Organisational Change Of The American International Group Commerce Essay

Organisational Change Of The Ameri back International pigeonholing Commerce EssayThe American outside(a) theme has a story that dates back to 1919. The soaring society was started when Cornelius Vander Starr established an insurance policy agency in print the capital city of china. Starr was the first person from the western to sell insurance policies to the Chinese. Starr sold policies until the comp any(prenominal) which is the current AIG left china in 1949. In the inter substituteable year the companys headquarter was moved to New York in United States from where it grow done venturing into another(prenominal) market places in the parts of Latin America, Asia, Europe and nerve centre East.In 1962 the circumspection of the company moved from Starr to Maurice Greenberg who diverted its concentration from ad hominem insurance sales to high margin corporate coverage where he eliminated agents by pitch in in work outent brokers whom he use in selling insurance police s. This strategy servicinged the company to price insurance depending on its probable return even at times when thither were reduced sales of certain products and for a long period and still obtain precise little extra expenses. After Greenberg as well ask over the direction of the company it sooner went public in 1969. Starting from 2005 the company was caught up in a series of frauds that were investigated by the justice department of U.S., the office of attorney general in new state and the securities ex wobble commission. The then chief executive officer Greenberg was suspended and replaced by Martin Sullivan in Feb. 2005. In June 2008 some pecuniary losings were disclosed which led to the fall of AIG sh be price in the banal market. This subjected to resignation of Sullivan who was then replaced by another CEO Edward Liddy in sep. same year. American international convention is the biggest underwriter of industrial and commercial insurance. The financial scandals of 2008 led to great losses to the company which conduct it suffer a liquidity crisis as its realization rating was downgraded.AIG it a existencewidely ac goledge insurance company with branches in un want parts of the world. Its vision is to be the leader in innovative mortgage solutions period its mission is to be the mortgage insurer of choice through skipper and dedicated staff, entrepreneurial leaders, discip traced risk taking, guest satisfaction, and through solutions to facilitate Canadian homeownership. The companys global benefits network has lately introduced the AIG atlas as one of its strategies. This atlas is a basalally a range of products meant to assist in meeting the unequaled benefit demand of the employees. This pull up stakes then enhance the utility of the energy of the companys employees in over 100 countries hence be able to result the best function as easily as cost potent solutions to its clients all over the world (AIG gathering anxiety Division 2009). The extraordinary benefits to the employees pass on include medical insurance, life insurance and long margin dis king insurance. The company overly intends to provide full time wait ons through charge-free phone number as surface as management and monitoring of emergency medical cases.Strategies of AIGThe company is one of the leading international insurance and financial boldnesss. It has partnered with several bloodline groups including CRM, which is the number one credit management solutions provider in Europe. This partnership has traded the company to provide break customer satisfaction and hence improving its sales of insurance policies while accomplishing efficiency gains. Currently, American international group operates in to a greater extent(prenominal) than one hundred thirty countries while its member companies serve governing bodyal, commercial, as wholesome as singular customers through the widest property, life, and casualty of any in surer in the world (AIG Group Management Division 2009). The company is thus going through a period of drastic reviews of its of the serve upes and mental synthesis in all its centres so as to maximize and establish its B2C customer management. By making use of its resources more in effect(p)ly the company aims to improve the efficiency of CRM and provide the best responsive customer carry on.Having partnered with other outsourcers, AIG realized the richness of outsourcing partners with whom they can combine the bigness of go steady by providing well managed and high calibre services. In 2002 AIG and finalized a air strategy with Transom with outlined a number of challenges very much(prenominal) as developing organisational skills to secure maximum profitability and customer satisfaction. The company in any case had to act according to the desired out occurs for change administration, attri alonee and management as well as provide cost useful high quality and fulfilm ent solutions (AIG Group Management Division 2009). next the deal between the two companies Transcom began to handle the inbound customer care service on behalf of AIG. Transcom then enhanced the quality of services by dealing with the mistakes in the existing program of AIG.Leveraging its long experience and first class engine room, Transcom has been able to strengthen and expand the CRM activities of AIG through do-gooder of telemarketing campaigns. Transcom has in kindred manner succeeded in bolstering AIGs customer revenue and base through contacting its potential customers and presenting them with persuasive offers to coverage commerce. The general improvement in the quality of service of AIG has come from the enormous improvement in customer relations which has in turn strengthened AIGs image as a professional face. All this was contingent since Transcom kept within the service level boundaries as well as constant customer contact (AIG Group Management Division 2009)org anisational Behavior Analysis agreemental air epitome is an evaluation of the way individual work in an organization. The organization does not need to be a business instauration like the American international group but can also be a religious institution. The ultimate goal of organizational behaviour analysis is to watch in a advance way the openhearteds between individuals in an organization, the relationship of the employees and the organization and the organizations relationship with the rest of the society (Harigopal 2006). This information is then used by the management of organizations to increase the efficiency and productivity of and achieve the goals and objectives of the institution as a whole. check to Harigopal (2006), by gaining and understanding this knowledge the employee are able to realize the contributions of their individual efforts to the bigger image of the organization. The turn over and victor of all(prenominal) organization rests on the philoso phy of management as well as on its vision, goals and values. These factor outs then drive the organizational husbandry that is make up of the social environment, formal and snug organization. The tillage then influences the grammatical case of converse, leaders and group dynamics within the institution. The employees or workers in the institution then take these aspects as the quality of their work life and and so they de shapeine their rate or degree of motivation. The ultimate results of these will be individual satisfaction, performance, personal growth and the general development of the organization.Organizations are undergoing exceptional(a) radical variety show in all systems of operation ranging from decision making to global competitive pressures and technology to acquisitions and mergers(Harigopal 2006). Organizations piss therefore to respond speedily and in effect(p)ly while remaining flexible and transforming themselves for the new world of work. organisatio nal behavior is therefore written with these substitutes and it explains through what leaders and managers need to know astir(predicate) organizations as they struggle to bring productivity and advantage in them. Organizational behavior and leadership development is institution wide office that stretches across all functions and departments.Culture is described as the conventional behavior in a attached society that includes beliefs, knowledge, customs and practices. Although it rarely scrapes its way into the conscious mind, it often affects the behavior of human worlds within a given society or organization. Employees in an organization like the AIG ordinarily depend on its nuance since its ending gives them stability, understanding, security and the ability to react to a given situation. Organizational socialization creates a number of concepts, situations and strategies that affect every level of supply in any institution. Understanding the operation of gloss and or ganizational building and the machinery that it runs behind the scenes helps the employees to organize and strengthen the effective cultures and send off the rubber ones thus establishing and environment that promotes success within the institution.According to leadership theorists, diminishing and weakening of an organization unitedly with the employees metro to change is ordinarily caused by ineffective leadership (Harigopal 2006). For instance the American international group underwent financial crisis in 2008 as a result of poor leadership. The bad culture of impunity that had been developed in the company led to corruption and misdirection of funds as well and some other unscrupulous deals. steady leadership and organizational culture are prerequisite for long term success in every corporation. However some institutions may study signs of success for a long time even without a arduous organizational culture but when the culture starts to erode, the big organizations take single a short period of time to collapse.Strong leadership is necessary for a wholesome organizational culture although the reverse is also true. Without strong leadership to maintain everyaffair running, a strong organizational culture will only dull and eventually erode. Practising business state and theorists absorb set up out that organizational culture and leadership are tightly intertwined. leaders require having a clear understanding of the furbish up and identity of the organization culture so as to determine the kind of adjustments and management systems needed within the organization as well as conduct the indemnify styles of effectively communicating their visions to rest of the institution.The study of the operation of organizational culture and organizational social structure makes the practical study of organizational culture and structure implications grave. In all organizations from government groups to sport teams, the study of the impact of culture and structure on the general picture of an organization shows a better way of making an entity work. Good organizational structure ensures balanced dispersal of responsibilities among the top management of groups as well as among the workers (Harigopal 2006 p.102). This has shown that good organizational structure with excellent personnel that ensure all are cogitate at the same goal, works well than excellent but conflicted personnel. Organization structure generally deals with the culture set up. It deals with the working of the management, the specific responsibilities of the supervisors, and the agency in which a complaint is passed through the ranks. Organizational structure ensures that.Managing change in organizationsA monumental change in an organization occurs when the boilers suit strategy of an organization are changed for success, or when an organization adds or removes a major section or practice or when there is a change in the operation nature. Organizations d evelop by undergoing through significant changes at antithetical accuses in their progress. Successful organizational change is usually very difficult to achieve thus it usually calls for skilful leadership in change management. In work organizations there are different approaches in guiding change whereby some are structured, planned and translucent while others are more unfolding, organic and implicit.These approaches work in different styles. Some work from the future to the present for instance when an organization develops a vision to be achieved in the future and then dumbfounds down strategies on how to acquire that vision. Some other approaches will work from the present to the future. In this approach the organization will identify its current problems issues and goals and then lay down strategies on how to deal with those priorities and how to achieve them (Harigopal 2006 p.97). The variation in the attribute of strategies used depends on the culture of an organizatio n or on the leadership style of the managers. When starting from the present to the future the organization looks at its aside in relation to the present and then looks at the present in relation to the future and then evaluate whether it can still go on with its activities just like it has been doing.For an organization doing business in this sporting changing and advancing environment, doing thins like has been doing before may not help it compete fairly with others in the industry (Harigopal 2006 p.98). Even doing the same thing harder or even fine tuning it may sometimes make no difference. What organizations need to do keep doing things different as the changing business environment demands. In the daily operation of organizations the structures, methods, processes and technologies that were appropriate in the earlier market conditions may not be applicable in the current or future conditions. This implies that organizations may be forced to readjust themselves on different assumptions and business prospects that are in accordance to customer focus, innovativeness, competitive intelligence, and competency base.For the best results in a change effort, the change agents should first of all have a comprehensive understanding of the setting of the change effort such as the right strategies needed and the kind of results evaluate. This means that the change managers should have a clear understanding of the basic structures and systems in an organization as well as their typical harm and roles (Harigopal 2006 p.98). The leadership style and management systems of an organization in relation to its culture are also necessary. Change management encompasses thoughtful planning and excellent implementation of necessary strategies. Before a change is initiated and during the change process the change leaders should conduct extensive consultations with the people stirred by the change and also involve them in the change process. The managers should also find w ays of aligning the aims of the business with the needs of their people.The managers should check if the people affected agree with or at least understand the need for change and that they have a chance to decide or give views on how the change should be managed. The sensitive aspects of the change management should be handled through face to face communicating so as to convey moment and understanding. According to Harigopal (2006), managing change therefore demand establishing different management structures, like the interim structure to deal with the business of the business, the transition management structure to smoothen the change process and a structure to stream line the new state of the organization (p.95). Before starting the change process, an organization should be clear on its purpose, direction and vision as well as have a clear analysis of its prevailing strengths and weaknesses in relation to opportunities and threats. The dynaminism of business environment will the n determine what should be changed and the required pace of change.Impact of technology on businessAccording to (Hkansson, Waluszewski Prenkert 2009), business today is inextricably entangled with technology starting from the smallest business to International Corporation with a number of monolithic applications of legacy. In todays world one cannot be in successful business activities and fail to come across the issues of technology. This is because the way business processes are carried out today is very different from the way they were being carried out 30 years ago. technical advancements have occurred in several areas from conversation, stock market, travel i.e. by air, knowledge domain and water and technology has also evolved around our lives.Information technology has revolutionised the systems of business operation around the world. Local business have now gone international as a consequence of simple website information technology that than enabled them to advertise in ternationally (Hkansson, Waluszewski Prenkert 2009). Information technology (IT) has helped in customer service where big organizations like Microsoft and American international group attend to needs of their customers through online services like email and chart. Internal and external networking in organizations has improved business operations around the world. Through networking staffs and clients in organizations can effectively get in touch with their leaders for feedback and updates on progress and extensions. talk within firms as well as between firms has unfeignedly bloomed with the current developments in technology. Business between organizations has even become easier and more effective. For instance the American international group has been able to work with other organizations and improve its services due to improved IT and communication. However due to high technology computer systems in organisations todays business calls for extensive and careful planning. This pla nning can be done on organised pattern, with formats schedules and Gantt charts. Due to improved computer systems huge data bases can now be managed and stored on network and back up drives for future records. Accessibility of stored data and files has also become easy with the discovery of a series of shared folders and tidings keys. According to Hkansson, Waluszewski Prenkert (2009) Cash transactions are easily made hence reducing delay which then gives liquidity to business and makes the overall processes in business faster.Information technology has enabled the businesses to put up an easier and effective coordination with their suppliers. This then has enabled them to benefit from production economics when they operate with the large vary suppliers. Furthermore the drastic reduction of in the IT cost as well as the reduced risk of transaction in explicit coordination has been it possible for extensive application of explicit coordination with the suppliers. The resulting eco nomized transactions and other factors thus enable a long term business partnership with a smaller set of suppliersAccording to Johnson Redmon Mawhinney (2001), communication is an essential part of any organization regardless of its operation size. It helps in building public relations via effective interpersonal relations and enhancing teamwork for high performance. Effective communication basically entails electrical relaying subjects in a clear and precise manner making it easy to be understood without altering the inwardness being conveyed. Communication is composed of a couple of wooden legs sender as the source of communication, encoding involves the sender internalizing the message, take of communication, decoding is relaying the message to the receiver. Receiver in this case is the intended receiver of the message and the reaction/feedback of the receiver completes the cycle. The effectiveness of the communication depends on both(prenominal) the degree of attention from both the listener and the recipient of the message.For effective communication one strives to reduce the mistakes seeming to occur at every stage of communication discussed above. Encoding involves synthesizing the information to be communicated. The precision and ease with which you communicate will depend on the level at which you internalize the message (Johnson Redmon Mawhinney 2001). Special attention should be placed on the critical issues, the likely mistaken assumption the communication might generate and the missing information. oneness should understand well the message he wants to convey, project the likely impact and reaction it will be getting then relay it at the best time possible Wrong interpretations or assumptions may result to communication breakdown. Communication breakdown slows the implementation of ideas and creates stumbling blocks for the path towards the success of an institution. two the sender and conveyer of the information should have the same understanding of the information. well(p) conveyed message helps the listeners understand your thoughts, your perspective on a certain idea.impart of communication vary from electronic communication electronic communication (fax, internet, boob tube conferencing) face to face, telephone, mails, reports, memo and notices. Choosing an appropriate product line adds value to the information being relayed since each channel has its advantages and weaknesses. Decoding of the message by the listener also requires skill. One should be keen in secernate to note things like the mood of the sender the feelings in the message and its relevance. deplorable decoding which broadly arises from lack of deep understanding of the issue at hand limits the immensity of the message. Feedback by the receivers both verbal and non verbal helps in assessing how effective the communication was received. Upon failures it might be important to repeat the message. Circumstances at which you relay your inf ormation has impact on the communication.Many organizations like AIG have maintain success and goals achievement due to use of effective communication methods which have enabled participation of all employees towards accomplishing common goals. Removing mistakes from all the stages of communication is very important. The message should be organized, summarized and with minimum or no errors at all.Recent studies point out that communication skill both written and spoken is the biggest factor in isolation that is used in determining managers of cooperation. This is a major boost on the ability to relate well with your subjects and respect you. unequal communication skills will lead stand in the way of race progression as it leads to poor coordination of ideas.ConclusionIn todays world, whether an organization is a profiting or non-profit making, it very important that the organization motivates and utilizes its talent. Understanding the organizational behaviour is a major factor fo r increased opportunity and chances of success in the business world (Johnson Redmon Mawhinney 2001). On the other comprehensively understanding the organizations culture ensures continued growth in a diverse manner. In order to attract talents and high quality skills into an organization there is need for a culture of open communication and diversity. Once the institution has the best culture it needs in its activities then it can improve its efficiency and have more widespread viewpoints from which it can identify from hence expanding its systems and operations. However there should be good care to ensure that the organizational culture and structure are in accordance or compatible with the strategic goals of the organization.In todays fast moving global world fro business, organizations need to quickly learn their threats and opportunities and adapt to them. The rate at which an organization learns these factors, affects the speed and efficiency at which the organization handle s these opportunities and threats. Effective communication is also a very important factor in the productivity and success of every organization (Johnson Redmon Mawhinney 2001). Communication can either be formal or informal which are both used in all institutions whether directly or indirectly. lump channels of communication in organizations usually follow the chain of leave out which is usually from top to bottom. On the other hand the informal channel tends to be more open and spontaneous. Gossip is some form of informal communication. The informal communication is a very effective method of communication and its mostly used by small companies.Investments aimed at increasing the level of explicit harmonization with the outside agents has resulted in enhanced risk to organizations. This has traditionally made organizations to avoid this increased risk by under put in coordination. However information technology has been found to have the ability of reducing coordination cost wi thout increasing the associated risk of transactions resulting in more outsourcing and less vertically integrated firms. Lower relationship specificity of IT investments and better ability of monitoring, means that organizations can safely invest in information technology. This will then enhance coordination between firms than in traditional investments.The rate and enormousness of organizational change has not slowed in the past years but it has actually been improving. The continued rapid technological innovations are bringing in changes in organizational processes and systems. The faster growth in internet has enabled much easier and faster access to information and knowledge which has then changed the way people operate businesses. The expectations of employees in their movement from one organization to another have also increased hence necessitating more and more organizational changes so as to meet the current market demand. American international group is a constantly chang ing organization due to the changing customer demands among other factors.According to AIG Group Management Division (2009), the rate of change portrayed a good culture of AIG that does not show resistance to change in the organization. Although the company experienced some hard times in 2005, its culture of good change enabled it to come out of the crisis. Organizational change has seen the abolition of some of the international market barriers which has then helped legion(predicate) organizations like AIG to venture into partnership with foreign institutions thus improving its market and services. This therefore illustrates the importance of constant organizational change.In spite the importance or organizational change not all the undertaken changes that deliver the expected benefits to the organization. This is the reason why any change in an organization should be carried out through the right procedures. Strong leadership qualities for the managers are also necessary for succ essful organizational change (Harigopal 2006). Failure for organizational change to deliver is usually brought by reasons such as absence of a change agent with qualifications or the change agent being too junior in an institution. Lack of support by the senior management and their committed executive should be available in any organization. Poor definition of organization objectives and diverse dimensional solutions helps in building trustfulness in the involved participants hence enabling them to take part in every process of the change.Failed organizational change initiatives do a group of harm to the employees both in their spirit and strength which creates more bar in the accomplishment of the consecutive change initiatives. Actually todays managers face a great challenge in managing change. In order to ensure success therefore all managers are required to understand their organization together with their real needs. According to Harigopal (2006), the change leaders should a lso understand that bringing positive change in any organization is primarily about changing the employees behaviour in certain ways. Leadership, and powerful management skills like visioning, planning, prioritizing, giving feedback and rewarding are key issues in the success of any organization.