1. Circumstances and Several Main Problems of EIIC at 1991
1.1 Changes in the economic environment and its impacts to EIIC
Engineering Inspection & Insurance Co. (EIIC) is a small and medium-sized insurance Enterprise depended on its distinctive competence, machinery and boiler inspection service. EIIC was a highly successful company before 1990. However the economic environment changed progressively when EIIC reached its flourishing stage. These changes reformed the new development road for insurance industries and consequently generated enormous troubles to EIIC.
At the early 1990s, …show more content…
Although EIIC paid relatively high salaries compared with their competitors in insurance industry (approximately $27,000 per year) to their inspectors, the company is still suffered from the high turnover rate, about 17% in 1990. The main reason of high turnover rate is demand of engineers from other industry, which could offer skilled staffs higher salaries by their cost-plus basis. Additionally, Inspections also reduced the speed of making policies for their staffs. So this is the key point that why EIIC’s policy delivery times are so excessive. The appearance of new collaboration model “packaging” requires every involved company could accomplish their section of work on time. This requirement will become a threshold competence for the future survival of all the insurance companies, but the minimum time for EIIC to make a simplest policy is 14 days and inspections were often later than the originally scheduled
After exploring the problem brought by inspection, the contradiction appeared. Inspection is EIIC’s distinctive competence, which was used as order winner, but it became the biggest obstruct for company development and even future survival. So this problem is not a simple common cold but a serious pneumonia.
2. Recommendations for EIIC’s Adaptation and Predicted Challenges in Implementation
2.1 My recommendations to CEO Ernest Cole for dealing with problems