In 1944 the Freeman Brown Preparatory School (FBPS)was built in Illinois and founded by both the Freeman and Brown Families. As the school grew, it was praised for its advanced academic curriculum alongside its value for a family-oriented community all while remaining non-profit. In 2007, FBPS was sold to a for-profit, the Caudill International Family of Schools (CITE CASE STUDY). However, as its name and management changed, several factors lead to the closure of the multiple campuses cause a chaotic close with disastrous consequences for its stakeholders.
An organization will interact with its external environment by taking what resources are available in their environment and transform them into some kind of product for their consumers; this is how they interact as an open system. With a hope for international focus and an attempt to enter the high school business, FBPS began and ended their attempt to work as an open system when those did not become prosperous. Upon the closure of the school, Freeman Brown limited their options of assistance by closing off communication with their employees and other various stakeholders. As well as this, the management could have utilized the surrounding schools, explaining the situation in an attempt to have them reopen enrollment for the affected families of the closing school. By choosing not to utilize their surroundings, as well as lacking in communication, this makes them a poor working open system.Organizations work as a complex adaptive system by changing their business model socially, politically, or economically to work more efficiently with the changing environment (Schermerhorn, Osborn&Uhl-Bein, 2014). In an attempt to expand assets, Freeman Brown Preparatory School opened new campuses and launched an International Baccalaureate. As a closed adaptive system, FBPS did not appropriately adjust their financial model appropriately upon these changes, thus lowering their financial status.
Organizational Culture and Climate
According to Willness, (2016), organizational climate refers to aspects such as beliefs or values while organizational climate refers to the behavioral and social atmosphere surrounding it. The culture of the Freeman Brown Preparatory Schools remained a family and community oriented constant until the decision to close was made. When the decision to close the Staunton campus, the culture shifted from family oriented to more individualized. Many parents withdrew their children, thus showing that the culture was no longer family oriented. The climate of the schools became a more hostile atmosphere. Many parents felt betrayed that they were left with little to no options for their children, children were upset about the closures, and faculty and staff were angry that they were left with minimal options for the coming school year in regards to a job. The dishonesty from top managers to its stakeholders caused the culture and climate to change drastically.
Evaluation of Decision and Process
The business decision to close some campuses was logical due to their financial state, however, it was unethical.With knowledge of the financial status, Caudhill send an email in mistake announcing the closure of the campus, but retracted itand soon after, retired (CITE CASE STUDY). Establishing Dr. Audrina Murphy as the new head, she was enlightened to the poor financial state of the parent company. Dr. Murphy should have announced theclosure at an earlier time, allowing for the relocations of faculty, staff, and students. The financial credibility of the FBPS was notably changed between August 2012 to 2014. FBPS went from a B2, a rating that indicated a limit to long term options, to a Caa2, a rating that indicated elements of danger for the company (Yoovle, 2014). According to Emery, (2016), a B2 rating shows a 97-99 percent recovery rate and a Caa2 rating shows a recovery rate of 80-90 percent. Due to the financial status of the parent company, the closure of the Staunton campus would, over time, improve their financial status. However, the process was unethical and could have been handled in such a way that the transition would have been smooth for all involved.
Social Responsibility and Satisfying Stakeholders
The three most immediately affected stakeholders of theFreeman-Brown Private School is the students, the parents of the students, and the faculty and staff of the school. FBPS did not demonstrate social responsibility towards the stakeholders in the closure of the schools by giving no notice to the closure with appropriate time to make arrangements for the following school year. Parents were left in a bind with minimal choices for the child’s education for the coming year. Students were left with frustration due to an inability to continue their education at a school they had come to love. Faculty and staff were unable to secure jobs for the coming academic year because hiring in surrounding schools had already ended (CITE CASE STUDY). FBPS also showed no initiative in helping the stakeholders find a school for the coming year leaving all involved angry with the decision and how it was handled by management.
While there are many different ways this situation could have been handled, the best way to satisfy the stakeholders would be to have communicated with them more often and more competently in regards to the situation and the possibility of closure. As well as this, upon the closure of the school, management could have attempted to help students, faculty, and staff relocate more efficiently. As mentioned above, utilizing surrounding schools and explaining the situation could have been immensely helpful for affected families. Doing any, or all, of these proposed changes, would have lowered the anger from the stakeholders and satisfied them by giving them more options.
Fayol’s Scalar Chain Principle is defined as a “clear and unbroken line of communication from top to bottom,” (Schermerhorn, (2007).Using this theory, top level of management could have communicated appropriately with the lower level workers, faculty and staff, as well as assist their relocation more effectively and in a timely matter. Follett believed that organizations were communities.The Freeman Brown Preparatory School values community as well as a family-orientation. Using Follett’s belief in a community mindset for all organizations, the school could have held a community meeting, involving parents, faculty, staff, and other stakeholders, in order to allow everyone to understand the situation at hand as well allowing them an opportunity to adjust appropriately. Contingency thinking is the ideology that there is no one best way to handle any given situation and that managers should accept these situational differences and respond to them in the most appropriate way based on the unique circumstance at hand (cite book). Had the FBPS used this type of thinking, they may have been able to better close the campus based on the unique situation tailored to the parents’ wishes at the affected campus.
Due to the nature of the closing campuses, a new nonprofit school, Allegiant Academy, was opened by parents previously affiliated with Staunton (CITE CASE STUDY). It was opened inside a church leased by the parents. A short term goal that the Freeman Brown Preparatory School could partake in is to donate all of the leftover resources, such as desks and school supplies, to the academy opened by parents. These supplies are to be donated upon the closure of the Stanton campus. This goal could potentially be financially challenging by means of an inability to return any qualifying item, thus losing money for FBPS.
A long term goal is that the Freeman Brown Prep School could raise the price of their tuition by five percent per student per academic year, beginning at the contract period for the next academic year, in order to put this into savings. This savings could be put into a fund designed specifically for crisis, such as the one described in the case study, in order to keep the school open for long enough to relocate all the stakeholders mentioned above appropriately.
Alongside a change in management and name, numerous factors lead to a chaotic close of some campuses of the Freeman Brown Preparatory School that resulted in disastrous consequences for all stakeholders involved. Henry Fayol described planning, organizing, leading and controlling as something each organization should take part in (Brunssson, 2008). For future management success, FBPS should define goals and intentions more clearly, create a definitive chain of actions to take in the event of another campus closure, assist affected stakeholders in a smooth transition, and continuously monitor finances and other factors that could potentially lead to a campus closure. Utilizing these four functions of management can better improve the experience of all stakeholders involved when a crisis occurs.
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