Prudential has applied growth strategy in its organization. For example, Prudential had acquired the Realty Express in Sarasota. The agents from the Realty Express is a great addition to them as with the outstanding resources and technology systems available throughout the company, Prudential believes that the sales associates of the company will be able to provide an even higher level of customer service (RISMedia, 2011). RISMedia (2011) also stated that Prudential continues to grow by increasing its number of locations through acquisitions, expanding its number of agents through acquisitions and natural organic growth, rolling out new products for its international division and capitalizing on its affiliation with the Prudential brand.
Besides that, growth strategy is being implemented in Prudential when the company expanded its operation to Vietnam ("Prudential Expands,"2004, p. 3). Prudential has grown by using concentration where it increases the markets served in its primary business. In Vietnam, Prudential is already the largest European life insurance company and has a market share of over 50 percent ("Prudential Expands,"2004, p. 3). The company is considered to be successful at implementing growth strategy by having such result.
2.1.2 Efficiency and Effectiveness
Prudential is one of the world's largest and strongest financial services groups with more than eight million customers (Messenger and Atkins, 1994). To maintain their position in the marketplace, efficiency and effectiveness is one of the concept of management that is being applied by Prudential.
Efficiency and effectiveness play an important role in the management of an organization. According to Robbins et al. (2011), efficiency means doing a task correctly ("doing the things right") and getting the most output from the least amount of inputs, while effectiveness is "doing the right things" by doing those work tasks that help the organization reach its goals. Chaffey (2011) stated that efficiency is needed to measure for marketing activities and business processes since it helps in minimizing resources or time needed to complete a process. In digital marketing, for example, efficiency involves increasing conversion rates and reducing costs of acquisition. On the other hand, effectiveness involves supporting broader marketing objectives and often indicates the contribution of the online channel in digital marketing.
To be more efficient and effective, Prudential has implemented a total quality management programme (TQM) which is also known as the "Way of Life" in its organization. This programme was introduced by the Life Administration Board of Prudential and is an attempt by Prudential to improve its position in the UK marketplace (Messenger and Atkins, 1994). Efficiency and effectiveness became the key driving forces and a team of manager act as facilitators to plan and support the initiative. Messenger and Atkins (1994) stated that the programme was to be followed and strengthened by other major training initiatives and projects focused on understanding and delivering total customer satisfaction.
In order to assist the Life Administration meet its performance targets, a four-point quality strategy was developed which include control of processes, customer-focused culture, continuous improvement, and communication (Messenger and Atkins, 1994). First and foremost, control of processes is getting processes "right first time" and having an understanding of their interdependency. Service excellence can only be delivered through capable processes. Next, customer-focused culture means listening to customers and reacting quickly to their changing requirements to increase customer satisfaction. This can help to increase the image and reputation of the organization. Thirdly, continuous improvement is adopting continuous improvement as a strategic imperative and striving to exceed customer expectations. Lastly, for communication strategy, it is to keep everyone in touch and to promote TQM within both Life Administration and Prudential in general. All members in the organization should keep in touch which involved upward, downward and horizontal communication (Messenger and Atkins, 1994).
Known as the Way of Life initiative, this program involved a major training and development exercise, specially designed to change the way people work so that they can consistently delivering quality service and become firmly embedded throughout every level of the organization. TQM was thus seen as a mechanism for creating a more flexible and responsive organization, which is able to adapt to the changing business environment by integrating within its culture (Tanner, 1994).
This TQM programme has succeeded in bringing about substantial change in communication, behaviour and attitudes to quality throughout Prudential. The programme has been very successful in terms of reducing unit costs, meeting business targets, and improving productivity (Messenger and Atkins, 1994). As a result of this program, the company has succeeded in winning the UK Department of Employment Training Awards for both 1991 and 1992, as well as becoming the first British insurance company to receive BS5750 certification for its Industrial Branch Area (Tanner, 1994).
2.1.3 Customer-Centric Products and Service Management
According to Robbins et al. (2011), most organizations would cease to exist without customers. A consistent high-quality customer service is essential for survival and success in today's competitive environment. Hence, Prudential has applied customer-centric products and service management to help the organization to reach its goals.
As Prudential grows, it provides many types of insurance or product to suit the needs of different customers. For example, it had launched the PRUlink assurance account in 1999, which is a regular premium linked product; followed by its entry into Malaysia's Shariah-Compliant Takaful industry via a joint venture with Bank Simpanan Nasional in 2006 and in 2010, Prudential launched PRUmy child, which is the first plan in the market that provides coverage during pregnancy and infancy periods (Prudential Assurance Malaysia Berhad [PAMB], 2013). This reflects that Prudential emphasizes the needs of their customers by creating diversified products in order to bring satisfaction to their customers.
On the other hand, customer-centric service management can be seen through the vision of Prudential where they are always anticipating customers' needs and hope to deliver world class customer experience (PAMB, 2013). Besides, one of the core values that are being practised in Prudential is "Demonstrate Care & Understanding" where the organization understand and care about the needs and expectations of their employees, customers, agents, partners and shareholders (PAMB, 2013). Once again this shows that Prudential always values their customers.
Not only that, Business Times(2005) reported that Prudential plans to grow its information technology (IT) hub in Cyberjaya as part of its plan to further enhance customer service levels. Prudential invested in the best-in-class technology to create a 'customer-centric platform' and if all goes according to plan, the company believes that they would have doubled their staff strength in both their IT hub and shared services hub within the next two years (Business Times, 2005).
In short, Prudential not only implements a lot of plans in its organization in order for the company to achieve results like increasing the revenues of the company and maintaining their positive reputation, at the same time Prudential is providing their customers with great satisfaction.
3.0 Findings
As Prudential is applying some management principles or concepts in its organization, there are also some problems that are faced or could be faced by the company. Below are the further explanations of the problems:
3.1 Growth Strategy
Growth strategy has been implemented when Prudential acquired the Realty Express in Sarasota and expanded its operation to Vietnam. Although it is a good thing for the company to increase its number of market served or products offered, Prudential could face several challenges when they are expanding their businesses by using growth strategy.
One of the problems that might be encountered by Prudential is the resistance of the staff to accept the new strategy. This is because people like to stick to their old habit and find it hard to abandon behavioural routines that the organization considers no longer appropriate. They like comfort zones by continuing routine role patterns. People hence resist structural and cultural changes that force them out of comfort zones and require investing more time and energy learning new role patterns (Brown, 2013).
Besides that, lack of proper coordination and aggregation of activities could also pose a challenge to Prudential when they are expanding their business. This is because when the company is getting larger, the way the organization works becomes more complex. Thus, if Prudential cannot handle such complex situation, it may affect the daily operation of the company.
Cultural difference could also be an obstacle to Prudential because the company need to hire local people to operate their businesses when the company is getting bigger and there are insufficient employees. Prudential needs to adopt its operation in a new environment according to the working style of the local people in order to ensure a smooth working flow in the organization. Any misunderstanding on how the organization works would be costly to Prudential.
To conclude, there are a lot of problems that Prudential may need to face when it is implementing growth strategy in its organization.
3.2 Efficiency and Effectiveness
In order to be more efficient and effective, one of the actions that has been taken by Prudential is implementing a total quality management programme (TQM) which is also known as the "Way of Life" in its organization. However, Prudential has encountered some problems while carrying out this programme in the company.
TQM programme did help Prudential to save money and reduce waste. However, work groups tended to choose cost-cutting and efficiency activities because they are easier to measure. Thus, this has caused the staff often neglected customer satisfaction (Tanner, 1994).
According to Messenger and Atkins (1994), the time taken to roll-out a change programme is crucial because too quickly can mean that the details are not fully understood, and too slowly can result in a loss of momentum. Training staff is a sensitive task and attention needs to be given to ensuring that the "pitch" of the material meets the requirements of the target audience and does not underestimate or overestimate their abilities (Messenger and Atkins, 1994). Apart from that, the language used must be meaningful and related to the particular needs of each department (Messenger and Atkins, 1994). Hence, Prudential could face the problem of whether the TQM programme could be conveyed effectively to its employees.
In short, it is a challenging task for Prudential to always maintain efficiency and effectiveness in its organization.
