Assignment

PRINCIPLES OF MANAGEMENT JUBILEE INSURANCES

LETTER OF TRANSMITTAL

DECEMBER 04, 2013 Miss Ume Sumayya Faculty Member, Iqra University, Defence View (Ext), Karachi – Pakistan. Respected Madam, We students of BBA hereby present the report that you asked for to submit on 04/12/2013 as part of the course requirement in Principles of Management which is a completion of all the hard work we have to put together during the course of the semester. We have done our best to present you with comprehensive, reliable and valid information from the concerned authorities of NEW JUBILEE INSURANCE. We hope that this report meet your expectations. But being students, this analysis by us may contain certain deficiencies. We look forward for your favorable response for this report. Yours truly. SYED SALMAN MOHIUDDIN

(22712)

UROOJ TABANI

(22028)

BARKHA KHUBCHAND

(20569)

JEHANZEB MAJID

(20658)

NAJIYA KHALANI

(20977)

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PRINCIPLES OF MANAGEMENT JUBILEE INSURANCES

ACKNOWLEDGMENT

We would like to extend our genuine regards to our teacher who has guided us for this report, without such great and immense co-operation the task would have been a cumbersome one. All these people who ultimately proved to be catalysts include our ever-helping teachers, colleagues and friends. In this regard we would like to point out the exceptional supervision bestowed by Miss Ume Sumayya for extending her help and cooperation throughout the dissertation, her guidance is priceless not only for present but also for the even challenging times ahead. And last but not least, we thank Almighty Allah to whom we must ask and to whom we must seek for help and guidance.

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PRINCIPLES OF MANAGEMENT JUBILEE INSURANCES

SUMMARY To sum up, this report deals with the practical application of general principles of management on New Jubilee Insurance. For several years, New Jubilee insurance has been in the business of providing us with a better life; a life of safety and security. Departmentalization occurs in the company in five ways such as functional, geographical, product, process, and customer departmentalization. The company manages its people through establishing core values to be followed across all levels. Their core values include; teamwork, integrity, excellence, and passion. In Jubilee General insurance, effective teamwork certainly does not just happen automatically; it takes a great deal of hard work and compromise. Similarly integrity for the company means being morally correct in all your endeavors. Management of the company divides the employees into cross functional teams. These types of teams are useful when this company needs to bring together expertise to solve an issue, or to explore potential solutions. However, setting up a cross-functional team sometimes brings difficulties. But Jubilee General Insurance overcomes these challenges by setting objectives early on, and by getting its team, and key managers, to agree to them. In jubilee insurance cross cultural teams usually perform these tasks, such as; in new product development, in establishing a goal, in working with key stakeholders, and in managing and reducing conflict. We’ve also done the SWOT analysis of the company. The organization culture includes, low stability, high outcome orientation, high people orientation, high team orientation, high innovation and risk taking. Span of control across the organization maximizes through efficient use of information technology, training, and specific work designs. The management of the company establishes strategic boundaries for the employees to direct their goals within the business goals of the company. Despite of setting strategic boundaries, management faces strategic uncertainties also. At this crucial time, management trains its employees to adaptive to strategic changes in order to survive in competitive environment. There is no any concept of employee commitment to the organization’s success as everyone works there for self interest. Due to vertical hierarchy structure and mechanistic organization, tasks for each level of employees are specifically designed and defined by the management. Top down communication system is implemented effectively across the organization. The organization is based on centralized system mainly but to some extent decentralization occurs so that the employees can meet their own objectives and goals. At last, in New Jubilee Insurance being a centralized organization, all feedback reports are related and generated by functional directors. Thus, annual reports are given out to overcome weak points and reach maximum management success.

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TABLE OF CONTENT

S.NO

TOPICS

PAGE #

1

COMPANY DESCRIPTION

5

2

MISSION ,VISSION AND VALUES

6

3

CROSS FUNCTIONAL TEAM

7

4

S.W.O.T ANALYSIS ( strengths& weakness )

9

5

S.W.O.T ANALYSIS ( threats & opportunity )

9

6

ORGANIZATIONAL STRUCTURE

11

7

ORGANIZATIONAL CULTURE

12

8

SPAN OF CONTROL

13

9

STRATEGIC BOUNDARIES

14

10

STRATEGIC UNCERTAINTIES

14

11

EMPLOYEES COMMITMENT

15

12

AFFECTS OF ORGANIZATION SIZE ON DESIGN

15

13

FACTORS INFLUENCES CENTERLIZATION AND DECENTERLIZATION

16

14

MECHANISTIC ORGANIZATION AND FORMALIZATION

17

15

RECOMMENDATION

18

16

CONCLUSION

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COMPANY DESCRIPTION

Established in 1953, JUBILEE GENERAL (formerly Jubilee General - New Jubilee Insurance Company Limited) is one of the brightest and most reputable names in the insurance sector. Sustained growth over half a century has secured JUBILEE GENERAL a place among the “Big Three” Pakistani insurance in terms of gross direct premium and financial base. JUBILEE GENERAL is listed on the Karachi & Lahore Stock Exchanges. Major shareholders include Aga Khan Fund for Economics Development and Hashoo Group. JUBILEE GENERAL, with its Head Office in Karachi, has an extensive and dynamic branch network in all major cities and towns of Pakistan that guarantees prompt service at the customer's doorstep. The company prides itself in its long-standing reinsurance arrangements and relationship with international renowned reinsurers such as Swiss Re, Munich Re, Lloyds, Hannover Re and Mitsui Sumitomo Re. The company is also supported by internationally acclaimed reinsurance brokers including AON Group, Willis, Marsh and UIB. In 2003, JUBILEE GENERAL became the first Pakistani insurance company to acquire a foreign company when it took over the Pakistan operations of Commercial General Union. Together with AKFED, JUBILEE GENERAL also acquired majority control of CU Life Assurance Company of Pakistan Ltd. At JUBILEE GENERAL, diversity is maintained through underwriting all classes of general insurance including fire, marine, motor, engineering, health and general accidents. JUBILEE GENERAL not only offers wide risk coverage, but also provides related risk management services delivered by highly qualified and experienced risk managers. JUBILEE GENERAL has developed unique and innovative insurance solutions to meet the growing consumer financing trends of economy. From auto financing to personal loans, mortgages to plastic cards, and trade finance to capital investment finance, JUBILEE GENERAL has the customized solutions to secure entire operations. Product range and transactions of all financial institutions.

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VISION, MISSION & VALUES

VISION To enable people to overcome uncertainty.

MISSION To provide solutions to protect the future of our customers.

CORE VALUES Teamwork Integrity Excellence

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CROSS-FUNCTIONAL TEAMS In jubilee insurance cross cultural team divided as follow,

   

NEW PRODUCT DEVELOPMENT. ESTABLISHING A GOAL. WORK WITH KEY STAKEHOLDERS. STEPS TO MANAGE AND REDUCE CONFLICT:

NEW PRODUCT DEVELOPMENT. Jubilee insurance have been able to use cross-functional teams to reduce the cycle time in new product development. As a result, CFTs have become a common tool in new product development at NJI, especially in insurance industries in which rapid change and innovation is the norm. CFTs have shown the flexibility to adapt to changing market needs and the ability to more quickly develop innovative products. In the past, new product development invariably meant gathering data sequentially from a number of departments before a new product was given the green light. First, the idea would be conceptualized. Then, it would be handed off to the marketing department, which would conduct market research to see if the product was viable. The product might then be passed on to the sales department, which would be asked to create a sales estimate .Finally, with all those numbers gathered over the course of months, or even years, the product would move to an executive committee which would either approve or kill the project. By that time, market conditions sometimes had shifted sufficiently to render the product obsolete.

ESTABLISHING A GOAL. when goal-setting is to be sure to identify key interdependencies on the team does one team member have to finish his or her part of the project before another team member can get started. It is essential to know these sequential steps before a team gets too deep into its project.

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WORK WITH KEY STAKEHOLDERS. When identifying all stakeholders, we determine what level of representation each needs on the team. Some groups will need permanent members, others may only need to participate in certain areas of the project. Communicate with all stakeholders and anyone else in the company who is affected by the team's work. Do not spring surprises this will make people resistant to the work that the team is trying to achieve. Communication steps should be decided upon up front and planned as carefully as any other part of the project in insurances industry. Jubilee insurance, one of the leaders in CFTs, has expanded the stakeholder idea. When it used to create a CFT, Jubilee insurance followed the traditional model and appointed only those people whose roles were crucial to the process at hand.

STEPS TO MANAGE AND REDUCE CONFLICT: 

Provide all team members with conflict resolution training. Conflicts can have value if managed properly, so improving team members' listening and consensus building skills is necessary.



Human resources personnel of NJI is involved in the team-building process to help teach facilitation and group dynamics skills.



Disregard the rank or perceived status of each group member and have standards in place that put For cross-functional teams to succeed, several factors have been identified that are imperative: (Source google)      

Team members must be open-minded and highly motivated. Team members must come from the correct functional areas. A strong team leader with excellent communication skills and a position of authority is needed. The team must have both the authority and the accountability to accomplish the mission it has been given. Management must provide adequate resources and support for the team, both moral and financial. Adequate communications must exist.

Without any one of these elements, any cross-functional team will be fighting an uphill battle to succeed.

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SWOT ANALYSIS

STRENGTHS:  The joining of experienced people, advance management, advance set up and facilities gave NJI Co.Ltd an edge over its competitors.  Enjoying economies of scale.  Good will in the market.  Strong financial position.  Long standing clients.  Experienced owners  Organization gives opportunity to this employees for career path.  Have strong distribution channel in Pakistan.  Variety of Products. WEAKNESS  Majority of people are not well aware about NJI Co. Ltd.’s product, so it needs extensive advertisement  Employees discriminate customers on the basis of their status.  Less Incentives to Lower level employees  The furniture available at the branch is not sufficient to occupy a larger number of people at a time in the branch.  Limited area covered (only major cities are insured)  No segmentation of market . 9

PRINCIPLES OF MANAGEMENT JUBILEE INSURANCES

OPPORTUNITIES  Used Latest IT Technology  Hire insurance experts from other countries  Explore unidentified market segments  Agriculture and live stock market.

THREATS  Change in government policies  The competition has become sever by the entrance of new companies.  The decrease in the purchasing power of people in the current economic situation affecting the business activity speed.  Facing tough competition in market.  New business practices rules and regulations by SECP / Government sectors  High risk in insurance business  Many new insurance companies are entering into the market which are backed by strong banks that can create problems for NJI.  Govt. allowed foreign insurance companies to start business in Pakistan that can also affect the whole procedure.

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ORGANIZATION STRUCTURE BOARD OF DIRECTORS MANAGEMENT

MARKETING

MANAGING DIRECTOR

SENIOR EXECUTIVE DIRECTOR

JOINT MANAGING DIRECTOR

EXECUTIVE DIRECTOR

SENIOR DEPUTY MANAGING DIRECTOR

DEPUTYEXECUTIVE DIRECTOR

DEPUTY MANAGING DIRECTOR

ASSISTANT EXECUTIVE DIRECTOR

SENIOR EXECUTIVE DIRECTOR

SENIOR EXECUTIVE VICE PRESIDENT

EXECUTIVE DIRECTOR

DEPUTY EXECUTIVE DIRECTOR

EXECUTIVE VICE PRESIDENT

ASSISTANT VICE PRESIDENT

ASSISTANT EXECUTIVE DIRECTOR

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ORGANIZATIONAL CULTURE

Contrasting Organizational Cultures of NEW JUBILEE INSURANCE .

DIMENSION

ORGANIZATION

REASON

STABILITY

LOW

They are dynamically change their policies according to the environment and adopt the changes that occur in the market.

OUTCOME ORIENTATION

HIGH

PEOPLE ORIENTATION

HIGH

Jubilee Insurance Company posses outcomeoriented cultures as those that emphasize achievement, results, and action as important values The vision of New Jubilee Insurance Company IS, “To enable people overcome uncertainty”

TEAM ORIENTATION

INNOVATION AND RISK TAKING

HIGH

HIGH

According to the values of an organization which is mention in annual report. They are are collaborative and emphasize cooperation among employees. Economic and Political Risk, Market Risk, Insurance Risk, Reinsurance Risk.

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SPAN OF CONTROL

Method to maximize the span of control in NJI are as follow.

Information technology: Use of efficient communication tools like online wiki’s,videos,project management and tracking tools and other decision support systems can reduce the overall relationship complexity, thereby encouraging our managers to supervise more subordinates.

More training: Investing in training the employees for the current job skills and also future skills makes them more independent is the goal of NJI. Constantly involving the employees in various training not only increases the collective intelligence within the organization but also results in readily available resources.

Work design: If the task are designed to be independent , closely coupled with few interdependencies and probable conflicts, the relationship complexity can be reduced.

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PRINCIPLES OF MANAGEMENT JUBILEE INSURANCES

STRATEGIC BOUNDARIES

Every strategy brings with it the risk that an individual's actions will pull the business off course. Here again, it's easy to fail to inoculate the business against this risk. As we will see, the trick is in setting clear boundaries. Controlling strategic risk is the fourth implementation imperative. Strategic boundaries which are always stated in the negative ensure that the entrepreneurial initiative of our employees aligns with the desired direction of the business. Strategic boundaries can also protect us from the types of errant actions.

STRATEGIC UNCERTAINTIES

No matter how good our current strategy is, it won't work forever. There will be booms and busts, customer preferences will change, competitors will introduce new products, and disruptive new technologies will emerge in unexpected places. This brings us to the final implementation imperative: adapting to change. Adapting is critical to survival, but it's extremely difficult to do. With change constantly surrounding us, employees often do not know where to look or how to respond.

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EMPOLYEES COMMITMENT

It's critically important to build norms so that people will help each other succeed, especially when you're asking people to innovate. But there are exceptions. our organization built on self-interest, with every man or woman working for him- or herself. I suspect that the choice between commitment to help others and self-interest is deeply ingrained in our organization, yet has never been discussed. But if we haven't addressed this choice explicitly and worked to make it happen, we have to increased the potential that our strategy implementation will fail.

AFFECTS OF ORGANIZATIONAL SIZE ON THE DESIGN

As an organization grows, however, it becomes increasingly difficult to manage without more formal work assignments and some delegation of authority. Therefore, We develop formal structures. Tasks are highly specialized, and detailed rules and guidelines dictate work procedures. Inter-organizational communication flows primarily from superior to subordinate, and hierarchical relationships serve as the foundation for authority, responsibility, and control. The type of structure that we develops will be one that provides the organization with the ability to operate effectively.

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PRINCIPLES OF MANAGEMENT JUBILEE INSURANCES

FACTORS INFLUENCE DECENTRALIZATION Decentralization has value only in NJI to the extent that it helps organization members achieve their objectives. In determining the amount of decentralization appropriate for an organization, the following factors are usually considered: 1. Environmental influences such as market characteristics , competitive pressures, and availability of materials 2. The organization’s size and growth rate 3. Other characteristics of the organization, such as costliness of given decisions, top management preferences, the organization’s culture and abilities of lower level managers.

FACTORS INFLUENCE CENTRALIZATION

A process where the concentration of decision making is in a few hands. All the important decision and actions at the lower level, all subjects and actions at the lower level are subject to the approval of top management i.e board of directors of NJI. The implication of centralization in NJI is as follow: Reservation of decision making power at top level.  Reservation of operating authority with the middle level managers.  Reservation of operation at lower level at the directions of the top level.

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PRINCIPLES OF MANAGEMENT JUBILEE INSURANCES

MECHANISTIC ORGANIZATION

Following are the key elements of mechanistic structure in NJI,

1. 2. 3. 4. 5.

Work tasks are specialized into separate parts Tasks are rigidly defined (high formalization) Strict hierarchy of authority Centralized decision-making and control Vertical communications.

FORMALIZATION IN ORGANIZATIONAL DESIGN



 



Communication is important part of each and every organization therefore our organization take care about smooth flow of communication to ensure the innovation and efficiency in the performance of employees. NJI have a centralized and formal organization structure that is designed on the top to down approach with strictly defined work roles.. Organization structure can be department based or project based , NJI is having department base organizational structure. Our organization structure is divided into line function and staff functions to encourage smooth flow of communication. Chain of command in NJI is design to determine the important names and their roles in the organization. We have multiple leaders they are divided to overall organization according to their qualifications to promote better workflow.

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SUGGESTIONS AND RECOMMENDATIONS

NEW JUBLEE INSURANCE is one of the leading Insurance companies in Pakistan. After working on this report it true to say that the NEW JUBLEE INSURANCE is well-managed, well organized company. The management has complete control over its working staff. All the departments in the company are well designed. And the Human resource is quite efficient, which is the major cause of success of the company in the market .But in spite of all the factors; there are certain areas on which the company needs to give m o r e c o n c e n t r a t i o n . O n t h e b a s i s o f t h e i r m a r k e t p l a c e , S W O T A n a l y s i s t h e f o l l o w i n g recommendations are suggested:  Employees are less, should hire more people to lessen the over burden of workload.  Salary should be revised.  Technical training must be conducted periodically.  They should hire more educated sales force to enhance the c u s t o m e r s u p p l i e r relationship.  More and more branches should be opened, particularly in the rural areas.  More and more focus should be given to enhance public image and goodwill through superior customer services and interaction.  The management of the company is highly centralized. In o r d e r t o i n c r e a s e t h e performance of the employees they should be actively participated in the decisions making of the company.  The prices of the products of the company are so high which are just in the range of the limited Market Niche. So in order to increase the local sales the company must go for the low pricing strategies for its product.

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 For better productivit y, the higher manageme nt must conduct p r o p e r s e m i n a r s , workshops for all the employees so that they can have upto date knowledge and they would be able to increase their skills.

 The company should have all sorts of policies in well defined, clear cut written form so as to be more specific and compare the performance with established goals. This i s v e r y c r u c i a l i n t h e m o d e r n c o m p e t i t i v e i n s u r a n c e s c e n a r i o s o a s t o r e m o v e a l l deficiencies.  Today is the age of marketing. The more strong will be the marketing of a concern ,the more will be the business. So NJI should heavily emphasize on its marketing policies. In this way, bank can also establish its creditability in the eyes of public and can tell them about its offering. Advertisement should run on TV, and in newspapers.  Monetary incentive should be given to employees to enhance their motivation level. Such type of incentive increase their work efficiency which would be beneficial for the bank in future. I hope if all above mentioned areas will be taken care off them it will change things a lot and will open new ways of prosperity and profitability for company

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CONCLUSION At present there is no such organization in the world that is free from problems and challenges. Every concern has to strive and struggle a lot to be more profitable and to get a more competitive edge. Improvement and advancement is crucial with every step and with the every minute passing. Especially insurance sector internationally and in Pakistan is f a c i n g h u g e c h a l l e n g e s a n d s i m u l t a n e o u s l y g e t t i n g h u g e o p p o r t u n i t i e s t o a v a i l . T h e competition is great in this regard. Only those insurance companies will succeeded which will strive for best. But NJI Limited is making as much struggle and effort to be profitable .Its relative ranking in the world in its country of origin and in Pakistan reveals the facts that where it is standing. It is facing a lot of problems. Some problems are due to changing political and economic structure but many problems are due to negligence and inefficiency of management. Some of these problems are very minor but these are the areas which make a difference in this competitive scenario. All these matters should be seriously taken care off. It will be so then it can be hoped that in future the relative ranking, its polic ies financial position and all other areas of NJI will improve and in future the picture will be quite different .There are some minor problems also these are the things which definitely make a difference. Today, the foreign companies and local companies in Pakistan are introducing new ideas, they providing their employees with extended facilities in order to keep their morale high and to full motivate them. But these are the things which are lacking in NJI Zonal Office. I think that if these problems will be solved, then employees will be more motivated, more efficient and more productive. Not only the employees but the general public will also be attracted and profitability will definitely improve.

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