DECEMBER 04, 2013: Letter of Transmittal

PRINCIPLES OF MANAGEMENT JUBILEE INSURANCES
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LETTER OF TRANSMITTAL

DECEMBER 04, 2013

Miss Ume Sumayya
Faculty Member,
Iqra University,
Defence View (Ext),
Karachi Pakistan.
Respected Madam,
We students of BBA hereby present the report that you asked for to submit on 04/12/2013 as
part of the course requirement in Principles of Management which is a completion of all the
hard work we have to put together during the course of the semester.
We have done our best to present you with comprehensive, reliable and valid information from
the concerned authorities of NEW J UBI LEE I NSURANCE.
We hope that this report meet your expectations. But being students, this analysis by us may
contain certain deficiencies.
We look forward for your favorable response for this report.
Yours truly.
SYED SALMAN MOHIUDDIN (22712)
UROOJ TABANI (22028)
BARKHA KHUBCHAND (20569)
JEHANZEB MAJID (20658)
NAJIYA KHALANI (20977)


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ACKNOWLEDGMENT

We would like to extend our genuine regards to our teacher who has
guided us for this report, without such great and immense co-operation
the task would have been a cumbersome one. All these people who
ultimately proved to be catalysts include our ever-helping teachers,
colleagues and friends.
In this regard we would like to point out the exceptional supervision
bestowed by Miss Ume Sumayya for extending her help and co-
operation throughout the dissertation, her guidance is priceless not only
for present but also for the even challenging times ahead.
And last but not least, we thank Almighty Allah to whom we must ask
and to whom we must seek for help and guidance.


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SUMMARY

To sum up, this report deals with the practical application of general principles of management
on New Jubilee Insurance. For several years, New Jubilee insurance has been in the business of
providing us with a better life; a life of safety and security. Departmentalization occurs in the
company in five ways such as functional, geographical, product, process, and customer
departmentalization. The company manages its people through establishing core values to be
followed across all levels. Their core values include; teamwork, integrity, excellence, and
passion. In Jubilee General insurance, effective teamwork certainly does not just happen
automatically; it takes a great deal of hard work and compromise. Similarly integrity for the
company means being morally correct in all your endeavors. Management of the company
divides the employees into cross functional teams. These types of teams are useful when this
company needs to bring together expertise to solve an issue, or to explore potential solutions.
However, setting up a cross-functional team sometimes brings difficulties. But Jubilee General
Insurance overcomes these challenges by setting objectives early on, and by getting its team, and
key managers, to agree to them. In jubilee insurance cross cultural teams usually perform these
tasks, such as; in new product development, in establishing a goal, in working with key
stakeholders, and in managing and reducing conflict. Weve also done the SWOT analysis of the
company. The organization culture includes, low stability, high outcome orientation, high people
orientation, high team orientation, high innovation and risk taking. Span of control across the
organization maximizes through efficient use of information technology, training, and specific
work designs. The management of the company establishes strategic boundaries for the
employees to direct their goals within the business goals of the company. Despite of setting
strategic boundaries, management faces strategic uncertainties also. At this crucial time,
management trains its employees to adaptive to strategic changes in order to survive in
competitive environment. There is no any concept of employee commitment to the
organizations success as everyone works there for self interest. Due to vertical hierarchy
structure and mechanistic organization, tasks for each level of employees are specifically
designed and defined by the management. Top down communication system is implemented
effectively across the organization. The organization is based on centralized system mainly but to
some extent decentralization occurs so that the employees can meet their own objectives and
goals. At last, in New Jubilee Insurance being a centralized organization, all feedback reports are
related and generated by functional directors. Thus, annual reports are given out to overcome
weak points and reach maximum management success.


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TABLE OF CONTENT

S.NO TOPICS PAGE #
1 COMPANY DESCRIPTION 5
2 MISSION ,VISSION AND VALUES 6
3 CROSS FUNCTIONAL TEAM 7
4
S.W.O.T ANALYSIS ( strengths& weakness )
9
5 S.W.O.T ANALYSIS ( threats & opportunity ) 9
6 ORGANIZATIONAL STRUCTURE 11
7 ORGANIZATIONAL CULTURE 12
8 SPAN OF CONTROL 13
9 STRATEGIC BOUNDARIES 14
10 STRATEGIC UNCERTAINTIES 14
11 EMPLOYEES COMMITMENT 15
12 AFFECTS OF ORGANIZATION SIZE ON DESIGN 15
13 FACTORS INFLUENCES CENTERLIZATION AND
DECENTERLIZATION
16
14 MECHANISTIC ORGANIZATION AND FORMALIZATION 17
15 RECOMMENDATION 18
16 CONCLUSION 20


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COMPANY DESCRIPTION

Established in 1953, JUBILEE GENERAL (formerly Jubilee General - New Jubilee Insurance Company
Limited) is one of the brightest and most reputable names in the insurance sector.
Sustained growth over half a century has secured JUBILEE GENERAL a place among the Big Three
Pakistani insurance in terms of gross direct premium and financial base. JUBILEE GENERAL is listed on
the Karachi & Lahore Stock Exchanges. Major shareholders include Aga Khan Fund for Economics
Development and Hashoo Group. JUBILEE GENERAL, with its Head Office in Karachi, has an
extensive and dynamic branch network in all major cities and towns of Pakistan that guarantees prompt
service at the customer's doorstep.
The company prides itself in its long-standing reinsurance arrangements and relationship with
international renowned reinsurers such as Swiss Re, Munich Re, Lloyds, Hannover Re and Mitsui
Sumitomo Re. The company is also supported by internationally acclaimed reinsurance brokers including
AON Group, Willis, Marsh and UIB.
In 2003, JUBILEE GENERAL became the first Pakistani insurance company to acquire a foreign
company when it took over the Pakistan operations of Commercial General Union. Together with
AKFED, JUBILEE GENERAL also acquired majority control of CU Life Assurance Company of
Pakistan Ltd.
At JUBILEE GENERAL, diversity is maintained through underwriting all classes of general insurance
including fire, marine, motor, engineering, health and general accidents. JUBILEE GENERAL not only
offers wide risk coverage, but also provides related risk management services delivered by highly
qualified and experienced risk managers. JUBILEE GENERAL has developed unique and innovative
insurance solutions to meet the growing consumer financing trends of economy. From auto financing to
personal loans, mortgages to plastic cards, and trade finance to capital investment finance, JUBILEE
GENERAL has the customized solutions to secure entire operations. Product range and transactions of all
financial institutions.


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VISION, MISSION & VALUES

VISION
To enable people to overcome uncertainty.

MISSION
To provide solutions to protect the future of our customers.

CORE VALUES

Teamwork
Integrity
Excellence


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CROSS-FUNCTIONAL TEAMS

In jubilee insurance cross cultural team divided as follow,
NEW PRODUCT DEVELOPMENT.
ESTABLISHING A GOAL.
WORK WITH KEY STAKEHOLDERS.
STEPS TO MANAGE AND REDUCE CONFLICT:

NEW PRODUCT DEVELOPMENT.

Jubilee insurance have been able to use cross-functional teams to reduce the cycle time in new product
development. As a result, CFTs have become a common tool in new product development at NJI,
especially in insurance industries in which rapid change and innovation is the norm. CFTs have shown the
flexibility to adapt to changing market needs and the ability to more quickly develop innovative products.

In the past, new product development invariably meant gathering data sequentially from a number of
departments before a new product was given the green light. First, the idea would be conceptualized.
Then, it would be handed off to the marketing department, which would conduct market research to see if
the product was viable. The product might then be passed on to the sales department, which would be
asked to create a sales estimate .Finally, with all those numbers gathered over the course of months, or
even years, the product would move to an executive committee which would either approve or kill the
project. By that time, market conditions sometimes had shifted sufficiently to render the product obsolete.

ESTABLISHING A GOAL.

when goal-setting is to be sure to identify key interdependencies on the team does one team
member have to finish his or her part of the project before another team member can get started. It
is essential to know these sequential steps before a team gets too deep into its project.


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WORK WITH KEY STAKEHOLDERS.
When identifying all stakeholders, we determine what level of representation each needs on the
team. Some groups will need permanent members, others may only need to participate in certain
areas of the project. Communicate with all stakeholders and anyone else in the company who is
affected by the team's work. Do not spring surprises this will make people resistant to the work that
the team is trying to achieve. Communication steps should be decided upon up front and planned
as carefully as any other part of the project in insurances industry.
Jubilee insurance, one of the leaders in CFTs, has expanded the stakeholder idea. When it used to
create a CFT, Jubilee insurance followed the traditional model and appointed only those people
whose roles were crucial to the process at hand.
STEPS TO MANAGE AND REDUCE CONFLICT:

Provide all team members with conflict resolution training. Conflicts can have value if managed
properly, so improving team members' listening and consensus building skills is necessary.
Human resources personnel of NJI is involved in the team-building process to help teach
facilitation and group dynamics skills.
Disregard the rank or perceived status of each group member and have standards in place that put
For cross-functional teams to succeed, several factors have been identified that are imperative: (Source
google)
Team members must be open-minded and highly motivated.
Team members must come from the correct functional areas.
A strong team leader with excellent communication skills and a position of authority is needed.
The team must have both the authority and the accountability to accomplish the mission it has
been given.
Management must provide adequate resources and support for the team, both moral and
financial.
Adequate communications must exist.
Without any one of these elements, any cross-functional team will be fighting an uphill battle to succeed.


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SWOT ANALYSIS

STRENGTHS:
The joining of experienced people, advance management, advance set up and facilities
gave NJI Co.Ltd an edge over its competitors.

Enjoying economies of scale.

Good will in the market.

Strong financial position.

Long standing clients.

Experienced owners

Organization gives opportunity to this employees for career path.

Have strong distribution channel in Pakistan.

Variety of Products.

WEAKNESS
Majority of people are not well aware about NJI Co. Ltd.s product, so it needs extensive
advertisement

Employees discriminate customers on the basis of their status.

Less Incentives to Lower level employees

The furniture available at the branch is not sufficient to occupy a larger number
of people at a time in the branch.

Limited area covered (only major cities are insured)

No segmentation of market

.


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OPPORTUNITIES

Used Latest IT Technology

Hire insurance experts from other countries

Explore unidentified market segments

Agriculture and live stock market.

THREATS

Change in government policies

The competition has become sever by the entrance of new companies.

The decrease in the purchasing power of people in the current economic situation
affecting the business activity speed.

Facing tough competition in market.

New business practices rules and regulations by SECP / Government sectors

High risk in insurance business

Many new insurance companies are entering into the market which are backed by strong
banks that can create problems for NJI.

Govt. allowed foreign insurance companies to start business in Pakistan that can also
affect the whole procedure.


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ORGANIZATION STRUCTURE

MANAGEMENT MARKETING

BOARD OF DIRECTORS
SENIOR EXECUTIVE VICE PRESIDENT
ASSISTANT EXECUTIVE DIRECTOR DEPUTY MANAGING DIRECTOR

DEPUTYEXECUTIVE DIRECTOR

EXECUTIVE DIRECTOR

SENIOR EXECUTIVE DIRECTOR

MANAGING DIRECTOR
JOINT MANAGING DIRECTOR

SENIOR DEPUTY MANAGING DIRECTOR

EXECUTIVE VICE PRESIDENT
EXECUTIVE DIRECTOR

DEPUTY EXECUTIVE DIRECTOR

SENIOR EXECUTIVE DIRECTOR
ASSISTANT EXECUTIVE DIRECTOR

ASSISTANT VICE PRESIDENT

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ORGANIZATIONAL CULTURE

Contrasting Organizational Cultures of NEW J UBI LEE I NSURANCE .

DIMENSION ORGANIZATION REASON
STABILITY LOW They are dynamically change their policies
according to the environment and adopt the
changes that occur in the market.
OUTCOME
ORIENTATION
HIGH Jubilee Insurance Company posses outcome-
oriented cultures as those that emphasize
achievement, results, and action as important
values
PEOPLE
ORIENTATION
HIGH The vision of New Jubilee Insurance Company IS,

To enable people overcome uncertainty
TEAM
ORIENTATION
HIGH According to the values of an organization which
is mention in annual report.

They are are collaborative and emphasize
cooperation among employees.
INNOVATION
AND RISK
TAKING
HIGH Economic and Political Risk, Market Risk,
Insurance Risk, Reinsurance Risk.

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SPAN OF CONTROL

Method to maximize the span of control in NJI are as follow.
Information technology:
Use of efficient communication tools like online wikis,videos,project management and tracking
tools and other decision support systems can reduce the overall relationship complexity, thereby
encouraging our managers to supervise more subordinates.

More training:
Investing in training the employees for the current job skills and also future skills makes them more
independent is the goal of NJI. Constantly involving the employees in various training not only
increases the collective intelligence within the organization but also results in readily available
resources.

Work design:
If the task are designed to be independent , closely coupled with few interdependencies and
probable conflicts, the relationship complexity can be reduced.


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STRATEGIC BOUNDARIES

Every strategy brings with it the risk that an individual's actions will pull the business off
course. Here again, it's easy to fail to inoculate the business against this risk. As we will
see, the trick is in setting clear boundaries.
Controlling strategic risk is the fourth implementation imperative. Strategic boundaries
which are always stated in the negative ensure that the entrepreneurial initiative of our
employees aligns with the desired direction of the business. Strategic boundaries can also
protect us from the types of errant actions.
STRATEGIC UNCERTAINTIES

No matter how good our current strategy is, it won't work forever. There will be booms
and busts, customer preferences will change, competitors will introduce new products,
and disruptive new technologies will emerge in unexpected places.
This brings us to the final implementation imperative: adapting to change. Adapting is
critical to survival, but it's extremely difficult to do. With change constantly surrounding
us, employees often do not know where to look or how to respond.


15

EMPOLYEES COMMITMENT

It's critically important to build norms so that people will help each other succeed,
especially when you're asking people to innovate. But there are exceptions. our
organization built on self-interest, with every man or woman working for him- or herself.
I suspect that the choice between commitment to help others and self-interest is deeply
ingrained in our organization, yet has never been discussed. But if we haven't addressed
this choice explicitly and worked to make it happen, we have to increased the potential
that our strategy implementation will fail.

AFFECTS OF ORGANIZATIONAL SIZE ON THE DESIGN

As an organization grows, however, it becomes increasingly difficult to manage without
more formal work assignments and some delegation of authority. Therefore, We develop
formal structures. Tasks are highly specialized, and detailed rules and guidelines dictate
work procedures. Inter-organizational communication flows primarily from superior to
subordinate, and hierarchical relationships serve as the foundation for authority,
responsibility, and control. The type of structure that we develops will be one that
provides the organization with the ability to operate effectively.


16

FACTORS INFLUENCE DECENTRALIZATION

Decentralization has value only in NJI to the extent that it helps organization members
achieve their objectives. In determining the amount of decentralization appropriate for an
organization, the following factors are usually considered:

1. Environmental influences such as market characteristics , competitive pressures, and
availability of materials

2. The organizations size and growth rate

3. Other characteristics of the organization, such as costliness of given decisions, top
management preferences, the organizations culture and abilities of lower level managers.

FACTORS INFLUENCE CENTRALIZATION

A process where the concentration of decision making is in a few hands. All the
important decision and actions at the lower level, all subjects and actions at the lower
level are subject to the approval of top management i.e board of directors of NJI. The
implication of centralization in NJI is as follow:-
Reservation of decision making power at top level.
Reservation of operating authority with the middle level managers.
Reservation of operation at lower level at the directions of the top level.


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MECHANISTIC ORGANIZATION

Following are the key elements of mechanistic structure in NJI,

1. Work tasks are specialized into separate parts
2. Tasks are rigidly defined (high formalization)
3. Strict hierarchy of authority
4. Centralized decision-making and control
5. Vertical communications.

FORMALIZATION IN ORGANIZATIONAL DESIGN

Communication is important part of each and every organization therefore our
organization take care about smooth flow of communication to ensure the innovation
and efficiency in the performance of employees.
NJI have a centralized and formal organization structure that is designed on the top to
down approach with strictly defined work roles..
Organization structure can be department based or project based , NJI is having
department base organizational structure. Our organization structure is divided into line
function and staff functions to encourage smooth flow of communication.
Chain of command in NJI is design to determine the important names and their roles in
the organization. We have multiple leaders they are divided to overall organization
according to their qualifications to promote better workflow.


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SUGGESTIONS AND RECOMMENDATIONS

NEW JUBLEE INSURANCE is one of the leading Insurance companies
in Pakistan. After working on this report it true to say that the NEW JUBLEE
INSURANCE is well-managed, well organized company. The management has complete
control over its working staff. All the departments in the company are well designed. And
the Human resource is quite efficient, which is the major cause of success of the company
in the market .But in spite of all the factors; there are certain areas on which the company
needs to give mor e c onc e nt r a t i on . On t he ba s i s of t he i r ma r ke t pl a c e ,
SWOT Ana l ys i s t he f ol l owi ng recommendations are suggested:

Employees are less, should hire more people to lessen the over burden of
workload.

Salary should be revised.

Technical training must be conducted periodically.

The y s houl d hi r e mor e e duc a t e d s a l e s f or c e t o e nha nc e t he
c us t ome r s uppl i e r relationship.

More and more branches should be opened, particularly in the rural areas.

More and more focus should be given to enhance public image and goodwill
through superior customer services and interaction.

The ma na ge me nt of t he c ompa n y i s hi ghl y c e nt r a l i z e d. I n
or de r t o i nc r e a s e t he performance of the employees they should be
actively participated in the decisions making of the company.

The prices of the products of the company are so high which are just
in the range of the limited Market Niche. So in order to increase the
local sales the company must go for the low pricing strategies for its product.


19

For be t t e r pr oduc t i vi t y, t he hi ghe r ma na ge me nt mus t c onduc t
pr ope r s e mi na r s , workshops for all the employees so that they can have up-
to date knowledge and they would be able to increase their skills.

The company should have all sorts of policies in well defined, clear cut written
form so as to be more specific and compare the performance with established
goals. This i s ve r y c r uc i a l i n t he mode r n c ompe t i t i ve i ns ur a nc e
s c e na r i o s o a s t o r e move a l l deficiencies.

Today is the age of marketing. The more strong will be the marketing
of a concern ,the more will be the busi ness. So NJI should heavily
emphasize on its marketing policies. In this way, bank can also establish
its creditability in the eyes of public and can tell them about
its offering. Advertisement should run on TV, and in newspapers.

Monetary incentive should be given to employees to enhance their motivation
level. Such t ype of incentive increase their work efficiency which
would be beneficial for the bank in future. I hope if all above mentioned areas
will be taken care off them it will change things a lot and will open new ways of
prosperity and profitability for company


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CONCLUSION

At present there is no such organization in the world that is free from problems and
challenges. Every concern has to strive and struggle a lot to be more profitable and to get a more
competitive edge. Improvement and advancement is crucial with every step and
with the every minute passing. Especially insurance sector internationally and in
Pakistan is f aci ng huge c hal l e nges a nd s i mul t ane ous l y
get t i ng huge oppor t uni t i es t o avai l . The competition is great in this regard.

Only those insurance companies will succeeded which will strive for best. But NJI
Limited is making as much struggle and effort to be profitable .Its relative ranking in the
world in its country of origin and in Pakistan reveals the facts that where it is
standing. It is facing a lot of problems. Some problems are due to changing
political and economic structure but many problems are due to negligence and
inefficiency of management. Some of these problems are very minor but these are the areas
which make a difference in this competitive scenario.

All these matters should be seriously taken care off. It will be so then it can
be hoped that in future the relative ranking, its policies financial position and all
other areas of NJI will improve and in future the picture will be quite different
.There are some minor problems also these are the things which definitely make a
difference. Today, the foreign companies and local companies in Pakistan
are introducing new ideas, they providing their employees with extended facilities
in order to keep their morale high and to full motivate them. But these are the
things which are lacking in NJI Zonal Office. I think that if these problems will be
solved, then employees will be more motivated, more efficient and more
productive. Not only the employees but the general public will also be attracted
and profitability will definitely improve.

DECEMBER 04, 2013: Letter of Transmittal

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PRINCIPLES OF MANAGEMENT JUBILEE INSURANCES

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