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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 tall hierarchy with eight management layers and a narrow span of control. The CEO notices that product-approval decisions now take months and front-line staff feel disempowered. Which structural change is most likely to speed up decisions?

Delayering the hierarchy and widening spans of control while delegating authority is the best fix. It shortens the approval chain and empowers front-line staff. Adding layers, committees, reporting or CEO centralisation would slow decisions further, which is the problem described.

  1. AAdd further management layers to improve supervision
  2. BDelayer the hierarchy and widen spans of control, delegating authority to lower levelsCorrect
  3. CCentralise all approvals with the CEO
  4. DIncrease the number of committees that must sign off each decision
  5. Introduce more written reporting from each layer to the one above

Explanation

Removing layers and widening spans shortens the chain of approval and pushes authority closer to the point of action. Adding layers, committees, centralisation or more reporting would lengthen the decision path and worsen the delay.

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