Analysing The Performance Of Aegon Group Business Essay

Analysing The Performance Of Aegon Group Business EssayAEGON Group is man subscribeer in financial function business which go aways emotional state amends, pensions, long term savings funds and investment work and crossings. AEGON Group has 30000 employees and serving over 40 million guests globally. AEGON Group provides services and products over cardinal five countries globally coupled States, unite acres, Europe and Asia. By 1994 AEGON started relationship with stinting Equit up to(p), which was in truth popular and hearty cognise name in the United Kingdom as a financial service industry. stinting Equitable founded in 1831. By 1998 AEGON had taken complete control of Scottish Equitable and Scottish Equitable was re markinged as AEGON Scottish Equitable in 2006. After two old age the Group ex fly the cooped its businesses in the United Kingdom and bought life insurance operations of Guardian Royal Exchange. AEGON main customers atomic number 18 United States, Un ited Kingdom and Netherland. AEGON withdrew more or slight business from Belgium and Greece, as substantially as general insurance from the United Kingdom market and healthcare sector from Netherland. The Group alike sold its stake in FGH Bank and merchant bank Labouchere. The endpoint was a more than efficacious and better concentrated face. AEGON playing very important role in its markets just non in United Sates, Netherlands and United Kingdom only if excessively in bare-assed markets of Asia, and central part of the Eastern Europe as well. AEGON is listed on the stock exchanges of Amsterdam, London, New York and Tokyo.Task -1 Explore the background to change change the current system.P -1.1 Discuss the background to change that exists in today economy.Change is a powerful force or an engine that drives legion(predicate) segments of our economy. by and large forces of change provide us as contractors with rising projects to build and older buildings to modify or amend. Changing is truly the lifeblood of our businesses and our economy. The forces of change are also more subtle and pervasive as its affect our economy, our businesses, our jobs and redden our daily lives as well. We might easily recognize changes as progress in physical world of merchandise, but maybe we fail to recognize other forces in our economy, our businesses, our jobs and even our personal lives. Failure to recognize force of change can only lead in downward spiral to lower efficiency, lower profitability, lower productivity and lower personal in-effectiveness. Change is continuous adoption of organization strategies and structures to changing international environment. Today change is ongoing process in our economies, our businesses, and our lives.Change that exists in todays economyThe competitive pressure forced the changes bring into our economy. There are several(prenominal) major forces for changes that exist in today economy and financial sectors. These forces arebureaucratismEnvironment changesClimate changeEconomics changesPolitical changesTechnological changes own(prenominal) behaviours changesChanges in turn started the industry globalizationWe can see incidents in past changes the businesses and stinting environment which is prudent for changes exist in current economy.Bureaucracy effect in our organization and economy because management were use resources to person needs rather than organization goals. Max Weber saw bureaucracy as the most rational and effective mode of organizing the activities of large numbers of the great unwashed because it ensured decision-making according to general rules rather than the whims of officials, cultivated trained experts, and reduced the possibilities of corruption and nepotism. Weber, M., (1979) deliverance and Society, in Journal of an Outline of Interpretive Sociology, Volume 2The global economic crisis that started in the US in 2007 and spread around the world in 2008 was preceded by large imbalances in global toughieital flows. The economic crisis has changed world economy during the past year alone, slowdowns economic growth. The IMF says this represents By far the deepest post-World War II recession with an actual decline in output in countries making up 75% of the world economyBBC News. (April22, 2009) (Online). Available at www.bcc.co.ukThe evidence shows that ignoring mood change will eventually damage economic growth. Our achievements over the coming few decades could create risks of major disruption to economic and social activity, later in this century and in the next, on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century. And it will be effortful or impossible to reverse these changes. Tackling climate change is the pro-growth strategy for the longer term, and it can be done in a way that does not cap the aspirations for growth of rich or poor countries. The earlier effective action m echanism is taken, the less costly it will be. NICHOLAS STERN, STERN REVIEW THE ECONOMICS OF CLIMATE throw LONG EXECUTIVE SUMMARY ii (2006)Economy growth slowdown, unemployment is up, house price fall down and these changes, changed people mindsets and their spending habits in order to inhabit this difficult time. Managers across the UK, meanwhile, have accepted their own redundancy as inevitable, according to the Chartered Management Institute. Those factors are cause to a lot of attempt for us all our society and individually.There also In near past the world economy was not good even before folk 11.Synchronized growth slowdowns and in the case of recession in Japan were already under Way in the US, Europe and Japan, while developing countries were facing weaker export demand and increasingly difficult financing conditions. After the shock of September 11 have changed the picture, increasing the already significant downside risks to world growthFischer, S., October 18, 200 1 international Monetary Fund.32nd IAFEI World Congress, Cancun, MexicoThe Changes in the political environment is also one factor to change in today economy. It is difficult to say that these changes are simply short-term reactions to a major shock or amount to sunrise(prenominal) and worrisome trends. At the very least, the balance between political and economic forces has been significantly altered. Because political have for globalization was at best shallow while the global economy was in a buoyant state, this suggests the pendulum is now cut in the opposite direction. Against this background, two lessons from history are worth keeping in mind. One, dismantling protections takes time. It took several decades for many of the trade barriers erected during the interwar period to be brought down. Second, even if a important part of the progress in liberalizing trade in recent times has been institutionalized and strong reversals la 1930s are not likely, the downward spiral of protectionism acts fast.Ferry.P.J Santos.I, (March2009). FD Volume46, Number1The technology is posing major challenge to todays economy that is information technology. The information technology of the computer and internet services has and will go on to changes the economy. In the world of economics, globalization is reflected in the increasing the acceptance of free markets and private enterprise as the principal mechanisms for promoting economic activities. Its growing magnificence is captured in such indices as trade in goods and services, private capital flows in different forms, foreign investment, information technology transfers, operations of transnational enterprises, business strike and communication, and migration and remittancesDunning, J. H. (1993) The Globalisation of Business. Routledge, London.As Labovitz Rosansky point out personal behaviour Psychologists have long recognized that humane beings like people who are like themselves and tend to reject people who are different from them. So far organizations continue to create changes between people interest of efficiency. Line versus staff, management versus labour, field versus corporate, national versus domestic, East versus West, accounting versus sales- the list goes on. No wonder it so hard to focus people around familiar goals when they are so different from separately other simply by virtue of what they do and where they do it. Specialization and receiveledge can be a wedge that drives people future apart and adjudges it difficult for them to work togetherPrice, A., (2007) Human Resource Management. 3rd Ed, p281Several commentators have drawn attention to the analogy with the effects of natural disasters like the Kobe temblor in Japan that barely show up in the national accounts. It is the indirect effects that will matter most, in particular, in the short-term some(prenominal) depends on the effects on consumer and investor confidence and spending, which were already under strain and have been strained further by the attacksFischer, S., October 18, 2001 IMF, 32nd IAFEI World Congress, Mexico.AEGON UK chief executive Otto Thoresen says The economic environment is challenging but we have a strong team to take us forward through the next phase of our increaseMany changes unnatural the AEGON, UK environment in recent years. These are few changesExternal factorsIn the UK, life expectancy has increased in recent years hence people can expect to be retired for longer. In many cases, individuals have not planned properly for retirement and there may be a shortfall in the amount of money available. AEGON UK have introduced new less expensive pension schemes or insisted on employee pension contributions where they did not in the past.In an economy closed to external equity investors, such as the UK before 1979, the decline of defined benefit pensions would have been a disaster. The cost and accessibility of equity capital would have reflected the reduced fl ow of funds into the equity market. This potential concern became irrelevant as a consequence of the lifting of exchange controls and the globalisation of capital flows, which made the market more efficient while putting downward pressure on the cost of capital. Plender, J., (2010) The pensions shake-up heralds equity demand change. The financial TimesPrivate pensionsThe political sympathies pensions were very small and also government want to decrease the dependency on the state in old age. The government also have introduced private pension schemes to deceased the dependency on the state.Pension funds are increasingly being asked by politicians, non-governmental organizations, campaigners, and pressure groups to cite their financial clout more actively and to take their responsibilities as corporate owners more seriously. The chances are it could change from being asked to being required. Fraser, I., (2010) Pension funds look for for climate change risks and opportunitiesFall ing vales of sharesThe current economic downturn situation affected the high society shares values, which reduce the renders on the customers investment. Customers getting less than they were expected for their investment, also people had a negative impact on pensions as well.CompetitionAEGON is in competition with other organisations which are selling directly to customers and those competitors also well known in United Kingdom. Also AEGON has had very poor study in the insurance and pensions industry in recent years.P -1.2 Evaluate the strengths and flunk of the organization.StrengthsThe strengths of an organization are those things that it does specially well, especially when viewed against the operations of its competitors and also its helplessness electron orbits in which it is less strong than the competition. AEGON had historically been advantagefulAEGON had historically been successful but government imposed price controls had reduced profitability. Compared to its c ompetitors, AEGON was not well known by consumers. It had developed good products and services and had a good reputation with distributors, particularly in the area of pensions which were a key strength of Scottish Equitable. Developed good products/servicesAEGON developed a range of products and services to individuals, corporations and institutions. Most of these products and services fall into one of the following three categoriesLife insurancePensionsLong-term savings and investments products Good reputation with distributorsCompared to its competitors, AEGON is well known and had a good reputation with distributors, particularly in the area of pensions which were a key strength of Scottish Equitable. Customer focused organisationAEGON UK is a customer focused organization as AEGON CEO (Otto Thoresen, 2009) pointed out that We work to help keep customers needs /wants at the heart of all developments and to take shape sure that financial service industry whole caboodle with cus tomers to give them what they want/need and we offer the best products and services from their point of view. Reflecting local cognition and global powerScottish Equitable is now AEGON Scottish Equitable reflecting both local knowledge and global power. All the brands now bring a new common look which is refreshing and different. AEGON provide the levels of return promisedAEGON UK Ltd is also providing the levels of return promised and being responsible for any risks associated with doing so. Provide products/services different levels of income for the consumersAEGON Ltd have contractual measures in place to help those customers who find themselves on low incomes and, often through no fault of their own, are unable to maintain premium payments. These measures implicate introducing lower premium payments, grace periods and loans or, in some cases, reducing the coverage offered by a particular policy.WeaknessesThe weaknesses of the organisation are matched to the opportunities and t hreats that may affect the organisation and which come from the external environment. Not well known by consumers in the UKAEGON was not well known by consumers. It had developed good products and services and had a good reputation with distributors, particularly in the area of pensions but not well known directly by consumers. Had poor reputation in life insurance and pensions industryThe insurance and pensions industry, in which AEGON operates, has had very poor reputation in recent years. Not providing consumers with best products for their needsThe AEGON Ltd is not providing the products and services in a way that genuinely meets consumer needs/wants, and also not regulator by government. Difficult to understand financial services productsFinancial services/products are hardly to understand. People do not eer detect which range of financial products/services they need and also are not sure where to seek support and advice. Wide difficultys to remain competitiveThe insurance a nd pensions industry have been characterised by intense competition. AEGON is in competition with other organisations which are selling directly to consumers and which are also better known in the UK. Not selling directly to customersAEGON Ltd not sells product direct to consumers, they sells products/services via salesmen, agents or brokers which sometime involves mis-selling of its products/services.P -1.3 Compare alternative forms of organizational development.When we promote the fancy of making consumer aware of the organizational change, it becomes organizational development. Generally, the organizational development is considered as a method of arrangement, suitable with the contemporary requirements of the organization and also being able to fulfil the future requirements that cannot be distinguish. After reading the case study of the AEGON Ltd, The plan appears to be the organizational efficiency and effectiveness from top to bottom level. The company led by its new CEO has new objectives such asDefining the view of where company stand.Defining how the company will stand in the future.Defining the policies and standards to reach the future goals and objectives.The get of the company was self analysis by defining goals, targets and objectives, how to reach them and what the management is doing to achieve these goals and objectives.AEGON took a brand take stock to find out the answers of these questions and the result of the audit reveals two goHow was the company come outed?How was the competitor of the company positioned?By the audit, the new CEO came to know that there is a need for formation of the new approach (play in the market). The staffs were adopted with the innovation and well organized communication system. Additionally, self analysis has helped new CEO to position a fresh plan to craft progress.The new plans resulted for the organization to involve in the following strategy stepsSimplify financial service and provide more focus.It was important that consumers understood more precisely what they were buying as well as the benefits and services they received. By making products and services clear to the consumers, to many of goal organization achieved and too many very important stakeholders introduced to the change. Both of the stakeholders (government and consumers) are aware and happy, because of services provided by AEGON, these steps were taken for the customer to make them aware and solve puzzles.Develop the workforce.The objective was to develop the skills, needed within the business and to involve the stakeholders in process of change, by providing them training and skills. Therefore, AEGON also created new opportunities for stakeholder to progress from one job to another job by developing and promoting the careers of work force. This helps AEGON to attract more customers and have competition. Organizational finishing may include such things as, confidence to innovation, decisions and trust for production and quality. The model, implemented by new CEO of the AEGON, brought positive change in the organization and gave new direction to the company.Fundamentally, example of simplify system with regard to the AEGON can be evaluated as followsAnalysing the factor affect the organizationOrganizational performance and future plans are constantly affected by the external and internal environmental factors. For success in the present world, one need to consider not only the internal environment of the organization consisting of its resources and employees, but needs to consider the external factors as well. These facts cannot be stopped but can adjust accordingly as per the changes in the political, economical or social pressures.These are the external aspects which consist ofCompetitors or OpponentsThe change in the economic structureThe Impact of the society/cultureFinancial agreementsPolitical or Legal systemImpact of the environmentAnalysing the weakness and strength of the organization A range of organization functions which determine an organization strength and weaknesses include production function, management function, Research and Development, selling function, sales function, HR function, procurement function, logistics function, and various other departments within the organization. For example, organization strength can be derived from the excellence human resource in the organization which might not be present in some of the competitors in the insurance and pensions industry. One more example includes marketing function i.e. if an organization is not effective in marketing efforts, competitors may take advantage of the firms weakness. So AEGON Ltd need highly competent in achieving competences in all these areas of business in order to be successful in the business environment.Determine the goals and objectives of the organizationIt aims to boost organizational performance by line up goals and objectives throughout the organization. Ideally, employees g et key input to identify their objectives, time lines for completion etc. Management by objectives to be effective, individual managers must understand the detail objectives of their job and how those objectives fit in with the overall organizational objectives set by the board of directors.Involving the stakeholder to process of changeInvolving the stakeholder, how well does the organization Involve stakeholders in problem solving?Keep stakeholders informed of status towards organizational objectives?Act on feedback from stakeholders?Mobilize the dependable resources at the right time to adopt the implementation possible action?Create a critical mass of effort by impacted groups to propel the change?StrengthRiskDr. Baba, M., (2005) Change Management. The Defence Logistics Enterprise. Transforming Organizations in the teaching Era. Enterprise Integration GroupCreating new culture in organizationChanging culture in organization helps to improvement organizational objects. Changin g culture involves changing the basic values, beliefs, norms, etc., with the individuals of the organization in order to improve overall organization performance. Whether or not it is possible to fully manage change, we believe that being very clear about what changes are required and being very intentional about building a culture that supports the new mission, goals, strategies and practices increases the probability of success exponentially. This necessarily involves a large cross section of the organization in assessing the current system of norms and beliefs, determining what changes are needed, and designing an implementation plan ( Shorb, J.K and Jones, M.D. 2009 ).The result of the change was increase in the efficiency and effectiveness, the company improve its strengths and over comes its weaknesses, the pattern of the behaviours and business culture was developed in the organization and base of the organization to learn from its experiences was forms.Task -2 Develop system s for understanding and involving others in the process of change.P-2.1 Identify systems to intricate appropriate stakeholders in the introduction of change.Stakeholder is someone who has some stake or interest in the changes and development of the organization, such as share holders, employees, government and customers. The new CEO consulted with different stakeholders of the company and then formulates a plan of action which includes following aspects Simplify to financial services and customer focusIt was important that consumers understood more specifically what they were buying, as well as the benefits and services they received. The new CEO make understandable to customers, what were company services and products, and what we going to invest and also what will possible to investment returns.Both of the stakeholders and government were unhappy because services and products were not good but after this step taken by new CEO to clarify methods and they become more aware to this regard and problem has been solved. Developing the workforceThe purpose was to develop theskillsneeded within the company to help it change. AEGON also created opportunities for progression from one job to another job and ordinarily one service to another service. Creating a distinct market place for the organizationCreate a more different presence within the marketplace. This involved refreshing the AEGONbrand in a means that made it more distinctive from its competitors and more attractive to hisconsumers.The new CEO has taken some steps in following ways.External promotionalExternal promotional campaigns emphasised the relationship between Scottish Equitable and AEGON. This helped to support the local familiarity and the global power of the Organization in UK.The CEO talked to mediaThe new CEO talked to media about the refreshing of the brand internally and externally resulted in strong positive response.AEGON has launched new and in advance(p) productsAEGON has launched new pr oduct e.g. the five for life pension has helped to change the way in which consumers can look at their retirement income. AEGON provide more conclusion about the levels of income for customer, with providing the levels of return promised.P-2.2 Analyse and evaluate these systems.The change in the system of the organization brought positive influence internally and externally. The big challenge was to convince the stakeholders, the importance of the change in the organization. For the achievement of this objective, new CEO manoeuvre from improving skills of the workforce, he linked this growth to certain behavioursThese eight behaviours areThink customerEmbrace changeEncourage excellenceAct with integrityDecisive actionWork togetherLearn and growRelate and communicateCustomers less awareness is one another reason of the change in the organization, this was also reason of the government increased tax impositions. As result of this, the company was losing customers. association of the service and product was made available through AEGON information system.Training and retraining of the employees was another aspect of the change.Finally, the company has to regain its reputation and built a brand name for its stakeholders, and the CEO responded to this challenge by bringing well known brand shares which recognise AEGON in front of its stakeholders. Furthermore, AEGON moreover revive its brand name to hold its market position though merger with Scottish Equitable (now known as AEGON Scottish Equitable), which gave company a new look.Task- 3 What were the models implemented for ensuring ongoing change.P-3.1 Adapt an appropriate model for change.The model, implemented by new CEO, brought positive and contrastive change and gave company new direction. The CEO already mentioned the performance of company through reforms in culture. As mentioned previously, both of the stakeholders (government and consumers) are aware and happy because of services provided by AEGON. The se steps were taken for the customer to make them aware and solve problems.With regard to AEGON model, implementation will bring some changes which can be categorisedAnalysing the factor affecting the organization.Analysing the weaknesses and strengths of the organization.Determine the goals and objectives of the organization.Involving the stakeholder to process of change.Creating new culture in organization.As Kotter, (1995) describe in Leading Change helpful model outlines an eight step process with suggestions to help organizations transform. Kotter model is useful in understanding that the change process takes time and is not something that happens immediately. It is important for program leaders and communications staff to understand that the steps needed to support any transformation plan takes place during all stages of project. Each step acknowledges a key principle identified and people can see changes, feel the changes.These eight stepsIncrease UrgencyAEGON pensions provi der has suggested that the issue of the government helping public to put money away for retirement is of greater indispensableness now than it ever has been. (AEGON UK chief executive Otto Thoresen. 2010)Build the Guiding Team buzz off the guiding team to create the right resource and strategies to guide action in all of the remaining stages of change. This is a difficult and increasingly complex market in which AEGON Ltd is committed to offering adviser partners the ongoing help they require. We are confident that we have developed an investment proposition that meets the needs of advisers and their clients now and in a post RDR world. (Andy Marchant., 2009. Life and Pensions Marketing Director at AEGON)Get the Vision RightA shared sense of urgency for change may push people into action, but it is the vision that taking them in the right direction. A good vision offers a compelling, motivating the picture of the future and serves several important purposes.Communicate for Buy InC ommunicate changing vision and strategies to create understanding and buy-inKeeping communication uncomplicated and heartfelt not complex and technicalKnow what your individuals are feelingSpeak to anxieties, confusion, anger, fear empower ActionEmpower action mean is a deal effectively with obstacles that block action, especially disempowering bosses, the wrong performance measurement and reward systems, deficiency of information, and lack of self confidence.Create Short Term winsA short term win boosts employees confidence in the process, helping to make their efforts seem worthwhile, and gives the people responsible a chance to relax and enjoy their achievements and also link achievements back to the original vision, quieten the cynics and resisters and strengthen support from organization.Consolidating achievements and progressingContinuing with moving ridge after wave of change, not stopping until the clear vision is a reality no matter how big the obstacles.Make Change Stick Change simply sticks when the people it affects are involved. All change is either rejected or embraced by the employees who have to live with its outcome. So its always better to involve those people in the process of change and pay close attention to their hopes and fears.P -3.2 How was the plan implemented, its process and outcomes.For successfully manage change processes, it is required to analyze the phases of the process. Managers want to know in which phase they have to anticipate and what types of problems. Most successful organizations are able to adjust themselves to new conditions quickly. This needs to learn planning processes that lead to alter organizational values.Consumers were confused before the model implemented what AEGON was. The outcome of model implement for change was extremely positive and successful. It helps to recognise the company strength and weakness and its also shows that global scale was important and local brand expertise as well. AEGON brand was not promoted alongside the Scottish Equitable and not well known in financial service industry. With a new Chief Executive of UK in place 2005 of AEGON put a new plan (model). The purpose of this model implement was to meet the CEO objectives and goals. Before implement to change AEGON was unknown in the United Kingdom, much less popular in consumers and product or services offer by the company not good enough. But after the implementation of changes AEGON became very popular brand in the United Kingdom and business started growing as well. Now the alliance with AEGON is much stronger. E.g. Scottish Equitable is now AEGON Scottish Equitable thus reflecting local knowledge and also global power.In order