Problem Solution: CareNetWest Companies, Inc.
University of Phoenix / Dallas
Enterprise Risk/MBA 560
July 4, 2006
Problem Solution:
CareNetWest Companies, Inc.
CareNetWest is a large hospital chain that has been growing aggressively for the past several years and is now facing the realization that the Sarbanes Oxley Act of 2002 must be complied with. No plans have been put in place for this compliance and all personnel who are running the company have little or no business experience. The company is being operated by individuals who seem to be looking to the founder, Dr. Tad Smith, for all business decisions and operational guidance. While the company has seen much success while focusing on the basics of providing medical assistance to those in need, it must now face the realization that businesses are subject to compliance laws and structural requirements of the federal government when in the business of serving the general public.
Situation Background (Step 1)
CareNetWest is currently a strong and viable publicly traded company listed on the New York Stock Exchange. As with many companies that begin small and have a great idea, the company began to grow faster than the leadership probably expected. This led to an initial public offering and growth into a major hospital chain. While the company was growing at an impressive rate, the leadership never stopped to hire business professionals or seek the advice of a risk management specialist to see what the future may hold with respect to compliance issues or governmental legislation that could be looming.
Once the Sarbanes Oxley Act of 2002 was enacted, all publicly traded companies had to begin to comply with new governmental regulations. In addition, timefr ...