Read the case given below and answer the questions given at the end of the case.

BinaRiangInsuranceCorporation(BRIC)providesautomobileinsurancethroughoutMalaysia. Last year a new president was brought in by BRIC's Board of Directors to improve the company'scompetitivenessandcustomerservice.Afterspendingseveralmonthsofassessing the situation, the new president introduced a strategic plan to improve BRIC's competitive position. He also replaced three Vice Presidents. Zaki was hired as Vice President of Claim Department,theBRIC'slargestdivisionwith1500employees,50claimscentremanagers,and five regionaldirectors.

Zaki immediately met with all claim managers and directors and visited employees at BRIC's 50claimcentres.Asanoutsider,thiswasaformidabletask,buthisstronginterpersonalskills and uncanny ability to remember names and ideas helped him through the process. Throughthese visits and discussions, Zaki discovered that the claim division had been managed in a relatively authoritarian, top-down manner. He could also see that morale was extremely low and employee-management relations were guarded. High workloads and isolation (claim adjusters work in tiny cubicles) were two other common complaints. Several managers acknowledged that the high turnover among claim adjusters was partly due to these conditions.

Following discussions with BRIC's president, Zaki decided to make morale and supervisory leadership his top priority. He initiated a divisional newsletter with a tear-off feedback form for employees to register their comments. He announced an open-door policy in which any claim division employee could speak to him directly and confidentially without going first to the immediate supervisor. Zaki also fought organizational barriers to initiate a flextime program so that employees could design work schedules around their needs. This program later became a model for other areas of BRIC.

One of Zaki's most pronounced symbols of change was the 'Claim Management Credo' outliningthephilosophythateveryclaimmanagerwouldfollow.Athisfirstmeetingwiththe complete claim management team, Zaki presented a list of what he thought were important philosophiesandactionsofaneffectivemanager.Themanagementgroupwasaskedtoselect andprioritizeitemsfromthislist.Theyweretoldthattheresultinglistwouldbethedivision's management philosophy and all managers would be held accountable for abiding by its principles. Most claim managers were uneasy about this process, but they also understoodthattheorganizationwasundercompetitivepressureandthatZakiwasusingthisexerciseto demonstrate hisleadership.

The claim 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 management in the organization for their comment and approval and sentbacktoallclaimmanagersfortheirendorsement.Oncethiswasdone,acopyofthefinal document was sent to every claim division employee. Zaki also announced plans to followup withanannualsurveytoevaluateeachclaimmanager'sperformance.Thisworriedthe

managers but most of them believed that the credo exercise was a result of Zaki's initial enthusiasm and that he would be too busy to introduce a survey after settling into the job.

One year after the credo had been distributed, Zaki announced that the first annual survey would be conducted. All claim employees were to complete the survey and return it confidentially to the human resources department where the survey results would be compiled for each claim centre manager. The survey asked the extent to which the manager hadliveduptoeachofthe10itemsinthecredo.ClaimCentremanagersweresurprisedthat the survey Zaki had promised a year ago would be conducted, but they were even more worried about Zaki's statement 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 subordinates? "We'll work out the details later," said Zaki in response to these questions. "Even if the survey results aren't great, theinformation will give us a good baseline for the next year'ssurvey.

The Claims division survey had a high response rate. In some centres, everyemployee completed and returned the form. Each report showed the Claim Centre managers average score for each of the 10 items and how many employees rated the manager at each level of the five-point scale. The reports also included every comment made by employees at that 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 above 3.0 (out of a five-pointscale)onmorethanacoupleofitems.Thissuggestedthat,atbestemployeeswere ambivalent about whether their Claims Centre manager had abided by the10 management philosophy items. The comments were even more devastating than the ratings. Comments rangedfrommildlydisappointedtoextremelycriticaloftheirclaimmanager.Employeesalso described their long-standing frustration with BRIC, high workloads, and isolated working conditions.SeveralpeoplebluntlystatedthattheywerescepticalaboutthechangesthatZaki had promised. "We've heard the promises before, but now we've lost faith." wrote one the claim adjuster.

The survey results were sent to each claim manager, the regional director, and employees at the Claim Centre. Zaki instructed managers to discuss the survey data and comments with their regional manager and directly with employees. The Claim Centre managers, who thought employees only received average scores, were shocked to learn that the reports included individual comments. Some managers went to their regional director, complaining that revealing the personal comments would run their careers. Many directors sympathized, but the results were already available to employees.

WhenZakiheardabouttheseconcerns,heagreedthattheresultswerelowerthanexpected and that the comments should not have been shown to employees. After discussing the situation with the regional directors, he decided that the discussion meetings between claim managersandtheiremployeesshouldproceedbyasplanned.Towithdrawthereportswould undermine the credibility and trust that Zaki was trying to develop withemployees.

However, the regional director in that area attended the meeting in each Claim Centre to minimize direct conflict between the Claim Centre manager and employees. Although many of these meetings went smoothly, a few created harsh feelings between managers and their

employees. The source of some comments was easily identified by their content, and this created a few delicate moments in several sessions. A few months after these meetings, two Claim Centre manager's quit and three others asked for transfers back to non-management positions in BRIC. Meanwhile, Zaki wondered how to manage this process more effectively, particularly since employees expected another survey the following year.

Question 1

Identify the pushing forces for change and the forces that restraining the change effort in this case (100 marks)