I.

COMPANY BACKGROUND

Brief History

R. De. C. Galvez Medical Center is a private organization that was established as

a sole proprietorship on December 18, 2008. It was first managed by the sole owner
and manager of the firm, Dr. Roldan Galvez. RDCG Medical Center started as a
small pharmacy located at Cagayan Valley Rd. San Juan, San Ildefonso Bulacan that
offers few health products and services such as general checkups and consultations.
After several years, it eventually managed to become a medical center that offers and
provides quality health products and services that encompasses wider field of
specialization, better medical equipment and more skilled nurses and doctors. RDCG
Medical Center has also expanded the hospital to accommodate more patients and
provide more services for them. The medical center have also stated their plan of
becoming a corporation soon that will be classified as closely held corporation since
the owners are close relatives of Dr. Galvez that will continue their business and
operations.

Mission and Vision of the Organization

Mission
To provide quality medical services at all times and to ensure client's full recovery in
their illness.

Vision
To give quality healthcare to every patient who had entrusted their lives with us.

Products and services offered:

 Pharmacy
 Laboratory
 X-ray
 CT Scan
 Ultrasound
 2D Echo/vascular
 Dialysis
 Eye referral
 Endoscopy/Colonoscopy
 Dental Clinic (Multi-specialty Clinic)

Accounting Issues

R. De. C. Galvez Medical Center is a medium-sized entity that has only one in-
house Accountant, Mr. Job Mariano, CPA. The entity uses First-in First-out and
Weighted Average method in managing the inventories and supplies of the hospital.
Their costing system applies actual method which recognizes profit and expenses
which was actually incurred in the period.
The entity encounters few accounting issues which were disclosed to the
researchers by the accountant in charge. One issue that affects the organization's
finance management is the BIR taxing penalties that burdens them if the remittance of
tax dues are filed passed deadline. This results to net loss for the period. However,
losses incurred are taken up to profits of succeeding periods that will result to
breakeven or net profit for the company.

Internal Control Issues

The organization's most relevant internal control issue is the hospital's' PhilHealth
accreditation which was according to Mr. Mariano, patients could not comply with
the PhilHealth's long list of requirements that is why, RDCG Medical Center could
not also give the PhilHealth members' benefits such as payment discounts, health
packages, etc. This causes conflict between the hospital and the customers because of
different complains and dissatisfaction of the patients, but also results to internal
conflict between the hospital and PhilHealth. Another factor is the delayed flow of
refund of payments from the PhilHealth that may sometimes lead to loss and
illiquidity of the company.

Ethical Conflict

Ethical issues and conflicts are not faced by the company's employee, staffs and
management. However, based on the reviews of R. De. C. Galvez Medical Center
customer, the most common ethical issue raised by patients who personally
experienced the hospital's services, the principle of justice was not properly observed.
Justice is a complex ethical principle and it entails fairness, equality and impartiality;
in other words, it is the obligation to be fair to all people. Distributive justice means
that individuals have the right to be treated equally regardless of ethnic group, gender,
culture, age, marital status, medical diagnosis, social standing, economic level,
political or religious beliefs, or any other individual characteristics. Everyone should
be treated in the same way. Social justice is based on the application of equitable
rights to access and participation in all aspects of goods and services provided in a
society, regardless of their individual characteristics. Everyone should have access to
the same things that might improve their health.

RDCG Medical Center's Facebook page shows reviews and ratings of the
customers to the products and services they have received in the hospital. Patients
who were admitted to RDCG Medical Center commonly complain about how they
were not treated right. These instances include poor performance of the medical
center's staffs and nurses, unresponsive medical attendants that do not give attention
to patients who are in emergency and unfair treatment to different customers. Aside
from that, additional charges were claimed which the patients do not see as equitable
and fair, since they did not really felt a satisfactory service from the company.

2
I. STATEMENT OF THE PROBLEM

The purpose of this study is to determine the issues that the company experienced based
on the Porter’s Generic Strategies which are the sources of competitive advantage.

The researchers aim to answer the following questions:

1. How does the company resolve the issues regarding the customer's requirements on
PhilHealth?
2. Why does the company incur loss at times?
3. What are the advantages and disadvantages of the business location?
4. How did the company adapt to changes caused by the existence of competitor?
5. Why the company does receive negative reviews from customers regarding the
services that they offer? What is/are the ethical issue/s that the company encountered?
6. What are the competitive strategies applied to reduce costs while increasing the value
and quality of services?

3
4