Question

Question:

Temple Insurance Company Temple Insurance Company (TIC) provides automobile insurance throughout the United States. Last year, a new president was hired by TIC's board of directors to improve the company's competitiveness and customer service. After spending months assessing the situation, the new president introduced a strategic plan to strengthen TIC's competitive position. He also replaced three vice presidents. Jim Leon was hired as vice president of Claims (TIC's largest division) with 1500 employees, 50 claims centre managers, and 5 regional directors.

Jim immediately met with all of the claims managers and directors, and he visited the employees at TIC's 50 claims centers. As an outside, this was a big task but his strong interpersonal skills and ability to remember names and ideas helped him through the process. Through these visits and discussions, Jim discovered that the claims division had been previously managed in a relatively authoritarian, top-down manner. He could also see that morale was very low and employee-management relations were guarded. High workloads and isolation were two other common problems since claims adjusters worked in tiny cubicles. Several managers acknowledged that the high turnover among claims adjusters was partly due to these conditions.

Following discussions with TIC's president, Jim decided to make morale and supervisory leadership his top priority. He initiated a division newsletter with a tear-off feedback form for employees to return with their comments. He announced an open-door policy in which any claims division employee could speak to him directly and confidentially without first going to the immediate supervisor. Jim also initiated a flex-time program so that employees could design their work schedules around their needs. This program became a model for other divisions of TIC.

One of Jim's most pronounced symbols of change was the "Claims Management Credo" outlining the philosophy that every claims manager would be required to follow. At his first meeting with the complete claims management team, he presented a list of what he thought were important philosophies and actions of effective managers. The management group was asked to select and prioritize items from the list. The final list would be the division's management philosophy and all managers would be held accountable for abiding by its principles. Most claims managers were uneasy about this process but understood that the company was under competitive pressure and that Jim was using this exercise to demonstrate his leadership.

The claims managers developed a list of 10 items, such as encouraging teamwork, fostering a trusting work environment, and so on. The list was circulated to senior management for their comments and approval and then sent back to the claims managers for their endorsement. Once this was done, a final copy was sent to every claims division employee. Jim also announced plans to follow up with an annual survey to evaluate each of the claims manager's performance. This concerned the managers but most of them believed that this was a result of his initial enthusiasm and that he would be too busy to implement the survey later.

A year later, Jim announced that the first annual survey would be conducted. All claims employees were asked to complete the survey and return it confidentially to the human resource department where the results would be compiled for each claims center manager. The survey asked employees to indicate the extent to which their manager had lived up to each of the 10 items in the credo provided an opportunity to give written comments. Claim center managers were surprised that the survey would be conducted and were even more worried when Jim indicated that the results would be shared with employees. What results would employees see? Who would distribute these results? What happens if a manager gets poor ratings from his or her employees? "We'll work out the details later" said Jim in response to these questions. "Even if the results are not great, it will give us a good baseline for next year's survey".

The survey had a high response rate, with most employees completing it. Each report showed the claim center manager's average score for each of the 10 items, as well as how many employees rated the manager at each level of the 5-point scale. Comments made by the employees were included in the report as well. No one was prepared for the results of the survey. Most managers received moderate or poor ratings on the 10 items. Very few managers averaged above 3.0 (out of 5 points) on more than a couple of items. The comments were even more devastating than the ratings, ranging from mildly disappointed to extremely critical of the claims managers. Employees also expressed their frustration with the company, its high workloads, and their isolated working conditions. In their comments, several employees stated that they were skeptical about the changes that Jim had promised.

The survey results were sent to each claims manager, the regional director, and employees at the claims center. Jim instructed managers to discuss the survey results with their regional managers and directly with employees. The claim center managers, who thought that employees would only see the average scores, went into shock when they realized that the reports included individual comments. Some managers went to their regional directors, complaining that the comments would ruin their careers. Many directors sympathized but the results were already available to employees. When Jim heard about the concerns, he agreed that the results were lower than expected and that the comments should not have been shown to employees. After discussing the situation with his directors, he decided that the discussion meetings between managers and their employees should continue as planned. He believed that to delay or withdraw the reports would undermine the credibility and trust that Jim was trying to develop with employees. The regional managers were encouraged to attend the meetings held between claims managers and their employees to minimize direct conflict. Although these meetings went smoothly, a few of them resulted in harsh feelings between managers and their employees since the sources of the comments were easily identifiable.

A few months after the meetings, two claim center managers quit and three others asked for transfers back to non-management positions with TIC. Meanwhile, Jim wondered how to manage this process more effectively, particularly since employees expected another survey the following year.

1) What are the forces driving change and what are the forces resisting change in this situation? To what extent is this change effort as a challenge? For example, are the resisting forces stronger than the driving forces?

2) Was Jim Leon successful at bringing about change? Why or why not? Or in what ways "yes" and in what ways "no"?

3) What should Jim Leon do now?

Answer 1

(A) What are the forces driving change and what are the forces resisting change in this situation? To what extent is this change effort as a challenge? For example, are the resisting forces stronger than the driving forces?

There are many reasons that can force pushing for changes in Transact Insurance Corporation (TIC) organizational management. A new president was brought in by TIC'S Board of Directors to improve the company’s competitiveness and customer service.

Firstly the new President of the firm wanted to improve the company’s competitiveness and customer service; these are main forces that pushing for change. That's why hired the new vice president Jim Leon for this corporation

Jim Leon decided to make morale and supervisory Leadership his top priority because of the relatively authoritarian management among the claim division and also employees morale level was poorly low, and high workloads and isolation that resulted high turnover one form of employee resistance.

Coming to the forces for restraining, probably managers and employees have a fear of unknown and incongruent organizational systems forces. Because Jim Leon let comments show to employees and that make managers feel a fear of unknown, Jim Leon mean they were afraid of the risk of losing personal loss or carrier path that they have reached so far. Revealing survey results also one of the reasons for emerging incongruent organizational system.

(B) Was Jim Leon successful at bringing about change? Why or why not? Or in what ways "yes" and in what ways "no"?

That was surprised new vice president Jim Leon’s first attempts to change organization as a transformational leader; his first attempts and efforts were really smart. He tried to use communication strategy as successful as possible. He immediately met all claims managers, directors personally to reach employees which are really smart decisions, He used highest priority and first strategy is communication successfully.

But the same he implemented really radical and serious step to change and reduce restraining. "Claims Management Credo" was good idea but Jim Leon rushed and hurried to do surveys and revealing comments. As a result, the harsh feelings emerged between managers and employees,

(C) What should Jim Leon do now?

Jim Leon’s didn't keep his promise to his employee and the managers and employee conflicts of work life balance, he try to adjust the work in tiny cubicles managers and employee power and influence leadership, Jim Leon's didn't prepare the solution for the outcome the problems starts when Jim Leon's are not keeping his promise and all employees are disagreement with his leadership action

The strategy that used by Jim Leon's which is "Claims Management credo" are not compatible goals and there have communication problem in this case