JohnHancock - Background and Relevant Facts The John...

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Background and Relevant Facts The John Hancock Mutual Life Insurance Company, formed in 1860, used prudent business strategies to grow by 1980 into a company worth $18.8 billion in assets -- the sixth largest insurance firm in America. Unfortunately, by this time its strong leadership position in the industry faced hazards on multiple fronts that threatened to topple it. These included "inflation, high interest rates, competition, alternative investment opportunities, deregulated institutions, high costs, and obsolete products." The age and large size of the company -- over 20,000 employees with 5,000 of them in the head offices -- had cultivated "a top-down, conservative, and somewhat ponderous" corporate culture. After much internal haranguing, executive leaders of the company finally decided to create the Inflation Strategy Task Force (ISTF). Executives composed the ISTF of "eight men [representing] different special areas of interest and expertise" within the company. The ISTF officially found itself assigned "to determine: (a) the best eventual configuration for [the company's] product organization [. ..]; the main outlines of the products that this organization will most likely sell and administer; (c) the principles of an appropriate compensation profile for such products [and] the best strategy for transition from our present organization and product lines to those formulated by actions described [earlier]." In its initial report to the executives, the ISTF stated that it had divided the cluster of tasks related to its purpose among its eight members and their respective department staff. It would then complete its purpose in three subsequent phases. However, it became apparent to many by Phase I that the ISTF had mired itself in poor processes that jeopardized achievement of its purpose. According to ISTF member Jim Thompson, "We do not have a problem with what we are trying to do as much as we have a problem with how we are trying to do it."
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Problem Definition The Inflation Strategy Task Force (ISTF) at the John Hancock Mutual Life Insurance Company, formed for the purpose of developing the best possible strategy for reshaping the company to meet the financial demands of the new economy, suffers from serious process deficiencies that currently impede it from achieving its stated purpose. Relevant Theories and Models
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JohnHancock - Background and Relevant Facts The John...

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