Implementing Teams at Aal and Ips

In: Business and Management

Submitted By frerek
Words 999
Pages 4
Major Issues:

The case discusses about the process by which Insurance Product Services (IPS) one of the departments of Aid Association for Lutherans (AAL) was transformed from traditional hierarchical structured to team based organization. The need for change at IPS was because the management felt AAL was not customer centric and the skills & abilities of the employees were untapped. Since the organization was hierarchical in nature the decisions were being framed at higher levels and people actually associated with the problems were not being consulted. The new vision of the IPS was to be a flat organisation with fewer levels of supervisions where customers will be their primary concern. To effectively implement their new vision IPS proposed to create self managed teams. This drastic organisation change at AAL initially won very few fans. Employees were not satisfied with the new compensation system and also employees demanded more training for their new roles and responsibilities.

Key Characters:

Dick Gunderson: The president of AAL who was appointed in 1985 from another insurance organization. Looking at the trends in the insurance industry Dick was convinced that AAL needs to cut costs by $50 million in order to stay competitive in the market. The only solution to the problem according to him was organizational transformation.

Jerome Laubenstein: Former marketing executive was brought in as the new IPS department head for his remarkable participatory style. He was the key figure in designing and implementing the new organizational change. Jerome along with a team of five individuals, which he had hand picked, were responsible for making the company more customer driven and also downsizing it.

Analysis of the issue:

While implementing the new organizational structure the managing body of AAL felt that the concept of self managed work teams can…...

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