Category: Business 11471

SWOT Analysis

PEST Analysis

• Political: Low importance. The political climate does not affect the production or sales of beer, though numerous laws govern these activities.
• Economical: High importance. Craft beer is a premium product that primarily appeals to people with high incomes. Therefore, sales strongly depend on the economic status of the populations where it is being sold.
• Social: Medium importance. Craft beer is associated with a specific social image of supporting local businesses, preferring quality, and having unique tastes. As such, its appeal is dependent on the prevalence of such trends in the local social climate.
• Technological: Medium importance. Most of the techniques used to brew beer are centuries or millennia old and do not require advanced technology. However, craft beer companies can use new equipment to differentiate their products from those offered by the competition.

Porters Five Forces

• Competition in the industry: High. Craft beer companies have to compete with each other, cheaper mass-produced brands, and European imports.
• New entry potential: high. While in-house brewing is expensive and difficult, contract brewing enables companies to enter the field with significantly lower costs.
• Power of suppliers: low. There are numerous sellers of hops, grain, and other beer ingredients, all of which come at mostly the same quality. As such, they are mostly interchangeable, where beer companies are concerned.
• Power of buyers: medium. Craft beer companies tend to have difficulty expanding into other regions and serve a small market. Price is usually not a concern for craft beer drinkers, but companies still have to fight for their loyalty.
• The threat of substitutes: medium. There are many other varieties of alcohol in the market, and more expensive options such as whiskey can appeal to craft beers target market. However, few alcoholic beverages can approximate beer closely or fulfill a social function that is similar to it.

Porters Generic Strategies

Overall, Redhook brews to appeal to a somewhat narrow section of the population, being both geographically limited and more expensive than other beer. As such, its brand strategy is narrow in scope, even though the IPO initiative is aimed to increase its nationwide appeal. Concerning focus, various craft beer brands generally did not compete on price, in which they would necessarily lose out to mass-produced brands. As such, they pursue a differentiation strategy, trying to be different enough from the rest that consumers would choose the brand. In terms of Porters generic strategies, this tendency would put Redhook in the differentiation focus strategy category.

Conclusion

The IPO initiative addresses Redhooks issues regarding its market expansion by providing sufficient finances to address its expansion problems. However, it is still going to be challenging for the company to grow due to its refusal to accept contract brewing and the narrow market of people who may try a craft beer. As such, it should invest in marketing to ensure that its products can penetrate the markets where they previously had low appeal.

With the increasing pace of work, customer expectations tend to grow as well. The hotel industry is characterized by the need for timely and high-quality service to satisfy customers and keep them loyal. In the Hilton Hotel, the customers note that some employees may be unfriendly and inefficient in providing check-in and other services. It should be stressed that the slow performance of employees not only reduces their productivity but also negatively impacts the motivation of their colleagues (Morsy, Ahmed, & Ali, 2016). When a team faces inefficiency, its members can be under the pressure. In this connection, staff training is the most relevant way to identify the source of the problem and address it.

The complexity of working in the Hilton Hotel requires its employees to master communication, relationship-building, and problem-solving skills. Training should be adopted to help the staff to enhance their skills and teach the strategies to handle challenges. The role of the managers is to act as partners, who can set specific expectations and goals. One of the key underpinning reasons for employee sluggishness is that they cannot understand what exactly is required (Padilla-Meléndez & Garrido-Moreno, 2014). Therefore, training should be aimed at revealing the internal communication problems, which can be achieved via building mutual trust and transparency between the employees and management. For example, the team members who are perfectionists can have difficulties with determining what needs to be impeccable and when it does not matter. A range of tasks performed by employees can be systematized and structured as a result of training, which will help in increasing their overall efficiency.

Job engagement is another area that demonstrates the positive impact of staff training on their performance and customer satisfaction. Morsy et al. (2016) state that those employees who are committed to corporate goals are more likely to work effectively compared to those who are not engaged. The results of training also increase the morale of employees, making them aware of the companys values and mission. There is a range of premises that determine the success of training, including management support, the responsiveness and adequacy of instructors, and the readiness of people undertaking training (Morsy et al., 2016). These factors should be taken into account to communicate the training content effectively. Along with the traditional engagement tools, the reliance on social networking tools can be used. For example, Slack is a platform that promotes faster team communication, where the problems can be resolved within several minutes instead of the hours of email messaging between a manager and employee.

Employee development is the key advantage of staff training, which leads to greater efficiency in the workplace. In the case of the hotel service, the employees who receive training become more focused and committed to their job. Since the Hilton Hotel is one of the most distinct brands worldwide, its staff is expected to correspond to its vision of hospitality and strive to ensure the best quality possible. Today, the mere satisfaction of customers is insufficient since hotels prioritize anticipating their needs (Padilla-Meléndez & Garrido-Moreno, 2014). Therefore, staff training allows the employees of the Hilton Hotel to manage the strategies that enhance the reputation of the hotel by providing a rapid and appropriate response to the emerging complicated situations. In everyday tasks, training promotes clear tasks and outcomes, which would improve customers perception of staff qualification and effectiveness.

References

Morsy, M. A., Ahmed, G. S., & Ali, N. A. (2016). Impact of effective training on employee performance in hotel establishments. International Journal of Heritage, Tourism, and Hospitality, 10(1/2), 92-109.

Padilla-Meléndez, A., & Garrido-Moreno, A. (2014). Customer relationship management in hotels: Examining critical success factors. Current Issues in Tourism, 17(5), 387-396.

Importance of Customer Retention

The relationship of a company with its customers significantly affects every part of the business. Specific customer needs, for instance, often change the main course of the firm and influence its marketing, customer service and sometimes even production (Bai & Yafeng 2016). Thus customer retention is also essential for the business as it allows companies to expand and become more stable in their operations.

The standard description of a customer lifecycle includes three periods such as introduction to the product, interest in the product and repeated use of the product. In this case, the focus on retention is present only in the last part of the cycle, as customers are already used to the companys goods and services. However, many scholars argue that client-oriented strategies should consider all parts of the lifecycle and encourage customer retention from the very beginning.

It is important to emphasise the role of the customer in the first stage of the lifecycle. When customers are introduced to the product, a well-calculated welcoming approach may bring the best results. For example, Ascarza et al. (2016) note that customers do not need to be targeted right after their acquisition. However, the company should start thinking about retention during that period. The process of a customer entering a particular market may shape his or her experience with the industry as a whole. Therefore, making sure that clients are satisfied with their choices from the start may significantly improve their retention rates.

The strategy of a telecommunications company, in this situation, would be to ensure that new customers choose the most suitable plan from the beginning (Ascarza et al. 2016). The customer does not think about looking for other options as he or she is presented with the best one. Thus retention strategies are vital at the beginning of a company-client relationship.

The next period of the customer lifecycle usually includes tactics focused on the process of growing a client base. However, this step should also include already existing customers and make sure that they stay with the company as well. Here, the firm should target consumers who may show some signs of being dissatisfied. Although these clients do not openly announce their decision to switch to a different product, it is clear that the companys inaction on this stage can lead to losing the customer base.

The company should try to anticipate the unmet needs of its clients and improve its performance accordingly. Hamilton, Rust and Dev (2017) argue that adding new features and services may help companies to retain their customers. As clients get used to the same number of options from one provider, they may become dissatisfied with the lack of change. Thus new campaigns and products may entice them to continue using different services of the same company rather than pursuing other options.

On the other hand, an incorrect strategy can adversely affect customer retention. Being too active, for instance, may frustrate clients and turn them away. Adding many features constantly, contacting clients too often or actively promoting new products to customers that do not want them can encourage people to leave the company. Thus the decisions connected to the firms retention strategy should be considered from this point of view as well.

The company should strive to find the balance in the way it interacts with clients. Furthermore, proactive timing should consider customers who are at risk of churning. The company should evaluate its clients and predict whether some groups can be retained as a result. This step may help the business to prevent consumers from churning and reduce the possibility of dissatisfaction.

The last stage of the customer lifecycle deals with keeping the client base stable. This period usually deals with satisfied consumers that want to continue using the companys services. However, it may also include negotiations with individuals who want to stop using the firms products and search for other options. Here, it is necessary to assess the state in which the consumers exist. Some customers can be in the act of churning and can be turned over, while others may only be considering other products.

Although it is possible to win clients back, it is much more beneficial for the business if they never leave (Ascarza et al. 2016). Retention strategies should have long and short-term goals for this particular reason as consumers may grow dissatisfied repeatedly. All in all, a thought-out retention strategy may help the company to grow and maintain its clientele on all stages of the customer lifecycle.

Developing a Customer Contact Plan

To keep the customers interested in the companys products and grow the client base continuously, businesses need to establish contact with both existing and prospective clients. Creating a customer contact plan requires a firm to consider its possible options of interaction. A telecommunications firm, in this case, has its benefits and drawbacks. On the one hand, this type of company has an extensive reach to ones mobile and computer data, which can significantly simplify the process of contact as clients leave their phone numbers and email addresses for the business to keep in touch. On the other hand, the industry is highly competitive and filled with special offers and plans (Hu, Shu & Qiao 2014).

Moreover, the spread of such companies implies that they often need to consider the differences between countries and their separate markets. Thus the process of developing a customer contact plan should incorporate all these details.

First of all, it is necessary to assess the individuals with which the company interacts. The firm can divide them into multiple groups according to their current relationship, activity, demographics and interests (Bai & Yafeng 2016). For instance, one can distinguish between existing customers, prospective clients, prior customers and useful contacts. Alternatively, the classification may include loyal clients, consistent but inactive consumers, underperforming groups, customers who seek new products and interested individuals.

The final system of clientele should be able to show which groups the company has to prioritise in order to keep the clients invested in the processes of the business, while not trying to reach out to the customers too frequently. This action may reveal the way people find information about the business in the first place. For instance, the European telecommunications market is highly developed, and the spread of the internet influences the ways people search for new information (Parcu & Silvestri 2014). This data can be used to create the best channels for interaction.

After examining the most utilised services for communication with customers, the company needs to establish the time and frequency of contact. It is vital for the business to reach its customers at the right time. Some firms make the mistake of interacting with their clients only when problems arise, and they need to be solved with the consumers help. This reactive communication does not help businesses to establish a trusting bond with their clients.

On the contrary, overwhelming customers with information and requests for participation may discourage them from interacting with the company. Regular and consistent updates and interactions should not produce this effect. One can consider making a calendar for communicational purposes, and contact clients once in one or two months to deliver new information, share the most critical updates and inquire about the clients satisfaction with the products. This type of communication shows a level of interest from the company and does not impose a frequent need for interaction on consumers.

To communicate with customers efficiently and cause each interaction to yield positive results, it is also crucial to consider the differences in the market conditions. For instance, Ghezzi, Cortimiglia and Frank (2015) examine the state of the Italian market of telecommunications and argue that while the rate of mobile subscriptions declines, data transmission and internet use are gaining more and more popularity.

Thus the developed markets of Europe are facing a shift in the industry, as continuous innovation pressures companies to change their offers and make plans fulfil customers growing needs. The authors state that Italian consumer demand is mature and sophisticated implying that customers are experienced in their interaction with businesses (Ghezzi, Cortimiglia & Frank 2015, p. 350). Thus the companies operating on this territory should keep in mind that their client base has higher expectations for customer service and most likely needs an attentive approach. Moreover, the authors note that the European market is highly-developed, and clients are aware of the best prices and products.

A proper customer contact plan should invite consumer participation and be active but not intrusive. The highly developed industry of telecommunications in Europe, for instance, shows that customers have high demands and expectations as they are well-informed about the most beneficial products. Such factors as peoples preferred types of interaction, interest areas and desire to communicate should be accounted for during the process of plan development. Furthermore, firms should think about the frequency of contacts and the specific contents of their discussions. In the end, a contact plan that provides clients with timely, concise and relevant information should encourage customer retention.

Reference List

Ascarza, E, Neslin, SA, Netzer, O, Anderson, Z, Fader, PS, Gupta, S, Hardie, BG, Lemmens, A, Libai, B, Neal, D & Provost, F 2016, In pursuit of enhanced customer retention management: review, key issues, and future directions. Web.

Bai, F & Yafeng, Q 2016, The implementation of relationship marketing and CRM: how to become a customer-focused organization, Journal of Business & Economic Policy, vol. 3, no. 2, pp. 112-124.

Ghezzi, A, Cortimiglia, MN & Frank, AG 2015, Strategy and business model design in dynamic telecommunications industries: a study on Italian mobile network operators, Technological Forecasting and Social Change, vol. 90, pp. 346-354.

Hamilton, RW, Rust, RT & Dev, CS 2017, Which features increase customer retention? MIT Sloan Management Review, vol. 58, no. 2, pp. 79-84.

Hu, C, Shu, H & Qiao, X 2014, Customer segmentation model research based on organizational customer life cycle in telecom operator, in 2014 International conference on education technology and social science, Atlantis Press, Xian, pp. 408-414.

Parcu, PL & Silvestri, V 2014, Electronic communications regulation in Europe: an overview of past and future problems, Utilities Policy, vol. 31, pp.246-255.

Being a good manager is a factor that goes beyond formal training and it requires a great deal of talent. In the context of the global business environment, good managers are required to have apt leadership abilities. The relationship between a manager and an employees is one of the most significant liaisons in any organization. Therefore, good managers make sure that their employees remain contented, motivated, and productive. There is a great debate as to whether managers are made or created. One school of thought thinks that all the skills that an individual requires to be a good manager can be acquired from learning and through practice.

On the other hand, another group thinks that managerial abilities are part of an individuals natural talent. According to this group, good management is almost an instinctive endeavor for naturally occurring managers. Most of the debate that surrounds the issue of management has to do with the belief in nature or nurture. The quagmire for companies is to decide whether they want to rely on managers with natural talent or those with ample and relevant training. This essay argues that good managers are created through rigorous training and experience, and natural ability alone is not enough in modern management.

Although natural abilities play a vital role in management, good nurturing of talents, skills, and abilities makes all the difference. The principle of nature versus nurture suggests that it is important to understand the difference between inherent qualities and acquired abilities (Ahearne & Kraus, 2014). Managers enter the world of management with only a limited endowment of natural abilities. Other times, managers only employ their training for their various management duties.

Nevertheless, good management is a form of leadership that just like a skill, is learned by training, practice, perception, and experience. According to recent statistics, a common problem in modern management is that only one in five managers has above-average leadership qualifications (Quinn, Bright, & McGrath, 2014, p. 23). However, it is important to note that not every manager is a leader and these two skills are independent of each other to some degree. It is easier for a manager to learn how to lead than it is for a leader to learn how to manage. Therefore, management skills are more valuable than leadership in the context of the modern business environment.

On the other hand, natural managers are favored for their instinctive actions that are important when an organization is in crisis. Natural leaders often gain an advantage over nurtured leaders because they can bring out the best in everyone within the working environment. A look into the statistics of management indicates that history favors natural leaders over nurtured leaders (Quinn, Bright, & McGrath, 2014). Consequently, most of the renowned natural leaders in history such as Nelson Mandela and Steve Jobs depended mainly on their natural abilities for them to reach their full potential. Even though natural leaders are rare and sought after, this does not mean that they are a one-size-fits-all phenomenon in management.

Consequently, organizations around the world reckon that nurtured leaders are more reliable than natural ones. The presence of a well-trained leader is felt in all spheres of an organization. On the other hand, natural leaders often excel in a few areas and fall short in others thereby creating an imbalanced sense of management. The first step in recognizing a good manager is through an assessment of manager-staff relationships. A research study on management concluded that while one of the most important decisions a company can make is whom they select to manage, companies fail to choose the candidate with the right talent for the job 82 percent of the time&.(while it is) managers who drive 70% of employees engagement (Raducan, 2014, p. 812). Organizations rate their managers using their abilities to foster good relationships and spur growth at the same time.

Therefore, organizations are most interested in a convergence of management skills and not just excellence in one area while the others lag. Natural managers tend to excel in one or two particular areas while they struggle in others. This tendency means that a nurtured manager can fit into any organization while a natural manager is only a good fit for specific situations. For example, a natural manager is often known for specific abilities such as human resource management, financial-management prowess, and marketing among others. These skills are very important in specific situations but they do not represent all management needs. Organizations often consider natural managers to be seasonal but nurtured managers are important for every situation. Furthermore, research indicates that all managers perform best when they have a profound understanding of their organizations (Raducan, 2014). This deep understanding of an organization can only be achieved through nurturing.

Eventually, a well-rounded natural manager can bring harmony to an organization as opposed to creating a major disruption in the guise of bringing change. The focus of any manager is to solve problems by acquiring an understanding of their root causes. The quest for improvement does not have to lead to confusion and chaos. This is one of the major differences between natural and nurtured managers. Natural managers have been observed to thrive in chaos while nurtured ones often solve problems without commotions (Raducan, 2014).

The opposing argument is that nurtured leaders tend to be mediocre whereby all they do is to avoid challenges and look for people to shift blame to when things go wrong. On the other hand, a natural leader confronts and handles problems head-on and only quits when the job is done (Ahearne & Kraus, 2014, p. 69). The argument is that the strategy of natural leaders is the main reason why commotion accompanies them. In the current environment, natural/disruptive leaders often seem like the best solution but research indicates that their strategies only work in the short-term. Currently, the challenge for most organizations is not to achieve tremendous growth, but to ensure survival. Nurtured managers are well equipped to ensure that an organization can survive the uncertainties of the current world.

Managers come in different shapes and sizes but while some rely on their natural abilities to perform, others solely depend on their training. In this essay, it has been proven beyond doubt that although natural abilities have their place in management, nurtured individuals are the ultimate solution to the current environment. The popular opinion is that while strategy can make up for talent, talent cannot make up for strategy. Therefore, both natural and nurtured managers require training in the same manner. Eventually, an organization should rely on a well-trained manager because he/she comes with a higher guarantee than the natural leader. Leaders are expected to harmonize instead of disrupting the operations of any organization. Overall, the aim of most organizations today is to survive the modern torrential business environment and nurtured managers are better equipped for this job.

References

Ahearne, M., & Kraus, F. (2014). Performance impact of middle managers adaptive strategy implementation: The role of social capital. Strategic Management Journal, 35(1), 68-87.

Raducan, R. (2014). Leadership and Management. Procedia-Social and Behavioral Sciences, 149(1), 808-812.

Quinn, R. E., Bright, D., & McGrath, M. R. (2014). Becoming a master manager: A competing values approach. New York, NY: John Wiley & Sons.

Factors considered when deciding which celebrity to use for product endorsement varies on how the celebrity will be used (Aaker & McLoughlin, 2010). For instance, the celebrities can be used as an added interest to a companys advertising campaign, or as the central feature of the advertising campaign. The main factors that are always considered when selecting an endorser include the profession, credibility, availability, prior endorsement, physical attractiveness, popularity, controversy risks, product match, values, and the target audience match of the celebrity. Additional factors such as the cost of obtaining the celebrity and whether the celebrity is a brand user can also be considered.

Attractiveness implies the physical appearance of the celebrity, his likeability, personality, and similarity to the target audience for that particular product. This is mainly due to the perceived social value of the source. Celebrities who are physically attractive are more likely to convince buyers or build the image of a brand. According to the article, the Beckham brand was further established because of his model looks and his image of being a family man. Women could easily see him as a glamorous and good-looking man while appreciated his skillful nature.

From the article, it is clear that companies have to seriously consider the risks of endorsement. Having a celebrity endorse a product is a big risk because the marketer may not be able to control the future behaviors and actions of the celebrity. In the event that their celebrity endorsers begin to experience negative publicity, companies can respond through various strategic options. Since research has shown that celebrity negative publicity can ruin a brand image, the best response option is to stop further endorsement from the particular celebrity.

Christiano Ronaldo is currently the highest-earning footballer from club salary and second from endorsement. He still has a lot of potential for further sponsorship because he is marketable. He meets most of the checklist that marketers would use to decide on a celebrity figure for endorsing their products. Currently, he is the athlete with the highest number of fans and followers on social media which makes him very popular compared to other athletes. He plays soccer, which is currently the worlds most popular sport. This increases his appeal to markets in South America, North America, Europe, Asia, and Africa. Additionally, he has always been rated either first or second when it comes to best players in the world of football, implying that he does not disappoint his fans and he is likely to remain popular for a long period.

References

Aaker, D. & McLoughlin, D., 2010. Strategic Marketing Management: Global Perspective, J Wiley & Sons, New Jersey.

Why companies undertake sustainability reporting

Companies undertake sustainability reporting in order to earn trust from the public and stakeholders. Sustainability reporting can also be used to manage the lost reputation of a firm. Managers, team leaders and employees in an organization can only be made accountable when sustainability reporting is done. Hence, organizations that participate in this type of reporting often seek to track their sustainability performance. The increasing demand for sustainability reporting has also compelled business organizations to be proactive in the process.

Sustainability reporting also assists organizations to obtain valuable feedback from customers and stakeholders. The same information can be used to improve the overall performance of a company.

Why some companies do not undertake sustainability reporting

Companies that do not undertake sustainability reporting argue that it is not a legal requirement. Since the process can be complicated and also demand additional workforce, it is not included as part and parcel of a companys core operations.

Negative information can be part of a sustainability report. Some companies have a notion that competitors may take advantage of the missing links and eventually outwit them in market competition. There are also business entities that lack the ability to gather information required to prepare a comprehensive report.

Response or feedback from stakeholders who are the consumers of the financial report has been deemed to be inefficient. Therefore, some companies do not find a good reason to engage in sustainability reporting. There are organizations that also fail to participate because they fear to provide sensitive information to the general public.

Large scale companies that have regional or continental presence may find it difficult to undertake sustainability reporting on a regular basis. Moreover, not all governance, environmental and social issues within an organization can be reported in broad multinational companies. This challenge has compelled certain companies to avoid sustainability reporting.

It requires an immense organizational commitment and resource utilization to compile comprehensive sustainability reports. This explains why some companies ignore the process. Besides, it is an engaging and time consuming procedure to obtain and synthesize reports from different units of an organization. Harmonizing the fragmented data is a difficult task. Some managers argue that allocating time and other resources to sustainability reporting are not commensurate to the expected benefits.

Wider Implications of non-reporting

In order to restore the confidence of stakeholders and clients in the operations of a business, it is vital to carry out sustainability reporting. Companies that do not undertake sustainability reporting cannot gain this opportunity. Lost confidence can only be regained when a rigorous sustainability reporting is carried out.

Second, it is easy to hold companies accountable when sustainability reporting is undertaken. When the managements of companies take the full responsibility of running their organizations, value creation opportunities can be easily created. Therefore, the latter opportunity is missed out in the absence of regular sustainability reporting.

The input of stakeholders can also dissipate where there is lack of robust data that vividly indicates the performance metrics against the stated goals and objectives. It is pertinent to mention that the track record of a company and the future prospects are vital to stakeholders. The latter can continue to support the given business organization if the trust level is sufficient. Worse still, the adopted business strategy and sustainability should have a clear correlation. Lack of such data may compel some stakeholders to withdraw their financial interests from an organization.

An onboarding program refers to a strategy that organizations use to equip new recruits with requisite skills to enable them to discharge their duties without challenges. The primary objectives of this program are to assist new hires, especially recent graduates to familiarize with a company, minimize the time it takes for them to become productive, and reduce cases of employee turnover. Hall-Ellis (2014) argues that an onboarding program consists of numerous phases and ought to be consistent, wide-ranging, and strategic.

Some onboarding practices include mentorship, ordered orientation, and continuous training. An organization must ensure that an onboarding program matches with its needs. This program is vital to new recruits, particularly recent graduates because it minimizes stress, enhances productivity, and facilitates their retention.

Importance of an Onboarding Program

Employee Retention

A well-thought-out onboarding program helps an organization to retain new recruits, thus saving it from the costs attributed to turnover. Hall-Ellis (2014) holds, The cost of replacing an entry-level employee is 30-50 percent of the persons annual salary (p. 140). A company can incur additional expenses if it is to replace senior-level workers. Each time an organization loses employees, the performance and spirits of the remaining workers suffer.

Therefore, it is imperative that organizations work hard to retain their workers, especially those that graduated recently. Hall-Ellis (2014) maintains that the initial six months of employment are essential to a graduate because it is the time when they decide whether to remain in a firm. A well-organized onboarding program helps to create a good, permanent impression on recent graduate employees. Moreover, the human resource department uses the program to demonstrate its commitment to helping the graduates assimilate into a company.

Time-to-Productivity

The time-to-productivity parameter has gained popularity amid hiring and talent development professionals. Krasman (2015) defines time-to-productivity as the period that a fresh graduate employee takes to acquire the relevant skills, information, and tools necessary to discharge their duties at an efficient level. A well-designed onboarding program enables new hires to gain experience in their areas of specialization, therefore becoming productive within the shortest time possible (Krasman, 2015). The program helps the employees to achieve work proficiency, making it difficult for one to differentiate them from experienced workers.

Minimization of Stress

New recruits, especially recent graduates who have limited experience, encounter numerous challenges in their initial assignments. In most cases, the employees rely on speculation to execute their functions. Ross, Huang, and Jones (2014) allege that the use of presumptions results in the graduates developing apprehension, which can be detrimental to their productivity. A well-thought-out onboarding program provides fresh graduate employees with information regarding their job specifications. Ross et al. (2014) assert, New employees learn what is expected of them, how to deliver, and how and when they will be evaluated (p. 731). Consequently, fresh graduate workers assume and execute their responsibilities with confidence because they understand an employers expectations.

Conclusion

An onboarding program is a policy that organizations use to equip new recruits, particularly graduates with limited working experience, with the skills to perform their duties. This program is helpful to companies because it enables them to retain the new recruits. Employers use this program to appreciate the significance of the fresh graduates to their companies. In return, the employees feel to be valued, thus opting to remain in an organization. An onboarding program assists organizations to expedite the time-to-productivity for fresh graduates. It also helps to minimize stress amid new recruits, hence improving their productivity.

References

Hall-Ellis, S. D. (2014). Onboarding to improve library retention and productivity. The Bottom Line, 27(4), 138-141.

Krasman, M. (2015). Three must-have onboarding elements for new and relocated employees. Employment Relations, 42(2), 9-14.

Ross, W. E., Huang, K. H. C., & Jones, G. H. (2014). Executive onboarding: Ensuring the success of the newly hired department chair. Academic Medicine: Journal of the Association of American Medical Colleges, 89(5), 728-733.

Introduction

Over a long time, managers were utilising financial measures in evaluating and analysing the performance of profit-making organisations. However, this situation changed following the development of a balanced scorecard (BSC) in the early 1990s. Through the inclusion of internal, learning, and customer perspectives in measuring performance, BSC has helped to address the challenge of relying on various performance-determining financial measures. Indeed, managers in different organisations had already begun opposing the utilisation of financial measures to evaluate performance even before the BSC was developed.

BSC enabled managers to pay attention to minimal critical measures. This strategy has reduced the complexity that is witnessed during the organisational evaluation and monitoring process due to the information overload. It has ensured that several aspects of an organisation are considered in the performance evaluation process, amid the growing organisational complexities. The balanced scorecard was introduced as a means for measuring organisational performance in 1992. Today, it has developed into a strategic management tool. This paper critically evaluates the development and the role of a balanced scorecard in production and service organisations. It pays critical consideration on the practical application of the balanced scorecard in organisations.

Development of a Balanced Scorecard

The development process of BSC may be discussed from the approach of its capacity to measure performance and/or as a strategic management tool. When it is used in measuring performance, managers can utilise it in determining organisational productivity. When used in strategic management, it forms an important aspect of decision-making processes, especially on critical areas that require a change in the current and future success of service and production organisations.

Measuring Performance using BSC

The balanced scorecard evaluates organisational performance through semi-standardised and structured tools. It finds ample application when deployed alongside design methods and tools that allow the automation of organisational performance. BSC finds practical application in both the service sector and production organisations when measuring employee performance. Kaplan and Norton first modelled a balanced scorecard for use in these organisations. The model addresses issues such as financial processes, customer and organisational growth, and learning as its three main components (Kaplan & Norton 1996). The financial component identifies a myriad of limited financial measures that are necessary for high-performing organisations.

In developing BSC for measuring the performance of an organisation, it is necessary to choose financial measures that respond to organisational concerns with regard to the desired financial image of the investors and other parties who have stakes in a companys financial performance (Madsen & Slåtten 2015). Compared to financial performance measures, Kaplan and Norton (1993) assert that BSC not only addresses issues of past fiscal years performance but also responds to the question of what needs to be done to improve organisational financial performance within the forthcoming fiscal year. To this extent, it serves the dual role of indicating the past and future financial performance. In this capacity, BSC does not dwell on the attainment of long-term organisational goals and objectives. It focuses on the short-term past and future performance of an organisation, irrespective of its sector of operation.

The customer component of BSC focuses on the manner in which the clients of an organisation perceive it (organisation). Its primary concern is on the fulfilment of wants and the clients needs. Indeed, organisations have the highest room of growth and success in case they have the capacity of meeting the emerging needs and wants of their customers. Dess, Lumpkin, and Taylor (2005) assert that without customer satisfaction with the products and/or services that an organisation renders, it is challenging to achieve a competitive advantage. Therefore, by providing a mechanism for measuring variations in customer anticipations, a room is created for developing and rebranding products and services to meet the changing customer needs to boost sales volumes.

Internal business process elements of BSC address the necessary strategic issues, which, while implemented successfully, improve organisational performance. Its primary objective entails highlighting excellence at performing internal processes and in employee competencies and skills (Brain 2005, p.37). Growth and learning aspects of BSC offer an organisation with the necessary information for facilitating continuous improvement with the objective of increasing value creation and organisational modernisation. It creates an avenue for dynamic improvements in service sector together with organisations that produce or sell products.

BSC that is deployed in service and product organisations should be developed and/or designed to meet an organisations unique requirements (Pollanen & Xi 2015). Kaplan and Norton (1996) discuss this process. The first step involves identifying various limited non-financial and financial measures for organisational performance, accompanied by establishing their different targets. This step is critical in ensuring that organisations develop the capability to meet their expectations. Any deviation from targets establishes responsibility for managers to develop strategies for improving performance to align it with the targets. In the first step, Kaplan and Norton (1996, p.75) posit that an organisation needs to change its vision into operational goals. The second, third, fourth, and fifth steps for BSC development entail collaborating the vision and connecting it to distinct performance, business planning, and guideline setting, feedback, learning and fitting strategy (Drury 2007, p.105). In the original BSC, an organisation needs to select 5 to 6 measures for its four main components. This situation creates the problem of developing and implementing the most appropriate and effective performance measures of the components of BSC.

The above challenge necessitates the modification of the original BSC developed by Kaplan and Norton. Indeed, Broccardo (2010) proposes the addition of a perspective that guarantees its flexibility. The flexibility of a BSC implies the capability of the BSC tool to adapt to every situation and to offer new perspectives from which new stakeholders can be considered (Broccardo 2010, pp. 81-82). Organisations encounter different operational situations that require the deployment of varying approaches to improving their performance. Therefore, the flexibility of BSC makes it adaptable to organisations of all kinds, irrespective of whether they deal with products and services or depending on operational market dynamics. In fact, in its original form, the BSC cannot be applied in diverse organisations. Consequently, Broccardos (2010) modifications are not only appropriate but also come in handy when performance encompasses an important aspect of ensuring the continuity of organisations that operate in highly competitive markets due to the increased range of products that are availed to the markets by globalised manufacturers and service providers.

The original BSC does not offer a template, which may be applied in general industries. This challenge highlights the necessity for ensuring BSC customisation to meet the needs of different organisational operation industries and business environments. Broccardo (2010) recognises that the four aspects of BSC are balanced in their design. However, the flexibility enhances its adaptability in the deployment as a strategic tool and performance measurement tool. A possible way to proceed is by incorporating enterprise and client factors, forces of change, business stability, practical and the involuntary organisational driving forces, in-house and peripheral business actors, and outdoor and domestic business processes (Broccardo 2010) into the original BSC to make its flexible.

The above modification identifies important aspects, which may require customisation in addition to their measurement. This process permits the application of BSC in a wide variety of industries. For example, in restaurants, which operate in the service industry, Broccardo (2010) confirms the necessity of incorporating perspectives such as consumer perspective, customer restaurant keeper perspective, internal process perspectives, and human and organisational resource perspectives into the BSC in measuring performance in the industry. Compared to the model developed by Kaplan and Norton (1993), Broccardos (2010) model deploys customer perspective in measuring the degree of satisfaction with services that are provided in restaurants. Restaurant keeper perspectives measure the satisfaction of all eatery keepers. Hence, in the service sector, the satisfaction of people who provide services (employees) together with customers is critical to ensuring high performance. Therefore, it is necessary to incorporate the organisational resource perspective together with the human resource perspective into the original BSC model proposed by Kaplan and Norton.

Developing a Balanced Scorecard as a Strategic Management Tool

Organisations that seek to gain a competitive advantage in the dynamic operational environment that is characterised by high competition apply effective strategic management efforts to remain relevant and/or gain market share to break even (Nielsen & Nielsen 2015). The objective of any company is to deliver value to its owners. This value is normally expressed in terms of the returns on investments. Strategic management plays an essential role in an organisation since it helps an organisation to gain competitive advantage. There are various strategies that can be used in gaining a competitive advantage, including pursuing low-cost strategies to help in driving the success of an organisation and conducting extensive promotion of products to win customer confidence (Dess, Lumpkin, & Taylor, 2005). Cost reduction focuses on reducing the prices of products and services in the industries. It aims at increasing profit while reducing the operational costs. Irrespective of the strategy deployed by an organisation, it is important to create long-term value and sustainability of the business of any business entity. Can BSC help in this effort?

The activities of strategic management change static plans into strategic performance outcomes that enable gradual development of strategies to drive situational change. Strategic management focuses on analysing an organisations strategic goals, which include visions, missions, and objectives alongside the analysis of the organisational environment, both internally and externally. To make decisions, it is important for managers and leaders in both service and products organisations to develop a means of measuring whether their strategic management decisions yield recommendable results (Chen, Yu, & Lin 2015). A balanced scorecard finds application to realise this concern.

The work of Kaplan and Norton (1996) forms the foundation of the applicability of BSC in strategic management. It identifies feedback and learning, translation of the organisational vision, communication and linkages, and business planning as important constituents of BSC. When using BSC as a strategic tool, clarifying on strategic visions or establishing a consensus is necessary. The primary objective here entails ensuring that all managerial decisions are translatable into some operational plans that have the capability to build local strategy implementers. Kaplan and Norton (1996) assert that this plan only happens in case statements of long-term success are integrated into business objectives and measures that are acceptable and observed by all people in the senior decision-making hierarchies.

As a strategic management tool, BSC recognises the contribution of communication in the success of products and service organisations. Communication enables managers at all organisational levels to push strategies across and along the bureaucratic organisational structure. Through business planning, organisations in both service and production sector acquire the capacity for integrating finances with developed business plans. The integration permits organisations to focus on those initiatives that can foster the attainment of long-term objectives and goals. However, the integration of business plans with organisational financial resources is not adequate to achieve long-term strategic success without the development of a mechanism for measuring organisational effectiveness.

The feedback and learning perspectives of BSC help in resolving this challenge. Kaplan and Norton (1996, p.77) reckon, the existing feedback and review processes focus on whether a company, its departments, or its individual employees have met their budgeted financial goals. Employing BSC at the centre of the four perspectives of strategic management facilitates the building of management systems that monitor the success of both production and service sector organisations from the perspectives of their internal processes, learning and growth, and the customer focus. Indeed, Apple the Company has deployed BSC in its planning for long-term performance that is pivoted around customer satisfaction, employee commitment and alignment, examining and expansion of shareholders value, and expanding market share (Kaplan & Norton 1993). Rockwater used the BSC in responding to alterations of operational industry. BSC also finds application in external reporting.

The Use of a Balanced Scorecard in Production and Service Organisations

For maximum performance, organisations in service and production industries deploy particular rules and regulations in their business processes. This strategy is critical for long-term service delivery and production. Indeed, without the use of necessary connections, such organisations have a low probability of gaining success. Consequently, performance measuring is an important chore for any organisation that seeks to operate in a dynamic business environment. Without measurements, an opportunity for determining the status and the necessary changes to deal with low performing business units or product and service lines are nonexistent. BSC functions as a tool for these measurements. It comprises an important tool that executives can utilise to translate the strategic objectives of an organisation while at the same time measuring performance (Kaplan & Norton 1993). It enables organisations to avoid troubles through the reduction of challenges that lead to failure to achieve some prescribed performance levels.

Anything that cannot be measured makes it hard to determine the extent of its achievement. Therefore, by measuring performance, it becomes possible to track potential loopholes in an organisation that may hinder its success. For example, some organisations may report high financial performance, yet suffer from achieving customer satisfaction. Consequently, the recorded financial performance only lasts for a while. Customer satisfaction is important for maintaining a customer-organisation positive relationship, which is necessary for consistent sales.

With low customer satisfaction, high sales in the short term may be witnessed due to low threats of substitutes. When a new competitor joins the market, an organisation loses its clientele to it. Such a problem can be avoided by having knowledge of products or service attributes that lower customer satisfaction. This way, BSC does not only help in measuring customer satisfaction but also comprises a strategic management tool. In fact, Kaplan and Norton (1993) reveal how BSC facilitates in making breakthrough improvements. BSC is instrumental in products and services value creation, improvement of processes, building customer relationships, and in-market developments.

BSC is receiving increasing popularity as both a performance measurement and strategic management tool. Broccardo (2010) investigated various performance measurement tools in different organisations. Many of the tools share similarities with the BSC approach. Broccardo (2010) argues that BSC has received immense popularity among non-profit-making and profit-making organisations that operate in both service and product sectors. Inferring from the case studies of Apple and Rockwater, Kaplan and Norton (1996) study the manner in which BSC can be used as a strategic management tool. They note the viability of the BSC in strategic management in the two corporations.

Through the utilisation of strategic management concepts, the competitive advantage of an organisation can be realised through several ways. Dess, Lumpkin, and Taylor agree with this assertion. They assert, sustainable competitive advantage cannot be realised through operational effectiveness alone (Dess, Lumpkin, & Taylor 2005, p.56). Rather, the scholars suggest that various management innovations that were realised over the last two decades act as crucial tools for enhancing sustainable competitive advantage. The innovations include benchmarking, the deployment of strategies for effective production such as the just-in-time production philosophy, reengineering, and outsourcing among others. Operational effectiveness implies the ability to conduct organisational activities in a way that out-powers rivals. In this process, a means of measuring operational effectiveness is necessary for both service and product organisations. The concept of organisational effectiveness is articulated to the idea that organisations must operate in a manner that warrant the ability to achieve their outcomes. Organisations effectiveness is crucial to investors. They are interested in the capacity of organisations to deliver value in the form of returns on investments (Herman & Renz 2008). Performance acts as an indicator of organisational effectiveness that is measured using the balanced scorecard.

Any performance measurement process must possess a mechanism for providing feedback to the developed success strategies. Devinney and Yip (2009) assert that performance comprises a critical criterion for evaluating the operational environments of both service and product organisations. Evaluating the financial performance of an organisation upon the implementation of a strategy of performance improvement provides performance feedback. The response includes returns on organisational investments, changes in organisational assets, and the evaluation of the changes in the profitability of an organisation. Feedback on the performance management approaches can also be evaluated from the context of increment on the market share of an organisation, changes in sales level, and even changes in the shareholder returns in the form of the magnitude of dividends.

A balanced scorecard can capture all the above indicators of organisational performance. An important measure of the performance of an organisation involves determining the success of strategies that are deployed to enhance performance. The measure alters managerial approaches to promoting employee engagement by managing employees cross-cultural differences that are associated with their diversities to enhance global growth. To this extent, the balanced scorecard provides the required feedback of a performance management model. Through the inclusion of peoples perspectives, organisations in service and product sector can deploy the BSC in evaluating and analysing the impacts of its people (employees) on performance. This strategy guarantees business sustainability in the short and long term.

BSC allows services and product organisations to review their internal and external environments, which may influence their performance. Through it, internal organisational managers gain a mechanism for establishing the necessary business strategies that aid in developing response mechanisms concerning changes in external environments. This way, BSC provides a comprehensive tool for analysing service and product organisations (Brain 2005), which also permits the identification of strengths and weaknesses of the organisations. Consequently, organisations can plan and direct an appropriate mix of resources in overcoming weaknesses while maintaining strengths to build a competitive advantage. There is an increasing concern for service and product organisations to deliver value to not only their owners but also other stakeholders who have stakes in the performance of a firm. Hence, organisations have an additional responsibility to engage in socially responsible business activities. BSC avails a mechanism for identifying various challenges that may negatively impair CSR policies for service and product organisations.

Conclusion

All organisations need performance measurement tools as a guide to making effective decisions. Traditionally, organisations measured their performance through financial measurement tools. However, the increasing complexities of operational environments and contributors to the success of an organisation have turned out ineffective approaches since non-financial variables such as customer satisfaction cannot be measured using financial measures. The BSC emerges as a performance and strategic management tool that overcomes the challenges of the traditional financial tools for measuring organisational performance. Through various modifications of the original BSC model, it is now flexible so that it forms a universal tool for measuring performance, irrespective of the industry of operation of an organisation.

References

Brain, C 2005, Using the Balanced Scorecard, Norton Publishers, New York, NY.

Broccardo, L 2010, Economia Aziendale Online, International Business Review, vol. 1, no. 2, pp. 81-91.

Chen, Y, Yu, Z & Lin, T 2015, How Zysco Uses The Balanced Scorecard. (Cover Story), Strategic Finance, vol. 97, no. 1, pp. 27-36.

Dess, G, Lumpkin, G & Taylor, M 2005, Strategic Management, McGraw-Hill Irwin, New York, NY.

Devinney, R & Yip, J 2009, Measuring business-unit level: Integrating administrative mechanisms with strategy, Academy of Management Journal, vol. 31, no. 4, pp. 826-853.

Drury, C 2007, Management and Cost Accounting, Cengage Publication, New York, NY.

Herman, R & Renz, D 2008, Advancing Organisational Effectiveness Research and Theory, Management & Leadership, vol.18, no. 4, pp. 399-415.

Kaplan, R & Norton, D 1993, Putting The Balanced Scorecard To Work, Harvard Business Review, vol. 71, no. 5, pp. 134-147.

Kaplan, R & Norton, D 1996, Using the Balanced Scorecard as a Strategic Management System, Harvard Business Review, vol. 74, no. 1, pp. 75-85.

Madsen, D & Slåtten, K 2015, The Balanced Scorecard: Fashion or Virus?, Administrative Sciences, vol. 5, no. 2, pp. 90-124.

Nielsen, S & Nielsen, E 2015, The Balanced Scorecard and the Strategic Learning Process: A System Dynamics Modeling Approach, Advances in Decision Sciences, vol. 2015, no. 1, pp. 1-20.

Pollanen, R & Xi, K 2015, Organisational Characteristics And Use Of Balance Scorecard Measures In Executive Compensation, International Journal of Business & Public Administration, vol. 12, no. 1, pp. 68-82.

Reminder of Key Company Policy on acceptable use of Email and text messaging

I would like to begin by offering warm greetings to all employees of the company.

It has come to my attention that many employees are not following the company policies about the use of email and text messaging. I have therefore taken the time to come up with a brief reminder of some key company policies. The following are the major policies adopted by the company about email and text communication.

Security Issues

Strict security policies are enforced by the company and all employees are supposed to follow the same at all times. The antivirus software and firewalls installed in each computer should always be running and employees should avoid opening attachments from unknown sources (Vacca, 2009). Any employee who violates the companys security policy will be held accountable for any damages that result from this. Every employee will be held accountable for any activity that takes place using their account and for this reason, always ensure that you keep your passwords secure and do not share your accounts with others.

Privacy Issues

Protecting the privacy of each employee is a key priority for the company. The company does not approve of any employee accessing electronic mail and text messages belonging to other employees just to satisfy their curiosity (Vacca, 2009). Any employee who engages in such activity will have violated company policy and will be liable for disciplinary action.

Company Monitoring Policy

Increasing the productivity of every employee is a key goal of the company. For this reason, it is necessary to ensure that all communication efforts undertaken during work hours and using company resources are aimed at achieving the company ends. For this reason, the company reserves the right to monitors all electronic communication (Vacca, 2009). Please be advised that all messages that you send or receive on the email system or office phone can be accessed by the company. Records of messages may be archived in the companys central server and as such, deleting message contents from your computer or phone may not delete the content from the system.

Personal Communications

It has been noted that the majority of the employees are using the company system to send personal email messages. While the company recognizes that it may be necessary for employees to make personal communications within hours, this use should be limited (Barman, 2001). Employees who abuse company resources for personal use shall face disciplinary action. Moderation of use is therefore encouraged and in case you are unsure as to how much use is excessive, kindly consult your supervisor.

Harassment

Engaging in harassment is strictly prohibited and the company has a zero-tolerance policy on all forms of harassment. The use of a company computer to transmit or store objectionable material is strictly prohibited (Barman, 2001). Any employee who shall be found guilty of sending harassing messages either to other employees or to our clients shall face immediate disciplinary action. The company does approve of its employees sending unsolicited email messages from within the companys network.

Please note that the companys intentions for giving this reminder are not to impose any restrictions on you but rather to enhance your performance and protect the company, its employees, and clients.

In case of any inquiries concerning the information provided here, kindly contact the HR department. You can also review the policy procedure manual which addresses each of these issues in greater detail.

References

Barman, S. (2001). Writing information security policies. Indianapolis: Sams Publishing.

Vacca, J.R. (2009). Computer and information security handbook. Massachusetts: Morgan Kaufmann.

Introduction

Lloyds of London is one of the oldest insurance markets in the world. Their history spans more than 330 years and an innumerable number of events that affected the market. Currently, the market consists of more than a hundred syndicates which are managed by 57 different agencies. The market as a whole has written £29, 862 billion of gross revenue in 2016, with the majority of policies concerning property and liability cases. Since its inception, the company has dealt with international insurance, and this led to a lot of factors affecting its work. This paper will provide information about the history of the company, its achievements, and its claims history.

History

The history of Lloyds of London began in a coffeehouse located in Tower Street, near the London docks. It was opened by Edward Lloyd in 1686 with plans to attract various clients in the shipping industry, especially those connected to the marine insurance business. The plan worked, and Lloyds coffeehouse quickly became a hub of marine insurance providers who were often focused on insurance for slaves and slave ships. The coffeehouse was moved to Lombard Street in 1691. Edward Lloyd passed away in 1713, but his business carried on. In 1734 the business started publishing a daily paper called Lloyds List. The paper is focused on shipping news and still comes out to this day (History of Lloyds of London).

With time, Lloyd became the primary place for marine underwriters. Despite the Bubble Act of 1720, which gave The Royal Exchange Assurance and The London Assurance the exclusive right to provide marine insurance as corporations, private insurers were still allowed to continue their operation. Aside from marine insurance, gambling insurances became popular among Lloyds clients. However, it brought a rift to the company, and a portion of the underwriters split off in 1769 after persuading Lloyds waiter to open the second coffeehouse. In only five years it became a more popular location, and the old one had to close down. However, the number of clients became too much for the small building, and to address it a committee was formed in 1771. It consisted of a group of nine people which included merchants, underwriters, and brokers. They took over the building and appointed two people to run it. Subsequently, in Lloyds moved into the Royal Exchange (History of Lloyds of London).

By 1779, Lloyds provided services to 179 subscribers, but this number rose to 2000 due to various wars with France. This period led to the first major influx of money into the business and continued until the early 19th century. However, the wars ended in the 1800s and the number of clients gradually started to decline. The Bubble Act was repealed in 1824, but it did not improve the situation for Lloyds because every year the number of customers fell. In 1814, Lloyds serviced more than 2,150 clients, but by 1843, this number fell to 953. The new office system was put in place to address this issue, and the prices of subscriptions were increased. The market struggled for several years, but through careful intelligence-gathering acts for the clients of Lloyds, the reputation of the market remained positive (History of Lloyds of London).

One of the most important events for the market happened in 1871 when the market was incorporated through the Lloyds Act. Prior, the committee of the market held little power, and the club was run only loosely. One of the only actions of the committee was performed in 1851 when it was decided that members who went bankrupt should have their membership forfeited. The incorporation of Lloyds brought in a great number of non-marine insurance cases to the market and expanded the business in a variety of directions. In 1871, the market started providing fire insurance and all risks insurance in a variety of cases. These innovations were created by C. E. Heath, who helped transition the market from its marine insurance roots. The international business of Lloyds began to expand in 1875. While before the market mostly insured internationally traveling ships, now the company started receiving new business from the United States and other regions. Also, reinsurance became a larger part of the companys business (History of Lloyds of London).

In the 1900s the corporation became more concerned with security and after a general meeting, it was stipulated that all underwriters had to provide certificates of solvency from approved auditors. The premiums under new policies would be held in trust accounts to ensure that the claims can be properly paid. The events of World War I were beneficial for the company as the demand for war-risk coverage at high premiums rose dramatically. During wartime, the state provided 80% of all war-risk insurance on ships, and cargo insurance at fixed rates. This allowed Lloyds to provide insurance at lower prices for any business. The state was losing money on less desirable cargo, while Lloyds provided insurance for the most valuable clients. The war-risk on property insurance was only provided by private enterprises, out of which, Lloyds took the lead because the majority of companies were unwilling to provide such insurance (History of Lloyds of London).

At the start of the century, the services of the market expanded to the motor, aviation, and credit insurance. However, credit insurance proved to be too risky and was subsequently banned. Nevertheless, the market grew due to the flexibility of its underwriters. Its syndicates also grew because of the size of insurances increasing over time. By 1952, the market had 16 syndicates with more than 100 Names each, with the largest reading up to 300 Names. The growth of the company led to an increased interest in the search for new Names, separation of the marine syndicate within Lloyds, and the increased size of the market forced it to move to specially built premises in Leadenhall Street (History of Lloyds of London).

The company grew rapidly in the post-World War II era, with memberships growing from 3,157 in 1952 to 33,532 in 1988. Motor insurance grew immensely after the 1950s. International business and especially the United States became a large portion of the markets profit, which led the brokers of the company to be headhunted by its competitors overseas. Some poor decisions on the part of syndicates have led to some losses which prompted the market to call for a new governing structure with wider powers (History of Lloyds of London).

The fast growth of the company eventually brought record profits in the 1980s. This was coupled with the implementation of the Lloyds Act of 1982, which included the recommendations that were presented by the market in 1980. The Council of Lloyds was established which included 16 members who held power over the committee of the market. Also, brokers and managing agents were separated in 1987. The council dealt with internal scandals and oversaw that Lloyds market did not suffer because of them (History of Lloyds of London).

At the time, the corporation had record numbers of clients. In 1988, they reached 32,433. However, after several large claims were paid out in a row, the organization started to experience large losses. By the end of 1988, the net loss of £509 million was recorded. Thousands of Names turned away from the market and refused to pay their debts while launching lawsuits against it. Even more, Names resigned, which led to a fall of memberships to below 10,000 in 1997. The most tragic cases included three instances of suicide by names. By 1992, the company lost £7.9 billion. This downfall led to a change in the company strategy, with Lloyds starting to permit corporate and institutional investors to underwrite policies. The financial obligations to the Names were limited to 80 percent of premium income, with an option to use a reserve in cases when the person is hit with excess losses. Despite the events of the 1990s, the company is still one of the largest insurance markets in the world and operates at assets worth dozens of billions of pounds (History of Lloyds of London).

Achievements

The primary achievements of the market are in the innovative insurance types that it began offering after the initial incorporation. Fire insurance and all-risk insurance on property and premises were the first in the long line of practical and appealing services that led to the companys success. Its unique structure also innovated the way that insurance business can be operated (Rejda and McNamara 103). The market was one of the first in providing motor and aviation insurance and managed to capitalize on it heavily after the Second World War (Innovation and Unusual Risks).

Claims History

The claims history of Lloyds is filled with historical events. For example, the company was heavily influenced by the events of the 1906 San Francisco earthquake that destroyed the vast majority of the city through the fires caused by it. However, the market fulfilled its obligations and paid all of its policyholders in full. Another historically significant claim was paid after the sinking of the RMS Titanic in 1912, the claims of safety that the engineers of Titanic provided, forced the claims to rise massively and almost led to large losses for the company. Later notable claims include the Three Mile Island nuclear accident, the Piper Alpha disaster, Exxon Valdez oil spill as well as effects of natural disasters such as typhoons and earthquakes (Catastrophes and Claims).

The company is also famous for its unusual novelty claims for famous people. For example, Bruce Springsteen insured his voice for £3.5 million, and food critic Egon Ronay insured his taste buds for £250,000. While such claims are unusual, they protect the livelihood of artists and make sense fiscally (Catastrophes and Claims).

Conclusion

Lloyds is an insurance market that has a tremendous history. After starting from a small coffeehouse, it expanded to a massive corporation that operates almost unimaginable sums of money. It innovated in the field of insurance and on multiple occasions made sure to pay out money to its policyholders despite it possibly putting the company in jeopardy. The market experienced a great number of losses in the late 1980s, but through massive reorganization, it was capable of regaining its status.

Works Cited

Catastrophes and Claims. Lloyds, 2017.

History of Lloyds of London. Funding Universe, 2017, Web.

Innovation and Unusual Risks. Lloyds, 2017, Web.

Rejda, George E., and Michael J. McNamara. Principles of Risk Management and Insurance. 13^th ed., Pearson, 2017.