Organisational Change FROM THE American International Group Business Essay

The American international group has a history that goes back to 1919. The company was started when Cornelius Vander Starr founded an insurance company in shanghai the capital city of china. Starr was the first person from the american to sell insurance policies to the Chinese language. Starr sold insurance policies until the company which is the current AIG remaining china in 1949. Within the same year the company's headquarter was moved to New York in USA from where it widened through venturing into other markets in the elements of Latin America, Asia, Europe and Midsection East.

In 1962 the management of the company migrated from Starr to Maurice Greenberg who diverted its concentration from personal insurance sales to high margin corporate and business coverage where he eliminated agents by bringing in independent agents whom he found in reselling insurance polices. This plan helped the company to price insurance depending on its probable return even sometimes when there have been reduced sales of certain products and for an extended period but still incur very little extra expenditures. After Greenberg took over the management of the company it sooner proceeded to go consumer in 1969. Beginning with 2005 the company was caught up in some frauds that were investigated by the justice office of U. S. , any office of attorney general in new point out and the securities exchange commission. The then CEO Greenberg was suspended and substituted by Martin Sullivan in Feb. 2005. In June 2008 some financial loss were disclosed which resulted in the fall of AIG show price in the currency markets. This resulted to resignation of Sullivan who was then replaced by another CEO Edward Liddy in sep. same yr. American international group is the largest underwriter of industrial and commercial insurance. The financial scandals of 2008 led to great deficits to the business which made it are affected a liquidity turmoil as its credit history was downgraded.

AIG it a internationally recognized insurance provider with branches in several parts of the earth. Its eyesight is "to be the first choice in innovative home loan solutions" while its mission is "to be the home loan insurer of preference through: professional and dedicated personnel, entrepreneurial authority, disciplined risk taking, customer satisfaction, and through answers to help Canadian homeownership". The company's global benefits network has nowadays presented the AIG atlas as you of its strategies. This atlas is a essentially a range of products meant to assist in meeting the unique gain needs of the employees. This will then enhance the electricity of the ability of the business's employees in over 100 countries hence be able to provide the best services as well as cost effective solutions to its customers worldwide (AIG Group Management Division 2009). The initial advantages to the employees includes medical insurance, life insurance coverage and long-term disability insurance. The company also intends to provide full time services through charge-free contact number as well as management and monitoring of disaster medical circumstances.

Strategies of AIG

The company is one of the leading international insurance and financial organizations. It has partnered with several business organizations including CRM, which is the main credit management alternatives provider in Europe. This partnership has enabled the company to provide better customer satisfaction and hence bettering its sales of insurance policies while completing efficiency gains. Presently, North american international group performs in more than 130 countries while its member companies provide institutional, commercial, as well as individual customers through the widest property, life, and casualty of any insurer on the planet (AIG Group Management Section 2009). The business is thus going right through a period of extreme reviews of it's of the functions and structure in every its centres so as to maximize and establish its B2C customer management. By using its resources more effectively the company seeks to enhance the efficiency of CRM and provide the best reactive customer support.

Having partnered with other outsourcers, AIG recognized the value of outsourcing lovers with whom they can incorporate the breadth of experience by giving well supervised and high quality services. In 2002 AIG and finalized an enterprise strategy with Transom with discussed a number of issues such as producing organizational skills to secure maximum success and client satisfaction. The company also had to act based on the desired outcomes for improved business, quality and management as well as provide affordable high quality and fulfilment solutions (AIG Group Management Division 2009). Following a deal between the two companies Transcom started to take care of the inbound customer support service on behalf of AIG. Transcom then improved the quality of services by coping with the problems in the existing program of AIG.

Leveraging its long experience and first class technology, Transcom has had the opportunity to bolster and grow the CRM activities of AIG through addition of telemarketing promotions. Transcom has also succeeded in bolstering AIGs customer earnings and bottom through contacting its prospective customers and showing them with persuasive offers to coverage business. The overall improvement in the quality of service of AIG has result from the enormous improvement in customer relations which has in turn strengthened AIGs image as a specialist organization. All this was possible since Transcom stored within the service level boundaries as well as regular customer contact (AIG Group Management Section 2009)

Organizational Habit Analysis

Organizational behavior evaluation is an analysis of just how individual work within an organization. The business doesn't need to be a business establishment like the American international group but can also be a religious establishment. The ultimate goal of organizational behavior analysis is to understand in an improved way the connections between individuals in an organization, the relationship of the employees and the business and the organizations relationship with all of those other world (Harigopal 2006). This information is then utilized by the management of organizations to improve the efficiency and productivity of and achieve the goals and goals of the establishment as a whole.

According to Harigopal (2006), by increasing and understanding this knowledge the staff are able to realize the contributions of their individual efforts to the bigger image of the business. The progress and success of every organization rests on the idea of management as well as on its vision, goals and values. These factors then drive the organizational culture that comprises of the social environment, formal and informal company. The culture then affects the kind of communication, management and group dynamics within the organization. The employees or workers in the establishment then take these aspects as the grade of their work life and therefore they determine their rate or amount of motivation. The ultimate results of these will be individual satisfaction, performance, personal development and the overall development of the business.

Organizations are going through exceptional radical change in all systems of procedure ranging from decision making to global competitive pressures and technology to acquisitions and mergers(Harigopal 2006). Organizations have therefore to answer quickly and effectively while staying flexible and transforming themselves for the " new world " of work. Organizational habit is therefore written with these changes and it clarifies through what leaders and managers need to find out about organizations as they struggle to bring efficiency and success in them. Organizational patterns and authority development is institution huge responsibility that exercises across all functions and departments.

Culture is referred to as the conventional patterns in confirmed society which includes beliefs, knowledge, traditions and practices. Although it rarely finds its way into the conscious head, it often affects the patterns of humans within confirmed society or business. Employees in an organization like the AIG usually be based upon its culture since its culture offers them balance, understanding, security and the ability to react to a given situation. Organizational culture creates a number of concepts, situations and strategies that affect every level of planning in virtually any institution. Understanding the procedure of culture and organizational framework and the equipment that it operates behind the scenes helps the employees to arrange and strengthen the effective civilizations and remove the bad ones thus creating and environment that stimulates success within the institution.

According to leadership theorists, diminishing and weakening of a business alongside the employees resistance to improve is usually triggered by ineffective leadership (Harigopal 2006). For instance the American international group underwent financial meltdown in 2008 therefore of poor authority. The bad culture of impunity that were developed in the business led to problem and mismanagement of cash as well and some other unscrupulous bargains. Strong management and organizational culture are necessary for long term success in every company. However some companies may show signs of success for some time even without a strong organizational culture but when the culture starts off to erode, the big organizations take only a brief time frame to collapse.

Strong leadership is necessary for a strong organizational culture but the change is also true. Without strong leadership to keep up everything running, a strong organizational culture will only dull and finally erode. Practising business people and theorists have discovered that organizational culture and command are firmly intertwined. Market leaders require possessing a clear understanding of the impact and personal information of the business culture so as to determine the sort of adjustments and management systems needed within the organization as well as hold the right varieties of effectively communicating their visions to rest of the institution.

The analysis of the procedure of organizational culture and organizational composition makes the functional study of organizational culture and framework implications important. In all organizations from government groups to sports teams, the analysis of the impact of culture and structure on the general picture of an organization shows a much better way of earning an entity work. Good organizational framework ensures balanced circulation of duties among the top management of groups as well as on the list of employees (Harigopal 2006 p. 102). It has shown that good organizational framework with excellent workers that ensure each is centered at the same goal, is effective than excellent but conflicted workers. Organization composition generally handles the culture create. It handles the working of the management, the specific tasks of the supervisors, and the manner when a complaint is transferred through the ranks. Organizational structure means that.

Managing change in organizations

A significant change within an business occurs when the overall strategy of an organization are improved for success, or when an organization adds or takes away a significant section or practice or when there is a change in the operation characteristics. Organizations develop by considering through significant changes at different items in their improvement. Successful organizational change is usually very difficult to accomplish thus it usually demands skilful control in change management. In work organizations there will vary solutions in guiding change whereby some are organized, organized and explicit while some will be more unfolding, organic and implicit.

These methods work in several styles. Some work from the near future for this for illustration when an organization develops a eye-sight to be achieved in the foreseeable future and then lays down strategies about how to acquire that vision. Various other approaches will work from the present to the near future. In this approach the organization will identify its current problems issues and goals and then lay out strategies on how to deal with those priorities and exactly how to attain them (Harigopal 2006 p. 97). The deviation in the sort of strategies used is determined by the culture of a business or on the control design of the managers. When starting from today's to the near future the organization talks about its past in relation to the present and then talks about the present with regards to the near future and then assess whether it can still continue on with its activities just like it's been doing.

For an organization doing business in this fast changing and evolving environment, doing thins like has been doing before might not exactly help it compete pretty with others in the industry (Harigopal 2006 p. 98). Even doing a similar thing harder or even fine tuning it could sometimes make no difference. What organizations need to do keep doing things different as the changing business environment requirements. Inside the daily procedure of organizations the structures, methods, operations and technologies which were appropriate in the last market conditions might not be applicable in the current or future conditions. This implies that organizations may be forced to reset themselves on different assumptions and business potential clients that are in accordance to customer emphasis, innovativeness, competitive intellect, and competency base.

For the best brings about a change effort, the change real estate agents should first of all have a comprehensive knowledge of the framework of the change work including the right strategies needed and the kind of results expected. Which means that the change managers should have a definite understanding of the basic buildings and systems in an firm as well as their typical conditions and roles (Harigopal 2006 p. 98). The command style and management systems of an organization with regards to its culture are also necessary. Change management encompasses thoughtful planning and hypersensitive implementation of necessary strategies. Before a change is set up and through the change process the change market leaders should conduct considerable consultations with individuals influenced by the change and also require them in the change process. The professionals should also find ways of aligning the goals of the business enterprise with the needs with their people.

The managers should check if the folks affected trust or at least understand the necessity for change and that they have a chance to determine or give views about how the change should be monitored. The sensitive areas of the change management should be managed through in person communication so as to convey interpretation and understanding. Relating to Harigopal (2006), handling change therefore demand creating different management set ups, like the interim composition to deal with the 'business of the business', the change management structure to smoothen the change process and a composition to stream brand the new point out of the organization (p. 95). Prior to starting the change process, a business should be clear on its goal, direction and perspective as well as have a definite research of its prevailing advantages and weaknesses with regards to opportunities and threats. The dynaminism of business environment will know what should be modified and the required rate of change.

Impact of technology on business

According to (HҐkansson, Waluszewski & Prenkert 2009), business today is inextricably entangled with technology starting from the tiniest business to International Firm with lots of monolithic applications of legacy. In today's world one cannot be in successful business activities and neglect to come across the problems of technology. It is because the way business processes are completed today is very different from the way these were being completed 30 years ago. Technological breakthroughs have occurred in a number of areas from communication, currency markets, travel i. e. by air, land and drinking water and technology in addition has improved around our lives.

Information technology has revolutionised the systems of business operation about the world. Local business have finally gone international because of simple website information technology that than allowed them to advertise internationally (HҐkansson, Waluszewski & Prenkert 2009). Information technology (IT) has helped in customer service where big organizations like Microsoft and North american international group focus on needs of the customers through online services like email and graph. Internal and external networking in organizations has better business operations across the world. Through networking staffs and clients in organizations can effectively speak to their leaders for responses and improvements on improvement and extensions.

Communication within firms as well as between businesses has really bloomed with the current innovations in technology. Business between organizations has even become easier and more effective. For instance the American international group has had the opportunity to utilize other organizations and improve its services scheduled to superior IT and communication. However due to high technology personal computers in organisations today's business demands comprehensive and careful planning. This planning can be carried out on organised style, with forms schedules and Gantt charts. Due to improved computer systems huge data bases is now able to be managed and stored on network and back up drives for future data. Convenience of stored data and documents has also become easy with the breakthrough of some distributed folders and password keys. Regarding to HҐkansson, Waluszewski & Prenkert (2009) Cash transactions are easily made hence lowering delay which then provides liquidity to business and makes the entire processes running a business faster.

Information technology has enabled the businesses to put on an easier and effective coordination with their suppliers. This then has allowed them to reap the benefits of production economics when they operate with the large particular suppliers. Furthermore the radical 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 economized transactions and other factors thus enable a permanent business relationship with an inferior group of suppliers

According to Johnson Redmon & Mawhinney (2001), communication can be an essential part of any company regardless of its procedure size. It can help in building pr via effective social relations and enhancing teamwork for powerful. Effective communication basically entails relaying information in a specific and precise manner making it easy to be known without changing the concept being conveyed. Communication is composed of several phases: sender as the source of communication, encoding entails the sender internalizing the note, route of communication, decoding is relaying the meaning to the device. Receiver in cases like this is the expected recipient of the communication and the reaction/feedback of the device completes the routine. The effectiveness of the communication is determined by both the amount of attention from both the listener and the recipient of the subject matter.

For effective communication one strives to reduce the mistakes likely to appear at every stage of communication mentioned above. Encoding consists of synthesizing the information to be communicated. The detail and ease with which you communicate will depend on the level at which you internalize the concept (Johnson Redmon & Mawhinney 2001). Special attention should be located on the critical issues, the likely mistaken assumption the communication might create and the missing information. You need to understand well the note he wants to convey, project the likely impact and reaction it'll be getting then relay it at the optimum time possible Incorrect interpretations or assumptions may lead to communication malfunction. Communication breakdown slows the implementation of ideas and creates stumbling blocks for the path towards success associated with an institution. Both sender and conveyer of the information should have the same understanding of the info. Well conveyed subject matter helps the listeners understand your ideas, your perspective on a certain idea.

Channels of communication vary from electronic communication electronic digital communication (fax, internet, video conferencing) in person, telephone, mails, reviews, memo and notices. Choosing an appropriate channel gives value to the information being relayed since each channel has its advantages and weaknesses. Decoding of the subject matter by the listener also requires skill. One should be keen to be able to note things like the mood of the sender the emotions in the concept and its relevance. Low-quality decoding which mainly arises from lack of deep knowledge of the issue at hand limits the importance of the concept. Feedback by the receivers both verbal and non verbal helps in examining how effective the communication was received. Upon failures it might be important to replicate the subject matter. Circumstances of which you relay your details has impact on the communication.

Many organizations like AIG have looked after success and goals achievement due to use of effective communication methods that have enabled participation of all employees towards accomplishing common goals. Eliminating blunders from all the periods of communication is vital. The message should be prepared, summarized and with minimum or no problems whatsoever.

Recent studies explain that communication skill both written and spoken is the biggest element in isolation that is utilized in determining managers of cooperation. This is a major raise on the ability to connect well with your subjects and respect you. Poor communication skills will lead stand in the way of career development as it brings about poor coordination of ideas.


In the modern world, whether a business is a profiting or non-profit making, it very important that the business motivates and utilizes its skill. Understanding the organizational behaviour is a major factor for increased opportunity and chances of success available world (Johnson Redmon & Mawhinney 2001). On the other comprehensively understanding the organizations culture ensures sustained expansion in a diverse manner. To be able to attract abilities and high quality skills into a business there is dependence on a culture of available communication and diversity. Once the organization has the best culture it requires in its activities then it can improve its efficiency and have more common viewpoints that it can learn from hence broadening its systems and operations. However there must be proper care to ensure that the organizational culture and structure are relating or compatible with the proper goals of the business.

In today's fast moving global world fro business, organizations need to quickly learn their risks and opportunities and adapt to them. The speed at which an organization learns these factors, affects the swiftness and efficiency of which the organization grips these opportunities and dangers. Effective communication is also an essential factor in the efficiency and success of every business (Johnson Redmon & Mawhinney 2001). Communication can either be formal or informal which are both used in all establishments whether straight or indirectly. Formal channels of communication in organizations usually follow the string of order which is usually throughout. On the other hand the informal channel is commonly more wide open and spontaneous. Gossip is some form of casual communication. The informal communication is a very effective approach to communication and it's mostly utilized by small companies.

Investments targeted at increasing the level of explicit harmonization with the exterior agents has resulted in enhanced risk to organizations. It has traditionally made organizations to avoid this increased risk by under investing in coordination. However information technology has been found to really have the ability of minimizing coordination cost without increasing the associated threat of transactions resulting in more outsourcing and less vertically built-in firms. Lower romantic relationship specificity of IT assets and better capability of monitoring, means that organizations can carefully invest in information technology. This will improve coordination between firms than in traditional investments.

The rate and importance of organizational change hasn't slowed in the past years but it includes actually been strengthening. The continued swift technologies are bringing in changes in organizational techniques and systems. The faster expansion in internet has enabled much easier and faster access to information and knowledge which includes then changed just how people operate businesses. The prospects of employees in their motion from one firm to another also have increased hence necessitating increasingly more organizational changes so as to meet the current market demand. American international group is a constantly changing organization because of the changing customer needs among other factors.

According to AIG Group Management Section (2009), the rate of change portrayed a good culture of AIG that does not show resistance to improve in the organization. Although the company experienced some crisis in 2005, its culture of good change enabled it to come out of the turmoil. Organizational change has seen the abolition of some of the international market barriers which has then helped many organizations like AIG to venture into collaboration with foreign companies thus bettering its market and services. This therefore illustrates the importance of regular organizational change.

In spite the importance or organizational change not absolutely all the carried out changes that deliver the expected benefits to the organization. This is the reason why any change in an firm should be completed through the right strategies. Strong leadership characteristics for the professionals are also necessary for successful organizational change (Harigopal 2006). Failing for organizational change to provide is usually brought by reasons such as lack of a big change agent with skills or the change agent being too junior in an institution. Insufficient support by the mature management and their dedicated executive should be accessible in any firm. Poor description of organization aims and diverse dimensional alternatives helps in building confidence in the involved participants hence allowing them to take part in every process of the change.

Failed organizational change initiatives do a lot of injury to the employees both in their heart and durability which creates more difficulty in the success of the consecutive change initiatives. Actually today's managers face a great challenge in managing change. In order to ensure success therefore all managers must understand their business together with their real needs. Relating to Harigopal (2006), the change leaders should also understand that delivering positive change in virtually any organization is mainly about changing the employee's behavior in certain ways. Management, and powerful management skills like visioning, planning, prioritizing, giving reviews and rewarding are fundamental issues in the success of any organization.

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