Global Insurance is a disability insurance company.
Traditionally, it has organized its corporate headquarters
around functional specialties. After an application for
an insurance policy arrives at headquarters from a field
agent, it is processed through a series of functional
departments. One department checks to see if the
application is filled out correctly, another department
checks the medical history of the applicant, and so on.
Among the final steps is the underwriting decision,
where the company agrees to accept the policy. This
task is handled by trained underwriters.
One of the more important departments at Global
is human resources. The human resources department
administers the personnel system (for instance, screening
job applicants, reviewing promotion decisions,
having key decision rights on salary levels and job
classifications, and providing training throughout
the organization). Currently, the system includes
nearly 2,000 discrete job titles. The director of
human resources is viewed by most employees as
a key person in the organization.
A major problem at Global is that it takes nearly a
month to process an insurance application. Applications
can sit for days in in-boxes, as they move from
department to department. Globalâ??s CEO has decided
that the company must reorganize to remain competitive.
He has a vision to do away with most of the functional
departments. Insurance applications would be
handled by caseworkers responsible for all the steps
from initial inspection of the application through underwriting.
These caseworkers would be supported by a computer system that would allow access to medical
record databases and other information necessary for
processing an application. The management information
system manager would be charged with developing
the information system. Caseworkers would
receive training in underwriting from the existing
underwriters in the firm. Entry-level caseworkers
would be required to have at least a 2-year degree
from a community college. The number of job titles
would be reduced significantly. Most of the people
would have titles like associate or partner. Training,
promotion, and hiring rights, currently held by
human resources, would be decentralized to senior
case managers (partners). The human resources
department would play an important role in transitioning
to the new system (dismantling existing
training programs and turning them over to case
managers, reducing the size of its staff, and so on).
Through similar programs, other insurance companies
have been able to reduce their application processing
times dramatically. They also have reduced
their workforces significantly.
1. Which employees in the organization do you
think will oppose the new proposal? Who will
2. What problems can the opponents cause in
implementing the plan?
3. What actions should the CEO take to increase
the likelihood that his plan will be implemented successfully?
1. Which employees in the organization do you think will oppose the new proposal? Who will support it?
Reducing the staff and job titles by recruiting caseworkers who will be responsible from all the steps of application may irritate the personnel of functional departments due to the risk of losing their jobs. On the other hand the personnel of ...
Human Resources Case Study is reiterated.