for the business as well as to the individual associated with it. The large economic benefits also associated with it.

Employment opportunities

A new business establishment in the country relate to healthcare provide more employment opportunities for the physicians and specialized doctors in respective fields in order to expand their career in their respective fields. Medical staff faculty gets the opportunities to get experience in their respective fields.

Social benefits

The health care institution in a country provide social benefits as more health care facilities will be available and more employment opportunities will be provided. Multinational companies also provide the knowledge of different cultures that bring social change.


Many disadvantages of incorporating a new business have to face by the administrator in establishing a new business.

Cross cultural conflicts

The basic disadvantage of setting a business in other country is the cultural conflicts that have to face by the business in setting their functioning outside its geographical boundaries. The mergers, acquisitions and newly formed business in the new geographical boundaries will create conflicts based on cultural differences of their respective countries. The administration required proper understanding of basic differences and fulfill these cultural lags are very important for the successful implementation of business operations. (Datta & Puia, 1995)

Market analysis

The proper market analysis and target market demand is difficult to analyze in global business operations. Administrator will also find difficulties in target market analysis and to measure the appropriate demand.

Employee satisfaction

The major difficulty which management has to tackle with is the employee satisfaction and collaboration of their cultural norms with the organizational culture and match their goals with organizational goals. Two way communications is required in order to meet the targets.

Ineffective Management

It’s a great challenge for administration and management to deal with business need when starts the multinational operations because of difference in cultural needs and requirements. Ineffective management of cross cultural conflicts usually has to face by the administration due to lack of communication. (Tushman & Scanlan, 1981)

Feasibility of a profit or nonprofit organizational status

The newly formed business required the appropriate structure in order to meet the better business performance and to perform in good manner to achieve the organizational goals.

To check the feasibility of this medical facility it is important to analyze its effective structure that will be appropriately meeting the company goal. To check the feasibility of for profit or non profit organization requires analyzing the advantages associated with it.

Profit organization

The basic motive of earning profit in the profit organizations encourages the company to run its operations effectively in order to meet the goals and to earn profit. The profit organization has the advantage of getting more capital access as compare to non profit organizations. The profit organizations have more open freedom to work as well as compare to non profit organization.

On the other side the tax burden on profit organization has played negative role in the company development. High costs have to bear by the company to pay the tax. High tax liabilities over burdened the corporate entity. Communities benefits some time suffer in large extend. The profit organization is also not eligible for various government funds.

Non Profit organization

Non profit organization has many advantages as well as disadvantages that provide the base for a company to make analysis of feasibility of the non profit firms.

Non profit organizations has the tax advantages as less tax liabilities are imposed on the organizations having non profit goals. Community overall get the benefit of securing their rights and welfare. Many sources of funding are there for the non profit organizations like society benefit funds, volunteer help and other government funds. Many legal relaxations are available to non profit organization. (Dees, 1998).

On the other side the profit motivator is absent in such organization so it is difficult to gat motivation for success of non profit organization.

Feasibility for health care clinic

The health care organization subsidiary in the neighboring country needs the non profit motive to take advantage fro legal laws and regulations and to get relaxation in the tax liability in order to make the opening of business in other country easy and beneficial. The clinic can be open with the gathering public interest on the firm as community service provider and motivate them by showing them the fact that newly formed clinic basic goal is to provide service for society welfare. It is widely used to gather public acceptance for new business. (Bradley, 2004).

Contract structure for medical staff

The medical staff inclusion for the new clinic requires a complete contractual structure in order to successfully meet the demand for business. The clinic requires the physicians who specialize in the following areas like gynecology, heart disease, dermatology, respiratory disease, surgery, and gastroenterology. The contractual structure and bylaws has been made and implemented because in the health care organizations physicians are responsible for the patient’s security. Other medical staff also needs to ensure the laws and regulations of health care in order to meet organizational goals. Four important clauses of contract structure are given:

Employee responsibilities

The contract should be structured in such away that must include in written about the parties of contract. The employer responsibilities and assigned duties will write in the contract. It will compose of following points. ( Pittman, 1994).

Physician warranty about its valid reference and unlimited license.

Physician representation in health care plan

Physician liability insurance coverage eligibility.

Agreement states full time or part time job duty includes number of patients attended or office timings etc.

Employment fees

The written agreement about employee revenue generated from the services is specified in the contract. It must include the surpluses and quality incentives provided to employees regarding there quality services. The contract also specify the clause for the basic salary paid to the individual employee on weekly or monthly basis and contract also specify the important compensations and bonuses that will be allowed to employees up to company benefit scheme.

Fringe benefits

The agreement also includes the fringe benefits provided to employees. The contract must specify the benefits criteria and procedures need to be focus. It includes following fringe benefits.

a- Insurance

Employee insurance plan provided the employees the facility with premium deducted by employee’s salary.

b- Time off

At the time of employee appointment the contract specified the vacation policies of employees also which includes the time off and vocations given to employees.

c- Expense Reimbursement

Contract specifies the clause about the reimbursement of expenses and allowance provided to employees regarding cell phone expenses, auto expenses etc.

d- Retirement Benefits

Retirement benefit scheme comprised of retirement benefits received at the time of retirement and the amount deduction on monthly basis for this benefit plans are pre decided in the contract structure.

Contract terms and termination

Contract terms and termination clause is important in the contract structure that specifies the employee terms and conditions of the contract. The clause specify the period of the contract. The most commonly the physician contract varies from one to three year of time period. The contract also specified the expectations to renew the contract. All the conditions of termination are also specify in this clause of contract.

Plan to hire or appoint specialists for the clinic

Te planning to hire specialists for the newly formed clinic include the recruitment of large number of employees relate to the qualifications required. The recruitment and hiring of medical staff need the important points to be closely considered. The eligibility criteria for the employees must be accordance to the country formal laws relating to the medical staff hiring. The medical license, practical experience and their dedication related to their profession are important to analyze.

Medicare or Medicaid as potential pay sources for exclusive clinic

Medicare and medicate are two different concepts. Medicare provides the benefits of health insurance to the people with age of 65 or above, having some social disability. It is the program with premium paid to cover the cost of hospital stays, basic doctor and laboratory cost and cost of prescription of drugs.

The medicate system is comprised of program for the financially needy or low income group. This program is set up by federal government, administered separately by different states.

Medicare has potential pay sources for the exclusive clinic as it is the primary payer of doctors, drugs prescription cost, hospitals and home health care.


The basic purpose of this health care institution is to meet the non profit organizational goals and to compete in the international market with complete competency and effective establishment of healthcare setup. An administrator needs to install the appropriate setup of clinic with effective management of resources and effective staff hiring in order to meet the health care objectives. Contracts and torts help to secure the medical liabilities. If the organization can not meet the medical requirement or any injury caused due to negligence of physician or hospital administration then tort is the type of civil contract to take action against that particular government institute. But the contract is specially applied to take action against unethical and unlawful doing of the private healthcare institute. In this way the law suits can be filed for the negligence of the civil institution through torts and contracts are made to sue the private institute. The management of health care differentiates with different types of structure an institution comprised of. Cross cultural conflicts and lack of employee communication are the key issues in multinational operations that need to over come in order to accomplish the goal to set up the subsidiary in other country to meet the health care needs, target the large market, and to utilize the human and other resources in order to carry out the operations successful with high cost advantages as well. The implementation of effective global strategy makes the administrator able to incorporate this facility efficiently.