Skip to content

IAI Actuarial Core Principles · Business Management · Communicating strategy; culture and structure in decision making; strategy case studies

Bharat General Insurance plans to launch a digital-first motor product. The CEO finds that the claims division, with a strong hierarchical and risk-averse culture, resists the faster decision-making the strategy needs. What is the most appropriate management response?

Management should identify the gap between the strategy and the existing culture and manage change deliberately, using incentives, visible leadership behaviour and clear communication of the rationale. Culture does not adapt on its own, and wholesale replacement or abandoning the strategy would be excessive.

  1. AAssess the cultural gap and plan deliberate change, such as revised incentives, leadership role-modelling and communication of why the change is neededCorrect
  2. BLaunch the product unchanged, since culture adjusts automatically once strategy is announced
  3. CReplace the entire claims division immediately to remove the old culture
  4. DDrop the strategy, because culture can never be changed
  5. Keep the division unchanged and tell customers to expect slower service

Explanation

Strategy implementation needs fit between strategy and culture. Culture can be shifted through incentives, leadership behaviour and clear communication. Ignoring it risks failure, mass replacement is disruptive and unnecessary, and abandoning the strategy wrongly assumes culture is fixed.

Did you get it right without looking?

One question tells you little. A timed set on Communicating strategy; culture and structure in decision making; strategy case studies shows your real accuracy, how long you take and where you lose marks.

Practise Communicating strategy; culture and structure in decision making; strategy case studiesFree diagnostic mock

More Communicating strategy; culture and structure in decision making; strategy case studies questions