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

Suraksha Life, an Indian insurer, has a strict hierarchy with many management layers. Every pricing change must be approved by four successive levels, and the product team complains that launches are repeatedly delayed. Which change to its structure is most likely to speed up decisions?

Delegating decision authority to lower levels within agreed limits, and widening spans of control, flattens the structure and shortens approval chains. More layers or greater centralisation would add further delay, so they would not solve the product launch problem.

  1. AAdd a further approval layer to improve control
  2. BDelegate decision authority to lower levels within agreed limits, widening spans of controlCorrect
  3. CCentralise all decisions with the chief executive
  4. DMerge all departments into a single team with no reporting lines
  5. Require written approval from the board for every pricing change

Explanation

Delayed decisions in a tall hierarchy come from too many approval layers. Delegating authority within limits and flattening the structure shortens the chain. Adding layers or centralising further would worsen the delay.

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