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1. Acknowledgement 2. Organizational Background 3. Company Profile 4. Organizational Chart (Organ gram) 5. Mission Statement 6. Vision 7. Strategy/ Objectives 8. Procedure 9. Departments 10. Government Policy: • • • • Corporate Governance Review Report of Corporate Governance Forty Fifth Meeting Auditor’s Report
11. Mega/Task Environment 12. SWOT analysis 13. Decision Making 14. Goal Setting Process 15. Quality Policy 16. Motivation 17. Organizational Social Responsibility 18. Technologies 19. Centralized/Decentralized 20. Recommendations 21. Conclusion
Our term report would have not been possible without the assistance of Mr. Mazhar Anjum, the general manager of Adamjee Insurance, who with his contacts made all our visits possible. We thank all the managers of Adamjee insurance who welcomed us and cooperated with us, resolving all our queries. Our group had to face different problems in different sections of our report which were resolved both in and outside of Adamjee insurance. We would also like to thank our fellow student, Noor ul Ain Abbasi, jehengir alam and Maliha Adil who took time off their studies to guide us through a few sections of our report. THE FOLLOWING ARE THE VISITING CARDS OF THE MANAGERS WE MET AT ADAMJEE INSURANCE.
ORGANIZATIONAL BACKGROUND OF ADAMJEE INSURANCE COMPANY (PVT.) LTD.
Adamjee Insurance Company Limited, the largest general insurance company of the country, was founded in 1960 by Mr. A. W. Adamjee. It was incorporated on 28th September 1960, Adamjee Insurance received its certificate of commencement on 30th November 1960. Adamjee Insurance issued its first policy on 5th December 1960. The first Managing Director of the company was Mr. Hanif Adamjee with Mr. D. W. Purnell as the first General Manager. In 1977, Mr. Mohammed Hanif Adamjee was elected as Chairman and Mr. Mohammed Choudhury joined as the Managing Director. With these changes Company entered into a new era of growth. The pace of growth picked up and the years ahead witnessed a phenomenal increase in business. This can be judged by the fact that at the end of 1976, the paid-up Capital of the company was Rs. 5.31 million while the Gross Direct Premium was Rs. 36.66 million. These figures at the end of 1998 rose to amazing figures of Rs. 390.37 million as Paid-up-Capital, and the Gross Direct Premium at Rs. 3,220.12 million. The net profit for 1996 was an envious Rs. 196.40 million. The Company has an extensive network of branches across the country. Till date 73 branches are functioning within the country, while seven are functioning abroad namely; Dubai, Sharjah, Abu Dhabi, in the UAE and Jeddah, Al-Khobar and Riyadh in Saudi Arabia. Dedicated and highly professional employees man these branches duly supported by technically sound executives and officers. Over 1500 dedicated employees
are the real assets of the company. The company has the largest reservoir of qualified personnel amongst the insurance industry.
Company Profile: Adamjee Insurance Company Limited (AICL) was incorporated as a Public Limited company on September 28, 1960 and is listed on Karachi and Lahore Stock exchanges of the country. The company is also registered with the Central Depository Company of Pakistan Limited. AICL is involved in general insurance business. The company started with a paid up capital of Rs. 2.5 million which has grown phenomenally to the current paid up capital of Rs. 826 million which is the highest amongst all the general insurance companies. AICL enjoys a competitive edge in the insurance industry due to its strong asset base, paid up capital, huge reserves, balanced portfolio mix, steady growth in gross premium and continuous increase in share price at the stock market.
B o a r d o f D ir e c t o rs
S a q ib E lla h i D irec to r A rif Ijaz M a n a g in d D i e c t o r & C h i e f E x e c u t i v e
S h a h z a d S a le e m D irec to r A b d u l H a m id A d a m jee D irec to r
M u h a m m a d N a e e m M u k h tar D irec to r A b d u l R a z z a k A d a m je e D irec to r
Ib ra h im S h a m si D irec to r W a sif M . K h an D irec to r
N a s r e e n R a h id D e p u t y M a n a g i n g D ir e c t o r
M u h a m m a d A li Z eb C h ie f F in a n c ia l O ffic e r
T a n e e z -u l-H a q u e S e c re ta ry
S e n io r G e n e r a l M a n a g e rs
G e n e r a l M a n a g e rs
G e n e r a l M a n a g e r s ( D e v e l o p m e n t)
S e n io r J o in t G e n e ra l M a n a g e rs
J o in t G e n e ra l M a n a g e r s(D e v )
J o in t G e n e ra l M a n a g e rs
D e p u ty G e n e r a l M a n a g e rs ( D e v )
D e p u ty G e n e ra l M a n a g e rs
A ssissta n t G e n e ral M a na g e rs(D e v )
A s s is sta n t G e n e ra l M a n a g e rs M ia n M u h a m m a d M a n sh a A d v iso r A u d itt C o m itte e
S h a h z a d S a le e m M em ber M u h a m m a d N a e e m M u k h tar M em ber
THE PLANNING PROCESS
Being the leading insurance company of Pakistan and Second best in Asia, our aim is to be a significant Participant in developing Pakistan's image by Providing maximum insurance protection at the most Competitive price in a highly efficient manner for Industrial and economic growth.
To remain the leading insurance company of Pakistan Excelling in every aspect of its business and in Delivering its obligations as a good corporate citizen To its clients, employees, shareholders, public and to The country.
Company’s Objective and Strategy:
To meet the challenges of 21st century due to change in global market and implementation of WTO, the company has set some defined objectives and strategy.
• • • • • Strengthen customer relationship through customer satisfaction by providing excellent service and quality products. Maintain a healthy balance between Profitability and Volume and have a balanced portfolio mix. Increase investment returns from its growing funds and absolute return strategy. Consolidate market share through offering new products and to focus our approach in areas where our presence is small. Establish modern management system and adopting latest techniques conforming to international standards needed for an efficient organization.
• To pursue strong growth: by adapting industry best practices and increasing economies of scale and through leveraging opportunities across the industry.
Development in Human resource through training and exposure to modern technologies and management techniques. Expansion of business and improving customer relationship management through wide network of branches locally and internationally.
• • •
Development in Information Technology to have an effective Management information system. Pursue best Reinsurance arrangements Establish effective Risk Management System
Our corporate responsibility focuses on compliance, ethics and corporate citizenship including overall sustainability and we have worked to advance these areas through enhanced communications, training and other initiatives.
Compliance and Ethics:
With regulation in most countries becoming most complex and extensive, there can be a business advantage for companies able to develop the capabilities and structures to meet these obligations more effectively and efficiently than their competitors. Our compliance strategy is based on this recognition, as well as on our commitment to do what is right. An important tool is our compliance performance standards that apply to our business and help advance common foundations and processes. We also work to deepen the
understanding of managers and employees regarding compliances and ethical obligations generally. These initiatives include multimedia awareness campaigns, specific training in detailed regulatory areas and learning initiatives related to areas such as conflicts of interest, business practices and ethical decision making.
Environment, Health and Safety:
It is the company’s policy to conduct business operations in a manner that protects the health and safety of all its employees and any third parties involved in its business. During the year under review the key focus was renovation of our branches and improvements to the lightning and air quality in all our offices. Major renovation has been carried out in our Punjab and Sarhad Zone, Clifton branch, West Wharf branch, health department, New Unit branch, Business Center and work is in process for renovation of our Corporate Division. The company does not have a major direct impact on the environment, as its business is office based. Nevertheless, the company is aware of the importance of environmental issues and is committed to measuring and reducing those impacts, which are within its ability to control.
Committed to Excellence:
We live in times of intense competition, but our key-differentiating factor is our unwavering commitment to operation and financial discipline in producing successful results, keeping our promises and meeting our customers’ needs.
A procedure is any plan that handles the future activity of the company. These are chronological sequences of required actions that the management enforces so that the goals are met.
• • • • •
The hiring procedures The operations procedures The way in which clients are handled The product development procedure The employee training procedure
A large variety of coverage is offered to the clients to fulfill their needs. Adamjee Insurance believes in customer satisfaction by providing quality in service and products and maximum benefits to its client. This is the reason why the company has a diversified portfolio of clients belonging to all categories. Most of the banks are insured by the company. AICL insures petrochemical and complex industrial risks of very high value. The company has a major share of engineering business in Pakistan. It provides Insurance protection to most of the private sector telecommunication industries. The company insures most of the textile mills, sugar mills and cement factories of the country. Adamjee Insurance pioneered the coverage of energy risks in Pakistan. Foreign concerns entering Pakistan to execute construction, erection or infrastructure development projects are insured by Adamjee Insurance Company (Pvt.) Limited. The company is the principal insurer in Pakistan for kidnap and ransom, Professional Indemnity, Product Liability and other specialized lines.
Adamjee Insurance is broadly involved in underwriting the following classes of business: • Fire and Property • Marine, Aviation and Transport • Motor • Miscellaneous business
These classes of business are described below: -
1. FIRE AND PROPERTY
Fire and Property includes business underwritten under the fire and engineering classes of business. The fire portfolio is currently being reviewed and special attention is being given to risk management and diversification in order to bring the claims ratio down to an acceptable level because of the heavy losses in 2005 which brought the deficit of 1.42 million rupees.
2. MARINE, AVIATION AND TRANSPORT
Marine, aviation and transport is one of the most profitable segments of Adamjee Insurance Company Limited. It contributes a major portion of the total underwriting profitability. In 2005, it showed a growth of 16% on overall basis and 27% in business underwritten inside Pakistan.
The motor portfolio currently constitutes almost 28% of the total business from inside Pakistan. Adamjee Insurance generated an underwriting profit of Rs. 77 million
during the year 2005 whereas the underwriting profit for business inside Pakistan is Rs. 120 million. The management of Adamjee Insurance has taken strict measures to improve the quality of business, increase profitability and to curtail the claims ratio by improving controls in the motor claims settlement procedure.
4. MISCELLANEUS BUSINESS
The miscellaneous class of business contributes almost 38% of the overall underwriting profit of the company. This segment has performed very well during the last couple of years.
STATEMENT OF COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE:
This statement is being presented to comply with the code of corporate governance (the code) contained in regulation No. 37 and chapter XIII, of listing regulations of the Karachi stock exchange (Guarantee) limited and the Lahore stock exchange (Guarantee) limited, respectively, for the purpose of establishing a framework of good governance, whereby a listed company is managed in compliance with the best practices of corporate governance. The company has applied the principles contained in the code in the following manner: 1. The company encourages representation of independent non-executive directors on its board of directors including those representing minority interests. At present the board includes eight non-executive directors.
2. The directors have confirmed that none of them is serving as a director in more than ten listed companies, including this company. 3. All the resident directors of the company have confirmed that they are registered as taxpayers and none of them has defaulted in payment of any loan to a banking company, a development financial institution or a non banking finance company and none of them is the member of any stock exchange. 4. One casual vacancy occurred during the year, one was filled in within one month. 5. The company has prepared a ‘statement of ethics and business practices’, which has been signed by all the directors and is in the process of being signed by the employees of the company. 6. The board has developed and approved a vision/mission statement. However, overall corporate strategy and significant policies of the company in vogue are in the process of being developed/ approved.
7. All the powers of the board have been duly exercised and decisions on material transactions, including appointment and determination of remuneration and terms and conditions of employment of the chief executive officer (CEO) and the executive director have been taken by the board. 8. All meetings of the board were presided over by the chairman of the respective meeting elected by the directors amongst their body. The board met at least once in every quarter. Written notices of the board meetings, agenda and working papers were circulated at least seven days before the meetings. The minutes of the meetings were appropriately recorded and circulated. 9. Most of the directors have attended orientation courses. Further, the directors of the company at the time of filing their consent to act as such, have given a declaration that they are aware of their duties and powers under the company’s ordinance, 1984, the listing regulations of the stock exchange and relevant laws. 10. The appointments of CFO, company secretary and the head of internal audit have been approved by the board. 11. The directors’ report has been prepared in compliance with the requirements of the code and fully describes the salient matters required to be disclosed. 12. The financial statements of the company were duly endorsed by CEO and CFO before approval of the board. 13. The directors, CEO and executives do not hold any interest in the shares of the company other than that disclosed in the pattern of shareholding. 14. The company has complied with all the corporate and financial reporting requirements of the code. 15. The board has formed an audit committee. It comprises of three members who are non-executive directors.
16. The meetings of the audit committee were held at least once every quarter for approval of results of the company except that the meeting could not be held to approve the final accounts for the year ended December 31, 2005 due to lack of 17. quorum. However, the members of the audit committee did communicate among themselves and with the management and external auditors on the issues relating to the financial statements for the year ended December 31, 2005 and approved the same. The terms of reference of the committee have been formed and advised to the committee for compliance. 18. The company has an internal audit department and is manned by experienced and qualified personnel. The audit team is fully conversant with the policies and procedures of the company and is involved in the internal audit function on a full time basis. 19. The statutory auditors of the company have confirmed that they have been given a satisfactory rating under the quality control review programme of the institute of chartered accountants of Pakistan, that they or any of the partners of the firm, their spouses and minor children do not hold shares of the company and that the firm and all its partners are in compliance with the international federation of accountants (IFAC) guidelines on code of ethics as adopted by the institute of chartered accountants of Pakistan. 20. The statutory auditors or the person associated with them have not been appointed to provide other services except in accordance with the listing regulations and the auditors have confirmed that they have observed IFAC guidelines in this regard. 21. We confirm that all other material principles contained in the code have been compiled with.
REVIEW REPORT OF THE MEMBERS ON STATEMENT OF COMPLAINCE WITH BEST PRACTICES OF THE CODE OF CORPORATE GOVERNANCE:
We have reviewed the statement of compliance with the best practices contained in the code of corporate governance prepared by the board of directors of Adamjee insurance company limited to comply with the listing regulation No. 37 of the Karachi stock exchange and chapter XIII of the Lahore stock exchange where the company is listed. The responsibility for compliance with the code of corporate governance is that of the board of directors of the company. Our responsibility is to review, to the extent where such compliance can be objectively verified, whether the statement of compliance reflects the status of the company’s compliance with the provisions of the code of corporate governance and report if it does not. A review is limited primarily to inquiries of the company personnel and review of various documents prepared by the company to comply with the code. As part of our audit of the financial statements we are required to obtain an understanding of the accounting and internal control systems sufficient to plan the audit and develop an effective audit approach. We have not carried out any special review of the internal control system to enable us to express an opinion as to whether the board’s statement on internal control covers all controls and the effectiveness of such internal controls. Based on our review nothing has come to our attention which causes us to believe that the statement of compliance does not appropriately reflect the company’s compliance, in all material respects, with the best practices contained in the code of corporate governance as applicable to the company for the year ended December 31, 2005.
NOTICE OF THE FORTY FIFTH ANNUAL GENERAL MEETING:
Notice is hereby given that the forty fifth annual general meeting (AGM) of the company will be held at the auditorium of the institute of chartered accountants of Pakistan, Chartered Accountants Avenue, G-31/8, Kehkashan, Clifton, Karachi on Thursday the march 30, 2006 at 3:00 p.m. to transact the following business: Ordinary Business: 1. To elect a chairman of the meeting. 2. To receive, consider and adopt the audited Accounts for the year ended December 31, 2005 and the Directors’ and Auditors; reports thereon. 3. To approve the 15% final dividend and 10% bonus share as declared by the directors. 4. To appoint auditors and authorize managing director and chief executive officer to fix there remuneration. The audit committee has proposed to appoint M/s A.F. Ferguson & Co. as auditors for the year 2006 instead of present joint auditors: M/s A.F. Ferguson & Co. and M/s M.Yousuf Adil Saleem & Co. 5. To transact any other business with the permission of the chair.
Special Business: 6. To consider and if thought fit to pass the following ordinary resolution.
“RESOLVED that pursuant to the Securities & Exchange Commission of Pakistan (SECP) Circular No. 19 of 2004 dated April 14 2004 (the circular) the directors of the company be and are hereby authorized to place the quarterly accounts of the company on the website instead of sending the same by post to members, subject to the fulfillment of the conditions contained in the circular including prior permission of SECP.” Notes: (a) The share transfer books of the company as notified earlier to remain closed from March 21, 2006 to march 30, 2006 (both days inclusive). (b) A member entitled to attend and vote at the annual general meeting is entitled to appoint another member as a proxy to attend and vote instead of him/her. (c) The instrument appointing a proxy must be received at the registered office of the company not less than 48 hours before the time appointed for the meeting. A member shall not be entitled to appoint more than one proxy. If a member appoints more than one proxy and more than one instruments of proxy are deposited by a member with the company, all such instruments of proxy shall be rendered invalid. (d) CDC shareholders are requested to bring with them their original national identity card or original passport along with the participant’s ID number and their account number at the time of attending the annual general meeting in order to facilitate identification of the respective shareholders.
AUDITORS’ REPORT TO THE MEMBERS
We have audited the annexed financial statements comprising of: (I) (II) (III) (IV) (V) (VI) (VII) (VIII) balance sheet; profit and loss account; statement of changes in equity; cash flow statement; statement of premiums; statement of claims; statement of expenses; and statement of investment income
of Adamjee insurance company limited as at December 31, 2005 together with the notes forming part thereof, for the year then ended, it is the responsibility of the company’s management to establish and maintain a system of internal control, and prepare and present the financial statements in conformity with approved accounting standards as applicable in Pakistan and the requirements of the insurance ordinance, 2000 (XXXIX of 2000) and the companies ordinance, 1984 (XLVII) of 1984. Our responsibility is to express an opinion on these on these statements based on our audit. We conducted our audit in accordance with the international standards on auditing as applicable in Pakistan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence made by management, as well as, evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion: a) proper books of accounts have been kept by the company as required by the insurance ordinance , 2000 and the companies ordinance, 1984; b) the financial statement together with the notes thereon have been drawn up in conformity with the insurance ordinance, 2000 and the companies ordinance, 1984, and accurately reflect the books and records of the company and are further in accordance with accounting policies consistently applied;
c) the financial statements, together with the notes thereon, present fairly in all material respects, the state of the company’s affairs as at December 31, 2005 and of the profit, it cash flows and changes in equity for the year then ended in accordance with approved accounting standards as applicable in Pakistan and give the information required to be disclosed by the insurance ordinance, 2000 and the companies ordinance, 1984; and d) Zakat deductible at source under the zakat and ushr ordinance, 1980 (XVIII of 1980), was deducted by the company and deposited in the central zakat fund established under section 7 of that ordinance. Without qualifying our opinion, we draw attention to note 12 to the financial statement which explain certain contingencies, the ultimate outcome of which cannot be presently determined. Accordingly, pending final resolution of the related matters, no provision has been made for any liability that may arise as a consequence thereof.
MEGA AND TASK ENVIRONEMTS
Adamjee exists in a mega environment that has many factors which can affect its standard. Those major factors are technological, economic, legal political, socio-cultural and international. Because these elements reflect major trends and conditions existing outside the organization, they tend to be beyond the ability of the single organization to affect or alter directly, at least in the short run.
At Adamjee, technology has a direct relation with our needs; it is a means for creating value and convenience for the customer. Over the last few years Adamjee has invested heavily into strengthening its technology backbone. Today it is leading the way in insurance technology and setting new standards for the insurance industry; penetrating into the local market, listening to the needs of the people and educating them on simple financial products and services that create. Technology continued to play an important role in improving and expanding product offering.
Our economy has made significant progress over the last five years; wide ranging structural reforms, prudent economic policies, financial discipline and continuity in policies have transformed Pakistan into a resurgent economy. The stage is now set for economic growth to accelerate with the private sector playing the private role The strong economic indicators and investment friendly policies have resulted in a buoyant performance of the financial sector. For the insurance industry, the year 2005 manifested an impressive growth of almost 20% resulting from positive changes in the industry, increasing competition and emergence of new entrants in the market supported by banks.
The Federal Government does not interfere in the activities of the company. State bank being the regular authority monitors all the activities of the company. For lending money, proper care and caution is exercised and all parameter as laid down under Prudential Regulations. Sate bank provides them with the rules and
regulations within which they have to work. The International branches of the company follow the rules and regulations of the respective government in which they are working.
Bank has to keep an eye on the social and cultural values of the societies in which it is operating. Bank seeks to continuously improve the quality of life in its communities, where they live and work. It realize that they have a responsibility to the society in which they operate and they seek ways of playing a positive role for the betterment of the community at large for a progressive environment, better living and a brighter future.
Adamjee insurance company is expanded to all over the country comprises from Sindh, Punjab, NWFP to Baluchistan. The branch network was expanded to Lahore and Multan during the last year and recently been extended to Hyderabad and Faisalabad and Peshawar to Quetta. Major renovation has been carried out in our Punjab and sarhad zone, Clifton branch, west wharf branch, health department, new unit branch, business center and in process for renovation of our corporate division. They also have branches in U.A.E and LONDON.
There are some important specific elements with which an organization interface in the course of conducting its business. Major elements in an organization task environment typically include customers and clients, competitors, suppliers, and government agencies. Each organization must assess its own situation to determine its specific task environment.
Customers and Clients:
For many years Adamjee has been building strong bonds with its customers. Its professional insights about their insurance needs have made them feel comfortable and well looked after. It responds to them, listening carefully to what they need and serving them with the best possible advice and service. Adamjee’s 45 years of banking excellence has been about giving its customers exactly what they expect. Be it financing for personal or business related needs, funds transfer and trade related facilities or a need for different type of deposit accounts, Adamjee make sure its services and products are customized to satisfy their individual needs. They are providing fire, motor, engineering and marine services to their customers. Recently they have started terrorism cover as well where they give back the terrorist attacked cars too.
There are many other insurance companies competing with Adamjee in the open market. Every insurance company is trying to promote its standard of products and services continuously in order to gain more customer satisfaction. Like, National insurance company limited, Angro general insurance co, EFU general insurance co, Orient insurance co. limited, ACE insurance co. limited and so on…
Company consists of those individuals who are potentially employable. Company organized written tests and interviews for the new comers. After recruiting, company keeps an eye on their progress and provides bonuses and awards according to their performance level in order to motivate them. High level managers have developed strong relationships with their employees by understanding their needs and by treating them with respect, dignity and importance to get best out of them. Company gives constructive feedback for their continuous development and seeks suggestions from all employees for further improvement. Company ensures that quality performance is acknowledged and rewarded and exercise utmost responsibility in decision-making with regards to their employees. Integrity of employees is the strength of company’s performance.
Adamjee’s strength lies in its customer services, public dealings and its ability to maintain customer loyalty. Inadequate number of branches across the city;
The opportunities for ADMJEE are in their two products; “car insurance” and “shipment insurance”. The presence of foreign and local companies and the emergence of new competitors.
DECISION MAKING PROCOESS
Decision that is made in routine, repetitive, well structured situations through the use of predetermined decision rules. The decision rules may be based on a habit, computational techniques, or established policies and procedures. Such rules usually stem from prior experience or technical knowledge about what works in a particular type of situation. As we are working on Adamjee insurance company. For certain types of situation they use programmed decision, for this they have predetermined decision rules and they follow according to these rules . For Example if a car accident case came to them they first assign a person of their organization to search for the accident whose fault is this, then they take photograph of the accident car, next the customer whose car is this have to give a written application and then they send this car to company and repair it. A person whom we met said that we have rules and regulation according to the situation and these rules depends upon situation.
Decision that are not made in routine, Decision for which predetermined decision rules are impractical because the situations are novel and or ill structured. Nonprogrammed decision usually involve considerable amount of uncertainty, a condition in which the decision maker must choose a course of actions without complete knowledge of the consequences that will follow implementation, Decision made under uncertainty involve risk, the possibility that a chosen action could lead to losses rather than the intended results. Adamjee Insurance Company also came to a situation where they have to take a Nonprogrammed decision. They also came to across certain problems or situation that are unique for them or
such problems that not reoccur in future. For example their network is not working, telephone service is not working, employee of organizations are on vacations and etc. They said that although these problems require an immediate decision but for this we don’t have rules because these problems are ill structured and are in random position. When the have to take a Nonprogrammed decision they are further faced to two problems i.e. Uncertainty in which they have incomplete information about problem and alternative solution, in this type of situation usually middle management of Adamjee Insurance Company take decision and while taking decision they face another problem i.e. Risk in which they are not sure that the outcome of decision will give them benefit or will further harm organization. For example they said that if our network is not working and our network engineer is on holiday we have to take an immediate action by appointing another engineer. This whole process is done so fast and this fast process will give a birth to two major problems that are uncertainty and risk while appointing another engineer we are unable to judge his knowledge and qualification as we have to appoint him fast to solve this problem and this leads to risk and we are unsure that this engineer will solve network problem or not.
Organization Rules and Regulations:
Adamjee Insurance Company has rules and regulations which they do not follow every time because it always depends upon situation what type of situation is it. As I have mentioned above that rules and regulations are follow according to situation. Adamjee Insurance Company has certain rules and regulations for certain types of situations. Like if there is a case of car accident they have certain rules and regulations and some formalities to fulfill, and if there is case of hotel accident like last year Village restaurant was burnt which was insured by Adamjee and for this case they have a set of rules and regulation.
Various Kinds Of Decision and who takes it:
Decision in Adamjee Insurance Company always depends upon situation. Different types of situation involves different managers in the hierarchy level to perform their job. Lower level managers take day to day routine decision like labor problem, electricity problem, water problem, machine is not working properly, and some other problems like this which does not involve middle level manager and top level manager. Employee in Adamjee organization who are in category of lower level managers are well prepared, skilled full and have well information about how to tolerate this kind of problem. In this organization lower level managers are trained for solving these kinds of problem, first they get training and then they are given position in the organization. Middle level managers take decision for departmental levels like some network is not working so how we will get information about market from our marketing agents, any member of lower level manager is asking for a increase in pay or he wants a bonus because he has some problem in future, and some others problems like this that do not involve lower level managers and top level managers. To solve these kinds of problem middle level managers are given guidelines from top level managers and in some cases they also get training to face these types of critical problems and in some cases they involve top level managers to give guidelines regarding these problems. Top level managers in this organization usually see organization as a whole and set goals of organization. They have given some power and authority to lower level and middle level managers so that every they don’t have to ask to the top managers for the decision, this type of management in Adamjee Insurance Company helps them to save a great deal of time. By every time asking to the top managers about every problem that occur in their organization will consume more time and sometime by taking late decision, the decision will neither give benefit or loss and many time it may lead towards losses and can create some other problem.
Authority given to lower level and middle level managers:
Till 1996, we have not given any authority to the lower and middle level managers to solve any kind of problem. They every time ask to the top managers to give them guidelines regarding that problem. In 1996, our some members of top management went to survey different organizations in the world. When they came back they call a private meeting in which every member of organization was called and then they brought revolutionary changes in the organization. In these changes include giving some authority and power to lower level and middle level managers so that they can take decision of their own and in this way they are more committed to achieve organization standards and goals.
GOAL SETTING PROCESS
Is the organizations target or future achievements they want to achieve. There are 3 different types of goals an organization may achieve. Goal helps an organization to increase performance, maintain standards and motivate workers.
The organizations target or future achievements set by the top management in Adamjee insurance these goals are set by the board of trusties or the general manager. They may include deciding what type of business the organization wants to be in. what type of insurance medium will keep Adamjee on the top of the market. Adamjee insurance has set strategic goals before succeeding such as Adamjee took a big market in new leased cars and affiliated with different leasing companies. In spite of some loss, Adamjee stayed in business and after a few years the number of cars leased increased so much that Adamjee gained prophet over night.
Tactical goals are future target or achievements set by the middle managers for a particular department. Adamjee insurance has given us with a few examples like every department in Adamjee has a separate goal. It may be a time limit, number of clients or business given by the department. Each department has to meet with the demands of the goal.
Operation goals are future targets or achievements set by the first class managers for nonmanagerial employees on the lower desk. Operation goals are mostly made for marketing employees in Adamjee insurance. They are responsible deal with all the millions of clients Adamjee has. As goals help maintain performance, operational goals help Adamjee with a good service in the market.
CONTENTS OF GOAL:
S A R T
PECIFIC: Adamjee insurance makes sure that their goals are specific so that
their employees know what and how o achieve. Making goals which are not specific is useless as managers don’t know how to react on them.
EASURABLE: Goals made in Adamjee are measurable which means
they are easy to asses as they clearly state how much to put effort and how much the organization expects for the manager
TTAINABLE: The goals are always attainable. Expecting unattainable
things from your managers is not applicable. Goals are clearly attainable but it is expected by the manager to come forward and work hard to achieve those goals.
The goals at Adamjee Insurance are relevant which apply to
different departments or projects. Making goals just for the sake of keeping ones employees busy is not the organizations target. Goals are made to meet the excellence of the market.
goals at Adamjee are made with a specific time span.
Every goal given to any department is given with a time limit in which the goal should be achieved. This helps the organization maintain performance in each department and keep the employees motivated.
How is quality managed at the organization? Adamjee Insurance Company Ltd. – Quality Policy: “We sell non life insurance. Our overriding objective is to satisfy our customers by meeting their agreed requirements. Their satisfaction is our success. We believe that we can achieve our objective only through faithful implementation of a well designed quality management system, a system, which is continuously reviewed and improved with an objective to serve the interest of all concerned – the customers, the shareholders, the employees and the suppliers.”
• • • • • Excellence in all areas Ethics, integrity and mutual respect Merit and performance based rewards Continuous professional development Trust and cooperation
We can see above that Adamjee Insurance Co. wants to provide its customers and other affiliates with the best quality of work. They have developed a quality management system which is used a base for quality service within the organization. Adamjee’s quality policy comforts the customers, shareholders, employees and suppliers belief that Adamjee is a quality organization willing to give their customers the best they can. The core values of Adamjee prove to us what a dedicated organization it really is. Adamjee wants to excel in all areas that it works in, and wants to
Do it ethically with integrity and mutual respect. Rewards are given based on performances and these rewards can motivate employees to do their best, thus providing customers in return with great quality. Not only this, but Adamjee has built itself on trust and cooperation with the people it does business with.
How are employees motivated within the organization? At Adamjee it is believed that the motivation of employees is a major factor that can bring enormous good to the organization itself. Encouraging employees to achieve short term and long term goals and helping them overcome obstacles that may be encountered on the way can motivate employees to excel to their personal best. Adamjee uses the reinforcement approach for motivation; the psychologist B. F. Skinner pioneered this approach. According to the reinforcement theory, our behavior can be explained by consequences in the environment, and therefore, it is not necessary to look for cognitive explanations. Instead, the theory relies heavily on a concept called the law of effect, which states that behavior having pleasant or positive consequences are more likely to be repeated and behaviors having unpleasant or negative consequences are lest likely to be repeated. There are four types of reinforcements in this theory, positive reinforcement, negative reinforcement, extinction and punishment. Of these four types, two are used quite often at Adamjee. Firstly, positive reinforcement is a technique that is aimed at increasing a desired behavior. It involves providing a pleasant, rewarding consequence to encourage that behavior. At
Adamjee this sort of reinforcement is quite common, when managers want a certain behavior to be repeated, they appraise the performance and sometimes give incentives and rewards that motivate employees to further excel. Another type of reinforcement that is used at Adamjee is negative Reinforcement. This is a technique that is aimed at increasing a desired behavior. This involves providing unpleasant stimuli so that an individual Will engage in the desired behavior in order to stop the unpleasant stimuli. For example, when an employee fails to accomplish a certain task on time, managers give him/her a hard time so they realize their mistakes and make sure they don’t repeat them. At Adamjee, employees are made to feel like members of a big family. Constant talks between managers and employees lead to a mutual friendship and therefore motivated employees. Performances are appraised on a regular basis, and outstanding performances are recognized throughout the organization, thus leading to motivation and a better internal environment for Adamjee.
How is the firm engaging in social responsibility? Adamjee is well known for its “Adamjee Trust” organization. This is an organization established by Adamjee which engages in social responsibility whenever possible. This organization donates millions of rupees each year to charity, and whenever it can lend a helping hand to the people of Pakistan, it does. From aiding earthquake victims of October 8th, 2005, to helping poverty stricken kids get an education, Adamjee Trust is by far a leading organization in Pakistan that has engaged in organizational social responsibility. Adamjee is constantly seeking actions that protect and improve the welfare of society along with its own interests. The major
Perspective that is used by Adamjee is that of the “Hand of Management”. Hand of Management is a view that states corporations and their managers are expected to act in ways that protect and improve the welfare of society as a whole as well as advance corporate economic interest. Social responsibility is not only meant for externalities, but can be touched upon within the organization itself. Helping employees within an organization is also a top priority, as it has a positive affect on the Organization itself, both in the short and long run. At Adamjee, employees are treated very well and given working conditions that they can be appreciative of. Employees are able to dwell upon certain problems that they might be facing with managers, and are able to seek help whether it is financially or mentally. Each employee is looked after to make sure that he/she can live have comfortable lifestyle with the salary they earn, making Sure they have a house, a ride, and the most important thing, three meals a day. Lastly, Adamjee is always sponsoring and hosting events such as concerts, gatherings, and charities. Apart from raising funds and donating money, they engage in various activities to help the needy. Such events are held to raise money for the entire community. They have spread awareness of diseases such as HIV and cancer in order to protect our country and people, and Adamjee believes that education is the biggest form of charity one can give, thus helping thousands of poverty stricken children go to school. Such big events can easily bring in tons of money, which is then invested into a better future not only for Adamjee, but also for the whole of Pakistan.
Elaborate on the different technologies used. Since Adamjee is an insurance company, the only technology they are currently using is IT (information technology). Computers are needed to save, store and record data that can be accessed when required. Everything is done on computer, and customers’ information is stored within the pc so that it can be accessed at a later time. When a customer first goes to get insurance for anything, an account is made for them including their age, name, ID number, and phone number, etc. so that they can easily be contacted if required. All information between employees and managers is passed through computers as well since a network has been created at each branch, thus Allowing all computers to access a particular piece of data at one time. These computers are basically used for storing and sharing data and making communication easier and faster within the organization.
CENTRALIZED / DECENTRALIZED
Is Organization centralized or decentralized? The Adamjee insurance company operates in so many different fields that it gets tough for the top management to participate in decision-making, especially in the time of emergencies and other discrepancies. With so much going on and all kinds of insurances, the company has spread to various countries within the gulf region as well. With such a widespread firm like Adamjee, it’s quite impossible not to be decentralized. When the firm takes decisions such as moving locations, opening a branch, going international, coming up with new policies, all of these decisions are discussed at the top level of management with the CEO, the director, etc. These decisions require time to make, and so top-level managers do have enough time to discuss the positives and negatives a decision will have on the firm. On October 8th, 2005, a disaster struck in the North of Pakistan. Hundreds and thousands of people were displaced and many lost their lives. During such a crisis problem, Adamjee knew what was to be done. The green light was given, and straightaway blankets, pillows, clothing, food items, and Medical equipment was donated to help ease the pain the victims were suffering from. Adamjee Trust gave millions in charity to save lives. Other decisions do not require immediate action; in this case time is given to employees and managers to analyze the situation and take the best action possible. However, in every day-to-day routine, if some discrepancy does arrive, the authority is decentralized enough for lower level and middle level managers can take actions. Depending on the size of the problem and the immediacy, everyone gets their share of taking actions necessary to prevent problems from springing
into great risks. The reason why authority is decentralized so is because Adamjee believes that, when employees and other managers are given responsibility, they feel a certain need to do what is best for their organization. With power over decision-making, employees can feel motivated and can work together to come up with the best solution possible, thus enhancing teamwork and mutual respect amongst the group.
RECOMMENDATION AND CONCLUSION
We recommend Adamjee to continue its operation all over the country. Other companies might have restricted their operation to a city or two, but Adamjee has its operation in nearly every city of Pakistan. Motivation of employees is also what we find a positive factor in Adamjee’s operation. Their employees work hard to achieve the organizations goals and they are also rewarded with incentives which motivates them to help Adamjee to the top. What Adamjee lacks is the customer service at a few departments. Agents should reach the client themselves and solve their queries. Work has to be searched in a country like Pakistan where unawareness is a big factor. If Adamjee employees reach the people and explain the need and benefits of insurance like fire incident insurance, Adamjee will surely increase its business. Another thing we noticed is that Adamjee has a very low advertising sector. Advertising is an important asset for a company operating in Pakistan along with competitors as people of Pakistan never survey for a matter. They would call the first insurance company which comes in their mind which is done only through advertising which Adamjee lacks. Adamjee has a good future in Pakistan growing its operation and leading the insurance business.
We after weeks of study and visiting Adamjee insurance find Adamjee as the leading insurance company of Pakistan. Surely there are others in the market that is competitive enough like AIG insurance, but what we find in the statistics of Adamjee could not be found in any other insurance company. The numbers of cars running only in Karachi are the highest number of cars insured by any other insurance company. The amount of risk Adamjee takes insuring small business and arranging ransom money for kidnapping insurance cases is not taken by any other which makes them unique in the market.
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