Clearly, mutual insurers were more successful than PLC’s in the second half of the 1990s in terms of greater premium growth, lower expense ratios and higher claims records. Higher claims demonstrate that mutual societies have a better record for returning money to policyholders per paid premium, while mutual societies lower expense ratios indicate greater efficiency.
While mutual society focus on the provision of benefits and services to their members, PLC’s must also consider shareholders’ needs in their business operations. This split loyalty can act to the detriment of policyholders.
Mutual societies should also be able to steal a march on proprietary companies in another area. Some banks have been found to be actively or covertly discouraging low paid or unemployed customers – or the “financially excluded” – whereas mutual societies such as credit unions and friendly societies have traditionally targeted their products and services at the lower paid. Furthermore, mutual societies argue that the very nature of insurance is anchored in the concept of mutuality – namely of risk being shared by the many, in order to protect the few that suffer loss.
Objectives of my business
Newcastle is a building society that was formed many years ago. This obviously affects their objectives. If they had been a company who was just starting up then there objectives could include the gain of customers and reputation.
As most mutual societies Newcastle cites the general public and its members as its most important area to focus on and this can be picked up on by their objectives in this section:
Newcastle also believes its employees are important and has stated its objectives concerning this:
Newcastle also states:
"Newcastle Building Society belongs to you - the Members. Please let us know when we serve you well. Should we fail to meet our membership objectives, please tell us. We will listen. The Management, Executive and Board of Directors are available locally with a commitment to serve you."
This shows Newcastle’s dedication to the public and how they are aiming to help the general public that has become it’s members
Functional areas
If a business is to work it needs to have separate departments or areas. These help it specialise. With specialisation this helps certain areas be more expert in their sections. All businesses have certain areas that deal with
- Finance
- Human Resources
- Production
- Marketing
- Administration
- Research and development
Inside my chosen business, Newcastle building society they have separate areas for all these and more for example they have subsections for mortgages, investments and funding. In more detail Newcastle’s departments are:
Finance:
The finance department keeps order with the income and expenditure side of the business, i.e.. It can control the money and the functions around this. Finance itself is the practise of managing and manipulating money. The people within this department work with investors, regulators and auditors by providing the true and accurate information.
These areas are key to deal with customers within Newcastle building society.
As finance is their main product that the building society provides. Inside these areas and as overall services there are other areas for example there is an area to deal with customer service, human resources and product development.
Due to my business being a building society the areas are also split into branches. Inside these branches areas are separated again and again. Into subsections this again backs up my claim on the organisational structure that it is quite a complex structure a bit like a matrix.
Human resources:
Human resources, is an area that provides service at customers. These include:
-
Recruitment- the selection of the best people for the post, based upon the use of job descriptions, person specification, and employer need. All of which are normally certified by the HR Dept. Newcastle are skilled in this and, has been awarded the Investor in People kite-mark for the 10th consecutive year. In recognition of their commitment to staff development and their ability to provide a balanced training programme for every member of staff.
- Training and development- The extension of the skills and knowledge of the workforce. Training and development can be carried out internally (i.e. by colleagues, etc) or externally (i.e. by colleges, etc) but the training is co-ordinated by the HR Dept. Within this Newcastle has decided to use IT to help train employees this has benefited the society by speeding up the training process as well as supplying a more detailed training program.
- The monitoring of the employees- the evaluation of employee skills is normally carried out by a superior in the same department as the individual, however the co-ordination of this is normally the responsibility of the HR Dept.
- Health and safety- Both employer and employee rigorously adhere to, health and safety- to ensure all aspects of Health and safety.
- Conditions for work- to ensure conditions of work are fair and meet the required standard. ‘Conditions’ covers things like the physical environment – is it too hot/too cold, working hours, break periods, holidays, etc.
And the necessary admin ranging from recruitment advertising, writing contract of employment, risk assessment, staff strategic planning, and wage negotiations. Inside Newcastle I have discovered this is one of the main departments inside the society and they take this side of the business very seriously. As can be shown by their awards won in these areas.
Production:
This is not really applicable in my business but as customers do still come and go there is still a process that includes welcoming the client, helping them, completing the transaction and giving satisfaction to the customer. Sorts of products Newcastle do supply are mortgages ands this is another area they have excelled they actually won another award called the Mortgage Finance Gazette’s 'Innovator of the Year' Award this was for the 2nd year in a row.
The magazine said, “The industry magazine applauded Newcastle’s strong product development, including innovative mortgages designed to help first time buyers on to the housing ladder, and a string of investments offering healthy returns while guaranteeing the original capital invested.”
Marketing:
This is the area that deals with customer demand for its products and should be able to satisfy demand and maximise its services offered. Mainly it should anticipate changes in demand and help it deal with the promotion of products, ensuring the price, availability and quality meets the customers needs. They manage this by amplifying the customer’s voice and helping meet their needs. Newcastle does have an excellent customer service that has won awards so through this they should be to discover the customer’s basic needs. Newcastle has actually introduced a new way to help the customer called the `Martini` principle of customer service, whereby appropriately skilled staff can access customer details and answer correspondence `anytime, anyplace, anywhere` within the organisation. This includes the head office, branches or even at home. It means the Society’s capacity to manage peak periods of demand is greatly improved and customers receive a highly efficient service.
Administration:
In this area jobs include:
- Support services for business
- Mail handling
- Telephones
- Stationary supplies / stock control
- Filing
It is an essential part of a business and no business can function fully without a department. In Newcastle the main ways administration helps is when dealing with information passed over the telephone and in mail. This can include information about investments mortgages etc.
Research and development
This is an area that helps the company succeed by improving continually and keeping up with the market standard. This involves technology as well as workers an example of both is Newcastle that improved its I.T. and now has more detailed training procedures to help improve their workers and better machines to work with I.T.
The management style in my business and the culture of my business
My business is one that mainly deals with customers via mail, Internet or by phone. This means that the business is divided up into groups to deal with different aspects of this. This means that most employees are skilled in multiple areas and can be moved into different sections if there is more work to be taken up. This could be described as a matrix style as most employees although they are designated a certain area can and have worked in other areas.
Within my business the culture is very friendly and helps the attitude and morale of the employees. This is achieved with ideas like flexible time this helps for example lone-parent families who struggle with children’s needs etc. Also to help people who have to deal with family needs e.g. to look after old people, there is a program which helps the person work from home using their own PC.
The use of ICT for internal and external communication
Newcastle uses ICT in many ways though this was not always the case, Newcastle up to a few years ago struggled dealing with information by paper and was really struggling to process mortgage reports in any speed. This was all changed when Newcastle employed a company to update its system and it now has one of the best communications network in the business. Newcastle uses ICT to communicate between departments and from head office to branches.
All post Newcastle receives is scanned onto the computer system, this also happens with Microsoft notepad. When on the system the information is readable by everyone with a link to the network.
