Case Study: Transact Insurance Ltd

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NB: You need to deal with your teammates. You're welcome to do it individually as well.

Check out the case study of Transact Insurance Ltd. Use one of the models in the chapter on culture or the recommended posts to describe the culture of the organisation.

Also determine the major influences on the development of that culture. Think about the modifications in the South African environment (competition, globalisation, employment equity, scaling down, need for development, etc), and suggest the viability of the organisational culture for the future objectives of the organisation. Case study: Transact Insurance Ltd

. Transact Insurance Ltd (TIL) offers motor vehicle insurance throughout South Africa. Last year, a brand-new managing director was worked with by the TILS's board of directors to enhance the company's competitiveness and consumer service. After spending several months assessing the scenario, the brand-new handling director presented a tactical plan to enhance TIL's competitive position. He also replaced three vice-presidents. Jim Leon was worked with as Vice-president: Claims, TIL's largest department with 1100 workers, 40 claims centre managers and 5 regional directors.

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Jim instantly consulted with all claims supervisors and directors, and checked out staff members at the 40 claim centres. This was a hard job however he persisted. Through these gos to and conversations Jim discovered that the claims division had actually been managed in a reasonably authoritarian way. He could also see that spirits was extremely low and employee-management relations bewared. High work and isolation (claim adjusters work in small cubicles) were 2 common grievances. Several supervisors acknowledged that the high staff turnover among claims adjusters was partially due to these conditions.

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Following discussions with TIL's managing director, Jim chose to do the following: * He started a divisional newsletter with a tear-off form for employees to register their remarks. * He announced an open- door policy in which any claims division employee might speak with him straight and in complete confidence without first going to their instant supervisor. * He likewise combated organisational barriers to start flexi-time program so that staff members might create work schedules around their needs.. This programme later became a model for other areas of TIL.

One of Jim’s most pronounced symbols of change was the “Claims Management Credo” outlining the philosophy that every claims manager would follow. At his first meeting with the complete claims management team, Jim presented a list of what he thought were important philosophies and actions of effective managers. The management group was asked to select and prioritise from this list. They were told that the resulting 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 they also understood that the organisation was under competitive pressure. The claims managers developed a list of 10 items, such as encouraging teamwork, fostering a trusting work environment, setting clear and reasonable goals, and so on. The list was circulated to senior managers in the organisation for their commitment and approval, and sent back to all claims managers for their endorsement. Once this was done, a copy of the final document was sent to every claims division employee. Jim also announced plans to follow up with an annual survey to evaluate each claims manager’s performance.

One year after the credo had been distributed Jim announced that the first annual survey would be conducted. All claims employees would complete the survey confidentiality and return it to human resources where the survey results would be compiled for each claims centre manager. The survey polled the extent to which the claims manager had lived up to each of the 10 items in the credo. Each form also provided space for comments.

The claims division survey had a high response rate. In some centres, every employee completed and returned a form. Each report showed the claims centre manager’s average score for each of the 10 items as well how employees rated the manager at each level on the five- point scale. The reports also included every comment made by employees at the centre. No one was prepared
for the results of the first survey. Most managers received moderate or poor ratings on the 10 items. Very few managers averaged 3 (out of 5) on more than a few items. The comments were even more devastating than the ratings. Comments ranged from mildly disappointed in to extremely critical of their claims manager. Employees also described their long-standing frustration with TIL, high workloads and isolated working conditions. Several people bluntly stated that they were sceptical about the changes that Jim had promised. “We’ve heard the promises before, but now we’ve lost faith”, wrote one claims adjuster.

The survey results were sent to each claims manager, the regional director and employees. Jim instructed managers to discuss the survey data and comments with their regional manager and directly with employees. The claims centre managers went into shock when they realised that the reports included individual comments. They had assumed that the reports would exclude comments and would only show averaged scores. Some managers went to their regional director, complaining that revealing the personal comments would ruin their careers. Many directors sympathised, but the results were already available to employees.

When Jim heard about these 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 claims managers and their employees should proceed as planned. To delay or withdraw the reports would undermine the credibility and trust that Jim was trying to develop with employees. However, the regional director attended the meeting in each claims centre to minimise direct conflict between the claims and centre manager and employees.

Although many of these meetings went smoothly, a few created harsh feelings between managers and their employees. The sources of some comments were easily identified by their content, and this created a few delicate moments in several sessions. A few months after these meetings, two claims managers resigned and three others asked for transfers back to non- management positions. Meanwhile, Jim wondered how to manage this process more
effectively, particularly since employees expected another survey the following year.


Focus on at least the following in your discussion:

* Define/ discuss organisational culture and change. (5)
* Discuss the characteristics (dimensions) of culture. (10) * Explain what a culture conducive to learning means. (10)

NB: PROVIDE YOU’RE ANSWERS BASED ON THE ARGUMENTS OF THE CASE STUDY * Explain how to assess (diagnose) organisational culture. (10) * Discuss the strength of the organisational culture at Transact Insurance and identify the type of culture present at Transact Insurance (case study). (15) * Discuss the influences/changes currently impacting on Transact Insurance Ltd (case study). (10) (case study) * Discuss the effect of these changes on the organisation’s performance and the culture of the organisation (case study) (10) * Discuss the changes required to be a successful organisation in the 21st century. (15) * Describe how Transact Insurance should move (change) from now (current culture) to a future state (desired culture). Focus on some guidelines and a change model. (15) (case study) RECOMMENDED SOURCES

Organisational behaviour textbooks
NB: Please ask the librarian to search the FOLLOWING journal articles on your behalf: Bandura, A. 1999. Self efficacy: toward a unifying theory of behavioural change. Psychological Review 84(2), 191-215. Burnes, B. 2004. (Kurt Lewin and complexity theories: Back to the future? Journal of Change Management 4(4), 309-325. Conger, J. A. & Kunango, R.N. )1998). The empowerment process: integrating theory and practice. Academy of Management Review 13(3), 471-482. Davidson, G. Coetzee, M. & Visser, D. (2007). Organisational culture and financial performance in South Africa Investment Bank. SA Journal of Industrial Psychology 33(1), 38-48. Ongori, H. & Shund, J.P.W. (2008) Managing behind the scenes: employee empowerment. The
Internatiional Journal of Applied Economics and Finance 2(2), 84-92. Siegall, M. & Gardner, S. 2000. Contextual factors of psychological empowerment. Personnel Review 29(6), 703-722.

NB: Please search other journal articles of organisational culture.

Updated: Jul 06, 2022
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Case Study: Transact Insurance Ltd. (2016, Mar 21). Retrieved from

Case Study: Transact Insurance Ltd essay
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